0:03
Hello, good morning everyone, and thank you very much for joining us. I'm Emma Piercy from FDF and I'm delighted to be working with Maria and colleagues at NatWest on a series of webinars supporting our Ambition 2030 work this year.
0:20
Next slide please.
0:24
So today, myself, Maria, and then we have Emma Keller from Nestle and Vasmus Gokumus also speaking, which will be really exciting.
0:37
Thank you for joining us today.
0:40
And next slide.
0:44
And then what we'll be covering, so a bit of introduction for Maria and myself, then we'll move to WWF, then Nestle, and we'll have plenty of time for some Q &A.
0:54
So, as we do go through the presentations, please do submit any Q &As that you may have, and we shall come towards those at the end. Next slide. Thank you.
1:07
So, just a bit of scene setting.
1:10
I'm sure you're all aware, we have our five pillars of Ambition 2030 listed here, and of which nature is the focus of today's session.
1:22
We will be doing an aftercare email, so links to some of what I'm showing here will be shared later. Next slide, please.
1:34
So, we will also be uploading shortly, not there yet, a toolkit which will be helping our members on their nature roadmap, and this is an extract from this.
1:47
So, it basically is about helping members on their journey from entry level towards the innovative end.
1:55
And as part of this webinar, this is starting to help people at the start of their journey. Next slide, please.
2:05
And this forms part of the work that we'll be doing over this coming year.
2:10
Now, I really want to get to the main presentation, so I shall leave that there as an introduction for myself.
2:15
And I'm we'll come to some more activities and what we'll be doing in the Q &A.
2:21
But I'll pass it over to you now Maria, thank you. Okay, thanks Emma. Good morning everyone.
2:25
I'm Maria Dolan, sector manager for consumer industries at NatWest.
2:29
This role involves overseeing both internal and external strategies for food and drink manufacturers as well as the leisure and retail sectors.
2:37
We are delighted to be working alongside FDF to deliver this series of webinars focused on Ambition 30 included today's on nature restoration.
2:46
At NatWest, we view climate change, the continued significant global decline in nature and biodiversity and resource scarcity is likely to impact our customers and society at large, both today and in the years to come.
3:00
Climate change, nature loss and inextricably linked requiring immediate and significant action to prevent potential irreversible impacts.
3:08
The increasing frequency of extreme weather events the UK from intense heat waves to devastating floods as start reminders of the changes already underway impacting businesses and communities alike.
3:21
Nature loss exacerbates these challenges weakening our natural defences against extreme weather.
3:27
In December 2022 the UK government committed to halting and reversing nature loss by adopting the Cooning Montreal global biodiversity framework which sets out global goals for 2030 and 2050.
3:41
At Networks Group we are integrating nature into our existing climate approach over several years.
3:46
We are in the early stages of understanding our nature-related risks and opportunities based on our lending portfolio and how we manage our own operational emissions.
3:56
This webinar reflects our shared commitment to nature-positive goals and to creating resilient and sustainable food systems, a vital area where nature plays an undeniable role.
4:07
It is important to recognise that nature restoration is more than an environmental issue.
4:12
It plays a pivotal role in ensuring our food security, supporting economic stability and safeguarding the long-term wellbeing of society.
4:20
However, with the 44 billion funding gap projected for nature restoration in the UK alone over the next decade, addressing this challenge will require innovative solutions from all of us.
4:31
In 2024, we worked with Tesco to offer financial assistance to farmers investing in low-carbon energy solutions who needed help accessing finance.
4:40
We also partnered with Silitra to reduce financial barriers for farmers transitioning to more sustainable agricultural practices.
4:48
We continue to work with McCain Foods, offering potato growers additional funding for those investing in regenerative farming practices.
4:55
McCain supports growers in several ways including improving prices on early season varieties, improving flexibility in farm to production system, taking the whole crop to reduce farm waste and restructuring contracts, as well as advising on the adoption of regenerative practices through an ecosystem based approach.
5:13
We also sponsored WWF's Roadmap to Regenerative Agriculture report that brings together experts from across the UK food systems to explore the actions we can take together.
5:23
On that note, now I'd like to hand you over to Basilis from WWF, who's going to talk about the concept of nature positive, UK regulation, risks and opportunities, and our partnership.
5:37
Thank you very much, Maria.
5:38
Thank you very much for your invitation to be on this webinar, and thank you for joining.
5:43
I'm an economist at WWF UK, where I focus on sectoral transition.
5:47
So I'm looking at how different sectors need to transition to align with environmental targets.
5:51
and in today's presentation I'll focus on three key messages.
5:55
First, I'll define the concept of nature positive and nature and explain the links between nature and business.
6:01
To some of you these concepts may be familiar but I'll try to set the scene and then proceed with my second key point which is to demonstrate that we need guidance to navigate this transition and this is a key component of my presentation explaining how we can provide this guidance to businesses and what are our plans going forward for developing this guidance.
6:19
My third key method is to explain how we need a transition that delivers not only on nature restoration targets but one that also accounts for climate objectives that we currently have as well as concerns of nutritional security, nutrition security. And so, next slide, please.
6:36
So, moving on with my third objective, which is to define nature-positive transitions.
6:41
So, there are two main reasons why this is very important businesses, especially in the food and beverage sectors.
6:48
On the right, left-hand side of the slide, you can see the impacts.
6:51
And this is just some examples of impacts I would observe in the UK in the last year. So they can manifest in many different ways.
6:58
It could be businesses that, for instance, pollute parts of the environment.
7:02
It could be impacts to species populations, to land use.
7:07
It's in any way that businesses interact with nature, that changes the state nature degraded and businesses and such impacts can result in risks because businesses are impacting nature negatively, maybe exposed to fines, as in the case of Southern Water receiving a 90 million fine for undermined sewage subjects, it could be sea or in the case of Heineken or Becavold, Becavold being exposed to fines for polluting water bodies.
