Report Scope
This report covers fiscal 2024, from May 7, 2023, to May 4, 2024, 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 2024 Annual Information Form, and excludes Investments and Other Operations. This report focuses on material environmental, social and governance (ESG) factors for 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 more than 1,600 stores, 24 retail support centres, three customer fulfillment centres and related business locations in all 10 Canadian provinces, as well as 131,000 teammates.
Unless otherwise stated, data included in this report reflects all Sobeys Inc. operations, excluding Farm Boy, Kim Phat, Longo’s and Ricardo.
Report Methodology
This report includes disclosures aligned with and informed by the International Financial Reporting Standards (IFRS) S1 and S2, the Sustainability Accounting Standards Boards (SASB) Food Retailers & Distributors Standard and Drug Retailers Standard (available here), and the Task Force on Climate-Related Disclosures (TCFD). The regulatory landscape related to ESG disclosures continues to evolve, and we monitor these changes to ensure alignment with the standards issued by the International Sustainability Standards Board (ISSB). Empire intends to align with the IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (S1) and IFRS S2 Climate-related Disclosures (S2) once they are endorsed by the Canadian Sustainability Standards Board (CSSB) and required by the Canadian Securities Administrators (CSA).
Materiality
The information included in this report is based on the topics that are deemed material to the sustainability performance of Empire Company Limited and Sobeys Inc. For more information see the 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 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% by 2030; expectations that 64% of suppliers, by spend, will set science-based reduction targets on their Scope 1 and 2 emissions by the end of calendar 2027; plans to reduce emissions from fuel sold by 28% by 2030; plans to pursue limited assurance of our Scope 1 and 2 GHG emissions data; plans to continue to aggressively pursue scope 1 emissions reduction drivers in the mechanical rooms of our stores in fiscal 2025; initiatives planned for fiscal 2025 including plans for refrigeration system upgrades to reduce energy consumption and emissions related to refrigerant leaks; plans to complete more HFC to HFO gas replacement projects; plans for solar projects and EV charging station expansion; plans to initiate an RSC energy-efficient program focusing on HVAC upgrades; plans for ongoing lighting retrofits, upgrades to HVAC controllers, variable speed HVAC motor systems installations, and deploying AIML (Artificial Intelligence and Machine Learning) technologies to support a number of conservation measures in corporate stores across Canada.
Other forward-looking statements include those relating to: cyber security and data protection, including without limitation plans to achieve ISO27001 information safety management certification by 2027; diversity, equity and inclusion, including without limitation plans to progress towards certification as a Progressive Aboriginal Relations (PAR) company and plans to improve representation of diverse-owned businesses in our supply chain; plastics and packaging, including without limitation plans to eliminate single-use plastics, plans to eliminate plastic and packaging waste in our Own Brands and in operations, and plans to continue to install bulk windshield washer fluid stations in Quebec at a scaled-up level; sustainable practices, including without limitation plans to reduce food waste by 50% by 2025, plans to develop a scalable store waste diversion program that will optimize diversion, reduce food waste, and meet our regulatory obligations, plans to conduct a full nature and biodiversity assessment in fiscal 2026, our intention to improve resource circularity; sustainable and fairtrade sourcing of products, including without limitation plans to source 100% physical trace certified sustainable palm oil for its Own Brands products by December 31, 2025; animal welfare, including without limitation plans to develop protein-specific sourcing guidelines with time-bound commitments towards higher welfare products, including guidelines for poultry and eggs, beef cattle, dairy cattle, pork and finfish; and human rights, including without limitation plans to launch a Human Rights Due Diligence Program to address risks in our supply chain.
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 2024 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 4, 2024.
