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In an exclusive interview, Liu Chunxi, executive president of Yili Group, discusses the company's commitment to sustainability as it joins the IDF Paris Manifesto. He elaborates on Yili's innovative approaches to achieving carbon neutrality, enhancing food security and addressing nutritional needs while positioning the brand as a leader in the global dairy industry’s sustainable transformation.

Yili is joining other leaders in signing the IDF Paris Manifesto. What specific commitments is Yili making through this initiative, and how do you see this influencing the company’s global strategy?

At this year’s IDF World Dairy Summit, Yili, under the theme “Embracing a Greener, Brighter Dairy Future,” showcased to global audiences our strong innovative capabilities and deep commitment to supporting the sustainable development of China’s dairy industry. I was also honoured to be invited to attend the Dairy Leaders’ Forum on Sustainability, where I saw the release of The Paris Dairy Declaration on Sustainability with dairy leaders from around the world.

As a firm supporter and practitioner of The Paris Dairy Declaration on Sustainability, Yili is committed to taking effective actions to reduce carbon emissions, enhance the comprehensive utilisation of resources, and promote green and sustainable development, with the aim of contributing to the global dairy industry’s drive towards a green, low-carbon and beautiful future. Having made continuous improvements over four years, Yili has now earned a groundbreaking Grade AA in the 2024 ESG ratings, released by the internationally authoritative index provider, Morgan Stanley Capital International (MSCI). This is the highest rating among all Chinese dairy producers and a strong recognition of Yili’s efforts in sustainable development.

Moving forward, Yili will continue to fully implement the United Nations’ 2030 Sustainable Development Goals and The Paris Dairy Declaration on Sustainability. Upholding sustainable development as the “golden key,” we will join hands with all stakeholders to create value and share a better future.

In your speech at the Dairy Leaders’ Convention on Sustainability, you highlighted Yili’s efforts in this area. Can you elaborate on some of the key innovations Yili has introduced to enhance sustainability within the dairy industry?

Sustainable development is the “golden key” to addressing the current global issues, and Yili has been at the forefront of the industry in pursuing sustainability. In 2022, Yili took a pioneering step in China’s food industry by unveiling its first carbon peak and carbon emission goals and net-zero carbon roadmap, committing to achieving industrial chain-wide carbon neutrality by 2050. In 2023, we reduced our carbon emissions by 43,000 tons compared to the previous year.

In the upstream sector, Yili has established the Dairy Nutrition Assessment System (DNAS); actively promoted the use of probiotic feed additives for dairy cows in cooperative farms, effectively reducing nitrogen excretion and methane emissions; and continuously promoted the circular development model of “planting and breeding integration.”

In the midstream sector, Yili has implemented green manufacturing across the entire supply chain in the production processes. We have enhanced factories’ energy efficiency, reduced power consumption and advanced energy-saving upgrades to steam boilers. Additionally, we have increased the utilisation of clean energy. As of 1 March 2024, 20 factories have built distributed photovoltaic power stations.

In the downstream sector, we continuously iterate on product packaging to make it greener and more environmentally friendly. We use FSC-certified green packaging materials, plant-based bottle caps and one-piece cap packaging designs. Recently, our brand Satine introduced green low-carbon pure milk, which has the natural hue of the paper pulp that is free from bleached coatings, significantly reducing the use of ink. To date, Yili has completed the carbon footprint assessment and accounting for all its core products. The group has pioneered the launch of China’s first “net-zero carbon milk,” “net-zero carbon milk powder,” “net-zero carbon yogurt” and “net-zero carbon ice cream”.

While focusing on its low-carbon transformation, Yili also continuously mobilises efforts throughout the global industrial chain. For example, we have initiated the first “Net Zero Carbon Alliance” in the Chinese dairy industry in collaboration with 88 global strategic partners. This alliance aims to build a green ecosystem for the sustainable development of the dairy industry and help achieve “net-zero carbon” goals.

How is Yili addressing the challenge of balancing food security, nutrition and environmental sustainability, especially considering the growing global population?

