MARS, PEPSI & MCCORMICK FORM CLIMATE TRANSITION GROUP

Mars, joined by Pepsi and McCormick announced a plan to form a new Supplier Leadership on Climate Transition (Supplier LoCT) coalition, aimed at driving industry-wide action through global supply chains.

In other words, they want to tackle environmental issues in their supply chain and be able to make green credential claims. To do this, they are working with Guidehouse Consultancy who claims to have experience in driving such initiatives. The company has a sprawling set of services ranging from Finance to Cyber Security, and they appear to be the architect of the LoCT system, along with other environmental management systems such as the Papaya platform, based on Salesforce.

Cynically, I suspect looking at Guidhouse’s services, they appear to have strong government contacts, which probably will come in handy when navigating the new regulations coming in. The consultant specialises in assembling data, and doing data visualisation, as well as managing environmental footprint for companies, including the purchasing of carbon credits, which Mars suggests may be necessary where direct emission reduction is not viable.

How Mars Plans to Cut Emissions

The Mars press release which we have reprinted in full below led me to check their initial targets they refer to. Playing follow-the-link whackamole on the website, you can cross-reference the different initiatives, supporting facts and further explanations on how their environmental plan is constructed. The first key fact I learned was that according to the company, 80% of their supply chain GHG Emissions comes from agriculture and land use – see chart below.

It would be great if this latest announcement helped pull the picture together, and perhaps it’s just men (it probably is), but I just get confused trying to tie all the initiatives and numbers together. For example, this is what they say on their undated Climate Action Position Statement Page

Our long-term ambition
Mars’ climate change targets are to reduce our total GHG emissions from our full value chain by 27% by 2025 and by 67% by 2050, from 2015 levels.  

So it’s clear that we’re measuring performance against the ‘full value chain’. There is no glossary for defining what a full value chain is, but I assume that it includes their supply chain.

In this recent press release, Barry Parkin, Chief Procurement & Sustainability Officer at Mars, Incorporated  stated (bold emphasis is mine):

Mars is making strong progress to cut emissions in our direct operations and will hit our 2025 target well ahead of our goal. However, with our extended supply chain accounting for over 94 per cent of our emissions, it’s crucial we also partner with our suppliers to drive broad transformations and mitigate our collective impact on climate change. By forming this partnership and actively engaging our suppliers on sustainability, we hope we can drive truly meaningful, global impact.”

The wording might be a little confusing, but they have moved from talking about a ‘Full Value Chain’ to an ‘Extended Supply Chain’, which they say also needs to be included. So a full value chain appears to not be as full as an extended supply chain? The company has a chart below which might provide some idea of what is in or out of the calculation. Here they refer to Value Chain again, not an extended supply chain, so it feels like we are still perhaps not understanding the full picture.

It seems by far the most important part of the project is to have a solid strategy for agriculture and land use. This is what the company says about the key subject of Sourcing.

Sourcing
Mars has three primary options for reducing our emissions related to the raw materials in our value chain:

  • Improve raw material production practices – most agricultural value chains have untapped efficiency opportunities, whether through yield improvement or more precise application of inputs such as fertilizer.
  • Change where we source – certain raw materials can be grown in alternative regions with a lower GHG impact.
  • Replace the raw materials we source – for some existing and new products, we have options including substituting lower-emission ingredients or designing new products that use lower impact materials.

Final Thoughts and the Press Release

I hope that Mars will release more detailed information to clarify the differences between what they were doing before under the full value chain, to the new extended supplier chain model they’re discussing now. In full disclosure, I have a limited amount of time to study the information on their site. It is quite possible, or probable even, that there is more information I’m missing.

I hope I have not painted an incorrect picture of the situation, but I find it frustrating that anyone should have to spend the time to understand it. The company has invested, according to them, $1bn, but the results are difficult to disseminate for the layman, or even someone of moderate analytical capacity, such as me.

A lack of absolutely clear and consistent goals, progress, and KPI’s makes me wonder if this is a result of purposeful obfuscation? Opacity leads to distrust, which is the opposite effect the company should be aiming for.

