Bakkafrost P/F

The company aims to reduce its Scope 1 and 2 emissions by 50% by 2030 from the base year 2020. This target was approved by the board and was submitted to the SBTi for validation in June 2022. It has set a Scope 3 GHG emission target to reduce emissions by 52% per tonne of product sold by 2030 from a 2020 base year. It is now in the process of achieving verification of these targets.

The company has set targets to reduce Scope 1 and 2 CO2 emissions by 50% and Scope 3 emissions by 52% by 2030. It anticipates reducing its Scope 2 emissions in the Faroe Islands as the national electricity provider is also working towards a 100% renewable energy target by 2030. It commits to reduce Scope 3 GHG emissions by 52% per tonne of product sold by 2030 from a 2020 base year. The board has approved this target and submitted a target validation form to the Science Based Target Initiative (SBTi) in June 2022. The Scope 3 emission accounts for 77.31% of its total emissions, including emissions from the category 'purchased goods and services'. However, it does not disclose the emissions from animal and feed farming.

The company has committed to reducing GHG emissions to net zero in 2050 and has submitted its target to the SBTi and is waiting for approval. The target aligns with a 1.5-degree scenario.

The company purchases feed from suppliers and simultaneously carries out feed processing in its own operations, which accounts for feed emissions in all Scope 1, 2 and 3. It discloses engaging with its most significant suppliers in the Faroe Islands on reducing emissions.

The company does not disclose innovative measures to reduce or mitigate emissions from active feed farming.

Bakkafrost is trialling RAS, which can improve its feed efficiencies. It is also trying to improve its transport emissions by reducing transport distances, reducing produce weight and trialling environmentally friendly fuels.

The company discloses that during the reporting year, its Scope 1 emissions were 93,646 TCO2e, Scope 2 emissions were 27,332 TCO2e and Scope 3 emissions were 412,165 TCO2e for its combined operations in the Faroe Islands, US, UK, Scotland and Denmark.

The company's Scope 1 emissions include emissions from Bakkafrost Farming of 18,125.9 metricTCO2e, and fishmeal and oil ingredients account for 10% of its Scope 3 emissions. It has also reported feed emissions accounted for in Scope 3 in its CDP Report 2022. It also discloses Scope 1 emissions from its own feed operations of 27,580.8 metricTCO2e. It does not disclose GHG emissions from land-use change as they do not own/manage land and only source agricultural/forestry products in the upstream supply chain for the production of fish feed and packaging.

The company responded to the CDP Climate Change in July 2023. The data can be considered audited as the third party handled all calculations.

The company's total Scope emissions have increased from 504,853 tonnes in FY2021 to 533,143 tonnes in FY2022. In the current reporting year, emissions from feed production could not be ascertained as the data is not available in any publicly available reports/web pages.

The company has completed a climate-related scenario analysis, which was started in 2022. It lists the priority risks by 2050 in their upstream, direct operations and downstream value chain. Each risk is mapped to high, medium and low severity. The risks include Sourcing feed inputs for Havsbrún, Electricity supply, Carbon pricing, Harmful algal blooms, Extreme weather events and Use of air transportation.

The company discloses that feed price fluctuations could dramatically impact profitability. However, the price fluctuations result from a few large commodity companies controlling the price and the finite availability of fish for fishmeal. It does not discuss if the fishmeal sourcing regions are at risk or not from long-term temperature changes and whether these would affect the availability of fishmeal. It reports reduced risk because fishmeal production is integral to the company's value chain. However, it does not elaborate further on how this mitigates the risk. The company highlights the risk of rising mean temperatures on fish mortality in its CDP report. The unexpected temperature rise can hurt growth rates and lead to high-cost implication measures. While it provides non-specific mitigation examples for its post-smolt operations, it discloses that increased temperatures will affect the welfare of its smolt production, which will require cooling. It discloses that electricity usage went up from 58,000kWh in 2020 to 289,000 in 2021, and it mentions the increase in energy costs in the Faroe Islands as Financial Risks in the CDP report. It actively engages stakeholders to facilitate the transition to cost-efficient solutions for powering Bakkafrost with renewable energy and exploring other routes to ensure access to renewable energy. The company states that it is exposed to the risk of a carbon tax on emissions. However, it does not mention the risks of a carbon tax on electricity and animal protein.

