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Nestlé pledges $1.29B to support regenerative agriculture

To further amplify its commitments to sustainability, Nestlé recently announced it is committing 1.2 billion Swiss francs ($1.29 billion) to develop regenerative agricultural practices within its supply chain.

Through encouraging practices that enhance biodiversity, soil conservation, regeneration of water cycles and integration of livestock, Nestlé said it will work with its network of more than 500,000 farmers and 150,000 suppliers to integrate these practices into production.

"These outcomes form the foundation of sustainable food production and, crucially, also contribute to achieving our ambitious climate targets," Nestlé Chairman Paul Bulcke said in a statement. The Swiss CPG titan said taking measures to improve its agricultural practices will be an important part of meeting its goal to halve its emissions by 2030 and achieve net-zero by 2050. Farming accounts for nearly two-thirds of Nestlé's total emissions, the company said.

However, this sustainability initiative does not exist in a vacuum at Nestlé. The multinational is also striving to reduce its overall environmental footprint by working to convert its packaging to more sustainable alternatives, and it has vowed to invest up to $2 billion in this effort. The company has also said that to achieve its net-zero by 2050 goal, it will spend $3.6 billion over the next five years.

However, by integrating regenerative agriculture into its business model, the Swiss company is also positioning itself to reap the advantages of this type of farming. In a statement, the company said regenerative techniques provide the opportunity for farmers to increase yields – a direct benefit to Nestlé when sourcing ingredients for its supply chain. This is particularly true for ingredients like coffee and coca that are becoming pricier as climate change negatively pressures their natural growing environments.

To combat this trend, the world's largest food company noted that in conjunction with supporting farmers to assist them with investments geared toward helping them convert to more sustainable practices and gain access to the required equipment, Nestlé is investing in R&D to develop higher-yielding coffee and cocoa varieties that also have a lower environmental impact.

All of this comes at a cost, but it is one that the Swiss conglomerate says it is willing to shoulder. "In the spirit of enabling a just transition it is vital that we support farmers around the world that take on the risks and costs associated with the move towards regenerative agriculture," CEO Mark Schneider said in a statement.

This announcement from Nestlé comes just prior to the convocation of the U.N. Food Systems Summit in New York, where participants will look to help combat climate change through creating sustainable food systems. Nestlé was one of the first companies to share its climate plan in December 2020 as a part of the U.N.’s Business Ambition for 1.5°C pledge.