Indicator Working Group Metric Development Report Version 5.0

Transcription

1 Indicator Working Group Metric Development Report Version.0 Prepared for: U.S. Roundtable for Sustainable Beef Prepared by: The USRSB Indicator Working Group Edited by: Marty D. Matlock, PhD, PE, BCEE Professor Dep t of Biological and Agricultural Engineering Executive Director Office for Sustainability University of Arkansas mmatlock@uark.edu November 1, 01

2 TABLE OF CONTENTS 1. PURPOSE U.S. ROUNDTABLE FOR SUSTAINABLE BEEF OVERVIEW USRSB Formation USRSB Structure, Governance, and Membership..... USRSB Approach to Sustainability through Continuous Improvement..... The Goal of This Report.... PRIORITY SUSTAINABILITY INDICATOR SELECTION Multi-Stakeholder Analysis and Deliberation Process..... Priority Sustainability Indicator Definitions..... Priority Indicator Selection High Priority Indicator Selection METRIC DEVELOPMENT FOR HIGH PRIORITY INDICATORS Theory of Change: How Metrics Drive Indicator Improvement Metric Inventory and Assessment Process Metrics for Cow-Calf Sector..... Metrics for Auction Market Sector..... Metrics for Feedyard Sector Metrics for Packer/Processor Sector..... Metrics for Retail/Food Service Sector METRIC ALIGNMENT ACROSS SUPPLY CHAIN SECTORS.... BEEF INDUSTRY SUSTAINABILITY LCA AND USRSB INDICATORS Life Cycle Assessment and Sustainability Indicators..... Beef Industry Sustainability Life Cycle Assessment Benchmark Results Beef Industry Sustainability Life Cycle Assessment THE BUSINESS CASE FOR CONTINUOUS IMPROVEMENT IN SUSTAINABILITY.... GUIDANCE DOCUMENT FORMAT AND CONTENTS.... CITATIONS... i

3 LIST OF FIGURES Figure 1: American National Standards Institute (ANSI) ASABE : Sustainability Framework for Continuous Improvement (ASABE, 01)... Figure : USRSB IWG Sustainability Assurance Framework... Figure. Indicator selection exercise process, developing cross-sector priorities (left) and within sector priorities (right).... Figure : Illustration of high priority sustainability indicator prioritization process... 1 Figure : USRSB Indicator Working Group Approach for Metric Development Across U.S. Beef Value Chain Sectors... Figure : LCA Impact Category Improvements across U.S. beef value chain High Priority Indicators, 00 0 (NCBA, 01) Figure : Relative Impacts & Connection of Metrics across High-Priority Indicators: Example in Cow-Calf Sector of Grazing Management.... Figure : Relative Impacts & Connection of Metrics across High-Priority Indicators: Example in Cow-Calf Sector of BQA Principles Implementation. Figure : Example of how Moving the Curve improves impacts from an agricultural sector (modified from Clay, 0).... Figure : Minimum Performance Level in Sustainable Improvement Strategies... Figure : Incremental or Tiered Structure for Sustainable Improvement Strategies... Figure 1: Continuous Improvement Structure for Sustainable Improvement Strategies... LIST OF TABLES Table 1: Description of USRSB Constituent Categories... Table : Initial USRSB Working Group Co-Chairs... Table : Amended USRSB Working Group Co-Chairs... Table. Sustainability Indicators by Dimension of Sustainability.... Table : Definitions for Indicators for the Economic (Profit) Domain of Sustainability... ii

4 Table : Definitions for Indicators for the Environmental (Planet) Domain of Sustainability... Table : Definitions for Indicators for the Animal (Beef) Domain of Sustainability... Table : Definitions for Indicators for the Community (People) Domain of Sustainability... 1 Table. The Priority Sustainability Indicators identified by the Indicator Working Group Table. Comparison of the Indicator Working Group s priority indicators to other indicators used across a range of agricultural sustainability initiatives Table : USRSB High Priority Sustainability Indicator Definitions... 1 Table 1: Indicator Working Group Beef Value Chain Sectors and Champions for Metric Inventory... Table 1: Schedule of IWG Meetings and Webinars for Metric Development during Table 1: Metrics for High Priority Indicators for the Cow-Calf Sector of the USRSB, based on an inventory of existing measurements.... Table 1: Metrics for High Priority Indicators for the Auction Market Sector of the USRSB, based on an inventory of existing measurements Table 1: Metrics for High Priority Indicators for the Feedyard Sector of the USRSB, based on an inventory of existing measurements.... Table 1: Metrics for High Priority Indicators for the Packer/Processor Sector of the USRSB, based on an inventory of existing measurements.... Table 1: Retail/Food Service Sector Spectrum of Continual Improvement Within Own Operations and Across Supply Chains... 1 Table 1: Retail/Food Service Sector Recommended Levels of Metrics for Water Resources... Table 0: Retail/Food Service Sector Recommended Levels of Metrics for Efficiency and Yield... Table 1: Retail/Food Service Sector Recommended Levels of Metrics for Air and Greenhouse Gas Emissions... Table : Retail/Food Service Sector Recommended Levels of Metrics for Land Resources... Table : Retail/Food Service Sector Recommended Levels of Metrics for Animal Health and Well-Being... iii

5 Table : Retail/Food Service Sector Recommended Levels of Metrics for Employee Safety and Well-being... Table : Sources of models used by BASF and University of Arkansas to calculate Impact Categories for the U.S. Beef Value Chain... 0 Table : USRSB High Priority Indicators and Life Cycle Assessment (LCA) Impact Categories potential systems-level metrics... Table : Example Guidance Document Format and Contents for Water Resources for the Cow- Calf Sector.... Table : Example Guidance Document Format and Contents for Animal Health and Well-being for the Feedyard Sector Table :Engagement, Measurement and Progress Working Group Sector Leaders... 1 iv

6 1. PURPOSE The U.S. Roundtable for Sustainable Beef (USRSB) was formed to develop and implement a process for multi-stakeholder driven creation of indicators and metrics for the sustainability of the U.S. beef value chain. The vision of USRSB is that U.S. beef value chain is the trusted global leader in the environmentally sound, socially responsible and economically viable beef. The mission of the USRSB is to advance, support and communicate continuous improvement in the sustainability of U.S. beef production by educating and engaging the beef value-chain through a collaborative, multi-stakeholder effort. The USRSB explores the challenges and opportunities for continuous improvement across all aspects of the beef value chain, but will not mandate standards nor verify individual stakeholder performance. This report provides the basis from which the USRSB and its members within the value chain can move the curve across the U.S. landscape for priority indicators using sustainability metrics that have been developed for each sector. Some context is provided in this report to provide insight to individuals and entities within the value chain, as well as others that may not be actively engaged in the value chain, especially as it relates to how each of the sustainability metrics have been developed by each sector to help ensure that the metrics are reasonable, attainable and recognize the balance between economic viability, environmental soundness and social acceptance. As the work of the USRSB continues, additional supporting documents will be developed to further assist the value chain with adoption and implementation of the indicators and metrics. These may include guidance documents, metric toolkits, self-assessment tools and other supporting resources that may be identified as a need by USRSB members. In addition, the Beef Checkoff sponsors the analysis of impacts of U.S. beef production using a Life Cycle Assessment (LCA, see Section ). The beef LCA provides benchmarks for many environmental impacts from across the beef value chain, and will support continuous improvement.. U.S. ROUNDTABLE FOR SUSTAINABLE BEEF OVERVIEW USRSB Formation The U.S. Roundtable for Sustainable Beef was formed in March, 01 as a multistakeholder initiative developed to advance, support and communicate continuous improvement in sustainability of the U.S. beef value chain (USRSB, 01). The USRSB strategy is to provide leadership, innovation, multi-stakeholder engagement, and collaboration for the U.S. beef value 1

7 chain. The vision of the USRSB is that the U.S. beef value chain is the trusted global leader in environmentally sound, socially responsible, and economically viable beef (USRSB, 01). The mission is to advance, support, and communicate continuous improvement in sustainability through leadership, innovation, multi-stakeholder engagement, and collaboration USRSB Structure, Governance, and Membership The USRSB is governed by a Board of Directors, composed of a chair and representatives of five constituency groups. The constituency groups are structured based upon primary roles in the beef value chain, and include Producer, Allied Industry, Processor, Retail, and Civil Society (Table 1). The work of the USRSB is guided by the Board of Directors through working groups with specific scopes of work and timelines. Three working groups were established in 01, with Co-Chairs assigned from different constituency groups (Table ). The USRSB currently has over 0 members from across these groups. Table 1: Description of USRSB Constituent Categories 1 Constituents Producer Allied Industry Processor Retail Civil Society Description Individuals, organizations and associations of people who are actively engaged in the ownership and management of cattle used to produce beef Industry organizations and associations of people who supply the beef value chain with goods and services Organizations and associations of people who process cattle and beef into saleable product Organizations and associations of people who bring beef and beef-related products to consumers Academic institutions, non-government and non-commercial institutions, foundations, alliances and associations with a stake in the beef value chain 1 Table : Initial USRSB Working Group Co-Chairs 1 Working Group Indicators and Goals for Progress Verification Sustainable Solutions Leadership and Affiliation Nancy Labbe, World Wildlife Fund Ben Weinheimer, Texas Cattle Feeders Association Leigh Ann Johnston, Tyson Foods Jennie Hodgen, Merck Animal Health William Burnidge, The Nature Conservancy Clayton Huseman, Kansas Livestock Association 1 1 As the scopes of work of the workgroups evolved over the first two years of the USRSB, the tasks of the Verification Working Group (VWG) and the Sustainable Solutions Working Group

8 (SSWG) began to overlap and potentially become redundant. To improve efficiency, management of fiscal resources and to streamline the efforts of the working groups, the Board of Directors approved the convergence of the VWG and SSWG in the spring of 01, noting that all work moving forward will now be under the newly established Engagement, Measurement & Progress Working Group (EMPWG). The updated list of USRSB working groups and Co-Chairs are listed in Table. Table : Amended USRSB Working Group Co-Chairs Working Group Indicators and Goals for Progress Engagement, Measurement & Progress Leadership and Affiliation Nancy Labbe, World Wildlife Fund Ben Weinheimer, Texas Cattle Feeders Association Clayton Huseman, Kansas Livestock Association Wayne Morgan, Golden State Foods The USRSB is funded through membership dues, with a scaled dues structure based upon constituency group (see Members are expected to support the vision, mission, and work of USRSB through participation in the Working Groups, attendance at the General Assembly meetings, and provide leadership in their beef value chain area. The Working Groups develop work plans and present results to the Board of Directors at annual General Assembly Meetings. Leadership and members of each Working Group participate in meetings of the other Working Groups to ensure alignment and consistency across efforts. Working Group activities, meetings, minutes and outcomes are distributed to USRSB membership and posted on the USRSB member-access website ( Communication and meeting logistics are coordinated by staff from the National Cattlemen s Beef Association USRSB Approach to Sustainability through Continuous Improvement Sustainability requires adapting processes and methods to drive desirable outcomes from critical indicators. Adaptation is a continuous process of change and improvement, motivated by new knowledge, innovations in technologies, and better understanding of the impacts from activities across the beef value chain. The USRSB initiated a continuous improvement strategy by establishing the following five goals: 1. Establish sustainability indicators;. Develop a method to verify outcomes/metrics indicative of a sustainable beef industry;. Create a program philosophy for implementing sustainability objectives;. Generate field projects that prove sustainability concepts; and. Establish goals for progress for each indicator.

9 Consistent with the Global Roundtable for Sustainable Beef ( the USRSB will not mandate standards nor verify individual stakeholder performance. Rather, USRSB serves as a multi-stakeholder collaborative effort to define desirable outcomes for the U.S. beef value chain, and to recommend methods and strategies for improving those outcomes. USRSB will not develop or implement a certification or verification program; rather, it provides industry-level assessment, verification, and continuous improvement strategies. Activities such as field pilots and businessto-business demonstration projects can provide models of implementation for improving specific indicators. These activities will be further defined by USRSB going forward. The approach chosen by the USRSB Indicator Working Group (IWG) was the ANSI Standard Framework to Evaluate the Sustainability of Agricultural Production Systems (ASABE, 01). This Standard provides a common, citable framework for charting progress towards sustainable agricultural production, including defining and benchmarking sustainability performance indicators, setting goals, implementing strategies for continuous improvement, and reporting improvements over time. The purpose of ANSI-ASABE is to provide a process to improve sustainability across agricultural production systems by driving change in priority indicators. The Standard defines Performance Indicators (PIs, or Indicators) as elements that producers and stakeholders can identify, define and measure that are important outcomes of activities. These PIs should be procedural, physical, or otherwise measurable using one or more metrics. Indicators should be outcome driven, science based, technology neutral, and transparent. Metrics are the things that are measured to benchmark and evaluate PIs. In order to drive continuous improvement, practice-based metrics may be necessary for outcomes-based indicators to show progress as value chain sectors develop methods to more directly measure outcomes. The framework for achieving these improvements is simple in concept but provides a resilient process (Figure 1).