7:33
And finally, our courts who are also are being sued currently for over alleged pollution of river wine.
7:38
But it also relates to dependencies.
7:40
So these are cases where businesses depend on ecosystem services or parts of nature for their own operations.
7:46
So this could be, for instance, abstracting water for the production or relying on a clean environment on regulation of the climate and stable climate nutrient cycles, so that carbon or other nutrients cycle through the production process.
8:00
And here we have examples of businesses being exposed to risks due to their dependencies.
8:05
for instance, we have mussel farms in the UK that have export bunds because there's been contamination from sewage.
8:15
It's been a classic mineral water company that had to shut down because of contamination.
8:24
Well, it's been the loss of 5% of fruit and vegetable crops last year to extreme weather events. Next slide, please.
8:30
But overall, we can see that this is one reason why is an important consideration for businesses because these impacts and dependencies define the relations that the private sector has with nature which then result in risks manifesting.
8:45
The second reason is that we have current environmental regulation in the UK and globally which creates regulation or expectations for businesses to contribute towards environmental targets.
8:57
And here I'm referencing environmental improvement plan which is the national strategy for achieving nature targets and this we are expecting and we already have an environmental improvement plan in place but the current government is revising it and we're expecting an updated version to be published in a month and in this we expect to see a much more language on how the private sector and businesses are expected contribute towards the targets of the environmental improvement plan so not just something that talks about broadly about nature restoration and restoring ecosystems but something that explains more specifically how businesses can contribute to it.
9:32
And some targets in these documents are explained quite specifically, that relate specifically to businesses.
9:38
For instance, we have holding biodiversity loss by 2030 and actually an increase by 2042.
9:44
As businesses use land, they could have an important impact on this.
9:49
So holding biodiversity loss will be part of the mission.
9:52
Or improving water quality in the UK, which is currently quite poor.
9:56
Again, businesses, especially in the agriculture, water utilities and construction have an important role to play in improving water quality.
10:03
And soil health, I think there's been a lot of focus in the region of agriculture and finding ways to improve soil health in a way that improves productivity as well as ecosystem services.
10:12
So we see that both from a physical perspective, we have risks that business are exposed to, but secondly, from a regulatory perspective, we have more targets kicking in.
10:21
So next slide, please.
10:23
And this now, so this concludes the first part of the presentation on why we need to transition what we mean by exploration between nature and businesses.
10:31
I'll now move on to the second bit, which is explaining how we need guidance to do it.
10:36
So in this slide, what this shows quite well is what we mean by nature-positive transition.
10:41
So on the top half, you can see it's a section defined as in-value chain actions.
10:46
So these are actions that businesses can take within their value chains to address their impacts on nature.
10:53
So this could mean, for instance, recycling products and improving process efficiency.
10:56
It could mean using more renewable energy, but it could also mean changing products and business models in a way that doesn't affect nature as much.
11:03
So we're talking here about intervention within the value chain and improve the impact that businesses have on nature and on transfer dependency.
11:10
The second type of example is a beyond value chain intervention.
11:15
So these are cases where we invest directly into nature-based solutions or conserving nature and restoring nature.
11:22
So this, I think, the more traditional component that people usually think about when we talk about investing in nature, they think about these kind of interventions when we directly invest into improving the state of nature.
11:32
However, it's important to highlight that.
11:33
As much as it is important to, for instance, improving our protected areas, improving the state of nature through direct investment in it, it is just as important to ensure that we limit the impacts we have on it.
11:43
Otherwise, our investments in nature become inefficient.
11:46
in the 100 planting trees and the other one, we are using a lot of land and cutting down trees for different natural processes. So this is what a nature-coastive transition is.
11:55
It includes all these types of intervention. So next slide please.
11:59
And as you can see probably this is quite complicated because we're talking about an intervention that talks to many types of businesses, many sectors, many interventions. So we need some guidance to try and process this.
12:09
And we have seen such guidance being developed for net zero in the climate transition.
12:14
And this is an example of this slide shows is analysis done by the Climate Change Committee where they on the left hand side the y-axis shows the emissions and the x-axis shows them progress in time and we have more of this is a balanced pathway for how the UK economy needs to decarbonize and at what pace to meet the net zero target we have in the UK by 2050.
12:36
So the target for decarbonizing the economy and this is very helpful because you can see the pace of the transition and it really helps businesses and institutions assess when are different policies going to kick in and what this transition looks like. Next slide please.
12:52
But I think it's this part that is really useful where this target, this red line is divided into sector specific contributions so now you can see how different sectors of the economy are expected to contribute towards this decarbonisation strategy that the government has.
13:06
So for instance if you're a business operating in the energy supply sector you know for instance how energy, the energy makes things to change to meet this decarbonisation target over time.
13:16
You can potentially anticipate interventions from the government in due course as it's trying to minimise the carbon intensity of energy production.
13:25
And this clarity, which helps distinguish the responsibility of different sectors and their contributions to a specific target, is very helpful and supports not only business and private investment into this transition, but also gives us more room to coordinate action across sectors.
13:41
And this is what we think is missing currently for nature.
13:44
So next slide, please.
13:46
We have, in this case, in the climate change committee's example, it was a focus on carbon.
13:51
Here is an illustrative example of what it would look like for nature.
13:54
So let's say we take one of the targets we have for nature, which is reducing nitrogen pollution.
13:59
So currently, nitrogen pollution comes primarily from three main sectors, agriculture, construction, real estate, and water utilities.
14:08
And we know that these are the sources of the pollution and we know that we have a national target to decrease nitrogen pollution by 40% by 2038.
