IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1 – Assessment and Management of Environmental and Social Risks and Impacts
E&S Policies. InVivo has corporate policies on environmental protection, workers safety and sustainable supply chains. InVivo has been implementing its 2030 Sustainability Strategy as a roadmap for Corporate Social Responsibility (CSR) commitments and policy implementation, defining Group’s values and behavior principles. The 2030 strategy is focused on: (i) working towards zero pesticide residues; (ii) restoring and enhancing biodiversity; (iii) contributing to carbon neutrality; (iv) preserving and regenerating the soil; and (v) diversifying farmers’ income. In 2020, InVivo Group established an independent Mission Committee to monitor the achievement of its CSR commitments which implementation undergo annual independent audit by a third party. Soufflet Malt translated these five InVivo objectives into its own 2030 CSR division strategy with key performance indicators (KPIs) and annual targets. Soufflet Malt’s three key sustainability objectives are the (i) reduction of its GHG emissions (Scope 1 and 2) by 50% and water withdrawal by 30% (in m3/metric tons of malt); (ii) reduction of its Lost Time Injury Frequency Rate (LTIFR) by 60%; and (iii) achievement of 80% sustainable barley sourcing globally. Energy, water, OHS and sourcing roadmaps have been defined for its existing 41 malting plants, including the Slavuta Malt House malting plant in Ukraine. Group’s CSR commitments and policies are implemented throughout Soufflet Agro Ukraine operations in Ukraine.
Identification of Risks and Impacts. E&S risks and impacts are identified at all group malting and agriculture operations in accordance with country-level E&S legal and regulatory requirements, operational permits, and the InVivo’s EHS Standard Operating Procedures (SOPs) as defined in its ESMS. Aside from legal and regulatory requirements, E&S risk assessment at InVivo and Soufflet Agro Ukraine operations is performed using the group’s SOPs, according to an implementation plan which includes annual reviews. All facilities undergo annual internal audits to ensure compliance with the applicable terms and conditions of E&S licenses, regulatory permits, and internal procedures. Non-compliances and areas of improvement are documented in plant-level Corrective Actions Plans (CAPs) with a time-bound implementation schedule, relevant CAPEX/OPEX, and responsibilities. Soufflet Agro Ukraine maintains a legal registry of applicable national E&S laws and regulations, accessible to its legal and operational management teams. The process of identification of risks and impacts defined by the group and Soufflet Agro Ukraine is aligned with the requirements of IFC’s PS.
E&S Management System and Programs. InVivo has established a corporate level ESMS in accordance with legal and regulatory requirements of countries of operations and international standards and the requirement of IFC’s PSs. The management system is aligned with international management standards (e.g., ISO 9001 (Quality), ISO 14001 (Environmental), ISO 45001 (OHS) and ISO 50001 (Energy)) and it is implemented at the Ukrainian facilities and operations for Slavuta Malt House and Soufflet Agro Ukraine. Divisions in Ukraine are certified in line with Sustainable Agriculture Initiative (SAI) Farm Sustainability Assessment (FSA) and International Sustainability and Carbon Certification (ISCC) schemes. Divisions in Ukraine will review and update their ESMS and relevant E&S management plans as described in the following sections, consistent with IFC’s PSs and to monitor and report on E&S performance per good international industry practice (GIIP), such as the applicable and relevant parts of the WBG General EHS Guidelines, and the EHS Guidelines for Annual Crop Production and Food and Beverage Production (ESAP#1).
Organizational Capacity and Competency. Monitoring the implementation of the CSR 2030 strategy, and monitoring and reporting on CSR/EHS performance are the responsibility of the CSR Managers in InVivo and Soufflet Agro Ukraine. Compliance with group’s and Soufflet Agro Ukraine’s management and procedures, and with national requirements at each facility is the responsibility of the Country Manager, supported by respective operational, supply chain and HR departments. Roles and responsibilities in EHS management are clearly defined at Soufflet Agro Ukraine level.