10 Figure 1: American National Standards Institute (ANSI) ASABE : Sustainability Framework for Continuous Improvement (ASABE, 01) The Goal of This Report The IWG developed a strategic framework that integrates USRSB activities and anticipates developing tools for implementation of strategies and tools to drive continuous improvement (Figure ). This report summarizes the activities of the IWG in implementing Stage 1: Definition of this framework, with three elements: A) Define sustainability; B) Define indicators; and C) Select metrics for the indicators (Figure 1). The USRSB approach to stakeholder involvement throughout this process for the indicators, metrics, goals, and reporting is illustrated in Figure. Business-to-business and facility-level certification programs are outside the scope of work of the USRSB, however tools and resources will be developed that maybe utilized by business to business activities (see Chapter ).

11 The USRSB is aligned with the GRSB definition of sustainability: Sustainable beef is a socially responsible, environmentally sound and economically viable product that prioritizes Planet (relevant principles: Natural Resources, Efficiency and Innovation, People and the Community); People (relevant principles: People and the Community and Food); Animals (relevant principle: Animal Health and Welfare); and Progress (relevant principles: Natural Resources, People and the Community, Animal Health and Welfare, Food, Efficiency and Innovation) (GRSB, The USRSB will implement Stage : Plan (Figure 1) elements when the first iteration of metrics for the priority indicators are developed. This process will require benchmarking indicator metrics across all U.S. beef value chain sectors. After the indicators are assessed, each sector will evaluate the potential for improvement across each indicator and set goals for improvement. The strategy to meet those goals will be established through collaborative engagement of stakeholders across all sectors. This process is described in more detail in Section.1: Theory of Change: How Metrics Drive Indicator Improvement. Figure : USRSB IWG Sustainability Assurance Framework 1

12 . PRIORITY SUSTAINABILITY INDICATOR SELECTION Multi-Stakeholder Analysis and Deliberation Process The USRSB IWG convened a workshop in Denver, CO from October -, 01 to review and prioritize sustainability indicators. There were approximately 0 participants representing sectors across the beef value chain, including producers, packer/processors, civil society organizations, allied industry groups, and retailers. The IWG convened a second workshop in Oklahoma City, OK on January, 01 to align the high priority sustainability indicators identified in the first workshop across constituency groups. A steering committee of participants representing sectors along the beef value chain, including producers, processors, civil society organizations, allied industry, and retailers were present. The workshops were organized to ensure that all sectors of the beef value chain had an opportunity to review and discuss priorities within their constituent groups. The goal of the meeting was to select primary sustainability indicators for USRSB, in alignment with the five Guiding Principles established by the Global Roundtable for Sustainable Beef (GRSB, The stakeholder engagement process of prioritizing sustainability indicators was Analysis and Deliberation through three decision stages: 1) Sustainability Indicators by Dimension, ) Sustainability Indicator Materiality Matrix, and ) Group Prioritization of Sustainability Indicators. The first task was identifying sustainability indicators by each dimension of sustainability; representatives from each sector collaboratively prioritized sustainability indicators across the dimensions of sustainability: profit, planet, people, and animal (Figure ). A sustainability dimension "dartboard" was used to categorize indicators that were identified by the working group into one of four sustainability dimensions (Figure, left side). The indicators placed in each dartboard quadrant were then placed in a materiality matrix and grouped in terms of relative importance to different stakeholder sectors (Figure, right side). A materiality matrix was developed for each dartboard quadrant and for each value chain sector. This exercise provided a series of indicators for consideration; these indicators were then analyzed using a materiality matrix to prioritize indicators of importance to the relevant stakeholders. Stakeholders were then assigned to groups at tables so that where possible at least one representative of each beef value chain sector was represented. There were eight tables of five people; each table identified the five most important indicators across each of the four sustainability dimensions. This resulted in 0 sustainability indicators per table, or total sustainability indicators. All 0 indicators from each table were placed onto a wall-mounted indicator chart representing space for all four dimensions of sustainability. The group consolidated the proposed indicators into groups of similar indicators that were given broadly descriptive names, collapsing the original list of into priority sustainability indicators (Table ).

13 Table. Sustainability Indicators by Dimension of Sustainability. Profit Indicators Planet Indicators People Indicators Animal Indicators Profitability Water Resources Food Safety Animal Wellbeing Efficiency & Yield Innovation & Technology Regulatory Environment Net GHG Emissions Air Emissions Soil Resources Consumer Perception Food Security and Availability Community Vitality Responsible Use of Technologies Animal Health Transparency & Traceability Consumer Perception Land Integrity Worker Safety and Wellbeing Sector Level Continuity Biodiversity Food Waste Food Waste Reduction Food Waste Access to Skilled Labor Transparency & Traceability 1 1 The top sustainability indicators were prioritized within each of the four domains with respect to each sector s priorities using a Materiality Matrix priority categorization comparison (Figure ). For this exercise the stakeholder representatives caucused by beef value chain sector: producer, packer/processor, civil society, allied industry, and retail. The producer group was well represented, which was a critical requirement for the legitimacy of this process. Each stakeholder group prioritized the proposed indicators as having low, medium, or high importance. The internal discussions provided a valuable opportunity for the group to discuss the implications of each candidate indicator on their sector with respect to the producer sector. The Materiality Matrix exercise analyzed each value chain sector s priorities with respect to the producer sector; this ensured that producers had a strong voice in each priority designation.

14 Planet (Environment) Other Stakeholder Sectors Producers Figure. Indicator selection exercise process, developing cross-sector priorities (left) and within sector priorities (right).

15 .. Priority Sustainability Indicator Definitions Each of the top priority sustainability indicators identified by the IWG was created from the multi-sector priority exercise. The definitions for each indicator are therefore the product of the priorities that were aggregated to create the indicator (Tables -). Table : Definitions for Indicators for the Economic (Profit) Domain of Sustainability Profit Indicator Profitability Efficiency & Yield Innovation & Technology Regulatory Environment Consumer Perception Sector Level Continuity Food Waste Reduction Definitions The economic viability of an enterprise, generally measured as return over investment. The IWG identified profitability as a critical indicator of sustainability for any business enterprise. Efficiency is the unit of input required to produce a unit of output, and yield is the total product generated per unit time or space. Both concepts address waste as a negative characteristic and drive toward improved profitability. The development and use of new technical solutions to address challenges in profitability, efficiency and yield throughout the supply chain, including biotechnology, genetics, and informatics. The collected set of laws, regulations, and rules across all sectors of the supply chain that impact freedom to operate and negatively impact profit. The attitudes regarding practices, processes, and technologies used by producers and processors to create safe and secure food. For the IWG consumer perception was mostly defined in terms of trust, negative perceptions and freedom to operate. The ability of a sector (producer, processor, etc.) to continue to function in the supply chain. For the IWG the focus was on producer successional planning, access to markets, and the ability of young producers to enter the market. The amount of food that is not used for the intended purpose. For the IWG food waste reduction was considered a consumer education and behavior issue.

16 Table : Definitions for Indicators for the Environmental (Planet) Domain of Sustainability Planet Indicator Water Resources Net GHG Emissions Air Emissions Soil Resources Land Integrity Biodiversity Food Waste Definitions The volume of water used by a sector for each process, and any impacts on water quality by a sector for each process. The cumulative emissions of greenhouse gas from a sector for each process. The cumulative emissions of pollutants, including GHG emissions, ammonia, particulate matter, and odors, from a sector for each process. The quality (including soil erosion) and fertility of soil used for production of feed, grazing, and other producer sector activities. The stewardship of terrestrial and aquatic habitat in relation to water, soil, and biodiversity in an area. Impacts of land use and land use conversion, both caused by and prevented by production activities. The relative diversity and abundance of native species in an area. The amount of food that is not used for the intended purpose. Table : Definitions for Indicators for the Animal (Beef) Domain of Sustainability Animal Indicator Animal Well-being Responsible Use of Technologies Animal Health Transparency & Traceability Definitions The cumulative effects of cattle health, care, comfort and wellbeing. The transparent use of approved diets, supplements, animal health products, genetics, biotechnology, animal management, and other technologies in compliance with local, state, and federal regulations. Providing proper care, treatment and animal husbandry to minimize morbidity and mortality in cattle. Transparency is openness in process, while traceability is the capability of tracking beef products back to the animal and ranch. The IWG discussed these indicators as part of openness, recognizing that current procedures, rules, and regulations provide for them.

17 Table : Definitions for Indicators for the Community (People) Domain of Sustainability People Indicator Food Safety Consumer Perception Food Security and Availability Community Vitality Worker Safety and Wellbeing Food Waste Access to Skilled Labor Transparency & Traceability Definitions The freedom from contamination, adulteration, or other impacts on beef that could harm the consumer of those products. The attitudes regarding practices, processes, and technologies used by producers and processors to create safe beef products. For the IWG, consumer perception was mostly defined in terms of trust and freedom to operate. The ability of producers, processors, and allied industries to provide retailers and consumers with beef of adequate quality, safety, and amount to satisfy demand. The economic, environmental, and social wellbeing of the community. For the IWG, community vitality focused on the producer sector community, particularly rural communities that support production labor. The implementation of safety programs and training to provide a safe workplace environment and help to prevent workplace accidents and injuries associated with production, processing, and distribution of beef, and the relative prosperity of workers employed in those activities. The amount of food that is not used for the intended purpose. The IWG generally agreed this is a consumer education and information issue. Workforce with aptitude and training to perform the range of tasks necessary for production and processing of beef. The IWG expressed specific concerns about access to ranch and feedyard labor that can manage cattle humanely and safely. Transparency is openness in process, while traceability is the capability of tracking beef products back to the animal and ranch. The IWG discussed these indicators as part of openness, recognizing that current procedures, rules, and regulations provide for them. 1

18 Priority Indicator Selection The Materiality Matrix prioritization exercises resulted in 1 indicators identified as top priorities (Table ). These priority indicators were selected as the sustainability indicators that the IWG would propose to the USRSB members. The discussion from IWG members turned to aggregation of indicators versus separation; in particular, the discussions focused on indicators in Animal and Economic sustainability domains. Some sectors favored including both Animal Health and Animal Well-Being as Animal indicators, but others favored combining those two indicators under Animal Well-Being. All agreed that metrics for these indicators would encompass the use of technology and animal health (see Table ). One stakeholder sector proposed that Food Safety be considered as a Community indicator; it affects the consuming public and encompasses concerns about the health impacts of beef consumption. In the environmental domain, the discussion was centered on the merits of Net GHG Emissions being listed as an indicator or as a metric for Air Emissions; one sector suggested that Air Emissions be the indicator with Net GHG Emissions the first metric to be benchmarked, based upon the Beef GHG Life Cycle Assessment. For this summary report, Air Emissions was listed as the indicator with Net GHG Emissions explicitly defined as a priority metric to be measured and managed, with the understanding that the process of identifying metrics for indicators is the next step, and Net GHG Emissions might be classified by the IWG as an indicator in that process. These discussions were intended to create improved understanding of perspectives across each stakeholder sector and as preparation for the next stage of decision-making: selecting metrics for each indicator. The priority indicators were compared to indicators from other U.S. and global sustainability frameworks (Table ). There was strong alignment across economic and environmental domains between the beef value chain stakeholders. The indicators selected by USRSB are not intended to be an exclusive list, but rather a starting place for implementation of data collection, benchmarking, goal setting, and improvement. Each of the indicators initially prioritized in the Materiality Matrix are important to at least one sector of the U.S. beef supply chain, and thus should be considered important in the overall process of developing and implementing a comprehensive sustainability program. 1

19 Table. The Priority Sustainability Indicators identified by the Indicator Working Group. Sustainability Domain Priority Indicators Profitability Economic Efficiency & Yield Innovation and Technology Water Resources Environmental Air Emissions Land Integrity Soil Resources Food Safety Community Transparency Consumer Perception Animal Well-being Animal Responsible Use of Technology Animal Health 1