The company mentions investing 355 m DKK dedicated to energy transition in the 2024-2028 capex plan.

The company mentions that it procures fish feed ingredients from Brazil and produces fishmeal and oil at its own production house - Havsbrún. Soy Protein Concentrate (SPC) represents 10% of the company's feed composition. It mentions that it procures soy from suppliers who are Pro-Terra certified or have similar certification, including those that do not practice deforestation. In 2022, the company resumed sourcing soy from Brazil instead of Europe due to the war in Ukraine. However, it does not disclose its suppliers or explicitly state that all its suppliers are 100% deforestation-free.

The company has a commitment to source Proterra, Europe Soya or similar certified soy and mentions that it only sources certified soy for its animal feed.

This commitment applies to all sourcing regions. As the company produces its own feed this commitment covers 100% of soy sourced by the company.

The company reports progress against its commitment, and the certifying bodies audit the data. The company did not respond to the CDP Forest questionnaire in 2022.

The company reports that it expects suppliers of non-marine ingredients to act in accordance with national laws and international agreements. It discloses engagement with suppliers to build partnerships to work on ending deforestation. However, it does not mention details of how it supports these suppliers.

100% of its soy is Pro Terra certified, which monitors compliance. ProTerra certification also entails actions if non-compliance is detected. The company can trace its soy back to its region of origin and it only sources soy from ProTerra-certified suppliers or similar.

The company reports that it will continue to research sustainable feed. However, this research does not seem to promote biodiversity or soil health in feed farming. Bakkafrost mentions that it is committed to protecting biodiversity and becoming net positive in its impact from operations. However, as of the current reporting period, it does not disclose innovations or practices to promote biodiversity with respect to soy for animal feed.

The company reports that its Scottish operation has achieved 4-star Best Aquaculture Practice (BAP) certification. The company also discloses that 100% of its sites in the Faroes are certified by the Aquaculture Stewardship Council (ASC), and the entire value chain is certified according to the international GLOBAL G.A.P. standard. Certifications are disclosed at farm level.

The company discloses its feed ingredients by percentage, broken down into categories but not disaggregated by species. The company states that all sourced soy is certified by Pro-Terra and that in 2022 all sourced marine raw materials were certified according to MarinTrust, MSC or other similar standards. In addition, the company discloses its FFDRo and FFDRm for each region it is operationally active in.

The company reports that 47% of fishmeal and 72% of fish oil included in feed was derived from fish trimmings. Additioanlly, the company discloses that FFDRm and FFDRo have fallen consistently across three reporting periods, but that feed conversion ratio has increased on aggregate across reporting periods.

The company reports that it focuses on the high inclusion of marine content in its feed rather than developing alternatives and does not have a strategy in place for increasing the use of alternative ingredients. In regards to marine ingredients, the company reports that it increased its use of trimmings and co-products during the reporting year, adding that it continually monitors fish stocks and only uses certified sources of marine products, but a specific specifically for responsibly increasing the use of trimmings and processing waste is not explicitly disclosed.

The company states that will try to reduce the carbon footprint of the feed and will try to assess opportunities in novel ingredients and resource efficiency through improved FCR performance. However, a specific percentage of R&D is not yet defined. The company discloses that its salmon has a mean omega-3 level of 2.5g per 100g. However, EPA and DHA-specific figures are not disclosed. Neither is whether the company has a target for novel ingredient inclusion.

The company discloses its sea lice count from 2016 to 2022 for the Faroe Islands. Whereas for Scotland, it reports the sea lice counts from 2019 to 2022. The company reports that its Scottish sites are compliant with sea lice limits as it has increased non-medicinal treatments to comply with this. However, for its Faroe Islands operations, it only mentions that legislation has reduced the permitted sea lice numbers but does not mention whether the company has been in compliance with them.

