Inghams Group Ltd

In March 2023, the company developed and submitted greenhouse gas emission reduction goals for Scope 1, 2, and 3 to the Science Based Targets initiative (SBTi) for validation, encompassing food and animal source food production.

The company has committed to the Science Based Targets initiative (SBTi) to reduce absolute Scope 1 and 2 emissions by 46.2% by 2030, using 2019 as the base year. Additionally, while its 2023 Annual and Sustainability Report indicated a future commitment to developing a Scope 3 emissions target, the SBTi website reports that the company has already pledged to reduce absolute Scope 3 emissions by 27.5% by 2030 from the 2019 base year. Clarification is encouraged as to whether this target includes all emissions from agriculture in future disclosures.

The company has committed to reducing Scope 1 and 2 emissions by 2030, from a 2019 baseline, based on a 1.5°C scenario. However, it has not committed to setting a Net Zero Target for validation by the SBTi.

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

The company is dedicated to sustainable agriculture and procurement practices by researching alternative raw feed materials with lower environmental impacts and greenhouse gas emissions than traditional soy meal feed. In FY2023, it partnered with an Australian university to advance this research. Additionally, the company participated in Sustainable Agriculture Initiative (SAI) activities, including a workshop on regenerative agricultural practices and carbon sequestration in soils. It is also engaged in projects to preserve biodiversity at its sites, promoting them as carbon sinks, monitoring soil health, and reducing pesticide use.

The company reports selling 4,893 tonnes of net carbon-zero certified chicken in New Zealand in FY2023. It is advised to disclose more information on the initiatives behind this certification. It outlines that environmental management plans are integral to its sustainability actions, emission reduction, and site energy efficiency improvements. In FY2023, solar panels were installed at new distribution centres in Truganina, Victoria, and Essington, South Australia. However, the use of solar panels is not deemed innovative.

The company reports combined Scope 1 and 2 GHG emissions of 195,164 TCO2e in 2023. Scope 1 emissions are direct from its facilities, while Scope 2 emissions are indirect, related to power generation for the company.

The company does not disclose any information on GHG emissions from animal farming. The company does not disclose any information on GHG emissions from feed production. The company does not disclose any information on GHG emissions from land use change.

The company did not respond to the CDP Climate Questionnaire in 2023. It has disclosed that its total Scope 1 and 2 emissions underwent limited assurance by Bureau Veritas Australia Pty Ltd.

Between FY2022 and FY2023, the company reduced its Scope 1 and 2 emissions from 216,081 TCO2e to 195,164 TCO2e, a decrease of approximately 9.7%. Over the period from FY2020 to FY2023, its emissions fell by 13.1%, representing an average annual reduction of 4.4%. For FY2023, the company disclosed total GHG emissions of 195,164 TCO2e but did not provide a breakdown between Scope 1 and Scope 2 emissions or disclose its Scope 3 emissions. Furthermore, it does not report emissions related to feed, enteric fermentation, or manure management.

The company continues to evaluate climate risks and opportunities and is advancing its phased approach to the TCFD, detailed in its 2021 Sustainability Report. In 2022, the company conducted a scenario analysis, considering a 2-degree or lower scenario set for 2035, to assess the future impact of climate changes on its assets and operations. The company used a carbon price of $150 per tonne for Scope 1 and 2 emissions to highlight transition risks and potential financial impacts. It also collaborated with a third-party sustainability consultant, conducting workshops to assess resilience and identify climate-related risks, summarised in its 2022 Sustainability Report.

The company identifies climate change and feed input costs as significant business risks, stating that droughts, floods, fires, and international supply shortages can elevate feed prices. To mitigate these risks, it sources grains from various regions and manages input costs through pricing negotiations and forward contracts. In its 2022 Sustainability Report, the company acknowledges heat stress on animals as a climate risk but does not provide mitigation plans. It also recognises energy as a key operational input susceptible to price volatility and the financial challenges of adopting low-emission technologies. In response to New Zealand's Zero Carbon Act, the company plans to implement onsite renewable energy sources. The company acknowledges the financial implications of carbon pricing and considers onsite electricity production a beneficial opportunity. However, it does not address the risk of increased veterinary and medicine costs or disclose the number of financially material events due to climate risk in 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 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 is researching alternative raw feed materials with reduced environmental and biodiversity impacts, compared to current soy meal feed, in partnership with an Australian university. However, more details are needed on these initiatives and their role in mitigating deforestation risks in its supply chain.