20 Table. Comparison of the Indicator Working Group s priority indicators to other indicators used across a range of agricultural sustainability initiatives. Indicator GTPS CRSB FL Pilot SAI SAFA Dairy Cargill NPB & NRSA U.S. Beef LCA TSC IWG Indicators Production and Yield Waste Reduction and Disposal Resource Recovery Adequate Environ. Licensing Energy Use/Efficiency Land Use Natural Resource Conservation Biodiversity Invasive Species Wetland Protection Prescribe Burn Management Soil Quality/Erosion Soil Carbon Land Degradation Native Habitat Pesticide Use Fertilizer Use Nutrient Management Dead Animal Management Water Use Water Quality Water Recycling and Reuse Drainage Management Renewable Energy Sourcing Greenhouse Gas Emissions Carbon Sequestration Air Quality Efficiency and Innovation Land Resources Water Resources Air & GHG Emissions Abbreviations: Brazilian Roundtable on Sustainable Livestock (GTPS), Canadian Roundtable for Sustainable Beef (CRSB), SAI Platform (SAI), Sustainability Assessment of Food and Agriculture Systems (SAFA), Innovation Center for U.S. Dairy (Dairy), National Pork Board (NPB), National Roundtable for Sustainable Aquaculture (NRSA), The Sustainability Consortium (TSC). 1

21 High Priority Indicator Selection Thirteen priority indicators are too many to focus on during the first phase of USRSB s implementation. The IWG discussed a reasonable number of indicators to address during the third stakeholder meeting, and was agreed on six of the 1 priority indicators as the focus for developing the first iteration of metrics for USRSB. The process of prioritization started with important issues across the four domains of sustainability and resulted in six high priority indicators (Figure ). The high priority indicators selected by the IWG were (in no order of priority): 1. Animal Health and Well-being,. Efficiency and Yield,. Water Resources,. Land Resources,. Air and Greenhouse Gas Emissions,. Employee Safety and Well-being. The definitions of these high priority indicators were modified to reflect context and aggregation of priority indicators (Table ). These six high priority indicators are the focus of the IWG metric development activities for Figure : Illustration of high priority sustainability indicator prioritization process

22 Table : USRSB High Priority Sustainability Indicator Definitions High Priority Indicator Animal Health & Well-being Efficiency & Yield Water Resources Land Resources Air & Greenhouse Gas Emissions Employee Safety & Well-being Definition The cumulative effects of cattle health, nutrition, care and comfort. Efficiency is the unit of input required to produce a unit of output and yield is the total product generated per unit of time or space. Both concepts address waste as a negative characteristic and drive toward improved profitability. The volume of water consumed by a sector for each process and any impacts on water quality by a sector for each process. The stewardship of terrestrial and aquatic habitat in relation to water, soil and biodiversity in an area. Impacts of land use and land use conversion, both caused by and prevented by ranching and farming activities and other supply chain land use decisions. The cumulative emissions of pollutants, including particulate matter, greenhouse gases and other gaseous emissions from a sector for each process. The implementation of safety programs and training to provide a safe workplace and help to prevent workplace accidents and injuries associated with production, processing, and distribution of beef and the relative prosperity of workers employed in those activities. 1

23 . METRIC DEVELOPMENT FOR HIGH PRIORITY INDICATORS Theory of Change: How Metrics Drive Indicator Improvement The mission of the USRSB is to advance, support, and communicate continuous improvement in sustainability through leadership, innovation, multi-stakeholder engagement, and collaboration. The theory of change, adopted by the USRSB, is that measuring the things we care about can inform and drive continuous improvement across the entire U.S. beef value chain. This is not an enterprise-level effort; rather, this is a full value chain initiative. The goal is to move the curve for the six high priority indicators across the entire beef value chain using metrics developed by representatives of each sector. Effective, implementable, and understandable metrics are the key to driving positive change across indicators at the scale of the U.S. beef value chain (Melnyk et al., 00). Effective metrics inform decisions made on a daily basis at operations as small as a -acre ranch, and as large as a multi-national food service company. A metric has to be implementable, which means measurable and reportable, so it has to be accessible to the decision-maker. Finally, the metric must be understandable so that all stakeholders can relate the metric to the relevant indicator(s). Making decisions that improve metrics will drive directionally correct change in the high priority indicators. The goal of USRSB is to develop outcomes-based metrics for every indicator, since they measure the outcomes desired by the stakeholders. However, some outcomes are difficult or even impossible to measure; for those, practice-based metrics must substitute. These practicebased metrics must clearly identify the outcomes they are designed to improve. Implementing changes in practices is what drives changes in outcomes. The reason for outcomes-based metrics is to insure that implementation of a practice is not equated with outcome improvement; rather, the outcome improvement must be demonstrated through pilot projects, verified process models, life cycle assessment, or other defensible means. The first stage in developing effective indicators is to inventory the metrics that are currently available and meaningful for decision-makers within each value chain sector. This document summarizes this stage of the metric development process. This inventory of metrics provides a starting place for the entire value chain, and creates a mechanism for the USRSB to begin analyzing and reporting metrics. The metrics that are selected during this inventory step are sometimes perceived as too general and simplistic. However, they build a foundation upon which more effective metrics can be constructed as each stage of the value chain develops more experience. Generally what groups discover in this process is that they don t measure the most important things. This is the first step in identifying those most important things that should be measured. The next step will be to revise and refine the metrics as more information is developed. A fundamental principle of legitimacy in this process is that one sector does not dictate metrics to another sector. All sectors agree on the indicators, and each sector must demonstrate 1

24 how their metrics will drive change in those indicators. The utility of the first iteration of indicators can be judged by the goals that are set for them (Figure 1 Stage ). The metric definition is an important part of this process, but only because it is the very beginning of the process. The imperfect metric that is easy to use, understand, and implement can transform landscapes and make entire supply chains more sustainable in a very short amount of time. The perfect metric that is unmeasurable will be ineffective at informing necessary changes to improve outcomes. The USRSB has already initiated benchmarking most environmental metrics across the U.S. beef value chain using a Life Cycle Assessment (LCA, see Section ). These benchmarks for air, water, land, and efficiency indicators will provide a foundation for the IWG to evaluate potential goals in the next iteration (within years). The assessments of metrics selected by each sector for each indicator will inform the LCA by providing knowledge about changes in practices across the U.S. The ANSI-ASABE Continuous Improvement Framework (Figure 1) requires reviewing changes on at least five year intervals to determine if the metrics are driving decisions that result in desired changes for each high priority indicator. If changes are not occurring the USRSB will evaluate the causes, then adaptive strategies will be implemented. These could be development of new metrics and/or new practices. The goal setting process (Figure 1 Stage ) is the most public-facing part of a continuous improvement framework. Setting goals tells the world what the U.S. beef value chain will do to improve target outcomes, and within what time frame they will make these changes. The metrics will be benchmarked for each indicator, and potential for improvement will be evaluated. This is the essence of the theory of change, because this is when we ask the question What changes are possible? when confronted with the question What changes are needed?. Assessment of the status of each indicator for each sector takes time and resources; a formal assessment structure will need to be constructed that is transparent, easy to contribute to, and informative to each sector of the value chain. The key to driving changes in practices to achieve the desired outcomes is the development of guidance documents and tools for implementation (see Section for more details). These are the instruments of change across the beef value chain. Each metric will be supported by additional details outlined in guidance documents for each sector of the U.S. beef value chain that describes how to measure the indicators of concern, how to improve them, and how to document the practices and associated outcomes that make improvements possible. General information on the structure and content of two example guidance documents is presented in Section. These documents will provide the necessary details for each participant in the USRSB to develop a meaningful plan for each high priority indicator, evaluate and improve each metric, periodically assess changes over time, and share the outcomes with the community. Finally, Stage of the ANSI-ASABE framework requires reporting the outcomes of the continuous improvement process. These reports should be scheduled on year intervals to provide adequate time for achieving change at the sector levels. The process of collecting metric 1

25 data to inform the Beef LCA and to compare against benchmark performance data is complex and will require time to develop. The USRSB should work with stakeholders in the beef value chain to determine how metric data can be used in the future to further improve the quality of assessment through the LCA and other methods. As the USRSB works to demonstrate improvement in beef sustainability of the U.S. beef value chain, several foundational concepts are paramount to our success: The USRSB will develop and update, as needed, a comprehensive sustainability package inclusive of high-priority indicators, metrics for each sector, sustainability assessment guides, tools and resources. The metrics developed by the USRSB must be measurable, implementable and understandable regardless of the scale of the operation; must be embraced by each sector and not dictated by one sector to another; and sectors must demonstrate how metrics will drive change in the high-priority indicators. The USRSB will continue to utilize the U.S. Beef Industry Life Cycle Assessment (LCA) as the guidepost to assess progress and adapt our indicators and metrics to continue the journey of continuous improvement, which is to never stop learning, adapting and improving. The USRSB must work with stakeholders in the beef value chain to determine how metric data can be used in the future to further improve the quality of assessment through the LCA. The USRSB recognizes the necessity of animal identification for the U.S. beef cattle herd to measure success and improvements in sustainability and embraces a nationwide goal of animal identification for purposes of disease traceability, herd security, consumer confidence, quality improvement, international market access, and a means to participate in supply chain programs that can offer value-added benefits. The goal of the USRSB is to move the curve for the six high priority indicators across the entire beef value chain. The beef value chain extends upstream of the producer to include grain and forage producers. These producers are outside the scope of the USRSB but are critical to achieving overall reductions of negative impacts and improvements of efficiencies across pasture and pen-fed beef. Field to Market: The Alliance for Sustainable Agriculture is a multi-stakeholder collaborative effort that engages the row crop supply chain to implement continuous improvement practices in corn, soybeans, cotton, wheat, rice, sorghum, and barley. The USRSB has worked directly with Field to Market to align approaches and to create opportunities for efficiency in sharing benchmarking performance in grain crops with USRSB members. This partnership is critical to driving continuous improvement across North America. 0

26 Metric Inventory and Assessment Process Metric identification is the most critical stage of a continuous improvement framework; the metrics drive changes in decisions which should drive improved outcomes. By definition, Indicators are the impacts and outcomes that the U.S. beef value chain wants to improve. They are common across all sectors of the beef value chain. The process of improving these indicators requires measuring aspects of the indicators that inform its condition and the potential for improvement. Measurements of these characteristics are called Metrics. Effective outcomes, indicators, and metrics have in common a set of characteristics (often called SMART) (Doran, ): 1. Specific. Measurable. Achievable. Relevant. Time-bound The IWG identified five sectors for the U.S. beef value chain that represented coherent scales for aggregation of decisions for improvement of high priority indicators. The five sectors were cow/calf, auction market, feedyard, packer/processor, and retail/food service. Each sector identified a champion to coordinate metric inventory communication within the value chain (Table 1). Allied Industry and Civil Society sectors worked across the other sectors to provide input and advice on their respective sector s available data, potential for supporting metrics, and understanding of future challenges. The IWG supply chain sector teams applied the SMART criteria to the six high priority indicators using a four-step, four rule process (Figure ). The rules for metric selection recognize the autonomy and expertise that resides within each sector of the value chain; each sector knows best how to achieve improved outcomes for the multi-stakeholder priority indicators. The IWG agreed that one sector should not define metrics for another; rather, each sector should identify their own metrics and review them across sectors to assess their effectiveness. Civil Society and Allied Industry sectors worked across all other sectors to provide technical insights and perspective on each metric, and reviewed the metrics for relevance to their sectors. This process involved eight in-person meetings (five of which were all-sector engagement) and fifteen webinars (Table 1). All activities were open for participation by all USRSB members, though for sector meetings only sector members could vote. 1

27 Table 1: Indicator Working Group Beef Value Chain Sectors and Champions for Metric Inventory IWG Supply Chain Sector IWG Co-Chairs Cow-Calf Auction Market Feedyard Allied Industry Packer/Processor Retail/Food Service Civil Society Sector Champion for Metric Inventory Nancy Labbe, World Wildlife Fund Ben Weinheimer, Texas Cattle Feeders Association Steve Wooten, Beatty Canyon Ranch Kristen Parman & Chelsea Good, Livestock Marketing Association Tom McDonald, JBS Five Rivers Cattle Feeding Katie Padilla, KCOE ISOM Jessica Finck, Merck Animal Health Wayne Morgan, Golden State Foods Kim Stackhouse, JBS USA Townsend Bailey, McDonald s Corporation Rob Manes, The Nature Conservancy The IWG recognized that some metrics will likely be common across all sectors (System Metrics) while some metrics may only apply to one or several sectors of the beef value chain (Sector Metrics). The infrastructure required for this process includes a mechanism for collecting data within each sector and across sectors; a reporting body that can assess the data to produce benchmarks for each indicator; an analytical process for evaluating change over time to determine if the sectors are achieving their sustainability goals; and a reporting structure to ensure transparency across all sectors and all indicators. The first step in metric development was to inventory the existing metrics for each indicator being measured by each sector of the U.S. beef value chain. The process of continuous improvement applies to metrics: if a metric does not drive improvement for the indicator within a sector it is determined to be ineffective and will be revised or replaced (Figure ). The purpose of this approach was to develop experience with assessment and reporting with EXISTING metrics, even if they are imperfect (the Achievable criteria from SMART). This process for metric development, implementation, and assessment takes time, but is resilient because it creates buy-in from each sector and amplifies systems knowledge across sectors. By working through this process, each sector understands the values, limitations, and potential for improvement across the other sectors. When the IWG develops experience with benchmarking existing metrics, USRSB can begin assessing and recommending improved metrics.