The company disclosed using cleaner fish, non-medical treatments, and computer-controlled feeding systems to prevent sea lice infestations. In 2022, the company implemented a lice simulation tool in the Faroe Islands, which is used to predict periods of heightened risk. The company is also researching to reduce lumpfish mortality and discloses having made a series of improvements in the reporting period. However, the mortality rate is not disclosed in the reporting period.

The company discloses that it had one fish escape event in the Faroe Islands in 2021 and 0 in Scotland. This was reduced to 0 fish escape events in the Faroe Islands and Scotland in 2022. The company discloses that it has a zero-tolerance policy for fish escapes and has invested substantially in containment measures, including early identification of risks through regular inspections. It also invested in the rollout of rigid nets across all sites more resistant to weather and damage from predator attacks and trains employees specifically on escape prevention. The company has committed to zero fish escapes by 2023, though it has achieved this target of 0 escapes in 2022.

The company is a member of Burðardygt Vinnulív, a network of businesses operating in the Faroe Islands aiming to advance sustainable business practices. The company is committed to responsible and sustainable sourcing of raw materials to improve global biodiversity and expects feed suppliers to be certified. The company adopts regular monitoring of benthic at peak biomass to maintain good ecological and biodiversity status in the fjords and coastal ecosystems in areas where they operate. Additionally, the company states that it has partially funded collaborative research projects to assess the potential environmental impact of aquaculture on the biodiversity of benthic macrofauna in Faroese fjords and to establish a baseline and a classification system for marine biological diversity state undisturbed by human impact. However, its operations do not have a time-bound target to eliminate human-wildlife conflict.

The company reports that it runs a collaborative project with Fiskaaling and other industry partners to monitor the level of algae in Faroese Fjords. The project will investigate the possibilities of implementing a warning system for algae blooms. The company does not provide further details regarding its management plan for when algal blooms occur.

The company has identified that its US operations are located in areas of high water stress. However, US operations accounted for negligible water withdrawals in 2021. Therefore, it is not material for the company as a whole. Its operations in the Faroe Islands and in Scotland are assessed to be located in an area of potential water stress during the summer months. World Resource Institute (WRI) water risk atlas was used for the company's water risk assessment. As of the current reporting period, the company has a plant in Wayne, NJ, which is assessed as "low-medium" in terms of water risk and "high" in terms of water stress. Bakkafrost has invested in improved technology to recycle water at all hatchery sites in the Faroe Islands and Scotland and has introduced Recirculating Aquaculture Systems (RAS) at its Applecross site. It is one of the first salmon farmers to start recirculating hatchery water, with 98.7% of all water used in the Faroe Islands being recycled. Bakkafrost also discloses total water consumption for the last reporting year.

The company discloses a target to achieve a 97% water recirculation rate in its Faroese hatcheries by 2023. However, it does not disclose an explicit target to reduce water consumption.

The company discloses the volume of municipal water used across all its sites in 2022. The company also discloses the water withdrawn from different freshwater sources. The company's processing plant in Wayne, NJ, operates in an area of high water stress. The company's operations in the Faroe Islands and Scotland are located in areas of low-medium water stress areas in terms of interannual variability. The company discloses an investment of 4,800,000 DKK to buy hatchery filters in FY2021. However, no information is disclosed for water CAPEX in the current reporting period. All water-related data has been audited by a third party and the company discloses data to CDP. The water withdrawals reported by Bakkafrost increased from FY2022. The volumes of water effluents also increased in FY2022. Based on this information, water consumption was calculated to have increased in FY2022.

The company does not address water usage in its feed supply chain. It does not discuss comprehensive guidance, support and/or incentives offered to suppliers/growers on water usage and has not established a partnership with third party to input into sourcing/farming strategy.

