By Paul Bulcke, Chief Executive Officer, Nestlé SA, and Dr. Andrew Steer
Around the globe, about one-third of all food produced for human consumption goes to waste. It rots, gets lost in transport or is simply left on our plates. The impact of this loss extends beyond just food: Production of food that is wasted uses 24 percent of all agriculture-related water, causes 8 percent of all human-created greenhouse gas emissions, and costs consumers, farmers and businesses up to $940 billion per year.
Last year's Sustainable Development Goals, signed by more than 193 countries, included a target to halve food waste by 2030, while some businesses have set even more ambitious deadlines. In 2015, The Consumer Goods Forum - a coalition of more than 400 of the world's largest manufacturers, retailers and service providers - resolved that its members should halve food waste from their own operations by 2025.
One major hurdle to meeting these commitments has been a lack of consistent guidance. The recent Global Green Growth Forum in Copenhagen addressed this need with the launch of the Food Loss and Waste Accounting and Reporting Standard (FLW Standard). This is the first-ever global guidance for businesses, governments and other groups to measure and report on their food loss and waste.
The new FLW Standard establishes consistent definitions, requirements, and guidelines on what companies need to measure and how they should measure it. Companies that use the guidance will be better able to quantify how much food loss and waste occurs in their operations and supply chains, understand where it goes, and set baselines and measure progress against targets. Armed with this information, companies can develop smarter strategies and increase the efficiency of their supply chains.
As members of Champions 12.3, we are convinced that if we work together we can develop effective solutions to reduce food loss and waste, helping the world meet Sustainable Development Goal Target 12.3, which aims to cut food waste by 50% by 2030. Launched in January 2016, Champions 12.3 is a coalition of leaders in government, business and the non-profit sector dedicated to inspire ambition, mobilize action, and accelerate progress toward this global goal.
Achieving Target 12.3 is aligned with Nestlé's goal to achieve zero waste for disposal by 2020. As the leading nutrition, health and wellness company, Nestlé is committed to reducing food loss and waste across its value chain.
Reducing food loss and waste not only helps Nestlé secure its supply of agricultural raw materials, but it will also have a positive impact on society by supporting rural development, water conservation, and food security. Shockingly, more than 800 million people - one in nine globally - are undernourished. And yet 1 billion tons of food that is produced for people never gets consumed. If we can get more food to more people, this will increase their nutrition intake and improve their well-being, while reducing pressure on natural resources.
By measuring food loss and waste, companies can better see and report on where and how food is lost in their supply chains. Increased transparency can, in turn, help companies identify hotspots, develop new strategies and monitor progress. Nestlé, for example, provides regular updates around its efforts and progress to reduce food loss and waste in its annual Nestlé in Society: Creating Shared Value report and through related private and public reporting initiatives.
The FLW Standard was developed using input and feedback from more than 200 external stakeholders. Nestlé provided input during the standard's development, drawing on pilot tests in its milk supply chain in Pakistan. The Pakistani dairy sector was chosen because of its complexity and high volumes, and because it offered an opportunity to test the efficiency of the company's dairy hub model.
At each stage of the value chain, Nestlé analyzed all potential causes of wastage using the FLW Standard. Results were impressive. The total milk loss in the company's supply chain was estimated to be only 1.4 percent, significantly lower than average country estimates. Indeed, approximately 15 percent to 19 percent of milk sold by Pakistani farmers is wasted in route to the market, according to a 2004 Asian Development Bank report. Nestlé also found that sharing best practices among farmers contributes to an increase in milk production and less milk being rejected by chilling centers, while improved management at the retail stage could further reduce product losses. We expect that as more businesses use the FLW Standard, they will be able to identify similar opportunities.
The FLW Standard builds on a precedent. About 15 years ago, WRI teamed up with the World Business Council for Sustainable Development to launch the Greenhouse Gas Accounting and Reporting Standard, which is now the most widely used and trusted approach for measuring and reporting emissions. We hope the FLW Standard will have similar reach.
It's a travesty that so much food is lost and wasted. With ongoing collaboration and commitment, we can turn the tide. Those who measure waste can better manage it. That's good news for people, business and the planet.