Saputo Inc

The company has responded to its CDP question about methane reduction targets. However, it only discusses energy consumption-related targets and not methane emission reduction.

The company has set an intensity-based target to reduce its Scope 1 and 2 emissions by 20% by 2025, using the 2020 baseline. It has disclosed its Scope 3 emissions. However, it does not report its target to reduce Scope 3 emissions.

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 discloses that during 2022, its Scope 1 emissions amounted to 520,784 tCO2, Scope 2 market-based emissions were 396,889 tCO2e, and Scope 3 emissions reached 12,848,474 tCO2e.

The company discloses quantitative data for Scope 1 emissions related to animal farming. It also mentions that animal farming emissions are relevant in its Scope 3 emissions. However, quantitative data for Scope 3 is not reported.

The company has responded to the latest CDP climate change questionnaire 2022. Only the GHG inventory Scope 1 and 2 emissions are externally verified by EY.

The company reports an increase in absolute emissions from 14,566,305 tCO2e in FY2022 to 14,766,147 tCO2e in FY2023. These figures are calculated using Food and Agriculture Organisation (FAO) Global Livestock Environmental Assessment Model (GLEAM), and Scope 3 emissions have been heavily revised between reporting periods to reflect changes in GLEAM.

The company has conducted a climate scenario analysis to understand how external climate risks and opportunities could impact its business operations. The climate scenario analysis allows the company to explore the resilience of its business strategy to different climate futures and the impacts associated with the transition to a lower-carbon economy. It followed RCP 1.9, 4.5, and 8.5 methodologies for conducting company-wide scenario analysis.

The company discusses that extreme weather conditions can affect the price of raw materials in its supply chain, and it discloses that it has a dedicated team responsible for sourcing natural ingredients and packaging. This team also works closely with its suppliers to minimise price volatility and the impact on its business. It mentions that the increased heat stress reduced the availability of milk, quality crops, and clean water. It has a dedicated team responsible for sourcing raw ingredients and undertaking a specific study to understand better the impact of heat stress on milk yield and its implications for the supply chain. It mentions that higher energy costs will impact the operating costs, and the company expects the climate and energy intensity reduction targets and capital investment for carbon reduction projects to reduce the direct costs and exposure to carbon pricing mechanisms. The company states that it purchases energy to process raw materials and manufacture finished goods and that fuel/energy taxes and regulations can increase costs. It also discloses its cost calculation and mitigation strategy for potential carbon taxes.

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

The company discloses that soy is used as a feed source for cattle. Saputo is committed to ensuring that all soy products purchased from South America for dairy cattle feed are sustainably certified by the end of 2025. It discloses membership to the Round Table on Responsible Soy Association (RTRS) and adherence to the Davidstow Farm Standards. These standards cover all suppliers to source sustainable soy. The company has committed to sourcing soy from South America, free from deforestation and conversion by 2025. However, as of the current reporting period, it does not source 100% deforestation-free soy. Saputo states that when it sources soy from suppliers, it procures sustainably or purchases soy credits equivalent to the Round Table on Responsible Soy (RTRS). However, the company also discloses that it does not conduct forest-related risk assessments.

The company is committed to sourcing zero deforestation and conversion-free soy in the supply chain by 2025. Saputo is a member of the RTRS, which has a cut-off date of 2016.

The company is committed to ensuring all Soy products purchased from South America for dairy cattle fed are sustainably certified. However, whether the company solely sources soy from South America remains unclear. Its commitment covers all soy products bought from South America for cattle feed. Saputo does not seem to produce soy in its direct operations.

The company does not disclose progress made against its commitment. It has responded to the CDP Forest Questionnarie 2022.

In its Sustainable Agriculture Policy, the company states that it has zero tolerance for illegal deforestation, land-clearing, or peatland development. It commits to sourcing sustainable soy in its supply chain by the end of 2025. Moreover, the Supplier Code of Conduct specifies that the company will not tolerate any severe environmental deficiency posing serious and immediate harm to the environment or community, thereby alluding to biodiversity protection. The company provides support to milk producers and suppliers through science-based research, industry partnerships, and technical and financial support, among other opportunities. However, the company does not mention support for soy suppliers and farmers aimed towards improving traceability and deforestation-free production.

