WH Group Ltd

As per the website of SBTi, the subsidiary - Smithfield has removed its commitment to SBTi

The company has set a group-wide target to reduce emissions per unit by 30% compared to a 2017 baseline across the value chain. It also discloses that Smithfield Foods has imposed a 30% absolute reduction in GHG emissions by 2030 across its entire value chain. The base year of the target is 2010. It aims to reduce emissions per unit by 30% compared to a 2017 baseline across the value chain. However, it has yet to disclose the breakdown of this target based on Scope 1, 2 and 3 emissions.

Smithfield is working with grain supply farmers and helping them to reduce crop inputs and improve crop yields by investing in carbon reduction and conservation methods. The geographic scope is limited to certain geographies as target information only covers Smithfield Foods.

The company is trying to reduce emissions from feed farms, including researching the impact of novel feed ingredients. It reduced GHG emissions associated with feed by more than 100,000 tons from a 2010 baseline.

The company's subsidiary, Smithfield, has projects to generate energy from manure biogas projects, which are covered elsewhere in the assessment. It does not disclose any further information.

The company discloses its Scope 1 emissions to be 3,513,674 metric tons of CO2e, Scope 2 emissions to be 2,030,585 metric tons of CO2e, and Scope 3 emissions to be 29,699,786 metric tons of CO2e for US region. Since the company discloses Scope 3 emissions for US region only, the geographic scope is limited to certain geographies.

The company's US subsidiary - Smithfield Foods, discloses that 38% of its carbon footprint can be attributed to manure management. Smithfield Foods also discloses that 25% of its carbon footprint can be attributed to grain farms and feed milling.

The company's US subsidiary, Smithfield Foods, responded to the CDP Climate Change questionnaire in 2022. Another subsidiary, Shuanghui Development, engages a third-party professional service to monitor emissions data in China. However, it does not disclose that a third party audits other regions' GHG data. Furthermore, per the Smithfield CDP Climate Change 2022 disclosure, third-party verification of emission data still needs to be done. Therefore, the geographic scope is specified and limited to certain geographies.

The company discloses an increase in Scope 1 and Scope 2 GHG emissions from 2,583,565 MT CO2e in 2021 to 5,544,259 MT CO2 in 2022. The company also discloses 29,699,786 MT CO2e Scope 3 emissions for US region. However, it does not disclose Scope 3 emissions for 2021. Therefore, a comparison can not be made. It states that it shrunk the emissions associated with manure management from 40-45% of its total emissions in 2010 to 27% in 2020. However, it does not disclose a decrease in absolute emissions in the past two years.

The company conducted climate scenario analysis using RCP 2.6, 4.5 and 6.0

The company's US subsidiary-Smithfield, mentions temperature shifts could impact the cost and availability of corn and other feed crops. However, it does not say how it will manage this risk. The company discloses that to meet the growing energy demand; it implements a series of optimisation measures to improve energy efficiency. The company implemented an intelligent cloud energy management platform in 14 facilities across China, allowing automatic meter readings with better energy measurement accuracy and real-time monitoring. This enables timely identification of energy consumption issues and improvement measures for rapid response to data anomalies and improves management and energy utilisation. Another project is the Ammonia Heat Pump Innovation Project, which recycles heat discharged from refrigeration using heat pump technology, reducing energy costs and saving 3,263 tons of steam. It also upgraded the Smithfield facility using a boiler house, which will reduce CO2 emissions by 50%. Smithfield Foods discusses the risk of taxation of operations and carbon emissions, which may affect the prices of its inputs. It needs to disclose how it will manage this risk.

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

The company sources soybeans as a raw material for meats and pork operations. However, it does not disclose how it manages soy-related deforestation risks.

The company does not have a soy deforestation or conversion-free target. Further, its subsidiary, Smithfield Foods, has not yet committed to responsibly or sustainably sourcing soy.

The company responds to the CDP Forests Questionnaire 2022 but only discloses timber products, not soy.

