Hormel Foods Corp
HRL:US US4404521001
Key Information
HQ:
United States
Market Cap:
$23.95bn
Primary Market:
North America
Company Information
Coller FAIRR Protein Producer Index
Analysis Overview
Greenhouse Gas Emissions Deforestation & Biodiversity Water Use & Scarcity Waste & Pollution Antibiotics Animal Welfare Working Conditions Food Safety Sustainability Governance Alternative Proteins
Analysis Breakdown
Risk Score
39/100
Medium Risk
Greenhouse Gas Emissions
28/100
Scope 1, 2 & 3 Target
55/100
Type of Target
The company is committed to setting a science-based emission reduction target. The target is in the process of being approved. In 2022, it mentioned that it is on track to have an approved science-based target by 2023.
0/1.25
Strength of Target - Non-SBT
The company has set an interim target to reduce absolute GHG emissions by 1% per year and improve GHG emissions efficiency by 1% per year. The company's commitment to reduce its greenhouse gas emissions applies to the entire Group and includes 100% of emissions in Scope 1 and 2. It states that it worked on Scope 3 GHG emissions analysis in preparation for submitting its preliminary goal to the SBTi. It does not have a separate target to reduce Scope 3 emissions.
1.5/2
Strength of Target - SBT
The company has already submitted its target to the SBTi for validation. It mentions that it is on track to have an approved science-based target by 2023.
1.25/1.75
Innovation on GHG Emission Reduction
20/100
Innovation to Reduce Agriculture Emissions
The company discusses that it seeks to do business with suppliers who share their commitment to reducing the environmental impact of business operations, which includes air emissions. It states it collects climate change and carbon information from suppliers annually to better understand its suppliers' position on GHG management in the CDP report. However, it has no strategies for promoting emission reduction from agriculture directly.
0/1
Feed Farming Innovation
The company is part of a collaborative programme that helps farmers explore sustainable farming practices across 50,000 acres in Minnesota. It states that the pilot programme is part of the Ecosystem Services Market Consortium's (ESMC) effort to launch a nationwide agricultural carbon and water credit marketplace in 2022.
1/2
Animal Farming Innovation
The company does not engage in innovative projects to reduce or mitigate emissions from animal farming
0/2
Quality of GHG Inventory
49/100
Quality and scope of GHG inventory Completeness
The company reports Scope 1 emissions to be 668,817 metric tons of CO2e and Scope 2 emissions to be 21,364 metric tons of CO2e in FY2021. It reported Scope 3 emissions in 2021. The company's response to the 2022 CDP Climate questionnaire is limited to Brazil, China and the United States. It also operates in the Philippines, Japan, Australia and Canada. However, this is not covered in the CDP Climate Change disclosure.
1.43/1.5
Feed & Animal Farming Emissions
The company discloses the Scope 1 emissions by greenhouse gas type, including CH4 and N2O. However, it does not mention animal farming specifically. It does not disclose the CO2 equivalent emissions, specifically from feed. However, it reports that it sources feed ingredients from suppliers. On Scope 3 emissions, it has reported emissions from purchased goods and services and from the use of sold products. However, this does not include all emissions from feed production as it does not include the feed it purchases from contracted feed grain growers.
0.5/2
Transparency of GHG Inventory
The company responded to the CDP Climate questionnaire in 2022.
0.5/1.5
Emissions Performance
10/100
Overall Emission Performance
The company mentions absolute emissions remain similar to the previous reporting year. It says a decrease in emissions intensity due to a reduction in Scope 1 and 2 emissions combined with an increase in total revenue from the previous year.
0.5/5
Climate-related Scenario Analysis
5/100
Climate-related Scenarios Analysis Conducted
The company has not conducted a scenario analysis. While it states that it anticipates using qualitative and/or quantitative analysis in the next two years, it is unclear if this is a commitment to conducting a climate-scenario analysis.
0/1
Disclosure of Analysis Results on Material Risks
The company uses futures contracts to manage the risk of increasing feed prices. However, it indicates this only concerns its short-term exposure to price fluctuations and does not discuss the projected impacts of physical dangers on feed ingredients' availability and price volatility. It discloses that changes in global economic conditions may cause adverse effects, such as energy availability and costs. However, it does not mention any mitigation plan directly related to the issue.
