Arla Foods

Sustainable development strategy
The company discloses its process for identifying and prioritising its most relevant sustainability impacts as well as the outcome of this process, in relation to its sustainability strategy.

Scope 1, 2, and 3 greenhouse gas (GHG) emissions
The company discloses a time-bound target to reduce its scope 1 and 2 greenhouse gas (GHG) emissions by 63% by 2030, using 2015 as the baseline year. Further, it has set a time-bound target to reduce its scope 3 GHG emissions by 30% by 2030. The company shows leadership by aligning all these targets with a 1.5-degree trajectory, showing its commitment to addressing climate change, while progress updates regarding these targets and emission reductions are regularly reported.

Animal welfare
The company discloses that external animal welfare audits on all its farms are carried out at least once every three years, and provides details on the audit process. Also, it has specified requirements for animal welfare in the quality assurance programme “Arlagården®”, which all Arla farmers must adhere to.

Ecosystem conversion
The company discloses evidence of zero conversion practices in its supply chains. It states in its Responsible Sourcing policy that all suppliers shall be in compliance with additional criteria, which include no deforestation, no new development of peat land and with full traceability to the mill, including supplying group of plantations.

Food loss and waste
The company has set FLW reduction targets that are in line with SDG 12.3 goal, aiming for a 50% reduction by 2030. In order to achieve this, the company actively collaborates with its value chain partners to prevent the generation of FLW.

Plastic use and packaging waste
The company describes initiatives related to plastic use reduction and transitioning towards sustainable packaging. For example, it is replacing fossil-based plastic with bio-based plastic derived from sugar cane or forest waste in its renewable milk cartons.

Water withdrawal
The company demonstrates a reduction in water consumption from 2021 to 2022.

Accessibility and affordability of nutritious foods
The company is committed to improving access to affordable dairy nutrition for lower income consumers in developing countries, and has set a target on reaching 94 million lower-income consumers in Nigeria and Bangladesh by 2026. Furthermore, it reports on the progress made towards this target and provides examples of programmes to reach it. For example, it describes how it collaborates with female microentrepreneurs to distribute affordable fortified filled milk powder in remote rural areas in Bangladesh. Also, it discloses that it provides affordably priced dairy products in Bangladesh with Dano Daily Pushti, and in Nigeria, Senegal and Ghana with Dano Cool Cow.

Availability of nutritious foods
The company reports on its efforts to reduce salt and sugar in its product portfolio. Moreover, it has set a target to increase the availability of healthy choices, as defined by the company’s Nutrition Criteria, by 60,000 tonnes by the year 2025. As of 2021, the company has already achieved 40,000 tonnes toward this goal, spanning from 2019 to 2021.

Food safety
The company discloses that 100% of its suppliers are certified to a GFSI-recognised food safety scheme. Additionally, it discloses that its product quality and food safety are accredited by a third party.

Farmer and fisher livelihoods
The company supports the income resiliency of local farmers by building new commercially viable dairy value chains in growth markets, for example by constructing a new Arla Farm in Nigeria. On top of stable supplies, it provides capacity building programmes to pastoralist farmer clusters to support them to meet the sufficient milk volumes. Furthermore, it demonstrates how it involves farmers in its Board of Representatives and has build a process through which the farmers share profits and losses from all its markets, enabling farm investments across regions.

Forced labour
The company discloses a prohibition to use any recruitment fees or related costs to secure a job. Also, it prohibits retaining workers’ personal documents or restricting workers’ freedom of movement for its operations and supply chain.

Act ethically
The company has a policy prohibiting bribery and corruption and includes anti-bribery and anti-corruption clauses in its contracts with direct business relationships. Additionally, it has a grievance mechanism for stakeholders to raise concerns and complaints regarding bribery and corruption. Moreover, while the company discloses its approach to lobbying and political engagement in a policy statement, it specifies that it does not make political contributions. Lastly, it also discloses a global tax strategy.

Provide and promote decent work
The company has a publicly available policy statement in which it commits to respecting the health and safety of workers and expects its business relationships to do so. It also describes how it determines a living wage for the regions where it operates and discloses a time-bound target for paying all workers a living wage. Additionally, it expects its business relationships shall not require workers to work more than 48 hours in a regular work week or 60 hours including overtime.

Moreover, the company discloses the proportion of women in its total direct operations workforce for each employee category. It publicly commits to gender equality and women’s empowerment and discloses target to have no more than 70% of one gender in the workforce and to have no more than 60% of one gender in a team across the top three organizational levels.

Respect human rights
The company has a publicly available policy statement committing it to respect human rights and the ILO core labour rights and expects its suppliers to do so. Moreover, it describes the process for identifying its human rights risks and impacts in specific locations or activities covering its own operations. It also describes its process for assessing its human rights risks and discloses what it considers to be its salient human rights issues.

Furthermore, it has a human rights grievance mechanism accessible to all workers and all external stakeholders who may be adversely impacted by the company. The company also discloses its global system to take action to prevent, mitigate or remediate salient human rights issues, and this includes a description of how its global system applies to its supply chain.

