CLIMATE ACTION POSITION STATEMENT
The current situation

Humanity’s greenhouse gas (GHG) emissions have changed the composition of ouratmosphere and the climate that surrounds us. Around the world, people are beginning tofeel the effects, from increased average and extreme temperatures, to changes in rainfall
patterns, to more severe and less predictable storms. There are clear signals that the climate
has changed over the last century. Climate scientists measured 2016 as the warmest year onrecord, and 18 of the 19 warmest years have occurred since 2001 (NASA, 2019). What’s more,climate scientists, through the Intergovernmental Panel on Climate Change (IPCC) publishedan eye-opening report showing the significantly greater risks we face if we don’t limit climatechange to 1.5°C. The scientific consensus on the need for urgent action is clear.
Mars recognizes our responsibility to address the environmental and social impacts of ourbusiness. That is why we launched our Sustainable in a Generation (SIG) Plan in 2017 with an
initial investment of $1 billion. Tracking and reducing GHG emissions to lessen our climatechange impact are key aspects of our SIG Plan, and provide important opportunities to help
drive momentum for global climate action.
Science tells us that to avoid the worst consequences, we should limit the increase in global
average temperature to well below 2°C above pre-industrial levels, a threshold outlined in theinternational Paris Agreement on climate change. To stay beneath this threshold, scientists
estimate that no more than 1 trillion tonnes of carbon dioxide can be added to theatmosphere. This is called the “carbon budget”. Global emissions since 1870 have alreadyconsumed more than half of that budget, leaving less than 500 billion tonnes to emit in thefuture.
The urgency of climate change is recognized in the UN Sustainable Development Goals (SDGs)– SDG 13 calls for “urgent action to combat climate change and its impacts.” Mars supports theSDGs and recognizes the need for engaging others to collectively play our part in addressing
climate change, as no single company can make meaningful progress alone.
Mars’ full value chain GHG emissions in 2015 were estimated at 33 million tonnes of carbon
dioxide equivalent (MtCO2e) – larger than the GHG footprints of some countries. Whileenergy use is a significant driver of our operational emissions, agriculture and land use changeemissions make up the lion’s share – approximately 80% – of our full value chain emissions(figure 1). With that in mind, we are focusing our climate change actions in the areas of ourbusiness that involve producing and purchasing agricultural raw materials. Ultimately, by
doing everything we can to reduce our GHG footprint consistent with the global goal, we aim
to achieve real, positive impacts on our business, people, and the planet.
Climate change is also intrinsically linked with Mars’ other sustainability priorities. It will impact
water scarcity, while land use choices can either drive or mitigate climate change. The
strategic approaches we choose to address climate change in our value chain have
implications for human rights and the incomes of farmers who grow the materials we source.

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Page 1 of 7Our long-term ambition

Mars’ climate change targets are to reduce our total GHG emissions from our full value chain
by 27% by 2025 and by 67% by 2050, from 2015 levels.
Mars has developed ambitious, science-based GHG reduction targets, which aim to keep us
within our share of the global carbon budget. Our targets are informed by the best-available
climate science, detailed emissions data, and a set of “carbon principles” (Putt del Pino, 2016).

We set our climate change targets by working with the Science Based Target initiative, WorldResources Institute (WRI) and other partners, to calculate our share of the global carbonbudget. If we achieve a 67% reduction by 2050, we will stay within our share of the carbon
budget, as illustrated in figure 2 below.

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Included within our full value chain emissions targets, we have set a goal to reduce emissions
from our operations 42% by 2025 and 100% (net zero) by 2040, in line with what science says
is necessary to keep global warming below 1.5°C.
In setting our GHG targets and developing our strategies for meeting those targets, Marsestablished several key “carbon principles”:
1. Allocation of the global carbon budget should be science-based and aligned with theglobal 2°C target, which if applied by all emitters would comply with the globalbudget.
2. Our GHG reduction targets must be absolute, not intensity-based, or we risk hitting
our targets but still exceeding our share of the budget.
3. All greenhouse gas emissions count – this includes emissions from land use change.
We will not exclude parts of our value chain from our accounting, though we willprioritize where we focus our efforts to deliver reductions.
4. Both reducing net emissions and increasing carbon sequestration can contribute toour goals in a way that is consistent with the science, if done and accounted forcorrectly.
5. Our strategies for meeting our carbon budget should not restrict the ability of others
outside of our value chain to meet GHG reduction targets for their activities.
6. We will use transparent and credible GHG calculation and accounting methods androbust data.

