NH Foods Ltd

In its 2023 CDP Climate Report, the company states it has not established a science-based target and does not intend to set one within the next two years. Additionally, it lacks a specific methane emission reduction target for animal farming.

The company targets a 46% reduction in Scope 1 and 2 emissions by FY2030, using FY2013 as a baseline. While its Scope 3 emissions data are included in the Non-financial Data 2023 and CDP Climate Change 2022 reports, the company has not disclosed any targets for reducing GHG emissions from Scope 3 sources.

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

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

The company prioritises innovation and collaboration to address emissions from animal farming. It focuses on initiatives such as creating carbon-neutral farms, adopting circular livestock farming practices, and reducing methane emissions through research partnerships. It reports joint research projects with Hokkaido University, Osaka University, and Tokushima University, concentrating on curbing methane emissions and capturing and using emitted methane.

The company's CDP Climate Report 2023 discloses Scope 1 emissions of 501,000 metric tons of CO2e and Scope 2 emissions of 332,000 metric tons of CO2e location-based and 322,000 metric tons of CO2e market-based. Its Scope 3 emissions in Japan total 10,258,000 metric tons of CO2e.

The company reports Scope 1 and 2 emissions from livestock breeding facilities, feedlots, fresh meat processing plants, and ham and sausage production. It is encouraged to disclose emissions from enteric fermentation and manure management. However, it does not disclose greenhouse gas emissions from feed production or land-use change.

The company responded to CDP Climate Change 2023. Its Non-financial Data Book 2023 states that it undergoes third-party audits by SGS Japan Inc.

The company reports a reduction in total Scope 1 and 2 emissions from 851,000 tCO2 in FY2021 to 833,000 tCO2 in FY2022, covering both Japan and overseas operations. Scope 3 emissions, covering only Japanese operations, decreased from 10,503,000 tCO2 to 10,258,000 tCO2. Overall, there was a 2.3% reduction in emissions between FY2021 and FY2022. However, methane emissions increased from 116 to 134 thousand metric tons of CO2 during the same period, and the company does not explicitly report emissions from feed or enteric fermentation.

The company has conducted a climate-related scenario analysis, considering both the 1.5º/2ºC and the 4ºC warming scenarios.

The company acknowledges climate change risks such as rising temperatures affecting livestock growth and feed cost instability. To mitigate these, it is improving feed conversion ratios, enhancing formulations, and procuring meat from low-risk areas. It is also expanding the use of Japanese-grown grains in feeding operations and developing proprietary feed formulas using domestic grains like brown rice. Additionally, the company is diversifying suppliers and technologies to stabilise costs and supply chains amidst environmental changes. To address heat stress impacting livestock, the company has installed cooling pads, misting equipment, and sunshades in some livestock housing. However, it does not mention increased veterinary and medicine costs. The company is confronting rising fossil fuel costs and electricity prices by implementing energy-efficient equipment and investing in solar power. From fiscal 2023 onward, it is incorporating internal carbon pricing (ICP) into the installation and renewal of significant equipment. The company acknowledges that a carbon tax will increase energy costs, posing a significant transition risk. The TCFD report describes mitigation strategies such as adopting low-emission vehicles and improving logistics efficiency to reduce emissions. The company does not disclose the number of financially material events related to climate risk in the reporting period.

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

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

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

The company has responded to the CDP Forests Questionnaire.

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

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

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

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

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

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

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

The company does not detail how compliance is monitored or the actions taken when non-compliance is detected. It can trace 99% of its cattle volume to individual fattening farms in Australia. There is no evidence linking the company to deforestation in the reporting year.