The company reserves the right to investigate and conduct audits within its supply chain to verify compliance with its Supplier Code of Conduct. A third party drives audits, and corrective actions acceptable to the company are agreed upon in writing. Saputo states that it reserves the right to terminate its relationship with a supplier if detected non-compliance occurs.

The company engages with stakeholders and states it embeds robust environmental values to protect biodiversity. However, it does not discuss practices or innovations to transition towards sustainable feed sources other than using certifications.

The company has conducted a water risk assessment and discloses that less than 22% of its facilities are currently exposed to high water risks. Sannouncescloses its total water consumption for the reporting year. It also mentions that in FY2022, it completed the installation of four water projects across the network, potentially saving more than 290,000 m3 of water annually. An additional ten water projects will be funded in FY2022 for an added 250,000 m3 of potential water savings annually.

The company aims to reduce the water intensity of its operations by 10% by 2025 against the 2020 baseline. The company discloses that in 2023, its water intensity increased by 0.79%. Saputo states that water intensity has remained relatively flat due to reduced production volume since 2020.

The company discloses water withdrawals by source. Overall, the company revealed that 28% of its water withdrawals are in regions with High or Extremely High Baseline Water Stress. It has committed to invest CDN$50 million in ears in its CAPEX allocation to achieve its water-related targets. The company is currently in the second year of this investment cycle. Saputo anticipates a 0% change in OPEX compared to last year. The company did not report OPEX expenditure in the previous year's CDP report, so a comparison cannot be made. KMPG externally verifies water consumption and withdrawal data. The company has responded to the CDP water questionnaire 2022. Saputo reports a decrease in water withdrawals in the last reporting year. The company does not report water consumption in its 2023 Report but does disclose an increase in consumption in its 2022 CDP responses.

The company has a sustainable agriculture policy for its raw material producers. The company discloses a goal to 'protect and preserve water ecosystems' in this document. However, in the description of this goal, the company refers to nutrient pollution as opposed to scarcity. It discloses that this year it has allocated resources to build its sustainable agriculture expertise and establish global standards, defining the farming practices expected of its milk suppliers. It states that these standards will be formally launched in FY2023 and rolled out across all its operations to have them fully implemented by 2025.

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

The company discloses that 26-50% of its milk comes from high-water stress areas. At the same time, 26% of milk sourced is from high-water stress areas. It also mentioned that this is the first year estimating the portion of the milk supply sourced from water-stressed regions. Saputo has a sustainable agriculture policy for its producers that explicitly addresses the protection and preservation of water in farmlands from a quality perspective. However, the company does not seem to address scarcity issues in this policy.

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

The company discloses that it has been issued three significant fines for non-compliance. The company states this was due to environmental breaches in 2016 and the other two fines related to historical ecological violations in the USA. It says it undertakes water-related risk assessments of its operations using the WRI aqueduct tool. One of the issues covered by the risk assessment is water quality at a basin/catchment level. Saputo discloses a target to improve its wastewater quality year over year in the areas where the company directly discharges to the environment. The company also states that it maintained a water quality compliance rate of 94% in FY2022 and 99% in FY23. However, it does not explicitly disclose a quantitative target to reduce primary pollutants such as COD BOD.

The company discloses that it measures discharged water quality at all of its facilities every month to ensure compliance with local regulations. However, the company does not report the exact quality of water discharged by standard effluent metrics. Saputo discloses a total wastewater discharge in the current reporting period. It has disclosed data in its CDP Water 2022 questionnaire.

The company continuously seeks ways to divert organic waste to produce biogas, composting, and land application. Compared to the previous reporting period, the company has decreased the volume of wastewater discharged at an aggregate level.

The company states that producers should identify and implement practices to address soil degradation and erosion in grazing and cropping systems.

The company is committed to working with its farmers, suppliers, and industry partners to protect biodiversity and soil health. It also says that it has allocated funding to establish sustainability standards and define the practices it expects in its milk suppliers. However, whether this applies to feed farming or includes improved nutrient management is unclear.

The company states that it converts organic biowastes into biogas using bio-digestion for composting and land application. However, as the company does not own farms, this will refer to by-products from processinopposedossed to manure. Saputo states it has undertaken water quality assessments but does not disclose the percentage of farms or locations at high risk.

