On May 22, the International Day for Biological Diversity, Yili held the "WISH2030 Prosperity Conference and ESG 20th Anniversary Yili Group Sustainable Development Forum" at the National Dairy Technology Innovation Center. At the meeting, Yili released the ESG Value Accounting Report, becoming the first Chinese company in the world to successfully implement this accounting, and also the first listed company in China to publicly disclose the ESG value accounting report. At the same time, Yili also released the "three reports" of ESG, namely the "Sustainable Development Report", "Zero Carbon Future Report" and "Biodiversity Conservation Report". In addition, Yili also cooperated with a number of domestic and foreign investors to once again issue the "WISH2030 Good Declaration", advocating to build a social enterprise and realize the common prosperity of commercial value and social value.
This is the third consecutive release of Yili's Zero Carbon Future Report. From the first "green leadership" in 2007 to the "green industrial chain" strategy in 2009, from the commitment to achieve carbon neutrality in 2020 to the release of the first "dual carbon" goal and roadmap of China's food industry in 2022, Iran has spent 18 years working with value chain partners to jointly solve the problem of carbon reduction in the dairy industry.
From "I" to "We"
Addressing climate change has become a globally recognized sustainable development issue. The low-carbon transformation of enterprises will not only help improve the resilience of sustainable development, but also provide a huge strategic opportunity for Chinese enterprises to build a green brand image at home and even globally.
Chinese companies began to respond to climate change on a large scale in 2020. In the same year, President Xi Jinping officially proposed China's dual carbon goals at the general debate of the 75th session of the United Nations General Assembly, that is, strive to peak carbon dioxide emissions before 2030 and strive to achieve carbon neutrality before 2060.
Yili's green and low-carbon transformation process also accelerated in 2020, but its exploration of green development began in 2007.
In 2007, Pan Gang, Chairman of Yili, creatively put forward the concept of "green leadership" at the first Davos Summer Forum, and further upgraded it to the "green industrial chain" strategy in 2009, advocating the three-in-one development concept of "green production, green consumption and green development".
Ideas drive action. In 2010, Yili began to set up an internal carbon management team, exactly 10 years before China proposed its dual carbon goals.
Since 2010, Yili has begun to carry out carbon inventory at the organizational level with reference to international standards, and has established an energy and environmental protection data accounting system including comprehensive energy consumption, water consumption, electricity consumption, gasoline and diesel consumption, steam consumption, and sewage discharge with carbon inventory as the core. Since 2017, the carbon emissions of pastures located upstream of the supply chain have also been included in the scope of Yili's carbon inventory.
Thick and thin. In 2020, after China proposed the dual carbon goal, Yili took the lead in the industry to commit to carbon neutrality. In 2022, Yili officially released the "Yili Group Zero Carbon Future Plan" and the "Yili Group Zero Carbon Future Plan Roadmap", indicating that Yili has achieved carbon peak in 2012 and strives to achieve carbon neutrality in the whole industry chain by 2050, and has formulated specific goals in three stages: 2030, 2040 and 2050, once again leading the industry.
As a leader in the industry, Yili does not stop at its own carbon reduction, but explores the green and low-carbon transformation of the whole industrial chain from the perspective of high-quality development of the industry.
The dairy industry chain involves a wide range of industries, spanning primary, secondary and tertiary industries, from forage planting, dairy farming, product processing, logistics and transportation to terminal sales, etc., all links will involve carbon emissions, in order to achieve carbon neutrality in the whole industry chain and life cycle, it is a huge challenge for the entire industry. This requires industry leaders to take the initiative to assume social responsibility and lead partners in the upstream and downstream of the industrial chain to embark on a green development journey together.
In April 2022, Yili joined hands with 43 global strategic partners to form the industry's first "Zero Carbon Alliance", proposing to jointly build a cooperation platform for co-creating carbon reduction technologies, sharing carbon reduction achievements and sharing carbon reduction responsibilities. The "Zero Carbon Alliance" aims to drive upstream and downstream enterprises in the industrial chain to continue to carry out environmental protection actions throughout the life cycle, and reduce greenhouse gas emissions throughout the life cycle by building low-carbon pastures, optimizing product design, using low-carbon packaging, and building green transportation modes.
