Mengniu leverages ESG's "Four Capabilities" experience to empower the sustainable development of the dairy industry in Southeast Asia

Recently, the “International Strategic Conference on Sustainable Livestock Industry Transformation,” jointly hosted by the Food and Agriculture Organization of the United Nations (FAO), the International Dairy Federation (IDF), and Indonesia’s National Research and Innovation Agency (BRIN), was held in Jakarta. The conference focused on global pathways for the sustainable development of the livestock sector, bringing together representatives from governments of various countries, international organizations, research institutions, and leading enterprises in the industry to jointly discuss how to promote the dairy industry’s green transition through technological innovation and multi-stakeholder collaboration.

(Li Pengcheng shares in the “Industry Leaders Dialogue” session)

Li Pengcheng, Senior Executive President of Mengniu Group and Chairman of the Mengniu Public Welfare Foundation, was invited to attend and delivered remarks in the “Industry Leaders Dialogue” session, sharing Mengniu’s practical experience in the area of sustainable development, offering a “Mengniu playbook” that can be referenced for dairy development in Indonesia and even across Southeast Asia.

**　The “Four Advancements” approach—making sustainable development a regional growth engine**

Indonesia is the world’s largest palm oil producer and the largest economy in Southeast Asia. Demand for dairy products is growing rapidly, but domestic production can only meet about 40% of needs, leaving a significant supply-demand gap. Against this backdrop, FAO, IDF, and BRIN jointly organized this conference to build a platform for dialogue among government, enterprises, academia, and research, and to drive the transformation of Indonesia’s and the region’s livestock sector toward efficient, low-carbon, and inclusive development.

(Indonesia’s National Research and Innovation Agency presents commemorative certificates and badges)

In the “Industry Leaders Dialogue” session, Li Pengcheng pointed out that Mengniu has been deeply involved in China for many years and has developed a set of sustainable development solutions covering the entire industrial chain. He also shared in depth the four key words: “accountable, traceable, transformable, and financeable”:

First, accountable—building a data foundation for carbon management.

In 2025, Mengniu completed carbon audits of all cooperative ranches, established a Scope 3 carbon emissions model, and for the first time disclosed emissions data across the full value chain. On this basis, Mengniu supported raw milk suppliers in adopting technologies such as low-methane-emission dairy cows, resource utilization of manure and wastewater, and optimization of feed additives to drive large-scale emissions-reduction innovation. Li Pengcheng emphasized that Indonesia’s dairy industry is mainly supported by smallholder farmers, with a relatively smaller number of dairy cows, but it can still benefit from the path of “audit first, account second, and reduce emissions third”—to get to the bottom of household carbon emissions, and find the low-carbon transition approach most suitable to local conditions.

Second, traceable—building a responsible supply chain.

Indonesia is the world’s largest palm oil producer, and supply chain transparency directly affects international market trust. Mengniu has already built a responsible management system covering key raw materials such as palm oil, soybeans, and timber, and committed to eliminating deforestation risks in the supply chain by 2030. In 2025, Mengniu promoted the proportion of “no-deforestation” procurement for soymeal to exceed 50%, and palm oil is 100% traceable back to refineries and palm oil mills. Li Pengcheng said that starting from the source of procurement to promote green development across the entire industrial chain can help Indonesia’s local livestock industry improve supply-chain resilience, reduce environmental footprint, and enhance international competitiveness.

Third, transformable—turning ecological value into product value.

Green consumption has become a global mainstream trend, and consumers are increasingly willing to pay for products with stories and warmth. In Ulaanbutao, China’s eighth-largest desert, Mengniu organically combined ecological restoration with industrial development, creating an organic dairy industry chain covering organic crop planting, organic livestock farming, and organic processing. The Terénsu “Desert Organic” product series has become a benchmark for ESG-enabled product innovation. Li Pengcheng pointed out that Indonesia has abundant tropical agricultural resources, and how to turn “green” into “premium pricing,” and make sustainability a part of the brand’s story, is a path worth exploring.

Fourth, financeable—using ESG governance to unlock green finance.