28 Table 1: Schedule of IWG Meetings and Webinars for Metric Development during 01 Date Indicator Working Group Activity January, 01 Indicator Working Group (IWG) Meeting: Review metric meeting outcomes March 1, 01 IWG Webinar #1: Beef Packer/Processors March, 01 IWG Webinar #: Beef retailers, food service, restaurants and distributors March 1, 01 IWG Webinar #: Cow-calf producers, stocker operators, auction markets and feedyards June, 01 IWG Update Webinar July 1-1, General Assembly Meeting August 1, 01 IWG Packer/Processor Metric Development Planning Webinar August, 01 IWG Packer/Processor Metric Development In-person Meeting September 1, 01 IWG Retail/Food Service Metric Development Planning Webinar September 0-1, 01 IWG Retail/Food Service Metric Development In-person Meeting September, 01 IWG Producer Metric Development Planning Webinar October 0-1, 01 IWG Producer Metric Development In-person Meeting November, 01 IWG Packer/Processor Follow-up Webinar November, 01 IWG Producer Follow-Up Webinar November, 01 IWG Retail/Food Service Follow-up Webinar Dec -, 01 IWG (All Constituency) In-person Meeting December 1, 01 IWG Packer/Processor Metric Follow-up Webinar January, 01 IWG Retail/Food Service Metric Follow-up Webinar January, 01 IWG All Working Group In-Person Meeting: Finalize Metric Selection January, 01 IWG Metric Report Draft #1 Sent to Members for Review February, 01 Comments Due on IWG Metric Report Draft #1 March 0, 01 IWG Metric Report Draft # Sent to Members for Review April, 01 IWG (All Constituency) In-person Meeting April 1, 01 Comments Due on IWG Metric Report Draft # June, 01 IWG Metric Report Draft # Sent to Members for Review June 1, 01 Comments Due on IWG Metric Report Draft # July, 01 USRSB General Assembly Meeting & Draft # Distributed July, 01 IWG Cow-Calf Metric Development Webinar July, 01 IWG Feedyard Metric Development Webinar August 1, 01 IWG Retail/Food Service Metric Development Webinar August 1, 01 IWG (All Constituency) In-person Meeting November 1, 01 IWG Final Metric Report

29 Figure : USRSB Indicator Working Group Approach for Metric Development Across U.S. Beef Value Chain Sectors

30 1 1.. Metrics for Cow-Calf Sector The set of preliminary metrics for the cow-calf sector for each high priority indicator are presented in Table 1. The approach for development of these metrics began with assessing what producers across the US could measure and/or report based upon existing practices, and how those measurements could be used to drive improvement across each indicator. The Cow-Calf as well as Civil Society sector representatives recognized these may appear simple, but have multiple complex considerations at the operation-level. These metrics can be used by every producer across the country, and can be extrapolated to inform and improve each operation. There are more than 00,000 cow-calf producers in the US. If only a small percent of producers currently have grazing management plans, a focused initiative to expand the number of producers with grazing management plans, led by that sector, would lead to measurable and desirable outcomes. Table 1: Metrics for High Priority Indicators for the Cow-Calf Sector of the USRSB, based on an inventory of existing measurements. 1 High Priority Indicator Water Resources Efficiency & Yield Air & GHG Emissions Land Resources Animal Health & Well-Being Employee Safety & Well- Being Preliminary Metric Is a grazing management plan (or equivalent) being implemented that maintains or improves water resources? Is there a strategy implemented to optimize animal productivity through improved nutrition, reproduction, genetics, technologies, and practices appropriate to their operational goals and context? Is a grazing management plan (or equivalent) being implemented to improve soil and plant community health, including soil carbon sequestration? Is a grazing management plan (or equivalent) being implemented to protect and/or improve the land resources, including succession/transition planning? Are Beef Quality Assurance (BQA) or similar program principles incorporated into management of the farm or ranch? Are all individuals who are involved in the operation trained and practices implemented with regard to stockmanship and safety on the farm or ranch? Water Resources - Is a grazing management plan (or equivalent) being implemented that maintains or improves water resources? A grazing management plan is an important sustainability metric for the cow-calf producer because it significantly affects three of the High Priority Indicators (Water Resources, Air & GHG Emissions and Land Resources) and moderately affects two other sustainability indicators (Efficiency & Yield and Animal Health & Well-being). Implementing a grazing management plan means a cow-calf producer is considering the following aspects: Resource Inventory & Condition

31 (including forage, precipitation, wildlife, timber, stocking rate); Goals & Objectives for improvement; Records of Grazing Management Decisions; any specific Regional Priorities (this could include any Endangered Species if applicable); and a Contingency Plan based on short and long-term monitoring. These considerations provide the basis for improved decision-making which improves the environmental factors of increased plant life and diversity, water infiltration, water retention, soil health, carbon sequestration, as well as improved animal health and economics through improved and more abundant forage. Grazing management decisions guided by grazing management plans have consistently been demonstrated to affect the aforementioned sustainability indicators (Sollenberger et al., 01). Additionally, simply reducing herd size is not necessarily the correct remediation to resource depletion. Grazing management strategy, wildlife management, extreme weather events, and other factors could also contribute to undesirable impacts on land and water; a grazing management plan allows for all those criteria to be considered. These plans avoid the pitfalls of this type of a one-size-fits-all solution. The potential for expanding the number of cow-calf producers with effective grazing management plans is significant, given time and a focused strategy. The potential to improve effectiveness of current grazing management plans through targeted allocation of resources is also large. Grazing management plans are site-specific and allow each producer to optimize the productivity, management, and natural resources objectives of their own operation. As such, using the presence of a grazing management plan as a metric avoids the pitfalls of one-size-fits-all metrics and has the ability to drive transformational sustainability improvements across regions and operational scales. Grazing management plans also focus on continuous monitoring to evaluate if the plan is meeting the producer s objectives and adaptation of the plan if it is falling short of those objectives, thereby fitting well within USRSB s goal of continuous improvement. While we understand these improvements will be in varying degrees depending on the complexity of the plan/strategy along with how stringently the producer monitors and utilizes such plan, in a completely voluntary system attempting to drive improvement this metric has the highest probability of moving the curve on water resources. Efficiency & Yield - Is there a strategy implemented to optimize animal productivity through improved nutrition, reproduction, genetics, technologies and practices appropriate to their operational goals and context? Optimizing animal productivity will have a significant positive impact on the sustainability indicators of Efficiency & Yield as well as Air & Greenhouse Gas Emissions. Such strategy should include monitoring and recording such things as number of calves weaned compared to the number of breeding age cows annually, benchmarking operation-level efficiency measurements to show improvement over time, and managing with a market strategy in mind. Monitoring and making decisions based on these factors will improve the animals' nutrition, reproduction and ability to convert feed to muscle in less time, which improves profitability thereby impacting significantly the Efficiency & Yield indicator, but will also have a significant impact on reducing the Air & Greenhouse Gas Emissions produced by that animal because production efficiency means less

32 resources are consumed and less waste (emissions) will be produced to get that animal to the optimal weight. These considerations and strategies will also have the added benefit to the indicators Animal Health & Well-being through improved nutrition, lower morbidity/mortality and promoting ease in calving, but also to Land Resources where resources can be saved through the animals' increased productivity/efficiency. Optimization of nutrition, reproduction, genetics, and the use of technology in the cow-calf phase can lower the land use, water use, and greenhouse gas emissions produced per unit of beef (White et al., 01). Capper and Hayes (01) found that removing growth enhancing technologies (growth implants, ionophores, and β-adrenergic agonists) would increase U.S. beef s environmental footprint and resource use per unit of beef in the following ways: carbon footprint by.%, water footprint by.%, feed use by.%, fertilizer use by.%, and land use by %. Capper and Hayes (01) also estimated removing growth enhancing technologies would result in effectively an.% tax on U.S. beef due to increased costs of production. Increased costs of production for beef producers and higher costs to consumers would negatively impact the socioeconomic sustainability of beef. This metric will expand documentation of decisions to ensure that impacts beyond growth rate are considered in herd management decisions. Milk producers have an established relationship with USDA for milk quality production standards. This relationship encourages the implementation of strategic protocols guiding animal health and well-being practices. Air & Greenhouse Gas Emissions - Is a grazing management plan (or equivalent) being implemented to improve soil and plant community health, including soil carbon sequestration? A grazing management plan that considers both the soil and plant community health and carbon sequestration will directly impact the Air & Greenhouse Gas Emissions as well as the Land Resources sustainability indicators. A strategy to maintain and improve soil and the plant community will have the benefit of improving soil health, increasing plant diversity and abundance, which ultimately will reduce carbon losses to the atmosphere. It also has a secondary benefit to the indicators of Animal Health & Well-being and Efficiency & Yield because an increase in forages can improve the health and performances of the animal, which improves the profitability of the cow-calf producer. Considerations and decisions made based on a grazing management plan will improve the soil, the plant community and reduce the loss of soil carbon. Guidance on this particular metric should be explicitly defined in the Water Resources section of the grazing management plan as well as this indicator, to emphasize the interconnection between air, water, and land processes. Land Resources - Is a grazing management plan (or equivalent) being implemented to protect and/or improve the land for future generations, including succession/transition planning? Keeping pasture and grasslands from being converted to development or other agricultural land is a sustainability challenge; therefore, succession planning can be one of the most effective strategies that a cow-calf producer can use to protect Land Resources in the long term. Planning

33 to transition operations to the next generation requires all aspects of the operation to be considered, from its financial health to water and other natural resources. This planning improves the monitoring and decision-making across-the-board, having a secondary positive impact on Water Resources, Air & Greenhouse Gas Emissions, as well as Efficiency & Yield. Implementation of effective grazing management plans will protect the productivity of the land for future generations, preserve critical native habitat, expand native species biodiversity, and help future generations of land managers understand the important interconnections between the land, water, air, ecosystem, and yields. Animal Health & Well-being - Are Beef Quality Assurance (BQA) or similar program principles incorporated into management of the farm or ranch? The BQA program and its accompanying guidelines cover the major areas of Animal Nutrition, Health, Care & Handling. Adoption of these science-based practices provides the opportunity for the cow-calf operator to produce a healthier, low-stressed animal, which has a significant impact on USRSB's sustainability indicator Animal Health & Well-being. Individuals that have undergone BQA training have better cattle handling skills as compared to individuals who have not participated in the BQA program (Simon et al., 01). These practices also have an impact on the indicator Employee Safety & Well-being by advancing low-stress, safe handling techniques thereby preventing injury to employees. They also have the secondary impact on the indicator Efficiency & Yield by having an animal perform at a higher level, thereby increasing profitability at the ranch. BQA is a recognized industry-funded program that has been around in some form since the s. Beef Quality Assurance is a nationally coordinated, state implemented program that provides systematic information to U.S. beef producers and beef consumers of how common sense husbandry techniques can be coupled with accepted scientific knowledge to raise cattle under optimum management and environmental conditions. BQA programs have evolved to include best practices around good record keeping and protecting herd health, which can result in more profits for producers (Beef Quality Assurance Program, 01). Use of BQA principles as the basis for this metric has the greatest chance of getting a high level of engagement since it is an industry program that has producer support and confidence. Guidance documents can be developed for this metric that incorporate the BQA manual, which lists the principles and best practices for ensuring a healthier animal. The BQA process acknowledges local conditions, so the guidance document will need to identify those elements that are universal and those that are local. Cow-calf producers can also use the BQA Cow-Calf Assessment, allowing each individual producer to assess their operation against BQA principles, providing an additional avenue for ranch-level benchmarking and continuous improvement. Putting the BQA principles into effect has strong potential to improve sustainability outcomes on the ground. Low-stress handling of livestock has decades of research indicating lower stressed animals perform at a higher level, even as far back at 1 (Grandin, 1).