By the end of 2023, Yili's "Zero Carbon Alliance" has reached 88 companies, and 71 suppliers have been promoted to achieve low-carbon transformation, and 6 suppliers have been promoted to complete carbon neutrality verification and certification, promoting the low-carbon transformation of the whole chain.
From management to empowerment
Achieving carbon neutrality is a systematic task. Decomposing and implementing the dual carbon vision or goal into every aspect of production and operation is a test of the company's management ability.
After more than 10 years of unremitting exploration, Yili has continuously consolidated its carbon management capabilities in terms of establishing organizations, formulating plans, management systems, and technical support, and gradually spreading its carbon management capabilities to the industrial chain, and improving the carbon management capabilities of supply chain partners through empowerment.
Establish and improve the carbon management organization system. Since the establishment of the internal carbon management team in 2010, Yili has gradually improved the carbon management organization system, and has now formed a three-level organizational system including the decision-making level, the organizational level and the executive level.
Develop a roadmap for a zero-carbon future. Thanks to its early planning and proactive actions, Yili took the lead in achieving Scope 1 and Scope 2 carbon peaking in 2012. In 2022, Yili released the "Yili Group Zero Carbon Future Plan", proposing to strive to achieve carbon neutrality in the entire industrial chain by 2050. In order to ensure the realization of the goals, Yili has formulated and optimized the "Yili Group Zero Carbon Future Plan - Carbon Peak and Carbon Neutrality Work Promotion Plan", formulated specific goals for 2030, 2040 and 2050, and released the "Zero Carbon Future Report" for three consecutive years since 2022 to report the annual green and low-carbon transformation progress to stakeholders.
Establish a systematic carbon management system. Based on the world's first carbon management system standard, T/CIECCPA 002-2021 Carbon Management System Requirements and Guidelines, Yili has formulated and promulgated a carbon management manual to form a systematic carbon management system. In 2022, the system was awarded the "Carbon Management System Assessment Certificate" by the Shanghai Environment and Energy Exchange, becoming the first batch of enterprises in the world to obtain carbon management system certification, and as the only enterprise in the food industry, it was selected as an excellent demonstration case of carbon management system (EATNS) in 2022-2023.
Build a digital system for carbon management. Yili has independently built the EHSQ information management system, which uses information technology to realize the traceability of carbon emission sources and the automatic calculation and evaluation of carbon emission data, and presents the emission situation of each control area of the whole group in real time through statistical analysis reports and big data views, so as to provide a basis for following up the achievement of the strategic goal of carbon neutrality. In April 2023, the "Carbon Digital System" jointly created by Yili and Cainiao won the 2023 iF Product Design Award. The system covers carbon emissions and carbon reduction calculations in seven major links, including ranching, manufacturing, packaging, warehousing, transportation, terminal stations and consumers, and makes a leading exploration for building a green supply chain.
On the basis of consolidating its own carbon management capabilities, how to spread carbon management capabilities, carbon reduction technologies, and carbon reduction experience to the supply chain has become a problem that Yili must consider to promote carbon reduction in the whole industrial chain. Focusing on the topic of empowering suppliers, Yili has explored from the aspects of setting standards, building platforms, building mechanisms, pooling forces, and cultivating talents.
From production to consumption
Thanks to the persistence and efforts of full-link carbon reduction and full-life cycle green manufacturing, by the end of 2023, a total of 41 Yili factories have been awarded the title of national "green factory" and 5 certified "zero-carbon factories" have been successfully built, namely Yunnan Yili Dairy Co., Ltd., Jinze Yili Dairy Co., Ltd., Tianjin Yili Dairy Co., Ltd., Zhejiang Yili Dairy Co., Ltd. and Changchun Yili Frozen Food Co., Ltd.
