Nestlé CEO: Climate change laggards put the planet—and their businesses—at risk
The issue of climate change presents one of the most difficult decision-making challenges a CEO might face—a case study in balancing uncertainty with costs to bring about changes that will require significant lead times. Businesses like ours that take climate change seriously are investing today because we’re thinking about tomorrow.
This is how automotive executives must have felt in the 1970s and ’80s, when they made the difficult choice to invest billions of dollars to make smaller and more fuel-efficient cars that were also going to be less profitable. This is how IBM’s CEO must have felt in the early ’80s, when the company decided to invest massively in smaller and less profitable PCs instead of just clinging to the immensely profitable mainframe computer business. This is how media executives must have felt as they poured money into digital assets over the past two decades even though their printing presses were not yet fully written off.
Personally, I was not exactly an early adopter when it comes to addressing climate change. In the early 2000s, when I had just become CEO of a global health care company, I was agnostic and wanted to see more proof that the massive investments required to address global warming were really needed. However, as more and more evidence has arrived, the need for action has become quite clear to me. Not all the facts are in today, but we know enough to act with a sense of urgency to address what is contributing to droughts and causing oceans to rise. Business leaders can no longer afford to be skeptical and interminably patient, waiting for every theory to be vetted or every climate model to be proven. The overall mechanism of action and direction of travel is clear. We should not expect comprehensive public policy and unanimity to do the job for us.
This is a moment of truth for industry leaders.
Those who choose hesitation over action will be endangering our planet and their business. Every person on earth is a shareholder in what must be a collective and international effort, and we are all served when measures to address climate change advance. Consumers care deeply about these issues as well, 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, as we operate in nearly every country in the world and have the size, scale, and reach to make a difference. A year ago, Nestlé laid out our ambition to achieve net-zero carbon emissions by 2050, which built on more than a decade of work in environmental sustainability. Today, we are accelerating this work, detailing our commitment to halve our greenhouse gas emissions by 2030. We have complex challenges because our vast supply chain includes agricultural suppliers around the world that account for about two-thirds of our greenhouse gas emissions. We must help them improve, too.
Nestlé is stepping up efforts to remove CO2 from the atmosphere by planting trees, and we’re partnering with our farmers to introduce regenerative agriculture. We are reformulating products to have smaller environmental footprints and expanding plant-based food offerings. We are moving toward 100% renewable electricity at all of our sites, enacting water conservation measures and tackling food waste. These initiatives will be exported across our vast global supply chain in the years ahead. As a good steward of the planet, Nestlé feels a moral obligation to make these changes and believes that the work we are doing is critical to the survival of supply chains and our business.
As a chief executive officer, I am held to account for our top- and bottom-line numbers, and I value real data and business returns over rosy projections. For Nestlé’s work combating climate change, I will expect and demand the same. We submitted our company’s targets to the Science-Based Targets initiative, a collaboration of nonprofit organizations that is considered the international gold standard on assessing net-zero commitments. They confirmed that our plan meets the toughest criteria of the Paris Agreement. Our many stakeholders also deserve a full accounting, and we will provide annual updates. In the coming years, we will build upon our reporting so the world can judge our progress.
As a company that will continue to provide the nutrition needs of a growing population, we understand that we will need to reduce our environmental footprint, even as our business grows. That’s why we support stable and consistent government policies that will guide all sectors toward the targets of the Paris Agreement. We would welcome clarity on carbon pricing and the requisite regulations so that our business can plan, with some degree of certainty, our path to progress.
A company like Nestlé has been able to thrive for more than 150 years by always looking around the corner and anticipating the world’s needs. This foresight is a key ingredient of our success. To my fellow CEOs and leaders across other industries, I would respectfully suggest that contemplation is not a viable strategy to address climate change or a sensible way to run a business. Let’s come together and commit to a shared future so that we will be able to look back at this moment in history not with regrets of how we failed, but with admiration for what we achieved.
Mark Schneider is the chief executive officer of Nestlé.