Appendix Sustainability Report 2017-2018

Organisation Profile

Lamb Weston® is a world leading producer of high quality potato products, with its products sold in 110 countries around the world. Lamb Weston / Meijer VOF (private partnership) started in 1994 as a joint venture between Lamb Weston Holland BV and Meijer Frozen Foods BV.

Lamb Weston Holland BV is owned by Lamb Weston Holdings, Inc., a publicly listed food company (NYSE: LW), while Meijer Frozen Foods BV is part of the family-owned Meijer Group (NL). Both JV partners have a 50% share in Lamb Weston / Meijer (LW/M).

LW/M serves markets in Europe, the Middle East and Africa (EMEA), as well as in Brazil and Russia. The company supplies frozen potato products, such as Twisters®, Potato Dippers and Connoisseur Fries to customers in the Foodservice, Quick Service and Retail segments. LW/M is also an ingredient solutions provider for the food industry. For nearly 25 years we have led the industry in innovation, by introducing inventive products that add convenience to the operations of our customers and making eating more pleasurable for their customers.

Our production capacity at the end of FY2018 was 890,000 metric tonnes, with an annual turnover of €780 million, and we employed approximately 1,400 people. The infographic below displays several key facts for both the global Lamb Weston business and for Lamb Weston / Meijer.

History

We are proud of our history, representing almost a century of consistent growth and expansion. Partnership and collaboration are deeply anchored in the foundation of LW/M and the way we work as Lamb Weston worldwide.

Locations

LW/M’s head office is in Kruiningen, the Netherlands, while our commercial offices are located in Breda (NL), Dubai (UAE), Sao Paulo (Brazil) and Lagos (Nigeria). We operate six manufacturing facilities in three countries in Europe: four in the Netherlands (Kruiningen, Bergen op Zoom, Oosterbierum and Broekhuizenvorst); one in the United Kingdom (Wisbech); and one, majority owned, in Austria (Hollabrunn), as part of a joint venture with our Austrian partner RWA (Raiffeisen Waren Anstalt).

To serve the Russian French fries market, we established a joint venture with Russian partner Belaya Dacha, under the name Lamb Weston Belaya Dacha LLC (LWBD). LWBD operates a newly built potato processing plant in Lipetsk (Russia), which was opened in April 2018.

The data in this report cover our potato processing activities in Europe and include only data from the related six LW/M facilities mentioned above. The new production facility in Lipetsk is out of scope for this report, as LW/M only holds a minority share in the joint venture Lamb Weston Belaya Dacha LLC (LWBD).

Organizational development since our last report

In mid-2017 we established a legal entity in Dubai (UAE) to replace our existing commercial office and better serve our customers in the Middle East and Africa.

In June 2017, we acquired Oerlemans Foods Nederland BV, renamed LW/M , a Dutch entity owning and operating our fourth Dutch production facility. This facility has been refurbished and began operating fully in accordance with our standards in 2018. At this moment, further upgrades are taking place to meet the companies high audit standards with regards to food and feed safety and consistent quality.

In 2017, we also established our activities in Nigeria under the name LW/M Nigeria Limited. The company is actively marketing a new product called Poundo Potato® on the Nigerian market. Poundo Potato® is a product based on dehydrated potato flakes, which can be stored at ambient temperatures.

In 2018, we officially opened the new potato processing facility of our joint venture LWBD in Lipetsk (Russia).

Our supply chain

Our customers

As LW/M, we supply potato products to customers in 90 countries throughout Europe, Russia, the Middle East, Africa and Brazil. The market segments we serve are Quick Service Restaurants, Foodservice, Retail, and the Food Ingredient industry.

Lamb Weston Holdings, Inc. is the world’s second-largest producer of (frozen) potato products, with twenty-four manufacturing facilities, including the six that operate as part of the joint-venture LW/M, spanning three continents (North America, Europe and Asia). The LambWeston® brand is sold globally in more than 110 countries. For many decades, Lamb Weston has been a preferred supplier of frozen potato products to major global restaurant chains.

Our growers

LW/M works with approximately 600 farmers, who grow potatoes for us in the Netherlands, Belgium, northern France, western Germany, Austria, Italy, Slovakia, and the United Kingdom. On the European continent, the average distance our potatoes travel from our growers to our production facilities is 110 km.   In the UK, the average distance from our local potato growers to the factory is only 90 km.

Other key suppliers

We work with hundreds of suppliers, of which approximately 100 are identified as key suppliers for materials and services other than our potatoes. Key procurement categories are: ingredients, packaging materials, co-manufacturing, logistics and warehousing, fuel, power, water, equipment, sanitation, technical and general services. The majority of our suppliers are local, based in the countries – and often even in the regions – in which we operate. Some of our bulk ingredients, such as vegetable oils, are necessarily sourced from a global market, for example because raw materials for these ingredients are grown in other parts of the world.

Governance


Our Company Management Model

At the beginning of 2017, we sharpened our company strategy of sustainable profitable growth. At the same time, we launched an organisational transformation program focused on the following three elements of our Company Management Model, and on the way they are interlinked:

  1. Organisational Design: the way our organisation is structured
  2. Governance: the way our organisation is managed and controlled; for example, authorizations, reporting, meeting structures, and so on
  3. Way of Working: the way we lead, behave and work together based on empowerment and our company values

The three elements have to fit together and re-enforce each other. We are well underway with the implementation and making the changes stick. We have changed our structure, built the governance model around it, and are working hard to embed the empowerment culture which we will continue to further embed over the next few years.


