Metrics
SASB Questionaire for Meat, Poultry and Dairy Industry

Working paper for SASB Questionaire for Meat, Poultry and Dairy Industry

Burgess COMMENTARY

Peter Burgess

Please indicate if each metric for Greenhouse Gas Emissions meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Gross global Scope 1 emissions Quantitative Metric tons CO2-e Yes No Yes No Yes No Yes No Metric Category Unit of Measure Description of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets Discussion and Analysis n/a Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No

SASB MEAT, POULTRY, & DAIRY INDUSTRY SURVEY Please indicate if each metric for Water Management meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Total fresh water withdrawn, percentage recycled, percentage in regions with High or Extremely High Baseline Water Stress Quantitative Cubic meters (m3), Percentage (%) Technical Notes: Water risk is as defined by the WRI Water Risk Atlas. Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No Please indicate the changes you would like to make to the Metric(s)/Disclosure Note(s) for this disclosure topic. Additional explanation/evidence is appreciated. Water should be considered in multiple steps: Clean water in, clean water out, Net use of water, Compare this to available water. Then energy used to clean water for water out. Separately you need to address dirty water discharge and the impact on the environment. Please indicate if each metric for Land Use & Ecological Impacts meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Number of incidents of non-compliance with water-quality permits, standards, and regulations Quantitative Number Yes No Yes No Yes No Yes No Metric Category Unit of Measure Amount of litter and manure animal waste generated, (1) percentage land-application, (2) percentage lagoon storage Quantitative Tons (t), Percentage (%) Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of operations that are concentrated animal feeding operations (CAFO) Quantitative Percentage by production output (%) Technical Notes: Concentrated animal feeding operation is defined according to EPA criteria. Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No Please indicate the changes you would like to make to the Metric(s)/Disclosure Note(s) for this disclosure topic. Additional explanation/evidence is appreciated. I don't like the use of percentage. The issue is how much absolute of these items. Number of non-compliance incidents depends on the prevailing regulatory regime ... this is also matter of corporate governance and the behavior of the company.

Please indicate if each metric for Food Safety meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Number of recalls issues, total weight of product recalled Quantitative Number, Tons (t) Yes No Yes No Yes No Yes No Metric Category Unit of Measure Number of facilities certified to a Global Food Safety Initiative (GFSI) approved standard Quantitative Number Technical Notes: Schemes that meet GFSI requirements include: British Retail Consortium (BRC), Food Safety Systems Certification (FSSC) 22000, International Features Standard (IFS), Safe Quality Food (SQF), CanadaGAP (Good Agricultural Practices), GlobalGAP, and PrimusGFS. Yes No Yes No Yes No Yes No Metric Category Unit of Measure List of markets banning import of registrant's products Discussion and Analysis n/a Technical Notes: The scope of bans includes those due to Sanitary and Phytosanitary (SPS) measures. The registrant should disclose, where relevant, the scope of the ban or suspension of sale, the length of time it has been in place, meat/products covered, and the stated reason (e.g. BCE). Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No Recalls ... how much product recalled relative to total production. Issue of severity of the recalls. Number of facilities ... how big are the facilities ... where are they located ... what amount of production flows through these facilities Food safety is a whole lot more than meeting prevailing regulation ... there are also huge issues related such things as growth hormone use, antibiotic use, feed containing pesticide (roundup) and so on. These components of the food safety issue need to be incorporated.

Please indicate if each metric for Workforce Health & Safety meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure (1) Total Recordable Injury Rate (TRIR), (2) Fatality Rate, and (3) Near Miss Frequency Rate Quantitative Rate Yes No Yes No Yes No Yes No Metric Category Unit of Measure Description of practices to monitor for and mitigate chronic and acute respiratory conditions Discussion and Analysis n/a Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No Safety ... the safety of the place People ... attitude to safety by management and staff Environment ... air quality Environment ... noise

ease indicate if each metric for Animal Care & Welfare meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Percentage of pork production without use of gestation crates Quantitative Percentage (%) Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of cage-free poultry Quantitative Percentage (%) Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of production certified to a third-party animal welfare standard Quantitative Percentage (%) Technical Notes: Relevant certifications include: Animal Welfare Approved, 5-Step, Food Alliance, Humane Farm Animal Care, and Global Animal Partnership Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of antibiotic-free animal production Quantitative Percentage (%) Technical Notes: “No hormone” livestock is defined by per USDA documentation requirements for labeling. Yes No Yes No Yes No Yes No Metric Category Unit of Measure Amount of feed that contains sub-therapeutic doses of antibiotics Quantitative Tons (t) Technical Notes: The scope of disclosure is restricted to sub-therapeutic doses. A suggested normalization factor for this metric is tons of production. Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No Percentages don't give a useful indicator of the scale of the issue. The issue of growth hormones and antibiotics is more an issue for human health than for animal welfare. The question of allowing photographs and videos of animals should be addressed ... why not some real time remote monitoring of treatment of animals?

