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 discloses that the GHG emissions reduction targets were validated by the SBTi in 2017. The company's Scope 3 emissions (23,100 tCO2e) make up 96% of its total emissions of 24,042 tCO2e. Therefore, it is required by SBTi to include Scope 3 emissions in its Science-based target. It has a target to reduce 30% of methane emissions from fresh milk by 2030.
Source(s): 2022 Climate Change CDP, page 48; Environmental Data 2022, page 2; Integrated Annual Report 2022, page 28, 29; Science-Based Target Webpage
Strength of Target - SBT
The company commits to reducing absolute Scope 1 and 2 GHG emissions by 47.2% by FY2030 from the FY2020 base year. It also commits to reducing total Scope 3 GHG emissions by 42% within the same timeframe. Targets are aligned with the 1.5-degree pathway. It has the interim target of achieving net zero by 2050. However, the target is not validated by SBTi.
Innovation on GHG Emission Reduction
Innovation to Reduce Agriculture Emissions
The company partnered with Royal FrieslandCampina to implement sustainable farming practices and roll out concrete carbon reduction projects with farmers in the Netherlands. It had already achieved a 17.6% reduction in greenhouse gas emissions from the dairy ingredients supplied by Royal FrieslandCampina to the company. It extended the partnership for additional three years to reach around 25% greenhouse gas emissions reduction. It also discloses that the deployment of the CoolFarm tool to its milk farmers has decreased CO2 equivalent emissions by 363,000 tons.
Feed Farming Innovation
The company does not engage in innovative projects to reduce or mitigate emissions from feed farming
Source(s): 2022 Climate Change CDP, page 107; A promising pilot in Belgium to further reduce methane emissions in dairy farming Webpage; Building a sustainable future for dairy farming Webpage
Animal Farming Innovation
The company collaborated with DSM and the Flanders Research Institute for Agriculture, Fisheries and Food (ILVO). It demonstrated promising results in reducing methane emissions by introducing a new ingredient to cattle feed. The on-farm trial confirmed the long-term methane reduction effect with a significant reduction of 18.3% in methane enteric emissions.
Quality of GHG Inventory
Quality and scope of GHG inventory Completeness
The company discloses its Scope 1, 2 and 3 emissions for its company-wide operations.
Feed & Animal Farming Emissions
The company disclosed the breakdown of total global Scope 1 emissions, including CO2, CH4 and N2O. However, it does not mention specific emissions from animal farming.
Source(s): 2022 Climate Change CDP, page 124, 126, 129, 131, 132, 134, 136, 146, 236; Danone CDP Climate Chnage 2022, page 129, 146; Environmental Data 2022, page 2, 3
Transparency of GHG Inventory
The company has responded to the latest CDP climate change questionnaire in 2022. It discloses that a third party audits its GHG data.
Source(s): Danone CDP Climate Chnage 2022; Environmental Data 2022, page 2
Overall Emission Performance
The company reports a reduction in its Scope 1 and 2 emissions from 979 Ktons CO2 equivalent in 2021 to 942 Ktons CO2 equivalent in 2022. It reports a reduction in Scope 3 emissions from 23,571 Ktons CO2 equivalent in 2021 to 23,100 Ktons CO2 equivalent in 2022. The total Scope 1,2,3 emissions are 24207 Ktons in 2022 compared to 24714 Ktons in 2021. Thus, the company discloses an average decrease in absolute emissions of 2.05% compared to 2021. It does not mention the GHG emissions from animal farming and feed farming, so the GHG inventory is incomplete.
Climate-related Scenario Analysis
Climate-related Scenarios Analysis Conducted
The company conducted a climate-related scenario analysis in 2021, using different methodologies such as RCP 8.5, RCP 2.6 and Transition Scenarios IEA 2DS for quantitative analysis. It also conducted a scenario analysis to assess the financial impact of the chronic physical risks of water and heat stress on its worldwide upstream milk supply chain.
