Coller FAIRR Protein Producer Index
Greenhouse Gas Emissions Deforestation & Biodiversity Water Use & Scarcity Waste & Pollution Antibiotics Animal Welfare Working Conditions Food Safety Sustainability Governance Alternative Proteins
Greenhouse Gas Emissions
Scope 1, 2 & 3 Target
Type of Target
The company is committed to reducing greenhouse gas emissions by increasing the use of renewable energy and improving energy efficiency. It also mentions that it identifies and acts on opportunities to implement clean energy and switch refrigeration systems to CFC-free alternatives. However, it does not have a science-based emission reduction target.
Source(s): Climate Change Position Statement 2022, page 1; Sustainability Report 2022, page 3, 4, 7, 8, 20, 41, 57
Strength of Target - Non-SBT
The company plans to improve energy performance by upgrading its lighting systems to LED, using renewable energy sources, and encouraging efficient resource use. It commits to a 15% reduction in its energy consumption by 2025 compared to a 2018 intensity baseline and to increase the share of electricity from clean energy sources to 20% by 2025. But, it has not set any Scope 1, 2 and 3 targets.
Innovation on GHG Emission Reduction
Innovation to Reduce Agriculture Emissions
The company discloses that 'Sustainable Agriculture' is of significant importance to suppliers and moderate importance to the company. It has set a goal to implement an ethical sourcing plan by 2025 and to reduce emissions, focusing mainly on reducing energy use. However, there is no specific disclosure on reducing emissions from agriculture.
Feed Farming Innovation
Although the company discloses practices that reduce emissions from its general operations, it does not disclose any innovative projects targeted at reducing or mitigating emissions from active feed farming.
Source(s): Almarai-DigitalSustainabilityReport-2022.pdf, page 45; Sustainability Report 2022, page 17, 20, 40, 45, 53
Animal Farming Innovation
The company also mentions that the majority of electricity that power operations is sourced from hydroelectrically generated power sources, and all irrigation pumps are electric. However, hydroelectricity is not considered innovative.
Quality of GHG Inventory
Quality and scope of GHG inventory Completeness
The company discloses its Scope 1 and 2 emissions were 938,126 metric tons of CO2e and 836,020 metric tons of CO2e, respectively, in 2022. It also discloses that its Scope 3 emissions from Almarai refrigerators in stores were 864,525 metric tons CO2e.
Feed & Animal Farming Emissions
The company is involved in animal feed production on their arable farms in Argentina and the United States. However, it does not disclose CO2-equivalent emissions from feed production.
Source(s): Independent Limited Assurance Statement 2022, page 1; Sustainability Report 2022, page 5, 11, 45, 94, 95
Transparency of GHG Inventory
The sustainability report has been audited by Intertek Saudi Arabia Ltd. It clearly states that it audits emissions reported under the GRI disclosure.
Source(s): Sustainability Report 2022, page 95
Overall Emission Performance
The company's total emissions have increased by 0.24% compared to the previous year. It reports emissions (metric tons CO2e) increased from 2,632,101 in 2021 to 2,638,671 in 2022. The emission intensity from manufacturing has also increased from 0.32 to 0.36. The GHG inventory is incomplete since it has not reported its emissions from agricultural emissions and feed production.
Climate-related Scenario Analysis
Climate-related Scenarios Analysis Conducted
The company discusses the risk associated with changes in the prices of certain commodities. However, it does not discuss the risk of volatile prices due to climate change. It also discusses climate change regarding the potential risks it poses for agricultural production. However, it does not disclose information on climate-related scenario analysis.
Disclosure of Analysis Results on Material Risks
The company forecasts sustained cost inflation in feed and energy. However, it does not discuss the risk of this increased cost or mitigation strategies. It collaborates with the Veterinary Medical Society and the University to support the veterinary profession, but it does not disclose how and if the programme helps address increased veterinary costs. It also mentions the increased energy prices due to the war in Ukraine and forecasts sustained cost inflation in feed and energy, which will influence the profit.