Our theory of change
Climate change has critical implications throughout our value chain. We release carbon
dioxide into the atmosphere when we consume energy from fossil fuels – directly in ourfactories or indirectly to produce the fertilizers used by farmers who supply our raw materials– or contribute to deforestation through expansion of agriculture lands. When those same
farmers grow crops to produce our raw materials, the plants sequester carbon, both in theparts we buy and those we don’t. This carbon cycle for agriculture is central to our share ofclimate impacts and our opportunities to reduce them.
The framework below (Figure 3) applies the carbon cycle and carbon budget concepts toinform our strategies for tackling our emissions. (Note that the actions included in this figure
are illustrative examples and not comprehensive). By focusing on actions within our value
chain and associated with clear, measurable emissions reductions, we can make significant
progress toward our GHG reduction targets. Concurrently, we can explore strategies thatsequester carbon within our value chain to help counterbalance emissions we can’t reduce.
Emission reduction activities outside our value chain will not be factored into our carbon
accounting, as our focus is on reducing emissions related to our business. Our theory ofchange is that by employing strategies to reduce our direct emissions and sequester carbon
within our value chain, while exploring opportunities to invest in carbon sequestration
activities outside our value chain, we can stay within our carbon budget.

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Short-term actions

At Mars, we are already taking action to tackle climate change, meet our GHG reduction
targets and drive momentum for global climate action. For our direct operations, thisapproach involves increasing energy efficiency and expanding clean energy by investing inrenewables. In our value chain, it involves preventing deforestation and forest degradation
related to the raw materials we source, as well as increasing carbon sequestration andreducing GHG emissions through improved agricultural practices. In all of our work, we
collaborate with thought leaders and other companies to help improve data and accounting
methodologies and pilot strategies to learn about what works.

Operations & Renewable energyMars has set a target to reach 100% renewable energy (both electricity and thermal) by 2040.
As of 2018, Mars sources more than 50% of our electricity needs from renewable sources.
Switching to renewable and low-carbon energy sources is an increasingly impactful and costeffective strategy for reducing emissions from our direct operations. Our strategy relies onboth on- and off-site renewable energy projects. All off-site and some on-site electricity
projects rely on the electrical grid for transmission and to balance energy generation with
consumption. As it isn’t possible to track electrons through a grid, we use attribute tracking
systems established by governments, grid operators or private contracts such as renewableenergy certificates (RECs) and other instruments. These systems allow us to build an
information bridge between the output of a generating asset and Mars’ energy use.
Thermal energy makes up nearly two-thirds of Mars’ current energy demand in direct
operations, so we consume significant volumes of natural gas at our sites. While acomparatively clean and efficient fuel source, we realize that we can’t reach our GHG
reduction targets if we are depending on natural gas. With this in mind, we partnered with themars.com© 2019 Mars, Incorporated

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Renewable Energy Buyers’ Alliance and others to launch the Renewable Thermal
Collaborative, a coalition for scaling up renewable heating and cooling solutions. We areworking on low carbon (such as certain biomass options) and zero carbon (such as solarthermal) energy sources at project and structural levels, to make it easier for all companies toprocure and source low-carbon thermal energy.
Mars will also continue to pursue innovative solutions to reduce energy use in our direct
operations through energy efficiency solutions. And Mars has set a Refrigeration
Commitment to phase down potent hydrofluorocarbon (HFC) refrigerants.

Land use and deforestation
Mars takes a systems approach to land impact. Building on our deforestation prevention
policy, we are working to better measure and reduce the land use impacts in our value chain.
Agricultural and land-use change related GHG emissions represent nearly one quarter ofglobal human emissions and 80% of Mars’ value chain emissions.1 By fully integrating
agriculture-related land use change into our GHG reduction target, Mars is establishing aquantitative metric for tracking reductions in deforestation. Coupled with our existing workon deforestation and our complementary target to “freeze” total land use, this represents asignificant step forward in our deforestation prevention efforts.
Few companies include land use change in their emissions reporting and GHG targets becauseof lack of data or standardized accounting methodologies. Working with several external
partners on the World Food LCA Database project that provides full life cycle environmental
impact data on thousands of raw materials, Mars has estimated our GHG emissions fromagriculture and land use change. We are also working with external partners and othercompanies to refine the method for allocating these emissions to raw materials and drive
standardization of these calculations.
We estimate that 80% of Mars’ emissions are from our agricultural value chains, which includes
approximately 42% from land use change and 38% from agriculture. This impact is primarily
concentrated in raw materials sourced from tropical countries – beef, cocoa, palm oil, pulp
and paper, and soy account for more than 80% of our estimated land use-related GHGs. This
information will help Mars, our suppliers and our peers more effectively target actions toaddress deforestation and land degradation and stay within our carbon budget.

