Danone: decarbonising agricultural supply chains

What was the plan?

As part of its goal to become a net zero organisation by 2050, the multi-national food products company, Danone, decided in November 2017 to focus on ‘regenerative agriculture’. In addition to reducing emissions, regenerative agriculture promises to make Danone’s supply chain more resilient to rising temperatures and other climate shocks (Danone, n.d.).

What was the challenge?

Promoting regenerative agriculture meant going against the tide of long-standing industry practices and market trends. The global food industry has promoted an industrial model of agricultural production that prioritises short-term yields over climate mitigation and other environmental concerns. In 2019, around 22% of all GHG emissions were generated from agriculture, forestry and other land use (AFOLU) (IPCC, 2022).

In many instances, the intensive farming model continues to be encouraged by government policies, such as subsidies for fertilisers and other intensive farming inputs. As the market currently stands, farmers have few incentives for attempting to decarbonise their operations, which presents a major challenge for the climate-oriented regenerative techniques Danone is trying to promote.

What strategies did Danone use?

In 2018, Danone collaborated with the World Wide Fund for Nature (WWF) France and other experts to formulate an approach centred around three interconnected outcomes: protecting soil, empowering a new generation of farmers and promoting animal welfare (Danone, n.d.). The company then took the following steps:

  • Working with multiple stakeholders, Danone defined good practice using a public Regenerative Agriculture Scorecard.
  • It set out to drive transformation on the ground, focusing on its agricultural supply chain in France and seven other key countries, including over 50,000 of Danone’s direct supplier farms.
  • It committed to measuring its impact robustly, not just tracking its carbon footprint but developing innovative soil health metrics and social outcomes. As a result, the company set a target to reduce GHG emissions from fresh milk in France by 15% by 2025.
  • It committed to driving innovation and collaboration with a plethora of partnerships such as One Planet Business for Biodiversity, Farming for Generations, Les 2 Pieds Sur Terre, and the Danone Ecosystem Fund and Livelihoods Funds (Livelihoods Funds, n.d.).
What were the outcomes?

By 2021 Danone had regenerative agriculture programmes in the United States, Spain, France, Mexico, Egypt, Morocco, Algeria, and Romania, and had converted over 150,000 hectares (12% of direct sourcing) to regenerative agriculture. In France, the company has made progress against its target to source all ingredients such as fruits, vegetables and fresh milk from regenerative agriculture by 2025 and it has reported a 3.6% reduction in GHG emissions for each litre of milk collected (Danone, n.d.).

To help build consumer demand, Danone communicated widely on how its products are produced and the benefits of regenerative agriculture, attempting to build a movement. To significantly shift the market, however, reforms to existing agricultural policies are necessary, and the company has also been a strong advocate for policy reform.

In March 2021, CEO Emmanuel Faber’s seven-year tenure came to an end. One year later, the company launched Renew Danone, a strong focus on a sustainable profitable growth model (Danone, n.d.). Will Danone’s regenerative agriculture plan survive this new drive for commercial performance?

***

Andrew Voysey outlines some of the challenges associated with agricultural policies that are hindering the agricultural sector’s transition to a net zero future. Voysey is Head of Sales and Carbon at Soil Capital, which helps farming professionals use regenerative agricultural practices to produce nutritious food, healthy soils and clean air, and to increase biodiversity and profitability (Soil Capital, n.d.). In the video, Voysey discusses the importance of regenerative agriculture and outlines some of the factors that have contributed to successful decarbonisation initiatives.

University of Cambridge Institute for Sustainability Leadership