Climate change

CLIMATE CHANGE

G4-DMA

Purpose

The preservation of the environment is priority in the industrial operations of Grupo Nutresa. Forest beside the plant of Compañia Nacional de Chocolates, Rionegro, Colombia.

The preservation of the environment is priority in the industrial operations of Grupo Nutresa. Forest beside the plant of Compañia Nacional de Chocolates, Rionegro, Colombia.

 

To contribute to the mitigation of and adaptation to climate change through the implementation of actions aimed to reduce Greenhouse Gas (GHG) emissions, the ongoing search for greater energy efficiency, the implementation of clean technologies, the efficient use of raw materials in Grupo Nutresa operations and the evolution of products to meet the demands from a more conscious market.

Strategy and Progress 2015

Strategy Progress 2015
Reduce GHG emissions. ico_f_verde

A 16.4% cumulative reduction in Grupo Nutresa’s corporate goal was achieved for the 2010–2015 period.

ico_f_verde

These results were affected by an increase in the emission factor for electricity in Colombia.

Ensure the use of cleaner fuels in all operations. ico_f_verdeOscuro

The use of cleaner fuels (biomass, natural gas, electricity) is maintained at a superior level of 97,9% of the energy basket in Colombia.

ico_f_verdeOscuro

The use of biomass continues, accounting for 18.3% of the energy basket in Mexico, Costa Rica, Colombia, Peru and Chile and representing 62,807 tons of carbon–neutral (CO2e) emissions.

Mitigate the impact of products on climate, throughout their life cycle. ico_f_verdeA

The measurement of carbon footprint of the products in the TOSH biscuit line was updated.

ico_f_verdeA

The Coffee Business continued with ICONTEC certification of neutrality in its carbon emissions associated with the roasting and grinding process, representing 5,200 tons of CO2e/year.

ico_f_verdeA

The carbon neutral certification and the renewal of its neutralization were updated for the Tresmontes Lucchetti Livean line of products.

Risks and Opportunities

Climate change poses threats to the economic development of the companies; the sustained increase in global temperatures and the consequences on the frequency and intensity of weather events affect the availability of resources, which encourages governments to respond with laws regulating their use.

The vulnerability analyses on key aspects, such as availability of energy sources and raw materials, are an input to the risk management plan and determine to what extent alterations in climate parameters, physical changes and modifications in society require adaptation actions in the value chain in which business is conducted.

The Grupo Nutresa corporate model considers climate change a relevant aspect in its strategy, due to threats and opportunities posed by the economic development of the organizations, so that – initially – it has focused its management on the pursuit of greater energy efficiency and the use of cleaner technologies that lead to the reduction of greenhouse gases (GHG) in production processes and then move to offsetting.

Future Perspective

Climate change poses major challenges for the Grupo Nutresa companies, given their geographical location and the markets they serve; therefore, the Organization must respond proactively by developing and permanently improving its mechanisms to mitigate and adapt to this phenomenon.

In 2016, the result of the methodological revision of Carbon Pricing for Grupo Nutresa will be implemented as an alternative to fixation and embedding the carbon price in the financial evaluation, which favors projects to improve and reduce carbon emissions.

Also, it is expected to advance in the analysis of climate–change risks, especially in quantifying the financial risk and adopting the measures, timelines and estimated costs of the actions to be followed in areas where there are possible effects of climate change and/or water shortage, the impact of which can directly affect operations.

In the short term, we will continue with the technological–transformation processes, updating equipment with more efficient options, conducting energy audits, modifying production standards and eco–designing.

Finally, we will continue to expand the basis of the analysis of the carbon footprint in processes and products, which will serve as a guide to determine where is more efficient to make changes to reduce emissions. Also, the businesses will continue advancing in the implementation of emission–neutralization programs for specific products and processes.

