Color me sustainable: Oterra unveils ESG strategy with carbon reduction focus

22 Aug 2023 --- Natural colors leader Oterra is set to launch its first sustainability strategy, which targets climate change and water scarcity. The company says its ESG agenda revolves around linking people and the planet through various initiatives that prioritize the responsible sourcing of raw materials.

Oterra aims to achieve a 42% absolute reduction in Scope 1 GHG emissions (from a CY2022 baseline of 12,311 tCO2e) and a 42% absolute reduction in Scope 2 GHG emissions (from a CY2022 baseline of 422 tCO2e (market-based)) by 2030.

For Oterra’s customers, the new sustainability strategy comes as welcome news, explains Vera Karmeback, global sustainability lead at Oterra.

“As the world’s largest provider of natural colors, with the industry’s most backward-integrated supply chain and 12 production sites globally, we can play a leading role in reducing GHG emissions,” she tells Food Ingredients First.

“Our customers also have ambitious sustainability targets, and our strategy is an important part of our promise to them: by partnering with Oterra, they are in the best position to ensure their natural color supplier is a sustainable source.”

Carbon reductions
Within scopes 1 and 2, the company will implement energy conservation measures. It says that through comprehensive energy audits conducted at its primary production sites, it has identified specific measures to conserve energy.

Oterra will also continue sourcing 100% renewable electricity at its main production sites.

In April, Oterra submitted its GHG reduction targets to the Science Based Targets initiative (SBTi), a leading organization for developing methods and criteria for effective corporate climate action.Oterra’s sustainability strategy centers around sustainable supply and sustainable operations.

“Many of our customers have already been inspired to hear that we use 100% renewable electricity at our main production sites and have reflected on how refreshing it is that Oterra has chosen to be so transparent and accountable to our targets by submitting them to SBTi for validation,” says Karmeback.

“Our plan includes replacing boilers with more energy efficient or renewable energy powered alternatives, on top of replacing lighting on our production sites with LED alternatives and conducting comprehensive insulation upgrades.”

Bigger challenges
Oterra will also target a 25% absolute reduction in Scope 3 GHG emissions (from a CY2022 baseline of 217,212 tCO2e) by 2030. For Karmeback, this will be the company’s most significant sustainability challenge.

“Achieving this target will require extensive engagement and transformation within our supply chain. But we already have significant backward integration, long-standing breeding initiatives (such as the development of improved black carrot varieties in Turkey) and long-term partnerships with our growers,” she explains.

“By achieving our Scope 3 target we in turn enable our customers to achieve their targets.”

Within Scope 3, the company will work to increase yields from fields to the end product by working to reduce color unit losses. It will also work to improve color content in raw materials and use less material input to produce the same end product.

Water usage
The Danish company also recognizes the increasing scarcity of water in its report and makes a commitment to reduce water use and improve water intensity at its factories. It plans to roll out supplier engagement on environmental impacts associated with its raw materials, including water usage.

Since each of its sites uses water differently, site-specific measures have been identified to conserve water. This plan includes measures such as implementing ultrafiltration systems for water recovery and optimizing “cleaning in place” processes.Oterra tracks factory water intensity and has set site-specific reduction targets amid rising water scarcity concerns.

Oterra tracks the factory water intensity in production across all of its sites and has set site-specific reduction targets for the coming financial year.

In its Indian operations, the company recovers substantial amounts of rainwater for use in our factory processes. Its team in India has also rolled out engagement with select turmeric contract farmers to implement drip irrigation methods, which resulted in a substantial reduction in the use of water for turmeric cultivation.

CEO’s comments
According to Mads Dehlsen Winther, CEO at Oterra, the company's new targets are ambitious, but high expectations are necessary if the organization wants to lead the industry on natural colors.

“Given we are only two years into our journey as a standalone company, we are extremely proud of how far we have come already,” he says.

“We have data, targets, a strategy and a clear framework of how to achieve our sustainability goals.”

By Joshua Poole