Earning an ESG Award: Darling Ingredients Shares Its Story

Written by: Guest   |   January 24, 2024

Sustainability

By: Emily Alvarez 

In a world increasingly conscious of sustainability and environmental responsibility, companies that prioritize eco-friendly practices are more vital than ever. Darling Ingredients has made a name for itself in the world of sustainability as it relates to the production of in-demand feed and food ingredients and renewable energy. It recently earned top awards for its commitment to environmental, social and governance practices (ESG). We had the privilege of speaking with Darling Ingredients’ Director of Sustainability Ethan Carter. Carter joined the company in August 2022 with more than 10 years of experience in a variety of environmental and sustainability roles in the energy industry. Here is a snapshot of that conversation.

Q: What is Darling Ingredients’ approach to sustainability? How does ESG fit into that? 

Carter: Rendering is the recycling of nutrients within the animal agriculture space. Darling takes about

15% of the world’s slaughtered meat byproducts and transforms it into ingredients for food, feed and fuel and is a leading producer of renewable energy. We view ourselves as the ‘original recyclers,’ as we’ve been in the rendering business for more than 140 years. We continue to grow and expand, and we want to continue to lessen our impact on the environment as much as possible.

In my mind, the difference between sustainability and ESG is that ESG is more of what investors use to try to measure companies’ sustainability performance. ESG fits into all that we do at Darling Ingredients, including how we talk about our operations and how we disclose information to our investors, customers and stakeholders about what how our business is performing through the lens of ESG.  

Q: Recognized as a Morningstar Sustainalytics ESG Industry Top Rated company, what do you believe was the most successful and influential goal that allowed for this achievement? What steps did you take internally to change processes or train staff to make it happen? Were there steps you had to take externally too with other stakeholders? 

Carter: We continually evolve how we report on sustainability. We’ve expanded what we report on, and that increased level of disclosure is what a lot of rating agencies are seeking. The company has also invested in this area, hiring employees entirely focused on sustainability. The most important way companies can improve, as it relates to sustainability performance and disclosure, is getting all levels of the organization -- from the board all the way down to the folks that are in the day-to-day operations --involved in the conversation and focused on ways to improve sustainability.  

Q: Darling Ingredients committed to align with 1.5°C and net-zero through the Business Ambition campaign. Why did you choose this campaign and the SBTi over other measurements that are out there? 

Carter: The Science Based Targets Initiative (SBTi) has been the standard in reporting for investors. We know it’s important to set science-based climate targets, and our shareholders asked us to participate in SBTi, so that’s been the path we’ve taken. Over the past few years, the company has again grown through acquisitions, so we’ve been working on finalizing our greenhouse gas data to be able to set those near-term climate targets to say how fast we expect to be able to reduce our emissions. SBTi will help inform what those goals will look like, and we intend to set those goals in 2024.

Q: How does having operations in more than 260 facilities in over 15 countries impact Darling Ingredients’ corporate sustainability goals? How does the company tailor solutions to address specific regional challenges? 

Carter: One challenge we have, especially when thinking about climate goal prioritization, is the size and scale of our operational footprint. [For example, we must] prioritize where we put capital and resources, including time. We manage similar challenges within the business on a normal basis, so it’s now just bringing sustainability into those capital allocation conversations. When we talk about social sustainability, there can be big differences between regions. Issues in the U.S., Europe, Brazil and China can be very unique to each region. Addressing social issues in a way that makes sense for each region is really important. As we look to build out that facet of our corporate program, we recognize the importance of understanding each region’s unique needs and culture and know we must be flexible in addressing regional concerns.

Q: How has Darling adapted to changing market trends/consumer demands for more sustainable and environmentally friendly products? 

Carter:  We focus on our customers and their needs. Demand for sustainable products continues to grow, and we have a strong portfolio of sustainable products. Over the past decade, we’ve created and expanded our production of renewable fuels through our joint venture, Diamond Green Diesel – which is now the largest producer of renewable diesel in North America. We also recently announced an investment in sustainable aviation fuel production. Our focus leveraging the inherent sustainability of our business model to bring innovative solutions to current and future customers is what sets Darling Ingredients apart from other companies.

Q: For companies not involved in sustainability yet, what would you tell them? Are there tactics you have used that have proven successful in persuading businesses to follow a more climate friendly framework? 

Carter: Sustainability is going to become the way we all do business. If companies aren’t already thinking about it, they should be. Sustainability can differ depending on the size of a business. Small companies may respond to customers and their needs differently than a larger publicly traded company like Darling Ingredients. We are more impacted by regulatory disclosure requirements and investor input.

I recommend companies begin to identify all stakeholders, whether they be customers, employees or investors, and start thinking how to best minimize their company’s impact on the environment and social issues.

Folks that aren't involved yet in sustainability - get involved! - because there are huge opportunities in this space. I think realizing where those opportunities are and viewing them as opportunities is a great way to start.  

Q: The meat production process for human consumption can create waste materials; what role does Darling Ingredients play in helping reduce the environmental impact of animal agriculture? 

Carter: At Darling Ingredients, we don’t view byproducts as waste; instead, we see underutilized resources. We’ve been rendering byproducts for more than 140 years. Rendering is a long-standing, proven process. Darling Ingredients is focused on creating the highest and best value for society, the environment and our customers as we utilize byproducts. In North America, about 50% of an animal makes it to the dinner plate and the rest of it goes to rendering. That percentage can vary in different regions of the world for many reasons. There are numerous beneficial products, from ingredients for animal feed and pet food to gelatin to collagen peptides and renewable fuels, that we produce that improve daily life around the world. Optimizing the best use is what we focus on. 

Q: Is there anything else we haven’t covered that you’d like to say about this topic? 

Carter: It's important to work together toward creating a more sustainable world. Especially within an industry like ours -- where everyone is looking at their scope-three footprint -- it can seem like a daunting task. It's important to remember a company’s scope by one or two is someone else's scope three, and vice versa. If you can focus on reducing your company’s scope one or two emissions, especially if you're in a manufacturing or production part of the value chain, there are big opportunities that will interest your customers, investors and stakeholders. Working throughout the value chain and with other industry partners to bring systemic emissions down over time allows us to all have a positive impact on the climate.

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If you would like to hear more about how companies are incorporating feed or feed ingredients into their sustainability targets, join the American Feed Industry Association at the “Feed Your ESG” session next week at the International Production & Processing Expo (details here).