Transcript
Welcome to Milk Theory, the podcast that decodes the future of food. In each episode, we talk to the innovators and leaders who are shaping the multi-billion dollar dairy industry from processing breakthroughs to sustainable packaging. We'll break down the complex world of food innovation, one conversation at a time.
You are listening to episode five of our conversation with Jeremy Pike, the director of sustainability at Idaho Milk Products, about their sustainable practices.
Host - It's clear to me that there's a, from front to back, and in your report, sustainability is covering all aspects of the business. It's a value this company has. We talked about it somewhat holistically, but can you speak to some of the standards and the organizations you partner with to get this message out to really prove that this is real and raw in terms of what you are tracking and reporting on? This is a fantastic story, but it seems to me that not enough people know about how Idaho Milk Products is really on the frontier of sustainability as a company. I think companies outside the dairy industry could learn from practices that we have adopted here. What is going on in terms of getting the word out and actually being concrete with our measurements to really prove ourselves in this field and just as a leader in this space?
Jeremy - Yeah, so we, again, a national organization standpoint, I referenced the US Dairy Stewardship Commitment earlier. And so really that's the initial genesis of the structure and substance around our platform. And so the fun story behind that, working with our CEO, we, again, we'd always had this cross-functional team and never had that single point owner. And I came on in May, 2022 as my official start date, but I accepted the position in April,2022. And essentially as soon as the, I don't even know if the ink was dry necessarily. When I signed to take the role at the time of Sustainability Platform Leader, our CEO went and spoke with the CEO over at the Innovation Center at Dairy Management Inc. And we signed the U.S. Dairy Stewardship Commitment. And so that in and of itself was really just a testament to the leadership approach of we said we were going to do it, we've got somebody in the role, we are going to do it. This is us signing on and alright, open the flood gates, let's go. And so really that U.S. Dairy Stewardship Commitment helps us to set the foundation of just alignment with the broader industry goals. And so what that stewardship commitment really is on the surface, there's so many more things, but on the surface it's focused around the collective industry's 2050 goals. And so the commitments around by 2050 being GHG neutral, there's components around optimizing water use and maximizing efficiency. There's components around water nutrients or water quality through effective manure management and nutrient management practices. So that's kind of just the broader heading that the stewardship commitment commits to. And then beyond that, it opens up a world of pre-competitive resources and also the ability to track our scope one and two, and then from there really continue to work with other industry leaders to best create a platform for change or a meaningful platform that's well respected.
So we did the U.S. Dairy Stewardship Commitment adoption in like I said, April, 2022. And then from there we really took a step back and we're like, okay, that's great. We signed up, but what does this all mean and what's actually relevant to us as a business? And so we then went through and conducted a materiality assessment. And so what that materiality assessment does is really sets the foundation. So the stewardship commitment is great. It has the 2050 goals. It kind of helps bucket the different areas around greenhouse gas and water, what have you. But the materiality assessment is that full E, S, and G spectrum, that environmental, social, and governance spectrum. And what that exercise did was really, really set the foundation for Idaho Milk Products sustainability platform. And really to understand what matters to us. We don't want to just copy and paste from what the industry says is relevant and important.
We wanted to understand what's relevant and important to us specifically. So we went through that process. Essentially it examines the impact and the importance of a variety of different topics, 20 topics to be exact. We send out surveys to both internal and external stakeholders. And so the intent is for input from both internal and external to look at those 20topics. Things from product safety and quality, people health and safety, water quality, greenhouse gas emissions, biodiversity. I mean, you can think of a number of the different topics that would come up if somebody says dairy sustainability typically would be captured in one of those 20 material topics. So we sent that survey out and then analyzed that data to then create a matrix. And so you basically get an XY scatter plot of where those topics land in space based on the level of impact and the level of importance that those topics have.
And so we now have a list from one to 20 of what our stakeholders both internal and external think are important. Essentially a ranked order. And then that helps to transition into an action plan and also give us a starting point to track. And so we then took those 20 material topics and assign key performance indicators or KPIs to them so that we have concrete data points or concrete metrics to measure ourselves against year over year. And so that really helps us to just take that exercise of doing a materiality assessment and instead of just saying, okay, yep, we checked the box, we did a materiality assessment, now we'll move on and worry about other stuff. It's like, okay, no materiality assessment is really what's ingrained in our business. That's how we're going to operate. We're going to focus on these topics and make sure we're addressing each of them each year.
Having those KPIs keeps us accountable, make sure that we're tracking that information. So we've done the U.S. Dairy Stewardship Commitment, we've done the materiality assessment, so we're covered from a national scale that materiality assessment ties to some more broader global landscape topics and questions. And then we also at that point joined the Sustainable Dairy Partnership or SDP. And so what that is is actually basically the next scale up of what a comparable stewardship commitment would be at the global scale. And really what the SDP is intended for is for us as dairy ingredients producers or dairy suppliers, it's supposed to create that dotted line to our customers for all things sustainability. So I alluded at the beginning of the conversation about customers having their own initiatives and customers having their own ways that they view sustainability. Well, SDP is essentially a repository, a portal that we're able to take all of our data, everything we're tracking, all the different policies and documentation and drop it into that platform. And so if we have a customer that's maybe a prospective customer that says, what do you think about sustainability? Or How does Idaho Milk Products view sustainability? Beyond pointing them to the sustainability report, you could say, are you members of SDP? And again, it's a global platform.
So if there are global players that we're working with, they could be users of that platform and then transparently see our data, see our information. So really that was kind of the progression of going from that national level to then really taking it back down to the local, to the Idaho Milk Products level through the materiality assessment, and then expanding now to the global level with SDP, having gone through, tracked our scope 1, 2, 3impacts having gone through. We've set science-based targets. And so what Science-Based Targets Initiatives aims to do, or what SBTI for short-term aims to do is set those ambitious climate targets. And so we have actual verified SBTI reduction targets, both for the energy and industry component. So those scope one, two, and three emissions around the more the business. And then we have reduction, verified reduction targets around our scope three, Forest, Land, and Ag or FLAG for short for those FLAG emissions.
And so really, again, got a bunch of different ways where we're tracking and tracing data, and then SBTI says, okay, now you have this information. What are you going to do about it? Basically, what are you going to do to reduce and work through the process to essentially get a percentage reduction assigned for a near term? So we have 2030 near term targets. Essentially through that SBTI platform, we get aligned with climate science to have basically the stamp of approval from them. So really a lot of different factors or players I guess, that we're working with at any given time to make sure that our platform is robust and is scientifically credible, but also backed by data and that we're doing the right thing. Because again, I think so often it's easy to just point that dairy is the problem, and maybe where dairy has gotten itself backed into a corner is when we haven't had available data and we've maybe been playing too much defense instead of offense and really lacking that educational piece. We're really well positioned to help champion that within the industry and within our world here. We can certainly help be those leaders.
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