0.25/3
Disclosure of Financial Material Events & Alignment of CAPEX
The company does not disclose its commitment to align capital expenditures with its GHG targets.
0/1
Deforestation & Biodiversity
17/100
Deforestation/Conversion-free Target - Soy for Animal Feed
10/100
Risk Assessment to Identify High-risk Locations
The company mentions that 10-20% of its revenue is dependent on soy. It has conducted a high-level evaluation of its soy supply and mentions that it is comparatively low risk as it is primarily sourced domestically, i.e. from the US. However, the company does not explicitly mention the % of soy sourced from the US.
0.25/0.5
Strength of Deforestation Commitment
The company commits to following SBTi’s Forest Land and Agriculture (FLAG) Guidance and discloses that it must finalize this commitment by 31 December 2024. However, the commitment only covers its primary deforestation-linked commodities and is not currently in place.
0/3.25
Transparency - Progress Against Commitment
The company discloses information to CDP Forests.
0.25/1.25
Deforestation/Conversion-free Target - Cattle
15/100
Risk Assessment to Identify High-risk Locations
The company discloses that it sources cattle from the USA, Australia, Brazil, Canada and Uruguay, some of which are locations with a high risk of deforestation. It states that it has assessed risk in the cattle products supply chain as part of an established enterprise risk management framework. However, it does not explain its methodology for analysing and identifying deforestation risks and does not explicitly disclose the high-risk locations it has identified through the assessment.
0.25/0.5
Strength of Deforestation Commitment
The company mentions that it aims to source beef from suppliers who follow the principles and criteria of the Global Roundtable for Sustainable Beef (GRSB). It discloses a target to source 100% of cattle sustainably by 2025, which includes deforestation as a major criterion.
0.25/3.25
Transparency - Progress Against Commitment
The company responded to the CDP Forests questionnaire in 2022.
0.25/1.25
Engagement, Monitoring & Traceability - Soy for Animal Feed
22/100
Supplier Engagement
The company requires all suppliers to acquire land rights and operations legally and to protect high conservation value areas, high carbon stock forests, rainforests and peatlands. However, the company does not explicitly refer to soy-related deforestation.
0.1/1.25
Compliance monitoring & Traceability
The company has conducted a high-level evaluation of its soy supply. It mentions its soy is primarily sourced from low-risk areas, but the company does not disclose the exact percentage.
0.75/3.25
Feed Innovation
The company is investing in regenerative agriculture, targeting improvements in soil health. Alongside this, one subsidiary has started to produce 100% grass-fed beef, thereby reducing reliance on soy.
0.25/0.5
Engagement, Monitoring & Traceability - Cattle
20/100
Supplier Engagement
The company explicitly states it is not working with smallholders, or tertiary suppliers in this area.
0.25/1.25
Compliance monitoring & Traceability
The company states that to ensure compliance with its requirements, all beef suppliers have monitoring systems for farms supplying cattle, which use satellite images and geo-referenced maps of farms, deforestation data and information from public agencies regarding embargoed areas and human rights. The company also requires and reviews independent audits of the environmental monitoring systems of its suppliers. Hormel has only partially mapped its value chain, so monitoring cannot extend to indirect suppliers. It mentions that if a supplier is found to violate its sourcing principles, the company will require the supplier to implement corrective actions. If reasonable/appropriate corrective actions cannot be agreed to, the company will suspend or discontinue purchases from the supplier. In 2019, it disclosed that 100% of its cattle are traceable to the finishing farm. However, the same information is missing in the current reporting period. The company states that traceability is monitored but does not substantiate its claims.
0.6/3.5
Feed Innovation
The company works directly with first-tier suppliers to manage and mitigate deforestation risks. The company is also investing in regenerative agriculture.
