Agri-food group Japfa champions a sustainable future

Japfa is a leading integrated agri-food group in Asia dedicated to feeding millions of people with essential animal proteins, namely poultry, swine, aquaculture, beef and protein-based consumer products.

1. What are some key highlights in Japfa’s latest Sustainability Report?
In 2023, we made further progress on action plans, data collection and analysis to improve impact assessment and decision-making.

We also refined our capital commitment system to monitor better capital investments and expenditures linked to our sustainability initiatives.

We initiated a Life Cycle Assessment (LCA) for our swine operations in Vietnam, which will help us identify key hotspots in our swine value chain and focus on areas for improvement.

We included a full chapter on the Task Force on Climate-related Financial Disclosures (TCFD) in our 2023 Sustainability Report, setting a roadmap towards achieving our targets and providing updates on action plans and progress development.

In 2023, the Japfa for Kids programme successfully improved the nutrition of primary school children by lifting 1,311 students from malnourished and undernourished status to well-nourished.

2. How has Japfa’s sustainability approach been integrated into its business operations?
Our sustainability efforts align with the United Nations Sustainable Development Goal 2 (UN SDG2): Zero Hunger.

We operate in markets where food security is still an issue. Over 40% of the 3.1 billion people worldwide who cannot afford a healthy diet live in the countries that Japfa operates in, such as Indonesia, Vietnam, Myanmar, India, and Bangladesh. This is reflected by the level of chicken consumption per capita, which is less than 10kg in Indonesia compared to over 40kg in Malaysia.

Today, Japfa supplies about 20% to 25% of staple proteins in many of our operating countries. As a leading efficient and low-cost protein producer, we can improve the diets of millions of people by providing nutritious and affordable protein foods while promoting sustainable practices.

Our sustainability efforts are driven by top and senior management and embedded in the organisation by the Sustainability Champions, who seek to lead the way towards adopting a sustainability mindset and initiatives.

The strict collaboration among people from different functions, operational units, and countries is key to organising our sustainability efforts into realistic targets and action plans.

We also seek the inclusion of sustainability elements in our capital expenditure commitment guidelines — when there is a request for funding for a project, we make sure that sustainability criteria are included in the assessment.

3. As a producer of staple animal proteins, how does Japfa manage the use of energy and resources?
Japfa has set ambitious sustainability targets in 2022, focusing on resource efficiency and waste reduction throughout our production process. Our approach focuses on an Efficient Production System, one of our sustainability pillars, with efforts in different areas.

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We leverage genetic selection, optimal nutrition and modern farming practices. For example, with optimal nutrition for our livestock, we can promote their health and improve productivity, which benefits resource use.

Key features include large-scale, standardised operations, economies of scale, and local sourcing of raw materials (where feasible). We integrate technology at every production stage to optimise energy and resource utilisation, reducing our environmental footprint.

Leveraging our vertically integrated business model, we unlock the full potential of our value chain, making essential staples accessible. Our efficient production system is not just a strategy — it’s a lifeline, delivering nutritious protein staples while protecting the future of our planet.

4. The group secured its first Sustainability-Linked Bond (SLB) in FY2022. Can you elaborate more on its key performance indicators?
Issued by our subsidiary PT Japfa Indonesia Tbk, our SLB was the first of its kind in the agri-food industry globally and the first US dollar-denominated SLB issuance from Southeast Asia.

The SLB is pegged to Sustainability Performance Targets (SPTs) linked to wastewater treatment and recycling to improve water circularity and reduce water withdrawal. The SPTs were established after conducting an environmental Life Cycle Assessment (LCA) of our poultry operations in Indonesia. The SPTs were assessed as “Robust” by Vigeo Eiris (V.E.), an affiliate of Moody’s ESG (environmental, social, and governance) Solutions. The LCA identified water, wastewater and water use as areas for improvement.

We plan to build nine water recycling plants for the SLB by Dec 31. Eight facilities have already been completed, and we are on track to meet the SLB targets.

5. What are Japfa’s plans to further enhance its ESG data and disclosure practices? Which ESG reporting technologies has Japfa adopted in recent years?
Our Japfa Sustainability Reporting System (JSRS) was built as a collaborative project between the human resources and information technology departments.

The JSRS has set up an in-house database system to collect and track human resources and sustainability data, such as energy, waste, water and employee metrics. JSRS covers more than 350 reporting units across the group and is planned to expand coverage and scope.

In the next phase, we will focus on enhancing the JSRS and data cleansing to create a reliable digital database with analytics that will provide tools for assessment and decision-making.

In addition, we’ve introduced a user-friendly dashboard to facilitate efficient management oversight and streamline the tracking of sustainability metrics. Appropriate Persons-in-Charge (PICs) were appointed in the operating units across the group to oversee the data collection and verification to enhance data integrity further. The PIC structure will significantly improve the timeliness and accuracy of the data collected.