Source(s): Annual Report 2022, page 34, 139, 190; Sustainability Report 2022, page 33, 52
Disclosure of Financial Material Events & Alignment of CAPEX
The company does not disclose its commitment to align capital expenditures with its GHG targets.
Deforestation & Biodiversity
Deforestation/Conversion-free Target - Soy for Animal Feed
Risk Assessment to Identify High-risk Locations
The company is involved in the rearing of both cows and poultry and the production of animal feed. The company recognises the risks associated with changes in the prices of feed commodities such as corn and soya. However, the company does not disclose information on how it manages deforestation risks linked to soy. The company reports producing animal feed in the United States, Saudi Arabia and Argentina. Saudi Arabia and the USA are considered low-risk deforestation areas, while Argentina is high-risk. It also discloses that 51%, 62% and 100% of suppliers are based locally in countries within the Gulf Cooperation Council (GCC), USA and Argentina, respectively. Therefore, a portion of soy sourced is from areas at risk of deforestation. The company expects its suppliers to comply with risk assessments and the Supplier Code of Conduct and provide transparent information in self-assessment questionnaires. However, the company provides no information on risk assessments undertaken nor discloses high-risk locations.
Strength of Deforestation Commitment
The company does not disclose having a deforestation/conversion-free target for soy.
Source(s): Annual Report 2022, page 165, 190; Sustainability Report 2022, page 7, 45, 53
Transparency - Progress Against Commitment
The company does not report progress against its commitment. Nor did it responded to the CDP Forest Questionnaire in 2022.
Engagement, Monitoring & Traceability - Soy for Animal Feed
The company does not disclose information related to how it engages soy suppliers on deforestation risks.
Compliance monitoring & Traceability
The company does not disclose how compliance in monitored or what actions are taken if non-compliance occurs. Further, the company does no disclose the level of traceability it has of its soy supply chain.
Source(s): Annual Report 2022, page 165, 190; Sustainability Report 2022, page 45
The company mentions that it uses regenerative farming practices in its Fondomonte arable farms in the USA and Argentina. It states that the regenerative practices undertaken by the company at these feed farming operations are beneficial as they improve soil health, increase carbon sequestration, and promote overall biodiversity.
Water Use & Scarcity
Water Use & Scarcity in Facilities
Monitoring Water Consumption & Withdrawals
The company has been a member of the Alliance for Water Stewardship (AWS) since 2018, through which it engages in water stewardship efforts at its sites. Almarai states that its operations are located in areas of varying water risk and cites the WRI Aqueduct Tool as a reference for this. However, the company does not disclose information about the high water-stress areas where it operates. The company reports total water consumption in 2022. However, this does not include operations in the US or Argentina. The company has also set up a water steering group to set targets and establish an action plan for improving water efficiency. The company has introduced a number of measures to accomplish this, such as water metering and monitoring as well as water risk assessments to understand water usage better and identify areas of improvement. The company published a Water Position Statement in 2022 outlining its commitment to greater water stewardship. It discloses that in the United States, it has implemented subsurface drip and pivot irrigation in arable farms in Arizona, while in California, the company is lining irrigation canals with concrete to reduce water loss. The company has invested in a new system to reuse water in its dairy and juice operations using a reverse osmosis technique.
Target to Reduce Water Consumption & Withdrawals
The company has set a time-bound target to increase water use efficiency by 15% by 2025 (against a 2018 intensity baseline). The company uses a monitoring system to optimise water consumption across its sites and discloses that it has achieved approximately 25% of this target. It discloses that through various initiatives, it has successfully reduced annual water withdrawal at one of its subsidiaries, and is committed to reducing water withdrawals across its operations. However, the company does not disclose any specific targets to reduce water withdrawals.
