From climate science to global goals: How Tetra Pak is realigning its sustainability strategy
As Tetra Pak's latest sustainability report reveals that the company looks set to outperform its original goals, the firm's vice president of environment Mario Abreu explains how the food packaging company is preparing to shoot for approved science-based targets.
A RE100 member, a CDP ‘A lister’ and the only company within its sector with approved science-based targets walk into a bar. This isn’t the beginning of a joke; the company in all three of these situations is food processing and packaging company Tetra Pak, and it is extremely committed to its “Food, People, Futures,” sustainability strategy.
That’s not to say the company isn’t cracking a smile. Anyone would think that committing to 100% renewable energy by 2030, setting approved science-based targets to reduce emissions by 58% by 2040 against a 2016 baseline and realigning an overarching corporate sustainability plan to reflect on the aims on the Sustainable Development Goals (SDGs) would be taxing and tiring.
And while marching towards new science-based targets is no easy matter, Tetra Pak’s vice president of environment Mario Abreu can afford to crack said smile because of the collaborative work done to date through the RE100 and the Science-Based Targets Initiative (SBTI).
“We have a made a SBTI commitment, and are the only packaging company with approved science-based targets on climate,” Abreu told edie. “It’s always difficult to judge or justify a target, but the advantage of the SBTI is aligning it with the science of climate change. It plots the curves towards 2050.
“Our climate goal is meeting those curves. It is a very good way of benchmarking how committed you are as a company. Whereas the RE100 is very helpful and enables us to be exposed to innovation in areas where other partners are, the SBTI is totally different. It’s much more technical. In contrast to RE100 where you share experiences, SBTI is more technical looking at science, reports and enlightening us to understand what our contribution should be.”
Evidently, the combination of technical teachings and collaborative advice is paying dividends. Tetra Pak’s latest sustainability report was released on Monday (2 October) and revealed a 16% reduction in greenhouse gas emissions since 2010, despite 19% more packages being sold.
This puts Tetra Pak level with its 2020 sustainability targets already. Although Abreu maintains that Tetra Pak wants to deliver this strategy all the way through to 2020, the company is already mapping how it will hit is lofty science-based goals for 2030 and 2040.
Time for action
One area that provides ample motivation to do so is the SDGs. Tetra Pak spent nine months working alongside sustainability experts on a “rigorous materiality assessment” to define priority areas where contributions to the SDGs could be made. Of the 17 SDGs, Tetra Pak believes it can contribute to nine of them, and is using these goals to build up progress and momentum towards its science-based targets.
Regarding the protecting food pillar of its strategy, Tetra Pak believes it can contribute to the goals of zero hunger, responsible consumption and production, and partnership for the goals. The latter two overlap into the protecting future pillar, which has also been aligned to champion the clean water and sanitation, affordable and clean energy, industry and innovation, life on land and climate action goals.
The goal of decent work and economic growth is covered under the protecting people pillar, but Abreu claimed that climate action is his favourite goal, mainly because it’s the only one with the word action in it. It’s also the area where Tetra Pak has made arguably the most progress.
More than 180 billion Tetra Pak cartons were sold in 2016, with each paperboard carton made from 100% FSC-certified or other controlled sources paper. The company also uses bio-based polymers in its portfolio, including the Tetra Brik Aseptic 1000 Edge – which uses a bio-based cap. Not only was this the carton the first in the world to receive the highest class of Vinçotte certification for its use of renewable materials – derived from sugar cane – but third-party analysis also notes that it boasts a 17% lower carbon footprint than a standard package.
For Abreu, Tetra Pak’s progress in this area is an example of how one company can push ahead to set industry-leading standards, that eventually embed themselves in the sector.
“Although it started as a company approach to limit forest consumption, it has become a sector approach because we were the first in our sector to put the FSC label on products in 2007 and we have expanded since,” Abreu says.
“We have labelled 180 billion cartons with the FSC mark and most of our carton competitors are labelling as a way to communicate to consumers. This was an example of one business not being able to change the world, but by taking leadership in your sector you can drive the sector itself to improve, expand and drive sustainability.”
