Organizational Governance Organizational Governance

Screw Incremental Improvements:
Mars Is Changing How It Does Business

One year since the launch of its 'Sustainable in a Generation' Plan, Mars announced this week that it is changing how it does business. Speaking ahead of last year’s UN General Assembly (UNGA) and Climate Week in New York, CEO Grant F. Reid warned that the "global supply chain is broken," and business needed to make a "huge step change" in order to deliver on the climate targets outlined in the Paris Agreement and the UN Sustainable Development Goals.

By Sustainable Brands | Published 6 years ago | About a 4 minute read

One year since the launch of its 'Sustainable in a Generation' Plan, Mars announced this week that it is changing how it does business.

Speaking ahead of last year’s UN General Assembly (UNGA) and Climate Week in New York, CEO Grant F. Reid warned that the "global supply chain is broken," and business needed to make a "huge step change" in order to deliver on the climate targets outlined in the Paris Agreement and the UN Sustainable Development Goals.

In that vein, Mars is now exploring how companies can work with governments, NGOs and other stakeholders to create solutions by focusing on what is broken. Along with investing in its Sustainable in a Generation Plan — a billion-dollar commitment to far-reaching goals underpinned by science and a determination to drive impact throughout the extended supply chain — the food giant is driving change in its own supply chains through:

A new sourcing strategy: The company says it will move away from a traditional commodity approach, changing the way it sources key agricultural materials to help address key sustainability challenges — including GHG emissions, water stress, land use, human rights and income. It will initially focus on 10 key ingredients where the impact is greatest, including cocoa, fish, rice and mint, among others.
Embedding sustainability: Mars is committing to putting sustainability at the core of its procurement strategy to balance decision-making.
Deepening collaboration: To deliver change at scale, Mars intends to focus on deepening existing industry collaboration and NGO partnerships, and on starting new ones.

Speaking this week ahead of the UNGA and Climate Week NY, and on the heels of last week’s Global Client Action Summit (GCAS), Reid said: "I am deeply invested in our plan to change the trajectory around how we do business. We continue to see a range of issues facing our global community — including climate change, poverty, obesity and water stress. Incremental improvement will not be enough. We must take action together.

“Mars has committed to working with governments, NGOs and industry leadership groups, like the Consumer Goods Forum, to make measurable differences — and to create a healthy planet on which all people can thrive,” he added. “Collaboration is critical if we are to accelerate how we address the challenges facing us today."

Chief Procurement and Sustainability Officer Barry Parkin said: "The transformation of supply chains is necessary across most of the materials we used to call commodities. In fact, I believe we're seeing the end of the commodities era, where materials used to be sourced from largely unknown origins and bought purely for price on a transactional basis.

"The future will require sourcing from known origins and in many cases known farms, with price and sustainability impacts evaluated side by side and generally from longer term partnership arrangements with fewer suppliers. We have started to make this shift."

He added: "This first year for us has been about accelerating what is already working starting with the transformation of our raw material supply chain, building critical partnerships and testing new approaches. The next few years will see a significant scaling up of our activity and impact on the ground."

Mars has released a progress report on the first year of implementing Sustainable in a Generation, and will be busy discussing its new trajectory at a range of events this month, including UNGA/Climate Week, as well as through the launch of two media initiatives:

Mars has partnered with Project Everyone, a not-for-profit organization that pushes for urgent progress on the SDGs, on a "pop-up" radio station called “Climate Calling” — offering business leaders and thinkers an opportunity to share their views on environmental progress. Working with a range of radio partners, the content will be broadcast globally and across social media throughout September.
Mars will release a series of short films demonstrating initial efforts to transform the traditional commodity approach — and commitments to smallholder farmers in its value chain. Films look at key ingredients including rice, mint and vanilla.