The real test for Arla involved meeting ambitious sustainability goals – under the company’s 2020 Environmental Strategy – at a time when global dairy consumption was rising, Johannesen said.
He explained that the firm’s 2020 goals covered the entire product lifecycle: from farmers, through to transport and manufacturing operations, packaging and distribution to consumers.
Johannesen said:“We have set up different targets to reach by 2020. We have specific targets in four areas. First of all we have set up targets for sustainable agriculture.
“Then we have targets in relation to the climate (carbon emissions), and a target for energy and water resources. The last one is about waste.”
Since Arla was a co-operative with farmer owners, Johannesen said they were now becoming more actively involved in the company’s sustainability strategy, with the company keen to set up a sustainable dairy farming standard in coming years.
Decoupling growth from emissions
Arla has pledged to cut greenhouse gas emissions in production, transport and packaging by 25 per cent by 2020, and Johannesen stressed the fact that this was an ‘absolute figure’ across group operations, and wasn’t just calculated on a per product basis.
He said: “That’s quite a challenge actually, because we have growth, so it’s very important for us to decouple production and emissions.
“We have been running for five years from 2005-2010 to an emissions goal, where we have an increased production 6-7 per cent and decreased emissions by 6-7 per cent. So we already seeing a decoupling.”
One big sustainability goal for Arla involved its desire to move away from fossil fuels to renewable energy, Johannesen said.
“One of the challenges is that you want to change from fossil energy sources to much more renewable sources. We have a target to go for 50 per cent renewable energy sources by 2020,” he continued.
“That’s a real challenge. We do not use much oil, but do use gas, because in a lot of the countries where we are operating it’s the only choice. So we have to find other ways, for example one could be producing biogas together with our farmers,” Johannesen added.
“We could build biogas plants where they could treat the manure and produce green energy that we can use in our operations. That’s one way.
“Another way is, for example in Sweden, where we have a lot of forests and some farmers own a bit of forest, we can use woodchips for insulation or also to produce energy in our operations. There are a lot of things that we can do.”
Government support varies
Asked whether sustainability goals easier to achieve in, say, Sweden, compared to a country such as Russia, for example, Johannesen said: “Some things are easier in one country, other things are easier in another country, because of the infrastructure, the energy setup, what is produced in different countries.
“It varies a lot from Sweden, Norway, and Finland where we have a lot of hydropower; we don’t have that in other countries. So in some countries it’s a huge challenge.
But I’d not say that in China, say, it’s more difficult. Because when we are building our sites we roll-out best practices we have up here [in Northern Europe]. The challenge is more about the infrastructure and the different rules in the different countries.”
The level of support that Arla received from governments and societies to meet sustainability goals also varied greatly across the world, Johannesen said.
“Help from authorities or society can depend upon how big we are, where we can influence something. We have our home markets in Northern Europe: there we have good co-operation with NGOs and other stakeholders, although we do generally worldwide,” he said.
Johannesen added: “It also depends upon culture. In some countries we do not use fibres, for example, in packaging, we use plastic. We also have infrastructures for recycling in some countries but not in others.”