Our Executive Leadership Team

The highest management body within our organisation is the Executive Leadership Team (ELT). The ELT consists of seven people. Partner meetings are held twice a year with the joint venture partners Lamb Weston and Meijer. Overall business performance, strategic investments and new business development plans are reviewed in periodical ELT meetings and quarterly strategic sessions with the leadership team

Bas Alblas
Chief Executive Officer
Dutch. Employed by LW/M since 2009 as CEO and chair of the Executive Leadership Team (ELT). Bas holds a master’s degree in Food Technology from Wageningen University. He has built up a wealth of experience in the food industry over the past thirty years, holding various leadership positions at Unilever, and as CEO of Leerdammer Company, Fromagerie Bel and VION Food Group prior to joining LW/M. As CEO of LW/M and chair of the ELT, Bas is responsible for all strategic affairs, accountable for the overall business performance and the first point of contact for the JV partners.

Peter van Wouwe
Chief Financial Officer
Dutch. Employed by LW/M since March 2014 as CFO and member of the ELT. Peter holds a master’s degree in RA accountancy and is highly experienced in the field of finance. He previously worked in similar management positions for Cloetta, Royal Wessanen, and as certified financial auditor at Paardekooper & Hoffman Accountants (Mazars). Within the ELT he is responsible for Controlling, Finance, Legal and Services.

Marc Brillaxis
Director Frozen Commercial

French. Employed by LW/M since February 2014 as Sales Director and ELT member. Marc holds a master’s degree in Business & Administration and Marketing. He previously worked for Pepsico, H.J. Heinz and The Kraft Heinz Company in senior management positions in sales and marketing in Spain and Portugal. Within the ELT he is responsible for the Frozen Commercial Business Units covering all commercial activities in Europe, Middle East, Africa and Brazil, and the commercial operations activities.

Michel de Lepper
Director Frozen Operations

Dutch. Employed by LW/M since October 2017 and appointed as Manufacturing Director and ELT member. Michel holds a master degree of Plant Science from Wageningen University. He brings 35 years of experience in the food industry, built up in different international management roles and disciplines. Within the ELT he is responsible for all manufacturing sites and operational activities of the Frozen Operations Business area. He also leads the Engineering Services and Product Application group.

Lisette Jacobs
Director HR & Communications
Dutch. Employed by LW/M since January 2015 and member of the ELT. Lisette holds a master’s degree in both Law and Economics and completed an HR Executive Program at TiasNimbas Business School. Lisette is very experienced in the field of HR and started her career in the business – always managing and building teams. She previously worked in several (HR) management positions at Coca-Cola Enterprises, ING Life in Korea and Nationale Nederlanden. Within the ELT she is responsible for HR, Sustainability and Corporate Communications.

John Wiskerke
Director Strategic Supply
Dutch. Employed by LW/M since 1997 and appointed as director and ELT member in 2007. John holds a master’s degree in Plant Science from Wageningen University and is an INSEAD alumnus. He has built up a great deal of experience in the potato industry during the past twenty-five years. He previously worked in different disciplines and management positions for LW/M. Within the ELT he is responsible for Strategic Supply, the Potato Centre of Excellence, Procurement, Safety and Quality Assurance.

Niklas Andersson
Director Strategic Innovation
Swedish. Employed by LW/M since August 2018 and member of the ELT. Niklas holds a master’s degree in Business Administration. He started his career with Unilever and held several positions within Marketing and Innovation in Sweden, Eastern Europe, Russia and the Netherlands. Most recently, Niklas worked for Cargill as Group Director Marketing & Communication Cocoa & Chocolate. Within the ELT he is responsible for Strategic Innovation which consists of Marketing, Technology Development, Digital & Business Intelligence and New Business Development.

Code of Conduct

LW/M has adopted a corporate Code of Conduct (CoC) that is binding to everyone who works within the company. The principles contained in our CoC represent the values that determine the way we operate, internally as well in relations with our customers, suppliers, competitors, authorities and other third parties. All employees have received training to make them aware and acquainted with our corporate CoC; for new employees this is part of the company induction programme. The LW/M Corporate CoC can be found here.

Since 2015, LW/M also works with a supplier CoC, which is binding to all suppliers who work with us. The principles contained in our supplier CoC represent the values that determine the way we ask our suppliers to operate, internally as well in relations with us as, their suppliers, competitors, authorities and other third parties. The supplier CoC has been signed by all? individual suppliers as part of contractual agreements and can be found here.

Works council

LW/M works closely with its works councils. Having a constructive and fruitful conversation with representatives of our employees ensures that all parties involved get heard. The works councils aim to safeguard the best interest of our employees as well as the best interest of the company – now and over the long term. The (local) works councils have regular meetings with the management teams. In the Netherlands, a new works council was elected in March 2018, valid for a period of three years.