As a pivotal industry closely related to human health and the ecological environment, the dairy industry plays a significant role in promoting global food security, driving human nutritional health and advancing sustainable development. As a member of this industry, we are deeply aware of the crucial mission we embrace. Throughout every link of the entire supply chain in the dairy industry, Yili is committed to enriching the nutritional value of our products. We aim to provide nutritional support for all populations, all consumption scenarios, and all life cycles, combat hidden hunger, and promote global health and well-being.

From the milk source, Yili exercises stringent quality control to ensure product safety. We provide innovative and comprehensive services for farmers, encompassing technical training, financial support and farm management training, jointly creating a high-standard, high-quality milk source base along with our industrial chain partners. Yili has newly developed the “Yiniu Youzhi APP,” which delivers one-stop digital solutions for farms that enable operations monitoring, early problem detection, efficiency improvements, matching of service resources and staff training.

On the research and development front, through its deep integration of global resources and extensive collaborations with top universities and research institutions worldwide, Yili actively drives product innovation and research and continually achieves technical breakthroughs in the dairy industry. This enables Yili to craft and deliver cutting-edge products that cater to the diverse nutritional needs of global consumers. For example, following dedicated research efforts over 16 consecutive years, Yili launched Satine Active Lactoferrin Organic Pure Milk over the past two years, shattering technical barriers in the industry. Using the world’s first active lactoferrin targeted retention technology, it has increased the retention rate of lactoferrin in room-temperature pure milk from a mere 10% to over 90%, thereby creating the world’s first room-temperature active lactoferrin organic pure milk.

At the production end, Yili proactively establishes smart factories that span from production and processing to distribution. We are also committed to reducing carbon emissions and mitigating the impact of production activities on the environment through specific measures such as green energy management, waste recycling, efficient production featuring digital capabilities and the adoption of green environmental packaging.

Looking ahead, what role do you see Yili playing in advancing sustainability within the global dairy industry?

Sustainable development is not only the leading trend in global development and clear pathway for the global dairy industry’s future direction but also the long-term developmental philosophy embraced by Yili. Just as chairman Pan Gang once put it, the capacity for sustainability indicates the future leadership of a company. Only by actively engaging in sustainable development and adopting a strategic, forward-thinking mindset will we be able to achieve healthy, long-term development and truly avail ourselves of the most promising future opportunities that lie ahead.

Based upon this perspective, Yili upholds the sustainable development philosophy of “green development, win-win collaboration, and creating a bright future.” With our core business at the center, we continuously improve organizational development, explore and build new green and low-carbon management models and constantly push the boundaries of what’s possible through carbon reduction practices. We are steadily progressing towards our goal of “achieving industrial chain-wide carbon neutrality before 2050” and always striving to create more development opportunities for the global dairy sector.

As a leading global dairy company, Yili is dedicated to fully leveraging our unique position and influence to gather together the capabilities of all stakeholders and mobilize participants throughout the industrial chain’s upstream and downstream segments, as well as consumers, behind the pursuit of sustainable development. By deepening exchanges and cooperation within the global dairy community and sharing the extensive experience of Chinese dairy companies in innovation, R&D, digitalisation and sustainable practices, we aim to join hands with all stakeholders and work together to realise a greener and more sustainable future. Going forward, this collective endeavor will add new momentum behind the sustainable development of the global dairy industry.

Yili once again won the World Dairy Innovation Award and outstanding performance in the World Dairy Innovation Award (based on actual results). What would winning this award mean for Yili and its future innovations in the dairy sector?

The IDF Dairy Innovation Award is widely recognised as the most influential and authoritative award in the global dairy sector, signifying the pinnacle of annual industry advancement. Yili stood out with four nominations and won the award of 'Innovation in New Product - Human Nutrition'. The awards highlight a recognition of Yili’s ongoing innovation capabilities by the International Dairy Federation and global dairy specialists.

In today’s rapidly changing market environment, where consumer demands and preferences are evolving by the day, the dairy industry is witnessing new trends in development focused on diversification, convenience and low-carbon emissions. These awards are not only a great encouragement to Yili but also a recognition of our relentless exploration and enterprising spirit on the path of innovation. We are grateful for this acknowledgement and understand the deep responsibility that comes with such recognition. It inspires us to continue directing our efforts towards innovation, understanding that only through continuous innovation can we drive the sustained growth of our business, help guide the ongoing transformation of the dairy industry, and create more value for consumers.

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