MHP SE

The company has disclosed its partnership with the EBRD to implement the TCFD framework, aiming to establish science-based targets by 2025.

The company is committed to becoming carbon neutral by 2030, typically addressing Scope 1 and 2 emissions, but it is advised to specify the percentage of emissions covered. In its Annual Report, the company mentioned a review of this target post-war in Ukraine, alongside the potential introduction of other targets, such as emissions intensity, as part of its climate change strategy. The company recognises that its activities generate Scope 3 emissions from purchased goods and services. Its Business Partner Code of Conduct outlines requirements for raw material suppliers, indicating raw material sourcing contributes to Scope 3 emissions. The company is exploring the development of Scope 3 reporting but does not expect to have necessary processes established until after the war in Ukraine concludes.

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

The company has disclosed partnerships with GeoPard Agriculture for implementing precision agriculture analytics and with Digital Agro 360° for a Business Intelligence Farming dashboard. It is advised to clarify whether these initiatives help reduce or mitigate emissions from feed farming. In 2024, the company plans to collaborate with Agreena, a Danish company, to generate carbon certificates aimed at reducing tillage and promoting sustainable crop production practices. Additionally, it has received a UK government grant for an algae project set to commence in the second quarter of 2024. This project aims to explore the use of algae in converting biomass into biomethane and reducing greenhouse gas emissions by consuming CO2.

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

In 2023, the company disclosed Scope 1 emissions totalling 362,323 tCO2e from Ukraine operations and 32,712 tCO2e from its European segment. It also reported Scope 2 emissions of 227,656 tCO2e from Ukraine operations only.

The company includes emissions from diesel and gasoline usage, natural gas, and biomass combustion but omits emissions from agriculture and animal farming. It reports a 2.52% increase in Scope 1 emissions, partly due to increased energy consumption for corn drying, suggesting that these emissions include feed production. However, specific emissions from feed production are not disclosed, and the company is encouraged to report them. In its 2019 Land Use Policy, the company states adherence to Ukrainian legislation but does not disclose greenhouse gas emissions from land-use change.

The company did not respond to the CDP Climate Questionnaire in 2023. It gained Carbon Trust accreditation for its greenhouse gas emissions related to poultry production in Ukraine. While it plans to expand verification in 2024, only its Ukraine emissions are currently audited.

Between FY2022 and FY2023, the company's total Scope 1 emissions for its Ukraine and European operations increased from 384,665 to 395,035 tCO2e. Scope 2 emissions in Ukraine rose from 220,985 to 227,656 tCO2e. Overall, there was an approximately 2.74% increase in emissions, totalling 622,691 tCO2e in FY2023, compared to 605,650 tCO2e in FY2022. The increase in Scope 1 emissions is attributed to higher energy consumption, changes in heating technology, and prolonged border crossing delays that elevated diesel usage in its truck fleet. Over the period from FY2021 to FY2023, the company's Scope 1 and 2 emissions increased by 1.1% from 626,015 to 632,811 tCO2e, with an average annual increase of 0.5%. The company does not provide data on emissions reductions from feed, enteric fermentation, or manure management. Scope 1 emissions for Ukraine are reported as 395,035 tCO2e and Scope 2 emissions as 227,656 tCO2e. Additionally, Scope 1 emissions for the European operating segment totalled 32,712 tCO2e for FY2023.

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

The company discloses several risks related to its operations, though some important details are not addressed. In 2023, the company harvested 346,000 hectares in Ukraine, benefiting from favourable weather conditions. It acknowledges price fluctuations for grains and related products, and responds by improving feed recipes and structure to optimise costs and increase feed conversion ratios. However, it does not provide information on the projected impact of physical risks like droughts or flooding on feed ingredient availability and price volatility. The risk of disease outbreaks, such as avian influenza, is acknowledged, and the company has implemented disease control measures. However, it does not explicitly link disease outbreaks to temperature increases, heat stress, or extreme weather events. The company purchases veterinary products from Ukraine and Europe but does not disclose the impact of rising costs for these products. Energy price fluctuations are recognised as a risk, with mitigation through renewable energy development and increased use of co-generation and alternative energy technologies. However, the company does not mention the risks of carbon taxation on electricity or animal protein. Lastly, the company does not disclose any financially material events resulting from climate risks during the reporting period.

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

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

The company has committed to zero deforestation and the prevention of converting high-carbon lands, including peat bogs, to agricultural land. However, it does not disclose a target or cut-off date for this commitment.

The company states that its environmental policy applies to all its operational locations; however, it is unclear if this commitment extends to all its soy suppliers.

