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

(Pengcheng Li shared in the “Industry Leaders Dialogue” segment)

Pengcheng Li, 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” segment. He shared Mengniu’s practical experience in the field of sustainable development, providing a “Mengniu model” that can serve as a reference for dairy industry development in Indonesia and even across Southeast Asia.

**　“The Four ‘Trues’” Experience, Making Sustainable Development a Regional Growth Engine**

Indonesia is the world’s largest producer of palm oil and the largest economy in Southeast Asia. Demand for dairy products is growing rapidly, but domestic production can only meet about 40% of needs, creating a significant supply-demand gap. Against this backdrop, FAO, IDF, and BRIN jointly organized this conference, aiming to build a government-enterprise-academia-research dialogue platform and to promote a transition of Indonesia’s and the region’s livestock industries toward efficiency, low-carbon development, and inclusiveness.

(A commemorative certificate and badge specially issued by Indonesia’s National Research and Innovation Agency)

In the “Industry Leaders Dialogue” segment, Pengcheng Li noted that Mengniu has deepened its presence in China for many years and has formed a set of sustainable development solutions covering the entire industrial chain. He then shared in depth using four keywords: “accountable, traceable, transformable, and financeable”:

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

In 2025, Mengniu completed carbon accounting for 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 to adopt technologies such as low-methane-emission dairy cows, resource-based utilization of manure, and feed additive optimization, driving scalable emissions-reduction innovations. Pengcheng Li emphasized that Indonesia’s dairy industry is dominated by smallholder farmers, and the number of dairy cows is relatively limited; however, it can still benefit from the pathway of “first conduct the inventory, then calculate, and afterward reduce emissions”—getting a clear picture of its carbon emissions baseline and finding the low-carbon transformation approach most suitable to its own conditions.

Second, traceable—building a responsible supply chain.

Indonesia is the world’s largest producer of palm oil, and supply-chain transparency directly affects international market trust. Mengniu has already established a responsibility management system covering key raw materials such as palm oil, soybeans, and timber, and has committed to eliminating deforestation risk in the supply chain by 2030. In 2025, Mengniu promoted sourcing of soymeal with “zero deforestation,” with its share exceeding 50%, and ensured that 100% of palm oil is traceable back to refineries and palm oil mills. Pengcheng Li said that promoting green development across the entire industrial chain starting from the procurement source can help Indonesia’s local livestock industry improve supply-chain resilience, reduce environmental footprints, and enhance international competitiveness.

Third, transformable—turning ecological value into product value.

Green consumption has become a mainstream global trend. Consumers are increasingly willing to pay for products that have stories and warmth. In Ulanbuhe, the eighth-largest desert in China, Mengniu organically integrated ecological restoration with industrial development. It created an organic dairy industrial chain covering organic planting, organic livestock farming, and organic processing, and the “Desert Organic” series of TeLunsu products became a benchmark for ESG-enabled product innovation. Pengcheng Li pointed out that Indonesia has abundant tropical agricultural resources. How to turn “green” into “premium pricing,” and make sustainability part of the brand story, is a pathway 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 to enterprises with excellent ESG performance. In 2025, Mengniu successfully issued RMB 3.5 billion in sustainable development bonds, setting the lowest interest rate and the largest issuance scale for overseas RMB bonds in China’s food and beverage sector. Pengcheng Li said that if local enterprises in Indonesia can establish a quantifiable ESG framework, they can also gain more support in international capital markets, enabling sustainable development to shift from cost input to value creation.

**　Deepening localized exploration and strengthening the Indonesia rollout **

As one of the world’s top 10 dairy companies, Mengniu not only leads in ESG in China, but also has a deep business layout in Indonesia—its controlling subsidiary Modern Dairy continues to deepen cooperation with local Indonesian enterprises.

(The Djarum Group visits Modern Dairy—)

In December 2025, SAVORIA, the core consumer products segment under the Djarum Group of Indonesia, visited Modern Dairy. Djarum Group is an Indonesian business conglomerate with significant influence. Under SAVORIA, the dairy brand “Milk Life” adheres to a high-quality and localization strategy, and is an important fresh-milk supplier in the Starbucks Indonesia market.

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

Ehsan Muliya Putri, CEO of SAVORIA, said that Modern Dairy’s strong capabilities in areas such as large-scale breeding, digitalized management, and cost control provide an intuitive and feasible reference for Indonesia to address bottlenecks in ranch productivity, cope with humid and hot climatic conditions, and optimize its operating system.

At present, Modern Dairy has formed a deep layout in Indonesia covering three major segments: ranch management/outsourcing, construction and operations, and forage trading. Not only does it manage a ranch with 3,000 dairy cows, but within half a year it also achieved Indonesia’s highest single-day/annual yield record of 41 kilograms. Recently, it also signed a cooperation project for consultation and service operations related to the construction of a new ranch with 28k dairy cows.

Pengcheng Li pointed out that Mengniu and its subsidiary enterprises’ years-long layout and localized exploration in Indonesia have given them a deeper understanding of the development stage, resource endowments, and real-world challenges of Indonesia’s livestock industry. This also puts them in a better position to combine the “Mengniu model” with local realities, providing valuable lessons for Indonesia’s dairy industry.

Deepening international cooperation and advancing the declaration on the ground

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 United Nations Food and Agriculture Organization and the International Dairy Federation. It aims to convey the dairy industry’s firm global commitment to sustainability and calls on all parties to take concrete actions to jointly promote coordinated progress across the economic, social, and environmental dimensions of dairy development.

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

As an important practical step after the signing of the declaration, this conference specifically set up a declaration interpretation session. Representatives present reached a consensus that the significance of the declaration lies not only in establishing goals, but also in turning commitments into actionable and measurable pathways.

As China’s dairy industry representative, Mengniu actively participates in international exchanges and cooperation under the framework of the declaration. It not only demonstrates to the international community China’s systematic practices in the field of sustainable dairy 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 continued advancement of the global sustainable development agenda, the dairy industry, as an important sector related to nutrition and health and food supply, shoulders significant responsibilities in addressing climate change, protecting the ecological environment, and improving resource utilization efficiency. Going forward, Mengniu will continue to uphold its mission of “safeguarding the shared health of humankind and the planet,” working with partners around the world to jointly drive the dairy industry toward a greener, more inclusive, and more sustainable future.

(Editor-in-charge: Wang Lei)

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