Meeting tomorrow’s demand COFCO International Sustainability Report 2017 cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 1 About us Upholding CEO Welcome 3 message standards page 3 page 13 Operations 4 Value chain 5 Our approach Meeting tomorrow’s demand 7 2017 in numbers 10 The bigger picture 11 Sustainability Pillars Upholding standards 13 Taking care of our people 15 Our Managing our environmental impact 21 operations Connecting supply and demand responsibly 25 page 7 Building strong communities 30 Further information About this report 34 Taking care Connecting supply and of our people demand responsibly Certifications 35 page 15 page 25 Memberships 37 This report covers the 2017 calendar year and applies the Global Reporting Initiative (GRI) Standards: Core option. For more information about this report, see page 34. Cover Image: COFCO International corn supply in Lincoln, Argentina. We are the 2nd largest exporter of grains and oilseeds in Argentina. cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 2 Welcome | Operations | Value chain About us We’re building a world- class global agri-business committed to providing the food the world needs in a responsible way. Image: COFCO International soybean supply in Mato Grosso, Brazil. We are the 3rd largest exporter of soybeans from Brazil. cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 3 Welcome | Operations | Value chain Supported by our Sunshine Culture, our new We strive to create a people-first culture and take Welcome sustainability strategy guides us in our aim to the safety and lives of our people as the top to our first become a world-class agri-business positioned to priority. This report shows the many ways in which meet tomorrow’s demand. This report shows the we engaged, developed and inspired our teams sustainability progress we are making towards our vision – and around safe and healthy behaviours, as well as report the challenges we have encountered along the way. lessons we have learned in this journey. Partnerships for sustainable development Reflecting the important link between climate change The Paris Agreement on climate change and the and the world’s agriculture, I am pleased to report UN Sustainable Development Goals help set the that 82% of our energy consumption came from context for our approach to sustainable agriculture renewable sources in the last year. Almost two thirds commodity supply. We are also aligned to of our waste is now reused, recycled or composted. internationally recognised sustainability standards By 2050, there will be over nine billion such as those of the International Finance In our communities, we now reach more than people living on our planet – almost Corporation, one of our shareholders. Building on 14,000 people with our programmes to support two billion more than today. At the strong values of partnership, we have decided to education, health, youth employability and same time, pressure on agricultural join as a member the World Business Council for environmental prospects. land and natural resources is stretched Sustainable Development in the coming days to Given the integration of COFCO International to the limit. Against this backdrop, catalyse change within our sector and beyond. in 2017, we may be in the early stages of our sustainability is defined as a core Continuous improvement sustainability journey, but these are exciting times value of COFCO International. It Recognising that our most significant environmental for COFCO International. I see a unique and social impact lies within our supply chains, we opportunity to create a lasting positive impact on forms an integral part of our business some of the world’s greatest challenges. I hope strategy, as we work to strengthen our work to better understand and support farmers and producers, starting with soy sourcing in Latin you will see our commitment reading this report, direct commodity sourcing capacity in America. Technologies such as geo-mapping are and I welcome your thoughts and feedback along key producing countries and expand helping us better track and improve the our path to meet tomorrow’s demand. our presence in rapidly growing sustainability performance of suppliers. demand markets. Johnny Chi Chief Executive Officer cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 4 Welcome | Operations | Value chain At a glance 1. Latin-America 2. North America $34bn 1,281 98 REVENUE Grains Oilseeds Sugar Coffee Cotton Freight 9,318 165 TOTAL STAFF TOTAL STAFF 105m TONNES TURNOVER 8,037 67 Office Assets Office Assets 33m 45 10 3 4 3 TONNES PORT CAPACITY WAREHOUSES TERMINALS WAREHOUSES TERMINALS 2 9 30m PROCESSING FACILITIES TONNES PROCESSING CAPACITY 3. EMEA 4. APAC 868 380 2.7m TONNES INLAND STORAGE 1,855 1,123 TOTAL STAFF TOTAL STAFF 1 4 12,461 986 744 EMPLOYEES Office Assets Office Assets Storage Port terminals Processing Main commercial offices 13 4 1 2 35 WAREHOUSES TERMINALS WAREHOUSE TERMINALS COFCO International shareholders COUNTRIES 2 6 PROCESSING FACILITIES PROCESSING FACILITIES cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 5 Welcome | Operations | Value chain Value chain how we meet tomorrow’s demand 2/ 4/ Storage and Trading and handling merchandising We collect, store We connect supply and handle our and demand through products efficiently our various trading platforms 1/ 3/ 5/ Sourcing and Processing Transportation production Once sourced and distribution We source grains, and produced, we We supply our oilseeds, cotton and process and refine products to customers coffee from major our products through efficient producing countries transportation and and produce distribution networks sugarcane for our sugar mills in Brazil cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 6 Meeting tomorrow’s demand | 2017 in numbers | The bigger picture Our approach Sustainability as a core value of COFCO International Image: Soybean harvesting in Mato Grosso, Brazil. cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 7 Meeting tomorrow’s demand | 2017 in numbers | The bigger picture Meeting COFCO International Materiality Matrix tomorrow’s Sustainable demand agricultural sourcing Respect for human Our materiality analysis and labour rights Responsible In 2017, we conducted a rigorous materiality agricultural production Community engagement assessment to identify the issues of greatest importance to our stakeholders and our business. This consisted of research into industry and Energy efficiency and reduction of emissions sustainability standards in order to generate a set of most relevant sustainability issues for consultation. Occupational health and safety We then engaged stakeholders, including COFCO Good governance International leadership, investors, employees, civil (Agricultural) and compliance society, clients, industry associations and regulators. innovation Stakeholders were requested to rank each identified Product quality Water issue based on its level of importance. and safety management Based on the consultation results, we identified Importance for External Stakeholders External for Importance 12 material issues for COFCO International as well Waste management as stakeholders, which are plotted on the matrix Talent attraction shown to the right. and staff retention On the following page, we show how we group these 12 issues into five pillars, which form the basis of our sustainability strategy Importance for COFCO International cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 8 Meeting tomorrow’s demand | 2017 in numbers | The bigger picture Our – Code of Conduct – Responsible land acquisition and leasing policy sustainability – Food and feed safety policy Good governance Product quality – Human rights and labour policy strategy & compliance & safety – Occupational health and safety policy Respect for human & labour rights Occupational health and safety Upholding Our sustainability strategy, standards of Taking care meeting tomorrow’s demand, our people Community engagement is our roadmap to feeding a – Stakeholder engagement policy Talent attraction growing population sustainably. & staff retention It consists of five main pillars, Building strong 12 material issues and policies communities to guide implementation. supply & demand Connecting Sustainable responsibly agricultural sourcing – Supplier Code of Conduct, including commodity-specific policies Waste management Energy efficiency & reduction Meeting of emissions impact Managing our tomorrow’s environmental Agricultural demand innovation Responsible Strategic objectives agricultural production Water management – Environmental policy Material issues All our sustainability policies are available at: www.cofcointernational.com/sustainability/ our-policies/ Sustainability policies cofcointernational.com Contents About us Our approach Sustainability Pillars Further information 9 Meeting tomorrow’s demand | 2017 in numbers | The bigger picture The team is supported at an operational level Our by 33 sustainability coordinators across 25 countries. In our coffee and sugar business, sustainability we also have three staff tasked with sustainability responsibilities, to ensure the implementation of strategy corporate policies