Sustainability Metrics at Smithfield Foods

2. SUSTAINABILITY METRICS Eric Lassalle Smithfield Foods, Inc. Environmental Training San Antonio, TX August 2011

3. Our Mission • To be a trusted, respected, and ethical food industry leader that excels at bringing delicious and nutritious meat and specialty food products to millions every day while setting industry standards for corporate social responsibility .

4. Our Core Values • We will constantly strive: – To produce safe, high quality, nutritious food. – To be an employer of choice. – To advance animal welfare. – To protect the environment . – To have a positive impact on our communities .

5. What is a Sustainability Metric? • The principal objective of sustainability indicators is to inform public policy-making as part of the process of sustainability governance . Sustainability indicators can provide information on any aspect of the interplay between the environment and socio-economic activities. Building strategic indicator sets generally deals with just a few simple questions: what is happening? (descriptive indicators), does it matter and are we reaching targets? (performance indicators), are we improving? (efficiency indicators), are measures working? (policy effectiveness indicators), and are we generally better off? (total welfare indicators). » Sustainability measurement. (2011, June 19). In Wikipedia, The Free Encyclopedia . Retrieved 15:22, July 21, 2011, from http://en.wikipedia.org/w/index.php?title=Sustainability_measurem ent&oldid=435023918

6. Why Sustainability Metrics? • To communicate goals & targets to Senior management, Shareholders, Customers, and the Public.

7. Normalized FY 2008 to Start of FY 2016 GOALS • Energy - 10% reduction (Dekatherms/cwt) • Greenhouse Gases 10% reduction (Metric tons/cwt) • Water Use – 10% reduction (Million gallons/cwt) • Solid Waste – 10% reduction (US Tons/cwt)

8. HOW – Web Metrics  Monthly Data entry to the EMCS site  Water use (million gallons)  Electricity use (kWh)  Natural gas use (dekatherms)  Propane use (lbs)  Fuel oil use (gallons)  Diesel fuel use (gallons)  Solid waste disposed (US Tons)  Production – Meat Processed (cwt)  Wastewater discharged (million gallons)  Biogas (dekatherms)

9. Common Data entry errors • Unit of measure • Order of magnitude • Missing data

11. Importance of good data • External reporting of data • Internal reporting of data • Third Party verification in the future?

12. Importance of good data • Internal reporting – Scorecards • External Reporting • Smithfield Corporate Social responsibility Report • Customer requests

13. Good Data continued • The FTSE4Good Index Series has been designed to objectively measure the performance of companies that meet globally recognized corporate responsibility standards. Transparent management and criteria make FTSE4Good a valuable tool for consultants, asset owners, fund managers, investment banks, stock exchanges and brokers when assessing or creating responsible investment products. • Dow Jones Sustainability Index

14. What happens to all the data • Energy data is used for Scope 1 and Scope 2 Greenhouse Gas calculations for internal/external reporting. • Water use is used for assessing scarcity along with internal/external reporting • Solid waste is used for internal and internal/external reporting.

15. Sustainability Recognition

17. SMITHFIELD FOODS, INC SUSTAINABILITY METRICS

22. Thank You! Questions/ Comments?