Good morning again, everybody. We're going to start the next session. We have 55 minutes, about an hour for the next session. As always, as a reminder, we will be live streaming this session as well on the Climate Week website. If you want to tweet or use social media about this session, then please use #ClimateWeekNYC. Coming up next, we have a session focused on fast-tracking climate impact through supply chain collaboration, a topic close to my heart. I should say, we had a session on this topic yesterday as well. In this session, hosted by AB InBev, we will look closer into supply chain collaboration and food and drinks, I guess. Without further ado, I'd like to welcome Aline Casagrande, the Climate Solutions Global Director from AB InBev, to the stage. Thank you very much.
Hi, everyone. Good afternoon. Thank you very much for having us here. I just want to welcome our panelists, and I'll give a quick introduction. Okay, so I'm very pleased to be here today with these amazing panelists that are leading the transformation on the scope three across the industries. So here with me, I have Irene Espínola Campos, representing Grupo Bimbo. I have Anna Stanley-Radière, representing WBCSD, Ramon Arratia from Ball Corporation, and Andre Fourie from AB InBev. Today, we are talking about fast-tracking climate action through supply chain collaboration. And actually, although all these companies here, represented here, have been decarbonizing their own emissions and their own operations, we also know that scope three remains a big challenge.
Actually, CDP estimates that the scope three, scope three is an average of 75% of a company's emission. My first question here would be: How are you working with your supply chain to tackle scope three emissions, and what are some of the biggest challenges and opportunities you have encountered? Maybe can we start with Ball, Ramon? I'm just being mindful that I've, I've read in your transition plan that over 92% of your emissions come from scope three.
Yeah, over 90, yeah, it's like 92% of our emissions are Scope 3. 74% are just aluminum. The lucky part is that there is like, you know, there is a limited suppliers for us to aluminum, so we don't need to engage with 1,000 of suppliers. We need to engage with the top two, with the top five. And so, what we've been able to do is to take our transition pathway. We're now doing custom pathways to customers, like, like you, and, and with pick, you know, one region or other region. And then what we're doing is working with our supply chain team, with our procurement team, and doing those pathways with customers, with suppliers. So we have workshops where we go in depth in the supply chain, and we look at the levers.
For us, the levers is 50%, for example, is on circularity. And then the next percent is in decarbonizing heat. The next percent is in primary aluminum. We work, what is... what would be, the possibilities, the technologies, the policy levers? We map at very detailed level, on sub-supplier and the sub-sub-supplier, with them, and then we look at what do we need. Sometimes you need government support, sometimes you need policy, sometimes you need to accelerate a technology. That's a little bit how we are looking at that, at collaboration. Sometimes, you know, it's tough because you need to make tough choices. Like, one of the things we've done is we need to onshore. We need to rely more on circularity.
Therefore, we need to create remelting and rolling mills in the markets where we operate, so we don't import cans with higher carbon from other places. And this is, you know, we are proud that with our demand signals and our long-term offtake agreements with some of the suppliers, we've been able to generate two investments that are key in the United States, 600 KT each in an industry who didn't invest in the, in 40 years.
It's really impressive. And I need to say, when I saw your transition plan, I was very impressed with how comprehensive and how transparent it is. So it's very clear the big bet is through clarity, and yeah, I think it's a good sign for the market as well. Irene, maybe I'll go next to you. I saw on your annual report that actually you've engaged last year with more than 200 suppliers through CDP supply chain. Is that a way to tackle Scope 3?
I'd say yes and no. So we've been working with our suppliers through CDP for sure. However, there's an important part of our suppliers that are not reporting today through CDP because of the complexity of it. And mainly, we're a food and beverage company. We're the largest bakery in the world, so part or most of our key ingredients come from agriculture. So reporting agriculture through CDP, and even CDP has said this, is it's very difficult, it's almost impossible. So we've been working with suppliers in direct-
... categories, or, in other categories that can report their emissions through CDP. However, the ingredients part, that includes raw materials, commodities, wheat, yeast, oils, cocoa, potatoes, maize, et cetera. We've been working with them directly in two tracks. So the first track is everything regarding regenerative agriculture and sharing all the best practices to actually start mitigating our emissions through improving the health of the soil. And the second track, through an initiative that we call a low-carbon supply. In this initiative, we work with our suppliers to actually find ways to collaborate on this path.