Sustainability within the organisation

The sustainability program leader is responsible for developing and communicating the sustainability vision and strategy and leads the sustainability program. She reports into the Director of HR & Communications. The sustainability program is fully integrated into the regular business planning process and Annual Operating Plan (AOP). On an annual basis, the sustainability program leader presents the progress of the sustainability program versus its 2020 goals to the ELT. Decisions on key changes in the sustainability strategy, programme, major projects and investments related to sustainability are approved at ELT level.

The Sustainability Program Leader is supported by the LW/M Sustainability Team, which consists of eight people: content matter experts linked to the Sustainable Seven (S7) themes and the communication specialist. Each theme owner – as a subject matter expert – is responsible for at least one S7 theme.

They ensure that the roadmap is filled with new projects and initiatives are being developed within their theme(s), and monitor progress for their area in accordance with the 2020 roadmap and objectives. The sustainability program leader chairs this team, which meets quarterly.

Risk Management

We have been working to ensure risk management is embedded in the way we operate, through the identification, mapping and mitigation of risks. Although the ELT has the final accountability for risk management within our company, risk management is the shared responsibility of everyone.

This is facilitated by our content matter experts in different disciplines, who embed risk management in the ongoing planning and performance management cycle. In 2015 we have introduced an Integrated Business Management (IBM) program to support integrated risk management through regular and more forward looking multi-disciplinary reviews on key business drivers. The development of our existing risk management approach into a fully functional Enterprise Risk Management (ERM) system is on our agenda for 2019.

Top risks and related mitigating actions

Description of risksMitigating Actions

Operational Risks



Potato crop performance: ensure a consistent quality supply to our customers while managing crop and commodity prices.The risk of insufficient crop availability is mitigated through multiyear business planning and alignment between sales and procurement processes to secure sufficient raw material supply from our grower base. We cannot control nature, and the risk of large scale crop failures cannot be eliminated (see crop 2018).
However, as our grower base of 600 highly qualified farmers is geographically spread throughout Europe, we are optimally organised to ensure maximum consistency in supply and compensation for local crop failures in specific areas, through sourcing from other areas. In case of serious, broad crop failure, we have contingency planning in place with our partner LW Inc. in the USA.
Decreasing soil health due to reduced levels of micronutrients and soil biodiversity, which can result in decreasing yields long term.LW/M developed a comprehensive sustainable agriculture plan with soil health at its core. This is currently being implemented in the Netherlands (2018) and will be rolled out over our total growing area in NW Europe in the next three years.
Environmental and climatic conditions, including extreme weather, drought or floods, affect the quantity and quality of potato crops and can damage our assets and stored goods.To mitigate water risks we have piloted drip irrigation over the last few years. We built a business case to apply drip irrigation on a wider scale in our most water stressed growing areas. Drip irrigation delivers a better crop in terms of quantity and consistent quality. We will participate in local pilot projects to investigate if we can store our effluent in basins to reuse in dry periods for irrigation and/or to prevent brackish groundwater in aquifers.

None of our factories are located in water scarce areas, however we are committed to reducing our direct water use by 50% towards 2020, by re-using our process water after 100% purification.

To mitigate water risks caused by flooding we are developing a climate stress scan for our production facilities, based on scenarios such as water entering production facilities after heavy rain fall. We will also develop a standard for climate adaptive buildings in the next two years.
Aging workforceTo mitigate the risk on insufficient qualified workforce, we are working on the sustainable employability of our employees. Next to this we attract and retain a diverse workforce, and healthy mix of young and experienced people through our Employer Branding program. LWM’s ambition is to become the employer of choice.

Reputational Risks



Public product recallsWe mitigate this risk through a rigorous and well-founded corporate quality assurance strategy and program, with dedicated qualified QA teams at every facility, and automated tracing at the defined batch level. 
Damage to our reputation as a good corporate citizen from unethical sourcing, manufacturing, and business practices, both in our own business and within our supply chain.In 2018, Sustainable Agriculture was added as a seventh focus area. Sustainability is included in our company ambitions, overall business strategy and annual operating plan, and focuses on our most material topics.

We adhere to strong business ethics, operating principles and core values. We work with selected suppliers, adhering to our suppliers’ code of conduct and our company code of conduct for our employees.

We have a communication plan and standard procedures in place to respond to community complaints related to our facilities. Outcomes are used to improve our operations, and prevent reoccurrence where feasible and proportionate.

Regulatory Risks



Protective trade barriers aimed at limiting the importation of European potato products by imposing very high import duties and/or apply very strict inspections at customs.We leverage our efforts through constructive collaboration with EU sector associations to influence sound policy making in Europe and deal with protective trade barrier issues. We are preparing ourselves for a potential Brexit by developing scenarios (hard, soft, no-deal) to mitigate its impact.

Market Risks



Responsible sourcing of key raw materials.
Potatoes are sourced sustainably and grown according to strictly regulated, local certification standards, benchmarked against the SAI Farm Sustainability Assessment (FSA) standard. Our goal is to have all our 600 growers scored at FSA Silver level by 2020 and scored at FSA gold level by 2025, as part of our company-wide sustainable agriculture plan and objectives.

Palm oil is sourced sustainably as segregated RSPO certified palm oil, and used for a limited number of private label products (<15% total volume).

