MHP SE

The company does not have a science-based emission reduction target and is not in the process of developing one.

The company’s environmental policy includes a zero emissions commitment by 2030. It states it plans to be carbon neutral by 2030. It operates a vertically integrated farming model and grows corn, sunflower and soybean to support its chicken production. Therefore, the majority of emissions would be accounted for in Scope 1 and 2. Its Business Partner Code of Conduct states the requirements to be followed by its raw material suppliers, thereby indicating that the company procures some part of its raw material, contributing to Scope 3 emissions. It states that it has not yet attempted to calculate its Scope 3 emissions or set detailed targets due to difficulty obtaining supply chain information.

The company has set requirement standards for its raw material suppliers. However, it does not discuss whether it is working with suppliers to reduce emissions from agriculture.

The company mentions that it aims to upgrade agricultural machinery and use artificial intelligence technology to ensure efficient crop production. However, it is unclear if it engages in innovative projects in the current reporting period and whether the improvements would impact GHG efficiency. It mentioned that it was testing practises to reduce the carbon footprint of its agricultural practises in the previous reporting period. Still, no follow-up disclosure on these activities has been released.

The company states it has begun implementing biogas production using effluents from its animal farming operations. However, it does not provide information on specifically GHG emission-reducing activities.

The company reports that in 2022, the Scope 1 emissions from its Ukraine operations were 353,413 tonnes of CO2e and from the European Operating segment were 31,252 tonnes of CO2e. It reported Scope 2 emissions only from its Ukraine operations, which is 220,985 tonnes of CO2e. Emissions from agriculture and animal farming do not appear to be included. It also reported emissions from biogas consumption, which were 130,345 tonnes CO2e.

The company includes emissions from diesel and gasoline use and natural gas and combustion of biomass, which comprise a large proportion of emissions from poultry farming. However, it does not disclose all CO2e emissions from animal farming. It reveals emissions from fuel oil consumption in its European operating segment used in the feed drying process.

The GHG data has not been externally verified. However, it states that it plans to begin the verification of its GHG emissions using a properly accredited independent third-party service in 2022.

The company discloses that total Scope 1 emissions for Ukraine and European operating segments have reduced from 405,030tCO2 in FY2021 to 384,665tCO2 in FY2022. Scope 2 emissions for Ukraine have also reduced from 237,776tCO2 in FY2021 to 220,985tCO2 in FY2022. Overall, it reports a decrease of 5.7% from 642,806tCO2 in FY2021 to 605,650tCO2 in FY2022. It discloses that the drop in emissions from its European operating segment of 155 tonnes of CO2e results from a lower corn harvest. However, this fall in emissions is not the result of an improvement in practices,

The company acknowledges environmental risk in its risk management analysis. It plans to conduct further analysis using different climate-related scenarios to develop its climate change strategy and risk management approach. However, it does not disclose information on whether it has conducted a formal climate-related scenario analysis.

The company harvested 340,748 ha of land, yielding 1,934,647 tonnes of grain, a decrease of 26% year-on-year, mainly driven by unfavourable weather conditions during the summer and autumn harvest seasons. However, it does not discuss the impact of physical risks or how it intends to mitigate or adapt to the effects of physical hazards (e.g., droughts, flooding) on feed ingredients' availability and price volatility (e.g., soy, maise, corn). It purchases veterinary products such as medicines and vaccines from suppliers in the European operating segment. However, it does not discuss the projected impact of increased veterinary and treatment costs. The company notes fluctuation in energy prices as a risk and monitors and controls its gas, fuel and energy costs. It mitigates this risk by developing renewable sources of energy and a continued increase in the use of co-generation and alternative energy technology.

The company does not disclose its commitment to align capital expenditures with its GHG targets.

The company produces soy and has a soybean crushing plant in Serbia to produce soybean oil. Soy represents 13% of the cropped area in the company's grain-growing operations. MHP is committed to zero deforestation and zero conversion of high-carbon lands to agricultural land. The company grows its own soybeans for animal feed, although compared to the previous reporting period, the company no longer explicitly states that it does not import soybeans. Therefore, it can not be concluded that 100% of soy was sourced from areas with no risk of deforestation in the last reporting period. We recommend improved disclosure if the company is still self-sufficient with regard to its soy supply.

