Danone

Sustainable development strategy
Danone discloses a sustainable development strategy, with numerous targets and key performance indicators set across its nine 2030 focus areas. It incorporates topics which cover all three benchmark dimensions (environment, nutrition and social inclusion) and includes consideration of the company’s own operations and value chain. The company also details its materiality process for identifying and prioritising its most material sustainability topics and action areas.

Soil health and agrobiodiversity
Danone demonstrates its commitment to regenerative agriculture practices through the co-formation of One Planet Business for Biodiversity. This aims to ‘promote biodiversity by scaling up regenerative farming practices, diversifying crop production, eliminating deforestation and conserving ecosystems’. The company also discloses how it supports upstream partners to preserve and improve the physical and biological structure of soil and to enhance its organic matter content by reducing soil tillage, encouraging crop rotation and planting permanent cover crops. Furthermore, the company has a target to source 15% of its key ingredients in 2021 from farms that have started the transition towards regenerative agriculture, up from 10% in 2020.

Food loss and waste
The company has a time-bound target to reduce its non-recovered food waste by 50% between 2016 and 2025. In 2020, it demonstrated an improved reduction of food waste of 15.6% compared to 7% in 2019. In relation to value chain collaboration, the company is aligned with the World Resources Institute’s 10x20x30 food loss and waste initiative and has a food waste action plan which encompasses activities and collaborations both upstream and downstream of its own production activities.

Protein diversification
Danone has a commitment to diversify proteins in its product portfolio. It discloses a sales-based target to increase plant-based sales worldwide from more than EUR 2 billion in 2020 to EUR 5 billion by 2025, underlining its commitment with the purchase of plant-based consumer food company Follow Your Heart in 2021. The company could strengthen its position by formulating a plant-based sales target as a proportion of its overall portfolio.

Plastic use and packaging
The company has published a comprehensive packaging policy and discloses several time-bound targets related to sustainable packaging and reducing plastic use. It reports that in 2020, 81% of its packaging was recyclable, reusable or compostable, demonstrating progress towards its target to achieve 100% compliance by 2025.

Availability of healthy foods
Danone discloses six nutrition commitments related to its contribution to healthier diets, including quantitative commitments on product reformulation, including reductions in sugars, saturated fats, salt, trans fats and calories. The reformulation commitment is based on the company’s own nutrient profiling system, with the objective that 100% of volume sold would meet the company’s nutritional targets by the end of 2020. Although it missed this objective, Danone did demonstrate progress, achieving 86% compliance to its nutritional targets in 2020 compared to 82% in 2019, and in addition reports on more specific targets per nutrient.

Clear and transparent labelling
Danone discloses commitments related to both back-of-pack and front-of-pack product labelling, alongside a target for 100% of its products to display comprehensive nutritional information. The company reached 82.6% in 2020, a significant improvement on 66.4% in 2019. It has also adopted the interpretive Nutri-Score labelling system and advocated its mandatory adoption across the European Union.

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

Governance and accountability for sustainable development strategy
Danone assigns accountability and responsibility for its sustainable development strategy to the company’s highest governance body. Furthermore, it incorporates sustainability criteria into its executive and director remuneration policies, reporting that 20% of compensation is based on social and environmental factors. The company could further strengthen its accountability by linking remuneration to performance on topics across the three benchmark dimensions of nutrition, environment and social inclusion, demonstrating a holistic responsibility to address food systems transformation

Stakeholder engagement
The company discloses that it undertakes stakeholder engagement activities. It provides an overview of the issues raised via these activities and how these outcomes are integrated into its sustainability strategy, covering topics across all three benchmark dimensions. Danone has an opportunity to improve its performance by detailing how it identifies and prioritises its key stakeholder groups.

Protection of natural terrestrial ecosystems
Danone is committed to eliminating deforestation from its supply chain, focusing on six raw materials including palm oil, soya and sugar cane. The company reports that, in 2020, its sourced palm oil was 95% Roundtable on Sustainable Palm Oil (RSPO) segregated and 3% RSPO mass balance, while 100% of its soya was ProTerra certified. While the company discloses that 70% of its cocoa was traceable back to origin in 2020, it could improve its performance by also setting a target for this high-risk commodity.

Scope 1, 2 and 3 greenhouse gas emissions
The company has set targets to reduce scope 1 and 2 greenhouse gas (GHG) emissions by 30% by 2030 and to achieve climate neutrality throughout its value chain (including scope 3 GHG emissions) by 2050. It regularly reports progress against these targets. Danone could further strengthen its commitment by aligning its targets with a 1.5-degree warming trajectory, ahead of the 2-degree trajectory with which it is currently aligned, and reports that the process to define such targets is underway.

Accessibility and affordability of healthy foods
Danone is committed to increasing the accessibility and affordability of healthy foods and discloses commercial activities in support of this commitment. One prominent example is the NutriPlanet Early Life Nutrition programme. The company also reports that 51% of its entities had at least one healthy product in their portfolios targeting low-income populations in 2020. However, it could strengthen its performance by devising and reporting on targets which specifically address accessibility and affordability, such as pricing or distribution.

Responsible marketing
Similarly, Danone discloses detailed policies related to marketing, including for breast milk substitutes and marketing to children. However, it does not offer detailed evidence of marketing activities to promote healthy food options in support of these policies, despite stating that the majority of its marketing budget is spent on promoting healthy products.

Farmer productivity and resilience
Danone is committed to supporting a wide range of farmers, including smallholders, and provides details of programmes it implements to do so. These include dairy farmers supported through the company’s cost performance model, with 29% of the milk collected in 2019 sourced from these farmers. Danone also reports on other support activities, for instance through the implementation of its global water policy, but has an opportunity to report holistically on the impact of its full programme portfolio.

Child and forced labour
Danone commits not to use child and forced labour and codifies the same expectation for its suppliers. The company also carries out internal and third-party audits throughout its supply chain, for example through the Sedex Members Ethical Trade Audit, and demonstrates that 1% of 277 instances of non-conformity were related to forced labour in 2019, compared to 1.6% of 126 instances in 2020. Danone could further strengthen its commitment by disclosing how it verifies the ages of workers in relation to child labour and disclosing how it monitors these issues across its own operations as well as its supply chain.

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.

Danone discloses policies and commitments across most key topics relating to respect for human rights. In addition to its commitment to respect human rights and the ILO core labour rights, the company updated its global materiality and risks matrix in 2021 to assess and take action on its human rights salient risks in its own operations and its business relationships. Although the company lists the stakeholders it engages with, it does not provide sufficient context on the categories of stakeholders whose human rights have been or may be affected by its activities. However, it does have a grievance mechanism which is accessible to both employees and external stakeholders.

The company publicly commits to respecting the health and safety of workers and is a signatory to the Women’s Empowerment Principles, demonstrating its commitment to gender equality and women’s empowerment. It discloses that 78% of employees were covered by collective bargaining agreements in 2020. It also places health and safety expectations on its business relationships and monitors their performance. However, the company does not commit or disclose a target to pay all workers a living wage.

Danone publicly commits to protecting personal data and has a privacy statement on the use of personal data. It also has a policy prohibiting bribery and corruption alongside a grievance mechanism. The company has a publicly available global tax strategy, although it does not disclose its income tax statements for all jurisdictions and sets out its approach to lobbying and political engagement. However, its lobbying expenditures are not publicly disclosed.