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MeterHero Sponsored Series

The ROI of Sustainability

General Mills: Water Stewardship and the Evolution of Business Imperatives

This article is part of a series on “The ROI of Sustainability,” written with the support of MeterHero. MeterHero helps companies and organizations offset their water and energy footprints through consumer engagement. To follow along with the rest of the series, click here.

Just like everyone else, the Pillsbury Doughboy needs water to survive.

For a Big 10 food company like General Mills, of which Pillsbury is but one of many popular brands, a triple-bottom-line sustainability is mission critical in an increasingly resource-strained landscape, and water stewardship is a cornerstone of that mission. Future return on capital investment is fundamentally tied to the health of watersheds -- a vital shared resource at risk of becoming a tragedy of the commons if not managed sustainably.

In the early 20th century, the "miracle" of the Haber-Bosch process ushered in the Green Revolution, turning Malthusian predictions of impending mass starvation on its head. With modern industrial agriculture now possible, the stage was set for the Great Acceleration that began with the post-war boomer generation. Expansion was the touchstone of responsible business. Convenience and variety revolutionized food production and consumption in the U.S. and across the developed world.

That was then, when there were four billion fewer people on the earth, when climate change was still something of an academic novelty, and "sustainability" was mostly an economic consideration. Times have changed. For a responsible agriculturally-based corporation seeking continued return for shareholders and the means to offer products to consumers, new definitions of sustainability and return on investment inform the evolution of business imperatives.

In fact, for General Mills, the seedlings of sustainability started in the 1930s with recycled paperboard packaging and crop-rotation methods for the company's Green Giant brand. In the 21st century, this ongoing journey includes, among many other initiatives, a commitment to lead the effort with all stakeholders to develop, implement and monitor watershed stewardship plans throughout the regions in which the company operates.

“When we think about our work on sustainability, it is as a business imperative,” Jerry Lynch, chief sustainability officer for General Mills, told TriplePundit. “The reason why is that we’re highly dependent on Mother Nature continuing to work well.”

“For a food company like ours, at a really high level, we take the output of Mother Nature, we transform it into products that are relevant to consumers' busy lives today and gives them the nutrition that they need, and we market it to them. It’s kind of a three-step business model," Lynch continued.

"If the the front end of that model breaks down, we’re in a world of hurt. There’s lots of evidence that, with incredible amounts of increasing demand over the next 40 years and the impact on Mother Nature and the stresses she’s already got … that will be a challenge, to say the very least. It could have lots of risks associated with it. So as a business imperative, we need to manage it."

Bringing the “bounty of nature” to consumers is a privilege for General Mills, and with that privilege comes a global responsibility - to shareholders, customers, local communities and the environment alike. This is the context for Lynch when considering the ROI of sustainability. A relatively stable climate, healthy soils, proper hydration and functioning watersheds are the raw elements essential for business success, without which any economic concern of ROI fast becomes a moot point.

In 2014 General Mills published a new water policy statement, including the goal of reducing internal water consumption by 20 percent by the end of fiscal 2015. But to really move the needle on water stewardship requires looking outside its "own four walls." As Lynch puts it:

“When we did our water footprint a couple of years ago -- our enterprise-wide water footprint -- we looked at it from seed to landfill. Only 1 percent of the water used in the products that we make is within our own four walls. Ninety-nine percent of it is upstream and in agriculture"

“Our mission is to conserve or protect the natural resources and the communities that our business depends on," Lynch says. "We’re dependent on a lot of farmer communities as well, which is why that is so important for us."

Watersheds in distress

A 2009 report from the World Economic Forum called Charting Our Water Future warns that, given a business-as-usual scenario, freshwater demand will outstrip supply by as much as 40 percent between 2030 and 2035.

That is a "compelling fact," Lynch said, and one that forces a tough, yet simple, question when considering water resource management: Will this watershed be able to support the human and commercial activity that's already taking place and projected to take place in the next 20, 30, 40, 50 years?

In partnership with the Nature Conservancy (TNC), General Mills began work in 2012 to find answers to that question. A four-step process was developed, beginning with a top-level assessment of all the watersheds important to the company's operations -- ranking each one in order of risk. With this "to-do" of critical watersheds General Mills determined "where we're going to go do work."

“So, that's going to help you get started," Lynch explained. "And then we think about a different level when we get down to real specifics. Then you start to get into what tactics you’re going to use, how do you think about that from a return-on-investment point of view, etc. That sets the context for you."
Four step plan:

  • Assessment: An assessment of all 60 watersheds the company depends on worldwide was conducted to determine the health of each. Based on this assessment, TNC and General Mills chose eight key at-risk watersheds.

  • Analysis and action planning: Next, a deeper analysis and conservation plan will be developed for the key at-risk watersheds. As of January 2015, TNC freshwater scientists were working with General Mills in Irapuato, Mexico; Yangtze River, China; Snake River, Idaho; Central California; and Albuquerque, New Mexico.