Soufflet Agro Ukraine is adequately staffed to manage EHS aspects for the implementation of the project. Soufflet Malt and Agro divisions implement a comprehensive EHS training program for their operations, including an induction for new workers and communication regarding CSR policies, strategies, objectives and targets. EHS trainings are planned and conducted according to personnel’s functional responsibilities. At the plant-level, EHS training is provided regarding workplace risk assessment (e.g., use of PPE, good housekeeping practices, electrical safety (Lock-Out/Tag-Out system), work-permit system (e.g., confined space, hot work, working at heights, rigging and scaffolding, heavy lift), emergency preparedness, fire prevention, first aid, agro-chemical handling and storage, and road transport safety. Contractors are subject to “entrance briefing” prior the commencement of works.
Emergency Preparedness and Response. Soufflet Agro Ukraine has Emergency Response Plans (ERPs) at all its operations, including life and fire safety (L&FS). These are documented and maintained in accordance with local/national regulations. The ERPs include response to fire, explosions and accidents, with clearly assigned roles and responsibilities within the organization. The ERPs include procedures for using, inspecting, and maintaining emergency response equipment, notification of the public and emergency response agencies, and training programs. Specific provisions to meet EU requirements (ATEX directives), describing equipment and safe working operations for a potentially explosive atmosphere, are included. The malting plant, silos and storages of Slavuta Malt House have clearly marked evacuation routes and lighting, along with L&FS equipment. Soufflet Agro Ukraine’s industrial sites have contracts with specialized third-party emergency rescue services. Silos are inspected on a regular basis for compliance with ATEX directives and included in the preventative maintenance program. Annual evacuation drills are held, and coordination takes place with local emergency authorities. Operation of the fire pumping station and fire hydrant system is tested on quarterly basis by firemen and a trained fire safety team. Given the increased risk of flooding, InVivo’s divisions in Ukraine will maintain the ERP updated to include evacuation procedures, safety drills, and training aimed at protecting workers in case of natural disasters such as floods (ESAP #1).
Monitoring and Review. The Group monitors, reports and reviews compliance of its plants’ operations with the respective national law and relevant standards. Management is regularly updated on effectiveness of E&S risk management and control systems through internal and external audits. Group’s monitoring system incudes performance indicators related to resource efficiency (energy and water use and Scope 1/2 GHG emissions), environmental protection (including dust, noise and waste management), OHS leading / lagging indicators (LTI, near-misses). Benchmarking is done against the energy, water, OHS and sustainable sourcing roadmaps and yearly objectives as defined in the 2030 CSR targets. InVivo Group annually publishes its sustainability report (InVivo Group Extra-Financial Performance Statement) on its corporate website.
Supply Chain Risk Assessment and Management System. The Group’s responsible procurement approach is outlined on its Sustainable Procurement Policy and CSR Charter (Supplier Code), applicable to all business lines, that includes criteria on ethical, environmental, social and economic principles. The Charter informs and requires Group’s suppliers to comply with human and labor rights, environmental risk management, animal welfare, communication and transparency, and cascading requirements down to the next tier suppliers. The Group is currently drafting a policy addressing the biodiversity protection and risks, with ambition to endorse the new policy in 2025.
In June 2020, the former Soufflet Group launched the program “Sowing Good Sense” which was adopted by InVivo. “Sowing Good Sense” program explains the sustainability approach for Group’s sourced agro-commodities. InVivo joined the Sustainable Agriculture Initiative (SAI) Platform, which promotes sustainable agriculture on an international scale. Using the SAI’s Farm Sustainability Assessment (FSA) tool, the malting division aims to procure 80% sustainable cultivated barley through promotion of agro-ecological practices, reduction of carbon footprint, biodiversity protection, preservation of water resources and soil quality, by 2030.
