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Money News

Nestle to spend big to cut carbon emissions while preserving profits

ZURICH (Reuters) - Nestle plans to invest 3.2 billion Swiss francs ($3.58 billion) over the next five years to progress towards its goal of net zero emissions by 2050, the world’s biggest food group said on Thursday.

“We believe we have sufficient operational and structural cost-savings initiatives under way to provide the room for these investments,” Chief Executive Mark Schneider told reporters on a call.

“For 2021 we have it covered. In the future, we will have to give specific guidance. While we intend to make this completely earnings neutral, the degree to which this is possible may vary from year to year,” he said.

Nestle, which produced 92 million tonnes of greenhouse gases in 2018, vowed to halve its emissions by 2030 and use 100% renewable electricity at its 800 global sites by 2025. It also promised full transparency and third-party certification to make its progress measurable.

Schneider said investment needed after 2025 was harder to quantify, but scale effects should make technologies cheaper and provide some tailwinds.

The maker of KitKat chocolate bars and Nescafe coffee said it would work with farmers and suppliers to promote regenerative agriculture practices - such as restoring soil health - saying it expects to source 14 million tonnes, or 50%, of its key ingredients from farmers using these techniques by 2030.

It also wants to scale up its reforestation programme, planting 20 million trees every year for the next 10 years in areas where it sources ingredients.

Nestle said it wanted to offset all business travel by 2022, and increase the number of ‘carbon neutral’ brands. Schneider dismissed the idea of selling brands with a high carbon footprint as window-dressing that would not help the planet.

The portfolio would change over time, he said, with an emphasis on plant-based products that should continue to grow strongly.

($1 = 0.8938 Swiss francs)

Additional reporting by John Revill; Editing by Nick Macfie

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