Packaging materials are sourced sustainably, whereas 85% of all materials are both renewable and recyclable. Our cardboard is 100% FSC certified and made from recycled paper fibres. We use only mono material plastic (PE) for our product packaging, not reusable (food safety) but recyclable.

Stakeholder Engagement

The original selection of our key stakeholder groups (direct and indirect) was done by the Sustainability Team discussed with and approved by the ELT. No changes were made in this selection in the past period, nor have we been questioned or challenged on them by readers of our previous reports. The selection of key stakeholder groups are verified every 2 years by the sustainability team and validated by the ELT. In the table below you can find how we engage with them.

Our direct Stakeholders
How we engage with them
CustomersCustomers are frequently visited by our responsible local account managers, while global chains are managed more centrally. For key accounts, we have contacts at multiple levels and disciplines in our organisation. Relevant topics in actual conversations are:
  • How to grow their business
  • Offering choices that fit their concept
  • Inspiring them with different applications of existing / new products and solutions
  • How to improve our service reliability in case any issues occurred.
  • How to meet their sustainability requirements, if applicable
We share consumer insights and look at how to create shared value. Customers are more interested to talk about sustainable services and solutions, like reducing GHG emissions in their supply chains, sustainable agriculture and/ or healthier menu options. In fact customers increasingly see how acting responsibly from a sustainability perspective helps them improve their image with the public.
Employees
For employees, in addition to individual meetings, regular canteen/team meetings are held to share our company strategy, actual performance highlights and future plans. We communicate and connect regularly with our employees through various corporate channels, and frequently use digital tools, such as our Intranet and Yammer, which is used actively. Our employee magazine is also available online in three languages and sent to the home of every employee to share key projects and developments company wide.

The LW/M ‘Personnel Association’ regularly organises social events and activities outside work for interested employees based in the Netherlands. Over the past two years, we have held family days in most production facilities.  

We sponsor local events/activities to contribute to the communities where we do business. Often in combination with a good cause. Where possible we actively involve and engage our employees. Employees participated with an LW/M team in the ‘Ride for the Roses’ (cycling), the Singelloop in Breda and the Rotterdam Marathon, while raising money for cancer and the RMCH foundation.

In 2018, we became the sponsor of national division soccer club NAC Breda’s pitch, with the aim of increasing labour market communication and collaborating on their corporate social responsibility projects. In general, in our communications with our employees, we actively emphasise that sustainability is not just a word for LW/M, it is a company goal and mind set for every employee.
Joint Venture PartnersThe LW/M Executive Leadership Team meets at least twice per year with our two Joint Venture partners (Vennoten) in a formal partner meeting, with the ELT from both Meijer Group and Lamb Weston. In between partner meetings there are frequent contact moments to stay tuned.

Key topics in the past two years were the creation of a new joint venture between LW/M and Belaya Dacha (LWBD) in Russia, and other new business development plans. Environmental and other sustainability aspects are part of the agreed process for judging investment proposals.
Growers
Our area field supervisors spend a lot of time on field visits, one on one and other meetings with growers in their area. A key discussion topic is yield and potato quality: from planting, when potatoes are in the soil, during the growing season, at harvesting, storing and when finally delivering them to our factories. A great deal of effort is spent on increasing the predictability of the final crop with an advanced sampling program. In the contracting season, selecting the right potato varieties, volumes and prices are key.

The agronomy team supports growers on growing a better and more sustainable crop, covering topics like planting, crop rotation, diseases and integrated pest management, soil fertility, water management, harvesting techniques and storage strategies. During regional study club & field meetings they share knowledge and best agronomy practices on how growers can improve yields and farm incomes in a sustainable way, and for example reduce pesticide use.

The potato department organises annual grower meetings per region in every country, to discuss actual trends and issues and share results of trialing new techniques for growing, harvesting or storing potatoes. Additionally, with a multi-annual digital grower newsletter we inform and engage our grower community about new developments, best practices and provide practical tools. In total we have 40 people working in either the central potato department, or in the countries as agronomist or field super visors to actively support our growers.
Key Suppliers
We maintain regular contact with all (key) suppliers to keep our business running. Additionally, our procurement department holds regular supplier meetings with key suppliers to evaluate performance, assess opportunities for improvement and to collaborate on a higher level. Our supplier sustainability scorecard was sent out for the third time, being the second time to our top-60 suppliers. in 2017 the supplier sustainability scorecard was integrated in our supplier audit questionnaire. This is send out to suppliers every 3 years to keep supplier files update and to secure environmental awareness.

The main topic is assessment of their current performance and increase involvement on sustainable development in our supply chain. Some key suppliers (for example, ingredients, packaging) are also directly involved in improvement projects, focusing on innovation, improving internal efficiencies and / or sustainable development (like reduction of packaging and use of materials with less impact on the environment).
Governments
We keep government bodies informed and involved in several ways, depending on the level we need to deal with (local, regional, national and international), and the relevance and urgency of the topic at hand. For our operations, local governments (city councils) are particularly important because of their involvement with permits and, for example, discussing local expansion plans.

