Disclosure and Target Setting in the Agriculture Sector

Industry Overview - The Canadian agriculture sector is a significant contributor to the economy, generating $143.8 billion (7% of GDP) and employing 2.3 million people (1 in 9 jobs) in 2022 [129] - Canada is a top global exporter of agricultural commodities like wheat and canola, with agri-food exports reaching a record $82 billion in 2022 [129] - The sector is highly fragmented, with 96,702 sole proprietorships, 45,059 partnerships, and 43,233 family-owned corporations operating farms in 2021 [134] Emissions Profile - Agriculture accounted for 10% of Canada's total GHG emissions in 2021, emitting 69 Mt CO2e [137] - Emissions increased 35% from 1990 to 2021, driven by a doubling of crop production emissions [117] - CH4 from enteric fermentation (41%) and N2O from fertilizer use (33%) are the largest sources of agricultural emissions [118] - Beef cattle are the main contributor to enteric fermentation emissions (81%), followed by dairy cattle (15%) [161] Key Subsectors - The top 5 crops (canola, wheat, soybeans, corn, cannabis) account for 62% of total crop receipts [130] - The top 3 livestock categories (cattle, unprocessed milk, hogs) contribute 75% of total livestock receipts [133] - Beef production emitted 22 Mt CO2e in 2016, the largest share of agricultural emissions [167] Decarbonization Progress - Dairy emissions intensity decreased from 1.03 kg CO2e/liter in 2011 to 0.94 kg CO2e/liter in 2016 [108] - Beef emissions intensity fell from 12.6 kg CO2e/kg live weight in 2013 to 10.4 kg CO2e/kg live weight in 2021 [108] - Canadian canola, wheat, lentils and peas are less carbon-intensive than the same crops grown in France, Germany or the US [108] Target Setting - The SBTi FLAG methodology provides a framework for setting science-based emissions reduction targets in agriculture [25] - FLAG has two approaches: sectoral pathway (-3.03%/year reduction) and commodity pathway for 9 key agricultural products [28][29] - Rabobank and Nordea are among the financial institutions that have adopted SBTi FLAG for target setting [14] Challenges - Measuring emissions is complex due to diverse practices, regional variability, and lack of granular client data [279][280] - Smallholder farmers face barriers to adopting low-carbon practices due to slim profit margins and high upfront costs [124] - Balancing emissions reductions with increasing food production to meet growing global demand is a key challenge [125]