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

As part of its medium-term goals up to FY2030, the company aims to identify sites in Japan and internationally located in high water-risk areas. Using the World Resources Institute's Aqueduct platform, it conducted water risk assessments for 233 production locations. Its 2023 CDP response reveals less than 1% of facilities face water risks, indicating low risk at domestic sites but high risk for 10 overseas sites. In its FY2023 disclosure based on the TCFD framework, the company identified sites in water-stressed areas under different climate scenarios. Under the 1.5C/2C scenario, four sites in Asia, one in North America, and one in the Middle East were noted. Under a 4C scenario, this increased to five Asian sites, with the counts for North America and the Middle East remaining unchanged. The company reports total water withdrawal and consumption of 18,360,000 cubic metres for FY2022. It highlights two water-saving measures: reusing cooling and washing water at manufacturing sites, and recycling water for its feed grain production.

The company has not set a time-bound reduction target for water consumption at its facilities. It aims to reduce water withdrawal per product by 2030. In Japan, the company achieved a 1.3% reduction, reaching 94% of its 2019 base year target, while overseas operations saw a similar 1.3% reduction, achieving 93% of the 2021 base year target. The company is encouraged to specify the targeted percentage reduction in future reports.

The company reports total water consumption at its Japan and overseas facilities of 18,360,000 m3 in FY2022, comprising 11,675,000 m3 groundwater, 5,898,000 m3 tap water, 771,000 m3 surface water, and 16,000 m3 seawater. It states that 1-10% of its water is withdrawn from high water stress areas. There is no disclosure of water-related CAPEX or OPEX. However, water withdrawal and consumption figures have been verified by SGS Japan Inc., and the data is included in the CDP Water Security 2023 response. The company's total water consumption rose from 18,009,000 m3 in FY2021 to 18,360,000 m3 in FY2022.

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

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

The company discloses that 1-10% of its animal protein production occurs in water-stressed areas but omits the proportion sourced from these areas. While it addresses water use management at its business sites generally, it does not specifically focus on water scarcity within its animal supply chain or farming operations. The company lacks a sustainable agricultural policy and its environmental policy does not explicitly mention water management. Furthermore, there is no evidence of guidance, support, or incentives provided to suppliers or growers 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 reports zero fines or penalties for water-related regulatory violations in the reporting year. It conducts water-related risk assessments, focusing solely on water availability at a basin or catchment level, excluding water quality. While the company has a publicly disclosed water quality target, it does not set a target to reduce wastewater discharge volume from its processing facilities.

The company discharged a total of 13,000,000 m3 of wastewater in FY2022 but does not disclose the quality of the discharged wastewater. Water consumption data has been verified by third-party SGS Japan Inc., although there is no mention of auditing for water discharge data. The company responded to the CDP Water Security questionnaire in 2023.

The company operates a biogas plant in Australia that uses processing wastewater as feedstock. It also produces biogas from waste and wastewater treatment in its pig farming business, primarily using manure rather than animal by-products. However, there is no evidence of improved wastewater quality overall compared to the last reporting period. Water discharge levels have decreased from 14 million m³ in FY2021 to 13 million m³ in FY2022.

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

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

The company converts both chicken and hog manure into fertiliser and biogas. It indicates that in the United States, a key area for livestock procurement, water stress is expected to deteriorate. However, the company does not disclose the number of sites in these areas or whether nutrient pollution risk was considered in the assessment.

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

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

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

The company does not disclose the quantity of antibiotics used.

The company is committed to animal welfare from an animal well-being perspective, eliminating gestation crates and using cameras to monitor environmental quality, in alignment with the Five Freedoms. It engages in employee training across all operations through workshops and an animal welfare consultation channel and has established Animal Welfare Core Values and a Code of Conduct. However, the company does not specify actions taken in response to breaches of its Code of Conduct. The company demonstrates leadership in animal welfare technology by developing PIG LABO, a pig-rearing system using AI and IoT in collaboration with The NH Foods Group and NTT DATA Group. This system optimises pig breeding by monitoring health and reducing stress through sensors and cameras. Additionally, the company partners with Obihiro University of Agriculture and Veterinary Medicine to contribute to the education of future farmers and advancement of the livestock industry through practical training and lectures.