At local and regional levels, regular meetings take place between LW/M content matter experts and the responsible managers with local authorities and government representatives. They are invited annually to visit our company and tour the facility to improve understanding of mutual interests. Sustainability is an important factor in dealings with authorities, for example in relation to permits and development plans. At international level (EU Commission, Regulators), we keep governments informed and engaged by having content matter experts involved in sector representation (EUPPA) for relevant topics and emerging issues.
Our indirect Stakeholders
How we engage with them
Neighbours
As well as with our direct key stakeholders, we also have regular contact with our neighbours (local communities and local businesses). We even try to collaborate with neighbouring companies when it comes to sustainability (such as the residual heat project with Wiskerke). We organise open days for neighbours at our production facilities to help create a good mutual understanding of each other’s interests and discuss potential issues. These are always highly attended and appreciated. Great example of recent engagement with neighbours is our waste heat-sharing project with Wiskerke Onions in 2018.
ConsumersWe stay engaged with our consumers through social media for our Lamb Weston-branded retail products, which are sold in a limited number of countries in Europe. In addition, we regularly perform in-depth consumer research in target markets within EMEA, Brazil and Russia. This helps us understand the deeper needs of final consumers when developing new products and testing concepts, before launching them to market.
Industry Associations
At national and international levels, we are actively involved in sector-specific and/or food industry associations, such as VAVI, FNLI (NL), PPA, FDF (UK), EUPPA and FDE (European level).

We work together on sharing knowledge to investigate the technical consequences of new regulatory proposals, always ensuring we stay within the boundaries of the applicable competition legislation. Our content matter experts are directly involved in sector representation for key topics and emerging issues. Working together as an industry is particularly valuable when a common interest topic like sustainability is concerned or when we need to tackle non-competitive issues.
Universities & Research InstitutesWe stay engaged with universities and research institutes by jointly carrying out business related projects, many of which are aimed at optimizing the use of resources and reducing waste. In addition to this, we offer university students the opportunity to follow project internships, or a six-month graduation project within the company. At least four times per year we give guest lectures at selected universities, to share our sustainability program and our results or offer students the opportunity to visit our facilities. We also occasionally carry out specific research with a university to investigate a technical issue, and we are exploring new partnership opportunities and collaboration on open innovations on a constant basis.
Non-Governmental Organisations
We embrace honest and open communication with NGOs and welcome constructive discussions when needed on any relevant topic of mutual interest and public concern. In the past period, we did not receive any questions from NGOs with regard to goods or services purchased or marketed by LW/M.

We are in the process of more actively engaging with NGO’s to ensure we make the right choices (do the right thing). Example is the development and roll out of our Sustainable Agriculture Plan in the Netherlands.


Commitments to external initiatives and memberships

We hold memberships in the following relevant associations and external initiatives in all countries in which we have physical operations (the Netherlands, the United Kingdom and Austria). Next to this, LW/M is a member of relevant organisations and initiatives at European or global levels. The overview is not intended to be complete, but indicates our most relevant membership of associations and initiatives in which we play an active role, through expert committees and/or hold a position on the board or as chair of committees.

Association / InitiativeRelevant company membershipsCommitments to External initiatives
LW/M is a direct member of VAVI since 1994, actively participates in committees (Raw Material, Processing, Market and Positioning) and holds a position at the VAVI board. www.vavi.nl-
LW/M is a member of the FNLI through VAVI and active in the Sustainability Committee, among others. In April 2018 Bas Alblas, CEO of LW/M, was appointed as chairman of the Dutch Food Industry Federation (FNLI). www.fnli.nl-
LW/M joined DBC in 2013, as one of six partners, is active in several technical working groups and holds a position on the DBC board. www.dutchbiorefinerycluster.nl-
LW/M UK is a direct member of the UK Potato Processors Associations since 2006, and actively participates in technical working groups, represented by experts from UK business. ppa@fdf.org.uk-
LW/M UK is a direct member of the UK Food & Drink Federation since 2014. www.fdf.org.uk-
LW/M Austria is member of the Food Industry Association Austria (FIAA), which is part of the Wirtschaftskammer Osterreich (WKO). www.wko.at-
LW/M is a direct member of EUPPA since 1994 and content matter experts actively participate in the EUPPA Food Law Committee and the EUPPA Trade Committee. Jolanda Soons, LW/M sustainability program leader, is the chair of the EUPPA Sustainability Committee.  Kees Meijer, shareholder of LW/M, has been the EUPPA president since 2010. www.euppa.eu-
LW/M has been a member of SAI Platform since 2006 and active in the Vegetable & Arable Crops Working Group. Our participation focuses on sharing insights, knowledge and best practices in order to work efficiently on our own sustainability strategy, while contributing to the worldwide development of sustainable agriculture. www.saiplatform.orgWe actively promote sustainable agriculture. Our aim is to have 100% of our growers score silver on the SAI FSA standard by 2020 and 100% score gold by 2025.

Since 2011 LW/M has been a direct ordinary RSPO member as FMCG company. More publicly available information on LW/M’s commitments towards RSPO certified sustainable palm oil (CSPO) can be found under ordinary members, including our updated Annual Communication of Progress (ACOP) www.rspo.org* LWM is committed to using 100% CSPO in products with palm oil in the specification, and, since 2015, has sourced 100% segregated CSPO.