For the past three years, Soufflet Malt has been offering its customers the “transparency service” to highlight the origin and traceability of its malts, including its agricultural supply chains. Soufflet Agro Ukraine and Slavuta Malt House in Ukraine are certified against International Sustainability and Carbon Certification (ISCC EU) for sustainable barley sourcing, both as a first gathering point and Soufflet Agro Ukraine also as a trader with storage. ISCC EU Certification ensures no-deforestation, protection of land with high biodiversity value and traceability throughout supply-chains. Few of Soufflet Agro Ukraine’s suppliers have their own ISCC certificates, while 10 percent are annually audited by Soufflet Agro Ukraine to evaluate compliance of these suppliers with relevant policies. Over the past 3 years, 24 percent of the suppliers have been audited. In addition, approximately 10 percent of farms are inspected each year. Thus, in the next 5 years, Soufflet Agro Ukraine aims at having 80 percent of verified counterparties in Ukraine. For the malting plant in Ukraine, sustainable barley is purchased from certified farms on SAI referential. In 2024 more than 60 percent of malting barley has been purchased under sustainability declarations.
Risks related to barley and grains sourcing are considered low from a PS2/PS6 supply chain requirements as all barley produced is mechanically harvested and are produced in existing consolidated agricultural areas in Ukraine.
PS2. Labor and Working Conditions
As of December 2024, the Ukrainian malting operations in Slavuta Malt House had 72 permanent employees (51 percent female), while Soufflet Agro Ukraine employed 240 people (41 percent female). In average around 88 percent were permanent full-time employees.
Human Resources (HR) Policies and Procedures. Soufflet Agro Ukraine HR policy framework is compliant with national labor laws and aligned with PS2 requirements. Corporate HR policy, internal labor rules (procedures) and a Code of Conduct are in place. The contents are shared with new employees during their induction process. Employees are provided with documented information on terms of employment and working conditions, occupational health and safety, workplace rules, code of conduct including information regarding disciplinary actions. InVivo and Soufflet Agro Ukraine keeps its employees regularly informed of policies and procedures updates, and of professional development opportunities through internal communication campaigns and digital platforms.
Principles on human rights, decent work and economic growth, gender equality, and reduction of inequality are incorporated in InVivo and Soufflet Agro Ukraine HR policies and Code of Conduct. Employees are provided with a contract and the terms and conditions specific to their grade and role. Contract documents provide details on work schedule, remuneration, including overtime pay, rights and obligations, safety instructions, and notice period.
Since Russia’s invasion of Ukraine, Slavuta Malt House and Soufflet Agro Ukraine’s employee welfare measures have included assistance packages to employees who have suffered from the military action, medical support including professional psychological support program, financial support and support for damaged houses.
Workers Organizations. Soufflet Agro Ukraine and Slavuta Malt House do not restrict the freedom of workers to associate. Management encourages workers to establish worker committees to discuss labor and OHS aspects of their operations. This provision is defined in InVivo’s HR policy and communicated during worker induction session.
Grievance Mechanism. A formal corporate worker’s grievance mechanism procedure is in place online and provides several alternatives for employees and temporary workers to raise concerns in writing to management other than to immediate supervisors and allows grievances to be presented without the risk of retaliation, in line with IFC’s PS2. In case contractors do not have their own grievance mechanism, entities will extend their grievance mechanism to contracted workers. Provisions relevant to prevention and protection against sexual harassment stipulations are included in the InVivo and Soufflet Agro Ukraine HR policy. Soufflet Agro Ukraine does not tolerate any form of harassment, and this is communicated to all employees during the induction process.
Protecting the Work Force. Ukrainian labor law prohibits child labor and forced labor. The same provision is explicitly defined in the group HR requirements. The group only employs persons in compliance with the age requirement by national law.
Workers engaged by Third-Party. Contractors are mainly engaged for construction works, security, maintenance services, etc. InVivo and its Soufflet divisions in Ukraine has defined EHS prequalification criteria for the selection of the contractors, including working conditions, health and safety, and labor protection in compliance with the national requirements and internal policies (e.g. responsible procurement and CSR). All contractors performing works within company’s facilities are subject to inspections and audits by the OHS department. Managers at respective facilities are responsible for monitoring compliance with the above requirements.
