Scandi Standard AB

The company has committed to reducing absolute Scope 1 and 2 emissions by 50% by 2030, based on a 2021 baseline. It also aims for a 50% reduction in absolute Scope 3 emissions from purchased goods and services, fuel and energy-related activities, and upstream transportation and distribution by the same year. These targets were validated by SBTi in 2023. Additionally, the company is working on setting targets under the SBTi’s Forest, Land and Agriculture (FLAG) framework, which involves reducing and removing land-related emissions.

The company has set SBTi-validated targets for Scope 1, 2, and 3 emissions aligned with a 1.5°C scenario by 2023. However, it has not disclosed any commitment to setting a Net Zero Target for SBTi validation.

The company claims to actively assist its suppliers in reducing energy consumption and transitioning to renewable energy sources. It also pledges to collect precise emissions data from its growers to help reduce their carbon footprint. Greater detail on its initiatives to reduce agricultural emissions is encouraged.

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.

For FY2023, the company reports Scope 1 emissions as 15,889 tCO2e, Scope 2 as 14,424 tCO2e (location-based) and 658 tCO2e (market-based), and Scope 3 emissions as 911,013 tCO2e. Scope 1 emissions include stationary combustion, mobile emissions, and fugitive emissions. Scope 3 emissions encompass purchased goods and services, capital goods, fuel and energy activities, upstream transportation, waste, business travel, end-of-life product treatment, and investments.

The company reports its Scope 3, category 1 emissions (Purchased Goods and Services) as 878,410 tCO2e, covering emissions from chicken feed and rearing. The climate impact calculation for feed includes land use change (LUC) emissions totalling 392,631 tCO2e, though specific emissions from LUC alone are not disclosed.

The company submitted its response to the CDP Climate Change questionnaire in 2023. PwC, an external auditor, provides limited assurance of the sustainability report for FY2023.

Between FY2022 and FY2023, the company reported an increase in absolute total emissions (Scope 1, 2, and 3 - location-based) from 852,327 to 941,984 tCO2e. Over the longer period from FY2021 to FY2023, emissions rose by 7% from 880,155 to 941,984 tCO2e, averaging an annual increase of 3.5%. The company attributes part of the rise in Scope 3 emissions to improved climate data quality for feed production, noting this impacts the reported CO2e despite stable feed consumption. The company intends to update its baseline linked to FLAG target applications. It does not report reductions in emissions from feed, enteric fermentation, or manure management. Reported emissions for FY2023 were: Scope 1 at 15,889 tCO2e, Scope 2 (market-based) at 658 tCO2e, Scope 2 (location-based) at 14,424 tCO2e, and Scope 3 at 911,013 tCO2e.

In 2023, the company used the TCFD framework to evaluate climate risks and opportunities across three scenarios, ranging from 1.5°C to over 3°C, to assess operational and strategic resilience. The analysis identified six significant climate-related risks and four material opportunities, considering their financial impact on both its operations and value chain over the short, medium, and long term.

The company anticipates that climate change will raise feed prices due to reduced harvests caused by droughts, water scarcity, floods, and extreme heat. Transitioning from South American soy to locally sourced protein crops has shown promising results in Sweden and Finland, potentially enhancing ingredient supply reliability and reducing soy-related emissions. The company does not address the impact of increasing temperatures and variability on animal productivity or mortality, nor does it cover the expected rise in veterinary and medicine expenses. In its 2023 CDP Climate report, the company highlights regulatory risks affecting energy and feed prices, which could lead to margin cuts or price hikes, possibly affecting demand. It has engaged consultants, established new roles, sourced green electricity, and pursued renewable energy initiatives to tackle these challenges. With new regulations introducing carbon taxes, the company faces increased compliance costs, necessitating investment in expertise and data management for energy and carbon emissions measurements. In 2021, it hired Schneider Electric as a consultant and added two positions to manage energy projects and emissions data. The company has not disclosed financially significant events arising from climate risks during the reporting period.

In its 2023 Annual Report, the company outlines the preparation of a climate transition plan targeting its 2030 Science-Based Targets. This plan, expected to be board-approved and implemented in 2024, involves integrating sustainability into the investment process to secure financing for climate initiatives. The company has allocated MSEK 210 for sustainability investments until 2027. However, it has not committed explicitly to aligning capital expenditures with its greenhouse gas targets. The company reports investments in flood prevention engineering solutions, amounting to SEK 14,000,000. None of its operations are currently regulated by carbon pricing systems, and it does not expect regulation in the next three years, although it anticipates potential costs between SEK 538,254 and SEK 4,186,429 due to these mechanisms. Compliance-related costs, including consultancy fees and new hires for energy projects and emissions data management, are approximately SEK 1,055,400.