0.13/0.25
Water Use & Scarcity
46/100
Water Use & Scarcity in Facilities
59/100
Monitoring Water Consumption & Withdrawals
The company has conducted a water-risk assessment of its operations using the World Resources Institute's Aqueduct Water Risk Atlas. It identified three manufacturing facilities in regions defined as overall high risk, and access-to-water risk remains low at all domestic manufacturing locations. However, it does not disclose exact locations. It has disclosed its total water consumption for the last year. The company also discloses information on various projects to reduce water consumption.
0.55/0.75
Target to Reduce Water Consumption & Withdrawals
The company had set a target to reduce absolute water consumption by 2% per year and improve water efficiency by 2% per year. The target year was 2021, and the company mentions it exceeded 106% of its target in 2020 when combined with progress since 2012. It does not mention any new targets at the time of writing. The company measures and monitors water withdrawals. However, it has not set a time-bound target to reduce total water withdrawals.
0.5/1
Disclosure & Performance of Water Risks in Facilities
The company discloses that in 2021, it withdrew 84% of its water from groundwater sources and 14% from surface water. It reports that 1-10% of water is withdrawn from areas with water stress. The company discloses that its water-related CAPEX has increased by 3% yearly, and its water-related OPEX has increased by 3%. It responded to the CDP Water questionnaire in 2022. The company reports that it reduced water use by over 42.2 million gallons and improved its annual water efficiency by 14% in 2021.
1.88/3.25
Water Use & Scarcity in Feed Farming
20/100
Supplier Engagement in Water Use in Feed Farming
The company’s Sustainable Agriculture Policy states that it expects suppliers and feed grain growers to improve their water use efficiency. However, this is just an expectation rather than a strict requirement. The company mentions that it engages with growers in high-risk water regions to identify areas for improvement that will lower water risk and improve water quality. However, it does not provide more details about the specific actions to support farmers. To strengthen the water management aspects in its sourcing strategy, the company completed a high-level water risk assessment for its top suppliers in partnership with the AgWater Challenge.
1/2.5
Disclosure of Water Risks in Feed Farming
The company discloses that it does not know the proportion of soy sourced from water-scarce areas but will obtain this data within the next two years. It is currently assessing regenerative agricultural projects, including pasture-raised beef on regenerative grasslands. However, it is unclear if it is investing or scaling these projects currently.
0/2.5
Water Use & Scarcity in Animal Farming
58/100
Supplier Engagement in Water Use in Animal Farming
The company primarily engages in the production of poultry and pork. It discloses that poultry production does not occur in water-stressed areas and that about 1-10% of pork production originates from sites with water stress. The company also sources poultry and pork from third-party contract growers. The company discloses that none of its poultry is sourced from water-stressed areas, and about 11-25% of its pork is sourced from water-stressed regions. Its Sustainable Agriculture Policy states that it expects suppliers to improve water use efficiency; however, this is not a strict requirement.
2/3
Disclosure of Water Risks in Animal Farming
To strengthen the water management within in its sourcing strategy, the company completed a high-level water risk assessment for its top suppliers in partnership with the AgWater Challenge. It is also committed to advancing its water stewardship efforts through initiatives in the top six priority watersheds. In 2021, it assessed several potential projects designed to help achieve its goal.
0.9/2
Waste & Pollution
31/100
Wastewater at Facilities
42/100
Disclosure & Targets for Wastewater Quality & Volume Discharged
The company was subjected to five cases of fines, enforcement orders or other penalties related to water regulatory violations. The fines reported were related to discharge events above permitted levels. It conducts an annual water risk assessment with a third-party consultant. This assessment includes water quality. The company aims to achieve a 10% reduction of organic matter discharged from its processing facilities by 2030. However, it does not disclose specific actions linked to that goal. The company mentions that it is currently evaluating wastewater-loading reduction and treatment-improvement opportunities and will provide additional updates in future reports.
0.85/1.5
Transparency on Water Pollution Risks
The company mentions it measures discharged water quality parameters. However, it does not disclose the results. It disclosed wastewater discharge for the reporting year and reported a decrease from the previous year. The company mentions it is actively considering auditing its water information reported to the CDP within the next two years. It responded to the CDP Water questionnaire in 2022.