So, we either put them in a training program, where we help them understand what a carbon footprint is, or we do a roadmap together, a decarbonization roadmap together, where they can find out best practices that we've already done, like renewable energy, like storage, electric vehicles, and other things that we have proven to be beneficial for the company, so that they can do that, too. Or just working together with them on sharing emission factors and sharing information and sharing data that they might not have, we might not have, and that can be a win-win situation for both sides. So this is like the overview of our program, and it's been very successful.
Really nice, this more clusterized way of approaching suppliers, and tackling Scope 3. Thank you for sharing. Andre, how is AB InBev tackling Scope 3? What are the challenge there?
Thanks, Aline. So as a global brewing company with a worldwide supply chain and more than 90% of our emissions in Scope 3, we know that we can't achieve our emission reduction on our own. We depend on a number of stakeholders, and particularly suppliers, to reduce across the value chain in agriculture, in packaging, refrigeration, et cetera. So a critical wide set of focus for us. The first obvious reason is to try and get better data than we have and to collaborate on data. That's really important, and we may touch a bit more on that. The second thing is to try help drive reduction.
It's the only way we're gonna meet our own net zero target is by our suppliers reducing their Scope 1 and 2 emissions, which is often our direct Scope 3 emissions. Then finally, also on innovation. I think we shouldn't just do this as compliance, real exciting innovation opportunities to unlock value. One example is where we worked quite recently with Ball and others in Canada with Rio Tinto, Novelis, in terms of testing whether we can produce the lowest emission can for our Corona in Canada. And really interesting innovations, the inner cathode technology using it in the primary aluminum, using recycled ingot, and we've demonstrated that it's possible to reduce the emissions by 30%.
So clearly, that's just an inspiration, and that's the sort of example that we need to scale. But our primary engagement with suppliers is through our Eclipse platform. So it's a dedicated platform for AB InBev to work with all our suppliers, in particular our, our major suppliers. A range of engagement in terms of capacity building and training, number of training modules available, but also tools in terms of how do you determine your carbon footprint, how do you develop a net zero plan, et cetera. It is differentiated, so beginners on the journey get different support, and clearly more sophisticated leaders like Ball with a very different level of engagement closer to the innovation, et cetera.
We also work with farmers, which is a key supplier for us in terms of agriculture, finding ways through our Barley program in terms of both on-field emissions that we capture, but also using satellite technology, et cetera, and combining that to get better data, but also provide better advice for the farmers in terms of how do they enhance yield and at the same time reduce the GHG emissions.
Thank you for that. Now, Anna, how is WBCSD supporting companies on achieving their Scope Three or reducing their Scope Three? Maybe if you could share with us if, what are leading companies doing on that?
Yeah. It's great to hear sort of some of the very specific examples being shared here on the panel. For those of you who don't know what WBCSD does, we bring together leading companies across the world to collaborate and really transform the systems across nature, equity, and also climate in particular. It's great to see the progress being made in supply chains, and I think the point you were making, Andre, around the data is really, really important. Where we see leading companies go is to focus, not just on corporate Scope 3, but actually focus on getting primary data from the value chain on product levels. I appreciate the Scope 3 journey is a...
It's a step-by-step journey, and, you know, you sort of need to get started, and you need to get better, you need to get better data, you need to work with more suppliers, and you then need to also get more granular with the data. So-
Don't get me wrong, you know, I think it's great if you're looking at a Scope 3, that's the first step. I think the really, like, the companies that are really leading on the ground, they're the ones that are really trying to understand the product carbon footprint of their most heavy-hitting products. Let me maybe share an example of why that is so important. If you've got a Scope 3 program, and you're trying to understand the impact that you're having on the investments you're making in the value chain, who are the suppliers, or where are the areas that you have to invest, particularly heavily, innovate around product ingredients, or just, you know, choose sort of which supplier to go to. If you're using secondary data from industry averages, you actually don't know whether it's you that's having the effect.
Somebody else might be having the effect, and what you're doing might be completely, sort of useless in a way, not useless, but, you know, sort of... You see what I mean. Or, it's also really, really useful if you're able to actually report now with the ISSB and other standards coming out, you're gonna be required much more to disclose and report on your emissions. And while there's not a requirement around primary data in these standards, there's an encouragement to use primary data because you're able to actually show where you are at. So we have companies coming to us and saying, you know, the work that we're doing at WBCSD, they've implemented some of it.
