Moving from Alignment to Action on Scope 3 Emission Reductions

    August 30, 2023

    For many consumer goods companies, the runway for meeting ambitious sustainability targets is starting to feel short. There is mounting pressure to achieve liftoff, moving from alignment to action to reduce their climate footprints, before the decade is over. For those looking to reduce Scope 3 emissions in their agricultural value chains, the recent guidance from the Science Based Targets initiative (SBTi) and Greenhouse Gas Protocol (GHGP) provide new clarity on how companies can set and achieve their targets, while at the same time revealing gaps in technology, expertise, and resources for executing on their goals. How can companies get started on their programs to ensure there is time to scale them by 2050, when many are trying to achieve net-zero?

    Moving from targets to actionable plans brings many questions. What kind of technology is required to quantify outcomes? What supply chain partnerships are needed to maintain surety of supply? How do you set the right metrics, and best support the producer—especially since they’ll be executing a regenerative project on-the-ground? More and more major companies are choosing Indigo’s Market+ Source program to help them achieve their Scope 3 targets.

    chris-maloneOn August 22, we hosted a virtual educational session (watch it here), featuring experts from Bunge and Indigo Ag, to address questions on how companies can define, implement, and scale regenerative ag projects to meet their Scope 3 targets. As a follow up, we sat down with Chris Malone, a leader in our Market+ Source program, to learn more about how it is helping to answer the above questions and make Scope 3 reductions a reality for these climate-conscious corporations.

    Let’s start by talking about policy developments that are helping provide the foundation for companies to reduce their Scope 3 emissions. What role is Indigo playing in these evolving policies to help consumer goods companies deliver in these uncharted territories?
    Chris Malone: On the policy side, we've closely followed the developing guidance from the Greenhouse Gas Protocol (GHGP) Land Sector and Removals Guidance (LSRG), which is very important because it allows companies to use removals in their supply chain for the first time to greatly reduce their carbon footprints. The LSRG helps companies understand what they need to do to be able to run projects on land, account for sequestered carbon, and use that towards their science-based targets. As a member of the technical working group, Indigo has been very involved in the GHGP's workshopping for the Land Sector and Removals Guidance as they work towards a final draft. Our policy team has been instrumental in helping shape the LSRG. A lot of Indigo's technology and the work we've done in other areas, such as creating high-quality, registry-issued agricultural carbon credits, shows that accounting for carbon removals can be performed rigorously and reliably. So, we are working with them to ensure that their guidance is ambitious yet achievable.

    The other policy development that we’ve taken an active role in shaping is the Forest, Land, and Agriculture (FLAG) guidance released in 2022 by the Science-Based Targets initiative (SBTi), which is a partnership between nonprofits. The SBTi FLAG guidance helps companies set emissions reductions targets for all land-based emissions that a company is responsible for. For many of our customers, the biggest part of their Scope 3 emissions are coming from agriculture, spanning millions of acres of land. And so, that FLAG guidance enables them to set a goal specifically to reduce that footprint and even count carbon sequestration in agricultural soils as a negative number towards their goal. The ability to go beyond emission reductions and achieve verified removals is a powerful opportunity in agriculture.

    With all of these policy developments, our goal at Indigo is to help establish a rigorous and achievable scientific standard that companies across the agricultural supply chain can rely on, and deliver the solutions that help them reach their goals.

    What is your advice for companies that have made progress setting their science-based targets for Scope 3, but are unsure how to turn these targets into an actionable plan?
    C.M.: Agricultural raw materials are a great place for companies to focus if they want to reduce their Scope 3 emissions. It may be counterintuitive to start with the emissions furthest from the company’s operations, but this is where the greatest opportunity is. There is the potential to dramatically reduce their footprint, and in some cases the agricultural land can even become a carbon sink (through carbon removals). With the emergence of regenerative agriculture and other sustainable practices, and with proven MRV (measurement, reporting, and verification) technology in place, there are programs like Indigo’s Market+ Source are ready to support this effort. The ag ecosystem is now quickly stepping forward to participate.

