General Mills

General Mills’ outlook on protein diversification has remained unchanged. There is no evidence that the company is incorporating plant-based proteins as a climate mitigation tool in its climate strategy. Rather, plant-based and alternative protein products in its portfolio (for example, Bold Cultr and Legendary Burgers) sit adjacent to their existing brands and are not considered as replacements. These products are aimed to reach the ‘leading-edge’ consumer and the company believes demand for these products will grow over time. However, despite expected growth in demand, the company was explicit that plant-based protein will not feature in strategic messaging or company commitments in the near future. In 2021, General Mills replaced its existing Sustainability Governance Committee with the Global Impact Governance Committee (GIGC). It is unclear yet whether the creation of the new committee has had an impact on the company’s approach to sustainability. The company’s emissions from meat and dairy have grown again y-o-y as the company expands its pet food business and its Epic brand – a line of meat snack bars. Regenerative agriculture remains the key focus area for General Mills to address the environmental impacts of its supply chain – including emissions from animal agriculture – and is one of its four ‘force for good’ priorities. The company is also looking to address emissions from meat by improving the sustainability of feed – particularly wheat and oats given the company is a large procurer of these commodities. Nevertheless, the company is missing out on the opportunity to diversify its portfolio as a complementary action to mitigate is carbon footprint. To help the company build capacity to address its Scope 1 and 2 emissions it published its inaugural sustainability-linked bond in October 2021. It is a 10-year $500 million bond and is the first sustainability-linked bond from a US consumer packaged goods company. Whilst positive, given 96% emissions are in Scope 3, this is only a small step towards meetings its climate ambitions. In its meeting with FAIRR and investors General Mills clarified that its TCFD-aligned scenario analysis covered meat and dairy. However, this has not resulted in a strategy around protein diversification.

General Mills continues to ignore portfolio diversification as a climate mitigation tool, it lacks targets and a strategy to decrease it exposure to animal-derived inputs and to increase sales from plant-based and alternative proteins. On the contrary, it continues to increase its exposure to animal proteins through its pet food business as described in materiality. The company’s sustainability strategy is focused on climate, regenerative agriculture, human rights, and water stewardship. Regenerative agriculture is the key lever being used to address supply chain emissions, soil health, biodiversity and water quality. General Mills defines regenerative agriculture as a system shift moving from an intensive to a nature-based agricultural system that will reduce both the company’s climate and environmental impact. The focus on regenerative agriculture has been made explicit in the company’s shift away from individual ingredient strategies to programs that will help regenerate the planet in its latest Global Responsibility Report. This follows the completion of its 2020 target to source 10 priority ingredients sustainably. The company disclosed that it has met 11.5% of this target so far. In the discussion with FAIRR and investors General Mills disclosed that it will refine and increase its regenerative agriculture target in the coming years in order to meet its Scope 3 commitment, and has modelled scenarios with potential future required emissions reductions. This is based on an internal estimate of x acres regenerated for x tonnes of CO2 mitigated. It has not disclosed this figure publicly but stated it is well within reach. General Mills is conducting a number of pilot studies to measure how much carbon can be stored in the ground at a farm level using life cycle analysis. One example is White Oak Pastures, one of the company’s regenerative farms that supplies its Epic meat snacking brand. The preliminary results suggest that more carbon can be stored in the soil than is produced during the cows lives. However, the potential of soil carbon sequestration is still not fully known and there are concerns around the long-term efficacy of carbon capture in soil. This is concerning given that General Mills is reliant on soil carbon sequestration through regenerative agriculture to meet its climate commitments. The company is a pioneer for regenerative agriculture and since the previous phase has continued to partner with a number of organisations and made progress on defining metrics. In November 2021, General Mills launched its first regenerative pilot in Europe partnering with Prospérité Fermiere Ingredia, a French dairy cooperative that supplies for Haagen Dazs ice cream, on a 5-year pilot in the north of France. The company is also working with the Ecosystem Services Consortium to set guidelines in the US and support farmers to get carbon credits for shifting to regenerative agriculture. It has invested $3 million to help scale Eco-Harvest, a voluntary market programme that pays farmers for the environmental benefits they generate through regenerative farming. A pilot scheme with wheat farmers in Kansas is underway. Most recently, in June 2022, General Mills announced it will be investing US $2.3 million to advance regenerative agriculture in Canada with ALUS, a charitable organisation focused on delivering community-developed and farmer-led programmes to maintain and advance ecosystem services. This pilot will focus on improving soil health for oat suppliers. To monitor agricultural practices in its supply chain General Mills has partnered with Regrow Agriculture. General Mills is also developing metrics and measurement tools to track the impacts of regenerative agriculture on water quality and biodiversity within its supply chain. Beyond regenerative agriculture General Mills is reducing its environmental impact by: reducing emissions throughout its dairy value chain focusing on animal feed, enteric emissions, manure and on-farm energy; eliminating deforestation for high-risk ingredients; improving energy efficiency. In Phase 5 the company stated that it would set deforestation-free targets for key ingredients by 2021 but there was no update found. The company’s performance on nutrition and health deteriorated, 41% of products met the company’s standards for health vs 43% last year. The company did not provide a reason for this. After pledging to be net-zero last year, the company formalised this commitment by signing up for the “Business for 1.5 degrees coalition”, which will require General Mills to set a science-based net zero target in the next few years, as well as revising its existing near term SBTi targets to align with 1.5 degrees.