It's a project called the Partnership for Carbon Transparency, or short, PACT, and they've implemented it in their value chains, and they are actually decarbonizing the wrong ingredient. So it's really, really impactful, and that's where leading companies are really focusing on. What we're trying to do to support them in that journey is to standardize how the data is calculated, but most importantly, also to standardize how the data is shared across value chains using technology, allowing companies to choose from all the brilliant tools that are being developed, just to sort of share the product comfort print and really making sure that we make it as easy as possible for suppliers. Coming back to what you guys were saying, you know, how do you actually capability build in the supply chain?
All those sort of topics is where we engage.
Well, thank you so much for sharing that. Bringing back the collaboration topic, some people say that supplier collaboration could be a way to put the responsibility on your suppliers other than do something yourself. What is your view on that, Irene? Maybe we could start with you.
I'd say it's a paradigm, and we need to start breaking paradigms if we're gonna achieve the real goal. I mean, I'm collaborating with my suppliers when we're talking about emissions, not passing the responsibility to them, and I'm also a supplier. I have customers, and when they ask me or when they start collaborating with us, we've never felt that they're passing the responsibility to us. On the contrary, we've felt that finally there's someone pushing for the same goals that we have. It's great, you know? The fact that a customer comes and, "Hey, join my Gigaton program," we all know who that is, and it's, it's wow, great, yes.
I mean, I wanna do so not only because that means that the effort is gonna be exponential, but because it's the right thing to do, you know? Or when other company, when other customer approaches and kind of share the guidelines that they're using for the product, and they want us to use the same guidelines, I mean, it's really great to start seeing things moving, and it's really great to start seeing that we can actually reduce our carbon footprints by creating this chain of collaboration where we all share best practices, where we all share what we are all doing on the same topic. So I don't think at the end, it's about responsibility. It's about action. It's about doing the right thing.
It's about working all together towards the same goal, that at the end, it's either net zero carbon emissions, either whatever you wanna call it, but it's actually keeping the temperature below 1.5, right?
Maybe I can just build on that. I really like, you know, sort of the, we need to flip it around. It's actually the responsibility to support the value chain rather than shirking your responsibility by asking your value chain to take action.
Yeah, I really relate to that one because, for example, we're seeing things such as we need to create demand signals for certain technologies to flourish. So that's why we joined the First Movers Coalition, because in some of the materials sectors and some of the new sort of fuels, you're gonna need, first of all, government support, but then a pool of aggregated demand. So what we are doing is to say, "We're gonna buy 10% of that low-carbon aluminum by 2030," and that will give the signals for producers to invest in that technology. That is one, and that's aggregated demand. You're doing great with Coke on the accelerator by aggregating as well. So, that's one view.
The other one is sometimes looking deeply at your given supplier and say, "What are the bottlenecks? Why, why they cannot make an investment?" And then sometimes or, "Do they have the technology? Or do they have the government support?" And what you can do. Sometimes it's a long-term agreement, sometimes unlocking the technology for them-
... sometimes is, you know, working with your customers that you guys have much more influence with governments to unlock a opportunity in a geography for that supplier. So it's really trying to understand what are those bottlenecks, supplier by supplier.
Thank you for that. Maybe, Andre, just to tweak a little bit the question, I still want to hear from you if we are putting responsibility on our suppliers, but could you comment specifically on agriculture? That is, one of, for ABI, is more than 15, almost 15% of its total emissions.
Yeah, I think it's a fair provocation and something we all need to guard against and be careful about. But for AB InBev, our first focus is on deep decarbonization of our operations, so that remains our first focus in climate. We've reduced Scope 1 and Scope 2 emissions by 39% since 2017, so we're very serious in terms of investing first and foremost in our own operations. So that remains our priority. But there's no way that we can engage with Scope 3 emissions without working with our suppliers, and in this case, where you're steering towards in terms of working with farmers. I know that many farming change programs over the years have always ended up with the burden on the farmers.
