Sanderson Farms Inc

The company has not set an emissions reduction target.

The company has set a target to reduce its natural gas usage by 2% by increasing renewable energy production. The company also mentions that in FY2020, over 80 poultry houses utilized renewable energy from solar panels to reduce their energy consumption. It reports that there has been a 20% reduction in electricity usage intensity at Sanderson Farms since 2008 and a 15% reduction in natural gas usage intensity for 2020 alone as a result of renewable energy generated by capturing and refining biogas.

The company does not discuss working with suppliers to reduce emissions from agriculture.

The company does not disclose innovations to reduce emissions from feed farming.

The company does not disclose innovations to reduce emissions from animal farming.

The company discloses that during the fiscal year 2020, it generated approximately 245,477 metric tons of CO2-e of gross Scope 1 emissions, which equates to an intensity of 0.050 metric tons of CO2-e of Scope 1 emissions per 1,000 pounds processed. When combined, the company’s gross Scope 1, Scope 2 and biogenic emissions totalled approximately 477,089 metric tons of CO2-e during the fiscal year 2020, and an intensity of 0.097 metric tons of CO2-e per 1,000 pounds processed.

The company does not disclose emissions from animal farming or feed production.

The company responded to the CDP Climate questionnaire in 2021 and received a 'D' rating but this is not publicly available. The company is still awarded points as investors have access to this response.

It is not possible to determine whether absolute emissions have changed compared to the previous reporting period because the company did not disclose emissions from scope 2 in the fiscal year 2019. The company discloses an increase in emissions intensity between 2019 and 2020, from 0.048 to 0.050 metric tons of Co2e per 1,000 pounds processed. The company does not disclose a quantitive decrease in emissions arising from feed or enteric fermentation or manure management.

The company has not disclosed that it has or will conduct a climate scenario analysis. However, it has discussed the impacts of climate change on its operations. The company mentions that climate change will have a financially material impact as it may not be able to recover damages, losses or costs through insurance due to adverse events caused by climate change.

Moreover, the company mentions how physical risks could impact feed ingredients' availability and price volatility, leading to increases in raw materials and operating costs. However, it has not discussed how it will manage these risks. The company mentions extreme weather events such as extreme temperatures and drought might impact the health and growth of its flocks and its hatching and production operations.

The company has not committed to aligning its CAPEX with its GHG targets.

The company mentions that soy is a key animal feed ingredient. During fiscal year 2020, Sanderson Farms purchased approximately 3.2 million metric tons of corn and approximately 1.1 million metric tons of soybean meal. However, the company does disclose information on where it sources its soybeans nor how it manages deforestation risks linked to soy.

The company has not committed to sourcing deforestation-free soy.

The company declined to participate in the CDP Forest Questionnaire in 2021 and therefore, received a scoring of 'F'.

The company mentions that it purchases soy from suppliers for its poultry feed. However, it does not disclose information on how it engages soy suppliers on deforestation risks.

The company does not disclose monitoring its suppliers on deforestation or the extent to which it has traceability of soy sourced.

The company discloses its water consumption for FY2020. Further, to ensure that every Sanderson Farms facility follows the company's standards for water conservation, each plant submits a daily utility log to the corporate environmental services team to compare utility usage across the company and evaluate areas that need improvement. It also provides on -the-job training to its employees for water conservation practices. The company mentions that it conducted a due diligence and found that it has only one complex, located in Hazlehurst, Mississippi, that is in an area with high baseline water stress.

For FY 2021, the company has a target to reduce its water usage per salable pound by 3 percent compared to the previous fiscal year. It also discloses progress against targets in previous years. The company reduced water usage per salable pound by 6.8% compared to fiscal year 2019.

The company states that it withdraws water from both municipal and groundwater sources. However, it does not give a quantitative breakdown of the amount withdrawn from each source. In FY20, the company withdrew 6.1% water and consumed 4.1% water from regions with high or extremely high baseline water stress. The company responded to the CDP Water questionnaire in 2021 but it is not publicly-available. Investors have access to this response. The company has reduced both water withdrawals and consumption year over year.

The company does not mention engaging with its feed suppliers on water-related issues.

The company discloses 3.7% of corn and soy sourced from suppliers is from regions with high and extreme high water stress.

The company states that it provides its contract farmers with a specific target water usage level that corresponding to the week of a flock's age. Water meters help to monitor the levels to balance between the need to conserve resources and ensuring flocks have the resources to grow and thrive. Although the company does not specific the geographic scope of its water usage targets, it is deemed to apply to all contract farmers.

In fiscal year 2020, the company discloses there were no incidents of non-compliance with water quality permits, standards or regulations. The company says that it has only one complex located in Hazlehurst, Mississippi, in an area with high baseline water stress and represents 4.8% of production capacity.