Disclosure of Analysis Results on Material Risks
The company discloses to CDP that physical climate risks such as severe drought and flooding have impacted the availability and price of agricultural commodities. It implements regenerative agriculture to mitigate the risks, which reduces its exposure to price volatility. It acknowledges that heat stress has a medium probability of occurrence with a medium potential financial impact on the milk supply chain. It has introduced hybrid maize species to support the cow's fibre digestibility and adaptability under heat stress in Spain. Romania has installed a mobile oasis in the grazing field to provide water, shade, and relief from heat stress, thus increasing milk production. The company discusses the impact of energy price volatility and the solution to limit the effect, such as improved energy efficiency (cutting energy consumption by 30% by 2025) and increased use of renewable energy. It discloses the risk of the carbon pricing system, comprising emissions trading and tax systems. It told the financial impact and cost calculation in its CDP Climate 2022. Additionally, it reports its mitigation measures to continually monitor its Scope 1 and 2 emissions and also monitor the latest developments on carbon pricing initiatives worldwide relating to carbon pricing. It discloses five financially material events resulting from climate risk, such as La Nina in 2021 and flooding in South-East Asia in 2020.
Source(s): 2022 Climate Change CDP, page 35, 38, 63, 65; Danone Annual Financial Report 2022.pdf, page 30; Danone CDP Climate Chnage 2022, page 37, 38, 43, 44, 77, 78, 79, 80, 242
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 dairy and states that soy used for cow feed constitutes less than 5% of the total feed ingredients. It discloses that 100% of the soy used in the Alpro brand is Proterra certified. However, only 7% of the soy used for feed is certified, with 56% being sourced from low-risk areas and 29% being sourced from areas potentially at risk of deforestation, which is compensated through RTRS claim credits. It has conducted a risk assessment of its entire value chain to identify the deforestation risks in its fresh milk collection. Since 2017, it has been conducting country assessments of soy feed volume and origin through its Cool Farm Tool worldwide (14 countries) and CAP2ER tool for France. Since less than 5% of soy is used in cow feed, the farmers rely on more sustainable soy concentrate which is either locally produced or certified. However, In some regions, especially in South America, soy production has been associated with deforestation and negatively impacts the environment and the local population. Therefore, the company is working to increase the adoption of regenerative agricultural practices in its value chain. The company also promotes local protein and alternative protein over imported soy for animal feed.
Strength of Deforestation Commitment
The company discloses a commitment to source 100% deforestation-free direct and indirect soy (used for feed). The target date for full implementation is 2025. Further, the company specifies a 2020 cut-off date for soy sourced that is used as animal feed.
Regional & Operational Coverage of Commitment
The company's zero-deforestation commitment applies to all sourcing regions at risk of deforestation and applies to 100% of soy at risk of deforestation.
Source(s): CDP Forests 2022, page 102, 103, 126; Danone CDP Forest 2022, page 12, 35, 58, 126, 127; Danone Forest Policy 2022, page 2, 16; EXHAUSTIVE 2022 EXTRA-FINANCIAL DATA; Universal Registration Document 2022, page 161, 162, 163
Transparency - Progress Against Commitment
Currently, the company reports that 77% of combined volumes of soy (indirect and direct) are sourced as deforestation free. It reports that of the total volumes that are net-deforestation free, 36% is sourced from low-risk origin, 9% is certified (Mass balance or Area Mass balance), and the remaining 55% that is potentially at risk is compensated through RTRS book and claim credits. It has responded to its CDP Forest Questionnaire 2022.
Engagement, Monitoring & Traceability - Soy for Animal Feed
The company discloses that it has started projects to help farmers plant local soy alternatives making them less dependent on imported soy, as well as reducing the risk of importing soy from deforestation-prone areas. Danone Germany, with the support of the Ecosystem Fund, launched in 2017 the Profee project which aims to encourage a switch to regional sources of protein and improve the feeding practices of farmers. The company claims that this helps to maintain the agricultural cultural landscape in Bavaria and improve soil quality as well as reduce the risk of deforestation in Latin America by sourcing local feed. However, It does not report any follow-up of the project in the current reporting period.
