RCL Foods Ltd/South Africa

The company does not have a science-based emission reduction target.

The company discloses that it has set an electricity consumption reduction target of 50% reduction from the base year 2015 to the target year 2025, which covers 50% of its Scope 1 and 2 emissions. It does not disclose the target related to its Scope 3 emissions in FY22.

The company works closely with small-scale growers to improve their agricultural practices. It evaluates its suppliers on climate-related objectives to ensure alignment throughout the value chain. However, it does not provide evidence related to its engagement with suppliers to reduce emissions from agriculture.

The company does not engage in innovative projects to reduce or mitigate emissions from feed farming

The company does not engage in innovative projects to reduce or mitigate emissions from animal farming

The company reports its Scope 1 and 2 emissions as 518,861 tCO2e and 526,981 tCO2e, respectively. However, it does not report its Scope 3 emissions for the current reporting period.

The company does not disclose any information on GHG emissions from animal farming. The company does not disclose any information on GHG emissions from feed production. The company does not disclose any information on GHG emissions from land use change.

The company responded to the CDP Climate questionnaire in 2022. It discloses that the Carbon Disclosure Review 2022 was conducted internally, and an external assurance specialist verified all results.

The company reports an increase in Scope 1 emissions from 509,265 CO2e in FY21 to 518,861 CO2e in FY22. On the other hand, it reports a reduction in its Scope 2 emissions from 547,122 CO2e in FY21 to 526,981 CO2e in FY22. So, the overall Scope 1 and 2 emissions report a decrease of approximately 0.99% from FY21 to FY22. It does not disclose its Scope 3 emissions. Therefore, the GHG inventory is not completed.

The company identifies short-term, medium-term, and long-term climate-related risks and opportunities. It also acknowledges the different climate risks at the organisational level, including regulatory risks, technology, legal, market, reputation, and physical risks. However, it does not conduct a climate-related scenario analysis.

The company recognises the climate-related risks related to feed prices and ongoing price volatility. However, it does not disclose its mitigation strategy to handle these material risks. It reveals that it acts to decrease the energy demand and increase renewable energy generation due to rising energy prices. Furthermore, it reveals that it measures to increase renewable energy generation and includes a diverse mix of encouraged actions. It recognises the risk related to the carbon tax on its operations in South Africa. However, it does not disclose the mitigation measures for the potential impact of carbon taxes.

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

The company reports that it increased the volume of soy used in its feed by 3.6% more than the previous year. It sources 58.5% of soy from Argentina, which is considered a high-risk area for deforestation. The rest (41.5%) is sourced locally in South Africa. RCL mentions that it has not undertaken a forest-related risk assessment for soy as it is not an immediate business priority. The company mentions that all soy sourcing is done by the strategic sourcing and procurement team, which aligns good business practices to ensure raw materials have been processed responsibly and sustainably. The company does not disclose information on how it manages deforestation risks linked to soy.

The company does not disclose having a deforestation/conversion-free target for soy.

The company has responded to CDP Forests 2022.

The company discloses that it requires all imported soybean meal and oil to meet SASB standards and pass the necessary ISO quality standards for feed safety. However, these standards do not cover deforestation management, and the company does not otherwise disclose information on how deforestation is managed within its supplier code of conduct or its supplier selection process.

The company mentions 58.5% of its soy is sourced from Argentina and the remainder is locally sourced from South Africa. Further, it reports that 100% of soy is traceable.

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

The company discloses that it conducts water-related risk assessments across its direct operations and supply chain using Enterprise Risk Management and ISO 31000 tools annually. RCL Foods disclosed that seven facilities are exposed to water-related risks and operate in high-water-stress areas. The company categorises the water-related risks as catastrophic, critical, serious, important, and minor based on their potential impact on RCL Foods' EBIT. The company reports that 22 facilities are exposed to water scarcity risks. The company also disclosed locations with high or medium water stress. It discloses that it recognises the need to conserve and recycle water and avoid the pollution of water sources. RCL Foods reports the total water consumed for all its operations in FY22.

The company reports that it has set a target to achieve a 50% reduction in water used in chicken processing by 2025. The company has other water-related targets for its different business divisions and discloses having achieved 8.4% of this target.

The company reports water withdrawals by source. It reports that 26-50% of water is withdrawn from areas with water stress. The company does not report the water-related CAPEX for the current reporting year but discloses that the change in water-related OPEX is a 6% increase compared to last year. RCL Foods states that the data on water withdrawals and water discharge is verified by the local water board. It responded to the CDP Water Security Questionnaire 2022. Further, RCL Foods reports an increase in its water consumption in FY2022.

The company discloses that it has a water policy. However, it is not publicly available. Additionally, the company discloses that ESG metrics are included in supplier service-level agreements but does not provide further detail.

The company reports that 11-25% and 1-10% of maize and soy are produced in water-stressed areas respectively. However, the company does not report information for all its feed commodity sources i.e., wheat, sunflower seeds, and peanuts.

The company does not disclose the proportion of animal protein commodities produced and/or sourced in water-stressed areas. It does not disclose information addressing water scarcity in its animal supply chain, nor does it discuss guidance it offers to animal farmers/suppliers on water usage.

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

The company discloses that it had one water-related fine due to exceeding the limit of water discharge quality at the chicken processing plant in the last reporting period.

The company reports the total water discharged in FY22 . The wastewater discharged data is externally verified by the Department of Environmental Affairs and the local water board. RCL responded to the CDP Water Security 2022.

