ESG reporting

• Packaging giant Ardagh Group has released its 2024 Sustainability Report, detailing the progress that it has made in terms of its ESG agenda.
• The report, structured with the EU’s Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) in mind, highlights significant achievements across its three strategic ESG pillars: Emissions, Ecology, and Social.
• Key environmental successes include Ardagh Metal Packaging (AMP) increasing its global renewable electricity coverage to 30% (Europe, 46%; South America, 43%) and Ardagh Glass Packaging (AGP) reaching 22% (Europe, 48%).
• Both businesses also achieved notable reductions in emissions: AMP reduced Scope 1 and 2 emissions by 10%, compared to 2023, and 18% compared to 2020, while Scope 3 emissions were down 25%, compared to 2020 (exceeding the group’s 2030 target).
• AGP reduced Scope 1 and 2 emissions by 12%, compared to 2023, and 16% compared to 2020, and Scope 3 by 10%, compared to 2020.
• ‘A More Sustainable Future’
• “As a leading manufacturer of highly recyclable aluminium and glass packaging, we understand the responsibility we carry – and the opportunity we have – to contribute to a more sustainable future for both the planet and the communities we serve,” commented Herman Troskie, chair, Ardagh Group.
• “While our beverage can business delivered strong growth, our glass division navigated a more challenging and dynamic trading environment.”
• Circular Economy
• In terms of circularity, AMP’s beverage cans now boast a 78% average recycled aluminium content, among the highest in the industry. Elsewhere, AGP utilised 56% recycled cullet in its glass production.
• The group also reported improvements in waste and water management, with 83% of AMP’s facilities achieving Zero Waste to Landfill (ZWTL) and AGP increasing its ZWTL rate to 35%. Water withdrawal intensity improved by 5% for AMP and 13% for AGP, year on year.
• Social and governance achievements include the Ardagh for Education programme investing $13 million (€11 million) in 44 communities and benefitting over 210,000 students in STEM learning in 680 schools.
• Ardagh Group also received an EcoVadis Gold Medal and was listed on the CDP A List for supplier engagement, with AGP being named an ‘Outstanding Partner’ by Merck Life Science.

• UK retailer Asda has decided to end refill trials in its four existing stores, citing challenges in scaling and operating the initiative in its current format.
• Asda added that it aims to explore new, scalable refill and prefill trials based on its learnings for improved customer uptake, operational feasibility and commercial viability.
• The retailer shared the details in its 2023 Brighter Living Report – the fourth report documenting the company's progress towards its Environmental, Social and Governance (ESG) targets in the last calendar year.
• Findings from the trial showed that cost, convenience, cleanliness, and perceived product quality were the key barriers that prevented customers from engaging with the refill proposition.
• In 2020, Asda launched the refill trial at its store in Leeds, followed by three stores in Toryglen in Glasgow, York, and Milton Keynes in 2021.
• ESG Report
• Asda's ESG report unveiled that the company reduced its carbon emissions by 7% compared with 2022, and 15% since Asda first reported its full carbon footprint in 2020.
• The retailer reported a 3% year-on-year increase in the percentage of recycled own-brand packaging to 96%.
• The retailer implemented changes to its beef mince and steak trays, which helped cut the use of packaging materials by 120 tonnes annually and improve shelf life from nine days to 14 days on beef mince.
• Over 1.8 million lids of Just Essentials soft cheese now include 30% recycled packaging materials, Asda noted.
• The company also launched a new range of healthy food items under the Health Menu range, offering more than 40 nutritionist-approved products.
• Asda announced an investment of £150 million in its retail pay for 2024. The retailer has invested a total of £415 million in increasing pay since the change of ownership in 2020.

