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Sustainability Topics for Sectors: What do stakeholders want to know?

FOOD PRODUCTION - AGRICULTURAL AND ANIMAL SOURCE FOOD PRODUCTION

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This table shows a list of topics identified as relevant by different stakeholder groups. They can be considered as stakeholders’ suggestions or requests for topics to be monitored or disclosed by organizations.

Additional information about the project can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx

Food Production - Agricultural and Animal Source Food Production

69 Common Topics

24 - Food Production - Agricultural Production 13 Specific Topics

Producers of agricultural products. Includes crop growers, owners of plantations and companies that produce and process foods but do not

package and market them. Excludes companies classified as Forest Products and those that package and market food products.

25 - Food Production - Animal Source Food Production(1) 26 Specific Topics

Companies that raise livestock and other producers of meat. Companies that raise poultry and other producers of poultry products. Fishing

companies and companies that raise fish and other producers of fish products.

(1) The name: Food Production –Meat, Poultry, Fish has been changed to the more generic Food Production –Animal source food production, to allow the inclusion of dairy and

other produce.

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Sustainability Category

Topic Topic Specification (if available)

Explanation Reference(s)1 Constituency

Food Production - Agricultural and Animal Source Food Production – Common Topics

Economic Economic performance

Agriculture natural resource management * Economic (production figures and quality, value, income, employment). - Environmental ( Water use efficiency and productivity, water quality, soil health, weed pest and land management, fertiliser efficiency biodiversity trends, greenhouse and carbon footprint, Pesticide use, stewardship of GM crops) - Social (education, employment, health and safety, employment conditions, human rights of staff, community attitudes, ownership, industry demographics, compliance with legal statutes). It is the environmental ones that need some adjustment. 1) Agriculture is the biggest industry in terms of its spatial area on the planet. 2) It is also the largest user of natural resources (land and water) and one of the largest users of human labour on the planet. 3) There are millions farmers producing food and fibre. Therefore, collectively these millions of farmers have a significant impact on economies , the environment (soil, water, biodiversity) and social fabric of communities (human rights, labour conditions).

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There are strong market drivers for sustainable food (& fibre) production. The GRI indicators do not suit food (& fibre) production, evidenced by a notable gap in farms participating in GRI. Farms are very unlikely to report as they are usually private companies and family owned. However, most of the world's farmers belong to an industry organisation or cooperative that represents them regionally or nationally. Guidelines and appropriate indicators should be produced so these industry organisations can report on behalf of their farmer stakeholders. eg xxx cotton growers associations, xxx farmers’ federation, xx wheat producers, . Similar to the NGO sector supplement, but with some more relevant environmental indicators (farms are not like factories). (Note the food production activity - should be food and fibre production. ie to include cotton and wool).

Financial assistance received from governments

Agriculture, biofuels and food production

Governmental support for agriculture, biofuels and food production has important consequences across the global food value chain. This support can promote responsible practices, economic development and enhance public health, but it can also marginalize smaller-scale producers and generate unintended negative consequences for public health.

207* Civil Society Organization

Indirect economic impacts

Local community

Supporting communities (Contribution to local, regional, state and national economies, use of local suppliers, community support and investment) * How the company contributes to local, regional, state and national economies

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- How local suppliers are engaged and under what terms - How the company supports local community development - Social and environmental investment programs in local communities of operation Dairy is Australia's third largest rural industry and a major regional employer, on-farms and also through processing, manufacturing and distribution of finished products. A number of rural communities depend heavily on the sector's prosperity. The decline in the number of farms in these regions has significant ripple effect on the local economies.

Local employment

Supporting communities (Contribution to local, regional, state and national economies, use of local suppliers, community support and investment) * How the company contributes to local, regional, state and national economies - How local suppliers are engaged and under what terms - How the company supports local community development - Social and environmental investment programs in local communities of operation Dairy is Australia's third largest rural industry and a major regional employer, on-farms and also through processing, manufacturing and distribution of finished products. A number of rural communities depend heavily on the sector's prosperity. The decline in the number of

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farms in these regions has significant ripple effect on the local economies.

Socio-economic benefits

Biomass and bioenergy production systems

This Principle speaks to the need for sustainable distribution of socio-economic benefits to the various participants in biomass and bioenergy production systems. A sustainable commercial model benefits from the support of wealth creation in local communities. An integrated resource management plan will address the environmental risks associated with current and future production, appropriate to the scale and intensity of the operation

92 Civil Society Organization

Impact assessment at community and farm level

The scientifically accurate measurement, in a globally comparable manner, of sustainability effects and impacts at the farm and community level. specific indicators of social, environmental and economic metrics that clearly demonstrate scientifically sound capture and analysis as well as consensus on the type of indicator that adequately reflects on of these topics improves management practices permits smarter investment or policy avoids greenwashing facilitates consumer faith

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Environmental Materials sourcing and use

Products from responsibly managed land to avoid deforestation and forest degradation

Deforestation and forest degradation, which account for 10-15% of global carbon emissions, are primarily driven by 4 commodities: timber, palm oil, soy and cattle products. Companies who produce or buy these products may be contributing to deforestation and need to have policies in place to manage potential risks and opportunities. Risk assessment of whether the company buys or produces any of these commodities, directly or through their supply chains. Company policies (if any) on sourcing or production of the commodities, eg only buying certified products, being able to trace back to source. Targets for production/procurement of certified commodities - quantity/percentage and year of target. Deforestation accounts for almost the same carbon emissions as the entire world's transport sector and is a major driver of biodiversity loss. There is also evidence that it contributes to fluctuations in rainfall patterns. Given increasing population and change in diets towards meat, the problems of environmental damage and food security are likely to increase sharply over the coming years. Land use change from forests and peatlands to agriculture results in significant carbon emissions and other environmental damage as well as often causing social problems around free, prior and informed consent

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and livelihoods for forest-dependent communities. Over 1 billion of the world's poorest people depend on forests for their survival but the financial rewards from replacing forests with agriculture are driving rapid deforestation in areas such as Brazil, Indonesia and Malaysia. There are opportunities for companies to improve their agricultural efficiency through certification and 'smart' agriculture while reducing environmental impacts of their businesses.

Supplier production of raw materials in environmentally sensitive and/or conflict-affected areas

The following factors, among others, may contribute to increased material risk and could be used by the reporting organization in the materiality assessment of its supply chain. The suppliers’ raw material is: • Produced in an area of resource constraint • Produced in a region of high conservation value • Produced in an area of social, political or economic vulnerability (DMA)


Energy efficiency of operations

Energy consumption management and reduction

Increasing energy efficiency through the value chain. Decreasing energy consumption - Energy use by source '- Initiatives to reduce direct and indirect energy consumption '- The use of energy saving technologies in Dairy Sheds '- Exploration of alternative energy sources (ie. wind, solar) Energy prices will rise significantly over the medium to long term. The Dairy sector faces a significant challenge

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in reducing energy consumption further to minimise the impact of price increases. Dairy shed electricity costs have increased over the past five years on average. In the five-year period shed power has increased by 22 percent. (Dept. of Primary Industries website)

Water use efficiency

Technology and infrastructure

The judicious management of water resources will play a key role in improving food security and sustainable agriculture Agriculture accounts for approximately 70% of all withdrawn fresh water. Thus, the judicious management of water resources, from irrigation to industrial and consumer use, will play a key role in improving food security and sustainable agriculture. Moving from flood irrigation, which can waste large amounts of water, to more targeted and efficient forms of irrigation will be important.

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Water consumption and pollution reduction

A sustainable agriculture system meets the following criteria: land tenure is established; soil fertility is maintained and improved; water quality is enhanced; biodiversity is protected; farmers, farm workers, and all other actors in the agriculture supply chains earn livable incomes; food is affordable and nutritious; businesses can be competitive and efficient; and the use of energy and the discharge of waste are within the capacity of the earth to absorb forever Sustainable agriculture, as it pertains to business, is




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defined by how a business organization conducts its direct or indirect operations in a way that is resource efficient, strengthens the resource base and environment on which agriculture depends, provides for basic human food needs, enhances the quality of life for farmers and society, and is economically viable. Sustainable agriculture systems, if properly implemented, can lead to poverty reduction, increased food security, and good environmental stewardship on a global level. It can create shared value (food security, environmental sustainability and economic opportunity) for companies and the communities in which they work. When sustainable agriculture systems produce enough nutritious food to feed the world, and that food is accessible to the world’s population, particularly the poorest, food security will follow.

Water consumption management and reduction

Sustainable water management referring to efficient practices to minimise water use for agriculture. Water use practices. Total water consumption and water intensity. Over a billion people currently have no access to clean drinking water. Although water covers more than two-thirds of the Earth’s surface, the vast majority of this is salt water. Only around 0.5 per cent of the world’s total water resources is available to people as fresh water in the form of groundwater or surface water. And 70 per cent of this is consumed by agriculture. For this reason, the agricultural sector has a particular responsibility




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here. In view of the fact that drinking water is set to become even scarcer, due in part to the growing world population and the consequences of climate change, a committed approach in this area is vital. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25).

Agriculture natural resource management * Economic (production figures and quality, value, income, employment). - Environmental ( Water use efficiency and productivity, water quality, soil health, weed pest and land management, fertiliser efficiency biodiversity trends, greenhouse and carbon footprint, Pesticide use, stewardship of GM crops) - Social (education, employment, health and safety, employment conditions, human rights of staff, community attitudes, ownership, industry demographics, compliance with legal statutes). It is the environmental ones that need some adjustment. 1) Agriculture is the biggest industry in terms of its spatial area on the planet. 2) It is also the largest user of natural resources (land and water) and one of the largest users of human labour on

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the planet. 3)There are millions farmers producing food and fibre. Therefore, collectively these millions of farmers have a significant impact on economies , the environment (soil, water, biodiversity) and social fabric of communities (human rights, labour conditions). There are strong market drivers for sustainable food (& fibre) production. The GRI indicators do not suit food (& fibre) production, evidenced by a notable gap in farms particpating in GRI. Farms are very unlikely to report as they are usually private companies and family owned. However, most of the world's farmers belong to an industry organisation or cooperative that represents them regionally or nationally. Guidelines and appropriate indicators should be produced so these industry organisations can report on behalf of their farmer stakeholders. eg xxx cotton growers associations, xxx farmers’ federation, xx wheat producers, . Similar to the NGO sector supplement, but with some more relevant environmental indicators (farms are not like factories). (Note the food production activity - should be food and fibre production. ie to include cotton and wool).

Water withdrawal

Risks and impacts on fresh water availability

Water (in m3) used per amount (e.g. in tonnes) of product manufactures Groundwater consumption in m3


Access to suitable water supply (quantity and quality)

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* Water consumption and needs - Impacted water sources - Activities to reduce consumption and/or reliance on potable water sources - Water efficiency - Coping with water restrictions - Future challenges The dairy industry is heavily reliant upon water availability with dairy farming in Australia, accounting for one third of land under irrigation. For the 66-month period ending in May 2007, 23.1% of Australia was in the lowest rainfall decile. Much of the Murray–Darling Basin continued to suffer from severe drought on this longer time-scale (Braganza, 2008). The level of rainfall had a significant impact on the dairy industry in terms of water availability for pasture irrigation, dairy herd consumption and other related uses. Climate variability and changing land use patterns (i.e. increased plantations near farms, urbanisation), along with emerging policy in Australia has caused uncertainty in the dairy farm sector regarding the ongoing security of water supply. Access to water is highly dependent upon regulation and price. - The periodic drought events that impact Australia’s agriculture sector are expected to become more severe. - The amended Murray Darling Basin Plan will still likely result in a 30% reduction in water diversions for agriculture, after accounting for the Commonwealth’s



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assumed infrastructure savings, driving up the cost of water borne by farmers.

Within this context of ever-decreasing supplies of clean, freshwater, the challenge for the Food and Agriculture industry in the next three to five years will be ensuring access to needed water while optimizing water management objectives to avoid conflict with other water users. The Food and Agriculture industry is one of the largest users of freshwater in the world. In the U.S., agricultural water represents 81 percent of all water consumed in the nation, much of which comes from groundwater sources. The cumulative depletion of groundwater in the U.S. spread out over the surface of the oceans would be equivalent to about a 1.3mm rise in sea level.


