Cargill, the giant food and ag conglomerate, last week announced a new set of 2030 corporate water targets, the latest to do so among firms in its sector.

But this was no me-too kind of endeavor. Rather, it put the company at the front of the pack, going well beyond its own operational footprint to engage its entire supply chain, and to do so using a novel science-based approach for water.

Specifically, Cargill said that by the end of the decade it would restore about 158 billion gallons of water, reduce about 5,500 tons of water pollutants and boost access to safe drinking water — all in what it refers to as priority watersheds, regions around the world where the company has a significant operational or supply-chain water footprint. 

This isn’t small potatoes. Agriculture represents about 80 percent of freshwater use in the United States and about 70 percent globally. Ag also is a major contributor both to water pollution and climate change; the water sector, which includes the collection and treatment of wastewater, accounts for 4 percent of total global electricity consumption, according to the International Energy Agency. Few food and ag companies have taken on the full measure of their water footprint the way Cargill seems to have done, and by using a science-based approach.

“If there’s a more robust enterprise level ambition for water, I haven’t seen it,” said Jason Morrison, CEO of the Pacific Institute and head of the United Nations CEO Water Mandate, who advised on the project. “This is a really impressive piece of work that they’ve done and a pretty ambitious commitment they’re making. It’s got a lot to it.”

If there’s a more robust enterprise level ambition for water, I haven’t seen it.

Cargill has made water commitments in the past, but they covered only the company’s direct operations, a relative drop in the bucket of the water needed to bring to market the $114 billion or so of products and services it sells each year.

About a year ago, the company set out on a journey to understand its water risks relative to its supply chain and operations, explained Jill Kolling, the company’s vice president for global sustainability. “Where does water really matter for us in our business?” she explained to me recently. “And where should we really be putting our efforts?” The goal, she said, “was to come out of this and have some aspirational goals to work against and also to make sure we’re working where it matters most. So, having that strong prioritization, backed up by science.”

Science-based targets have become de rigueur in setting corporate greenhouse gas commitments. In effect, they ask what level of carbon reductions represents a company’s fair share, given its contribution to the climate problem. It was inevitable that this approach eventually be applied to water. Indeed, for the past two years a group called the Science-Based Targets Network has been looking at how to apply such methodologies to a range of environmental impacts, including water.

But water is unlike climate gases in several fundamental ways. First, water is inherently local, with droughts in some areas and a surfeit in others. With climate gases, any improvement anywhere in the world helps alleviate the global problem; not so with water. Water is also temporal, with conditions changing throughout the year and from year to year, based on both normal and abnormal climatic shifts. And while the aggregate amount of available water is important, so is its quality. Having millions of gallons of water isn’t helpful if it is toxic, brackish or otherwise unsuited for human use.

Rivers of data

In the case of Cargill, these and other factors were applied not just to its own operation, but also to its more than 250,000 suppliers, ranging from multinational corporations to single-family farms in developing nations. They provide the raw materials for everything from cocoa and cotton to salmon feed and sweeteners.

Cargill already had dipped its toes into water issues. It has invested in such programs as the Soil and Water Outcomes Fund, which helps farmers adopt soil health and water conservation practices. It also participates in the Midwest Row Crop Collaborative’s efforts to support and accelerate sustainable agricultural practices in Illinois, Iowa and Nebraska, including on improving water quality across the Upper Mississippi River Basin, which supports nearly 44 percent of U.S. corn, soy and wheat production. Still another Cargill initiative is BeefUp Sustainability, which focuses in part on restoring grasslands, which perform many ecosystem services including filtering water.

To develop its latest commitments, the company turned to World Resources Institute, with which it had previously worked on water issues. The first step was to aggregate the data Cargill needed to prioritize locally relevant decisions. “We’ve got globally comparable data on water risks that we help companies leverage in order to look at water risks to their supply chain, and now increasingly use that same data to help think through what an effective science-based target could look like,” Sara Walker, WRI’s senior manager, water quality and agriculture, told me.

“They’re kind of our science partner,” Kolling said of WRI. “What they bring to the table is datasets, tools and scientists who are able to help do the analysis. It’s also good to have an NGO partner working with you to push you to be more aspirational. They’ve provided tremendous guidance through this.”

