Food company Mars commits to accelerating action against climate change
STEVE INSKEEP, HOST:
A company that may have made your Halloween candy or food for your dog wants to wipe out its effect on the climate. Mars Inc. makes M&M's and Mars bars and Twix and other products. Its CEO came to the climate summit in Scotland and said his company plans to reach net zero greenhouse gas emissions by 2050. The company says its pledge includes its entire supply chain. How does a corporation do that? CEO Grant Reid called us from the summit.
GRANT REID: So first of all, maybe step back and say, why did we make the commitment to net zero? You know, we've been using science-based targets for over a decade now. And originally, if you go back to 2015, Steve, we were looking at four degrees warming of the planet. We brought that down globally to three. But at three degrees warming, our agricultural base is severely at risk. And, indeed, humanity's severely at risk. We've seen storms and other impacts of climate change already. So - you know, the commitment to 1 1/2 degrees, I think, is vital. And that was really the science base that drove us to an even harder target.
INSKEEP: How do you do that in a day-to-day basis? Do you buy an offset of some kind? Can you get exclusively from wind and solar? What do you do?
REID: Yeah. So for example, I'm in Scotland. So we worked with a wind supply here to actually construct a big wind farm up near Inverness and Moy. And we've used electricity from there to fuel our U.K. operations. And we've done the same in about eight to 11 countries. And we're adding more. So we're at 54% worldwide of our total energy usage either from wind or solar. And our mission is to get to a hundred. So that's our own operations. How do you take the agricultural side? That's the bigger challenge. We've got about 20,000 suppliers. About 200 of them make up about 80% of our emissions. So we're looking to work with those suppliers. Now, just to give you some sort of benchmark, when we worked with those suppliers and asked them how many of them had science-based targets to get to 1 1/2 degrees, only 10% did. So that gives you some idea of the scale of the challenge ahead of us.
INSKEEP: What is it that those suppliers have to do on a day-to-day basis? I mean, if you're growing beef, there's certain environmental consequences for that. Do you offset them in some way? Do you do without beef? What do you do?
REID: Yeah. So let me give you an example that might bring it to life. So palm oil - you know, palm oil was probably the poster child for deforestation. And Mars, like everybody else, was buying palm oil as a commodity. What we've done is we've gone from 1,500 suppliers of palm oil down to a hundred to really focus in. And that allows us to take those 100 suppliers, and it allows us to map where the palm oil is coming from either by feet on the ground or using satellite technology. And once we've mapped it, we monitor that. And we manage it with the supplier. And so we are very confident now that none of our palm oil supply comes from deforestation areas. And we've got to do that across every commodity and every country that we do business.
INSKEEP: This is very interesting. So you're not just taking the supplier's word for it then?
REID: Correct. We trust but verify, I think, as Ronald Reagan said.
INSKEEP: How do these efforts affect the cost of doing business?
REID: It certainly cost - you know, we've invested about a billion dollars in sustainable and the generation already in the last few years. And we're going to - ready to invest another billion dollars. So I would say, much - if you think of regenerative agriculture, for example, which is using cover crops and less inputs, et cetera, the technology of that and the science behind it is very, very well-known. The key is there's only 1% of the world using those techniques. So how do we prime the pump and work with our farmers to ensure that they're using those techniques? Because if you use those techniques, not only do you get the yield increase, but you also reduce water usage, use of insecticide and other things. So it is a gargantuan effort. But, you know, we're at a critical time with the planet. We've got to change the trajectory. And that's why we're so committed, too.
INSKEEP: Am I correct that Mars is a privately held company?
REID: Yes. We're a privately held company. We've been in operation for over 100 years. We're over $40 billion. So - you know, good-sized private company.
INSKEEP: Does that make it easier for you to do these things, because I could imagine, with a publicly held company, a CEO feeling pressure from shareholders to keep up the shareholder value?
REID: Yes. I think public and private companies can both do it because I still have to deliver growth and financial return. That's my job. I mean, I think, if you look at some of my peer groups who we work with - whether it's Coca-Cola, Pepsi, Unilever - they're all making very similar investments.
INSKEEP: While I have you, I want to ask about a different issue that relates to your supply chain. As you probably know, Ivory Coast farmers recently have made some news by saying that the cocoa market has been pushing them into poverty, the prices going down and down. Some people in Mali accuse Mars and other companies of profiting from child labor. Do you have broader concerns about where your supplies are coming from?
REID: Yeah. So - you know, let me start with, you know, we do not want poverty. And we don't want child labor in any of our supply chains. And we've been investing in the local communities there. We've been mapping, we've been monitoring and we've been managing to ensure that none of our cocoa has those elements in it. So we are absolutely committed to that. And I can assure you that is not the type of supply chain we want. And we will fight vigorously to ensure it doesn't happen.
INSKEEP: Do you accept the accusation that you're not quite there yet in these cases that were brought up?
REID: Yeah. I mean, we don't claim perfection, Steve, right? We're making great progress. And we will continue to work with NGOs and governments to ensure that we take out.
INSKEEP: Is there, in your mind, a potential or real conflict between the desire of people to make a living and the desire of many people in the world to reduce the output of carbon?
REID: Absolutely not. If you look at what Mars has done, we've been growing for the last five years. And at the same time, we've taken down our total emissions from farm to consumer by 7.3%. Now, there's much more to do. We're targeting 2050. And I think the pressure has to be on companies like ourselves and governments to ensure that there are intermediate targets along the way and that we're making tremendous progress. And we can work with local communities. We're investing in their future. We can do this together. And we can both win.
INSKEEP: Grant Reid is CEO of Mars. Thanks so much.
REID: Thank you very much, Steve. Take care.
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