14:16
Mind you, there's a global target of decreasing nitrogen pollution by 50% by 2030.
14:23
So there's a mismatch set, but let's focus on the UK target.
14:27
So we know that these three sectors are the main contributors of the pollution.
14:30
However, it is not clear how these three sectors are meant to contribute towards this 40% reduction by 2038.
14:37
Which sector is responsible and what percentage of pollution are they going to meet this?
14:42
And it's very unrealistic, I think, to expect companies across these sectors and across the supply chains within these sectors to sit down around the table and coordinate their actions on how they want to achieve collectively this target.
14:53
Instead, what we think is needed is a government-endorsed process where you have businesses, NGOs, government, financial institutions, developing guidance on how these different sectors can contribute towards this transition.
15:08
It has to be a quantitative exercise, similar to how we saw earlier in the climate change committees, the carbonisation strategy, but it has to be an exercise where we look at what is the impact that these sectors have on nature, what are the interventions they can introduce, how much they cost, what alternatives we have to using them, and to try and model the transition in a way that delivers not only the natural targets we have, but it's also effective. It's something that businesses can get behind. Next slide please.
15:35
So this is a concept that we refer to as nature-positive pathways.
15:39
And this is something that we called for with Aviva, the insurance company back in October.
15:46
And we asked the government to develop nature-positive pathways by putting forward this illustrative example of what a nature pathway would look like.
15:52
So this is an example of a nature-positive pathway for the agriculture sector in the UK.
15:57
So if you this black line all the way down you can see this is a business as usual case so this is how the sector degrades nature and decreases the availability of ecosystem services over time as currently most of the practices used in agriculture are quite intensive.
16:12
However there are certain interventions that we can introduce to improve the state of nature and to prevent this from happening.
16:18
One such intervention is taking action for nature within agriculture so this could be of agriculture or nature-friendly farming, or interventions like MESA can help decrease the impact that the agricultural production has on nature.
16:33
But it also includes other interventions, such as optimizing international trade in a way that ensures that the goods we import from abroad don't undermine environmental standards that we have domestically, but also to ensure that they don't destroy nature abroad.
16:47
Secondly, it's improving productivity and efficiency in a way that allows us to produce more food in smaller parts of land.
16:54
And lastly, shifting consumer demand, according to the Climate Change Committee, currently a lot of consumption of some products are very land intensive needs to change for us to meet climate targets, and the same is true for nature targets.
17:06
So a combination of these interventions could improve the way in which the sector interacts with nature, and help the sector not only meet targets, but also improve financial performance, as I'll explain in a minute.
17:17
But the key message from this report I want to communicate is that We need such guidance and these discussions to take place in order to guide this transition and we need to work collectively with businesses and government to do so.
17:29
And I think we've made quite enough progress so far.
17:32
So this, it seems like currently we've convinced them that this is something that needs to be developed.
17:37
And we expect the upcoming environmental improvement plan to include an endorsement of nature bosses pathways in it.
17:44
So it means that we get some government backing and from there on we'll proceed with developing pathways.
17:48
We're working with the Green Finance Institute to develop together a nature-positive pathway for key sectors and to facilitate this process of collaboration between government and the private sector to provide this guidance that is needed for the transition of these sectors.
18:03
So next slide, please.
18:06
And I'll get now to this is my final section, this final section of my presentation, where I'll provide an example from regenerative agriculture on why we need this guidance.
18:15
And this, I think, will illustrate very clearly how we need this cross-sector collaboration and cross-sector guidance to drive the transition.
18:23
So this is the outcome of the work that we did with NutQuest on the transition of the dairy sector towards a regenerative system.
18:31
What this graph shows here is the cost of fertilizers in the UK and how it's changed from before the Ukrainian war to afterwards.
18:40
And as you can see many cases the peak of the world, then the inflation because of fertilizers is traumatic.
18:46
It's not to be increased by four or five times in some cases, but also it's important to know that they remain high after the war as well, so the inflation is significant.
18:54
And this shows the incredible adaptability that farmers need to demonstrate to work with such inflation.
19:02
I think if this was compared to other financial projects outside of agriculture, I think inflation of such sizes Anyway, so this is, I think, and this fact, the fact that the, sorry, previous slide, I'm not done yet, the fact that the volatility of markets is so massive.
19:23
Forces is a major problem for farmers in the UK, dairy farmers.
19:28
So I think just in this year, 5% of dairy farmers have left the sector, and another 25% don't know whether they'll be operational after this year.
19:38
So this shows a dramatic change in the sector and how farmers are struggling within it. So next slide, please.
19:44
So what we've done with Nahquist, we tried to model, okay, what could be a different financial model that doesn't rely so much on external inputs, but at the same time provides, it's less carbon intensive, less damages natureless, and could also be financially beneficial for farmers.
20:02
And we looked at regenerative transition.
20:04
So we looked at what it would cost for farmers to transition from an intensive system into regenerative system.
20:10
And this graph, I'll focus first on the bars in the back, the dark green bars.
20:15
So what they show is the revenue of the farm, so how much money is coming in.
20:19
And as you can see before the transition, compared to year one, income is really dropping.
20:24
So after the farmers start investing, for instance, in more grazing facilities and changing the breed of cow into one that's more resilient and adaptable to being grazed into less intensive milking regimes, introducing more nature in farm.
20:37
Immediately, the income, the revenue drops.
20:39
And the reason for this is, it is very expensive to invest into some of the elements of the transition.
20:45
It involves a lot of learning by doing as you try to introduce new practices in your farm that are different from what you did before.
20:52
And this causes a disruption and a disincentive farmers for them to transition. However, there's light at the end of the tunnel.
