Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Total energy consumption decreased by 11% year-over-year to 3,242k GJ. Consumption of electricity in sugar production reduced by 19% year-over-year.
• Total amount of waste (excluding by-products) generated decreased by 32% year-over-year to 677kt.
• Water withdrawal by the Sugar segment decreased by 24% year-over-year to 1.4m m3; water discharge decreased by 18% year-over-year to 1.3m m3.
• First harvest of 3.5kt of organic crops.
• Awarded for leadership in energy management according to the results of “Energy Management Leadership Awards” by Clean Energy Ministerial.

Social Achievements

• Invested UAH49.3m (EUR1.6m) in local community initiatives.
• 4,791 employees trained (74% of the average annual number of employees).
• Launched a new methodology for efficient remote education in partnership with the Ukrainian Agrarian Lyceum.
• Recognized as one of the best employers in Ukraine.

Governance Achievements

• Established the Sustainability and Corporate Responsibility Committee.
• Developed a compliance control system to manage risks of noncompliance.
• Introduced the Standard on sustainable procurement.
• ESG risk rating score of 32.6 by Sustainalytics (3rd position among 89 companies in the agriculture subindustry).

Climate Goals & Targets

Environmental Challenges

• Unfavorable weather conditions negatively impacting crop yields.
• Lack of experienced staff.
• Deterioration of product quality.
• Logistical challenges.
• Data loss or dissemination.
• Use of outdated technologies.
• Volatility of global prices for grains, oilseeds, sugar, milk, and soybean products.
• Volatility of raw material prices.
• Non-fulfillment of financial obligations by counterparties.
• Liquidity risk.
• Changes in interest rates.
• High volatility of the Ukrainian hryvnia.
• Inability to proceed with planned investment programs.
• Inability to manage corruption risk.
• Shift to low-carbon technologies leading to higher input prices and changes in demand.
• Introduction of legislation on GHG reduction resulting in additional taxes and fines.
• Water scarcity.
• Inappropriate actions of partners, management, or employees threatening reputation.

Mitigation Strategies

• Strong business model, expansion of export sales.
• Compliance and monitoring of regulatory environment, participation in industry associations.
• Geographical diversification of risk, professional management, use of advanced technologies, diversified product portfolio, modern agronomic solutions.
• Modernization programs, quality management and certification.
• Silo infrastructure expansion program, own railway fleet.
• Implementation of information security and cyber-risk management systems, Business Continuity Planning (BCP), cloud storage systems.
• Improvement of existing production processes and technologies, R&D solutions.
• Diversified product portfolio, balanced portfolio of customers, flexible sales policy, strategic and long-term cooperation with suppliers, diversified supplier base.
• Energy saving programs, risk policies and counterparty risk assessment systems, regular analysis, verification, and monitoring of counterparties.
• Strategic and financial assessment of the company’s current performance and quick response to deviations from set targets.
• Long-term financing strategy at fixed interest rates.
• Locking in purchasing prices in the national currency.
• Prioritization of investment projects, search for alternative sources of financial resources.
• Strict adherence to the Anti-corruption policy, robust internal audit.
• Implementation of energy-efficient and low-carbon technologies.
• Improvements in production processes aimed at reducing water use, modernization and improvement in technology.
• Introduction of response and contingency plans, proactive communications.
• Control over compliance procedures, compliance committee, strict control over GHG emissions, implementation of programs aimed at its reduction.

Supply Chain Management

Supplier Audits: 157 suppliers assessed for ecological and social impact in 2020.

Responsible Procurement

• Standard on sustainable procurement implemented; includes ESG evaluation process, sustainable agreement addendum, sustainability questionnaire, and employee feedback.