Sustainable development requires investment, and capital markets are already providing lower-cost financing support for companies with strong ESG performance. In 2025, Mengniu successfully issued RMB 3.5 billion in sustainable development bonds, setting the record for the lowest interest rate and the largest issuance scale among overseas RMB bonds in the China-based food and beverage sector. Li Pengcheng said that if Indonesian local enterprises can establish a quantifiable ESG system, they can also gain more support in international capital markets, turning sustainability from cost investment into value creation.

**　Deepening localized exploration and expanding the Indonesia footprint **

As one of the world’s top 10 dairy companies, Mengniu not only leads in ESG in China, but also has deep business operations in Indonesia—its controlled subsidiary Modern Dairy continuously deepens cooperation with local Indonesian enterprises.

(Djarum Group visits Modern Dairy—)

In December 2025, SAVORIA, the core consumer-products segment under Indonesia’s Djarum Group, visited Modern Dairy. Djarum Group is a highly influential Indonesian business conglomerate. The dairy brand “Milk Life” under SAVORIA adheres to a high-quality and localized strategy and is an important fresh-milk supplier in the Indonesian market for Starbucks.

During SAVORIA’s visit to China, the team toured the Asian largest single-site ranch operated by Modern Dairy in Bengbu (with nearly 40,000 head) and a low-carbon demonstration ranch in Shanghe. The Shanghe ranch has built a circular industrial chain of “forage crop planting—dairy cow farming—manure treatment—biogas power generation—returning biogas fertilizer to fields,” and it was among the first to introduce GreenFeed’s dairy cow methane monitoring technology, becoming a green benchmark in the industry. The two sides engaged in in-depth discussions around ranch operation and management, consultation on new project development, dairy product R&D, and channel collaboration, jointly advancing strategic cooperation.

SAVORIA’s Chief Executive Officer, Iheasan Muliya Putri, said that Modern Dairy’s hard-core strengths in large-scale breeding, digital management, and cost control provide an intuitive and feasible example for Indonesia to break through bottlenecks in ranch output per head, cope with hot-humid climatic conditions, and optimize its operating system.

Currently, in Indonesia, Modern Dairy has formed a deep layout covering three major areas: ranch management and delegation (ranch operation outsourcing), construction and operations, and forage trading— not only managing a ranch with 3,000 dairy cows, and achieving Indonesia’s highest output-per-head record of 41 kilograms within half a year, but also recently signing a new project for construction consultancy and services operations cooperation for a new ranch with 28,000 dairy cows.

Li Pengcheng said that Mengniu and its related enterprises’ years of planning and localized exploration in Indonesia have given them a deeper understanding of the development stage of Indonesia’s livestock industry, resource endowments, and real-world challenges, and have put them in a better position to combine Mengniu’s experience with local realities, providing valuable references for Indonesia’s dairy industry.

**　Deepening international cooperation to drive the declaration into practice**

During the conference, all participating parties held in-depth discussions around the “Paris Declaration on Sustainable Dairy Development.” The declaration was jointly signed in 2024 by the UN Food and Agriculture Organization and the International Dairy Federation, aiming to convey the dairy industry’s firm global commitment to sustainable development and to call on all parties to take effective action together to drive coordinated progress in the dairy industry across three dimensions—economy, society, and environment.

(Li Pengcheng exchanges with IDF Global Director Laurence Rycken during the conference)

As an important implementation practice following the declaration signing, the conference specifically set up a session for interpreting the declaration. Representatives agreed that the significance of the declaration lies not only in setting goals, but also in turning commitments into actionable and measurable pathways.

As a representative of China’s dairy industry, Mengniu actively participates in international exchanges and cooperation under the framework of the declaration. It not only demonstrates to the international community China’s dairy industry’s systematic practices in sustainable development, but also, through in-depth exchanges with international organizations such as FAO and IDF, further strengthens its participation and influence in the global dairy industry’s sustainable development agenda.

With the global sustainable development agenda advancing further, the dairy industry—an important sector related to nutrition and health as well as food supply—should shoulder major responsibilities in addressing climate change, protecting the ecological environment, and improving resource utilization efficiency. Going forward, Mengniu will continue to uphold its mission of “protecting the shared health of people and the planet,” working with global partners to jointly promote a greener, more inclusive, and more sustainable future for the dairy industry.

(Editor: Wang Lei)

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