The company reports it continuously evaluates climate risks and opportunities while advancing its approach to the TCFD framework. Its sustainability materiality assessment identifies key environmental parameters influencing its operations. The Risk and Sustainability Committee (RSC) reviews the risk management framework and key risks, including water-related risks. Enterprise-level and site-specific Business Continuity Plans (BCP) are in place for climate-related events. In-depth analyses of selected material climate-related risks, like potential water scarcity issues in Australia and New Zealand, have been completed and presented to the Board RSC. However, the company has yet to provide updates on water scarcity risk assessments in the reporting year and is encouraged to do so. In its 2023 Annual Report, the company plans to propose a water consumption measure, using approximately 5,701 ML annually. As part of water-saving measures, it commenced construction of a water recycling plant at its Osborne Park facility in FY2022, aiming for a 40% reduction in water supply use, operational by the end of FY2023. Additionally, it employs the AZZO monitoring system at its Somerville facility for daily water usage diagnostics. Daily inspections also assist in monitoring and mitigating water leaks. Other measures at Somerville include installing aeration in spin chillers, recapturing and recycling water from processes, shutting off water during breaks, and automating the trailer wash system. Since FY2022, these initiatives have decreased the facility's water usage by 11% compared to the previous year.

The company has set a target to reduce water use intensity for product processing by 20% by 2030, using 2019 as the benchmark year. While adopting the WRI definition of "water use," which refers to the total amount of water withdrawn, the company has not clarified if this applies to consumption or withdrawal. The company reports an increase in water intensity from 2.74 to 2.82 kL/T between FY2022 and FY2023, but does not disclose its progress against the benchmark value.

The company engaged Bureau Veritas Australia Pty Ltd for limited assurance on its water use intensity data. In 2023, it did not respond to the CDP Water Security survey, receiving an F score as a result. Water use intensity increased by 2.84% from 2.74 kL/T in 2022 to 2.82 kL/T in 2023, due to the Wanneroo feed mill closure and operational challenges at South Australian and New Zealand facilities. The company does not disclose water withdrawals or consumption by source or water stress level, nor does it provide information on water-related CAPEX or OPEX.

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 does not identify facilities that operate in locations with high and medium water stress from a quality perspective. It has not set a quality or volume target for wastewater, nor does it report the number of instances of non-compliance with water quality permits, standards, and regulations.

The company does not disclose the quality or volume of wastewater discharge. No evidence was found that wastewater-related data has been audited, and the company did not respond to the CDP Water Questionnaire in 2022.

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 has a detailed antibiotic use policy, prohibiting antibiotics for growth promotion and prophylactic purposes. It uses non-critical antibiotics sparingly, as a last resort for bird welfare when no alternative treatments are available. Instead, it prioritises preventive measures, such as husbandry and vaccination, to maintain bird health. The company's Antibiotic Stewardship Policy includes antibiotics currently used in human medicine but does not cover animal-only antibiotics. It should clarify which antibiotic classes are covered and explain its stance on therapeutic use. The company is committed to animal welfare through responsible antibiotic use, avoiding genetic modification and cloning, ensuring space for natural behaviours, and limiting farm alterations to welfare needs. It focuses on disease reduction, preventive care, and research on antibiotic alternatives, although it does not address routine mutilation or the use of probiotics.

The company does not disclose the quantity of antibiotics used.

