July 29, 2014

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Increased Disclosure & Supply Chain Responsibility: General Mills Responds

We're not going to see dramatic change unless we make investments to help farmers grow more and improve the whole food supply chain.

Jerry_lynch_general_mills

By Jerry Lynch, VP and Chief Sustainability Officer, General Mills

A huge thank you to all those who participated in our recent sustainable sourcing Twitter chat on April 23rd. It was great to have so many engaged thought leaders and industry professionals join in the conversation. The energy you all brought to the chat was electric, and it’s great to know that there are so many who share our passion for sustainable sourcing and environmental sustainability.

While our Twitter chat was a short one hour, Steve Peterson and I appreciated the dialogue. There were many questions we weren’t able to get to, so we want to take time now to address each of these unanswered questions.

The questions span several topics but broadly fall into five key areas:

  • Supply Chain and the Environment
  • Verification and Transparency
  • Nutrition
  • Food Safety
  • Influencing Consumer Behavior

Today, I'll tackle the first two categories.

Supply Chain and the Environment

Given the focus of the chat – sustainable sourcing – many of the questions we received relate to how General Mills is working throughout its supply chains to protect the environment and communities.

@beltwits and @johnfriedman, for instance, asked what we were doing to identify sustainability opportunities with the greatest potential.

Through our focus on sustainable sourcing, we are tackling the areas of greatest environmental impact on our supply chain. Of course, we are taking many steps to improve our environmental practices within our facilities, but since nearly two-thirds of greenhouse gas (GHG) emissions and 99 percent of water use occurs Upstream of our operations, primarily in agriculture, this is where we see the biggest opportunity.

We’re partnering with industry groups and growers to find sustainable solutions that can be shared throughout the industry. Two partners that have been central to our efforts are World Wildlife Fund (WWF) and The Nature Conservancy (TNC).

In 2011, WWF helped us with a comprehensive supply chain risk analysis of all the raw agricultural materials we buy worldwide. Through this assessment, we were able to prioritize raw materials against risk categories such as human rights, deforestation, economic sustainability, fertilizer (nitrogen) use, GHG emissions, soil loss, water quality and water use.

This work helped us cement our commitment to sustainably source 100 percent of our 10 priority ingredients by 2020, representing 50 percent of our total raw material purchases.

In addition, TNC has helped us forge a path toward watershed health, taking into consideration our key growing regions and plant communities.

Based on the results from TNC’s global water risk assessment with General Mills, we developed the following list of eight priority watersheds, and already have efforts underway in several of these regions.

Geographic location GenMillsSusty

In relation to our water stewardship, @lisawdownes asked: “What motivates General Mills to participate in water stewardship initiatives such as the Alliance for Water Stewardship?”

@jackwysocki asked: “What do water consumption efforts do for the financials?”

We take a leadership role in efforts like the Alliance for Water Stewardship because we have an interest and a responsibility to protect the quality and supply of water upon which our business depends. Water is critical for our business; we can’t continue to operate without it. So, it is imperative to the long-term health of our business that we lead the way in water stewardship. We believe the cost associated with these efforts outweighs the future cost of inaction.

As much as possible, we look for ways to collaborate with others to benefit our growers, the community and the environment. I encourage you to read more about this on our General Mills blog.

@ipura asked about our food waste efforts and how they will evolve in the future.

Dramatically reducing food waste is one of the key strategies for creating sustainable food security. As part of the Food Waste Reduction Alliance, we are working with others in the industry to reduce the amount of food that goes to landfills each year and increase the amount of GenMillsSusty water and wastefood donations that feed hungry families.

Also, in sub-Saharan Africa, where over 265 million people are hungry, more than a quarter of the food produced rots due to poor harvest or storage techniques, post-harvest losses caused by severe weather or disease and pests. While many investments are being made to help smallholder farmers become more productive there remains a large need to improve the capacity of the food-processing sector that can be catalytic in driving demand for the crops of smallholder farmers.

We’re not going to see dramatic change unless we make investments to help farmers grow more and improve the whole food supply chain. Through Partners in Food Solutions, a nonprofit organization founded by General Mills, we are helping improve efficiency and product quality of local food processors, which includes improving sourcing, logistics and distribution.

I encourage you to check out our General Mills blog for more specifics on these and other food waste efforts.

@johnfriedman asked: Is General Mills looking at non-environmental risks to supply chain, so as labor, political stability, etc.?

Yes, John, this is absolutely something we look at.

We believe that the protection of human rights through responsible sourcing is critical to our company’s mission of Nourishing Lives. We are leaders in the AIM-PROGRESS Responsible Sourcing Forum, whose mission is to promote responsible sourcing by sharing best practices and promoting efficiency in the packaged goods supply chain. In addition, we have a strong Supplier Code of Conduct that outlines our expectations of suppliers.

Four of our 10 priority ingredients are sourced from the developing world: vanilla, cocoa, palm oil and sugar cane. We know that our ability to continue to source these high-quality ingredients depends on the health of the communities where these ingredients are grown.

We now have programs underway in Madagascar and Côte d’Ivoire, West Africa, to help improve the livelihoods of smallholder farmers that grow the high-quality vanilla and cocoa used in our Haagen Dazs ice cream.

In both cases, the primary risk to the world’s long-term supply of these ingredients is the ability of smallholder farmers to earn enough from their crops to feed their families. We are partnering with suppliers and CARE to help improve the sustainability of these crops while supporting training and education for farmers to help them increase their yields and ownership of the value chain.

@grnsup: I hope this also answers your question about our work with small farmers. [Does General Mills consider sourcing organics from smaller farmers? Or is it always about scale?] In addition, General Mills, through our Small Planet Foods organic business, sources from both small and larger farmers.

In response to the question posed by @thesustoolkit about whether or not consumers should expect to see any price changes, the efforts and programs I’ve just outlined in addition to others help us maintain the health of our business while continuing to bring great-tasting, affordable products to our consumers.

Transparency and Verification

Several participants had questions about transparency and verification of our audits and supply chain commitments.

We realize the importance of greater transparency and are doing a better job of sharing our story every year. In 2013, we partnered with Forum for the Future to conduct a materiality assessment that helped us identify the issues most material to our business. We’ve now aligned our responsibility reporting with these key material issues to increase GenMillsSusty accountabilityour transparency on the big issues impacting our business and stakeholders. We’ve also adopted the GRI guidelines in our reporting to increase transparency.

Inclusion of General Mills on the 2013 Dow Jones Sustainability North America Index is recognition of our progress in this area. Increased disclosures, both in our annual reporting and in our application, were key drivers.

This also gets to the heart of the question asked by @beltwits: “What if a goal was not met?

As we improve our reporting and make public commitments, we make ourselves accountable to provide our stakeholders with updates on our challenges and progress. We are delivering on this.

@causeartist asked about our Oxfam rating: Oxfam bases its reports on publically available information, which is likely a key factor in our ranking. As we continue to better share our story through our global responsibility report and other public forums, we think our score will increase.

Other questions about assurance and verification came from a number of our chat participants.

General Mills is building assurance and verification across our sustainable sourcing commitment. Early examples include RSPO certification plus traceability on palm oil, Bonsucro certification on sugar and Rainforest Alliance verification on packaging fiber in higher risk geographies. We are identifying the best options on other ingredients as we move deeper into piloting projects and sharing the results.

In addition, @jamesfarrar asked about recent news of our legal terms.

Although I am not a lawyer and this is not my area of expertise, I can tell you that we listened to our consumers and changed our legal terms back to what they were. More on our blog.

Next: Jerry Lynch responds to questions about nutrition, food safety and the company's responsibility toward consumers.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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