From Waste to Resource: Circularity In Food Systems

By Madeline Blankenship – Sustainability Reports Research Analyst Intern – G&A Institute

Do you ever come home from grocery shopping only to discard 1/3 of your purchases? Absurd as it sounds, this is equivalent to the waste happening in the American food system.

The U.S. Environmental Protection Agency (EPA) estimates that 35% of the U.S. food supply is wasted annually— between 492 and 1,032 pounds of food per person.

Waste in the food system creates multiple problems. It represents not only a lost opportunity to feed food-insecure people but also a substantial contribution to greenhouse gas (GHG) emissions – an estimated 8 -10% of total global emissions, according to the United Nations Environment Programme (UNEP), as well as 58% of all landfill methane emissions, according to the EPA.

Circular systems reduce food waste

One approach for combatting food waste is found in the concept of a circular economy. Economists developed this concept as a counterpoint to our prevailing economic structure, which they describe as a linear process of “take-make-waste.” Under the linear system, resources are extracted (“take”), used to produce goods (“make”), and then discarded after use (“waste”). Disposability is the norm, without consideration for how much useful life may be left in an item.

By contrast, a circular economy is based on three design-driven principles:

• Eliminating waste and pollution
• Circulating products and materials at their highest value
• Regenerating nature

In a circular process, technical or synthetic materials are separated from biological materials (such as food or other nature-made products) to facilitate the repair, reuse, or regeneration of materials.

The circular economy approach reflects a systems-thinking approach, wherein problems are viewed in the context of the system in which they are embedded, rather than as independent issues to be solved in isolation. In this case, waste is designed out of food production by considering alternative sources (inputs to the start of a product’s lifecycle) and uses for materials (outputs from production — and what remains at the end of a product’s lifecycle), such as by using food waste as feedstock for another cycle. (Source: Ellen MacArthur Foundation)

For food manufacturers, waste can arise in agricultural production, processing, and packaging of products before they reach the consumer. With redesigned methods and inputs, producers can avoid this waste and use leftover materials in another product lifecycle.

Utilizing regenerative agricultural practices, more efficient processing methods, byproducts of production, and certified compostable packaging are possible solutions to avoid waste throughout food products’ lifecycles.

To align consumer behavior with the circular economy principles and prevent post-consumer waste, food companies may engage in consumer education campaigns that encourage consumers to purchase, use, and dispose of excess food and its packaging more mindfully.

Reporting promotes accountability among food companies 

When companies report on waste in their food production systems and efforts to reduce it, they increase transparency. This can strengthen their accountability to consumers and foster better engagement of other stakeholders, while inspiring collaboration and innovation. Existing and emerging reporting frameworks and standards can guide food companies’ reporting on this topic:

• The 2020 topic standard on waste released by the Global Reporting Initiative (GRI) was the “first globally applicable reporting standard for companies to provide a complete picture of waste impacts along their value ” (GRI) The standard includes a focus on circularity measures. Specifically, disclosures 306-1: Waste generation and significant waste-related impacts and 306-2: Management of significant waste-related impacts provide guidance around circularity measure reporting, such as input material choices and quantities, product design, value chain collaborations, and business model innovations. GRI standards are designed for multi-stakeholder use and audiences, meaning that private and public sector actors alike can use the waste standard.
• Companies may also use the GRI topic standard on emissions (GRI 305) to report on their waste-related emissions. Standard 305-3: Other indirect/Scope 3 GHG emissions includes guidance on waste-related emissions to help reporters identify opportunities for improvement throughout their value chain, supporting circularity efforts.
• The recommendations of the Task Force on Nature-related Disclosures (TNFD), published in September 2023, include additional global disclosure metrics on circular economy principles related to pollution removal and waste avoidance, such as opportunities for resource efficiency (A17.0) and nature-related dependency mitigation through circular material usage (A23.4).
• The industry-specific Sustainability Accounting Standards Board (SASB) Standards include disclosure topics based on material issues, which may vary between industries. In the food and beverage sector, disclosures related to circular economy and waste are incorporated throughout many industry standards. SASB standards are designed to be used by private sector companies and their investor audiences. Recommended material topic disclosures vary from industry to industry, though companies may elect to report on the topics they deem most material to their business.
• Many European and international companies doing business in Europe will soon be required to comply with new reporting standards, the European Sustainability Reporting Standards (ESRS). The standards require companies to report on various sustainability- related impacts, risks, and opportunities under new standards of double materiality defined in ESRS legislation. ESRS E5: Resource Use and Circular Economy, one of five environmental standards, sets out disclosure requirements related to resource inflows, outflows, and waste in line with circular economy principles. ESRS 5 and other topical standards are subject to a double materiality assessment, meaning that companies need to only report on the issues if they are relevant or material to the business.

To make reports more useful to a variety of stakeholder audiences, companies often use a combination of reporting standards or frameworks in their sustainability reporting. Additionally, companies may supplement their reporting using tools to assess their operations’ circular economy performance, such as the following:

• Circulytics, developed by the global thought leader on the circular economy, the Ellen MacArthur Foundation. The tool strongly aligns with GRI 306 and ESRS 5.
• Circular Transition Indicators (CTI) Tool, developed by the World Business Council for Sustainable Business, to support companies implementing the CTI methodology.

In conclusion, our current level of waste from food production and consumption creates serious environmental and social problems in addition to contributing significantly to global GHG emissions.

The systems-wide scope of circular economy principles has the potential to impact the environment, economy, and human well-being by leveraging design to eliminate waste and leverage existing resources for productive purposes.

Food companies and other reporters may use sustainability frameworks and standards like GRI, TNFD, SASB, and ESRS as well as various performance assessment tools, to effectively communicate their efforts to stakeholders.

Embracing circular economy principles and following consistent reporting practices offers a promising pathway for food companies to significantly reduce their waste impacts while meeting stakeholder expectations for transparency and accountability.

ABOUT THE AUTHOR
By Madeline Blankenship – Sustainability Reports Research Analyst Intern – G&A Institute

Madeline Blankenship is a Sustainability Reports Research Analyst Intern with G&A Institute. She is an MBA candidate at the University of Georgia focused on Strategy and Social Innovation. She earned a BA in Art History in 2015, also from the University of Georgia. Madeline worked primarily on the strategic philanthropy side of corporate social responsibility for five years before graduate school. She intends to continue her work in this field by moving into corporate sustainability strategy consulting.