Sustainable water management referring to efficient practices to minimise water use for agriculture. Water use practices. Total water consumption and water intensity. Over a billion people currently have no access to clean drinking water. Although water covers more than two-thirds of the Earth’s surface, the vast majority of this is salt water. Only around 0.5 per cent of the world’s total water resources is available to people as fresh water in the form of groundwater or surface water. And 70 per cent of this is consumed by agriculture. For this reason, the agricultural sector has a particular responsibility




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here. In view of the fact that drinking water is set to become even scarcer, due in part to the growing world population and the consequences of climate change, a committed approach in this area is vital. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25).

KPI 14 Water Abstraction Definition Water is an essential resource that is required for a healthy environment and is used in the production and provision of numerous goods and services, such as electricity. In the UK approximately a third of drinking water is abstracted from groundwater, whilst the remainder comes from surface water. Abstraction of water can have significant local, or more widespread, impacts on the environment. The threat of climate change, resulting in severe droughts, floods and storms, also constitutes a challenge for water resources management. Countries around the world are aware of the need to use water resources more efficiently and reduce waste in order to ensure availability of the resource in the long term. To achieve this goal various market and financial instruments have been put in place, such as abstraction charges, effluent consents and pricing mechanisms. Processes




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Water can be abstracted for public water supply to produce drinking water following treatment. It can also be abstracted directly for use by businesses for a wide variety of uses including irrigation and for industrial processes (e.g. coolant, carrier or solvent purposes). Sectors Water is abstracted by various companies including water and sewerage companies, industrial and chemical companies, and power companies. Many sectors rely heavily on supplied water, although this impact should be reported as a supply chain impact and not a direct KPI. For more information please refer to Figure 4 and to the section on supply chains (Section 4.5). Calculation or measurement procedures For abstracted water, the majority of charges are levied according to the licensed volume, but actual volumes abstracted are reported to the Environment Agency. It is the actual volumes abstracted that should be measured. Reporting guidance The table overleaf illustrates the scope of measures that should be reported. In most cases reporting will be much simpler, as most companies focus on a specific type of abstraction. The most appropriate way of reporting abstracted water should be in cubic metres. If an estimation method has been used this should also be reported. Compliance with any abstraction consents,



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such as those provided by the Environment Agency in the UK, should also be reported. Companies should also discuss whether water has been re-used or returned to source (e.g. cooling water). Direct abstraction should be reported as the volume taken, not the licensed volume. Water use It is important to distinguish water abstraction from the use of supplied water. The environmental impacts associated with supplied water use are indirect and more guidance on how these can be reported can be found in section 4.5 – Supply Chains.

The judicious management of water resources will play a key role in improving food security and sustainable agriculture Agriculture accounts for approximately 70% of all withdrawn fresh water. Thus, the judicious management of water resources, from irrigation to industrial and consumer use, will play a key role in improving food security and sustainable agriculture. Moving from flood irrigation, which can waste large amounts of water, to more targeted and efficient forms of irrigation will be important.




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Water consumption and management in water scarce areas

The environmental impacts of Food Production are huge, and demographic growth is putting an ever-growing strain on limited earth resources, mainly land and water. Water scarcity, already impacting food commodity prices (example of rice production in Australia in 2008), is expected to affect a vast majority of countries in the coming decades. This is a significant issue for companies in this sector as 70% of the water used globally is for agriculture (almost 90% in some developing countries).

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Biodiversity management and protection

Soil biodiversity Conservation measures for soil biodiversity include: Plant cover supports soil protection and biodiversity, - Mulching - Conservation tillage / no tillage - Location specific tillage - Adequate crop rotation - Appropriate use of fertilisers and pesticides - Protection of landscape elements Soil biodiversity is one of the richest, most complex biological communities on earth - it is home to a larger share of biodiversity and genetic diversity than tropical forests. The mites, lice and bacteria that inhabit the world beneath our feet are vital for maintaining balanced ecosystems and agricultural production - quite simply, we could not live without them.. The primary role of soil biota is to recycle organic matter that is derived from the “above-ground plant-based food web”. Soil is in close cooperation with the wider biosphere - the maintenance of fertile soil is “one of the most vital

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ecological services the living world performs”; the “mineral and organic contents of soil must be replenished constantly as plants consume soil elements and pass them up the food chain” (Baskin, 1997). The correlation of soil and biodiversity can be observed spatially – for example, both natural and agricultural vegetation boundaries correspond closely to soil boundaries, even at continental and global scales (Young & Young, 2001). Some problems which can happen if efforts aren't made to preserve soil biodiversity are: Soil acidification, Soil structure decline, Soil sodicity, Soil salinisation, and Soil erosion.

Protecting the natural environment including, biodiversity, effluents and waste, managing erosion and salinity. - Strategies and programs to manage negative impacts on biodiversity - Strategies and programs to manage effluent run-off (soil and river health) - Recycling initiatives and re-use of solid materials (inc. packaging) - Strategies and programs to reduce so The dairy industry is a major agricultural exporting and food processing industry in Australia. Dairy production is one of the more energy, water and fertiliser-intensive land uses, and is associated with negative environmental impacts. Impacts occur right along the value chain. How

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these impacts are managed will affect the ongoing sustainability and viability of the industry. As dairying becomes more intensive, ecological impacts could potentially become more severe.

The conservation of biological diversity is a critical component of sustainability at the field/stand level as well as at the landscape level. An integrated resource management plan will address the environmental risks associated with current and future production, appropriate to the scale and intensity of the operation


A sustainable agriculture system meets the following criteria: land tenure is established; soil fertility is maintained and improved; water quality is enhanced; biodiversity is protected; farmers, farm workers, and all other actors in the agriculture supply chains earn livable incomes; food is affordable and nutritious; businesses can be competitive and efficient; and the use of energy and the discharge of waste are within the capacity of the earth to absorb forever Sustainable agriculture, as it pertains to business, is defined by how a business organization conducts its direct or indirect operations in a way that is resource efficient, strengthens the resource base and environment on which agriculture depends, provides for basic human food needs, enhances the quality of life for farmers and society, and is economically viable.




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Sustainable agriculture systems, if properly implemented, can lead to poverty reduction, increased food security, and good environmental stewardship on a global level. It can create shared value (food security, environmental sustainability and economic opportunity) for companies and the communities in which they work. When sustainable agriculture systems produce enough nutritious food to feed the world, and that food is accessible to the world’s population, particularly the poorest, food security will follow.

Investments in ecosystems and biodiversity


Soil management

Farming practices

Poor farming practices leave soil vulnerable to be swept away by wind and rain. Better farming practices can halt and even reverse the process of soil degradation. At the same time, farmers need to use existing farmland more efficiently and investors need to make responsible agricultural investments. Sustainable farming solutions include not tilling the land, crop rotations, bringing vegetation back to degraded land and planting vegetation around fields to prevent erosion.


Farming practices - Soil erosion

Risks of erosion are largely attributed to the: continued cultivation of fragile and marginal soils; overgrazing of pasture, especially in hilly areas; and poor uptake of soil conservation practices. In some regions erosion is aggravated by the increasing incidence and severity of droughts and/or heavy rainfall events, and in some countries land clearing. The reduction in agricultural




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land susceptible to moderate to severe risk of erosion is mainly linked to the growing uptake of soil conservation practices, such as the adoption of reduced or no tillage, and the conversion of agricultural land to forestry. Estimates show that the costs of soil erosion damage can be considerable. On-farm costs correspond essentially to the agricultural production foregone as a result of soil degradation lowering crop productivity. Off-farm costs, resulting from off-farm sediment flows, include: extra expense to treat drinking water; costs of dredging rivers, lakes and reservoirs; damage to roads and buildings; and harmful effects on aquatic ecosystems, including recreational and commercial fishing

Soil conservation and carbon stock

Soils are vulnerable to carbon losses through degradation. They also release greenhouse gases to the atmosphere as a result of accelerated decomposition due to land use change or unsustainable land management practices. Soil carbon stocks are highly vulnerable to human activities. They decrease significantly (and often rapidly) in response to changes in land cover and land use such as deforestation, urban development and increased tillage, and as a result of unsustainable agricultural and forestry practices. Soil carbon losses are an important form of degradation that can result in loss of productivity and of the ability to provide other ecosystem service


Soil fertility Soil stability is vital, and that soil fertility and organic matter are critical to the sustainable production of food, feed, fiber, and fuel




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An integrated resource management plan will address the environmental risks associated with current and future production, appropriate to the scale and intensity of the operation

A sustainable agriculture system meets the following criteria: land tenure is established; soil fertility is maintained and improved; water quality is enhanced; biodiversity is protected; farmers, farm workers, and all other actors in the agriculture supply chains earn livable incomes; food is affordable and nutritious; businesses can be competitive and efficient; and the use of energy and the discharge of waste are within the capacity of the earth to absorb forever Sustainable agriculture, as it pertains to business, is defined by how a business organization conducts its direct or indirect operations in a way that is resource efficient, strengthens the resource base and environment on which agriculture depends, provides for basic human food needs, enhances the quality of life for farmers and society, and is economically viable. Sustainable agriculture systems, if properly implemented, can lead to poverty reduction, increased food security, and good environmental stewardship on a global level. It can create shared value (food security, environmental sustainability and economic opportunity) for companies and the communities in which they work. When sustainable agriculture systems produce enough nutritious food to feed the world, and that food is




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accessible to the world’s population, particularly the poorest, food security will follow.

Agriculture natural resource management * Economic (production figures and quality, value, income, employment). - Environmental ( Water use efficiency and productivity, water quality, soil health, weed pest and land management, fertiliser efficiency biodiversity trends, greenhouse and carbon footprint, Pesticide use, stewardship of GM crops) - Social (education, employment, health and safety, employment conditions, human rights of staff, community attitudes, ownership, industry demographics, compliance with legal statutes). It is the environmental ones that need some adjustment. 1) Agriculture is the biggest industry in terms of its spatial area on the planet. 2) It is also the largest user of natural resources (land and water) and one of the largest users of human labour on the planet. 3) There are millions farmers producing food and fibre. Therefore, collectively these millions of farmers have a significant impact on economies , the environment (soil, water, biodiversity) and social fabric of communities (human rights, labour conditions).

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There are strong market drivers for sustainable food (& fibre) production. The GRI indicators do not suit food (& fibre) production, evidenced by a notable gap in farms participating in GRI. Farms are very unlikely to report as they are usually private companies and family owned. However, most of the world's farmers belong to an industry organisation or cooperative that represents them regionally or nationally. Guidelines and appropriate indicators should be produced so these industry organisations can report on behalf of their farmer stakeholders. eg xxx cotton growers associations, xxx farmers’ federation, xx wheat producers, . Similar to the NGO sector supplement, but with some more relevant environmental indicators (farms are not like factories). (Note the food production activity - should be food and fibre production. ie to include cotton and wool).

Soil fertility and nutrient balance

Inputs of nutrients, such as nitrogen and phosphorus, are important in farming systems as they are critical in raising crop and forage productivity, and a nutrient deficiency can impair soil fertility and crop yields. A buildup of surplus nutrients in excess of immediate crop and forage needs, however, can lead to nutrient losses representing not only a possible cause of economic inefficiency in nutrient use by farmers, but especially a source of potential harm to the environment. This can occur in terms of water pollution (e.g. eutrophication of surface water caused by nutrient

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runoff and groundwater pollution by leaching), and air pollution, notably ammonia, as well as greenhouse gas emissions. An additional environmental issue concerns the sustainability of phosphorus resources, as world reserves are diminishing (Johnston and Steén, 1997).

Agricultural farming practices

Monoculture Sustainable agriculture and fisheries, which produce food and beverages in an environmentally sustainable and animal-friendly way. supplier standards and monitoring - health and nutrition issues of products - natural products - nanotechnology - food safety management system - animal testing - agriculture approaches - livestock farming and fisheries - agricultural genetic engineering Several unsustainable practices, such as the industrialisation of food production, deforestation, monoculture, intensive use of artificial fertilisers and pesticides, agricultural genetic engineering, inhumane methods of husbandry and slaughtering and overfishing of the oceans are wide-spread in food and beverages industry. These areas often lack comprehensive, ambitious and binding standards and programmes applying to all raw materials. To ensure food supply for the growing population in an environmentally sustainable, socially fair and animal-friendly way, the

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companies must put effort into developing and implementing sustainable practices. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25). '- Some implemented labels and certification systems, such as Marine Stewardship Council (MSC) label, certification by the Rainforest Alliance, industry-wide initiative Roundtable on Sustainable Palm Oil (RSPO) refer to more sustainable agricultural or fishing practices.