Governance and accountability for sustainable development
The company has an opportunity to strengthen its sustainability governance and accountability by assigning decision-making and oversight responsibility for its sustainability strategy to the highest governance body. While it discloses its plan to establish a remuneration policy related to climate, it has an opportunity to link this policy to improvement in social issues. Additionally, it could disclose if the highest governance body has expertise in its most material sustainability topics.

Lobbying and advocacy
The company has an opportunity to disclose a list of trade associations of which it is a member. Furthermore, the company can provide a clear and detailed framework for assessing the alignment of these trade associations with its sustainability targets. Additionally, the company can report any (potential) misalignments between the lobbying activities of its trade associations and its sustainability targets.

Stakeholder engagement
The company has an opportunity to disclose how it engages with stakeholders, the issues raised during such activities, and the outcomes of its stakeholder engagement.

Sustainable development strategy
The company discloses some sustainability objectives/targets including social inclusion, nutrition and climate; however, it has an opportunity to establish group-wide targets for the most material parts of its value chain. While the company reports consistently against some targets including climate and social inclusion, it has an opportunity to report consistently against all its targets.

Animal welfare
The company has an opportunity to set animal welfare targets applicable to all species, geographies and products.

Ecosystem conversion
The company has an opportunity to disclose time-bound targets to achieve conversion-free supply chains.

Food loss and waste
Although the company discloses its FLW reduction targets, it does not track and measure its progress against these targets.

Plastic use and packaging waste
While the company discloses some data on reducing plastic use and transitioning towards sustainable packaging, it has an opportunity to state if the data pertains to the most relevant part of its value chain, as well as provide the associated disclosures.

Protein diversification
The company has an opportunity to set a sales-based target to increase alternative proteins across its portfolio, as well as report progress against this target.

Water withdrawal
The company has the opportunity to set a time-bound target for reducing water withdrawal in its own operations and to report on the progress made towards achieving this target. Additionally, the company can report the amount of water withdrawn for its own operations in areas where water is scarce. Furthermore, the company can engage with its suppliers to help reduce water withdrawal.

Availability of nutritious foods
The company currently discloses its Nutrition Criteria, which consist of internal standards reflecting current scientific evidence and guidance from key global health authorities. Nevertheless, there is an opportunity for the company to further disclose how these criteria align with government-endorsed or externally validated nutritional guidelines. Additionally, it can establish a sales-based target to increase the proportion of nutritious products in accordance with these guidelines.

Clear and transparent labelling
While the company discloses that it “supports the idea of nutrition front-of-pack labelling or health claim messages on pack”, it has an opportunity to adopt an interpretive government-endorsed front-of-pack labelling system. Furthermore, it can disclose the percentage of products for which its front-of-pack labelling schemes have been rolled out.

Food safety
While the company discloses that most of its own operations are certified to certified to the food safety standard ISO 22000, it has an opportunity to extend the certifications to 100% of its own operations.

Child labour
The company has an opportunity to disclose examples of remediation programmes when a case of child labour is found in its operations and to indicate how it is building the capacity of its suppliers to prevent child labour impacts. While the company prohibits its suppliers from using child labour, it could require them to have an age-verification system in place.

Farmer and fisher livelihoods
The company has an opportunity to demonstrate that it has identified living income benchmarks for some commodities and/or regions and disclose how it assesses living income gaps.

Forced labour
While the company provides some examples of how it mitigates risks of modern slavery in its supply chain, it could provide further details of its engagement with suppliers on preventing forced labour impacts.

Health and safety of vulnerable groups
The company has an opportunity to recognise and assess the health and safety risks to vulnerable groups, such as migrant and temporary labourers, women and young farmers. Furthermore, it could provide evidence of support activities that improve the health and safety of vulnerable groups.

Living wage
The company has an opportunity to set a target for paying a living wage across its direct suppliers and describe how it determines a living wage for the regions where it sources. Also, it could disclose the percentage of workers across its own operations or suppliers that are paid a living wage.

Act ethically
The company could describe the process for identifying its bribery and corruption risks and impacts in specific locations or activities covering its own operations. While it discloses some information regarding its lobbying expenditures, it has an opportunity to disclose the expenditures in all locations where it carries out lobbying activities or specify it only does so in specific countries or regions. Furthermore, it could disclose that it requires third-party lobbyists to comply with its lobbying and political engagement policy.

Provide and promote decent work
While the company states that it requires its business relationships to undergo due diligence for health and safety risks, it has an opportunity to disclose how the company monitors its suppliers’ due diligence. Furthermore, while the company has set expectations on the wage paid by its suppliers, it has an opportunity to add a requirement for them to pay a living wage, and disclose how it supports the payment.

Additionally, the company has an opportunity to disclose that it has at least 30% women on its board and can consider disclosing the ratio of basic salary and remuneration between women and men in its total direct operations workforce, categorized by significant locations of operation.