RCL Foods Ltd/South Africa

The company reveals it has set a target currently under review by the Science Based Targets initiative.

The company discloses a target to reduce coal consumption by 50% by 2025, using 2015 as the baseline year. However, it does not disclose any target related to its Scope 3 emissions for FY23.

The company has not committed to setting a Net Zero Target and is not trying to obtain a 1.5°C or 2°C scenario target to be validated by the SBTi.

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

The company reports its Scope 1 emissions as 517,596 tCO2e and Scope 2 emissions as 525,456 tCO2e.

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

The company responded to the CDP Climate questionnaire in 2023. Its Carbon Disclosure Review was externally verified by Carbon & Energy Management Consultant Karen van der Wath in September 2022.

Between FY2022 and FY2023, the company's Scope 1 and 2 emissions decreased from 1,045,842 to 1,043,052 tCO2e. From FY2020 to FY2023, emissions decreased by 1.4%, representing an average annual decrease of 0.5%. The company reports its Scope 1 emissions as 517,596 tCO2e and Scope 2 emissions as 525,456 tCO2e. It does not disclose quantitative decreases in emissions from feed or enteric fermentation or manure management.

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

The company acknowledges the commodity pricing risk due to the war in Ukraine and climate conditions, affecting the volatility and availability of raw materials. It outlines strategies to mitigate these risks, such as regular strategic review meetings and local sourcing of materials. However, there is no mention of increased heat stress or animal mortality, nor of rising veterinary and medicine costs. The company is undertaking measures to reduce energy consumption and enhance renewable energy production in response to rising energy costs. It has implemented an Energy Roadmap to stabilise electricity prices and secure long-term supply, which includes generating electricity from biogas at chicken processing plants and using solar energy at bakery facilities. The company recognises the risk from carbon taxes impacting its operations in South Africa but does not disclose mitigation measures for this risk. Additionally, it does not report the number of financially material events resulting from climate risk 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 does not disclose having a deforestation/conversion-free target for soy.

The company has responded to CDP Forests 2023.

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 requires that imported soybean meal and oil satisfy SABS standards at ports and meet ISO standards for feed safety at the mill. Verification by the onsite SHEQR/technical manager and internal auditors is conducted, though these standards exclude deforestation management. The company plans to adopt a third-party certification scheme within two years and should clarify if it will address deforestation. All procured soy is traceable through legal contracts, which mandate that the trading company disclose the soy's production location. Raw material delivery can be traced through delivery notes and batch numbers. The company sources 45.5% of its soy from Argentina, with the rest from South Africa, and claims full traceability of its soy supply.

The company outlines nature-positive practices in its soil and pest management for sugarcane farming, partly used in producing Molatek animal feed for ruminants. These practices include no-burn harvesting, precision farming, and using cover crops and water sources to attract beneficial insect predators and enhance biodiversity. However, the company does not discuss reducing soy feed ingredients or innovations in its poultry feed operations. Greater detail on the outcomes of these practices is encouraged.

The company conducts annual water risk assessments across its operations and supply chain using Enterprise Risk Management and ISO 31000 tools. It reports that 22 facilities are exposed to water-related risks, primarily concerning availability and infrastructure, assessed at the individual site level. Water risks are categorised based on their potential impact on EBIT as catastrophic, critical, serious, important, or minor. It also identifies two South African locations experiencing high or medium water stress. The company discloses its water consumption as 106,650,205 kL for the reporting year. Acknowledging the urgency of water conservation amidst increasing scarcity and pollution, it undertakes initiatives such as rainwater harvesting, Waste-to-Value plants, and water recycling projects. The company's strategy of "Re-think to Reduce," "Re-define for Zero Waste," and "Re-invent to Create" focuses on minimising water usage, maximising wastewater value, and exploring innovative water generation methods.

The company measures water usage daily and sets targets for each division, but it does not disclose these divisional targets or a company-wide, timebound goal for reducing water consumption. In its 2023 CDP Water disclosure, the company aims to reduce water withdrawal from municipal or third-party sources by 50% to 73108607 units by 2025, based on a 2017 baseline of 146217214 units. It reports achieving 19.9% progress towards this target.

The company reports water withdrawals of 124,770.8 ML from fresh surface water, 732.8 ML from groundwater, and 6,142.5 ML from third parties in 2023. Of this, 11-25% is sourced from areas experiencing water stress. Despite the absence of significant CAPEX investments in water initiatives due to the COVID-19 pandemic in FY2022, the company notes a 10% increase in water-related OPEX compared to the previous reporting year. It confirms that the data on water withdrawals is verified by the local water board and has responded to the CDP Water Security Questionnaire for 2023. Additionally, the company indicates a decrease in water consumption from 131,485,704 kL in FY2022 to 106,650,205 kL in FY2023.