20:59
If you look at tier seven, revenues go up, but importantly, the income margin and capital margin, which are indicators of how much cash these farms convert from the revenue that comes in, is significantly higher.
21:12
And the reason for this is that they rely on fewer costs in their most cost-effective operations, and they're able to, even though they produce less milk and they're less intensive, they can convert more of the revenues into cash, becoming more profitable.
21:28
So the business at the end of the transition is giving more cash to farmers as a part of this transition, but also at the same time is a business that's more likely for us to receive financing.
21:40
And I'll finish with one core message before passing on.
21:42
I think what this demonstrates very clearly is a complexity of the transition, because if we're relying on the farmers to introduce these interventions, to decrease the carbon intensity of production and to improve their impacts on nature and become more profitable, then there is an expectation for the rest of the supply chain to invest in the transition.
21:58
This means, for instance, retailers providing long-term contracts.
22:01
It means processors providing those incentives or premiums for this transition, price for this transition to happen.
22:08
It means governments providing the right incentives for farmers to transition.
22:11
And this involves a lot of actors collaborating for this transition to happen.
22:15
But in order for this to take place, we need sort of a clear line and clear direction of travel, which I think is provided by sexual pathways as I mentioned earlier and I'm sure that Emma from Nestle in a minute will present there are many cases where the industries have started collaborating on such initiatives but we have retailers working with processors, working with producers to incentivize these changes and some of them have a big scale like for instance Ferris and Milk a cooperative of region farmers it's currently 700 farmers in the cooperative so that's really big and very important but to have the drive transition at scale and to make this happen in the time needed.
22:50
We need this cross-sector collaboration provided through a government and those processes such as Nature Process Pathways.
22:56
So that's all for me for now and thank you very much for listening to help us on apologies I didn't cover any slides we can do it in the Q &A sorry for that I think is the next slide should be able to.
23:25
Perfect thank you for the list really useful and I think what you've highlighted is the clear risks and roles that business has so hopefully I'll bring a bit of that to light through our view at Nestle.
23:35
So hi everybody lovely to be with you today I'm Emma head of sustainability for Nestle-Hawken Island.
23:40
So what that means is I look after our kind of sustainability strategy from end to end, right from upstream through downstream, looking across all our different business areas.
23:49
And I guess what I wanted to start with really is reflecting on where we are generally with nature.
23:54
And I think many of us see that nature has been kind of carbon's poorer cousin. It's been a bit neglected.
24:00
We've definitely, I think as a collective, been looking at it, but not in the way that we're starting to do now.
24:05
And I think it's coming to the fore more more.
24:08
I think something that's also important is personally, if I think about nature, I know how important it is to me for my mental well-being. I think we all saw that during COVID.
24:18
We've also seen loads of research showing that people's mental health is much better when they're out in nature.
24:24
We know that one in five city dwellers feels disconnected to nature and even more disconnected where their food comes from.
24:30
And also we know that nearly 70% of people say their mood uplifted when they spend time in nature.
24:35
So we know it has a value, we know it's important, we know we find it really difficult to quantify it.
24:41
And I think what the Thaliss has highlighted is we need to look at nature in many different ways.
24:45
It isn't going to be one single metric, one single target. So I'll try and bring some of that to light today as well.
24:51
So if you skip on to the next slide, I think for many of us businesses, we started really by focusing on carbon.
24:57
It's taken a long time to get us there, but it got to a point where we could quantify it, we could really understand the impacts of climate change on business.
25:04
And so many businesses back in 2018 to 2020 really started setting net zero targets and Nestle was no different. We launched our net zero roadmap in 2020.
25:15
We're due to refresh it later this year, as well as we look at what we've learned over those last five years since we first set our target.
25:22
But really what I wanted to highlight here, if you click on, is as a food business, Nestle's major impact, In fact, two thirds of our carbon footprint comes from our upstream supply chain.
25:34
That's the way we produce and source the agricultural ingredients that we depend on to make the products that we sell, from Nescafe through to KitKat to Quality Street through to Baby Formula.
25:44
They all depend on agricultural ingredients.
25:46
And as part of our Net Zero roadmap, which focuses on carbon, you can see that nature is already embedded.
25:52
I've just highlighted some of these key things here.
25:55
So as I say, two thirds of our footprint is in agriculture.
25:58
So, for us to get to net zero, we've aimed to source by 2025, so the end of this year, 20% of our key ingredients through regenerative agriculture methods.
26:08
I'm really pleased that we actually just about exceeded that target at the end of 2024.
26:13
So, we're making really good progress.
26:14
But we know to double that to get to our next target of 50% of our ingredients coming from regen ag by 2030 is going to be incredibly difficult and require a lot more work.
26:25
Also, as part of our net zero strategy, we had huge ambitions to work on forests through both sustainable sourcing of different key ingredients, particularly those from forest risk countries, but also by planting and restoring forests, and I'll come a little bit more onto that.
26:40
So I think the first point I really want to make is let's not treat these things as separate, carbon over here and nature over there, and have them trading off.
26:48
Where we can bring them together, particularly in a business context, is incredibly important.
26:52
So hopefully, I'll bring some of that to life as well.
26:55
So on the next slide, I think the next thing to say really is the reason this has become so important for businesses like ours is simply if nature collapses, so too does our business.
27:06
As a food business, we inherently depend on a functioning and balanced climatic system, but also on a thriving ecological environment as well.
27:18
So if nature collapses, so do we, and that's a huge issue.
27:24
And I think that's something that's really been recognized by the business.
27:27
And we can see that through things we've done like our TCFD report and looking at other nature metrics.
27:34
We know that commodities that we depend on across the world are going to be affected by climate risks and other physical risks.
27:41
And so there's a huge business incentive as well to really work on these issues and address them to make sure that we can continue to produce the quality, the nutritional quality of ingredients that we depend on in the availability that we require as well.