Compliance monitoring & Traceability
Danone has been conducting country-by-country assessments of soy feed volume and origin since 2017 through its Cool Farm Tool worldwide in order to identify the deforestation risks in its fresh milk collection accurately. It also states that it has implemented a Measurement, Reporting, and Verification (MRV) system to minimize the deforestation risk. The company sources Pro-terra-certified soy. However, less than 100% of the direct and indirect soy used is certified. The company also discloses that it has previously taken actions to remove tier-1 suppliers who were not compliant in Brazil. It discloses that as of 2022 it has analysed soy as feed sourcing for 95% of its milk volume.
Source(s): 2022 forest policy; CDP Forests 2022, page 12, 47, 58, 72, 126; Danone Profee Project 2017, page 1, 2; Forest Updates on Key Categories 2020, page 2; Supplier Code of Conduct; Sustainable sourcing; Universal Registration Document, page 161; for a regenerative future
The company discloses that it is working to increase the adoption of regenerative agricultural practices in its value chain. Alongside this, the company states that it promotes local protein and alternative protein to imported soy for animal feed. The company has released a regenerative agriculture report which details the results of regenerative programs in the US, France and Mexico.
Water Use & Scarcity
Water Use & Scarcity in Facilities
Monitoring Water Consumption & Withdrawals
The company has assessed the relative water risk of its operations using the WWF Water Risk Filter and found that 17% of its production sites were located in high or extreme water risk areas. The company discloses the location by region and/or river basin of its facilities exposed to water risks. It states it is focused on increasing water circularity and high-quality wastewater treatment. 86% of its production facilities follow the 4R roadmap that optimises water usage and reinforces circular use of water. Danone also discloses its total water consumption in 2022.
Target to Reduce Water Consumption & Withdrawals
The company has set a target to reduce water consumption intensity by 50% from processing, at all water high-risk production sites by 2030 from a 2015 baseline. The target was set in 2020, and the company has so far achieved 50% of the target.
Source(s): CDP Water 2022, page 256; Danone CDP Water Security 2022, page 20, 263, 264; Universal Registration Document 2022, page 157, 158, 159, 160, 223
Disclosure & Performance of Water Risks in Facilities
The company discloses its water withdrawals by source in 2022. It reports that between 26-50% of the water was withdrawn from the water-stressed areas. The company discloses that CAPEX relating to water was reduced by 26% in 2022 compared to 2021 and that it expects a forward trend of 46% increase. OPEX relating to water increased by 3% in 2022, and it expects a forward trend of 38% increase. The company discloses that, in 2022, the total volume of water withdrawn decreased by 1.3%, and water consumption decreased by 3% compared to 2021. Mazars Group has externally verified water-related data. The company submitted responses to the latest CDP water security questionnaire in 2022.
Water Use & Scarcity in Feed Farming
Supplier Engagement in Water Use in Feed Farming
The company has a regenerative agriculture policy which applies to livestock farmers and crops for livestock. Through this policy, the company addresses water scarcity and discloses the indicators it uses to engage with farmers on this topic. It states that it provides financial incentives to support projects that help farmers build resilient agricultural models that respect and preserve natural resources. Farmers are selected for support based on their exposure to water-related risks, mainly water scarcity and drought. As part of its regenerative agriculture program, the company has partnered with Wageningen University and WWF France and others to create its Farming for Generations (F4G) global alliance, which aims to provide a forum for peer-to-peer exchanges of information on topics such as soil health and biodiversity, as well as water.
Source(s): CDP Water 2022, page 45; Danone CDP Water Security 2022, page 10, 11; Regenerative Agricultural Scorecard; Universal Registration Document 2022
Disclosure of Water Risks in Feed Farming
The company discloses that 12.6% of the volume of its dairy ingredients are sourced from areas which are facing higher than average water stress. The company is also investing in regenerative agriculture within its feed crop supply chains.