Since 2017 LW/M is one of 25 core partners in 'Samen tegen Voedselverspilling' (United against Food Loss and Waste). This is an initiative of Wageningen University & Research, the Dutch Ministry of Agriculture, Nature and Food Quality, Three Sixty and regional public organisations. Members and signatories are committed to reduce food waste by 50% in 2030, in line with SDG 12.3 and focus on better valorisation of by-products and side streams.* LWM is committed to reducing its food waste by 50% in 2030 versus 2015 baseline, and will annually report its food waste as core partner.
Since 2017 LW/M is a member of the BICEPS Network, a network of shippers joining forces to accelerate the transition in the global shipping sector towards more sustainability. https://bicepsnetwork.org/We accelerate the transition of the global shipping sector towards greater sustainability


Since 2006 LW/M is an ordinary member of Sedex, a global membership organisation that support companies to make it simpler to do business that’s good for everyone. We reward any customer, requesting info on ethical trading, access to our membership account to enable viewing SMETA audit reports. They give insight in our ethical, environmental and social practices in order to manage risks and protect our corporate reputation. https://www.sedexglobal.comWe provide transparency on ethical, environmental and social practices. We provide requesting customer asking access to our data on Sedex.
In addition to our own LW/M ‘Code of Conduct’ and codes of conduct of our customers, we have committed ourselves in 2016 at European Union level to the ‘Principles of Good Practice’ developed and published by the Fair Trading Practices Initiative.  https://www.supplychaininitiative.eu/* LWM is committed to applying ‘Principles of Good Practice’ by the Fair Trading Practices Initiative, at EU level.
IMVO Covenant 
Dutch Food Industry 
In 2018 LW/M agreed to support the Dutch IMVO Covenant (International CSR Conduct), which was co-signed in June 2018 by the FNLI. By signing the covenant, FNLI is committed to ensuring that every company within the food industry, in terms of capacity and size, is involved in IMVO risk management. https://www.imvoconvenanten.nl/voedingsmiddelen* LWM is committed to applying IMVO Risk Management, and will analyse its impact in 2019.
* In the table LW/M’s formal commitments to external initiatives are marked with a star and shown in orange.


About this report

This is our fifth sustainability report where we explain our policies, strategies, practices, goals and performance results on environmental, social, economic and governance aspects that are material to us and our stakeholders. Unless otherwise stated, all data in this report represent the period from 18 July 2016 until 15 July 2018, being our fiscal years 2017 and 2018.

Operational boundary

In July 2017, we acquired a new plant in Broekhuizenvorst, the Netherlands. As a result, we extended the operational scope of our report and included data for our new plant for the FY18. Our joint venture Lamb Weston Belaya Dacha (LWBD) in Russia is not included, as we only have a minority share in this JV. This report covers data for all of the potato processing plants we fully own or have a majority share:

  • Kruiningen, the Netherlands
  • Bergen op Zoom, the Netherlands
  • Oosterbierum, the Netherlands
  • Wisbech, United Kingdom
  • Hollabrunn, Austria
  • Broekhuizenvorst, the Netherlands (only for FY18)

Our human resources data includes all sales offices, including our headquarters in Breda.

Our company waste data also includes waste (such as paper) from our head office, located in Kruiningen.

Organisational activities

Our core activities include potato processing in our own factories. We own all of the six processing facilities, but no cold stores, no trucks or land except a very small amount of leased land in the UK (corresponding to about 1% of the total land needed to grow potatoes processed by LW/M. On this land, LW/M takes the financial risk, instead of the farmer.)

Approach to reporting

This report has been prepared in accordance with the GRI Standards: Core option. However, for three themes, we have chosen to report on a Comprehensive level of the GRI Standards. This is because we aspire to be the thought industry leader on sustainable development towards 2020 in the EMEA market. These three themes are: Water, Energy & Emissions and Potato & Waste, which are most relevant to our core business and for which we want to make a bigger impact in our total supply- and value chain.

The contents of this report have been extended based on the materiality analysis we conducted in 2018. One of the main changes is that, in addition to the Sustainable Six focus areas, we identified Sustainable Agriculture as a new key focus area to report on.

Methods of measurement and data collection

The data included in this report were collected using the following systems and methods:

  • Quantitative data regarding human resources: from FY 2015 onwards, data covering all entities originate from YouForce
  • Quantitative occupational health and safety data and environmental data: different sources provided by plants, retrieved from company safety databases, supplier information (invoices, waste dashboards) are combined in Excel (S7 master file) to track progress versus 2020 objectives and our 2008 baseline year
  • Other quantitative data (such as all usages related to production quantity): company ERP system (SAP)
  • Qualitative data: interviews with sustainability team members, being the content matter experts on the S7 chapters, and additional internal and external stakeholders for specific topics.


Changes in data and restatements

  • On 1 January 2016, our Kruiningen plant took over the CHP plant from the energy supplier, Delta. During the remaining part of the Fiscal Year this CHP plant was rebuilt into a High Efficiency Boiler house. To avoid major changes in gas, electricity and water consumption we decided to report the consumption during this transition period as if the equipment was still owned by Delta. In this report, we re-adjusted the water and energy consumption data for all previous years including the reference year (2008). Therefore, for the years until FY2016 the figures are slightly higher than those previously reported. 
  • FY17 was the last year that we sold biogas or electricity generated from biogas to third party companies. From FY18 onwards we include data for biogas consumption in the total energy consumption figures.
  • In FY18 we added Broekhuizenvorst plant in the usage data. For this, we made use of the average reference usage data of FY08 for the existing plants as 2008 reference for Broekhuizenvorst.