The company states that its feed raw materials are preferably sourced from certified suppliers with full traceability, thereby ensuring the raw materials are sourced in areas with low risk of water scarcity. However the company does not disclose the proportion of feed ingredients sourced from water stressed areas.

Bakkafrost mentions that its Faroe Island, US and UK operations are located in water-stress regions. From the Faroe Islands, 60-70% of global revenue could be affected, 10% from the US operations, and 20-30% of revenue from UK operations could be affected. The company states that it has recirculating aquaculture systems (RAS) at its Faroese operations and will implement this at its Scottish operations to increase water reuse. The company expects hopes to achieve a 99.7% recirculating rate of the water in all hatcheries by 2026.

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

The company discloses zero events of non-compliance with environmental laws and regulations. It mentions according to its assessment using the WRI Aqueduct tool, it has one facility located in the US (Wayne, NJ) which is in an area of low-medium in terms of water risk and high in terms of water stress. However, the company does not disclose this information relating to water stress from a quality perspective. The company does not disclose explicit targets for the quality and/or volume of wastewater discharged.

The company discloses the volume of wastewater discharged in the last reporting year. The data has been audited by a third party - Januar, and the company discloses information to CDP relating to water usage.

The company has been operating a biogas plant since 2020, and states that it aims to explore innovative waste streams at the new biogas plant. However, it does not disclose if animal by-products from processing effluents are currently utilised in biogas production. The company does disclose that it collects fish faeces from effluent water at the Strond smolt facility in the Faroe Islands, which is subsequently converted to biogas at Bakkafrost's biogas plant - Førka. The wastewater discharge data reported by the company shows an increase in the volume discharged at the Glyvrar site in 2022 and a similar increase in the Marybank site in FY2022. Its Havsbrún site reported a decrease in waste water discharge in the last reporting year.

The company does not have a nutrient management plan in place for its feed suppliers. It states that its suppliers must employ a sustainable approach to the sourcing of ingredients used in feed, but does not reference nutrient management for feed farming in its disclosure.

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 included a statement in one of its public consultation posters for Bakkafrost Scotland, referencing an assessment of nutrient sensitivity at proposed sites. However, this disclosure is isolated, and no information has been disclosed indicating a widespread risk assessment of existing sites has been undertaken. The company is encouraged to improve disclosure on this matter. The company uses the MOM-B scoring system to measure organic loading, measured at peak biomass and discloses the loading rates by region. The company should be commended for the detail in their statements detailing their benthic monitoring process. However, the company does not provide a detailed strategy to eliminate faecal matter and uneaten food. The company references the following in some site-specific documentation but does not disclose what can be considered a strategy.

The company encourages community engagement plans. However, the engagement is not carried out regarding nutrient management in Aquaculture.

The company commits to an antibiotic-free approach in its operations, upheld since 2004 in the Faroe Islands and 2010 in Scotland. It partakes in animal welfare programmes in collaboration with the University of the West of Scotland, employing selective breeding and vaccinations to negate the need for antibiotics.

The company has produced antibiotic-free salmon in the Faroe Islands since 2004 and in Scotland's marine operations since 2010. Additionally, its antibiotic usage data is independently audited by Januar.

The company states that fish health and welfare is one of the business's top priorities and that it aims to ensure the highest standards of welfare across its value chain. The company is GLOBAL GAP certified. It includes procedures on humane slaughter and stunning practices. Although it is unclear what stunning techniques are used by the company, the direct reference to Global GAP principles in its disclosures is sufficient to draw conclusions. The company does not have an explicit statement or standalone policy stating animal handling protocols but does disclose that strict routines and training are provided to handle the fish.

The company discloses its average stocking densities for 2022 were 6.79 kg/m3 in the Faroe Islands and 8.31 kg/m3 in Scottish sites, meaning the company falls well within the RSCPA recommendation of 17kg/m3. The company also discloses data on survival rates and sea lice counts.

The company reports that its feed department at Havsbrún is involved in a two-year research project to improve the welfare of cleaner fish through nutrition. However, the company does not report the R&D spend for optimal environmental enrichment.

