Grupo Bafar SAB de CV

The company lacks both a science-based target for reducing greenhouse gas emissions and a specific target for methane emission reductions. It is not in the process of developing these targets.

The company has implemented various emission-reduction initiatives. Its subsidiary, B-Energy, supplies thermal energy to the Chihuahua plant, generating about 8 megawatts per hour through trigeneration and saving approximately 2,300 tons of CO2 emissions annually. Additionally, the company is developing a digital sales process aimed at energy efficiency, employing sensors to monitor refrigeration equipment and retail area temperatures for energy savings and efficiency strategies. In 2023, the company began installing solar panels in its stores, targeting a 20-30% reduction in energy consumption. However, the company does not disclose specific targets or how extensively these initiatives address its Scope 1 and 2 emissions. Furthermore, it has not set a target for Scope 3 emissions.

The company does not discuss whether it is working with suppliers to reduce emissions from agriculture.

The company does not engage in innovative projects to reduce or mitigate emissions from feed farming.

The company does not engage in innovative projects to reduce or mitigate emissions from animal farming.

The company reports Scope 1 emissions of 40,318 tCO2e in 2022, covering livestock and fuel consumption, and Scope 2 emissions of 75,881 tCO2e from electricity consumption. However, it does not disclose any data on Scope 3 emissions.

The company reported 0.03 tCO2e from livestock emissions in 2022, based on 131 cattle from its agro-industrial unit. This seems to cover only a minor part of emissions from its meat and dairy operations, lacking detailed information on methane emissions and broader coverage of animal farming emissions. Additionally, the company does not disclose its GHG emissions from feed production or land-use change.

The company does not disclose to the CDP climate change questionnaire. The company does not disclose whether the GHG inventory data is audited by a third party.

The company reports an increase in absolute emissions (Scope 1 and 2) from 108,994 tCO2e in FY2021 to 116,199 tCO2e in FY2022. In 2022, Scope 1 emissions were 40,318 tCO2e and Scope 2 emissions 75,881 tCO2e. However, its GHG inventory is incomplete, and it does not disclose quantitative emissions from feed, enteric fermentation, or manure management.

The company does not disclose information on a climate-related scenario analysis.

The company identifies factors affecting raw material availability and input costs, which in turn influence its performance and profitability. These factors include increased global demand for cereals, reduced supply due to alternative uses or new consumption areas, climate-related events such as droughts or floods, geopolitical factors affecting exchange rates, and health contingencies. It manages these risks by strategically purchasing products when prices are lower. The company also cites increased energy costs and shortages as financial risks, detailing the impact of electricity shortages on operations and implementing tri-generation power techniques as a mitigation measure. However, the company does not disclose information on heat stress, animal mortality, veterinary and medicine costs, or the impact of a carbon tax on electricity or animal protein. Additionally, it does not report on financially material events from climate risk during the reporting period.

The company does not disclose its commitment to align capital expenditures with its GHG targets.

The company sources soy for animal feed but does not disclose the percentage of feed ingredients this represents. 100% of soy is not sourced from deforestation-free areas or suppliers. The company has not undertaken a deforestation-related risk assessment to identify high-risk sourcing locations.

The company does not disclose having a deforestation/conversion-free target for soy.

The company does not report progress against its commitment. Nor did it respond to the CDP Forest Questionnaire in 2022.

The company does not disclose whether all sourced cattle come from regions free of deforestation risk. Additionally, it has not conducted a risk assessment or identified all high-risk locations.

The company does not report having a deforestation/conversion-free target for cattle.

The company does not disclose the proportion of cattle sourced which complies with its commitment. It does not state that progress against its commitment undergoes a third-party audit, nor did it respond to the CDP Forest Questionnaire in 2022.

The company does not disclose any information on how it engages soy suppliers on deforestation and does not provide support to soy producers to encourage deforestation-free production or improve traceability.

The company does not disclose how compliance is monitored or what actions are taken if non-compliance occurs. Furthermore, the company does not disclose the level of traceability in its soy supply chain.

The company does not discuss innovations or practices to move towards sustainable feed sources.

Deforestation is not referenced in the company's supplier code of conduct. Furthermore, the company does not disclose providing support to cattle producers to encourage deforestation-free production or improve traceability.

The company does not disclose how it monitors compliance with its commitment or the actions taken in cases of non-compliance. Furthermore, it does not disclose the level of traceability in its cattle supply chain.

The company does not disclose information regarding innovative and sustainable farming practices implemented to improve biodiversity and soil health.