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 reports that 3,845,451 tons of sugar cane were crushed using 124,770 mL of raw water, resulting in an intensity of 30.82. It also produces Molatek animal feed for ruminants and poultry in its sugarcane and rainbow divisions, respectively, but does not disclose water intensity for these feeds. The company imports all soy from Brazil and Argentina, where drought conditions in 2022 reduced water availability. It states that 1-10% of its soy and 1-25% of its sugar cane, used in Molatek feed, were produced in water-stressed areas. However, the company does not disclose information on other feed commodities like maize or corn. In its sugar division, the company adopts a "precision farming" approach to optimise water use and reduce over-application, achieving a 30% improvement in water use efficiency by 2023. The company is encouraged to clarify investments in these practices and disclose any water-saving measures for its poultry feed.

The company does not disclose the proportion of animal protein commodities produced or sourced in water-stressed areas. It does not disclose information addressing water scarcity in its animal supply chain, nor does it discuss guidance it offers to animal farmers/suppliers on water usage.

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

The company has been fined for water-related regulatory violations, specifically exceeding effluent discharge limits. In response, it conducted a risk analysis and implemented a mitigation plan that included updates to standard operating procedures for DAFF maintenance and operations, as well as DAFF upgrades and chemical reformulations. Water risks are evaluated as part of the company's overall risk assessment system, considering water quality and availability at a basin/catchment level. It reports that 22 facilities, representing 26-50% of its sites, are exposed to water risk. However, it does not provide details on specific locations affected by water stress in terms of quality. The company discloses it has no plans to set a target for water pollution, as it claims all water is treated and discharged in compliance with government regulations. It also lacks a volume target for water use.

The company monitors standard effluent parameters such as COD, TDS, TSS, TKN, and pH to ensure ecological safety by discharging within correct limits. It conducts monthly water discharge quality checks across 26-50% of its facilities, yet does not publicly disclose this data and is encouraged to do so. The company monitors water discharge volumes monthly in 51-75% of its facilities and reports a total discharge volume of 3,406,251 kL for FY23. Its discharged wastewater data is externally verified by the Department of Environmental Affairs and the local water board. Additionally, the company participates in the CDP Water Security 2023.

The company discloses that its Rainbow division's two Waste-to-Value (W2V) plants utilise a biological anaerobic digestion process to convert post-processing waste from its Worcester and Rustenburg chicken plants into biogas and heat energy. There is no evidence of improvement in the overall wastewater quality compared to the previous reporting period. In 2023, the total volume of water discharged increased from 3,307,879 kL in 2022 to 3,406,251 kL.

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 employs a "precision farming" approach in its sugarcane business unit, which produces Molatek animal feed for ruminants. This method aims to enhance productivity and efficiency by optimising fertiliser application. However, more details on sustainable feed production and nutrient management are encouraged, particularly regarding the feed used in the Rainbow poultry division. Additionally, the company utilises Integrated Pest Management (IPM) techniques, recommended by the South African Sugar Research Institute (SASRI), to minimise pesticide use. These techniques incorporate cover crops and water sources to foster biodiversity by supporting beneficial insect predators. Pesticides applied are all registered for sugarcane, and the company adheres to SASRI guidelines for chemical use. The company, though, does not specify if highly hazardous pesticides (HHPs) are used, nor does it address pesticide use in poultry feed.

The company converts poultry waste into biogas and heat energy through anaerobic digestion. It assesses water risks, including quality and availability, at a basin or catchment level as part of its risk assessment system. However, it does not provide details on identifying animal farms affected by water stress based on quality.

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 discuss antibiotics in its reports. It is considering implementing enhanced biosecurity controls at all Rainbow sites to prevent Avian Influenza infection and spread.

The company does not disclose the quantity of antibiotics used.

The company does not provide a statement in support of the Five Freedoms or a similar statement on the importance of animal welfare.

The company does not state a commitment to engaging and training employees on animal welfare issues.

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

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

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 commits to non-discrimination and prohibits the use of child and forced labour. It includes changes in the national cost of living in its salary review budget but does not commit to paying a living wage. The company lacks a disclosed policy against harassment or abuse. Its Employment Equity Policy involves audits for equal representation and prohibits discrimination. Audits focusing on child labour are conducted, although it is unclear if forced labour is covered. The company's child and forced labour policies are extended to its supply chain. While medical aid schemes provide affordable care to employees, it is unclear whether paid sick leave is guaranteed.

