From Innovation to Impact: Cargill’s Sustainable Development Journey
By Norris Tangen
Cargill’s commitment to sustainable development runs deep. In an exclusive interview with the AmCham China Quarterly as part of the first installment of the AmCham China Social Impact Initiative (SII) Talk Series, Lily Guan, Cargill’s President of China and General Counsel of North Asia, shares why sustainable development is critical, how the organization prioritizes innovation to promote its initiatives, and how gender diversity and female empowerment contribute to the company’s larger goals.
Founded in 1865, Cargill Inc. has grown from a family-owned grain operation in Iowa to the largest privately held corporation in the US in terms of revenue. Today, Cargill is a global food corporation with operations spanning 70 countries and over 155,000 employees. Cargill has been operating in China since the early 1970’s, employing over 10,000 Chinese staff and operating in more than 50 locations across the mainland. As Cargill’s President of China and General Counsel of North Asia, Lily Guan stresses that one of Cargill’s top priorities is sustainable development, both regionally and globally. Guan references the United Nations’ definition of sustainable development, stating that “at Cargill, we think sustainable development is the ability to exist and develop without depleting natural resources for the future.”
Given the pressing global challenges of climate change and food security, Guan emphasizes that sustainable development is more important than ever. “We believe that only by promoting long-term thinking and a holistic approach to problem-solving can sustainable development help address the root causes of many of the challenges we face,” she says. Sitting at the center of the global food and agriculture system, and with a footprint extending into industrial sectors, Cargill is uniquely positioned to contribute to tackling these challenges. Guan outlines three specific areas where Cargill is prioritizing sustainability efforts: climate, land and water, and people.
Ambitious Targets Benefit from Local Collaboration
Cargill’s commitment to sustainable development is evident in the company’s specific targets, which have been set with a focus on environment and social sustainability. Guan highlights the company’s science-based targets and the bold actions they have taken to achieve them. “We are committed to reporting progress against those goals, and to expanding transparency regarding the impacts of our operations, products and services, and supply chains around the world,” she says.
In terms of environmental sustainability, Cargill has set ambitious goals for reducing greenhouse gas emissions, achieving sustainable water management, and transforming agricultural supply chains to be de-forestation free. “Against a fiscal year 2017 baseline, we aim to reduce absolute operational greenhouse gas (GHG) emissions by 10% by 2025, and reduce global GHG emissions from our global supply chain by 30% by 2030, measured per ton of product,” Guan explains. Cargill also aims to achieve sustainable water management in all priority watersheds by 2030 and implement water stewardship practices at all priority facilities by 2025. Furthermore, the company aims to transform its agricultural supply chains to be deforestation free by 2030.
To reach these goals, Guan says the company works alongside farmers to increase the economic, social, and climate resilience of farming households and communities. “To date, we’ve provided valuable training for more than five million farmers globally, reaching 14.6 million people since 2017,” Guan shares. Additionally, Cargill has promised to invest 2% of its global pre-tax earnings to support local communities. On water, as of 2022, we have achieved on average 77% implementation of our water stewardship programs across our priority facilities, restoring more than5 billion liters of water in priority regions in our supply chainThe amount of water restored is the equivalent of the average use of 10 Cargill facilities, or the annual water use of a city with 100,000 people.
Innovation is Key
Localization and integration with China’s development strategy naturally plays a central role in the company’s social development strategies. The company has committed to China’s rural revitalization strategy which aims to eradicate poverty and improve the living standards of rural residents. At the 2022 China International Import Expo (CIIE), Cargill signed contracts with the China Agricultural Science and Education Foundation and the Academy of National Food and Strategic Reserves Administration, pledging to donate 3.8 million RMB to help farmers improve grain storage technology and promote sustainable agricultural practices.
As a company with 158 years of experience and global presence, Cargill is leveraging its unique position in the global food supply chain and value chain to “connect” different expertise and entities to innovate for China. According to Guan, the relationship between innovation and sustainability is crucial to Cargill’s approach to business, especially when it comes to meeting the increasing demand of Chinese consumers. Cargill has set up a number of innovation centers in the country, and Guan says that this will be key in the future. “Sustainability is a fundamental part of the value we bring to our customers, and innovation is the solution to sustainable development,” she says. As such, Cargill is prioritizing innovation in its efforts to promote sustainable development in the food system. One example of this is its partnership with China Agricultural University to co-establish the Cargill Technology Application Center (TAC), which focuses on exploring carbon reduction solutions in livestock farming. Additionally, Cargill is committed to improving operational efficiency, applying emission-reduction solutions, and using renewable energy to help meet greenhouse gas reduction targets. In fact, Guan says that since 2021, Cargill has planned and built renewable energy power generation equipment at several production facilities across China. Guan adds that more such projects are on the way.
