Having faced scrutiny over governance instability and sluggish market performance, Nestlé is on a quest to reinvent itself. The plan is to accelerate real internal growth through strategic investment in flagship and high-growth platforms (such as cold coffee) rather than one-off releases. At the same time, the company is carrying out various operational optimisations, from reviewing marketing spend to updating pack architecture and restructuring parts of its workforce.
Alongside that, a different kind of pressure is mounting.
In October 2025, Nestlé withdrew from the Dairy Methane Action Alliance, an industry initiative designed to encourage companies that source dairy to measure, report and reduce greenhouse gas emissions from their dairy supply chains. The Swiss major presented its exit as part of a routine review of external partnerships, but at least one investor took notice.
British pension management company Railpen recently divested its Nestlé shares after the Swiss major’s departure from the DMAA raised ‘further questions about the robustness of its climate strategy’. Railpen said it had engaged with the CPG company ‘over several years’ over governance and ESG concerns, but had observed limited responsiveness to investor feedback and limited progress against the areas it had highlighted.
Sustainability may not be the biggest boardroom priority for dairy companies, particularly during ongoing economic and geopolitical upheaval, but ESG is firmly embedded in market and investor expectations today. For Nestlé, dairy is its largest agricultural source of GHG emissions and its recently-released Dairy Plan lays out its ambition to improve climate reporting transparency, support sustainable sourcing, and invest in farmer support and on-farm interventions.
However, beyond the headline reduction, there is limited detail on how the results have been achieved; and on the supplier side, the report leans heavily on individual case studies than collective outcomes.
Nestlé reports that net dairy GHG emissions fell 26% versus 2018, methane fell 25%, and dairy emissions declined from 23.36 MtCO₂e in 2018 to 17.39 MtCO₂e in 2025.
This is the first time Nestlé publishes a dairy-specific net GHG emissions reduction disclosure – a milestone both for the company and for the wider sector, as it underpins the importance of transparency and accountability in food and beverage given dairy’s significant impact on manufacturers’ climate footprint.
But alongside the positives are some real grey areas. Nestlé’s 26% net emissions reduction includes removals from inside Nestlé’s dairy value chains and sourcing landscapes. This means farm-level reductions, such as cutting methane, are combined with value-chain removals, such as carbon captured through soil management practices. This makes it difficult to assess how much emissions have been cut at source.
The net reduction also combines reductions from both fresh milk and dairy derivatives, but there is no disaggregation of each separate category. This matters, because Nestlé has a different level of control across its value chain. The company has greater flexibility to intervene at its own farms it sources milk directly from, compared to ingredients such as powders or lactose purchased from suppliers.
There is also little concrete data about how different farm interventions – such as feed and manure management, productivity gains or sourcing choices – contributed to the overall reduction. Nestlé does outline priority areas, including cow nutrition and lower-carbon feed, but those levers are not tied to quantified contributions in a way that would allow readers to understand what is actually driving the reported reduction.
Instead, Nestlé often relies on anecdotal evidence from its supplier network, with limited data on collective outcomes.
In India, the company says it’s trained more than 18,000 farmers in Punjab and Haryana on breed improvement, feed management, animal health and manure management. In South Africa, Nestlé reports precision agriculture interventions have resulted in improved yields, lower input costs, and stronger margins. These examples are framed more as progress stories than as measurable, aggregated results.
In Brazil, Nestlé’s Nature por NINHO technical training programme that includes premiums for adopting regenerative agriculture practices mentions one piece of data – that gold-tier producers achieved a 34% increase in feed efficiency by the end of 2023 – but there’s nothing about how bronze and silver-tier producers have benefited.
In Indonesia, the Swiss major says it works with more than 13,000 farmers to enhance milk quality and yield but presents the story of a single family-run farm instead of offering insights on collective outcomes.
In Spain, Nestlé says an analysis of 194 supported farms showed an 11% yield increase one year after investment, while farms receiving animal welfare investment recorded a 16% increase in milk yield; and that heat stress technology helped improve animal welfare in northern Spain. Yet the report doesn’t demonstrate how these interventions are linked to broader reductions.
Outcomes from regenerative agriculture practices are also sparsely discussed. Regenerative agriculture is a key pillar in Nestlé’s sustainability strategy and the company believes climate-smart agriculture will increasingly form the basis for success in the food and beverage sector.
Nestlé says that in 2025, 34% of dairy was sourced from farmers ‘adopting’ regenerative agriculture. This echoes its group-wide achievement (27.6% of key ingredient volumes met this definition) but doesn’t differentiate between levels of adoption. This is understandable to an extent – regeneration is rarely linear and outcomes may take years to achieve and verify – but if Nestlé has more granular data, it should consider publishing it.
Overall, Nestlé’s Dairy Plan includes some useful figures and case studies of its dairy-related climate interventions globally. But in the future, the report should emphasise verified outcomes to demonstrate not just intent but measurable impact.
