Environmental and Social (E&S) Assessment and Management System. Soufflet has effectively developed and implemented a corporate Integrated Quality, Environmental, and Safety (QSE) management system (MS) compliant with international standards, such as: ISO 9001:2015 for the agro and malting division; and ISO 14001:2015, ISO 45001:2018 and ISO 50001:2014 for the malting division. The scope of this QSE MS applies to its core businesses, including the malting and agro operations in the Project’s countries. At the malting facility in Bulgaria, the QSE management system is in place and currently ISO 9001 certified. This system will be further elaborated to include all the above-mentioned ISO certifications. Given the reviews of earlier IFC investments, the QSE is robust and includes all elements of IFC PS1. A Hazard Analysis and Critical Control Points (HACCP) framework has been developed for all agriculture and malting facilities and comes under the responsibility of the Food Safety Manager of the malting division and International QSE manager for the agro division.
E&S Policy. As part of QSE MS, Soufflet has developed policies regarding the environment, workers safety and sustainable supply chains. In 2020, the Soufflet Group adopted an overarching 2030 Corporate sustainability strategy “We Do Fair (https://www.soufflet.com/en/our-commitments), which includes these policies. The strategy consists of 5 pillars; i) Protecting ecosystems and climate; ii) Developing a responsible, sustainable economy; iii) Guaranteeing products of a high food safety and nutritional standard; iv) Contributing to regional development; and, v) Ensuring staff members; safety and developing skills. For each pillar, key performance indicators (KPIs) have been determined, including reduction targets, such as GHG emission, water consumption, waste treatment. These will be addressed in the applicable PSs below. The malting division has translated the five pillars in a 2030 division strategy with measurable KPIs and targets on an annual basis. In addition to the corporate strategy, the agro division will implement a new QSE policy focussing on (i) cross-country integration; (ii) reinforcement of HACCP risk assessments; (iii) guaranteeing conformity of products and traceability of grain procurements through an enterprise resource planning (ERP) system.
Identification of Risks and Impacts. As part of its corporate QSE MS, EHS risks and impacts are identified at all Soufflet facilities, according to Standard Operating Procedures (SOPs) developed within the QSE MS. EHS risk assessment is the foundation on which management programs are established and reviewed annually. Soufflet’s scope of risk assessment also covers contractors’ operations, including development of corrective measures, audits of Soufflet requirements on implementation and enforcement by contractors performing work at company’s facilities. For new facilities, Soufflet conducts a gap analysis against national regulations and international standards (e.g. EU regulations and IFC PSs). As a rule, the stricter standard will be applied for EHS management. All Soufflet’s facilities undergo an annual internal audit against applicable national legal and regulatory requirement, IFC PSs and WBG EHS Guidelines. Any deficiencies are documented and a plant-level Corrective Actions Plan (CAP) are prepared, including completion timeline and assignment of CAPEX/OPEX.
Management Programs. QSE management programs and plans of the input distribution, grain procurement and malting operations are based on QSE policy commitments, outcomes of risk identification process, overall E&S performance (based on KPIs and corporate target), and findings of internal audits and authorities’ inspections. Plans are developed or updated annually. Moreover, Soufflet adopted corporate targets for environmental protection, reduction of greenhouse gas (GHG) emissions, energy efficiency, and waste management. Currently, Soufflet applies KPIs which are monthly reported to the management at the division level and the board at the Group level, which include water and energy consumption, solid waste recycling or reuse, lost time accidents and near misses.
Organizational Capacity and Competency. Soufflet has established an organizational structure that defines roles, responsibilities, and authority to effectively implement its QSE MS. At the Group level, a Corporate Social Responsibility (CSR) Director is appointed overseeing all divisions and setting the CSR strategy and monitoring CSR/EHS performance of all divisions. The malting division has a CSR Director, 22 QSE managers managing the 27 malting facilities, one Safety Manager and one Food Safety Manager. In addition, there is one central laboratory with 12 lab technicians. The agro division has an International QSE Manager who oversees the input distribution, grain procurement operations with local staff assigned with a QSE role at each location. In addition, Soufflet has technical committees which are involved in EHS monitoring. During the appraisal, IFC held conversations with the two CSR Directors and the International QSE Manager; such conversations provided IFC with assurance that the local QSE staff is experienced and is competent with respect to management of relevant E&S aspects of the project, as contemplated by IFC PSs. Observations made during a past visit to the Soufflet operations confirmed that opinion. Reports are provided quarterly to Soufflet’s management and corrective measures defined and communicated to the contractor for timely implementation.
EHS Training. Soufflet has implemented a comprehensive EHS training program, including the Project’s countries that encompasses an induction on EHS for new workers and discussion with workers on main EHS aspects. Soufflet implemented a job coaching program, in which local EHS teams are supervised by senior corporate specialists to share the existing expertise across the company. An annual plan for OHS training is developed, as per local requirements, and outcome of risk assessments to be agreed with the QSE Director. Soufflet also has an Environmental and OHS prevention plan for all contractors.
