Your sustainability report indicates you’ve set the target to be carbon neutral by 2050. Could you tell us how far along you are? Has Covid-19 impaired your progress?
FrieslandCampina is committed to working towards a better, carbon-neutral future – in line with the Paris Climate Agreement, we are working towards being carbon neutral by 2050.
As part of this goal, want to play a frontrunner role for the dairy industry in greenhouse gas reductions. Therefore, it’s essential that we’re ambitious – but also realistic. We’re implementing practical solutions in our factories and we work with our member farmers to reduce these emissions throughout our value chain. Progress so far is really encouraging.
In fact, across the whole FrieslandCampina business, we achieved climate neutral growth between 2010 and 2020, despite our production volume growing by 13.6% in the same timeframe. And gradually, our ingredients factories are progressing too, as we switch to green power sources and reduce our overall energy consumption.
What’s been important to us in this last year is that, despite the potential for disruption due to Covid-19, sustainability has become an even higher priority as a long-term goal. In December 2020 we launched our “Nourishing a better planet” program, built on six key sustainability priorities. As we progress and look ahead to a world after the coronavirus outbreak, we’re determined to keep up the pace of change to ensure we meet that 2050 target. So far, we’ve not only managed to stick to this commitment, but have also recently signed an agreement with ING Bank N.V for a new €300m ($361m) sustainability linked loan.
The dairy sector has had to face a significant amount of pressure to reduce carbon emissions. As a company operating in this space, how do you think this can be successfully achieved?
I think carbon emission reduction is a challenge for the whole food industry including, as you say, our sector. However, dairy is making significant steps, and also has a huge opportunity here, as sustainability rises as a key consumer driver at the same time as health consciousness. There’s an opportunity for the dairy industry to tap into these needs, developing products that are not only more sustainable but also contain the essential nutritional ingredients to support health and wellbeing.
But how can we do this? Partnership is a “simple” but essential way to reduce our impact across the full value chain. The need to protect and preserve our planet is bigger than any one company, and so fostering a spirit of transparency, collaboration and shared objectives is critical. As FrieslandCampina Ingredients, we’re conscious that our activities form an integral part of a wider supply chain in many areas, from elderly and medical nutrition to infant formula, and everything in between. So, we believe that it’s important for companies to look beyond their own operations in order make a difference and lower their carbon footprint. We’re seeing more and more of our customers share this ethos, wanting to pursue ambitious, collaborative sustainability programs with us.
And while it’s important to collaborate with those close to us, it’s equally important to keep an eye on the bigger picture. So, everything we’re doing today, and will do tomorrow, is closely aligned with the United Nations’ Sustainable Development Goals (SDGs).
Who are you collaborating with and could you tell us a bit more about some of the projects/initiatives you’re working on?
At FrieslandCampina Ingredients, we truly believe that we can achieve more when you work with others – as a cooperative, this mindset is in our DNA. As such, collaboration takes many forms across our business. We proactively engage with a range of key industry stakeholders on a regular basis – our employees, our customers, our member farmers, government bodies, suppliers, NGOs, trade associations and health experts.
When it comes to carbon emissions, we know this is a key topic for all our stakeholders – every year, we conduct a survey with our internal and external stakeholders to identify the most important issues to them and use this information to inform our strategy and reporting. This year, CO2 footprints topped the survey as the most important issue, so we’re looking to continue to take meaningful action towards CO2 reduction as part of our Nourishing a better planet program.
As mentioned, a key part of greenhouse gas reduction is making improvements across a product or business’s supply chain, and partnership is essential for complete visibility and understanding. We’re actioning this by working collaboratively with our customers and our member farmers to assess and address our collective environmental impact across the supply chain.
Last year, for instance, we worked with some of our key customers and our member farmers to invest in accelerating the reduction of greenhouse gas emissions and promoting sustainable development in our farms. Another example of this commitment is the initiation of a pilot project for an ingredient that could reduce greenhouse gas emissions at the farm. None of these projects would have been possible without a willingness from all to collaborate and learn more about emissions at the farm for the greater good.
As a dairy cooperative owned by farmers, what are some of the areas in the supply chain you see as critical to improving/reducing carbon footprint? What are some of the key challenges you’ve encountered so far?
Aa a business, we’re on a journey to circularity, and that means considering the entire supply chain from start to finish – or ‘from grass to glass’ as we say at FrieslandCampina. Of course, there can be complexities within this, as it is in constant evolution.
No one business operates in a bubble, and so – much like our customers rely on us to support them by creating more sustainable dairy ingredients – we also need to reassure ourselves our bought-in agricultural raw materials, like coconut oil and cocoa, are also being produced in a responsible way. The challenge is to ensure high sustainability standards are met, but also bring consumers along for the ride.
Sustainability is an investment, and so this must be understood at every stage – from the farmers producing raw materials, to those operating the factories and transportation, to customers buying our ingredients, through retailers to the end consumer.
Of course, being part of a co-operative, we at FrieslandCampina Ingredients are fully aware that our farms have a key role to play in carbon emission reduction. Agriculture is responsible for 24% of global greenhouse gas emissions, with dairy accounting for just over one tenth of that figure1.
As a co-operative, we share responsibility for our full supply chain and work with not just our factories to reduce emissions, but also our member farmers directly. With the right support, we know that dairy farmers can operate more efficiently and reduce their footprints significantly. Key measures taken by our member farmers to reduce our carbon footprint include saving energy with green solutions, generating sustainable energy, optimising agricultural practices and reducing emissions from manure storage. And together with member dairy farmers, we’re currently looking at how we can reclaim heat from milk and use energy-efficient lighting.
Elsewhere, our member farmers are generating sustainable energy through solar panels and wind turbines, and generating gas from manure fermentation. In addition, some of them are optimising their water management, growing and using corn for feed instead of grass or leaving cows in the meadow longer. In essence, we’re of course looking at all areas of our supply chain, but critically, are also working closely with our member farmers to tackle the areas that will make the most difference to the dairy and dairy ingredients supply chain’s overall emissions.
Sustainable sourcing and sustainability in general have become a key priority for the conscious consumer. Are you seeing a change in attitude from consumers on carbon emissions, and is there a correspondingly higher demand from your customers for sustainability credentials and evidence?
Absolutely. Sustainability is increasingly a key driver of consumer attitudes, and – interestingly – is also linked to a growing interest in being more health conscious. People want products that aren’t just good for the body, but also good for the planet. The challenge for consumers is that there is a lot of information out there – how do they know what brands to trust when it comes to delivering on their sustainability and health goals?
For brands, a focus on clarity and evidence is essential. We’re big believers in measuring before acting, and data and transparency are the cornerstone of our strategy. This means our customers can have absolute confidence in what we say, and in turn, they can make confident claims to consumers about their products too. That’s only possible because of the uniquely comprehensive and granular information we harvest, our transparency about our operations and our commitment to shaping our sustainability activities to specifically align to our customers’ unique goals.
We’ve taken it upon ourselves to produce annual Corporate Social Responsibility reports for well over a decade. Looking ahead, the issue of evidencing sustainability claims is only going to be more and more prominent as consumers continue to educate themselves on the topic of sustainable nutrition.