Source(s): Independent Limited Assurance Statement 2022, page 1; Sustainability Report 2022, page 5, 36, 37, 43, 45, 92, 121; Water Position Statement, page 1
Disclosure & Performance of Water Risks in Facilities
The company discloses its total water withdrawal and water consumption in the last reporting year. However, the company does not disclose the water withdrawal or water consumption by source. The sustainability report has been audited by a third-party independent auditing firm, Intertek Saudi Arabia Ltd. Water withdrawals and water consumption both increased in the last reporting year.
Water Use & Scarcity in Feed Farming
Supplier Engagement in Water Use in Feed Farming
The company owns arable farm operations in the USA and Argentina (Fondomonte). It addresses water use in its operations by using various irrigation methods best suited to the environment. The company is working on methods to manage water use. However, it is not clear whether the company has a sustainable agricultural policy. The company discloses that it is actively pursuing implementing regenerative agriculture within its arable farms where possible, although this does not seem to be for the purpose of improving water use. The company states that its partnership with AWS has allowed it to understand and implement the best practices to reduce impact and conserve water. Further, the company states it has implemented greater efficiencies into its arable and pasture farming, allowing for higher yields with lower water usage.
Source(s): Sustainability Report 2022, page 36, 45
Disclosure of Water Risks in Feed Farming
The company highlights the importance of adopting regenerative practices wherever possible in the context of its arable farming operations. In California, it participates in a land conservation program, where around 15% of the land lays fallow at any given time to support soil regeneration.
Water Use & Scarcity in Animal Farming
Supplier Engagement in Water Use in Animal Farming
The company does not disclose the proportion of animal protein commodities produced and/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.
Disclosure of Water Risks in Animal Farming
The company has not established partnerships with third parties to input into sourcing/farming strategy, including water use.
Waste & Pollution
Wastewater at Facilities
Disclosure & Targets for Wastewater Quality & Volume Discharged
The company reports zero incidences of non-compliance with environmental laws and regulations. Therefore, it is assumed that the company's disclosure covers non-compliance with water quality permits. Almarai has set a target to increase water efficiency, however, it does not disclose quality or volume targets for wastewater.
Transparency on Water Pollution Risks
The company discloses the total volume of wastewater discharged. However, this does not include operations in Argentina and the US. Its sustainability report has been audited by a third-party independent auditing firm, Intertek Saudi Arabia Ltd.
Source(s): Independent Limited Assurance Statement 2022, page 1; Sustainability Report 2022, page 5, 37, 44, 79, 92
Performance on Wastewater Quality & Volume Discharged
The company states that it produces organic fertiliser at its EcoChar Gasification plant. However, it does not convert animal by-products or processing effluents into fertiliser or biogas. Further, the volume of water discharged has increased in the last reporting year.
Nutrient Management in Feed Farming
Supplier Engagement in Nutrient Pollution Risks
The company discloses using organic fertilisers produced from poultry litter and cites that this has superior nutrient-retention properties whilst also improving soil stability. However, it does not mention the use of nutrient management plans in feed farming.
Source(s): Sustainability Report 2022, page 44
Innovation to Improve Nutrient Management in Feed Farming
The company states that it is undertaking regenerative agriculture within its feed farming operations and cites improvements to soil health and regeneration. It also monitors the application of fertiliser and pesticides in accordance with local regulations but does not provide further information relating to pesticide use.
Manure Management in Animal Farming
Disclosure of Pollution Risks from Manure
The company provides a high-level statement on manure management and it has started producing organic fertiliser using poultry litter.
Supplier Engagement in Manure Management
The company does not make site-specific nutrient management plans a part of its supplier´s contractual agreement and/or own farms management. Nor does it provides technical and/or financial support to suppliers and/or own farms to develop nutrient management plans and improve manure storage.
Source(s): Sustainability Report 2022, page 44
Innovation to Improve Nutrient Management in Animal Farming
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.
