Net Zero and Science Based Targets
At Kraft Heinz, we have pledged to achieve net zero greenhouse gas (“GHG”) emissions across our operational footprint (Scope 1 and Scope 2) and entire global value chain (Scope 3) by 2050, establishing our major commitment to contribute to global efforts to reduce the ongoing threat of climate change. As a milestone on our path to achieve net zero emissions, consistent with the Science Based Targets Initiative (SBTi), we will target a near-term absolute emissions reduction of 50 percent by 2030 across all three scopes with a 2021 base year.
A considerable portion of our total carbon footprint is produced from our Scope 3 emissions, and more specifically originate in our supply chain (see graphs to the right for emissions breakdown). Agricultural and ingredient-related emissions are particularly significant and provide the greatest opportunity for reduction through increased collaboration and transitioning to regenerative agriculture.
Achieve net zero carbon emissions by 2050, halving same by 2030.
2022 Progress
We began a partnership with external climate experts to help us define our pathway to net zero. In late 2022 we worked to define technical decarbonization pathways for Kraft Heinz and develop our approach to addressing product carbon intensity through portfolio growth choices and product formulation. During this process, we worked very closely with our executive leadership team on the development of our roadmap.
Key focus areas of our net zero program include:
- Reducing the impact of enteric emissions by partnering to scale methane inhibitors and anaerobic digesters for meat and dairy ingredients;
- Revising sourcing specifications for key commodities including regenerative agriculture, deforestation and conversion free commitments and localization of sourcing;
- Transitioning to more circular and lower carbon packaging;
- Building the cost of carbon into our financial planning and investment decisions;
- Further aligning internal performance incentives with net zero targets;
- Transitioning to net zero manufacturing facilities and improving our logistics footprint.
We are continually striving to improve the accuracy of our Scope 3 emissions reporting. There were several material amendments made to our 2021 Scope 3 figures due to data error, improved data quality, inclusion of FLAG emissions, and/or improvements in calculation methodology.
Sourcing Localization Initiative
A significant portion of our GHG emissions reside in our upstream transportation and distribution network. To reduce our operational footprint, Kraft Heinz began a journey to improve the efficiency of our sourcing through localization initiatives in our Egypt and Eastern Europe operations. Kraft Heinz teams worked to build capacity with local suppliers in the regions to ensure a stable supply and reduce transportation miles while also improving price and reducing supply risk. For example, thanks to localization efforts launched this year in Poland, we are proud that next year, almost 100 percent of tomato paste used in our Pudliszki branded finished goods will be sourced from more than 150 small farms that are within 60 kilometers of our production facility. As we look to the future, we intend to further improve localizing and regionalizing procurement of key commodities.
Looking Ahead
While we have made incredible progress in 2022, we have substantial work ahead of us. In 2023, we are working to further embed our net zero strategy within our 10-year strategic plan and submit our targets and roadmaps to the Science Based Targets initiative. We are exploring investments in critical technologies including carbon removals, where we have clear scientific evidence of material GHG emissions reduction.
Renewable Electricity
Kraft Heinz is committed to operating responsibly and doing our part in the critical global efforts to reduce the harmful impacts of climate change.
A big component of this commitment is both reducing how much energy we consume, and thereby reducing the associated emissions where applicable, as well as rethinking our energy sources and supporting to expedite the energy transition. As such, we are committed to procuring the majority of electricity from renewable sources by 2025.
2022 Progress
In 2022 we made major headway on our renewable energy commitments toward our 2025 goal. Our first large scale renewable electricity supply started in June 2022 and by year-end, approximately 15 percent of our U.S. manufacturing facility electricity consumption for the year was supplied from renewable sources. Globally in 2022, we contracted renewable electricity capacity that will come online in multiple phases over the next two years equating to approximately 46 percent of our current manufacturing facility demand.
Procure majority of electricity from renewable sources by 2025.
14.21%
BHE Renewables Investment
We also signed a virtual power purchase agreement (“vPPA”) with BHE Renewables, a Berkshire Hathaway Energy business, for our U.S. operations, which make up a significant portion of our global energy usage. This partnership will initially cover approximately 30 percent of the energy usage at our U.S. manufacturing facilities; and at the start of 2025, this amount is expected to increase to approximately 60 percent. The renewable energy is delivered by BHE Renewables’ 158-megawatt Gopher Creek wind farm in Scurry County, TX.
Repsol Wind Energy Investment
In June 2022 we announced a 12-year vPPA with Repsol, a global multi-energy company operating across more than 20 countries and based in Madrid, Spain. This was our first investment in wind energy, and we expect to source over 90 gigawatt hours per year of renewable energy from Repsol’s largest wind project, Delta II (Aragon, Spain) – equivalent to powering approximately 90 percent of Kraft Heinz’s European manufacturing facilities, which is the majority of our European load. The vPPA is expected to generate enough renewable electricity to power approximately 25,000 average EU households per year at its peak.
Looking Ahead
We are excited by our progress in 2022 and confident that we will reach our 2025 renewable electricity procurement goal. We are currently identifying and implementing new renewable energy projects across the world to support our net zero commitments. Kraft Heinz is planning to expand through impactful projects, offering verification and additionality to the build-out of renewable electricity generation capacity, and supporting decarbonization of local grids and our operations.