27:57
So this really is now a fundamental business issue.
28:02
So next slide, really, just to highlight that nature protection and restoration is completely embedded into our business strategies.
28:10
What we might see when we try to look across different businesses is that there isn't, like we have net zero commitment, there isn't kind of really clear nature commitments that are out there at the moment, but they are absolutely embedded.
28:23
And for us, they're a huge part of our forest commitment, which is towards a forest positive future. I'll come on to that in just a moment.
28:30
As I mentioned, agriculture is absolutely critical to us.
28:33
And a big focus of ours is driving the transition towards regenerative agriculture, which back in 2020, we set a 1.2 billion Swiss commitment to really play our role in driving that transition and that's a key part of our strategy to focus on nature as well.
28:50
And then of course Regenag is so different globally it's really about how we make that real across different commodities in different places across the world and again nature is fully embedded into some of those different commodity strategies and I'll give a couple of examples of those in a moment.
29:05
So on the next slide really if we start to look at kind of quite obviously where we think some of the key impacts of HR, and it's on forests and particularly on deforestation.
29:15
And so our strategy is to move towards being forest positive, very much leading into what Zillis was talking about, about tackling work in our own supply chain, but also looking what we can do beyond our supply chain.
29:27
So for us, it's around absolutely getting rid of deforestation from our supply chain and driving deforestation-free supply chains among our key commodity ingredients.
29:37
So that's palm oil, soy, beef, wood, timber pulp and paper, but also coffee and cocoa as well, which are very different given their smallholder context.
29:48
We also have strategies to look at this long-term forest conservation and restoration.
29:53
So how do we play a role in keeping precious forests standing and making sure it's more economically viable standing than it is being deforested, but also looking at where those areas are that we've just simply lost too much forest, and therefore we've lost the ability of nature to sustain itself.
30:11
And what role can we play to restore replenish and bring those forests back to life and help build nature corridors, et cetera, so that nature can continue to move.
30:20
And then also sustainable landscapes.
30:23
At the moment at Nestle, we've got 16 key landscapes that we're working in across the globe, focused around those key commodities that we source from.
30:30
And this is about working in collaboration to bring in multiple sources of finance to really look at that landscape scale sustainability and resilience. So that's our forest area.
30:42
If I move on then to regenerative agriculture though, which is absolutely fundamental for us in Nestle, it is the way we are going to continue to exist as a business and continue to strive towards our net zero commitments and looking at nature positivity.
30:56
And for us, it's about getting to by the end of this year, as I mentioned, 20% sourced and 50% sourced from regentive sources by the end of 2030 and this focuses on the ingredients you can see on screen everything from dairy through to things like coffee and cocoa as well as cereals and grains but also meat fish and seafood that go into a lot of our pet food products as well and for us as a business if you look at the volume of this it's absolutely enormous it's around 14.2 million tons of commodities this is huge amounts and for some these commodities we resource up to one to two, actually let's say as a business, sources 1% of global agricultural output just as this one business.
31:39
So the scale of what we're trying to achieve is enormous and we certainly cannot do it as one company alone. Collaboration to facilities point is really important.
31:47
From the next slide, a couple of key examples of where we're bringing this to life and how we implement this.
31:54
For us as a business, we don't own farms, we are kind of we operate in the supply chain away from our farmers.
32:02
So we need to look at the role we can play.
32:05
And for us, we see it as key areas, providing that technical support and absolutely that signal that this is a direction of travel and that we want our farmers who are gonna be in our supply chain to be moving towards region agriculture.
32:19
So we provide that technical assistance to help farmers adopt regenerative practices that look at both carbon, nature and also resilience as well.
32:28
and that means economic resilience as well.
32:31
It's about being collaborative.
32:32
How do we help to bring in and crowdsource in expertise and other partners to make this scale at large?
32:41
And that also involves talking about what we've succeeded at, but also what we've failed and what we've learned so we can fail fast and fail forward.
32:48
And then of course, the key role for us as a business, and this is where it's really important for us to work with government as well, is providing those financial incentives to ensure that RegenAg is profitable for farmers into the future and is something that can be, that can ensure a good competitive environment for farmers to take on, to give them the incentive to do that.
33:11
So some examples of where we've been doing this in our population, if you just click on to the next slide.
33:19
One of the key approaches we've taken, particularly in the UK, but I'm pleased to say this is now spread, the model has spread to other parts of the world, particularly across Europe is to look at this landscape scale.
33:31
And one approach we've taken is through something called Lens or the landscape enterprise network, which is essentially about creating two market sides.
33:42
So you have your demand side market, which is companies like us and also those on the screen like Pepsi and Diageo and many others who will set their demands on the landscape, which is essentially we want low carbon commodities being produced.
33:55
We want better water quality and availability. We want more flood resilience.
33:59
And of course, we want nature restoration And we set out those demand signals and then you've got the supply side signals Which are those farmers and landholders in that landscape that can then say we can do these practices to meet those demands and you create a Marketplace that enables the flow of those goods and services and the financial incentives to drive them.
34:20
So if you just click on you can see some of the the ways that this is being done and how this works in the landscape and we've now we've got a really operational program in the east of England focused around wheat farming but this is also scaled out to many other parts of Europe including looking at areas of prosecco growing regions and other key key commodities. If you skip on to the next slide.
34:44
Another key focus for us at Nestle is cocoa and I this has been a really, really important one to help raise the profile of the importance of this agenda at all levels of the business.
34:56
We all know cocoa is facing a really challenging time at the moment.
35:00
The costs of cocoa are five times higher than they've ever been in the last 40, 50 years of recording.