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

The company commits to zero deforestation and zero conversion of high-carbon lands for agriculture. However, it does not mention soy in its commitments, nor does it disclose whether it supports soy producers in promoting deforestation-free production or enhancing traceability efforts.

The company does not provide details on its compliance monitoring process or the actions taken when non-compliance is identified. It discloses that its soybean, meal, and cake suppliers are categorised as non-domestic, while 11% of large and medium soya oil suppliers are based in Ukraine. This indicates some traceability to the country of origin, although it does not specify the precise percentage traceable.

The company is developing Black Soldier Fly Larvae with specific protein and fat characteristics for use in poultry feed.

The company prioritises water conservation by regularly monitoring usage and maintaining metering units. In 2021, it updated the Register of Wells to ensure accurate monitoring of underground water sources, aiming to minimise local resource impact. Water consumption increased in 2023 due to production and crop expansion, with Ukrainian operations using 15,134,531 m³ and the European segment 2,025,300 m³. However, the company has not disclosed a formal water-risk assessment or identified facilities in water stress areas.

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

In 2023, the company's Ukrainian operations used 15,134,531 m³ of water, comprised of 7,906,287 m³ from surface water, 7,026,945 m³ from groundwater, and 201,299 m³ from municipal and other sources. The European segment used 2,025,300 m³, including 1,384,545 m³ from subterranean sources and 640.75 m³ from municipal sources. Both segments show an increase from 2022. The company does not disclose water withdrawals or consumption by water stress level and has not specified whether the US$80 million allocated for various ESG-linked CAPEX projects includes water-related investments. It also does not provide water-related OPEX, and its water data lacks third-party audit. Additionally, the company has not responded to the CDP Water Questionnaire 2023.

The company prioritises reducing water consumption as a key environmental goal, asserting that its operations do not impact local water balances. Its subsidiary, Perutnina Ptuj, has set annual water consumption targets and monitors them weekly. However, the company does not provide comprehensive guidance, support, or incentives to suppliers or growers on water use in feed. Additionally, it has not disclosed any partnerships with third parties to address water use in its sourcing or farming strategy.

The company does not disclose the water intensity of its feed or the proportion sourced from water-stressed areas. However, its subsidiary reports practising crop rotation to enhance soil structure and water infiltration, aiming to protect water resources and soil health.

The company asserts that its poultry rearing meets all environmental and regulatory standards, including water availability. However, it does not disclose the percentage of animal protein commodities produced or sourced from water-stressed areas. Reducing water consumption is a key environmental objective in the company's Sustainable Environmental Policy. It is encouraged to provide more details on its water management in animal farming operations. Furthermore, the company does not disclose whether it offers guidance, support, or incentives regarding water use in animal farming.

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

The company does not disclose instances of non-compliance with water quality permits and regulations, nor does it identify facilities in areas of high or medium water stress in terms of quality. While the company intends to reduce freshwater consumption and ensure water discharges are pollutant-free, it lacks specific quantitative targets for individual pollutants.

The company reports wastewater discharge volumes of 5,900,534 m³ for its Ukraine division and 1,690,228 m³ for its European segment during the reporting year. However, it does not disclose the quality of the discharged wastewater, and the data is not audited by a third party. Additionally, the company did not respond to the CDP Water Questionnaire 2023.

The company produces biogas from waste generated by its activities. It reports an increase in the total volume of wastewater discharged from 6,886,696 m³ in FY2022 to 7,590,762 m³ in FY2023, an approximate rise of 10.2%. However, it has not disclosed any improvements in aggregate wastewater quality compared to the previous reporting period.

The company's subsidiary, Perutnina Ptuj, aims to maintain agricultural land fertility through sustainable soil cultivation. It employs practices including organic fertilisers, cover crops, crop rotations, leguminous plants, and minimal tillage to sustain soil health. The company does not disclose if it requires feed suppliers to have nutrient management plans. Additionally, it does not provide comprehensive guidance, support, or incentives to suppliers or growers concerning nutrient management or fertiliser use. There is no partnership with third parties to influence its sourcing or farming strategies related to nutrient pollution or fertiliser use.

In 2023, the company launched a pilot laboratory in partnership with LIVIN Farms Agrifood to use its production waste for cultivating Black Soldier Fly Larvae (BSFL) with specific protein and fat profiles. This initiative has led to a poultry feed formula that includes BSFL alongside traditional ingredients, with the potential to replace up to 15% of conventional feed in broiler diets. Additionally, the company's subsidiary, Perutnina Ptuj, employs crop rotations and cover crops to maintain soil health. However, the company has not disclosed information about pesticide use in its feed supply chain.