0.75/2
Performance on Wastewater Quality & Volume Discharged
The company disclosed wastewater discharge in the reporting year. It reports the decrease in discharged volumes is attributed to increased product and evaporative loss from the incoming water withdrawals.
0.5/1.5
Nutrient Management in Feed Farming
40/100
Supplier Engagement in Nutrient Pollution Risks
The company has a sustainable agricultural policy for feed grain growers that states the importance of developing a nutrient management plan specific to their conditions. The policy is meant to "eliminate runoff linked to improper fertiliser, pesticide and herbicide use". The policy lists various steps for contract animal producers and feed grain growers concurrently. Hormel Foods and Target, along with MBOLD, have joined together to support an innovative agriculture pilot project for farmers to adopt soil health practices to improve water and air quality. These practices include cover cropping, reduced tillage and nutrient management. The goal is to enrol up to 50,000 acres. The company is also a founding member of the Cedar River Watershed Partnership, a public-private partnership designed to further the implementation of sustainable agriculture best practices.
1.4/4
Innovation to Improve Nutrient Management in Feed Farming
As part of the regenerative agriculture pilot project, farmers will use cover crops. The company states it will provide $1.7 million in partnership with Target for this project.
0.6/1
Manure Management in Animal Farming
12/100
Disclosure of Pollution Risks from Manure
The company expects its animal producers to implement agricultural best practices, which include the proper storage of manure and policies and procedures to ensure the proper management of organic solid waste. However, the company does not explicitly state that it converts manure to fertiliser. It discloses that it assesses risk in direct operations concerning water quality at a basin/catchment level. However, it does not disclose the locations found to be at risk.
0.25/1.25
Supplier Engagement in Manure Management
The company expects contract animal producers to evaluate their operation and develop a nutrient management plan specific to their conditions. However, the company does not provide details of the consequences of non-compliance.
0.34/1.5
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.
0/2.25
Antibiotics
54/100
Policy on Antibiotics Use
50/100
Policy on Antibiotics Use
The company commits to the responsible use of antibiotics, adhering to US FDA guidelines that prohibit the use of medically important antibiotics (MIAs) for growth enhancement. It promotes antibiotic stewardship through veterinary oversight, adopting preventive strategies, and employing alternative solutions such as biosecurity programmes and targeted vaccines.
2.5/5
Disclosure of Quantity of Antibiotics Used
57/100
Disclosure of Quantity of Antibiotics Used
The company discloses the quantity of medically important antibiotics used in some of its operations and supply chain.
2.85/5
Animal Welfare
45/100
Animal Welfare Policy
57/100
Welfare Policy
The company commits to respecting the Five Freedoms for Animals and provides role-specific training to employees at hog farms and processing plants. It has a zero-tolerance policy towards animal abuse and neglect and incorporates a speak-up policy in its business code of conduct. The Supplier Code of Conduct allows for suspension of purchases from non-compliant suppliers. It also operates a facility focused on animal welfare and is innovating its hog and turkey handling processes. However, there is no statement on employee training for poultry operations.
1.75/2
Key Welfare Issues
The company details its animal welfare standards for hogs and eggs, stating 100% cage-free eggs and group sow housing for hogs. It also commits to broiler chicken welfare through its Applegate subsidiary, targeting stocking densities in line with GAP. Additionally, all hog producers participate in the Hormel Foods Quality Assurance Program. Commitments extend to a controlled atmosphere stunning for turkeys and supplier engagement for improved broiler chicken welfare. However, it does not disclose cattle information, lacks details on animal health during transport, and does not mention natural behaviour facilitation such as outdoor access. By 2026, it aims to adopt chicken breeds with improved welfare outcomes.
1.1/3
Assurance & Certification
52/100
Auditing & Assurance by an Animal Welfare Organisation
The company's subsidiary Applegate, producing organic beef, is certified by Good Agricultural Practice (GAP) and Certified Humane. The company's subsidiary Applegate, specialising in organic pork, is certified by Good Agriculture Practices (GAP) and Certified Humane. The company's subsidiary Applegate is certified by Good Agricultural Practices (GAP) and Certified Humane for its organic chicken production. It commits to extending GAP certification across its entire supply chain by 2024. The company commits to high-tier animal welfare through alignment with Global Animal Partnership (GAP) for its broiler chicken operations. Its subsidiary, Applegate, is certified by GAP and Certified Humane. However, the company does not clarify if any assurance certifications are active in the current reporting year, as its broiler chicken commitments are forward-looking statements.
