Tackling traceability: GRI launch new sector standards for food production

Supply chain due diligence has been pushed to the front of the corporate responsibility agenda of late, spurred by a legislative and regulatory focus on modern slavery, and headlines shedding light on sourcing commodities as diverse as cotton and seafood. The upcoming launch of a new standard for how organizations involved in food production can disclose the impact of their activities, should help to further drive transparency, and support responsible sourcing.

From procurement professionals to chefs, cost is key when it comes to sourcing products and produce. The true cost of these goods is regularly felt upstream in supply chains, by the communities or environment in which a product is grown, harvested, or processed. These impacts can be significant.

How a company manages its impacts is the focus of the Global Reporting Initiative (GRI) whose mission is to drive transparency and enable organizations to take responsibility. They do so by issuing the world’s most widely used standards for sustainability reporting – the GRI Standards. However, a GRI review of corporate disclosures by multiple companies in the same industry found that disclosure on the impacts of activities by those companies often lacked consistency. The lack of comparability between companies’ disclosures is likely due to large differences in activities and risks across sectors.

In response, the GRI is developing GRI Sector Standards in which, we note, there is a strong focus on supply chain traceability – a critical risk in this industry.

What are the Sector Standards and why are they needed?

The aim of the GRI Sector Program is to develop Sector Standards for 40 to 45 high-impact sectors, prioritized by their sustainability impacts. They are a direct response to the lack of alignment in disclosures reported by companies operating in the same industry.

What is the GRI Agriculture, Aquaculture, and Fishing Sector Standard?

The GRI Agriculture, Aquaculture, and Fishing Sector Standard program is the second pilot program to be launched. Prioritized due to these sectors’ significant sustainability impacts – it calls on companies in these industries to disclose 26 likely material topics.

“These sectors have been prioritized based on their widely documented impacts across economic, environmental, and social dimensions, including impacts on climate change and biodiversity, food security, farming and fishing practices, and community engagement.” – GRI

Seven of these topics are sector-specific topics, and two, including supply chain traceability, draw from recommendations in the existing Topic Standards but also include additional sector disclosures. The emphasis placed on traceability demonstrates a growing need for companies to understand impacts in their value chains and provide transparency through disclosures in their corporate reporting.

The GRI Agriculture, Aquaculture, and Fishing Sector Standard:

• Applies to organizations undertaking crop production, animal production, aquaculture and/or fishing,
• Does not replace the Universal or Topic Standards but adds to them,
• Includes 26 likely material topics: 17 relevant disclosures found in the Topic Standards, 7 additional self-contained sector-specific disclosures not included in other Standards,
• Includes linkages to the UN SDGs.

Key requirements:

• Use the applicable Sector Standard in conjunction with a materiality assessment when determining material topics,
• Provide an explanation of why any sector-specific topics have not been deemed material by the company in the GRI content index.

Focus on traceability

Based on ELEVATE’s experience with clients in these industries, a materiality assessment will likely result in supply chain traceability surfacing as material. If found to be material, companies reporting in accordance with the new Sector Standard must:

• Disclose actual and potential impacts, management approach, and evaluation of actions taken according to the revised Universal Standards,
• Describe the level of traceability in place for each product the organization sources,
• Report the percentage of suppliers in the organization’s supply chain that are certified or undergoing improvement projects or assessment,
• Report the percentage of products verified as being in accordance with credible internationally recognized responsible production standards, according to standard or product.

All companies in these industries are also recommended to:

• Describe the rationale and methodology for tracing the source, origin, or production conditions of raw materials and production inputs purchased.
  While organizations in the fishing industry are expected to:
• Describe the policies, assurance, and risk assessment processes of the organization related to risks of illegal, unreported, and unregulated (IUU) fishing,
  List collaborations intended to help address illegal, unreported, and unregulated (IUU) fishing that the organization participates in.

How companies in these industries may be affected?

The new Sector Standard is due to launch in early 2022, three years after the process began. The attention placed on traceability by GRI is much needed and will serve to guide discussions on what is material for companies in agriculture, aquaculture, and fishing industries and, therefore, what needs to be managed. However, companies that have recently undertaken robust materiality assessments should have arrived at a comparable list of topics ahead of those that have waited three years to be led by GRI.

Companies in these industries should begin to see a convergence of corporate reporting supported by comparable disclosures and data. The agriculture and food sector has a long history of certification schemes and responsible sourcing programs that should welcome new members and affiliates as companies outside of these programs better understand their risks and the benefits of transparency and collaboration.

With regard to supply chain and disclosure, we recommend companies to map and publish their supplier list – at least at the direct supplier level – as the first step to understanding where your goods come from and what potential supply chain risks your company may face. It is also prudent to conduct regular assessments of supply chain risk and identify suitable tools to monitor improvements.

How can ELEVATE help you?

Companies keen to prepare for the launch of the Standard can learn more by reviewing the exposure draft, and by getting in touch with ELEVATE, where we can explain more about sustainability reporting in accordance with GRI, the new Sector Standard, and how we can support you with our services for the Food and Agriculture industries.

ELEVATE is also helping to support the implementation of the Social Responsibility Assessment (SRA) tool for the Seafood Sector, including those Fishery Improvement Projects that are reporting on FisheryProgress.

ELEVATE co-hosted a webinar “The Future of Due Diligence in Seafood” with FishWise on September 30th, 2021. The webinar covered how to support a responsible seafood supply, particularly risk assessments and improvements. You can watch a recording of this webinar here.

Lastly, if you are a supplier, distributor, or purchaser of seafood in the Hong Kong market, reach out to our consultants in the Secretariat of the Hong Kong Sustainable Seafood Coalition to learn how you can join a growing body of industry representatives to advance the sustainable seafood market, by promoting responsible sourcing and consumption.

These blogs are written by ELEVATE staff members or associates and the views and opinions expressed are not necessarily those of ELEVATE.