Arla accused of ‘greenwashing’ and creating a sustainability ‘fairytale’

Representatives from the Changing Markets Foundation and Greenpeace Nordic plan to visit Arla’s headquarters in Aarhus, Denmark, today (11 February) to present the report in person.

Arla Foods, one of the world’s largest dairy cooperatives, has come under fire in a new report from the Changing Markets Foundation and Greenpeace Nordic, which accuses the company of using misleading sustainability claims to mask its failure to take meaningful climate action.

The report, titled Dairytales: Arla’s Smokescreen for its Lack of Climate Action, scrutinises Arla’s climate policies and concludes that the company’s current initiatives fall significantly short of what is required to reach its net zero by 2050 target.

The findings raise serious concerns about the multinational dairy giant’s commitment to genuine sustainability, instead painting a picture of a company more focused on maintaining its status quo than driving real change in the dairy industry.

Weak targets, weaker action

The report evaluates Arla’s strategy against the UN High-Level Expert Group’s Integrity Matters guidelines, which set out key recommendations for credible and accountable net zero targets. Arla is allegedly found to fully meet just one of nine relevant recommendations, while only partially meeting five and failing to comply with three.

One of the key criticisms is Arla’s lack of clear targets for methane reduction, despite the company admitting in its 2023 Annual Report that methane accounts for 43 percent of its total emissions. Greenpeace Nordic estimates Arla’s annual methane emissions at 13.4 MtCO₂e — exceeding the entire agricultural methane output of the Netherlands. The UN’s Integrity Matters report stresses the need for absolute reduction targets, yet Arla’s approach to its Scope 3 emissions, those generated by suppliers and farms, is based on emissions intensity rather than absolute reductions, which campaigners argue is an inadequate response to the climate crisis.

Another issue highlighted in the report is Arla’s reliance on technological solutions, such as feed additives to reduce methane and the production of biogas. While Arla has promoted biogas as “climate gold,” the report estimates that current manure-based biogas initiatives only reduce emissions by 2.6 percent per kilo of milk, with a maximum potential of 15 percent, far from sufficient to meet the company’s climate targets.

To reach its climate targets, Arla also promotes its FarmAhead Check tool and FarmAhead Sustainability Incentive initiative, the report noted. These aimed to provide farm-level carbon footprint measurements and offered financial incentives to farmers for reducing emissions according to Arla’s own point-based system.

“However, these initiatives have been heavily criticised, especially by small to medium-sized dairy farmers, who argue that the system is unfair and pushes farmers towards intensification,” the study reported.

Lobbying for the status quo

Beyond its own sustainability failings, the report accuses Arla of actively working to obstruct broader industry reforms. It highlights at least 24 direct lobbying efforts made by Arla with the EU Commission since 2017, focused on influencing policy in areas such as dairy sustainability, biomethane incentives, and nutrition labelling. Before 2023, MEPs were not required to disclose all lobby meetings, suggesting that Arla’s actual involvement in shaping EU policy could be even greater than recorded.

The report points to Arla’s influence in weakening the EU Methane Strategy and blocking plant-based alternatives to dairy from being included in school food schemes. Despite its sustainability claims, Arla is portrayed as a key player in delaying regulatory changes that would facilitate a meaningful transition towards a more sustainable food system.

A fairytale of sustainability?

Despite branding itself as a farmer-owned cooperative, Arla is also criticised for not living up to cooperative principles.

The report suggests that many of its farmer-members have limited influence over major decisions such as pricing and resource allocation. Additionally, its Arlagården programme is described as imposing rigid structures on farmers, rather than providing the flexibility and independence often associated with cooperatives.

Alma Castrejon-Davila, Senior Campaigner at the Changing Markets Foundation, argues that Arla is more invested in projecting an image of sustainability than delivering real change.

“Arla has been selling us a fairytale for far too long. This report exposes the stark contradiction between Arla’s reputation as the poster child of dairy sustainability, and the reality of its failure to develop robust plans to reduce its emissions – in particular its methane emissions,” Castrejon-Davila said.

“We’re calling on Arla to set an ambitious methane target – at a minimum a 30 percent reduction by 2030 – and shift to less and better dairy, as well as more plant-based products. Only by implementing these measures will the dairy giant be able to reduce its emissions at the pace and scale that are needed.”

Greenpeace Nordic campaigner Sandra Lamborn echoed this sentiment. “The overall conclusion from the report is that Arla cares more about looking good than actually doing good for the climate.”

“If Arla had put as much resources into the actual climate work as it does into PR and lobbying, it would probably have had a good chance of achieving its own climate goals, but sadly they are not.”

Arla response

Responding to the report, an Arla spokesperson said: “We are taking the time to thoroughly review the report; however, we believe from some of the data we have seen, that there are multiple inaccuracies, and it is not a true reflection of Arla’s science-based targets and commitment to producing more sustainable dairy.”