Marfrig Global Foods SA

The company is committed to reducing absolute Scope 1 and 2 GHG emissions by 68% by 2035, and Scope 3 GHG emissions from purchased goods and services by 33% per head finished by 2035, using 2019 as the base year. These reduction targets for Scopes 1, 2, and 3 have been validated by the Science Based Targets initiative (SBTi). However, it has removed its net-zero target. Notably, Scope 3 emissions account for approximately 99% of the company's total emissions, making their inclusion in the science-based target necessary. The company aims to reduce methane emissions from Effluent Treatment Plants to 3,473 tonnes by 2035, from 3,540 tonnes in 2021. All its units have Wastewater Treatment Plants designed for treating wastewater generated during various production stages. The company has invested in and tested new technologies to ensure these processes operate sustainably, continually improving and mitigating risks.

The company has disclosed that its Science Based Targets cover all sites across North and South America, including its operations and production chain, and are aligned with the 1.5°C climate change scenario. Its net-zero commitment, previously listed on the SBTi website, has been temporarily removed in accordance with SBTi's target validation policy. The company is a signatory of the UN Global Compact's Net Zero Ambition Movement and actively participates in establishing carbon reduction targets and training programmes with the Brazilian Business Council for Sustainable Development (CEBDS). The company is advised to disclose information on its commitment to setting a Net Zero SBTi-validated target in future reports.

The company promotes sustainable livestock farming by engaging with suppliers to minimise environmental impact. Through the Marfrig Club, it supports suppliers in managing pastureland, animal nutrition, and waste. Additionally, in partnership with EMBRAPA, the company employs low-carbon technologies, such as Integrated Crop-Livestock (ICL) and Integrated Crop-Livestock-Forest (ICLF) systems.

The company sources most of its corn and sorghum for cattle feed from Uruguay. The sorghum cultivation involves high ground cover, which minimises erosion and emphasises the benefits of agricultural rotation and crop diversification for sustainable agriculture. Additionally, the company employs "Steam Flake" technology to precondition grains such as sorghum, corn, barley, and wheat with steam treatment, thereby reducing greenhouse gas emissions from ruminants.

The company has disclosed that its Low Carbon Beef product line, Viva!, adheres to the CCN protocol and was developed in collaboration with the Brazilian Agriculture Research Company (Embrapa). It uses Integrated Crop-Livestock (ICL) and Integrated Crop-Livestock-Forest (ICLF) techniques to reduce methane emissions during husbandry. Additionally, the company incorporates a natural tannin extract-based feed additive, Silvafeed®️ BX, which lowers methane emissions from enteric fermentation by an average of 17% during the fattening phase at supplier farms. The feedlot employs "Steam Flake" technology, enhancing grain digestibility for cattle and further reducing greenhouse gas emissions. The company plans to introduce a line of beef cuts produced under the low-carbon concept in partnership with Embrapa.

The company reports its FY2023 emissions as follows: Scope 1 emissions at 320,671 tCO2e, Scope 2 emissions at 169,532 tCO2e, and Scope 3 emissions at 27,696,559 tCO2e.

The company details variables considered in calculating Scope 1 and Scope 3 emissions, including those from agriculture. Scope 1 emissions cover enteric fermentation, waste management at feedlots, and transportation of raw materials and equipment. Scope 3 emissions, while disaggregated, include enteric fermentation on supplier farms, raw material purchases (poultry, lamb, pork, beef), feed raw materials used at feedlots, upstream transportation and distribution, outsourced waste treatment, and composting. However, emissions from all animal farming are not fully disaggregated, and the company is encouraged to provide this. Emissions at its Uruguay feedlot, where feed is produced and cattle bred, totalled 6,458 tCO2e, but the company does not disclose emissions specifically from the feed production. Although variables for Scope 3 emissions include feed raw material purchases, the company does not fully disaggregate emissions from feed production, which is also encouraged. The company states its cattle confinement unit in Uruguay has no emissions from land use changes in forestry activities. It participated in reviewing and testing the new 'Land Use & Removals' GHG Protocol methodology, aimed at more accurately measuring GHG emissions, including land use change emissions across the production chain. However, it does not explicitly report land use change emissions for the current reporting period.

In the 2023 CDP Climate Change questionnaire, the company disclosed that its Scope 1, 2, and 3 emissions inventories for FY2022 underwent third-party verification. However, this was not mentioned in its 2023 Sustainability Report for FY2023. It is recommended that the company includes such details in future reports.

The company reports a 2.17% decrease in total GHG emissions (Scope 1, 2, and 3) from 28,810,746 tCO2e in FY2022 to 28,186,762 tCO2e in FY2023. Scope 3 emissions, which account for roughly 99% of the total, decreased by 2.15% and include emissions from enteric fermentation, waste management, and cattle feed. For FY2023, the company disclosed Scope 1 emissions of 320,671 tCO2e, Scope 2 emissions of 169,532 tCO2e, and Scope 3 emissions of 27,696,559 tCO2e.

