More dirt on General Mills’ sustainable agriculture goals
When I first met Jerry Lynch, chief sustainability officer at General Mills, he offered me some dirt. We were at the Business for Social Responsibility conference in November, where General Mills, the main corporate sponsor of the Nature Conservancy’s Soil Health Road Map, spoke about soil-savvy farming practices. Each table at the event was topped with a Mason jar full of healthy soil.
General Mills operates in more than 100 countries and manufactures food in 15 countries. The giant food company stands behind iconic brand names such as Cheerios, Haagen-Dazs, Pillsbury and international favorites such as Yoki, a im
Its global operations have sustainable roots. General Mills publicly has stated that climate change has long-term effects on its business: Drought and flood decrease access to raw materials, and changing weather disrupts deliveries. But overall, agriculture still accounts for 9 percent of U.S. greenhouse gas emissions, and farming is the world’s second-largest industrial emitter.
To reduce its footprint, General Mills has set a goal of cutting greenhouse gas (GHG) emissions by 28 percent by 2025. It’s moving towards zero waste-to-landfill at 100 percent of its production facilities over the same timeframe. And it has committed to sustainably sourcing 100 percent of 10 key ingredients. A strict animal welfare policy, including a plan to source cage-free eggs from Canada and the United States, means that nearly all of General Mills' U.S. milk supply will comply with national animal stewardship standards.
What has the company accomplished so far? In 2015, General Mills had cut the emissions rate in its manufacturing operations by 23 percent since 2005. In 2016, the company said it sustainably sourced 100 percent of palm oil and nearly half of cocoa ingredients. Looking into the future, it is grappling with energy, product transportation, water and solid waste goals.
I spoke with Lynch and Kevin O’Donnell, General Mills’ sustainability director of worldwide sourcing, to discuss what it will take to shift not just a company but an entire industry.
Anya Khalamayzer: Kevin, you were Nike’s global environmental sustainability director before joining General Mills over a year ago. What is different about sustainability in a food business?
That’s everything from North American row crops like wheat, oats, corn and sugar beet to ingredients that take us to far-flung parts of the planet. So cocoa and vanilla — both come from Africa — we've got ingredients like sugar cane, which come from a variety of different sources. General Mills is a dairy company, and so that's very much part of our commitment. Fiber packaging is on the list as well.
The other part of it is the sourcing component of our enterprise-wide GHG reduction commitment. This was a science-based target that we set around September 2015 to reduce our enterprise-wide emissions on an absolute basis by 28 percent by the end of 2025. And so I've got accountability for the sourcing part of that.
Khalamayzer: What do you have to do to reach this target?
O’Donnell: Even if we shuttered our manufacturing plants forever this afternoon, it wouldn't be enough to hit this target. A lot of our footprint is upstream in agriculture and it really boils down to two things.
It boils down to dairy. We know about the waste — or the cow manure — methane, but also, cows have four stomachs. They release significant enteric emissions, basically from burping or belching. And then there's also a significant component represented by the animal feed from the cow.
That dovetails with the other part of the agricultural footprint, which is row crops and dairy feed. Nitrogen fertilizer and nitrogen fertilizer manufacturing are also embedded in the GHG factor. The more efficient we can get with only using as much nitrogen fertilizer as necessary, that's going to bring it down.
We are trying to find ways to sequester more carbon in the soil through better soil health practices and conservation and all kinds of innovation around trying to reduce the greenhouse gas footprint from dairy.
Jerry Lynch: All of our raw materials together that Kevin's responsible for in the GHG piece is 57 percent of our enterprise-wide carbon footprint, including packaging.
Khalamayzer: Jerry, how do you and Kevin work together as part of a sustainability team?
Lynch: My responsibility is overall strategy and governance for the company. So I'm responsible for helping the company set targets, policy and overall strategy, and helping the leadership team decide our key investments.
One of the things that I do is I facilitate our sustainability governance committee. It's a subset of our CEO's leadership team, with six members. They meet three times a year and set strategy policy targets and key investments.
And then we have a broader team that's more embedded in functions, particularly in supply chains. We've got several people that focus solely on the manufacturing environment. Kevin is working within sourcing. So his focus is really on the execution of those strategies, policies and targets within the sourcing function and supply chain.
Khalamayzer: What’s the business argument for General Mills to take action on climate?
Lynch: As a food company, we're absolutely dependent on Mother Nature and the farming communities continuing to work well and continuing to be healthy [...] We've been in business 150 years; we have every intention of being in business for the next 150 years. And sustainability is a business imperative for us to be able to do that.