Occupational Health and Safety. As part of its 2030 CSR strategy, Soufflet Malt aims for a reduction of 60 percent of lost time incidents. Soufflet Malt OHS 2023-2024 roadmap focused on (i) staff training and risk analysis prior to operations; (ii) reinforcing its processes post major events (accidents / fires), through enhancing the quality of analysis and the use of feedbacks from other malting plants, and setting management standard for serious accidents and crisis, (iii) leveling up InVivo safety standards and organization, by implementing safety targets at operational level and improving sharing and use of feedback and initiatives across sites; (iv) anticipating the impact of organizational changes and projects on safety. Specific mitigations measures have been developed at division levels. Building on its All-Safe Together (OHS) policy and its 9 golden rules, InVivo is seeking to avoid and minimize workplace risks in its operations. Inherent hazards and risks of a malting plant, including working at height, in confined spaces, with energized equipment, or with hazardous materials (ammonia), have been assessed and safe working measures developed and implemented. OHS SOPs and working permit system are in place. A lock-out/tag-out (LOTO) practice ensures that workers engaged with energized equipment are protected from exposure to electricity and pressurized liquids.
The lost time injury frequency rate (LTIFR) at all 41 Soufflet Malt plants stood at 5.6 in June 2024, which was marginally lower than Occupational Safety and Health Administration (OSHA) Industry Data for 2021 – malting manufacturing at 6.1. For operations in Ukraine in last two years Soufflet Agro Ukraine reported zero (0) lost time accidents. Soufflet Agro Ukraine and Slavuta Malt House have documented safety procedures for the reporting and investigation of incidents and accidents, and diseases, and, as indicated, has emergency prevention, preparedness, and response measures, in accordance with Ukrainian labor protection regulations and IFC PS2.
Supply Chain. Grain farming in Ukraine, being fully mechanized, is not known to be associated with the child labor, forced labor or significant safety issues. As outlined in the PS1 supply chain section, the Group implements responsible procurement approach which is outlined on its Sustainable Procurement Policy and CSR Charter (Supplier Code).
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency. All InVivo’s plants monitor their energy and water consumption in line with GIIP and identify areas for improvement, as production of malt being a resource (energy/water) intensive process. Slavuta Malt House 2030 CSR strategy includes reduction targets for carbon footprint (Scope 1&2) by 50 percent of CO2 emissions (Scope 1&2) and 30 percent reduction in water consumption per ton of malt produced compared to 2020 levels. Slavuta Malt House developed roadmaps for achieving its energy and water reduction targets, including annual plant-level objectives. Soufflet Agriculture annual reduction target is 2.5 percent of CO2 emissions. All facilities have heat-generating equipment, such as generator sets to provide backup power during outages of the main energy supply. Electricity supply is provided by the Ukrainian electricity grid. Cleaner production measures implemented in Ukraine malt plant include a biomass-fueled power plant using own by-products and providing 40 percent of heat needs. Group is optimizing water management. In malt production, Soufflet Malt develops and validate the effectiveness of new technologies, such as the “washing screw”, which reduces water consumption by 20 percent by shortening the steeping phase. The malting plant in Slavuta Malt House withdraws fresh water from underground sources in compliance with limits and provisions defined in the permits from local authorities.
Greenhouse gas (GHG) emissions. The baseline scope 1 and 2 GHG emissions for the Project is assessed as 12,829 tCO2e. IFC financing package to provide support for Soufflet Agro Ukraine is expected to help meet the GHG reduction target of 2.5% per year. As a result, the Project scope 1 and 2 emissions are estimated at 12,508 tCO2e per year. This represents a decrease in emissions of 321 tCO2e per year relative to the baseline emissions, pending confirmation at commitment. These GHG calculations have been conservatively estimated by IFC.
Soufflet Malt and Soufflet Agriculture reported Scope 1&2 Greenhouse Gas Emissions for 23/24 of454 468 T CO2eCO2e and 20,965 t CO2e, respectively.