The company has carried out a climate-related scenario analysis up to 2040 using IPCC climate scenarios RCP4.5 and RCP8.5. This analysis assessed the impact of precipitation changes on pasture quality in South America's cattle ranching areas. To mitigate risks, the company is exploring opportunities to expand pasture recovery programmes in collaboration with its regional cattle suppliers.

The company recognises several climate-related risks and outlines partial mitigation measures. It identifies reduced pasture quality in the Midwest region of Brazil as a risk due to decreased rainfall and drought. Increased production costs may result from the need for livestock feed supplementation and irrigation. The company monitors the risk of raw material availability but reports no financial or material losses from climate events in 2023. To mitigate these risks, it is expanding pasture recovery programmes and working with suppliers to reduce land conversion and deforestation. The company is also conducting research to evaluate heat mitigation strategies at a fattening farm in Uruguay, in response to performance declines during summer. Rising veterinary and medicine expenses are acknowledged, with alternative solutions explored alongside Brazilian cattle suppliers, such as improved feedlot practices and regular sanitary checks to reduce veterinary costs. Energy regulations, including fossil fuel taxes and electricity pricing, are identified as potential risks. In Brazil, higher electricity costs have been faced, and to mitigate this, the company procures energy from clean sources, such as wind and small hydroelectric plants, and employs energy-efficient equipment to reduce Scope 2 emissions. Carbon taxation and government regulation are recognised as significant risks, with the potential for financial penalties for non-compliance. The company monitors carbon tax legislation and takes steps to minimise its environmental impacts to manage these risks. The company reports no financial or material losses from adverse climate events impacting its operations in 2023.

In its CDP Climate response, the company reports that 2.8% of CAPEX for the reporting year was aligned with its climate transition plan, with projections of 0.88% alignment by 2025 and 1% by 2030. The cost associated with the Marfrig Emissions Inventory and investments in sustainability initiatives, such as the wind power generator at the Tacuarembó plant, totals BRL 1,870,000. Additionally, the company provides potential financial impact figures for specific climate risks.

The company utilises soy commodities as a protein component in its cattle feedlot unit in Uruguay and as an input in certain processed products in Brazil. While the company claims soy accounts for less than 2% of total inputs in its operations, the large volume of cattle sourced from other suppliers means it is unclear if this holds true across the entire supply chain. A majority stake in National Beef, a US company responsible for 58.94% of the company's cattle production in 2022, further complicates determining soy percentage, especially since soy and compound feed are common in US cattle operations. The company engages with suppliers to source soy from participants in the Soy Moratorium, ensuring no soy comes from deforested regions of the Amazon. However, it does not confirm all soy is sourced from 100% deforestation-free suppliers. The company has conducted risk assessments in its operations and supply chain, recognising the risk of soy deforestation and implementing responsible purchasing measures to mitigate it. Nonetheless, it does not disclose all high-risk sourcing locations nor confirm if the assessment includes soy sourced by National Beef in the USA.

The company has committed to a zero deforestation and conversion target by 2025, applicable to both its operations and supply chain. The commitment target date was brought forward from 2030, with a cut-off date of 2020 for achieving these targets.

The company's zero deforestation and conversion commitment applies to all suppliers and sourcing regions within Brazil. It discloses sourcing soy from Uruguay and likely utilises soy in its US operations. However, it is unclear whether soy used outside Brazil is included in this commitment. The company aims to ensure its entire supply chain is deforestation-free in the Amazon and the Cerrado by 2025. Due to the unclear scope of this commitment regarding soy used in its US Beef operations, a partial score has been applied.

The company reports that 100% of the soy it purchases directly from Brazil is verified as deforestation-free, covering 14% of its direct soy sourcing in 2022. It does not disclose if its progress data has been third-party verified or audited. The company has responded to the CDP Forest Questionnaire 2023.

The company reports that its Verde+ initiative identifies 85.7% of indirect suppliers in the Amazon Biome and 70.9% in the Cerrado as being from deforestation-free areas. However, it has not disclosed the percentage of cattle sourced from these areas. The company has adopted the Marfrig Verde+ Program to promote sustainability and ensure a deforestation-free supply chain for cattle products. It conducts multiple annual assessments of forest-related risks using an established enterprise risk management framework. The company identifies vulnerable areas in the Amazon and Cerrado Biomes through its socio-environmental risk map and implements measures to enhance sustainability and environmental practices. In 2022, it completed a risk map of the Atlantic Rainforest, achieving full coverage of all relevant biomes.

The company has set a target to achieve a deforestation-free supply chain for the Amazon, Cerrado, and other biomes by 2025, and aims for a 100% deforestation-free supply chain by 2030. Additionally, it has established a 2008 cut-off date for its cattle-related deforestation target.