The company operates in both freshwater and seawater. It reports that in 2022, the mortality rate of Atlantic salmon in the Faroe Islands and Scotland was 4.91% and 23.16%, respectively. The company also discloses Atlantic Salmon Mortality Rates for 2020, 2019 and 2018. The company discloses information regarding the causes of mortality for marine and freshwater farms. However, it does not provide any quantitative data. The company also has a 2026 commitment to maintain salmon survival rate at sea at 88% or above in Scotland and at or above 94% in the Faroe Islands. Still, no such target is set for freshwater operations.

Although the company mentions that no notifiable diseases were observed in 2022, the company has not disclosed condensed figures for three years. The company states that to mitigate exposure to disease, they source from selective breeds, which are particularly resilient and continue investing in developing Faroese broodstock. The company also adapts a post-smolt strategy to minimise exposure to biological risks.

The company reports that it supports and respects the protection of all internationally recognised human rights and is committed to embedding UN Global Compact's ten fundamental human rights, labour, the environment and anti-corruption principles into the business.

The company ensures human rights are assessed through internal audits and external certification with ASC and BAP, while suppliers are audited through social audits as per the SEDEX requirements. The company discloses areas of focus regarding international labour, feed procurement and how it responds to the lack of collective bargaining in some sites by ensuring living wages. However, the company does not explicitly provide a human rights risk matrix or an extensive due diligence process. Furthermore, it does not state how it identifies the next steps of action based on the results of any monitoring procedures. To mitigate human rights risks, the company has provided training to its employees on different topics such as health and safety, hygiene, and equal opportunity, and offers international staff induction days that cover human rights, among other key working conditions topics.

The company does not report if any human rights risks were found through a due diligence or audit process. Further, it does not disclose if remediation or preventative measures were taken as a response to the results of a human rights assessment.

The company discloses that it promotes fair wages and prohibits forced labour, child labour, abuse/inhumane treatment and discrimination. Moreover, the company conducts internal audits for human rights, and it is also audited externally on social topics by standards such as ASC and BAP. The company also explicitly states that it requires suppliers to prohibit child labour, forced labour, abuse, and discrimination.

The company conducts social audits to assess its suppliers on human rights abuses. Further, the company discloses that it has an online grievance mechanism for the public and whistleblowing systems for employees to raise concerns anonymously. For FY2022, the company reports that it received no complaints/reports through the external grievance or internal whistle-blowers systems.

The company acknowledges health and safety as a priority for the business and is committed to providing a safe working environment for all employees. It mentions that all sea farming sites in the Faroe Islands hold an ASC certification, ensuring international health and safety standards are met. The company also has ISO45001 certification. All of its facilities in the Faroe Islands and Scotland have a health and safety committee with employee representation. In addition, the company states it does not use antibiotics in the Faroe Islands or Scotland, meaning the risk of antimicrobial-resistant bacteria transferring to workers in these regions is low.

The company discloses that in FY2022, the lost time injury rate per million working hours (LTIR) was 14.88. The company discloses an increase in the LTIR in the Faroe Islands operations, accounting for two-thirds of its operations, from 10.68 in 2021 to 12.22 in FY2022. Whereas, in Scotland, which accounts for one-third of the workforce, the rate decreased from 22.7 in FY2021 to 19.43 in FY2022. The company reports a zero fatality rate in 2022 as well as in 2021, 2020 and 2019. In addition, the company turnover rate is approximately 30% based on a turnover figure of 534 and a full-time employee figure of 1773 in 2022. However, the company does not break down the turnover figures by seniority level.

The company reports that it respects its employees' right to freedom of association and collective bargaining. Unions cover all workers in the Faroe Islands, but there are no union agreements in its Scottish operations. The company does not provide information regarding their small processing operations in the US and Denmark. The company also states its membership in the Faroese Employers' Association, the leading representative body for Faroese employers. It meets with unions regularly and strives to have constructive relationships with them. Employee representatives are also given time off from work to fulfil their union duties and undertake training courses. However, the company does not explicitly include an expectation or requirement for suppliers to respect freedom of association and collective bargaining.

