The Sustainable Proteins engagement is now closed, and this company is no longer assessed by this methodology. This company is now covered under FAIRR's new Protein Diversification engagement, data launching in Autumn 2024.
Sustainable Proteins Engagement
Tracking and Reporting
Tracking and Reporting
Negative Neutral Positive
2022 Outlook and 2021 Outlook
Carrefour’s understanding of the materiality of the animal protein issue has progressed. During its discussion with the collaborative engagement, the company showed a high awareness of the risks related to animal agriculture supply chains and the impact on its business. It also demonstrated a high acceptance of protein diversification, through increasing plant-based options, as a promising climate-mitigation tool. It is mapping plant-based diets as a solution to tackling the vertices of climate (Scope 3), biodiversity and nutrition. Yet, a precise action plan on how this will be integrated into the overall company’s climate strategy is still missing. The company plans to publish its work on materiality, consequent strategies, and roadmaps by the end of 2022. For the first time, the company assessed biodiversity risks and acknowledged the high impact of animal proteins in its annual report. From the conversation with the company, it is still unclear whether it plans to conduct a TCFD-aligned scenario analysis this year and if this will cover the impacts of animal agriculture supply chains, which is key to understanding how climate change and transition risks will impact the sourcing of its key agricultural commodities such as beef, dairy, poultry, pork, and seafood. Nevertheless, in 2021, Carrefour conducted the first risk assessment of physical climate change risks on its assets. This study analyses the current exposure of its sites to natural disasters by country and the long-term risks in accordance with the IPCC SPC 4.5 climate scenario. It also identified a market risk related to changes in consumer behaviour, including local consumption, low-consumption products, reduction of animal protein consumption. The company confirmed it is deepening its climate risk assessment process and publishing a scenario analysis based on this risk and opportunities analysis. It provided no timeline for this.
The company advanced its sustainable sourcing policies and is working on quantifying the carbon abatement potential from portfolio diversification. In 2021, the company made a first evaluation of potential decarbonisation levers for agriculture based on available public data (World Resources Institute). This first evaluation informed a starting point for a more detailed analysis based on Carrefour’s sales on a long-term basis. The shift toward more plant-based diets could be the first carbon abatement lever for Carrefour, given that it showed the largest carbon abatement potential from the levers analysed. However, the company stated its plans on how to execute the levers still need to be confirmed. The company has shown progress in sustainable sourcing initiatives and launched new targets. For example, the company disclosed progress on its ‘Food transition pact’; in 2021, it achieved 38% of the target to get 300 suppliers to commit to the pact by 2025. The number of suppliers increased from 26 to 114 YoY. It also aims to have 45,000 partner producers in organic or local farming or as part of its better-sourced line (Carrefour Quality Line); here, it has achieved 97% of the target. Carrefour launched new sustainable sourcing targets supporting local produce, deforestation-free soy for animal feed, better fish sourcing, blockchain for tracing animal agriculture products (salmon from Norway, eggs from Romania and beef from Argentina), and the assessment of progress from key traders. Besides, a new target is to achieve 15% of fresh food sales to be organic or agroecological by 2025. The company strengthened its compliance rules for suppliers in response to deforestation and land conversion linked to soy and beef. It expanded its commitment to geo-monitoring systems for Brazilian beef suppliers. Despite having a target to increase the sales generated by organic products (sales of EUR 4.8 bn. from organic products in 2022), the company does not have a target for sales of plant-based foods and alternative proteins. Organic is the primary lever for sustainable agriculture and the transition of the portfolio. Carrefour is not using protein diversification to the same extent, and we encourage the company to see it as a complementary climate mitigation tool. As part of its climate action plan, the company aims to develop plant proteins through a dedicated offer and promote a more plant-based diet. However, this goal still lacks specificity regarding baseline and target figures. Moreover, it is generally difficult to track how the company has progressed on its commitments related to portfolio diversification, as it does not report metrics, the scope of the goals, and the calculation methodology. Last year, the company promoted an assessment on carbon intensity, yet FAIRR found no disclosure of results of the review of the carbon intensity of products. The company did not disclose progress on reducing the average grocery basket carbon footprint either. There is also no clarity on how the company has progressed in promoting low-carbon consumption, as there is no clear baseline nor definition of what that means. The company reviewed its scope 1 and 2 target, now aiming for a reduction of 50% by 2030, and 70% by 2040. Moreover, it aims to have carbon neutral operations by 2040, however it excluded the supply chain from the carbon neutrality commitment.