The company commits to sourcing deforestation-free cattle universally, covering all regions at risk and the entire production chain, including both direct and indirect suppliers. However, it only has traceability for its direct suppliers in the USA.

The company aims to be deforestation-free by 2030 and achieve full traceability of its direct and indirect suppliers by 2025. Currently, 85.7% of its indirect suppliers in the Amazon, 70.9% in the Cerrado, and 73% of its direct suppliers are verified as deforestation-free. It has traceability only for its direct suppliers in the USA, where beef production accounts for nearly 59% of total production. The company is collaborating with Agroícone to develop auditing parameters for the Marfrig Verde+ processes. Cattle sourced from the Amazon biome have been verified as deforestation-free by third-party auditors following a 2023 audit, though the proportion of total cattle this represents is not disclosed. The company also responded to the CDP Forests Questionnaire 2023.

The company collaborates with a select group of suppliers renowned for their compliance with socio-environmental standards. It strategically engages soy suppliers by using questionnaires to verify adherence to specific sustainability criteria. It has also developed monitoring tools to track the origin and quantity of soy in its operations, ensuring compliance with legal and socio-environmental standards like the Soy Moratorium commitment. While the company engages only direct suppliers, the proportion of cattle production this involves is unclear. Additionally, it is uncertain whether the supply chain monitoring extends to its National Beef operations in the USA.

The company engages with suppliers and uses an approval form to evaluate environmental aspects, ensuring its soy does not come from deforested areas. In Brazil, all soy is sourced from companies adhering to the Soy Moratorium. Non-compliant suppliers are blocked in the purchasing system and prohibited from trading animals until issues are resolved, with guidance provided on addressing non-compliance. The company traces 86% of its soy to direct suppliers in Uruguay and 14% in Brazil. However, it does not disclose the traceability of soy used in animal feed for its USA operations, which accounted for 58.94% of directly sourced cattle in 2022. Additionally, the company has not disclosed the total volume of soy used across global operations, leaving the level of traceability unclear.

The company reports that its cattle feed incorporates corn and sorghum cultivated through crop rotation and diversification practices. Sorghum is noted for its high ground cover, which aids in reducing soil erosion and supports regenerative, resilient, and sustainable agriculture.

The company monitors legal compliance, environmental conservation, and management types when selecting suppliers and purchasing animals. It evaluates all beef suppliers according to environmental, social, and animal health welfare criteria. Through the Marfrig Verde+ initiative, the company supports the reintegration of suppliers in socio-environmental risk areas. It provides technical support to those needing adjustments to ensure compliance with its commitments. The Verde+ Programme aims to enhance livestock farming sustainability and reduce deforestation impacts in Latin America. The company requires direct suppliers to report on their own suppliers, temporarily removing non-compliant livestock farmers from the supply base until they provide the necessary data and align with commitments. Additionally, it employs a blockchain-based platform, "Conecta," to improve supplier traceability and monitor deforestation using public information.

The company has completed geospatial monitoring and a Socioenvironmental Risk Mitigation Map to identify areas with high socio-environmental risks in the Amazon and Cerrado biomes, covering both direct and indirect suppliers. However, this process does not appear to be used in its US operations. Based on identified risks, the company requests detailed information from farmers to ensure compliance with its socio-environmental commitments. It employs a blockchain platform, "Conecta," and the Visipec tool specifically for tracking indirect suppliers in Brazil, to enhance supplier traceability and monitor deforestation. Noncompliant suppliers are blocked in the purchasing system until issues are resolved. The company supports cattle suppliers in developing corrective action plans to meet environmental criteria. It monitors 100% of its direct suppliers and aims for full traceability of its supply chain in the Amazon, Cerrado, and other Brazilian biomes. Currently, 85.7% of indirect suppliers in the Amazon and 70.9% in the Cerrado provide supply chain information. Of cattle traceable to direct suppliers, 58.94% are from the USA, 4.22% from Uruguay, 3.23% from Argentina, and 28.97% from Brazil. The company has been linked to deforestation in the reporting year.

The company, in collaboration with EMBRAPA, plans to launch a line of low-carbon beef under the Viva! brand. It also utilises Integrated Crop-Livestock (ICL) and Integrated Crop-Livestock-Forest (ICLF) techniques to balance pastures and biodiversity.

The company reports that most of its units are located in areas of low water stress, as determined by the World Resources Institute (WRI) Aqueduct tool. It uses this tool to assess water availability and quality globally. In FY2023, the company identified three units with extremely high exposure, four with medium to high exposure, five with low to medium exposure, and twenty-one with low exposure to water stress. In its 2023 CDP Water response, the company disclosed a total water consumption of 3,246,500 m3 for FY2022. It has outlined initiatives to reduce water consumption, including installing leak reduction devices, automation equipment, and implementing employee training programmes. Additionally, electromagnetic flow gauges are used to monitor water consumption at each unit.