The company does not disclose any deforestation-related reference in its supplier code of conduct and supplier selection process. Its 2022 ESG report commits to promoting biodiversity conservation under its corporate principles. Also, it prioritises suppliers who demonstrate efforts to avoid direct or indirect harm to biodiversity but does not reference deforestation. To further this commitment, it plans to develop a sustainable sourcing policy providing detailed guidance on sourcing raw materials and incorporating certification standards. It also states that Smithfield Grain was established to source feed commodities from local farmers. However, no further information is disclosed on any support it provides to soy producers to encourage deforestation-free production or improve traceability.

The company does not disclose how compliance in monitored or what actions are taken if non-compliance occurs. Further, the company does no disclose the level of traceability it has of its soy supply chain.

Across the US, Smithfield Grain partners with independent agronomic consultants to help farmers develop site-specific nitrogen management tools to optimise nutrient absorption, use less fertiliser, and optimise soil health using alternative crops and curated seed mixes.

The company conducted a water risk assessment in 2016. Results indicate that various operations face little to no risk and do not significantly impact local water supplies, and none of the company's water comes from protected sources. The regions with limited water are closely monitored regarding water availability and potential changes. However, this assessment must be updated as of the reporting year. Therefore, it cannot be concluded that processing facilities only operate in areas of low water stress. Smithfield discloses that the issues considered in its risk assessment include water availability and the status of ecosystems and habitats. The company mentions that the results showed that its operations faced little to no risk. It discloses that it monitors water availability for the few operations facing limited risk. Overall, Smithfield Foods announces that it monitors discharged wastewater quality parameters. For its operations in China, the company has internal water management mechanisms at different levels to monitor and manage water risks. The company operates water consumption by reducing freshwater use and using recycled water in its production activities. The company, in FY2022, reports the total water consumption.

The company's US subsidiary, Smithfield, set a target to reduce water use per 100 pounds of product produced by 10% by 2020; using 2014 as a baseline, the company achieved 90% of its target. However, there has yet to be a follow-up target put in place. It plans to reassess its US water supply footprint and adopt internationally recognised water stewardship standards by 2025. The group's subsidiary, Shuanghui, aims to reduce water consumption per unit by 10% by 2030 compared to a 2019 baseline.

The group discloses its water consumption by source. It informs not withdrawing water from areas identified as water-stressed based on its risk assessment. As this disclosure only covers Smithfield, the geographic scope to which this statement applies is limited. WH Group as a whole does not disclose water-related CAPEX. However, its subsidiary, Smithfield Foods, discloses that water-related CAPEX increased by 10% in the reporting year. The group as a whole does not disclose water-related OPEX. However, Smithfield disclosed that water-related OPEX has increased by 3%. Smithfield responded to the CDP Water questionnaire in 2022. The group's total volume of freshwater consumption has increased in 2022. The company's US subsidiary, Smithfield, discloses water withdrawal volumes by source in the reporting year. After adding water withdrawal from both US and international operations, it can be concluded that it will increase in 2022.

Smithfield, busness code of conduct has a high-level statement on minimising water use and wastewater generation. This subsidiary owns various feed mills and produces feed for the group. Smithfield implemented a program with grain supply farmers to implement best practices for producing grain supply for hog feed, including improved water efficiency. It also works with farm-related organisations to engage grain farmers on best practices to reduce water use. However, it needs to provide further detail on how it guides or supports feed suppliers to improve water efficiency.

The company's US subsidiary, Smithfield, discloses that maize is the most significant water-intensive agricultural commodity used as feed for the hogs. The company does not disclose to the CDP regarding soy or other feed commodities. Regarding maize, Smithfield discloses that it does not currently have data on the proportion sourced from areas of water stress but intends to obtain this data within the next two years.

Smithfield intends to calculate the proportion of maize produced in water-stressed areas within the next two years. However, the company does not disclose the proportion of protein produced and/or sourced in water-stressed regions. It states that in China, Shuanghui Development is working with its upstream and downstream suppliers to uphold biodiversity conservation in various aspects such as environmental protection, construction, soil and water conservation, and energy conservation. The company also provides information on different water-saving techniques used at its farms but needs a sustainable agricultural policy focusing on water scarcity risks.