Climate-Related Risks & Opportunities

Physical Risks

• Unfavorable weather conditions

Transition Risks

• Changes in global climate, energy policies, and shift to low-carbon technologies

Reporting Standards

Frameworks Used: GRI Standards: Core Option, UN Global Compact

Certifications: ISO 14001, ISO 45001, ISO 9001, ISO 50001, FSSC 22000, ISCC PLUS

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 2: Zero Hunger
• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation, and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 15: Life on Land
• Goal 16: Peace, Justice and Strong Institutions
• Goal 17: Partnerships for the Goals

See pages 19-27 for details on ASTARTA's contribution to each SDG.

Sustainable Products & Innovation

• Organic crops

Awards & Recognition

• Energy Management Leadership Awards by Clean Energy Ministerial

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental
• Social
• Governance

Environmental Achievements

• Reduced natural gas consumption per tonne of sugar beet processed by 9% y-o-y to 21.5 m3.
• Reduced diesel consumption per ha of farmland by 2% y-o-y to 71kg/ha.
• Increased energy consumption from renewable energy sources by 11% y-o-y to 115k GJ (3% of total energy balance).
• Crop growing subsidiary List-Ruchki confirmed organic producer status and passed certification allowing sales to the EU.
• Practiced reduced (minimal and subsoil) tillage at 110kha of farmland.

Social Achievements

• Launched the “Well-being: improving health at the workplace” program.
• Implemented the Operational Improvement System of Astarta (OISA), generating UAH28m in economic benefits.
• Launched educational career guidance project “My Future in Agro” promoting agricultural professions among young people.
• Awarded for best CSR project “My Future in Agro” and recognized as a finalist for the Partnership for Sustainability Award 2021.

Governance Achievements

• Established the Sustainability and Corporate Responsibility Committee in 2020.
• ESG committee at the executive management level responsible for implementing sustainability strategy.
• Director for Business Development and Investor Relations leads the sustainability function.
• Updated Human Rights Policy and Code of Corporate Ethics.

Climate Goals & Targets

Environmental Challenges

• Climate change risks (heat stress, lower precipitation, drought) leading to lower harvests.
• Gradual shift in climate-favorable zones for crop growing.
• Potential negative media coverage on the Company’s contribution to climate change.
• Adoption of climate regulatory controls and imposition of environmental payments.
• Development and use of emerging technologies potentially leading to loss of competitiveness.

Mitigation Strategies

• Increased share of winter crops in crop rotation.
• Focus on drought-resistant crop varieties.
• Application of reduced tillage to preserve moisture.
• Expansion of soybean growing in higher-precipitation regions.
• Divesting two sugar plants and stopping sugar beet growing in the Kharkiv region.
• Developing a Climate Action Plan in partnership with the European Bank for Reconstruction and Development.
• Strengthening corporate governance, legal, and compliance functions.
• Permanent assessment of new technologies.
• Integration of technology cost-benefit analysis into investment decisions.
• Expansion of product range.
• Assessment of global food trends and scenario analysis.
• Cooperation with food industry leaders.
• Crisis management plan.
• Monitoring of media activity.
• Proactive communication with stakeholders.
• Use of AgriChain software for better management of physical risks.
• Active work with local farmers to secure raw materials.
• Insurance against harvest loss.
• Diversification of farmland bank across different regions.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Standard on sustainable procurement.
• Sustainable agreement addendum to contracts.
• Sustainability questionnaire for suppliers.
• Requirements for prohibition of child and forced labor, no discrimination, freedom of association, rational natural resource use, minimization of packaging, consideration of climate change issues.

Climate-Related Risks & Opportunities

Physical Risks

• Heat stress
• Low precipitation
• Drought

Transition Risks

• Policy and legal risks
• Technology risks
• Market risks
• Reputation risks

Opportunities

• Participation in voluntary carbon credit markets.

Reporting Standards

Frameworks Used: GRI Standards: Core Option, TCFD, EU Taxonomy

Certifications: ISO 50001, ISO 45001, Organic Standard, Bio Suisse, FSSC, ISO 22000, GMP+, HACCP

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 16

Initiatives contribute to these goals through various environmental, social, and governance programs.

