By helping protect its supply chain from extreme weather, Nestlé aims to protect its bottom line. It also signals to consumers who are increasingly concerned about the environment — and may see Nestlé as part of the problem — that the company is trying to help.
Global warming poses a huge threat to a business like Nestlé, which relies heavily on agricultural products and water. “Scientific evidence shows that the food and agricultural sectors will be among those most affected by climate change,” said Magdi Batato, the company’s head of operations, during a call with reporters. “This is why it matters to Nestlé.”
Climate change is “one of the greatest risks to the future of our business,” Mark Schneider, the company’s CEO, said in a statement Thursday.
The company has already made several steps toward reducing emissions, but with the new target Nestlé is speeding up its work, Schneider said.
That means switching over to more sustainable ingredients in Nestlé (NSRGY) products, selling more plant-based foods and using greener packaging. It also means helping capture carbon by replanting trees, working with suppliers to use more sustainable farming practices, and using renewable energy in more Nestlé factories, warehouses and offices. The company will set more specific targets over the next two years.
“The task is huge,” Batato said in a statement. “But we are determined to make it happen.”
The changes are designed to play a role in keeping the planet from warming more than 1.5 degrees Celsius above pre-industrial levels, Nestlé explained. The company’s earlier efforts were aligned with a two-degree goal, a commonly used threshold.
Nestlé has already made a number of investments that could help it achieve the 2050 commitment. Nestlé is participating in Loop, a service that lets consumers buy products in reusable packages. It plans to expand its plant-based offerings through Sweet Earth, a vegetarian meal company it acquired a few years ago. And it has made a number of recycling commitments.
These efforts could help temper environmental criticism against the company. Activists have called Nestlé a contributor to plastic pollution. And the dairy industry, which Nestlé relies on for its chocolate, ice cream and creamers, is a producer of greenhouse gases (Nestlé’s commitments include helping make its dairy suppliers more sustainable).
Other big food companies are also trying to make their supply chains more sustainable. Mondelez International, which makes Toblerone, Cadbury and Milka, is planning to switch to sustainable cocoa for its chocolate brands by 2025.