The company utilises animal by-products as raw materials in its biogas facilities to produce electricity, industrial steam, and on-site heating. At its Slovenia facility, chicken manure is converted into biogas and organic fertiliser through anaerobic digestion, reducing waste and disposal costs while generating energy. However, the company has not disclosed whether it conducts risk assessments to identify high-risk locations.

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 demonstrates awareness of antimicrobial resistance and has implemented measures to reduce antibiotic use. It prohibits the use of antimicrobials critical to human medicine, following guidance from the World Health Organisation (WHO), and employs a strategy to minimise antibiotic use by incorporating organic acids and probiotics in animal feed. Antibiotics are administered solely under veterinary supervision and are not used routinely or for growth promotion. A subsidiary of the company has expanded its broiler breeding operations to include antibiotic-free broilers, accounting for approximately 40% of the subsidiary's operations and 6% of the company's overall operations. To improve animal welfare and reduce the need for antibiotics, the company has implemented vaccination programmes, biosecurity protocols, and various welfare initiatives. These include ensuring adequate space, light, and heat, and prohibiting routine mutilation.

The company's subsidiary, Perutnina Ptuj Group, has expanded its operations to include antibiotic-free broilers, now representing about 40% of its output but only 6% of the company's overall operations. This suggests that 94% of the company's broilers receive antibiotics at some point in their lifecycle. The company does not disclose antibiotic quantities by type or class, nor does it explain the reasons for antibiotic use during the reporting period. Additionally, Perutnina Ptuj Group reports that the percentage of broilers raised without antibiotics decreased from 60% in 2022 to 40% in 2023, indicating an increase in antibiotic use. The company also does not confirm whether its antibiotic usage data is audited by a third party.

The company demonstrates a firm commitment to the Five Freedoms for animal welfare, covering all stages of production, including farms, transit, markets, and slaughterhouses. Its policy includes specific principles to prevent unnecessary animal suffering, backed by specialist teams. Employee engagement and training in animal welfare are emphasised, with regular programmes for all production staff, seminars, and ongoing education for breeders. These initiatives cover topics such as antibiotic-free production, animal health, vaccinations, and capture techniques. The company implements a feedback system between slaughterhouses and poultry farms to evaluate poultry welfare during breeding and transportation. Slaughterhouses follow KPIs for health, welfare, and bird injuries, with farms assessing compliance. In the event of non-compliance, corporate investigations are conducted, though specific actions taken are not disclosed. Additionally, the company's subsidiary, Perutnina Ptuj Group, upgraded its breeder farms in Serbia with new egg collection, feeding, and watering systems. However, these upgrades do not extend to research and development programmes for animal welfare advancement.

The company is committed to avoiding close confinement by ensuring poultry is reared on the floor without cages. Its animal welfare standards require stocking densities to comply with EU regulations. The company has pledged to avoid routine mutilation, prohibiting practices such as beak trimming. During transportation, its focus is on minimising harm and stress, providing sufficient space, maintaining temperature, and using specially designed vehicles. However, it does not commit to limiting transport times to 8 hours or less. The company is committed to humane slaughter, ensuring animals are adequately stunned to prevent pain and stress. It adheres to industry best practices for space, light, heat, food, and water but does not explicitly provide for environmental enrichment that promotes natural behaviours and positive emotional states. The company prohibits breeding animals with genetic modifications that cause suffering, using only welfare-friendly breeds. Approximately 70% of its Ukrainian broilers are COBB chickens, and 30% are ROSS chickens, both known for their welfare-friendly growth rates and feed efficiency.

The company possesses several animal welfare farm assurance certifications, including Global Good Agricultural Practice (G.A.P.) for its operations covering poultry breeding and other production processes. Its operations undergo both internal and external audits to ensure compliance with these standards. Additionally, the company discloses that its two broiler chicken facilities have been certified under the Global G.A.P. Integrated Farm Assurance scheme.

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

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

The company's human rights policy aligns with the Universal Declaration of Human Rights and the International Labour Organization's Declaration on Fundamental Principles and Rights at Work.

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

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

The company prohibits discrimination, forced labour, and child labour but does not explicitly disclose a policy against harassment or abuse, nor does it discuss providing a living wage or sick pay for all employees. It does not reveal whether audits are conducted to ensure compliance with its policies in its direct operations. The company mandates that its suppliers prohibit forced labour and harassment. However, it is unclear if there is an expectation for all suppliers to prohibit discrimination and child labour or to promote living wages.

The company indicates it may periodically assess business partners for alignment with its requirements but does not confirm conducting audits. It has established the MHP Ethics Helpline, accessible 24/7 via telephone, email, or online, for internal and external stakeholders to anonymously report concerns. This helpline is also available to suppliers for whistleblowing purposes. However, the company has not disclosed the number of grievances received in its direct operations.

