Mars global CEO says the US$45 billion company does not believe that “purpose and profits are enemies” and warns businesses of the risks they run not having meaningful environmental, social, and governance (ESG) principles.
Poul Weihrauch stepped into the CEO role in September last year, having been the global head of Mars Petcare.
He gave his first interview to the US Financial Times.
Weihrauch said if companies step away from ESG commitments because of “nonsense” political attacks, they risk alienating a generation of talent.
“Quality companies are deeply invested in this and if I walk out of this office and I take a 25-year-old associate that has joined us from university they will want us to do this,” Weihrauch said.
Mars has 140,000 employees and recruits 25,000 people a year. Weihrauch said those employees would not stay with the company if it didn’t care about, “ESG or purpose or whatever we call it. So, from my chair, I think it’s a nonsense conversation. We don’t believe that purpose and profit are enemies”.
Julia Seddon, director of environmental and sustainability services firm Cress Consulting, said on the local front many businesses were keen to address ESG but not quite sure how ESG relates to them or where to start.
“There is a fear about ‘getting it wrong’ and a general awareness that greenwashing is a risk to avoid,” Seddon said.
She added that while many workers now expect their employers to be genuine about sustainability, good governance, and social impact, from Cress’ point of view, what was more critical was that the ESG issues get properly assessed and the most relevant and material focussed on.
“Those that get it right report many benefits including in the talent area but also in opportunities for efficiency, innovation, and shared value creation.
“Done well, ESG driven initiatives are often mutually beneficial for both the business, suppliers, service providers, employees and the communities they operate in,” Seddon said.
Weihrauch told Andrew Edgecliffe-Johnson the company was aiming to double the group’s revenue over the next ten years. He said he was looking at organic growth and acquisitions to double sales from US$45 billion, but that the more important target was “responsible” growth.
Seddon explains, “Responsible growth is essentially the opposite of growth at all costs, it talks to businesses that are right sized and take a proportionate approach to their core business operations as well as how they manage their business and their risk.
“It’s also about making sure that there is a clearly articulated company purpose and that the strategy, the day-to-day and the way things are done when no one is looking are aligned.
“A responsible business has a sustainability strategy that is all about ensuring continuing of business – ensuring that the business model and continued growth is balanced against risk, ranging from data breach, supply chain disruption, skills shortage to greenwashing.”
Weihrauch said politicians needed to “step in and take more responsibility” in areas such as providing recycling systems while maintaining a dialogue with “good big businesses that want to drive change”.
He added the company planned to more than double spending on its sustainability agenda, which spanned greenhouse gases, packaging, and its supply chain from US$1.1 billion over the past three years to US$2.7 billion over the next three.
Mars Food Australia, Mars Wrigley Australia, and Purina Petcare Australia have all displayed sustainability projects and goals.
For example, in November, Mars Wrigley Australia was the first global group to move to paper-based wrappers for its chocolate bar lines.
Chris Hutton, R&D director, told Food & Drink Business’s stablemate PKN, “As this is a world-first for Mars Wrigley, we didn't have a playbook or a road map to follow, so our local R&D team worked really closely with Amcor Australia & New Zealand to come up with a solution that maintained the quality and freshness of our product, whilst working efficiently with our machinery and technology in the factory.
The company globally sources 61 per cent of cocoa through its Responsible Cocoa program and is on track to reach its goal of 100 per cent by 2025. Mars Wrigley is engaged in Australian first research with James Cook University on integrating cacao within sustainable agroforestry systems.
Seddon says there are three pieces of advice she gives to clients, “First don’t try to do too much – we often advise clients to start with a materiality assessment and stakeholder analysis to make sure the most important and relevant issues are captured, then look at how those are being managed rather than trying to address each element in every framework.
“The second is treat ESG data the same way as financial data, not only to ensure its accurate, but that it is good enough to disclose as a baseline, benchmark, or target.
“Thirdly, ESG is best considered part of the main event, embedded within the business and not an add on. Done well, ESG is proportionate, creates value, reduces risk, and is readily disclosed across 2-3 pages in an annual report.
