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Friend of Tortoise Exclusive

Chain of command: how can we get businesses, governments, suppliers and customers to Net Zero?

Chain of command: how can we get businesses, governments, suppliers and customers to Net Zero?

This event is exclusive to Friends of Tortoise

in partnership with McDonalds

At this ThinkIn we considered the power of understanding – and acting upon – company supply chains. What data do we have on food systems and security, and are we willing to act on them? What is the impact large businesses, no matter how big, can really have in leading this action? This event was part of Tortoise’s Accelerating Net Zero coalition, visit the homepage to find out more and join us.

Readout

We do have a granular understanding of the problem in our food systems, – and supply chains are critically lacking in resilience to climate change. It’s a fact we are increasingly presented with, and Sara Menker reminded us of the unprecedented nature of these shocks in recent months: Brazil faced record drought followed by frost – with the destruction of one crop after another – while food inflation now headlines conversations, having been hitherto rarely mentioned. The data itself is a reminder of the variegated vulnerabilities globally, with meat consumption in sub-saharan Africa 1/40th of the level it is in the US: transitioning from meat, a relevant discussion perhaps in the conference halls today, must be contextualised as part of a wider set of insights from the data Gro Intelligence and others have accumulated. 

Whether we act on this understanding is another question – to understand the supply of agriculture, you need to understand our earth – our soil, climate, and environment – but if you want to understand demand you need to understand humans. Menker considered this the source of a fundamental tension “between ecological preservation and economic growth”, which is helpful in understanding the backdrop of these conversations about chains of command.

When we speak of chains of command, we are crucially interpreting different forms of power: 

The power of the purse – McDonald’s serves 70 million customers a day in 100 countries around the world. It has enormous purchasing power, buying $40 billion worth of food produce in a single year. It can set the standards it wants from suppliers, and find new ones if they aren’t met (in a sense, they have “all the choice in the world”). This enables it, and other large food producers, to drive innovations and standards that cascade through the food chain. These aren’t, Chris Kempczinski noted, necessarily met with resistance: providers are often naturally aligned with making practices such as regenerative agriculture work in economic terms – especially so in agriculture, which has a natural incentive for helping our planet’s health – and big players can make this a more accessible feat. The power of the purse also includes removing cost barriers to sustainable consumer choices. The McPlant burger is an example of this: McDonald’s absorbed the added cost, relative to its beef counterpart, of making this burger – meaning there’s no disincentive to the consumer for picking it. Given per capita consumption of pork, chicken and beef is growing (regional variation aside), these nudges can be extremely valuable in changing behaviour.

The power of the voice – across businesses, governments, suppliers and customers, having access to data on these issues is not the same as using the same language in explaining it. It’s important to recognise the consumer side of the conversation in chains of command, and communicate the opportunities for driving resilience in farming: showing regenerative practices in beef farming can prevent climate shocks, for example, and be economically productive too. Framing is critical, and both a challenge and an opportunity.

The power to convene coalitions of the willing – large companies can play a crucial role in bringing together key actors. There was particular mention of the ability of those, such as McDonald’s, to listen to partners as much as instruct, and to treat chains of commands as genuinely collaborative exercises in spite of obvious power asymmetries which might exist. 

Most importantly perhaps, we are considering how these forms of power translate into governmental action: beyond buzzwords, how can we move from science-based targets to a rules-based system? There are limits to what private actors can do, not least removing and transferring risks for those embracing progress. The free rider problem remains a concern for companies looking to move first: there is an inarguable role for appropriate regulation to ensure they aren’t discouraged financially from doing so. It’s far from regulation alone, either. Governments will be essential in the sustainable chain of command where electricity grids, new infrastructure and – perhaps less considered – in making disclosure and standards mutually intelligible, and consistently evaluated. 

Rather than think of the chain of command, an audience member suggested, perhaps we might better consider a command of care: working with, and not dictating to, your partners. In reaffirming the power of these coalitions in achieving change, we hope you’ll consider being a part of Tortoise’s Accelerating Net Zero coalition. Visit the homepage here, and join us.

editor and invited experts

James Harding
Co-founder and Editor

Chris Kempczinski
President & Chief Executive Officer, McDonald’s Corporation

Sara Menker
Founder & CEO, Gro Intelligence