Morrisons

Does the company agree that protein diversification is a material issue for its business? 5/9 - Active Morrisons plant-based product expansion continues to be driven by consumer demand only. In its meeting with FAIRR and investors, the company stated that it will continue expanding its plant-based portfolio as long as consumer demand is present. Morrisons does not yet recognise the climate-mitigation opportunities associated with diversified protein sources. Its current efforts to address environmental impacts, including climate risk in its animal agriculture supply chain, are being driven by its Net-Zero by 2030 commitment. In its meeting with FAIRR and investors, the company stated that it is not aiming to reduce the amount of meat it sells, but rather to help farmers reach net-zero as a collective instead of individually. The company's board-level sustainability governance has undergone restructuring. A new Sustain Group reports to the Sustain Sub Committee of the Executive Committee with meetings every four weeks. The Sustain Group's workstream includes "Climate Change & Sustainable Stores", "Food Waste", "Sustainable Sourcing", "British Agriculture", "Healthy & Sustainable Diets", and will respond to what the company calls "emerging topics including the links between health and sustainable diets". Further, the company indicated in its meeting with FAIRR and investors that it is working with the Sustainable Food Trust and the WWF on defining what sustainable food looks like and is taking a holistic approach to consider nutrition and sustainability. Morrisons stated that before publicly discussing its role in supporting a healthy and sustainable dietary transition, it needs to establish a clear definition for what this would mean in practice. We would encourage the company to further develop its sustainability strategy and consider adopting a dual-approach to climate mitigation, which includes a protein diversification strategy alongside its existing supply chain efforts in order to decouple supply chain impacts from growth ambitions. Does the company plan or has carried out TCFD-linked scenario analysis? 3/9 - Reactive Morrisons is undertaking climate scenario analysis to map out its targets. The company confirmed that the ongoing scenario analysis follows TCFD recommendations and that impacts in animal agriculture supply chains will be covered. In its meeting with FAIRR and investors, the company states that it is currently conducting gap analysis on its disclosures in order to identify gaps and become TCFD-compliant. Its reporting is not yet TCFD-aligned, but the company stated in its 2020 Annual Report that it aims to report in line with TCFD recommendations for its 2021 Annual Report.

Does the company have goals/ targets to shift to diversified protein sources? 5/9 - Active Sustainable sourcing: Morrisons has a strong focus on local sourcing of animal proteins. It sells 100% British meat, milk and eggs. The company has considerable oversight over the production and processing of animal proteins given it owns its abattoirs and manufacturing facilities. As part of its Net-Zero by 2030 commitment for its agriculture supply chains, Morrisons has embarked on a number of initiatives including providing funding to Queen's University, Belfast to support seaweed supplementation in livestock feed and access to methane inhibitors. In its meeting with FAIRR and investors, the company stated that it has two “blueprint” beef farms which it will take to net-zero by 2026, and then scaling up such efforts. It has a further 40 project farms which cover eggs, pork, lamb, beef, potatoes, and soft fruit (these are the product groups covered by its net-zero agriculture commitment). Further, the company stated that it is in the process of setting up the School of Sustainable Food and Farming with Harper Adams University, to educate farmers on sustainable agriculture practices and net-zero targets. The company is also working with the UK Government to understand the role of public funding in its offsets within farm boundaries, which it intends to do through improving soil quality, peatland, and tree planting schemes. Dairy is not covered by the company's net-zero target and is not addressed in its sustainable sourcing initiatives given its fresh milk comes from Arla, which has its own climate strategy and emissions reductions target. Additionally, the company has several other sustainable sourcing programmes outside of their protein supply chains, including food waste and palm oil. The company is also in the process of developing a water reduction and stewardship plan for its own-brand supply chains in areas with water scarcity, this initiative seems to be entirely focused on the company's own sites rather than the wider supply chain. The company has made commitments to eliminate deforestation from its supply chain by 2025 and it has developed a time-bound plan to implement the use of credible third-party standards which assure zero deforestation. For seafood, Morrisons became a member of the Global Tuna Alliance last year and is now working as part of the North Atlantic Pelagic Advocacy Group to help address sustainability issues in its seafood supply chain. However, there is no evidence of specific sustainable sourcing programmes around poultry, beyond requiring sustainability certification and animal welfare standards. Targets: Morrisons does not have any commitments in place to support a protein transition. However, the company has a strong focus on healthy eating, which includes increased fruit and vegetable consumption as well as its plant-based V-Taste range Does the company have Scope 3 emissions targets? 7/9 - Proactive The company is part of the collaboration of retailers, led by the British Retail Consortium, that have signed a declaration to develop a roadmap to tackle the causes of climate change. Signatories have committed to a net-zero target ahead of the UK Government's 2050 target; hence, Morrisons has set a net-zero 2040 target. This target specifically covers the retailer's own operations, such as home grocery delivery vehicles and electricity used in stores (scope 1 and 2 emissions only). Morrisons has further committed to net-zero agriculture by 2030, this includes its animal agriculture supply chain. This commitment specifically covers products directly sourced from UK farmers for its own-brand products in beef, pork, lamb, potatoes, and eggs. The British retailer has also stated it does not aim to reduce the amount of meat it sells but plans to offset its emissions, alongside bringing its farms to net-zero. The company is also working to develop a Scope 3 emissions reduction target. If this is successful, the company will announce its intention to become SBTi certified.

