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Mars has pledged to invest $1bn over the next three years in an effort to achieve net zero by 2050, after failing to meet an earlier emissions reduction target.
The US snack and pet food company, which says its carbon footprint is equivalent to a country the size of Finland, has set a more ambitious target to halve its emissions by 2030, bringing its commitments in line with competitors Nestlé and Danone.
Mars had previously pledged to reduce emissions by 27 per cent by 2025, but has only achieved an 8 per cent reduction — or 2.6mn metric tons — to date against a 2015 baseline.
The business grew 60 per cent over the same period. Mars rarely discloses its financial performance but last year confirmed that annual revenues had increased from $28bn to $45bn during the previous chief executive Grant Reid’s eight years in the post. A large portion of the growth came from acquisitions, including the $9.1bn purchase of VCA, a group of pet hospitals in 2017.
“The financial performance and the greenhouse gas performance are equally important,” said Barry Parkin, Mars’s chief sustainability and procurement officer. “It’s the performance that holds us all to account.”
For the past year, 20 per cent of the company’s senior executive long-term incentive plan has been tied to how successfully the maker of Snickers bars and Skittles reduces its greenhouse gas emissions.
“It’s got to be big enough that it changes behaviour,” Parkin said.
The publicity-shy company has been uncharacteristically public about its efforts to reduce emissions. Chief executive Poul Weihrauch told the Financial Times earlier this year that companies which backed away from environmental, social and governance commitments in the face of political pressure risked alienating young talent.
The $1bn investment that the company pledged on Thursday will go towards a transition to 100 per cent renewable energy, improving supply chain traceability, scaling up climate smart agriculture, changing recipes and improving logistics.
Mars said it could reduce approximately 80 per cent of its emissions within its own value chain, while the rest would be offset via the carbon credit market.
“In effect, it’s the net of net zero. The net part for us will be about 20 per cent and we’ll use those when we run out of other options down the road,” Parkin said.
The carbon offset market has drawn criticism as studies found that several tree protection projects did not deliver the emissions savings they advertised. Parkin said the company would only use “reduction credits from very high quality projects”.
The biggest challenge for Mars, like many food manufacturers, is reducing Scope 3 emissions — the greenhouse gases emitted all along their supply chains — which make up the largest chunk of the company’s total footprint.
Parkin said, for example, that the 140 Mars factories and thousands of veterinary clinics around the world make up only 4 per cent of the company’s emissions. More than 80 per cent of total emissions is embedded in the goods and services that Mars buys.
“Huge amounts of this is about raw materials and agriculture . . . We have to change what we buy, or where we buy or how we buy it,” he said, adding that Mars buys raw material from 100 countries around the world.
The M&Ms maker said its new target had been reviewed by the Science Based Targets initiative, the arbiter of corporate climate targets. The SBTi has been forced to overhaul its structure after concerns that the company was being paid to validate targets for which they were also setting the criteria.