Water Use & Scarcity in Animal Farming
Supplier Engagement in Water Use in Animal Farming
The company discloses that 34% of its milk farms were located in areas of high water stress. However, it is unclear if the scope of the disclosure includes smallholder farms. Livestock farmers are included in its regenerative agriculture policy, and it engages with them on water scarcity. The company offers support and guidance for regenerative agriculture for its dairy farmers. This guidance is provided in a regenerative agriculture handbook and scorecard and informs farmers on practices to address water usage and scarcity.
Source(s): CDP Water 2022, page 11; Danone Water Policy, page 14; Regenerative Agricultural Scorecard; Regenerative Agriculture Scorecard, page 6, 54
Disclosure of Water Risks in Animal Farming
The company developed its regenerative agricultural scorecard in partnership with WWF. Water use is one of the topics which is assessed using this scorecard.
Waste & Pollution
Wastewater at Facilities
Disclosure & Targets for Wastewater Quality & Volume Discharged
The company reports it paid fines for exceeding discharge limits to municipal treatment facilities in Turkey, Germany and Russia in 2021. Danone has conducted a water risk assessment using the WRI aqueduct tool and the WWF Water Risk tool, where scarcity and physical risk tools were both used. The assessment found that 17% of its processing facilities and production sites were located in high or extreme water risk areas. However, the company does not disclose the locations of water stress from a quality perspective. Danone has a target to manage water quality risks at the watershed level and return all wastewater to natural ecosystems clean at 100% of its production sites. However, it is unclear if it has targets to reduce specific pollutants by a certain amount.
Transparency on Water Pollution Risks
The company reports the COD for water discharged in 2022. The non-financial data reported by the company are externally verified by Mazars Group. It has also submitted the latest CDP Water Security Questionnaire in 2022.
Source(s): CDP Water 2022, page 59; Danone CDP Water Security 2022, page 48; Integrated Annual Report 2022, page 30; Universal Registration Document 2022, page 157, 160, 223
Performance on Wastewater Quality & Volume Discharged
The company reports a 15.61% decrease in COD level in 2022.
Nutrient Management in Feed Farming
Supplier Engagement in Nutrient Pollution Risks
As part of its regenerative agriculture policy, the company engages with crop farmers and livestock farmers on soil health and water quality issues. Danone has a goal to implement regenerative agriculture practices by 2030 to optimise fertiliser use at the farm level for 75% of milk, fruit, almond & and soy volumes, however, it is unclear if this applies to soy used for feed. The company also speaks about feed self-sufficiency being a target of regenerative agriculture for its dairy suppliers.
Source(s): CDP water 2022, page 57; Regenerative Agricultural Scorecard; Regenerative Agriculture Scorecard, page 20
Innovation to Improve Nutrient Management in Feed Farming
Danone has a goal to implement regenerative agriculture practices at the farm level for 75% of milk, fruit, almond & soy volumes. However, it is unclear if this applies to its soy used for animal feed.
Manure Management in Animal Farming
Disclosure of Pollution Risks from Manure
The company states that it has developed action plants to convert manure into organic fertilisers through compost and bio digesters. The project currently covers 350 hectares in Brazil and Danone expects to cover 1,4000 hectares with regenerative agriculture practices, including manure management, in 2023.
Supplier Engagement in Manure Management
The company has a regenerative agricultural initiative with a scorecard that was designed to support suppliers in improving their environmental performance. Dairy cattle are one of the targets of this initiative with some proposed aims being to tackle physical and scarcity risks related to water, as well as to improve soil health.
Source(s): CDP Water 2022, page 101; Integrated Annual Report 2022, page 30; Regenerative Agricultural Scorecard, page 2; Universal Registration Document 2022
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): Animal Welfare Commitment & Full Year 2020 Progress Report, page 2
Policy on Antibiotics Use
The company commits to curbing the prophylactic use of antibiotics across its value chain, aiming to focus more on disease prevention and excluding the use of growth promoters in its entire livestock supply chain, with the target to extend this commitment globally by 2026. It has embarked on numerous animal welfare initiatives including vaccination programmes, health monitoring, and the reduction of routine mutilation, actively seeking expert collaboration and funding research to enhance its disease prevention strategies.