2020 GOAL:
33% REDUCE EMISSIONS OF GREENHOUSE GASES.

Remarkable achievements

icono estrella calidadCompañía Nacional de Chocolates was declared a Carbon Neutral company in Costa Rica. The company updated its GHG inventory, produced a manual to declare carbon neutrality and – through energy–savings projects – estimated its reductions in CO2e. Emissions were neutralized through forestry development programs, supported by the National Fund for Forest Financing (Fondo Nacional para el Financiamiento Forestal, FONAFIFO).

icono estrella calidadA noteworthy success story is the improvement in the process of centralizing refrigeration in the Cold Cut Business in Caloto, allowing it to have its first Freon–free plant. This generated energy reductions estimated at 127,834 kW/year, a reduction of 25,567 kg CO2e/year and cost savings of COP 32,000 million/year. Further, by dispensing with five Freon–refrigeration units, the emission of ozone–depleting and GHG emissions is mitigated; preventive and corrective maintenance costs of this equipment are decreased byan approximate value of COP 12,000 million/year.

Progress 2015

As a strategy by 2020, Grupo Nutresa defined corporate objectives to mitigate the impact on climate change and minimize its risks, in order to be prepared for and adapt to future changes in climate parameters and the behavior of society towards the Organization’s products and services. This, through an ongoing process of surveillance and strategic monitoring to maintain the risk matrix updated for the entire strategic region and to be prepared for the timely design of strategies to adapt to climate change.

2020 GOAL:
100% USE OF CLEANER ENERGIES

 

In Colombia, there is currently no binding legislative framework on carbon emissions, even though since 2012 the National Government has been reviewing a proposal to create a carbon tax that has not yet become effective.

The situation in Chile, Mexico, Costa Rica and the United States is different. While no regulations have been established on this matter in these countries, in the case of the United States there are emission–trading schemes in place and the possibility of establishing carbon taxes is being studied in several states. Mexico already has a Government initiative to put a price on carbon and Chile expects that a similar initiative will take effect between 2017 and 2018.

Financial implications and other risks and opportunities for the organization’s activities due to climate change G4-EC2 SDG 13

Risks and effects of regulatory changes In the valuation exercise of corporate risk, Grupo Nutresa determined that climate change is a factor of high importance to the business, it identified scenarios in the short and medium term of creation of payments for GHG emissions. In the long term the Organization envisages that the labeling of Products Environmental Footprint (PEF), based on the life cycle analysis could be a legal barrier to coffee products, meat and pasta.
Financial implications of the risk or opportunity before action is taken Between COP 1,785 millions and COP 8,440 millions.
Projected time frame in which the risk is expected to have substantive financial implications 5 to 7 years.
Methods used to manage the risk or opportunity See within this chapter information related to Incentives for Employees to Reduce Carbon Emissions, Corporate Carbon Pricing Model, Innovation Directed toward Low–Carbon Development and Product Carbon Footprint.
Methods used to manage the risk or opportunity See within this chapter information related to Incentives for Employees to Reduce Carbon Emissions, Corporate Carbon Pricing Model, Innovation Directed toward Low–Carbon Development and Product Carbon Footprint
Risks and effects of weather physical changes Due to the increasingly intense climate variations and volatility of oil prices, the Organization identified that the volatility of commodity prices could reduce profitability.
Methods used to manage the risk or opportunity See within this chapter information related to Innovation Directed toward Low–Carbon Development and Product Carbon Footprint
Projected time frame in which the risk is expected to have substantive financial implications More than 6 years.
Methods used to manage the risk or opportunity See within this chapter information related to Corporate Carbon Pricing Model and Product Carbon Footprint.
Risks due to changes in
climate parameters
Consumers are increasingly aware of the environmental impacts of products.
Projected time frame in which the risk is expected to have substantive financial implications 1 to 5 years.
Methods used to manage the risk or opportunity See within this chapter information related to Mitigation of Environmental Impacts of Products and Services.

INCENTIVES FOR EMPLOYEES TO REDUCE CARBON EMISSIONS

The Organization encourages employees in senior positions of responsibility and positions with operational responsibility to meet the strategic objectives for 2020.