Data Quality and Validation

  • The ultimate responsibility for data quality lies with the data providers at each plant, the sustainability team responsible for the Sustainable Seven and the LW/M sustainability program leader. In addition, the data in this report have been checked by an independent content matter expert. This included cross checks versus references and checking calculations of internal KPIs and data reported in accordance with the GRI Standards.
  • Specific attention was paid to the accuracy, reliability, clarity, comparability and robustness of data included in the LW/M sustainability dashboard and the Sustainable Seven (S7) master database, their reference to internal information sources, calculation of our final numbers, and improvement made versus 2008.

Materiality


Explanation matrix: The position of a topic on the axis indicates whether we consider it as having current/potential impact on us (horizontal axis) or is regarded by our stakeholders as important (vertical axis). Topics plotted above the white line are considered to be material by us and our stakeholders and are included in this report.

For identification, prioritization and validation of the material topics, we used the four Principles of Reporting (Stakeholder Inclusiveness, Sustainability Context, Materiality, and Completeness) of the GRI Standard.

In developing this materiality matrix, we used the matrix from our previous report as the starting point to perform a thorough re-validation. This included desk research which focused on analysing key sustainability issues related to our industry and product category, environmental and ethical priorities from key customers, and sustainability trends and topics in our key markets. This exercise led to the identification of some new material topics. We reviewed the importance of existing material topics in our matrix, and adjusted other topics. And we simplified the wording of topics.

The next step was to incorporate the views of relevant internal and external stakeholders. We spoke to the leaders of our Sustainable Seven focus areas and the works council. Next to this, a limited number of interviews were held with external stakeholders, which included a grower, one key supplier, a neighbour, a representative of the European Potato Processors Association (EUPPA), and our Dutch Joint Venture partner to identify and prioritise topics and to re-validate our matrix.

Together, this gave us an overview of new material topics, topics to be rearranged, and topics to be excluded. The draft revised materiality matrix was discussed with the Executive Leadership Team (ELT) in August 2018, who approved the final revised version shown in this report.

Major changes

A major change in our materiality matrix was the inclusion of the Sustainable Agriculture theme. This topic was selected because, in order to guarantee the long-term supply of sufficient and good quality potatoes, we need to act now to develop more sustainable farming systems and techniques.

To explain the material topics, we created with additional information and links to the related SDGs. For readability and interpretation, we used different colours to link all material topics to either one of our Sustainable Seven themes, Overarching Topics or Guiding Principles. The definition of the categories was changed from the previous report (relevant, important and essential) into importance to stakeholders and current or potential impact on LW/M.

Our material topics

We engage with a wide range of stakeholders across our business. Understanding their needs enables us to understand the issues that are important to them. Based on this, we are able to identify the material topics that bring us together.

By focusing our energy on those material topics, we are able to operate a successful business that positively impacts stakeholders across society. From our customers to the environment. And from our employees to our suppliers.

Topic boundaries

The graph below illustrates the topic boundaries along our product supply chain, including upstream and downstream activities conducted by our suppliers.


UN 2030 Sustainable Development Goals


The 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs) were adopted by world leaders at the end of 2015. The new Goals call for action by all countries to promote prosperity while protecting the planet. As LW/M we aim to contribute to achieving these global goals through making progress in the seven areas where we focus, namely the Sustainable Seven.

In 2017 we analysed how our Sustainable Seven focus areas relate to the 2030 UN Sustainable Development Goals. We identified to which SDGs we already contribute through our current 2020 sustainability objectives and which SDGs we will focus on when developing our sustainability strategy towards 2030. The below ‘Sustainable Seven Wheel’ represents the SDGs connected to each of our Sustainable Seven and gives an overview of our current Sustainability Objectives per area.

Facts and Figures

Data on Energy and GHG Emissions

We collect the energy consumption data from our fully-owned plants every four weeks. Data for electricity and natural gas consumption is taken from energy meters which are also used for the invoices. Biogas consumption is measured by our own meters located at each plant. Based on the energy data, we calculate our GHG emissions.

Biogas is produced as a by-product in our wastewater treatment plants. FY17 was the last year in which we sold biogas or electricity generated from biogas to third party companies. In Kruiningen, Bergen op Zoom and Oosterbierum, the biogas is used in our own boiler house to produce heat. In Hollabrunn, biogas is used to produce electricity which is fed back to our own plant. The heat is used to heat the water to 90 degrees centigrade. This enables us to save natural gas and reduce the amount of electricity purchased. In FY 2019, we will sell waste heat from our plant in Kruiningen to a third-party company.

GHG emissions are calculated based on the Greenhouse Gas Protocol methodology of the WRI/WBCSD (GHG Protocol). We report GHG emissions in CO2-equivalent. Conversion factors and Global Warming Potential (GWP) rates for GHG emissions are obtained from ADEME version 4 Bilan Carbone.

