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Danone & EDF’s partnership to transform agriculture, Ep #44

Big companies must make significant changes to address the climate crisis. Katie Anderson and Chris Adamo share how this unique partnership is helping Danone reach its ambitious goal, what other companies are learning from their experience, the role of policy, and what the future holds.

Date: 03/21/2023
Guest:

Katie Anderson & Chris Adamo

About episode

While new innovations from climate tech startups are exciting, effectively addressing the climate crisis simply isn’t going to happen without big companies making big changes. To be honest, that’s part of why I recently started a new role at NationSwell where I get to help a growing community of chief sustainability officers and ESG leaders take bold action. But don’t worry this episode isn’t about me.

It’s about Danone, a global dairy company that is taking significant steps to reduce emissions, and the Environmental Defense Fund (EDF), a nonprofit partnering with Danone and other companies to accelerate climate action. Recently, Danone became the first food and agriculture company to set a methane-specific climate target – a 30% reduction from its fresh milk sourcing by 2030 – through their partnership with EDF. We’re speaking with EDF Director Katie Anderson and Danone’s Vice President of Public Affairs and Regenerative Agriculture Policy Chris Adamo about how this collaboration is helping Danone reach its ambitious goal, what other companies are learning from their experience, the role of policy, and what the future holds. This episode offers valuable, frontline insights into the transformation of a large corporation and agriculture as a whole. Enjoy.

In today’s episode, we cover:

  • [3:53] Katie’s background, EDF & her role
  • [5:13] Chris’s background, Danone’s sustainability commitment & his role
  • [9:30] How Danone & EDF’s partnership came to be & what it involves
  • [11:57] Why do environmental & climate issues matter to Danone & what’s at stake
  • [15:02] The scale that Danone operates at, its aim & biggest barriers in doing more
  • [17:22] How EDF helps partners like Danone make progress on these issues
  • [22:00] Collaboration for financing to support the agricultural transition
  • [25:43] Thoughts on grants being viewed as corporate welfare
  • [26:58] How methane became a priority & the impact that Danone is hoping to have
  • [30:55] Why is Danone working on getting other companies to follow
  • [33:09] The most effective strategies for getting companies engaged & committed
  • [36:59] Investment areas that Chris thinks investors should look into
  • [39:57] Thoughts on reducing animal agriculture & the diversity of the field
  • [43:09] EDF & Danone’s policy priorities
  • [47:09] What needs to happen in the next decade to transform agriculture

Katie’s background, EDF & her role

Katie is a Director at EDF, where she leads the organization’s efforts to work with food and agriculture companies in setting and achieving climate action goals. EDF is a global nonprofit that focuses on finding game-changing solutions to environmental issues, with a particular emphasis on climate and solutions that can work for people as well. Since the 1990s, EDF has been collaborating with private sector companies to drive real impact for the planet while also benefiting businesses. Katie’s team is specifically focused on working with the agricultural industry, and they’re excited to be working with Danone on their new methane commitment.

Chris’s background, Danone’s sustainability commitment & his role

Chris is the Vice President of Public Affairs and Regenerative Agriculture Policy at Danone. In this role, he is responsible for policy advocacy and working with the internal team on regenerative agriculture, which means working directly with farmers in their supply chain, strategizing on how they build out the program, and thinking about how they can incentivize and help pay for some of the upfront costs to find a different kind of ROI for both the farms for the company. By training, Chris is an environmental attorney and has spent over a decade in the federal government working on public policy, particularly climate policy. Chris has also worked for President Obama and his council on environmental quality. He has experience in various environmental policies, but has a particular interest in agriculture and forestry due to the significant land base they occupy.

Danone’s sustainability commitment aligns well with Chris’s personal and professional interests. The company has a rich history of trying to be a different kind of business that brings social and business benefits together. In fact, in 1972, Danone’s CEO talked about the importance of businesses considering both social and business benefits, which the company calls the “dual purpose.” When Chris joined Danone in 2018, the company was on the verge of becoming B Corp certified, which was a huge attraction for him. Danone’s focus on sustainability and healthy foods has been a perfect fit for him.