O’Donnell: From a sourcing standpoint, it's really all about supply chain resiliency, making sure that we can continue to deliver the raw materials that our business depends on to thrive and to grow. It’s also about risk reduction.
Khalamayzer: What have you learned about making sustainability work as a business practice and not just a philosophy?
O’Donnell: I think sustainability, when done right, is really all about resource efficiency. It’s about efficient use or raw material and natural resource influx, trying to use as little as possible to get the greatest amount of output we can. You can also define it as reducing as much waste as possible. Everybody wants to be as efficient as possible in terms of that whole conversion process. There's definitely a cost-savings angle as well.
Khalamayzer: What does it take to implement change in the agricultural supply chain?
O’Donnell: Industry collaborations are critical, and for us, involvement in groups like Field to Market and its Alliance for Sustainable Agriculture, as well as the Midwest Row Crop Collaborative are really differential for bringing scale to problems and finding joint solutions.
Strategic supplier engagement is also really critical. General Mills rarely touches production agriculture directly, and everything that we opt to do to improve agricultural sustainability really happens at the farm level.
In order to accomplish our targets and objectives, we need to work through agribusiness suppliers and other partners. And so a big part of what it takes to implement change in the agriculture supply chain is engaging those strategic suppliers and getting them aligned with us as partners to deliver the work.
Khalamayzer: To shift the agriculture industry to sustainability, is it more important to set regional or global goals?
O’Donnell: We targeted key watersheds that intersect with General Mills sourcing regions. And so that's a way that we try to prioritize where we can make the greatest impact. Having said that, both our GHG reduction and raw material sourcing sustainability targets are global goals, but they have regional implications in terms of where the key sourcing regions are.
Lynch: We're in many product categories, which means we have a lot of different raw materials. It's very important that we focus on the big things first, which is why Kevin was talking about row crops and dairy. And so those are the things that are in our 10 by 2020 sustainable ingredients sourcing commitment, and also where Kevin's spending a lot of time on the greenhouse gas commitment.
Once you get into implementation, then it's really about the big movers that we can focus on within our own supply chain to make a difference. Sometimes it's very regional. All of our natural bourbon vanilla, for example, comes right now from Madagascar, which grows somewhere between 70 and 90 percent of the world's supply.
Khalamayzer: How do you incentivize your manufacturers to make the shift to more soil-healthy, cage-free and pollinator-friendly ingredients?
O’Donnell: Our strategic suppliers are aware of our public sustainability commitments. I would say they’re on board with us, and we’ve helped them understand that we are in this together. The story's a lot more powerful if it's told collectively.
And I think a company like General Mills, with direct connections to consumers, can tell a pretty compelling story that is of benefit to an agribusiness supplier and even an individual farmer.
We are looking at more direct financial incentives over time to help us go from pilot to scale more quickly. It's a combination of shared value, and then also we're looking at elevating sustainability to be more on par with cost, quality and delivery. I think suppliers that perform well in the sustainability space are getting rewarded accordingly. It's something we're paying more attention to in terms of retaining and growing business with suppliers.
Lynch: One thing that helps is the clarity of our public commitments and communication strength.
Khalamayzer: How does public policy affect General Mills’ sustainability framework?
Lynch: The landscape of public policy is constantly shifting. That's just a given. The nature of the challenges we're facing, the interest from consumers, all those still remain the same. We see that business imperative as a long-term commitment. We see the interests of consumers and customers continuing to grow in this area [...] To the degree that public policy can be a helpful leader in the process — we're very supportive of that. But we're going to continue to do the work, no matter what the public policy landscape looks like.
Khalamayzer: How do you set and keep sustainability targets?
Lynch: We wanted to make sure that we were setting meaningful targets that would drive action. In the case of climate change, clearly we wanted to take a long-term view of this, and so that's why we've got two milestone dates out there: 2025 and [achieving sustainable emission levels in line with scientific consensus by] 2050, which much of the world is measuring up against and aligns with other deadlines that governments and organizations are setting.
O’Donnell: And they're stress targets, no doubt. They're not going to be easy to reach. They're going to push us hard.
Khalamayzer: What is the biggest challenge of your role?
O’Donnell: Perhaps the greatest challenge is harnessing the necessary scale and resources to achieve our sustainable sourcing ambitions. One way we overcome this is by leveraging the power of industry partnerships to pursue common objectives. NGOs often play a key role here as well. Another solution is "business integration" and enlisting the collective capacity of our buyer network to build sustainability into ingredient sourcing strategies and adding a sustainability lens to commercial responsibilities.