Everybody wants change, but the burden is on the farmers and the cost is on the farmers. We've been very careful to design our programs differently. In barley, which is a key commodity for us, I can think of three types of interventions. The first is the most obvious in terms of reducing fertilizer. By helping farmers understand better the agronomic practices, how they can reduce fertilizer use and still enhance yield, is a key focus for us in terms of climate reduction. The second one is in regenerative agriculture. I'll take an example from South Africa, where with our barley model farm, we work with the local farmers to demonstrate the impact of minimum tillage, where the farmers can demonstrate...
We can demonstrate, and they can see the value in terms of better soil structure, which means less energy used on the farm. They can see the benefits in terms of enhanced yield, and this is so critical. The only way we're gonna stop deforestation is by having better yields on the existing lands that we have, but also better soil moisture, which is part of our climate adaptation strategy. So that's a really important. And the third one on barley is also in terms of breeding better seed varieties that are adapted to local parts of the planet, but also in terms of climate change and being more resilient. Or maybe just give one example from rice to show that it's not just a one-trick pony.
We work extensively with the rice farmers in Arkansas. A really important program by introducing alternative wetting and drying rather than the traditional flooding of the rice fields, and with dedicated agronomic support, but also very strongly backed by research, so that it can be applied on different farms, different soil conditions, et cetera. Helping those farmers to improve their yield, but at the same time, on average, we're reducing 20% of water use and 40% of methane emission. So by working directly and supporting the farmers, we help them be more successful, but also decarbonize our value chain.
Thank you. What would be your suggestion to increase collaboration in general?
So I think one of the key missing elements is better private-private collaboration. I think in terms of particularly working with farmers, it's not helpful for them to have AB InBev arrive one day with a toolkit and say, "This is how you grow better barley." The next day, one of our other companies in the room arrives with a different set of guidelines. The next week, someone else is there. So I think private-private collaboration is probably key in terms of working with farmers, that we have aligned approaches and standards.
Yes, we can still have specific issues, but for instance, if the farmer is gonna plant potatoes the first part of the season and barley on the same land the second part of the season, there could be ways that we can align our standards and our approaches for them.
Irene, do you want to comment on how to increase collaboration?
I believe engagement, it's part of it. So, we have a similar program in regenerative agriculture with our farmers, and we've found out that actually farmers want to try these new practices, which are not really new. I mean, it's actually going to the past and saving those practices that were once there. So, people wanna do that, farmers wanna do that, suppliers wanna do that, but they need to know what they're doing that for. So the engagement that we can show our suppliers and that we can really commit to, it's a really important part of this collaboration strategy to start working towards the same goals. And also, the sharing part. We've been-...
Thinking that we're competing towards the same customer, that we're competing towards being the first, towards being the best. I think we need to stop competing and actually realize that if we don't work together, we're not gonna move the needle, you know? I can do the practices of regenerative agriculture, but at the end, there's so little I can do if I don't start working with other companies like ourselves that are the same size and that can invest the same amount of money that I'm investing, just together.
Thank you. Anna, how would you recommend to keep increasing the supplier collaboration?
I really liked what you were saying there. Yesterday, I think in the main, the main opening panel in the morning, Jim from PepsiCo was sort of giving, saying a very same, similar notion. You know, you sort of have to work together. You can still compete, but you're not gonna solve these challenges if you don't work together on them, and that's, you know, the sort of standardization aspect is very key. Working with different types of companies, not just in your own value chain, but also in different industries and learning from each other. I really think it's important to share what you're doing, to talk about it, and sort of to also listen to others and see how you can sort of jointly find a way forward. I think that's one sort of side of it.
I think the other side, and that's where organizations like WBCSD have a big responsibility, it's around bringing the whole ecosystem together. So bringing together the SBTi, Greenhouse Gas Protocol, CDP, the regulators, the standard setters, and making sure that what is being sort of developed in terms of standards, in terms of support systems to help corporates decarbonize, that that's aligned. At the moment, the system is, quite frankly, it's a mess. It's difficult to navigate. I think every one of you will agree that it's really, really complex to know which standards to use to set your targets. There's so much room for interpretation in some of the standards to calculate your carbon emissions, and, you know, let's not even talk about sort of, you mentioned adaptation, some of the newer topics. It's really, really difficult for corporates to navigate this journey.
