Corporate commitment

Climate change is undoubtedly one of the major strategic challenges that companies around the world will have to face in order to protect our future and that of the planet.

The United Nations estimates that the annual cost of natural disasters is between 250 and 300 billion dollars. These phenomena also truncate or slow down the progress of millions of citizens. While society as a whole has a responsibility to contribute to sustainable development, corporations have a key role to play. Their impact on collective and individual well-being is key: they help to improve people’s lives through the products and services they offer; they contribute to economic and social development; and their activity has a direct effect on the environment.

Climate change is of concern to world political, social and business leaders alike. In 1972, the United Nations Conference on the Human Environment was held in Stockholm. For the first time, the issue of environmental degradation appeared on the agenda of the world’s major governments.

Two decades later, the Earth Summit on Environment and Development (1992) was held in Rio de Janeiro, which aimed to lay the foundations for a global policy that would allow the sustainable development of the planet. The point of no return was marked by the Kyoto Protocol, approved in 1997, which agreed to reduce greenhouse gas emissions by 5% in the period 2008-2012 with respect to 1990 levels. Since then, various summits have been held, although the results have been mixed.

The Paris climate summit (COP21) was a success, adopting the first global agreement to tackle man-made warming through greenhouse gas emissions, including a financial commitment of $100 billion per year from 2020. The COP 23 summit concludes with progress on technical issues, but with important issues still to be resolved on emission reductions. What has become clear is that decarbonisation of the economy offers the only real possibility for sustainable economic growth and development.

In the same vein, almost three years ago, 150 heads of state and government adopted a set of global goals to eradicate poverty, protect the planet and ensure prosperity for all as part of a sustainable development agenda. This 2030 Agenda has 17 Sustainable Development Goals that include, among others, the fight to curb climate change, women’s equality, education, environmental protection and the design of our cities.

Now that a broad consensus has been reached at global and governmental level, civil society and business must play a leading role in using their creativity and capacity for innovation to solve the challenges we face as a society. Many companies have already weighed up the risks and opportunities of responding to this problem and have incorporated sustainability, and the “climate change” variable, into their strategies.

To achieve the Global Goals for Sustainable Development, different sectors must understand and assume their responsibility and role in removing barriers to social progress, working together to create more sustainable markets and societies. In short, through their activity, businesses can make a decisive contribution to achieving the goal of reducing the impacts of climate change set out in this framework of collective and cooperative consensus that is the 2030 Agenda.

Over the next 20 years, companies that take a leadership role in the fight against climate change will not only make a direct contribution to reducing emissions, but will have the credibility and standing to invite their staff, customers and suppliers to join them on their journey, in what they do, in their pioneering initiatives or in the products and services they offer. Some companies, aware of the synergies between reducing greenhouse gas emissions and increasing productivity and revenues, have been working for years on regenerative projects as a solution to climate change.

A leadership role in the fight against climate change

One example is Lush, an international cosmetics company that invests in regenerative farms in Peru, Guatemala, Arizona and Uganda._[1] Another is Danone, who announced in 2018 its ambition to source 100% of ingredients produced in France from Regenerative Agriculture by 2025._[2]

Moreover, General Mills announced a much-publicised commitment to bring regenerative agriculture practices to 1 million acres of farmland by 2030._[3]

Patagonia is also an advocate, as one of the corporate allies of the Regenerative Organic Alliance. This group was established in 2017 by a group of farmers, business leaders, and experts in soil health, animal welfare, and social fairness._[4] Their mission is to promote regenerative organic farming as the highest standard for agriculture around the world, and they have useful short films on the topic, designed for farmers in Southern Europe.

Nestlé has also joined this battle and plans to invest 3 billion euros to accelerate its carbon neutrality. “The battle to make our planet habitable in the long term is a task for humanity as a whole, so we want to lead the food sector in committing to the fight against climate change”. With these words, Mark Schneider, CEO of Nestlé, assures that the company he chairs will use the next decade to continue the work that has been underway for several years: promoting regenerative agriculture and committing to renewable energies throughout its value chain.

Nestlé wants to be one of the first companies to demonstrate its commitment to the United Nations Business Ambition for 1.5°C initiative. To this end, it has published a detailed roadmap with strict timelines for compliance. Along these lines, the company has announced that it has been developing different strategies to halve its emissions by 2030 and make them disappear by 2050. To meet its ambitious plan, Nestlé is focusing its efforts on supporting farmers, ranchers and suppliers to develop advanced regenerative agriculture techniques. In addition, the company has set a goal of planting hundreds of millions of trees over the next ten years and making its energy transition to exclusively renewable energy sources by 2025.

Other companies are joining forces, such as Unilever, Axa and Tikehau Capital, creating a €100 million fund to support the shift to regenerative agriculture. The aim of the investment vehicle will be to help invest in this activity, a new trend that focuses on three key areas:

• protecting soil health to improve biodiversity and preserve water resources;
• contributing to the future supply of regenerative ingredients; and
• helping to unlock technological solutions that aim to accelerate the transition to regenerative agriculture.

The three companies believe that this necessary transition to improved agricultural practices will only be possible through a new form of collaboration between stakeholders across the value chain. This involves farmers, producers, manufacturers, retailers, technology providers or financial investors.

Leveraging the international network of AXA, Unilever and Tikehau Capital, the fund will have global reach. Targets and impact measurement will be central to its operation and will be fully integrated into the investment strategy of the three companies.

Conclusion

With leading global companies setting ambitions to source or switch to regenerative agriculture, demand for regenerative farmers and products will only grow. However, although increasing globally, regenerative agriculture is still practised on a small-scale basis within Europe. These small-scale pilots lead to “limited edition” products or “proof of concept” projects designed to explore commercial opportunities, rather than supply regenerative goods to the market at scale.

There is therefore a real opportunity for early-mover regenerative farmers to fill that gap.

Let’s discuss:

1. Do you think corporations are doing enough?
2. Do you have other examples that you’d like to share?