In addition, Grupo Nutresa has a variable compensation system that considers key indicators, such as identifying, measuring, reducing, offsetting and mitigating GHG emissions, energy consumption and environmental initiatives that directly affect climate change and its effects. These performance indicators are part of the additional compensation for the first level of management, Operations Managers, Production Managers, Heads of Maintenance and Heads of Environmental Management.

Managing environmental indicators includes the following purposes: to reduce the consumption indicator of non–renewable thermal energy and electricity, reduce the GHG emissions per ton produced (Scopes 1 and 2) and have an energy basket in which clean energies (biomass, electricity and natural gas) are predominant.

Consequently, senior management in each business is responsible for leading the implementation and execution of projects that help to optimize energy consumption and reduce GHG emissions in the plants.

CORPORATE CARBON PRICING MODEL

During 2015, Grupo Nutresa developed a proposal of a model to assign a value to carbon emissions within the economic feasibility studies of projects. This allows direct technological upgrading toward a low–carbon industrial development. The inclusion of a carbon price for the internal assessment of CapEx projects will take place in 2016.

INNOVATION DIRECTED TOWARD LOW–CARBON DEVELOPMENT

Yariguies Farm certified in the capture of carbon emissions.

Yariguies Farm certified in the capture of carbon emissions.

Recognition for continuous improvement through the Innovative Success Stories program, which is part of the Imagix Model (see the chapter on Effective Innovation), where all Company employees and suppliers can participate with their ideas to improve processes and products, considers special recognition to those focused on preventing, controlling and mitigating environmental impacts, including those related to climate change.

PRODUCT CARBON FOOTPRINT

The Organization progresses in calculating the carbon footprint of six product categories: biscuits, chocolates, sausages, coffee, ice cream and pastas, for more than 279 references. Additionally, the calculation and verification of the carbon footprint for 30 TOSH product references was conducted by the Colombian Institute of Technical Standards and Certification (Instituto Colombiano de Normas Técnicas y Certificación, ICONTEC), as well as the calculation and verification of the carbon footprint of the processes in the Coffee and Chocolate businesses. In addition, the carbon footprint was calculated for cold powdered beverages, with the Livean and Zuko brands.

ico_ca_amarilloChequeado

MITIGATION OF ENVIRONMENTAL IMPACTS OF PRODUCTS AND SERVICES G4-EN7 SDG 7 SDG 8 SDG 12 SDG 13

Grupo Nutresa strengthens the value proposition of its brands and products to ensure preference, satisfaction, loyalty and market leadership, as well as a better understanding of the needs of consumers, shoppers and customers. Innovation is one of the growth engines and, in this sense, it has the challenge of creating products with less impact on the environment. The following are examples of products and processes that were developed with the potential to reduce GHG emissions:

  • Fast food products that are cooked in less time and require less energy.
  • Products that eliminate the need for heat to achieve solubility, thus eliminating the need for energy in their preparation.
  • Frozen products that are modified in the process to only need refrigeration.
  • Instant beverages that remove the transported water, and therefore reduce their carbon footprint during distribution.
  • Decrease in the weight of packaging, thus reducing emissions in transport and distribution.
  • Avoidance of refrigerant gases with high global warming potential and usage of solar energy in freezers to store ice cream.

EMISSIONS OF GREENHOUSE GASES (GHGS)

In 2015, a 16.4% cumulative reduction of the GHG emission indicator (Scopes 1 and 2) for the period 2010–2015 was achieved.

The emissions per ton produced in Colombia increased 5.9% over 2014, mainly due to weather conditions that affected the country and increased the emission factor of electricity by about 10%. Also, specific situations arose in the shortage of natural gas to the industrial sector, which led some plants to use less–clean fuels.

Reduction of greenhouse gas emissions G4-EN19 SDG 13 SDG 14 SDG 15

Crecimiento e innovacion_02
Net Reduction of tCO2e Emissions
2014
669.70
132.40
2015
68.8
169.7
Net Reduction of tCO2e Emissions
2014
2015
Reduction in Scope 1 thermal energy consumptions
669.70
68.8
Reduction in Scope 2 electricity energy consumptions
132.40
169.7
Sustainable Development session in Colcafé.

