Report Scope
This report covers our fiscal 2023, from May 8, 2022, to May 6, 2023, unless otherwise stated.
Report Boundaries
This report represents the sustainability commitments, targets, approach and progress of Empire Company Limited and Sobeys Inc. Empire Company Limited (TSX: EMP.A) is a Canadian company headquartered in Stellarton, Nova Scotia. Empire’s key businesses are food retailing, through wholly-owned subsidiary Sobeys Inc., and related real estate. This report covers Empire’s food retailing business, as defined in Empire’s 2023 Annual Information Form and excludes Investments and Other Operations. This report focuses on material environmental, social and governance (ESG) factors for our Sobeys Inc. operations. This encompasses:
- Full-service, community and discount grocery banners
- Related Businesses, including convenience, fuel, liquor, pharmacy, wholesale, Pete’s Frootique and Big 8
- E-commerce grocery business
This report covers our more than 1,600 stores, 24 distribution centres, three customer fulfillment centres and Related Business locations in all 10 Canadian provinces, as well as our 131,000 teammates.
Unless otherwise stated, data included in this report reflects all Sobeys Inc. operations, excluding Farm Boy and Longo’s.
Report Methodology
This report includes disclosure required by the Sustainability Accounting Standards Boards (SASB) Food Retailers & Distributors Standard and Drug Retailers Standard, available here. As an independent standards-setting organization, SASB has issued sector-specific standards to enable businesses to identify, manage and communicate material sustainability information to their investors.
Materiality
The information included in this report is based on the topics that are deemed material to the sustainability performance of Sobeys Inc. For more information see our Materiality section.
Feedback
For related inquiries and the latest updates on our programs and commitments, please contact investor.relations@empireco.ca
Learn More
This report is part of a suite of disclosures and resources through which we share updates on our performance and progress, including:
Forward-Looking Information
This document contains forward-looking statements, which are presented for the purpose of assisting the reader to contextualize the financial position of Empire and Sobeys Inc. (the “Company”) and understand management’s expectations regarding its sustainable business program. These forward-looking statements may not be appropriate for other purposes. Forward-looking statements are identified by words or phrases such as “estimates,” “plans,” “predicts,” “anticipates,” “forecasts,” “expects,” “believes,” “intends,” “could,” “may,” “predicts,” “projects,” “will,” “would,” “foresees” and other similar expressions or the negative of these terms.
These forward-looking statements include, but are not limited to, the following items:
Statements relating to climate and greenhouse gas emissions, including without limitation plans to achieve net-zero by 2040 for Scope 1 and Scope 2 emissions, and net-zero by 2050 for Scope 3 emissions; plans to reduce absolute Scope 1 and 2 emissions by a minimum of 55 per cent by 2030; expectations that 64 per cent of suppliers, by spend, will set science-based reduction targets on their Scope 1 and 2 emissions in five years; plans to reduce emissions from fuel sold by 28 per cent by 2030; plans to pursue limited assurance of our Scope 1 and 2 GHG emissions data; plans to retrofit additional locations through actions such as reducing leak rates , and to complete more HFC to HFO gas replacement projects; initiatives planned for fiscal 2024 including ongoing lighting retrofits, upgrades to HVAC controllers, and variable speed HVAC motor systems installations; we are deploying AIML (Artificial Intelligence and Machine Learning) technologies to support a number of conservation measures in corporate stores across Canada; plans to deliver solar rooftop projects in corporate stores in Nova Scotia in fiscal 2024; plans to pilot electric vehicle (EV) Class 8 trucks for our fleet in Quebec and source viable EV solutions for our e-commerce business; plans to transition to low carbon sources, and partner with suppliers to set science-based targets, all of which may be impacted by changes in renewable energy production, risks of defects from early adoption of technology, electricity grid decarbonization, economic conditions, availability of electric vehicles, political stance on emissions, availability of and changes in government incentives, supplier and contractor relationships and negotiation, carbon fuel supply and demand, and implementation delays to certain initiatives highlighted in our Climate Action Plan.
Other forward-looking statements include those relating to: cyber security and data protection, including without limitation plans to achieve ISO27K information safety management certification by 2025; Diversity, Equity & Inclusion, including without limitation plans to progress towards certification as a Progressive Aboriginal Relations (PAR) company; plans to mitigate bias in recruitment; our annual community investment donations, including without limitation, intended donation recipients; plastics and packaging, including without limitation plans to eliminate single-use plastics; commitments to eliminate banned items under the Single-use Plastics Prohibition Regulations well ahead of the effective date; plans to scale the use of compostable bags to our Alberta and Ontario Voilà customers by the fall of 2023; sustainable practices, including without limitation plans to reduce food waste by 50 per cent by 2025; plans to source 100 per cent physical trace certified sustainable palm oil by 2025 for its Own Brands products and implementation of its next Sustainable Business Strategy in fiscal 2024; plans to create an updated version of seafood sourcing guidelines to be published by the end of fiscal 2024; Human Rights, including without limitation plans to launch a Human Rights Due Diligence Program to mitigate risks in our supply chain; Animal Welfare, including without limitation plans to develop protein-specific sourcing guidelines (to be published by the end of fiscal 2024); plans to begin work on guidelines for poultry, beef cattle, dairy cattle and finfish by the end of fiscal 2025; sustainable and fairtrade sourcing of products, including without limitation, our Sustainable Palm Oil Policy.
By its nature, forward-looking information requires the Company to make assumptions and is subject to inherent risks, uncertainties and other factors that may cause actual results to differ materially from forward-looking statements made. These risks include supplier relationships and negotiations, supply chain disruptions, customer behaviour, and resource capacity For more information on risks, uncertainties and assumptions that may impact the Company’s forward-looking statements, please refer to the Company’s materials filed with the Canadian securities regulatory authorities, including the Risk Management section of the fiscal 2023 annual Management’s Discussion & Analysis (MD&A).
Although the Company believes the predictions, forecasts, expectations and conclusions reflected in the forward-looking information are reasonable, it can provide no assurance that such matters will prove correct. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. The forward-looking information in this document reflects the Company’s current expectations and is subject to change. The Company does not undertake to update any forward-looking statements that may be made by or on behalf of the Company other than as required by applicable securities laws.
Non-GAAP Financial Measures & Financial Metrics
There are measures and metrics included in this report that do not have a standardized meaning under generally accepted accounting principles (“GAAP”), and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. Management believes certain investors use these measures and metrics as a means of assessing financial performance. Empire’s definitions of the non-GAAP terms are as follows:
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is calculated as net earnings, before finance costs (net of finance income), income tax expense, depreciation and amortization of intangibles.
Adjusted EBITDA is EBITDA excluding certain items to better analyze trends in performance. These items are excluded to allow for better period over period comparison of ongoing operating results. Adjusted EBITDA is reconciled to EBITDA in its respective subsection of the “Summary Results – Fourth Quarter” and “Operating Results – Full Year” sections of the MD&A for applicable years.
Adjusted net earnings is net earnings, attributable to owners of the Company, excluding certain items to better analyze trends in performance. These items are excluded to allow for better period over period comparison of ongoing operating results. Adjusted net earnings is reconciled in its respective subsection of the “Summary Results – Fourth Quarter” and “Operating Results – Full Year” sections of the MD&A for applicable years.
For a more complete description of Empire’s non-GAAP measures and metrics, please see Empire’s MD&A for the fiscal year ending May 6, 2023.
