Who Got Rescued?

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Who Got Rescued?

Mark Schneider, the company’s C.E.O., spoke with DealBook about how he won support from more than 290,000 employees — and how he will sell investors on paying now to meet a goal 30 years in the future.

On the scope of the challenge

It will take Nestlé, which has a globe-spanning, resource-intensive supply chain, a lot longer to reach net zero emissions than it would for, say, a big tech company. For example, Nestlé was responsible for 92 million metric tons of greenhouse gas emissions in 2018, roughly double the amount emitted by all of Switzerland. “When we’re all living on this earth,” Mr. Schneider said, “we want to be sure that it becomes a place for future generations that’s inhabitable.”

On making a climate pledge “earnings neutral”

Long-term investors see the net-zero pledge as “future-proofing the company,” Mr. Schneider said, especially as environmental laws become stricter and consumers increasingly seek climate-friendly products. For investors with shorter horizons, the pledge is “earnings neutral,” he added: Despite costing around $3.6 billion over the next five years, these investments will be financed by operational efficiencies and will, eventually, enable the company to “charge a premium for better products.”

“There is also a revenue upside,” Mr. Schneider said. “The margin is not going backwards.”

On ensuring that future company leaders stick with it

After announcing the targets with “great fanfare,” it will become “a matter of honor” to meet them, Mr. Schneider said. Still, the executives making these commitments will probably have retired by 2050. To give the plan teeth, starting next year the company will tie part of its executive committee’s annual bonuses to quantifiable environmental factors. “We’re putting our money where our mouth is,” he said.

On how the pandemic changes everything

Nestlé made the net-zero commitment about six months before the pandemic, which has had two major effects on the pledge, Mr. Schneider said.

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