The company has committed to zero deforestation and zero conversion of high-carbon lands to agricultural land.

The company's commitment does not apply to all sourcing regions at risk of deforestation, or all of the soy it sources.

The company has not responded to CDP Forest Questionnaire 2022.

The company states that it is committed to zero deforestation and zero conversion of high-carbon lands to agricultural land. However, it does not reference soy specifically.

The company does not mention that it can trace all soybeans used in animal feed.

The company does not discuss innovations and/or practices to move towards sustainable feed sources.

The company discloses that in 2021, environmental specialists at each site updated the register of wells, which includes parameters such as the physical location of underground water supply sources, their debt, physical condition, need for repair, and actual water intake. The company stated that there was no impact on the resources available to local communities. However, the company does not disclose whether it has conducted a formal water-risk assessment. MHP discloses that it aims to reduce freshwater consumption. It reports its water withdrawals for Ukranian and European operations in 2022.

The company states a qualitative goal of reducing the volume of water consumed. However, the target is not official or timebound.

The company discloses water withdrawals for its Ukrainian and European operations by source for 2022. It discloses that its European Operating Segment aims to minimise water use in 2022 due to plant investment. Also, the company discloses that its investment in the Serbian facilities continued during the year and will total EUR 30 million by 2025, with CAPEX focused on the establishment of broiler farms, the modernisation of the slaughterhouse and the construction of a processing plant and hatchery. However, it is unclear whether the disclosed CAPEX is linked to water-related CAPEX. MHP discloses a reduction in water withdrawals in the Ukrainian segment and an increase in the European operating segment. Across both segments, the data shows an overall reduction in water withdrawal by the company in 2022.

The company mentions that one of its main environmental priorities is to reduce water consumption. It states that none of its business operations affects the water balance in the nearby regions. However, there is no reference to how the company addresses water risks in feed farming specifically.

The company does not disclose feed water intensity, or the proportion of feed sourced from water stresses areas. Further, the company does not provide evidence that it is investing in sustainable feed production from a water use perspective.

The company does not disclose the proportion of animal protein commodities produced and/or sourced in water-stressed areas. It mentions that one of its main environmental priorities is to reduce water consumption. However, there is no information on how the company specifically addresses water risks in animal farming.

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

The company mentions that in 2021, the quality of treated water discharged fully complied with the required regulatory standards in Ukraine. All MHP enterprises strictly adhere to current regulatory requirements. However, no information is available regarding its other European operations. It has a target to reduce wastewater and decrease the concentration of pollutants within its operations but does not provide a quantitative target for specific pollutants.

The company discloses the volume of water discharged in the reporting year for its Ukraine division and the European Operating segment.

The company states that it produces biogas using the waste generated by MHP’s other activities. The company also provides an infographic which shows a link between its three vertically integrated poultry complexes and its biogas plants, signalling that waste from these complexes is utilised. Further, the company states that its operations support a circular economy using by-products to produce biodiesel, biogas, culinary fats, fodder and natural fertilisers. The total volume of wastewater discharged within the Ukrainian operations and the European Operating Segment decreased by 1.48% in the last reporting year.

The company does not address nutrient management in its code of conduct. It does not disclose a requirement for feed suppliers to have a nutrient management plan in place, nor does it provide guidance, support and/or incentives to suppliers/growers on nutrient management/fertiliser use in crop production.

The company does not invest in sustainable feed production to improve nutrient management or disclose information about pesticide use in its feed supply chain.

The company mentions that it uses waste to create biogas facilities which in turn produces electricity, industrial steam and heating on site.

The company does not make site-specific nutrient management plans a part of its supplier's contractual agreement and/or own farms management. Nor does it provides technical and/or financial support to suppliers and/or own farms to develop nutrient management plans and improve manure storage.

The company has a grievance mechanism which is monitored by management on a monthly and annual basis to ensure that it is working effectively. Representatives of the local communities where MHP is based can submit a complaint or suggestions to the company through this channel. During 2021, approximately 900 communications were received and addressed. However, the company does not provide any further information on community engagement in relation to pollution.