The company conducts a samples check from the wastewater it discharges. The sample checks include total suspended solids, chemical oxygen demand, ammonia, total phosphorous, nitrate and dissolved oxygen. However, the company does not provide a quantitative disclosure on the effluent metrics. The company responded to the CDP Water questionnaire in 2021 but it is not publicly-available. The company is still awarded points as investors have access to this response.

The company states that it uses a portion of its wastewater to generate renewable energy by capturing and refining biogas.

The company is a partner of Farm Journal’s Trust in Food Conservation Ag Movement, where it commits to encourage conservation and sustainability in its feed grain supply chain. Trust in Food partners with NGOs, agribusinesses, government agencies and others stakeholders to create innovative conservation solutions focusing on areas such as soil health and protecting water and air quality.

The company mentions 100% of the litter and manure is managed according to a nutrient management plan, which requires an adequate treatment of manure.

The company mentions that 100% of the litter and manure generated by independent contract poultry producers is managed according to a nutrient management plan, which is a requirement in each state in which the company operates. The company mentions nutrient management plans are individually tailored to each grower and include proper collection, treatment, storage and agronomic use of litter. However, it is not clear whether the company provides support to growers to develop the plans.

The company prohibits the routine use of medically important antibiotics (MIA) in it's own operations and it's supply chain. Antibiotics are used for disease treatment when necessary. The company does not disclose any measures taken to reduce the demand for or usage of antibiotics.

The company discloses the percentage of it's livestock population which were treated with MIAs in the reporting period. It disclosed a significant reduction (47.4% to 3.5%) between reporting periods. It is unclear whether animals were treated with non-MIAs. It does not disclose the reasons for the remaining use of antibiotics in it's operations. Data on the performance of owned farms and the company's supply chain is audited internally, and audits are verified by an external operation, but data is not directly audited by a third party.

The company is committed to the highest animal welfare standards in the industry. It mentions that it also incorporates animal welfare standards not only in the humane treatment of animals, but also into its independent growing programs. However, the company fails to provide a statement in support of the Five Freedoms (or similar statements) in its public disclosures. The company mentions that trained flock supervisors administer training on the company’s animal welfare requirements with growers. All employees are trained on proper animal welfare practices. Additionally, all employees who are responsible for handling live birds receive additional job-specific training annually. A failure to meet the company's animal welfare standards can result in a disciplinary action or even termination of contract with the grower or employee. The company mentions that as a founding member of the US-Roundtable for Sustainable Poultry and eggs and the International Poultry Welfare Alliance, it is committed to furthering animal welfare through leadership, innovation, multi-stakeholder communication and supply chain collaboration. However, details of any research and development program carried out by the company is not disclosed.

The company assures that the housing it provides is built to accommodate chickens’ natural behaviours and reduce stress on the birds. It provides spacious poultry houses for birds to move about freely in optimal, climate-controlled conditions safe from harsh elements and predators. The company mentions that all birds are adequately stunned prior to slaughter. However, the company does not disclose commitments to restrict mutilation, limit transportation, environmental enrichment and higher welfare breeds.

The company discloses in fiscal year 2020, third-party animal welfare audits were conducted by PAACO throughout its operations.

The company does not report welfare metrics.

The company discloses that its chicken are cage-free and they are only caged when being transported from the farm the company's processing facilities. The company states that the conditions of housing for its chicken are designed to accommodate chicken's natural behaviors and to reduce stress on birds. However, the company does not disclose the stocking density. The company mentions that its birds are stunned prior to slaughter but it does not explicitly say it uses inert gas or multiphase systems or that it does not use waterbath stunning. Moreover, the company does not discuss whether its chickens are of higher welfare breeds.

The company has a comprehensive human rights policy statement approved at the most senior level. It commits to respect all internationally recognised human rights as expressed by the Universal Declaration of Human Rights and the principles set forth in the International Labour Organization's Declaration on Fundamental Principles and Rights at Work. The company expects all employees, contract producers, suppliers, and other business partners to adhere to the principles expressed in the statement.

The company conducts a human rights due diligence process before setting up a new plant. It does so by engaging in extensive dialogue with local officials, community and business leaders and other stakeholders. The company also assesses the human rights impacts on its day-to-day operations by continuously consulting various stakeholders. It recognises some key human rights risk such as discrimination and harassment, workplace safety, fair and equitable pay, diversity and inclusion, and training and development.

The company does not disclose any information on how it mitigates risk and remediates people and/or communities.

The company provides a high level discussion on fair wages, discrimination and harassment. However, it does not disclose information related to forced or child labour. The company’s diversity and inclusion committee consists of senior leaders from various departments. The committee meets quarterly to assess current standards and set future goals regarding recruiting strategies, hiring data, employee training and development opportunities, as well as employee engagement and inclusion initiatives. However, the company does not explicitly mention if ethical verification audits are also conducted. Furthermore, it does not include fair working conditions in its supplier policy. The company does not disclose whether it provides sick pay to its workers.