Pollution Prevention. The main environmental issues associated with the operations of the malting plant in Slavuta are related to grain dust, noise, and wastewater. As part of its CSR 2030 Strategy, Soufflet Malt has set a target of zero percent of landfilled waste in 2030. The Ukraine malting plant is managing its solid wastes in a sustainable manner including biowaste which is used as a feedstock in biomass-boiler. As grain dust at malting plant and silos may pose risk of explosions or fires if allowed to build up in an uncontrolled way within the facility, they are equipped with dust suppression and aspiration systems. Maintenance plan and cleaning program are part of Soufflet Agro Ukraine’s EHS SOPs. Soufflet Agro Ukraine monitors and reports compliance on ambient air quality and emissions to air with regulated national limit values, with no exceedances reported for 2023/2024. Process wastewater, generated by the malting plant, is passed through sieve drums, equalization tank, aeration tank, filter press and chlorinator. Effluent monitoring is conducted by accredited third-party laboratories according to the permits and Ukrainian legislation requirements. Effluent after treatment and before discharging to surface water is compliant with permits, local requirements and WBG General EHS Guidelines. Noise monitoring is conducted by accredited third-party laboratories according to the permits and Ukrainian regulatory requirements. Measured values were below the thresholds for the daytime and nighttime at the sanitary protection zone border of the malting plant and silo, in line with national regulations. As part of ESAP#1, InVivo’s divisions in Ukraine will formalize E&S monitoring plan to monitor, manage and report on E&S performance (ambient air quality, point source air emissions, odor, noise, ground water, effluent discharges, waste management) in Ukrainian operations against regulatory requirements and GIIP, such as the applicable and relevant parts of the WBG General and sector-specific EHS Guidelines.
Waste management. As part of their corporate E&S management system, Soufflet Agro Ukraine and Slavuta Malt House implement cost-effective options for waste avoidance, waste sorting, waste recovery and/or waste disposal aligned with GIIP and WBG General EHS Guidelines. Waste streams are identified, collected and classified according to national waste codes, aligned with the European Waste Catalogue. Within the production facilities Soufflet Agro Ukraine has dedicated areas for temporary storage of waste, clearly labeled, secured and protected from external factors. Licensed waste operators are under contract to collect and dispose of hazardous wastes, including empty packages from crop protection products (CPPs) used by its suppliers.
Hazardous Materials Management. Hazardous substances (ammonia for refrigeration, oils, fuels, chemicals) are stored in line with GIIP to avoid spilling and land and water pollution risks. Soufflet Agro Ukraine and Slavuta Malt House keep updated records on chemicals used in operations and instructions for safe storage and use and appropriate disposal. Employees are trained on Material Safety Data Sheets (MSDS) available. Asbestos containing material (ACM) is still present on some silos’s roofs. As per ESAP#2, Soufflet Agro Ukrainewill update ACM management procedure, including ACM survey and management (disposal) plan in compliance with national regulatory requirements and in line with GIIP, as per WBG General EHS Guidelines for Construction and Decommissioning. Soufflet Malt will carry out an assessment to identify the presence of asbestos containing material in the malting facilities in Ukraine. In case of ACM presence, Soufflet Malt will update asbestos containing material (ACM) management procedure as described above.
Pesticide Use and Management. Soufflet Agro Ukraine division distributes fertilizers and CPPs, including pesticides, to its suppliers. For this activity, Soufflet Agro Ukraine is referring to its technical assistance program called SOILTEQ, as agronomic SOP for Good Agriculture Practices (GAP). Farmers learn how to improve their soils by changing soil treatment, usage of permanent cover and crop rotation. Program includes measures enabling to avoid or reduce the use of synthetic phytosanitary products. To disseminate information about the use of integrated pest management (IPM), besides visiting farmers, Soufflet Agro Ukraine holds workshops, trainings of farmers, and agricultural conferences. Soufflet Agro Ukraine is also active in regenerative agriculture and implements “Regenerative Trials” located on the pilot farms.
The Agro division developed and implemented a pesticide selection procedure which since 2019 has discontinued from operations in Ukraine the purchase, use and trade in products that fall in WHO Class Ia (extremely hazardous) or Ib (highly hazardous) pesticides. In the past years, Soufflet Agro Ukraine has updated its policy and procedures to meet IFC’s PS3 requirements on store, use or trade in WHO Class II (moderately hazardous) products. Soufflet Agro Ukraine keeps updated an inventory of Class II pesticides, reported a reduction in trading in Class II chemical formulation of 56 percent in 2024 comparing to year before.
