P.PSH.1426 - Hewitt’s ESG pathways for a vertically integrated organic supply chain

Summary

Growing consumer, investor and societal expectations are driving industries—including red meat—to improve environmental, sustainability and ethical performance. However, the red meat sector faces challenges in meeting these demands due to limitations in data, technology and cost-effective emissions abatement and measurement capability for assessing regenerative production practices.

Hewitt aims to be a global leader in sustainable branded products and already markets goods under Organic, Regenerative Organic and Carbon Neutral credentials. In line with industry goals such as carbon neutral by 2030 and increasing consumer interest in nature-positive production, Hewitt has initiated a multi-stage sustainability plan.

Hewitt manages 14 extensive grazing properties across Queensland (QLD), Northern Territory (NT) and New South Wales (NSW), covering 2.25 million hectares (ha) and running approximately 170,000 livestock. Most animals are certified organic, and the business also produces wool. Scope 3 emissions from purchased inputs, particularly livestock and meat, are significant. To address this, Hewitt is working with the MLA Donor Company on a multiphase project involving baseline assessments of carbon, biodiversity and natural capital.

Objectives

The project had the following aims, covered in this final report:
•    Complete a carbon footprint for the Hewitt Cattle supply chain (scopes 1, 2 and 3), covering Hewitt Cattle direct control operations (stations and facilities) and third party purchased cattle and sheep.
•    Baseline profile of biodiversity, natural capital, groundcover and relevant infrastructure for selected farms in the supply chain. 
•    Determine and establish targets and scale of sustainability strategies across the various elements baselined.
•    Investigate feasibility of vegetation (insetting and offsetting) options for the supply chain, including emissions reduction and sustainability improvement strategy for direct controlled and third-party cattle and sheep suppliers to achieve identified targets.
•    Identify market opportunities for well-credentialled red meat, including access and verification requirements for certification with selected bodies.
•    Develop an overview of new products commercialised within the project (specific stock keeping units, illustration of product packaging mock ups, indication of initial forecast volumes and sales achievement to evaluate impact of project).
•    Identify lessons learned in developing a new value chain pursuing significant sustainability, regenerative agriculture, and emission reduction attributes beyond carbon neutrality.
•    Develop extension and adoption material for the supply chain and broader industry including five specific case studies sharing findings from pre-feasibility, baseline and emission reduction actions.

Key findings

Key results from the project included the completion of a comprehensive carbon footprint for the supply chain, identification of market opportunities for well-credentialed red meat, and the development of new products with sustainability attributes. The project also produced extension materials to share findings with the broader industry.

Benefits to industry

The benefits to the industry include improved understanding of sustainability practices, enhanced market opportunities for certified products, and practical knowledge for implementing emission reduction strategies. These outcomes support the industry's goals of reducing greenhouse gas emissions and enhancing biodiversity.

MLA action

Value Based Marketing remains a strategic investment priority for MLA. MLA will continue co investing with supply chain partners to develop innovation capability in the area of Value based marketing sustainability credentials.

Future research

1.    Methane emissions for livestock grazing predominantly scrub lands are poorly understood and currently predicted from emissions measured on grass. Some Australian shrubs are anti-methanogenic and methane emissions may be lower than predicted for grass pastures. Further research is needed to fully understand the emission profile of rangelands cattle grazing predominantly shrubland environments, which are common in central Australia. 
2.    Methanotrophic activity in pastures and rangelands is currently excluded from the carbon account because of a lack of fundamental knowledge regarding methane breakdown rates. Further research is needed to quantify methanotrophic activity and the balance of methane emissions from these environments. 
3.    Methane emissions from Desmanthus pastures are uncertain and limit abatement estimation. Further research is needed to confirm if reduced methane production can be accounted when livestock are grazing Desmanthus pastures.
4.    Methane calculation methods are needed that allow verification of methane reductions from cattle grazing Leucaena pastures. This is unlikely to require primary research on methane emissions. Focus is needed on quantifying abatement at paddock and property level without requiring excessive amounts of data. 
5.    LU and LUC methods, models, GIS data layers and test datasets are needed. This is part of the Federal Government workplan for GHG Standards, but is most likely 2 years from completion. In the mean time, further research to develop test datasets that can be used to calibrate models would be valuable.
6.    Develop insetting methods for accounting for forest regeneration and develop management practices that foster regeneration of forests while maintaining livestock production and asset value. 
7.    Develop insetting methods for sparse woody vegetation and shrubs, and develop management practices that increase biomass in shrubland, to reduce net emissions.