So while there's a big pressure to increase and accelerate progress, there's a big pressure to do more. There's criticism of what you're doing, you know. There's sort of a lot of fear of greenwashing, but at the same time, also a lot of, you know, when you go out there, you get attacked for what you're doing. And so I think as a result of that, you know, we really need to focus on improving the system, and the only way we can do that is if we work together, and if that we sort of are very open about what we're doing. So like I said, go out there, ask others what they're doing in your industry, talk to people in other industries, and join these collaboration efforts, and make your voice heard on what works, what doesn't work.
Don't be afraid to share what doesn't work, because that's the only way we're actually gonna move this forward.
I completely agree. Maybe, Ramon, let me tweak a little bit the question: how to deal with being differentiated in the industry versus collaborating in the industry? Like, how do you still differentiate yourself among others?
You need to do both. And I think you need to look at what are your competitive advantages versus competitors. Then you need to look at what are the collective industry advantages versus other substrates. So, what we are seeing is that, first of all, we need to invest in accessing the information across the supply chain, have always better information than any of our suppliers, customers, and peers and competitors. And then once you have that visibility of information and you see what are opportunities for the industry to... It can be to take more market share, then you can also share with customers certain information.
You can share with suppliers why you think those suppliers are poised to grow, either because their pie is getting bigger or either because they have a competitive advantage, and this is the type of suppliers you want to do more business with. But what we have seen in the last five years is that developing that muscle in the organization about having much more intelligence and information around mapping carbon and oil is critical. And that's why our climate transition plan has not been done by any consultants. We've developed it ourselves. Yes, it has taken longer, but we have mapped all through the suppliers and sub-suppliers, and we have now that information that we can choose to use with suppliers and informing them, or with customers, or with governments.
Thank you. Maybe coming back to this data discussion, I think what we cannot measure, we cannot improve, right? And we also know, as Anna was mentioning before, there are a lot of increasing regulatory requirements on data transparency as well. Maybe the question is, is data transparency a positive thing or, and how it can shift behavior up and down the value chain? Anna, do you wanna go first?
Well, I think I'm definitely a fan of data transparency 'cause I think it's... I mean, obviously, it accelerates progress, but it also gives companies the information to make carbon-informed decisions. And there's gonna be much more requirements, as you mentioned, around disclosing data, around sort of being. A lot of companies, I mean, we're in the U.S. here, you know, in Asia as well, a lot of companies are coming to us and saying: "We're really worried about the Carbon Border Adjustment Mechanism and what it means for us and what we are having to sort of showcase in terms of the data, and we don't have the data, and how do we get that?" So to me, transparency is a really, really good thing, and I think it's not just on carbon, I think it's on everything.
I mean, companies don't make decisions off the back of carbon. They make integrated decisions off the back of water use, social factors, and, and other things. So the more data transparency we can encourage, the better. And I think in the long term, like I said earlier, the leading companies, they're really diving deep.... So it's going to be a competitive advantage to know where you're going. So to me, it's, it's yeah, I mean, in a way, I'm, you know, it's my job, but, but I think it's incredibly important to realize the power that that data gives you in terms of actually meeting your targets, knowing where to invest, those sort of things. Andrew, do you wanna co-- oh, Ramon, I don't know.
Ramon first.
Transparency is a trend, whether you like it or not. Now, you want to take advantage of it, or you don't want to take advantage of it? Yes, it's gonna be maybe expensive to, you have to report on more things, but in Europe, you, for example, you're gonna get from the EU CSRD from 20,000 suppliers to 50,000 suppliers. They would be private companies obliged to report. Now, if those companies they are obliged to report, they're gonna have to be obliged to reduce, because you're gonna be exposed. Is that a business opportunity or not? So what we have seen is that once you go into the, into the journey, I understand the transformative power of that transparency. Yes, it's gonna be a bit more expensive, a bit, you know, a bit more hassle.
We would love also some better standards and more aligned standards, et cetera, to make our lives easier, but it is a trend, and there would be winners and losers. And we think that the more information you have, the better competitive advantage.
Can I maybe just briefly add one point on that? Because I think in terms of the sort of price and, or the cost of more data transparency, we are also seeing a lot more technology that enables you to do the job much faster, or technology which enables you to upskill your supply chain to actually help them get to that data. So whilst it is an investment, there's also... I read a figure the other week, and I can't remember exactly what the exact number was, but basically the startup world, where companies are developing a lot of tools to help exchange data, calculate carbon footprints, it's one of the fastest growing investment spaces at the moment.