The company states that producers should store and manage all effluent, manure, and nutrients in a way that does not pollute groundwater or surface water. However, it is unclear what support the company provides suppliers to ensure proper management of manure and nutrients.

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

The company mandates compliance with applicable antimicrobial regulations and has enacted a dedicated antibiotic use strategy in its UK Dairy Division. It also minimises antibiotic use through measures including proper housing, immunisation, biosecurity, and veterinary care.

The company does not disclose the quantity of antibiotics used.

As outlined in its animal welfare policy, the company commits to comprehensive animal care, including housing, nutrition, and veterinary care. It engages in employee training and has protocols for dealing with policy breaches, including supplier suspension. The company also supports animal welfare educational initiatives, such as a dairy programme in collaboration with the University of Guelph. However, it does not mention the Five Freedoms and could benefit from more explicit disclosure to clarify the full scope of its welfare initiatives.

The company commits to avoiding close confinement of dairy cattle in alignment with the OIE Terrestrial Animal Health Code and is working to address confinement issues in Canada. It also endorses the UK phase-out of tethering by October 2023. It commits to eliminating tail docking and painful handling methods and expects suppliers to adhere to humane practices. The company supports OIE Transport of Animals Standards and has advocated for amendments to Canadian transport regulations. However, it does not explicitly commit to avoiding long-distance transportation. While it prioritises humane slaughter methods in line with national veterinary positions, it lacks specific disclosure on its stunning practices.

The company commits to implementing animal care assessment programmes with third-party validation to ensure compliance with recognised industry standards. However, it does not explicitly state whether it is certified by these standards.

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

The company discusses tethering in its Animal Welfare Policy but does not commit to prohibiting the practice. Tethering is not practised in Argentina and Australia but is allowed in Canada and the UK.

The company acknowledges that it is responsible for respecting human rights but provides no information indicating if it adheres to internationally agreed human rights standards such as the ILO core conventions.

The company's Australia division discloses that it conducts due diligence to mitigate the risk of modern slavery across its operations and supply chain. Further, the company states that it manages identified risks of modern slavery through employee education, training, and discussions with industry and community partners. For its supply chain, the company mitigates identified current slavery risks by onboarding suppliers to Sedex, reviewing internal policies, engaging with suppliers to create a plan to reduce the risk, and stopping trading with suppliers if chances are unresolved. However, other human rights are not mentioned, and this disclosure is limited to the Australian division.

The company states that the most prevalent risks of modern slavery in its operations are geopolitical, product, and sector risks. However, while it states why these risks may occur, it is unclear as to the specific type of risk to labour conditions that these risk categories cover. The company also says that it has implemented the proper work spot checks with contractors in the supply chain following an SMETA. However, this was described as an improvement opportunity rather than in response to a specific risk. Furthermore, the company does not state that this was in response to the three main risk categories identified as part of its due diligence or disclose how it has responded to these identified risks through preventative measures.

The company prohibits harassment, discrimination, and forced and child labour in its operations and supply chain. However, the company does not disclose whether it promotes fair wages or how it monitors compliance with these policies.

The company reserves the right to audit suppliers to ensure compliance with its Supplier Code of Conduct but does not clarify occur. The company has an anonymous grievance mechanism that can be used to report misconduct. It also states that the company's UK subsidiary has its whistleblowing policy, which suppliers can access. It mentions that complaints can be made anonymously but also notes that concerns expressed this way are discouraged. The company must sufficiently disclose how suppliers can submit grievances outside the UK division. Further, the company does not mention designing whistleblowing channels in consultation with stakeholders.

The company has a health and safety policy, demonstrating its dedication to identifying and eliminating hazards to minimise the risk of workplace injuries and illnesses arising from its operations. The company also maintains a health and safety committee tasked with aligning and ensuring adherence to best practices in health and safety across its divisions. However, the company must disclose whether worker representatives are included in the committee or if individual facilities also have dedicated committees. Furthermore, the company must state its health and safety certification.

