China Mengniu Dairy

No leading practices were identified for the company in the governance and strategy measurement area.

No leading practices were identified for the company in the environment measurement area.

No leading practices were identified for the company in the nutrition measurement area.

No leading practices were identified for the company in the social inclusion measurement area.

Sustainable development strategy
China Mengniu Dairy discloses objectives across all three benchmark dimensions of environment, nutrition, and social inclusion. The company discloses its process for identifying and prioritising its most relevant sustainability topics and has a three-year plan to pursue its sustainability objectives. However, it does not disclose time-bound targets for all of its priority topics, nor a long-term strategy.

Governance and accountability for sustainable development strategy
China Mengniu Dairy has staff specifically dedicated to sustainability activities, which are the Sustainable Development Committee, the Executive Committee on Sustainable Development and the Sustainable Development Working Group, responsible for the decision-making, management and implementation of the Company’s sustainable development, respectively. China Mengniu Dairy has an opportunity to strengthen its sustainability governance by linking remuneration incentives to sustainability outcomes.

Stakeholder engagement
The company discloses key stakeholder groups, such as shareholders, consumers, suppliers, and communities, common goals shared by these groups and the company, and the means by which it communicates and responds to each group. It also provides a materiality matrix based on that engagement. However, the outcomes of the engagement itself and how it is integrated into China Mengniu Dairy’s sustainability strategy is not disclosed.

Scope 1, 2 and 3 greenhouse gas emissions
While China Mengniu Dairy discloses greenhouse gas (GHG) emission reductions between 2016 and 2019, the scope of this disclosure is not defined, and it does not have a time-bound target for further reductions. The company can improve its climate change mitigation strategy by measuring all of its GHG emissions, setting targets for overall GHG emission reduction across its operations and those along its value chain, and reporting progress on the target.

Protection of natural terrestrial ecosystems
While China Mengniu Dairy reports that 92% of palm oil is sourced from Roundtable on Sustainable Palm Oil (RSPO) certified suppliers, no information was disclosed regarding the sustainability of its soy procurement. The company has an opportunity to strengthen its commitment by setting targets for achieving deforestation and conversion free supply chains for its relevant high-risk commodities and by disclosing the proportion of its relevant high-risk commodities which already are, if any.

Water use
China Mengniu Dairy has a time-bound target to reduce water consumption year-on-year by 0.5% from 2020 to 2022, and reports a higher reduction than its target between 2019 and 2020 . However, this disclosure does not refer to company-wide water consumption. China Mengniu Dairy has an opportunity for improvement by disclosing dependency on water-stressed areas.

Food loss and waste
China Mengniu Dairy discloses several measures to tackle food loss and waste, and reports that its milk loss rate decreased from 3.7% to 3.0% in 2018 . The company has an opportunity to set a commitment against food loss and waste by setting time bound targets and reporting against them.

Plastic use and packaging waste
China Mengniu Dairy provides quantitative data of reducing plastic use and increasing sustainable packaging across its operations. However, it has an opportunity to strengthen its commitment by setting targets to reduce plastic use and transition to more sustainable forms of packaging and reporting against these targets.

Animal welfare, antibiotic use and growth promoting substances
While China Mengniu Dairy has a commitment on animal welfare that addresses animal welfare issues in its supply chain, it does not apply to all key species, geographies or products that are relevant to the company. Furthermore, the company does not disclose that it is reducing or prohibiting the prophylactic use of antibiotics and growth-promoting substances for aquatic and farm animals relevant to the company. China Mengniu Dairy has an opportunity to disclose a commitment on antibiotics which addresses the topic across its relevant species, geographies and products.

Availability of healthy food
While China Mengniu Dairy has a commitment to increase the availability of healthy and nutritious foods, it has an opportunity to set targets related to increasing the production, quality and variety of healthy and nutritious foods.

Accessibility and affordability of healthy food
While China Mengniu Dairy has a plan to take dairy products to remote areas of China and reports progress on that plan, it is not clear if the products offered are considered healthy or nutritious. The company has an opportunity to disclose or develop value chain partnerships or projects specifically designed to address the accessibility of healthy and nutritious foods.

Responsible marketing
The company has a responsible marketing commitment aligned with international codes and guidelines but does not provide evidence of marketing activities promoting healthy food.

Food safety
China Mengniu Dairy discloses compliance with food safety national regulations. However, the company does not disclose how many plants are certified to a Global Food Safety Initiative standard.

Workforce nutrition
The company does not disclose a workforce nutrition programme that prioritises making healthy foods the standard in the workplace.

Farmer productivity and resilience
While China Mengniu Dairy commits to support farmers through its 136 Project, which has provided 3,000 technical demonstrations to over 50,000 people on dairy farm management, the company does not provide evidence of the impact of these activities on farmer outcomes.

Child and forced labour
The company does not disclose a commitment to prohibit child in its supply chain, or to prohibit forced labour in its operations and supply chain.

Living wage
The company does not disclose that it pays its workers a living wage or requires its suppliers to do the same. Neither has it set targets to do so in the future.

Health and safety of vulnerable groups
The company does not disclose that it specifically recognises the health and safety risks to vulnerable groups, such as migrant and temporary labourers, women and young farmers.

Land rights
The company does not commit to recognising and respecting the legitimate tenure rights related to the ownership and use of land of local communities.

Although China Mengniu Dairy commits to respecting human rights in their Sustainability Reports, such commitment cannot be found in its policies, reflecting a lack of alignment between its corporate policies and sustainability reports. As such, the company does not have a due diligence process to identify human rights risks and impacts. The company has a grievance mechanism in place and commits to protecting the identity of the whistleblower. It however does not have a similar system which is it accessible to external stakeholders.

China Mengniu Dairy’s statements related to health and safety in its sustainability report are not referenced in policy documents, providing no evidence of their implementation and monitoring. The company does not commit to providing a living wage. The company commits to working hours, but does not codify this expectation towards suppliers. And while the company provides evidence of having a collective bargaining system covering its workforce, it is not clear how relevant this representation is for its supply chain partners. Regarding human rights, China Mengniu Dairy lacks alignment between all policy documents, internally and externally.

While China Mengniu Dairy specifies that it does not make political contributions, it lacks a publicly available policy on lobbying and political engagement. Moreover, the company fails to disclose commitments on personal data protection, tax information and bribery and corruption mechanisms.