Arca Continental profile
Profile generated on 29 August 2011
Business Details
Country:
Sector:
SEDOL:
Mexico
Beverages
0000000
Main Activities
Embotelladoras Arca. The Company produces, distributes and sells soft drink beverages
under the Coca Cola company brand name. The Company was formed in 2001 though the
merger of three of the oldest bottlers in Mexico. The Company serves the northern region of
Mexico, as well as northern Argentina. The first full year of operations of Arca Argentina was
2009. The Company also produces and distributes snack foods under the Bokados brand.
The Company exports to the US though an affiliate company. The Company acquired Salsas
Trechas in 2008 as a complement line to the Bokados product line. Bokados are salty
snacks, including peanuts and tortilla chips. The Company has 12 plants and serves 25
million consumers in 300,000 sales points. The Company's turnover was MXN 24,234m in
the year ended 31 December 2009, and the workforce comprised 19,036 employees.
[Annual report, 31/12/2009] [Company website, 07/07/2010]
Company website: www.e-arca.com.mx
EIRIS assessments of Mexican companies are largely undertaken by, and make use of,
information and research provided by our Mexican research provider, Ecovalores.
Environment
Environmental impact
Arca Continental has been classified as having an overall high environmental impact
because it is involved in Food, beverages & tobacco (high).
Food, beverage & tobacco companies are major energy and water users and analysis of
pollution incidents show that they also have significant impacts in this area. Air emissions
are relevant for certain types of process (e.g. edible oils), while the wastes generated tend
to have secondary uses (e.g. animal feed). Of particular significance for this sector is the
influence it has over agricultural supply chains. The sector is classified as high impact.
Environmental policy
Assessment: Good
The Company has an environmental policy which meets the following elements:
* all key issues
*
*
*
*
*
responsibility at board level with supporting resources
commitment to use objectives and targets
commitment to monitoring and auditing
commitment to public reporting
commitment to stakeholder involvement
The environmental policy does not meet the following elements:
* * provision of quantitative objectives and targets for all key areas
* globally applicable corporate operating standards
* commitment to address product or service impact
* strategic moves towards sustainability
[Annual Report 31/12/2010] [Social Responsibility report 31/12/2010;Communication from
Company 30/042011]
Environmental management
Assessment: Good
The Company has an EMS which meets the following elements:
* environmental policy
* identification of significant aspects
* documented objectives and targets in all key areas
* outline of processes and responsibilities, manuals, action plans, procedures
* internal system audits
* internal reporting and management review
The EMS does not meet the following elements:
* quantitative objectives and targets in all key areas
The Company has 75% of its operations covered by ISO14001-certified EMS.
The Company undertakes the following EMS-related initiative(s), which EIRIS grades as
'weak':
* it has committed to introduce management systems certified to, or aligned to, ISO14001
[Annual Report 31/12/2010] [Social Responsibility report 31/12/2010]
Environmental reporting
Assessment: Inadequate
The Company has an environmental report which meets the following elements:
* text of environmental policy
* description of main impacts
* financial dimensions
* stakeholder dialogue
* coverage of sustainability issues
The report does not meet the following elements:
* performance measured against targets
* outline of environment management system
* details of non-compliance, prosecutions, fines, accidents, etc
* external verification
* quantitative data
[Annual Report 31/12/2010] [Social Responsibility report 31/12/2010]
Environmental performance
EIRIS has assessed Arca Continental overall as demonstrating no improvement on the
following key issues:
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No
No
No
No
No
Improvement on Climate Change (high impact, weighted x5)
data on Emissions to Air (medium impact, weighted x3)
data on Emissions to Water (high impact, weighted x5)
data on Water Consumption (high impact, weighted x5)
data on Waste (low impact, weighted x1)
The Company has reported on trend data for CO2 emissions performance.
[Annual Report 31/12/2010] [Social Responsibility report 31/12/2010]
Energy/CO2: No Improvement
The Company reports that in 2007 it released 88000 tonnes of CO2 and the same in 2009.
When normalised this is an increase of 0.22%.
Waste: No data
The Company reports 32,242 tons of waste 72.25% recycled); 9,090 tons of carton, 5,363
tons of glass, 1,089 tons of PET, 87 tons of aluminium, 1,603 tons of lids, 1,545 tons of
plastic, 900 tons of metals, 860 tons of wood, 2,757 tons of other materials recycled (2009).
Biodiversity
Arca Continental has been classified as having an overall High potential impact on
biodiversity. This is because it derives over 15% of its turnover from the Food, beverages
& tobacco (high) sector.
Food, beverages and tobacco companies may impact on biodiversity through land clearance,
introduction of non-native species, water use, or soil and water contamination. Fish and
agricultural sourcing, and wood use for tobacco curing are other impacts.
Arca Continental has a moderate biodiversity policy. The policy includes the following
elements:


some actions or sponsorship undertaken to enhance local ecosystems for part of the
Company operations - the Company reports 1,325 hectares of reforested lands,
1,324,041 trees planted, 1,080 soil restoration projects, and indicates 26,000 trees
planted in Arca territories in the past few years.
NGO or conservation organisation involvement - the Company participates with 49
Chambers and Associations like ECOCE and ANSPAC
The Company does not provide for:
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Group-wide or site-level BAPs or equivalent accepted conservation priorities
the existence of a policy in line with the Convention on Biological Diversity (CBD)key principles include protection of biological diversity within protected areas, and the
sustainable use of biological resources
implementation of a policy to source natural resources from suppliers operating a
certification scheme, e.g. FSC, MSC
details of biodiversity improvements reports
[Annual Financial Report, 31/12/2010] [Social Report, 31/12/2010] [Company website,
08/08/2011]
Climate change
Arca Continental has been classified as having an overall medium climate change impact.
This is because the Company derives over 15% of its turnover from Beverages.
The beverage sector has direct climate change impacts through energy use and upstream
impacts through agriculture (sugar cultivation etc) often driving land use changes.
Arca Continental management response to climate change issues is assessed as limited
Policy and governance
The Company meets the following indicators:

Climate change commitment - the Company discloses a commitment to keep
emissions at the level of 2004 by 2015
The Company does not meet:
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Senior responsibility for climate change related issues
Policy reflects national or international governmental agenda
Public policy leadership
Remuneration linked to climate change performance
Management and strategy
The Company meets the following indicators:

Short-term management targets linked to GHG emissions reductions - the same CO2
emissions of 2004 in 2015
The Company does not meet:

Long-term strategic goal linked to GHG emissions reductions
Disclosure
The Company discloses:


Absolute emissions - the Company discloses CO2 emissions from 2004 to 2010
Trend data
The Company has not disclosed:
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Normalised emissions (or appropriate denominator)
Scope of data
Methodology applied
Verification
Reporting against targets
Risk disclosure
Performance and innovation
The Company does not meet:


Operational emissions reductions
Operational transformational initiatives
[Social Responsibility Report, 31/12/2009] [Annual Financial Report, 31/12/2010] [Social
Responsibility Report, 31/12/2010] [Company website, 08/08/2011]
Arca Continental climate change disclosure is assessed as intermediate
Please see 'Climate change response' for further details.
Water use
Water management response
Arca Continental's management response to water management issues is assessed as
intermediate
Policy and governance


Senior responsibility for water management related issues - the Company has 11
water committees, aiming to reduce consumption of water in production of beverages
Water management commitment - the Company has implemented the Water Source
Vulnerability Protection (SVA)
The Company does not meet:
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Supply chain related water management commitment
Policy context
Public policy leadership or collective action
Remuneration linked to water management performance
Community engagement
Management and strategy
The Company meets the following indicators:
Water Quality targets - the Company complies with the Nom-002-SEMARANT-1996, which
establishes the maximum permissible limits for containments in wastewater discharge
The Company does not meet:
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Preventive and corrective action plans for identified risks
Financial accounting
Long-term water management targets linked to water management reductions
Short-term water management targets linked to water management reductions
Supply targets
Disclosure
The Company discloses:


Normalised water use disclosure - the Company consumed 1.96 litre of water/litres of
beverage consumed in 2009
Trend data - from 2004 to 2009
The Company reports during 2010:

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an improvement of 24% in the efficiency of the use of water vs.. 2004.
MXN 20m inverted in projects for taking care of the water.
11% of water consumption reused in processes.
Save 4% vs.. 2009 of water equivalent to 118,556 m3.
The Company has not disclosed:
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Absolute water use disclosure
% of operations in water stressed regions - the Company is aware that water as a
resource is scarce and has therefore implemented the Water Source Vulnerability
Protection (SVA)
% of suppliers in water stressed regions
Supply chain water use
Reporting against targets
Verification
Risk disclosure
Performance and innovation
The Company does not meet:
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Operational water use reduction
Technology and Innovation
Supply chain water use reduction
Supply chain technology and innovation initiatives
[CSR Report, 31/12/2010] [Annual Report, 31/12/2010]
10/08/2011]
[Company website,
Arca Continental's water management disclosure is assessed as intermediate
Please see 'Water management response' for further details.
[Annual Report, 31/12/2010]
Governance
Board practice
Arca Continental indicates it contains some of the four global governance components
monitored. The Company:

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has a separate chair and chief executive
has an audit committee, the majority of whose members are independent nonexecutives - the Company reports that all of the members of the audit committee are
independent, however it fails to disclose the number of members in the audit
committee.
discloses the remuneration of company directors - the Company reports that the
compensations to its key executives and board members is MXN 113.1m
The Company does not have more than 33% of the board as independent non-executives five out of the 20 board members are independent.
[Annual report, 31/12/2010] [Company website, 08/08/2011]
Bribery & corruption
Bribery risk exposure
Arca Continental has a medium potential exposure to bribery risk. The Company operates
In one or more high risk countries. [Annual report, 31/12/2010] [Company website,
08/08/2011]
Countering bribery overall
Arca Continental has a medium potential exposure to bribery risk. The Company has a
limited overall approach to countering bribery. Its policy is intermediate, its systems are
intermediate and it has not reported on this area.
Countering bribery policy
Arca Continental has an intermediate anti-bribery policy. This includes the following
elements:
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prohibition of giving and receiving bribes - the Company is signatory of the UNGC
obeying laws and regulations
restriction of facilitation payments
restriction of giving and receiving gifts
board level commitment
transparency of political donations
prohibition of facilitation payments
The policy does not cover:



prohibition of political donations
business partners (including contractors, suppliers, agents) being covered by the
policy
no detriment for employees refusing to pay bribes
Embotelladoras Arca has made its policy publicly available. [Annual report, 31/12/2009]
[Company website, 07/07/2010] [Code of Ethics, 04/05/2011]
Countering bribery systems
Embotelladoras Arca has an intermediate system for implementing its anti-bribery policy.
This includes the following elements:

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communication of policies to employees
employee training
compliance monitoring, including details of assurance, audits, monitoring, board
reports etc
In addition to this, it has the following elements:

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
whistleblowing procedures
communication of policies to contractors, suppliers and agents
conduct due diligence before establishing joint ventures and/or evaluating
prospective contractors and suppliers
Its systems do not include:
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sanctions process
risk based assessment
appropriate systems for the appointment and remuneration of agents
training for contractors and suppliers