The company reports that 23.3% of its chicken feed is soy, primarily imported from South America, with smaller quantities from North America and Asia. In 2023, it produced 133,000 tonnes of feed using imported soy, of which 70.8% has sustainability certification such as RTRS and ProTerra. However, not all soy is sourced from deforestation-free areas or suppliers. An annual forest-related risk assessment is conducted, yet the company does not disclose high-risk sourcing locations. It sources soy from regions including Paraguay, Argentina, and Brazil, which are considered deforestation risk countries, as well as Canada, India, and the US.

The company aims to source 100% certified soy by 2025, with a cutoff date of 2005, and plans to reduce soy in feed by 50% by 2030, replacing it with locally produced protein sources.

The company's commitment to responsible sourcing applies to all soy, specifically targeting soy from high-risk countries, and extends to both its own operations and suppliers.

The company reports that 70.8% of its soy was certified in 2023 and its annual report data was verified by the third-party auditor, PWC. It has also verified the forest information included in the CDP report and responded to CDP Forests 2023.

The company mandates all suppliers to identify potential adverse effects on biodiversity and demonstrate relevant policies and action plans. However, it does not specifically mention soy in this context. Its Danish subsidiary, Danpo, is working with suppliers to use more certified soy in feed through the Danish Soy Alliance. Additionally, the company is collaborating with feed suppliers on a pilot project aimed at finding alternatives to soy to reduce its consumption. In its CDP report, the company mentions using financial and commercial incentives to engage suppliers.

The company reports that 70.8% of its soy is certified by third parties, such as CRS, RTRS, ProTerra, and others, to ensure compliance with no deforestation commitments. However, feed used by its Danish growers lacks comprehensive certification or monitoring, and approximately 30% of soy remains unmonitored. Non-compliance is addressed by certification bodies, which engage with 10-20% of non-compliant suppliers for corrective actions. Furthermore, 74.8% of the company's soy supply is traceable to the country level.

The company collaborated with feed specialists in 2019 to develop and test new feed mixes aimed at substituting imported soy with local protein sources. Successful large-scale trials of these mixes were conducted in Finland and Sweden during the year.

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 does not identify facilities that operate in locations with high and medium water stress from a quality perspective. It has not set a quality or volume target for wastewater, nor does it report the number of instances of non-compliance with water quality permits, standards, and regulations.

The company does not disclose the quality or volume of wastewater discharge. No evidence was found that wastewater-related data has been audited, and the company did not respond to the CDP Water Questionnaire in 2022.

The company utilises animal by-products such as feathers, offcuts, and offal in biofuel and animal feed production. However, it does not disclose whether it has improved wastewater quality or reduced the volume of wastewater discharged compared to the previous reporting period.

The company operates poultry feed operations in Ireland but does not disclose nutrient management details in feed farming. While its Supplier Code of Conduct calls for environmental responsibility, it lacks specifics on control methods and verification. The company produces its own feed for Irish operations but procures feed through chicken farmers in other markets. There is no requirement for suppliers to have a nutrient management plan. The company does not provide guidance, support, or incentives for nutrient management or fertiliser use in crop production for suppliers or growers. While it intends to collaborate with feed producers for sustainable soy production, it is unclear if this includes nutrient management in feed farming.

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 advocates for growers to reuse chicken manure to improve soil quality and reduce climate impact, although it provides no further details on this initiative. The company reports that its water risk assessment indicates none of its production sites or growers are in areas with direct water stress. However, it is unclear if water quality risks were considered in this 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's Antibiotics Policy restricts antibiotic use to therapeutic purposes only, prohibiting their use for growth promotion and routine prophylactic treatment. Antibiotics are administered solely under the supervision of designated veterinarians as part of its animal welfare programme. Additionally, the company enforces measures to reduce disease incidence and minimise antibiotic usage. These measures include reduced mutilation, dry bedding, adequate lighting, good ventilation, and regular health monitoring, as well as assessments of temperature, humidity, and air quality across all operations.