34 1 1 1 Employee Safety & Well-being - Are all individuals who are involved in the operation trained and practices implemented with regard to stockmanship and safety on the farm or ranch? Adopting principles of good stockmanship and safety procedures on the ranch improves not only the safety and well-being of farm/ranch workers by reducing injury and providing confidence and pride in their work, but trained employees using these practices reduce cattle stress and injuries, thereby improving the health and well-being of the animal. Additionally, cattle under low stress conditions and reduced injury risk perform better, improving the sustainability indicator Efficiency & Yield by improving profitability for the cow-calf producer. Industry initiatives have long recognized the benefits of proper stockmanship and safety practices on the farm and ranch. Numerous programs exist to provide training to farmers and ranchers and their employees. One example would be the National Cattlemen s Beef Association s Stockmanship & Stewardship Program. This program, which was revamped in 01, provides training in multiple locations across cattle country to cow-calf producers and employees in an effort to keep everyone safe Metrics for Auction Market Sector While cattle only spend a very brief time (usually hours, almost always less than a week) in the care of the Auction Market sector, their impact on Water Resources, Animal Health and Well-being, and Employee Safety and Well-being can be substantial, so an inventory of preliminary metrics was performed for these indicators (Table 1). This sector determined that their relative impacts on Efficiency and Yield, Air and Greenhouse Gas Emissions, and Land Resources was very limited. While metrics may emerge for these high priority indicators for the Auction Market sector in the future, their ability to affect improvement across those indicators was limited, and thus they chose to focus on the three indicators where they had the greatest impact. Adopting a water resource management strategy at an auction market impacts both water quantity and quality. A water resource management strategy must meet all applicable state laws and regulations. It would additionally mean that the auction is monitoring and maintaining water tanks to improve efficiency and minimize waste or leakage. This sustainability metric also has an impact on Animal Health & Well-being because it provides a process for providing an adequate supply of clean water to animals and the availability of heat control measures as conditions require. 0 1

35 Table 1: Metrics for High Priority Indicators for the Auction Market Sector of the USRSB, based on an inventory of existing measurements. High Priority Indicator Water Resources Efficiency & Yield Air & GHG Emissions Land Resources Animal Health & Well-being Employee Safety & Well-being Preliminary Metric Are water resource management strategies implemented at the auction market that address water management, water use optimization/conservation and water quality? The initial focus of auction markets will be on the sustainability indicators for water resources, employee safety & well-being, and animal health & well-being. The initial focus of auction markets will be on the sustainability indicators for water resources, employee safety & well-being, and animal health & well-being. The initial focus of auction markets will be on the sustainability indicators for water resources, employee safety & well-being, and animal health & well-being. Are employees trained and auction-specific Beef Quality Assurance (BQA) principles being implemented at the auction market? Is an employee safety program in place? Water Resources - Are water resource management strategies implemented at the auction market that address water management, water use optimization/conservation and water quality? Air & Greenhouse Gas Emissions, Efficiency and Yield, and Land Resources The initial focus of auction markets will be on the sustainability indicators for Water Resources, Employee Safety & Well-being, and Animal Health & Well-being. The focus of the auction market sector should be on those indicators where they have an impact and the ability to improve the sustainability of their sector. Animal Health & Well-being - Are employees trained and auction-specific Beef Quality Assurance (BQA) principles being implemented at the auction market? The LMA Guide to Animal Handling and Employee Training in Livestock Marketing Businesses as well as the BQA program and its accompanying guidelines cover the major areas of Animal Nutrition, Health, Care & Handling. Adoption of these scientifically based practices allow auction markets to deliver healthy, low stressed animals to the buyer, which has a significant impact on USRSB's sustainability indicator Animal Health & Well-being. These practices also have an impact on the indicator Employee Safety & Well-being by advancing lowstress, safe handling techniques thereby preventing injury to employees. They also have the secondary impact on the indicator Efficiency & Yield by having an animal maintain itself at a high level, thereby increasing profitability and reducing shrink. 0

36 The LMA program is designed specifically for the unique handling challenges faced in auction markets and includes a requirement for LMA member auction markets to participate in on-site assessment of their handling and employee safety practices. Further LMA members are offered third party assessment as an additional layer of evaluation of handling practices, use of policy, employee training and safety practices. Employee Safety & Well-being - Is an employee safety program in place? Making an employee safety program that includes principles of flight zone training and safety procedures a priority at an auction market has the dual benefit of protecting and improving the well-being of those that are employed at the auction market. It also reduces the stress and potential injury to cattle, thereby improving Animal Health & Well-being. As with other sectors on the live-animal side, reduction in animal stress and injury improves animal performance and in turn improves profitability under the Efficiency & Yield indicator. The LMA Guide to Animal Handling and Employee Training in Livestock Marketing Businesses is the industry s primary source for programs, training, certification and assessment at livestock auctions. Training materials include an emphasis on gate safety, flight zone training and stockmanship skills. As a supplement to the LMA training programs LMA supports and collaborates with Beef Quality Assurance (BQA) standards and LMA strongly supports the acceptance and adoption of Beef Quality Assurance programs as scientifically based principles advancing low-stress, safe handling techniques thereby preventing injury to employees. LMA programs promoting safety at the livestock auctions include assessment of animal handling practices, and customized employee policy and training that is specifically designed for auction facilities, animals and employees Metrics for Feedyard Sector The Feedyard sector evaluated existing measurements across each high priority indicator and identified a set of preliminary metrics for improving high priority indicator outcomes (Table 1). The approach for development of these metrics began with assessing what feedyards across the U.S. currently measure and/or report, and how those measurements could be used to drive improvement across each indicator. The Feedyard as well as Civil Society sector representatives identified these metrics because they are applicable across all feedyards, have direct impact on the priority indicators, and reflect the potential for the Feedyard sector to implement change in practices that drive outcomes. This sector did not consider upstream metrics from Cow/Calf Producers or Crop Producers at this time, but rather focused on those metrics that are directly under the control of the Feedyard sector (Scope 1 by WRI terms). Crop impacts are considered in the Life Cycle Assessment of US beef, and are encumbered to the Feedyard sector in that analysis (see Chapter ). This initial set of metrics and the infrastructure for developing them will make 1

37 implementation of these new technologies more effective, and will likely aid in focusing technology innovation in the target areas identified through these metrics. Table 1: Metrics for High Priority Indicators for the Feedyard Sector of the USRSB, based on an inventory of existing measurements. High Priority Indicator Water Resources Efficiency & Yield Air & GHG Emissions Land Resources Animal Health & Well-Being Employee Safety & Well-Being Preliminary Metric Are water resource management strategies implemented at the feedyard that address water management, water use optimization/conservation and water quality? Are cattle performance and operational efficiency tracked over time? Are strategies in place to manage air and greenhouse gas emissions (GHGs)? Has a nutrient management strategy or plan been implemented? Are employees trained and Beef Quality Assurance (BQA) principles being implemented at the feedyard? Are employees trained and is an employee safety program implemented at the feedyard? Water Resources - Are water resource management strategies implemented at the feedyard that address water management, water use optimization/conservation and water quality? Adopting a water resource management strategy at a feedyard impacts both water quantity and quality significantly by allowing the feedyard to monitor and put measures in place to optimize and recycle water, as well as protect surface and groundwater quality. This sustainability metric also has an impact on Land Resources and Animal Health & Well-being because it provides a process for appropriately applying nutrients from captured water to improve and protect soil quality as well as maintaining and providing an adequate supply of clean water to animals at all times. Regulatory requirements on feedyards with capacity for 1,000 beef cattle animal units or more has led to almost all such feedyards having a federal Clean Water Act (CWA) permit. Many states have permit requirements for feedyards smaller than 1,000 head capacity as well. These permits include hundreds of pages of requirements, periodic inspections, and record-keeping requirements. Facilities meeting the capacity thresholds are under a zero discharge legal obligation, and even permitted facilities are considered to be under zero discharge permits, meaning that every drop of water that has touched the production area of the feedyard must be captured and processed appropriately. Any unanticipated release of process water is only authorized by the permit when a facility receives extreme amounts of precipitation, above and beyond the design storm capacity of the retention ponds, in a short period of time. The premise of the federal requirement is to protect water quality, and for feedyards that meet the capacity requirements

38 (whether or not they have received a permit), the violation of such protections carries criminal and/or civil penalties (NPDES-AFO, 01). Feedyards with less than the 1,000 head capacity are still under obligations to protect water quality and the USRSB metric allows those feedyard operators to consider the different aspects around Water Resources, including conservation and management. Resources are available to aid smaller feedyards in developing such strategies or plans from a number of Land Grant Universities. Strategies that may be in place to mitigate Air & Greenhouse Gas Emissions (dust control measures) are largely watering systems which increase the overall consumption of water by the feedyard and can increase greenhouse gas emissions. In these cases, it is important to understand the intricacies and complexities of the tradeoffs between metrics when they are implemented in a production agriculture setting. Efficiency & Yield Are cattle performance and operational efficiency tracked over time? The feedyard owner/operator who tracks cattle performance and operational efficiency over time will monitor such things as average daily gain and animal health, which leads to improved decision-making that results in improved profitability for the feedyard, thereby directly impacting the Efficiency & Yield indicator. Other efficiency measures that feedyards should monitor, including utilizing growth promoting technologies, ration formulation and improved manure management can not only improve the feedyard's profitability but will also reduce Air & Greenhouse Gas Emissions. However, the practice of composting manure can significantly increase greenhouse gas emissions, illustrating the tradeoffs between impacts faced by the beef value chain. Furthermore, in many cases there is a synergistic relationship between improved Animal Health & Well-being, improvements in Efficiency & Yield, and decreases in Air & Greenhouse Gas Emissions (Llonch et al., 01; Place and Mitloehner, 01). Understanding these tradeoffs creates the potential for innovation as indicators are optimized. Air & Greenhouse Gas Emissions Are strategies in place to manage air and greenhouse gas emissions (GHGs)? A feedyard that has a strategy in place to manage air and greenhouse gas emissions would not only reduce emissions, but would also have a secondary benefit to the sustainability indicators of Land Resources, Animal Health & Well-being and Efficiency & Yield. A strategy would include practices such as pen management for both wet and dry conditions, road and alley management, and feed processing management. Such practices can mitigate air emissions associated with the outside nature of agricultural production, but also would impact the indicator Land Resources through the land application of process water management. Other practices that could be considered in such a strategy include managing average daily gain, feed efficiency, animal health, and utilization of growth promoting technologies, which improve the performance of the animal, reduce feed required, and reduce overall outputs such as emissions and waste. Adoption of practices recommended in the Efficiency & Yield metric can lead to substantial reductions in

39 air emissions per unit of beef from feedyards (Capper and Hayes, 01; Cooperider et al., 0; Rotz et al., 01; Stackhouse-Lawson et al., 01). Feedyards across the U.S. must manage air emissions for a variety of reasons including regulatory requirements and neighborly considerations. Each feedyard has different conditions to take into account and therefore it is appropriate for this metric to allow for a strategy to manage all air and greenhouse gas emissions based on the specific characteristics of that operation. Production practices such as feed additives can reduce enteric methane emissions while improving yield efficiency. Brooks et al. (01) concluded that Ionophores are feed additives used to alter rumen bacterial fermentation, allowing for improved feed efficiency and decreased methane emissions. Capper and Hayes (01), Cooperider et al. (0), Stackhouse et al. (01), and Stackhouse-Lawson et al. (01) demonstrated that growth-promoting technologies such as ionophores, growth implants and β-adrenergic agonists can reduce greenhouse gas, volatile organic compounds, and ammonia emissions per unit of beef. Land Resources - Has a nutrient management strategy or plan been implemented? A feedyard owner/operator who implements a nutrient management strategy or plan will have a significant impact on the sustainability indicators of Land Resources and Water Resources because such a strategy or plan will include managing wastewater, monitoring soil health, and prescribing the proper application rates of nutrients which protects surface and groundwater quality, as well as improves and protects soil quality and crop yields. Application of nutrient-rich wastewater can reduce the need for artificial/commercial fertilizer, increasing the profitability of the feedyard and potentially other nearby farms by providing an economically feasible and readilyavailable source of nutrients, which is a positive impact on the sustainability indicator of Efficiency & Yield. The efficient recycling of nutrients through a nutrient management strategy or plan in most cases will also reduce Air & Greenhouse Gas Emissions. Feedyards with federal permits are required to have a nutrient management plan and implement such plan, subject to criminal and civil sanctions for any violations. Record keeping is also part of such a plan. Feedyards not under federal permits also have resources available to them to guide them in development of a nutrient management plan or strategy. Land grant universities and extension services across the country have provided these resources to producers, including Iowa State University s Beef Feedlot Systems Manual that provides guidance on housing and floor structures, manure handling and storage as well as proper application of manure. Similar resources can be found at the University of Nebraska, Kansas State University, Texas A&M University, other universities, as well as government agencies such as the USDA National Resource Conservation Service (NRCS). Due to differences in soil types, climate, and other factors, it is important for feedyards to base such strategy or plan on the best regional data and resources. The ability for all feedyards, no matter their size or location, to develop a plan that works for their operation will be key to making significant strides in beef sustainability

