'The corporate veil is being pierced by this generation': The CEO of a $55 billion company reveals how Gen Z is forcing people to take stand on climate change
- 19 companies with more than $500 billion in combined annual revenue launched an initiative to protect biodiversity on Monday, with Danone CEO Emmanuel Faber saying the world is at a crossroads.
- According to Faber, Gen Z is demanding companies take action, seeking out products that promote sustainability and biodiversity.
- "The corporate veil is being pierced by the generation," Faber told Business Insider.
- The erosion of biodiversity costs trillions of dollars globally, according to experts.
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Emmanuel Faber, the CEO of $55 billion food and beverage giant Danone, is leading a coalition for an industry at a crossroads.
On Monday, 19 companies with combined annual revenues of more than $500 billion, including Danone, Kellogg Company, Mars, and Nestlé, launched the "One Planet Business for Biodiversity" initiative at the United Nations Climate Action Summit in New York City.The companies have pledged to boost regenerative farming practices, revamp product portfolios to become less reliant on overused crops, and identify actions to eliminate deforestation and protect natural ecosystems. The group will disclose "ambitious, timebound and measurable commitments" by October 2020.
"We are really at the crossroads when it comes to our land use and output systems," Faber told Business Insider. "The CEOs of those companies have decided that we needed and we could make a difference to restore the loss of biodiversity, which is both a value driver and resilience matter for our businesses."
Faber says that customers, especially younger consumers, increasingly demand that companies promote sustainability and address climate change. Gen Z shoppers "take a box on the shelf and they turn it around because they want to look at the small print," understanding what the ingredients are and from where they're sourced. Taste and brand recognition isn't enough; Gen Z is increasingly demanding full transparency.
"The corporate veil is being pierced by the generation," Faber said.If evolving norms and customer demand isn't enough to force businesses to make changes, the economic cost of ignoring the erosion of biodiversity is weighing on companies.
Food and beverage giants have helped create a system that destroys natural biodiversity. The UN's Food and Agricultural Organization found that just nine plants account for roughly two-thirds of total crop production globally. Natural forests declined by 6.5 million hectares per year between 2010 and 2015, an area larger than the UK, according to the Organization for Economic Co-operation and Development (OECD). The OECD also found that since 1970, 60% of vertebrate populations have disappeared.
These changes are destroying natural ecosystems. Climate change has made droughts and floods more common; without a diverse array of crops, these natural occurrences can be even more devastating to farms. In areas where bees have been wiped out, humans are forced to pollinate crops by hand, taking on a job that nature once managed.
In this deteriorating situation, growing and creating enough food to feed a growing global population becomes more difficult and more expensive for companies. Hiring humans to pollinate crops, after all, is pricey. The OECD estimates that between 1997 and 2011, the world lost up to $31 trillion per year in "ecosystem services" due to land degradation and loss of natural land.
"Nature works for us," Faber said. "But we don't look at this work. We're destroying this work."