Food Waste is an Emerging Sustainable Agriculture Issue

By Allan Pearce, Shareholder Advocate
Given the tremendous environmental impact that agricultural and food companies have, food system advocacy has been a mainstay of Trillium’s shareholder activism for decades. Trillium has focused on sustainable agriculture as it directly contributes to, and is impacted by, climate change, through deforestation and the use of fossil fuels to fertilize and harvest. In addition, our agricultural production systems use 50% of U.S. land and 80% of our freshwater. Taking into account the resource demands of our agricultural systems, one might be tempted to think that we would waste as little of the food we produce as possible. However, approximately 40% of all food produced in the U.S. goes uneaten every year [1], the equivalent of 133 billion pounds of food. Yet the sheer quantity of this waste does little to illustrate the extent of the far-reaching environmental, social and financial impacts that stem from this waste.

If global food waste was a country, its carbon footprint would rank third, behind only China and the U.S.

The Magnitude of the Food Waste Problem

The vast majority of this uneaten food ends up in landfills, where it decomposes and emits an estimated 23% of U.S. methane emissions [1] and 4.5% of all U.S. greenhouse gas emissions. Due to the resource demands of agriculture, 25% of U.S. water use, 30% of fertilizer and 31% of cropland go into the production of food that feeds only landfills [3]. Another way to look at the environmental magnitude of food waste is that if global food waste was a country, its carbon footprint would rank third, behind only China and the U.S. [4].

Responding to the magnitude of the impact of food waste, the Obama Administration recently set a goal to reduce food waste 50% by 2030. This is an historic goal that has received broad support. For instance, EPA Administrator Gina McCarthy said: “Let’s feed people, not landfills. By reducing wasted food in landfills, we cut harmful methane emissions that fuel climate change, conserve our natural resources, and protect our planet for future generations” [5], This goal is echoed by a commitment to halve food waste that is part of the UN’s 2030 Sustainable Development Goals [6].

In addition to these ambitious goals, Vermont, Massachusetts and California are among the states that now require large generators of organic waste (i.e. large supermarkets, hotels, convention centers), to divert this waste from landfills [7,8]. The legislative approach to tackling food waste is also proceeding at the federal level as U.S. Representative Chellie Pingree of Maine is currently drafting a bill that would address food waste [9].

Reducing food waste in the U.S. would free up food and resources that could be used to feed many of the nearly 50 million Americans that are food insecure every year. The Natural Resources Defense Council reports that reducing food waste by just 15% could feed 25 million Americans every year [1]. The adverse impacts of food insecurity are particularly frightening for the nearly 16 million food insecure children in the U.S. because such children are more likely to have anemia, asthma, certain birth defects and higher rates of hospitalization, among others [10].

If the environmental and social impacts associated with food waste were not enough to spur companies to act, there is also a strong business case to be made for reducing food waste. The 133 billion pounds of uneaten food in the U.S. carry an estimated retail value of $162 billion [2]. Grocery stores and supermarkets alone lose approximately $47 billion annually [11]. Demonstrating the business case for implementing these strategies, Stop and Shop, a grocery retailer in the Eastern U.S., reported saving $100 million per year following an analysis of loss and waste in its perishables department [1].

The Natural Resources Defense Council reports that reducing food waste by just 15% could feed 25 million Americans every year.

Beyond retailers, food is wasted at all stages of the value chain from the farm to our plates. And despite the staggering food waste generated by companies, it is actually consumers that account for more waste than any individual business sector. As a result, Trillium believes it is imperative that companies – at every point in the supply chain – take action to reduce food waste; a comprehensive approach should include efforts to educate consumers on methods to reduce food waste. From a corporate perspective, a comprehensive approach to food waste will serve as a means to reduce GHG emissions, save resources and money, and feed those in need.
Trillium Leading Investors on Engaging on Food Waste

Because Trillium believes reducing food waste is a critical component of more sustainable agricultural systems, we have been leading our industry in engaging companies on food waste. In addition to on-going dialogues with Starbucks, Target, Panera and others, Trillium, with Green Century Capital Management and First Affirmative Financial Network as co-filers, filed the first shareholder proposal on food waste at Whole Foods Market.
The proposal, which was filed in September of 2015, asks Whole Foods to issue a report on company-wide efforts to assess, reduce and manage the food waste from its stores. Whole Foods’ current efforts are lagging behind its peers, including Kroger and Walmart, which are members of the Consumer Goods Forum, an organization that has set a goal to halve food waste by 2025. Therefore, we are urging the company to determine the causes, quantity and destination of the food it is wasting. We anticipate than in the process Whole Foods will identify cost savings and new revenue streams, in addition to helping the company reduce its environmental impact, donate food to those in need, all while strengthening its reputation as a responsible company.
Trillium will continue to raise the topic of food waste with additional companies. We believe that our clients’ commitment to sustainable agriculture will be reinforced by the addition of our work on food waste.

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Editor’s Note: This piece was originally published in the Winter 2106 issue of Trillium’s newsletter, Investing For a Better World.

[1] Gunders, Dana. “Wasted: How America is Losing Up to 40 Percent of Its Food from Farm to Fork to Landfill.” NRDC Issue Paper IP: 12-06-B. August 2012.
[2] Buzby, Jean C., Wells, Hodan F. and Hyman, Jeffrey. “The Estimated Amount, Value, and Calories of Postharvest Food Losses at the Retail and Consumer Levels in the United States.” Economic Information Bulleting Number 121. Economic Research Service. February 2014.
[3] ReFED. Rethink Food Waste through Economics and Data. Retreived from www.refed.com. November 18, 2015.
[4] Food and Agriculture Organization. Food Wastage Footprint: Impacts on Natural Resources. Summary Report. 2013. Accessed at http://www.fao.org/docrep/018/i3347e/i3347e.pdf on November 18, 2015.
[5] U.S. Department of Agriculture News Release No. 0257.15. “USDA and EPA Join with Private Sector, Charitable Organizations to set Nation’s First Food Waste Reduction Goals.” Sep. 16, 2015. Accessed at http://www.usda.gov/wps/portal/usda/usdahome?contentid=2015/09/0257.xml
[6] https://sustainabledevelopment.un.org/sdg12
[7] http://www.calrecycle.ca.gov/recycle/commercial/organics/
[8] Heikkinen, Niina. “Food Security: Vt. Tries to lower emissions by keeping food waste out of dumps.” www.eenews.net. July 21, 2015.
[9] Goad, Meredith. “Chellie Pingree proposal would target food waste, ‘sell by’ dates.” The Portland Press Herald and Maine Sunday Telegram. October 20, 2015.
[10] Gundersen, Craig and Ziliak, James P. “Childhood Food Insecurity in the U.S.: Trends, Causes, and Policy Options. Research Report for the Future of Children. Fall 2014. Accessed at https://www.childrensal.org/workfiles/futureofchildren/GR_Presentation_Zilliak.pdf.
[11] Buzby, Jean C., and Hyman, Jeffrey. “Total and Per Capita Value of Food Loss in the United States.” Food Policy 37. 2012. P. 561-570.

IMPORTANT DISCLOSURE: The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.