Salmar ASA

The company has set a science-based target to reduce Scope 1, 2 and 3 emissions by 42% from 2020 to 2030. The target is validated by the SBTi, in line with a 1.5-degree reduction. As part of this emission target, it also commits to reduce absolute Scope 3 GHG emissions by 42% by 2030 from a 2020 base year.

The company's emission reduction target is aligned with 1.5°C by 2030.

The company reports that fish feed accounts for almost 60% of Scope 3 emissions. It works with feed suppliers to improve agricultural practices and include more climate-friendly feed ingredients. It also discloses that it reduced its carbon footprint from feed by 18% compared with 2021.

The company is researching and testing novel and local feed ingredients, such as algae, insect meal, kelp, salmon oil, and seafood trimmings, to reduce the carbon footprint from feed farming. It is also working towards reducing its feed conversion ratio.

The company conducted a life cycle assessment for the footprint of various coastal farming technologies and land-based recirculating aquaculture systems in 2021. It has also increased the proportion of local processing, leading to a reduction in transport-related emissions. In 2022, 42.3% of its salmon harvest volume was processed in Norway, reducing emissions by 86,000 tonnes of CO2e. It is also trialling projects involving alternative forms of transport for its harvested stock, including sea, rail and road transport, to reduce its reliance on air freight. It doubled rail transport from Northern Norway. It states that rail transport produces 40 times fewer emissions than trucking.

The company reported the group's Scope 1 and 2 emissions collectively, which was 29,177. This is broken down into 27,123 tCO2e for Norway and 2,054 tCO2e for Iceland. Scope 3 emissions were 1,104,451 tCO2e in Norway and 68,729 tCO2e in Iceland.

The company discloses Scope 1 and 2 emissions for farming in Norway and Iceland in its CDP 2022 climate change report. The Scope 3 emissions represent 100% of emissions from suppliers, including emissions from fish feed production and ingredients. Fish feed accounts for 440,543 tCO2e, and packaging accounts for 20,837, totalling the Scope 3 emissions from feed production. It discloses that 21% of the emissions from its feed came from land-use change. However, it does not completely break down CO2-equivalent emissions from land use.

The company responded to the CDP Climate questionnaire in 2023. EY audits the company’s data on GHG inventory.

The company's total emissions (including Scope 1, 2 and 3) in 2021 was 1,378,810 tCo2e, reduced to 1,202,357 tCO2e in 2022 (12.79%). The GHG inventory is complete. It discloses that it reduces the carbon footprint from feed by 18% compared with 2021.

The company has conducted a climate-related scenario analysis aligned with the Task Force on Climate-related Financial Disclosures framework. It discloses threats, opportunities, and all the associated physical and transitional implications that could affect the company's financial position. The analysis discloses that for fish farmers, Scope 1 and 2 emissions are mainly from boats and farming sites, power usage, and electricity mix, impacting the company's climate ambitions. Scope 3 emissions are primarily comprised of downstream transport and feed production, and the suggested solution to reduce Scope 3 emissions is to switch to zero-emission transport methods like hydrogen-driven ships or low-emission airfreight.

The company discloses that the increased frequency of floods and drought can significantly affect fish feed production. It mentions that the risk of feed availability can be mitigated by ensuring flexibility in feed sourcing and exploring alternatives. It discloses that higher seawater temperatures can affect fish health and welfare, increasing disease-related events. To mitigate this risk, it monitors the marine environment and plans for future scenarios by moving significantly towards exposed and offshore operating areas where the seawater temperatures are more stable. It discloses that it needs to transition to zero-emission technology to meet its ambitious climate targets. It has already started using full-electric and hybrid boats to meet the increased expectation of renewable energy. However, it does not discuss the impact of increased electricity and energy demand and prices. It recognises the risk of a carbon tax on its electricity and transport use. It is shifting towards low-emission energy sources, such as onshore power and electrically powered boats, to mitigate this risk.

The company does not plan to align capital expenditures/revenue with GHG targets for the next two years.

The company discloses that vegetable raw materials (including soy) have become an important ingredient in fish feed, making up 34% of the feed. SalMar discloses that all soy purchased for fish feed is certified in accordance with ProTerra, Europe Soya or an equivalent environmental standard. This means the soy sourced is not farmed in areas threatened with deforestation and has not been genetically modified.