The company reports a decrease in the LTIFR (lost time injury frequency rate) from 1.61 in 2021 to 1.37 in 2022. It also discloses that fatalities remained zero in FY2022 and FY2021. The company's global turnover rate was 24% during the reporting period. However, this data is not broken down by seniority level.

The company states that it respects the rights of employees to associate, organise, and bargain collectively by applicable laws. However, it does not disclose actions taken to support these rights. The company reports a unionisation rate of 35% among employees in its operations. The company's suppliers are also required to respect the rights of employees to associate, organise, and bargain collectively freely.

The company discloses that collective bargaining agreements cover 35% of its employees. The company does not reveal the distribution of its workforce across existing contractual agreements.

The company discloses that 100% of its sites were GFSI-certified during the reporting period. Further, it mentions extending its commitment to ensuring food safety to suppliers and expects all suppliers across its value chain to hold GFSI certification. In FY2023, 97% of its third-party ingredient suppliers were also GFSI-certified.

The company discloses that it has an Audit Committee, which meets regularly and reports to the Board quarterly on ESG issues, including food safety. Additionally, it provides information on the percentage of certified facilities with Good or Excellent GFSI audit ratings for the annual reporting periods of FY19 to FY23. However, the number and frequency of audits conducted relating to food safety are not disclosed for this reporting period. The GFSI non-conformance rate was reported as 4%. Corrective actions were implemented for 100% of the significant non-conformances identified and 100% of the minor non-conformances. It discloses that it ensures systems are in place for tracing products and raw materials. However, no further details are revealed, and it is not clear whether these systems are consumer-facing.

The company discloses food safety as one of its material business risks. However, it does not describe the product recall system it has in place. Three voluntary product recalls were reported in FY2023. Further, it states that its contingency processes resulted in the products being swiftly removed from the market without impacting consumers.

The company does not disclose information on market bans in the reporting period, and none were detected in the media screening.

The company states that the board is formally mandated to oversee material ESG risks and deploy strategies to manage them. The company conducted a materiality assessment in 2020 to identify ESG topics and inform its annual disclosure. In the evaluation, the company includes corporate governance, food safety, human resources, cybersecurity, business ethics and transparency, environmental, social, animal Welfare, water use in operations, climate risk, energy use and management, packaging and plastics and ecological impact of operations as the primary material issues. The company reports holding board-level sustainability expertise but not food safety or innovation.

The company has reinforced its climate governance by introducing ESG-related targets as part of its long-term incentive plan. It discloses that 30% of the performance-related share-based compensation granted in FY2023 is linked to achieving its climate and water targets. The company states that in FY2022, it engaged in the development of the Farm Assuring Responsible Management (FARM) animal care program v5.0 of the National Milk Producers Federation in the US and was also included in the Business Benchmark on Farm Animal Welfare (BBFAW). Additionally, the company continued supporting the Dairyland initiative led by the University of Wisconsin School of Veterinary Medicine. It allows faculty and staff to provide bi-annual workshops for farmers, veterinarians, nutritionists, and industry consultants. The company also states that it is a member of the Global Dairy Platform, which invests in sustainability, efficient food production and reducing environmental impacts in the dairy sector. The company also discloses some details of memberships with coalitions and alliances. However, it does not discuss aligning its policy-engagement strategy to restrict global temperature rise to 1.5°C.

The company does not disclose a straightforward strategic approach to sustainability innovation or benchmark itself against peers in sustainability and innovation.

The company discloses its entry into the plant-based market due to the growing consumer interest in alternative proteins. It reports that its non-dairy products segment for FY2023 generated 4% of consolidated revenues. The feature includes dairy-free cheeses, dairy alternative beverages and creamers, oil and other products. However, it has not yet set a timebound target to diversify protein sources.

The company has introduced "Vitalite" and "Cathedral City" plant-based alternative products in the Canadian and European markets. Additionally, in both Canada and the US, it has expanded its presence in the plant-based beverage category by manufacturing private-label products for major retailers. Furthermore, it launched plant-based cheese under the lead cheese brand "CHEER" in Australia. In 2021, it acquired all of the shares of Bute Island Foods Ltd, a manufacturer, marketer, and distributor of various dairy alternative cheese products for both the retail and foodservice market segments, under the vegan brand "Sheese" alongside private label brands.