Saputo Inc

The company has expressed its intent to set science-based targets and expects its climate targets for post-FY25 to be validated by the SBTi. However, it has not disclosed a specific methane emission reduction target for animal farming.

The company, a dairy processor operating in Canada, Argentina, the USA, the United Kingdom, and Australia, aims to reduce the CO2e and energy intensity of its operations by 20% and 10%, respectively, by 2025, using a 2020 baseline. This target covers Scope 1 and Scope 2 market-based emissions. While it has disclosed its Scope 3 emissions, it has not set a reduction target for them.

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 launched its global Sustainable Agriculture Policy in 2023 to ensure responsible dairy ingredient production and continued implementing these standards throughout its supply chain in 2024. By the end of 2025, all milk producers are required to have a documented Farm Plan, addressing Sustainable Agriculture Standards and Additional Sustainability Topics if necessary. To support its goal of a net-zero food system by 2050, the Farm Plan mandates identifying sources of emissions and implementing reduction practices or technologies. The company pledges to work with farmers and suppliers to achieve its net-zero ambition. In 2022, it introduced the 2025 Supply Chain Pledges, aiming for 100% of its milk supply chain to meet sustainability standards aligned with net-zero goals and fostering direct relationships with farmers. In 2024, the company funded farmer initiatives in the UK, Australia, and the USA for capacity building in sustainable practices. In the UK, efforts focused on tools and training to establish and reduce GHG emissions in the Davidstow milk pool. However, the company is encouraged to clarify how it will collaborate with suppliers to fulfil the Farm Plan requirement.

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 Scope 1 emissions of 509,543 tCO2e, Scope 2 market-based emissions of 369,574 tCO2e, and Scope 3 emissions of 13,825,661 tCO2e for FY2024.

According to its CDP Climate 2023 response, the company reports that Scope 3 emissions from purchased goods and services, including on-farm milk production and packaging materials, totalled 14,173,367 tCO2e for the reporting year. On-farm emissions are calculated using supplier-specific emission factors through the Global Livestock Environmental Assessment Model (GLEAM), which focuses solely on on-farm milk production and excludes post-farm emissions to prevent double counting. The company provides a breakdown of Scope 1 GHG emissions as follows: CO2 - 519,538 tCO2e; CH4 - 543 tCO2e; N2O - 707 tCO2e. However, the company does not disclose GHG emissions from feed production or land-use change.

The company responded to the CDP Climate Change Questionnaire 2023 and disclosed that KPMG externally verifies its Scope 1 and 2 GHG emission inventory. However, it does not clarify whether Scope 3 emission data is externally audited.

Between FY2023 and FY2024, the company reported a slight decrease of 0.41% in total absolute emissions (Scope 1, 2, and 3), from 14,766,147 to 14,704,778 tCO2e. Over a longer period, from FY2020 to FY2024, the company's emissions increased by 1%, averaging an annual rise of 0.25%. In its CDP Climate 2023 response, the company states that Scope 3 emissions from purchased goods and services rose to 14,173,367 tCO2e in FY2023, from 13,571,188 tCO2e in FY2022. These emissions are attributed to on-farm milk production and packaging materials. The company does not provide quantitative data for emissions reductions related to feed, enteric fermentation, or manure management. For FY2024, its Scope 1 emissions were 509,543 tCO2, Scope 2 emissions (market-based) totalled 369,574 tCO2e, and Scope 3 emissions were 13,825,661 tCO2e.

In 2023, the company conducted a climate scenario analysis to evaluate the impact of external climate risks and opportunities on its operations. Using scenarios from internationally recognised agencies, it considered demographics, economics, environmental factors, legal, social, and technological aspects. This analysis aids in understanding the resilience of the company's business strategy across different climate scenarios, the transition to a lower-carbon economy, and implications for strategic and financial planning. The company utilised RCP 1.9, 2.6, 4.5, and 8.5 methodologies in its analysis.