Disclosure of Quantity of Antibiotics Used
Source(s): Animal Welfare Commitment & Full Year 2020 Progress Report, page 2
Disclosure of Quantity of Antibiotics Used
The company does not disclose the quantity of antibiotics used.
Animal Welfare Policy
The company commits to the Five Freedoms in its universal animal welfare policy and offers training and technical support to dairy farmers, with 2,600 farms already implementing changes. It also integrates training requirements into its animal welfare documents and categorises non-compliance as a contract breach. Additionally, it has initiated efforts in regenerative agriculture through Farming for Generations. However, it does not disclose specific actions for contract breaches or the extent of the implementation of its progressive welfare practices in regenerative agriculture.
Source(s): Animal Welfare Commitment & Full Year 2020 Progress Report, page 1, 2; Animal Welfare Position Paper 2016, page 5, 6; Dairy Animal Welfare Program 2018, page 10; Universal Registration Document 2022, page 169, 196
Key Welfare Issues
The company commits to avoiding close confinement and tethering, eradicating on-farm mutilation, and minimising live animal transport durations to under eight hours. It is also committed to pre-slaughter stunning in specific geographies, with plans for a global extension by 2026. However, there is no disclosure on the practical implementation of its housing conditions commitment within the current reporting period.
Assurance & Certification
Auditing & Assurance by an Animal Welfare Organisation
The company holds AENOR certification for animal welfare awarded in 2019. The company reveals that 80% of its fresh milk production has undergone audits via the Group's animal welfare audit. Additionally, approximately 2,600 farm-level audits have been conducted.
Source(s): Animal Welfare Commitment & Full Year 2020 Progress Report; Double certification for DANONE Webpage; Environmental Data 2022, page 5; Universal Registration Document 2022, page 169
Public Reporting on Welfare
The company disclosed animal welfare data up to 2020, with no subsequent disclosures since then.
Performance on Key Material Risks
Source(s): Animal Welfare Commitment & Full Year 2020 Progress Report, page 2, 4, 10, 11
Performance on Key Material Welfare Risks by Protein
The company commits to phasing out all forms of permanent tethering for farm animals, with 91% of its dairy cows already not subject to tethering. It also reports a decrease in mastitis instances in 2018. However, ambiguity exists regarding whether the lameness score is below the optimal 10% threshold. Furthermore, it fails to provide updated data on mastitis for the subsequent years or substantiated evidence of an adequate environment for its dairy cows.
Strength of Policy
The company commits in writing to respect all internationally recognised human rights per international standards such as the ILO’s Declaration on Fundamental Principles and Rights at Work.
Due Diligence Process
The company states that in 2022, it conducted a salient human rights impact assessment of its operations and value chain with the support of Shift, an organisation with deep expertise in the UN Guiding Principles on Business and Human Rights. This was a follow-up to the detailed human impact assessment conducted in 2017, which assessed the risks associated with the company’s 20 most essential commodities. Regarding risk monitoring, it distributes a social scorecard throughout its operations to ensure its farms adhere to regenerative agricultural social practices, including those concerning labour rights. Furthermore, the company conducts SMETA audits in its supply chain, and upon completion of the audits, the company supports suppliers in developing corrective action plans and provides support and regular engagement. The company also discloses its human rights risks and mitigation strategy for its supply chain and operations. For its suppliers, the company mitigates risk through the social scorecard, providing resources, and constantly engaging suppliers in discussions to improve human rights adherence. For its direct operations, the company provided training on human rights to 6,658 employees at the end of 2022. The company has also participated in various coalitions and workstreams on responsible sourcing topics.
Source(s): Human Rights Policy, page 1; Social scorecard; URD Social Societal and Environmental Responsibility 2022, page 181; Universal Registration Document 2022, page 168, 182, 183, 184, 211
Evidence of Remediation
The company shared the results of the SMETA audits of its suppliers in 2021 and 2022. It discloses critical non-conformities related to child labour, forced labour, discrimination, health and safety, freedom of association, the right to collective bargaining and business ethics. However, this information excludes milk farmers.
