Kellanova set to achieve 90 percent renewable electricity across North America in 2024

Rhea-AI Summary

Kellanova, formerly known as Kellogg Company, is making significant progress towards achieving 100% renewable electricity in its global manufacturing facilities by 2030 as part of its Better Days Promise. The company has announced that its North America manufacturing operations will achieve 90% renewable electricity by the end of 2024 through a virtual power purchase agreement. Kellanova has also made strides in achieving renewable electricity across its manufacturing facilities in Europe, Asia, Middle East, Africa, and Latin America.

Insights

Sustainability Analyst

Transitioning to renewable energy is a key strategy for companies like Kellanova to mitigate climate change risks and align with global sustainability goals. Kellanova's commitment to achieving 100 percent renewable electricity by 2030 is a significant undertaking that reflects the company's proactive approach to corporate responsibility and environmental stewardship. The use of Virtual Power Purchase Agreements (VPPAs) allows Kellanova to invest in renewable energy projects without the need for physical energy generation assets on-site, which can be a cost-effective and scalable solution.

From a business perspective, this strategy may provide long-term cost savings on energy and potential protection from volatile fossil fuel prices. Additionally, it may enhance Kellanova's brand reputation and customer loyalty, as consumers increasingly prefer products from environmentally conscious companies. However, the initial investment and potential operational adjustments necessary to integrate renewable energy sources could pose short-term financial challenges.

It is also important to consider the impact of Kellanova's sustainable initiatives on its supply chain partners and the broader industry. As Kellanova moves towards renewable electricity, it may encourage or even require similar commitments from its suppliers, potentially accelerating the shift towards sustainability in the food production sector.

Financial Analyst

Kellanova's announcement regarding its progress in renewable electricity usage is likely to be scrutinized by investors for its financial implications. The shift towards 90 percent renewable electricity in North America by 2024 and the long-term goal for global operations could signal a forward-thinking management approach, potentially attracting impact investors who prioritize sustainability in their investment criteria.

Investors will be interested in how these sustainability efforts translate into Kellanova's operational efficiency and whether they can lead to reduced operational costs in the long run. The use of Renewable Energy Certificates (RECs) and potential research into green hydrogen suggest a diversified approach to achieving energy goals, which may mitigate the risk associated with reliance on a single renewable energy source.

However, it is crucial to monitor the company's capital expenditures and the return on investment for these sustainability projects. If the cost savings from reduced energy prices and potential government incentives outweigh the initial investments, Kellanova's profitability may improve over time, positively affecting its stock performance.

Energy Market Analyst

The renewable energy market is becoming increasingly integral to global manufacturing operations. Kellanova's commitment to renewable energy, particularly through the use of VPPAs, is indicative of broader market trends where companies are seeking to lock in energy prices and contribute to the development of renewable energy infrastructure.

The Greenhouse Gas Protocol compliance mentioned by Kellanova ensures a standardized reporting of emissions, which is critical for transparency and comparability in the energy market. As more companies follow suit, there could be an increased demand for RECs and a boost to the renewable energy market, potentially lowering costs for these technologies.

The mention of exploring green hydrogen in the UK also highlights the evolving landscape of renewable energy sources beyond wind and solar. Green hydrogen's potential to replace natural gas could have significant implications for energy markets and manufacturing operations, reducing dependence on fossil fuels and possibly reshaping energy procurement strategies.

• Pringles^® and Pop-Tarts^® maker continues to make progress on renewable electricity transformation
• Announcement represents significant step as part of Kellanova's Better Days Promise to advance sustainable and equitable access to food

CHICAGO, Jan. 30, 2024 /PRNewswire/ -- Kellanova (NYSE: K), formerly known as Kellogg Company, a global snacks-led powerhouse, is pleased to announce that the maker of Cheez-It^® and Rice Krispies Treats^® is on track to reach its goal of creating a climate-positive future, including achieving 100 percent renewable electricity in global Kellanova-owned manufacturing facilities by the end of 2030. This step forward is part of Kellanova's Better Days™ Promise.

