Guest Columns

Perspective:
Dairy Sustainability

Navigating sustainability in dairy

Andy Powers

Andy Powers, vice president of technical services for the American Dairy Products Institute, is a guest columnist for Cheese Market News®.

While it all starts simply with milk, that unique material undergoes a dizzying array of transformations as it makes its journey to the consumer. Those transformations vary widely in complexity; the pathway to drinking milk is relatively quick and straightforward, with just a handful of fundamental steps, while the production of an artisanal cheese is equal parts craftsmanship and science and can be 12 months or more in the making.

Sustainability, like milk, is a unifying thread that weaves its way through the entirety of the dairy industry. And like the myriad ingredients and food products that we derive from milk, sustainability is just as dazzling in its variations and its complexity. In its most straightforward respects, sustainability is a fairly simple, relatable concept: resources of all types are precious; do what you can to conserve them. But in practice, the sustainability landscape as a whole is just as complicated and sophisticated as our industry’s catalog of products and processes, and it can take just as much time to develop an understanding of the subject’s myriad dimensions as it can to understand the full significance and value of dairy as food.

Most dairy operations have been working in sustainability throughout their history, but getting credit for that work (monetarily and otherwise) means a couple of intimately connected things: gauging your performance and using relevant metrics, and then communicating your performance to important stakeholders like customers and regulators using an agreed-upon, systematic reporting framework.

The first part, measuring your performance, is reasonably familiar and intuitive, at least in concept. Mid-20th century businessman Peter Drucker popularized the phrase “you can’t manage what you don’t measure,” and while it might be a bit antiquated as a management philosophy, it does hold a measure of truth where sustainability is concerned. You start your journey by characterizing where you are, according to key measures. How much water does our operation consume? Fuel? Electricity? And how efficient is that utilization? Do we convert 100% of that resource into value, or is something left on the table? Lost down the drain? Drifting out into the atmosphere? But even then, if the concept is straightforward, choosing the tools by which you make those measurements can be a daunting task. Maybe most stakeholders in the dairy value chain understand the concept of a life cycle analysis (or LCA), but there are many systematic methodologies for LCA — which one is right for you? And most in dairy know that Scope 3 emissions account for the lion’s share of the greenhouse gases associated with our industry, but which way is best to get your hands around your baseline performance and to track your improvement over time, at the farm level? Is FARM ES (environmental stewardship) right for you? What about Muddy Boots and the Cool Farm Tool? These choices have far-reaching implications.

The second part, reporting your position and your progress, can be a bit trickier still, and therefore it depends on understanding not only what the existing reporting frameworks are, but also how they fit with your organization’s needs and with the requirements of the organization’s relevant stakeholders. It’s a proverbial “alphabet soup” of abbreviations for the plethora of systems available to choose. They are not all created equal. They are not “one size fits all.” You might be following U.S. Securities and Exchange Commission requirements to make mandatory disclosures about your company’s environmental, social and governance (ESG) performance as one area of tracking and reporting, but you might choose (or be compelled) to use a system like TNFD (developed by the Taskforce on Nature-related Financial Disclosure), IFRS (International Financial Reporting Standards), SBTi (Science Based Targets Initiative) or Ecovadis because it’s a good fit with your organization’s internal needs or the requirements of your strategic customer accounts. Even then, your major customers may have different expectations, and they may be operating in regions of the world with different regulatory requirements. It may be necessary to conform to multiple systems in order to satisfy all your business needs.

While the U.S. remains slightly softer on sustainability regulations than the European Union, for example, we are still driving in that direction. Paper and packaging sustainability regulations are one area where our domestic obligations continue to grow, state by state. As of this writing, seven U.S. states have implemented laws regarding Extended Producer Responsibility (EPR) that impose management and reporting responsibilities across the supply chain for sustainable packaging, product design and other end-of-life requirements. The states with EPR laws on their books tend to work with one producer responsibility organization, the Circular Action Alliance, which may help to focus the required work under the same potential system.

In this article we have just scratched the surface of what it means to be committed to sustainability in U.S. dairy. The topic remains an important call to action for all stakeholders in the dairy value chain. Whether your organization is just merging onto the roadway, or your company and your colleagues are already established thought leaders in the space, everyone is searching for the best ways to conserve their own precious resources while continuing to make progress across that landscape. Sustainability is a journey, not a destination, so you want to check the map, avoid the obstacles that you can and prepare to commit for the long haul.

The industry’s consultants, software and service providers, and trade associations are great resources to help you navigate what we’ve consistently described here as a complicated and evolving landscape. Consultants can be agile and may have knowledge that spans multiple systems and regulatory environments. New software tools and platforms are constantly emerging to help with everything from measurement to accounting to reporting to valorization. Organizations like the Dairy Sustainability Alliance (under the Innovation Center for U.S. Dairy) and the American Dairy Products Institute provide resources, conduct educational and informative events, and operate pre-competitive industry committees to help get the job done. All these resources provide support and accelerate your progress, and they are eager for your participation and engagement. Reach out to one today!

Dairy sustainability is a journey. Are you on board?

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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