Orkla

Sustainable development strategy
The company discloses a 2020 materiality assessment which is reflected in the five dimensions of its sustainability strategy: environmental engagement, sustainable sourcing, nutrition and wellness, safe products, and care for people and society. The company lists targets for 2025 under each of these dimensions and reports progress against them. Furthermore, alongside the targets relevant for its own operations, the company discloses value chain-related targets.

Scope 1 and 2 greenhouse gas emissions
Orkla discloses a time-bound target to reduce its greenhouse gas (GHG) emissions from its own operations by 63% by 2025, from a 2014 base year, and by 77% by 2040. The company reports annually on GHG scope 1 and 2 emissions, and also aligns its targets with the Science Based Targets initiative’s 1.5-degree warming trajectory.

Protein diversification
The company has several plant-based products in its portfolio, based on ingredients such as oats, almonds, soya, peas and rice, and continues to diversify its protein portfolio. It also discloses a target to attain a turnover of NOK 3 billion in plant-based food by 2025. However, the company has yet to report progress against its target. Moreover, there is an opportunity for Orkla to disclose a target for replacing animal proteins with alternative proteins as a percentage of its total portfolio and reporting progress against the target.

Plastic use and packaging waste
The company has set 2025 targets that include achieving 100% recyclable packaging, 75% packaging made of recycled materials and 50% of plastic packaging made of recycled or renewable materials. It reports on these metrics annually as well as discloses information on its overall packaging consumption. However, while 95% of Orkla’s packaging was recyclable in 2020, the company has yet to fully transition to more sustainable packaging across its operations. Moreover, there is an opportunity for Orkla to disclose a target to reduce its overall packaging consumption, notably related to its plastic use.

Clear and transparent labelling
The company reports on its 211 Keyhole-labelled products in 2020, an increase of 22% since 2019. It also discloses a goal to increase sales of Keyhole-labelled products to NOK 1 billion by 2025. There is, however, room for the company to disclose the percentage of products for which labelling commitments have been rolled out.

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

Governance and accountability for sustainable development
The company discloses that its decision-making process and oversight responsibilities for its sustainability strategy lie with its board of directors, notably by means of an annual assessment of progress in sustainability work. However, there is an opportunity for Orkla to improve its performance by enhancing the disclosure of its executives’ long-term incentive programme regarding sustainability and linking its board of director’s remuneration policy to sustainability-related targets covering topics across all three benchmark dimensions.

Stakeholder engagement
Orkla describes its stakeholder dialogue efforts over the previous year. Furthermore, the company demonstrates that it incorporates stakeholder feedback beyond its materiality matrix. Nevertheless, there is room for Orkla to improve its stakeholder engagement disclosure by clarifying its process for identifying relevant stakeholders across its value chain.

Scope 3 greenhouse gas emissions
The company has set a 2025 target of 29% reduction in its scope 3 GHG emissions in its value chain, outside its own operations, and 75% reduction by 2040 against a 2014 base year. The company reports annually on scope 3 emissions and shows some progress against the baseline. However, it only reports segments of its scope 3 emissions. Furthermore, the company could increase its disclosure by explicitly reporting progress against the target.

Protection of terrestrial natural ecosystems
The company discloses a commitment to remove commodity-driven deforestation from all supply chains by 2020, reporting on high-risk commodities including palm oil, cattle and soya. For its cocoa supply chain, the company has a goal of 100% of the cocoa purchased to be traceable by 2025. There is, however, room for improvement, as the company has not yet achieved 100% deforestation and conversion-free supply chains for all of its relevant high-risk commodities.  Notably, Orkla does not disclose where the sourcing regions for its beef are.

Fertiliser and pesticide use
While the company states that fertiliser and pesticide use is a challenge for sustainable sourcing, it is unclear whether the company engages in sustainable sourcing practices to optimise the use of fertilisers. Furthermore, no policy or targets were found in the public domain.

Food loss and waste
Orkla has a target to reduce food waste by 50% by 2025 and reports that it has reduced organic waste by 23% since 2014. While it lists examples from companies in the Orkla Food Ingredients business that contribute to reducing food waste, it does not provide enough evidence of activities to collaborate with value chain partners to prevent food loss and waste. Orkla has an opportunity to enhance its disclosure on its collaboration activities with value chain partners to prevent food loss and waste.

