Fionnuala Walravens, Senior Climate Campaigner, of the U.K. division of the Environmental Investigation Agency (EIA), is urging investors in large public food retailers in Europe to “really care about cooling” as they evaluate and potentially influence the environmental practices of these companies.
“The financial sector itself holds immense power to shape corporate behavior and emissions,” said Walravens in a recent podcast conversation with her colleague Paul Newman, Senior Press and Communications Officer for EIA U.K. Large institutional investors in European food chains include BlackRock and Vanguard Group.
Her comments were based on EIA U.K.’s report “Cooling the Climate Crisis: Why investing in sustainable refrigeration is crucial for decarbonising supermarkets,” published in June.
In the report, EIA tracked the publicly reported Scope 1 and 2 CO2e emissions generated by cooling at five major European food retailers, Ahold Delhaize, Carrefour, Jerónimo Martins, Metro AG and Tesco. For example, the 2023 cooling-related emissions at individual companies ranged from 48% of their total CO2e emissions (Jerónimo Martins) to 69% (Carrefour). The report also assessed the progress each chain is making in transitioning to natural refrigerants.
“For retailers, we see that cooling is such a big chunk of their emissions that they really need to take action,” said Walravens. “And investors in retailers should really be aware of this.”
EIA U.K. also published a condensed version of its report tailored to investors.
“There are huge emission savings to be gained here and we know that investors are looking for those kind of real-world wins.”
Fionnuala Walravens, EIA U.K.
Walravens pointed out that large companies in the EU are required by the Corporate Sustainability Reporting Directive (CSRD) to publish their CO2e emissions data as well as a credible climate transition plan aligned with a 1.5°C (2.7°F) warming scenario. (A new proposal this year would reduce the number of companies reporting data to those with more than 1,000 employees.)
In addition, a sister regulation, the Directive on corporate sustainability due diligence, also requires large companies to identify and address adverse and environmental (and human rights) impacts. “Companies which don’t do this could actually face significant fines, actually up to 5% of turnover,” said Walravens.
Another reason why investors should care about cooling is that the cost of HFC refrigerants is “skyrocketing” as a result of the ambitious phaseout of these gases under the updated EU F-gas Regulation, Walravens noted. “We’ve seen the price of HFCs rise by about 800% in recent years.”
The high prices are helping to lead retailers away from HFCs. However, said Walravens, “some retailers are just moving too slowly, and this is leaving them at risk of very high costs associated with just the price of topping up the gases in their systems.”
Moreover, the high price of HFCs has boosted the illegal trade in these refrigerants by criminal gangs. “Retailers don’t really want the reputational risk of being associated with organized crime,” she said.
NatRefs are the best choice
HFOs, the chemical industry’s low-GWP replacement for HFCs, raise new concerns, noted the EIA’s “Cooling the Climate Crisis” report. HFOs are often blended with HFCs, with the resulting mixtures still having relatively high GWPs. In addition, HFOs such as the commonly used HFO-1234yf, are considered in Europe (and by scientists globally) to be an example of a class of environmental pollutants called PFAS (per- or poly-fluoroalkyl substance), commonly known as “forever chemicals.” Moreover, fugitive emissions of HFO-1234yf degrade in the atmosphere into trifluoroacetic acid (TFA), a PFAS that washes down in the rain and seeps into the global environment.
The EU’s F-gas Regulation already restricts the use of HFOs in certain equipment types starting in 2032, with further restrictions being explored under the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation in relation to their classification as PFAS, the report noted. In addition to PFAS-related concerns, the production of HFOs is energy intensive and leads to emissions of other high GWP or ozone-depleting substances.
Thus the alternatives to f-gases should be centered around natural refrigerants, said Ravens, though she observed that some retailers are “behind the curve” when it comes from moving from HFCs to naturals. “That’s why we think it’s important for investors to step in to help guide some more sound financial decisions,” she said.
The EIA’s report shows that action on sustainable cooling “is a low-hanging fruit,” said Walravens, noting that not only do natural refrigerant systems slash emissions from direct emissions, they’re more energy efficient. “There are huge emission savings to be gained here and we know that investors are looking for those kinds of real-world wins.”
For example, Carrefour reported that the adoption of natural refrigerant systems in combination with adding doors to store display cases resulted in energy savings of 19 to 45%, meaning that the systems pay for themselves in four to 10 years, Walravens said. Since the systems last about 15 years, “there really is a financial reason for investing in them,” she added.
Net zero pathway
EIA has also developed a “net zero supermarket cooling pathway” as a strategic roadmap for investors and retailers alike. The pathway is structured around four pillars:
- Disclosing data: Comprehensive, public reporting of refrigerant emissions, energy performance and transition planning is essential to transparency and accountability. “We found that the retailers that have done well are those that have really mapped out the number of stores that they have relying on HFCs and developed a costed plan to convert those stores, and importantly, allocated the capital to do that,” said Walravens.
- Cutting refrigerant emissions: Retailers must stop installing new HFC refrigeration and commit to HFC-free refrigeration in all European stores by 2030 and globally by 2040, supported by immediate action to reduce leaks and transition to natural refrigerants (non-fluorinated alternatives).
- Reducing energy usage: Cooling-related energy emissions must be reduced by 55% by 2030. Energy-efficient technologies, fridge-door retrofits and renewable energy adoption are critical to achieving these savings.
- Engaging the supply chain: Supermarkets should extend climate action beyond their stores, influencing suppliers to reduce emissions from cold chain operations, particularly in transport refrigeration. “This is something that has been largely unaddressed,” said Walravens. “One retailer that stood out, though, was Jerónimo Martins, who told us that they’ve been engaging with suppliers to help shift the refrigerants in shipping containers.”