Fair Working Conditions
Policy for Direct Operations
The company commits in writing to prohibit forced labour, child labour, discrimination and harassment and requires suppliers to make these commitments. Furthermore, The company discloses that much of its operations undergo audits covering these policies. However, the company does not commit to ensuring all its employees are paid a living wage or disclose information regarding sick pay.
Source(s): Code of Business Conduct 2022, page 4; Danone Sustainability Principles and Implementation Note for Business Partners 2022, page 3, 7, 14, 15; Danone anti-harassment and discrimination Policy 2020, page 4; Ethic Line and Whistleblowing Statement 2022, page 1, 2; Human Rights Policy, page 4, 5, 6; URD Social Societal and Environmental Responsibility 2022, page 177, 182; Universal Registration Document 2022, page 146, 182, 183
Monitoring & Discosure
The company monitors adherence to labour standards through audits and social scorecards, but it is unclear if these cover all the policies of forced labour, child labour, discrimination and harassment. The company has a whistleblowing channel for internal and external stakeholders, developed with input from employee representatives. It also mentioned that anyone who raises a concern may choose to remain anonymous. The company reports 273 alerts were raised through its whistleblowing channel. All these issues were categorised as human rights issues. However, this category needs to be broken down further. It also mentions that 220 alerts have been closed at year-end, and 53 are still under investigation.
Safety & Turnover Data
Committee representation of workers
The company commits in writing to provide its workers with a safe, healthy and calm working environment. However, it does not disclose any health and safety certification. The company states that its Workplace Health and Safety Program is overseen at the Group level by the Safety Steering Committee, comprised of senior management. However, the company does not mention if it has site-level health and safety committees with worker representatives.
Source(s): 2022 social extra-financial data.pdf, page 4; Universal Registration Document 2022, page 171, 174, 175, 218
Disclosure of safety and turnover data
The company reports a lost-time injury frequency rate (LTIFR) of 1.1 per one million hours worked in FY2022, an increase from the LTIFR of 1.0 reported in FY2021. The company reports one fatal accident across its direct operations in FY2022 and FY2021. However, the fatality rate has slightly increased as the number of employees dropped in FY2022 while the number of fatalities remained one. The company reports an overall 20% employee turnover rate in FY2022, with a slightly smaller turnover of 17.5% for managers and more senior management. However, it does not disaggregate this further by seniority level.
Freedom of Association
Strength of Policies
The company commits in writing to respect labour rights, including freedom of association. It also describes in detail its approach to discussing matters and meeting with union representatives, the International Union for Food Workers (IUF), and two councils representing employees. While it does discuss the number of agreements signed with the IUF, it does not report the unionisation rate. The company also states that suppliers must recognise and respect employees’ freedom of association and their right to bargain collectively.
Source(s): 2022 social extra-financial data.pdf, page 3; Code of Business Conduct 2022, page 4; Danone Sustainability Principles and Implementation Note for Business Partners 2022, page 1, 6; URD Social Societal and Environmental Responsibility 2022, page 177, 178; Universal Registration Document 2022, page 171, 177, 178, 181
Disclosure of Collective Bargaining Metrics
The company mentioned that In 2022, 74% of employees were covered by collective bargaining agreements. It also breaks down the distribution of its workforce across existing contractual arrangements, including part-time and subcontracted workers.
Food Safety System
The company discloses that there are a total of 178 production sites for all of Danone’s Categories, not including the production sites of co-manufacturers and suppliers. In 2022, it reached a 95% site FSSC 22000 certification rate, which is a GFSI-recognised certification. Further, it audits third-party manufacturers and suppliers against GFSI-recognised schemes to ensure compliance with the Quality Food and Safety (QFS) policy. It expects its suppliers to maintain and deploy a Food Safety Management System following GFSI-recognised standards.
Source(s): Universal Registration Document 2022, page 33, 186, 187, 214
The company conducts both internal and external food safety audits in its operations. In 2022, the Global Food Safety Audit team conducted 72 in-house audits. Further, 166 FSSC 22000 certification audits were conducted by independent certification bodies. However, the corrective action rate is not disclosed. Additionally, it does not confirm whether it is developing or has implemented a consumer-facing technology for food safety.