The company reports that 8.1% of flocks were treated with antibiotics across its operations in 2023, with regional variations: Denmark 0.7%, Finland and Norway 0%, Ireland 29.6%, and Sweden 0.2%. It aims to reduce treated flocks to below one percent by 2030. However, it does not disclose antibiotic quantities by type or class. The company attributes the increase in antibiotic use in 2022 to poor-quality day-old chicks and limited advisory support during the COVID-19 pandemic. In 2023, bird flu outbreaks in several domestic markets prompted shutdowns and heightened disease control efforts. The company reports a reduction in antibiotic use, decreasing from 10.8% in 2022 to 8.1% in 2023, with significant reductions in Ireland from 40.8% to 29.6%. A third-party auditor, PWC, has provided limited assurance on the data within the sustainability report, including antibiotic quantities.

The company strives to fulfil the Five Freedoms for animal welfare, indicating a commitment beyond just hygiene and disease management. This policy encompasses all animals in its supply chain. Animal welfare is ensured by training staff handling live chickens and appointing an animal welfare coordinator at each site. The company collaborates with growers through its Chicken Quality Programme, providing tailored action packages and multiple training sessions to enhance practices. While breaches of animal welfare policy are reported to managers and action plans are implemented, the company does not disclose specific actions taken. Internal research and development initiatives, such as the Center of Excellence and the Scandi Quality Chicken Programme, focus on improving animal welfare across the group. These initiatives aim to develop sustainable feed and monitor performance through KPIs linked to animal welfare.

The company maintains chicken flocks below EU maximum density limits, focusing on animal well-being by providing ample space, clean housing, and comfortable bedding. It is committed to avoiding routine beak trimming and reducing transportation times to 72 kilometres and 1-1.5 hours, significantly below the statutory maximum of 8 hours. The company ensures humane slaughter practices by adequately stunning chickens before slaughter, using Controlled Atmosphere Stunning (CAS) and electrical stunning methods across all production plants. However, it does not provide evidence of an enriched environment, lacking specific provisions such as perches or dustbathing areas. While the company uses both slow-growing and conventional breeds, including the fast-growing Ross308, it does not disclose the specific slow-growing breeds or their percentage distribution in its operations.

The company conducts regular audits to ensure adherence to animal welfare standards, supported by a systematic animal welfare programme with key performance indicators (KPIs). Internal audits and visits are conducted routinely, and action plans are implemented to address any deviations discovered.

The company annually reports on animal welfare, tracking key performance indicators like the foot score, which improved from 12.2 in 2022 to 9.9 in 2023.

The company addresses key poultry welfare risks by using gas stunning at most slaughterhouses and raising 15% of broiler chickens with slow-growing breeds such as Ranger Gold and Hubbard XX. It implements daily monitoring of temperature, humidity, and air quality to ensure conditions are suitable, including dry bedding, good lighting, and ventilation.

As a signatory of the UN Global Compact, the company pledges to uphold the ten principles concerning human rights, labour, the environment, and anti-corruption. It also commits to respecting all internationally recognised human rights as outlined by the core ILO conventions.

The company has implemented a new supplier risk assessment process to identify high-risk suppliers by category and country-specific risks. These suppliers undergo third-party evaluations, aided by dedicated resources within the purchasing organisation. This initiative aims to enhance due diligence on human rights and environmental criteria, with plans for corrective actions. In 2023, the company partnered with EcoVadis to evaluate the social and environmental performance of its suppliers. The EcoVadis assessments have been rolled out to 18.8% of high-risk suppliers, covering 50% of total spending on these suppliers. In 2024, the company intends to include the remaining high-risk suppliers of additives and raw meat, alongside implementing corrective action plans and targets. The company prioritises employee training on the Code of Conduct, which includes human rights. However, it does not disclose human rights due diligence for its own operations, nor does it address mitigation or remediation measures within its supply chain.

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

The company prohibits child and forced labour, discrimination, and harassment, ensuring compliance with national legislation on wages, benefits, and overtime compensation. However, it does not explicitly commit to paying wages aligned with the cost of living and does not specify whether it conducts audits to monitor compliance within its operations. For its suppliers, the company mandates the prohibition of forced labour, child labour, discrimination, and harassment. While it encourages suppliers to aim for at least a living wage, this is not a requirement. The company operates in countries with government systems providing compensation during sick leave. It is recommended that the company publicly discloses the adequacy of these provisions to discourage workers from attending work while ill.

