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 Industry,” 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. Representatives from governments, international organizations, research institutions, and leading industry enterprises from multiple countries gathered to discuss how to drive the green transformation of the dairy industry through technological innovation and multi-stakeholder collaboration.

(Li Pengcheng shares during the “Industry Leaders Dialogue” segment)

Li Pengcheng, Senior Executive Vice President of Mengniu Group and Chairman of the Board of Trustees of the Mengniu Public Welfare Foundation, was invited to attend and delivered remarks during the “Industry Leaders Dialogue” segment. He shared Mengniu’s practical experience in the field of sustainable development, offering “Mengniu’s experience” that can be referenced for dairy development in Indonesia and even across Southeast Asia.

**　The “Four haves” experience makes sustainable development a regional growth engine**

Indonesia is the world’s largest producer of palm oil and the largest economy in Southeast Asia. Dairy consumption is growing rapidly, but domestic output can only meet about 40% of demand, resulting in a substantial supply-demand gap. Against this backdrop, FAO, IDF, and BRIN jointly organized this conference with the aim of building a government-enterprise-academia-research dialogue platform, and promoting a transformation of Indonesia’s and the region’s livestock sector toward efficiency, low carbon, and inclusiveness.

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

During the “Industry Leaders Dialogue” segment, Li Pengcheng said 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 shared in depth using four key keywords: “accountable, traceable, convertible, and financeable”:

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

In 2025, Mengniu completed the carbon audits for all its cooperating 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 waste, and optimized feed additives to promote scalable emissions-reduction innovation. Li Pengcheng emphasized that Indonesia’s dairy industry is mainly supported by smallholder farmers, with a relatively small number of dairy cows; nevertheless, it can also benefit from the path of “audit first, account next, then reduce emissions,” clarifying the household “carbon emissions ledger” and finding the low-carbon transformation approach most suitable to its own conditions.

Second, traceable—build 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. It has committed to eliminating deforestation-related risk in the supply chain by 2030. In 2025, Mengniu pushed the share of “zero-deforestation” purchases of soybean meal to more than 50%, and 100% of palm oil is traceable to refineries and palm oil mills. Li Pengcheng said that driving green development across the entire industrial chain starting from the procurement source can help Indonesia’s local livestock sector improve supply chain resilience, reduce environmental footprint, and enhance international competitiveness.

Third, convertible—turn ecological value into product value.

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

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

Sustainable development requires investment, and capital markets are 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 size among offshore RMB bonds in the China-based food and beverage sector. Li Pengcheng said that if local Indonesian enterprises can build a quantifiable ESG system, they too can obtain more support in international capital markets, enabling sustainable development to be transformed from cost inputs into value creation.

**　Deepen localized exploration and lay out operations in Indonesia**

As one of the global top ten dairy companies, Mengniu not only leads in ESG in China, but also has deep business plans in Indonesia—its controlling enterprise Modern Dairy continuously deepens cooperation with local Indonesian companies.

(The Jinc Group visits Modern Dairy —)

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

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 of livestock) and the low-carbon demonstration ranch in Shanghe. The Shanghe ranch has built a circular industrial chain of “forage cultivation—dairy cow breeding—manure treatment—biogas power generation—returning biogas fertilizer to the fields.” It also took the lead in introducing GreenFeed dairy cow methane monitoring technology, becoming an industry green benchmark. The two sides held in-depth exchanges around ranch operations and management, consultation on new project construction, dairy product R&D, and channel collaboration, jointly advancing strategic cooperation.

Jihsan-Mulia Putri, CEO of SAVORIA, said that Modern Dairy’s strong capabilities in areas such as large-scale breeding, digital management, and cost control provide an intuitive and feasible reference for Indonesia to break through bottlenecks in ranch milk yield per cow, respond to the hot and humid climate, and optimize its operational system.

At present, Modern Dairy has formed a deep layout in Indonesia covering three major areas: ranch outsourcing, construction and operations, and forage trading. It not only manages a ranch with 3,000 dairy cows and achieved an Indonesia’s highest record of 41 kilograms within half a year, but it has recently also signed a cooperation project for construction consultation and service operations for a new ranch with 28,000 dairy cows.

Li Pengcheng said that Mengniu and its affiliated enterprises’ multi-year layout in Indonesia and localized exploration have given them a deeper understanding of Indonesia’s stage of livestock development, resource endowments, and real-world challenges. This also places them in a better position to combine Mengniu’s experience with local realities and provide valuable references for Indonesia’s dairy industry.

Deepen international cooperation and promote the implementation of the declaration

During the conference, all parties discussed the “Paris Declaration on Dairy Sustainability” in depth. Signed jointly in 2024 by the United Nations Food and Agriculture Organization and the International Dairy Federation, the declaration aims to convey the global dairy industry’s firm commitment to sustainability and calls on all parties to take strong actions to jointly promote coordinated progress across the economic, social, and environmental dimensions of the dairy industry.

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

As an important implementation practice following the declaration’s signing, this conference specifically set up a declaration interpretation segment. Representatives attending agreed unanimously that the significance of the declaration lies not only in establishing 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 declaration framework. It not only demonstrates to the international community China’s systematic practices in sustainable development, but also further strengthens its participation and influence in the global dairy industry’s sustainability agenda through in-depth exchanges with international organizations such as FAO and IDF.

As the global sustainable development agenda continues to advance, the dairy industry, as an important sector related to nutrition and food supply, bears major responsibilities in addressing climate change, protecting the ecological environment, and improving resource utilization efficiency. Next, Mengniu will continue to uphold the mission of “safeguarding the shared health of humankind and the planet,” working with global partners to help the dairy industry move toward a greener, more inclusive, and more sustainable future.

(Editor: Wang Lei)

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