The company aims to eliminate gestation crates for sows in all farms by 2030 but has achieved this goal in only 9.5% of farms as of 2022. The company lacks commitments to avoid routine mutilation, humane slaughter, and long-distance transportation of livestock. While it outlines measures to safeguard animal welfare during extended transport, including adequate feeding, water, and rest, it does not commit to avoiding long-distance transportation. Additionally, the company does not disclose information on enriched environments or exclude breeds with traits causing anatomical or metabolic disorders, nor does it select breeds with welfare traits.

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

The company aims to eliminate gestation crates for pigs on its Japanese farms by FY2030, and had an implementation rate of 9.5% as of 2022.

The company reports its affiliate, Whyalla Beef Pty. Ltd. in Australia, is improving cattle welfare by installing sunshades for UV protection. However, it does not disclose details about transportation durations, stunning methods, or dehorning processes. The company aims to eliminate gestation crates on all its Japanese farms by 2023, but as of 2022, this is only achieved at Oshamambe Chirai and Oshamambe Ayame Farms in Hokkaido. It remains undisclosed whether routine tail docking, surgical castration, or suitable environments are addressed. There is no information on maximum stocking density, waterbath stunning, or the use of higher welfare breeds. The company states its chicken rearing business in Turkey is focused on minimising stress via attention to rearing space, environmental temperature, and ventilation, though it does not address key welfare risks.

The company provides a general statement on its commitment to respect human rights, aligning with international standards such as the International Bill of Human Rights and the ILO's Declaration on Fundamental Principles and Rights at Work. This policy applies to all its workers.

The company conducts human rights due diligence in line with UN guiding principles, assessing risks through self-questionnaires and external expert consultations. It does not elaborate on specific steps such as reviewing country dynamics or mapping supply chains within its process. Harassment, working hours, and health and safety are prioritised risks. The company monitors these risks via its Compliance and Audit Departments, involving site visits and worker consultations. However, it does not detail steps for addressing identified risks or how it tracks these risks continuously within its supply chain. While the company provides human rights training for all employees, including new hires and management, it does not disclose actions for risk mitigation or remediation for people and communities within its supply chain.

The company identifies harassment, working hours, and health and safety as its highest priority risks through its due diligence process but does not detail the location or nature of these risks. It reports developing action plans to address these areas but provides no further evidence of remediation.

The company issues a high-level statement prohibiting abuse, discrimination, forced labour, and child labour, but does not address the promotion of living wages. It asserts that its Audit and Compliance department investigates human rights issues during site visits, though it does not clarify whether these investigations include specific policy areas. The company's procurement policy prohibits inhumane treatment, discrimination, harassment, child labour, and forced labour. Additionally, it discloses an average of 18 days of annual paid leave, although it is unclear if this includes paid sick leave and if it applies to all employees, regardless of contract type.

The company provides suppliers with a Self-Assessment Questionnaire to evaluate their adherence to its Sustainable Procurement Guidelines. However, it does not disclose conducting audits to ensure policy compliance within the supply chain. The company has a grievance mechanism with anonymity options in place for all its direct operations, featuring one internal and two external channels for employees to report workplace issues. It does not disclose the existence of a grievance mechanism for its supply chain. The company received 244 consultations through its whistleblowing mechanisms, with 57% related to personal relations and 13% to labour management. However, grievance data are not categorised by health and safety or worker rights issues.

The company is committed to worker health and safety and has implemented an occupational health and safety management system. It has received ISO45001 certification at seven sites, representing 1.4% of its total sites. A Health and Safety Committee is in place to prevent accidents, but the company does not disclose the number or percentage of facilities with a worker-representative health and safety committee. There is no evidence that the company has assessed or discussed antimicrobial resistance risk for its workforce.

The company reports an increase in the frequency rate of occupational accidents per million hours worked in its Japanese operations, from 2.21 in FY2021 to 2.54 in FY2022. It does not disclose fatality data or rates for either the reporting year or the previous year. The company's turnover rate for FY2022 is 3.8%.

The company affirms its commitment to respecting freedom of association and union rights under Japanese law, achieving a 100% unionisation rate in fiscal year 2022. However, it is unclear if these policies extend to employees outside Japan. There is no disclosure of measures taken to actively support workers' rights to freely associate and bargain collectively. Additionally, while the company has guidelines for its supply chain regarding freedom of association and collective bargaining, it does not mandate supplier adherence to these guidelines.

