“Climate change can impact both food security and our business by posing risks to the long-term health and viability of the ingredients we use in our foods,” according to Diane Holdorf – The Kellogg Company’s Chief Sustainability Officer . As a food company, Kellogg’s is most vulnerable to the effects of climate change in the form of shocks to its supply chain, manifested through limited availability, unpredictability, and consequently fluctuating prices of the ingredients it uses. In one example, a 2008 drought in Egypt disrupted rice production before the government shut down exports. Given the popularity of The Kellogg Company’s Rice Krispies product, this presented a real problem !
To date, Kellogg’s has focused its efforts in tackling climate change on its upstream agriculture and manufacturing processes, since they are the largest contributors to emissions across the value chain . In 2008, the company set reduction targets of 15-20% in its greenhouse gas emissions, water use, energy use per metric tonne of food, and waste send to landfill metrics relative to 2005 levels. As of 2015, it had succeeded in reducing the latter by 62%, but had fallen short on the others with reductions of 12%, 7.4%, and 11% respectively . Per the company’s 2015 CSR Annual Report, this was caused in part by the acquisition in 2012 of the Pringles brand, whose production processes uses twice as much energy and 70% more water than those of other Kellogg Company’s products. Going forward, the company has set more ambitious milestones – seeking to reduce greenhouse gas emissions, and energy and water use by 15%, increase its use of low-carbon energy by 50%, and implement water re-use projects in 25% of plant between 2015 and 2020 . Additionally, it is looking to have 30% of its plants sending zero waste to landfill by the end of 2016 and improve its use of packaging made from recycled materials .
Kellogg’s is also taking steps to engage its external stakeholders in its mission to reduce the company’s environmental impact. The company has instituted a Responsible Sourcing Initiative and will now require its key suppliers to track and report their own emissions targets – 75% will do so by 2020 . Further, between 2015 and 2050, it has committed to helping suppliers reduce their emissions by 50%. In the same vein, the company is encouraging the adoption of “climate-smart agricultural practices” for 15,000 small farmers in communities it sources from .
The company has also been playing a role in climate change related advocacy efforts. During the UN’s 2015 Climate Week, The Kellogg Company’s Chairman & CEO John Bryant wrote a Huffington Post op-ed presenting the business case for addressing climate change with Unilever CEO Paul Polman . Kellogg’s has also participated in President Obama’s Climate Data Initiative, the White House American Business Act on Climate Pledge, the Climate Declaration, and Business for Innovative Climate and Energy Policy . This summer, the firm joined a group of its peer companies and non-profits like the Ceres Group to brief Republican lawmakers on the business risks climate change presents to make the case for climate policy .
I think Kellogg’s could enhance its efforts to tackle climate change in a number of ways. First, the company could be more conscientious about meeting its self-set environmental targets – considering the impact on its metrics before acquiring products like Pringles, for example. Second, I think Kellogg’s could use Unilever as a role model in this sphere. In the 2015 Climate Survey, 20% of 624 sustainability experts from 69 countries chose Unilever as the company that has “achieved the most real, substantial advances .” One reason Unilever is such a leader in this category is because it has set and achieved more aggressive targets – aiming to achieve zero net deforestation by 2020, become “carbon positive” by 2030, and source 100% of its energy from renewable sources, for example  . The more interesting angle Unilever has taken, in my mind, is considering the environmental impacts of its products from a consumer use perspective. 2 billion people use Unilever products every day. Recognizing that power, and that 70% of the greenhouse gas emissions from their products come from their use, the company calculates metrics on a consumer use basis . Aligned with this, it has made a significant push to include its consumers in its environmental crusade. By 2020, the company intends to “reach 400 million consumers with products and tools that will help them to reduce their greenhouse gas emissions while washing and showering.” Finally, it is “encouraging our consumers to wash at lower temperatures and at the correct dosage in 70% of machine washes by 2020 .” I find Unilever’s work in the climate change space inspiring and think Kellogg’s would benefit from learning from its leadership position and emulating its efforts in including the consumer in how it approaches tackling climate change.
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