“There’s quite a lot of good data out there,” explained Truke Smoor, director of water at Cargill. “But if you look at the number of companies who have said they want data for water quality and costs, for both operations and the supply chain, you see there are very few.” 

600 billion liters — it’s insanely large. It’s more than the total amount of water that we use in all our operations.

That may be in large part because the available data isn’t always consistent across watersheds and borders. Smoor said that Cargill ended up “combining a global data set with a better data set for the U.S. to meet our needs. And now we have the data we need to help us prioritize.”

The commitments Cargill settled on were stretch goals, Smoor said. For example: “Six hundred billion liters — it’s insanely large. It’s more than the total amount of water that we use in all our operations. So, we’re basically offsetting double our total water use in those priority water systems in the regions where it’s needed most.”

Down on the farm

In some ways, getting the data was the easy part. Working with farmers — from Big Ag behemoths to smallholders in far-flung economies — is another matter. Promoting change can be hard work, although some farmers are beginning to realize the need to adapt new kinds of practices to ensure the long-term viability of local water supplies.

“I think farmers are starting to realize that it’s ultimately the consumer who’s starting to care more and more about this,” Kolling said. “Over the coming years, those pressures and those desires from consumers to want to know more about how their food was produced and having greater expectations, we believe it’s going to grow and will continue to trickle back to the farmer. I think some of those more resistant farmers may realize that this is the way things are going.”

Most farmers aren’t yet feeling those market impacts, she said, but there are other compelling arguments for their linking arms with Cargill on water. “At the end of the day, farmers are businessmen and women,” Kolling said. Toward that end, her company is helping farmers understand the business case today for improving water management practices, ranging from improving soil health to ensuring community water supplies. “It helps us make the change we want to make for the environment and for social and economic reasons.”

And, of course, there’s climate change. Specifically, its relationship to both water quality and quantity, as well as the role of farming in sequestering carbon dioxide, which, in turn, improves soil health.

“Water is so critical for nature, for agriculture, for communities,” Smoor said. “And it has that synergies with climate change.” 

For example, she said, “Look at soil health practices. They help in carbon sequestration and they help in reducing greenhouse gas emissions. That is tied to fertilizer use, water quality and runoff. So, soil health practices provide water quality benefits. And through increasing soil moisture, we actually make sure that more water can recharge, so you have improved water availability. They really go hand in hand, which is such a powerful thing. Through combining these, you have so many touchpoints, whether it’s through farmers or regulators or the community.”

Pooling resources

As with every sustainability issue, one company’s leadership action is but a start. It will take collective action to achieve global goals, but also to ensure each company’s efforts aren’t undermined. For example, Cargill’s water conservation efforts in a particular basin may be for naught if other companies, large or small, aren’t similarly engaged there.

In April, Cargill announced that it would contribute $2 million to the next phase of its partnership with WRI. The two entities said they will combine their expertise to accelerate the development and improvement of tools, including a new Water Management Toolkit, to enable companies to set science-based targets for water. The toolkit “will allow us to address shared water challenges and promote sustainable water use within planetary boundaries across the industry,” they said in a statement.

Cargill is already making its methodology publicly available. “We’re hoping we can invite others — customers, competitors, whomever — to collaborate with us where their sourcing and focus may intersect with our same watersheds,” Smoor said.

But companies seem to be uncertain about when to jump into the pool. “We’re getting a lot of questions from companies like, ‘Should I wait for better data or should I wait for the Science-Based Target Network to tell me what exactly to do?’” WRI’s Walker said. “We’re really trying to encourage companies to act now. I think Cargill is a good example of this.”

On the other hand, Smoor said, companies can wait until — some day.

“You can continue to analyze everything forever, and especially in water, with all the different aspects. You can get stuck in risk analysis. You can get stuck in needing better data. Our approach is, we’re starting now; we’re going to drive the change. We will validate if we are doing the right thing.”

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In the four years since Nancy Mahon assumed responsibility for CSR and sustainability strategy at The Estée Lauder Companies — she’s currently senior vice president of corporate citizenship and sustainability — her team has launched a series of new initiatives that are a “first” among her organization’s sector.

