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PH PH PH PH PH PH Principles in Action Summary 2012 | Contents Mars Contents Mars in a Moment .........................................................................................1 Data Restatements A Letter from Mars President, Paul S. Michaels ...............2-3 We have restated our 2007 baseline and each subsequent year of Our Approach to Business ...............................................................4-8 environmental data (where applicable) for our operations, to reflect changes in our business and improvements to our data collection Our Stakeholders’ Views .......................................................................9 systems. These changes are not material to our overall performance. The most significant adjustments are as follows: Health and Nutrition ...........................................................................10-11 We have included greenhouse gas emissions from our global auto fleet as Scope 1 rather than Scope 3 emissions as in previous years. Our Supply Chain ..................................................................................12-13 These emissions do not count toward our Sustainable in a Generation goals, which are for our factories and offices only. Our Operations ......................................................................................14-18 We have restated the percentage of black tea purchased from certified sources in 2011 to 32 percent from 18 percent. The new Our Brands ...............................................................................................19-20 figure represents certified tea as a percentage of black tea only, in line with our target, whereas the previous figure showed certified Working at Mars ................................................................................ 21-23 tea as a percentage of all leaf tea purchased. Assurance ...................................................................................................... 24 The percentage of new Associates receiving Essence of Mars training within their first 12 months has been restated for 2011 due to a calculation error. Reader’s Guide Welcome. This 2012 Principles in Action Summary provides an overview of our business and a review of 2012 progress toward our objective of creating mutual benefits for all our stakeholders through our operations. This Summary describes the highlights and challenges faced in addressing our material issues in 2012. There is more information about our wider efforts in the fields of health and nutrition, sustainability and being a great place to work at www.mars.com/global/about-mars/people-planet- performance.aspx. Reporting Scope and Data Our Principles in Action Summary covers the global activities of Mars, Incorporated and its business segments: Mars Petcare, Mars Chocolate, Wrigley, Mars Food, Mars Drinks and Mars Symbioscience. It describes our performance in the 2012 calendar year. Where appropriate, we mention or provide links to activities and case studies from other years to give a more complete picture of our work. All environmental data for our factories are based on actual 2012 figures, though data for most offices are still estimated. Estimates comprise approximately five percent of data relating to raw materials and packaging materials. We measure all volumes in metric tonnes (1,000kg), which we refer to simply as tonnes throughout. Financial values are United States dollars (US$) unless otherwise stated. © 2013 Mars, Incorporated and its Affiliates. All Rights Reserved. Principles in Action Summary 2012 | Mars in a Moment “The company’s objective is the manufacture and distribution of food Mars products in such manner as to promote a mutuality of services and Mars in a benefits among all stakeholders” Moment – Forrest E. Mars, Sr. 1947 . We strive to do this by putting our Five Principles into action every day to make a difference to people and the planet through our performance. incorporated PH Petcare Chocolate 394 Operations in Sites 74 Global HQ Countries in McLean, Virginia, USA 1911 Frank C. Mars made 11 the first Mars candies Food in his Tacoma, $ BILLION Washington kitchen BRANDS More than 100,000+ $33bn SUPPLIERS net sales Private family-owned company Symbioscience Drinks PLANTS SIMPLY LOVE IT ! Total Sales More than 90% of sales come from Petcare, Chocolate and Wrigley © 2013 Mars, Incorporated and its Affiliates. All Rights Reserved. 1 Principles in Action Summary 2012 | Letter from Paul S. Michaels Mars Letter from Paul S. Michaels President Mars, Incorporated The challenges our business shares with society require long-term efforts to deliver change on a large scale. In last year’s Principles in Action Summary, I described how daunting millions of people in Africa in the future. challenges are shaping our approach to business and our thinking about the kind of business we want to be. These challenges – preserving the Creating Shared Prosperity in our Supply Chain environment for future generations; spreading prosperity and economic Our business cannot endure unless the farmers that supply our agricultural growth; feeding a burgeoning global population while addressing obesity – ingredients can make a decent living from raising their crops sustainably. remain as pressing as ever. Our Vision for Change program for cocoa farmers in Côte d’Ivoire made As a private, family-owned company, we have the benefit of being able to considerable progress last year, opening eight more Cocoa Development take a generational view – committing to the long term and making choices Centers (CDCs) to provide the tools, techniques and training to cultivate today that will pay off down the road, rather than this quarter. But, even with high-quality yields that result in better incomes. Our challenge now is to scale this freedom, we know that we can’t tackle the challenges we share with up successful pilot projects to become standard practice. Mars is now the society alone, if we really want to make a difference and create the scale of world’s largest purchaser of cocoa from certified sources, and farmers need change necessary. We believe that collaborating with others is part of our our continued support to achieve certification if we are to meet our target of responsibility to society and to our stakeholders. And, we know it is the best sourcing 100% of cocoa from certified supplies by 2020. way to achieve our objective “to manufacture and distribute food products in To ensure success, we need to understand the long-term outcomes and a manner that creates a mutuality of benefits for all of our stakeholders.” It impacts of our interventions in the communities producing key ingredients will also make us a better, more efficient company that is still in business in such as cocoa, tea, coffee and rice. We have developed a methodology for another 100 years. monitoring CDC performance and are gathering baseline data. Working with Our determination to make a difference unites the Mars family, the Mars others, our aim is to set data-based, meaningful and ambitious targets for Leadership Team, and more than 72,000 Mars Associates around the improving livelihoods, safety and wellbeing throughout our value chain. world. Providing opportunities to make a difference makes the experience of working at Mars more than just a job – and in an extremely competitive Making a Difference for the Environment global marketplace this is a critical factor in attracting and retaining the highly We all rely on the planet’s resources – businesses, communities and talented people we need to be successful. individuals alike – so the case for environmental protection is indisputable. At Mars, we are reducing our environmental impacts through our Sustainable In our previous Principles in Action Summaries, we reported in detail on the in a Generation program, though we have made slower progress toward our depth of our commitment and the breadth of our activities. This year, our aim 2015 targets than we would like. Our energy use, greenhouse gas emissions is to be more focused on recent progress and challenges facing our business. and water consumption remained constant this year rather than declining. Addressing Hunger and Obesity through Health and We need to redouble our efforts and stay focused on our commitments. Nutrition If we employ all the energy efficiency, technology and renewable energy projects we have planned, our targets are still achievable. To make sure this Obesity and hunger are tremendous, complex challenges for the world – happens, this year we linked a percentage of the long-term incentive plan for impacted by everything from how we live, work and get around, to social, our top 100 executives to achieving our greenhouse gas emissions reduction economic and cultural factors, genetics and what we eat. target for our operations. We offer a broad portfolio of products from rice and sauces to chocolate, We have also broadened our approach to take responsibility for the gum and confectionery. We are proud of these products and the pleasure environmental impacts caused by, and affecting, our agricultural supply they bring. They can be enjoyed as part of a healthy, balanced diet, and we chains. In this year’s Summary, we provide data on the water and land use are making this easier by reducing sodium and saturated fats. Of course, this impacts of sourcing our raw materials and packaging, in addition to the is just a small step that we can take on our own. To make a more substantive figures on greenhouse gas emissions reported in previous