General Mills Releases its Sustainable Supply Chain Strategy

April 30, 2013
In this effort to measure and manage the use of water and energy throughout its supply chain, the chief sustainability officer reports to the senior vice president of supply chain.

General Mills just released its 2013 Global Responsibility Report, which outlines the company’s progress and commitments in the areas of health, environment, sourcing, workplace and community engagement.

The environment and sourcing areas are related in this report. In fiscal 2012, General Mills commissioned a trucost study of its environmental dependence on natural resources across the value chain, including agriculture, ingredient production, packaging supply chain, product production, distribution and consumer use. The resulting natural capital assessment shows that nearly two-thirds of greenhouse gas emissions and 99 percent of water use occurs outside its own operations—in the growth of raw materials and preparation of ingredients General Mills uses to produce its products.

“Through our work with industry groups, such as Field to Market: The Alliance for Sustainable Agriculture and the Roundtable on Sustainable Palm Oil (RSPO), we are helping to move the raw material supply chain toward more sustainable solutions,” the manufacturer’s report stated. “Our efforts include measuring and managing the use of water and energy throughout our supply chain. Through our holistic value creation strategy, we also are helping to improve the livelihoods of smallholder farmers and their communities.”

General Mills outlined a four-step sustainable sourcing model to improve the sustainability of the raw materials it uses and to manage the impact of water usage across its supply chain:

1. Assessment: In 2011, it worked with the World Wildlife Fund (WWF) and the Rainforest Alliance to complete an assessment of all the raw materials it buys worldwide. Each raw material was measured against potential risk categories, including animal welfare, child labor, deforestation, economic sustainability, fertilizer (nitrogen) use, GHG emissions, soil loss, water quality and water use.

2. Strategy formation: It identified the 10 priority raw materials with which it could have the greatest impact from a sourcing standpoint: wheat, oats, palm oil, vanilla, cocoa, corn, dairy, eggs, fiber packaging and sugar (sugar beets and sugarcane).

3. Transformation: Working with industry partners and nongovernmental agencies across the supply chain to identify new solutions. General Mills pilots projects and communicates the results so it—and others in the industry—can continue to refine its approach.

4. Monitoring and evaluation: When necessary, the company will involve third-party auditors to help measure and analyze its results.

Within General Mills, responsibility for sustainable sourcing lies with the vice president and chief sustainability officer (CSO) and the director of sourcing sustainability (who reports to the CSO) and the vice president and chief purchasing officer. The CSO reports into the senior vice president of supply chain and the senior vice president of external relations.

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