40 Animal Health & Well-being - Are employees trained and Beef Quality Assurance (BQA) principles being implemented at the feedyard? The BQA program and its accompanying guidelines cover the major areas of Animal Nutrition, Health, Care & Handling. Adoption of these scientifically based practices allow feedyards to produce healthier, lower stressed animals, which has a significant impact on USRSB's sustainability indicator Animal Health & Well-being. These practices also have an impact on the indicator Employee Safety & Well-being by advancing low-stress, safe handling techniques thereby preventing injury to employees. They also have the secondary impact on the indicator Efficiency & Yield by having an animal perform at a higher level, thereby increasing profitability. The BQA Program ( is the symbol of the industry s effort to provide voluntary training to producers around animal health, care and handling. New online training modules launched in February 01 will allow for individual certification. In addition to the Cattle Industry Guidelines for Care and Handling of Cattle, there is also a BQA Feedyard Assessment available online for producers. It was developed by veterinarians, industry representatives, animal scientists and extension professionals. It is important to note that the primary step is the implementation of BQA principles, which the metric adequately recognizes. Despite whether an assessment is done or not done, improvements in sustainability come from the implementation of the actual principles. The assessment is extremely important, but only to inform and allow changes or new implementation of BQA principles at the feedyard. Employee Safety & Well-being Are employees trained and is an employee safety program implemented at the feedyard? Making an employee safety program a priority at a feedyard has the dual benefit of protecting the safety and improving the well-being of those that are employed at the feedyard, but it also reduces the stress and potential injury to cattle, thereby improving Animal Health & Wellbeing. As with other sectors on the live-animal side, reduction in animal stress and injury improves animal performance and in turn improves profitability under the Efficiency & Yield indicator. Safety training programs for feedyard members are broadly available; several state cattlemen s associations provide their members with just such a training. State associations also assist feedyards with the development of written safety programs, conduct safety inspections and provide in-person training to feedyard employees. Many such resources are available to aid in the development of an individual operation s safety program... Metrics for Packer/Processor Sector The potential metrics for the Packer/Processor sector evolved during the series of deliberations, and was influenced by the approach taken by the Retail/Food Service sector (Section

41 .). The Packer/Processor sector opted to include a graduated set of metrics based upon degree of complexity and detail adopted by participating organizations (Table 1). This approach to recognizing metric performance status within an indicator by using Level 1, Level, Level categories is useful for benchmarking the status of enterprises with pre-established measuring and reporting practices. From a sector level this creates a mechanism to improve performance for an enterprise across each indicator. Table 1: Metrics for High Priority Indicators for the Packer/Processor Sector of the USRSB, based on an inventory of existing measurements. Level 1 Level Level Level 1 Level Level Level 1 Level Level Level 1 Water Resources Is a water resource management plan implemented at the facility? Water Quality: How many wastewater permit non-compliances has the facility had in the previous calendar year? Water Quantity: What is the water use in gallons/head/day or gallons/pounds of beef processed? Does your company track water quality and quantity over time? Does your company have set goals for continued improvement? Does your company make water performance efforts public? Does your company participate in partnerships, initiatives or programs to further advance water resource management? Efficiency & Yield Is a program to divert waste from landfills implemented at the facility? How much mass of waste/head or mass of waste/finished product do you divert from landfill? Does your company track waste reduction over time and set goals for continued improvement? Does your company participate in partnerships, initiatives or programs to further advance waste reduction strategies? Air & GHG Emissions Are strategies in place to optimize energy efficiency and reduce GHG emissions? What is your company s COe per head or COe per mass of finished product? Does your company make COe publicly available? Does your company track greenhouse gas and air emissions over time? Does your company set goals for continued improvement? Does your company participate in partnerships, initiatives or programs to further greenhouse gas reduction and improve air quality? Land Resources Does the company have initiatives and/or explore opportunities to mitigate land and biodiversity impacts for new facility developments? Animal Health & Well-being

42 Level 1 Level Level Level 1 Level Level Packer: Does the company have a comprehensive animal welfare program including rd party verification? Processor: Does your company have a documented animal welfare policy (or equivalent) and encourage the adoption of USRSB animal health and well-being metrics? Packer: What is your company s total number of USDA non-compliance animal welfare violations per 0,000 head processed in the previous calendar year? Packer: What percentage of cattle come under a third-party audit? What percentage pass on first audit? Processor: Does the company use nd or rd party animal welfare audits or certifications to verify compliance with its policy at least to the packer level? Does your company track animal health and well-being overtime and set goals for continued improvement? Does the company engage its suppliers or participate in partnerships, initiatives or programs to advance continuous improvement regarding animal health and well-being in the beef value chain? Employee Safety & Well-being Does the company have an employee safety and well-being program that engages front-line employees and leadership? What is your company s Total Reportable Incident Rate (TRIR)? Does your company track trends on TRIR or reference the industry standard rate for goal setting? Does your company perform better than North American Industry Classification Systems (NAICS)? Does your company participate in partnerships, initiatives or programs to Water Resources Levels 1- The first level of engagement in water resource management is a water resource management plan should be implemented at the facility. Packers/Processors should have a water resource management plan that outlines the planning, developing, distributing and managing optimum use of the companies water resources. Successful management of water as a resource requires accurate knowledge of the water available, the uses to which it may be put, the competing demands for the water, measures and processes to evaluate the significance and worth of current and future competing demands and processes to translate policy decisions into actions. The second level addresses water quality and quantity through tracking wastewater permit non-compliance incidences and evaluating water use efficiency. Packers/Processors should track wastewater permit non-compliances, which in the realm of sustainability reporting is defined as receipt of a letter from the state, federal, or local environmental regulatory authority that specifically states a notice of violation. Storm water violations are excluded from this assessment. Water use efficiency should be tracked by Packers/Processors keeping records of water used per head (packers) and/or per mass (pound) of beef processed (processors).

43 The third level of Water Resources includes water quantity and quality goals at the enterprise level, publication of water resource performance data, and engaging in partnerships to advance water resource management. Industry leaders should be able to track and report on water quality and quantity including short term goals and long term goals. Leading companies should be engaged in industry organizations and/or initiatives to seek continuous improvement in this area. Packers and Processors should publicly disclose their water quality and use performance. This information can be disclosed through a company s website, annual report, sustainability or corporate responsibility report, and other publicly available documents. One example of a water resources partnership initiative could be to assess the water risk of direct operations using the WRI aqueduct tool (or equivalent) and incorporate this data into local water management plans. Efficiency and Yield Levels 1- The first level metric for the Packer/Processor sector for Efficiency and Yield focuses on waste management. Packers/Processors should have established programs to divert waste from landfills. Elements of a successful program may include identifying and quantifying materials entering the facility and waste streams by category (e.g., packaging, pallets, food); pursuing a prioritized approach to diversion through (a) source reduction, (b) reuse, (c) composting, (d) recycling, (e) incineration with energy recovery, and (f) incineration; engaging stakeholders (i.e.., employees, suppliers, customers, waste vendors) to support the program; and capturing data on waste volume and diversion rates to track progress and set goals. The long-term goal should be to pursue as close as possible to a zero waste to landfill objective. Properly managing waste resources may also provide economic benefits for a company. The second level metric for Efficiency and Yield includes measurement waste generated per mass of product produced. Packers/Processors should measure amount of waste diverted from landfills. Waste diverted from landfill may be defined as total mass (lbs.), per unit of measurement (lbs. per head or lbs. per finished product), or a percent of total waste (0% waste from landfill), for a specified time period (quarterly, annually, etc.). The third level metric addresses tracking, reporting, goal setting, and partnerships for waste reduction. Leading companies should include a waste diverted from landfill component as part of an overall sustainability strategy. Both short and long term goals should be set, and company performance measured by defined key metrics to demonstrate continuous improvement. A leadership activity could be if a company is using extended shelf life packaging (e.g., vacuum packaging) that can contribute to reduced food waste downstream or sourcing packaging should be designed to be recyclable. Leading companies should seek opportunities for continuous education in relation to waste resources management through industry organizations, mentoring programs, partnerships, or other initiatives. Leading companies should seek solutions to challenging waste issues. Best practice sharing with other companies is encouraged. Air and Greenhouse Gases Levels 1-

44 The first level metric for the Packer/Processor sector for Air and Greenhouse Gases focuses on strategies to optimize energy efficiency. Improving energy efficiency is one of the easiest and most cost effective way to combat climate change and improve the competitiveness of business. This can be achieved through new technologies to capture and reuse methane, using more energy efficient equipment in processing plants and optimizing transportation. The second level measure efficiency of carbon dioxide emissions equivalents (COe). This is the global standard metric used to calculate the equivalence of greenhouse gases (GHGs) encumbered in a product or process. Measuring COe from business operations is the most comprehensive way to understand its contributions to greenhouse gas emissions and climate change. These emissions include direct emissions of GHGs from all sources under the company s control that include, but are not limited to land-use change, equipment, production facilities, and transportation. There are a number of software tools available to calculate COe. The conversion factors should align with guidance from the U.S. EPA and/or the GHG Protocol, and will be defined further in the Sustainability Assessment Guides (SAG). The third level metric for Air and Greenhouse Gas Emissions focuses on reporting, goal setting, and partnerships for reducing GHG emissions and improving air quality. Publicly reporting inventory COe resulting from business operations provides a transparent review of the emissions sources and resulting impact. Inventory emissions can be public, typically on an annual basis and can be disclosed through a company s website, annual report, sustainability or corporate responsibility report, SEC filings, and other publicly available documents. Tracking GHG emissions over time results provides the company the benchmark data necessary to set feasible reduction goals. Packers and processors should have a documented process to track GHG and air emissions over time and disclose time bound targets for continued improvement. There are two types of targets companies can make: 1) Absolute target: A target that describes a reduction in actual emissions in a future year when compared to a base year. Examples include metric tonnes COe or percent reduction from base year, metric tonnes COe or percent reduction per year, and a cap on emissions in metric tonnes COe. ) Intensity target: A target that describes a future reduction in emissions that have been normalized to a business metric when compared to normalized emissions in a base year. Examples include metric tonnes COe or % reduction per unit revenue relative to base year, and metric tonnes COe or % reduction per unit of product relative to base year. Companies can have both absolute and intensity targets for GHG emission reduction. For long term reduction plans (e.g. years), the company should disclose progress against the target on an annual basis. Initiatives like CDP, GHG Protocol and others can help the company more effectively understand its GHG emissions sources and set commitments to continuously improve. Other initiatives can also be adopted, such as programs to renew fleets, combined transportation along supply chain, renewable energy projects at plants, and similar strategies. Land Resources Level 1

45 There is only one level of Land Resources metric for the Packer/Processor sector, and it focuses on habitat loss for new facilities. If new facility developments are expected to expand the footprint of the facility, or alter existing land use, the company should anticipate how those impacts to land will be mitigated and seek to evaluate and minimize any anticipated operational impacts to, or effects on, biodiversity. Animal Health and Well Being Levels 1- The three levels of metrics for Animal Health and Well-Being were defined directly in Table 1, and require no more elaboration. Employee Safety and Well-Being Levels 1- The first level of the Employee Safety and Well-being metric for the Packer/Processor sector addresses training and leadership for front-line employees. A safety and well-being program should include safety policies, governance structure, and management programs that are designed to promote a safe work culture and meet a minimum of Equal Employment Opportunity Compliance (EEOC) compliance. Programs should be clearly communicated (with documentation) to all employees to insure employees are being treated fairly by the employer in accordance with all US regulations. Policy should focus on training and educating team members and eliminating work hazards. The safety management program should meet U.S. Occupational Safety and Health Administration (OSHA) standards. All team members should be covered under this program. The second level metric addresses Total Reportable Incident Rate (TRIR) documentation. The company should record TRIR in accordance with OSHA regulations and guidelines. The third level addresses reporting, analysis, and partnerships for Employee Safety and Well-being. Clear documentation of performance from at least the last three years as well as established and documented annual goals and long term goals should be available. Results and goals should be benchmarked against national standards for like businesses as determined by the North American Industry Classification System (NAICS). There should be evidence of these results and goals being communicated to company leadership and front line employees such as publications, meetings or presentations. Industry leadership is evidenced by the company s involvement in activities above and beyond regulatory requirements and demonstration of the company being proactive in this area. Participation in industry organizations, recognition by third parties and programs that distinguish the company based on its Employee Safety and Well-being efforts are all indicators... Metrics for Retail/Food Service Sector The Retail/Food Service sector also adopted a graduated set of metrics (Levels 1-) based upon degree of complexity and scope of supply chain engagement (Table 1). Level 1 within an operation acknowledges awareness and engagement, Level means the operation has programs to 0

