METHODOLOGY UPDATES CSA 2021 Loss &

OVERVIEW: As part of the methodology development process for the 2021 CSA, we have created new questions and updated existing ones to ensure we are capturing the most material topics. Please find below the new and updated questions for this criterion in 2021.

The question texts and methodology presented may be subject to change at any time before the end of March 2021. In addition, questions may look different in the Online Assessment Tool in terms of question structure and layout.

Please note that all questions may not be applicable to your industry so please carefully consult the Industries Impacted section.

Introduction

Criterion Rationale In 2011, the Food and Agriculture Organization of the (FAO) estimated that a third, by weight, of all food produced in the world was lost or wasted, highlighting the significant economic, environmental and social impact of the inefficiencies in existing food systems.

International investor and civil society attention on the issue of is firmly reflected in the 2030 Agenda for Sustainable Development. Specifically, Target 12.3 of the Sustainable Development Goals (SDGs), calls for the halving of per capita global food waste at the retail and consumer levels and the reduction of food losses along production and supply chains, including post- losses.

In order to make effective progress on this issue, quantification of food loss and waste needs to be accurate and follow internationally recognized standards in order to understand how much food is lost and wasted, as well as where and why.

Corporations are called on to develop clear objectives to reduce their food loss and waste inventories. Whether this is addressing the costs of goods sold, improving of social and environmental performance, informing internal decision making, or to comply with government, industry association or other third-party reduction efforts. Defining such objectives need to be met with clear actions and measures in order to meet time-bound, long-term targets to significantly reduce overall inventory volumes.

Reason for Update

place to manage overall food loss and es a share of food loss & waste volumes, which are ultimately discarded. Additionally, we require companies to state the financial impact experienced due to these volumes in terms of intensity.

Summary of Changes

1. New Question: Food Loss & Waste Commitment 2. New Question: Food Loss & Waste Impact

1. New Question

Question: Food Loss & Waste Commitment

INDUSTRIES IMPACTED: AIR Airlines FOA Food Products BVG Beverages REX Restaurants and Leisure Facilities CNO Casinos & Gaming RTS Retailing COS Personal Products TRT Hotels, Resorts & Cruise Lines FDR Food & Staples Retailing

QUESTION RATIONALE Quantifying food loss & waste is an important foundation for reduction efforts that can deliver a diverse array of benefits from reducing costs associated with over-purchase and disposal to avoiding , or supporting efforts to eliminate hunger. By following recognized standards, corporations are better equipped to understand why and where losses occur and therefore also how to take appropriate actions to minimize food loss & waste volumes. Furthermore, efforts to appropriately quantify food loss & waste need to be met by clear, time- bound targets and actions across the value chain.

KEY DEFINITIONS

Food: Any substance whether processed, semi-processed, or raw that is intended for human

therefore no longer fit for human consumption. It does not include cosmetics, tobacco, or substances used only as drugs. It does not include processing agents used along the food supply chain, for example, water to clean or cook raw materials in factories or at home.

Inedible parts: Components associated with a food that is not intended to be consumed by humans. Examples of inedible parts associated with food could include bones, rinds, and pits/stones. Inedible parts do not include packaging. What is considered inedible varies among users, changes over time, and is influenced by a range of variables including culture, socio- economic factors, availability, price, technological advances, international trade, and geography, and is, therefore, to be included in food loss & waste quantifications.

Food loss: Losses that occur in the food supply chain up to but excluding, retail. Any food that is discarded, incinerated, or otherwise disposed of, and does not re-enter in any other productive utilization, such as feed or seed or other industrial uses. Losses that occur during storage, transportation, and processing, also of imported quantities, are therefore all included. Losses include the commodity as a whole with its non-edible parts.

Food waste: Waste which occurs at retail and consumer level. Food may be wasted in many ways; such as fresh produce that deviates from what is considered optimal, for example in terms of shape, size, and color, is often removed from the supply chain during sorting operations. Similarly, - consumers and large quantities of wholesome edible food are often unused or leftover and discarded eating establishments.