• PepsiCo has reported significant progress across its pep+ (PepsiCo Positive) sustainability and nutrition goals, according to a report based on its 2024 ESG Reporting Suite.
• The company advanced its climate, agriculture, water and packaging objectives, and even surpassed two nutrition targets a year ahead of schedule.
• In agriculture, the company’s regenerative practices extended to 3.5 million acres, marking progress towards its goal of ten million acres by 2030. It seeks to achieve healthier soil, cleaner air, and improved yields.
• The company now meets 89% of its company-owned global electricity needs (around 3,900 GWh) from renewable sources, and Scope 1 and 2 greenhouse gas emissions were reduced by 18%, compared to their 2022 baseline.
• PepsiCo replenished about 75% of the water used in its high-water-risk manufacturing sites, or 24 billion litres globally. Since 2006, it has also helped over 96 million people access safe water.
• Between 2023 and 2024, the company reduced virgin plastic in its primary packaging by 5% in key markets and used 15% recycled plastic in the same time frame.
• It exceeded its 2025 targets a year early, with 67% of its beverage volume having fewer than 100 calories from added sugars per 12-ounce serving, and 77% of its convenience foods not surpassing 1.3 milligrams of sodium per calorie.
• These efforts are detailed in PepsiCo’s 2024 ESG Reporting Suite, which aims for transparency in reporting progress and challenges, as the company integrates sustainability into its business strategy.
• ‘Long-Term Strength’
• PepsiCo chairman and CEO Ramon Laguarta said, “When we rolled out pep+ in 2021, we knew it would be important for the long-term strength of our company. Since then, we have worked towards creating value for our shareholders, customers and communities, while aiming to make PepsiCo more resilient and overcome systemic barriers that limit progress.
• “I look forward to continuing this critical journey with our associates and partners, as we strive to prove that growth and sustainability go hand in hand.”
• Jim Andrew, PepsiCo executive VP and chief sustainability officer, added, “Our progress in 2024 shows that when we embed sustainability into the heart of our company, we not only help strengthen our communities and our planet, we also make our business more resilient.
• “At the same time, we know our sustainability journey will not always be linear. There are a number of obstacles that stand in the way of the systemic changes needed to continue making progress at scale. To overcome these obstacles, the world needs more collaboration and engagement from business, governments, and civil society. We will continue our efforts to lead, to learn from our progress, and to share those learnings to help build a more sustainable and resilient food system.”

• PepsiCo has reported significant progress across its pep+ (PepsiCo Positive) sustainability and nutrition goals, according to a report based on its 2024 ESG Reporting Suite.
• The company advanced its climate, agriculture, water and packaging objectives, and even surpassed two nutrition targets a year ahead of schedule.
• In agriculture, the company’s regenerative practices extended to 3.5 million acres, marking progress towards its goal of ten million acres by 2030. It seeks to achieve healthier soil, cleaner air, and improved yields.
• The company now meets 89% of its company-owned global electricity needs (around 3,900 GWh) from renewable sources, and Scope 1 and 2 greenhouse gas emissions were reduced by 18%, compared to their 2022 baseline.
• PepsiCo replenished about 75% of the water used in its high-water-risk manufacturing sites, or 24 billion litres globally. Since 2006, it has also helped over 96 million people access safe water.
• Between 2023 and 2024, the company reduced virgin plastic in its primary packaging by 5% in key markets and used 15% recycled plastic in the same time frame.
• It exceeded its 2025 targets a year early, with 67% of its beverage volume having fewer than 100 calories from added sugars per 12-ounce serving, and 77% of its convenience foods not surpassing 1.3 milligrams of sodium per calorie.
• These efforts are detailed in PepsiCo’s 2024 ESG Reporting Suite, which aims for transparency in reporting progress and challenges, as the company integrates sustainability into its business strategy.
• ‘Long-Term Strength’
• PepsiCo chairman and CEO Ramon Laguarta said, “When we rolled out pep+ in 2021, we knew it would be important for the long-term strength of our company. Since then, we have worked towards creating value for our shareholders, customers and communities, while aiming to make PepsiCo more resilient and overcome systemic barriers that limit progress.
• “I look forward to continuing this critical journey with our associates and partners, as we strive to prove that growth and sustainability go hand in hand.”
• Jim Andrew, PepsiCo executive VP and chief sustainability officer, added, “Our progress in 2024 shows that when we embed sustainability into the heart of our company, we not only help strengthen our communities and our planet, we also make our business more resilient.
• “At the same time, we know our sustainability journey will not always be linear. There are a number of obstacles that stand in the way of the systemic changes needed to continue making progress at scale. To overcome these obstacles, the world needs more collaboration and engagement from business, governments, and civil society. We will continue our efforts to lead, to learn from our progress, and to share those learnings to help build a more sustainable and resilient food system.”

A proposed European Union shake-up of the environmental, social and governance (ESG) ratings industry will bring much-needed transparency but fall short of the standardisation some in the market say is needed to stop the scores confusing investors and companies.

The market for assessing companies' ESG performance has boomed as investors pour money into products marketed as sustainable - swelling the coffers of nearly 60 providers globally including MSCI, S&P Global and ISS.

However, eight in ten respondents to a European Commission survey last year said the system was not functioning well. Critics point towards often divergent scores for the same company and little transparency about how providers determine their ratings.