46 address metrics within the operation and the supply chain is engaged in the process, and Level indicates the operation is measuring and reporting metrics, and the supply chain is collaborating with suppliers to measure and report. This approach is important for the retail sector because it outlines the spectrum of continuous improvement as the sector collaborates with the full beef value chain to advance beef sustainability. This approach also serves as guide for retailers beginning their journey and looking to improve over time. This approach will be valuable for benchmarking the status of enterprises with pre-established measuring and reporting practices. The Retail/Food Service sector could use this approach as a mechanism to motivate performance for an enterprise across each indicator. It is important to note that many of the retailer metrics refer to corporate programs or targets. An affirmative answer to these metrics refers to the presence of a corporate program or target. Given the diverse structures of retailers and franchising models, an affirmative answer should not be interpreted as implying full participation of all locations or achievement of a target. The content and resources listed in the guidance that accompanies many of the metrics in this section are intended to be used only as suggestions for retailers and food service providers striving for continuous improvement in these areas. They should not be interpreted as standards that would determine how the respondent should answer each question. Table 1: Retail/Food Service Sector Spectrum of Continual Improvement Within Own Operations and Across Supply Chains Own Operations Supply Chain Level 1 Own Operations Awareness and Engagement Level Programs to address metrics in own operations Supply chain engagement Level Measurement & Reporting Collaboration with suppliers Water Resources: Retailer/Food Service Sector is an active steward of water resources used in its own operations and by its direct suppliers. Water is an essential resource for food production, safe handling and service. As such, net use reduction is not always the desired objective but rather optimal efficient use and awareness and engagement with prioritized watersheds. For this reason, the metrics for this indicator are designed to highlight the importance of awareness, planning, measurement and broader engagement with suppliers, industry, and relevant stakeholders (Table 1). Desired outcomes for water resources within this sector include: Improved water planning and stewardship in retailer operations; Better collaboration between retailers and their suppliers on water stewardship; Greater understanding of issues surrounding water scarcity and the risks water scarcity poses for retailers and their supply chains; and Broader engagement in around common industry tools. 1

47 The Guidance Document for Water Resources for this sector should include information and documentation to support context-based decision making. Retailers and Food Service organizations should consider the location of their operations with regards to identified high risk water scarcity regions. Equipment selection within the local establishment is an important opportunity to improve water efficiency. The Guidance Document should include elements of a good plan and differentiate between process water (e.g. used for landscaping, sanitation, etc.) and water used for products (e.g. fountain beverages, brewed coffee/tea, etc.). Tools and information on water resources for the Guidance Document can be provided by a number of sources, including: Local Utilities Equipment Vendors CDP (formerly, Carbon Disclosure Project) Water Survey ( WRI (World Resources Institute) Aqueduct ( WWF AgWater Challenge ( LEED (Leadership in Energy and Environmental Design) Certification Water Standards U.S. Green Building Council ( Table 1: Retail/Food Service Sector Recommended Levels of Metrics for Water Resources Level Description Metric Guidance/Reference 1 Own Operations Awareness and Engagement Has the company assessed the water risk of its operations and locations? WRI s Aqueduct tool (WRI, 01) is an example of an easy tool to assess water risk. Programs for Own Operations Supply Chain Engagement Measurement & Reporting Supplier Collaboration Does the company have a plan for water resource and risk management including both quantity and quality impacts? Has the company assessed the water risk of its direct beef suppliers? Does the company engage suppliers and encourage adoption of USRSB water metrics in its beef supply chain? Is the company participating in a credible system for measuring and reporting for water stewardship? Has the company set water targets based on its assessments? Can the company demonstrate progress towards these targets? Does the company track performance on water stewardship in its beef supply chain? Plan should be informed by water risk assessment. WRI s Aqueduct tool (WRI, 01) is an example of an easy tool to assess water risk. Examples include: Carbon Disclosure Project (CDP) Water Survey, Alliance for Water Stewardship Examples of ways companies can track supplier performance include

48 rd party tools such as CDP Supply Chain or supplier surveys Efficiency and Yield: Retailer/Food Service Sector works to prevent and recover organic and non-organic waste in its operations Efficiency is an essential component of any successful and sustainable production system. The intent of this indicator is for retailers to recognize waste as a significant issue and to develop programs and tracking tools to reduce waste in their operations (Table 0). The desired outcomes for Efficiency and Yield indicator include: More efficient operations. Increased diversion of waste from landfills. Waste reduction, especially food waste. The Guidance Document for Efficiency and Yield for this sector should consider the range of available resources supporting food waste reduction. The Consumer Goods Forum has set a target to halve food waste within retail and manufacturing operations by 0 (relative to a 01 baseline). The UN Sustainable Development Goals include a target to halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest loss by 00 (Lipinski et al., 01). Table 0: Retail/Food Service Sector Recommended Levels of Metrics for Efficiency and Yield Level Description Metric Guidance/Reference Own Has the company measured baseline waste Waste may include 1 Operations levels in its own operations and set targets both organic and Awareness and for future comparison? non-organic waste. Engagement Own operations Supply Chain Engagement Measurement & Reporting Does the company have a program focused on diverting waste from landfills? Does the company have policies that encourage adoption of USRSB metrics and enable suppliers to find alternative uses for obsolete or off-spec product? Does the company report on its waste program and outcomes? What % of the company s waste is diverted from landfill? Examples of organizations that support companies reducing waste, especially food waste include: Feeding America Second Harvest Food Donation Connection Local Food Banks Scope: Waste produced and disposed of on site

49 Supplier Collaboration Does the company engage suppliers and track performance on waste minimization and diversion from landfill in its beef supply chain? An example of a tool to help track food waste reduction is the WRI Food Loss and Waste Accounting and Reporting Standard (Lipinski et al., 01) Air and Greenhouse Gas Emissions: Retailer/Food Service Sector works to reduce Greenhouse Gas Emissions. Greenhouse Gas emissions have been linked to climate change, which poses significant risk to retailer supply chains. For this reason, the retailer metrics for this indicator focus mainly on the drivers of greenhouse gas emissions within our direct sphere of influence, namely energy efficiency and consumption (Table 1). We also believe increased transparency and reporting will help drive system-wide solutions to a challenge that is bigger than any one sector or industry, so we have included metrics for measurement and reporting further down the path of continuous improvement. Desired outcomes for this indicator include: Increased transparency and reporting of greenhouse gas emissions; More retailers working towards goals informed by science. The Guidance Document for Air and Greenhouse Gas Emissions for this sector should consider the range of available resources supporting emissions reduction. Table 1: Retail/Food Service Sector Recommended Levels of Metrics for Air and Greenhouse Gas Emissions Level Description Metric Guidance/Reference 1 Own Operations Awareness and Engagement Has the company assessed the energy and GHG risk of its operations? Does the company have a plan to reduce scope 1 and GHG emissions? Examples of risk include energy pricing, availability, legislation, regulations, etc. The GHG Protocol ( is an example of a standard way to measure GHG emissions and provides definitions for scopes 1,, and. Own operations programs Does the company use a continuous improvement environmental management system or equivalent that e.g. ISO, etc.

50 encompasses energy, GHG and air emissions? Supply Chain Engagement Does the company engage suppliers and encourage adoption of USRSB Air & GHG metrics in its beef supply chain? Has the company assessed the GHG emissions of its supply chain? Measurement & Reporting Is the company participating in a credible external system for measuring and reporting GHG or air emissions? Has the company set credible GHG emissions targets based on its assessments? Can the company demonstrate progress towards these targets? Examples of reporting systems include: CDP ( What is your company s scope 1+ GHG emissions? Supplier Collaboration Does the company track performance on GHG or air emissions in its beef supply chain? Has the company set a credible Scope GHG target? Does the company report progress against this target? Examples of ways companies can track supplier performance include rd party tools such as CDP Supply Chain or supplier-specific surveys. 1 Land Resources: Retailer/Food Service Sector works to minimize the environmental and social impacts of land resource use in its operations The use of land for human needs affects the biodiversity of the ecosystem, as well as the surrounding communities. The intent of this indicator is for retailers to recognize the role they play in setting policies that support sustainable land use in their supply chains in alignment with the USRSB High Priority Sustainability Indicator Definitions (Table and Table ). The desired outcome for this indicator is minimized adverse environmental and social impacts of land resource use. In order to align the metrics of this indicator with the impacts identified in the materiality

51 study, the retail sector has chosen to keep this indicator s metrics simple and to focus on policy to eliminate land use change in the sector s various beef supply chains. Since systems for verifying compliance with deforestation policies are still under development, the indicator does not yet include a level metric. As the systems develop, the retail sector will reconsider adding a reporting metric for level. Table : Retail/Food Service Sector Recommended Levels of Metrics for Land Resources Level Description Metric Guidance/Reference Has the company assessed Supplier 1 the deforestation risk in its Collaboration beef supply chain? Supplier Collaboration Does the company have a no net deforestation policy for its beef supply chain? Examples of organizations and resources that could support companies with these assessments and commitments include: The New York Declaration on Forests U.S. Green Building Council Acres for America Global Forest Watch Tool Other NGO collaboration Animal Health and Well-being: Retailer/Food Service Sector works with supply chain actors to monitor and improve animal health and well-being Animal health & well-being is an integral component of the viability, productivity, and integrity of beef production. The intent of this indicator is for retailers to recognize animal health and well-being as a significant asset to their meat value proposition to their customers and to collaborate with and incentivize their suppliers to continually improve in this area (Table ). Desired outcomes include: Verification of humane handling and stunning at the packer level. More collaboration with suppliers to continually improve animal health and welfare throughout the beef value chain. Broader support for the Beef Quality Assurance (BQA) program. Table : Retail/Food Service Sector Recommended Levels of Metrics for Animal Health and Well-Being Level Description Metric Guidance/Reference Does the company have a Policy should include standards and 1 documented and publicly practices for key animal health and welfare Supplier available animal welfare outcomes. Collaboration policy (or equivalent)?

52 Supply Chain Collaboration Supply Chain Collaboration Supplier Collaboration Measurement and Reporting Does the company encourage the adoption of USRSB metrics and support the use of the BQA program in its beef supply chain? Does the company require nd or rd party animal welfare audits or certifications to verify compliance with its policy at least to the packer level? Does the company have a policy for audit failures? Does the company engage its suppliers on continuous improvement and emerging issues regarding animal health and welfare in its beef supply chain? Does the company track progress on welfare outcomes that align with its policy and publicly disclose performance and progress against its animal welfare metrics? The audit or certification should be based on widely recognized standards. It should include humane handling and stunning practices that reduce fear and distress. Examples of resources for continuous improvement include but are not limited to: NAMI Guidelines BQA Business Benchmark on Farm Animal Welfare ( Consider alignment with Business Benchmark on Farm Animal Welfare (BBFAW) Employee Safety and Well-being: Employee safety, training, and well-being are critical to a safe workplace. Employee safety, training, and well-being are essential to accomplish day-to-day business operations. The metrics for this indicator are designed to build a work culture that includes robust safety and training programs, and provides resources to encourage employee health and well-being (Table ). Desired outcomes for this indicator include: Defined policies, procedures and training programs that promote a safe work environment. Delivery of benefits and resources that support employee health and well-being. Improved worker injury rates as compared to industry standards. Improved tracking of employee safety, training and engagement (E.g., participation in programs, engagement of resources, outcome measures). Unless otherwise specified, businesses should answer the questions in this section based on what safety, training, and well-being programs they provide to their own employees only. Two questions below also address whether the business offers any optional tools/resources to external business partners, such as suppliers, vendors, and/or franchisees, on these topics.