Deforestation Expansion of plantations and industrial agricultural production frontier

Expanding frontier of plantations and industrial agricultural production into natural rainforests (Intact Forest Landscapes). Unchecked large-scale expansion of the industrial agricultural production could lead to environmental devastation, and precipitate social and economic havoc Some acquisitions put forests, ecosystems and the climate at risk, and threaten the livelihood of the people depending on the land.


Seed quality standards

High-quality seed is a pre-requisite to achieve maximum outputs and good returns for farmers. In many countries crop production and seed trade are also important sources of rural employment and foreign income. Seed quality can be described as the overall value of the seed, resulting from genetic characteristics and from all other factors affecting the development, maturation and storability of the seed.




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World population will increase from 6.9 billion in 2010 to 9.3 billion people in 2050; and agriculture will play a fundamental role in meeting the world’s growing demand for food, feed and fibre. In order to feed the world population in 2050, agricultural production will have to almost double, and most of the incremental output will have to come from increases in yields (FAO, 2009). High-quality seed is a pre-requisite to achieve maximum outputs and good returns for farmers

Emissions to air - GHG emissions

Agricultural practices, transport, manufacturing and packaging

Climate change referring to the emissions of greenhouse gases through agricultural practices, transport of goods and cooling systems. * environmental performance indicators (e.g. energy consumption, greenhouse gas emissions) - climate change strategy '- greenhouse gas emission reduction targets and action plans '- strategy, measures and targets for transport The influence which the food industry has on climate change, through the cultivation of crops and the breeding of livestock as well as processing, packaging and transportation, is huge. In addition, agricultural production releases an enormous quantity of greenhouse gases. In turn, climate change poses a major business risk for the sector: the predicted global warming and the extreme weather phenomena, such as drought, floods and storms, expected to result from it will alter the world’s fauna and flora and make it more difficult to




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obtain agricultural raw materials in future. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25). - The transportation and processing of foodstuffs are responsible for 80 per cent of the sector’s entire energy consumption. In addition, livestock farming alone, via methane emissions, is responsible for 18 per cent of the greenhouse gas emissions caused by humans globally. It is an entirely realistic scenario that due to climate change there will be shortages of raw materials.

Dealing with energy challenges (reducing energy consumption and related CO2 emissions) remains the environmental issue which gets most attention from the companies in our coverage. Through its sourcing, processing and transportation, the food industry – comprising both agribusinesses, food manufacturers and packagers – accounts for around a third of global greenhouse gas (GHG) emissions. Agriculture accounts for half of these 30%. The sector itself is also one of the most affected by climate upheaval and is periodically affected by extreme climate events (droughts, floods).

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Agriculture natural resource management * Economic (production figures and quality, value, income, employment).

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- Environmental ( Water use efficiency and productivity, water quality, soil health, weed pest and land management, fertiliser efficiency biodiversity trends, greenhouse and carbon footprint, Pesticide use, stewardship of GM crops) - Social (education, employment, health and safety, employment conditions, human rights of staff, community attitudes, ownership, industry demographics, compliance with legal statutes). It is the environmental ones that need some adjustment. 1) Agriculture is the biggest industry in terms of its spatial area on the planet. 2) It is also the largest user of natural resources (land and water) and one of the largest users of human labour on the planet. 3) There are millions farmers producing food and fibre. Therefore, collectively these millions of farmers have a significant impact on economies , the environment (soil, water, biodiversity) and social fabric of communities (human rights, labour conditions). There are strong market drivers for sustainable food (& fibre) production. The GRI indicators do not suit food (& fibre) production, evidenced by a notable gap in farms participating in GRI. Farms are very unlikely to report as they are usually private companies and family owned. However, most of the world's farmers belong to an



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industry organisation or cooperative that represents them regionally or nationally. Guidelines and appropriate indicators should be produced so these industry organisations can report on behalf of their farmer stakeholders. eg xxx cotton growers associations, xxx farmers’ federation, xx wheat producers, . Similar to the NGO sector supplement, but with some more relevant environmental indicators (farms are not like factories). (Note the food production activity - should be food and fibre production. ie to include cotton and wool).

Total CO2 emissions in million tonnes


Emissions to air - GHG emissions and other emissions

Agricultural practices, use of machinery and crop production

Climate change including both contribution to climate change through greenhouse gas emissions and exposure to climate variability and physical impacts (water availability, temperatures changes and severe weather events) * GHG emissions by source (pre-farm, on-farm, manufacturing and retail) - Strategies and programs to reduce emissions (methane and nitrous oxide) through the value chain (ie. changes to animal diet and nutrient management) - Negative impacts to productivity and profitability as a result of climate variability - Adaptation and mitigation strategies, programs and performance

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Agriculture (inc. Dairy) is viewed as a significant contributor to Australia's GHG emissions. In turn, it is significantly exposed to the negative impacts of climate variability. Agriculture accounts for about 17% of Australia’s greenhouse gas emissions and the Dairy Industry contributes about 2% of total national emissions. (Dairy Australia website) However, in addition to the greenhouse gas emissions counted as ‘on-farm’, the industry emits further emissions through farm inputs via use of machinery, fertilisers and chemicals which aren't allocated to the sector. The productivity of livestock industries will be influenced by the changes in the quantity and quality of available pasture through climate variability, as well as by the effects of temperature increases on livestock and severe weather events such as floods, droughts and fires. Government carbon tax costs have an impact on energy use on farms and in manufacturing. Climate variability is likely to impact on: - Adaptability & sustainability of proven production systems - Increased complexity and need for long term resilience of business - Increased competition for irrigation water - Volatility of feed input supply and costs - Uncertainty of policy settings affecting resource access and emissions

Emissions come from three main sources: · Direct emissions, including use of fossil fuels in farm operations




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and enteric fermentation from livestock; · Indirect use of embodied energy in inputs, particularly those that are energy-intensive to produce, such as fertilizers;· Cultivation of soils resulting in the loss of soil organic matter. The Food and Agriculture industry is responsible for about 15 percent of global greenhouse gas emissions, with particularly high contributions from the potent gasses, nitrous oxide and methane.

Total CO2, NOx, SOx, VOC emissions in million tonnes 153 Financial Markets & Information Users

Food waste management

Minimization and management of food waste. Total amount of food waste generated and breakdown of disposal (i.e. donation to feed hungry people, animal feed, waste-to-energy, compost/land application, or landfill) Food waste is an issue that has earned global attention, with nearly 40 percent of all food never being consumed. It has social implications (global hunger, child hunger) and environmental implications (organic wastes creating GHGs in landfills).

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Waste management

Recycling and reuse of solid materials

Protecting the natural environment including, biodiversity, effluents and waste, managing erosion and salinity.

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- Strategies and programs to manage negative impacts on biodiversity - Strategies and programs to manage effluent run-off (soil and river health) - Recycling initiatives and re-use of solid materials (inc. packaging) - Strategies and programs to reduce so The dairy industry is a major agricultural exporting and food processing industry in Australia. Dairy production is one of the more energy, water and fertiliser-intensive land uses, and is associated with negative environmental impacts. Impacts occur right along the value chain. How these impacts are managed will affect the ongoing sustainability and viability of the industry. As dairying becomes more intensive, ecological impacts could potentially become more severe.

Waste Scope I: Total waste in tonnes Waste Scope II: Percentage of total waste which is recycled


Water pollution Water discharge and effluent run-off

Protecting the natural environment including, biodiversity, effluents and waste, managing erosion and salinity. - Strategies and programs to manage negative impacts on biodiversity - Strategies and programs to manage effluent run-off (soil and river health)

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- Recycling initiatives and re-use of solid materials (inc. packaging) - Strategies and programs to reduce so The dairy industry is a major agricultural exporting and food processing industry in Australia. Dairy production is one of the more energy, water and fertiliser-intensive land uses, and is associated with negative environmental impacts. Impacts occur right along the value chain. How these impacts are managed will affect the ongoing sustainability and viability of the industry. As dairying becomes more intensive, ecological impacts could potentially become more severe.

Water pollutants from agriculture include runoff and leaching into water systems from nutrients, pesticides, soil sediments, and other contaminants (e.g. veterinary products). Clean water is vital in securing economic benefits for agriculture and other sectors, meeting human health needs, maintaining viable ecosystems, and providing societal benefits, such as the recreational, visual amenity, and cultural values society attaches to water systems.


The vast extent of agricultural activities around the world contributes significantly to both economic productivity and water-pollutant loads. Since the 1970s, there has been growing concern over the increases in nitrogen, phosphorus, and pesticide runoff into surface and




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groundwater. Intensive cultivation and growing concentrations of “factory” livestock or aquaculture operations have also long been known to produce large non-point source contributions of pollutants to surface and groundwater pollution. Beyond nitrate contamination, agricultural activities are also linked to the salinization of surface water, eutrophication (excess nutrients), pesticides in runoff, and altered erosion and sedimentation patterns. The quality of water is central to all of the roles that water plays in life. Safe water plays an essential role in drinking water and health – good water quality is fundamental to the network of life and livelihood that water supports. Water is the source of life on earth, and human civilizations blossomed where there was reliable and clean freshwater. Use of water by humans – for drinking, washing, and recreation – requires water free from biological, chemical, and physical sources of contamination. Plants, animals, and the habitats that support biological diversity also need clean water. Water of a certain quality is needed to grow food, to power cities, and to run industries.

Social Labor conditions Human capital development

Investing in dairy people (Skills & training, labour welfare, preparedness for emerging practices, adaptive technologies) * Education and training opportunities provided - Career pathways - Fostering innovation

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- Strategies for attraction and retention of staff With increasing scale of operations, an increasing amount of milk in Australia will be produced on larger scale farms requiring more skilled employees, compared with the more traditional model of family labour only. There is a growing concern about the availability and skills level of labour and an increasing demand for higher levels of farm management skills, with large farms better able to split operations into specific areas eg milk harvesting, herd health and nutrition, pasture and feed production etc. This will require more management and production supervisory skills and staff. If farms fail to provide workplaces that are attractive, rewarding and efficient, their ability to achieve sustained business success will be severely limited. Sourcing the people and skills the industry needs to grow is a key issue. Continual improvement of the skill base of the farm workforce is essential if the dairy industry is to increase its productivity, profitability and competitiveness in national and international markets. International market volatility, industry consolidation and new technological advances are key trends driving changes to the structure of the dairy industry workforce and its skill development needs.

Migrant workers Human trafficking risks

Trafficking in persons, or human trafficking, involves the recruitment, transportation, transfer, harbouring or receipt of a person (a woman, man or a child), often over international borders but also frequently within the




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boundaries of a single country, for the purpose of exploitation. It is a widespread abuse, affecting developing countries, countries in transition and industrialized market economies alike. The majority of victims of human trafficking are between the ages of 18 and 24, with most having received a job offer prior to their departure

Safe labour migration is a key driver of sustainable economic development in both sending and receiving countries. The protection of migrant workers is becoming an increasingly important issue for a number of global industries, as well as for home and host governments. Trafficking of workers, particularly women and girls, into global supply chains remains a significant reality, in part due to poorly regulated recruitment industries. Pockets of good and innovative practice in responsible recruitment and combating trafficking exist but have yet to be taken to scale. Over 215 million international migrants living outside their countries of origin play a vital role in the global economy. Recorded remittances received by developing countries, estimated to be US$325 billion in 2010, far exceed the volume of official aid flows and constitute more than 10 percent of gross domestic product (GDP) in many developing countries. The vast majority of migrants today are low-paid workers in industries ranging from apparel, electronics and construction to agriculture, hospitality, and domestic service. From the point of recruitment, through employment and to the point of




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return home, these workers are vulnerable to exploitation. Protection mechanisms to safeguard their rights continue to be wholly inadequate and access to legal remedy is poor in both host and home countries.

