Climate change is one of the toughest challenges a CEO faces in making decisions – a case study of balancing uncertainty and cost to bring about change that requires significant lead time. Companies like us that take climate change seriously invest today because we think about tomorrow.
This is how auto executives must have felt in the 1970s and 1980s when they made the difficult decision to invest billions of dollars in smaller, more fuel-efficient cars that would also be less profitable. This is how the CEO of IBM must have felt in the early 1980s when the company decided to invest heavily in smaller and less profitable PCs instead of just sticking to the immensely profitable mainframe business. This is how media managers must have felt as they poured money into digital assets for the past two decades, even though their printing presses were not yet fully written off.
Personally, I wasn't exactly an early adopter when it comes to combating climate change. In the early 2000s, when I had just become CEO of a global healthcare company, I was agnostic and wanted to see more evidence that the massive investments made to fight global warming were really necessary. However, as the evidence grows, it has become clear to me that I need to act. Not all of the facts are known today, but we know enough to act urgently to clarify what is contributing to droughts and ocean rise. Business leaders can no longer afford to be skeptical and infinitely patient and wait for every theory to be tested or every climate model to be proven. The overall mechanism of action and the direction of travel are clear. We shouldn't expect full public order and unanimity to do the job for us.
This is a moment of truth for industry leaders.
Those who choose hesitation over action will put our planet and their business at risk. Everyone on earth is part of a collective and international effort, and we are all served when action is taken to combat climate change. Consumers are also very interested in these issues and if we don't listen to them they understandably won't do business with us.
As the world's largest food and beverage company, Nestlé has a unique opportunity to address climate change because we operate in almost every country in the world and we have the size, scope and reach to make a difference. A year ago, Nestlé set out our goal of zero carbon emissions by 2050, based on more than a decade of work on environmental sustainability. Today we are accelerating this work and explaining our commitment to halve greenhouse gas emissions by 2030. We face complex challenges as our large supply chain includes agricultural suppliers around the world, which account for around two-thirds of our greenhouse gas emissions. We also need to help them improve.
Nestlé is stepping up its efforts to remove CO2 from the atmosphere by planting trees, and we are working with our farmers to introduce regenerative agriculture. We are reformulating products to reduce their ecological footprint and expand the range of plant-based foods. We rely on 100% renewable electricity at all locations, take water protection measures and combat food waste. These initiatives will be exported across our global supply chain in the coming years. As a good steward of the planet, Nestlé is morally committed to making these changes and believes the work we do is vital to the survival of our supply chains and our business.
The Taygete I solar project in Texas, Nestlé's largest investment in renewable electricity to date. Courtesy of Nestle
As Chief Executive Officer, I am responsible for our sales and profit figures and value real data and business returns over rosy forecasts. For Nestlé's work to combat climate change, I will expect and ask for the same. We presented our company's goals to the Science-Based Targets initiative, a collaboration between non-profit organizations that is considered the international gold standard for assessing net zero commitments. They confirmed that our plan meets the strictest criteria of the Paris Agreement. Our many stakeholders also deserve full accounting and we will provide updates annually. In the years to come, we will build on our reporting so the world can judge our progress.
As a company that will continue to meet the nutritional needs of a growing population, we know we must reduce our environmental footprint as our business grows. That is why we support a stable and coherent government policy that guides all sectors towards the goals of the Paris Agreement. We would appreciate clarity on carbon pricing and the required regulations so that our company can plan our path to progress with some confidence.
For more than 150 years, a company like Nestlé has been successful by always looking around the corner and anticipating the needs of the world. This foresight is an essential part of our success. I would respectfully suggest to my CEOs and executives in other industries that contemplation is not a viable strategy to combat climate change or a reasonable way of running a business. Let us come together and work for a common future so that we can look back on this moment in history, not with regret for how we failed, but with admiration for what we have achieved.
Mark Schneider is the CEO of Nestlé.
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