Product Recalls & Market Bans
Product Recall Systems
The company acknowledges food safety as its key material risk, but no further information regarding its product recall system is provided. Additionally, it does not disclose the number of recall incidents during the reporting year, and none were detected in the media screening.
Source(s): Universal Registration Document 2022, page 23
The company does not report information on market bans for the reporting period, and none were detected in the media screening.
Assessment of a Company's Sustainability Governance
The company has a Global Sustainability Board led by the Chief Sustainability Officer and composed of functional and business leaders responsible for steering the execution of the sustainability strategy. In addition, the company conducted a materiality assessment and has identified 12 material priorities as product safety/quality, the nutritional quality of the overall product portfolio, food/water access and affordability, new consumption patterns/planetary diet, consumer behaviour change, climate change, sustainable dairy farming/land use, local sourcing and rural/farmer development, water stewardship, circular economy/packaging/waste, responsible procurement/supply chain management and responsible practices ethics and integrity. The Global Sustainability Board has approved the materiality. The company has board-level expertise in sustainability and food safety but not innovation.
Incentives & Policy Engagement
The company has set executive monetary rewards linked to climate-related and sustainability indexes and discloses the percentage of variable compensation related to these metrics. The company collaborates with multiple policymakers and civil societies, and some of its crucial impact partners include B Lab, Ellen MacArthur Foundation, Environmental Defense Fund, RAMSAR, Food and Agricultural Organization (FAO), OECD, WWF and UNITAR. The company also supports the European Commission’s Climate Neutral Farms (ClieNFarm) project to co-develop and upscale locally relevant solutions (organisational, financial, technical) to reach Europe's climate-neutral, resilient and sustainable farms. The company also discloses its trade association and alliance memberships. However, the company does not have a public commitment or position statement to conduct its engagement activities in line with the goals of the Paris Agreement. Still, it plans to have this within the next two years.
Source(s): CDP Climate, page 279; CDP Climate 2022, page 288, 296; DANONE POLICY ON ADVOCACY, page 6; Danone CDP Climate Chnage 2022, page 22; Integrated Annual Report 2022, page 41; Isabelle Esser; LISE KINGO Biography; Materiality Report, page 2; Regenerative Agriculture Scorecard; Universal Registration Document 2022, page 145, 147, 148, 266, 267
Innovation & Benchmarking
The company aims to develop regenerative agriculture models to help farms maintain soil health and protect animal welfare. The company has cofounded two initiatives, One Planet Business for Biodiversity (OP2B) and Farming for Generations, to promote regenerative agriculture throughout the industry. However, the company does not disclose how it benchmarks itself against peers in sustainability and innovation.
Diversification of Products to Alternative Protein Sources
Existing product portfolio
The company has not communicated about protein diversification as a material business issue. However, it states that 54% of its revenue is generated from its Essential Dairy and Plant-Based (EDP) products segment, which is not disaggregated by product. It mentions a timebound target to achieve a 3.5-star rating by 2025 by Health Star for its dairy, plant-based, water and aqua drinks products. However, it does not disclose a timebound target to increase the sales of such alternative protein products.
Source(s): Danone Drops $2 Million Into Wilk’s Cultured Breast Milk; Danone Makes Its Second Alt-Milk Investment In a Month With Minority Stake In Imagindairy; Essential Dairy & Plant-based products (strategy, research & innovation); Integrated Annual Report 2022, page 9, 22; Silk Webpage; Universal Registration Document 2022, page 12, 198
Investing for future growth
The company has two plant-based protein brands: "Alpro", based in Europe, and "Silk", in North America. These brands offer a variety of products, including milk, yoghurt, cheese and ice cream. Further, it reported a strategic $2 million investment deal with cell-based breast milk startup, "Wilk", in April 2023. A month later, it made a second alternative milk investment in startup Imagindairy, taking a minority stake in the precision fermentation firm.
2023 Risk Score:
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31st October 2023
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Coller FAIRR Protein Producer Index