Labor and working conditions

Accurate statistics are hard to find given the number of illegal migrants that are involved in the agricultural sector, but in many developed countries migrant workers account for a significant share of the workforces in agricultural production and processing. Agricultural production has always been, a source of and destination for many migrants, and thus the socioeconomic impact of migration has always been strong on the agricultural sector and in rural communities. Three key issues that companies should pay attention to are: (1) difficulties in providing adequate health care, (2) poor working conditions, and (3) lack of clarity and cohesion in public policies regarding migrants. International migration within the agricultural sector has some of the same impacts as rural to urban migration on the “sending communities”, but a critical difference is remittances. The impact of international migration on receiving farming communities is extensive and cuts across the full range of economic, social, cultural, and political issues. Most obvious is the positive benefit of having a qualified workforce to produce agricultural goods and services either for domestic consumption or export. In some countries international migrants make up a large proportion of the agricultural workforce and the production of farm goods would be extremely




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difficult, if not impossible, without them. Migrant farm workers also purchase goods and services in the local community and thereby provide support to local economies. On the challenging side, migrant populations often have difficulty assimilating into local communities, and their presence can cause social and political disruptions and thus difficulties for agricultural producers.

Occupational health and safety

Accurate statistics are hard to find given the number of illegal migrants that are involved in the agricultural sector, but in many developed countries migrant workers account for a significant share of the workforces in agricultural production and processing. Agricultural production has always been, a source of and destination for many migrants, and thus the socioeconomic impact of migration has always been strong on the agricultural sector and in rural communities. Three key issues that companies should pay attention to are: (1) difficulties in providing adequate health care, (2) poor working conditions, and (3) lack of clarity and cohesion in public policies regarding migrants. International migration within the agricultural sector has some of the same impacts as rural to urban migration on the “sending communities”, but a critical difference is remittances. The impact of international migration on receiving farming communities is extensive and cuts across the full range of economic, social, cultural, and political issues. Most obvious is the positive benefit of having a qualified workforce to produce agricultural




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goods and services either for domestic consumption or export. In some countries international migrants make up a large proportion of the agricultural workforce and the production of farm goods would be extremely difficult, if not impossible, without them. Migrant farm workers also purchase goods and services in the local community and thereby provide support to local economies. On the challenging side, migrant populations often have difficulty assimilating into local communities, and their presence can cause social and political disruptions and thus difficulties for agricultural producers.

Recruitment and employment

Recruitment and employment of migrant workers Number of migrant workers employed Countries of origin Gender of workers Positions within company Length of contracts Recruitment channels Any fees for recruitment Passport retention Migrant workers both internal and external are a significant and growing feature of all company activities. There are over 200 million migrants in the world. They are found within nearly all business sectors and across all regions. Many migrant workers, particularly those working in unskilled jobs are subject to discrimination and are vulnerable to exploitation and abuse.




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For many migrants exploitation begins during recruitment. Exorbitant fees and other charges, often at usurious rates of interest can leave many migrant workers effectively bonded labour whatever the subsequent conditions of employment. Company due diligence and reporting should therefore extend into the supply chain for labour.

Occupational health and safety management

Education and training on health and safety issues

Employee safety Employee health and safety trainings at farm and processors. What programs and activities in place to inform and train employees about health and safety, available in their native language. Dairy farm employees work with large life animals that need to be handled with care so that employee and animals don't get injured. Large animals could kick or squeeze employees. Particular care is needed for handling bulls. Also, dairy employees on the farm as well as in processing plants work with large equipment and machines.

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Investing in dairy people (Skills & training, labour welfare, preparedness for emerging practices, adaptive technologies) * Education and training opportunities provided - Career pathways - Fostering innovation - Strategies for attraction and retention of staff

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With increasing scale of operations, an increasing amount of milk in Australia will be produced on larger scale farms requiring more skilled employees, compared with the more traditional model of family labour only. There is a growing concern about the availability and skills level of labour and an increasing demand for higher levels of farm management skills, with large farms better able to split operations into specific areas eg milk harvesting, herd health and nutrition, pasture and feed production etc. This will require more management and production supervisory skills and staff. If farms fail to provide workplaces that are attractive, rewarding and efficient, their ability to achieve sustained business success will be severely limited. Sourcing the people and skills the industry needs to grow is a key issue. Continual improvement of the skill base of the farm workforce is essential if the dairy industry is to increase its productivity, profitability and competitiveness in national and international markets. International market volatility, industry consolidation and new technological advances are key trends driving changes to the structure of the dairy industry workforce and its skill development needs.

Occupational health and safety risks

Chemical fertilizer, herbicide and pesticide use

Agricultural pesticides contribute to raising agricultural productivity but also pose potential risks to human health and the environment. Data refer to active ingredients of insecticides, fungicides, herbicides and other pesticides including plant growth regulators and rodenticides.




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The risks vary greatly depending on pesticide’s inherent toxicity (or hazard) and exposure. Exposure depends on a number of variables, such as the application method, the weather after application, its environmental mobility and persistence, and proximity to water courses.

Acute and chronic pesticide poisoning among agriculture and plantation workers.


Corruption Administrative stewardship of land

As evident around the globe, where land governance is deficient, high levels of corruption often flourish. Weak land governance tends to be characterised by low levels of transparency, accountability and the rule of law. Under such a system, land distribution is unequal, tenure is insecure, and natural resources are poorly managed. As a consequence, social stability, investment, broad-based economic growth and sustainable development are undermined. Unprecedented pressures on land have been created as new areas are cultivated, taken over by expanding urban centres or are abandoned due to degradation, climate change and conflict. These developments have strained the rules, processes and institutions that determine which land resources are used, by whom, for how long and under what conditions.


Child labor Child labour - incidents and actions to address root causes of child labour HR6 Reporting on incidents and actions taken after




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incidents. Reporting on actions taken to address root causes of child labour in relevant communities. Companies exposed to direct or indirect child labour risks should clearly define not only the policies related to child labour risks but also the incident management processes and how they are addressing the root causes of child labour to eliminate child labour. Violation of children's rights: articles 3, 28 and 31.

Indigenous peoples rights

Adherence to international agreements (e.g. Equator Principles and Free Prior and Informed Consent (FPIC) of Indigenous Peoples)

The Rights of Indigenous People requires active management & engagement due to societal, legal & financial impacts of companies operating in extractive industries. The GRI should solicit companies’ policies and practices on the question of Free Prior and Informed Consent (FPIC) by asking if company explicitly recognizes or references the UN Declaration on the Rights of Indigenous Peoples or the ILO Conventions 107 and 169. Reporting should go beyond compliance violations to explicitly address reporters’ proactive strategies to address their impact on Indigenous communities (particularly with respect to cultural heritage) and how well companies are equipped to anticipate, forestall and mitigate negative impacts. Report on operations where indigenous communities are affected by activities (where FPIC applies), where specific engagement strategies are in place, number of projects that have failed FPIC review processes, and any projects that were preempted or




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discontinued due to that failure. Report on measurement and tracking of indicators of Indigenous Peoples’ community well-being, (e.g. life expectancy, substance abuse, domestic violence, native language literacy, and intensity of cultural practices) before during and after project. Disclose what materials and training the company provides to its employees pertaining to the rights of Indigenous Peoples. Land grabs of traditional lands and territories is one a major problems faced by Indigenous Peoples globally. With the increased value of commodity crops land grabs by forestry and agriculture companies is on the rise. Commercial fishing competes with Indigenous populations for a resource that is increasingly scarce due to overfishing and mismanagement. LEGAL: The UN Declaration on the Rights of Indigenous Peoples (IP) and with the expectation that these rights will be adopted both nationally and internationally as legal standards, corporations should be thinking from the highest levels about how they are incorporating these specific human rights into their management structure. FINANCIAL: While there are some examples of successful FPIC, there are many more where a company's operations have been shut down, projects delayed or in some cases forcibly abandoned due to blockades, legal actions or permit appeals. REPUTATIONAL: Companies that ignore the rights of local communities and/or respond to protests through the employment of private security forces are highly exposed to human rights violations, and face



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reputational risks that can lead to lost revenue or destruction of shareholder value. Any company involved in forestry, agriculture or fishing on the lands of Indigenous People will have an impact. It is the company's responsibility to ensure that the impact is positive. Potential negative impacts include but are no limited to forced displacement, competition for resources, contamination of resources, division of local tribes, and loss of cultural heritage sites. Risks include not only operational (financial) but reputational. FPIC provides the opportunity for companies to operate on Indigenous Peoples' land in a manner that respects their right to self-determination, provides equitable economic benefits, and serves to preempt multiple financial, legal, regulatory and reputational risks. Opportunities exist for economic partnerships that not only provide communities with an equitable stake in company success, but can serve to increase efficiency and profitability of operations through application of Indigenous Peoples' unique expertise of their territories.

Land use rights Risks and conflicts with local communities and indigenous peoples

The right to access the land is not restricted by a narrow interpretation of property rights. The rights‐holders have human rights, which may not include land‐ownership rights, partly because some countries do not recognize individual property rights, and partly because some people may not have legal title to the land on which they live or work, but may have customarily done so for years, if not generations. That aspect has huge significance for the landless and other rights are also involved. It affects




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those with land rights, and those who work on the land, such as sharecroppers, and those who use land seasonally, such as pastoralists or informal businesses common in many parts of Africa. These groups often correlate with those that are already the most vulnerable groups in society (e.g. due to gender, caste or age discrimination). Their not owning property rights does not mean they do not have rights – The impact on human rights is felt much before business operations begin – even when a company expresses its intention to develop a project in a particular area, there are human rights implications, because of raised expectations within a community. The power asymmetry between State and communities, between private economic interests and individuals or groups, often becomes the determining factor in shaping the land ownership dilemma. Business, civil society, and governments have a common interest in developing a framework that prevents human rights abuses at all stages of business’ relationship with land – before acquisition, during acquisition, and after operations have commenced and, if necessary, concerning appropriate relocation, rehabilitation and compensation. The extraction of natural resources – oil, gas, and mining – has commanded considerable attention in the area of business and human rights, but other businesses – tourism, manufacturing, infrastructure projects, power plants, public highways, irrigation projects, and even urban office complexes and supermarkets require land.



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Consumer health and safety risks

Industrial farming practices

Recent food scandals such as mad cow disease have entrenched supply chain safety issues at the heart of consumer choice. The current model of industrial farming practices is being called into question; in particular, the widespread use of antibiotics in livestock farming has been publicised widely as a health issue. Other concerns include food additives, chemicals such as pesticides used in agriculture, and plastic packaging containing endocrinal heckler. Public views on GMOs have also thus far prevented widespread use in Europe.

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Agricultural standards and certification

Sustainable agriculture and fisheries, which produce food and beverages in an environmentally sustainable and animal-friendly way. supplier standards and monitoring - health and nutrition issues of products - natural products - nanotechnology - food safety management system - animal testing - agriculture approaches - livestock farming and fisheries - agricultural genetic engineering Several unsustainable practices, such as the industrialisation of food production, deforestation,




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monoculture, intensive use of artificial fertilisers and pesticides, agricultural genetic engineering, inhumane methods of husbandry and slaughtering and overfishing of the oceans are wide-spread in food and beverages industry. These areas often lack comprehensive, ambitious and binding standards and programmes applying to all raw materials. To ensure food supply for the growing population in an environmentally sustainable, socially fair and animal-friendly way, the companies must put effort into developing and implementing sustainable practices. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25). '- Some implemented labels and certification systems, such as Marine Stewardship Council (MSC) label, certification by the Rainforest Alliance, industry-wide initiative Roundtable on Sustainable Palm Oil (RSPO) refer to more sustainable agricultural or fishing practices.

Sustainable, Organic & Fair Trade Products Percentage of total revenue from products with organic origin certified by a member of the International Federation of Organic Agriculture Movements (IFOAM) standards Percentage of total revenue from products certified and stamped as Fair Trade by an affiliate or partner




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organization of Fair Trade Labelling Organizations International (FLO) Percentage of fish certified according to recognized certification schemes for sustainable fishing (MSC – Marine Stewardship Council)

Standards and certifications have evolved to be a tool to enable trust, by providing Traceability and Transparency. As food becomes a ready means for consumers to practice their own form of responsibility and sustainability, these attributes grow in complexity and can include dimensions of social and environmental performance. For companies, this makes delivering on trust increasingly complex and demanding. Trust is the foundation and the goal in the global Food and Agriculture business today. Today and increasingly in the future, safety is part of a growing portfolio of attributes consumers and stakeholders throughout the value chain expect from Food and Agriculture companies.