The company does not mention conducting audits for supply chain policies. It has an anonymous whistleblowing hotline available to all stakeholders to report fraud, statutory negligence, crime, and policy deviations. During the reporting year, 83 allegations were received, with 24 validated. Fraud was the most common report type, followed by human resources issues, though further categorisation of reports is not provided.

The company claims to promote and protect employee well-being through ISO 45001-based health and safety protocols, but does not disclose any health and safety certification. While it states that employees are consulted through regular safety committee meetings, it does not specify the percentage of facilities with health and safety committees that include worker representatives. Additionally, there is no evidence that the company has assessed or discussed antimicrobial resistance risk for its workforce.

The company reports a decrease in its Lost-Time Injury Frequency Rate (LTIFR) from 2.08 in FY2022 to 1.75 in FY2023, indicating an improvement. However, its total recordable injury rate is 3.14 for FY2023. The company notes an increase in fatalities from one in FY2022 to two in FY2023. The company discloses a turnover rate of 12.1% for FY2023, though this figure is not broken down by seniority level.

The company states 43% of its employees are union members and has signed multi-year wage agreements with unions. It maintains national and site-based employee representative forums for union negotiations and engagement. However, it does not disclose measures to facilitate workers' uptake of freedom of association, nor whether its supplier code of conduct requires a policy on freedom of association and collective bargaining.

The company reports that 72% of its employees are covered by collective bargaining agreements, but it does not indicate if agreement terms apply to all workers regardless of union or contract status. It has 21,839 permanent employees, 840 temporary employees, and 5,457 subcontracted workers, with all directly employed workers working full-time.

The company states that all its food production sites are certified under either FSSC 22000 or ISO 22000, both recognised by the Global Food Safety Initiative. However, it does not disclose the specific proportion of sites certified to FSSC 22000, nor does it specify a requirement for its suppliers to have Global Food Safety Initiative certification. Additionally, the company does not reveal the proportion of suppliers with such certification.

The company conducted 131 food safety audits during the reporting year. However, it does not disclose corrective action rates for non-conformances identified in these audits or information on the implementation of consumer-facing technology for food safety.

The company acknowledges the risk of reputational damage, product liability claims, and product recalls if food safety standards are not met and indicates that it has established withdrawal and recall procedures. However, it does not disclose details about its recall system. The company reports three recalls: two related to food safety and one due to incorrect product labelling, alongside the volumes involved. Specific instances included two cases of animal feed contamination and an incorrect font size on labels, leading to swift recalls without affecting consumer health or supply. The company does not disclose the costs of these recalls or any significant consequences such as legal actions. While the company suggests it has a protocol for managing product recalls, including corrective measures to prevent recurrence, it does not specify these actions. Limited information is provided on systemic changes or technological upgrades to enhance overall food safety, beyond incident-specific responses.

The company does not disclose the number or locations of market bans for the reporting year. It also fails to provide information on product recalls or market bans, and no such bans were detected in media screenings.

The board of directors oversees the company's ESG strategy through the Social and Ethics Committee. It has evaluated material risks via Enterprise Risk Management processes, identifying key risks such as commodity price fluctuations, supply chain disruption, industrial action, health and safety, IT system availability, energy security and pricing, food and product safety, societal risks and unrest, and water security. The board aids in identifying material matters. However, the company does not disclose board-level expertise in sustainability, food safety, or product development and innovation.

The company offers executive bonuses linked to climate-related targets but does not disclose the percentage of variable compensation tied to these goals. While it engages policymakers on carbon taxes, it does not reveal its stance on the matter and lacks discussion on engagement with public policy officials or associations on other ESG issues. Additionally, it does not disclose memberships with trade associations, alliances, or coalitions. Furthermore, the company has not committed to aligning its policy engagement activities with the goal of limiting global temperature rise to 1.5⁰C.

The company collaborates with LIVEKINDLY Collective Africa to expand the plant-based foods sector in South Africa as part of its mission to promote healthy diets through innovative products. However, it does not publicly benchmark itself against peers in sustainability and innovation.

The company recognises trends in food production challenges and opportunities, with sustainable products and practices as a priority issue in FY2023. Efforts include focusing on responsible energy, emissions, water and waste management, soil health, and biodiversity. The company is developing plant-based products in response to consumer trends and to mitigate risks. However, it lacks evidence of sales linked to alternative protein sources and is encouraged to disclose this data. Additionally, the company has yet to establish a timebound target for diversifying protein sources and is encouraged to set one.

The company partners with LIVEKINDLY Collective Africa to improve the affordability and accessibility of plant-based products, particularly through its Fry's brand, promoting sustainable living and addressing malnutrition. The company highlights growing the alternative protein market and addressing affordability as key priorities to provide consumers with more choices. However, it does not specify any venture investments or research and development activities.