90 percent renewable electricity in North America
Today, we are proud to share that our Kellanova-owned North America manufacturing operations* will achieve 90 percent renewable electricity by the end of 2024 through a previously signed virtual power purchase agreement (VPPA). In 2021, the company signed a long-term wind energy VPPA in North America for approximately 360 gigawatt hours of wind electricity annually. The wind farm, located in north central Texas, adds clean energy resources to the community's local grid that is equal to 90 percent of the volume of electricity used across Kellanova's North American manufacturing facilities.

"Today's announcement is a big step toward achieving our Better Days Promise goal of 100 percent renewable electricity across our global manufacturing facilities by the end of 2030," said Janelle Meyers, chief sustainability officer, Kellanova. "As a global food company, we have a significant role to play in helping to reduce reliance on limited energy sources across our value chain and creating a positive impact for people and the planet."

Renewable electricity across the globe
Globally, by the end of 2030 Kellanova aims to achieve 100 percent renewable electricity across owned manufacturing plants through a variety of programs, on-site, VPPAs and renewable energy certificates (RECs)—and has made significant progress to that end:

• In Europe, Kellanova's manufacturing facilities have recently achieved 100 percent renewable electricity to address its operations through the purchase of RECs. Kellanova's European manufacturing facilities have been purchasing RECs since 2016. In addition, the company is in the early stages of a research program partnership with the U.K. government to establish the potential use of green hydrogen as an alternative to natural gas for Kellanova manufacturing facilities in the country.
• In its Asia, Middle East and Africa region, Kellanova has grown the share of renewable electricity from 1 percent in 2018 to 33 percent in 2023 through a variety of solutions, such as the use of solar panels in our owned facilities in India, South Africa, Thailand and Malaysia.
• In Latin America, Kellanova's facility in Colombia sources 100 percent renewable electricity through hydroelectric energy.

Kellanova measures greenhouse gas emissions and renewable electricity in accordance with the Greenhouse Gas Protocol. The company will report on 2024 progress against its Better Days™ Promise commitments in its social and environmental report, which will be issued in 2025.

*Kellanova North America manufacturing operations encompass facilities in the United States, Canada and one facility in Mexico.

About Kellanova
Kellanova (NYSE: K) is a leader in global snacking, international cereal and noodles, and North America frozen foods with a legacy stretching back more than 100 years. Powered by differentiated brands including Pringles^®, Cheez-It^®, Pop-Tarts^®, Kellogg's Rice Krispies Treats^®, RXBAR^®, Eggo^®, MorningStar Farms^®, Special K^®, Coco Pops^®, and more, Kellanova's vision is to become the world's best-performing snacks-led powerhouse, unleashing the full potential of our differentiated brands and our passionate people.

Kellanova is guided by our purpose to create better days and a place at the table for everyone through our trusted food brands. We are advancing sustainable and equitable access to food by addressing the intersection of hunger, sustainability, wellbeing, and equity, diversity & inclusion, with the ambition of creating Better Days for 4 billion people by the end of 2030 (from a 2015 baseline). Visit www.Kellanova.com for more information.  

Forward-Looking Statements
This news release contains "forward-looking statements" about sustainability performance and projects. These statements are made on the basis of the Company's views and assumptions at this time and the Company undertakes no obligation to update these statements unless required by law. This statement is not a guarantee of future performance; and actual events or results may differ materially from this statement. Investors should consult the Company's filings with the Securities and Exchange Commission (including the information set forth under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and the Company's Quarterly Report on Form 10-Q for the quarter ended July 1, 2023) for information about certain factors that could cause such differences. Copies of these filings may be obtained upon request from the Company's Investor Relations department or on the Company's web site at https://www.kellanova.com

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SOURCE Kellanova

FAQ

What is Kellanova's ticker symbol?

K

What is Kellanova's Better Days Promise?

Kellanova's Better Days Promise aims to advance sustainable and equitable access to food and achieve 100% renewable electricity in its global manufacturing facilities by 2030.

How much renewable electricity will Kellanova's North America manufacturing operations achieve by the end of 2024?

Kellanova's North America manufacturing operations will achieve 90% renewable electricity by the end of 2024.

What is the source of renewable electricity for Kellanova's facility in Colombia?

Kellanova's facility in Colombia sources 100% renewable electricity through hydroelectric energy.

How does Kellanova measure greenhouse gas emissions and renewable electricity?

Kellanova measures greenhouse gas emissions and renewable electricity in accordance with the Greenhouse Gas Protocol.