The Press Release

  • Mars announces partnership with sustainability consultancy Guidehouse to form a new Supplier Leadership on Climate Transition (Supplier LoCT) coalition, aimed at driving industry-wide action through global supply chains
  • PepsiCo and McCormick also join to help suppliers develop their own science-based targets and climate action plans
  • Barry Parkin, Chief Procurement & Sustainability Officer, welcomes the new coalition saying transforming the supply chain will be “critical” in changing the trajectory on climate change
  • Mars also announces progress reducing greenhouse gas emissions in its direct operations, with the business on track to hit its 2025 target within the next three years

McLEAN, VA (April 15, 2021) — Mars, Incorporated, in partnership with sustainability consultancy Guidehouse, has today announced the formation of a new coalition, the Supplier Leadership on Climate Transition (Supplier LoCT), to mobilize suppliers on climate action. The partnership aims to drive industry-wide movement by providing suppliers with the knowledge, resources and tools to develop their own climate plans to reduce their impact on the planet.

In its first year, the program will focus on helping suppliers understand the foundations of greenhouse gas (GHG) reductions in their own businesses, including core knowledge of how to calculate their own GHG footprints and to set their own science-based targets. Mars is a founding partner of Supplier LoCT, with global businesses PepsiCo and McCormick also joining and enrolling suppliers to take part.

Mars has already made steady progress to cut emissions in its own operations by switching to renewables – which now accounts for 54% of the company’s global electricity use, and is now on track to reach its interim 2025 target early. Within the next three years, Mars will have cut over 42% of emissions in direct operations (compared to a 2015 baseline), building momentum towards net-zero in direct operations by 2040.

Barry Parkin, Chief Procurement & Sustainability Officer at Mars, Incorporated said of the new coalition: “As the world looks to rebuild from the pandemic, this will be a critical year in altering the trajectory of climate change. It’s never been more vital for global businesses and their suppliers to come together and protect the health of our planet and global communities for generations to come.”

“Mars is making strong progress to cut emissions in our direct operations and will hit our 2025 target well ahead of our goal. However, with our extended supply chain accounting for over 94 per cent of our emissions, it’s crucial we also partner with our suppliers to drive broad transformations and mitigate our collective impact on climate change. By forming this partnership and actively engaging our suppliers on sustainability, we hope we can drive truly meaningful, global impact.”

It comes as part of the business’ #PledgeforPlanet initiative launched in 2019, calling on its suppliers to join Mars in setting climate targets in line with the Science Based Targets Initiative, signing on to The Climate Group’s RE100 and embracing a future with renewable energy at the center of operations. Mars is focused on engaging its largest 200 suppliers to maximize impact and catalyze change through its broader supply chain. So far, 23 of its major suppliers have set science-based targets or joined the RE100, and Mars has since engaged another 30 suppliers to set their own climate targets or to enroll in the Supplier LoCT program.

By actively engaging suppliers on climate action, Mars aims to accelerate progress towards its commitment to reduce GHG emissions across its extended value chain by 27% by 2025 and 67% by 2050.

Britt Harter, Guidehouse’s sustainability lead and partner in the firm’s Energy, Sustainability, and Infrastructure segment, said: “Emissions reductions are now essential, and global supply chains contain some of the most significant and difficult-to-reduce emissions. While organizations across the world have made bold commitments to science-based climate reductions, most are struggling to deliver progress, and the clock is ticking. We have joined forces with Mars, McCormick, and PepsiCo to demonstrate our combined leadership and go beyond target setting to drive real action.”

Industry organizations including The Food Industry Association (FMI) and sustainability nonprofit Ceres, applaud the efforts of Supplier LoCT to convene suppliers on this important topic.

“Pre-competitive coalitions like this are a critical component to industry progress toward science-based targets,” said Marjorie DePuy, Senior Director, Supply Chain & Sustainability at FMI. “Every company’s supply chain practices are important in the drive to reduce overall GHG emissions.”

Steven Clarke, Director of Corporate Clean Energy Leadership at the sustainability nonprofit Ceres, said: “With leading companies increasingly setting science-based targets, we see growing demand for peer-to-peer learning focused in particular on scope 3 emissions in corporate supply chains. The challenge goes beyond motivating ambition that cascades through supplier tiers; meaningful impact will depend on building suppliers’ capacity to act.”

For further details on the Mars Sustainable in a Generation Plan and its climate action, visit https://www.mars.com/sustainability-plan.

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