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identification and 'black listing' of known bribe payers
the audit committee making an independent assessment of the programme and/or
disclosing its assessment in the annual report (or similar)
[Annual report, 31/12/2010] [Code of Ethics, 31/12/2010] [Company website,
10/08/2011]
Countering bribery reporting
Embotelladoras Arca has disclosed no evidence of reporting on its bribery policy and
management systems. There is no indication that the Company publicly reports on
communicating its policy, or on details of its systems for compliance and/or
monitoring/auditing. There is also no indication that it reports details of its procedures for
remedying non-compliance or details on its whistleblowing systems in relation to bribery.
The Company has made its counter bribery policy available, however this is not sufficient to
improve the assessment.
[Annual report, 31/12/2010] [Code of Ethics, 31/12/2010] [Company website,
10/08/2011]
Codes of ethics
Arca Continental has an advanced code of ethics. This includes the following elements:
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commitment to obeying laws and regulations
prohibits giving and receiving bribes
restricts giving and receiving gifts
restricts facilitation payments
prohibits donations to political parties
This code does not cover: dealing with conflicts of interest.
Arca Continental has communicated the code to its employees and made it publicly
available.
Arca Continental has an intermediate system for implementing its ethical code. It has the
following elements:
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employee training
compliance monitoring
provision of whistleblowing procedures - the Company has a transparency website
and a 1-800 number both available globally 24/7
regular review of the code
Its systems do not provide for reporting, including details of any breaches and
enforcements.
[Annual report, 31/12/2010] [Company website, 08/08/2010] [Code of Ethics, 31/12/2010]
[Social Report, 31/12/2010]
ESG risk management
Arca Continental has disclosed no evidence of board/senior management engagement with
Company-wide ESG risks and opportunities. The Company scores 0 out of 16 overall on the
basis of individual scores (out of 4) under each of four headings: board responsibilities,
corporate ESG risk management systems, consideration or identification of Company-wide
ESG risks and quantification of potential liabilities and opportunities. [Annual report,
31/12/2010]
Responsibility for stakeholders
Arca Continental has indicated that it has allocated board responsibility to specific board
members for employee-related issues - the director of human capital and quality
It has not allocated board responsibility to specific board members for:


external stakeholder issues
environmental issues
[Annual report, 31/12/2010] [Company website, 10/08/2011]
Women on the board
Arca Continental has one woman on its board of 20 directors - less than 20% of board
members. [Annual report, 31/12/2010] [Company website, 08/08/2011]
Human rights
Human rights overall
Arca Continental has no subsidiaries or associates in either the EIRIS Category A or
Category B lists.
Stakeholder issues
Stakeholder policy
Arca Continental has provided details of a moderate level of overall stakeholder policy.
They have some policies on board level responsibility for stakeholders, employee training
and development, job security and job creation & community involvement and policies going
beyond the minimum assessment level on equal opportunities and diversity & bribery and
corruption.
Stakeholder engagement
Arca Continental has provided moderate disclosure of its systems for engaging with its
stakeholders.
The Company has disclosed:
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that it regularly surveys customers
that it regularly surveys employees
that it reviews the impact of their operations on communities
The Company has not disclosed:

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that it regularly surveys suppliers
that a significant part of its engagement with stakeholders is independently verified /
audited
[Annual report, 31/12/2010] [Company website, 10/08/2011]
Stakeholder reporting
Arca Continental has disclosed good quantitative indicators to support social reporting.
Those marked with an asterisk (*) indicate that there is relevant quantitative data in the
Company's publicly-available reports and/or websites. Otherwise data should be assumed to
come from communications or survey responses from the Company.
The Company has produced:
a social report
The Company has provided quantitative data in relation to:

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health & safety *
workforce composition *
training *
staff turnover or job security *
The Company has not produced or provided quantitative data in relation to a community
involvement report giving details of projects supported
Details are contained elsewhere in this company profile. The Company has not indicated that
any of this data is independently verified.
[Annual report, 31/12/2010] [Company CSR report, 31/12/2010] [Company website,
10/08/2011]
(REPORTE DE RESPONSABILIDAD SOCIAL PAGINA
Employee issues
Equal opportunities
Embotelladoras Arca has a moderate commitment to promoting equal opportunities or
diversity. The Company:
 has a non-discrimination policy going beyond race and gender -it includes race,
religion and disability.
 has made clear that this policy is applicable to the Company's global operations The Company does not:
 indicate whether it supports wider business-focused anti-discrimination initiatives
[Annual report, 31/12/2009;Code of Ethics, 07/07/2010;Company website, 07/07/2010]
Arca Continental has disclosed some evidence of systems for promoting equal opportunities
or diversity.
The Company has:
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
a senior person responsible for overseeing non-discrimination issues
a system for monitoring equal opportunities (as indicated by the figures below)
The Company does not show evidence of:
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flexible (and family-friendly) work arrangements, such as flexible working hours,
childcare facilities or job sharing
a significant proportion of the management who are women (or from ethnic
minorities)
Embotelladoras Arca reports that:
10.6% of its global workforce is female
10.6% of its home/main country workforce is female
% of managerial grade employees are female (worldwide)
% of managerial grade employees are female (home/main country)
% of managerial grade employees are from ethnic minorities (home/main country)
% of its home/main country workforce are from ethnic minorities
[Annual report, 31/12/2010] [Company CSR report, 31/12/2010] [Company website,
10/08/2011]
Health & safety
Arca Continental has provided clear evidence of systems for managing health and safety
policy. The Company has:
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provided details of its health and safety training
indicated a senior person is responsible for overseeing health and safety - the
Company indicates that i has a H&S Committee integrated by the CEO and top
executives
provided quantitative data on its health and safety record as detailed below
The Company has not provided details of awards won
Embotelladoras Arca reports that:
Number of days/1000 employees lost due to accidents = 4% accidents rate and 3% days
lost (2010)
Number of days/1000 employees lost due to illness = 2% (2010)
Lost Time Injury Frequency Rate (LTIFR) per million hours worked =
[Annual report, 31/12/2010] [Company website, 10/08/2011;Social Report, 31/12/2010]
Job creation and security
Arca Continental has disclosed some evidence of systems for advancing job creation and
job security. Factors considered include rates of staff turnover and the percentage of the
workforce on temporary contracts, any formal commitment to avoid or minimise compulsory
redundancies, and the percentage of organic growth in jobs in the past year. The Company
job growth during 2010, is due to the acquired of AC Ecuador, witch represents 3342
employees. Then the organic job growth should be 572 employees.
The Company reports:
Total number of employees = 22,950 (2010); 19,036 (2009); 19,895 (2008)
0.92% employees with temporary contract (2010)
[Annual report, 31/12/2010] [Code of Ethics, 31/12/2010] [Company website,
10/08/2011]
Trade unions and employee participation
Arca Continental has disclosed clear evidence of systems for managing employee/union
relations. It has made the following data available:
59.5% of home/main country workforce represented by trade unions or collective bargaining
agreements
53.3 % of its global workforce represented by trade unions or collective bargaining
agreements
[Annual report, 31/12/2010] [Company website, 10/08/2011]
Training
Arca Continental has disclosed some evidence of systems for promoting employee training
and development.
The Company has:
published supporting data on the extent of Company training and development (as indicated
by the figures below)
The Company does not show evidence of:


a senior person responsible for overseeing employee training
over 25% of employees having an annual training and development review - however
the Company reports that 100% managers are reviewed every two years
Embotelladoras Arca reports that:
Average amount spent on training per employee = MXN 17m (2010).
Average number of days spent per year on training per employee = 4.1 (2009)
[Company CSR report, 31/12/2010] [Company website, 10/08/2011]
Customers & suppliers
Customer/supplier relations
Arca Continental has adopted and clearly communicates a corporate policy statement
setting out details of its policy for managing relationships with customers and/or suppliers.
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In relation to customers - the Company reports that it keeps relations with clients
hearing and responding to their needs
In relation to suppliers - the Company reports that it works with them in order to
develop their business and include them into sustainability
This policy is clearly communicated to customers and suppliers.
[Annual report, 31/12/2010] [Company CSR report, 31/12/2010] [Company website,
10/08/2011]
Arca Continental has provided some evidence of management systems for managing and
improving relationships with customers and suppliers.
Embotelladoras Arca indicates:
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that a significant part of its worldwide activities is covered by internally developed
quality systems and by ISO 9000 and 22000
that it systematically monitors relationships with customers
that it systematically monitors relationships with suppliers
Embotelladoras Arca has not indicated:
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
that it has a senior person responsible for this area
that it can supply evidence of improvements in its relationships with customers or
suppliers
To improve its assessment Embotelladoras Arca would need to provide more evidence of its
systems or have a higher percentage of its operations certified.
[Annual report, 31/12/2010] [Company CSR report, 31/12/2010] [Company website,
10/08/2011]
Community involvement
Arca Continental has disclosed some evidence of systems for promoting community
involvement.
The Company has indicated:

that it supports charitable / community involvement by its employees - the Company
reports that 2,500 employee were involved in voluntary activities in 2010


that it makes charitable donations (as indicated below) - the Company reports a MXN
26m social investment, the distribution of this investment was: 18.5% for health
programmes, 17.6% for culture, 12.3% for education, 5.1% for natural disaster relief
and 46.5% in other programmes
that it has a report detailing community projects supported
The Company has not indicated that its charitable donations exceed 0.5% of pre-tax profits.
Arca Continental indicates:
Total amount given to charitable causes = MXN 26m (2010); MXN 300,000 (2009)
Charitable contributions as % of pre-tax profits = 0.44% (2010); 0.0078% (2009)
[Annual report, 31/12/2010] [Company CSR report, 31/12/2010] [Company website,
10/08/2011]
Sector specific issues
Obesity
Arca Continental is considered to face a high for obesity issues based on the absolute and
percentage turnover derived from unhealthy foods and drinks.
Company overview

Exposure level is based on estimates that the Company derives over 33% of
turnover from unhealthy drinks and GBP 2 billion of turnover from unhealthy
drinks. The Company produces soft drinks and corn snacks.
Assessment
Arca Continental's management response to obesity is assessed as limited.
Responsibility
The Company publicly discloses that it:


recognises responsibility for obesity / identifies obesity as an ESG risk
acknowledges the obesity problem in children
The Company does not publicly disclose it sets targets for the future development of
healthier products
Product strategy
The Company has not committed to:


developing healthier products
restricting/decreasing portion sizes
Consumer information
The Company has a policy referring to:


nutrition labelling: lists the nutrient content of its products and/or includes GDAs
responsible advertising/marketing to all consumers: encourages consumption of more
nutritious products and/or has a policy on nutritional claims
The Company does not have a policy referring to responsible advertising/marketing to
children:
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restricts use of media/fantasy personalities
prohibits embedded toys
prohibits pester power
prohibits in-school marketing
restricts in-school vending
sets a targeted minimum age
other element
Reporting and dialogue
The Company:


reports annually on its obesity strategy and/or performance
is in dialogue with other companies, independent bodies or government authorities to
devise common strategies to tackle obesity - the Company implemented the program
"Escuelas en Movimiento" and the program "Salud para Aprender" with the object of
reduce child obesity.
[Annual report, 31/12/2010] [Social Report, 31/12/2010] [Company website,
10/08/2011]
Other ethical concerns
Genetic engineering
Arca Continental is involved in manufacturing or processing food, feeds and drinks
products and has been assessed as having a poor GMO avoidance policy. The Company
manufactures food products or sells own-brand food products which commonly contain soya
and maize ingredients, including EIRIS classifies this Company as having a poor GMO
avoidance policy as it has not made clear whether it has a non-GM sourcing policy for soya
and maize for at least 10% of relevant food lines.
[Annual report, 31/12/2010] [Company CSR report, 31/12/2010]
Areas of non-involvement
CONVENTION WATCH:
CONVENTION WATCH:
CONVENTION WATCH:
CONVENTION WATCH:
CONVENTION WATCH:
CONVENTION WATCH:
CONVENTION WATCH:
CONVENTION WATCH:
Other ethical concerns
Anti-bribery principles
Anti-personnel landmines
Biodiversity
Environmental pollution
Human rights principles
International labour standards
Kyoto Protocol
Ozone depleting chemicals
Disclaimer
This report is provided under the terms of a research service agreement which specifies how
this report and the information contained in it may be used. This report may not be used for
any other purpose, or published or provided to any third party other than as specified in the
relevant research service agreement.
(C) Copyright EIRIS 2011