53 Table : Retail/Food Service Sector Recommended Levels of Metrics for Employee Safety and Well-being Level Description Metric Guidance/Reference 1 Own Operations Awareness and Engagement Does the company have clearly documented policies and procedures around employee workplace safety and training programs? Examples of policies and procedures include but are not limited to the following: Onboarding and orientation; safety training course; annual safety training and/or re-training; food safety training; ServSafe certification; training program specific to job responsibility; first aid and CPR; Hazard Communication Program (chemical training, high heat); personal protective equipment (PPE), workplace violence and security training Own Operations Awareness and Engagement Supplier Collaboration Measurement & Reporting Measurement & Reporting Does the company require training on food safety and handling techniques? Does the company have a supplier code of conduct or equivalent and have a system for tracking compliance? Does the company use at least one metric and set targets related to worker safety for company employees? Does the company track the number of company employees participating in well-being programs or the number of employees completing safety and training programs? The following list contains examples of potential worker safety metrics a company may consider. They are suggestions for consideration and are not required to respond affirmatively to this metric. Companies setting targets for worker safety should choose targets that work best for each company s unique structure, culture, and worker safety opportunities. Examples of potential metrics include: Workers Compensation; Experience Rating Modification Factor (EMR). METRIC ALIGNMENT ACROSS SUPPLY CHAIN SECTORS This process of metric development made it clear that each sector influences the sustainability of the beef value chain differently. The four domains of sustainability, People,

54 1 Animals, Profit, and Planet, have all been evaluated and addressed, as appropriate, by each sector. The potential for each sector to improve high priority indicators varied based upon the control each sector has over decisions that drive these improvements. The alignment of each sector s ability to change high priority indicators across the four domains of sustainability are illustrated in Figures -, where white indicates low to no impact, light blue indicates moderate impact, and dark blue indicates high impact. This visualization demonstrates the broad coverage across the four domains achieved through the sector-specific High Priority Indicator approach. All four domains are identified as high ability to change by at least one sector of the U.S. beef supply chain. Most quadrants are medium levels of influence in at least two sectors. These assessments are normalized within a sector; high impact on water resources in the Planet domain in the Cow-Calf Sector may be significantly lower than the Packer/Processor and Retail/Food Service Sectors, for example. 1. BEEF INDUSTRY SUSTAINABILITY LCA AND USRSB INDICATORS Life Cycle Assessment and Sustainability Indicators Life Cycle Assessment (LCA) is a method for analyzing cumulative impacts across complex systems over the life cycle of a process or product. LCAs can be applied to quantifying sustainability performance indicators by measuring the impacts of practices on indicator metrics across the life cycle of a product, from cradle to grave. This approach can be effective for setting benchmarks and for performing assessments of change over time. The LCA method applies a quantitative systems analysis in which each discrete element of a value chain is defined as a unit process, with inputs from nature and other processes and with outputs to nature and other processes. An agricultural value chain can be defined as a system of these unit processes, which can be modeled with current or alternative practices to evaluate the impacts of different scenarios on priority indicators. The LCA allows impacts to be aggregated to quantify all the upstream impacts of a product or process (Matlock, 01). LCAs are limited to a snapshot of condition in time, and can only assess impacts based upon available information. LCAs can serve multiple functions in continuous improvement processes. They can benchmark impact categories at a point in time across a supply chain. This process of benchmarking is one of the most common uses of LCA in sustainability programs. LCAs can be constructed to compare relative contributions of impacts between sectors of supply chains. This process is valuable in defining hotspots across supply chains so that proportionate efforts to reduce whole supply chain impacts can be more effectively targeted. They can also be linked with physical process models (PPMs) to analyze the potential impacts (benefits and/or costs) associated with practices. This type of LCA can also become a valuable decision support system (DSS) if the life

55 cycle inventory data are adequately resolved and updated. Finally, LCAs can be used to assess changes in outcomes based upon practices, if adequately informed by PPMs for the practices. The Beef Checkoff supported development of LCA tools to measure the impacts of U.S. beef production on a set of environmental categories by BASF and the University of Arkansas (U of A) (Frank et al., 01; Table ). The BASF LCA used the Eco-Efficiency Analysis to assess beef production-specific impacts from cradle to grave, across life stage categories, from benchmark year 00 to 0 (Table ). The inventory data were normalized to a common functional unit, referred to as the consumer benefit, using models to predict environmental impacts. 1 1 Table : Sources of models used by BASF and University of Arkansas to calculate Impact Categories for the U.S. Beef Value Chain Impact category BASF Characterization Models U of A Cumulative energy demand No reference Frischknecht et al., 00 Consumptive water use Assessed Pfister 00 Pfister et al., 00 Absolute Solley et al., 1 Solley et al., 1 Global warming IPCC 00 0a IPCC 00, 0a Photochemical ozone Heijungs et al., 1 Guinee, et al., 1 Ozone depletion No reference TRACI.1, Ryberg et al., 01 Acidification Saling et al 00 TRACI.1, Ryberg et al., 01 Water emissions Wastewater Ordinance 01 Wastewater Ordinance 01 Solid waste Klein 0 H&W, 1 Land use K&S 00 K&S, 00 Human toxicity L&S 00 USEtox, Rosenbaum et al., 00 Abiotic depletion potential No reference Rotz, CA 01 pers. com Beef Industry Sustainability Life Cycle Assessment Benchmark Results 00-0 The Beef Industry Sustainability Life Cycle Assessment estimated of changes of impact categories for the U.S. beef value chain from the benchmark year 00 to 0 (Figure ). This LCA represented the best knowledge of the cumulative practices and processes used at each stage of the beef value chain at that time. The impact categories from the LCA directly align with systems-wide metrics for High Priority Indicators (Table ), and can be used as a beef life cycle benchmark. 0

56 The set of LCA Impact Category metrics for Efficiency and Yield, Water Resources, Land Resources, Air and Greenhouse Gas Emissions, and Employee Safety and Well-being were measured for every sector of the U.S. beef value chain. The LCA also reported progress in the area of occupational illness and accident, which included adoption of BQA at the cow/calf and feedyard sectors as one of the metrics contributing to improvements, which directly relates to the current USRSB high priority indicator for Animal Health and Well-being (Figure ). Figure : LCA Impact Category Improvements across U.S. beef value chain High Priority Indicators, 00 0 (NCBA, 01) Figures and provide examples demonstrating the relative impacts and connections between the USRSB Indicators and Metrics. On the landscape, many USRSB Metrics have impacts across many indicators in varying degrees. Through implementation of one metric on a farm or ranch, many sustainability factors can be improved. USRSB Indicators and Metrics also encompass the four pillars of sustainability as outlined by the Global Roundtable for Sustainable Beef (GRSB, 01) and touch on many of the impact categories outlined by the Beef Industry LCA

57 Figure : Relative Impacts & Connection of Metrics across High-Priority Indicators: Example in Cow-Calf Sector of Grazing Management

58 Figure : Relative Impacts & Connection of Metrics across High-Priority Indicators: Example in Cow-Calf Sector of BQA Principles Implementation

59 1 Table : USRSB High Priority Indicators and Life Cycle Assessment (LCA) Impact Categories potential systems-level metrics High Priority Indicator Animal Health & Well-being Efficiency & Yield Water Resources Land Resources Air & Greenhouse Gas Emissions Employee Safety & Well-being LCA Impact Categories Occupational Illnesses and Accidents Cumulative energy demand Consumptive water use Global warming Photochemical ozone Ozone depletion Solid waste Abiotic depletion potential Consumptive water use Assessed Absolute Water emissions Acidification Water emissions Solid waste Land use Abiotic depletion potential Global warming Photochemical ozone Ozone depletion Occupational Illnesses and Accidents The values for the LCA impact categories were analyzed in 01 using updated practices and processes across the U.S. beef value chain to evaluate changes in status (if any). Results indicated significant improvement in Occupational Illnesses and Accidents and Employee Safety and Well-being ( percent reduction) and Water Resources ( percent reduction) across the value chain (Figure ). Other improvements included reductions in emissions to soils, atmosphere, and increases in energy, water, and resource use efficiencies (Figure ). These improvements reflected changes in practices across the U.S. beef value chain, such as increased use of precision farming and thus crop yields in feed production; improved cattle genetics, health and nutrition for cattle, increased use of biogas conversion in processing, and reduced food waste through rightsized packaging in the retail/food service sector Beef Industry Sustainability Life Cycle Assessment - 01 The impact categories listed in Table are being re-measured by the University of Arkansas using 01 production practice data to determine the changes, if any, that occurred over the decade since the benchmark LCA. This process provides a national scale inventory of impacts.

60 The relative burdens across the U.S. beef value chain may provide insights into additional opportunities for improvement of high priority indicators THE BUSINESS CASE FOR CONTINUOUS IMPROVEMENT IN SUSTAINABILITY Continuous improvement is a well-established concept in business management. The framework defined in Figure 1 is similar to many business management strategies, such as Total Quality Management, and is encompassed by the Japanese word 'Kaizen' (Manos, 00). The original Japanese concept, getting better, was a slow, incremental, and continuous process on a trajectory of improvement across many metrics. This concept is equally understood in the board room and in the corral; this is why the ANSI-ASABE standard has been so broadly adopted by agricultural value chains. The continuous improvement process can be incremental, and thus slow. Rapid, transformational, and even disruptive change in systems is necessary under specific circumstances to create new processes that are more sustainable than their predecessors. Transformational and disruptive changes usually require shifts in economic boundaries (energy shortages, for example), technological breakthroughs (driverless cars, for example), or regulations imposed across entire value chains (Fair Labor Standards Act, for example). Transformational and disruptive change can be healthy and can result in dramatic improvements. Stakeholder deliberations or advocacy group activity alone usually does not create these changes, but they can prepare the supply chain to take advantage of the conditions for transformational change when they do occur. Continuous improvement, though incremental, can result in dramatic reductions of impacts from entire value chains without disruption of existing supply chain processes. Applying a continuous improvement model to sustainability initiatives makes sense if the goal of the initiative is to make things better, and there is agreement on what those things are. This approach is pre-competitive; it creates opportunities for all participants in a value chain to improve, and thus increases the resilience of the product supply chain from the value chain. This concept of systemic improvement was referred to by Jason Clay (WWF) as moving the curve (Clay, 0) (Figure 1). Improvements are targeted at the lowest performers in the system to improve the entire system. Another approach is threshold compliance, where participants must meet a minimum acceptable performance standard in order to be considered sustainable (Figure 1). This approach is very common in third-party and regulatory compliance processes; the most common examples in agriculture are the USDA s Organic Certification and Accreditation, the FDA s Hazard Analysis Critical Control Point (HACCP) management system, and very likely new rules to be promulgated by FDA under the Food Safety Modernization Act (FSMA). These strategies can be very effective at bringing all participants in a sector to a common level of performance.

61 Figure : Example of how Moving the Curve improves impacts from an agricultural sector (modified from Clay, 0). Figure : Minimum Performance Level in Sustainable Improvement Strategies Incremental performance frameworks are also commonly used to create a progressive, stepwise process for enterprises and organizations to improve sustainability indicators (Figure 1). These programs often require third-party, company or enterprise-level certification programs. These programs have progressive performance criteria, divided into threshold classes, where the

62 company or sector is assigned a rank. Ranks are often recognized as rare metals (silver, gold, platinum); numbers of stars (One, Two, and Three), etc. Under this framework, incentives for increasing ratings (improving indicators) must be clear to the participating organizations, or can diminish over time. Performance certification program often increase the performance criteria for each level as more participants advance through the stages. Business-to-business agreements often used this framework to motivate performance at individual enterprise scales, which improves the sustainability of the partner enterprises. The sustainability performance framework adopted by USRSB is the approach recommended by the ANSI-ASABE standard, and is a simple continuous improvement process as expressed by kaizen the Japanese concept of growth through improvement. This process has no end-point; it requires a commitment to continuous review and improvement. The value chain establishes sustainability indicators and associated metrics, benchmarks the performance of those metrics at the enterprise, sector, and value chain levels, sets goals for improvement of the metrics with performance period commitments, and assesses performance against those goals over time (Figure 1). This process has the advantage of being fully responsive to changing conditions, priorities, and technologies. The goals and timelines can be adapted based upon emerging priorities and responsive to the urgencies of the conditions requiring change. This adaptability is key to resilience in a value change sustainability framework. Figure : Incremental or Tiered Structure for Sustainable Improvement Strategies 1

63 Figure 1: Continuous Improvement Structure for Sustainable Improvement Strategies