The company requires its feed suppliers to purchase soya from sustainable sources certified by ProTerra, Europesoya or equivalent environmental standards. In 2022, all feed suppliers only used certified soy in their feed baskets. SalMar states that it has a continuous dialogue with feed suppliers to ensure that deforestation requirements are met. However, there is no disclosure expanding on measures it takes to support suppliers actively.

The company states that it conducts regular audits of its feed suppliers and that 100% of its sourced soy is certified by a third party. Non-compliance is managed in accordance with certification standards. It discloses that 100% of the soy it sources from direct and indirect suppliers is fully traceable.

The company discloses that to safeguard the fish feed used, it carries out extensive employee training alongside R&D. The company works collaboratively with its main feed suppliers to include sustainable ingredients and improve agricultural practices and nutrient management. It is also involved in several R&D projects investigating the use of novel feed ingredients, such as algae, insect meal, kelp and salmon oil.

The company reports that 100% of its value chain has either Global Gap, Debio or ASC certifications. The company provides details of all the farms that are certified, under assessment, and previously certified.

The company discloses its feed ingredients by percentage, broken down into categories but not disaggregated by species. The company states that all sourced soy is certified by Pro-Terra or RTRS. It also states that 94% of marine raw materials are certified by MarinTrust or MSC in Norway and 100% of raw materials are certified in Iceland. In addition, the company discloses its FFDRo and FFDRm disaggregated by operating country.

The company reports that 32% of fishmeal is derived from trimmings but does not report the same stats for fish oil. For the Norway operations, the company recorded an economic FCR of 1.19 in 2021, whereas it was 1.18 in 2022. For Iceland eFCR increased from 1.30 in 2021 to 1.34 in 2022. Due to the relative size of each operation, the aggregate eFCR shows a decrease between the two reporting periods. The company has reported FFDR (Fish meal) to be 0.36 in 2021 and 0.47 in 2022 for its Norway operations, and FFDR (Fish meal) is reported to be 0.32 in 2021 and 0.56 in 2022 for Iceland operations. Therefore, it can be concluded that the company saw an increase in FFDRm in all operating regions. The company discloses a decrease in FFDRo in both Norway and Iceland across three years.

The company is working with its main feed suppliers, Cargill Aqua Nutrition Norge and Skretting, to include sustainable ingredients in its feed. However, the company does not disclose a complete stratgy including final goals, timelines and specific actions for increasing the useage of alternative feed ingredients. In regard to marine ingredients, the company aims to increase its use of trimmings and by-products by 2023 and discloses that 32% of marine ingredients are derived from trimmings. The company conducts regular risk assessments to identify how feed ingredients' availability may impact future production. However, the company does not provide detailed information about risk assessments conducted to determine the impact of feed ingredients on production.

The company does not disclose the percentage of R&D allocated to novel ingredient development, nor does it set a qualitative target for inclusion of alternative ingredients.

The company discloses the historic average sea lice count per week since 2018. The data is also publicly available for its Nordic sites on barentswatch.no. The company states that in 2021, 2.2 per cent of observations showed numbers exceeded the lice threshold.

The main strategy undertaken by the company for reducing the number of sea lice is through preventive measures, such as lice skirts, reduced cycle time and fallowing, and risk-based use of cleaner fish. In addition, the company has also established its internal capacity for non-medicinal delousing. In 2022, the company also introduced lice lasers, where advanced optics identify salmon lice on the salmon and remove them using a laser pulse. The company also introduced the OptoScale optic solution to increase insight and monitor fish lice, weight and welfare indicators. The company discloses that it aims to maximise cleaner fish survival rates by farming robust, cleaner fish and giving them healthy living conditions inside the net pens. However, the company does not disclose quantitative data on cleaner fish mortalities.

The company discloses the number of fish escapes and fish lost for the last three reporting years for its Norway and Iceland operations. In 2022, SalMar had two reported escape incidents in Norway and none in Iceland, showing a downward trend in escapes across global operations over the last three years. The company states it focuses on day-to-day routines for escape monitoring and checking the technical equipment. The company has been working with its net pen supplier to test several different types of pens. It states it has successfully found a kind of pen that provides enhanced protection and delivers additional environmental benefits. The company has set a goal of zero fish escapes by 2023.