Sustainable Products & Innovation

• Organic products
• Inverted sugar syrup for beekeeping

Awards & Recognition

• Best Employer Brand award from Delo magazine
• Among the best three employers in the Agrosector category by Focus magazine
• ACCA Approved Employer
• Award for introduction of principles of circular economy by ECОtransformation-2021
• Silver Medal from EcoVadis platform

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Energy consumption decreased by 9% y-o-y to 3,352kGJ
• Energy consumption from renewable sources more than doubled y-o-y to 346kGJ (10% of total energy balance)
• Reduced tillage applied to 106kha
• Cover crops, nitrification inhibitors and organic fertilizers used on 11kha
• List-Ruchky subsidiary reconfirmed organic producer status and passed certifications by Organic Standard, Bio Suisse, Danube Soya, and Europe Soya.

Social Achievements

• Launched large-scale humanitarian project Common Help UA, delivering 28kt of humanitarian supplies to ~716k displaced civilians (USD18m estimated value)
• Implemented various employee development programs (OISA, Successors Development, Staff Reserve, Think Tank, School of Internal Experts)
• Provided financial and non-financial assistance to over 300 employees affected by the war
• 101% female to male remuneration ratio

Governance Achievements

• Established Sustainability and Corporate Responsibility (SCR) Committee and Environmental Social and Governance (ESG) committee
• Enhanced GHG emissions and climate governance disclosure under TCFD recommendations
• Continued reporting under the Carbon Disclosure Project (CDP)

Climate Goals & Targets

Environmental Challenges

• Russian invasion of Ukraine causing unprecedented challenges to operations, supply chains, employee safety, and the environment
• Increased energy prices
• Potential for increased carbon tax and other climate-related regulations
• Supply chain disruptions due to extreme weather events

Mitigation Strategies

• Developed alternative overland export routes for agricultural produce
• Purchased electricity generators to secure production continuity during power outages
• Implemented special employee support program covering physical safety, financial, and psychological support
• Implemented adaptation measures to mitigate physical risks (e.g., improved ventilation for cattle, diversification of supplier base)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Standard on sustainable procurement with ESG evaluation process
• Sustainable agreement addendum to contracts
• Sustainability questionnaire for suppliers
• Requirements for prohibition of child and forced labor, non-discrimination, freedom of association, rational natural resource use, waste minimization and recyclability, and climate change considerations

Climate-Related Risks & Opportunities

Physical Risks

• Increase in labor costs due to extreme heat
• Heat stress to farm animals
• Supply chain disruptions due to drought
• Decline in harvest volumes due to drought
• Decline in corn and sugar beet yields
• Loss of physical assets due to acute weather events
• Soil erosion

Transition Risks

• Carbon tax
• Emissions Trading System and Carbon Border Adjustment Mechanism
• Loss of suppliers due to carbon footprint
• Increase in energy prices
• Increase in interest rates
• Increased stakeholder concerns
• Mandatory shift to lower emission energy sources
• Mandatory adoption of energy-efficiency solutions
• Costs to urgent transition to lower emissions technology
• Implementation of CCS technologies
• Increased cost of raw materials
• Switch to electric heavy trucks
• Shifts in consumer preferences
• Mandates on regulation of water resources management

Opportunities

• Increase in soy and wheat yields
• Emergence of new low-carbon technologies
• Development of low-carbon/organic production
• Improving production efficiency
• Increasing scale biomass processing
• Participation in voluntary carbon credit markets
• Strengthening competitiveness in sugar markets

Reporting Standards

Frameworks Used: GRI Standards: Core Option, TCFD, EU Taxonomy

Certifications: ISO 50001, ISO 45001, ISCC EU

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3
• SDG 6
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 16

Initiatives contribute to these goals through various environmental, social, and governance programs.