In response to China’s dual-carbon national goal, Cargill is working to transform its food and agricultural system to address climate challenges. Guan explains, “In 2020, China formally announced that the country would strive to peak carbon emissions by 2030, and achieve carbon neutrality by 2060. This top-level emphasis on climate has fueled a policy push to support businesses that focus on renewable energy and reduce carbon emissions.” Cargill is actively exploring the use of renewable energy in its facilities in China. Cargill has also been working with farmers in China’s major corn producing regions to implement programs aimed at modernizing farming practices, improving yields and farmer livelihoods, and making soil and water usage more sustainable. These programs have benefited over 27,000 farmers and led to a 10% increase in corn productivity while minimizing environmental impact.
Regarding direct engagement with stakeholders, Guan says that Cargill is working with suppliers, customers, and local communities in various ways to advance its sustainability goals. The company has adopted a Supplier Code of Conduct that stipulates ethical and lawful behavior for farmers, producers, manufacturers, and others working with Cargill. For customers, the company is working to develop products created from more sustainable raw materials with lower carbon footprints. Cargill is also investing in innovations that can reduce emissions, such as a wearable device that can capture and neutralize methane emissions in cattle and wind assisted propulsion technology for ocean transport.
Balancing the Bottom Line
One of the biggest challenges that Cargill faces when trying to implement sustainable development strategies is balancing objectives. Guan emphasizes that achieving the bottom line of sustainability requires careful balancing of economic growth, environmental protection, and social development.
To overcome these challenges, the company has invested in renewable energy, reduced its environmental footprint, and collaborated with external stakeholders to improve environmental and social performance. Guan also highlights that the company has invested in training and education programs to raise awareness of sustainability issues across the organization.
Cargill works directly with suppliers, customers, and local communities in various ways to advance its sustainability goals. For example, the company has implemented a Supplier Code of Conduct that outlines ethical and legal requirements for working with Cargill and they have also collaborated with customers to develop products made from more sustainable raw materials with lower carbon footprints.
Guan shares her advice for other companies just starting out on their sustainability journeys, particularly in China. She suggests having a clear and measurable goal in mind, tailoring sustainability initiatives to the unique needs of the business and the local market, embedding sustainability initiatives into the company’s business model and operations, and communicating these initiatives effectively. She recommends to also consider partnering with local organizations and government bodies and engage with their stakeholders in meaningful ways to build trust and foster long-term success. After all, global and country-wide sustainability success requires a local approach and together we can reimagine what is possible to protect the planet while nourishing people.
Policies to Empower
As Guan mentioned at the outset of the discussion, one of the three pillars of Cargill’s sustainability efforts are people, so diversity, equity, and inclusion (DEI) are necessary to bring about positive change in the communities where they operate. To achieve this, the company has developed a Global Diversity and Inclusion (D&I) strategy that fosters a culture of respect and understanding, promotes representation of all genders, and empowers women to succeed. “We are committed to advancing gender parity within our company and supply chains,” Guan adds.
Guan reveals that her personal journey as a female executive at Cargill China over the past seven years has been overwhelmingly positive. Above all, she says she has found it extremely gratifying to see her team work together to create a gender-inclusive environment that values different perspectives. “We hold regular meetings with our diverse team members to encourage open dialogue and discussion of potential gender-related challenges,” she says. “Overall, I am proud to be part of a workplace where my gender is not a limitation to my success.”
Cargill’s commitment to gender diversity and inclusion extends beyond the workplace. The company invests in programs and initiatives that promote women’s empowerment in the communities where it operates. Guan emphasizes the connection between gender equality and sustainable development, stating that empowering women is fundamental to achieving Cargill’s sustainability targets.
Guan says that, thanks to the efforts of senior leadership, DEI has become a regular and natural part of the Cargill’s leadership conversations. In fact, she says that the company sets specific DEI goals for its executives and holds them to account with quarterly updates on progress. Additionally, Guan shares that the company has also taken steps to build a pipeline of talent. She cites an example of Cargill’s Ocean Transport business, which recently launched a new two-year development program for trainees to identify graduates with high learning potential, diverse backgrounds, and experiences.
When asked about the advice she would share with other organizations looking to foster gender diversity and equity in leadership roles, Guan says she believes that creating a company culture of inclusion is first and most important. “Companies should strive to offer equal opportunities and access to resources for career and business development. They should also create an environment where individuals can bring their whole selves to work, encouraging them to be unapologetically themselves through training, networking, and mentorship,” she says. Ultimately, she believes that it is the duty of organizations to ensure that their leadership teams represent the gender diversity of their workforce and consumers. As Guan puts it, the bottom line is simple, “Companies should strive to create a workplace where there is equal pay for equal work, equal opportunities for career and business development and where people have access to the resources and tools to achieve their goals.”
Cargill China is a participant of AmCham China’s Social Impact Initiative (SII). The program aims to build public-private partnerships that encourage American business to participate in the social and economic development of China. To learn more about SII, please click here. For any inquiries, please contact Grace Liu at email@example.com.