35:07
And many reasons of this, there's a huge number of reasons across the value chain, but a big one is the impact of climate change and yield loss that are happening in key cocoa producing regions, particularly places like Côte d 'Ivoire and Ghana.
35:21
So a project that Nestlé has launched was called, back in 2022, was called the Nestlé Income Accelerator.
35:27
Now, really this program was focused on tackling the root causes of why we see child labour and other social issues happening on cocoa farms.
35:38
But by taking a step back and looking at, we've been trying to tackle this issue for over a decade with many other players, But really taking a step back and listening to why this was still occurring, what the root causes were, we learned there was many, many reasons.
35:52
And we were able to build a program that genuinely listened to farmers, understand their cycle of cocoa farming, and why we were still seeing some of these social issues happening.
36:02
So this income accelerator program essentially incentivizes farmers across four key areas, providing an economic incentive if they do something in each pillar, and then an extra if they do all four pillars.
36:15
They get financially rewarded for enrolling their children into school, for adopting good agricultural practices, and a major, major one there is pruning, and it's quite severe pruning of the cocoa tree.
36:27
It's also agroforestry, so planting alternatives like fruit trees, et cetera, to diversify their farm base and provide more shade trees, which ultimately help the cocoa as well.
36:39
And then also looking at diversified income, how particularly some of the cocoa income can go to the female of the farming family and can be invested into other other means and we've seen incredible results so far with over 10 ,000 farmers in Cote d 'Ivoire and we're scaling that up now to over 30 ,000 farmers aiming ultimately towards more than 100 ,000 farmers over the next few years and remarkably we've seen yield increase, we've seen a huge step change in kids being enrolled in school, and we've seen a massive increase in in pharma income.
37:16
So I think when you can embed the nature outcomes with other outcomes that we've been trying to tackle for many times including those social ones you get really really positive holistic results.
37:27
On the next slide another key commodity for us just to briefly touch on is coffee.
37:32
Again like many commodities at the moment, many things happening in the, in the key producing regions. And coffee is no different.
37:40
It's at least double, if not triple the price that it's been for the last decade.
37:45
And again, many reasons due to climate change, but also nature, as well as things like increasing in pests.
37:52
So we have our Nescafe Plan 2030, which again looks at all those key ingredients similar to that I talk about on cocoa, but it looks a lot at specifically what's happening in the cocoa farming, in the coffee farming areas, how we restore land, how we increase those green buffers, and again how we bring agroforestry into that coffee sourcing.
38:18
And again we're seeing really, really positive results as we move forward and importantly nature is, we're seeing it come back onto some of these farms, which is great.
38:28
Last example really I wanted to give was back at home in the UK and I'm really pleased that as Alice mentioned, First Milk, one of the major milk cooperatives in the UK.
38:38
We're really proud that we've been working with First Milk for about 21 years.
38:42
We've celebrated our 21st birthday this year.
38:45
And as part of their huge milk plan or milk pool, we source from about 80 different farmers.
38:52
And our milk plan's been in existence for now for about five years.
38:55
And we've reached a 30% greenhouse gas emission reduction.
38:59
And this has been by incentivizing farmers across 21 different types of intervention that farmers can do on their farm, and essentially paying them a sustainability bonus that gets paid over and above the price of milk.
39:13
So this is negotiated separate to the milk price.
39:17
And part of that has been things like woodland restoration, and we've seen over 140 hectares of woodland been planted, planting of over 25 ,000 boundary trees, and over 650 kilometers of hedges.
39:30
So a huge restoration effort, And as part of that, we're now really starting to lean into, as well as going from what we've seen on farm and hearing accounts of farmers, how we start to quantify and understand the real nature impact and biodiversity gains that we're seeing.
39:46
And what's important about this is this has genuinely been farmer-led.
39:50
We've worked with the farmers to look at what practices can they achieve and how do we drive that continuous improvement over time.
39:58
So next slide, and I think my last one really to talk about is how nature is an unlock for business potential.
40:07
And ultimately, it's a key driver in business resilience, particularly as a business that depends on agriculture and nature systems.
40:15
This is really about making sure this is the future, the resilience of the business.
40:20
I think we've seen the regulatory context is driving an increased focus on nature, which is really powerful and really important.
40:26
Things like CSRD, TNFD and other platforms bringing this to the fore.
40:31
We've also importantly seen opportunities to collaborate, not just within our sector and we're very good, we're better at collaborating within the food sector, but collaborating across sectors, whether that's looking at work with water companies, but also with construction through things like BNG, Biodiversity Net Gain opportunities.
40:48
And we've seen nature as a really important builder of employee engagement, of pride and of talent attraction.
40:54
But of course if you click on challenges still remain and we know that there are lots of definitions and methodologies that still vary across industry so there's a real opportunity and I think appetite now for us to come together and look at how we can deliver to make sure we are all moving in the same direction and adding up to more than the sum of up parts.
41:15
We know that there isn't going to be any silver bullets and a likely patchwork of solutions is still needed, both from kind of supplier, particular ingredient led programs, right through to those landscape collaborative efforts.
41:28
And then we need, ultimately we know that this costs money and takes investment to do.
41:33
So better alignment and coordination between ourselves, between other public bodies and private sector is going to be really important.
41:41
I'm struck by Maria mentioning at the beginning that 44 billion funding gap.
41:46
I think there's a really key opportunity for us come together to unlock that as well.
41:51
So I'll finish there and I think we move into Q &A.
41:58
Thank you, Emma, for that.
42:00
So good morning, everyone.
42:03
I am Sam Swift, I'm Director of Climate within National Sector's Sustainability and Propositions team here at NatWest Group.
42:10
And I'm delighted to host the Q &A today.
42:13
So I can see that we've had some questions submitted already, but a gentle reminder for me that you can ask your questions using that Q &A function.
