GRI Platform

By selecting your indicators of interest, corresponding information will display below.

General Indicators

Corporate Governance

Ethics and Integrity

Profile of the Organization

Reporting Practice

Stakeholder Engagement

Strategy

Material Topics

Business Development and Economic Performance

Climate Change Risk Management

Commitment and Working Conditions

Community Engagement

Customer Health and Safety

Environmental Management and Operating Efficiency

Ethics and anti-corruption

Innovation (products and processes)

Occupational Health and Safety

Supply Chain Management

102-1 Name of the Organization

102-10 Significant changes to the organization and its supply chain

102-11 Indicate how the organization applies the Precautionary Principle

102-12 Social, environmental and economic initiatives

102-13 Membership of associations

102-14 Statement from the Chief Executive Officer

102-16 Values, principles, standards and norms of the organization

102-17 Mechanisms for advice and concerns about ethics

102-18 Corporate governance structure and committees

102-19 Process for delegating authority for economic, environmental and social topics from the highest governance body

102-2 Primary brands, products and services

102-20 Executive-level responsibility for economic, environmental and social topics

102-21 Consulting stakeholders on economic, environmental and social topics

102-22 Composition of the highest governance body and its committees

102-23 Chair of the highest governance body of the organization

102-24 Nominating and selecting the highest governance body and its committees

102-25 Processes for the highest governance body to avoid conflicts of interest

102-26 Role of highest governance body in setting purpose, values and strategy

102-29 Highest governance body’s role in identifying and managing economic, environmental and social topics and their impacts, risks and opportunities

102-3 Location of the organization’s headquarters

102-31 Review of economic, environmental and social topics

102-35 Remuneration policies for the highest governance body

102-36 Process for determining remuneration of the highest governance body

102-4 Countries where the organization operates and markets served

102-40 Stakeholder groups

102-41 Percentage of employees covered by collective bargaining agreements

102-42 Selecting stakeholders

102-43 Approach to stakeholder engagement

102-44 Key topics and concerns raised through stakeholder engagement

102-45 Entities included in the consolidated financial statements

102-46 Explanation of the process for defining the report content

102-47 Material topics

102-48 Effect of any restatements of information and the reasons for such restatements

102-49 Significant changes in scope

102-5 Nature of ownership and legal form

102-50 Reporting period

102-51 Date of most recent report

102-52 Reporting cycle

102-53 Contact point

102-54 Description of the degree to which the GRI standards have been applied

102-55 GRI content index

102-56 External assurance

102-6 Countries where the organization operates and markets served

102-7 Scale of the organization

102-8 Number of employees by employment contract (permanent and temporary), by gender

102-9 Supply chain

103-1 Management Approach

103-11 Management Approach

103-12 Management Approach

103-13 Management Approach

103-3 Management Approach

103-5 Management Approach

103-7 Management Approach

103-9 Management Approach

201-1 Economic value generated and distributed

201-2 Financial implications and other risks and opportunities due to climate change

203-1 Infrastructure investments

204-1 Percentage of spending used for significant locations of operation that is spent on local suppliers

205-1 Number and percentage of operations assessed for risks related to corruption and significant risks identified

205-2 Communication and training about anti-corruption policies and procedures

205-3 Confirmed incidents of corruption and actions taken

206-1 Legal actions for monopoly practices

206-1 Number of demands for unfair competition, monopolistic practices against free competition and their result