The company discusses monitoring large areas to see whether farming operations are having a regional impact and aims to operationalise methods to trace the source of escaped farmed salmon. However, the company does not disclose a time-bound target to end human-wildlife contact in its operations.

The company does not disclose a management plan in the event of algal blooms.

The company discloses that its feed suppliers are involved in activities in areas with higher water risk, and the company expects these feed suppliers to withdraw, consume, and discharge water responsibly and sustainably. It also states that feed suppliers are expected to have a clear strategy towards reducing freshwater use. It engages in continuous dialogues to identify and implement best practices on sustainability, including water use in feed farming. However, from the available disclosure, it is unclear what support or guidance the company provides.

The company discloses that some feed suppliers have activities in areas with higher water risk. However, the company does not disclose the percentage of feed sourced from high-risk areas.

The company discloses zero incidents of non-compliance to water quality or discharge permits in 2022. It explicitly states that it only withdraws freshwater from low-risk water areas from a water scarcity and quality perspective. SalMar uses recirculating aquaculture systems in Norway, which helped reduce water consumption by 43% over the last two years. The company has set a target to reduce freshwater withdrawals by 20% from 2022 to 2030. The company states it has a target to not violate our water quality permits but does not disclose a quantitative target related to specific pollutants or water quality.

The company mentions that it discharges wastewater in accordance with discharge permits. All the hatcheries are required to treat their wastewater before discharge. The company collects monthly measurements of the total organic carbon (TOC), total nitrogen, and total phosphorus in the wastewater, which is sent to local authorities. However, the company does not explicitly disclose the quality of wastewater discharged against these metrics. It discloses the volume of wastewater discharge from its Norwegian and Icelandic sites for the last reporting year.

The company uses a drying facility to dry wastewater into a 95% solid state. This is then used as fertiliser for soil improvements by third parties. At their Follafoss hatchery, a similar process is used, and biogas is produced from hatchery waste. SalMar also initiated another project to establish a biogas plant close to the company's smolt facility, which will directly utilise sludge from smolt production to produce biogas. The company states that the water withdrawal reductions in the previous years also mean a significant reduction in wastewater discharge. However, quantitative data on water withdrawal demonstrates an increase in the volumes of water withdrawn in the last reporting period due to the inclusion of newly acquired companies within this dataset. SalMar discloses that if the acquired company's data were not included, freshwater withdrawal (and discharge) volumes would be 43% lower than two years prior to this report. However, the publicly disclosed data shows an increase in wastewater discharge at an aggregate level.

The company recognises soil health and nutrient management as a global challenge and expects feed suppliers to manage soil health and perform nutrient management responsibly and sustainably. The company helps feed suppliers by discussing ways to reduce nutrient spills, and states that it has continuous dialogue with feed suppliers on their nutrient management plans. The company also discloses that it monitors the nutritional value of the feed utilised in its hatcheries and sea farms and conducts regular inspections on the physical quality of the feeds.

The company invests in and tests novel feed ingredients like algae, insect meal, kelp, seafood trimmings, and salmon oil to reduce the likelihood of nutrient spills from agriculture.

The company conducts regular MOM-B assessments of proposed and existing sites and requires that new sites are below a threshold to qualify as usable. It also states the percentage of existing sites that meet this threshold. In the reporting period, 91% of operational sites in Norway and 100% of sites in Iceland achieved a score of "very good" or "good" score (MOM-B score of ≤ 2). The company does not describe its inorganic waste monitoring and mitigation process. The company considers uneaten feed and faecal matter a significant challenge in the fish farming industry and engages in various projects to gain knowledge. The company also uses modern optical technology to improve the feed conversion ratio and reduce feed spilt into the ocean.

The company does not disclose the treatment or metrics of effluent pond water. It does not disclose a neutral impact on water, or provide evidence of a community engagement plan.

The company has implemented a stringent antibiotics policy, stating explicitly that the use of antibiotics for growth enhancement is prohibited at all stages of the salmon lifecycle and emphasising that their usage is confined to specific situations under veterinary advice. The policy applies uniformly across operations. Moreover, it has reported zero antibiotic use over the past three years, which suggests a strict prohibition on routine use across all functions. Additionally, the company commits to vaccination protocols and the maintenance of zoning boundaries between different fish generations to mitigate bacterial infections.