The company reports that 100% of employees are represented by a trade union in FY2022, although some employees are excluded based on contract type. It is also unclear if these policies extend to employees outside Japan. The company provides the total number of employees and the average number of temporary workers but does not break down the workforce by full-time, part-time, or hourly status.

The company holds FSSC 22000 and SQF certifications, recognised by the Global Food Safety Initiative (GFSI), as well as BRC and JFS certifications across 119 sites. Given its 83 manufacturing bases, 242 logistics and sales bases, and 2 research and testing bases, this represents partial coverage. The company does not disclose any mandates or expectations for suppliers to obtain GFSI certification, nor the proportion of its suppliers that hold such certification.

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

The company outlines general procedures for extraordinary events, which may include product recalls. However, it lacks a detailed description of a comprehensive product recall system covering roles, responsibilities, communication plans, or traceability logistics. Additionally, the company does not disclose the number of product recalls in the reporting year.

The company does not disclose information on product recalls or market bans, and no such issues were detected in media screens during the reporting period.

The company has established a Sustainability Committee chaired by the president, including the director responsible for sustainability and department heads. The committee discusses environmental targets, human rights policy, and TCFD disclosures with the Board. In 2024, the company reviewed its materiality assessment, identifying five key issues: stable procurement and supply of proteins, enriching lives through food, creating new values, contributing to a sustainable environment, and fostering an organisational culture focused on new challenges. The Board is responsible for approving these material areas. The company reports that three board members have expertise in sustainability, while four members have experience in consumer perspectives, marketing, and/or R&D. However, it does not disclose whether any board members have expertise in food safety.

The company provides a bonus to a director linked to a climate-related target, but the specific target and the portion of variable compensation tied to it are not clear. The company reports regular meetings with the director of Animal Rights Centre Japan and engages in discussions on animal welfare. As a member of the UN Global Compact, the TCFD Consortium, and the RSPO, the company demonstrates commitment to working conditions, ESG disclosure, and climate issues. However, while it is also a member of the Consumer Goods Forum, it does not disclose a complete list of trade association memberships. In its CDP climate questionnaire, the company states its policy engagement activities align with the Paris Agreement. However, the evidence provided does not clearly substantiate this commitment.

The company has developed PIG LABO®, a comprehensive pig-rearing support system using AI and cameras to promote sustainable livestock farming and address industry challenges such as declining farm numbers and an ageing workforce. It collaborates with Hokkaido and Osaka universities to develop methods for reducing and absorbing methane. However, the company does not disclose benchmarking against peers in sustainability and innovation.

The company identifies opportunities in the rising demand for environmentally conscious consumption and the expanding market for new proteins. In response, it is developing high-sustainability products, researching new proteins, and enhancing product offerings. It acknowledges that global population growth and climate change may challenge protein supply and is thus diversifying consumer options by promoting and expanding sales of plant-derived proteins, malt-derived proteins, and cell-based foods. For FY2022, the company reports sales of plant-based proteins totalling 660 million yen, with the aim to increase this to ¥1 billion by FY2023 and ¥10 billion by FY2030.

The company has launched a range of plant-derived products under the brand 'NatuMeat', which includes alternative meat substitutes such as filets, ham, sausages, and burgers targeting both consumer and commercial markets. The company is in the research and development stage for cell-based foods and malt protein as sustainable protein sources. It is navigating the regulatory environment but currently offers no cultivated meat or malt protein products. In March 2023, it introduced NatuMeat Fishless Fried Fish Fillets, using proprietary technology to mimic the flavour and texture of animal protein. In October 2022, the company announced success in replacing animal-derived components in the meat culturing process with those from common foodstuffs. This progress aims to increase production quantities at a lower cost. Regulatory changes will be required before introducing cell-based products in Japan, while efforts to commercialise malt-derived protein are being accelerated.