The company aims to reduce water consumption intensity by 20% per ton of product by 2025, using 2020 as the baseline. It has provided updates on progress towards meeting site-specific targets for slaughter and processing units. However, the company has not set a time-bound target to reduce total water withdrawals at its facilities for the reporting year.

The company discloses water withdrawal data by source and stress level for its operations in North and South America for 2023. Total water withdrawals amounted to 26,504,538 m3, with 8,904,106 m3 from surface waters, 11,577,153 m3 from groundwater, and 6,023,279 m3 from other sources. Water stress data indicates withdrawals of 12,525,765 m3 from low stress areas, 1,814,706 m3 from low to medium stress areas, 1,659,410 m3 from medium to high stress areas, and 10,504,657 m3 from extremely high stress areas. Capital expenditure on water and effluent management infrastructure increased by 10.87%, from R$70.9 million in 2022 to over R$78 million in 2023. Operating expenses for effluent treatment and maintenance rose by approximately 66.45%, from R$112 million in 2022 to over R$186.5 million in 2023. The company's global water-related data is independently audited, helping identify improvement opportunities and measure performance. It has participated in the CDP Water Security questionnaire for 2023 and reported a 2.93% reduction in total water withdrawals from 27,303,524 m3 in 2022. Additionally, water consumption decreased by approximately 10.33%, from 3,621 megalitres in 2021 to 3,245 megalitres in 2022.

The company evaluates water availability in regions where supplier properties are located during the procurement of raw materials, focusing on grasslands for pasture-raised organic beef. This evaluation allows the company to assess water risks and take preventive actions to enhance water management in its supply chain, including setting targets and promoting rational use. It is unclear if suppliers are required to have water use reduction targets. Through the Marfrig Club Program, under the "Environmental Respect" guidelines, the company encourages direct suppliers, about 9,000 livestock suppliers, to adopt good water management practices, including on pasture. However, the company lacks an official policy specifically addressing water use in feed. The company provides guidance on good water management practices to ensure regulatory compliance and environmental sustainability. It promotes effective water management among partners, discussing practices like rainwater collection, crop rotation, no-till farming, fertigation, and consumption measurement tools. Additionally, it advocates early slaughter to reduce resource demand for animal feed production. Suppliers must meet water-related requirements in the procurement process. However, the company has not partnered with any third parties to advise on sourcing or farming strategies related to water use in feed.

The company provides data on water intensity per ton of products at production plants and per head at slaughterhouses but does not disclose information on the water intensity of feed. Additionally, it has not reported the proportion of feed sourced from water-stressed areas during the reporting period. Through the Marfrig Club Program, the company promotes effective water management practices among its partners, recommending sustainable practices such as crop rotation, no-till farming, fertigation, and tools to measure consumption. The company also utilises sorghum as a feed input at its Uruguay feedlot, known for benefits in crop rotation and diversification. However, it does not explicitly link these practices to addressing water risk.

The company reports that it sources only livestock, with 52.3% of the supply coming from areas experiencing water stress. It maps water availability within its supply chain to assess risks and implement preventive measures, such as setting targets and promoting rational water use. Suppliers are required to reduce water withdrawals, but it is unclear if they need to set specific reduction targets. The company engages the supply chain in water management best practices through its "Environmental Respect" initiative within the Marfrig Club. This includes a Sustainable Practices Guide that recommends reducing water consumption, rational use through rainwater collection, crop rotation, no-till farming, providing drinking fountains, fertigation, and water measurement tools. Suppliers are encouraged to invest in livestock with traits for early slaughter, receiving incentives to improve water efficiency. In Brazil during 2022, the company partnered with three large suppliers to offer technical support on environmental issues, particularly water availability. This initiative seeks to improve cattle farmers' environmental performance by ensuring water resource availability. It collects data on consumption, reduction plans, water-related events, and risks to identify areas under stress and evaluate management practices.

The company is committed to responsible water management by engaging with third parties and suppliers to promote and ensure sustainable water practices across its supply chain.

The company incurred no fines or penalties for regulatory violations related to water quality in 2023. It has identified water risks concerning availability and quality at four facilities, representing 13% of its total operating units, using the WRI Aqueduct tool. The company aims to achieve a ten on the Wastewater Treatment Quality Index (WTQI) by 2025 for its Latin American operations, requiring a reduction in Biological Oxygen Demand (BOD) to 69 mg/L. Furthermore, it targets a global reduction in wastewater volume by 15% by 2035.

In 2023, the company disclosed an average Biochemical Oxygen Demand (BOD) of 51.78 mg/L, likely covering only its Latin American operations, as it does not report global data. The total wastewater discharge volume reported was 23,937,777.63 m3. This data on effluent generation across all operations was certified by a third party during its greenhouse gas emissions inventory audit. The company also included wastewater data in its 2023 CDP Water Security questionnaire.