The company recognises that changing weather patterns may affect raw material prices and availability, such as crops, impacting production. It has dedicated teams in each market working with suppliers and farmers to manage raw material availability and minimise price volatility. Nevertheless, the company does not provide specifics on how it plans to mitigate or adapt to this risk. For milk production, the company acknowledges the risk of reduced availability due to heat stress on livestock. It conducted a study as part of its climate scenario analysis to understand this impact and its implications for the supply chain. However, the company does not explicitly reveal plans to adapt to temperature increases affecting animal productivity or mortality, nor does it mention potential risks from increased veterinary and medicine costs. The company is aware of the risk of higher energy costs affecting operational expenses. It anticipates that achieving climate and energy intensity reduction targets and investing in carbon reduction projects will reduce direct costs and exposure to carbon pricing mechanisms. It also acknowledges the risk of operations being affected by carbon taxes or emissions trading schemes. The company outlines a cost calculation and mitigation strategy for potential carbon taxes, involving monitoring plans and investments. Additionally, the company does not disclose the number of financially material events due 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 has committed to sourcing soy free from deforestation and land conversion in its supply chain by 2025. It is a member of the Round Table on Responsible Soy (RTRS), which has a cut-off date of 2016.

The company commits to ensuring all soy products purchased from South America for dairy cattle feed are sustainably certified, adhering to standards like the Round Table on Responsible Soy (RTRS), ProTerra, or equivalent. However, this commitment to deforestation-free soy products appears limited to the UK dairy division, and it is unclear if soy is exclusively sourced from South America.

The company does not report on its progress towards its zero deforestation and conversion commitment, nor does it indicate if this data has been verified or audited by a third party. However, the company has responded to the CDP Forests Questionnaire 2023.

The company's Sustainable Agriculture Policy asserts zero tolerance for illegal deforestation, land clearing, or peatland development, with a commitment to sourcing sustainable soy by 2025. The Supplier Code of Conduct emphasises no tolerance for severe environmental harm, highlighting a focus on biodiversity protection. While the company has mentioned sourcing certified soy from South America, it is unclear if it also sources from other regions. Additionally, the company supports milk producers and suppliers through science-based research, industry partnerships, and technical and financial assistance, aiming to contribute CDN$10 million to initiatives in the milk supply chain. However, it does not extend similar support to soy suppliers and farmers for improving traceability and achieving deforestation-free production.

The company's Supplier Code of Conduct provides for the investigation and auditing of its supply chain for compliance, with third-party audits conducted and corrective actions formalised in writing. It reserves the right to terminate relationships with non-compliant suppliers or those failing to implement remedial actions. However, it does not disclose the proportion of traceable soy within its supply chain.

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

In 2022, the company's water risk assessment, conducted using the WRI Aqueduct tool, identified that seven facilities, representing 1-25% of its total facilities, face high or extreme water risks. However, it does not disclose the exact locations of these facilities. In its 2023 CDP Water response, the company reported negative water consumption of 1,307 m3, attributing this water-positive status to its product mix. The 2024 Annual Report shows an increased water-positive status of 1,825,648 m3 for FY2024. Additionally, the company completed five water projects in 2023, potentially saving over 230,000 m3 of water annually, and plans to undertake 19 further projects to reduce its carbon, energy, water, and waste footprint.

The company aims to reduce water intensity by 10% by 2025, using the 2020 baseline. It reports a decrease in water intensity from 5.08 to 5.00 m3 per tonne of product between 2023 and 2024, a 1.57% improvement. However, the company has not set a time-bound target for reducing total water withdrawals at its facilities for the reporting year.

According to its 2023 CDP Water response, the company withdrew 262 m3 from surface water, 5,595 m3 from groundwater, and 18,361 m3 from third-party sources, with 50% of its withdrawals in FY2024 occurring in regions of high or extremely high baseline water stress. The company completed a CDN $50 million investment as part of its CAPEX allocation for water-related targets in FY2023 and plans to invest an additional $20 million in FY2024 to support the global action plan, maintaining its previous investment level. The company does not anticipate any change in OPEX, although last year's data was not reported, preventing comparison. Water consumption, withdrawal, and intensity data are externally verified by KPMG, and the company has responded to the CDP Water Security Questionnaire 2023. It reported a 0.61% decrease in water withdrawal, from 24,218,443 m3 in FY2023 to 24,071,722 m3 in FY2024. The company was also water positive by 1,307,412 m3 in FY2023 and 1,825,648 m3 in FY2024, although it does not disclose specific water consumption data.

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.

