New ESG Reporting Standard for Supermarkets
Food retailers may now track their sustainability performance using a comprehensive set of criteria.
The non-profit Ratio Institute has published its Food Retail Environmental, Social, and Governance (ESG) Reporting Standard, guidance for businesses to implement specific operational changes while increasing their openness with investors and other stakeholders.
Historically, food retailers have tracked ESG performance using non-industry-specific reporting frameworks such as the Climate Disclosure Project and Global Reporting Initiative, making it difficult for investors, vendors, non-governmental organisations, and consumers to evaluate company efforts, according to the Ratio Institute of Santa Cruz, California.
The new standard aggregates measurements from multiple well-established voluntary reporting frameworks into an easy-to-implement food retail-specific reporting methodology.
The institute added that, as a result, businesses can establish ESG objectives and design strategies to accomplish them while also providing insights into operational changes that increase profitability.
Jonathan Tan, co-founder of Ratio Institute, said:
"Equipped with a systematic approach to grade their operations, food retailers can more easily define their baseline and identify the changes necessary for large greenhouse gas emissions and other performance gains. This is a huge opportunity to raise the industry’s profile as a sustainability leader. It is also a big profit opportunity for both retailers and investors. Now investors can easily compare food retail companies against best-in-class performers and make better-informed investment decisions.”
The ESG Reporting Standard defines important components of a high-quality ESG report, including governance and risk management, greenhouse gas emissions, food safety, occupational health and safety, labour, human rights and diversity, equity and inclusion (DEI), and sustainable supply chain and sourcing.
Several stakeholders, including the Independent Grocers Alliance (IGA), FMI-The Food Industry Association (FMI), and the National Retail Federation (NRF), are already on board with Ratio Institute's activities (NRF).
Andrew Harig, vice president of tax, trade, sustainability, and policy development at FMI, said:
"FMI members are focused on making sure that the same transparency and rigour they bring to financial reporting are brought to bear in their ESG reporting. Ratio Institute has created a food retail-focused tool that can help with that process by offering a standardised framework for communicating the metrics, best practices, commitments, and progress on ESG goals that are increasingly important to grocery’s business model.”
Mark Koppang, director of sustainability at Raley’s Supermarkets, said:
"This is a great first step in defining sustainability reporting in the grocery industry. It enables companies to demonstrate their ESG commitment to their team members and customers and improve the industry overall.”
Radio Institute, which is collaborating with several stores and cooperatives to implement the standard, solicited feedback from retailers, sustainability professionals, regulators, and vendors during a sixty-day public comment period. To aid stores in adopting the standard, the Institute provides consulting services, educational training, and the Sustainable Food Retail Certification programme.
Source: Supermarket News
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