Sustainable Development session in Colcafé.

 

Continuity was given to the GHG inventory in the distribution process for operations in Colombia, resulting in a total of 64,598 tons of CO2e for 2015. Of this total, 21,969 tons correspond to primary transport (or distribution from the place of production to regional centers or between major cities) and 42,629 tons to secondary transport (store–to–store distribution). Of total emissions, 16% (10,365 tons of CO2e) was generated by vehicles owned by Grupo Nutresa (Scope 1) while 84% by transportation suppliers (Scope 3), presenting a reduction of 16.8% over values reported in 2014.

The calculation methodology includes data on weight transported, distance traveled, type of vehicle and mode of transport according to Company dispatch records for 2015. Subsequently, each record was assigned an average yield by type of vehicle; fuel consumptions per trip were estimated according to the distance traveled.

The calculation was made according to the GHG Protocol methodology and took into account carbon dioxide (CO2), Methane (CH4) and nitrous oxide (N2O) emissions from the burning of fossil fuels, excluding emissions associated with biofuel blending established by the Colombian Ministry of Mines and Energy, as well as emissions from leaks of refrigerant gases. GHG emissions were calculated according to emission factors of Colombian fuels (Factores de Emisión de Combustibles Colombianos, FECOC).

OTHER INDIRECT EMISSIONS OF GHGS (SCOPE 3) G4-EN17 SDG 3 SDG 12 SDG 13 SDG 14 SDG 15

Foto panorámica planta Molinos Santa Marta, Colombia.

Foto panorámica planta Molinos Santa Marta, Colombia.

ico_ca_avionEmployee air travel (tCO2e)

Distribution (tCO2e)

Total GHG emissions (Scope 3) (tCO2e)

2015

2,745

64,598

67,343

2014

2,334

77,680

80,014

In the same line, during 2015 the first GHG inventory was conducted for Servicios Nutresa Colombia, establishing this as the base year for subsequent measurements. The study used the ISO 14064–1 methodology and the GHG Protocol, and took into account direct Scope 1 and indirect Scope 2 emissions. Servicios Nutresa’s emissions were 217 tons Co2e, of which 28 tons Co2e are direct emissions and 189 tons Co2e, indirect, corresponding to indirect emissions associated with the use of electricity.

GASES THAT DEPLETE THE OZONE LAYER G4-EN20 SDG 3 SDG 12

The emission of gases that deplete the ozone layer reached 0.172 tons of chlorofluorocarbons (CFC–11) equivalent gases, represented in accounting for the leakage of R–12, R–22 and R409a refrigerants. The Organization conducts preventive maintenance processes and technological upgrades to prevent the leakage of this type of gases; however, in 2015 there were leakages of the R–22 refrigerant gas.

Emissions of ozone–depleting substances are estimated with gas consumption included in the Montreal Protocol registered in weight and the emission factor relative to CFC–11, in the Organization’s different plants. For mixtures, the composition is identified and emissions are estimated according to the percentage of participation of each gas included in the Protocol.

NOX, SO2 AND OTHER SIGNIFICANT ATMOSPHERIC EMISSIONS G4-EN21 SDG 3 SDG 12 SDG 14 SDG 15

NOX, SO2, MP and COVs emissions in Colombia come from heating sources (furnaces and boilers) at each plant and from the coffee roasting process. Emission factors from the US Environmental Protection Agency are used.

 

PM: Particulate matter/ SO2: Sulfur Oxides
NOx: Nitrogen oxides/ VOC: Volatile organic compounds

 

Lansdcape recovery of the Gualí Wetland by planting trees from the Sponsorship Plan of Pastas Doria. Bogotá, Colombia.

Lansdcape recovery of the Gualí Wetland by planting trees from the Sponsorship Plan of Pastas Doria. Bogotá, Colombia.