The company’s work regarding sustainable forestry has placed it on CDP’s Climate A list, which grades companies on promoting low-carbon outputs and disclosing climate mitigation plans and risks. The latest iteration of the report revealed that “A listers” are producing 6% higher returns on average compared to other brands.
If Tetra Pak has learned anything since launching its first filling machine in 1952, it’s that one company can drive improvements, but that climate action cannot be achieved in isolation.
By working and collaborating within the Climate Group’s RE100 initiative to source 100% renewable energy, Tetra Pak had leaned on the learnings of others to drive change. In 2016, Tetra Pak’s total electricity use was 845,058 MWh, out of which 298,374 MWh was renewable electricity – effectively placing the company around a third of the way to its RE100 pledge.
Tetra Pak is also a member of the WWF Global Forest and Trade Network to target zero net deforestation and degradation by 2020, and is a founding member of the High Conservation Value Resource Network, which works with others to gain certification from major forestry and agricultural commodity standard schemes.
Even though aluminium is a minute part of the company’s raw material use, Tetra Pak was still a founding member of the Aluminium Stewardship Initiative (ASI) to tackle sustainability in the sector, alongside the likes of BMW and Nespresso.
With suppliers accounting for 38% of Tetra Pak’s value chain emissions – and one of the key leverage points of science-based targets being the reduction of scope 3 emissions – this collaborative approach has been extended down the value chain.
In Sri Lanka, Tetra Pak partnered with Cargills and German agency GIZ to open new farming hubs in the Poonkari region. More than 300 smallholder farmers have been trained to increase average daily milk yields by more than 40% and farmer income by more than 50%. On a wider level, Tetra Pak recorded a 21% improvement in climate efficiency amongst packaging material suppliers over the last six years.
Collaboration covers goal 17 of the SDGs, and it has been a vital skill for Tetra Pak to develop as it sets out to deliver its science-based targets.
“Collaboration brings expertise and knowledge from other operations, you create better conditions where these are really needed,” Abreu adds. “We doubled crossed our materiality aspects against the SDGs. Under each three pillar we have aligned the SDGs and have aligned the pillar with the most material aspect. It is the best way to create an integrated strategy. It makes it more tangible and more practical as a company to set the right targets.”
As a member of the Cambridge Institute for Sustainability Leadership (CISL), Tetra Pak collaborated with the likes of Marks & Spencer, Jaguar Land Rover (JLR) and Hammerson to outline potential solutions to move away from a "business as usual" approach to sustainability and champion the SDGs.
As part of the realignment process towards the SDGs, Tetra Pak spent large parts of 2016 revamping its internal approach to sustainability. As well as reporting to the Global Reporting Initiative’s G4 guidelines for the first time, Tetra Pak launched a Sustainability Forum to address a cross-functional approach to sustainability. The Forum reports directly to a strategy council and its members include vice president and director level company representatives.
In order to maintain the goal of reducing value chain emissions by 16% per unit of revenue before switching to the science-based targets, Tetra Pak launched a Code of Business Conduct for Suppliers (the Supplier Code). All suppliers must adhere to the code, which is based on 10 principles of the UN Global Compact, many of which cover sustainability. Tetra Pak also uses ratings and scorecards to help procurement teams monitor environmental, social and governance issues in the supply chain.
Tetra Pak also measures the carbon footprint of its cartons through a specific calculator that accounts for life cycle emissions. This includes all the raw materials used, the production, the distribution, the consumption, as well as the end-of-life treatment of the product, bringing suppliers and consumers into the sustainability strategy.
Having already announced itself as a member of the Ellen MacArthur Foundation’s Circular Economy 100 (CE100) to accelerate circular economy ambitions, could similar platforms such as the Energy Productivity 100 (EP100), or the recently-launched Electric Vehicle 100 (EV100) appeal to Tetra Pak’s collaborative ethos?
“We've created a roadmap for 2020, where we keep track of key areas of emissions to look at what developments are available regarding suppliers, equipment, services and groups,” Abreu says. “We have to be mindful about how much we can commit or contribute to in regards to resources.
“Tetra Pak is not a company where the use of EVs is intensive, so for us we have not made a decision, because of the type of operations that we have it has not been a focus, we have to pick our battles and focus on them, which is what we're trying to do.”