However, as an industry leader, Yili's carbon reduction actions have not stopped there, nor should they stop there.
Yili ranks among the top five dairy companies in the world, ranks first in the Asian dairy industry for ten consecutive years, and is also the largest dairy enterprise with the most complete product categories in China. Every day, more than 100 million Yili products are delivered to consumers; Every year, nearly 1.3 billion Chinese consumers can enjoy nutritious and delicious Yili products.
Only by connecting the two ends of sustainable production and sustainable consumption to form a closed loop can the carbon reduction action of the dairy industry be stable and far-reaching.
Yili keenly captures the changes in consumers' demand for healthy and green products, actively develops "zero-carbon products", guides consumers to carry out packaging classification and recycling, and leads the new trend of low-carbon consumption.
Since the official release of the first "zero-carbon product" in 2021, Yili has launched 5 certified "zero-carbon products", leading the new trend of sustainable development in the industry.
In addition to providing green and low-carbon products, Yili also advocates a new concept of green life through innovative public welfare projects. For example, on April 22, 2023, Yili Jindian brand launched the "Empty Bottle Reflow Action", setting up product packaging recycling points in core areas, advocating consumers to put the finished empty milk cartons and other product packaging at designated recycling points for recycling, and recycle empty bottles into recyclable environmentally friendly items such as picnic mats and photo frames, so as to continue to be organic with the earth. On May 22, 2023, Yili and the World Wide Fund for Nature (WWF) jointly launched the "Yili Homeland Action Empty Bottle Return Public Welfare Program", mobilizing more than 50,000 consumers to participate in the "Yili Homeland Action Empty Bottle Recycling Public Welfare Program", and recycled more than 100,000 empty bottles into 55 artificial nest boxes to provide habitat for endangered animals in grassland wetlands.
In addition to cooperating with public welfare organizations, Yili also innovatively cooperates with well-known brands to jointly launch low-carbon life advocacy and further amplify the power of public welfare. For example, in 2023, Yili and Alibaba will cooperate to launch the "Low-carbon New Year, Carbon Reduction Box Partner" activity to encourage consumers to participate in the recycling of empty milk cartons. Consumers can collect the empty Yili milk cartons and put them in the recycling bin in the Cainiao Station, scan the code and link the Cainiao account to get the corresponding green energy points.
Starting from green, thriving in a win-win situation, and returning to a better future is Yili's way of sustainable development. Yili's 18 years of green and low-carbon efforts have cultivated its own sustainable development capabilities, explored the path for the high-quality development of the industry, and provided reference for the green and low-carbon transformation of other brands.
The first is to take responsibility and give full play to industry leadership. The dairy industry is a major carbon emitter, and its carbon footprint runs through the entire dairy production chain, including the breeding end, the processing end and the market end. For example, the "Code of Conduct for the Green Development of China's Dairy Industry" issued by the China Dairy Industry Association in 2022 focuses on the entire industrial chain of the dairy industry, involving clean pastures, green factories, green consumption, resource recycling and other links. Since 2007, Yili has promoted the green and high-quality development of the whole industrial chain of "from a grass to a cup of milk" with a sense of mission as a leading enterprise in the industry, fully demonstrating its sense of mission and leadership as a leading enterprise.
Second, we need to open up and cooperate to stimulate greater vitality for green transformation and innovation. Achieving carbon neutrality is a broad and profound systemic change, which requires the joint participation and mutual cooperation of various market players such as government departments, commercial institutions, social organizations, media, and consumers. In the process of green and low-carbon transformation, Yili has spread its accumulated technology, knowledge and experience in green and low-carbon to supply chain partners and empowered them. On the other hand, Yili actively participates in external sustainable development platforms and networks, such as Yili is a member of the United Nations Global Compact, a signatory of the United Nations Convention on Biological Diversity's Business and Biodiversity Commitment, the first Chinese enterprise to commit to and be approved by the United Nations Water Action Agenda, and a signatory of the United Nations COP28 "Transforming Food Systems for People, Nature and Climate: Joint Action Initiative (CTA)".
