Climate Week in New York took on a specific urgency this year as two supercharged hurricanes slammed into the United States in quick succession, not to mention ongoing extreme weather events around the globe. At the same time, the upcoming elections could have implications for our capacity to prevent and mitigate these disasters. Now is the time to do all that we can to lower emissions.  

Emissions are categorized according to scope. Scope 1 includes direct emissions related to a company, Scope 2 are indirect emissions from energy used, and Scope 3 covers all other indirect emissions throughout a company’s value chain.  Scopes 1 and 2 are well within a company’s sphere of influence, the easiest to measure, understand, and mitigate. Scope 3 is where we need to turn our focus. For companies that source raw materials, it’s estimated that 70 to 90 percent of their carbon emissions are in Scope 3, with a majority of that originating in the first mile of production. 

Even for its importance, most of the investment in Scope 3 has instead gone to reporting. That is money dedicated to talking about measurements, deciding what to measure, measuring it, and verifying those measurements. While it is important to move deliberately and agree on common measurements, investing in solutions that reduce or avoid emissions in the first mile is urgent. 

What is a Just Transition?

Addressing Scope 3 emissions is set to completely change the way business is done. It’s also an opportunity to rethink supply chains, rethink supplier relationships, and rethink the impact of our actions on emissions and climate.

The transition from a carbon-based economy to a carbon-neutral needs to be equitable. It’s not enough to halt emissions at any cost. We cannot treat those at the beginning of the supply chain as just another cog in our wheel. We’re in this together and a Just Transition means respecting the agency of producers and working alongside them to create mutually-beneficial relationships.

Last year, Solidaridad released the Small Farmer Atlas, a comprehensive survey of 10,000 farmers in 28 countries. Among the findings, 57 percent of farmers interviewed indicated that they lack sufficient resources to adapt to climate change. Additionally, 67 percent said that they do not receive a premium or reward for sustainable production. 

The communities that have the most to lose in the changing climate are the small-scale farmers and miners who are completely dependent on land and nature for their livelihoods. They also typically have the fewest resources to adapt. A Just Transition is about finding an answer to this question: 

How can companies create opportunities for these communities on the road to net zero rather than leaving them behind? 

The overwhelming burden of compliance on small-scale farmers

One of the things that stood out at Climate Week – and in many forums on climate – was a distinct lack of producers. Looking around the room, you would be hard pressed to believe that the first mile is anyone’s priority. Across the sea of faces, there were representatives of big banks, companies, think tanks and dialogue groups, but few if any producers.

So many discussions on how we make this transition happen – discussions that referred to these small farmers – were conducted completely in their absence. And this fact is reflected in the complex protocols and legislation that are being adopted. 

Governments are finally getting serious about the climate crisis. In the EU and US, they have lined up strict new regulations, such as the European Regulation on Deforestation-Free Products and the EU Due Diligence Directive. Companies are taking a hard look at how they measure and address impacts in the first mile. 

All too often the burden of complying with reporting requirements, whether in the public or private sector, falls on the small-scale producers.

Jennifer Horning, Head of Corporate Engagement, Solidaridad North America

All too often the burden of complying with reporting requirements, whether in the public or private sector, falls on the small-scale producers. The vast majority of these producers have no idea what these new regulations require, let alone how to prepare buyers on another continent to meet them. How do we tell a farmer without access to basic education working in her field in Malawi that she needs to share her farm field coordinates to people she’s never met living across the globe? 

In discussions at Climate Week and in responding to requests for how we operationalize the concept of a Just Transition, I arrived at three critical first steps for any company looking to engage.

Three steps to get the ball rolling

As an NGO committed to creating more fair and sustainable supply chains, the number one thing we hear from companies is: How do we operationalize this? Here are three ideas for companies looking to begin the journey to addressing Scope 3 emissions in a fair and just way. 

1. Ask questions and be willing to listen – The critical first step is to invest in talking with the main change agents: communities in that first mile. This begins with sincere, open conversations and a willingness to understand the vulnerabilities and needs. Are their needs focused on mitigation, adaptation or both? How are women and indigenous peoples affected? This critical relationship building needs to happen with suppliers and the farmers and workers who make up your supply chain. NGOs and locally-based organizations can serve as cultural translators to help you understand your partners’ perspectives and needs. This step comes well before any external plan or public announcement.
2. Incentives & motivations – This is at the core of the work that needs to be done with producers in the first mile. What will motivate change? As in any business relationship, the focus needs to be on long-term, mutually-beneficial partnerships. Transitioning to a Net Zero economy will require new ways of working, data sharing  to measure progress, and more. How do we make the extra effort worth it for first mile producers?
3. Data & technology – Data has become currency. In the scramble to gather the information needed to monitor Scope 3 emissions, remember that this data does not belong to companies. It is owned by first mile producers. For downstream buyers, data can provide insight and legitimacy in reporting and building social license to operate, as well as de-risk investments through increased transparency. Compensating producers for the time it takes to collect and share that data in a secure way is just one way to build the long-term trust needed to grow together.

More talk, more action

It’s clear as we move on from Climate Week to COP 29, we need a shift in how we approach a Just Transition in global supply chains. If 70 to 90 percent of climate impact is in Scope 3, companies should be investing a similar percentage of climate-related spending in Scope 3.  That investment should go directly to incentivizing and rewarding the main change agents: the first mile farmers, miners and workers. 

Talk is good, but action speaks volumes. Gather with producers to dig into opportunities in the first mile – conversion to regenerative agriculture or agroforestry, infrastructure for mitigation, investments in formalizing land tenure, payments for data, or more.  After all, if you’re expecting change in the first mile, you need to invest in the first mile.