More than 90% of respondents said intervention was needed, and on Tuesday the EU announced new rules for the largely unregulated industry, including requiring providers to publish their methodologies.

The companies will be regulated by the European Securities and Markets Authority (ESMA) and - in what could force some to restructure - they must stop providing credit ratings, consulting services and the development of benchmarks, among other things, to prevent conflicts of interest.

The new rules, however, stop short of seeking to harmonise ESG providers' methodologies to ensure a "variety of approaches" is available.

"By opting for transparency over standardisation, the EU's proposals are a promising blueprint, but they must go all the way," said Daniel Klier, CEO of data provider ESG Book.

Ratings providers, he said, needed to reveal the data and information used to calculate the scores if investors and companies are to understand exactly what lies behind a rating.

"Without this information, nobody can mark ESG ratings providers' homework," he added.

ISS said in a statement on Thursday that it welcomed the EU's effort to allow for a variety of ESG rating opinions and supported it "in not setting minimum requirements on the content of ESG ratings".

MSCI said this week it was examining the potential impact of the rules on its business, while S&P Global said it was looking forward to working with policymakers.

The EU's draft legislation comes after recommendations in 2021 made by IOSCO, which groups securities regulators, to help combat 'greenwashing'. Britain launched a consultation this year proposing to regulate providers.

ESG ratings typically measure a company's exposure to and management of financially relevant ESG factors - anything from carbon emissions to data privacy and board diversity. Every provider will weight these factors differently. Only a few will measure a company's impact on the environment and the outside world.

This all leads to confusion among investors who may be surprised that an ESG fund can hold oil or mining stocks, or wonder why the same electric carmaker can be simultaneously ranked as less and more ESG-friendly than a combustion engine-reliant rival.

"As long as ratings are not comparable, you have the ability to cherry pick the ratings you like," said Liberum Capital investment strategist Joachim Klement, calling the draft rules "baby steps" towards eventual standardisation.

"The long-term aim is to harmonise the way ratings work... and undermine 'greenwashing'," he said, adding that the new rules should mean lower fees for investors who use ratings.

Daniel Cash, an academic at Aston University and an expert on the industry, saw authorities' "end-goal" as mirroring the credit ratings industry, where a small group of companies dominate, meaning "much less 'noise' and much more comparability".

Not everyone is convinced about standardising ESG scoring, though, arguing ESG ratings are inherently more subjective than the quantitative scoring used to assess sovereign or corporate debt.

Sonja Gibbs, head of sustainable finance at the Institute of International Finance, said regulators in different jurisdictions needed to "take care to preserve the independence of ratings providers' methodologies". She said doing so was "crucial for sustainable finance markets".

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

• European Union sustainability disclosure rules are set to give companies more room to decide what should be reported, though safeguards should ensure this makes little difference in practice, a senior EU agency official has said.
• The EU is rolling out its corporate sustainability reporting directive (CSRD) to force 50,000 listed companies to make environmental, social and governance (ESG) disclosures in annual reports for 2024 onwards.
• Detailed rules have been drafted by the European Financial Reporting Advisory Group (EFRAG), an EU body, but the European Commission is due to ease them amid pushback from some EU lawmakers worried about mounting red tape from the bloc's 'green deal' reforms.
• "I think that the exercise that the Commission is performing is going in the right direction, it's opening more space for judgement without creating leeway," Patrick de Cambourg, chair of EFRAG's Sustainability Reporting Board, told Reuters.
• "I think also that they will consider phasing-in options for smaller entities. You have also the possibility to introduce a little more voluntary disclosures as compared to the required ones," de Cambourg said.
• ESG Disclosure Rules
• Most of the draft standards proposed by EFRAG are already based on 'materiality', meaning the company decides if an ESG factor is substantial enough to warrant reporting, though disclosures on carbon emissions would be mandatory.
• But the Commission is expected to increase the number of disclosures based on materiality.
• De Cambourg said companies would still have to report anything that is material, with market pressure and external auditors providing safeguards against incomplete reporting.
• "Either under a materiality assessment or under a mandatory disclosure, I think that at the end of the day the outcome would be very, very close," de Cambourg said.
• Read More: Mondelēz Reports Progress In Its 'Snacking Made Right' ESG Goals
• The Commission is expected to put a revised version of EFRAG's proposals to public consultation imminently.
• "We are considering changes to lessen the reporting burden, helping companies to adjust to this new regime," EU financial services commissioner Mairead McGuinness told a banking conference on Thursday.
• Commission president Ursula von der Leyen has said reporting requirements for companies in general should be reduced by a quarter this year.