Catering and facility management providers are under mounting pressure from their biggest customers — corporations, universities, and hospitals — to cut greenhouse gas emissions, as new carbon emissions-disclosure regulations take effect in the European Union and United Kingdom. The push is rapidly turning sustainability into a must-have strategy for the sector and a competitive advantage for those vendors taking the lead in implementation.

In our June survey of 200 leading buyers of catering — or food services, as it is known in the United States — and facility management, 90% said they wanted their vendors’ help in shrinking their carbon footprints. This is particularly the case in the reduction of hard-to-abate Scope 3 emissions that are generated by upstream suppliers like catering and facility management providers and downstream consumers. Scope 3 are among the emissions for which companies subject to the new rules are now mandated to disclose and set reduction targets. We will issue a further report this fall with the full results and analysis of the survey.

Pursuing low-carbon options

In the race to decarbonize, catering and facility management providers can be influential in cutting emissions for customers and themselves through reliance on sustainable sourcing of food, a switch away from animal-based proteins, waste reduction, and energy efficiency, to name a few strategies. For example, plant-based foods emit 10 to 50 times fewer carbon dioxide equivalent emissions on average than animal products, according to the database Agribalyse. Thus, changing menus becomes a potent strategy for cutting emissions.

Among other tactics customers would like to see vendors adopt are focusing on seasonal menus (66%) and locally sourced ingredients (59%), adoption or development of energy-efficient technology, and increased reliance on the circular economy. For instance, over half of the respondents said they expect their facility management suppliers to develop advanced technology for energy management, which results in a 15% reduction in energy consumption. This would include such tactics as installation of smart devices.

In Europe, a catering strategy gaining popularity is carbon farming — an agricultural approach that optimizes carbon capture through improvement in the rate at which carbon dioxide is removed from the atmosphere and stored in plant material. Research suggests carbon farming could offset 26% of the EU’s annual agricultural emissions, according to the European Parliament.

How sustainability can help business

This trend means food services and facility management players need to focus on developing and expanding low-carbon practices and their use of sustainable raw materials if they are to keep their current contracts and land new ones. For example, United Kingdom government contracts now require bidders to have a net-zero target or at least a carbon reduction plan.

But it could pay off in other ways. For instance, sustainability also assists in recruitment and retention of employees — particularly among younger generations of workers who expect to be offered sustainable and healthy food and work in sustainable environments. According to a 2024 Mercer Global Talent Trends study, nearly all the 12,000-plus employees (99%) responding said they expect their employers to pursue a sustainability agenda. One in three indicated that setting goals alone was not enough and said they plan to hold leaders accountable for sustainability outcomes as well.

By aggressively pursuing sustainability, food services and facility management vendors can become integral components of corporate recruitment and retention strategies across industries as well as practical tactics for encouraging workers to return to the office.

Customers ready to pay more for sustainable services

Because sustainability has gained prominence and urgency, big customers expressed their willingness to pay a premium for more sustainable offerings — particularly if they can produce significant reductions in emissions. Two-thirds said they would go as high as a 10% premium on sustainable offerings; one-third said they would go as high as 20%. In France and the US, around 40% of clients claimed to be ready to pay a 20% premium. In contrast, only 17% of customers in the UK share the same willingness to pay for sustainability.

While suppliers are encouraged by talk of premiums for sustainability, they are also realistic and recognize that such sentiments can easily melt away with renewed inflation or a slowdown in economic growth.

To underscore the importance of sustainability and justify the higher prices, many sector providers are turning to emissions disclosure rating organizations, such as the Science Based Targets initiative (SBTi) and the Carbon Disclosure Project (CDP), to validate transition strategies and gain a competitive advantage. For instance, Sodexo, one of the leading global food services and facility management companies, looked to SBTi for a seal of approval on its strategy to reach net-zero emissions by 2040.

Overcoming obstacles on the path to sustainability

But there continues to be some pushback. For instance, big customers are worried about whether consumers will be supportive of sustainability efforts when confronted with the changes they require. Seven out of 10 survey respondents said they are unwilling to drop beef from their menus; that percentage dropped to 60% in France. This is despite the fact that the bulk of emissions from food services are from beef because of cow emissions of the extremely potent greenhouse gas methane.

Even so, given the growing shift toward sustainability and emissions reduction, food services and facility management companies have an opportunity to become market leaders in the space and ultimately build a competitive advantage for the future. Ultimately, more regions are likely to follow the EU and UK lead on emissions regulation.

For instance, while the federal emissions disclosure rules in the United States have been temporarily held up by partisan politics, the state of California has gone ahead and mandated disclosure. Companies with annual revenue of over $1 billion must disclose their Scope 1 and 2 emissions in 2026 and Scope 3 in 2027. With more likely to come, the sector should try to turn the regulatory requirements into a selling point.