Product labeling Nutritional information of product

Maximising health and nutrition. Provide valued nutritional products that contribute to good community health outcomes. * Nutritional information of products - Labelling and transparency requirements on products. Consumers are becoming more conscience of their health and allergies are becoming more prevalent.

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Negative health perceptions about dairy products (primarily around fat content) can have a considerable impact on dairy consumption. The dairy industry needs to develop the capability to influence the policy debate, and provide a strong, defendable scientific position on dairy nutrition issues. More stringent requirements for product labelling, ingredients, etc.

Agricultural genetic engineering (GE)

Product safety - Assessment of foods and feeds from GE crops

Safety assessment of foods and feeds derived from genetically engineered crops The development of such a data base indicates the value of having information for safety assessments Web pages: Product Database currently includes 158 entries of transgenic crops and flowers from 14 species. Products are listed with unique identifiers, and the information includes common/scientific names of the host organism and introduced genes, the events and traits, the regulatory elements and relevant links regarding approvals for release and use in countries.


Sustainable agriculture and fisheries, which produce food and beverages in an environmentally sustainable and animal-friendly way. supplier standards and monitoring - health and nutrition issues of products - natural products - nanotechnology




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- food safety management system - animal testing - agriculture approaches - livestock farming and fisheries - agricultural genetic engineering Several unsustainable practices, such as the industrialisation of food production, deforestation, monoculture, intensive use of artificial fertilisers and pesticides, agricultural genetic engineering, inhumane methods of husbandry and slaughtering and overfishing of the oceans are wide-spread in food and beverages industry. These areas often lack comprehensive, ambitious and binding standards and programmes applying to all raw materials. To ensure food supply for the growing population in an environmentally sustainable, socially fair and animal-friendly way, the companies must put effort into developing and implementing sustainable practices. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25). '- Some implemented labels and certification systems, such as Marine Stewardship Council (MSC) label, certification by the Rainforest Alliance, industry-wide initiative Roundtable on Sustainable Palm Oil (RSPO) refer to more sustainable agricultural or fishing practices.

Gene Modified Organisms

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Share of products containing genetically modified organisms or ingredients containing genetically modified organisms in %

Information Users

Food product quality and safety management systems

Ensuring quality and safety of products (Product safety, control of pathogens, origin and type of purchased inputs such as fertilisers, feedstock, traceability) * Description of processes and programs in-place (both regulatory and non-regulatory) to manage process hazards, product safety and integrity. - Adverse outcomes of audits (including product recalls) and subsequent action (i.e. changes to manufacturing or audit processes). Product integrity is critical to image and reputation. Any issues of non-compliance would result in negative impacts for the whole value chain because consumers do not necessarily distinguish between retailers, manufacturers and farmers. The Australian dairy industry has developed stringent quality management systems that are underpinned by comprehensive regulatory requirements. Customer needs, food safety and product traceability are paramount for the quality systems but other factors such as animal welfare, bio-security and environmental sustainability are also important considerations in the development of the quality management programs. The industry works collaboratively with federal and state government regulatory agencies and service suppliers to

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ensure a preventative approach to food safety across the integrated supply chain.

Food security Arable acreage and productivity

Demand/supply imbalance. We expect continued strong demand for agricultural produce over the next 5 years on the back of population growth, greater calorie and protein consumption and the biofuel industry. To match the demand we need to see enhanced growth in arable acreage and improved productivity

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Nutritional quality of food

Public health issues referring to nutrition Product ranges: inclusion of healthier foods and modification of relevant product (e.g. by eliminating transfats and gradually reducing salt and sugar content). Product development. Marketing activities and advertising guidelines. Consumer information on ingredients and nutritional values. Diseases such as obesity, type 2 diabetes and cardiovascular disorders are increasingly referred to as lifestyle diseases. Morbid obesity, in particular, is now classified as an epidemic. According to estimates from the World Health Organisation (WHO), more than a billion people are now overweight, and at least 300 million of these are morbidly obese. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25).


A sustainable agriculture system meets the following criteria: land tenure is established; soil fertility is




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maintained and improved; water quality is enhanced; biodiversity is protected; farmers, farm workers, and all other actors in the agriculture supply chains earn livable incomes; food is affordable and nutritious; businesses can be competitive and efficient; and the use of energy and the discharge of waste are within the capacity of the earth to absorb forever Sustainable agriculture, as it pertains to business, is defined by how a business organization conducts its direct or indirect operations in a way that is resource efficient, strengthens the resource base and environment on which agriculture depends, provides for basic human food needs, enhances the quality of life for farmers and society, and is economically viable. Sustainable agriculture systems, if properly implemented, can lead to poverty reduction, increased food security, and good environmental stewardship on a global level. It can create shared value (food security, environmental sustainability and economic opportunity) for companies and the communities in which they work. When sustainable agriculture systems produce enough nutritious food to feed the world, and that food is accessible to the world’s population, particularly the poorest, food security will follow.

Governments, civil society and the private sector will have to work together to address three challenges of malnutrition – undernutrition, micronutrient deficiency and overnutrition – by reshaping the food and agriculture system to focus on not merely increasing




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production globally, but increasing the nutritional quality of food and access to it by the poorest families. Malnutrition is the number one health risk worldwide. Vitamin A, iodine, folic acid, iron and zinc deficiencies weaken bodies and hinder economic development. In addition, another 1 billion people suffer from being overweight and obese (overnutrition).

Product quality and safety management systems

Assessment and screening of animal ingredients

Food safety is a scientific discipline describing handling, preparation, and storage of food in ways that prevent foodborne illness. This includes a number of routines that should be followed to avoid potentially severe health hazards. Food can transmit disease from person to person as well as serve as a growth medium for bacteria that can cause food poison Ensuring food safety would entail the assessment of animal ingredients and screening them for salmonella, viruses and prions which can affect the health of animals and public health.

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Hygienic conditions for food processing of animal origin

The hygiene of food of animal origin is applicable to all food and all food operators right through the food chain "from farm to fork". They include effective instruments to manage food safety and any food crises throughout the food chain. Edible animal fats are processed to edible fats like lard (pig fat) or tallow (beef fat) and to edible greaves the proteinaceous by products of the fat melting. Both Regulations are a key action component of the Commission strategy to combat and eradicate feed-

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borne crises such as BSE, foot and mouth disease and swine fever. Under both Regulations, only materials derived from animal declared fit for human consumption following veterinary inspection may be used for the production of feeds. They also ban intra-species recycling of proteins i.e. feeding a species with protein derived from the same species. They set out clear rules on what must and may be done with the excluded animal materials, imposing strict identification and traceability system requiring certain products such as meat and bone meal and fats destined for destruction to be permanently marked to avoid possible fraud and risk of diversion of unauthorised products into food and feed. The Regulations introduce new disposal methods such as biogas, composting and co-incineration and certain approved alternative methods, based on scientific evidence. They lay down the requirements for the importation and transit from non-Member countries of certain animal by-products and derived products.

Process hazards, product safety and integrity

Ensuring quality and safety of products (Product safety, control of pathogens, origin and type of purchased inputs such as fertilisers, feedstock, traceability) - Description of processes and programs in-place (both regulatory and non-regulatory) to manage process hazards, product safety and integrity. '- Adverse outcomes of audits (including product recalls)

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and subsequent action (ie. changes to manufacturing or Product integrity is critical to image and reputation. Any issues of non-compliance would result in negative impacts for the whole value chain because consumers do not necessarily distinguish between retailers, manufacturers and farmers. The Australian dairy industry has developed stringent quality management systems that are underpinned by comprehensive regulatory requirements. Customer needs, food safety and product traceability are paramount for the quality systems but other factors such as animal welfare, bio-security and environmental sustainability are also important considerations in the development of the quality management programs. The industry works collaboratively with federal and state government regulatory agencies and service suppliers to ensure a preventative approach to food safety across the integrated supply chain.

Due to the reputational impact on sales, the companies in our coverage have transparent audit and certification procedures to manage their food safety. However, the sector has seen heightened concerns as a number of produced foods have been affected by product recalls related to contamination with salmonella and E. coli, two kinds of food bacteria that cause illness and even death. Such incidents clearly increase reputational and market risk.

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Product safety information and communications

Ingredients, nutritional and health quality of food

Global Food and Agriculture companies today face a public that is highly engaged on topics related to personal health and nutrition and how food choices can impact both. The convergence of technology, access to information and health concerns contributes to the unique environment for food product marketing and communications. Chronic diseases such as obesity and diabetes are increasingly linked to changing patterns of food consumption (together with other contributing factors) and are increasing rapidly in both adults and children. Companies have an opportunity and the ability to develop market and sell more balanced and nutritious food products and to make these available to a wider audience in both developed and developing nations.


Seeds and plants patents

Patent monopolies for seeds and plants

Control of agriculture through the patenting of seeds and plants The agrochemical sector and an increasing number of patent litigation cases have been lodged. Choice for farmers has also been reduced and seed prices are skyrocketing


Other Biomass production

Full Life Cycle Assessment (LCA)

One fundamental objective of biomass-based bioenergy systems is to mitigate greenhouse gas (GHG) emissions, providing a low-carbon energy alternative to fossil fuels. This Principle embraces full life cycle assessment (LCA) as the primary tool for ensuring substantive reduction in GHG emissions.




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An integrated resource management plan will address the environmental risks associated with current and future production, appropriate to the scale and intensity of the operation

Chemical fertilizer, herbicide and pesticide use

Agriculture natural resource management * Economic (production figures and quality, value, income, employment). - Environmental ( Water use efficiency and productivity, water quality, soil health, weed pest and land management, fertiliser efficiency biodiversity trends, greenhouse and carbon footprint, Pesticide use, stewardship of GM crops) - Social (education, employment, health and safety, employment conditions, human rights of staff, community attitudes, ownership, industry demographics, compliance with legal statutes). It is the environmental ones that need some adjustment. 1) Agriculture is the biggest industry in terms of its spatial area on the planet. 2) It is also the largest user of natural resources (land and water) and one of the largest users of human labour on the planet. 3) There are millions farmers producing food and fibre. Therefore, collectively these millions of farmers have a significant impact on economies , the environment (soil,

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water, biodiversity) and social fabric of communities (human rights, labour conditions). There are strong market drivers for sustainable food (& fibre) production. The GRI indicators do not suit food (& fibre) production, evidenced by a notable gap in farms participating in GRI. Farms are very unlikely to report as they are usually private companies and family owned. However, most of the world's farmers belong to an industry organisation or cooperative that represents them regionally or nationally. Guidelines and appropriate indicators should be produced so these industry organisations can report on behalf of their farmer stakeholders. eg xxx cotton growers associations, xxx farmers’ federation, xx wheat producers, . Similar to the NGO sector supplement, but with some more relevant environmental indicators (farms are not like factories). (Note the food production activity - should be food and fibre production. ie to include cotton and wool).

Agricultural pesticides contribute to raising agricultural productivity but also pose potential risks to human health and the environment. Data refer to active ingredients of insecticides, fungicides, herbicides and other pesticides including plant growth regulators and rodenticides. The risks vary greatly depending on pesticide’s inherent toxicity (or hazard) and exposure. Exposure depends on a number of variables, such as the application method, the




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weather after application, its environmental mobility and persistence, and proximity to water courses.

Use of chemical inputs in agricultural production (i.e. fertilizers, pesticides, herbicides, etc) Amount of chemical inputs used yearly per hectare - Doses and techniques used to apply them (applied using labor or machinery?) -Public or private organism that regulated the use of these inputs in the local area Degradation of soil, pollution of water and air are all closely linked with overuse of pesticides and the kind. The misuse/overuse of chemical inputs in all forms has not only environmental impact but also financial impact because of increasing costs of these products. Agricultural production needs to start accounting for long term loses of natural capital and human health in order to balance the misuse promoted by certain chemical companies selling this kind of products.


