How candymaker Mars cut emissions 16% and still grew its business by 60%

Mars — the private company behind Ben’s rice, Pedigree pet food and M&M’s confections — reduced its greenhouse gas emissions by a record 8 percent in 2023, largely through initiatives that address how key ingredients including soy, cocoa, beef, palm oil and rice are grown.

But even more significant is that since 2015 Mars has cumulatively cut its carbon footprint by 16 percent, or 5.7 million metric tons, while growing its business 60 percent to more than $50 billion annually, according to the 2023 Sustainable in Generation Report. Mars’ net-zero targets, validated by the Science Based Targets initiative, call for it to reduce emissions 50 percent by 2030, compared with a 2015 baseline year. Those results include changes made to baseline year data that are made as acquisitions happen.

Mars estimates 96 percent of its total footprint in 2023, or 29.2 million metric tons, came from suppliers; approximately 60 percent was related to agricultural ingredients. The company has also pledged to eliminate deforestation in its supply chains by 2025, a goal its lead sustainability executive closely links to emissions reductions.

For context, Mars rival Mondelez International cut its emissions by about 3.5 percent in 2023; it’s on track for a 35 percent reduction by 2030. Like Mars, the company is on track to be deforestation-free for its cocoa, palm, soy and paper materials supply chains globally by the end of 2025.

“If you think about the big levers that we have [to reduce emissions], then the biggest lever … is land use change and stopping deforestation,” said Barry Parkin, chief sustainability officer at Mars.

Step 1: ‘Tackle the fundamental ingredients’

By the end of 2025, Mars will map suppliers for key raw ingredients including beef, cocoa, soy, palm oil, pulp and paper, and soy — to measure impact on deforestation and emissions. By the end of 2023, it assessed more than 300,000 cocoa farms alone. From there, Mars is changing sourcing locations and suppliers across certain ingredients to reduce their impact. So far, Mars has the most complete information about its palm oil and beef supply chains; almost all partners are deforestation-free or at low risk, according to the report.

Mars is also changing product formulations. Mars Petcare, for example, created a reformulation team that has already changed the makeup of several products. The largest brand, Royal Canin, is decreasing the amount of rice used in kittens and puppy food, and looking at substitutions such as micro-algae and insects that offer the same protein benefits at a lower climate impact. Rice accounts for 66 percent of Mars’ “unsustainable” water use and 4 percent of its agricultural emissions.

“This is about how we transform our supply chains, our products, so that they can be four times more efficient on carbon,” Parkin said. “You have to tackle everything and at the heart of that you tackle the fundamental ingredients. If you don’t change what you buy, where you buy it, or how you buy it, you’re not going to change the footprint.”

Step 2: Incentivize executives

In September 2023, Mars committed to investing $1 billion over the next three years to support innovations and efficiency measures that support its emissions reductions. It’s investing $1.7 billion more on projects such as a packaging redesign across at least half its product portfolio and regenerative agriculture.

Each business lead must consider greenhouse gas reductions and related climate goals, such as reducing plastic, as part of their annual planning and three-year business development agendas. They’re discussed during quarterly reviews. “To be honest, that’s at the heart of why we’re getting this done,” Parkin said. “It isn’t on the side, it’s integrated into how we do everything — when we’re deciding to invest in building new factories or invest in launching products.”

Mars structured its compensation to encourage this. The company’s 400 top executives have at least 40 percent of their long-term incentives tied to non-financial targets including emissions reductions, Parkin said. The next layer of management, about 1,700, will have 20 percent of their renumeration tied to sustainability goals, including climate targets.

There’s no reason a public company couldn’t take a similar approach, he said. “What company wouldn’t want to be growing as we are, making the financial returns we are, and delivering sustainability,” Parkin said. “We’re proving you can do both, and we’re saying it’s affordable.”

Step 3: Get buy-in from suppliers

In a forthcoming wave of programs, Mars will encourage “climate smart” agricultural practices that improve the ability of soil to sequester more carbon dioxide or that address the emissions of other widely used ingredients, such as milk, butter and cream. For example, it’s spending at least $47 million over the next three years to help close dairy suppliers reduce methane emissions and opt for less carbon-intensive feeds for their herds.

One example is a collaboration between Mars Snacking and dairy cooperative FrieslandCampina that will test enteric methane reduction, efficient manure management and sustainable feed production. The group, which represents 15,000 farmers, has been collecting emissions data for several years and will be able to help Mars quantify reductions, said Sanne Griffioen-Roose, director of farm sustainability for the cooperative. “Sustainability means you will have a company that exists for generations; farmers believe this, too,” she said. “They cannot do this themselves … It takes effort, finance and a long-term view.”

Dairy represents the second largest climate impact for Mars Snacking, which makes Kind, Nature’s Bakery and Snickers bars. As part of the relationship, FrieslandCampina is promising that a certain amount of the milk produced for Mars will come from farms using those practices. In return, Mars will pay a temporary premium to guarantee that supply and help with price breaks for some of the investment, such as feed additives or manure digesters, said Amanda Davies, chief research and development, procurement and sustainability officer for Mars Snacking.

“If you’re looking across the work we’re doing with that $47 million [dairy investment] the principle that is consistent is that we are economically incentivizing the farmers,” said Davies.

Step 4: Talk about performance, not promises

Like other big companies, Mars is studying carbon removal purchases it must make to achieve net zero by 2050 — to address the last 20 percent or so of its emissions that it won’t be able to eliminate entirely. It’s biased toward nature-based approaches and is an investor in the Livelihoods Funds, which back agroforestry, reforestation and rural energy projects.

“We talk about performance, not promises, and we think in general there’s been too much discussion about promises,” Parkin said. “There’s been a promise era, a promise culture. We’re in the performance space.”

Mars’ short-term plans up until 2030 are well in line with the goal of the Paris Agreement to keep global temperature increases below 1.5 degrees Celsius, according to an analysis published in April by New Climate Institute. The company’s strategy beyond that point is less clear, the report suggests, specifically referencing the need for more actions at dairy farms. “More information on Mars’s longer-term emission reduction strategy is needed for a thorough and fair assessment of the company’s 2050 target,” according to the report.