The company utilises wastewater treatment practices, including using treated effluent as fertiliser on nearby farms and collecting biogas for Scope 1 emission reductions via the flaring method. In Brazil, 25% of its facilities already employ fertigation, with another 8% close to implementing technical projects. In the USA, its National Beef operations utilise 'carcass paunch' from Kansas facilities in a composting programme at the Seward County Landfill. The company reports an increase of approximately 11.35% in average BOD levels, rising from 46.50 mg/L in 2022 to 51.78 mg/L in 2023. There is also a reported 0.5% reduction in the volume of wastewater discharged, decreasing from 24,057,015.60 m³ in 2022 to 23,937,777.63 m³ in 2023.

The company uses sorghum in feedlots to comply with Law 15.239, which requires Uruguayan grain producers to have a Responsible Land Use and Management Plan. Additionally, it offers pasture management guidance, including a nutrient management section for livestock suppliers, through its Marfrig Verde+ program. This program is aimed at suppliers in Latin America, where the majority of the company's operations are located. However, the company does not mandate suppliers to have a nutrient management plan for feed purchases or production and has not partnered with third parties to inform its sourcing or farming strategies, including nutrient pollution or fertiliser use.

The company discloses the use of sorghum as a feed input at its Uruguay feedlot, highlighting its benefits for soil protection and sustainable agriculture. However, it is uncertain if this contributes to diverse crop rotations. Additionally, the company does not provide information about pesticide use in its feed supply chain.

The company sends manure from operations, including pens, animal transportation, and cattle entrails, to wastewater treatment plants (WTPs) where it undergoes physical, chemical, and biological treatment. The resulting solid waste, which has high agronomic value, is used as a fertiliser alternative. However, it is uncertain if similar processes apply to animals supplied by external partners. Some operations collect biogas from treated effluents, but it is flared rather than utilised by the company. The company conducts risk assessments to identify high-risk locations in its supply chain related to water management using tools like the WRI Aqueduct. This helps map water availability and stress levels, especially for suppliers in Brazil, by correlating data with farm locations. The company identifies sensitive areas and develops strategies for supplier engagement in water-use practices. However, these assessments focus mainly on water scarcity and supply rather than 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 incorporate nutrient management performance into its incentive schemes for farmers. In 2022, it launched pilot projects using Silvafeed® BX, a feed additive based on natural tannin extracts, to improve nutrient management and manure handling. This initiative, part of its GHG emissions management efforts, reduces methane emissions in cattle by 17% and decreases nitrogen volatilisation in manure, lowering nitrous oxide formation. The company also distributes manure free of charge to grain suppliers within a 25km radius of its feedlot facilities. The fertiliser is used in community projects, such as enhancing soccer fields and supporting nurseries and vegetable gardening programmes in Soriano and Rio Negro. However, this initiative does not directly address manure-related pollution at its animal farms.

The company has established a comprehensive antibiotics policy within its supply chain, focusing on reducing, refining, and replacing antimicrobials, and upholding animal welfare. It mandates that antimicrobials are used only for therapeutic purposes by trained professionals and prohibits the use of Highest Priority Critically Important Antimicrobials (HPCIA), as classified by the World Health Organisation. Specific to beef, the company prohibits routine antibiotic use, including for growth promotion. Suppliers are similarly prohibited from using antibiotics prophylactically or for enhancing weight gain, growth, or feed efficiency. Furthermore, the company has implemented extensive measures to enhance animal welfare and reduce antibiotic usage. These include vaccination programmes, improved biosecurity, sterilisation with sanitised non-slip floors, reduced stocking densities of at least 20m² per animal, and additional welfare practices such as roofing systems, water sprays, and clean drinking troughs. These initiatives are supported by training programmes, the Marfrig Club Program, and dedicated animal welfare teams.

The company discloses the quantity of antibiotics used in its operations and supplier farms in industry-standard units. In 2023, it used 0.222 mg/kg of antibiotics in its operations and 0.21 mg/kg in supplier farms. Additionally, 2.66% of its animals and 2.21% of animals from supplier farms received antibiotics. However, the supplier farm data only covers 7 farms in Brazil, representing 8.5% of the total volume slaughtered there in 2023. The company provides detailed breakdowns of antibiotic usage by class, including Cephalosporins, Aminoglycosides, Macrolides, Tetracyclines, and Natural Penicillins for its feedlot operations. It reports a 23.4% reduction in antibiotic use at its Uruguay facility, from 0.290 mg/kg in 2022 to 0.222 mg/kg in 2023, and a 12.5% reduction at supplier farms, from 0.24 mg/kg to 0.21 mg/kg. In 2022, antibiotics were used to prevent diarrhoea outbreaks in calves and the spread of ticks in feedlots, but the company does not disclose equivalent information for the 2023 reporting period. The data on the quantity of antibiotics used is not confirmed to be audited by a third party.