Measuring food loss & waste: Options may include; daily logs, mass balance, survey, proxy data, records, direct weighing, modeling, etc. Often, the options present a trade-off between accuracy and completeness on the one hand and the cost of conducting the quantification on the other. Hence, a company may have to use a range of methods that may be accepted if the method used is relevant to the goals, scope, and resources of the company.

Break-down of food loss & waste volumes by food category and/or lifecycle stage: Not a requirement of the FLW Standard, but companies may find it useful to do so in order to identify critical areas for improvement. companies may also disaggregate results in other ways (e.g., by geography or organizational units).

Alternative uses of food loss & waste: Streams that are utilized for other processes that may have economic, environmental, or social benefits instead of being discarded without any value creation since some level of food loss or waste might be inevitable. Therefore, it is essential that the current destination of food loss & waste volumes is tracked and that actions are taken to optimize the value created. Destinations and actions may include any of the below: • for energy production or industrial products: Entails the conversion of food loss or waste material into industrial products may include examples such as packaging (e.g. ) materials, traditional materials (leather or feather), or any other products which do not enter the food chain. Using processes to convert the material into energy or might include processes such as biochemical, /co-digestion, controlled combustion, or biomaterial processing. • Recycling for land applications or : May include; spreading, spraying, injecting, or incorporating organic material (e.g. harvestable crops left/tilled into the ) onto or below the surface of the land to enhance soil quality are examples of land application. Diverting materials from the food chain (directly or after processing) to animals is also to be included in this category. • : May take place through formal programs or informal efforts (that may also be referred to as food recovery, redistribution, or donation). Collection may take place at any point along the food supply chain, such as at the farm (e.g., field gleaning), the facility, or the outlet (e.g. , restaurant). Other destinations may include collection by a third-party. If relevant destinations have not been listed, please provide information on your chosen destination in the company comment.

Reduction of total food loss & waste volumes in existing processes: Actions taken in order to deliver tangible total volume reductions of your food loss & waste volumes in the value chain may include programs that address pre-harvest/-slaughter losses, , handling, manufacturing, inventory management, purchasing practices, employee engagement, revisiting shelf-life/sell-by date extensions, new product formulations, packaging innovations, new service solutions, etc.

DATA REQUIREMENTS When referring to 'food loss & waste', we do not expect reporting on both categories. Food loss and/or food waste may be reported separately, or a company may only be exposed to one category. Companies that are not exposed to food products, or evaluate food loss & waste to be a non- material issue for the company (e.g. financial impact negligible), may mark "Not Applicable" if a detailed explanation is provided in the comment box. Companies in the Food & Drug Retailing Industry that: • only do drug retailing should mark this question as "Not Applicable" and provide an explanation in the comment box • only sell durable goods should mark this question as "Not Applicable" and provide an explanation in the comment box • have operational control over the production of products (e.g. own brand label products), should also include food losses. Companies in the Casinos & Gaming industry (CNO) that are only into online gaming should mark

REFERENCES

Food loss & waste protocol: www.flwprotocol.org

QUESTION LAYOUT Requirement: The question requires publicly available information.

Does your company have a strategy to address food loss & waste? o Yes, we address aspects in our food loss & waste strategy Please indicate which group-wide commitment and associated programs you have in place to monitor and reduce your food loss & waste volumes and provide supporting evidence for each tick box:

Reference box (max 5. Allowed, public URL only)

□ Programs established to measure food loss & waste □ Programs to reduce the total volume of food loss & waste □ Measurable, time-bound and group-wide targets to reduce the total weight of food loss & waste □ Break-down of food loss & waste volumes by food category and/or lifecycle stage □ Programs aimed at using food loss & waste for alternative uses □ Collaboration with up/downstream partners to reduce the amount of food loss & waste in the value chain o No, we do not address any of these aspects publicly in our food loss & waste strategy o Not applicable. Please provide explanations in the comment box below. o Not known

2. New Question

Question: Food Loss & Waste Impact

INDUSTRIES IMPACTED:

AIR Airlines FOA Food Products BVG Beverages REX Restaurants and Leisure Facilities CNO Casinos & Gaming RTS Retailing COS Personal Products TRT Hotels, Resorts & Cruise Lines FDR Food & Staples Retailing

QUESTION RATIONALE For companies that have established the appropriate framework to quantify food loss & waste volumes, are able to take a systematic and disciplined approach towards reducing their overall food loss & waste. Some level of food loss or waste might be inevitable. However, it is essential that these waste streams are utilized for other processes that may have economic, environmental, or social benefits instead of being discarded without any value creation. Therefore, it is essential that the current destination is tracked and that actions are taken to progress towards total food loss & waste volume reduction as well food fit for human consumption getting recycled or ending in .