Please indicate if each metric for Climate Change Adaptation meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Discussion of strategy to manage risks to feed sourcing and livestock production presented by climate change Discussion and Analysis n/a Technical Notes: Risks include but are not limited to disease migration, rise in macroparasites, increased animal stress and slower growth rates, water availability risks, and disruptions to feed supply. Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No This is very weak. a bit of talk and no walk! Something like life-cycle assessment needs to be in play for ALL the aspects of the supply chain with clear metrics for impact on all capitals during the supply chain, and through the entity's operations.

Please indicate if each metric for Supply Chain Management meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Percentage of outsourced production from suppliers meeting fair labor standards Quantitative Percentage (%) Technical Notes: Fair labor standards at a minimum should meet the criteria outlined in SA8000. Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of outsourced production meeting animal welfare standards Quantitative Percentage (%) Technical Notes: The scope includes those standards developed and enforced by registrant, as well as recognized third-party standards. Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of feed sourced from water-stressed regions Quantitative Percentage (%) Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No e indicate if each metric for Supply Chain Management meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Relevant/Useful Cost-effective Comparable Auditable Metric Category Unit of Measure Percentage of outsourced production from suppliers meeting fair labor standards Quantitative Percentage (%) Technical Notes: Fair labor standards at a minimum should meet the criteria outlined in SA8000. Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of outsourced production meeting animal welfare standards Quantitative Percentage (%) Technical Notes: The scope includes those standards developed and enforced by registrant, as well as recognized third-party standards. Yes No Yes No Yes No Yes No Metric Category Unit of Measure Percentage of feed sourced from water-stressed regions Quantitative Percentage (%) Yes No Yes No Yes No Yes No Would you like to suggest any changes to the Metric(s) or content for the Disclosure Note(s) (Technical Guidance) for this disclosure topic? Remember SASB metrics must meet the criteria above. Yes No Don't like percentage ... need some absolute quantities. Supply chain cuts across the other issues ... life cycle for everything should be taken into consideration. These disclosure guidance notes are way too long and not tied to anything of substance like the accounts. There is no way to summarize the information in a sensible way, and to drill down to identify the issues that are critical and need addressing immediately.

SASB MEAT, POULTRY, & DAIRY INDUSTRY SURVEY Activity Level Metrics and Normalization Factors SASB expects that users of SASB standards will normalize the metrics using different variables in order to create ratios to perform comparative analysis. General notes relating to normalization factors to consider when evaluating SASB’s Sustainability Accounting Standards are: SASB intends that when metrics are disclosed in the form of percentages and ratios, disclosure will include both the numerator and denominator. This will allow for: a) analysis of the raw data on an absolute basis and b) users to normalize the raw data to variables they select themselves. SASB will not specify disclosure of normalization factors typically found elsewhere in the Form 10-K such as revenue, EBIDTA, share price, etc. SASB welcomes advice on any additional normalization factors that will make the metrics more relevant, useful, comparable (peer-to-peer), and directional (for year-on-year comparisons) that are not included in the set of metrics and are not typically found elsewhere in the Form 10-K. Please indicate if each activity level metric meets the following criteria: Relevant/Useful: The metric adequately describes performance related to the disclosure topic, or is a proxy for performance; Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost; Comparable: The data allow for peer-to-peer benchmarking within the industry; Auditable: The data underlying this metric can be verified by auditors. Activity Level Metric Relevant/Useful Cost-effective Comparable Auditable Activity Metric Category Unit of Measure Number of processing and manufacturing facilities Quantitative Number Yes No Yes No Yes No Yes No Activity Metric Category Unit of Measure Output, by category; percentage outsourced Quantitative Tons (t) Technical Notes: Categories include beef, pork, poultry, eggs, dairy, other. Yes No Yes No Yes No Yes No Would you like to suggest any changes to the activity level metric(s) or content for the disclosure note(s) (technical guidance) for this industry? Remember SASB activity level metrics must meet the criteria above. Yes No Please indicate the changes you would like to make to the Activity Level Metric(s)/Disclosure Note(s) for this industry. Additional explanation/evidence is appreciated. Sustainability metrics are not part of any clear framework ... they are random questions addressing a range of issues (of great interest and importance) that are not linked together in any logical fashion. Conventional accounting (and FASB) addresses issues relating to money transactions (flows) and financial capital (state). The sustainability world should be accounting for and reporting for the other capitals: physical capital, human capital, social capital, institutional capital, intellectual capital and natural capital. Food is vital for the maintenance of human capital, but its production has huge impact on many aspects of natural capital. Conventional accounting has both balance sheet and profit and loss account ... the flow and the state. SASB needs to be clear about reporting information about state (of all the capitals) and the flows (that impact all the capitals). At the moment this is not at all clear.

