Dairy and coffee companies lacking methane reduction targets

Most dairy and coffee firms still lack methane reduction targets

New research shows that most major dairy and coffee companies have yet to set methane-specific reduction targets or publish credible action plans. The analysis highlights uneven progress across the sector. Only a small number of firms have moved beyond broad climate commitments to address methane emissions directly.

The findings come from a report published by the Changing Markets Foundation. The study assessed 20 major dairy and coffee companies and found that 18 of the 20 scored below half of the available points. Danone, Starbucks, and General Mills were identified as sector leaders. However, the report notes that even these front-runners have significant gaps in transparency and detail.

Methane is a high-impact greenhouse gas. Consequently, reductions deliver near-term climate benefits that carbon dioxide cuts cannot match over short timescales. For UK businesses in dairy-dependent supply chains, this research raises questions about supplier risk, procurement criteria, and the credibility of value-chain emissions data.

Coffee sector lags behind dairy in methane action

All coffee companies assessed ranked among the bottom nine performers. Dunkin’ scored zero points because it had set no methane targets, published no action plan, and disclosed no relevant emissions data. The report examined companies representing more than £330 billion in combined revenue, yet found widespread absence of methane-specific ambition.

Only Danone had both a methane-specific target and an aligned, detailed plan to achieve it. Nestlé and Danone were the only companies to report methane reductions since a baseline year. Nevertheless, the report criticised both firms for failing to disclose sufficient detail about how those reductions were achieved or verified.

Fourteen of the 20 companies assessed had set neither a methane, livestock, nor dairy reduction target backed by an associated action plan. Furthermore, 18 of the 20 did not publish a public action plan outlining specific methane-reduction activities or expected emissions cuts. This absence of transparency makes it difficult for procurement teams to verify supplier claims or assess progress against stated climate goals.

Industry initiative shows mixed results on methane commitments

The report assessed companies participating in the Dairy Methane Action Alliance, an initiative launched by the Environmental Defense Fund at COP28 in December 2023. Members of the alliance performed better on average than non-members. Specifically, alliance members scored an average of 34.7 points compared to 22.7 for non-members. The top three performers were all alliance participants.

However, only three of the eight alliance companies had set any form of methane-reduction target or published an action plan. This suggests that even the leading industry initiative has not yet driven broad alignment or accountability across its membership. For businesses evaluating supplier commitments, membership alone does not guarantee action or transparency.

After the report’s publication, several companies made new commitments and disclosures through the alliance. This indicates that external scrutiny can accelerate corporate response. Nevertheless, the overall picture remains one of limited ambition and patchy disclosure across the sector.

Methane from dairy supply chains carries material business risk

Methane is approximately 80 times more potent than carbon dioxide over a 20-year period. Therefore, cutting methane emissions offers one of the fastest routes to slowing near-term warming. In dairy supply chains, enteric fermentation in cattle produces significant methane emissions. Addressing this source requires specific interventions such as feed additives, breeding strategies, and herd management changes.

For UK businesses, the implications are both regulatory and commercial. Companies with dairy-intensive supply chains face growing scrutiny from investors, regulators, and procurement frameworks. PPN 06/21 and its successor arrangements require suppliers bidding for central government contracts to publish carbon reduction plans. These plans must cover Scope 3 emissions, which include purchased goods such as dairy ingredients.

If your suppliers lack credible methane-reduction plans, your Scope 3 reporting becomes less robust. Similarly, carbon reduction plans submitted to support tender bids may be challenged if they rely on supplier data that lacks transparency or verification. The research suggests that many dairy and coffee suppliers are not yet providing the level of detail needed to meet these expectations.

Additionally, businesses operating in sectors with high dairy content face reputational risk if their suppliers are identified as lagging on methane action. As stakeholder pressure intensifies, companies without clear supplier engagement strategies may find themselves exposed to criticism or excluded from sustainability-focused procurement frameworks.

What the research reveals about corporate methane performance

The report assessed companies across several criteria. These included whether firms had set methane-specific targets, published detailed action plans, disclosed baseline and progress data, and engaged transparently with stakeholders. The findings reveal significant variation in corporate readiness and ambition.

• Only one company, Danone, had both a methane-specific target and a detailed, publicly available action plan aligned to that target.
• Nestlé reported a 20.1 per cent reduction in methane emissions since 2018, but the report found insufficient detail on methodology or verification.
• Eighteen of the 20 companies assessed did not publish a public action plan outlining specific methane-reduction activities or quantified emissions cuts.
• All coffee companies ranked in the bottom nine, with several scoring zero or near-zero points for methane-related action.
• Membership in the Dairy Methane Action Alliance correlated with higher average scores, yet only three of eight members had set any form of methane-reduction target.