The company plans to achieve ISO 45001 certification in 2024 and reports that five of its sites are Global G.A.P. certified. However, it does not disclose the percentage of facilities or sites with health and safety committees including worker representatives, nor has it assessed antimicrobial resistance risk for its workforce.

The company reports an increase in lost working time frequency ratios due to health and safety incidents in its Ukraine operations, from 0.73 in 2022 to 1.9 in 2023. In European operations, this rate slightly decreased from 1.22 to 1.21 over the same period. This reflects an overall increase in injury rates across the company. In 2023, there were two fatalities in the company's Ukraine operations and none in European operations. In 2022, three fatalities occurred in Ukraine, while European operations reported none. Consequently, the fatality rate in Ukraine decreased from 0.16 in 2022 to 0.05 in 2023, remaining zero for European operations both years. The company has not disclosed turnover rates.

The company upholds the principle of freedom of association, allowing employees to join, not join, or create a labour organisation according to Ukrainian law. However, it does not disclose the unionisation rate or describe measures taken to support these rights. Additionally, its supplier code of conduct does not require suppliers to establish policies on freedom of association and collective bargaining.

The company supports collective bargaining rights but does not reveal the percentage or number of workers covered by such agreements. It employs 27,564 full-time and 1,224 part-time staff in Ukraine, and 4,558 full-time and 109 part-time staff in Europe. However, it does not disclose the number of subcontracted workers or those paid by the hour.

The company holds various GFSI-recognised food safety certifications, including BRCGS for food safety and GLOBALG.A.P. for integrated farm assurance, covering sites such as meat processing and poultry breeding. It has also attained ISO 22000:2018 certification for processing poultry meat and beef. However, the company does not specify the percentage of its sites that are certified, with GLOBALG.A.P. and ISCC certification achieved at ten sites, leaving overall coverage unclear. The company conducts audits of suppliers, particularly high-risk partners, to ensure compliance with quality and safety standards. It verifies certifications with the International BRC Standard or other GFSI-approved systems, conducting its own audits if such certifications are absent. Audits involve safety, traceability, and compliance checks against HACCP and Good Business Practices, using questionnaires, on-site audits, and inspections. Non-compliance demands immediate corrective measures or results in termination of cooperation. While the company actively seeks to maintain high food safety standards among suppliers, it does not disclose the exact proportion of suppliers with GFSI certifications, suggesting some hold these certifications.

The company conducts annual internal and external food safety audits across all production facilities, led by the Quality & Development Department and third-party certification organisations. Laboratories perform extensive analyses to ensure compliance with its standards and regulatory requirements. However, it does not disclose corrective action rates for non-conformance issues. The company does not implement consumer-facing food safety technology, instead prioritising regulatory compliance and product security through labelling, managed by the Technical Regulation division.

The company recognises food safety as a material business risk but does not describe a product recall system. It mentions product quality, safety, and regulatory compliance; however, it lacks details on recall protocols, roles, responsibilities, documentation, and procedures. Additionally, there is no mention of a recall management team or guidelines for recall decisions. The company also does not disclose the number of recalls for the reporting year.

The company does not disclose information on the number, location, or details of market bans or recalls for the reporting year. Furthermore, no such issues were detected in media screenings.

The company's Board oversees adherence to its Environmental Policy, while the Sustainability and International Affairs Committee develops its sustainability approach. A stakeholder materiality exercise conducted in 2021 addressed issues including biodiversity, land restoration, human rights, and climate change. Following the outbreak of war in Ukraine, the company prioritised stakeholder engagement to support employee needs, community requirements, financial partner updates, and food security. Four board members, Dr. John Rich, Oscar Chemerinski, Philip J. Wilkinson OBE, and Andriy Bulakh, are experienced in responsible business and sustainability. However, there is no board member with expertise in food safety. Three board members, Dr. John Rich, Yuriy Kosyuk, and Viktoriia Kapeliushna, possess experience in technology and innovation.

The company integrates ESG principles into performance measures for annual bonuses for executive directors but does not disclose the percentage of variable compensation linked to ESG metrics. The company does not provide information on engagement with public policy officials or trade and civil associations regarding ESG issues. It is a member of the Centre of CSR (Ukraine), the Poultry Union of Ukraine, EBA, and UCAB, but has not disclosed a commitment to align 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 does not explicitly acknowledge that protein diversification is a material business issue. Furthermore, it has not yet set a time-bound target to diversify protein sources, nor does it report revenue or sales linked to alternative protein sources.

The company does not indicate an approach to diversifying its product range to include plant-based and alternative protein options.