So there's a lot of support to make that, sort of to keep those costs down as well, coming down the pipeline. So I really want to sort of highlight that because I think it's, people are very scared in investment, you know, sort of it's, it's a bad thing, but there's also ways to reduce that investment.
Yeah, there's no doubt that data transparency is coming in. We have to embrace it. But there are challenges to it as well. I can see for some suppliers, they just don't have the data, so it's not that they don't want to give it to you, they just don't have it. So there's not a history of engaging with carbon footprint in detail, so we have to work with them and understand it's gonna take time. The others who have the data, but very sensitive to share it. And there are some ways which you can understand, because for some companies, it gives you a very interesting view on their cost structure, if you can read through their carbon data.
So you have to be careful in terms of how you manage this, and but there are ways of making the data transparent without exposing yourself. So I think that, that's important, firstly, in terms of the data. So in terms of approach, what we know doesn't work is just knocking on the door and say, "Give me your data." It's just the response rate is extremely low. You have to find ways of firstly showing why, what is the rationale for you and for your suppliers and for others, what is the benefit over time, and how do we turn that data into decision-making information? So it's not just how do I report on it, but how is it possible to find opportunities for collaboration, for shared value? I shared some examples earlier. It's gonna be critical.
Then finally, I'm also really excited about some of the AI solutions that are out there, but also just having done some quick testing in terms of what is the findings from these AI models and what we know, 'cause in AB InBev, we have quite a robust carbon model. I can see huge discrepancies. So I think we're gonna have to find ways in terms of making sure that we have collaborative answers. And it doesn't help that we invest in an enormous in-depth carbon model, and Ball says, "Oh, we just estimate by using some AI model." Let's find ways of collaborate, and that we use the same data sets, same assumptions.
Is it that important that we actually understand it to the last nth degree in terms of Scope 3, which is so far removed, or can we find ways that make business sense, make carbon sense, and yet keep us accountable?
Building on your point before, around, you know, not showing up and asking suppliers for more data, is the question of what's in it for the supplier? And, I think, you know, you, you need to, to give a sense and a case for the supplier to give you that data. And we are seeing, for example, on the carrot side, for example, we had discussions with the supplier where we say: You, you have a competitive advantage. Do you realize that we could do more business with you because you have that competitive advantages if you did X, Y, and Z, and you provided the data? Yes, you might be reluctant, but actually, this is what we can do with you.
On the stick side, we've been going to some suppliers and say: Do you realize about CBAM and if other few regulations, what are you gonna be selling in Europe and in other countries with your current profile, carbon profile? Have you, you know, done the math? Because we think you have big risks. So we, we are having those conversations, and it's sometimes just information is not flowing to some of those suppliers.
Harin, do you want to comment?
Yeah. I mean, I agree. The thing today with transparency, I believe, is the dream. I mean, to eventually get to a point where we can all talk about carbon like we talk about money today. "Oh, what are the sales of any company?" "Ah, just look that in Google. Ah, there you go, your sales." "Okay, what's the carbon footprint of the company?" You're not gonna find it anywhere. It's really the dream to eventually get to that point where you can say, "Oh, this is my sales, this is my profit, this is my carbon footprint, this is my whatever you want." I mean, it's just another number for the company that should be public, that should be transparent. The truth is, and perhaps I'm gonna be the negative person in the group, it's not happening.
And if we get lucky, from 100 suppliers, we're gonna be able to find five, 10, 10 sustainability reports in the web, but that's it. The other 90, you're gonna have to deal with your assumptions to actually calculate the carbon footprint to get to your Scope 3. So again, industry.
Maybe, to sort of be the positive, counterpoint then. We've actually just done an implementation program with eight leading corporates, Unilever, P&G, and others, sort of chemical industry companies and, and, also some Japanese companies. We've had these eight companies exchanging product carbon footprints with 900 of their suppliers, real data flowing through the value chain. We're right at the beginning of that, that sort of data flow, but it's been about 500 data points that have flown at the moment, and up into Q4, that's going to sort of exponentially grow because that's when a lot of the programs finish. It is happening. It's hard work, right?