42:21
and we'll get through as many of them as we can.
42:24
But thank you so much to our speakers today.
42:27
I personally found what you've shared incredibly insightful and I'm glad to see that you've all joined us on camera as we kick off the Q &A.
42:36
So one of the very first questions and really relevant for the majority of our attendees today is for yourself Emma from FDF.
42:46
And that is how are FDF planning to support members moving forward in their nature journey.
42:53
Well, yeah, and I meant to do a big shout out to the work FDF has done so far and really important, of course, that nature is a key pillar along with the other focuses we've got as well.
43:03
So I think FDF is a really important space for us to come together and have these difficult conversations, but also look at where we can collaborate even more. As I say, we all face these similar challenges.
43:16
we're all kind of trying to work in this direction to restore nature and bring it back.
43:21
So where we can come together, look at shared initiatives is really, really powerful.
43:26
I think also FDF has the power to bring both the big businesses like us as Nestle, who see ourselves as having to be in the vanguard and wanting to be in the vanguard to lead that transition, but with a lot of those smaller businesses as well.
43:39
And by coming together and looking at where we are across those maturity curves and still how we can come together and collaborate is really, really valuable to make sure that we don't repeat mistakes that have been made and that we genuinely look at the lessons learned and move forward.
43:54
So we're really thankful for the work FTF do both to bring us together to help set strategy, help drive harmonization where we need it on standards, but also advocate for us as a collective to help bring in other public bodies etc so that we can all kind of work together Thank you. Emma, Piercy, I can see that you might be on mute though, I'm afraid. I can't hear you.
44:28
Welcome back to that.
44:34
I've got another question which is around about how do we see, or open for all the panellists, do you see a shift in consumer expectations around nature and diversity? Are these issues resonating with mainstream audiences?
44:52
And I'm going to combine that with another question which we've had which is then similar to that but taking the consumer lens off but actually what importance has been put on biodiversity and how is it being built into trading agreements within UK supply chains?
45:11
And the context for the question is currently the UK retailers are focused on carbon and emissions but do we believe that there will be a shift to nature and biodiversity and do we think that will happen in the next five years?
45:26
So as opposed to sum up what are the consumer drivers, do we think consumers are driving the requirement to shift to thinking about it in that way and do we think that agreements across supply chains and contracts are reflecting that or will reflect that in the next five years.
45:44
Vasilis, if I come to yourself first.
45:48
Yeah, I think from, we have a food transformation team at WWF, so we can tackle this question quite well.
45:56
And from what I've read in their analysis, I think, you know, consumers and voters in general supportive of sustainable people who use food and there is a lot of momentum going on right now with businesses transitioning the production in that direction.
46:10
But I think the cost of production and cost of food is by far the most important factor when selecting such products.
46:20
So I think what Emma said earlier, and it really resonated with me, that we need created a transition where farmers are able to meet nature targets while at the same time build resilience against nature-related risks and financial resilience.
46:35
The modeling we did with NatWest shows that that's possible.
46:39
The examples from the LEN that Emma presented in the first look also show that if supply chain actors get together, they can help farmers produce food and using sustainable methods that also doesn't break the bank and could become rafferable.
46:52
So I would like to see that if this transition happens on a national level, I would get to when the food produced with using regenerative methods and methods that promote the environment are also something that consumers cannot afford.
47:05
And I think it's an imperative that it happens because climate change committees from this part we are presenting, the climate change committee expects around 20% of decrease in dairy and meat consumption to meet the targets we have for climate.
47:22
So I think if we wanna improve the resilience of us and both from climate related risks and otherwise I think it is necessary.
47:31
Thanks Vassilis.
47:32
And Emma Pearcy, what are you saying from FTF members in terms of feedback around about those two key points? I'm afraid I still can't hear you.
47:46
We're maybe having a wee technical issue there. If we come to yourself Emma Keller then.
47:51
Yeah, look, I think consumer expectations on nature, I mean, consumers won't necessarily thank us for tackling these issues, but they'll certainly punish us if we don't.
48:04
So we know that this is something consumers just expect us to be taking care of.
48:08
And I talked about deforestation as one of our kind of key areas that we focused on for a long time now.
48:14
But of course, consumers don't want us putting products that contain deforestation on their shelf and asking them to choose between products that do contain deforestation and don't.
48:24
So I think it's similar with with nature.
48:27
I think the other thing to say is look if we particularly when we look at kind of will this be part of contracts going through the supply chain if we don't do this now we'll end up paying for it twice in future.
48:40
So this is about and that's why I think the word and the language of resilience is really important about those risks because as I mentioned commodity prices particularly things like cocoa and coffee, are at record breaking highs right now.
48:53
And that means we're having to really double down our efforts to look at what are the root causes, how do we tackle that?
48:59
And ultimately the businesses are realizing that, oh, it's climate change and it's these impacts that as society we've neglected for too long that we're now really feeling.
49:09
So the more we can do now to protect that future, we now are armed with this knowledge, I think we'll end up having to do it anyway.
49:16
I also think it's absolutely fundamental that this is part of what farmers want to do as well.
49:24
They know their land and their agricultural systems better than anyone and they see that to be resilient, particularly in the face of changing climate, I mean I've seen at the moment they're calling for more support right now because of the dryness we've had.
49:37
It was supposed to be April showers and we didn't have hardly any rain.
49:40
So these are having real world impacts today and and will be into the future.
49:46
So I think these things are becoming more and more embedded.
49:49
I think also what's interesting is we see different segmentation among consumer groups as to what they are interested in.
49:56
And we actually see lots of, typically older consumers really wanna hear about farmer livelihoods and how protecting farmers.
50:03
We're seeing lots of younger consumers often wanna hear about nature and about carbon.
