Inner Mongolia Yili Industrial Group Co Ltd

The company has already committed to a near-term science-based target and net zero commitment, according to the SBTi website. However, the target is not validated by the SBTi.

The company has set a target to achieve carbon neutrality in the entire industry chain before 2050. It has formulated specific tasks in three stages: 2030, 2040 and 2050, and strives to achieve Scope 1+2 carbon neutrality by 2030. So far, the company achieved a 50% reduction since 2012. It targets a 50% reduction in Scope 3 carbon intensity of low-carbon suppliers by 2030 compared to 2021 levels. However, it does not disclose emissions from agriculture.

The company has committed to a net zero SBT, according to the SBTi website. It has committed to a SBT aligned with a 1.5-degree scenario. However, it is unclear whether specifics for this target have been submitted.

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

The company discloses conducting planting carbon sequestering crops nearby operations but does not disclose innovative projects designed to reduce or mitigate emissions from active feed farming.

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

The company discloses Scope 1 carbon emission of 520,000 tCO2-e and Scope 2 carbon emissions of 1,270,000 tCO2-e in the reporting period. However, it does not disclose other forms of GHG emissions in Scope 1 and Scope 2 data.

However, the company does not disclose quantitative data related to GHG emissions from animal farming.

The company responded to the CDP Climate Change questionnaire in 2022 and scored B. The report is not publicly available but is available to investors.

The company's data and external calculations report a 4.78% decrease in absolute greenhouse gas emissions from 188 tons in FY2021 to 179 tons in FY2022. However, GHG inventory is incomplete since it only discloses Scope 1 and Scope 2 carbon emissions.

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

The company discloses that global warming has increased chances of natural disasters and abnormal weather, affecting feed availability and price volatility. To mitigate this risk, it plans to coordinate with suppliers and guide them to plan strategic reserves and purchases to control feed costs. It discloses that with continuous improvement of national carbon policies and regulations, carbon emissions will gradually increase, leading to increased costs. However, it does not discuss the rise in carbon taxes on electricity and animal protein.

The company mentions investing RMB 200 million to retrofit coal-fired boilers by converting coal to gas to reduce 580,000 tonnes of CO2e/year. However, it does not commit the capital expenditures aligned with GHG targets.

The company discloses that 100% of the purchased soybeans come from certified organic suppliers with no deforestation risk planting bases. However, the company does not disclose the areas.

The company discloses that 100% of its soybeans come from certified organic suppliers with no deforestation-risk.

The company mentions that it has established soybean traceability, allowing all soy to be traced back to the production source.

The company states that it is cooperating with professional scientific research institutions and non-profit organisations to improve soil fertility, restore grassland and discuss other ecosystem functions. This initiative aims to mitigate the risk of grassland desertification and degradation, which could impact the supply of animal feed.

The company conducts water risk assessments and has identified high-water stress areas. It uses the AWARE tool to identify water-related risks for 100% of its factories, with water risk divided into different risk levels. According to the water risk map, Hebei, Shanxi, Inner Mongolia, Shandong, Gansu, Shaanxi, and Xinjiang, amongst others, are the highest water-risk areas. It advocates and encourages pastures to configure water-saving technology, such as precision spraying, manure water reuse, improvement of the cleanliness of drinking water tanks, overflow water recovery and utilisation of dairy parlour heat recovery systems. Furthermore, the company promotes using manure water backwashing systems in pastures to realise the recycling of water resources. However, total water consumption is not reported by the company.

The company discloses targets to reduce the water consumption per ton of product by 1% and increase the reuse rate of reclaimed water by 2% compared with 2022.

The company discloses that the water-related data of one of its subsidiaries, Zhejiang Yili Dairy Ltd., was audited by BSI in 2022. The company has submitted a response to CDP Water Security. However, the reports are not publicly available. It discloses that its total water inflow (assumed to be withdrawals) has decreased in the last reporting period. It also reports that water consumption decreased by 1.5% compared to last year but does not disclose the exact figures for water consumption.

The company acknowledges that upstream raw and auxiliary materials mainly generate the environmental impacts of water scarcity. The company adjusts the water footprint evaluation criteria for primary and secondary raw and auxiliary material suppliers to improve water conservation performance through the supply chain.

