Nestlé, known globally as one of the world’s largest food and beverage companies, had $92 billion in revenue in 2020. Its size is a double-edged sword: on the one hand, it has leverage in its supply chain. It can force upstream companies to comply with its mission — to be environmentally sustainable and work toward net-zero emissions by 2050. On the other, it has more than 2000 brands, and that’s a lot of plastic and potential waste.
It uses a baseline of 2018 to measure its progress. And while the company has gotten good marks in many corners, not every environmental and climate observer is ready to stand and applaud. But to give its goals credence, it hired South Pole, an external consultant. Its role is to ensure that Nestlé is transparent and realistic about its promises. To that end, the company agreed to halve its CO2 emissions by 2030 and be net-zero by 2050. It is using Science-Based Targets that are in line with the Paris agreement — ones that limit temperature increases to 1.5 degrees Celsius by mid-century from pre-industrial levels.
The primary challenge is scope 3 emissions or those tied to its supply chain. “ As our Scope 3 emissions make up 95% of our footprint, we are addressing more than 80% of these,” says the company’s 2021 roadmap. “As we enhance our ability to identify and measure emissions, and better use the data that has been disclosed by our suppliers and others, our monitoring will improve. We intend to also share our science-based methodology for calculating GHG emissions to help push new frontiers in climate data transparency for the food and beverage industry.”
What has the company committed to doing since 2018?
Nestlé is committed to regenerative agriculture practices that improve soil health and preserve diverse ecosystems. It is now working with more than 500,000 farmers and 150,000 suppliers to put such promises into practice. It says it is offering plant-based food and beverages and reformulating products to make them more environmentally friendly.
Furthermore, it is planting 20 million trees each year for the next 10 years while also transitioning to 100% renewable electricity by 2025. It is also buying carbon credits — financial mechanisms that pay rainforest nations to maintain their trees or plant the seeds to build new ones. It’s a cost-effective strategy — one that some say is more powerful than switching to renewable energy. The trick, though, is to ensure the money makes to the countries in need.
The food and beverage company has started the march to becoming fully renewable. It says it is on target to achieve that goal: making sure 800 sites in 187 countries are totally green by 2025. Additionally, it is switching its global fleet of vehicles from those that run on fossil fuels to those that are sustainable. To that end, it began reducing its business travel this year — a trend that will continue.
The 2018 greenhouse gas benchmark: 113 million tons, 92 of which were under its control. Now that figure is 4 million tons less.
“The South Pole team helped us develop our carbon strategy through their technical knowledge, deep sector understanding, and uncanny ability to translate science into actionable approaches to reach our goals,” says Benjamin Ware, head of climate and responsible sourcing for Nestlé.
What milestones has Nestlé already hit?
— to be deforestation-free for its supply chain by 2022;
— to switch its car fleet to sustainable fuels or electricity by 2022;
— to use all sustainable palm oil by the end of 2022. (palm oil accounted for about 33% of global oils produced from oil crops in 2014;)
— to use fully recyclable and reusable packaging by 2025. (It is on track;)
— to cut virgin plastics in packaging by a third by 2025. (It is on track;)
— to use all sustainable coffee and cocoa by 2025. (It is on track, and)
— to source 20% of critical ingredients through regenerative farming by 2025. (It is on track.)
“We have set new commitments to achieve 100% reusable or recyclable packaging by 2025 and to achieve net-zero greenhouse gas emissions by 2050,” says Mark Schneider Chief Executive Officer, and Paul Bulcke Chairman. “Our actions include working with 500, 000 farmers and 150, 000 suppliers to support them in implementing regenerative agricultural practices, planting hundreds of millions of trees within the next 10 years, and completing the company’s transition to 100% renewable electricity by 2025.”
As of 2021, 97% of its main forest-risk commodities that the company buys — palm oil, pulp, paper, meat, and sugar — have been determined to be “deforestation-free.” That means the company is replacing each tree that is cut down for farming, timber, or paper.
Similarly, 88% of its packaging by weight is reusable or recyclable. There has been an 8% reduction in virgin plastics against the 2018 baseline, while there’s been a 2.3 million cubic meter reduction in water usage during the same time.
Meanwhile, 95% of Nestle’s factories are considered to have zero waste. And there has been a 37% decrease in greenhouse gases since 2010. There has been a 4 million ton reduction since 2018.
What do the critics say? A story in the Guardian calls into question not just Nestlé’s net-zero pledge but also those of 25 other high-profile companies such as Ikea. Thomas Day of NewClimate Institute, who compiled the report, said that the companies’ 2030 goals were too optimistic. Cutting emissions by half at that time is an overstatement. Twenty-three percent is more reasonable.
But Nestle’s CEO and chair responded, “Climate change actions can take time to take effect, but even as our company has grown and revenues increased, we are seeing a reduction in emissions. We have passed ‘peak carbon’ and decoupled our emissions from growth, charting an even more sustainable future for our company.”
Editor’s note: Don’t miss the virtual Environment+Energy Leader Solutions Summit, July 19-21. Learn tangible, innovative solutions to the struggles you face every day. Speakers from companies including Kellogg’s, Estée Lauder Companies, American Family Insurance, Tillamook and many more will share tactics and lessons-learned that can help you solve your energy management, sustainability and ESG challenges. Learn more about the Summit here, or go straight to registration!