Sourcing
Mars has three primary options for reducing our emissions related to the raw materials in ourvalue chain:• Improve raw material production practices – most agricultural value chains haveuntapped efficiency opportunities, whether through yield improvement or more
precise application of inputs such as fertilizer.
• Change where we source – certain raw materials can be grown in alternative regions
1Operations emissions result from on-site electricity, fuel and refrigerant use at facilities owned or controlled by Mars;
agricultural emissions result from practices Mars’ suppliers use to produce, process and transport agricultural raw
materials, such as fertilizer application, irrigation, and harvesting; and land use emissions result from changes in the way
land is used, for example clearing forests for agricultural use, or changes in the amount of biomass on the land.

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Page 5 of 7•with a lower GHG impact.
Replace the raw materials we source – for some existing and new products, we have
options including substituting lower-emission ingredients or designing new productsthat use lower impact materials.

As we implement our raw material specific strategies, we will deploy combinations of theabove strategies. In all cases this involves working closely with our suppliers and the farmers in
our value chains to develop mutually-beneficial solutions.

Sequestration
The ability of trees, other plants, and the soil to sequester carbon from the atmospherecreates two opportunities to help Mars stay within our carbon budget: sequestering carbon in
our value chain, and investing in sequestration activities outside of our value chain (see figure3).
In the first category, Mars is working to source raw materials from agricultural systems that
capture carbon for a longer time period or can be changed to do so. Composting agricultural
wastes to be used as soil enrichment or deploying soil conservation practices on productive
lands are two examples; another is to support activities that create and store biomass on
degraded lands. This approach can have additional benefits such as soil erosion control, water
storage and community development, for example by providing new sources of income
through sustainable forest products or payments for ecosystem services. The practices thatfarmers employ in their fields can also provide yield benefits. In the same field, one farmer
could grow crops to sell to Mars, compost wastes from the crops we buy, and plant forest on avacant part of her land. Mars also invests in the Livelihoods Fund for Family Farmers, which
includes initiatives to help small-scale farmers improve on-farm practices to improve farmer
incomes and increase carbon sequestration. From a carbon budget and accounting point ofview, there is no limit to the amount of sequestration we can aim for – it is even possible for acrop to have negative emissions. We are exploring this opportunity across our raw materials –particularly in tree crops such as cocoa.
We are exploring options for the second category of sequestration – projects outside ourvalue chain. We realize we need to be judicious about relying on negative emissions
approaches because of the costs and new supplier relationships needed, the potential
distraction from reducing emissions in our own value chain, and the land resources they mayrequire.

Data & Reporting
Since 2009, Mars has published a GHG emissions inventory annually through CDP. We use theGreenhouse Gas Protocol to calculate and report our emissions in each source category, withthe best available data. For categories with a larger share of our total emissions, we haveinvested additional effort in securing better and more granular data to improve accuracy. We
use public data sources, such as the U.S. Environmental Protection Agency’s eGRID, the U.K.
Department of Environment, Food and Rural Affairs database, and ecoinvent, to supply theimpact factors used in our calculations when available, and we apply them consistent withpublicly available methods. We will continue to invest in the collective development of bettermethods and data availability and work with our suppliers to apply a better understanding ofmars.com© 2019 Mars, Incorporated

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their emissions to drive reductions.

What’s Next
Mars will continue to refine and expand our approach to measuring and reducing our GHG
emissions, including addressing land use related emissions such as deforestation. We will workwith thought leaders to improve data and methodologies and apply the best available science
to our strategies. We are committed to transparency, and will work to strengthen ouremissions calculations and reporting. Applying our principle, “all GHG emissions count,” wewill strive for a complete picture of our emissions, by exploring emerging areas such as soil
carbon dynamics, carbon pricing, and indirect land-use change emissions accounting. We willcontinue to develop our approach to carbon sequestration activities both inside and outside
our value chain. Finally, while our GHG reduction targets aim to reduce our emissions
consistent with helping to prevent the worst climate change impacts, we recognize thatclimate change is already occurring. Adapting to and improving resilience against climatechange is also critical for the long-term sustainability of our business, and we will continue toassess and respond to the related impacts in our value chain.

CitationsNASA (2019). NASA, Vital Signs, Global Temperature. Retrieved from NASA Web site:
https://climate.nasa.gov/vital-signs/global-temperature/
Putt del Pino, S., et al. (2016). From Doing Better to Doing Enough: Anchoring Corporate
Sustainability Targets in Science. Retrieved from World Resources Institute Web site:
http://www.wri.org/publication/doing-enough-corporate-targets.
World Resources Institute (WRI), CAIT Climate Data Explorer (2019). Historical Emissions
Dataset. Retrieved from World Resources Institute Web site: http://cait.wri.org/historical.

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