Food waste reporting makes business sense

Written by: Julian Parfitt | Published:
Julian Parfitt, technical director at Anthesis

Open disclosure of food waste by major food businesses has obvious sustainability benefits, but taking action can also improve other efficiencies.

A third of global food production is wasted, representing a great inefficiency in terms of wasted resources, environmental pollution and wider socio-economic detriment.

Food waste is also a moral issue in relation to food insecurity, with global hunger on the rise again for the first time in a decade and a half.

Food waste reduction will become a prominent weapon in the battle to raise overall food production by the 70% needed to adequately feed over nine billion global citizens by 2050.

The economic costs of the mountain of food waste are huge: $940bn globally, a significant waste of money at all stages of the food supply chain from farmer to consumer.

The UK is committed to halving food waste by 2030 under United Nations Sustainable Development Goal (SDG) 12.3, one of 169 targets contributing to the 2030 ‘people, planet and prosperity’ agenda.

Its elevation to having its own separate goal is partly a reflection of the last decade of debate in which the scourge of global food waste has become widely recognised.

The SDGs demonstrate how the sustainable development agenda isn’t something to be applied ‘top down’ or perceived as only relevant to distant places, but to be acted on both locally and globally. We all need to play our part, including within businesses.

It is also notable that SDG 12.6 “encourages companies, especially large transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycles”.

Taking SDGs 12.3 and 12.6 together, are food and drink businesses that are committed to the goals likely to move towards the measurement and open reporting of their food waste?

Leading by example

Open disclosure of food waste statistics by food businesses is already happening, with Tesco being the pioneer in this field, reporting food waste from UK stores and depots for the past five years. Public disclosure has since expanded to Tesco in Central Europe and Ireland.

Last year the Environment, Food and Rural Affairs Committee called on government to require food businesses over a particular size to publicly report on food waste data, and commended Tesco for the voluntary reporting of annual arisings.

Tesco has since shared the methodology and developed a transparent, independently validated reporting process that conforms to the World Resources Institute’s Food Loss and Waste Accounting Standard.

The most important feature of this system is that it uses a ‘bottom up’ methodology, based on stock-keeping units and standard product weights for all scanned unsold food products. This generates very detailed reports, including the reasons for wastage.

Having this level of granularity is essential to inform Tesco’s food waste reduction and food redistribution strategy: a single annual tonnage estimate does not enable progress towards SDG 12.3. Other retailers need to follow this type of approach and Tesco’s example in transparent reporting.

Through the work of the SDG 12.3 Champions’ Group, chaired by Tesco’s CEO Dave Lewis, there are grounds for optimism that food waste reporting will become widely adopted by food and drink businesses.

The Champions are a global coalition of leaders drawn from businesses, NGOs, government, farmer groups, academics and civil society dedicated to accelerating progress towards the target. In September 2017 they met at the Rockefeller Foundation in New York to review progress along their road map for achieving SDG 12.3.

Support across the supply chain

Tesco announced that alongside the publication of its retail food waste, 24 of its largest food suppliers would also adopt the SDG target and report on their progress.

This supply chain approach to food waste reporting and disclosure represents a significant step towards mainstreaming the adoption of SDG 12.3. So too does the growth in the Champions’ Group membership, which includes, among others, the Consumer Goods Forum, with a membership of 400 retailers, manufacturers and service providers from 70 countries.

The Champions also published a business case for food waste reduction containing analysis from 700 food businesses across 17 countries.

Over half of these were found to have earned a greater than 14-fold return on their investment, indicating the ‘size of the prize’ for firms that measure and reduce food waste. The typical full cost of food waste to a food business was reported to be 4-5% of turnover.

There are signs that greater public disclosure of food waste among large food businesses and their suppliers will start to take off under the umbrella of the SDG 12.3, through country, trade body and company-level initiatives.

There is a strong business case for acting on food waste and there can be few other opportunities with such potential to improve added value, build better supplier and public relations, while also achieving better societal and environmental outcomes.

With such a range of benefits on display, open disclosure of food waste by food businesses certainly makes good business sense. It might also be the most effective strategy to encourage others to do the same.

Julian Parfitt is technical director at Anthesis.

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