Sustainable agriculture and fisheries, which produce food and beverages in an environmentally sustainable and animal-friendly way. supplier standards and monitoring - health and nutrition issues of products - natural products - nanotechnology - food safety management system - animal testing - agriculture approaches




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- livestock farming and fisheries - agricultural genetic engineering Several unsustainable practices, such as the industrialisation of food production, deforestation, monoculture, intensive use of artificial fertilisers and pesticides, agricultural genetic engineering, inhumane methods of husbandry and slaughtering and overfishing of the oceans are wide-spread in food and beverages industry. These areas often lack comprehensive, ambitious and binding standards and programmes applying to all raw materials. To ensure food supply for the growing population in an environmentally sustainable, socially fair and animal-friendly way, the companies must put effort into developing and implementing sustainable practices. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25). '- Some implemented labels and certification systems, such as Marine Stewardship Council (MSC) label, certification by the Rainforest Alliance, industry-wide initiative Roundtable on Sustainable Palm Oil (RSPO) refer to more sustainable agricultural or fishing practices.

Chemical fertilizer use can contaminate surface and ground water and contribute to greenhouse gas emissions.


Agriculture also emits very significant amounts of greenhouse gases and the increase in meat consumption

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points to growing impacts. Improving yields could also engender an increased consumption of fertilizers and pesticides, thereby sparking other very damaging environmental effects such as water eutrophisation. All these factors add to the complex and finely-balance equation of food security.

Information Users

Agricultural machinery use

Impacts on environment and employment

Use of machinery in agricultural production -Number, brand and year of manufacturing of each machine -Number of hours per hectare and number of times it is required. -Agricultural tasks done with aforementioned machinery Use of machinery is intrinsically linked with energy efficiency, Co2 emissions and social impact of machines replacing labor.


International and national regulations on genetically modified (GM) products

A genetically modified organism (GMO) is an organism whose genetic material has been altered using genetic engineering techniques. Organisms that have been genetically modified include micro-organisms such as bacteria and yeast, plants, fish, and mammals. Some countries are demanding separation of GM and non-GM products and are fixing standards for the level of adventitious presence of GM material in non-GM products, including in seed. Seed companies have to comply with these regulations. In order to achieve that, it is essential that seed companies have at their disposal for their internal use




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the necessary technology to test the seed they are producing.

Corporate governance

Gender participation on governance bodies

GOVERNANCE / EUROPE: boardroom lady boom: is it possible without quotas? On 22 June, the CapitalCom agency published its 2011 survey into the boardroom gender mix of CAC 40 companies, with fairly encouraging results: the proportion of women on the board has doubled in recent years, from 10.5% in 2009 to 20.8% in 2011. In January, the French parliament adopted legislation imposing quotas for the proportion of women on the board of major companies. Under the measures, the development of female board membership is mandatory and gradual: 20% for listed groups, public companies of an administrative, industrial and commercial nature by January 2014, rising to 40% by January 2017. The law also stipulates that companies with no women present on their board must appoint at least one within six months of it being on the statute books (voted on 13 January 2011). In France, some 2,000 companies are affected (the 650 largest listed firms and companies with more than 500 employees and those generating sales in excess of €50bn). In terms of sanctions for noncompliance, appointments that run counter to the parity principles are to be declared null and void and attendance fees are to be temporarily suspended. At the European level and at the instigation of the Vice-president of the European Commission, Viviane Reding,




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the European parliament will decide in March 2012 on whether to adopt common legislation on this matter (a mandatory proportion of women in decision-making positions of 30% in 2015 and 40% in 2020). This will depend on the level of improvement seen based on the selfregulation of European companies, in accordance with the equality initiative adopted by the European Commission in December 2010 and the European parliament resolution of 17 January 2008 calling for the Commission and member states to promote a balance between women and men on company boards, particularly where member states are shareholders. Europe as a whole illustrates the degree of hesitation between a soft-law approach and conventional legislation (quotas in this instance), but it is clear from the experience at national level that the second method tends to get much better results.

Land tenure A sustainable agriculture system meets the following criteria: land tenure is established; soil fertility is maintained and improved; water quality is enhanced; biodiversity is protected; farmers, farm workers, and all other actors in the agriculture supply chains earn livable incomes; food is affordable and nutritious; businesses can be competitive and efficient; and the use of energy and the discharge of waste are within the capacity of the earth to absorb forever Sustainable agriculture, as it pertains to business, is defined by how a business organization conducts its




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direct or indirect operations in a way that is resource efficient, strengthens the resource base and environment on which agriculture depends, provides for basic human food needs, enhances the quality of life for farmers and society, and is economically viable. Sustainable agriculture systems, if properly implemented, can lead to poverty reduction, increased food security, and good environmental stewardship on a global level. It can create shared value (food security, environmental sustainability and economic opportunity) for companies and the communities in which they work. When sustainable agriculture systems produce enough nutritious food to feed the world, and that food is accessible to the world’s population, particularly the poorest, food security will follow.

Political accountability

There are various measures of political accountability that can be measured (contributions, disclosure, board oversight). Note that this topic is applicable to more than the three industries noted. Essentially the political accountability practices of any company that is owned by public stockholders. Political contributions, the amount of disclosure and board oversight are among the data items that would be helpful in a sustainability report. In making investment decisions (especially for investors interested in socially responsible investing) is would be helpful to understand how a given company is exposed to political risk (i.e. are they backing the winning




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candidate, are they subject to potential retribution, why do they find it necessary to make political contributions, etc.). I have found the information I reference to be helpful in constructing investment portfolios that take into account this attribute of sustainability. Since it is not currently an established parameter in the socially responsible investment industry (www.ussif.org), adoption by the Global Reporting Initiative would go a long way in moving the topic of political accountability forward.

Resource use efficiency

A sustainable agriculture system meets the following criteria: land tenure is established; soil fertility is maintained and improved; water quality is enhanced; biodiversity is protected; farmers, farm workers, and all other actors in the agriculture supply chains earn livable incomes; food is affordable and nutritious; businesses can be competitive and efficient; and the use of energy and the discharge of waste are within the capacity of the earth to absorb forever Sustainable agriculture, as it pertains to business, is defined by how a business organization conducts its direct or indirect operations in a way that is resource efficient, strengthens the resource base and environment on which agriculture depends, provides for basic human food needs, enhances the quality of life for farmers and society, and is economically viable. Sustainable agriculture systems, if properly implemented, can lead to poverty reduction, increased




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food security, and good environmental stewardship on a global level. It can create shared value (food security, environmental sustainability and economic opportunity) for companies and the communities in which they work. When sustainable agriculture systems produce enough nutritious food to feed the world, and that food is accessible to the world’s population, particularly the poorest, food security will follow.

Sourcing strategy and policies

Raw materials, ingredients and feedstock

The reporting organization should also provide a disclosure of the sourcing strategy taken to the following sector-specific Sourcing Aspects: • Protecting Natural Resources; • Minimizing Toxicity; • Fair Trade; • Fair Compensation for Labor; • Traceability; • Genetically Modified Organisms (GMO102); • Animal Welfare; and • Biofuels. The reporting organization should explain how those of the above Aspects that are considered material are incorporated into the organization’s sourcing strategies and processes. The reporting organization should state how it integrates sustainability considerations throughout its supply chain into its purchasing criteria. Definitions Sourcing For the purposes of this Supplement sourcing is defined as the obtaining of inputs such as raw materials,




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ingredients and feedstocks. Natural resources Are naturally occurring substances or non-human organisms that are considered valuable in their relatively unmodified (natural) form. A natural resource’s value rests in the amount of the material available and the demand for it. The latter is determined by its usefulness to production. Ecotoxicity Refers to the potential for biological, chemical or physical stressors to affect ecosystems. Fair Wage Is determined by the type of work required in terms of roles and responsibilities, skills and qualifications, and comparative value for similar work prevailing in the job market, often regulated by legislation, negotiated by trade bodies or determined by market forces. Additional considerations for a fair wage include internal equity, a balance of monetary and non-cash benefits consistent with organizational goals and prevailing culture, that is sufficient to cover basic living costs. Fair Trade Is a trading partnership, based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers –



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especially in the South. Fair Trade Organizations, backed by consumers, are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade. Genetically Modified Organisms Means an organism (with the exception of human beings) in which the genetic material has been altered in a way that does not occur naturally by mating and/or natural recombination.

Supplier screening

Economic, environmental, and social standards in the supply chain

Requires that every provider along a supply chain meet economic, environmental, and social standards that will ensure a healthy food and agriculture system well into the future. For the 70 % of the world’s poor who live in rural areas, agriculture is the main source of income and employment – and they produce most of the world’s food. Linking these smallholder farmers to markets, whether to local markets or regional supply chains, provides an avenue to reduce poverty and food insecurity, while increasing the global supply of food. Numerous third-party certification schemes exist for measuring, reporting and defining sustainability at the farm level, including Organic, Fair Trade, Rainforest Alliance, and UTZ Certified, among others. Industry groups and companies are also establishing their own set of principles and standards. Additionally, multi-stakeholder “Roundtables” have formed over the past




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decade to focus on a set of performance-based standards and practices by commodity groups (for example, palm oil, soy, and cocoa) that are widely traded around the world.

Labor and working conditions in the supply chain

Social problems in the supply chain - guidelines on the procurement of raw materials '- supplier standards '- supplier monitoring '- labelling (e.g. Fair Trade) '- support of international initiatives such as the Common Code for the Coffee Community (4C) The production of foodstuffs and the primary products used in them is becoming increasingly global. Most notably, the cultivation of raw materials often takes place in low-wage countries. In developing countries, in particular, social standards in agricultural production are generally very low, and there are repeated reports of child labour and slavery, for example on cocoa plantations in West Africa, and of inadequate health and safety standards (for example in the handling of pesticides) in the cultivation of coffee. In addition, poor wages and long working hours combined with inadequate social provision are common in the industry. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25).




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A sustainable agriculture system meets the following criteria: land tenure is established; soil fertility is maintained and improved; water quality is enhanced; biodiversity is protected; farmers, farm workers, and all other actors in the agriculture supply chains earn livable incomes; food is affordable and nutritious; businesses can be competitive and efficient; and the use of energy and the discharge of waste are within the capacity of the earth to absorb forever Sustainable agriculture, as it pertains to business, is defined by how a business organization conducts its direct or indirect operations in a way that is resource efficient, strengthens the resource base and environment on which agriculture depends, provides for basic human food needs, enhances the quality of life for farmers and society, and is economically viable. Sustainable agriculture systems, if properly implemented, can lead to poverty reduction, increased food security, and good environmental stewardship on a global level. It can create shared value (food security, environmental sustainability and economic opportunity) for companies and the communities in which they work. When sustainable agriculture systems produce enough nutritious food to feed the world, and that food is accessible to the world’s population, particularly the poorest, food security will follow.




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Food Production - Agricultural Production – Specific Topics

Economic Financial implications due to sustainability issues

Prices of crops The agriculture sector has hit the headlines again in recent weeks on the back of the severe weather disruption to wheat and barley supplies from Russia and the Ukraine. This serves to highlight the higher volatility of soft commodity prices that is at least partly attributable to lower average levels of inventories across the grain markets. Arguably, the decline in soft commodity inventories of the last decade is as much driven by design as by supply/demand dynamics. A soft commodity is a commodity such as coffee, cocoa, sugar, corn, wheat, soybean and fruit. This term generally refers to commodities that are grown, rather than mined.

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Environmental Natural water systems impacts

Water-related infrastructure

Water-related infrastructure imposes many changes on natural water systems. Large dams built for water storage, recreation, or flood control are intended to alter the natural hydrologic regime by affecting the size, distribution, and timing of streamflow. They also trap sediments and food sources used downstream in deltas, and affect temperature regimes leading to changes in ecosystems. Major irrigation systems withdraw water from rivers or lakes to be used consumptively on fields to grow food, reducing flows in natural systems. These physical, chemical, and geomorphological changes affect the biological productivity and characteristics of aquatic ecosystems, which in turn affect flora and fauna as well as economics and politics




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Water pollution Water discharge and effluent run-off

Water use (quantity) and water quality in dairy supply chain Efficiency of water use for growing crops and dairy cow milking operations. How is the farmer working towards improved efficiency? Water quality impacts of growing crops and dairy cow milking operations. How is run off of nutrients into water streams and ground water prevented by the farmer? How is manure management, how are fertilizers managed? Cleaning water of the barn? Water quality impacts of dairy processing (including cheese making). How are water discharge and quantities of nutrients managed by the dairy processor? Water is scarce in particular areas and could be in intensive competition with other water users. Run off and water discharge can lead to eutrophication of water streams and bodies. Government, customers and communities are interested in water. Water use is not a topic that can easily be compared across regions and countries. It should be analyzed in context of availability of water and already existing impacts on water sources.