    Let’s use wheat as an example. What makes wheat a good opportunity for consumer goods companies to reduce their Scope 3 emissions?
    C.M.: With wheat, there is an incredible potential for sustainability at scale because it is a major crop in the U.S. We produce about 2 billion bushels or 50 million metric tons of wheat every year. That makes us in the top five producers globally. We grow wheat on about 40 million acres every year, which makes it one of the largest crops from a land standpoint. Most of that wheat is going into food. What we’ve learned through our research and work with wheat farmers is that there are effective ways to lower the carbon footprint of wheat through practices like no-till and cover crops in some regions, as well as practices to conserve water use. And then from a technology perspective, we have the tools to track those practices at the field level, accurately measure the sustainability outcomes, and provide that information to agribusinesses, like grain millers. Those grain millers are then able to share these detailed crop attributes with their consumer goods customers, who can use it in their Scope 3 accounting.

    How does Indigo help companies meet their ESG targets through sustainably produced crops?
    C.M.: Our Market+ Source program helps consumer goods and other companies buy crops produced with specific sustainability attributes. For example, what is the carbon footprint of a lot of wheat flour? It turns out that's really interesting and useful for food companies that are trying to reduce their Scope 3 emissions because they can use this information in their carbon/GHG inventories. When they buy lower-carbon wheat, they reduce their corporate emissions. With Market+ Source, we can work with their existing agribusiness suppliers and run farmer-facing programs to procure grain with a lower-carbon footprint that has been rigorously quantified. It helps the brands meet their Scope 3 reduction goals. It provides a new revenue stream and differentiator for the agribusinesses. And for farmers, it creates a new source of demand and revenue, and a motivator to consider adopting more practices that will reduce the emissions associated with their farming.

    Let’s talk more about what this means for farmers: How does Market+ Source incentivize farmers to grow sustainable crops?
    C.M.: What are the agronomic benefits of sustainable and regenerative practices? Our sustainable crop program presents multiple agronomic benefits for the farmer. On one side, as they're making a more sustainable, lower-carbon crop, there's demand for it, and it can help them make more money. On the other side, a lot of the sustainable practices, for example cover crops or reduced tillage, help make farming more economically efficient. For example, we often see farmers in the Great Plains choosing no-till practices. In other words, they are not plowing their fields after harvest; they're allowing microbes and other organisms to help maintain the topsoil, prevent erosion, and create a healthier soil for crop production. This is what we mean when we talk about regenerative agriculture – these practices are actually regenerating soils, bringing more organic matter into those soils. Healthy soil is more efficient soil. Farmers can get greater yields with fewer inputs, from fertilizers to fuel costs, and similarly, healthier soils help crops survive stresses better. They can also manage their soil moisture more effectively with improved water infiltration, which is especially important in regions like the Great Plains, where drought conditions persist. It sets up the farmer to have a more profitable operation for the long term.

    How is Indigo’s approach unique when it comes to data collection and tracking to confidently provide companies with emission factors that meet Scope 3 accounting guidelines?
    C.M.: Indigo has invested a huge amount of resources over the last several years to build out our MRV stack to conduct field-level measurement, reporting, and verification at scale. At the foundation of our MRV stack, we have tools to help capture and verify farming practice data, like easy-to-use software for growers and agribusinesses. We also acquired and developed remote sensing satellite capabilities and built state-of-the-art data science capabilities, which give us the ability to automatically infer what's happening on a field. For example, when did the grower harvest their crop, did they till the field, or did they plant cover crops? Then, we have integrations with major tractor and farm management systems to import the data farmers already have, with no manual effort. So for example, if you're a grower and you're using John Deere equipment, a lot of your on-field activities are automatically tracked in John Deere. With our integration to John Deere, the grower can choose to send that information directly from John Deere into Indigo. Our goal is to make capturing farm data efficient and reliable.