Suppliers are required to provide documentation on Code compliance upon request and allow on-site audits. However, the company has not disclosed whether it conducts audits on selected policies. The company has implemented a whistle-blowing system with an external partner for employees to anonymously report potential Code of Conduct violations. It is not disclosed whether this system was developed in consultation with stakeholders such as employees or unions, and suppliers do not have access to it. In 2023, the company received seven reports through its whistle-blowing service, related to local employment, leadership, and policy compliance issues. While all cases were investigated and responded to, none were deemed actual violations. The company does not provide further breakdowns of the grievances.

The company maintains a health and safety policy and reports that 27% of its employees in Denmark are certified under ISO45001. It emphasises regular dialogue between employees and leadership for health and safety management, using committees as an example, although the use of such committees is unclear. The company should provide further clarity on this. Additionally, it does not disclose whether it has assessed and addressed the risk of antimicrobial resistance for its workforce.

The company reported a decrease in its group-wide Lost-Time Injury Frequency Rate (LTFIR) from 27.4 in FY2022 to 23.8 in FY2023. It recorded no fatalities across 2021, 2022, and 2023. However, the company does not provide information on turnover rates.

The company acknowledges employees' rights to organise and engage in collective bargaining but does not disclose unionisation rates or detail measures supporting these rights. It also requires suppliers to uphold employees' rights to unionise and participate in collective bargaining agreements.

The company reports that collective bargaining covers 97% of workers in Sweden, 100% in Denmark, 78% in Norway, 88% in Ireland, and 93% in Finland. It also discloses the numbers of its part-time, full-time, temporary, permanent, and non-guaranteed hours employees, including non-employee workers, across its operations.

The company reports that all its production facilities are third-party certified under BRC or IFS standards, recognised by the GFSI. However, it does not disclose whether its suppliers are required to have GFSI certification or the percentage of total suppliers who are certified.

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 reports two product recalls in 2023 and none in 2022, asserting that it recalls any products posing a risk to consumers and records yearly recalls. However, it does not provide details about the recall system, associated costs, significant outcomes, or whether recalls were voluntary or involuntary. Additionally, it does not disclose information on preventative or corrective actions for recalls.

The company does not disclose the number or locations of market bans during the reporting year, and no instances were detected in media screenings.

The company has established a Sustainability Steering Committee, comprising senior directors and managers, to ensure the Board of Directors receives relevant information. The board has ultimate responsibility for the sustainability strategy and performance and is regularly briefed on sustainability-related KPIs. A materiality analysis, first conducted in 2017 and updated annually, identifies sustainability-related risks and opportunities. The company notes that the material issues and their prioritisation remained unchanged from 2022 to 2023, highlighting quality and food safety, nutrition and health, animal welfare, and biodiversity as key topics. The board oversees these factors, actively participating in the materiality assessment process. A double materiality assessment was conducted this year to adhere to the EU's Corporate Sustainability Reporting Directive, with full reporting expected in the 2024 financial year. Ida Ljungkvist, part of the company's group management, offers sustainability expertise, having worked in advisory and project management roles at KPMG AB and RobecoSAM AG. However, the company does not disclose board-level expertise in food safety or product development and innovation.

The company ties 10% of variable compensation for Group Management and other senior executives to achieving sustainability targets, including reducing GHG emissions, lost-time injury frequency rates, and antibiotic use. The company engages with industry organisations and authorities on issues related to quality and food safety, animal welfare, local environmental concerns, and greenhouse gas emissions. It is a member of the UN Global Compact, focusing on human rights, labour, the environment, and anti-corruption. The company discloses an extensive list of memberships with industry organisations and associations. Although it plans to publicly commit to aligning its engagement activities with the Paris Agreement goals within the next two years, it has not yet made such a commitment as of the reporting year.

The company lacks a strategic approach to sustainability innovation. However, it is ranked 10th in Morningstar Sustainalytics's Packaged Food category, indicating some awareness of its industry position relative to peers.

Acknowledging a growing demand for plant-based protein, the company has strategically expanded its product portfolio to include such products, aligning with consumer trends for healthier and more sustainable food choices. However, the company has not addressed the tracking and reporting of revenue or sales from alternative protein sources and lacks a timebound target to diversify protein sources.

The company is capitalising on the rising demand for plant-based protein in the EU and UK by expanding its product range to include plant-based items. It launched plant-based "chicken" products in Norway and Denmark in 2021 and has invested in both internal and external research and development (R&D) to innovate and refine these offerings. The company has allocated 4 million SEK to collaborate externally with Veg of Lund for R&D focused on developing plant-based products.