But I think it's really important to showcase that there is a real progress being made, and, you know, it's, it is possible, and I think that's the... Some of the narrative around Scope 3 is always very critical. There's a lot of negativity. There's even people who actually criticize the concept of Scope 3, like you were sort of alluding to earlier. And I really think it's important to showcase what's actually being done and what it actually means in practice.
Fully agree with that, and I think maybe it's different industries have a different degree of difficulty on that. Like, oh, I understand maybe for farmers and dealing with that is really difficult. For industries, we know everything, and, you know, we. If you look at all our full supply chain, we know pretty much every node, how much energy they're using.
Yeah.
It's all mapped, and, you know, sometimes we get the supplier questionnaire from certain suppliers in certain regions, and we say, "We don't believe in that data because we know your energy relies on this and that," and then we have much more conversations. But you need to go out, buy the data, and then challenge, you know, the supplier questionnaires, which in some cases, either they are wrong or, you know, estimations or inflated.
Olivi, can I just comment firstly on this, analogy of financial accounts and, carbon accounting? So I think it's worthwhile remembering that it took them more than 100 years to develop financial accounting, and it's gone through a number of iterations, and when some land barons cooked their books, then we need new accounting formulations, and that's how it's developed over time, and even till quite recently, we're struggling with how do you account for derivatives, et cetera. So it's not like an exact science, but we don't have 100 years. We're gonna have to accelerate this, but we are also gonna have to understand it's a learning journey. There are some parts where we can go faster, I agree with Ramon. But for us, we know with some of the farmer data, some of the ref...
The cooling and refrigeration data, it's not gonna move at the same speed. But let's not keep those as obstacles. Let's find ways where you can estimate it in a very informed way, in an agreed methodology. So there's no need for us to wait 100 years. I think we can set ourselves a decade, and we can get this working for all of us.
Amazing. Maybe. Can I ask something very directly to Paul and Ramon, as you are AB InBev suppliers, maybe it's a good position for you to be. The question is: Could we have a more organized way of collecting data from our suppliers, not only as ABI, but as a beverage industry, for example, or even industry in general? Like, how do we approach suppliers in a more organized way to collect the data that we are asking? And I know competitors and peers are asking exactly the same data over and over again.
I think we could. I mean, if the CDP is out, I think why cannot we do much more granular at industry level? And sometimes, I mean, you guys are big companies. You have their way of doing things. We also, you know, we're big companies. We have our ways of doing things, and, maybe we'll, you know, it needs to be, that discussion created and say, "Okay, what is the minimum data that everybody could put? We standardize that." We are already standardizing calculations, even how to calculate recycled content. We didn't have that. I mean, we're doing that right now, where we know where the carbon profiles of scrap and how you account... I mean, there are things in our industry that are happening right now.
The next level of how we could put the data and standardize the flow of the data, I think I would love that, and getting all the industry together.
Yeah, I think we need to have a conversation after this panel, because that's exactly what we're trying to do in the Partnership for Carbon Transparency.
That's wonderful. Thank you so much. Maybe a very last question: what excites you the most about the future? Maybe, Irene, do you want to go first?
Sure. I mean, the easy answer, saving the planet, for sure. Because at the end, that's what we're doing, right? No, but, really, I'm looking forward to that day where we can all just share the right data because capabilities have been built, because people have been trained, because companies have been developing and investing, and have the systems, and have the right technology, and have the right mindset to actually collaborate and share and be responsible and take action, and have the whole package to start moving the needle. I mean, CO2 emissions are being mitigated, but we do need to do things quicker. So looking forward to that.
Makes sense. Anna?
I think if we sort of look back three years ago, there were barely any panels on Scope 3, right? Like, nobody was talking about it. The sort of in three years, Scope 3 has become the topic. It's everywhere. This week is crazy busy, and I'm really, really optimistic about the progress that I see business making in this space and sort of how far we've come in the past three years. I shared a little bit of the sort of stats around what the data sharing is like on the very granular primary product level at the moment. To see that, and I remember having conversations with companies two or three years ago, and they said, "It's so hard, it's so impossible. We're never gonna manage to get our suppliers to share that data," and here we are.
Looking forward, I really think it's gonna be an exponential explosion of this, and I'm really excited about that.