Sustainable Products & Innovation

• Organic products
• Biogas

Awards & Recognition

• 2022 SDG Pioneer for Sustainable Business Strategy (Viktor Ivanchyk)
• All-Ukrainian HR-Brand Award 2022

Environmental Metrics

ESG Focus Areas

• Climate Change
• Regenerative Agriculture
• Energy Efficiency
• Renewable Energy
• Human Capital
• Community Investment
• Governance
• Supply Chain Sustainability
• Animal Welfare

Environmental Achievements

• Developed and published a decarbonization strategy aimed at reducing greenhouse gas emissions by 44% by 2030.
• Increased biogas production in soybean processing, substituting 75% of gas consumption in 2023 (compared to 50% in 2022).
• Reduced coal consumption at Narkevytsky sugar plant by 33% y-o-y, leading to a 32% decline in Scope 1 emissions.

Social Achievements

• Continued development and scaling up of the Common Help Ukraine project, providing EUR 30m of charitable contributions and humanitarian aid.
• Maintained 33% of total workforce as women.
• Implemented ProFeed animal feeding system at 21 farms (compared to 9 in 2022).

Governance Achievements

• Finalized Climate Corporate Governance Action Plan, identifying and assessing physical and transitional climate risks.
• Established a two-level structure for managing sustainability matters (Board of Directors and Executive Management level).
• Became the first agricultural company in Ukraine to receive sustainability-linked financing from the EBRD during the full-scale war.

Climate Goals & Targets

Environmental Challenges

• War-related issues, including high cost of export logistics, supply chain disruptions, and risks to seaborn grain exports.
• Price risks due to buyer uncertainty related to military risks.
• Seaborne transportation restrictions due to the termination of the Grain Deal and attacks on port infrastructure.
• Import issues of inputs at the beginning of the war.
• Reduced fertilizer application by farmers due to high input costs.
• Political and economic uncertainties due to the Russian military invasion.

Mitigation Strategies

• Adopted commercial strategy for grain sales, focusing on large cargo ships and remote destinations.
• Shifted focus to large cargo ships and remote destinations to expand grain export capabilities and decrease logistics expenses.
• Developed new routes for international trade through EU ports and the Danube River.
• Built resilience and ability to withstand commercial challenges.
• Strengthened risk management over the supply chain.
• Implemented agroforestry practices, climate-smart technologies, and precision/regenerative farming practices to mitigate drought risks.
• Diversified supplier base.
• Developed a decarbonization strategy to reduce GHG emissions.

Supply Chain Management

Responsible Procurement

• Project with EBRD and KPMG Ukraine to identify sustainability priorities, reduce Scope 3 carbon footprint, and enhance overall environmental and social impact.

Climate-Related Risks & Opportunities

Physical Risks

• Increased labor costs due to extreme heat
• Heat stress to farm animals
• Supply chain disruptions due to drought
• Decline in harvest volumes due to drought
• Decline in corn and sugar beet yields

Transition Risks

• Carbon tax
• Emissions Trading System and Carbon Border Adjustment Mechanism
• Loss of suppliers due to carbon footprint
• Increase in energy prices
• Increase in interest rates
• Increased stakeholder concerns
• Mandatory shifting of energy use
• Mandatory adoption of energy-efficiency solutions
• Costs to urgent transition to lower emissions technology
• Increased cost of raw materials
• Switch to electric heavy trucks
• Shifts in consumer preferences
• Mandates on regulation of water resources management

Opportunities

• Increase in soybean and wheat yields
• Emergence of new low-carbon technologies
• Development of low-carbon/organic production
• Improving production efficiency
• Increasing scale biomass processing
• Participation in voluntary carbon credit markets
• Strengthening competitiveness in sugar markets

Reporting Standards

Frameworks Used: CDP, GHG Protocol, TCFD, ESRS, UN Global Compact

Certifications: FSSC 22000, ISO 22000, ISO 9001, ISO 50001, ISO 45001, ISCC EU, Organic Standard, BioSuisse, Danube Soya, Europe Soya

Sustainable Products & Innovation

• Organic produce