How Danone & EDF’s partnership came to be & what it involves

Danone and EDF have had a longstanding partnership on various projects. The collaboration on reducing methane emissions in the dairy sector began through their involvement in the “Transform to Net Zero” cross-sectoral initiative, which aims to encourage corporations to take ambitious action towards achieving a net zero economy. Through their conversations, they recognized the urgent need to reduce methane emissions in all sectors, particularly in the dairy industry. They identified opportunities to work together, and when Danone announced the goal of reducing methane emissions in their fresh milk supply chain by 30% by 2030, EDF was excited to collaborate and explore how they could achieve this goal together. Their partnership will focus on improving reporting in the science and data arena, providing financial incentives to farmers for implementing methane-reducing practices, and encouraging other companies and policymakers to join their efforts. They are excited to develop more specific plans over the next few months.

Why do environmental & climate issues matter to Danone & what’s at stake

Chris explains that as a food company, agriculture is essential to Danone’s business, and without strong suppliers and supply chain continuity, they cannot operate efficiently. Climate change impacts their suppliers and farmers across the globe, affecting their ability to grow crops and raise livestock. For example, some farmers may face water and pasture concerns, which can affect the quality and quantity of their products. This, in turn, affects Danone’s commodity prices, supply chain, and business continuity. Danone works closely with their suppliers and farmers to mitigate risks and ensure a steady supply of commodities. Additionally, Danone’s investors, employees, and customers are increasingly interested in companies that prioritize sustainability and social impacts. Therefore, it is crucial for Danone to prioritize environmental and climate issues to maintain a strong business, attract talent and customers, and contribute to a better world. 

How EDF helps partners like Danone make progress on these issues

Katie highlights three key areas of focus, the first being the need to clearly articulate the toolkit of solutions for different regions. To achieve this, EDF employs its scientific expertise to understand what practices, innovations, and technologies work best in different regions and create tailored opportunities on the ground. EDF also helps partners like Danone to account for the outcomes of their sustainability initiatives by improving their modeling capabilities and incorporating those outcomes into their storytelling and branding efforts. As a science-based organization, EDF works collaboratively with partners like Danone, which also possesses extensive scientific and agricultural knowledge, to address these challenges.

Collaboration for financing to support the agricultural transition

Katie acknowledges that no farmer can cover the entire cost of new technologies themselves and highlights the need to work collaboratively with private and public sector dollars. This may involve connecting private sector funding to programs like USDA funding or collaboration across the supply chain. This can be a complicated process, but Katie emphasizes the critical need for it and is committed to working collaboratively to make it efficient and effective.

Chris says that there is no silver bullet for financing this transformation and that it will require significant investment across the value chain. He suggests leveraging each dollar spent by incentivizing farmers to find efficiencies and incentivize savings, using low-interest loans for bigger investments, and blending government dollars with their budget to increase impact. He discusses the potential for buyers in the supply chain to act as intermediary service providers to get more government dollars out and increase the overall impact. Chris also mentions that the USDA has been a willing partner and they have worked together on programs like the Conservation Innovation Grant to help pay for infrastructure projects and try different technologies on farms. He also discusses sharing arrangements, such as loaning out equipment to neighboring growers, as a way to stretch the dollar as much as possible.

EDF & Danone’s policy priorities

Katie mentions two key opportunities in the US, including utilizing the Farm Bill and other USDA programs to incentivize farmers to reduce climate impact, and increasing public sector investment in research and development for enteric solutions. Chris adds to this by emphasizing the importance of connecting policy initiatives across different countries to create a coordinated effort, and utilizing recent laws such as the Inflation Reduction Act to incentivize supply chain work and increase innovation in agriculture. He also mentions the upcoming Farm Bill as an opportunity to accelerate research and development for reducing climate impact. Both Katie and Chris express excitement for the potential impact of these opportunities.

What needs to happen in the next decade to transform agriculture

Katie acknowledges that progress is slow-moving and messy, but the message of climate action being crucial to business success is starting to resonate with more people, including farmers. To drive faster progress, she believes that more people need to step in and do their part, and key barriers such as solution set, science, incentives, and enablers need to be overcome.

Chris shares that the agricultural conversation has come a long way since 2007 and 2008, when forestry and agriculture conversations were far from the center of discussions. He is hopeful that the industry will continue to move forward, but acknowledges that progress in agriculture will occur at different rates in different areas due to the complexity and diversity of the sector. Despite this, he remains excited and shares an anecdote from his time working in government about how CPG companies and retailers have evolved in their sustainability efforts over the past decade, with more companies now advocating for policies and measurable, quantifiable change. He believes that while there is still a long way to go, the foundation for progress is fundamentally different today than it was a decade ago.

Resources Mentioned

Connect with Katie Anderson & Chris Adamo

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