In 2021 G-Works launched a number of products including Bold Cultr cheese, an alternative protein product made using precision fermentation supplied by Perfect Day. This is the first product using fermentation technology General Mills has ever launched. In total, the company has over 800 vegan products including new additions under its Yoplait brand – Yoplait Vegetal – and a vegan Petit Filous in the UK. All R&D sits under the Chief Innovation, Technology and Quality Officer. For alternative protein products in particular innovation is driven by its venture arm 301 Inc and G-Works, which includes several small, nimble teams focused on responding to consumer needs and trends. The company looks at where it has a ‘right to win’, and this is stronger for certain brands. For example, Haagen Dasz is built on simple ingredients and that makes it harder to develop and be successful with plant-based products, despite recognising the growth potential in plant-based ice cream. Health and nutrition is not a key focus for the development of new plant-based products.

General Mills’ efforts to engage consumers remain primarily focused on organic, non-GMO, and no artificial ingredients. The approach to engaging consumers has not significantly shifted in the last 12 months. The company does engage with its consumers on its plant-based and dairy-free products but there is no strategic approach or messaging. The company advertises its plant-based products as vegan or dairy-free. Beyond individual brands webpages (e.g. Lärabar, El Paso and Glen Muir) offering tips and recipes for vegan and vegetarian eating it is not clear how General Mills is promoting consumer uptake of plant-based products. General Mills is engaging consumers on the environmental impact of some of its brands. Mainly through its brands that have a focus on organic and regenerative agriculture such as Cascadian Farm and Annie’s, and its Kernza grains products are labelled as ‘Climate Smart’. With respect to its alternative proteins portfolio there is no clear and consistent messaging around the sustainability benefits of these products. However, on the website for Bold Cultr, the company states the following on the Frequently Asked Questions page: “We know the impact that animal agriculture has on the planet and we know there’s a better way that doesn’t drain our precious Earth of its resources.” General Mills is continuing its work at the Bell Institute of Health and Nutrition which publishes resources for consumers and the foodservice industry to encourage uptake of healthy products. The company also has promotional campaigns to increase the consumption of healthier meals. For example, in partnership with Chiquita bananas, General Mills is promoting that a bowl of any General Mills Big G cereal, Original Style Yoplait and banana costs just over $1 – an affordable and healthy breakfast option.

There was no significant change in the metrics reported by General Mills. In its 2022 Global Responsibility report General Mills disclosed that it has 800 vegan products in its portfolio, including cereals. However, there is no evidence that the company has established formal, standardised metrics to track its protein portfolio transition. In its meeting with FAIRR and investors, the company also said it might be able to provide information on the proportion of Cost of Goods Sold relating to its plant-based product portfolio in the meeting with investors, but did not provide this in its follow-up response. Instead, the company shared that it estimates 65-75% of its portfolio to be materially plant-based, but that this is directional only and has not been formally calculated. General Mills tracks and discloses its Scope 3 emissions relating to agriculture and breaks this down by key sourcing ingredients which include dairy and meat. In the fiscal year 2021 Scope 3 emissions increased overall by 4% to 13.3 MTCO2e. The reason given was increased production to meet the demand of consumers during the Covid-19 pandemic. In 2021, agriculture and transformation accounted for 55.5% of overall emissions, compared to 54% in 2020. Dairy emissions increased 7.7% to 16% of total emissions and emissions from meat increased 25% to 22.4% of total emissions. Despite its interventions, General Mills has not yet been able to reduce its exposure to emissions from meat and dairy. Despite overall emissions increasing, emissions intensity is reducing. It has halved from 2017 (0.165 MTCO2e/MT product) to 2021 (0.08). The company does not provide a figure for meat and dairy, so it cannot discern if emissions intensity has reduced for these ingredients too.

This year there was no investor letter. However, General Mills agreed to a dialogue with investors and met with the coalition as it did last year. General Mills provided detailed responses to the coalition’s questions on the call, where information was available and provided a partial response to investor’s follow-up questions. The company also reviewed the final assessment and provided additional information.