2.6/4
Public Reporting on Welfare
The company does not disclose information in relation to animal welfare certifications or assurance programs for its beef operations.
0/1
Performance on Key Material Risks
25/100
Performance on Key Material Welfare Risks by Protein
The company transitioned to group sow housing in its hog farms, and all designated suppliers' hogs are housed in group pens. It also commits to improved poultry environments, including better lighting and litter quality. However, the company does not address maximum transport times, effective stunning, or dehorning in beef production. Additionally, there's no disclosure on maximum stocking density, water bath stunning, or the use of higher welfare breeds in poultry.
1.23/5
Working Conditions
54/100
Human Rights
40/100
Strength of Policy
The company commits in writing to respect human rights per the International Bill of Human Rights and the core ILO conventions.
1/1
Due Diligence Process
The company conducts due diligence and assessment processes to monitor modern slavery and review the next steps of action in its supply chain. However, these do not seem to cover all human rights. Furthermore, the company does not disclose how it would identify the next steps of action it would take if it identified human rights risks in its own operations.
Regarding risk mitigation, the company states that team members are trained on policies and procedures concerning aspects of human rights that are relevant to its operations. However, it does not disclose sufficient information to determine how identified risks in its supply chain are mitigated or how stakeholders are remediated.
1/3
Evidence of Remediation
The company does not disclose if it identified any human rights risks during the reporting year.
0/1
Fair Working Conditions
72/100
Policy for Direct Operations
The company commits in writing to prohibit child labour, forced labour, discrimination and harassment and requires suppliers to do the same. The company states that to ensure adherence to these policies, it has established a compliance program led by its audit committee, designed to uphold accountability through reporting, tracking and investigating possible violations.
2.1/3
Monitoring & Discosure
The company's compliance program also aims to ensure adherence to the supplier code of conduct. The supplier code of conduct requires adherence to the prohibition of discrimination, abuse, child labour and forced labour.
The company has established a hotline number and website, operated by a third party, to facilitate anonymous employee feedback and address concerns should employees observe anything that does not comply with the code of conduct. The company also has an anonymous grievance mechanism for its suppliers. However, the company does not explicitly disclose the number of grievances reported via the whistleblowing hotline for the reporting year.
1.5/2
Safety & Turnover Data
45/100
Committee representation of workers
The company commits in writing to uphold a safe work environment for all employees. The company has a corporate safety steering committee for all its business units and subsidiaries. Further, whilst it does not disclose the percentage of facilities with worker representatives, it states that its safety committees comprise more than 1,000 hourly and salaried employees. The company does not disclose a health and safety certification.
0.49/2
Disclosure of safety and turnover data
The company's total case incident rate (TCIR) per 200,000 hours worked was 2.3 in FY2021, demonstrating an increase from the previous reporting year's TCIR of 2.6. The company reports zero fatalities in FY2021 but does not disclose the number of fatalities in last years.
The company discloses that the turnover rate for the fiscal year 2022 was 11% for employees with an annual salary and 44% for those paid by the hour. Still, the company does not disaggregate further by seniority level.
1.75/3
Freedom of Association
60/100
Strength of Policies
The company commits in writing to uphold its employees' freedom of association and collective bargaining. It discloses that trade unions represented 20% of its employees worldwide in 2022. The company also expects suppliers to respect their employee's rights to freedom of association and collective bargaining.
1.5/3
Disclosure of Collective Bargaining Metrics
The company discloses that 20% of the employees are covered by collective bargaining agreements through trade union membership. Also, the company states that in 2021, it had 81% of employees working hourly, 19% of employees as salaried, 1% as part-time, and 6% as temporary.