The list includes the company’s first virtual power purchase agreement for 22 megawatts, a move made in pursuit of its 2020 net-zero carbon emission goal. More recently, it energized on-site two solar arrays — one at its Melville, New York, campus that will produce 1,800 megawatt-hours of power annually, and a smaller one at the Aveda brand’s campus in Minnesota.

The New York installation will provide 100 percent of the electricity required for its Joseph H. Lauder office facility, while the Minnesota one will contribute up to 50 percent — the remainder of its power will come from utility-sourced wind power. 

Moreover, Estée Lauder Companies also has declared its intention to make 75 percent to 100 percent of its packaging recyclable, refillable, reusable, recycled or recoverable by 2025 — the strategy will depend on the needs of individual brands.

As with many companies heavily dependent on nature for product ingredients, Estée Lauder Companies is developing biodiversity action plans and becoming far more attuned to its role in deforestation, afforestation and reforestation. And befitting its heavily female clientele, the company also funds initiatives focused on raising up girls and women, such as HERProject, a BSR initiative aimed at supporting low-income women in global supply chains.

I recently checked in with Mahon, one of this year’s 25 Badass Women in Sustainability, to get an update on how her priorities have shifted in light of the COVID-19 pandemic and the corporate awakening about systemic racism.

In mid-June, the company issued a series of sweeping new racial equity policies, including reaching “U.S. population parity” for Black employees at all levels of the company within five years, doubling the amount spent on sourcing ingredients, packaging materials and supplies from Black-owned businesses over the next three years, and committing $10 million over the next three years to support racial and social justice initiatives.

“Moving forward, I think where we are energized as a division — it’s become super clear — [is] on how core the work we do is to the business, not only the environmental side, but also the social side,” Mahon told me.

Following are excerpts from our conversations, edited for clarity and length.

Heather Clancy: How has the COVID-19 pandemic changed the focus of the Estée Lauder sustainability team, if at all? 

Nancy Mahon: The clear disparate impacts of COVID-19 across countries and communities has really highlighted, and I think really illustrated, the intersection … of gender justice and social injustice, essentially, and racial injustice.

While before that intersectionality might have been a little obtuse for folks, it’s much clearer now that if you come from a community where there’s high rates of pollution, there’s a huge intersection between high rates of pollution, access to healthcare and health outcomes and COVID-19 outcomes.

The speed, the velocity and the ferocity of COVID-19 really highlighted that in a way that both unearthed that underlying reality and threw a spotlight on it. And also for consumers, [it] really allowed an opportunity to focus on what was most important in their lives around healthcare, around their families, and put an emphasis — really, I would say it hasn’t changed it, but it has really accelerated consumer interest, particularly — on supply chains, which is super interesting … 

Similar to HIV, there is a question of what [we will] make of this moment and how will we as stewards of funds or stewards of companies or stewards of our families make a difference.

Internally, what it’s allowed us to do in a very agile, very energizing way is move very quickly across different functions to stand up programs that we were planning on setting up. For instance, we created an employee relief fund, and we had targeted that we were going to do it basically this fall. When [COVID-19} happened, we thought, “You know what? We have to do this right away.” We had incredible partnership from [human resources] and [information technology] and legal, and we started up right away, then globalized it. 

We also created [an accelerated racial and social justice grants campaign] in a matter of a couple of weeks. In that way, we’ve had opportunities, which hopefully we’ve seized upon. Moving forward, I think where we are energized as a division — it’s become super clear — on how core the work we do is to the business, not only the environmental side, but also the social side.

Clancy: In a previous role, you were very closely involved with addressing the AIDS crisis, which is a humanitarian but also an economic crisis as well. How are you layering that perspective into the strategy as you’re mobilizing around COVID-19? 

Mahon: If there is a positive to all of this, it’s that in terms of HIV, it took us well over two decades to have a deep discussion around structural racism or classism or the ways in which structures like a criminal justice system or a healthcare system basically disadvantage certain communities. It was always very hard to get at that discussion. It was much easier to fund street outreach or various research pieces or services than it was to really say, “We have to look at the way we act — either as consumers or as companies — and we might need to give something up, in addition to actually giving.” … 

What also then is a big emphasis, understandably, is the movement around action, whether it be FDA approval of drugs or the acceleration of accessibility of healthcare or integration of HIV into other healthcare systems. And we’re seeing that very quickly now, the fact that out of the gate we’re funding a group like Equal Justice Initiative around structural racism and the criminal justice system is exciting. 