Product Portfolio Analysis
Carrefour’s plant-based own-brand, which now has 110 products, is available in all its operating countries. The company introduced its products in Brazil and expanded the range in Belgium. However, plant-based expansion still focuses on Europe. European countries have at least one alternative product in all relevant categories. The company evolved its nutrition target aiming to have 7,000 products with a Nutri-score labelling system, including the Veggie range, by the end of the year. The company’s releases indicate that alternative products are being designed with nutrition (fibre, protein, vegetable contents) and aiming for high Nutri-scores. The company shared it is currently running a plant-based competition, encouraging start-ups to design new products. The competition has 250 entrances and is supported by C-suite level management. Once the contest is over, five innovations will be showcased on Carrefour supermarket and hypermarket shells, (as well as its e-commerce websites), and consumers will get to test them.
Consumer Engagement Analysis
The company is thinking out of the box with initiatives to increase the uptake of plant-based foods, such as the collaboration with the vegetarian butcher. The company continues its promotion efforts for its plant-based portfolio, it still lacks a strategy behind its consumer engagement campaigns with metrics showcasing progress. Carrefour has launched a committee at European level to drive the development of plant-based proteins, gathering purchasing departments of all countries. This committee is working on four main axes: development of the offer for own-brand and national brands products, merchandising strategy, promotional activation and shopper engagement. For example, The Collaboration for Healthier Lives (CHL) coalition in France drives collective action of retailers, manufacturers and partners online and instore to address the growing expectations of consumers in terms of healthier and more sustainable lives through flexitarian and plant-based recipes with the “On S’y Met – Let’s do it” initiative Carrefour acknowledges the need for the company to drive consumer interest in alternative proteins. In discussion with investors, it stated that there is lower awareness of dietary transition away from animal agriculture in their operating markets. Hence, recognises consumers will not drive the change alone, and their role requires them to run strong consumer awareness campaigns to increase the consumption of these foods. In 2022, Carrefour opened the first vegan “butcher’s” shop in France and now offers its customers a range of meat-free products including mince, chicken-style nuggets and vegan burgers. The company shared it launched trails in Europe to test product activation on “healthy veggie recipes”, and said it measures the impact of those projects (e.g., return on investment, consumers reached, sales increase), but it did not share any figures with the coalition. Moreover, the company recognised its role in accelerating behaviour change and enabling consumers’ willingness to transition their diets towards more plant-based foods. From public disclosures, it seems the company primarily uses its organic range when catering to lower-impact consumer demand, to achieve its objective of ‘greening of food’.
Tracking and Reporting
Tracking and Reporting Analysis
Carrefour stops short of giving a clear picture of tracking progress and disclosing comparable figures for portfolio diversification. There are enough mentions of ‘greening of food’ and reducing the carbon footprint of the average basket in its strategy, yet no metrics to back them up. Its current approach seems inconsistent as the company constantly embraces new terms and high-level goals. Still, these do not seem to land in useful metrics that portray how its portfolio is decarbonising over time. The company shared that in 2022 they conducted a first evaluation of the sales of plant-based products (veggie and vegan products), but did not share the figure. More than 45% of those products are also organic certified. During the discussion with investors, Carrefour stated that around 70% of its Scope 3 emissions are from Category 1 (purchased goods and services) and that meat and dairy contribute to most of these emissions. Yet, despite having the data, the company does not disclose Scope 3 figures for its livestock supply chains, making it impossible for investors to track the success of sustainable sourcing or portfolio diversification initiatives. In 2021, the company launched a collaborative reporting platform shared with suppliers (“20 megatons” project) to encourage suppliers to make commitments to reduce their emissions, measure their progress, involve consumers and suggest patterns of consumption that generate lower CO2 emissions. This platform will allow the Carrefour Group to monitor the commitments and progress of its suppliers in tackling global warming and highlight their most innovative actions. The method used is aligned with industry benchmarks (Greenhouse Gas Protocol and Carbon Disclosure Project). At the end of 2021, 29 of the 34 Pact partners had committed to reducing their emissions, 22 of which had been approved by the SBTi. Carrefour will report on the first results of this supplier engagement campaign. The suppliers that are part of the food transition pact represent around 20% of the Group’s total sales.
Investor Engagement Analysis
The company met with FAIRR and investors, provided answers to the follow-up questions after the engagement dialogue and feedback to the final assessment. The company’s level of receptiveness has increased through the engagement; during the dialogue, its representatives appeared receptive and willing to learn more about protein diversification best practices, specifically on metric disclosure.