PATHWAY 2 Decoupled sourcing What it means Decoupled sourcing focuses sustainability investments in the same supply-sheds companies source from, while separating sustainability efforts from procurement specifications and the commodity purchase itself. This pathway is most effective in supply chains where traceability is constrained by supply chain fragmentation, mixing of produce from multiple farms and processors, or multiple tiers of intermediaries between buyer and producer – such as with soy and rice. Companies typically know their sourcing regions without being able to pinpoint specific farms or fields. With decoupled sourcing, they can engage in targeted sustainability programmes in key supply-sheds. Typically these programmes may involve partnering with other companies sourcing from the same supply-shed. When appropriate, they can also bring in concessionary, catalytic and commercial financiers to support producers through the transition. Successful programmes may reduce on- farm and financing costs and share remaining costs between participants. This significantly improves affordability for companies, making it easier for them to expand their programmes and impact. Over time, companies may evolve this approach into spec-anchored sourcing. But, at a minimum, this decoupled approach offers a pathway that avoids the need to rebuild supply chains from day one, and helps producers progress towards meeting strengthened procurement requirements. How it works –Buyers create or join initiatives operating in relevant supply-sheds. These programmes support producers through the evolution to more resilient, sustainable production with training, data and tools, while often giving them access to upfront financing. –Producers are still able to sell on the open market without a contractual obligation to sell to the companies supporting the initiative. –Outcomes from the programmes are handled separately, with benefits flowing to the companies supporting the initiative. –Buyer payments for the environmental outcomes and any funding for the initiatives’ operations may come from company- wide or sustainability-specific budgets, with some companies also using shadow carbon pricing to impose an internal “fee” on their procurement teams for these kinds of programmes. Buyers may pool resources with other actors in the supply-shed, such as buyers of co-products or other crops in a rotation, or water authorities. Carbon credit buyers can also play a role, but additional safeguards are needed to avoid double-counting carbon savings or other environmental outcomes. –Widely adopted carbon accounting rules do not require buyers to prove field- or farm-level traceability. Buyers can use a mass-balance approach to invest efforts in the overall supply-shed, while still claiming the carbon or environmental benefits they helped deliver. Importantly, even where costs are shared among different corporate players in a linear value chain, each is allowed to count the full carbon or environmental benefit in their supply chain footprint calculations. –Resilience benefits often arise from more reliable supply-sheds overall. Because participating suppliers may sell their products on the open market, as opposed to only participating buyers, benefits can extend to buyers who did not contribute financially. Examples of companies adopting this approach in practice can be found in the boxes below. Decoupled sourcing focuses sustainability investments in the same supply- sheds companies source from, while separating sustainability efforts from procurement specifications and the commodity purchase itself. Even where costs are shared among different corporate players, each is allowed to count the full carbon or environmental benefit in their supply chain footprint calculations. PepsiCo and South East Research Farm (SERF): co-creating a replicable model for regenerative outcomesBOX 12 PepsiCo, the food and beverage multinational, partnered with SERF, a farmer-run research group dedicated to advancing regenerative techniques across Western Canada, to run farmer-led, side-by-side trials that quantify soil health, yield stability and greenhouse gas outcomes across practical practice bundles (e.g. reduced tillage, cover crops, nutrient optimization). The approach couples neutral agronomic validation with simple monitoring, reporting and verification (MRV) that meets buyers’ reporting needs while staying farmer-centric on profitability and risk reduction. Governance is independent, incentives are stacked and transparent, and data/methods are open for peers and suppliers to adopt. Because the modules are standardized, SERF’s design can be quickly “lifted and shifted” to new regions, suppliers and crops – supporting rapid scale-up. First Movers Coalition for Food: CEO Lessons for the Future of Food Procurement 15

First Movers Coalition for Food 2026