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

The company's US subsidiary, Smithfield, discloses 15 incidents of noncompliance with water quality permits, standards, and regulations. This data is for the year ending 31 December 2022, and, as per CDP Water Security 2022, the company discloses seven water-related fines. The company aims to conserve water quality and availability through conservation, efficiency and cooperation with related stakeholders. However, this target does not constitute primary pollutants such as COD, BOD, Total Nitrogen or phosphorus.

The company discloses the volume of wastewater discharged in the reporting year. One company's subsidiaries, Smithfield Foods, responded to the CDP Water Security questionnaire in 2022.

The company's US subsidiary, Smithfield Foods, discloses that it has partnered with Optima BioEnergy on wastewater-to-RNG biogas projects. This helps protect water resources while producing clean energy. The company reduced its wastewater discharge in FY2022.

The company collaborates with the Environment Defense Fund (EDF) to optimise fertiliser use and improve soil quality. In the US, the company started the SmithfieldGro project, which helps farmers across the supply chain to improve crop yield by reducing pesticide pollution to water resources and soil erosion, thereby reducing carbon emissions. Smithfield Grain also partners with independent agronomic consultants across the US to help farmers develop site-specific sustainability strategies to help farmers reduce water use and improve water quality, service nitrogen management tools to optimise nutrient absorption and use less fertiliser, as well as using alternative crops and curated seed mixes to optimise soil health.

The company discloses that Smithfield has the SmithfieldGro project in the US, which works with upstream farmers to reduce pesticide pollution to water resources and soil erosion. However, further information was not found in the report.

The company's owned operations started adding anaerobic digesters in 2018. The company mentions that as of 2022, it operates more than 100 digesters. The company feeds Renewable Natural Gas pipelines in the US, while in Mexico, it heats hog barns with biogas. The company only produces biogas in its Smithfield operations. It explores developing a process to remove and dry sludge from the lagoons. The company does not produce biogas in China, but it discloses that manure is converted into organic fertiliser. It states that its subsidiary has been using the World Business Council for Sustainable Development's (WBCSD) Global Water Tool and the GEMI Local Water Tool developed by the Global Environmental Management Initiative (GEMI) since 2010 to assess its water impacts. However, the Global Water Tool was decommissioned in 2019.

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.

Smithfield has partnered with Anuvia‚Ñ¢ Plant Nutrients to produce commercial-grade fertiliser from its manure.

The company commits to responsible antibiotic use, mandates supplier compliance, and conducts regular health assessments following veterinarian guidelines. Shuanghui Development and Smithfield Foods subsidiaries monitor and reduce antibiotic usage and explore alternative treatments. Smithfield restricts medically necessary antibiotics for growth promotion and has a dedicated oversight task force. Vaccination programs, preventive health and biosecurity measures are universally implemented across subsidiaries. However, it needs to be clarified if the no-routine-use policy applies globally, including in China, thus covering most but not all pork facilities. The company does not disclose its stance on the routine use of other types of antibiotics.

The company discloses a decrease in antibiotic use in pig farming in its 2022 ESG report, with a 4.4% reduction to 260 mg/kg in China and a 3.3% reduction to 239 mg/kg in the US compared to 2021. However, it neither elucidates the reasons for antibiotic use nor confirms the audit of the data.

The company has an Animal Care Management System and Policy overseen by a dedicated committee since 2002. It conducts regular audits and training focused on animal safety, comfort, and health. Its subsidiaries, Shuanghui and Smithfield, extend this commitment through various programmes and swift corrective actions for non-compliance. The company collaborates with third-party panels for policy review and is involved in R&D through its subsidiaries. However, it does not disclose group-wide actions for non-compliance.

The company's subsidiary, Shuanghui, commits to animal welfare by avoiding long-distance transport and equipping vehicles with thermal insulation for chicken comfort. It also saves to humane slaughter methods, such as advanced CO2. In Romania and Poland, efforts are underway to explore and implement environmental enrichments for pigs. However, there is no commitment to avoiding close confinement nor specific mention of reducing transport time to under eight hours.