There has been one difference: The acceleration of funding in the field. I was on a call [recently] and Darren Walker from Ford Foundation, who’s so eloquent, basically said that there is roughly a half a billion dollars now in the field of racial and social justice, whereas last year there was only 10 percent of that. 

Clancy: Wow. 

Mahon: Similar to HIV, there is a question of what [we will] make of this moment and how will we as stewards of funds or stewards of companies or stewards of our families make a difference. How will we change our behavior? The exciting moment that we have. The complexity, of course, is that it’s up against enormous economic loss, a lot of fear — which we always had in HIV, but we didn’t have the economic backdrop that we currently have overall to COVID-19. But there’s a lot of great people who are rowing in the same direction now. The question is how do we integrate ourselves? How do we sit in on committees that are focusing on office reopenings or how we’re doing with COVID? How do we integrate social impact and environmental impact into the way we do business every day, and how we as a luxury company show up in our communities?

One of our strongest brands, Aveda, is in Blaine, Minnesota, and we’ve had town halls and will continue to have town halls with our employees there, and how are they engaging … [and] thinking about how they can help? We spent a lot of time thinking about, well, what are virtual volunteering opportunities? What are the ways that we can basically help our employees channel their passion? We decided that we were going to allow, in our year one [of our response], our employees to give away most of the money.

We created [an internal] five-times matching campaign, and the groups we selected were Black Lives Matter Global Foundation Network, Equal Justice Initiative, Race Forward, NAACP Legal Defense Fund [and Educational Fund]. And we basically said to our employees: Every dollar that you give, [the company] will match it five times. We saw literally over 4,000 employee [donations]. We had a higher engagement rate than we’ve ever seen. People were posting on their social channels. We’ll be giving away [more than] $2.3 million through [company matches].

Clancy: Putting the long-term lens on, have there been any adjustments to your long-term corporate sustainability plans in this period? Have your priorities changed? 

Mahon: I don’t think they changed. We have been fortunate in that our overall performance over the last I’d say two years in particular has really accelerated. We’re getting recognized by CDP or MSCI or ISS for that, which we find very gratifying. It feels like directionally we’re headed in the right way. And we certainly see in our brands, our consumers and our employees are basically saying, “We want more of this.”

While it hasn’t changed the direction, it’s definitely accelerated. For instance, our climate work. We hit [RE100] early [in the United States and Canada]. We’re looking to hit our science-based target early… 

We are leaning in on our social impact work, which we’re historically very well-known for. We have integration with social justice. That was an area in our social impact work which we hadn’t done in the past. Many of us had done somewhat similar work. We leaned in and spoke with allies and the Ford Foundation and some of the great foundations that are doing this work. We are looking forward to being part of a broader community and trying to leverage our corporate microphone and our company values to play an even bigger role.

So I’d say [we’re moving] faster, perhaps more dimensionalized, and definitely [have a] better understanding not only how do we fund racial and social justice, but how do we as a business take concrete action around hiring and what our creative marketing looks like. So that’s very exciting, because what you don’t want as somebody in my job is to kind of be the nice people that aren’t really integrated into the business. 

Clancy: Much of the work on renewable energy has really focused on electricity. Obviously, one of the toughest areas and processes to decarbonize is manufacturing. What solutions are you exploring for your production facilities?

Mahon: Waste and water and energy are all linked together. Within each facility, we have an incredible team that’s been focusing on this for quite some time, which is looking at how efficient is our water use? Is there a way to reduce water use? Have we maxed out solar? And are there internal solutions before we move to offsets that we can buy to reduce our energy use? And the answer there is yes.

It does vary somewhat by country, and by the state of the green energy and green finance in those countries. Also, as you know, the government plays an important role, and of course, being in the U.S., we’ve seen a real rollback in terms of incentivizing green practices …

What you don’t want as somebody in my job is to kind of be the nice people that aren’t really integrated into the business.

The best thing that we can do is help the market grow so there are more alternatives for companies like ours. We don’t have to do any convincing at this point. It’s really about the level of sophistication of what we can invest in, and also kind of a deeper discussion about offsets, the quality of offsets, and where do offsets get us. 

Clancy: Can you share your vision for sustainable packaging? How do things like reuse or refillable containers fit into that? 