1.5/2
Food Safety
30/100
Food Safety System
30/100
Certifications
The company has disclosed that 26 of its sites are certified by a GFSI-recognised programme. As per the corporate website, it has 40+ manufacturing facilities. Hence, the certified site proportion is unclear. It states that it ensures suppliers comply with the GFSI-recognised standards. However, it is not clear whether suppliers are explicitly required to be GFSI-certified, and the proportion of suppliers certified with GFSI is not disclosed.
1.5/3.5
Performance
The company discloses that it conducts internal and external food safety audits. In 2021 it disclosed that it conducted an additional eight food safety supplemental audits. However, it does not disclose the total number carried out. If suppliers are found to be non-compliant, appropriate action is taken, including termination. However, there is no mention of corrective action rates associated with its own facilities' non-conformances. It mentions a traceability process that goes from the ingredient suppliers to the production plant, the finished product, and finally, to each customer. This system relies on electronic systems and records to provide visibility into the company's supply chain. The detailed and thorough approach to traceability lets the company know the farm of origin for each hog processed daily at plants throughout the country. However, it is not clear whether this traceability system is consumer-facing.
0/1.5
Product Recalls & Market Bans
30/100
Product Recall Systems
The company mentions that there is a communication channel for consumers to report food safety cases. However, it does not have a product recall system in place. It had one voluntary Class II recall in 2022 for a limited number of jars of SKIPPY® products. It discloses one case of a product recall in the current reporting period. It mentions that a limited number of pots may contain a small fragment of stainless steel from a piece of manufacturing equipment in SKIPPY® products. The recall is being conducted with the knowledge of the US Food and Drug Administration.
1/3
Performance
The company does not disclose market bans and no market bans found in media screening.
0.5/2
Sustainability Governance
45/100
Assessment of a Company's Sustainability Governance
45/100
Board Sustainability
The company discloses that the governance committee of its board of directors has formal oversight of its ESG issues. Also, the company has conducted a materiality assessment to identify topics most relevant to its business and stakeholders. It lists the key topics, including products, supply chain, environment, people and community, air emissions, climate change and environmental compliance. It does not be made clear whether the board oversees the assessment. The company discloses board-level expertise in food safety and innovation but not sustainability.
1.13/2
Incentives & Policy Engagement
The company discloses that direct and indirect incentives are provided for managing climate-related issues. However, it does not reveal the percentage of variable compensation linked to achieving related targets.
The company engages in an ongoing dialogue with elected officials and community members about various sustainability-related issues. Within its CDP disclosure, the company states that it indirectly engages, through trade associations, to influence policy, law, or regulation that may impact the climate. However, it does not be clarified what stance the company takes on climate change when engaging on topics unrelated to climate resilience in supply chains. The company also provides details on trade association memberships. However, it does not discuss aligning its policy-engagement strategy to restrict global temperature rise to 1.5°C.
0.85/2.5
Innovation & Benchmarking
The company holds an annual summit for team members involved in innovation and has an Innovation Steering Committee that meets quarterly to review the company’s innovation progress. It discloses that one of its goals for the 20 by 30 challenge is to develop more sustainable packaging. However, the company does not disclose how it benchmarks itself against peers in sustainability and innovation.
0.25/0.5
Alternative Proteins
55/100
Diversification of Products to Alternative Protein Sources
55/100
Existing product portfolio
The company acknowledges protein diversification as a material business issue driven by consumer appetite for plant-based proteins. It has set a goal to achieve 15% sales from new products each year and discloses annual progress. However, it has not yet set a timebound target to diversify protein sources, nor does it report revenue/sales linked to alternative protein sources.
0.25/2.5
Investing for future growth
The company has a wide array of plant-based protein brands such as SKIPPY® peanut butter, Justin’s nut butter and Happy Little Plants. Hormel's subsidiary, Burke Corporation, launched a set of alternative plant-based products in 2020. Powered by pea protein, these include fully cooked crumble and uncooked ground products. It also expanded its range of plant-based proteins through the acquisition of the Planters® snack nuts business in 2021, which includes the Planters®, NUT-rition®, and Corn Nuts® brands. Further, it also entered into an exclusive partnership with The Better Meat Co. in 2021 to bring new mycoprotein and plant-based protein products to the marketplace.