In its 2023 CDP water response, the company disclosed that 11-25% of its produced milk came from high-water stress areas. In contrast, its 2024 Promise Report states that 47% of milk sourced was from such areas in FY2024. The company acknowledges the risk of water availability for milk production and has conducted risk assessments of its supply chain. Through its 2025 Supply Chain Pledges, the company has committed to partnering with farmers, suppliers, and industry partners to protect and preserve water ecosystems. It has a Sustainable Agriculture Policy that outlines sustainability standards and expected farming practices for milk suppliers. However, the policy does not address water scarcity in animal farming, focusing instead on effluent, manure, and nutrient management. The company is encouraged to disclose its management of water use in animal farming within its supply chain.

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

The company reports no fines for non-compliance in FY24. It performs an annual risk assessment using the WRI Aqueduct tool, evaluating water quality at a basin level. Facilities in Canada, USA, Argentina, UK, and Australia face risks of declining water quality, with seven facilities in the Sacramento River - San Joaquin River Basins identified as high risk. The company manages wastewater through regular monitoring, source reduction, and suitable capital investments. While it aims to improve wastewater quality annually, maintaining a compliance rate of 99% in FY23 and 98% in FY24, it does not disclose specific targets for main pollutants like COD and BOD. The company targets a 10% reduction in water intensity but does not specify a target for reducing wastewater volume.

The company measures discharged water quality monthly to ensure regulatory compliance but does not provide specific effluent metrics. It reported a total wastewater discharge of 25,525.86 megalitres for FY2022, with this data verified by a third party using the CSAE 3000 standard. The company also responded to the CDP Water Security Questionnaire 2023.

The company does not disclose having improved the wastewater quality at the aggregate level compared to the previous reporting period or reduced the volume of wastewater discharged.

The company advises producers to address soil degradation and erosion in grazing and cropping systems. However, it has not disclosed whether it mandates purchasing feed solely from suppliers or producing feed with a nutrient management plan. Additionally, the company lacks information on guidance, support, or incentives for suppliers regarding nutrient management or fertiliser use in crop production. It also has not established partnerships with third parties to influence its sourcing or farming strategy, including nutrient pollution and fertiliser practices.

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 is exploring waste reduction, repurposing, and diversion methods, such as redirecting organics to animal feed. It is also working towards completing a biodigester in Argentina to convert organics into biogas, potentially related to manure, although the project's operational status is unclear. The company advises producers to manage effluent, manure, and nutrients to prevent water pollution and conducts water quality assessments of its operations and supply chain. However, it does not disclose the percentage of farms at high risk from a water quality perspective.

The company mandates that suppliers store and manage effluent, manure, and nutrients to prevent groundwater and surface water pollution. However, it does not specify the support or resources provided to suppliers for effective management.

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 acknowledges the importance of antimicrobial resistance (AMR) and has developed an antibiotic use strategy in its Dairy Division in the UK to promote responsible usage. Although it supports the World Organisation for Animal Health and World Health Organisation AMR strategies, it lacks a specific policy on antibiotic usage for growth promotion, prophylaxis, metaphylaxis, or therapeutic administration and does not indicate the availability of antibiotic-free brands. The company has implemented measures to reduce disease incidence and minimise the need for antibiotics, such as biosecurity protocols, vaccination programs, and reducing routine mutilations like tail docking. It mandates pain control during castration and dehorning. Additionally, the company promotes animal welfare measures, including eliminating tethering where possible, ensuring untethered exercise for cattle in the UK and Canada, and supporting recognised animal welfare standards.

The company does not disclose the quantity of antibiotics used.

The company supports animal welfare through adherence to the principles of the Five Freedoms. Its policy commits to high standards of animal care, including proper housing, nutrition, immunisation, biosecurity, herd health management, and veterinary oversight. The company enforces a zero-tolerance policy for animal cruelty and requires compliance with recognised standards, such as the World Organisation for Animal Health Terrestrial Animal Health Code and the Red Tractor Standards in the UK. It advocates for the elimination of routine mutilations and commits to education and training initiatives promoting low-stress handling techniques. Training and education efforts across all operations ensure employees adopt proper animal care and handling methods. The company supports workshops and programmes to promote best practices. Suppliers in breach of animal welfare standards are suspended until corrective actions are implemented and verified through third-party audits; such enforcement resulted in a supplier suspension in the reporting period. The company demonstrates leadership in animal welfare advancement through research and development partnerships with global academic institutions. Collaborations include the Dairyland Initiative at the University of Wisconsin, the Saputo Dairy Care Program at the University of Guelph, and various projects at the University of British Columbia. Additionally, the company works with the University of Melbourne and Dairy Australia on cattle handling assessment and training tools.

