Sustainability in the food sector: between aspiration and reality

According to the European Environment Agency (EEA), around 11 percent of CO₂ emissions and more than half of methane emissions in the EU come from agriculture. To achieve the EU's climate targets for 2030, the sector must significantly accelerate its transformation. Although emissions have been reduced by 25 percent since 1990, this is not enough.

Sustainable agriculture does much more than just contribute to climate protection: it strengthens food security, protects biodiversity, improves public health, and thereby increases social resilience. When increased efficiency and environmental friendliness go hand in hand, sustainability can also be economically viable.

A key problem for the food industry is that most emissions are not generated by the processing companies themselves, but by agricultural producers – far upstream in the supply chain. Companies are relatively good at measuring and reducing their direct emissions (Scope 1) – such as those from their own production facilities or vehicles – and indirect emissions from purchased energy (Scope 2). The greatest levers for reducing emissions, however, lie in the agricultural sectors. To achieve the food industry's climate targets, close cooperation along the entire value chain is therefore essential.

 Data gaps and conflicting goals slow progress

A further obstacle is that many countries lack reliable data on emissions. The EU has even excluded the agricultural sector from its taxonomy for sustainable investments, citing excessive uncertainty in data collection. There is also a conflict of objectives between sustainability and economic efficiency – both on the corporate and consumer side.

 Despite these challenges, more and more companies are setting sustainability targets. They aim not only for more efficient production, but also for more environmentally friendly production. Combining these two goals can result in a business model that is sustainable in the long term.

Biodiversity moves into the spotlight

Since the global biodiversity agreement of 2022, the protection of ecosystems and the loss of biodiversity have come into sharper focus – also for companies and investors. A key project is the protection of 30 percent of land and water areas by 2030. This goal is getting closer. Companies and investors alike are increasingly responding to this urgency, not least because nature conservation projects have visible and tangible effects.

Unlike CO₂ emissions, however, progress in protecting nature and biodiversity is more difficult to quantify. ING is currently developing its own assessment model to better understand and specifically manage the impact of its financing on nature. The existing customer support, which focuses on the transition to sustainable business practices, is being expanded to include nature-related criteria. The aim is to apply the same high standards in agriculture as in other sectors, such as mining. This includes considering aspects such as water usage and waste management in diaries or breweries.

In addition, banks expect their customers to have a viable transformation plan in hand to address environmental challenges, including, increasingly, nature conservation and biodiversity protection.

 Regenerative agriculture as a model for the future

Regenerative agriculture is still in its early stages. There is great potential here—provided that the entire supply chain can be integrated. A model with “nature credits,” which works similarly to CO₂ certificates, could make investments in sustainable practices more attractive.

Currently, most EU subsidies go to conventional agriculture. Alternative, more sustainable approaches have received little support so far. Moreover, there is a lack of cooperation along the value chain and a lack of uniform standards between countries.

The transformation of agriculture and thus the food industry is a task for society as a whole – with far-reaching consequences for the climate, the environment, and health. Through financing, expertise, and a strong network, banks support their customers in shaping a sustainable and resilient future.

Society is transitioning to a low-carbon economy. So are our clients, and so is ING. We finance a lot of sustainable activities, but we still finance more that’s not. See how we’re progressing on ing.com/climate.