Policy on Antibiotics Use
Source(s): Sustainability Report 2022, page 51
Policy on Antibiotics Use
The company has issued a statement endorsing the use of antimicrobials solely for therapeutic treatments. It maintains good management practices focusing on preventative measures such as effective vaccination, hygiene, and animal husbandry to bolster cow health. Furthermore, it has banned antimicrobials in its broiler chicken operations. However, it does not have a comprehensive universal policy, with the current ban not extending beyond broiler chicken operations.
Disclosure of Quantity of Antibiotics Used
Disclosure of Quantity of Antibiotics Used
The company does not disclose the quantity of antibiotics used.
Animal Welfare Policy
The company commits to the universally recognised 'Five Freedoms' for animal welfare and ensures humane treatment throughout the animals' lifecycle. It reports zero incidents of non-compliance concerning animal welfare and has conducted employee training in preparation for NSF Global Animal Wellness Standards certification. However, the scope of employee training is unclear, and it does not disclose procedures for handling potential breaches of animal welfare.
Source(s): Sustainability Report 2022, page 5, 51, 52, 58, 79, 128
Key Welfare Issues
The company reports 100% cage-free housing for chickens and provides year-round amenities for cattle, including shaded housing and air cooling. It is the first company in Saudi Arabia to be certified for poultry operations. However, it does not commit to avoiding long-distance transportation of animals.
Assurance & Certification
Auditing & Assurance by an Animal Welfare Organisation
The company has achieved international animal wellness certification from NSF International for its dairy and poultry farms and operations. It also conducts multilevel internal audit programmes, independently verified by globally recognised certifications.
Source(s): Sustainability Report 2022, page 4
Public Reporting on Welfare
The company does not disclose information in relation to animal welfare certifications or assurance programs for its beef operations.
Performance on Key Material Risks
Source(s): Sustainability Report 2022, page 51, 52
Performance on Key Material Welfare Risks by Protein
The company discloses that 100% of its poultry are in cage-free housing. However, it does not provide information on stocking density or the use of higher-welfare breeds. Additionally, it does not prohibit tethering in dairy operations and lacks data on lameness and mastitis incidence rates.
Strength of Policy
The company commits in writing to respect all internationally recognised human rights defined by the International Bill of Human Rights and the core ILO conventions throughout its operations.
Due Diligence Process
The company does not disclose details of its human rights due diligence and monitoring procedures or whether it identified and addressed any human rights risks in the reporting year.
Source(s): Human Rights Policy, page 1; Sustainability Report 2022, page 30
Evidence of Remediation
The company does not disclose whether it has identified any human rights risks in its operations through human rights due diligence
Fair Working Conditions
Policy for Direct Operations
In its Human Rights Policy, the company commits in writing to prohibit harassment, abuse, inhumane treatment, child labour, and forced labour. However, while the company ensures employees' compensation is in line with applicable wage laws, this does not constitute fair wages. In addition, it is unclear whether suppliers must have a policy prohibiting child labour, forced labour, discrimination, abuse/inhumane treatment and promoting fair wages.
Source(s): Annual Report 2022, page 119; Code of Conduct, page 2; Code of Conduct 2022, page 13; Human Rights Policy, page 1
Monitoring & Discosure
The company describes its grievance mechanisms available to all internal and external stakeholders. A third party hosts these mechanisms, and reports can be made anonymously. However, the company must disclose whether grievance mechanisms were designed in consultation with stakeholders such as employees or unions. Furthermore, the company does not report the number of grievances received during the reporting year or state that it provides permanent sick pay to its workers.
Safety & Turnover Data
Committee representation of workers
The company commits to protecting its employees by applying international occupational health and safety standards across all its operations. It is working towards achieving ISO 45001 certification in all its divisions by 2025. Only its dairy, poultry farming and supply chain operations have been certified. In addition, whether the company has health and safety committees with worker representatives is still being determined.