GHG emissions are reported based on Scope 1, 2 and 3:

  • Scope 1: Direct CO2 emissions – natural gas burned
  • Scope 2: Indirect CO2 emissions – electricity purchased
  • Scope 3: Other indirect CO2 emissions – related to activities on the farm, business travel, transport, and so on.

Base year for the GHG emission calculation is 2008. In 2008, we standardised our data collection and reporting systems, and we used this data for our first carbon footprint calculations.

We also report annually to CDP Supply Chain program, where we report data on our GHG emissions as well as our strategy and management efforts to reduce these emissions. This report is then used by our clients.

Quantitative data based on:

  • Conversion factors for GHG emissions are obtained from ADEME version 4 Bilan Carbone: 
    • Electricity: 186 g / MJ 
    • Electricity for 2017: 165 g / MJ and for 2018: 104 g / MJ (in 2017 we purchased 11.3% renewable electricity and in 2018 56 %)
    • Electricity from renewable sources: 0.002 g / MJ  
    • Natural gas (MJ): 56.6 g CO2 / MJ 
    • Biogas (MJ): 0 g CO2 / MJ
  • Carbon Footprint LW/M potato varieties by PPO (WUR), studies carried out in 2008 and 2015
  • Suppliers carbon footprint (CFP) calculations 
  • Energy conversion factors:  
    • Natural gas: 35.17 MJ / Nm3
    • Electricity; 3.6 MJ /kWh
    • Biogas: 23.3 MJ / Nm3 (when used as primary energy source) 
    • Biogas: 10.2 MJ / Nm3 (based on 44% efficiency)
    • Assumption: Energy consumption per year by a household = 76 GJ / year
  • Monitoring of production in tonnes of produced products

Data presentation


Planet: Energy & Emissions











Emissions to air including NOx and SO₂ emissions

Year round we monitor NOx emissions from our boiler systems and report these figures to the local government. Our NOx and SO2 emission levels are measured annually by external, certified companies and reported to the government.

In 2018 we saw an increase in complaints regarding odour in the neighbourhood of our Bergen op Zoom plant. During our expansion of this plant in 2016 we installed an incinerator to reduce the odour released from our frying process. We conducted a study after the implementation of this new equipment to measure its effectiveness. As a result in 2018 we decided to place a higher chimney and will monitor its effectiveness after the implementation, to prevent odour nuisance to the environment.


Water Sources

The fresh water supply to the Dutch production facilities of LW/M is taken from different water sources near the production facilities. The areas of the water sources are not noted as vulnerable and have the sole function of supplying water. The withdrawal of water is always within the permitted quantity. Therefore none of the water sources used by LW/M in the Netherlands can be considered as significantly affected by the withdrawal of water. Hollabrunn and Broekhuizenvorst are the only plants where we withdraw ground water in addition to municipal water.

Water Discharge

In all our plants, wastewater is treated before discharge and all quality parameters are regularly measured to comply with local regulations. Our wastewater plants in Bergen op Zoom and Kruiningen both had problems to comply with some effluent parameters in the reporting period. Improvements are identified to prevent this from reoccurrence and corrective and preventive measures are implemented. No water bodies or related habitats are significantly affected by the discharge of water by LW/M facilities in the Netherlands, the United Kingdom or Austria.

The amount of hazardous waste generated in our plants is negligible compared to the non-hazardous waste; and it is sent for incineration.

Collective Labour Agreements (CLA)

We have collective labour agreements (CLAs) that cover 71% of our employees. In the Netherlands, a company CLA applies for 80% of our employees. In February 2018, we reached an agreement with the Dutch unions for a new CLA for 15 months, from 1 January 2018 until 1 April 2019. For the other 20% of employees in the Netherlands, or those who are accounted for under ‘corporate’, including our (sales) employees working in different parts of the world, or non-CLA employees, other labour regulations apply. These regulations have been approved by the Dutch works council.

There are local differences regarding (collective) labour agreements in the other countries in which we have production locations. In our UK organisation, we do not have a collective bargaining agreement; in Austria, we are part of a collective agreement for the industry and this applies to all our Austrian employees with the exception of the plant manager. Our international (sales) employees working in different parts of the world do not have a collective bargaining agreement.

Employee Profile

Footnote: Data is not available by gender. Outsourced personnel carry out core activities to cover vacations, pregnancy leave and illness.

Employee Diversity

Purchased volume compliant with company's sourcing policy and/or internationally recognised responsible production standards

Since FY2016,100% of the palm oil we purchase is segregated RSPO certified.
Since FY2014, 100% of the cardboard we purchase is FSC certified, while 91% of the total cardboard weight is made from recycled corrugated material.



Colophon:

This report was developed and produced by LW/M’s Sustainability Team, with valuable input from content matter experts. External support was provided by a Good Company team:

  • Eleonoor Hintzen: Advice & Content
  • Bahar Keskin den Doelder: Project management & Figures
  • Mike Croall: Text

Report design: Weekend Creative Agency

For questions concerning the report, please email: sustainability@lambweston.eu

Alternatively, you can also write to:


Lamb Weston / Meijer VOF
For attention of Sustainability Program Leader
Stationsweg 18a
4416 ZG Kruiningen
The Netherlands
Tel. +31 113 394955
Company website: www.lambweston.eu