Emergency Preparedness and Response. Soufflet has developed Emergency Response Plans (ERPs) at all its operations, commensurate to potential risks, including life and fire safety. These are documented and maintained in accordance with local law. ERPs are, typically, a combination of procedures for using, inspecting, and maintaining emergency response equipment; notification of the public and emergency response agencies; and, training programs. Specific training on EU requirements (ATEX directives), describing equipment and safe working operations for a potentially explosive atmosphere, is included. The silos in the Project’s countries are equipped with dedusting systems and safety devices; life and fire (L&FS) equipment, including fire alarm systems, fire hose and fire extinguishers. Silos are being inspected on a regular basis to be in compliance with ATEX directives and included in the preventative maintenance program. The malting facilities in the Project’s countries use ammonia for refrigeration purposes, requires chemicals to keep equipment clean, utilizes combustible substances and employs pressurized vessels. As such, emergency preparedness and response activities are required to ensure that workers are protected and understand what measures are to be taken in the event of an emergency. A standard requirement at all malting plants is the installation of clearly marked evacuation routes and lighting throughout the facility. There are trained firefighters along with appropriate equipment in place. The ammonia storage areas, at all malting plants, are equipped with leak detectors, alarms and signage, and have entry restricted to only authorized personnel. During supervision visits of malting plants, these measures were observed to be in place. IFC reviewed the cooling room safety inspection checklist which is considered adequate.
Monitoring and Review. There are various types of internal QSE audits conducted at Soufflet’s operations in the Project’s countries. The QSE Managers conduct equipment and staff safety audits of selected facilities. HACCP and safety audits are conducted by Soufflet’s audit department depending on site performance and implementation of CAPs are closely monitored with an agreed upon schedule outlined in the QSE management system framework. The company has installed a QSE document control software. All Group documents and processes are stored in this software and are at the disposition of all QSE managers of the Project’s countries. All events (human or material incident/accidents/complaints) are registered and classified by the site as minor or important. The CSR Director and Management at the Group level has access to all events, and can make interventions, and follow up on every event they consider important, or upgrade specific events, ranging from minor to important, if deemed necessary. Statistics of events are shared and analysed by technical committees, and quality committees, among others.
The Company has implemented a QSE monitoring and reporting systems, including performance indicators related to resources efficiency, environmental protection, reduction of greenhouse gas emissions, accident reduction and waste management. Management of each division reviews the EHS performance of all facilities on a quarterly and annual basis. Actions are decided depending on performance and mitigation measures included in QSE management programs. The external reporting of individual facilities is carried out in accordance with local legal EHS requirements. Since 2012, Soufflet Group publishes a CSR (Sustainability) report covering all Group’s operations (https://www.soufflet.com/en). The E&S commitments, targets and performance data included in the ESRS are based on the 2019/2020 report. Reporting to IFC on continuous improvement of E&S performance, ESAP items and the E&S management system is provided through Annual Monitoring Reports (AMR).
Supply Chain Management System. In June 2020, Soufflet launched the program “Sowing Good Sense” (https://www.youtube.com/watch?v=htLnXNZnzY8). This sustainable approach, which involves all Group’s sourced commodities – wheat, barley, rice, pulses and vines – is based on five pillars: provenance, environment, naturalness, distribution of value, and quality. To date, four of the five ECA countries are involved in the “Sowing Good Sense” program for the malting division. The remaining country is Kazakhstan, which will be included by December 2023. Using the farmers database included in the ERP, the agro division established full traceability of all the grains they procure. In principle, the malting division procures its barley in the same country. In the case the malting division cannot procure enough to meet demand, they will import from another country through the agro division.
Using the Sustainable Agriculture Initiative (SAI)’ Farm Sustainability Assessment (FSA) tool, the malting division aims to procure 80% sustainable cultivated barley by 2030. To assess sustainable primary production, SAI has set guidelines, including respect for the bio-physical environment (soil, water and biodiversity) at the farm level. Currently, the agro division is testing the FSA tool, through independent verification by Control Union to assess, improve, and validate on-farm sustainability in their grain supply chain. The outcome of the 2021 verification was that the majority of the farmers scored Silver which means that the farmers’ sustainable farming practices are recognized by leading companies: 100% coverage of essentials, 80% of basic, and 50% of advanced. A small group of farmers scored Gold: exceptional farming practices. 100% coverage of essentials, 100% of basic, and 75% of advanced. The certificates are valid for three years. If this approach is confirmed, Soufflet will repeat the verification audit after three years or sooner if they add new farmers to their sourcing base
Soufflet adopted a responsible purchasing approach committing all of its divisions for an initial period from 2020 to 2025 In this period, Soufflet Group aims to get 80% of the Group’s strategic suppliers (except farmers) to obtain compulsory EcoVadis assessments. EcoVadis ratings cover a broad range of management systems including Environmental, Labor & Human Rights, Ethics and Sustainable Procurement. For the malting division a global assessment was done in April 2021, resulting in a Silver Rating. The Silver Rating means that the division score is in the top 25 percent globally of all companies. Going forward, the agro division suppliers will also be included in the EcoVadis rating.