Source(s): Sustainability Report 2022, page 19, 23, 24, 26, 27, 80, 85
Disclosure of safety and turnover data
The company reports the employee and contractor lost-time injury rates (per 1 million person-hours) for FY2022 as 1.90 and 1.28, respectively. In FY2021, The company's employee lost-time injury rate (per 1 million person-hours) was 2.15, meaning injury rates have improved since the last reporting period. It also discloses that the total voluntary turnover rate was 10.5% in FY2022. However, the company does not disaggregate turnover by seniority, discuss fatality rates or mention whether it has assessed antimicrobial resistance risk for its workforce.
Freedom of Association
Strength of Policies
The company provides a basic statement on the right to freedom of association and collective bargaining. However, it does not disclose the percentage of its workforce that is unionised, measures taken to support rights, or whether suppliers are expected or required to set a policy on freedom of association and collective bargaining.
Source(s): Human Rights Policy; Sustainability Report 2022, page 68, 82
Disclosure of Collective Bargaining Metrics
The company provides a breakdown of its workforce as full-time and part-time employees. However, the company does not discuss employees paid by the hour or sub-contracted workers. Furthermore, the company does not disclose evidence of measures taken to support worker rights or the percentage of its workforce covered by collective bargaining agreements.
Food Safety System
The company reports it has pre-achieved its target of having all manufacturing sites GFSI-certified by 2025. It states that 100% of plants are certified. However, the company only operates relevant sites in GCC and has arable farms outside GCC. It has a target that all high-risk ingredient suppliers will be GFSI-certified by 2025, and it is already halfway through the target, as 74% of suppliers have attained this certification.
Source(s): Sustainability Report 2022, page 20, 49, 50, 74, 80, 98
The company reports conducting various multilevel internal audit programmes to ensure food safety and quality. However, the number and frequency of these audits are not disclosed. It states that there were zero incidents related to product information and labelling. However, it does not specify associated corrective action rates. It does not disclose whether it has implemented or is in the process of developing consumer-facing technology for food safety.
Product Recalls & Market Bans
Product Recall Systems
The company does not describe a product recall system in place. However, it discloses zero recalls in the reporting period.
Source(s): Sustainability Report 2022, page 50
The company does not disclose information related to market bans; no market bans were detected in media screening.
Assessment of a Company's Sustainability Governance
In 2021, the company initiated its latest materiality assessment with internal and external stakeholders. The issues identified include sustainable agriculture, ethical sourcing, climate change, quality and food safety. Furthermore, the company has three senior management members with product development and innovation expertise. However, the company does not provide evidence that any board members have sustainability or food safety expertise. The company does not specify whether the Board of Directors are mandated to oversee ESG issues or whether they are involved in the materiality assessment process.
Incentives & Policy Engagement
The company does not disclose details of memberships with trade unions or engagements with policy officials for FY2022.
Source(s): Annual Report 2022, page 37, 77; Senior Management Webpage; Sustainability Report 2022, page 17, 18, 24, 36, 38, 52
Innovation & Benchmarking
The company discusses the importance of innovation. It has implemented a stage-gate innovation management process with more than 140 projects in the pipeline and conducts R&D on packaging to reduce its environmental impact. The company also incorporates nutrition training within the innovation process by providing employees with guidance on healthy and nutritious criteria.
Diversification of Products to Alternative Protein Sources
Existing product portfolio
The company acknowledges that protein diversification is consumer trend-driven. However, it does not report revenue/sales linked to alternative protein sources. Further, it has not set a timebound target to diversify protein sources.
Source(s): Almarai_Annual_Report_2022_En323202353555AM (1).pdf, page 52
Investing for future growth
The company mentions several plant-based milks for consumers who want dairy alternatives. However, it does not disclose whether it is investing for future growth.
2023 Risk Score:
Poultry and eggs, Dairy
Company Feedback Given:
31st October 2023
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