Animal welfare
The company has time-bound targets for 2025 that address key animal welfare issues for each sourcing category, including cattle, pigs, laying hens, poultry and sheep. It reports progress against the targets. However, while the company demonstrates overall good reporting, it discloses little evidence of processes such as third-party certifications or third-party audits. It has an opportunity to enhance its disclosure on its auditing processes for animal welfare.

Availability of healthy foods
The company has enhanced its criteria specifying the characteristics of sustainable food and grocery products, and classified all of its products in accordance with these. As such, it estimates that in 2020, the proportion of turnover from products that contribute to a healthy lifestyle was 19%. Nevertheless, the company is not transparent about its definition of ‘healthy foods’. There is an opportunity for Orkla to clarify its definition of healthy foods, establish a target for the percentage of healthy food products and report progress against it.

Accessibility and affordability of healthy foods
The company does not disclose a commitment to address food insecurity by improving the accessibility and affordability of healthy and nutritious foods. The company has an opportunity to enhance its disclosure on commitments and strategic commercial activities designed to improve the accessibility and affordability of healthy foods.

Responsible marketing
The company reports that it pays particular attention to communications that target children and young people concerning unhealthy products and supports the principles set out in the EU Pledge. It provides evidence of campaigns and initiatives aimed at inspiring consumers to adopt healthier consumption habits. Nevertheless, there is room for Orkla to improve its disclosure on responsible marketing by sharing the proportion of marketing budget spent on promoting healthy foods.

Food safety
While the company discloses compliance with national regulations and/or the Codex General Principles of Food Hygiene, it has an opportunity to strengthen its commitment by disclosing the percentages of its own operations that are certified to a food safety scheme by the Global Food Safety Initiative or other widely recognised certification.

Farmer productivity and resilience
The company provides examples of supporting farmer productivity and resilience through Orkla Eesti’s work with local farmers and its joint project with Uluva Yogi Horticulture Farmers Producer Company in Karnataka, India. However, there is room for Orkla to enhance its disclosure by reporting the impact of its support activities.

Child labour
The company commits to prohibiting child labour in its own operations and requires its suppliers to adhere to the same standard. In addition, the company requires its suppliers to have an age-verification system in place. However, it lacks a coordinated and consistent monitoring system for its own operations and supply chain – notably as its current monitoring is only used in specific high-risk place in its supply chain.

Forced labour
The company commits to prohibiting forced labour in its operations and requires its suppliers to adhere to the same standard. It also prohibits suppliers from retaining workers’ personal documents and restricting workers’ freedom of movement. However, it has an opportunity to disclose a commitment to respect workers’ rights to freedom of association and collective bargaining which references the prohibition of intimidation as well as specify that it does not interfere with workers seeking to exercise these rights.

Living wage
The company commits to pay its employees a living wage. However, there is an opportunity for the company to strengthen its commitment by including dependants in its definition of a living wage and demonstrating that its wages are enough to cover basic necessities and discretionary income for workers and their dependants.

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

Land rights
The company commits to recognising and respecting legitimate tenure rights related to the ownership and use of land in its Responsible Employer and Human Rights Policy, and to require that its supply chain adheres to a similar standard. There is room for Orkla to improve by establishing a grievance mechanism that covers land rights issues that is accessible to external individuals and communities or by requiring suppliers to have a grievance mechanism that covers land rights issues that is accessible to external individual and communities.

Orkla provides grievance mechanisms for both workers and third parties and commits to respecting the human rights of workers in its operations and supply chain. However, there is an opportunity for the company to improve its performance by increasing disclosure on its engagement activities with stakeholders whose human rights are potentially or actually impacted by its operations. Moreover, Orkla does not provide sufficient evidence of a human rights due diligence process and does not disclose it engages with affected and potentially affected stakeholders.

While Orkla publicly commits to respecting the health and safety of workers, workforce diversity and working hours fundamentals in its supply chain, the company can improve its performance by increasing its disclosure on these topics. Additionally, Orkla can improve on its gender equality and women’s empowerment ambitions by strengthening its commitments and policies. Lastly, Orkla does not disclose a sufficient commitment on living wages and does not report on key metrics regarding collective bargaining.

Orkla discloses publicly available policies or statements on personal data protection and tax, but there remains an opportunity for the company to increase its disclosure on taxes paid and the sharing of personal data. Regarding bribery and corruption, Orkla has a statement prohibiting these practices and extends these requirements to its supply chain but does not disclose how it identifies risks and impacts in its operations. Moreover, the company does not provide a publicly available policy statement setting out its lobbying and political engagement approach.