Surely you have considered how the foods you buy take a toll on the environment. But have you ever thought about how that toll is multiplied by everyone around the world who buys food? Can you imagine the impact on our entire global food system? For a company like Mars, Incorporated—which makes more than 8 million tons of that food every year—it is a challenge felt every, single day.
The sustainability professionals at Mars, the parent company of dozens of brands like M&M’s, Pedigree pet food and Uncle Ben’s rice, evaluate the company’s environmental impact by employing the latest environmental science.
WRI worked with experts at Mars to analyze the company’s footprint and develop sustainability targets for land, water and climate. These targets, currently under review with the company’s leadership, take into account the latest science on the global carbon budget, water stress and other ecological limits.
“We take our responsibility for our products and the supply chain behind them seriously,” said Kevin Rabinovitch, global sustainability director at Mars. “For us that means understanding the science not only behind those impacts, but behind the limits we must all learn to operate within. This project helped us take a leap forward in our understanding.”
We documented our methodology and lessons learned in a new working paper, From Doing Better to Doing Enough: Anchoring Corporate Sustainability Targets in Science.
Why Science-based Targets?
Rising incomes and population growth mean the expanding global middle class will soon demand more food, water and materials than our planet can provide. Already, there are signs that we are straining the ecosystems that support human life: Global annual temperatures have exceeded the 20th-century average for the last 39 years, more than a billion people live in water-scarce regions, and only 15 percent of the world’s forests remain intact.
Despite these looming ecological threats, most companies set sustainability targets based on what is considered feasible or competitive rather than what is necessary to preserve Earth’s resources for future generations. Out of 40,000 corporate sustainability reports published between 2000 and 2014, only about 5 percent mention ecological limits.
Companies that commit to working within ecological limits are better prepared to lead in a green economy. They can have more focused and practical discussions about green investments, innovate transformative solutions rather than going after low-hanging fruit, and build trust with local communities.
The process of designing science-based land, water and climate targets for the sixth-largest, privately held company in the world was complicated, but doable. Four lessons emerged:
1. Make it useful for top management.
Mars employs more than 80,000 people and earned $35 billion in revenue in 2015. The company relies on a dizzying number of data points to support strategic decision-making, but top management uses only a few key financial metrics. We followed this model of streamlining metrics to create a sustainability dashboard that includes the company’s top land, water and climate goals. A much larger set of more granular metrics that measure things like watershed health and greenhouse gas emissions cascade from there, and are meant to be used by mid-level managers, engineers and supply chain experts to track progress. The entire framework is designed to coordinate the company’s various initiatives – from investing in renewable energy to increasing water efficiency – in a manner that is practical for the CEO.
2. Go to the source of land and water impacts.
Setting a science-based target for climate is comparatively easy because greenhouse gas emissions are equally destructive no matter where you are in the world (the Science Based Targets initiative provides six target-setting methodologies, including one developed by Mars in 2009). Land and water impacts, on the other hand, depend on location. A gallon of water used in drought-stricken southern California is more consequential than a gallon of water used in rain-soaked Scotland. At this time, science-based target setting methodologies do not exist for land or water impacts.
When plotting science-based land and water targets, companies must look at each watershed, aquifer and tract of land within their operations and supply chain. The company must then evaluate how its impact on the area squares with local conditions, both natural and socioeconomic. We won’t sugar coat it – this can be extremely challenging, but it’s not impossible.
WRI tools like Aqueduct and Global Forest Watch Commodities make this process easier and more accurate. We are also working with the CEO Water Mandate to develop better guidance. (For more on setting science-based targets for water use, see this blog post by Paul Reig and draft working paper with the CEO Water Mandate.)
3. Address value chain impacts.
Mars sources hundreds of raw ingredients, including tea, coffee, cocoa, fish, sugar, mint and palm oil, from countries all across the globe. The company estimates that more than 90 percent of its environmental impacts lie outside its own operations. Therefore, the company must account for all impacts throughout its value chain to truly respect ecological limits.
4. Look for synergies.
By designing a comprehensive sustainability target framework, we were able to identify opportunities to hit two environmental problems with one stone. For example, protecting water resources requires that water-related ecosystems such as wetlands and forests are healthy. Therefore, preventing deforestation can also protect water supplies.
The Bottom Line
Environmental science belongs in the boardroom for companies that wish to lead in a sustainable economy. Our work with Mars demonstrates how global companies can mainstream comprehensive, meaningful sustainability targets that respect ecological limits.
Corporate sustainability professionals should contact JP Leous to learn more about how WRI’s experts can assist companies with science-based environmental target setting.
WRI conducted this analysis with financial support from Mars.