Why procurement teams should pay attention to methane targets

Methane disclosure is becoming a differentiator in supplier selection. As public sector buyers and large corporates tighten carbon reduction requirements, suppliers without methane-specific plans may struggle to compete. Procurement frameworks increasingly ask for evidence of Scope 3 engagement, and dairy is a material category for many businesses.

Moreover, voluntary frameworks such as the Science Based Targets initiative now include specific guidance on methane. Companies setting science-based targets are expected to address methane separately from long-lived greenhouse gases. Therefore, suppliers that treat methane as part of a general carbon target may not meet the threshold for credible, science-aligned action.

For procurement professionals, this creates a need to ask more granular questions during supplier qualification. Generic carbon reduction commitments are no longer sufficient. Instead, you should ask whether suppliers have set methane-specific targets, how they measure and verify methane emissions, and what interventions they are deploying to reduce those emissions. If suppliers cannot answer these questions, their carbon reduction plans may lack substance.

Furthermore, businesses relying on dairy-intensive ingredients should consider supplier diversification or engagement strategies to reduce methane-related risk. This might include prioritising suppliers with credible methane action plans, engaging with existing suppliers to accelerate progress, or participating in industry initiatives that drive collective accountability.

Regulatory and investor pressure is building on methane

Methane is attracting increasing attention from regulators and investors. The UK government committed to reduce methane emissions by 30 per cent by 2030 as part of the Global Methane Pledge. Although this target is not yet enshrined in binding legislation, it signals the direction of policy travel and creates an expectation that businesses will act.

In addition, the Financial Conduct Authority’s disclosure rules require listed companies to report on climate risks in line with the Task Force on Climate-related Financial Disclosures. Methane is a material risk for businesses with significant agricultural supply chains. Consequently, investors are beginning to ask more detailed questions about methane exposure and mitigation strategies.

The research also highlights the role of industry initiatives in shaping corporate behaviour. The Dairy Methane Action Alliance represents an attempt to drive collective action, but the findings suggest that voluntary commitments alone are insufficient. Only three of the eight alliance members had set any form of methane-reduction target. This indicates that external accountability mechanisms, such as procurement requirements or investor engagement, may be necessary to drive broader change.

For UK businesses, the message is clear. Waiting for suppliers to act voluntarily is unlikely to deliver the pace of change needed to meet net-zero targets or satisfy procurement frameworks. Instead, businesses should engage proactively with suppliers, set clear expectations, and build methane performance into supplier evaluation criteria.

SBS perspective on methane and supply chain decarbonisation

We see methane as a critical but often overlooked component of Scope 3 emissions. Many businesses focus on carbon dioxide when setting reduction targets, but methane offers faster returns because of its shorter atmospheric lifetime. For companies with dairy, livestock, or agricultural supply chains, addressing methane should be a priority.

However, setting a methane target is only the first step. Businesses also need credible action plans, transparent reporting, and verification mechanisms. The research shows that most companies have not yet reached this level of maturity. Therefore, procurement teams should be cautious about accepting supplier claims at face value. Ask for evidence, check for third-party verification, and compare supplier performance against sector benchmarks.

Additionally, businesses should consider how methane performance affects their ability to compete for public sector contracts or meet investor expectations. Our net-zero program for carbon reporting compliance includes support for Scope 3 engagement and supplier assessment. We help businesses identify methane hotspots in their supply chains and develop strategies to address them.

Furthermore, businesses participating in tender processes should ensure their carbon reduction plans address methane explicitly. Generic commitments to reduce greenhouse gases may not satisfy evaluators looking for evidence of science-based, sector-specific action. Our ESG compliance and carbon reporting services can help you strengthen your documentation and demonstrate credible progress to procurers and investors.

Where to find further information on methane and dairy emissions

The Changing Markets Foundation published the full report, titled Running Latte: Slow Progress on Methane in the Dairy and Coffee Industry. The report includes detailed scorecards for each company assessed and outlines the methodology used to evaluate methane performance. You can access the report on the Changing Markets Foundation website.

The Dairy Methane Action Alliance provides information on member commitments and progress. The alliance was launched by the Environmental Defense Fund at COP28 in December 2023. Details of participating companies and their commitments are available on the Environmental Defense Fund website.

For UK-specific guidance on methane and livestock emissions, the Department for Environment, Food and Rural Affairs publishes resources on agricultural emissions reduction. These include guidance on measuring and reporting emissions from livestock and information on support schemes for farmers adopting low-emission practices.

The Science Based Targets initiative offers guidance on setting methane-specific targets aligned with climate science. This includes sector-specific pathways for food and agriculture businesses. The guidance is available on the Science Based Targets initiative website and provides a framework for companies developing credible methane reduction strategies.