The company acknowledges the importance of animal welfare and has integrated the internationally recognised 'Five Freedoms' into its Animal Welfare Policy, applicable in Australia and New Zealand for both farming and processing. A dedicated team of specialists, including veterinarians, oversees animal welfare, while externally trained poultry welfare officers are stationed at every primary processing site. All employees and contractors receive training under the Animal Welfare Management Systems. An externally managed Whistleblowing Hotline allows confidential reporting of animal welfare concerns or breaches. Although there is a structured reporting and investigation procedure, details of actions taken following reports are not disclosed. The Animal Welfare Council monitors key welfare indicators and identifies projects for improvement. It convenes quarterly to oversee welfare performance, research, technology, and strategy, along with reviewing customer insights in Australia and New Zealand. The company does not disclose its involvement in research and development programmes to advance animal welfare.

The company prioritises providing space for poultry to express natural behaviours, promoting free movement, perching, exercise, and socialisation. It avoids routine physical alterations for meat chickens unless there is a risk of injury. For birds kept on farms longer, such as breeders, procedures like beak and toenail trimming are performed according to best welfare practices. The company aims to keep animal travel time below eight hours and is committed to pre-stunning all animals in its supply chain to prevent pain or distress, investing in methods like Controlled Atmosphere Stunning (CAS). Additionally, the company fosters enriched environments that allow natural behaviours, with farms accredited by RSPCA and FREPA. These certifications confirm adherence to standards that meet birds' physical and behavioural needs. However, the company does not explicitly commit to excluding breeds prone to anatomical or metabolic disorders.

The company certifies all its products through either the RSPCA or FREPA. Its Australian farms adhere to the RSPCA Approved Farming Scheme, considered a medium-tier certification, which covers over 66% of its operational sites. Moreover, all meat chicken farms in Australia comply with this scheme's standards, including both indoor and outdoor operations. The company's free-range meat chicken farms in Australia are also accredited by FREPA. Additionally, farms in New Zealand hold SPCA Certification.

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

The company holds certifications such as the RSPCA's animal welfare standard for meat chickens, covering key areas like litter management, air ventilation, and perch access. Standards from Free Range Egg and Poultry Australia Ltd also promote a stress-free environment and outdoor access for birds, with a focus on providing perches, mainly in free-range farming. While the company invests in bird welfare, it does not universally implement Controlled Atmosphere Stunning (CAS). Furthermore, the stocking density exceeds 30kg/m² in New Zealand and 78% of its Australian operations.

The company lacks a comprehensive policy or commitment to respect all human rights.

The company reports that it identifies, manages, and mitigates human rights risks in its operations and supply chain, and assesses modern slavery risks in its supply chain using a heat map that considers geographical and sector risks. However, it does not provide details on its due diligence process for assessing these risks within its own operations. The company conducts proactive audits of third-party labour suppliers in high-risk industries, such as labour-hire, contract cleaning, and road transport, to identify and address serious non-compliance or areas for improvement. Collaboration with suppliers is undertaken to resolve non-compliance issues. Yet, while the company states that its operations undergo SMETA audits, it is unclear what actions are taken in response to identified human rights risks in its operations. In 2023, the company promoted its whistleblowing, anti-bullying, harassment, and discrimination policies through training and toolbox talks. However, it has not disclosed mitigation and remediation measures for its 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. It discloses that employee wages are determined in line with collective bargaining agreements but does not confirm whether all employees receive a living wage or sick pay. The company participates in Sedex’s SMETA audits at its processing sites, covering 50% of its workforce. It also commissions independent audits of its largest labour-hire providers to assess compliance with performance standards. Suppliers are required to prohibit discrimination, harassment, inhumane treatment, forced labour, and child labour. While the company suggests that suppliers should provide wages meeting workers' basic needs, this is not mandatory; suppliers are only required to meet national legal standards and industry benchmarks.

The company conducts supplier audits for modern slavery. It provides email addresses, phone numbers, and mailing addresses for reporting grievances, accessible to all workers, suppliers, and associates. Complainants have the option to remain anonymous. However, the company does not specify if the whistleblowing channel was designed in consultation with stakeholders. The company received seven whistleblowing reports during the reporting year but did not further categorise these reports.

The company has a Work Health & Safety Management System (WHSMS) but does not indicate if it is certified. It has established Work Health and Safety Committees at sites, yet it does not disclose the involvement of worker representatives or the percentage of sites covered. Additionally, the company has not assessed or addressed the risk of antimicrobial resistance for its workforce.