The company commits to reducing antibiotic use, permitting them only for therapeutic treatments under state veterinarians' guidance. It prohibits the use of growth promoters and WHO-recognised critical antimicrobials in human medicine. The strategy includes enhancing biosecurity measures, utilising vaccination programmes, and incorporating alternatives such as organic acids and probiotics to lessen disease incidence. Furthermore, it observes EU standards for animal welfare, regulating stocking densities and banning routine surgical interventions.

The company discloses that 60% of its flocks in 2022 were reared without antibiotics, a decrease from 63% the previous year. Antibiotics were thus administered to the remaining 40% of its flocks. Audits related to animal welfare are performed by independent agencies such as DG SANTE and the State Consumer Service. In 2022, 89 inspections were conducted, including examinations of antibiotic usage by the State Service of Ukraine on Food Safety and Consumer Protection. However, inspections by DG SANTE were not executed due to geopolitical tensions involving Russia.

The company commits to the Five Freedoms framework and employs specialists to oversee animal welfare across all operations, from farming to slaughter. It engages in employee training on relevant animal welfare issues and has implemented a monitoring system with Key Performance Indicators (KPIs) to maintain standards. However, it does not disclose specific actions taken in the event of policy breaches.

The company commits to cage-free, floor-only rearing and adheres to EU animal welfare standards for stocking densities. It prohibits non-therapeutic surgical alterations in poultry and mandates veterinarian oversight for procedures like dehorning and castration in cattle. Animal health during transit is safeguarded through specific measures, and humane slaughter practices are strictly followed. It also prohibits breeding animals with genetic alterations causing suffering. However, there's no explicit commitment to limit transport distances or times, and details on outdoor access, perches, air quality, and natural light for animal habitation spaces are unspecified.

The company discloses that five broiler chicken facilities are certified by the Global Good Agricultural Practice (G.A.P.) Integrated Farm Assurance scheme. The company states that five of its poultry breeding facilities are certified in compliance with the internationally recognised Global Good Agricultural Practice (GAP) standards.

The company does not disclose information in relation to animal welfare certifications or assurance programs for its beef operations.

The company presents general statements on animal welfare. However, it does not disclose specific details on stocking density, methods of stunning, use of superior welfare breeds, or environmental suitability.

The company commits in writing to uphold human rights per the Universal Declaration of Human Rights and the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization.

The company does not discuss how it monitors, assesses and mitigates actual and potential human rights risks in its own operations or supply chain.

The company does not disclose whether it has identified any human rights risks in its operations through human rights due diligence

The company prohibits discrimination, harassment, forced labour, and child labour. However, the company does not explicitly state that it provides all its employees with a fair wage or audits the selected policies. The company also requires its suppliers to prohibit forced labour and harassment. However, it is not clear whether the company expects all its suppliers to prohibit child labour and discrimination or promote fair wages.

The company does not mention conducting audits for the supplier policies concerning forced labour and harassment. The company has established the "MHP Ethics Helpline", a platform for internal and external stakeholders to raise issues relating to intimidation, humiliation, defamation, discrimination, unsafe working conditions, human rights violations and environmental violations. Employees are also able to ask questions or make a recommendation. The helpline is available 24/7 and operated by an independent party, allowing the complainant to raise issues anonymously. The company discloses that no critical concerns were recorded in the reporting year. However, the company does not disclose that there were zero grievances.

The company highly values the health and safety of its employees and strives to minimise work-related injuries. The still does not not yet hold a health and safety certification but has commenced its preliminary preparation for OHSAS/ISO45000 international certification. The company's European operations are said to have occupational health and safety committees. Still, the company keep the number of facilities/sites with health and safety committee with worker representatives.

From FY2021 to FY2022, the company reports that injury frequency rates improved from 1.03 to 0.73 in its Ukraine operations but declined in its European operations from 0.83 to 1.22. This equates to a decrease in the overall injury rate, given that most of the company's employees are based in Ukraine. The company had three fatalities in its Ukraine operations in 2022 and 0 in its European operations. Its fatality rate has increased since the previous reporting year, when only one fatality was reported overall. The company does not disclose its staff turnover rate for the current reporting period.