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Agricultural productivity optimization

Integrated resource management

Maximizing production on lands dedicated to producing biomass and having additional lands with other primary end uses provide supplementary biomass can help address the multiple demands for land resources in a




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more sustainable way. Optimizing agricultural productivity while limiting impacts to the environment can create profitable and more sustainable agricultural systems, and help minimize the footprint required to support the growth of a large-scale industry of low-carbon bioenergy An integrated resource management plan will address the environmental risks associated with current and future production, appropriate to the scale and intensity of the operation

Social Child labor Social problems in the supply chain - guidelines on the procurement of raw materials '- supplier standards '- supplier monitoring '- labelling (e.g. Fair Trade) '- support of international initiatives such as the Common Code for the Coffee Community (4C) The production of foodstuffs and the primary products used in them is becoming increasingly global. Most notably, the cultivation of raw materials often takes place in low-wage countries. In developing countries, in particular, social standards in agricultural production are generally very low, and there are repeated reports of child labour and slavery, for example on cocoa plantations in West Africa, and of inadequate health and safety standards (for example in the handling of pesticides) in the cultivation of coffee. In addition, poor




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wages and long working hours combined with inadequate social provision are common in the industry. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25).

Labor conditions Cotton production

Freedom of Association, Health and Safety, Child Labour, Forced Labour, Non-discrimination Achieving improvements in the social and environmental conditions of cotton production is essential for human and environmental health, the livelihood of millions of people world-wide, and the future of the commodity

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Consumer product safety information and communications

Breast milk substitutes

Adherence to the WHO code of Marketing of Breast-milk substitutes ( see http://en.wikipedia.org/wiki/International_Code_of_Marketing_of_Breast-milk_Substitutes) Company policies and management systems related to the code. Breach of the code leads to violation of the following human rights: Universal declaration of human rights : article 3 Convention on the rights of the child: articles 3 and 6




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Agricultural genetic engineering (GE)

Hybrid and genetically modified (GM) seed and plant use in agricultural production

Gene Modified Organisms Share of products containing genetically modified organisms or ingredients containing genetically modified organisms in %


Use of hybrid and GM seeds in agricultural production Reason for adopting these sort of seeds in the production -Amount of hybrid and GM seeds used in production -Name of providers of these sort of seeds -expected impact of these sort of seeds on the environment -expected impact of these sort of seeds on human health The sort of seeds used in agricultural production is the first step that adds an impact of humans and natural resources. The effect of hybrid and GM seeds is reportedly to be adversed, however companies are still willing to spread their use despite the environmental and social costs in long term.


Stakeholder trust in genetically modified (GM) seeds and plants

The use of biotech products in agriculture (green biotechnology) is widely criticized among certain stakeholder groups. Public mistrust centers on the production, release and use of genetically modified seeds and plants. The use of genetically modified organisms in closed production processes (white biotechnology) to increase the cost efficiency, speed and yield of industrial




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applications is far less criticized. Building and maintaining stakeholders’ trust in their core technologies is a general sustainability challenge faced by the biotechnology industry.

Food security Environmental impacts in achieving food security

Agriculture also emits very significant amounts of greenhouse gases and the increase in meat consumption points to growing impacts. Improving yields could also engender an increased consumption of fertilizers and pesticides, thereby sparking other very damaging environmental effects such as water eutrophisation. All these factors add to the complex and finely-balance equation of food security.


Impacts of biofuel production on food security

Biofuels: public enemy number one? Another factor, namely employing feedstocks in energy markets, has diverted the use of agricultural raw materials in recent years, which has driven up prices. Biofuels account for a growing proportion of food production in Europe, in the US, Brazil, Malaysia and Indonesia, as illustrated in the following figures: - Ethanol uses up 40% of the corn produced in the US, though the country is still the world’s biggest importer. - 20% of the sugar cane produced in Brazil is for ethanol production. - Half of the rape seed grown in Europe is for biodiesel production. - A growing part of the palm oil produced in Malaysia and Indonesia (responsible for so much deforestation) is used to generate biodiesel (most of it targeted at European countries).




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Research to increase productivity

The G20 recommends boosting productivity and financing research to improve crops with a view to obtaining better yields. The G20 also recommends a particular research emphasis on improving wheat and rice yields, given the recognized importance of these crops in terms of food security.


Food Production - Animal Source Food Production – Specific Topics

Economic Socio-economic performance of fisheries

Sustainable development of fisheries, aquaculture and fisheries areas Earnings in the EU marine fisheries are only around a third of the average for the general EU economy. The socio-economic performance of the fisheries sector has been falling; this has diminished the attractiveness of employment in the fisheries industry and is posing a fundamental threat to the future of the sector. Higher landings would help to safeguard employment in the fish processing industry and possibly even lead to some job increases.


Environmental Emissions to air - GHG emissions

Dairy supply chain

Greenhouse gas emissions in the dairy supply chain, from cow feed production to consumer use. For dairy farming: 1) manure management, 2) enteric emissions 3) fertilizer use 4) energy use during growing of crops, processing of milk, and general operations of the dairy farm. For dairy processing: energy use during processing of dairy products and transportation, packaging Retailer: energy use in store Consumer: food waste

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GHG emissions on the farm are responsible for around 70% of the GHG footprint in the dairy supply chain life cycle. Overall, the US dairy industry is around 2% of total GHG emissions in the US. Retailers and dairy customers have set targets for GHG reduction, and consumers are interested in this information. Opportunity for farmers and processors to save costs and identify production efficiencies since energy, fuel and fertilizers are expensive. See response to question 3.

Food waste management

Recycled cooking oil and grease from food-processing in-line grease traps has been collected by independent renderers for many years. Unprocessed recyclable cooking oil may contain over 50 % impurities such as water, food particles, plastic utensils, etc. Most processed recycled cooking oils are sold as Yellow Grease. Many independent renderers operate fleets of specialized trucks for transporting these various raw materials to plants for processing. They maintain the required waste transportation licenses in each state in which they operate and have implemented environmental protection and safety programs which protect communities from spills and other hazards of transporting waste materials. Biodiesel production is inherently dangerous due to the handling of fats and oils feedstocks, alcohol reactants, and strong acids and bases, sometimes under pressure or

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high temperatures. Potential collectors or users of these materials should fully research safety and handling issues to gain a full knowledge of oil and grease handling and biodiesel processing. In addition to safety issues, the production of biodiesel also generates disposal concerns with byproduct glycerin, unreacted feedstocks, and off-spec product.

Wastewater Generation and discharge from rendering plants

There are four basic categories of environmental concerns regarding wastewater generated and discharged by rendering plants: protection of aquatic life, protection of human and animal health, protection of receiving stream aesthetics, and protection of water supply quality. Protection of aquatic life requires the most significant attention and expense in wastewater treatment Rendering plants generate significant volumes of wastewater. The wastewater contains contaminants that are relatively low in long-term environmental risk, but cannot be released directly to the rivers, streams, or lakes without proper treatment.

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Water use efficiency

Dairy farming and processing

Access to suitable water supply (quantity and quality) * Water consumption and needs - Impacted water sources - Activities to reduce consumption and/or reliance on potable water sources - Water efficiency - Coping with water restrictions - Future challenges

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The dairy industry is heavily reliant upon water availability with dairy farming in Australia, accounting for one third of land under irrigation. For the 66-month period ending in May 2007, 23.1% of Australia was in the lowest rainfall decile. Much of the Murray–Darling Basin continued to suffer from severe drought on this longer time-scale (Braganza, 2008). The level of rainfall had a significant impact on the dairy industry in terms of water availability for pasture irrigation, dairy herd consumption and other related uses. Climate variability and changing land use patterns (ie. increased plantations near farms, urbanisation), along with emerging policy in Australia has caused uncertainty in the dairy farm sector regarding the ongoing security of water supply. Access to water is highly dependent upon regulation and price. - The periodic drought events that impact Australia’s agriculture sector are expected to become more severe. - The amended Murray Darling Basin Plan will still likely result in a 30% reduction in water diversions for agriculture, after accounting for the Commonwealth’s assumed infrastructure savings, driving up the cost of water borne by farmers.

Water use (quantity) and water quality in dairy supply chain Efficiency of water use for growing crops and dairy cow milking operations. How is the farmer working towards improved efficiency?

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Water quality impacts of growing crops and dairy cow milking operations. How is run off of nutrients into water streams and ground water prevented by the farmer? How is manure management, how are fertilizers managed? Cleaning water of the barn? Water quality impacts of dairy processing (including cheese making). How are water discharge and quantities of nutrients managed by the dairy processor? Water is scarce in particular areas and could be in intensive competition with other water users. Run off and water discharge can lead to eutrophication of water streams and bodies. Government, customers and communities are interested in water. Water use is not a topic that can easily be compared across regions and countries. It should be analyzed in context of availability of water and already existing impacts on water sources.

Use of reclaimed or recycled water

Reclaimed water or recycled water, is former wastewater (sewage) that is treated to remove solids and certain impurities, and used in sustainable landscaping irrigation or to recharge groundwater aquifers. The purpose of these processes is sustainability and water conservation, rather than discharging the treated water to surface waters such as rivers and oceans. The definition of reclaimed water, as defined by Levine and Asano, is "The end product of wastewater

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reclamation that meets water quality requirements for biodegradable materials, suspended matter and pathogens."[1] In more recent conventional use, the term refers to water that is not treated as highly in order to offer a way to conserve drinking water. This water is thusly given to uses such as agriculture and sundry industry uses. An industry specific target for the (Red meat processing industry) is 10% reduction in water consumption per tonne of Hot Standard Carcass Weight (tHSCW) by 2015. One way to increase water efficiency is to recycle/ reuse water.

Aquaculture Ecosystems impacts

Impacts like: competition for space, pollution, escaped farmed fish, parasites and disease, the use of wild-caught fish for fish feed, the use of wild-caught fish for farming, conflict with predators, such as seabirds, seals, and starfish Aquaculture is a huge industry, and the world's fastest growing food sector. It's worth a massive US$56 billion globally and provides one-third of the fish people consume. When done properly, some forms of aquaculture can indeed help take pressure off wild fisheries and provide needed income to coastal communities.


Odor emissions Management and reduction strategies

The rendering industry has an impact on the air quality surrounding its facilities, namely with the odor it creates. Odor emissions have historically been the most

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significant air emission issue in the rendering industry. Regulation of odor emissions has been challenging due to the difficulty in quantifying odor concentrations. Odor emissions are often regulated at the local governmental level and regulations are often based on nuisance concepts rather than on analytical concepts Odor emissions have historically been the most significant air emission

Social Overfishing and fish stock recovery

Fishery operations

A fishery must be conducted in a manner that does not lead to over-fishing or depletion of the exploited populations and, for those populations that are depleted, the fishery must be conducted in a manner that demonstrably leads to their recovery 2 Overfishing can lead to the irreversible extinction of certain fish species


Policies and management systems in fishery operations

Many commercial fisheries are characterized by too many fishers (and vessels) chasing too few fish. According to FAO data from 2007, 17% of the world’s fish stocks are overexploited, 7% are depleted, and 1% are recovering from depletion. The collapse of several high profile fish stocks, such as the North West Atlantic cod, and their failure to recover despite a reduction or moratorium on fishing effort, has raised concerns over the success of rebuilding plans for overfished stocks. Central to addressing the situation of overfished and depleted stocks is the establishment of responsible fisheries policies and management systems, within a broader marine ecosystem context.




