Food price inflation and supply shocks look set to worsen unless the UK’s biggest supermarkets rapidly escalate work to tackle climate change and nature loss.
Retailer progress on reducing environmental risks was “stagnating” and threatening future commercial viability without delivering necessary systems-level change, the World Wide Fund for Nature has warned.
The NGO’s annual What’s in Store for the Planet report, published this week, revealed major supermarkets were missing key climate targets – leading to an increased risk of price volatility and shortages in key categories ranging from bread to chocolate, milk, meat, fish and coffee.
Over a year’s supply of bread had been lost in the past decade due to the effects of drought and heavy rainfall on wheat harvests, the WWF said, while “excessive heat and shifting rainfall patterns” were driving the well-documented surge in cocoa prices – which had jumped by 136% between 2022-2024.
Key cocoa growing regions were “set to become unsuitable for production”, the report added, placing further uncertainty on future supplies.
With world coffee prices up by more than 40% in 2024 due to extreme weather, the global area suitable for coffee growing was expected to shrink by 50% by 2050, it added, while climate change-induced stress, coupled with extreme weather reducing availability of forage, threatened milk production in dairy cows.
The report also warned meat, poultry and salmon production remained over-reliant on deforestation-linked soy.
Read more: How can supermarkets persuade suppliers to cut Scope 3 emissions?
Drawing on data from 90% of the UK grocery market, report authors revealed retailers were set to miss 2025 targets on removing deforestation and conversion – with 2024 data revealing only 1.8% of soy and 3.1% of cocoa was being sourced as deforestation and conversion-free (DCF) from high-risk areas.
Supermarkets were also “a long way off” on reducing Scope 3 (indirect) emissions, which account for 90% of their total emissions. “It will not be possible to hit targets without tackling emissions associated with agriculture, diets, food waste and deforestation,” the report warned. “Collective action on these areas is the only way to expedite progress.”
Concerns were additionally raised on the lack of progress by supermarkets on protein diversification, with the sector “still selling twice the target proportion of meat compatible with a healthy and sustainable diet”.
Meanwhile, there had been “limited progress and engagement for improving livestock production standards”, the WWF pointed out. “Retailers must scale up their sustainable sourcing policies beyond a select few farming groups,” it urged.
The report follows the publication of a whistleblowing memo in April by an anonymous group of food industry executives which warned the sector was heading for an economic disaster bigger than the pandemic, with companies’ resilience planning based on “wishful thinking” and “false reassurances” to investors.
The same group claimed last month that UK food companies were pressuring farmers into intensive meat production with lower welfare standards as part of a race to the bottom on prices.
“We are already seeing immense pressure on global supply chains, often resulting in higher prices for UK consumers,” the WWF said.
Read more: As climate summit ends in disappointment, is the COP model broken?
“As the impacts of climate change increase, retailers are facing an ever more volatile supply chain. This drives up prices as consumers are already facing continued cost of living pressures,” it added.
However, the report also argued “it is not too late for action”.
Retailers were “making good progress on Scope 1 and 2 emissions”. On average, the sector was 49% of the way towards achieving near-term Scope 1 and 2 targets, compared to 37% last year. There had also been a 10% increase of DCF sourcing of palm oil since last year, continuing efforts over the past decade by the industry.
This indicated “collective action taken now can pave the way for a healthy and sustainable future and secure a resilient food system with stable prices for consumers” ahead of 2030 climate targets, said the NGO.
But in order to achieve this, it called on food company board members “to table this immediate risk to future commercial viability, highlighting the duty they have to ensure retailers can keep food on shelves in future”.
“The way we currently produce food is contributing to climate change and devastating our natural world,” said WWF CEO Tanya Steele.
“It is only by protecting our environment that we can maintain our ability to grow healthy and affordable food for everyone. By not meeting their commitments supermarkets are playing with fire,” she added.
“For the good of their customers, and for their own commercial viability, retailers must act now to embed sustainability at every stage of their decision-making. The clock is ticking.”
Responding to the report, BRC director of food & sustainability Andrew Opie said: “Ensuring long-term, secure supply chains is critical in a highly competitive market, which is why supermarkets are investing in carbon reduction and improving nature and biodiversity. They have led innovation in supply chains, including calling for UK deforestation regulations and helping farmers improve production.
“They recognise the challenge of meeting environmental targets but will continue to prioritise this work despite tough market conditions and the need to keep food as affordable as possible.”
No comments yet