The company has a standalone animal welfare policy that upholds the Five Freedoms across its global operations, with a commitment to comprehensive animal welfare training. In 2023, the company delivered 1,402 hours of training, averaging 82 hours per slaughterhouse, for employees working with live animals. Animal welfare is integrated into new employee orientation, supported by the Marfrig Club Program and regular training sessions which promote best practices. Annual technical training ensures proper animal handling and encourages innovation among employees and third parties. There is a clear policy for managing breaches of animal welfare guidelines, including actions such as suspending purchases from non-compliant suppliers and addressing employee misconduct. Contractors must report any deviations for corrective measures, facing potential sanctions from disqualification to suspension during investigations. They can only rejoin the supply chain after the company verifies issue resolution. The company showcases leadership in animal welfare through research and development partnerships with academic institutions and non-governmental organisations. In 2023, it collaborated with São Paulo State University on environmental enrichment, and the Institute for Animal Science on thermal comfort and transport time, besides involvement in Uruguay and Argentina regarding welfare materials and equipment. Investments focus on facility upgrades, stunning equipment, animal housing, certifications, audits, training, and monitoring systems.

The company is committed to ensuring animals have sufficient space, mandating a minimum density of 20 m² per animal and banning restrictive confinement systems such as gestation crates, cages, and tethering. The company avoids routine mutilations, such as dehorning, castration, and tail cutting, across all operations and suppliers. If these procedures are necessary, they are performed by qualified professionals. To reduce transportation time, the company aims to limit journeys to eight hours or less. In 2023, 77% of cattle transported to Marfrig units in South America met this target, exceeding the annual goal of 70%. The company ensures humane slaughter by adequately stunning animals before slaughter, except where specific religious requirements dictate otherwise. The company promotes animal welfare through enriched environments, including open-air areas, shading, sprinkler systems for thermal comfort, and non-slip floors to prevent injuries. In 2022, the company did not acquire animals with anatomical or metabolic disorders for fattening or slaughter, though it does not specify breeds or geographical scope in its operations and supply chain.

The company possesses several animal welfare certifications. In 2023, its farms received the Global Animal Partnership (GAP) Step 4 - Pasture Raised certification, which applies to specific segments of its beef production. The company's slaughter installations meet the North American Meat Institute (NAMI) standards. The company has been running an organic meat programme in Uruguay since 2000, certified by Control Union to both European and U.S. organic standards. This programme forbids the use of herbicides, synthetic fertilisers, antibiotics, hormones, and genetically modified products. Its beef operations in Argentina, Brazil, and Uruguay also hold multiple certifications and audits. However, the GAP certification does not cover the majority of the company's global operations.

The company reports progress in animal welfare, showing that in 2023 all its slaughter plants complied with North American Meat Institute (NAMI) standards. In South America, 77% of cattle experienced transport journeys of eight hours or less, surpassing the target of 70%. It also provided 1,402 hours of animal welfare training in South America, averaging 82 hours per slaughterhouse. In Brazil, 86% of farms met at least one animal welfare criterion set by the company's standards. For future enhancements, the company aims to implement cage-free systems for eggs by 2025 and collective breeding systems for pork by 2026.

The company reports several welfare criteria for its beef operations. In 2023, 77% of cattle transported in South America had journeys of eight hours or less, exceeding their target of 70%. It adheres to North American Meat Institute standards, ensuring all cattle are humanely stunned before slaughter, with emergency stunning measures in place. In Uruguay, its organic beef programme features pasture-raised cattle with outdoor access. Furthermore, environments are enriched with 20 m² per animal, open spaces, rest areas, non-slip floors, and water sprinklers for thermal comfort. Regarding pork welfare, the company plans to eliminate gestation crates and adopt collective breeding systems by 2026. It seeks to avoid routine tail docking, enhance environmental enrichment, and source pork only from systems using immunocastration or intact males. In 2022, 3% of pork was sourced from enriched environments, 8% from animals not tail-docked, and 50% subjected to immunocastration. In poultry production, the company mitigates welfare risks by replacing water bath stunning with controlled atmospheric stunning. In 2022, all chicken meat purchased came from cage-free sources, with an average breeding density of 29 kg/m², and half of the broiler chicken meat was from animals raised at densities of 30 kg/m² or less.

The company is a signatory to the UN Global Compact and is committed to upholding ILO principles throughout its operations and value chain.

The company conducts comprehensive human rights due diligence across its supply chain, including risk identification, assessment, and monitoring. Suppliers are required to complete a questionnaire based on the SA8000 standard, addressing human rights, fair wages, safe working conditions, and non-discrimination. The company employs several methods to combat child and forced labour risks, such as monitoring through its Socio-environmental Risk Mitigation Map, consulting the MTE’s ‘Slave Labour’ list, and collaborating with InPacto. It screens contractors using the UpMiner platform, with additional evaluations by its Compliance team. For its own operations, the company undergoes annual due diligence by an independent auditor based on SMETA criteria, covering human and labour rights. The company opposes child and forced labour throughout its value chain and monitors human rights risks at the supplier level, particularly focusing on forced labour and child labour, using a socio-environmental risk map. This map integrates diverse data types to aid responsible procurement. The company will terminate relations with suppliers found to have irregularities. Audit results inform the development of corrective and preventative measures. In 2023, the company reported that 22,601 employees in North and South America participated in compliance training sessions on human rights and anti-corruption. During its Integrity Week, it hosted discussions and activities aimed at combating workplace harassment. However, the company does not specify how it engages with suppliers to mitigate risks.