The company highlights the potential adverse impact of water shortages on its operations but has not conducted a water scarcity risk assessment for its processing facilities. It reported water consumption of 11,447 m³ in 2022 and has implemented measures for responsible water use. The company operates a wastewater treatment plant at the Chihuahua Plant, recycling 95% of effluent water for irrigation and cooling. In the agroindustrial division, it has modernised irrigation systems with sprinklers and adopted automated sensors to track water extraction. Additionally, its industrial warehouses comply with international standards, incorporating systems for efficient water use.

The company does not disclose a time-bound water reduction target to reduce total water withdrawals at facilities in the reporting year.

The company reports a total water withdrawal of 11,681,686 m3 for FY2022, with 11,569,768 m3 from underground sources and 111,918 m3 from third-party sources. This increase from 10,530,523 m3 in 2021 is linked to changes in the irrigation system over 300 hectares. However, the company does not disclose water withdrawals or consumption by water stress level, nor does it provide information on water-related CAPEX or OPEX. Additionally, its water data is not third-party audited, and it has not responded to the CDP Water Security questionnaire.

The company does not address water usage in its feed supply chain. It does not discuss comprehensive guidance, support, or incentives offered to suppliers/growers on water usage and has not established a partnership with a third party to input into sourcing/farming strategy.

The company does not disclose feed water intensity or the proportion of feed sourced from water-stressed areas. Furthermore, the company does not provide evidence that it is investing in sustainable feed production from a water-use perspective.

The company does not disclose the proportion of animal protein commodities produced or sourced in water-stressed areas. It does not disclose information addressing water scarcity in its animal supply chain, nor does it discuss guidance it offers to animal farmers/suppliers on water usage.

The company does not disclose having established partnerships with third parties to input into sourcing/farming strategy, including water use.

The company reports no violations of applicable laws or regulations, nor any penalties or sanctions in 2022. It has not identified processing facilities operating in areas of high or medium water stress from a quality perspective and has neither a quality target nor a volume target.

The company reports a total water discharge of 870,608 m³ in 2022 but does not disclose the quality of this wastewater. The wastewater data is also not audited by a third party, and the company did not respond to the CDP Water Security questionnaire.

The company does not disclose having improved the wastewater quality at the aggregate level compared to the previous reporting period or reduced the volume of wastewater discharged.

The company does not address nutrient management in its code of conduct. It does not disclose a requirement for feed suppliers to have a nutrient management plan in place, nor does it provide guidance, support, or incentives to suppliers/growers on nutrient management or fertiliser use in crop production.

The company does not invest in sustainable feed production to improve nutrient management or disclose information about pesticide use in its feed supply chain.

The company does not outline processes for manure management, conversion to biogas, or sustainable slurry application. Additionally, it has not specifically identified farms located in areas at high risk of nutrient pollution.

The company does not make site-specific nutrient management plans part of its supplier’s contractual agreement or its own farms management. Nor does it provide technical or financial support to suppliers or its own farms to develop nutrient management plans and improve manure storage.

The company does not integrate nutrient management performance into incentive schemes for farmers. It does not discuss innovations in manure or provide evidence of a community engagement plan in relation to pollution.

The company does not disclose a policy on antibiotic usage or measures taken to reduce their need.

The company does not disclose the quantity of antibiotics used.

The company does not provide a statement in support of the Five Freedoms or a similar statement on the importance of animal welfare.

The company does not state a commitment to engaging and training employees on animal welfare issues.

The company does not disclose information on animal welfare certifications or farm assurance programs.

The company does not disclose information on animal welfare certifications or assurance programs for its beef operations.

The company does not disclose information on key animal welfare risks in beef.

The company is committed to respecting fundamental human rights as recognised by the United Nations.

The company does not discuss how it monitors, assesses, and mitigates actual and potential human rights risks in its operations or supply chain.

The company does not disclose whether it has identified any human rights risks in its operations through human rights due diligence.

The company prohibits child labour, forced labour, discrimination, and harassment, and expects external stakeholders, including suppliers, to adhere to its Code of Ethics containing these prohibitions. However, it does not explicitly state that it provides all employees with a living wage or disclose if it offers sick pay. Additionally, the company does not disclose the monitoring of compliance with its policies in direct operations through audits.

The company has several reporting channels, including intranet, website, email, and telephone, allowing complainants to remain anonymous. However, it does not disclose whether these systems were developed in consultation with employees or unions. The grievance mechanism is also available to external stakeholders. In 2022, the company received 587 complaints through its channels but did not sufficiently categorise them. Additionally, the company does not mention conducting audits for policies within its supply chain.