KEY DEFINITIONS Alternative uses of food loss & waste are streams that are utilized for other processes that may have economic, environmental, or social benefits instead of being discarded without any value creation since some level of food loss or waste might be inevitable. Therefore, it is essential that the current destination of food loss & waste volumes is tracked and that actions are taken to optimize the value created. Destinations and repurposing actions may include any of the below: • Recycling for energy production or industrial products entails the conversion of food loss or waste material into industrial products may include examples such as packaging (e.g. bioplastic) materials, traditional materials (leather or feather), or any other products which do not enter the food chain. Using processes to convert the material into energy or biofuels might include processes such as biochemical, anaerobic digestion/co-digestion, controlled combustion, or biomaterial processing. • Recycling for land applications or animal feed may include; spreading, spraying, injecting, or incorporating organic material (e.g. harvestable crops left/tilled into the soil) onto or below the surface of the land to enhance soil quality are examples of land application. Diverting materials from the food chain (directly or after processing) to animals is also to be included in this category. • Food rescue may take place through formal programs or informal efforts (that may also be referred to as food recovery, redistribution, or donation). Collection may take place at any point along the food supply chain, such as at the farm (e.g., field gleaning), the food

processing facility, or the food distribution outlet (e.g. supermarket, restaurant). Other destinations may include collection by a third-party.

Total discarded refers to sending material to an area of land or an excavated site that is specifically designed and built to receive . This may also include abandoning material on land or disposing of it in the sea, such as open dumps (i.e., uncovered, unlined), open burn (i.e., not in a controlled facility), the portion of harvested crops eaten by pests, and fish discards (the portion of total catch that is thrown away or slipped). Volumes for which the destination is unknown due to off-site processing should be added to this category.

Sending material down the sewer (with or without prior treatment) without control over is to be considered as discarded unless the company utilized wastewater to generate alternative uses (e.g. energy recovery).

DATA REQUIREMENTS a) Total weight of all food loss & waste: The weight food loss & waste should reflect both the total weights of food waste and the total weight of food loss, if applicable. Please report your volumes in metric tonnes. c) Total discarded: Volumes should include the destinations which are unknown due to off-site processing. This includes volumes that are sent to sewer (with or without prior treatment), including that which may go to a facility designed to treat wastewater. Please report your volumes in metric tonnes. d) Food loss & waste intensity: Please state the chosen approach to calculate the intensity. The recommended approach is to use food loss/waste weight per food sales. However, alternative intensity calculation approaches are also accepted (e.g. food loss & waste volumes by revenue). • If your intensity calculation is based on estimation due to challenges of data collection (e.g. AIR Airlines), please provide details of your approach in the textbox available. • If you only capture food loss and/or waste data in monetary values, please provide a comment in the comment section at the bottom of the question. e) Coverage: The coverage (or boundary/scope) of food loss & waste is determined by the food category, lifecycle stage, geography, and organizational unit for which the company has operational control (i.e. own operations).

Please provide the food loss & waste as a percentage of total food volumes or revenue generated by your organization and provide supporting explanations.

For further details on definitions of 'boundary', please review page 47 of the FLW Standards (see references).

Target: Please indicate the type of target you have set for food loss & waste: • if your company reports its target for food loss & wasted discarded in percent (or any other metric), please convert it to weight • if your company has set a food loss & waste target related to the percentage of alternative uses, please convert this to a target for total discarded.

Supporting evidence: Additional credit will be granted for relevant evidence in the most recent financial year covering each row. Further credit will be granted for information available in the public domain.

Third-party verification: For third-party verification, we expect that data in the most recent year reported has been third-party verified and that relevant documentation is attached showing this verification. Internal audits or verification will not be considered.