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, harassment, abuse, and inhumane treatment within its operations and promotes fair remuneration. However, it does not disclose if all employees are compensated at least in line with the cost of living. The company undergoes an annual SMETA 4 Pillar audit, covering child and forced labour and discrimination, but it is unclear if this includes US facilities. Although it mentions evaluating criteria under ILO and UN conventions, which prohibit abuse, this is not explicitly stated. The company requires its suppliers to prohibit discrimination, child labour, forced labour, harassment, and abuse, yet it does not address living wages for them. In Chile, employees receive paid sick leave after 11 days, but it is unclear if this meets National Minimum or Living Wage standards. In other regions, paid sick leave is legislated, yet may not always align with national wage standards. The company's US subsidiary provides sick leave, but details on benefits for hourly workers and subcontracted workers remain unclear.

The company has implemented a due diligence platform on the SAP Ariba technological system to analyse and assess third-party business partners. This tool identifies risks, particularly those related to child and forced labour. However, it does not specify if audits are conducted to address these policy areas. The company has established an anonymous helpline for employees to report violations of the Code of Ethics and Conduct, as well as other policies and regulations. It does not disclose whether stakeholders were consulted in designing this grievance mechanism. Grievance mechanisms are available to all internal and external stakeholders. In 2023, the company received 709 grievance complaints, with 650 in South America and 59 in North America. These are categorised into issues such as health and safety, moral harassment, sexual harassment, workers' rights violations, and discrimination.

The company ensures employee welfare and safety within its facilities through regular inspections and the implementation of the Corporate Work Safety Guidelines Program and the Corporate Health, Quality of Life, and Welfare Program. However, it does not mention holding a health and safety certification. The company reports that all its units in Brazil, Chile, Uruguay, and the US, along with 80% of its plants in Argentina, have health and safety committees with worker representatives. It follows World Health Organization guidelines and does not promote the use of antibiotics by employees to prevent antimicrobial resistance. However, in 2023, the company used 0.222 mg/kg of antibiotics in its operations and 0.21 mg/kg for supplier farms in its livestock production.

In 2023, the company reported 932 work-related accidents in North and South America, with 13,669 days lost due to injuries. This represents a 19% decrease in injuries and a 25% reduction in days lost compared to 2022, when it reported 1,156 injuries and 10,951 days lost. The company had zero fatalities in 2023, an improvement from one fatality in 2022. The company disclosed a turnover rate of 29.84% for South America and 38.42% for North America, with a breakdown by seniority for all regions.

The company respects freedom of association and collective bargaining rights, disclosing its unionisation rates as follows: 75.84% in Argentina, 70% in Uruguay, 57.9% in the United States, and 35.58% in Brazil. In Chile, no employees are union members, but they have the legal right to associate. In Brazil, the company ensures all employees are covered by union collective bargaining agreements and provides union opportunities for communication and campaigns. In Argentina, it allows time and space for voting on election days, and representatives are given days off for union duties. However, it does not provide evidence of additional support for association rights in the United States beyond legal compliance. The company expects all its suppliers to adhere to its policies, ensuring employees' rights to freedom of association and collective bargaining.

The company's collective bargaining agreements cover all employees in Brazil and Uruguay, 81.67% in Argentina, and 57.9% in the United States. No employees are union members in Chile, although they have the right to join unions under local legislation. The company does not clarify whether these agreements encompass all employees irrespective of contract type. Additionally, it provides a detailed breakdown of its workforce by contract arrangements, including permanent, temporary, outsourced, full-time, and part-time positions in North and South America.

The company reports that all its units in Argentina, Brazil, Chile, Uruguay, and the United States hold BRCGS certification, with two additional processing units in Brazil certified by the International Featured Standards (IFS) Food. Both BRCGS and IFS are recognised by the Global Food Safety Initiative (GFSI). While not all suppliers are GFSI-certified, the company encourages certification applications. Suppliers lacking GFSI certification undergo audits based on risk and past performance, although GFSI certification is not compulsory. The company further discloses that the GFSI certification levels among suppliers are approximately 0% in Uruguay, 48.42% in Brazil, 54% in Argentina, 87.5% in Chile, and 100% in the United States, without specifying supplier numbers.

