Arla Foods’ UK division has struck commercial agreements with a selection of retailers to cut carbon emissions in the milk supply chain.

Asda, Morrisons and Aldi have signed up to Arla UK’s Customer Sustainability Program (CSP), along with high-street coffee giant Starbucks.

Those customers will “invest extra money in the cooperative’s ongoing efforts to reduce emissions on-farm”, providing them with “the opportunity to reduce their Scope 3 emissions faster, along with more accurate reporting”, the UK division of the Denmark-headquartered dairy co-op said in a statement.

Outside of the commercial programme, Arla Foods has already pledged to spend €500m ($528.8m) a year – of which €300m has been activated – to “reward and motivate farmers” to lower emissions.

The CSP partnerships cover one billion litres of milk from Arla’s farmer-owners who have signed up to the co-op’s climate check data programme and its so-called sustainability incentive model. The commercial agreements are designed to “deliver progress towards shared climate targets”, the BOB milk brand owner said.

Peter Giørtz-Carlsen, the COO and executive vice president for Arla Foods Europe, said: “Driving down Scope 3 emissions is another way of bringing value to our customers, and we want to be a strategic partner for them in that journey.

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By GlobalData

“Dairy is an important category for our retail and foodservice customers, and for some of them, emissions from dairy constitute a significant part of their Scope 3 emissions.”

Aldi and Starbucks have yet to reply to Just Food’s request for comment. Morrisons confirmed the partnership, saying it welcomed the “proactive steps” Arla is taking to address sustainability.

Asda said joining Arla’s CSP programme supports the retailer’s carbon-reduction target to reach net-zero by 2040. The chain entered a new contract with the co-op this year for private-label milk that will run to June 2027.

Jenny Cannon, Asda’s director for the chilled business unit, said: “We’re committed to supporting dairy farmers and are investing financially to sign up to Arla’s CSP and in doing so will support Arla farmers’ ongoing efforts to reduce global warming contributions and to raise animal-welfare standards.”

In return for the investment through the CSP, Arla’s customers will have an association with on-farm R&D projects and on-site data relating to the CO2 footprint pertaining to the per kilogram of milk produced, along with “claimable” carbon emissions reductions.

Arla said it will “run projects with the participating customers and their aligned Arla farmers that look to reduce on-farm emissions through new research and testing new innovations for potential scaling within areas such as feed additives, herd genetics, biodiversity, fertiliser use etc”.

The CSP will be rolled out to customers in retail and foodservice in its “core” European markets in 2024, Arla added.

Arla announced in June it had teamed up with Danish meat company Danish Crown for a “carbon-neutral” transport pilot project in the UK in association with shipping companies as part of a drive to lower emissions.

The farmer incentive programme to cut emissions was rolled out a year ago, with the price they receive for milk to be based on their sustainability measures from 2023. The Cravendale owner has a Scope 3 target of aiming to reduce greenhouse gas emissions at farm level by 30% by 2030.

Announcing the commercial agreements today (25 October), Arla explained its Scope 3 emissions account for around 96% of total emissions. However, when “isolating emissions from the dairy farms”, the percentage falls to about 81%.