When referring to 'food loss & waste', we do not expect reporting on both categories. Food loss and/or food waste may be reported separately, or a company may only be exposed to one category.

Companies that are not exposed to food products, or evaluate food loss & waste to be a non- material issue for the company (e.g. financial impact negligible), may mark "Not Applicable" if a detailed explanation is provided in the comment box.

INDUSTRY-SPECIFIC GUIDANCE Companies in the Food & Drug Retailing Industry that: • only do drug retailing should mark this question as "Not Applicable" and provide an explanation in the comment box • only sell durable goods should mark this question as "Not Applicable" and provide an explanation in the comment box • have operational control over the production of products (e.g. own brand label products), should also include food losses.

Companies in the Casinos & Gaming industry (CNO) that are only into online gaming should mark

REFERENCES Food loss & waste protocol: www.flwprotocol.org

GRI 103-2

QUESTION LAYOUT

Notice: Additional credit will be granted for relevant public information

financial year, for the part of your company's operations for which you have a reliable and auditable data acquisition and aggregation system. This includes the share used for alternative purposes, volumes that are discarded, and your food loss & waste intensity. For each row in the table, it is mandatory that the values provided are in the appropriate unit and that at least data for the most recent reporting year is reported. o Yes, we measure our performance with regards to food loss & waste

Food loss & waste Supporting evidence FY FY FY FY Target 2017 2018 2019 2020 for 2020 a) Total weight of all food Metric tonnes loss & waste Reference box (max 3. allowed)

b) Total weight of food loss & waste volumes used for Reference box alternative purposes (max 3. allowed)

c) Total discarded (a-b) Reference box (max 3. allowed)

d) Food loss & waste intensity Reference box (max 3. allowed)

e) Coverage Reference box (max 3. allowed)

Third-party verification □ Our data has been third-party verified in the most recent financial year reported. Please provide supporting evidence.

Reference box (max 3. allowed)

o No, we do not address any of these aspects publicly in our food loss & waste strategy o Not applicable. Please provide explanations in the comment box below. o Not known

Contact Us

CSA Helpline +41 44 529 5160

Copyright© 2020 S&P Global Inc. All rights reserved.

Unless otherwise noted, all information, data and other material, including ratings or scores (all such information, is the exclusive property of S&P Global (Switzerland) SA, a subsidiary of S&P Global Inc., and/or its relevant affiliates permission of S&P. The Content shall not be used for any unlawful or unauthorized purposes. This publication is derived completeness and usefulness of any opinions, statements or other Content contained in this publication. The Content and any other expressed or implied. S&P Global (Switzerland) SA, a subsidiary of S&P Global Inc., and/or its relevant affiliates disclaim all warranties, expressed or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose.

S&P (and any third-party providers, as well as their directors, officers, shareholders, employees or agents) does not guarantee the accuracy, adequacy, completeness, timeliness or availability of any Content and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such Content. In no event shall S&P (and any third-party providers, as well as their directors, officers, shareholders, employees or agents) be liable for any direct, indirect, special, incidental, and/or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profit and opportunity costs) in connection with any use of the Content (including, without limitation, any opinions or other information expressly or implicitly contained in this publication).

Any opinions and views in this publication reflect the current judgment of the authors and may change without notice. Further, any opinions and views expressed by CSA participants do not reflect the policies or positions of S&P or any other person, organization or company. The Content contained in this publication is distributed with the understanding that the authors, publishers and distributors are not rendering legal, accounting or other professional advice or opinions on specific facts or matters and accordingly assume no liability whatsoever in connection with its use. The Content contained in this publication constitutes neither a solicitation, nor a recommendation, nor an offer to buy or sell investment instruments or others services, or to engage in any other kind of transaction, and such information is not directed to persons in any jurisdiction where the provision of such Content would run counter to local laws and regulations. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

https://portal.csa.spglobal.com/survey/documents/Use_of_Information_Policy.pdf and for personal information -policy-english.

S&P Global Switzerland AG, Zurich Branch, Josefstr.218, 8005 Zurich, Switzerland