2.5/2.5
Members-only Content
To register as a member of the FAIRR network, please fill out the sign up form or if you need additional information on the FAIRR network, please contact investoroutreach@fairr.org.
Workstream Information
2023 Risk Score:
39/100
Level:
Medium Risk
Ranking:
24/60
Main Protein:
Pork
Assessed Proteins:
Beef, Poultry and eggs, Pork
Company Feedback Given:
No
Last Updated:
31 October 2023
2023 Resources
2023/24 Index Report Summary (Mandarin) 报告总结摘要(中文) Launch of the Coller FAIRR Protein Producer Index 2023/24 2023/24 Company Dialogue Questions 2023/24 Full Report Coller FAIRR Protein Producer Index
Coller FAIRR Climate Risk Tool
Analysis Overview
Cost Increase
Cost Increase
EBIT Margin
Cost Increase (%)
60%
40%
20%
0%
-20%
-40%
-60%
Net Zero Aligned
BAU
High Climate Impact
Cost Breakdown
2030 | Net zero aligned | BAU | High climate impacts |
---|---|---|---|
Total Costs | 4% | 14% | 32% |
Carbon Tax | 2% | 2% | 2% |
Feed | 2% | 12% | 30% |
Feed Additives | N/A | N/A | 0% |
Heat Stress | 0% | 0% | 0% |
2050 | Net zero aligned | BAU | High climate impacts |
---|---|---|---|
Total Costs | 3% | 17% | 47% |
Carbon Tax | 2% | 4% | 5% |
Feed | 0% | 12% | 42% |
Feed Additives | N/A | N/A | 0% |
Heat Stress | 0% | 0% | 0% |
Members-only Content
To register as a member of the FAIRR network, please fill out the sign up form or if you need additional information on the FAIRR network, please contact investoroutreach@fairr.org.
Workstream Information
Last Updated:
5 April 2023
2023/24 Resources
Climate Risk Tool Walkthrough 2023 Public Report 2023 (English) Public Report 2023 (Mandarin) Coller FAIRR Climate Risk Tool
Waste & Pollution Engagement
Analysis Overview
Risk Assessment Value Chain Coverage Risk Mitigation Circularity Company Engagement
Summary
Hormel has extended its water risk assessment beyond its contracted, and integrated turkey farms and own pork farms to include its other pork suppliers.
Analysis Breakdown
Risk Assessment
Medium
Coverage of water quality risk assessment
The company mentions it completed a water risk assessment for its direct operations in 2018, and then it was refreshed in 2020. The company mentions using the WRI Aqueduct tool as well as an internal risk management process. The company includes both water scarcity and water quality issues in the risk assessment.
The company discloses the risk assessment covers all the entities and groups over which operational control is exercised. Therefore, it’s assumed that the company covers its operations in China, Brazil and the United States.
The company mentions it has two production locations in the US and three internationally that are in regions defined as high or extremely high water risk by WRI Aqueduct Water Risk Atlas. It discloses the main watersheds that receive its wastewater but it does not explain which ones are at risk from water quality.
Transparency and disclosure of water quality indicators
The company discloses in its CDP Water 2022 report that it was subjected to an enforcement order. The incident was related to the excessive discharge of fats, oil and grease in a processing plant in the Wichita River Basin in the US. The company mentions corrective actions have been taken.
The company discloses it has increased its water-related CAPEX a 10% in the reporting year, due to increases in water and wastewater treatment requirements and increased program fees and related expenses.
Recognition of nutrient pollution risk on biodiversity
The company does not disclose information.
Value Chain Coverage
Poor
Inclusion of upstream feed and livestock suppliers in risk assessment
The company has mapped its turkey and pig sourcing areas to identify water risks. However, in the engagement call with FAIRR, the company mentioned that this assessment looks at broader regional levels rather than farm-specific locations.
