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A Lasting Trend? Mondelez International’s Sustainable Promise

Over the last few years, more American citizens have become aware of the current condition of our planet, with about 69% of Americans acknowledging global warming in 2016. Whether or not scientists have perfected the theory of climate change, there is a definite difference in our availability of resources and the health of our natural environment.Through pressure of the people and the government, Corporate America has been making positive change to their practices, and many companies have started sustainability initiatives in response. Many companies have realized that in the long run sustainability is a profitable decision. Resources are finite; whether we like it or not the economy is dependent on the well-being of the environment from which we get our food, fuel, and most importantly, oxygen and water. The current Administration’s decisions and beliefs aside, many companies are moving in a positive direction, but for how long and with what environmental and financial impact?  

The companies that are pioneering the sustainable energy industry have become prominent in media discussion and the market, as they begin to offer alternative products at affordable prices. Elon Musk and Tesla are bringing efficient travel to the masses with the new Model 3, which is more affordable than the Chevrolet Volt. Large technology companies like Google, Cisco, and Intel are investing in sustainable energy for their corporate headquarters and for the communities surrounding them. Even ExxonMobil, the largest oil company and the third largest company in the world, is spending $1 billion annually on alternative energy research, which was announced to the public in November of 2017. It makes sense that technological giants and companies with finite resources are making headway, but how about our favorite snack food company?

 

Mondelez International Foodservice is a world leader in snack foods, operating in 165 countries, and boasting an annual revenue of about $34 billion (2014). Some of their famous brands are NABISCO, which includes Oreos, Chips Ahoy, Ritz, and Wheat Thins, and many others including Trident gum, Sour Patch, Halls, and Toblerone. In the summer of 2017, the company released a statement to their investors and stakeholders about a mutli-year plan to comply with scientific research that was the basis of the Paris Climate Agreements. By 2020, Mondelez plans to reduce their CO2 output to 15%, with claims that they have already reduced their CO2 emissions by 7% over the past five years. The company also has made statements about altering their supply chains by finding sustainable foresters and harvesting companies for their key ingredients, such as cocoa and palm oil. Mondelez has made headway in reducing water usage, eliminating excess packaging, and committing to using more cage free eggs in their products. Along with their sustainability goals and commitments, Mondelez has made efforts towards healthy consumer lifestyle through creation of well-being snacks, increased safety in the workplace, and improving communities through donations to healthy lifestyle community partnerships to promote nutrition knowledge and physical activity and access to fresh fruits and vegetables in 14 countries.

 

While I love sustainability progress as much as the next environmentalist, I am skeptical of the idea that this is a trend that will last. Many businesses have embraced projects in order to gain public support, especially if their customers have been vocal about a particular issue. Mondelez--being an international powerhouse--means that the company faces pressures from multiple countries that have increased food regulations and adopted a sustainable focus. These countries pose a greater threat to Mondelez than America does, regarding regulations, especially because 164 of the 165 countries it operates in signed the Paris Agreements.

 

The Paris Agreements can be regarded as a complex web of requirements that scientists determined would help the planet avoid reaching a temperature increase of 2 degrees if all countries abided by the framework of the agreement. This framework would limit carbon emissions, and the EU together agreed that they would limit their collective emissions by at least 40% by 2030. Since many of Mondelez International’s subsidiary companies started in Europe, and Europe is their second largest market, the company probably felt pressure to comply with the standards in this region. However, the headquarters for Mondelez International Foodservice is in East Hanover, New Jersey, in the United States of America, which happens to be one of the two remaining countries to not sign the Paris Agreements. It seems like a lot of the decisions made were driven by the company’s profit incentive, rather than the pure benefit of their consumers. Of course, this is how many companies make their decisions, but when working in food service, consumers should hope that their producers have their best interests in mind. This is not always the case.

 

Either way, many companies create sustainability goals with giant holes in them. For example, research on electric car batteries has shown that batteries may have a negative environmental impact compared to gas powered cars.  We’re talking about the complete restructuring of a supply chain towards a more sustainable focus by ethically sourcing all ingredients or components of a product. Mondelez has done a good job covering many bases of their production operations, including some supply chain changes, but are they truly making strides towards true sustainability? Only time will tell. One of the first indicators of their potential lapse is their CO2 emissions promises, which are only halfway met with only two more years before the set deadline.

 

Overall, some companies are moving in an admirable direction, whilst many are not. Is it acceptable for society to criticize a company that is doing something rather than nothing? When making a promise to uphold certain goals, a company should do its best to implement their promises in as many aspects of their business as possible. Multi-billion dollar companies like Mondelez International can’t necessarily make a financial excuse for the lack of implementation of new policies that would benefit their customers and the environment. Yes, the upfront costs of implementation for these initiatives is steep, but a large multinational corporation like Mondelez International has the financial means, and a huge incentive, because they serve billions of people. When we begin reaching a point where resources are limited, the companies that take preventative measures now can operate at a much lower rate and save on bidding for resources later. If we can shift the focus from short term profitability to long term sustainability, companies will notice that this, in time, leads to greater success. If we could internalize the externality of “well-being” and the environment, the rewards definitely outweigh the risks. However, values in our society have been skewed, which  leads to reasonable suspicion at the initiatives of these larger companies. At any rate, if I was a stakeholder in Mondelez International Foodservice, I’d have my eyes looking out for that progress report for the Sustainability 2020 initiative.

 

Sources:

Hirtenstein, Anna. "Exxon Quietly Researching Hundreds of Green Projects." Bloomberg.com.

November 03, 2017. https://www.bloomberg.com/news/articles/2017-11-03/exxon-is-spending-1-billion-a-yea

r-to-research-green-energy.

 

Wade, Lizzie. "Tesla's Electric Cars Aren't as Green as You Might Think." Wired. January 09, 2018.

https://www.wired.com/2016/03/teslas-electric-cars-might-not-green-think/.

 

"Mondelēz International Delivers Strong Progress Against Its 2020 Impact Goals." Mondelēz

International Delivers Strong Progress Against Its 2020 Impact Goals (NASDAQ:MDLZ).

July 20, 2017. http://ir.mondelezinternational.com/releasedetail.cfm?releaseid=1033790.

 

"Paris Agreement." Climate Action - European Commission. February 16, 2017. Accessed

February 22, 2018. https://ec.europa.eu/clima/policies/international/negotiations/paris_en.

 

"Yale Climate Opinion Maps - U.S. 2016." Yale Program on Climate Change Communication.

  1. http://climatecommunication.yale.edu/visualizations-data/ycom-us-2016/?est=happening

&type=value&geo=county.

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