SUSTAINABILITY METRICS

Eric Lassalle Smithfield Foods, Inc.

Environmental TrainingSan Antonio, TX

August 2011

Our Mission

• To be a trusted, respected, and ethical food industry leader that excels at bringing delicious and nutritious meat and specialty food products to millions every day

while setting industry standards for corporate social responsibility.

Our Core Values

• We will constantly strive:

– To produce safe, high quality, nutritious food.– To be an employer of choice.– To advance animal welfare.– To protect the environment.– To have a positive impact on our communities.

What is a Sustainability Metric?

• The principal objective of sustainability indicators is to inform public policy-making as part of the process of sustainability governance. Sustainability indicators can provide information on any aspect of the interplay between the environment and socio-economic activities. Building strategic indicator sets generally deals with just a few simple questions: what is happening? (descriptive indicators), does it matter and are we reaching targets? (performance indicators), are we improving? (efficiency indicators), are measures working? (policy effectiveness indicators), and are we generally better off? (total welfare indicators).

» Sustainability measurement. (2011, June 19). In Wikipedia, The Free Encyclopedia. Retrieved 15:22, July 21, 2011, from http://en.wikipedia.org/w/index.php?title=Sustainability_measurement&oldid=435023918

Why Sustainability Metrics?

• To communicate goals & targets to Senior management, Shareholders, Customers, and the Public.

Normalized FY 2008 to Start of FY 2016

GOALS

• Energy - 10% reduction (Dekatherms/cwt)

• Greenhouse Gases 10% reduction (Metric tons/cwt)

• Water Use – 10% reduction (Million gallons/cwt)

• Solid Waste – 10% reduction (US Tons/cwt)

HOW – Web Metrics

Monthly Data entry to the EMCS site

Water use (million gallons) Electricity use (kWh) Natural gas use (dekatherms) Propane use (lbs) Fuel oil use (gallons) Diesel fuel use (gallons) Solid waste disposed (US Tons) Production – Meat Processed (cwt) Wastewater discharged (million gallons) Biogas (dekatherms)

Common Data entry errors

• Unit of measure

• Order of magnitude

• Missing data

Water Use

0

10000

20000

30000

40000

50000

60000

70000

80000

MG

Series1 69.3 87.6 78 90 86.1 82.9 90.5 77.8 79.4 68.4 80.8 71.5 7627

1 2 3 4 5 6 7 8 9 10 11 12 13

Importance of good data

• External reporting of data• Internal reporting of data• Third Party verification in the future?

Importance of good data

• Internal reporting – Scorecards• External Reporting

• Smithfield Corporate Social responsibility Report• Customer requests

Good Data continued

• The FTSE4Good Index Series has been designed to objectively measure the performance of companies that meet globally recognized corporate responsibility standards. Transparent management and criteria make FTSE4Good a valuable tool for consultants, asset owners, fund managers, investment banks, stock exchanges and brokers when assessing or creating responsible investment products.

• Dow Jones Sustainability Index

What happens to all the data

• Energy data is used for Scope 1 and Scope 2 Greenhouse Gas calculations for internal/external reporting.

• Water use is used for assessing scarcity along with internal/external reporting

• Solid waste is used for internal and internal/external reporting.

Sustainability Recognition

SMITHFIELD FOODS, INC

SUSTAINABILITY METRICS

Energy Normalized

0.115

0.120

0.125

0.130

0.135

0.140

0.145

2008 2009 2010 2011 Goal

dek

ath

erm

s/cw

t

Water Normalized

0.0000760

0.0000780

0.0000800

0.0000820

0.0000840

0.0000860

0.0000880

0.0000900

0.0000920

0.0000940

2008 2009 2010 2011 Goal

MG

/cw

t

Solid Waste Normalized

0.00095

0.00100

0.00105

0.00110

0.00115

0.00120

0.00125

2008 2009 2010 2011 Goal

To

ns/

cwt

Thank You!

Questions/

Comments?