The company mandates Pork Quality Assurance Plus (PQA+) certification for all suppliers, ensuring compliance with various standards, including animal welfare and hygiene. Additionally, 86% of its contract finishing farms in Poland are certified under Global Good Agricultural Practices (GAP). The company's United States operations at Smithfield are certified by the United States Department of Agriculture Process Verified Program (USDA PVP), and 86% of contract finishing farms in Poland are certified to Good Agricultural Practices (Global GAP). It also mandates that all suppliers be certified under the Pork Quality Assurance Plus (PQA Plus) programme. However, no information is disclosed regarding internal auditing in Shuanghui operations.

The company commits to group housing for pregnant sows and reports 100% adoption in its company-owned farms. It also encourages U.S.-based live animal suppliers to adopt group housing, with 36% compliance as of 2022. However, it does not disclose historical data for comparison.

The company commits to group housing for confirmed pregnant sows globally and adheres to EU pig and poultry housing requirements. However, it lacks disclosure on tail docking practices and maintains an unclear stance on surgical castration.

The company commits in writing to respect human rights. The company's human rights policy is said to be aligned with the United Nations (UN) Guiding Principles on Business and Human Rights and the Universal Declaration of Human Rights (UDHR).

The company does not disclose that it carries out human rights due diligence. Further, while it conducts annual third-party audits of human rights compliance for its US and European operations, it does not explain how it identifies the next steps of action based on the results of these audits. The company does not disclose how it mitigates human rights risks or provides remediation.

The company's subsidiary, Smithfield, has not identified any operations with significant risk for forced or compulsory labour and child labour incidents. However, the company does not disclose whether it conducts due diligence to identify human rights risks.

The company strictly prohibits child labour, forced labour, discrimination and harassment. However, whether the company ensures its employees are paid at least a living wage is still being determined. The company discloses that in the US, Smithfield conducts third-party audits every year on approximately 25 to 30 factories about their human rights situations by the four-pillar (Labor Standards and Health, Safety, Environment and Business Ethics) standards of the Sedex Members Ethical Trade Audit (SMETA). Also, the company conducts external third-party human rights-related audits in Europe. However, whether these audits are for all the selected policy areas is still being determined. In addition, Smithfield's Supplier Code of Conduct states that it expects its suppliers to prohibit child labour, forced labour and harassment. That said, it does not discuss discrimination or fair wages. The company must mention whether it provides paid sick leave to all its workers.

The company does not explicitly disclose conducting human rights audits in its supply chain. The company has a whistleblower mechanism where customers, suppliers, contractors, creditors, debtors and employees can anonymously report misconduct, fraud, immorality, and non-compliance violations. However, the company does not write the number of grievances it received in the reporting year.

The company regards the health and safety of employees as priorities in its business activities. The company discloses that Shuanghui Development, a company subsidiary, has achieved ISO 45001 certification in four factories by the end of the reporting period. The company also aims to obtain ISO 45001 certification for all its US facilities by 2025. In addition, the company has a Safety Management Committee and Safety Production Leading Groups headed by the General Manager of each factory. However, the company does not disclose whether workers are represented on the Safety Production Leading Groups or the Safety Management Committee. Moreover, no health and safety committee is mentioned for the company's US operations.

The company reports an improvement in the injury rate (injuries per 200,000 working hours) from 1.54 in 2021 to 1.33 in 2022. The company's fatality rate has increased compared to the previous year. It rose from one fatality in 2021 to three fatalities in 2022. Also, the company discloses that the employee turnover rate in 2022 was 45%. Employee turnover rate is disclosed by gender, age, region and seniority level.

The group has operations in China, which are exempt from the question. However, the company does not disclose the unionisation rate for operations in regions where it supports freedom of association. Nor does the company provide evidence of measures to help its workers' rights to collective bargaining or freedom of association. Only the company's US subsidiary's supplier code of conduct requires suppliers to respect their employees' freedom of association.

For the reporting period, the company discloses that collective bargaining agreements covered 100% of employees in China and Romina. This figure was 59% in the US and 15% in Poland. However, the company does not disclose a percentage of the workforce covered in Mexico. The company also breaks down its workforce by contract type, stating that 93% of its employees are full-time and 7% are contracted.