SASB MEAT, POULTRY, & DAIRY INDUSTRY SURVEY Section 3: Comments on Research Brief This is the final section of the survey and it seeks to capture your comments on the research brief that you have reviewed. This section will take approximately 5 minutes to complete.

Did the research brief provide the information you needed to complete this survey? Yes No Please let us know what additional information we could have provided to prepare you to complete this survey. I want to do a reality check. There are lots and lots of questions, but in the end what can I do with the answers. We have had fifty years of getting more and more data, and yet decisions are not much better because the data are not helping in the way they should be. This questionnaire has been all about defining things but to what end. There is a need for a system of accounting that addresses all the issues implied by the word sustainability, and I don't see this at all in this questionnaire and the standards being defined. What is Sustainability Accounting? Is it merely a pile of questionnaires or is it something more. Conventional financial accounting has a single unit of measure (money) that is used to quantify everything that is impacting financial capital and there is real clarity about what is state (going into the balance sheet) and what is flow (going into the profit and loss account). Conventional accounting also has very strong rules about how 'consolidation' takes place ... but law and FASB allows all sorts of reporting avoidance so that issues in a supply chain (for example) can be ignored in the analysis of company performance. I see the need to expand conventional accounting for impact on financial capital to be expanded so that sustainability accounting addresses impact on all the capitals: physical capital, human capital, social capital, institutional capital, intellectual capital, and natural capital. Conventional accounting also has a focus on the performance of an organization. There is a need for a system of accounting that not only addressed the multiple capitals but also looks at the progress and performance pf society and the economy from different perspectives ... specifically from the perspective of people, place, planet and product. The system should allow for optimization so that we get the most benefit flowing into people (human capital) while the least damage is being done to the other capitals, especially natural capital. Typically accounting is about what has happened (historic accounting, if you will) and financial analysis tend to project into the future and compute value based on the present value of the future. This is how capital markets work for financial capital, and we should be able to do something like that for the other capitals. We should be careful about using the standard formula for present value which discounts the future. Rather there should be some better thinking about how to take into account in present value the impact of risk that has the potential to be calamitous. Food is vital ... but it is also doing huge damage to natural capital and maybe also doing more damage to human capital than we want to admit. In your opinion, were there any inaccuracies in the research brief? Yes No

SASB MEAT, POULTRY, & DAIRY INDUSTRY SURVEY General Comments (Optional) Questions, Comments, or Testimonials Please feel free to include any last thoughts, concerns, or suggestions regarding the Standards or the IWG Process. We greatly appreciate any comments or testimonials. You will submit your survey on the following page. The SASB initiative is very important ... and it must be successful and become a core part of the dataflows associated with social and economic metrics about progress and performance of the society and the economy. A singular focus on growing financial capital at the expense of all the other capitals is a formula for disaster. It worked pretty well when the global economy was small relative to the planet but times have changed. In 1900 the global population was 1.7 billion and now it is around 7.1 billion. Standard of living is 10 times better (bigger) so an economy and impact that is 40 times (at least) what it was 'back in the day'. We have to have metrics that reflect this reality and conventional accounting and conventional macro economics does not 'cut it'. I qualified as a Chartered Accountant in the UK almost 50 years ago. I learned a lot about the 'principles' of accounting and how important it was that these principles remained at the core of the accountancy profession. Eventually I came to the United States and was appalled that principles had been overtaken by regulations, rules and standards ... some of which made no sense from a principled perspective. I see the need for some clarity about the principles for sustainability accounting, or if not principles some clarity about the framework for sustainability accounting. The work I have been doing in this space is emerging as Multi Dimension Impact Accounting (TrueValueMetrics.org)

Addtional Contributors If applicable, please provide SASB with any additional names or functions of people who helped you to answer our survey. SASB will only use this information internally. These individuals will not be contacted or disclosed externally. This information helps us to further contextualize the survey responses, and also helps to improve our recruiting efforts for future industries. I have been talking about better metrics for about 30 years. For half my career I was in the corporate world and was a very young CFO. For another part of my career I have worked in international development and emergency response and appalled at the state of the world from the perspective of the Bottom of the Pyramid. Simply optimizing for financial capital will not make a much better world ... but doing good can. There is no accounting for doing good, and certainly no bank to store the good one does. Sustainability accounting is a first step in getting to a better world ... you manage what you measure. I have talked to thousands of people over the years ... and there is a growing community of people that would love to be involved with 'good things'. CEOs are talking the talk, but the CFOs do not have effective tools to justify doing good because they are fixated by conventional accounting and the impact there is on financial capital alone.

SASB MEAT, POULTRY, & DAIRY INDUSTRY SURVEY Survey Submission Please submit your survey by clicking on the SUBMIT button below. You’ll be able to save a PDF with your answers on the next page. Please note that once you submit your survey, you won't be able to change your responses. Thank you again for your participation in a SASB Industry Working Group. If you have any questions please contact Katie Schmitz-Eulitt at katie@sasb.org