The company is dedicated to avoiding close confinement for dairy cattle, supporting the World Organisation for Animal Health (OIE) Terrestrial Animal Health Code by promoting untethered exercise. It ensures no confinement or tethering in Argentina and Australia and adheres to the UK's Red Tractor Standards, which require untethered exercise and a phase-out of year-round tethering by October 2023. Efforts are underway in Canada to revise practices concerning confinement and tethering. The company is committed to preventing routine mutilations, particularly tail docking, disbudding, and castration. Its Animal Welfare Policy bans tail docking in cattle due to the lack of scientific benefit and associated pain risks. Necessary procedures such as disbudding, teat removal, or castration must be conducted at a young age with proper techniques and pain management. The company endorses the OIE Transport of Animals Standards and advocates for improved Canadian federal regulations for animal welfare during transport but does not aim to reduce transportation times. Its efforts concentrate on aligning with international standards and enhancing welfare during transit. Humane slaughter practices are prioritised, ensuring adequate stunning of all animals, including dairy cattle, before slaughter. The policy aligns with veterinary standards in Canada, Australia, and the UK, ensuring methods minimise fear and distress and guarantee rapid or confirmed death. The company does not mention providing an enriched environment for animals. Additionally, it does not commit to excluding breeds with traits that heighten anatomical or metabolic disorders.

The company’s dairy operations in the UK, United States, and Canada are certified under various Tier 3 farm assurance programmes, including the Red Tractor Assured Food Standards, the National Milk Producers Federation FARM™ Animal Care Program, and the Dairy Farmers of Canada proAction® animal care module. These certifications address animal welfare standards through regular audits and compliance measures. However, it is unclear if these certifications cover all of the company’s global dairy operations.

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

The company expresses support for untethered exercise for dairy cattle, aligning with the World Organisation for Animal Health's Terrestrial Animal Health Code. However, it does not disclose specific metrics or practices concerning key welfare risks such as lameness prevalence, mastitis incidence, or the provision of suitable bedding materials. While it emphasises compliance with general animal welfare standards, there is no detailed reporting or monitoring of these critical welfare issues.

The company acknowledges its responsibility to uphold labour and human rights but does not specifically commit to internationally recognised human rights principles.

The company uses risk assessment tools such as Sedex and Ecovadis to conduct modern slavery due diligence within its operations and supply chain, and performs SMETA audits at certain sites based on customer requirements. However, the focus appears restricted to modern slavery risks, and it is encouraged to expand due diligence to encompass all human rights. The company performs regular due diligence on its operations and supply chain, utilising risk assessment platforms and conducting SMETA audits at some facilities. It outlines subsequent actions following risk assessments or audit investigations. For supply chain non-compliance, it requires suppliers to implement a remediation plan and halts trade until the issue is resolved. For non-compliance within its operations, the company may enact disciplinary action or terminate employment contracts. To mitigate modern slavery risks, the company includes employee training in Australia during the onboarding process. However, it is unclear if any further mitigation actions, such as capacity building, are undertaken for suppliers.

The company identifies geopolitical, product, and sector risks as prevalent modern slavery concerns in its operations and supply chain. However, it does not specify where these risks are most significant in its value chain. The company reports finding no instances of child or forced labour during the reporting period and states that no modern slavery risks required remediation. Nonetheless, it is unclear whether other human rights issues were detected or required remediation.

The company prohibits harassment, discrimination, forced labour, and child labour within its operations but does not disclose whether it promotes living wages or sick pay. It conducts SMETA audits at some manufacturing sites based on customer needs, though the extent of site coverage is unclear. The company mandates that its suppliers prohibit discrimination, forced labour, child labour, harassment, and abuse. However, it does not disclose whether it requires suppliers to promote living wages.

The company states that it may assess suppliers' compliance with the Supplier Code of Conduct at any time and may request high-risk suppliers to undergo a SMETA audit. However, it is unclear if audits are actually conducted to verify compliance. The company has a third-party managed grievance mechanism for its direct operations, offering anonymity to users. However, it does not disclose whether this mechanism was developed in consultation with stakeholders such as employees or unions. Additionally, its whistleblowing mechanism is available to suppliers. The company does not disclose the number of grievances received during the reporting year.