Maybe we'll get into the 10-year path that Andre was mentioning before. Ramon, what excites you the most?
The exciting thing for me is that there are gonna be winners and losers, and the acceleration is gonna create that spread faster than ever. If you sort of are in the right value chain, in the right sector, do the right moves, you can be a winner.
Andre, well?
I'm really excited about all the new technologies and potential solutions out there. They're probably not yet at the maturity level that we want them, but I'm really excited about it. 'Cause my sense has been for the last 10 years, that there's been a lot of progress, but it's just not at the pace that we can scale this. And all of a sudden, we can see potential solutions. So for instance, in agriculture, we're so hard, particularly with smaller farmers, to try and get farm level data. Now, you have remote sensing technology, which can really overnight, take you from almost no information to very detailed, well-mapped data and information.
I think some of the new AI applications that they need some maturity, but I'm really excited if we get it right, that this can lead progress and provide both data and decision-making information into the future.
That's wonderful. Well, I need to say that I've never seen so much coordinated action among all the supply chain, and I do believe that we will get there step by step, as Anna mentioned at the very beginning, but I'm very confident we will get there, and hopefully as fast as we need to do it. Maybe we have a couple of minutes. Does anyone have any question?
Thank you so much for talking about the collaboration with the supply chain. In the agricultural sector, how do you think about bringing in some of the larger distributors, ADM, Cargill, those that are sort of in the middle of the system?
Um-
Kind of thinking about the fact that you have, because you have these multi-steps of supply chain, how do you really reward the farmers for taking the best practices when ultimately it still gets sold as a commodity?
Well, in our case, we actually bring them into the equation, and we can't do the work alone, all the way to the farmers. We do that work through the, through Cargill, through ADM, through Ardent, through, the suppliers who work directly with the farmers. And we. There's actual collaboration between, these companies, so our suppliers and Grupo Bimbo, and we do together the program to bring it to the farmer. Because at the end, like we were saying, I mean, the farmer, it's very difficult for them, to invest or to make sure that they are gonna have a return on the investment if they don't see engagement from the actual companies, right? So, for us, it's an all-inclusive package, where we all need to be working directly with the farmers.
So we work with Cargill, ADM, Ardent, then we go to the farmer, we present the practices, and that's how we get the data from the farmer. That's how we start monitoring, measuring all the KPIs. We create this framework, we share that framework, and that's the way we've been doing that. So it's again collaboration. We're not doing that alone. They are part of the equation.
Do you have direct sourcing from farmers?
Not in the U.S., just in other geographies. So in other geographies where we have direct sourcing from the farmers, we do work directly with them, but because there's no third party, actually, doing the practices, since we're at one with that direct relationship. So I believe that those are, like, two tracks that we have, one's through the Cargill, the ADMs, the other one is directly to the farmer.
Lidia, I can add, we have a similar approach in Europe. We did a pilot with barley farmers in terms of how do we introduce regenerative ag with them. And so we needed 4 parties, it's ourselves, the farmers, but also the farmers' co-op, which is in essence the buyer, but also the ultimate player for us, our malting suppliers. So for us, it was essential to put all 4 parties together with technical support in terms of getting to the answer and mapping out pathways forward.
Maybe one more.
Thank you. Greg Demers with ClimatePartner. Building on the Regenerative Agriculture topic, I was curious about your thoughts on plans to incorporate removals into the greenhouse gas accounting, where that stands from a priority perspective?
The pink elephant in the room. I mean, I think it's part of the program, right? At the end, we're doing these practices, no-till cover crops, no fertilizer, to actually keep the carbon in the soil, but also, accounting for those carbon removal. So in our case, we're committed to net zeros through a science-based target, and, we're working with science-based target to actually define the guidelines on how to account for them. I mean, once you start measuring, and I believe that's where the challenge is gonna be, the measurement of the actual CO2 being removed, from the environment. But once we start doing that, I believe we're gonna be able to see the final guidelines that we're gonna need to follow.
I don't believe we have them yet as clear as they should be, but they will come at the same pace that we're moving, which in this case, I believe is pretty fast. But there are opportunities yet.
Thank you. Do you want to call?
No,
Okay. Yes, no. Thank you so much. Thank you so much for the panelists, and thank you so much for the questions as well. That's it.