The company discloses that 100% of its owned facilities in the US and Europe (Poland and Romania) have BRCGS certification, which is GFSI-recognised and was audited by external independent institutions, including the ISO 22000, the SQF, the BRCGS and the IFS. However, whilst it discloses the number of factories in China with certification, it does not reveal the proportion of Chinese sites certified. Therefore, the ratio of total sites certified cannot be determined. In the US, suppliers must undergo annual GFSI certification or other appropriate third-party food safety and quality audits. Only US suppliers must have GFSI certification; it is assumed that this constitutes less than two-thirds of total suppliers.

The group has set up a Food Safety and Inspection team, which performs random inspections to ensure that the facilities meet specific standards. The company created a food safety risk control list covering every production chain process in China. A monthly three-level food safety inspection is conducted, led directly by each facility's manager and deputy manager. The Quality Control division oversees follow-ups to identify and address issues promptly and prevent the reoccurrence of relevant incidents as an effort to standardise safe and compliant production. However, no information was disclosed regarding audits of operations in Europe. It does not disclose its corrective action rates in China, European or US operations. In China, it has a product traceability platform that controls all aspects of product procurement, production, transportation and sales and ensures accurate and rapid execution of recalls should that occur. In the US, it utilises the product SKU and date code to ensure full traceability of products, ingredients, raw materials, and packaging. However, it does not disclose any definite consumer-facing technology for food safety.

In China, the company developed the "Food Recall Management Measures" and "Standard Operating Procedures for Product Recall", stipulating the requirements and procedures for product recall work. Another subsidiary, Smithfield, also conducts recall simulations. In Europe, it has a Product Recall Manual that defines response and product tracing protocols, including the appointment of a person in charge to ensure recalls are managed promptly and effectively. However, it does not disclose roles, responsibilities, documentation, or disposal procedures. The company discloses zero product recalls in its Shuanghui Development subsidiary and eight in its Smithfield subsidiary. Of the Smithfield recalls, one in the US was voluntary due to suspected metallic foreign objects; five in Poland were due to salmonella and doxycycline; and two in Romania were due to an African swine fever case and a Salmonella case. After the recall incidents at Smithfield, it invested in testing equipment and optimised critical processes at relevant facilities. Special employee training on food safety and risk management was also conducted for production sites with recalls to minimise human error. It states that all memories were appropriately handled and did not result in any food safety incidents.

The company's US subsidiary, Smithfield, disclosed no market bans in the reporting year.

The company's board is responsible for assessing, defining, and managing ESG risks and objectives for the group. In addition, the company has conducted a materiality assessment and disclosed the identified issues. These include sustainable income growth, product quality and safety, response to climate change, occupational health and safety, and antibiotic use. The board of directors is responsible for the final review and approval of the material topics identified. The company does not disclose if it holds any board-level expertise in sustainability, food safety or innovation.

The company considers it key to link remuneration to ESG performance for relevant management personnel. However, there is no explicit mention that the company has actually set executive variable monetary remunerations linked with sustainability performance. Furthermore, it has not 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 with the goal of restricting global temperature rise to 1.5C

In 2022, Shuanghui Development, a company subsidiary, continued its ammonia heat pump innovation project that recycles heat discharged from refrigeration using heat pump technology, reducing energy costs. The company has also been collaborating with BioCircuit Technologies to develop products that improve animal health and welfare, such as Nerve Tape, designed to seamlessly repair injured nerves. The company also discloses it benchmarks itself against peers in sustainability and innovation using the S&P Dow Jones Corporate Sustainability Assessment.

The company states diversifying the plant-protein segment helps satisfy consumer needs and preferences. However, it does not disclose a timebound target for diversifying protein sources or report the sales/revenue linked to alternative protein sources.

In 2019, the company's subsidiary, Smithfield Foods, launched its dedicated alternative protein brand, "Pure Farmland", which produces a range of plant-based protein products. Its subsidiary, Shuanghui, also has a plant-based range under the brand "Vegetarian World." It discloses that it may undertake more R&D initiatives on alternative meat to launch innovative products. However, during the reporting period, it does not disclose further details on any investment for future growth.