Natural capital and biodiversity accounting in the dairy industry: the case of Valio Group

Abstract

<p>This chapter aims to address the enhancement of and reporting on natural capital and biodiversity within the dairy industry as part of one company´s broader sustainable development strategy. Chapter focuses on the dairy industry, as it is heavily dependent on natural and animal resources and also uses them significantly. Milk is the central raw material for a wide variety of dairy products. A primary concern at the very beginning of the production chain is animal well-being (McLaren, and Appleyard, 2020). From farms to production facilities there is a delicate logistic chain. Finished products need to be delivered also with careful, sustainable distribution channels for wholesalers and retailers. Since milk and those products arising from milk can be typically spoiled easily there are special demands for the whole logistics and production chain and its safety.<br></p><p>Based on the interviews and other public material about Valio I am convinced that well-functioning corporate governance (CG) has been a key element at Valio to successful sustainable development throughout the production chain (from field to table). All three interviewees highlighted the importance of good CG and clear responsibilities. At the same time, teamwork in matrix organization takes place. Expert work in teams is indispensable because sustainability issues in the dairy business are diverse and call typically scientific, specialized, solutions. According to their interviews and sustainability reports of Valio, it is quite evident that collaboration between Valio and Universities and other expert organizations is intense, fruitful, and productive. All this leads us to conclude that Finland offers a good platform and regime for the dairy industry to develop operations towards a higher level of sustainability. One supportive indication of that is Finland´s number one position in the international sustainable development comparison of the total 193 countries ranked (Sachs <em>et al</em>., 2021). The annual ranking is by the UN and the Bertelsmann Foundation. The ranking assesses countries’ progress in implementing the 2030 Agenda for Sustainable Development and its SDGs.<br></p><p><br></p><p>Keywords: dairy industry, sustainability, natural capital, biodiversity, pollinators, SDG14, SDG15, corporate governance</p>