The third is to continue to surpass and continuously upgrade the sustainable development system. From the "Green Leadership" proposed by Pan Gang, Chairman of Yili in 2007, to the "Green Industry Chain Strategy" in 2009, which advocated the three-in-one development concept of "green production, green consumption and green development", to the construction of the "Healthy China Social Responsibility System" into a future-oriented "Shared Health and Sustainable Development System" ("WISH" system) in 2017, and then to the official release of the goal of "Comprehensive Value Leadership" in 2021, it can be seen that Yili is constantly exploring the connotation and boundaries of social responsibility. With advanced strategic vision, we will continue to build a future-oriented sustainable development system.
Expert commentary
Since 2017, I have been tracking Yili's sustainable business practices for eight years, whether it is going deep into Yili's production line, empowering Yili's management, communicating with Yili's sustainable business leaders, or analyzing Yili's information disclosure, I have been fortunate to witness Yili's continuous exploration, breakthrough, and continuous improvement on the road of sustainable business, with firm beliefs, solid steps, commendable progress, and excellent results of compound value and shared value. Yili's practice can be summarized by these key words: firm direction, pragmatic strategy, systematic methodology, and generous square inches, which I call the precious "Quartet" that lays the foundation for Yili's success.
•Firm direction means inheriting the social responsibility gene formed in the early stage of Yili, insisting on strengthening the enterprise while committed to expanding the sustainable development of the industry and ecology, building a world health system, and creating value for the society.
•Pragmatism is to establish a strategic path to guide the growth and development of the enterprise, leading consumer value, leading social value, leading employee value, leading enterprise value, and integrating the concept of sustainable development into the whole life cycle, full value chain and all-round ecology of enterprise development and operation.
•The methodology system is to strengthen the construction of the organizational structure and governance mechanism, formulate the sustainable development program of the enterprise, benchmark it with the advanced standards of the international, domestic and industry, and then form Yili's sustainable business management index system, standardize the management and operation, promote the upgrading of itself and the whole industry through empowerment, and lead continuous innovation.
•Broad-mindedness, that is, to carry out all-round layout with a forward-looking and open vision, carry out extensive social innovation cooperation, and promote the establishment and development of the industry-wide coordination mechanism with "green leadership" and then "green industrial chain" actions, and promote the value sharing of the whole industry chain.
In view of the particularity of the long-chain operation of "from a grass to a cup of milk" in its own industry, Yili has accurately identified the substantive issues that have a double significant impact on Yili's growth and development, and from this, it has played a key role in the industry leaders taking the initiative to assume social responsibility and leading the upstream and downstream partners of the industrial chain to embark on a green development journey together.
At this year's report conference, Yili first released the "ESG Value Accounting Report" in the whole industry, which further quantitatively evaluates and calculates the ESG performance of enterprises, and measures the progress and gaps of enterprises in creating economic, social and environmental benefits with higher standards, so as to more deeply implement and promote the implementation of sustainable business strategies, which is a very remarkable measure. This move is inseparable from Chairman Pan Gang's efforts to promote the evolution of sustainable business leadership. Chairman Pan Gang emphasized that sustainable ability represents the future leadership of the enterprise. At a time when the company has achieved the success of being the No. 1 dairy industry in Asia, Yili has further promoted the evolution of sustainable business leadership and scaled new heights.
Without accumulating steps, it is impossible to reach thousands of miles, and it is difficult to go high without the ambition of the bird. Start from green, prosper in win-win, and return to beauty. Yili's sustainable development has provided us with excellent practical references.
- Lv Jianzhong
Deputy Director of the Sustainable Development Management Committee of the Chinese Management Science Society
Think tank expert of China Corporate Social Responsibility Research Center of Southern Weekly
China Corporate Social Responsibility Research Center of Southern Weekly
Editor-in-charge: Zou Li