Food giant Nestlé is set to invest $1.77 billion to transition to regenerative agricultural practices across their entire supply chain. This investment will include a new “living income” program for farmers in it’s value chain over the next five years.

Nestlé’s network spans across more than 500,000 farmers and 150,000 suppliers, with specific plans for their coffee and cocoa supply chains to be announced later this year.

The regenerative food system concept aims to “protect and restore the environment,” as well as to “improve the livelihood of farmers, and enhance the well-being of farming communities.”

The pledge covers biodiversity enhancement, soil conservation, regeneration of water cycles and integration of livestock.

Nearly two-thirds of Nestlé’s total greenhouse gas emissions are caused by agriculture, and the multinational company is testing “scalable, climate-friendly, and regenerative agricultural practices that help achieve net zero greenhouse gas emissions.”

The company seek to help farmers adopt regenerative practices through:

  • state-of-the-art science and technology, provide technical assistance: Leveraging its vast network of R&D experts and agronomists, Nestlé is, for example, developing higher-yielding coffee and cocoa varieties with lower environmental impact and assessing novel solutions to reduce emissions in the dairy supply chain. Nestlé will also offer agricultural training and help farmers exchange information and best practices that can be adapted locally.
  • investment support: The transition to regenerative agriculture comes with initial risks and new costs. Nestlé will support farmers by co-investing with them, facilitating lending or helping them obtain loans for specific equipment. The company will also work with partners to fund pilot projects to test and learn how best to advance regenerative agriculture.
  • paying premiums for regenerative agriculture goods: Nestlé will offer premiums for many raw materials produced using regenerative agriculture practices and buy bigger quantities. This means rewarding farmers not only for the quantity and quality of ingredients, but also for the benefits they provide to the environment through soil protection, water management and carbon sequestration.

Nestlé was among the first wave of companies committed to the UN Business Ambition for 1.5°C Pledge and is taking measures to halve its emissions by 2030, and achieve net zero by 2050.

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