An executive at Kellogg sees an increase in interest in sustainability.
Chief sustainability officer Amy Senter stated that Kellogg Co. executives, like many others in the food and beverage sector, were curious about how the coronavirus (COVID-19) epidemic will impact consumer interest in social concerns and sustainability.
She stated, “We were so happy to see from our point of view that it has just accelerated,” at an online panel discussion for “Climate Week” on September 21.
Customers are still drawn to brands that are owned by businesses that share their values.
“We anticipate that to persist and expand,” Ms. Senter stated. “We are appreciative as we have been traveling that path at Kellogg for a very long time with excellent transparency.”
She cited Kellogg, Battle Creek, Michigan, as an example of a corporation making progress toward sustainability. The company has reduced greenhouse gas emissions per pound of food produced by 15% compared to a baseline set in 2018, and its MorningStar Farms brand is associated with sustainability, nutrition, and environmental and social responsibility.
According to Ms. Senter, Kellogg requires partners in its sustainability efforts because of where the firm is in the supply chain. Kellogg does not deal directly with farmers and does not market to consumers directly.
However, Ms. Senter stated, “we are unquestionably at the center of a lot of relationships.” “How do we get together, make the connections, and figure out how to help farms? How do we work with non-governmental organizations (NGOs) that might have the technology answers, but might not have the access that our suppliers might have to those solutions?”
For the Kashi brand, Kellogg has partnered with Chicago’s Archer Daniels Midland Co. to source quinoa from Bolivia. The Bolivian farmers’ solar panels were partially funded by ADM.
Speakers in the online panel spoke about ESG, which stands for environmental, social and governance factors.
Ray Young, executive vice president and chief financial officer for Chicago-based ADM, said that during recent virtual investor conferences he spent “an extensive amount of time” talking to investors from both Europe and the United States about ESG issues.
“The interest and questions that we are getting from investors are not only regarding what exactly, what specifically ADM is doing, but more importantly how we are thinking about ESG on a more strategic, more broad sense: How we’re holding ourselves accountable to sustainability, and how we’re showing continuous improvement in these areas,” he said. “The feedback we’re getting is they are not expecting us to achieve perfection overnight in the area of ESG, in the area of sustainability, but they do expect us to show continuous progress and to have a good reporting progress to at least ensure we are monitoring and measuring that progress.”
ADM this year set 2035 goals of reducing water intensity by 10%, achieving a 90% landfill diversion rate, reducing GHG emissions by 25%, and reducing energy intensity by 15%. The company is investing in innovation and technology to hit the targets, and ADM’s board of directors has created a sustainability committee to provide guidance and oversight, Mr. Young said.
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“I think that for many companies this is really the next focus area, the data collection aspect, getting the information that is going to allow us to drive toward the targets that we’ve established here. We’ve done pilots. It’s working. I think we’re going to learn from these pilots and keep evolving.”
Help comes from CDP, an international non-profit organization that drives companies and governments to reduce their GHG emissions, safeguard water resources and protect forests. Over 8,400 companies with over 50% of global market capitalization disclosed environmental data through CDP in 2019.
The president of CDP North America, Bruno Sarda, compared evaluating the impact of sustainability on the food and beverage business to the long-ago impact of X-ray machines on medicine.
Mr. Sarda stated, “Once you can see inside the patient, you kind of know where to intervene.” It’s precisely what we carry out. We produce this transparency and mapping, if you will.
It’s dangerous to not be involved in ESG matters, he remarked. According to Mr. Sarda, CDP examined 200 corporations and found over $1 trillion in short-term risks, or three to five years. Additionally, CDP found that there were potential opportunities worth over $2 trillion related to climate action. At a little under $300 billion, the potential had to be realized.
Therefore, Mr. Sarda remarked, “if you were to employ capital in the direction of solutions, it’s about a seven times payback.”