The company discloses the water intensity of its finished products but does not disclose the specific water intensity associated with feed.

The company states that it adheres to managing the whole life cycle of its water footprint, making efforts in both direct and indirect water usage.

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

The company discloses that according to the current pollutant discharge standards and total discharge limit requirements, no environmental pollution incidents have occurred, and no environmental pollution fines have been imposed by the Ministry of Ecology and Environment.

The company discloses the pollutant discharge amount for various subsidiaries, including the amount of COD, ammonia nitrogen, and phosphorus discharge. The company also discloses each subsidiary’s approved total limits. It discloses the total water discharged in 2022. It has submitted its response to CDP Water Security 2022. However, the reports are publicly unavailable.

The company discloses the wastewater quality of its subsidiaries for 2021 and 2022. It also disclosed that the volume of wastewater discharged decreased in the last reporting year.

The company does not disclose information relating to nutrient management in feed farming. It states that it considers the water resource risks during site selection but does not have a requirement to purchase feed from suppliers or produce feed with a nutrient management plan in place. The company is undertaking projects to combine animal husbandry with forage planting to reduce synthetic fertiliser use by replacing them with manure.

The company states that in the Songyuan area of Jilin, farmers have reduced the use of pesticides and fertilisers. However, it does not provide any further disclosure about pesticide use in its feed supply chain.

The company converts manure into biogas. The company also uses manure as a fertiliser on pastures but does not disclose the use of nutrient management plans.

The company does not make site-specific nutrient management plans a part of its supplier's contractual agreement and/or own farms management. Nor does it provides technical and/or financial support to suppliers and/or 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 innovation in manure or provide evidence of a community engagement plan in relation to pollution.

The company acknowledges the issue of antimicrobial resistance and commits to antibiotic stewardship. However, it fails to disclose specific measures to curtail antibiotic use and lacks a formal antibiotic policy.

The company does not disclose its usage of antibiotics.

The company highlights its commitment to animal welfare by providing an array of facilities aimed at animal comfort and health, including heatstroke prevention, warming areas, and standardised bedding. It utilises an intelligent system for health monitoring and provides nutritional meals. A professional veterinary team oversees healthcare measures, including a rigorous vaccination and disease prevention protocol. The company also invests in infrastructure improvements, such as standardised cowsheds, to further animal welfare. However, it does not commit to animal welfare training for its employees. Additionally, while the company mentions involvement in research on animal welfare and breeding technologies, it lacks specificity on research topics, partnerships, or implementation status.

The company employs temperature regulation, heatstroke prevention, and warmth preservation facilities. It also utilises fans, showers, windshield walls, and temperature-controlled water tanks to maintain a comfortable environment. Daily 'test sleep' assessments, standardised beds, rubber mats, and automatic cow body brushes are implemented for further comfort. The company employs an intelligent management system with pedometers for health monitoring and meal matching. However, it does not commit to avoiding close confinement of animals.

The company does not disclose the presence of third-party auditing, monitoring, or assurance for animal welfare.

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

The company addresses welfare risks in dairy through comprehensive facilities including sand beds, rubber matting, and body brushes. It uses windshield walls and temperature-controlled water tanks to protect cows from extreme weather. An intelligent management system and veterinary team are in place for health monitoring and disease control. Technical standards for vaccination and environmental hygiene have also been established. However, it does not disclose policies on tethering prohibition, lameness prevalence, and mastitis incidence.

The company is a United Nations Global Compact member and thus commits to respecting internationally agreed human rights.

The company does not discuss how it monitors, assesses and mitigates actual and potential human rights risks in its own 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 commits to prohibit child labour, forced labour, and discrimination. However, it does not discuss inhumane treatment or fair wages or conduct audits covering these policies. The company also discloses that it prohibits child labour in its supply chain but does not discuss prohibiting discrimination, inhumane treatment, or promoting freely chosen employment or fair wages. In addition, the company discloses that it provides statutory sick leave to its employees but does not state why governmental guidance meets the National Minimum Wage/ National Living Wage standards as recommended by the CIPD.

The company has established a "Yixin Care Hotline" for employees to report grievances. However, it is unclear if anonymous reporting is possible or if the hotline was designed in consultation with stakeholders. Moreover, the company does not state whether suppliers have access to a similar mechanism or how many grievances it received during the reporting year.