The company discloses that collective bargaining agreements cover 93% of employees in the Faroe Islands. However, figures are not revealed for employees in Scotland or the US. The company also breaks down its employees by temporary and permanent employment and full-time and part-time employment for both the Faroe Islands and Scotland.

The company discloses that the entire Faroese value chain is GlobalGAP certified, and 100% of marine sites in the Faroe Islands are ASC-certified. Further, the Scottish operation achieved 4-star BAP and BRC certification. These certifications are GFSI-recognised. The company is vertically integrated. It reports that all facilities, from fishmeal and fish oil production to packaging, are certified by GlobalGAP.

The company states that internal audits are conducted annually across its entire value chain to maintain adequate food safety and animal welfare requirements. However, the corrective action rate is not disclosed. The company use QR codes on the products, enabling the end consumer to access information about the origin and further details on the product, ensuring that the supply chain is fully traceable. This helps to document the authenticity of products and combat potential food fraud.

The company reports it has established business continuity and incident management procedures, including product recall and regular recall exercises. However, it does not provide further description regarding the product recall system. It reported zero product recalls in 2022.

The company reported zero market bans in 2022.

The company's board of directors has oversight on sustainability, including issues related to climate change. The company's sustainability committee, chaired by the CEO, meets six times a year to oversee the implementation and performance of the company against the sustainability strategy commitments. In addition, the company reviewed its materiality assessment in 2022 and publicly disclosed the results. The material topics include government regulation and compliance, ethical conduct, customer satisfaction, innovation, international relations, human capital, health, safety and well-being, and human rights. The company discloses that the board contributed to the review of the materiality assessment. The company's Chairman of the Board, Rúni M. Hansen, is a member of the UN Global Compact's Platform for Sustainable Ocean Business, showing board-level expertise in sustainability issues. However, the company does not disclose board-level innovation or food safety expertise.

The company has not disclosed executive monetary remunerations linked with climate performance. It states it plans to introduce climate-related incentives for the management in 2022. The company engages and collaborates with various international and national organisations to actively contribute to the sustainable development of the seafood industry. The company has helped promote the Global Salmon Initiative (GSI), an international leadership initiative established to improve sustainability in salmon farming. The company is also a part of the new Sustainability Charter launched by The Scottish Salmon Producers Organisation (SSPO), which aims to create a vision for the sustainable growth of the aquaculture industry. Finally, the company is a founding member of the Faroese Corporate Sustainability Initiative, which aims to advance sustainable business practices and contribute towards UN Sustainable Development Goals such as climate action. The company also states that it engages industry groups on pollution topics. The company also discloses which trade associations and coalitions it belongs to and says that its engagement with the GSI is aligned with its support of restricting global temperature rise to 1.5°C.

The company discusses its strategic approach to driving innovation to develop and grow the aquaculture industry. The company established a biogas plant, FÖRKA, which sources waste products from farms and other farmers to produce renewable energy and natural liquid fertiliser for local use. The company has also improved water recirculation at hatcheries via 'recirculating aquaculture systems' (RAS). This strategy also includes selective breeding programmes to improve fish resilience and increase treatment capacity for optimal fish health and welfare. The company also works closely with the Scottish Aquaculture Innovation Centre to carry out innovative projects. In addition, the company discloses it uses the Coller FAIRR Protein Producer Index, Sustainalytics, S&P Global's Corporate Sustainability Assessment, ESG100, OBX® ESG Index and MSCI ESG ratings to benchmark itself on sustainability.

The company does not explicitly acknowledge that protein diversification is a material business issue. Further, it has not yet set a timebound target to diversify protein sources, nor does not report revenue/sales linked to alternative protein sources

The company's subsidiary, Munkebo Seafood, launched a range of vegan soups 2022 containing seaweed from the Faroe Islands. However, it does not disclose any further information on its approach to protein diversification.