The company reports zero grams of active pharmaceutical ingredients per tonne produced in 2022 and confirms that EY audits its antibiotics data.

The company communicates a detailed statement underlining the significance of animal welfare, and its policy is built upon the Five Freedoms of Animal Welfare. The company states they have dedicated personnel focusing on fish health and welfare, providing training for all employees, closely monitoring indicators related to fish comfort and stress levels, optimising environmental conditions, implementing careful handling protocols, and performing regular welfare inspections. Despite mentioning the importance of handling protocols, it does not disclose having an official handling policy. The company employs higher welfare stunning techniques across all operations.

The company maintains a stocking density of 25 kg /m3 (2.5%) for conventional salmon and 10 kg/m3 (1%) for organic salmon as per the current legislation of Norway and Iceland. However, the company does not assure a stocking density lower than 17kg/m3 for salmon at all times across operation. The company discloses the average stocking density in Norway. However, it does not report on other welfare monitoring metrics or disclose stocking density for Iceland.

The company engages in various R&D activities to provide optimal environmental conditions for salmon. However, the specific amount of funds allocated or spent on such research is not disclosed.

The company discloses the survival rate across its Norway and Iceland operations. In 2022, Norway-based operations had a survival rate of 94.6%, whereas Iceland-based operations had a survival rate of 89.7%. The company acknowledges a fall in the survival rate compared to the previous reporting period, which was attributed to biological challenges faced in Central Norway towards the end of the year. Specifics of the incidents faced have not been disclosed. In 2021, the company set a target of achieving a 97% survival rate in Norway and a 95% survival rate in Iceland by 2025.

The company does not disclose the number of disease outbreaks in terms of million fish/biomass tonnes or any other metric. The company states it prioritises vaccination programmes alongside efficient feed utilisation to promote fish health and prevent diseases.

The company commits in writing to endorse the Universal Declaration of Human Rights principles and the core ILO conventions.

The company reports conducting systematic and random audits of subcontractors to ensure that human rights standards are adhered to. The company then performs follow-ups if suppliers are at risk of failing to meet its human rights expectations. The company also states that it will regularly perform risk-based due diligence activities, including identifying and assessing actual or potential adverse impacts on fundamental human rights. The company found no significant risk of human rights breaches or incidents of human rights in its due diligence processes during the reporting year. The company then conducts follow-ups if suppliers are at risk of failing to meet the company's human rights expectations. In its operations, the company discloses it will implement suitable measures to cease, prevent or mitigate adverse impacts based on its human rights assessments and provide for or cooperate in remediation and compensation where this is required. Additionally, the company reports that it continuously focuses on its employees receiving education, information, and training to reduce risk. However, the company does explain how it mitigates and provides remediation in response to identified risks in its supply chain.

The company discloses that it found no significant risk of human rights breaches or actual breaches of human rights in its due diligence processes for its supply chain. However, the company does not disclose if it identified human rights risks in its operations. Also, it provides no evidence of remediation where human rights risks are found or evidence of preventative measures.

The company commits in writing to prohibit child labour, forced labour, discrimination and abuse. Compliance is checked using audits by third parties and customers, as well as through its internal controls. Those in the company's supply chain must adhere to the prohibition of forced labour, child labour and discrimination per the company's human rights policy. However, this policy does not require suppliers to prohibit abuse or inhumane treatment. Furthermore, the company does not commit to paying fair wages across its operations or mention whether it provides paid sick leave.

The company conducts audits of suppliers about human rights. However, the company does not explicitly say which of the policies concerning forced labour, child labour, and discrimination. The company has an external whistleblowing channel open to all stakeholders and an internal reporting procedure that employees can access. Reporting through the shallow channel can be done anonymously. However, the company must mention whether the mechanisms are designed in consultation with stakeholders such as unions and employees. The company discloses that in 2022, nine whistleblowing reports were recorded. While the company mentions that its internal guidelines have dealt with the cases, it does not categorise the reported violations.