The company reports a decrease in its Lost Time Injury Frequency Rate from 2.8 in FY2022 to 2.4 in FY2023, and its Total Recordable Injury Frequency Rate from 5.1 to 4.75 over the same period. However, the company does not disclose fatality data for the reporting year or previous years, nor does it provide information on any improvements in fatality rates. Additionally, the company does not disclose turnover rates.

The company states that its employees are free to join or refrain from joining a union but does not disclose the proportion of unionised workers. It also lacks explicit measures to support workers' rights to freely associate and bargain collectively. The company requires its suppliers to respect employees' rights to freedom of association and collective bargaining, and where such rights are legally restricted, to facilitate alternative mechanisms for expressing grievances and safeguarding employment conditions.

The company does not disclose the distribution of its workforce according to contract type, nor does it state the number of employees covered by collective bargaining agreements or provide a statement supporting its employees' right to bargain collectively.

The company has achieved A or AA certification in the BRCGS Food Safety Global Standard for all its sites and holds BRC certification for processing and BRC Storage and Distribution certification for distribution centres, with an overall AA rating in Australia and New Zealand. The company confirms compliance with a HACCP-based food safety and quality system, adhering to the Global Food Safety Initiative (GFSI) standards. It prioritises food safety and quality by implementing certified quality management systems, including its Food Safety and Quality Management System and Minimum Standard Procedures. The company ensures suppliers and contractors uphold the same commitments, monitoring them through audits and inspections. However, it does not disclose if suppliers are required to obtain GFSI certification or what percentage of them hold it.

The company has achieved A or AA certifications for all its sites under the GFSI BRC Food Safety Standard through annual British Retail Consortium audits. However, it does not report the corrective action rate for food safety non-conformances at its facilities and is encouraged to provide this information. The company aims to reduce customer complaints (CPmkg) by 5% on average annually and achieved a 21% reduction to 3.22 CPmkg in FY2023. It has not disclosed any development or implementation of consumer-facing technology for food safety.

The company recognises food safety and disease outbreaks as significant risks and has implemented a product recall system to mitigate them. However, it does not disclose specific details of this system or the number of recalls during the reporting year.

The company does not disclose information on product recalls or market bans, including their number and locations, for the reporting year. No product recalls or market bans were reported in media screenings during this period.

The company discloses that its board, along with the Risk and Sustainability Committee (RSC), oversees sustainability and climate-related risks and opportunities. A materiality assessment conducted in 2022 identified 16 material risks, including governance of climate action, employee health and safety, product safety, animal health and welfare, and water stewardship, which the company continues to address in 2023. The board has endorsed these material issues. The Risk and Sustainability Committee is responsible for identifying and overseeing material and emerging risks. The company reports that two directors on the board are specialists in ESG, with a further five possessing ESG experience. Additionally, a Skills/Experience matrix indicates that three board members specialise in innovation, transformation, and continuous improvement, while the remaining five have experience in these areas. Notably, the company lacks a board member with expertise in food safety.

The company links executive performance payments to financial targets and ESG metrics, specifically food safety and employee safety, which can influence short-term monetary incentives by up to 20%. While the company monitors and engages with government and regulatory bodies on compliance and regulatory impacts, it does not disclose interactions with public policy officials or trade and civil associations concerning ESG issues. Additionally, the company does not disclose memberships with trade associations, alliances, or coalitions, nor has it committed to aligning its policy-engagement activities with the goal of limiting 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 references its 2022 Sustainability Report for details on its climate-related scenario analysis and mitigation actions. It identifies diversifying its portfolio with plant-based and hybrid protein products as an opportunity to reduce climate impact and build resilience, with exploration planned until 2030. However, the company does not disclose specific sales or revenue targets related to alternative protein sources.

The company markets plant-based products under its "Let’s Eat" brand, including burgers, nuggets, and tenders, in New Zealand, and offers plant-based nuggets in Australia. However, it has not disclosed any investment in future growth for alternative proteins.