    The next layer of our MRV stack processes all of that information – getting it into the right formats, running checks on it, bringing in additional data sets to overlay with it. We prep that data to run through our proprietary biogeochemical modeling technologies, which produce numbers for natural cycles for the carbon cycle, the nitrogen cycle, and the methane cycle (if relevant), as well as field-level emissions outside of these cycles – fertilizer emissions, tractor emissions, irrigation pump emissions.

    We use a model called DayCent-CR, the leading biogeochemical model for agricultural soil. That allows us to produce an accurate view of the carbon footprint of soil every year without having to send people and take costly, time-intensive soil samples across fields, year after year. We can reliably estimate those values – for example, carbon stocks in soils – and then reconcile them over time with highly targeted sampling. Once the analysis has been completed by our MRV system, we have a really thorough understanding of a field's carbon footprint and the changes resulting from a farmer’s practices.

    We provide everything needed to run a program with farmers and agribusinesses – collect the data, process it, verify practices, and produce and report on the rigorously measured outcomes that can be used for a Scope 3 reduction or other sustainability claim. Indigo has a best-in-class platform for doing all of this scalably and accurately, and we’re proud to do so for some of the largest food, beverage, and apparel companies in the world. For example, it's easy to run a small pilot, but when you're trying to operate across millions of acres scalably, you need ways to get information to and from farmers and agribusinesses efficiently, and that’s where Indigo can play a really important role in making science-based targets possible for consumer goods companies in ways that also benefit the farmers and the agribusiness partners.

    How is Indigo’s approach unique for different crops, from wheat to cotton, corn, rice, and soybean?
    C.M.: A lot of the tenets of regenerative farming and particularly soil carbon are consistent across crops, which is great. When we think about soil carbon for example, we're really thinking about a farmer’s whole rotation and what they’re doing to generate more and more carbon and soil organic matter over time. There are some differences between the crops though, especially when we think about the supply chain. You might have a field that's rotating between soybeans, wheat, and cotton. With cotton, it's going into bales that may be shipped all over the world. It has a very different supply chain than, say, that soybean, which may stay pretty local, be crushed going into either meal for food or oil for a different use case. Through our FieldFlex capabilities, Indigo provides a single approach for the farmer who is growing soybeans, wheat, and cotton – making it easy for them monetize their sustainable practices in different ways with different crops each year, while centralizing all the relevant data in one place, avoiding duplicate efforts, and allowing the farmer to interact with different agribusinesses that are creating different demands for crops—and the associated sustainability scores.

    How does Indigo’s collaboration throughout the agriculture ecosystem set Indigo apart to deliver truly unique value in this space?
    C.M.: The best person to take an offer like this to the farmer is the person who already buys that crop. And that person's customer or their customer's customer is downstream, looking for that sustainability attribute. So, our approach has been to focus on working directly with the agribusinesses that are at the heart of this ecosystem. We're creating new opportunities for these businesses by enabling them to do what they do best – providing expert service and support to farmers – and focusing on what we do best – innovating in science, technology, and data to create value for the whole industry. As we've built software and established partnerships and relationships, we've focused on, "how do I enable the buyer of an existing crop to bring this type of offer to their growers and then also generate demand for it downstream with their customers or their customers' customers?" A good example is our partnership with Bunge to sell low-carbon cornflour and grits to consumer goods companies. Our technology allows the agribusiness to bring these types of sustainability offers to growers, contract with them, collect the data, and produce a valuable sustainability attribute. That approach has allowed us to integrate across the supply chain to create value for everybody.

    Curious to learn more about how to make your Scope 3 targets a reality? Watch our educational session, From Alignment to Action: Advancing Scope 3 Reductions Across the Ag Value Chain.” Experts from Bunge and Indigo shared insights on how to define, implement, and scale regenerative ag projects to meet your organization’s targets with meaningful, measurable results.