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Overfishing, overexploitation and depletion of fish stocks

Impacts on aquatic biodiversity and marine ecosystems from fishery operations

A fishery must be conducted in a manner that does not lead to over-fishing or depletion of the exploited populations and, for those populations that are depleted, the fishery must be conducted in a manner that demonstrably leads to their recovery 2 Overfishing can lead to the irreversible extinction of certain fish species


CITES listings are also a powerful tool in combating illegal, unreported and unregulated (IUU) fishing, providing support to and complementing national, regional and international fisheries conservation and management measures. Decades of overfishing, overcapacity and extremely high levels of illegal fishing have, for example, led to a severe decrease in the Atlantic Bluefin tuna population, one of the most valuable tuna species in the world.


Many commercial fisheries are characterized by too many fishers (and vessels) chasing too few fish. According to FAO data from 2007, 17% of the world’s fish stocks are overexploited, 7% are depleted, and 1% are recovering from depletion. The collapse of several high profile fish stocks, such as the North West Atlantic cod, and their failure to recover despite a reduction or moratorium on fishing effort, has raised concerns over the success of rebuilding plans for overfished stocks. Central to addressing the situation of overfished and depleted stocks is the establishment of responsible




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fisheries policies and management systems, within a broader marine ecosystem context.

In relation to locally sourced products, a biodiversity issue that has become critical is the increased pressure on global fish stocks. This has led to regulations and quotas in some regions (UK, EU and international fisheries law and regulations).

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Agricultural or fishing standards and certification

Sustainable agriculture and fisheries, which produce food and beverages in an environmentally sustainable and animal-friendly way. supplier standards and monitoring - health and nutrition issues of products - natural products - nanotechnology - food safety management system - animal testing - agriculture approaches - livestock farming and fisheries - agricultural genetic engineering Several unsustainable practices, such as the industrialisation of food production, deforestation, monoculture, intensive use of artificial fertilisers and pesticides, agricultural genetic engineering, inhumane methods of husbandry and slaughtering and overfishing of the oceans are wide-spread in food and beverages industry. These areas often lack comprehensive, ambitious and binding standards and programmes applying to all raw materials. To ensure food supply for




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the growing population in an environmentally sustainable, socially fair and animal-friendly way, the companies must put effort into developing and implementing sustainable practices. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25). '- Some implemented labels and certification systems, such as Marine Stewardship Council (MSC) label, certification by the Rainforest Alliance, industry-wide initiative Roundtable on Sustainable Palm Oil (RSPO) refer to more sustainable agricultural or fishing practices.

Fishing standards and certification

Standards and certifications have evolved to be a tool to enable trust, by providing Traceability and Transparency. As food becomes a ready means for consumers to practice their own form of responsibility and sustainability, these attributes grow in complexity and can include dimensions of social and environmental performance. For companies, this makes delivering on trust increasingly complex and demanding. Trust is the foundation and the goal in the global Food and Agriculture business today. Today and increasingly in the future, safety is part of a growing portfolio of attributes consumers and stakeholders throughout the value chain expect from Food and Agriculture companies.




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Other

Animal husbandry practices

Physical alterations

FP10 Policies and practices, by species and breed type, related to physical alterations and the use of anaesthetic. Animal husbandry practices involving critical issues such as physical alterations are of increasing concern to stakeholders. Physical alterations require appropriate husbandry practices or the use of anaesthetics to minimize pain to animals. This indicator seeks to measure the types of physical alterations performed by the reporting organization. Also, where the reporting organization processes animals reared by contract farmers or animals procured on the open market, reporting on this indicator will provide valuable information for the report readers.


Veterinary pharmaceuticals use

Expenditure for veterinary pharmaceuticals, seeds, herbicides, pesticides and other drugs


FP12 Policies and practices on antibiotic, anti-inflammatory, hormone, and/or growth promotion treatments, by species and breed type Antibiotics may be used to maintain and/or treat the health of animals specifically reared for the production of food products. Certain hormones may be used to promote growth, induce spawning, and increase yields of animals reared for food products. Consumers and stakeholders have become increasingly concerned about the potential development of antibiotic resistance in humans as well as the potential impacts of hormones on human health. Data reported under this indicator




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provide a measure of the reporting organization’s use of antibiotic, anti-inflammatory, hormone, and/or growth promotion treatments. Also, where the reporting organization processes animals reared by contract farmers or animals procured on the open market, reporting on this indicator will provide valuable information for the report readers.

Animal health and welfare

Animal housing systems

FP11 Percentage and total of animals raised and/or processed, by species and breed type, per housing type The type of housing systems used to rear animals for the production of food is of increasing importance to stakeholders. Animal welfare can be impacted by the housing system. This indicator identifies the types of animal housing systems used by the reporting organization. Also, where the reporting organization processes animals reared by contract farmers or animals procured on the open market, reporting on this indicator will provide valuable information for the report readers. Housing System Housing system refers to the use of 1) indoor intensive systems (e.g., cage systems for laying hens or sow stall and slatted floor indoor units for pigs), 2) indoor extensive systems (e.g., barn or perchery systems for laying hens and bedded indoor systems for pigs), and 3) outdoor or free-range systems which allow animals the freedom to move outside. Housing systems also includes




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at-sea or freshwater enclosures, cages, tanks, and/or ponds for aquaculture.

Animal husbandry, transport and slaughter

FP13 Total number of incidents of significant non-compliance with laws and regulations, and adherence with voluntary standards related to transportation, handling, and slaughter practices for live terrestrial and aquatic animals Non-compliance indicates either inadequate internal management systems and procedures or ineffective implementation. In addition to direct financial consequences such as penalties or fines, significant non-compliance poses a risk to animal welfare, the reporting organization’s reputation, and customer trust. An organization’s incidents of non-compliance should remain as low as possible. The trends revealed by this indicator can indicate improvements or deterioration in the effectiveness of internal controls.


Livestock production systems

Animal welfare or animal well-being refers to the physical and mental health of animals. (Animal health and husbandry, feed conditions, animal transport, bobby calves) Discussion of strategies and programs to manage: - Nutrition - Cow health (ie. mastitis, calving practices, lameness) - Young stock and animal husbandry management (birthing, weaning) - Transport (domestic and export) - Euthanasia - Stock handling

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Adherence to best practice standards and extent of training Good animal husbandry practices are essential to ensure dairy farm livelihoods. As well, consumers have become more aware and concerned about the welfare of animals. Animal welfare organisations such as the RSPCA, have raised the profile of animal welfare in livestock production systems. An increased awareness of animal welfare is increasingly encouraging consumers to seek animal welfare assurances for the animal products they buy. This in turn has encouraged retailers and fast food outlets to regulate and label how the meat and eggs that they purchase are produced. A failure to recognise the importance of animal welfare to consumers may result in the loss of market access or market share. The media coverage of exported cattle slaughter practices in Indonesia has demonstrated the public’s sensitivity to the issue of animal health and welfare. Yet factors highly relevant to the Australian dairy industry such as the treatment of ‘bobby calves’ and the link between milk producing capacity and animal health are also reasons why this issue is ranked as highly material.

FP9: Percentage and total of animals raised and/or processed, by species and breed type. Breeding and genetically selecting or modifying animals are practices commonly used for the purpose of increasing production yield; improving disease resistance; or producing other desirable traits. These practices can have impacts on




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animal welfare. This indicator serves as a measure for assessing the breeding and genetic practices of a reporting organization, including the consideration of those practices in relation to animal welfare, and the actions the reporting organization takes to mitigate any negative impacts on animal welfare of its breeding and genetic practices. Also, where the reporting organization processes animals reared by contract farmers or animals procured on the open market, reporting on this indicator will provide valuable information for the report readers.

Sustainable agriculture and fisheries, which produce food and beverages in an environmentally sustainable and animal-friendly way. supplier standards and monitoring - health and nutrition issues of products - natural products - nanotechnology - food safety management system - animal testing - agriculture approaches - livestock farming and fisheries - agricultural genetic engineering Several unsustainable practices, such as the industrialisation of food production, deforestation, monoculture, intensive use of artificial fertilisers and pesticides, agricultural genetic engineering, inhumane methods of husbandry and slaughtering and overfishing of the oceans are wide-spread in food and beverages




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industry. These areas often lack comprehensive, ambitious and binding standards and programmes applying to all raw materials. To ensure food supply for the growing population in an environmentally sustainable, socially fair and animal-friendly way, the companies must put effort into developing and implementing sustainable practices. - All material issues referred to in this document refer to all four industry activity groups working on food, including retailing (No. 22-25). '- Some implemented labels and certification systems, such as Marine Stewardship Council (MSC) label, certification by the Rainforest Alliance, industry-wide initiative Roundtable on Sustainable Palm Oil (RSPO) refer to more sustainable agricultural or fishing practices.

Facilities and equipment design and maintenance

Examples: 1. Facilities and equipment are designed and maintained to ensure its effective operation and use and is appropriate for the species and class of livestock. 2. Facilities are free from protrusions and other objects that can cause injury, are clean and in good working order. 3. Design of facilities takes into account protecting animals from extremes of weather and provides effective ventilation. Facilities and equipment are designed and maintained to ensure minimal interference or stress is incurred by livestock

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Humane slaughter procedures

Examples: 1. Livestock are effectively restrained with minimal stress and for minimal duration prior to stun. 2. Livestock are effectively stunned with appropriate equipment for the species and class of livestock. 3. Where reversible stunning is used, sticking is applied promptly and in a manner that ensures animals do not regain sensibility. Restraint, stunning and slaughter procedures are carried out in a humane and effective manner.

30 Business

Livestock management

Examples: Livestock are moved throughout the facility in a calm and quiet manner that minimises stress. 2. Livestock are segregated in pens in accordance with species (and class wherever possible). 3. Animals are penned with sufficient space to move freely, lie down and to access the watering facilities Livestock are routinely managed to minimise stress and injuries.

30 Business

Livestock management during transport and slaughter

1. Expectations for assuring that livestock are fit for the intended journey are communicated to livestock suppliers to minimise the risk of receiving weak, ill or injured livestock at the establishment. 2. Consignments of livestock are assessed upon arrival and weak, ill or injured livestock are identified and recorded. 3. Livestock identified to be weak, ill or injured or suffering from other ailments that impact on their welfare are assessed by a competent person and the appropriate action is promptly taken.

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Weak, ill or injured livestock are identified and promptly treated in a humane manner

Staff competency handling livestock

Examples: 2. Personnel undergoing training are monitored regularly by a competent person and/or are observed directly for tasks that are considered high risk to livestock welfare, until deemed competent. 3. Personnel handling livestock on a daily basis regularly observe the animals and are competent to: • Identify abnormal animal behaviour, injuries or signs of stress in livestock; and • Take action when required to rectify a problem. 4. All personnel handling livestock are competent in the appropriate use of handling implements and/or dogs to move animals. All personnel responsible for the handling of livestock are competent in their tasks consistent with the requirements of these Standards.

30 Business

Animal care How the farmer takes best care of his/her animals. Should include questions like farmer participates in animal care program, has an established veterinary-client-patient relationship, and implements a herd health plan with standard operating procedures (includes SOPs like vaccination, newborn calf management, dehorning, castration, etc). Consumers, customer, retailers care about it. For

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producers, healthy animal means better efficiency in production, less costs and better quality milk (better milk price).

Expenditure for veterinary pharmaceuticals, seeds, herbicides, pesticides and other drugs


Biosecurity Rendering industry

Biosecurity is a set of preventive measures designed to reduce the risk of transmission of infectious diseases, quarantined pests, invasive alien species, living modified organisms The handling of biosecurity issues by the rendering industry has an impact on public health and animal health. Some other claim that the rendering process is an effective method for ensuring biosecurity because processing conditions assure the destruction of pathogenic viruses, bacteria, and other microorganisms.

236 Business

International fisheries regulations and/or agreements

Illegal, unreported and unregulated (IUU) fishing

CITES listings are also a powerful tool in combating illegal, unreported and unregulated (IUU) fishing, providing support to and complementing national, regional and international fisheries conservation and management measures. Decades of overfishing, overcapacity and extremely high levels of illegal fishing have, for example, led to a severe decrease in the Atlantic Bluefin tuna population, one of the most valuable tuna species in the world.


* GRI Sector Guidance 1 All references can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx




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* GRI Sector Guidance

° Resource available on request and/or for a fee.

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