50:07
So I think how we leverage those different messages to different consumer groups is gonna be really important as well.
50:14
That's great, thank you. And yeah, I think you're absolutely right.
50:18
If I put my consumer head on, I don't think that is what I want to see when I, you know, I don't think I want to have to make that emotional or ethical choice in the supermarket as I'm, it would probably double or triple the length of time it took me to make my way up and down the aisles to consider that at each product choice point.
50:37
I've got a couple of questions that have come in around about key indicators or indices that are being used to measure progress in terms of biodiversity and how firstly kind of what are those key indices and I think Vasilis you might be able to talk to some of the the measures from some of the dairy work and wider work the WWF have done and Emma maybe specifically around about how Nestle is currently integrating science into your work with your farmers, and what are with that in mind, what are the kind of main opportunities or challenges around that data collection that you both see moving forward?
51:22
Faisal, if I come to you first.
51:24
Yeah, thanks.
51:27
So it will be to reach out to me afterwards, and if I know exactly what sector you're coming from and what exactly you do, I'll be able to give more targeted responses.
51:36
But overall, I think depending on the lens you're looking at, there are different indicators and metrics are being used.
51:43
So for instance from a policy perspective both the global biodiversity framework which is a global framework for a nature transition but also the environmental improvement plan includes specific APIs which hopefully will trickle down to businesses and then when businesses do their own assessment through the NAD or any other framework process their impacts and dependencies on nature they hopefully will communicate.
52:06
The question is I think what are provide indicators to measure the state of nature and this is something that the Nature Positive Initiative is working on now.
52:16
So I think they have a massive file of around 600 businesses where they'll be testing indicators for their state of nature to see how you can measure the change in the state of nature from today as opposed to tomorrow because otherwise we have good indicators to measure flows and how impacts flow into the ecosystem.
52:35
So for instance, you can measure the carbon intensity of certain processes and nitrogen intensity of such processes, the land use, those are quite easy to measure.
52:45
So I would refer you there.
52:47
And finally, if you go on the TNFD website, they have a lot of large suite of indicators and metrics that could be applicable to your business, starting from something very generic like ENCO, which helps assess impacts and dependency on the traffic light scale, all down to more specific metrics that can help for instance how to estimate your proximity to a native species or protected areas or the metrics in specific operations that can have an impact on nature and use different frameworks how you define those impacts.
53:19
So I'd be happy for you to reach out to me afterwards and if I know which sector you're looking at I can provide more specific suggestions.
53:29
That's great Vassilis and thank you so much for the offer for attendees to reach out directly afterwards. Emma, Kayla, what were your thoughts?
53:38
Yeah, I think that it's nature is messy, and it's complicated.
53:44
And it's it's all sorts of things wrapped into one.
53:46
So I think this is where it's been really challenging is finding single indicators to look at, or particularly in a business context.
53:53
And when we're dealing with farmers that we're asking to do a huge amount of things in a really complex environment is is really difficult.
54:00
I think where we're at at the moment is generally it's about how do we transition farmers to that journey so that they're implementing the practices that we know are going to lead to those positive outcomes.
54:13
And of course a lot of that we're still focused on measuring carbon.
54:16
We know that reducing input use, using more organics, we know that replanting different things, mixed species in fields etc.
54:26
all lead to really positive carbon outputs and we can measure that quite well now.
54:30
We also know at same time they lead to better biodiversity outputs and nature outputs as well.
54:36
But yet trying to quantify that in a real single indicator is really difficult.
54:41
So for us it's very much about let's really focus on wide-scale adoption of those practices that we know will move us in the right direction.
54:50
But at the same time we absolutely need to quantify them to make sure that we are absolutely pushing the practices that are generally going to lead to those both carbon and nature positive.
55:00
So there's lots of indicators, as Phyllis mentioned, but looking at richness and abundance in different indicator species.
55:05
So birds has been really critical and we know it's something farmers get obsessed about.
55:10
I've seen, I've been lucky enough to see a glimpse into some of my farmer WhatsApp groups and what can they talk about?
55:16
They talk about the birds and the worms that they see on their farm.
55:19
I think where we can really lean into what we know farmers are passionate about is really important, but also we know that's a really positive sign we have different species of birds either returning to the farm or nesting or coming back in in bigger numbers. So lots more work to be done and there's huge amounts of innovation as well.
55:37
I think technology we can now do we can now listen to the soil and understand what the diversity of life is in the soil and that's of course another huge important indicator for understanding healthy soils and healthy life on farms.
55:51
So loads of work happening it's a really exciting space but I think Again, it's that how do we harmonize and make sure we're all measuring the right indicators for the right outcomes.
56:02
That's great. Thank you very much both.
56:04
And I think, you know, a big a big theme from there, though, being let's not let perfection be the enemy of progress.
56:11
As you say, we need to decide what to measure and how you measure it.
56:14
But we we know the practices that will make positive changes regardless of how how you're measuring it.
56:21
So, yeah, let's make progress with it in the long run.
56:25
Thank you so much.
56:26
I'm just going to hopefully hand to Emma from FDF to close off today.
56:32
And apologies for the technical issues that we have had.
56:36
Emma, are you with us?
56:37
Can you hear me?
56:39
I can hear you.
56:41
Fantastic.
56:43
Apologies, everyone, for that.
56:45
Thank you, everyone.
56:46
all our participants and all our panellists today for joining this webinar.
56:53
We will be doing an aftercare email which will include some of the resources that I would have shared during the Q &A that will be helping members over the next couple of months in particular, a couple of workshops and site visits and a hand that we're doing and slides from today and recording too.
57:15
So, yeah, please do get in touch with us and, yes, we look forward to taking forward this journey with you all.
57:25
Thank you very much and have a good day.
57:28
Bye.
