Groupe Casino

Groupe Casino has not made much progress in materiality over the past 12 months, and the expectation of change is minimal in the next year, as there is no evidence the company will robustly integrate sustainable proteins in its climate strategy. The company continues to acknowledge the need for a dietary shift towards more plant-based proteins, in line with the Eat Lancet report; Groupe Casino recognises its role in facilitating a protein shift. It understands the climate mitigation potential of growing its plant-based portfolio, although it has not provided evidence of quantifying this. Groupe Casino discussed, based on market studies, that the dietary transition toward more nutritious plant-based foods is not growing as quickly as hoped in France. It does foresee a near future in which consumers readily increase their plant-based consumption. Furthermore, the demand for plant-based products in its South American markets is even less mature. The company believes strong consumer and stakeholder engagement is necessary to accelerate the plant-based and alternative protein trends in both markets. While Groupe Casino has made a commitment to increase plant-based protein consumption and decrease animal-derived protein consumption it has not disclosed a Board-endorsed strategy that supports the reduction of exposure to animal-derived proteins through setting a timebound portfolio diversification target. The company is conducting an in-depth study, reviewing its operations and value chain to quantify climate change's environmental, financial and social impacts. The time frame considered (2022, 2030 and 2050) is aligned with the IPCC’s RCP4.5 and RCP8.5 scenarios. However, Groupe Casino has not disclosed the findings of potential impacts on animal agriculture supply chains or the mitigation and adaptation needs to address the risks identified.

Groupe Casino has made progress in its strategy; the company is committed to increasing plant-based consumption and is improving its Scope 3 target to bring it in line with a 1.5C warming trajectory. The company continues to mitigate risks in its beef and soy (for animal feed) animal agricultural supply chains for products sold through its French and South American businesses. For its French business, it ensures the traceability of beef and soy products and enforces a non-compliance mechanism if policies are breached; this has resulted in the termination of 18 supplier contracts since 2017. Increasingly, the company’s South American business unit is focusing on the risks in its beef and soy supply chains. For example, banner Grupo Éxito is increasing its anti-deforestation policies; it has audited more than 46,545 hectares of land farmed by 56 suppliers. However, it is challenging to estimate what proportion of total suppliers this represents. In 2021, the Brazilian banner, GPA, collaborated on developing a “Guide on Preparing Beef Sourcing Policies for Retail” to assist other South American retailers in monitoring their beef suppliers using a unified sector-wide approach. However, except for beef and soy, sustainable sourcing for animal agriculture continues to be focused on animal welfare commitments without sufficient management of environmental impacts (e.g. water use and scarcity, biodiversity loss, waste and pollution, GHG emissions, deforestation) as there are no targets or KPIs that cover all animal species across all geographies. Furthermore, the company’s reporting lacks specific details of how its sustainable sourcing feeds into its climate mitigation strategy. Groupe Casino reports more than 1,900 Casino and Franprix private-label products have scored A or B on Nutri-score. However, it is unclear what proportion of these products are plant-based. Additionally, the company has not publicly reported progress against its target to improve the Nutri-Score of 1,000 products by 2021. Casino Groupe continues to discuss the importance of transitioning its product portfolio towards locally sourced, sustainable proteins. The company has publicly committed to increasing the amount of plant-based proteins consumed by customers and encouraging them to reduce their intake of animal proteins, as recommended by the Agency for Ecological Transition. The company wants consumers to eat higher quality animal proteins but in smaller quantities. While it is positive to see this progress, Groupe Casino needs to extend this work further to create a timebound commitment to protein diversification and disclose metrics to allow year-over-year tracking of progress. Groupe Casino is currently using levers to reduce emissions in its supply chain; these include promoting plant-based foods and supporting suppliers to reach their carbon reduction targets. The company is also working towards setting more ambitious carbon reduction targets that are aligned to a 1.5C warming trajectory. From the discussion with investors, the company disclosed that the future Scope 3 target and action plan would specifically cover plant-based products, though this could be an internal target only. The company did not provide a timeline for this workstream due to the SBTi approval backlog.

Compared to other retailers in this engagement, Groupe Casino continues to offer fewer underserved categories (such as plant-based pork, fish and ice cream) and novel protein ingredients across its banners. The company wants to be a leader in plant-based innovation but also wants to be realistic about what consumers are willing to buy consistently. Groupe Casino found that in France, many plant-based products are not being purchased again. Groupe Casino shared with investors that it is not expanding its plant-based presence in South America as it is concerned it does not have the right products for the market. The company expects to use learnings from the French market to launch products in South America, however, it did not provide a timeline for this. Groupe Casino does not directly invest in plant-based R&D; it has no factories or manufacturing capacities. However, it continues to invest in plant-based start-ups, including a programme to invest in equity of early-stage start-ups, including ideas generated by high school students. The company believes that a key driver behind innovation is taste; it shared with investors that to address this it has a laboratory where consumers take part in blind taste tests to identify which products are the best and how to improve recipes for private label products. In 2021, French banner Casino opened its “100% veggie” corners which offered more than 400 SKUs. Additionally, the company’s brand Naturalia opened three 100% vegan organic produce stores, which stock 2,000 plant-based food, beauty and lifestyle products.

While Groupe Casino runs consumer campaigns, such as Veganuary and providing plant-based recipe inspiration online and in-store, the company’s plant-based marketing is unambitious and it does not provide evidence of strategic, data-driven consumer engagement campaigns to nudge consumers to transition their diets. The company quoted a study that plant-based trends are not prominent in France, and Groupe Casino has found it challenging to grow in the market. The company recognises a need to increase innovation and consumer education around plant-based items and better identify its target audience. Groupe Casino shared with investors that it believes animal welfare might be a more compelling reason, rather than environmental concerns, to increase the adoption of protein alternatives in France. Despite having this consumer awareness, the company is not evidently utilising this information to accelerate and promote plant-based products to consumers who are concerned about these issues. The company is not actively engaging with its South American market on the need to adopt a plant-based diet. The company is currently focused on securing its supply and identifying products that will perform well. In 2021, Naturalia, Franprix, and Monoprix banners pledged to display the “Planet-Score” calculated by the Technical Institute of Organic Agriculture (ITAB). More than one hundred private-label products will be assessed, and the scores will be displayed on the Franprix and Monoprix websites.

As expected, the company did not provide an updated figure for its plant-based sales. It shared with investors that it finds it challenging to identify trends in plant-based sales and needs more time (approximately 5 years) to see actual trends. Groupe Casino stated that the debate over defining plant-based products makes it challenging to calculate plant-based sales and carbon emissions. Groupe Casino wants industry alignment on how to define plant-based foods. It has developed its internal nomenclature for alternative proteins (and shared this with investors), but it is still debating whether to include the nutritional aspect within the categorisation of plant-based foods (e.g. should products with a Nutri-score of D and E be included). In 2021, the company estimated Scope 3 emissions to be around 20 million tonnes of CO2 equivalent yearly. Purchased goods and services accounted for more than 65% of the Scope 3 footprint, and it shared with investors that an estimated 30% of the Group’s total emissions arise from animal proteins. The company used the industry standard of a monetary ratio to estimate its carbon emissions. However, having realised the inaccuracies of this methodology the company is developing a tool to better understand and quantify its Scope 3 emissions. It currently uses estimations at the category level but wants to estimate emissions per subcategory and at the product level. The company did not provide a timeline for this workstream.

The company did not attend the technical roundtable on protein diversification metrics. It met with FAIRR and the investors for formal dialogue. The company showed a willingness to learn about best practices. Groupe Casino responded to FAIRR’s follow-up questions via email and provided feedback on the final assessment.