Maple Leaf Foods Inc. chief executive Michael McCain said the company will slash its greenhouse gas emissions by nearly a third over the next decade and will offset what it can’t eliminate, while leaning on its suppliers to take action as well.
“If you’re not interested in climate change today, you’re not listening,” Mr. McCain during an interview at a company office in Toronto. “It is a crisis and it does require leadership.”
The announcement from Maple Leaf, a large producer of pork and poultry products, comes at a time when the meat industry is increasingly under fire for its greenhouse gas emissions and environmental impact, and as consumers incorporate more plant-based protein into their diets.
“I get the fact that the meat industry is a primary protagonist and our footprint is inappropriate today,” Mr. McCain said. “What I don’t accept is that the meat industry can’t improve its footprint.”
Maple Leaf said it will reduce its absolute greenhouse gas emissions by 30 per cent by 2030 from a base year of 2018. The goal has been set with the Science Based Targets initiative, a partnership between the United Nations Global Compact, the World Wildlife Fund, and other organizations. The purpose is to encourage corporations to set targets that are in line with the goals of the Paris Agreement, which seeks to keep the rise in temperatures this century to well-below 2 C above preindustrial levels, and pursue efforts to limit the temperature increase even further to 1.5 C.
Around 285 companies have had their targets validated with the initiative, including McDonald’s Corp., Nike Inc. and Procter & Gamble Co. Maple Leaf is one of three animal protein companies to set such goals.
Maple Leaf also pledged to reduce emissions produced in its supply chain by 30 per cent a tonne of product over the same time period. Mr. McCain said that can be achieved through “moral suasion.” He pointed out that Maple Leaf is a supplier to Walmart Inc., which previously set science-based targets, and that the retail giant has been successful at encouraging companies in its network to tackle emissions. “There’s no coercion,” he said. “It’s very much a process of, ‘Let’s be in this together.’ ”
Mr. McCain anticipates the company will spend between $5-million and $10-million to purchase offsets for emissions that it cannot eliminate. The company has already purchased offsets from 10 environmental projects in Canada and the United States, including wind energy and renewable fuel production, offsetting roughly 440,000 tonnes of carbon, making Maple Leaf carbon neutral, Mr. McCain said. That figure includes emissions from some of its suppliers. “It would be inappropriate to bend the trend on emissions without also figuring out how to get to a net neutral position,” he said.
Since 2014, the company has cut its emissions intensity by 14.3 per cent per 1,000 kilograms of finished product, in addition to reducing its water and energy use intensity. Maple Leaf has invested more than $12-million on lighting retrofits, heat recovery systems and other projects to address its environmental footprint. The company is also exploring different technologies to limit emissions, such as a method to capture methane from pig manure at its barns.
Mr. McCain said the company’s emissions targets were not motivated by the federal carbon tax that took effect this year, a measure that he supports.
“Of course we should have a carbon tax,” he said. “It’s an economic and moral imperative.”
The federal levy has proved divisive, with premiers in some provinces, including Alberta and Ontario, opposed to it. “That discourse is a shame,” Mr. McCain said, pointing out that a majority of voters in the last federal election supported parties in favour of a carbon tax. “That’s pretty overwhelming in my mind, so I’d rather focus on that.”
Maple Leaf is not betting its entire future on meat – Mr. McCain considers it a protein company – and two years ago purchased Lightlife Foods for US$140-million followed by Field Roast Grain Meat Co. for US$120-million, which both specialize in plant-based food. In April, the company said it will spend US$310-million to build a new plant protein facility in Indiana.
The market for plant-based burgers, sausages and other meat is rapidly growing, but intensely competitive, with Beyond Meat Inc. garnering much of the attention thanks to high-profile partnerships with A&W and McDonald’s. Maple Leaf is spending heavily to push its own products, and Lightlife has partnered with celebrities Ellen DeGeneres and Kristin Bell.
The promotional activities are hitting the bottom line. The plant protein division posted an adjusted operating loss of $45.8-million year-to-date and recorded $73.6-million in selling, general and administrative expenses. However, sales are up 25.7 per cent to $126.7-million over the same time period.
Mr. McCain is still bullish on the prospect for plant-based meat. “This is the best investment opportunity I’ve seen in the last 25 years,” he said, encouraged by the consumer uptake. But if demand does wane, Maple Leaf can pull back its spending. “You can choose to decelerate this rocket ship back to normal,” he said, “and you’re left with a very profitable business.”
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