The company commits in writing to support its employees' occupational health and safety and discloses that 23 factories have achieved ISO 45001 certification. Also, whilst the company does not disclose the percentage of facilities with health and safety committees with worker representatives, it does mention establishing a committee to improve the safety production management system.

The company reports a 0.17 per million person-hours lost time accident rate (LTAR) and a 0.76 per million person-hours total recordable accident rate (TRAR) in the reporting year. This is an increase from the LTAR of 0.13 and a decrease from the TRAR of 0.82 reported in 2021. The company's fatality rate has remained zero since 2020.

The company is exempt from supporting freedom of association as it primarily operates in China. However, the company does not discuss providing alternative methods of employee representation or whether it requires its suppliers to uphold their employees' rights to freedom of association and collective bargaining.

The company discloses that collective agreements cover all employees. The company does not disclose the distribution of its workforce across contract types.

The company discloses that 100% of its subsidiaries are covered by HACCP, FSSC 22000, BRC GS, and ISO9001 certifications, with factories passing renewal audits in the reporting period. In its 2022 Sustainability Report, the company mentions it will be the first company in the world to pass the "Gold Label Certification" issued by the International Dairy Federation and subsequently be awarded the "Food Safety Innovation Award". It discloses that 100% of the factories have a product safety management system with certification, such as HACCP, FSSC 22000, BRCGS, etc. Further, it mentions that the food safety audit standards include the HACCP management system for its suppliers. The assumption is that a Chinese company will be required to obtain the China HACCP certification. However, the company is encouraged to specify which HACCP it is in the report, as China HACCP is a GFSI-recognised certification, but HACCP is not.

In 2022, it was reported that 29 factories passed the ISO 9001 renewal certificate audit, 32 factories passed the HACCP renewal audit, and 24 factories passed the FSSC22000 certificate renewal audit. It discusses the importance of food safety and has a three-level food safety risk monitoring and control system in place. However, the number or frequency of audits related to food safety is not disclosed, nor is the corrective action rate. In its 2022 Sustainability Report, the company plans to establish a highly automated production line and a code traceability system to track the entire production chain and each product's full life cycle traceability. However, via its website, the company does report that a consumer-facing technology has been developed in partnership with Baidu, which visualises the whole industrial chain online and enables consumers to witness the transparent quality of its products.

The company addresses food safety as a top risk for its operations. The company has established a food safety emergency response mechanism whereby products are recalled quickly to minimise harm to the public in the case of any food safety incidents. However, it does not describe its product recall system and is encouraged to disclose the full protocol, roles, responsibilities, documentation, and disposal procedure. It reveals that there were zero product recalls in the current reporting year.

The company discloses zero food safety and quality incidents in the reporting year. Therefore, it can be assumed that there were zero market bans.

The board has established a sustainable development committee responsible for coordinating and promoting sustainable development, chaired by the chairman and president. The company has also conducted a materiality assessment to analyse the importance of sustainable development issues. It accomplishes this by rating issues according to two dimensions: the issue's importance to the company and the degree of concern of stakeholders. The company disclosed the results, and some of the most critical issues identified included business ethics and anti-corruption, compliance with laws and regulations, product quality, R&D and sustainable packaging. However, the company does not disclose if the board is involved in the assessment. One of the company's board members has innovation expertise, but board-level safety and sustainability experience does not be discussed.

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

The company discusses its ambitions to make innovations in packaging to help push towards net-zero carbon emissions. It mentions that it plans to build a research and development platform for a national-level industrial design centre to create technologies and conduct research that improves the efficiency and environmental impact of its packaging. However, the company does not disclose how it benchmarks itself against peers in sustainability and innovation.

The company does not explicitly acknowledge that protein diversification is a material business issue. Further, it has not yet set a timebound target to diversify protein sources, nor does not report revenue/sales linked to alternative protein sources

The company launched its plant-based brand, "Plants Selected", in 2017. Soy milk was its first plant-based product under the brand, and in 2021, it announced two new products: oat milk and plant-based yoghurt. Beyond its core dairy sector, IT states that it is continuously evolving its product portfolio and entering new business lines, including plant-based beverages. Further information is disclosed on how it might invest for future growth kept secret