The company was part of the AgWater Challenge, an initiative led by Ceres, which ended in 2022. Through this initiative, the company committed to engaging with its largest suppliers, including feed grain growers, to meet best environmental practices for reducing water pollution risks, including with respect to the storage, transport and application of animal manure. While the company has created a sustainable agriculture policy which also includes feed suppliers, it seems it does not currently include feed as part of its assessment to identify its exposure to areas with water quality risks. The company mentions in its CDP report that it is currently working to improve data exchange for sourced maize and soy with a focus on water risks.
Downstream use of manure by animal feed suppliers
The company does not disclose information.
Acknowledgment of regulatory risks
The company does not disclose information.
Transparency on non-compliance from suppliers
The company does not disclose information.
Risk Mitigation
Poor
Biogas generation and organic fertilisers from animal waste
The company discloses the volume of wastewater that has undergone different levels of treatment. The company does not use wastewater for fertigation without any treatment.
In the engagement call with FAIRR, the company mentioned that its manure management systems are usually pit management systems. It also noted having made a small capital investment in storage for turkey litter to better protect it from rainfall and reduce the risk of potential nutrient runoffs. It is unclear whether these pits are covered or not.
The company does not disclose publicly available information on biogas production. In the engagement call with FAIRR, the company mentioned that it has explored a couple of projects for energy digestion processes for its own turkey farming operations. However, most of these farms do not have lagoons, and they have not found a viable system for methane capture yet. The company also mentioned that its operations in Colorado are geographically spread out, which makes getting the methane captured into the pipeline an economic and engineering challenge. FAIRR notes that this doesn¢â‚¬â„¢t preclude the use of the biogas at the farm itself.
Target-setting for water quality
The company had a target to reduce organic waste discharge from its facilities by 10% by 2030. It mentions that in 2022, it achieved a 21% reduction in organic waste discharge. The company also mentions starting in 2023, it would transition its focus on organic waste reduction to investing in wastewater-treatment projects in collaboration with municipal partners and reducing water use by 10% by 2030 from a 2022 baseline to systematically reduce the impacts of organic matter in waste discharges and water footprints of our business.
Support to third-party suppliers
In the engagement call with FAIRR, the company said that its water quality risk mitigating actions are focused on its own farms.
The company mentions manure from company-owned live production operations is managed to ensure protection from loss to the environment, including land application as a nutrient substitute overseen by licensed agronomists. In the engagement call with FAIRR, the company mentioned that it has an arrangement in southern Minnesota and northern Iowa by which it gives processing waste and some manure from its operations to a third-party contractor to be applied on fields. Through this, the company says it gains insights into how its facilities’ manure management processes are performing and which improvements need to be made. However, it’s not clear to what extent the company supports farmers in the improvements that are needed to reduce pollution.
In 2022, the company became a lead sponsor of a 50,000-acre regenerative pilot project in Minnesota in collaboration with other partners such as the ESMC and The Nature Conservancy. Collectively, Hormel Foods and Target will provide $1.7 million for farmers to participate in the pilot and adopt practices such as cover cropping, reduced tillage and nutrient management. In the engagement call with FAIRR, the company mentioned that the project will be expanded to another cropping year to gather enough information to make market-based decisions on scaling up. Some results are also expected to be made publicly available by the end of 2024, pending review and approval by The Nature Conservancy.
Circularity
Medium
Pilot projects around nutrient circularity
The company´s Brazilian subsidiary Cidade do sol has sent 100% of the byproduct generated in the effluent treatment station to be transformed into organic fertilizers through composting.
Disclosure of investment in circular solutions
The company does not disclose information.
Targets to increase share of manure under circular initiatives
The company does not disclose information.
Company Engagement
Good
Level of company engagement with the coalition
The company provided a response to the investor letter and responded to the engagement questions. The company met with investors within the engagement period. The company acknowledged the FAIRR’s assessment but it did not provide feedback.
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Workstream Information
2024/25 level
Poor
Index Waste & Pollution Score:
31/100
Assessed Proteins:
Beef, Poultry and eggs, Pork
Last Updated:
26 June 2024
2024/25 Resources
Phase 3 | Investor Briefing Pack Waste & Pollution Engagement