The company provides an anonymous and confidential grievance mechanism in case of any violations or to raise concerns over discrimination and harassment. However, it is not explicitly mentioned that the company has a channel for reporting other human rights violations. Furthermore, there is no evidence that the company involves employees or their representatives in the design or evaluation of the channel. It does not specify whether its reporting channel is publicly available to all workers regardless of contract type, suppliers and third parties.

The company is committed to protecting the health and safety of all its workers by preventing work-related injuries. It also provides training to its employees in the areas of chemical handling, emergency action and accident prevention, as well as research-driven health education designed to improve employee health and well-being while reducing preventable health disparities. However, the company does not mention a health and safety management system certification in place. It has a five-member team that oversees occupational health and safety programs. The company also engages external consultants and ergonomists to audit its practices and update the safety policies to ensure team welfare. However, it does not disclose the number and/or percentage of facilities that have a separate health and safety committee The company does not discuss antimicrobial resistance risk to workers.

The company states that injury rates were 4.6 in 2020, 4.8 in 2019 and 6.1 in 2018, showcasing a year-on-year improvement. Zero fatalities were reported in 2020, however, there was one case in 2019. Fatality cases and injury rates for this reporting year are not disclosed. Furthermore, the company does not report turnover data.

The company provides a statement respecting freedom of association and collective bargaining. However, it does not disclose unionization rate. Whilst it does not provide a description of measures taken to support rights, The company says that it expects its contract producers, suppliers and other business partners to adhere to the right to freedom of association and collective bargaining.

approximately 13% of its employees are covered by a collective bargaining agreement. It discloses the distribution of its workforce; stating that 11.44% of its employees (2021 employees out of total 17662) are salaried and the remaining 88.56% (25641 employees out of 17662) are hourly employees. However, the company does not disclose on subcontracted vs directly employed workers.

The company’s processing facilities are audited based on Brand Recognition Compliance (BRC) Global Standard Issue 8, which is a Global Food Safety Initiative (GFSI) food safety certification program. However, being audited based on the BRC standard is not the same as being certified by the standard. It is not clear how many facilities are certified by GFSI. The company states that 100% of supplier facilities from which it purchases animal protein, which has already been processed, are certified to a GFSI-recognized food safety certification program.

The company mentions of the audits it conducted in FY2020, there were no major non-conformances identified at its 13 processing facilities. However, it is not clear how often the audits are conducted. The company states that it did not have any major non-conformances. A total of 60 minor non-conformances was reported in FY2020 with a 100% corrective action rate for minor non-conformances. However, it does not disclose any further details regarding the corrective actions taken.

The company provides a high-level discussion of recalls and market bans as a material risk. It mentions that if its products are contaminated or damaged, it will be required to recall products or close its plants which could be costly andcause significant losses. It is not clear whether the company has a product recall system in place nor does it provide an extensive description of the product recall system. The company discloses that it had zero recalls in the reporting year.

Moreover, the company mentions that there are currently no markets that ban or restrict the import of its products based on sanitary or phytosanitary measures.

The company's executive committee is responsible for managing the day-to-day risks. It assesses and manages risks related to sustainability and ESG issues, quality control, environmental compliance, crisis response and management, including climate-related disasters. The Board regularly receives updates about and reassesses the management of these risks throughout the year. The company does not disclose whether it has conducted a materiality assessment. The company states that the board benefits from Gail Jones Pittman's experience in the area of brand growth and management, product development and sourcing, marketing and business development.

The company is a founding member of the United States Roundtable for Sustainable Poultry and Eggs. This organization is a multi-stakeholder engagement and collaboration effort that is focused on addressing issues regarding poultry and egg sustainability. Members collaborate on various innovations to improve air quality, energy use, GHG emissions, land use, nutrient management, water conservation and solid waste disposal. The company is also a founding member of the International Poultry Welfare Alliance, an organization devoted to innovation in animal welfare practices that improve poultry sector sustainability and production efficiency.nThe company works in partnership with Farm Journal's Trust in Food Conservation Ag Movement which works with leading NGOs, agribusinesses, government agencies and others to create solutions driving profitable on-farm conservation practice adoption. Focus areas of the organization include soil health and protecting water and air quality, as well as growing habitat. However, it does not disclose a complete list of memberships with trade associations, alliances and coalitions including other areas.

The company discusses technological innovation to ensure food safety and quality standards. This includes using x-ray technology at processing facilities to monitor the presence of bones that are not visible to the human eyes as well as testing for microbial loads on products.

The company does not indicate having an approach towards diversifying its product range to include plant-based and alternative proteins. In a news article in FY2019, CEO and chairman of Sanderson Farms, Joe F. Sanderson Jr., stated that alternative proteins is not something the company is interested in producing.

The company has not publicly acknowledged protein diversification as a material business issue.