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How Mars Inc. Aligns Sustainability with Biz Strategy: Q&A with Supply Chain Exec

Global food manufacturer Mars Inc. recently made public the fact that the global carbon footprint from its extended supply chain is equivalent to a country roughly the size of Panama. But last week, the company announced its new commitment to reduce its GHG emissions from its full value chain by 27% by 2025, and by 67% by 2050 (from 2015 levels).

Mars says its plan to reach its goals combines the company’s business principles with innovative science. Some of its successful initiatives include using technology to reduce water usage and GHG emissions in its rice supply chain and using solar gardens and wind farms to power production sites.

“To see other industries, competitors and peers, such as Nestle and Unilever, doing good work in this area is […] a testament to the business case,” Richard Ware, global VP of supply, R&D and procurement for Mars, told Environmental Leader. “Tackling these issues requires collaboration, not competition.”

We touched base with Ware to learn more about how such commitments and initiatives move the company closer to its business goals.

 

Environmental Leader: How are the company’s sustainability initiatives in line with its business strategy?

Ware: The world is changing, from the way we source, manufacture, and distribute products to the availability of resources that go into them – and that is having implications on the way we do business at Mars. Taking action is no longer a “nice to-do,” but imperative if our business plans to thrive and endure for generations to come. And none of us will thrive without a healthy planet. That’s why we launched our Sustainable in a Generation Plan last year – to show that transformational leadership is required to fix the engine of global business: the supply chain.

While we have 100 years of history, Mars is a dynamic business, responding to the extraordinary pace of change around us with an agenda that is future-proofing our business.

While we have made significant investments in acquisitions and innovation to expand and reshape our portfolio, and will continue to do so as necessary, it’s important that global businesses realize that beyond the fact that it’s the right thing to do, investment in operating sustainably can also deliver cost savings:

By capitalizing on the falling prices of renewable energy and the long-term cost savings of clean technology, Mars has been able to reduce the carbon emissions of our 150 factories around the world by 25%. We also now purchase enough renewable energy to fuel our entire operations in five countries and plan to make that 11 countries this year. And all of this is delivered at the same cost, or lower, as fossil fuel.

In addition, our investments are creating a more resilient and resource-efficient supply chain where smallholder farmers and others can thrive. We are working with our suppliers to source raw materials in a way that lowers climate risk and creates opportunity for people, so we can increase crop yields and ensure affordable ingredient supplies, reduce our impact on natural resources and ensure a generation of future farmers.

It also makes us a more attractive partner to customers, governments and NGOs, and it ensures we stay relevant to consumers, current and future Mars Associates.

 

EL: What obstacles have you faced?

Ware: We believe the scientific evidence is clear: Earth’s climate is changing and it is a serious threat to the future of the planet and all people. Once challenge we’re already seeing is the impact of weather on our ability to source ingredients. In addition, there are tremendous shifts taking place in our industry, and trust in business has never been lower among the public. Consumers are becoming more and more interested in where their products come from, and expectations for companies to be more transparent about sourcing is becoming the norm. All of these challenges are not unique to Mars – our peers, competitors and consumers alike are seeing the impact on society and how we do business. This why a response is required from businesses across the globe to evolve, adapt and to grow sustainably.

For Mars, launching the Sustainable in a Generation Plan and committing to achieving the goals we set over the next few years is our way of doing our part. We realized that all of the obstacles we’re facing – climate change and resource scarcity, the rise of automation, expectation of transparency, etc. – come down to the impact of our extended supply chains, and we recognize we need to do things differently:

Business needs to look beyond our operations (our own sites/manufacturing) to the entire supply chain.

Our largest impact is from the agricultural sourcing of our raw ingredients. Our GHG footprint in our extended supply chain is equivalent to that of a country the size of Panama. With that scale comes responsibility – regardless of the fact that those agricultural fields are not under our control.

We need to partner with others across our industry to influence meaningful change and not just be better, but to actually do what’s necessary based on what the science tells us is required to mitigate the impact of climate change.

With our Sustainable in a Generation Plan, we’re taking a new approach to addressing these challenges – taking what we’ve learned during the last decade by focusing on the impacts of our direct operations – and expanding our ambitions to our entire value chain to make a significant impact.

 

EL: We know the argument for initiatives such as these in terms of environmental responsibility, but how does the company make sure top brass knows the importance of them, the business case, ROI, costs vs. benefits, etc.?

Ware: As a values-driven business we’ve always been focused on sustainability. […And] they see the importance in talking about it publicly – Stephen Badger, chairman of Mars, Incorporated, recently penned an op-ed in the Washington Post and Andy Pharoah, VP for corporate affairs, talked openly to NPR about our commitments. We truly believe our business’ resiliency, relevance and success depends on our ability to be a force for good with people and the planet as this is the legacy we intend to create for future generations.

To see other industries, competitors and peers, such as Nestle and Unilever, doing good work in this area is also a testament to the business case. Tackling these issues requires collaboration, not competition. And while there have been pockets of brilliance, business has not gone far enough. Through our Sustainable in a Generation Plan, we want to inspire and move the industry to show that transformational change is possible.

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