Nestlé’s methane blindspot and plant-based confusion

10 May 2023 Blog

Maddy Haughton-Boakes, Campaigns Advisor, Changing Markets Foundation

Originally published:

On 20 April Nestlé held its annual general meeting. The CEO, Mark Schneider, declared at this meeting of shareholders he wants to focus on products that are “good for the planet”. I’m sure many believed this was truly the company’s positioning, afterall they’ve been fed the glossy headlines of the company’s ‘ambitious’ net zero roadmap.

But we’ve done the analysis and the plan is little more than a green mirage, shimmering faintly on the horizon of the ever warming planet. Hiding behind this green mirage is Nestlé’s outsized methane emissions.

That’s why, on the eve of Nestlé’s AGM we sent a message it couldn’t ignore. Projected onto three locations, we called out Nestlé’s overinflated green claims, its huge methane blindspot and called for the company to ‘Cut methane and come clean now’.

During COP27, a UN High-Level Expert Group on Net Zero launched a report Integrity Matters: Net Zero commitments by Businesses, Financial Institutions, Cities and Regions. This report is in many ways a gift to shareholders, or anyone needing to scrutinise a company’s net zero target – it provides a set of criteria against which they can test if a company’s net zero commitments have integrity; it’s a set of tools by which to identify if a net zero plan is robust, or pure fantasy. At the time of the launch, the UN Secretary-General António Guterres was clear: “Abide by this standard and update your guidelines right away – and certainly not later than COP28”, leaving no more excuses for the continuation of unfettered green fairytales.

Despite these clear guidelines, there seems to be little sign that companies are taking note, opting to stick with misguided fantasies and with emissions from meat and dairy continuing to go largely unchecked. For this reason, we decided to use this report as a tool to test whether Nestlé is failing to act with integrity. Spurred on by the announcement from Danone that it would separately report and rapidly reduce its methane emissions, Nestlé was a logical choice – they are one of the biggest food and dairy companies and an industry leader. Their action would therefore send an important signal that dairy giants are serious about methane. Except Nestlé did not want to talk about methane.

Nestlé’s net zero integrity

For over a year now we’ve been calling for the company to properly report and tackle its outsized methane emissions and every time the company pointed us to its net zero roadmap. Our new analysis pulls back the curtain on this roadmap, revealing the company fails to fully meet a single recommendation from the UN’s guidance. Although the company positions itself as a sector leader on climate, its roadmap is full of creative accounting, has a huge methane blindspot and is misaligned on genuine solutions like diversifying to more plant-based ingredients and “less and better” animal products.

Of the 9 relevant recommendations in Integrity Matters, Nestlé fails to fully meet a single one. The company, by our analysis, partially meets five and completely fails four. What’s more, our interrogation of Nestlé’s climate plans and reporting showed that in five years, its emissions have only reduced by 1% – compared to the 6.4% it misleadingly declares through creative accounting by using the ‘business as usual’ scenario.

Methane blindspot

Amongst the Integrity Matters recommendations was a clear call for companies to separately report, and have separate targets for, substantial non-CO2 gases. When it comes to meat and dairy companies, their methane emissions are more than substantial – twice those of the entire livestock sector of Switzerland where it’s headquartered. Methane is a greenhouse gas that is 80 times more warming than carbon dioxide over 20 years and the meat and dairy sector is the single largest source of these emissions.

Not only does Nestlé does not report its methane emissions separately, but its mitigation plans completely ignore the science. There is no doubt, scientifically, that in order to meet 1.5˚C not only does methane in general need to be drastically reduced but emissions from meat and dairy specifically have to be cut. When it comes to reducing its emissions from dairy production, Nestlé is over reliant on regenerative agriculture whilst ignoring real, proven solutions. Regenerative farming can have beneficial effects on biodiversity and soil health, and it’s certainly a step in the right direction, however these farming techniques are unreliable for providing significant and permanent cuts in livestock-associated greenhouse gas emissions.

Plant-based solutions

But one golden ticket does exist for Nestlé. It is entirely possible for Nestlé to utilise developments in plant-based alternatives to drastically reduce its emissions, if these lower emissions ingredients were part of its climate transition plan and used to curtail the growth of its high emissions dairy portfolio. Instead, when it comes to plant-based products Nestlé wants to have its (dairy filled) cake and eat it. The company has stated explicitly that plant-based is not a substitute but instead it intends to grow both portfolios.

See for example its flagship brand KitKat, which has a goal of being carbon neutral by 2025. The company is also exploring plant-based versions of chocolate bar. Surely then the emissions savings of switching some KitKat bars from dairy to plant-based would be a key part of the climate plan for both KitKat and Nestlé more broadly? Wrong. Instead KitKat’s climate plan is essentially to plant trees on farms in and outside of the supply chain. The plant-based offerings are seemingly just another opportunity for Nestlé to grow, those alternatives are not designed to replace dairy versions.

Nestlé acknowledges the emissions savings that plant-based options can provide – indeed in its roadmap it states that by 2030 it will reduce emissions by 1.4million tonnes of CO2e by shifting toward more sustainable ingredients like plant-based foods. However, elsewhere in its other reports the company’s line on plant-based gets confused, insinuating that if it reduced its dairy production and diversified, another company would just replace them. This misalignment is evident in KitKat’s climate plan but also throughout Nestlé’s climate position. The company knows, from their own research, plant-based offerings could have substantial emissions savings – but these aren’t savings and there could be potential losses if dairy continues to grow alongside them.

Head in the sand

Nestlé continues to ignore the science of methane and the urgency to drastically cut these emissions by 2030 to slow warming. This head in the sand approach will impact the business in years to come, not least because dairy is highly vulnerable to both extreme and also slow-onset climate events, like droughts and heat waves.

We hope that shareholders saw our message during the AGM and start asking some pertinent questions to Nestlé on how “good to the planet” their portfolio really is. If the calls from shareholders about the ‘systemic risks’ of Nestlé’s reliance on unhealthy food is anything to go by, investors in the company are prepared to push for major change. Given the escalating climate emergency, we hope methane is next on their list.

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