MINNEAPOLIS — General Mills, Inc. is ramping up its efforts around regenerative agriculture and sees the practice as essential to meeting its ambitious greenhouse gas reduction goals, the company’s chief sustainability officer said.
Mary Jane Melendez, Head of Sustainability and Social Impact, provided details on General Mills’ regenerative agriculture efforts at the May 4 General Mills Force for Good event, held virtually with analysts in investment. She also described setbacks over the past year in the company’s progress toward reducing greenhouse gas emissions.
Jeffrey L. Harmening, President and CEO of General Mills, kicked off the investor event.
Mr Harmening sought to put the company’s current efforts into perspective by noting that General Mills has publicly reported on its corporate social responsibility work for 52 consecutive years and in 2015 became the first company to establish a Greenhouse gas reduction goal across the value chain endorsed by the Science- Initiative based on targets. In 2019, the company committed to advancing regenerative agriculture. The goals, he said, are aligned with the United Nations Sustainable Development Goals.
More recently, to better integrate environmental, social and governance objectives into corporate operations, General Mills established a Global Impact Governance Committee (GIGC), “responsible for ensuring that our global responsibility are funded, on track and ultimately achieved”.
The committee, which Mr. Harmening leads, meets regularly and includes several senior cross-functional leaders. GIGC has strong commitment and oversight from General Mills’ board of directors, he said.
General Mills has committed to reducing its absolute greenhouse gas emissions by 30% by 2030 and to achieving net zero emissions by 2050.
“And because a minimal amount of our GHG footprint comes from owned operations, we have set goals that go beyond our walls, from farm to fork, addressing Scopes 1, 2 and 3,” she said.
Progress towards its goals has not been without challenges, Ms. Melendez said.
“Our business has grown significantly during the pandemic,” she said. “And the volatile operating environment has caused considerable inefficiency in our supply chain, including the need to reposition products and ship less than full truckloads in an effort to keep our customers’ shelves. supplied.
“As a result, our GHG emissions increased by 2% from fiscal year 2020 to fiscal year 2021. We see opportunities to eliminate these supply chain inefficiencies as supply and demand improve. balance. In addition, we are implementing several key strategies to further strengthen our GHG reduction efforts.
Of the company’s total greenhouse gas emissions, more than 90% come from Scope 3, which is unrelated to the activities of company-owned assets. The majority of them are upstream from agriculture, Ms. Melendez said.
“As a result, we are accelerating the adoption of regenerative agriculture, which we believe will be the biggest contributor to our greenhouse gas reduction goals,” she said.
The company is committed to advancing regenerative agriculture on 1 million acres by 2030, Ms. Melendez said. To date, the company is 20% of the way to this goal.
To accelerate farmer adoption and improve measurement of environmental and economic outcomes, General Mills is taking a variety of steps, Ms. Melendez said.
Two things in particular resonate with farmers, she said.
The first is focused on education, helping growers gain an understanding of the principles of regenerative agriculture and “how best to apply these principles to the unique environmental, social and financial context of their farm.”
The company funds multi-day soil health academies and workshops for this purpose. One-on-one mentoring of growers by partners at Understanding Ag LLC, Fort Payne, Ala., bolsters educational efforts, Ms. Melendez said.
Additionally, building a community around regenerative agriculture will be important in achieving adoption, Ms. Melendez said.
“We often hear from farmers that they are the only ones in their area exploring regenerative agriculture, and that can be an isolation to farm differently,” she said. “To address this issue, we are connecting farmers with their local peers and supporting farmer-led organizations to accelerate knowledge sharing and build a support network.”
Feedback about the community-building efforts has been encouraging, Ms. Melendez said.
As an example, she cited a group of Kansas farmers who recently switched to using roller presses (a bladed drum attached to the front of a tractor) to promote soil health.
“The tool terminates cover crops by rolling them instead of using chemicals,” she said. “They now lend their equipment to other farmers in the community so they can try it out for themselves. We share these and other examples of large-scale peer-to-peer networking and innovation, helping to further strengthen the community of regenerative farmers.
While General Mills measures the effects of regenerative agriculture on measures such as soil health and carbon sequestration, biodiversity, water and the economic resilience of farmers, Ms Melendez said these measures take time. and are expensive. The company invests in research to enable better measurement technology.
“For example, we use tools like satellite imagery to detect the presence of cover crops and the amount of tillage,” she said. “These data feed into models that can estimate the impact of these practices.”
Jonathon J. Nudi, Group President, North America Retail, made the connection between the company’s regenerative agriculture efforts and the real-life brands of General Mills.
For example, he cited a direct partnership with producers in Montana to grow crops for pasta ingredients in the limited-edition Annie’s Mac-and-Cheese.
“Crops for pasta ingredients are grown with regenerative organic practices such as extensive crop rotations and integrated crop and livestock management,” Nudi said. “By educating consumers about regenerative agriculture in our marketing and on our packaging, Annie’s is strengthening its connection with consumers who seek to make a difference for the earth with their food choices.”
He also spoke about General Mills’ work around the regenerative production of almonds, an important ingredient in the company’s ready-to-eat cereals and its Lärabar brand.
He noted that California produces 80% of the world’s almond supply and the state is struggling with extreme water stress. The company’s research preliminary indicates that regenerative agriculture can help solve water problems.
“In fact, we find that regenerative farming practices result in similar yields, increased farmer profits, and water infiltration rates up to 6 times better than conventional approaches,” said Nudi.
Sustainability efforts are also actively underway at General Mills facilities, said Paul J. Gallagher, director of supply chain. He focused on efforts to completely eliminate waste sent to landfills. The company has set a 2025 goal to achieve zero waste to landfill status at 100% of the company’s manufacturing facilities. To date, a third of its global installations have achieved this status, he said.
Mr Gallagher said the company’s flour mill in Los Angeles achieved zero waste to landfill status in December.
“They’ve created a centralized recycling center that makes it easier for employees to separate waste streams and compact waste and cardboard,” he said. “The benefits go beyond convenience. And it also reduces the number of trips and the associated transport and fuel costs, two of the main expenses associated with zero waste to landfill.
Kofi Bruce, Chief Financial Officer, linked the company’s sustainability goals to its financial goals. He reviewed the company’s goals, which include 2-3% sales growth, mid-single-digit operating profit growth and mid-to-high single-digit earnings per share growth.
“We expect embedding sustainability and purpose into our brands will lead to stronger organic sales growth,” he said.
Mr. Bruce cited data from IBM and the National Retail Federation indicating that sustainability is important to 80% of consumers, and among this group, more than 70% would pay a premium of 35% on average for sustainable brands and environmentally friendly.
Furthermore, he said that many efforts associated with sustainability generate cost savings. For example, wind farms will generate $10 million in cost savings for the business between fiscal year 2019 and fiscal year 2022.