Net-zero notebook: Coffee, climate compensation and carbon cuts

Costa commits to slash ‘per cup’ carbon emissions in half by 2030 but the chain’s total emissions will only fall by 18.5%. What gives? By David Burrows.

Costa has published a two-page net-zero plan (more details to come, we assume). This will see emissions (all scopes, globally) cut from 540,000tCO2e in 2019 to 54,000tCO2e in 2040. Most (95%) of the emissions are in scope 3, with milk (32%), food (16%) and green coffee beans (15%) accounting for almost two thirds of the total footprint.

Costa says the focus will be on scope 3. It talks of regenerative agriculture pilots, a transition to plant-based options for food (pending further life cycle assessments) and drink. UK-owned stores and its roastery are already powered by renewable energy. This is all very encouraging. 

However, the coffee chain appears to be leaving itself a lot to do between 2030 and 2040. Emissions will actually increase to 2025, presumably as trade picks up following the covid-19 pandemic. They will then fall to 440,000tCO2e by 2030, a reduction of 18.5% on the 2019 baseline, which doesn’t seem that ambitious. From there emissions will have to plummet by 88% to 54,000tCO2e in 2040 (the 2040 target has yet to be validated by the SBTi). Costa told Notebook that supply chain decarbonisation programmes “take time to become established and deliver results, which is why our forecasts reflect an acceleration after the first five years”.

Intensity carbon debate

The UK’s favourite coffee chain (according to Allegra research) has also gone for a science-based target of halving emissions ‘per coffee serving’ by 2030 (from 0.69kgCO2e to 0.34kgCO2e). The metric is a “representative unit which captures all our scope 1, 2 and 3 emissions”, says a spokesperson, including all products and services and not just coffee.

Such ‘per serving’, ‘per cup’ or ‘per whatever’ targets irk experts and NGOs, who argue that the climate doesn't care about these so-called intensity targets if overall emissions increase. Dairy companies have been keen to publish carbon footprints per kilo of milk produced, for example, and targets to shrink them. The Institute for Agriculture and Trade Policy, a think-tank with presence in the US and Europe, has likened this to a “sleight of hand” because total emissions continue to rise due to increases in milk production and rising numbers of animals in supply chains. 

Costa has both an intensity and absolute target but you can see why it pushed the former in its press release: halving per serving emissions by 2030 sounds a lot better than reducing total emissions by 18.5% in the same timeframe, doesn’t it?

‘Non’ to carbon neutral

Fellow coffee behemoth Nespresso has gone for a per cup carbon neutral target, and has been under fire in France for it. NGOs there argue that the adverts and carbon neutral claims should also carry details of the offsets being used. They don’t feel consumers should have to dig around for it on the website.

From what we can see, the Nestlé-owned brand is currently offsetting 506,760 tonnes of CO2e across 10 projects, most of them linked to reforestation, forest conservation and clean energy in farming communities. This currently only covers five markets and business-to-business, but will be expanded globally so that by the end of 2022 “every cup of Nespresso will be carbon neutral”.

Nespresso also has a carbon reduction target - 20% between 2018 and 2025 - as part of its carbon neutral commitment. What happens if that isn’t met? “We would miss the 2030 target and be delayed in the climate race to net-zero.” Bad news for the planet, but hardly terrible for the brand (which would still have been marketed as carbon neutral for three or four years).

At least the new commitment now spans all emissions rather than the previous iteration, which only covered its ‘business operations’ – in other words just scopes 1 and 2. Nespresso says it is now “ready to take the next step” on tackling emissions from its business and it sees carbon neutrality as an “immediate first step” to engage consumers and introduce them to the ways in which it will reach net-zero. Sceptics suggest the approach is more about consumer marketing (buying offsets as a quick fix to ease consumer concerns) than actual carbon management.

Leon has already been criticised for its offsetting approach. Benugo, Nandos’ and Wahaca have also gone down this route. The argument brands make is that by offsetting they are taking immediate action to tackle emissions they can’t yet reduce. 

‘We’re screwed’

This brings to mind research carried out by Robert Watt from the University of Manchester, and published in the journal Environmental Politics. The paper – The fantasy of carbon offsetting – highlighted how carbon offsets can vacillate between a quick fix (the carbon-neutral claims now) and a last resort (those ‘unavoidable emissions’).

“We always encourage our clients to reduce [emissions] as much as they can,” said one the 65 people involved in carbon offset markets that Watt interviewed, “but there comes a point where you can’t reduce any more unless you turn the lights off and turn everything off and go and sit in the darkened corner and shiver, but that’s not realistic.”

What level of reduction is realistic is moot. Sceptics, like those who wrote the 2022 corporate climate responsibility monitor, feel that brands are perhaps throwing in the towel too early. The focus has to be on reducing emissions, says Gilles Dufrasne, policy officer with Carbon Market Watch and one of those involved in producing the monitor.

“I do think the priority should be on reducing emissions and for many companies that probably means investing in future solutions that don't necessarily deliver [...] right now,” he explains. “But what is really problematic is that a lot of companies today are talking about this share of emissions [that can’t be reduced] as if this was an unchangeable state ... like forever. If that's the case [then] we're screwed, right?”

Expect far more scrutiny in the coming months on the emission reduction ambitions within the net-zero plans of food and drink companies. Criticism of those relying on offsets will continue.

Carbon compensation con

Speaking of which, the consumer ombudsman in Sweden is taking dairy giant Arla Foods to court over claims its milk is carbon neutral. The assertion gives “consumers the wrong picture of a product’s impact.” 

Sandra Lamborn from Greenpeace – a fierce critic of offsetting schemes – said this kind of climate compensation (and accompanying carbon neutral claims) is “based on the belief we can continue business as usual as long as we, often in the richer part of the world, pay someone else, often in the poorer part of the world, to create ways to reduce emissions, often through conservation or planting of forest”.

McKinsey has estimated the annual global demand for carbon credits could reach 2.0GtCO2e by 2030 and as much as 13GtCO2e by 2050. Voluntary carbon markets could be worth anything between $5bn (£3.82bn) and $50bn (£38bn) by 2030.

Brands supporting tree-planting schemes certainly need to be wary, as Greenbiz reported recently; those using them to claim carbon neutrality should be clear about what they are doing and how they are doing it, according to the UK Green Claims Code. “They should include accurate information about whether (and the degree to which) they are actively reducing the carbon emissions created in the production of their products or delivery of their services or are offsetting emissions with carbon removal,” the code reads.

The Competition and Markets Authority, which developed the code and is taking an active interest in greenwashing, has just urged the government to introduce legislative definitions for potentially misleading terms like ‘carbon neutral’, too. “[...] we plan to shine a light on what businesses can and can’t do under current competition and consumer laws, as well as advising the government on changes that will help people shop more sustainably,” said Sarah Cardell, CMA general counsel.

Forgetting the 93%

The CMA might also want to take a look at the requirements the government places on those bidding for big public sector catering contracts. They need to have a carbon reduction plan in place but this likely misses a considerable chunk of carbon emissions. Sodexo has revealed that the requirements (under PPN06/21) cover just 7% of its total emissions.

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