The company states that it adheres to the principle of freedom of association but does not disclose the unionisation rate or methods to support its employees' right to freedom of association. The company does not mention whether it expects or requires suppliers to set a policy on freedom of association and collective bargaining.

The company provides a basic statement on its workers' right to collective bargaining but does not disclose the number of employees covered by collective agreements. The company also discloses the distribution of employees across full and part-time contracts but does not mention subcontracted workers or workers paid by the hour.

The company discloses that its directly-owned facilities have GFSI-recognised certifications such as Global GAP, FSSC 22000 and BRC. It discloses that its poultry breeding, oil production, poultry processing and meat processing facilities are GFSI-certified. However, this applies to Ukrainian operations only. Therefore, the percentage of certified sites cannot be inferred. It has implemented supplier approval standards, which must be passed before they commence business with the Group. This requires suppliers to align with its product quality and safety approach; however, whether this includes GFSI certification needs to be clarified. It states that for high-risk business partners, it checks for certification with the BRC standard and conducts audits without certification. However, it is unclear which suppliers constitute "high-risk" business partners and, hence, the number of suppliers covered by the policy. Therefore, it is assumed that less than two-thirds of suppliers are GFSI-certified since the company keeps this number private.

The company mentions that all production facilities regularly undergo internal and external audits. State regulatory checks are also made to ensure compliance with the law and its rigorous internal requirements, conducted by Department of Technology, Quality and Food Safety representatives. Enterprises also run self-inspections at least once a year. However, the company does not report corrective action rates. It states that product labelling is fundamental to maintaining product security, safety and quality and is particularly important to customer relationships. However, it needs to provide information describing technology implemented or in development to provide traceability to the end customer.

The company identifies product quality and safety as one of its material business risks. However, it does not disclose details of a product recall system or the number of recall incidents in the reporting period.

The company does not disclose information related to market bans, and none were detected in media screening during the reporting period.

The company discloses that its board ensures adherence to the group's environmental policies. In addition, the company has a sustainability and international affairs committee, which is responsible for developing the company's approach to sustainability and international affairs. This committee comprises at least two board members and can invite any other director to meetings. The company also mentions that it has conducted a stakeholder materiality exercise to ensure that it fully understands the views of its stakeholders concerning its recent, current and future activities. The results are disclosed, with the company identifying product quality, water management, innovation, health, safety and well-being, and customer experience amongst the issues most important to stakeholders and the company's ESG permeance. It has applied this information to set goals, manage performance and drive long-term progress. The company's materiality plans were postponed in the current reporting year due to the conflict that began on 24 February 2022 in Ukraine. Therefore, this year's report findings are based on the most recent assessment conducted in 2021. However, whether the board oversees the entire materiality assessment process is still being determined. The company discloses board-level expertise in sustainability and innovation rather than food safety.

The company discloses that performance measures for annual bonuses allocated to executive directors include ESG principles. However, the company does not disclose the percentage of variable compensation linked to ESG metrics. The company provides details of its trade association memberships. However, it has not disclosed engaging with civil or trade associations on ESG issues or if it aligns with any policy-engagement activities to restrict global temperature rise to 1.5C.

The company has R&D programmes dedicated to efficiency improvements, ensuring high product safety standards and reducing environmental impacts. Furthermore, the group aims to pioneer sustainable agriculture through investments in innovative technology, such as AI and machine learning. However, the company does not disclose how it benchmarks itself against peers in sustainability and innovation.

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

The company launched a long-term open innovation programme called MHP Innovation Lab in 2020 to engage local and international stakeholders to join forces in addressing the food-related needs of people and become a more customer-oriented company. It reports progress in the Group's innovation management process and developing an open ecosystem of partnerships to create value. Further, it is developing new products for the Ukrainian market, including soups or broths, cooking kits and ready-to-eat frozen foods. However, no discussion has been provided regarding plant-protein-related products in the reporting period. A 2021 press article indicates an interest in pursuing new segments of the food market in directions that are considered alternative, including a vegan segment. However, it does not explicitly confirm that it is investing in the future growth of alternative proteins.