Using Qualitative Analyses to Measure Against OSI 2018/2019 Sustainability Report Priorities

December 2, 2019

In the last decade, sustainability has moved from the periphery of our business thinking to the forefront. It impacts nearly every element of our industry. Because of this, we began publishing Sustainability Reports in 2016. As we are now well into the final quarter of 2019, it is important that we take a step back to see the progress we have made based on the goals and priorities we included in the 2018 / 2019 OSI Sustainability Report.

The 2018 / 2019 Sustainability Report was meant to accomplish a number of things, but none more important than providing a foundation for new and far-reaching goals. In this, our most recent report, we documented our intentions, policies, progress and activities in order to be transparent about our operations and impacts. This helps our company remain honest and forthright about the challenges we face and dedicated to achieving meaningful results.

MEASURING PROGRESS AGAINST OUR SIX PRIORITY AREAS IN SUSTAINABILITY

From our strategic sustainability process and the materiality analysis, we have organized the most significant issues into six priorities for our company. Highlighting specific priorities advances our approach by defining the opportunities where we can drive meaningful and sustainable impact and also measure the progress we are making. While we do not yet have the comprehensive hard data that will be included in our next Sustainability Report, we can still see some of the progress we have made in these areas through stories and qualitative insights.

SUSTAINABILITY PRIORITY 1: ANIMAL WELFARE

We recognize that animal welfare is not only an ethical responsibility, it also ensures a high quality product. For this reason, we are careful about our supply of raw materials. We source exclusively from approved external suppliers or our own primary processing facilities for beef and chicken, which we take care to operate according to best practices of industry experts.

While these efforts have proven successful, we have taken our animal welfare initiatives to the next level over the past few years through organizational work and by instituting third party monitoring at our plants in Europe.

OSI began working with an independent, third party monitoring service, in 2005. This service offers remote video auditing (RVA) that can cover the entire sequence of farming operations, from live animal handling to further processing, and the entire breadth of criteria from animal welfare to food safety and margins. This is a great solution for providing quality assurance within our own operations and on behalf of our supply chains.

OSI has not only invested in technology and innovation to promote animal welfare throughout our operations, we have also invested in our people. Susi Shifflette started helping OSI's European facilities improve on their monitoring and standardization of animal welfare practices from her position at OSI Group headquarters in Aurora, Illinois in early 2018. Now, Susi lives full time in Europe, where she is now working to empower the entire OSI supply chain - and the industry as a whole - to advocate for and work on behalf of one group: the animals.

SUSTAINABILITY PRIORITY 2: ANTIBIOTIC STEWARDSHIP

Antibiotics play an important part in both human and animal health by treating bacterial infections. Unfortunately, some bacteria are no longer able to be controlled by antibiotics after developing full or partial resistance to their effectiveness. We recognize that using antibiotics appropriately in food animal production will lead to optimal animal health and welfare, which is good for producers and the rest of the food production chain and is essential to helping ensure a safe, affordable and abundant food supply.

To help promote sustainable farming practices, including antibiotic stewardship, OSI launched the OSI Sustainability 365 Farmer Recognition Program. Farmers recognized in the OSI Sustainability 365 program may prioritize different principles of sustainable agriculture but they share several key values. These partners approach sustainability holistically and practice sustainable farming across three distinct areas of impact: their animals and farm management, the environment and the community. Farmers implementing sustainable practices within their operation are advancing animal welfare, stewarding antibiotics and keeping good records.

SUSTAINABILITY PRIORITY 3: CONSERVATION

Healthy soil, water, air, plants and ecosystems are critical to ensuring sustainable agriculture. Our goal is to best use the materials needed for our products and, through regular review, identify suitable environmentally friendly alternatives or practices that will reduce any negative impact. We believe that properly using the natural resources in our supply chain will address critical risks to our areas of operation and supply chain.

This priority is so important to OSI, we ensure that our workforce is exposed to sustainable practices even if they do not need to use them in their daily responsibilities. This is done at the earliest moment through OSI’s Rotational Management Trainee (RMT) program. As part of the RMT program, Eric Small continued his supply chain management training by visiting Hunt Hill Cattle Company in Woodville, Mississippi to learn about a grazing method that is dramatically better for the environment and animals than traditional methods used before the 1990s. This will help him make better decisions on where to source beef, because he now understands more about what sustainable farming looks like.

SUSTAINABILITY PRIORITY 4: CLIMATE CHANGE

Addressing climate change is a business issue, and, at OSI, achieving continuous improvement in energy efficiency and taking steps to reduce our carbon footprint are of critical importance to both our company operations and our stakeholders. From employees to facilities, the entire company is working hard at this priority.

Currently, OSI’s Pickstock Telford beef processing facility in England is using anaerobic digestion, so it can run on 100 percent renewable energy. This form of power generation uses organic materials that come from animals and plants to produce energy. Utilizing anaerobic digestion in a beef processing facility works because much of the waste stream is organic waste generated by the livestock and processing activities which can feed the anaerobic digester and convert to biofuel. Additionally, byproducts from the digestion process can go back to the agricultural nutrient cycle through fertilizer.

OSI’s facility in Riverside, California is demonstrating how our conservation and climate change principles can be put into action. For Riverside, unlocking energy benefits and savings has powered the pursuit for continuous environmental improvement.

SUSTAINABILITY PRIORITY 5: WORKPLACE

When asked to describe the culture at OSI, the first word that comes to Chairman and Chief Executive Officer, Sheldon Lavin’s, mind is “family.” Fostering the familial culture means that both safety and development are critical components for the well-being of our workforce and our success. From Food Safety Week at OSI to innovative training methods to better prepare workers to avoid and deal with dangerous situations, 2019 has been a strong year for improving our workplace.

Marta Torres from the Human Resources department at OSI Food Solutions Spain found an innovative way to prepare her colleagues to turn what could be their worst day on the job into just another day at the office. Torres sourced virtual reality (VR) headsets and software that replicates safety scenarios. She knew that instead of watching videos and responding to comprehension quizzes, getting someone to experience the adrenaline and fear that comes with dealing with a fire or a fall, even on a smaller level, could reduce injuries and save lives.

SUSTAINABILITY PRIORITY 6: COMMUNITY

As food providers, we appreciate the power of eating together and celebrate the connections that can be made over food. We also recognize that there are critical needs in our community, and we are well-placed to help meet those needs as part of our corporate responsibility commitments.

We pride ourselves on being a company that works hard to instill a culture of giving as a central part of who we are. In fact, giving is one of the most important and fun things we do. From working with local food banks in the United States to partnering with the Clown Doctors in Australia, the culture of giving at OSI extends across our entire network. While OSI does focus on three priority areas relating to its giving, food research and education, health and nutrition and children and families, we also empower our employees to help drive many of our charitable causes.

CONTINUING THE PURSUIT OF SUSTAINABILITY AT OSI

As a company, we continue to pursue sustainability because we know it is fundamental to operating a successful business. We also know that we have both a tremendous opportunity and responsibility in our company’s vision of being a Premier Global Food Provider to Leading Branded Companies. Our customers maintain ambitious, best-in-class sustainability goals because it is demanded by their customers, investors, and the public.

For them, many of their sustainability goals begin in the supply chain, and we are fortunate to benefit from their important industry leadership that helps make those goals a reality. As we continue to work together, we are seeing the benefits of combining their sustainability momentum and adding our own energy and influence to the movement. We are excited about the change that we can create in our supply chains for our customers, the industry, the environment and the communities in which we operate.