The company is committed to employee well-being and the reduction of workplace hazards but does not disclose holding any health and safety certifications. It has a Health and Safety Committee to ensure adherence to best practices across divisions, but it is unspecified whether this includes worker representatives or if individual facilities have dedicated committees. Additionally, the company has not assessed or addressed antimicrobial resistance risk for its workforce.

The company reports a decrease in its Lost Time Injury Frequency Rate (LTIFR) from 1.40 in FY2023 to 1.24 in FY2024. It also states a reduction in fatalities, from one in FY2023 to zero in FY2024. Additionally, the company discloses a global turnover rate of 19% for FY2024, though this figure is not broken down by seniority level.

The company commits to upholding employees' rights to associate, organise, and bargain collectively, with a reported unionisation rate of 34% for FY2024. However, it does not disclose measures taken to support these rights. Suppliers are also required to respect employees' rights to freely associate, organise, and bargain collectively.

The company reports that 34% of its employees were represented by trade unions in FY2024. However, it does not disclose if the terms of collective bargaining agreements apply to all employees irrespective of union membership, nor does it provide details on the distribution of the workforce across different contractual agreements.

The company reports that all its facilities and 95% of its third-party suppliers were certified to GFSI standards in FY2024. It expects suppliers across its value chain to adhere to high standards, including GFSI certification for food safety, and has an audit programme for high-risk suppliers to ensure compliance.

The company reports that its Audit Committee meets regularly and provides quarterly updates to the Board on ESG issues, including food safety. It also discloses the percentage of certified facilities with Good or Excellent GFSI audit ratings from FY2020 to FY2024 but does not reveal the number and frequency of food safety audits conducted in this period. For FY2024, the company reports a GFSI non-conformance rate of 4% and confirms that corrective actions were implemented for all identified non-conformances. While the company states that systems are in place for tracing products and raw materials, it does not specify if these systems are accessible to consumers.

The company identifies food safety as a material business risk and reports zero voluntary product recalls in FY2024. However, it does not confirm whether a product recall system is in place.

The company does not disclose the number or locations of market bans for the reporting year, and none were detected during media screening.

The company reports that its Board oversees ESG factors and risks critical to the business and manages them accordingly. In FY2022, a materiality assessment was conducted to identify and validate key ESG topics, including climate change, health and safety, food safety, well-being, waste management, biodiversity, and water. The company plans to update its materiality matrix in FY2025 to guide future strategy. The Board holds a formal mandate to oversee material ESG risks, and four board members have expertise in ESG. However, the company does not disclose board-level expertise in food safety. Additionally, the company's President and Chief Operating Officer (International and Europe), Leanne Cutts, possesses expertise in new product development.

The company has improved its climate governance by integrating ESG-related targets into its long-term incentive plan, linking 30% of the performance share units granted in FY2024 to its climate and water targets. The company participates in animal welfare initiatives, including the FARM animal care programme of the National Milk Producers Federation in the US and the National Farm Animal Care Council in Canada. It is also a member of the Global Dairy Platform, focusing on sustainability and reducing environmental impacts in the dairy sector. Additionally, it supports the Australian Dairy Sustainability Framework’s Human Rights Working Group, which addresses human rights issues in dairy supply chains. The company has noted its membership in the Global Dairy Platform, yet it does not provide a comprehensive list of its trade associations, alliances, and coalitions, which would enhance transparency. Furthermore, it does not disclose a commitment to align its policy engagements with the goal of limiting global temperature rise to 1.5⁰C.

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 reports that increased environmental and climate change awareness has boosted market demand for plant-based alternative dairy products. It is capitalising on its trusted brands to provide dairy-free options. For FY2024, 5% of its consolidated revenues were generated by its non-dairy products segment, which includes dairy-free cheeses, alternative beverages and creamers, and oils. However, the company has not set a time-bound target to diversify its protein sources.

The company has introduced Vitalite and Cathedral City plant-based cheese alternatives in the Canadian and European markets, respectively. The Sheese brand has been relaunched in Europe, and plant-based cheese has been launched under the CHEER brand in Australia. The company acquired Bute Island Foods Ltd. in 2021, a manufacturer and distributor of dairy-alternative cheese products. However, it has not disclosed any investments in alternative proteins for the current reporting period. An update on developments in its alternative protein product portfolio is encouraged for the next reporting period.