The company aims to uphold the health and safety of its employees. The company also discloses that all parts of the group have an industrial safety representative, and two industrial safety inspections are carried out in each department every year. In addition, it has a working environment committee comprising representatives of management and nominated employees. However, the company does not disclose the percentage of its facilities with a site-specific health and safety committee with worker representatives. The company also states that it does not use antibiotics in its operations.

The company's total lost time injuries in 2021 were 24, and 2022 to 19. The fatality rate remained zero across 2020, 2021, and 2022. However, the company does not discuss the employee turnover rate for the reporting year.

The company supports the right to freely associate as set out in the Universal Declaration of Human Rights but does not mention the unionisation rate. The company regularly meets with labour unions representing its employees, demonstrating its support for freedom of association. However, the company does not describe measures taken to support collective bargaining. In addition, the company states that suppliers must follow certain standarspecificch may include freedom of association and the right to collective bargaining. However, it is still being determined if suppliers must set a policy on freedom of association.

The company mentions that collective bargaining agreements cover 96% of its workforce. In addition, it discloses the distribution of its force across existing contractual agreements, including full-time and part-time employees.

The company discloses that its facilities have GlobalGAP, BRC or IFS certifications, which are GFSI-recognised. Further, its food policy states that all its operating units are certified according to GFSI-recognised standards. It expects its suppliers to have GFSI certification. As its feed suppliers are third-party authorised, it can be concluded that they must have GFSI certification. However, it does not explicitly state the percentage of suppliers which adhere to this and does not state this as an absolute requirement, so it cannot be inferred.

The company conducts regular internal food safety audits and welcomes external audits. The production is subject to Norwegian and Icelandic regulations for food production, and facilities are regularly inspected by the Norwegian Food Safety Authority (NFSA). It also discloses that a total of 252 internal audits and 243 external audits were conducted in 2022. However, corrective action rates are not disclosed. It reports increased use of its consumer-facing Keep-It® shelf-life indicator, a device that displays the product's temperature and remaining shelf-life. However, to be eligible for points, it is encouraged to disclose whether it is developing or implementing consumer-facing traceability technology for food safety.

The company has defined routines for the follow-up of customer complaints regarding food safety and disclosed that all products can be traced back through the whole value chain. However, a detailed product recall system is private. In 2022, it had zero recall incidents.

The company discloses that it faced restrictions in specific markets like China and Russia. However, these restrictions were imposed due to international conflicts, not due to food safety reasons.

The company discloses that the group's CEO is ultimately responsible for its environmental footprint and efforts to increase its sustainability. Further, the company's CDP disclosure states that the board of directors is primarily responsible for climate change mitigation and strategy. In addition, the company discloses that it updated its materiality assessment in 2022. The updated topics include interaction with wildlife, climate risk, waste and nutrient management, water risk scarcity, fish escapes, fish welfare, safe and healthy food, salmon lice, sustainable feed, GHG emissions, human rights, regulatory compliance and safe and secure workplaces. However, no board involvement in the assessment is disclosed. The company holds board-level expertise in sustainability, food safety and innovation.

The company discloses that its senior executives and fish farm technicians are eligible for performance-based incentives related to ESG metrics. However, an exact percentage of variable compensation is not defined. The company engages in dialogues and collaborates closely with public authorities, local stakeholders, educational and research establishments, and NGOs to tackle the aquaculture industry's pollution and animal welfare issues. The company has also disclosed its membership with various trade associations. However, it does not discuss aligning its policy-engagement strategy to restrict global temperature rise to 1.5°C.

Whilst the company does not extensively discuss sustainability innovation, it has a new subsidiary, SalMar Aker Ocean AS, a collaboration between the company and Aker to make the world's first offshore fish farms, which the company believes has significant sustainability benefits. The company has also begun to build the world's most considerable fish farming construction made by thermoplastics, the Marine Donut, in collaboration with Bluegreen in 2022. In addition, the company acknowledges its position regarding ESG performance among the world's largest protein producers in 2022 by the Coller FAIRR Protein Producer Index.

The company does identify protein diversification as a source of risk, as stated in an investor briefing. However, it is not externally acknowledged as a material business issue. Further, it has not yet set a timebound target to diversify protein sources.

The company does not indicate having an approach towards diversifying its product range to include plant-based and alternative proteins.