Mahon: What we’re trying to do, really, is to give the brand [presidents] the most flexibility they can to get to sustainable packaging, and while at the same time reducing plastics and reducing carbon footprint. And that’s kind of a juggling act, frankly, because in many instances it involves added cost. We have a five-year glide path for every single brand. The ability to shift from plastic to glass is easier in skincare. Makeup innovation and sustainable packaging is a new frontier, and we’re really active in that. As you likely know, the size of makeup packaging, particularly samples, is too small — it falls through the filters in the MRFs — so it’s one of the areas that we’re really focusing on now, and really inviting innovation. 

Clancy: You’re very excited about forestry and forest options as a means of carbon removal. Are there any particular things you’re looking at that you can mention? Can you elaborate? 

Mahon: There’s been some companies that have basically supported, through grant funds, the creation and preservation of forests. And so we are looking at that. More directly, though, we would love to have direct investment in forestry as part of our climate portfolio, and an ability to create green energy. It gets somewhat complex, but obviously, we’re a beauty company, and we don’t want to be in the business of running forests …

Those are the discussions that we’re having now, and we’ve been looking at various things over the last couple of years. We don’t have anything specific. We’re basically in the due diligence phase on a couple of things. But because this moves so quickly, it doesn’t really make any sense to name names. But we would love, as a result of the article, to certainly invite both other companies who are looking at this [to talk about this and also have] a larger discussion about private/public partnerships around encouraging investment in forest preservation. We recently published a no deforestation policy, as many companies have, so there’s a nice intersectionality there between no deforestation and improving our climate component. 

Clancy: I have two more questions. One is just a thread I hear often. What role will collaboration play in The Estée Lauder Companies’ strategy? What sorts of partnerships are you prioritizing? 

Mahon: One of the exciting aspects of our company and our board … is we have folks who’ve worked in all different sectors. We have a lot of folks who’ve worked in government, like myself. We’ve worked in nonprofits. We’ve worked in for profits. So really, in order to move the ball down the field in a meaningful way, whether in social impact form or another form of impact, we have to basically look at this in a sector-agnostic way in which we really have company discussions about what we’re doing in climate. 

What does the government bring to the table? OK, there’s tax incentives. They can give various breaks in various laws, regulatory, both the carrot and the stick. What does business bring? Well, business brings enormous amounts of business discipline of understanding markets, understanding consumer needs, understanding how to scale a solution, understanding how to, candidly, abandon a solution if it’s not selling. And then NGOs clearly bring a lot to the table in terms of advocacy. 

As we’ve moved so rapidly in the for-profit sector being in favor of green energy and of strong climate solutions, the role I believe of NGOs will be more to be a bridge between government and I would say also private foundations [to come up with solutions].

For instance, in our VPPA, we will have excess green energy. Do we want to be in a position as a beauty company of selling energy, green energy? Or would we rather donate it? We’re having some conversations with the Rockefeller Foundation about, “Well, could we figure out a way where we could just donate it?” That’s where we really do need these cross-sector solutions. 

Clancy: My last question is what do you feel is your most important priority as a chief sustainability officer in this moment?

Mahon: At the end of the day, the great pleasure and complexity and entrepreneurism of CSO jobs is that we don’t own the P&Ls generally of the issues we need to influence. So, I would say the biggest priority really is continuing to listen to our key stakeholders with empathy, and be as responsive as we can, to try to run alongside the train of the business …

A lot of what we do is obviously bring a substantive area of expertise, but also integrate as best as we can empathically to the business, and to drive value. At the end of the day, if we drive value for communities and our shareholders and our consumers, then we drive value for the business, and that is I think the great challenge … How do you sit at the table as a business person and understand and have empathy for the great demands being placed for instance on our retail team, and at the same time build climate solutions that help those retail teams, and don’t seem sort of pie in the sky and divorced from the rest of the business?

Ultimately, how do we leverage the passions and the interests of our employees and our consumers and now our investors, which is great. Because that creates an unlimited path. 

This article was updated on July 27, 2020, at the request of The Estée Lauder Companies to correct Mahon’s tenure in her current role, and provide more detail about some of the included commitments discussed during the interview. Where changes have been made to her verbatim comments, they are noted with brackets.