  • Collaboration: Share findings with the local communities in the watersheds and develop collaborative action plans with large water users, governments and interested community members.

  • Transformation: Finally, TNC and General Mills will continue to work together to bring to fruition and monitor these action plans and strategies developed in collaboration with watershed stakeholders in the context of a global water stewardship strategy that includes public commitments, education and advocacy, and funding.

The valley of the Jolly Green Giant

As a kid growing up in the '60s, I remember the "ho-ho-ho" of the Jolly Green Giant in television commercials. What I didn't know was where all those green vegetables came from. Where is this valley that the friendly giant of my youth lives?

The El Bajío region in the north-central state of Guanajuato is a key agricultural and industrial hub in Mexico. General Mills contracts with local farmers in the region to supply vegetables for the Green Giant brand. A frozen vegetable processing plant is also located in Irapuato, the state's second largest city with a population of about 5.5 million people.

The Nature Conservancy assessment of the El Bajío watershed shows a rapidly declining aquifer, at a rate of about 2 meters (around 6.5 feet) annually. "That’s pretty significant,” Lynch told us. “If you project that over time and if you model in the impacts of climate change, that watershed starts to become untenable for large-scale agriculture within 20 years.”

"So, particularly if you’ve got capital investment in that watershed, 20 years is a timeframe when that really rubs up against significant capital expenditures. You start to ask yourself the question about what your alternatives are."

This was a stark wake-up call not just for General Mills, but for all stakeholders in this important growing region of Mexico. Even though General Mills accounts for only 0.002 percent of total water usage in the watershed, mostly from supplier farmers, it is "incumbent upon us," said Lynch, to develop a watershed stewardship plan "that will turn that around ... because we have significant investment in that watershed."

Can a single company, even one with the resources of General Mills, change the trajectory of a rapidly depleting watershed? The quick answer is "no."

Collaboration is key to progress

At the watershed level, no one entity acting alone can make much of a difference, no matter how well intentioned. A collaborative process involving all stakeholders is arguably the most important step in watershed management. "With partners, we develop a first-pass at strategy. Then we engage a broad set of collaborators to actually test those strategies and ultimately to roll them out," Lynch explained.
"[In the El Bajío watershed], there are a number of large auto manufacturers, other food manufacturers, there are beverage companies that play there. We have done a lot of work looking at that watershed with the Femsa Foundation, which is an arm of the FEMSA Corp. They operate the largest chain of convenience stores in Mexico, so they know the stakes really well ...

"... We will pull in communities, government agencies, NGOs and academics as a part of that process. It’s really got to be a multi-stakeholder collaboration to get this thing going in the right direction, to get the kind of credible collaboration that you need to actually make a difference in the direction of the watershed”

Of all the critical watersheds for General Mills, Irapuato and El Bajío are at the forefront of this process, but "even there we’re only at the beginning of the collaborative stage," Lynch said.

Every watershed is unique

The need for freshwater is universal, but, as Lynch explained, every watershed presents a unique set of challenges.
"In no watershed are we to the monitoring stage, yet. But I can tell you a couple things that we know already: We know that every watershed is different, so it’s got to be customized per watershed, whatever that watershed is. So for instance, the issue in the Snake River of Idaho is not that there’s not enough water; it’s that it’s in the wrong place at the wrong time. It’s got a very different kind of underground geology than, say, Mexico does.”

Much work remains to address critical watersheds, but with key partners in place and increasing stakeholder engagement, General Mills brings to the table a leadership role for effective water stewardship, in Mexico and all its critical watershed regions, including those in drought-stricken California, where the sense of urgency is palpable.
"Essentially that’s what needs to happen in every high-risk watershed around the world, you could argue, but certainly in the ones where we operate and we have a vested interest. What the drought situation in California does is it puts a fine point and a high degree of urgency in getting those stewardship plans not only in place but acted upon."

Evolving for a new reality

The question of sustainability rests in large part on how global corporations like General Mills can evolve in a new reality of resource constraints. Born of a different age, General Mills represents how businesses and brands so many people now rely on every day must evolve in a crowded, climate-changed world.

As a founding partner in the Alliance for Water Stewardship, through its ongoing work with the Nature Conservancy and by promoting multi-stakeholder engagement in key watersheds, this food giant demonstrates that sustainability, particularly water stewardship, is no luxury of conscience, but a business imperative for a new century.

Image credits: Christian Ostrosky, courtesy flickr; Wikimedia Commons

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Tom is the founder, editor, and publisher of GlobalWarmingisReal.com and the TDS Environmental Media Network. He has been a contributor for Triple Pundit since 2007. Tom has also written for Slate, Earth911, the Pepsico Foundation, Cleantechnia, Planetsave, and many other sustainability-focused publications. He is a member of the Society of Environmental Journalists

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