Does the company demonstrate evidence of the following: (i) internal R&D, (ii) cross-sector collaboration, (iii) reformulation programmes, (iv) expanded product offerings, (v) venture investments or acquisitions? 4/18 Reactive R&D and internal resourcing: In its meeting with FAIRR and investors, Morrisons stated that innovation and product development are led by brand teams (including V Taste). This is driven by employee and customer programmes, which highlight the company's focus on responding to consumer demand. For example, Morrisons runs customer and employee listening groups, as well as social media forums as sources of consumer insights. However, the company did not provide further information to demonstrate the extent of innovation occurring within plant-based and alternative proteins nor the resources being directed to its plant-based portfolio. Reformulation: In its meeting with FAIRR and investors, the company acknowledged that its efforts are focused on 'growing the pie' in terms of its alternative protein offering, rather than making substitutions in its ranges. Product portfolio expansion: The company has expanded its own-brand plant-based offerings including plant-based meats, doughnuts and an essentials box, in the last twelve months. Morrisons own-brand plant-based V Taste range has grown by 50% in 2020. This expansion includes offerings in the underserved plant-based seafood category, with fish cakes and fish fillet alternatives launched. The company has also grown its external brand offerings to include plant-based brands like THIS and Vegetarian Butcher in-stores.

Is there a defined strategy on (i) promotions and communications, (ii) consumer interface, and (iii) labelling and product placement? 4/18 - Reactive The company is using a range of channels to engage consumers on healthy diets and wellbeing, as well as plant-based foods. These include: • Promoting alternative proteins. Morrisons has advertised vegan alternatives and its own-brand plant-based products on social media, especially during Veganuary. It has done so through recipes that include meat alternatives from Morrisons V Taste range, as well as whole food protein ingredients such as chickpeas. The promotions often focus on suggested recipe swaps from an animal-based protein dish to a plant-based alternative one. In 2020, Morrisons launched a new plant-based food-to-go and delivery outlet called Street Vegan in London. The concept aims to target students and young families and is the fourth of its kind in the UK. • Promoting nutritious diets. The company's 'Healthy Living' web page includes recipes with whole grains, fruits and vegetables, the V Taste range, and Morrisons' calorie-controlled range. This page also includes promotions and offers on fruits, vegetables, and other ingredients. The company stated in its meeting with FAIRR and investors that it uses clear signage and banners to promote its V Taste range in-store. • Evidence-based consumer engagement campaigns. Morrisons runs customer and employee listening groups, as well as social media forums, as sources of consumer insights. The company also stated in its meeting with FAIRR and investors that it uses its loyalty scheme to assess customers' order history and tailor promotions to them personally. Morrisons does not disclose whether it uses this approach to promote its plant-based range, so partial points have been awarded. • Labelling efforts. The retailer states that it is working to improve the nutritional information available to customers on its products. This effort focusses primarily on healthier options such as fruit and vegetables, yet it does not mention sustainable diets or plant-based diets from a health or sustainability perspective. Additionally, the company states that, to help its customers make quick and informed decisions about the food they buy, it is rolling out colour coded nutrition labels on its own-brand pre-packed food and drink. The company has also developed strategies such as removing child-friendly characters from children's products with high levels of fat, sugar, and salt, including cereals and confectionary. Morrisons has also introduced a 'Healthier Living Icon' which is informed by stringent health and nutrition tests and is designed to help customers make more informed choices. • In terms of merchandising, the company stated in its meeting with FAIRR and investors that it sees the benefits of placing plant-based products in dedicated bays so that the consumer knows where to go for items which meet their dietary requirements. Morrisons also states that it does merchandise some plant-based proteins alongside animal proteins, however, it does not appear that this approach is a result of strategic planning or research, hence points have not been awarded. Overall, points have not been awarded at a higher level because there is no evidence of an integrated approach in terms of promoting sustainable diets, healthy diets, and plant-based options. We found no evidence of the company promoting the link between these three elements and see no evidence of the company promoting sustainable diets in its consumer engagements.

Tracking and measuring protein transitions 0/9 - Inactive No relevant information found or provided. Data on Scope 3 emissions linked to animal agriculture 3/9 - Reactive Morrisons started publicly reporting on its Scope 3 emissions in its 2020 CDP disclosure, reporting these at 27,289,221 metric tonnes CO2e for FY 2019. Morrisons is currently working with the Carbon Trust to understand its scope 3 animal agriculture emissions at the farm level, what production factors influence emissions and how these can be improved. Morrisons gave no update on its scope 3 emissions linked to animal agriculture in its meeting with FAIRR. We urge the company to provide a breakdown of its Scope 3 emissions linked to animal agriculture in its public disclosure.

Level of engagement with investor coalition 8/10 - Proactive Morrisons met with FAIRR and investors in lieu of providing a written response. The company provided a formal response acknowledging the final FAIRR assessment and provided additional feedback.