The company outlines measures for preventing and mitigating workplace health and safety risks and has a health and safety committee to ensure regulatory compliance. However, it does not disclose any health and safety certification, whether workers are represented through plant-level committees, or the scope of the committee. Additionally, it has not assessed or discussed antimicrobial resistance risk for its workforce.

The company reported 237 severe accidents in 2022, but did not specify the geographic scope, although detailed data is provided for the Chihuahua and La Piedad plants. This suggests the figures cover only these two production plants, excluding distribution centres. In 2021, the company reported 294 severe accidents at the same two plants, indicating a decrease to 237 in 2022. The company disclosed zero fatalities in both 2021 and 2022, but these figures are associated with only two of its four plants, excluding distribution centres. Therefore, the data may only represent a limited part of the company’s operations. Additionally, the company revealed a voluntary turnover rate of 13.86% and an involuntary rate of 6.93%, though it does not provide a breakdown by seniority.

The company states that it respects freedom of association and the right to collective bargaining, with 15% of its workforce in Mexico covered by labour union agreements or represented by the leading trade unions in the meat industry. It has negotiated a collective contract with unions detailing salaries, rest days, working conditions, working hours, vacations, and union leadership. However, the company does not provide evidence supporting its workers' right to freedom of association. Additionally, it expects its suppliers to adhere to its Code of Ethics, which includes respecting employees' rights to freedom of association and collective bargaining.

The company reports that approximately 15% of its employees in Mexico are covered by collective bargaining agreements. As of the end of 2022, all 11,779 employees were permanent and full-time, though it is unclear if subcontracted workers are utilised.

The company has implemented a quality control system, BQS, across its entire supply chain, enforcing high-quality standards for its products. In Mexico, its four production complexes hold ISO and Federal Inspection Type (TIF) certifications, with three facilities also having USDA certification for export to the U.S. The Chihuahua Plant is further certified by MAFF for export to Japan. However, these certifications are not recognised by the GFSI. The company mandates that suppliers have certifications such as TIF in Mexico and USDA in the U.S. to ensure raw material safety and ethical animal treatment. It emphasises the importance of certifications like SQF, BRC, and ISO 22000 for suppliers. If suppliers lack these, the company uses auditing services, such as NSF and Silliker, to verify raw material safety. The company does not disclose what proportion of its suppliers hold GFSI certification.

The company does not report the number or frequency of food safety audits conducted during the reporting year. It also does not specify associated corrective action rates, nor does it disclose whether it has implemented or is in the process of developing consumer-facing technology for food safety.

The company identifies product recalls as a significant business risk, citing potential market withdrawals, inventory destruction, and economic losses. It also notes the risk of liability for product-related injuries and damage judgments, which could erode customer trust. However, the company does not disclose the number of recalls in the reporting year.

The company does not disclose information on market bans or recalls for the reporting year. Furthermore, there were no such events detected in media screenings.

The company recognises the significance of managing ESG issues and is in the process of formally establishing a governance structure for this purpose. Currently, its managers oversee ESG management. The company conducted its first materiality assessment in 2021, identifying ten material topics for each of its Business Units, including operational eco-efficiency, climate change and GHG emissions, corporate governance, occupational health and safety, labour practices and human rights, and biodiversity. It is collaborating with an external consultant to set goals and objectives related to these issues. However, the company's disclosure lacks details on the board's involvement in the assessment process. The company has revealed that board member Guillermo Enrique Baeza Fares possesses expertise in product development and innovation, having held various management roles over 30 years at Grupo Bafar. The company does not disclose any board-level expertise in sustainability or food safety.

The company does not disclose executive monetary remuneration linked to climate or sustainability performance. Nor has it disclosed engaging with civil or trade associations on ESG issues, providing a comprehensive list of trade association memberships, or aligning any policy engagement activities with the goal of restricting global temperature rise to 1.5°C.

The company does not disclose a strategic approach to sustainability innovation or state whether it benchmarks itself against peers in sustainability and innovation.

The company does not explicitly acknowledge that protein diversification is a material business issue. Furthermore, it has not yet set a time-bound target to diversify protein sources, nor does it report revenue or sales linked to alternative protein sources.

The company has introduced the Zero Meat brand and the "Guisy" line of marinated soy proteins to enter the plant-based market, as part of its multi-protein solutions catalogue. However, these products are manufactured by its international subsidiary for other companies under private labels. The company has not disclosed any investment plans for future growth in alternative proteins.