The company discloses that poultry effluents and chicken litter are converted into biogas at a small scale. It reports an increase in its wastewater discharge by 15.8% in FY22

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 uses a digestion process to convert poultry waste into biogas, which is used for its own consumption . Further, the company states that the electricity produced will provide 65% of the power needed at its Rustenburg Chicken and Animal Feed 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 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.

The company underscores adopting biosecurity measures and commitment to best farming practices to reduce reliance on antibiotics. However, it does not disclose any information regarding an antibiotics policy or discuss the specific topic of antibiotic usage in its reports.

The company does not disclose the quantity of antibiotics used.

The company does not provide a statement in support of Five Freedoms, or a similar statement on the importance of animal welfare to the company.

The company does not state a commitment to engaging and training employees on animal welfare issues.

The company does not disclose information in relation to animal welfare certifications or farm assurance programs.

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

The company does not disclose information in relation to key animal welfare risks in beef.

The company discloses that its human rights policy is not publicly available.

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 commits in writing to ensuring non-discriminatory practices and conducts audits to ensure compliance with this commitment. However, it does not mention prohibiting child labour, forced labour or abuse or promoting fair wages. Further, the company does not disclose publicly available supplier policies concerning the selected human rights policies. It also does not be clarified if the company guarantees all employees the right to paid sick leave.

The company mentions it has an anonymous whistleblowing hotline for any stakeholder to report fraud, statutory malpractice, crime, and deviations from company policy. However, it does not mention designing this hotline in consultation with stakeholders. The company discloses that 74 allegations were received via the whistleblowing hotline during the year under review, out of which 21 were validated. That said, it does not categorise these grievances.

The company states that it promotes and protects its employees' well-being through strict adherence to health and safety protocols and the provision of various support initiatives. The company's risk and social and ethics committees help monitor health and safety risks in the company's operations. However, the company does not disclose if it has site-level health and safety committees with worker representatives or holds a health and safety certification.

The company reports an increase in its lost time injury frequency rate from 1.779 in FY2021 to 2.076 in FY2022. Fatalities have also increased from zero in the previous year to one in the current reporting year. Additionally, the company reports that the turnover rate was 9.6% for the reporting period, but this is not disaggregated by seniority level.

The company discloses that 45% of its employees are unionised but does not explicitly disclose supporting freedom of association. Nor does the company provide evidence of support for collective bargaining agreements and freedom of association. The company also does not mention whether it expects suppliers to set a policy on freedom of association and collective bargaining.

The company reports that various collective bargaining agreements cover 72% of its employees. The company also says the number of permanent, fixed-term, temporary, and contractor employees from FY2022. However, there does not be a mention of the number of full-time or part-time employees.

The company reports that 100% of its food production sites are certified by either FSSC 22000 or ISO 18001. However, the proportion of sites certified by FSSC 22000, the GFSI-recognised certification, needs to be clarified. It states that it embeds ISO principles in integrated management systems across its supply chain. Also, the company recognises food safety as a critical issue in its supply chain. However, the company does not explicitly mention a clause requiring suppliers to be certified by a GFSI-recognised programme.

The company discloses that food safety risks are identified using the HACCP methodology and managed by implementing pre-requisite programmes relevant to the scope of certifications. It states that regular audits are conducted internally and externally. However, the number or frequency of audits relating to food safety is not disclosed, nor is the corrective action rate. Further, the company needs to disclose whether it is developing or has developed a consumer-facing technology for food safety.

The company recognises that the failure to meet food safety standards is a material risk that could lead to reputation damage, product liability claims, and product recalls. Further, it states that it has well-established withdrawal and recall procedures. However, it does not disclose the details or description of the recall system. Additionally, it does not reveal the number of recall incidents in the reporting year, and none were detected in the media screening.

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

The company's board of directors oversees the company's ESG strategy via the company's Social and Ethics Committee. The company also discloses that it has conducted a materiality assessment in 2022. The key risks identified were reduced demand, pricing pressure, liquidity risk, commodity price fluctuations, supply chain disruption, industrial action, health and safety, non-availability of information systems, energy security and pricing, food and product safety, societal risks and unrest, water security and pricing, and non-compliance with legislation. Additionally, the board identifies matters that are material to the company. The company does not report holding board-level expertise in sustainability, innovation or food safety.

The company has not disclosed executive monetary remunerations linked with climate or sustainability performance. Nor has it disclosed engaging with civil or trade associations on ESG issues, a comprehensive list of trade association memberships or if it aligns any policy-engagement activities to restrict global temperature rise to 1.5C.

As part of the company's goal to promote a healthy diet through innovative products, it partners with LIVEKINDLY Collective Africa, pushing to grow the plant-based foods sector in South Africa. The company is also focussing on sustainable packaging innovations as a priority. However, the company does not disclose how it benchmarks itself against peers in sustainability and innovation.

The company discusses that the depletion of natural resources due to mass production will require sustainable shifts in food production. Further, it introduces plant-based foods as a solution to this problem, which has the potential to reduce environmental impact and increase nutritional values. However, it has not yet set a timebound target to diversify protein sources nor disclose sales/revenue linked to alternative protein sources.

The company discloses that it has established a local plant-based joint venture, LIVEKINDLY Collective Africa, with the US-based LIVEKINDLY Collective. The joint venture will market, sell and distribute all of LIVEKINDLY Collective’s brands, including the local "Fry Family Food Co." and the international brands "LikeMeat" and "Oumph!" in South and sub-Saharan Africa. Through this partnership with LIVEKINDLY Collective, it states it is growing the plant-based foods category in South Africa through new product launches. It reports that a key focus in the coming year will be to build the category, educate and attract new consumers, and increase the affordability of key products in the plant-based portfolio. However, the company does not specify whether it has made venture investments or is investing in R&D.