Safety operation procedures are in place for pesticides transport, storage and distribution, including warning signs, personal protective equipment (PPE) use, training, product segregation and handling. Seeds treatment plants have measures in place to avoid workers exposure to pesticides, in addition to enforcement of the proper use of PPE.
Rodent and pest control at Soufflet Malt and Soufflet Agro Ukraine’s divisions facilities in Ukraine are regularly undertaken by licensed companies.
PS4: Community Health, Safety and Security
Community Health and Safety. As the malting plant is in an industrial zone, community health and safety risks associated with the operations are limited. A Sanitary Protection Zone (SPZ) is defined and strictly observed in line with the local regulations. Potential risks are those associated with ammonia leaks, dust, odor, noise and transport. Slavuta Malt House and Soufflet Agro Ukraine undertake regular safety audits and assessments with respect to dust explosions and ammonia leaks. Measures are in place to ensure that suspended particulate concentrations and accumulation do not pose a risk (e.g. enclosed conveyor belts, automatized temperature measurements and online control in silos, leak detectors, etc.). The facilities have sound proofing barriers near grain storages to abate and prevent noise pollution. Response to emergencies is defined within EPRP and coordinated with appropriate authorities.
Road Traffic Safety. For the transport of grains and CPP, InVivo/Soufflet Agro Ukraine engage third-party service providers. For its own trucks, Soufflet Agro Ukraine has specific policies/procedures for drivers’ safety rules and in accordance with country-level road safety regulations and GIIP. Drivers receive periodical safety training; however four transport-related incidents were reported for Ukrainian operations between 2023 – 2024, and five in 2024 – 2025. As part of its ESMS for the operations in Ukraine, as per ESAP #3, for the third party transport providers, Soufflet Malt and Soufflet Agro Ukraine will (i) review their Transport Safety Policy and procedures to include transport operations carried out by third party service providers, (ii) conduct a traffic risk assessment for its transport operations in Ukraine and identify and implement measures to minimize risk of road traffic related incidents, (iii) implement traffic safety awareness programs along key transport routes to and from Soufflet Agro Ukraine site in high risk areas, such as community crossings, local schools and densely populated areas, where there is interaction, and (iv) develop/implement vehicle management, driver management and journey management procedures.
Food/Product Safety Management. In both divisions annual internal hygiene, cleanliness and safety risk assessments are completed based of Hazard Analysis Critical Control Points (HACCP) framework. Soufflet Malt and Soufflet Agro Ukraine’s divisions organize trainings for staff on food safety, control technical state of all equipment and machinery, grain reception points, transportation route on the silo territory and store grain in proper warehouses and cells, separately from other materials. Malting plant and grain silos have an on-site laboratory for quality testing.
Security. Security for Soufflet Malt and Soufflet Agro Ukraine offices and facilities is provided by a private security agency, in line with internal security requirements specification. The contractor is licensed and has staff trained according to the relevant national legal requirements, to act in emergency situations and also to provide first aid. Security personnel is unarmed.
PS6: Biodiversity conservation and sustainable Management of Living Natural Resources
Soufflet Agro Ukraine’s and Soufflet Malt facilities in Ukraine are located in industrial areas with no overlap with identified priority biodiversity values, Legally Protected or Internationally Recognized Areas.
As stated under PS1, barley and grains used in Slavuta Malt House and Soufflet Agro Ukraine’s operations in Ukraine are sourced locally from areas where there is no significant risk of deforestation or Natural Habitat conversion. Slavuta Malt House and Soufflet Agro Ukraine facilities, in addition to some of the Group’s suppliers, are certified against ISCC EU, ensuring no-deforestation, protection of land with high biodiversity value and traceability throughout supply-chains.
As mentioned above, the InVivo Group is currently drafting a new policy to be endorsed in 2025, which will address biodiversity risks in areas of production. Remaining PS6 risks are related to strengthening suppliers’ policies to comply with InVivo’s Sustainable Procurement Policy, Supplier CSR Charter and PS6 supply-chain requirements. InVivo’s divisions in Ukraine will mitigate these risks by updating and implementing Sustainable Procurement Policy and Supplier CSR Charter for industrial suppliers in supply chain in Ukraine by 2029, as per ESAP #4.