Corporate Sustainability Reports and ESG Evaluation of Loblaws

Corporate Sustainability Reports and ESG Evaluation of Loblaws
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Corporate Sustainability Reports and ESG Evaluation of Loblaws
This evaluation will focus on the current state of ESG reporting for Loblaws and its competitor, Sobeys, and the extent to which they are addressing sustainability issues to try to assess whether both Loblaws’ and Sobeys’ reporting is sufficiently transparent. The discussions are under the below headings.
1 Evaluation of the Company’s CSR Reporting
a. The company has adequate ESG disclosure, the reports having the strength that they are detailed, for instance, according to Loblaw Companies Limited (January 24, 2022), the reporting on Governance follows the Task-Force on Climate-Related Financial Disclosures, TCFD recommendation, like the reporting on responsible sourcing of its beef. The environment disclosure is also sufficient from the disclosed carbon emissions amounts, the targets, and timelines of cutting the emissions. Social reporting has also seen the disclosure of the President’s Choice Children’s Charity, a school meals program, and the promotion of higher education through the Loblaw Scholarship. The weakness of the reports is that they are produced annually with nil or minimal disclosure in the interim.
b. As a potential investor, the information in this report gives the needed disclosures for making a meaningful sustainable investment decision.
c. There are ESG issues that would be material considerations, for example, human capital and carbon emissions report.
d. Yes. This is achieved through engaging its shareholders and investor groups in assessing the climate-related risks and actions
e. Yes, Loblaws’ commitment to source its beef from The Canadian Roundtable for Sustainable Beef (CRSB), is a partnership with a target of reducing greenhouse gases by 33% by 2030.
f. The CSR report is useful in highlighting the Loblaw Scholarship, a higher education sponsorship program, and a school meals program under the President’s Choice Children’s Charity (Loblaw Companies Limited, November 30, 2021).
2. Evaluation of a key Competitor’s CSR Reporting.
a. Sobeys has sufficient ESG disclosures with its strengths in the information on the environment, in which it has committed to implement a number of energy efficiency initiatives e.g., upgrading its lighting and refrigerators, and a reduction in the use of energy, the same approach taken by Loblaws. On the social front, it has a Diversity, Equity & Inclusion Council that works towards the company’s commitment to these values, an equivalent of Loblaws’ engagement of its shareholders and investor groups in assessing its climate-related risks and actions. The two companies share the weakness that their reports are produced annually with nil or minimal disclosure in the interim.
b. As a potential investor, the information in this report, especially the GHG emissions metrics are sufficient disclosures for making a meaningful sustainable investment decision. Loblaws too has the same needed disclosures.
c. Yes, since the oversight of the ESG issues is carried out by the Corporate Governance & Social Responsibility Committee, the Executive Committee, and the Board of Directors (Sobeys, 2021). This is the equivalent of Loblaws’ shareholders and investor groups.
d. Yes. From the chairman’s message, Empire Company Limited (2021), Sobeys’ acquirer, the company has committed to releasing its first-ever ESG report, and the report further indicates the company’s achievements in removal, from their stores, 800 million plastic bags and packaging, planting 14,000 trees under the One Tree Planted initiative, and a 24% reduction in food waste. Loblaws has similar disclosures and metrics.
e. The report is useful since it provides information about the company’s strategy of pairing up with the international charity, One Tree Planted, just like Loblaws’ report that highlights sponsorships and charities.
f. Loblaws is outperforming based on its extensive reporting on sustainability considerations.
3. Review of the most Current Sustainalytics ESG Research Report for the Company.
a. According to Sustainalytics (2022), the company has an overall corporate governance top score of 60, a leader, a regional score of 65 out of 218 companies in Canada, and a score of 84 among the 70 companies in the industry. It is a leader in the key corporate governance issues of Board Structure (with top performances in director disclosures, voting structure, and risk oversight), Audit & Financial Reporting (with top performance in audit fee), and Stakeholder Governance (with top performances in ESG governance, Lobbying and Political Expenses, Bribery & Corruption Policy, tax disclosure, and GHG Reduction Program). It however scores poorly in Board/Management and Quality & Integrity Ownership & Shareholder Rights as an average performer. The Controversy Report has the highest controversy score of 3 under customer incidents in the social pillar. It has a low ESG rating, with a score of 18.9 (Sustainalytics, 2022).
b. Business Ethics (such as accounting & taxation and intellectual propert...