Nestlé Vietnam and the Ministry of Agriculture and Rural Development have recently signed a memorandum of understanding on cooperation in the development of regenerative, low-emission agriculture, under the Partnership for Sustainable Agriculture in Vietnam (PSAV). At the same time, Nestlé has launched an agro-forestry and reforestation project in the Central Highlands of Vietnam, with an aim of making coffee farming more resilient and helping improve the income of local farmers. With stronger confidence and a higher level of trust, Mark Schneider, CEO of Nestlé S.A., discussed the company’s dedicated efforts and its long-lasting commitments to advance sustainable development practices in Vietnam during an interview with The Saigon Times. Excerpts:
The Saigon Times: Nestlé has announced a climate roadmap to achieve the goal of net-zero emissions by 2050 in response to climate change. What is the company doing to make words and deeds aligned on the right track?
Mark Schneider: Of all our sustainability initiatives, reducing the emission of greenhouse gases is probably the most important one. In my personal point of view, I look at a number of different sustainability issues, and the most defining problem is about climate change.
In society and industry, if temperatures keep rising, if unusual weather patterns happen more often, and if the world’s sea levels are rising, a lot of unwanted negative consequences may come as a result. But if we are able to get the climate issues under control, I think many of these problems can be avoided.
Some 25% of the world’s greenhouse gas emissions are related to the production of food and agriculture. As the largest food and beverage company, we believe that it is a good thing to be a leader and to show how some solutions for these issues can be developed. When we set up the plan, we were calling for a whole company to reduce 20% of the greenhouse gases by 2025, compared to a base level established in 2018, 50% by 2030, and then to net zero by 2050. Even while the business keeps growing, it is important as we continue to reduce the emission of greenhouse gases.
Peak carbon output was behind us. We reached peak carbon output between 2019-2020 and are now below our starting point in 2018, even though the company has grown quite a bit ever since. It is no longer just words.
When people talk about climate around the world, there is so much talk about commitments, but there is not always enough talk about what people are doing and what the results are. We would like to point out the fact that we are already on our way. For example, we are switching all of our electricity sources around the world, including our factories and offices, to renewable electricity. We expect to finish it within the next one or two years.
In addition, we also work with agricultural communities around the world to make their practices more sustainable. Regenerative farming practices can improve the quality of the soil, even in areas where damage has happened.
Why does Nestlé put great emphasis on the agricultural sector to launch its sustainable growth plans?
Our company has a history of almost 160 years. From the very beginning, we have been collaborating with the agriculture sector. In every product category, what we are doing is essentially buying agricultural products and commodities, and then turning them into food and beverage. This is not industrial production. This is farming production.
We work with hundreds of thousands of people that work in family farms. They are dependent on the weather. And exposure to the weather is very common to agriculture around the world.
Thus, working with agricultural communities takes a very special approach, as farmers are the most exposed element in our entire supply chain, especially those in small-sized farms. As a company, we can always explore another market and another source, but the farmer literally has only the farm, and losing the crop is very easy. The risks are always there. Respecting the farmers’ vulnerable situation, helping them and always being their reliable partner are thus very important to us.
We are deeply moved whenever a farmer tells us that we have been buying from his farm for many generations. It is not only for himself, but also for his family and all people working on that. We are the company that he trusts and the one that never leaves him alone. We are always trying to give a helping hand in terms of technical assistance, and sometimes even the financial one, to our farmers.
Vietnam is one of the most vulnerable countries to climate change, as seen by severe drought conditions in the Central Highlands provinces of Vietnam. How could Nestlé’s agroforestry project improve the situation?
One of the key features is to protect the soil, and one of the best ways to protect the soil is to have intercropping and tree shading. The whole notion of creating protection to the soil is to maintain moderate sun exposure and to not deplete the soil by monocultures.
Additionally, we have carried out many research into the coffee-planting methods that are more drought-resistant and less vulnerable to weather-related dangers. By subsidizing the programs and making them widely available, we aim to make farming in the Central Highlands more resilient. These are also the two salient features of the NESCAFÉ Plan, which we continue to advance to make coffee farming more successful and increase the farmers’ income.
What challenges have the company faced in implementing the tree planting model in Vietnam? How did the company overcome the obstacles?
On a fundamental point, farmers who are exposed to the natural elements tend to be fairly conservative given the risks of agricultural production. The difference between prosperity and loss may hinge on only one or two poor crops. Local coffee producers therefore want to stick to the proven methods that would hopefully give them the next better crops. Though you can talk all day long about new cultivation methods backed by positive research results, if you are wrong, local farmers will bear the economic consequences.
Gaining trust from the farmers is like taking one little step at a time and providing them with encouraging examples from others so that they may be certain that the new method actually works. The notion of building trust is very important to us. Instead of saying farmers are conservative, our job is to understand their risks and gradually earn their trust.
Once you have that trust, it will stay with you for long periods of time. That is something that we like, because our whole approach to business farming is a very long-term one.
What is the plan of Nestlé to accelerate the project and bring positive impacts to the environment and the economy?
It is important to see this project not as a completely enclosed one. Rather, we would like to scale it and potentially implement it in all the coffee-growing provinces in Vietnam so that local farmers and the country would benefit from it.
Regarding the tree planting, we have in mind about 2.3 million trees to be planted and grown over the next five years. According to the NESCAFÉ Plan 2030, we will buy half of the coffee sourced for Nescafé from regenerative agriculture by 2030.
We want to be a long-term player in this market. It would be easy for us to just buy the coffee here and process it somewhere else. But we are here, investing in facilities in Vietnam and building our plans patiently. We are providing high-quality jobs, training courses and career opportunities to hundreds of colleagues.
We do not want to be just a multinational company that does business transactions. We want to be a good corporate citizen that Vietnamese people can rely on for jobs and tangible contributions to economic growth.
Thank you for your time!
Reported by V. Dung