The company implements comprehensive food safety audit programmes across all its units to maintain high standards. In Brazil, units are subject to continuous internal and third-party audits, including MAPA inspections, two BRCGS audits, and ten client audits in 2023. Argentina conducts quarterly internal audits, supplemented by monthly MGAP inspections and five third-party audits in 2023. In Chile, the audit process includes seven annual internal audits, with additional evaluations by third parties, clients, and authorities. In the United States, six third-party audits occurred in 2023, though their specific frequency is undisclosed. Uruguay performed quarterly internal audits, monitored by annual third-party audits, and ten monthly inspections by the Ministério de Ganadería and the Ministry of Livestock, Agriculture and Fishing in 2023. The company adheres to a corrective action plan, ensuring submission within a 24-day deadline set by certifying agencies, achieving a 100% corrective action rate with alignment to GFSI standards. Additionally, it provides full traceability through an online platform, allowing consumers to trace the origin of its products.

The company has a product recall procedure, including a specialised recall group in Brazil with representatives from production, procurement, sales, quality control, and legal departments, trained to manage product emergencies. Each plant maintains a 24/7 contact list for the recall group, ensuring swift response capabilities. In 2023, the company reported zero product recalls, both voluntary and involuntary, related to food safety issues in its global operations.

The company faced a market ban in its global operations, which was lifted in October 2023. Specifically, one unit in Uruguay was temporarily suspended from the Canadian market by the Uruguayan Ministry of Livestock, Agriculture, and Fisheries, after lymph nodes were identified by Canadian authorities. In response, the company implemented measures to mitigate impacts and prevent future incidents. These measures include conducting a rigorous review with stock retention, providing specialised training for lymph node inspection and removal, adjusting boning processes for hip and shoulder meat, and hiring a dedicated collaborator for quality control inspections.

The company's sustainability committee provides advice to the board, monitors environmental impacts, and ensures best practices in areas such as source control, animal welfare, greenhouse gas emissions, natural resource conservation, and waste management. The committee, consisting of two board members, two external members, and one director, regularly meets with the Board of Directors to report on sustainability initiatives and shares relevant updates. In 2023, the company revised its Materiality Matrix with guidance from the Sustainability Board, receiving final approval from the Board of Directors. The updated matrix encompasses nine key topics: sustainable livestock farming, climate change, biodiversity, animal welfare, water resources management, food quality and safety, safe and inclusive work environments, business and geographic diversification, and the transparency and integrity of the business. The company has disclosed that board member Roberto Silva Waack has sustainability expertise and involvement with organisations such as WWF and GRI. Alain Emile Henry Martinet has expertise in food safety within the meat industry. Marcos Antonio M. dos Santos has expertise in product development and innovation, and also serves as the controller and chairman of the Board of Directors.

The company links sustainability performance to the variable remuneration of leaders at all levels, with targets for water consumption reduction and quality goals accounting for 10% and 15% of this remuneration, respectively. The company engages in dialogue with various initiatives and participates in sector-wide efforts to improve sustainability practices, focusing on climate change, animal welfare, pollution, antibiotics, alternative proteins, and working conditions. It collaborates with trade associations and coalitions, including the Brazilian Association of Meat Exporting Industries (ABIEC), but should provide a comprehensive list of such memberships. The company is committed to aligning its engagement activities with the Paris Agreement goals, though it has not specified whether this pertains to a 1.5⁰C or a well-below 2⁰C scenario.

The company is involved in a joint venture with ADM to lead the development of 100% plant-based products. It provides employee training on animal welfare in its South American operations and collaborates with research institutions on projects aimed at improving animal welfare. Additionally, the company benchmarks its sustainability practices using indices such as the Coller FAIRR Protein Producer Index and FOREST 500.

The company has formed a joint venture with ADM to address the increasing global demand for plant-based products, aiming to reduce reliance on animal-based foods and lessen environmental impact. As part of its commitment to environmental sustainability, the company has updated its Materiality Matrix to include alternative protein activities. However, it has not disclosed sales or revenue data for alternative protein products. The company plans to diversify its portfolio to meet the societal and market demands for vegetarian, organic, and plant protein-based foods. Nonetheless, it has not established specific time-bound targets for this diversification strategy.

The company is involved in producing and marketing 100% plant-based food products through PlantPlus Foods, a joint venture with Archer Daniels Midland Company (ADM) established in 2020. It offers a range of alternative protein options, such as hamburgers, meatballs, kibbeh, sausages, and ground beef, manufactured in Brazil and the United States for both local and international markets. In 2023, it launched 18 new plant-based products in the United States, Canada, and Mexico. Through a partnership with BRF, the company aims to expand its presence in the Brazilian market using BRF's logistics and commercial infrastructure, which includes access to 340,000 points of sale. The recent acquisitions of Canadian Sol Cuisine and US-based Hilary’s have also enhanced PlantPlus Foods' presence in the plant-based protein sector. Furthermore, the company supports academic research on transitioning to plant protein-based food systems.