301-1 Materials used by weight and volume

302-1 Energy consumption

302-3 Energy intensity

302-4 Reduction of energy consumption

303-1 Water withdrawal by source

303-3 Water recycled and reused

305-1 Direct (Scope 1) GHG emissions

305-2 Energy indirect (Scope 2) GHG emissions

305-4 GHG emissions intensity

305-5 Reduction of GHG emissions

305-6 Emissions of ozone-depleting substances

305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions

306-1 Water discharge by quality and destination

306-2 Waste by type and disposal method

308-1 New suppliers that were screened using environmental criteria

308-2 Negative environmental impacts in the supply chain

401-1 New employee hires and employee turnover

401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees

401-3 Parental leave

403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

404-1 Average hours of training per year per employee

404-2 Programs for upgrading employee skills and transition assistance programs

404-3 Percentage of employees receiving regular performance reviews

405-1 Diversity of governance bodies and employees

406-1 Incidents of discrimination and corrective actions taken

408-1 Operations and suppliers at significant risk for incidents of child labor

409-1 Operations and suppliers at significant risk for incidents of forced labor

414-1 New suppliers that were screened using social criteria

414-2 Negative social impacts in the supply chain

415-1 Political contributions

416-1 Assessment of the health and safety impacts of products

416-2 Incidents of non-compliance concerning the health and safety impacts of products

417-1 Requirements for product information and labeling

417-2 Incidents of non-compliance concerning product information and labeling

417-3 Incidents of non-compliance concerning marketing communications

419-1 Non-compliance with laws and regulations in the social and economic area

DMA Managment Approach

PI-1 Customer Relations

PI-2 Percentage of operations with implemented community engagement, impact assessments and development programs

PI-3 Healthy and Affordable Food

PI-4 Healthy Eating

102-6. Countries where the organization operates and markets served

We are present in 18 countries in 6 different regions around the world:
North America

Canada

Central America

Nicaragua
Costa Rica
Guatemala
Honduras
El Salvador

Caribbean

Dominican Republic
Cuba

Europe

Espain
United Kingdom
Russia
Czech Republic
Germany

Africa

Dubai

Oceania

New Zealand

308-1. New suppliers that were screened using environmental criteria

For Grupo Herdez, the tracking of our prime materials and the relationship with our providers is of utmost importance to guarantee that our products reach our consumers’ tables in time and form, with the quality that distinguishes us.

That is why no matter what type of product or service they provide, all our new commercial partners must sign and comply to the Code of Conduct for Suppliers, in which minimal environmental and social standards must be met, evaluates the fulfillment of the labor standards and the environmental normativity in vigor. In 2017, 77 new suppliers signed this Code.

Agricultural sustainability

Through the Good Practices Manual, training sessions and environmental audits, we walked our agricultural suppliers through the adoption of the best working and environmental practices, in 2017 two Agricultural Sustainability of Integrated Management of Crops training sessions took place, and the applicable regulations about the good use of agrochemicals and the fulfillment of the Good Agricultural Practices Manual was monitored.

Additionally, to give continuity to the development of these iniciatives and the advancement of the Sustainable Agricultural Plan, we count with a team of six auditors that evaluate and give follow-up to the state of the properties, monitor if the suppliers are in sensitive ecological areas and the measures that are being implemented for their protection, as well as the measures adopted to enhance the quality of the land, increase recycling and reduce the amount of waste, monitoring the working conditions and the health of the agricultural workers, all this done through a checklist which measures the progress and the improvement points for each supplier. In 2017, 48 suppliers were audited.

308-2. Negative environmental impacts in the supply chain

DMA. Managment Approach

Zero Hunger Culture

SDG: Zero Hunger

Following our line of business as a leader in the food, beverage and wellness products sector, we focus our sustainability and social responsibility efforts on contributing to food security in Mexico, improving nutrient bioavailability, contributing to a healthy and affordable diet and mitigating food waste through two core programs: the generation and installation of productive projects in rural communities through Saber Nutrir® in alliance with associations like Child Fund and Pro Mazahua; and through a monthly in-kind donation to the Association of Mexican Food Banks which provides food to populations living in food poverty across the nation.
All our community engagement and support programs are aimed at improving the quality of life and nutritional status of beneficiaries through actions that contribute to fulfilling what is, for us, one of the most important sustainable development goals: Zero Hunger.

PI-2. Percentage of operations with implemented community engagement, impact assessments and development programs

Community Engagement

PI-3. Healthy and Affordable Food

This year, the Healthy Eating Program was extended to our units in Los Mochis, Sinaloa, bringing the number of locations which run the program to four, along with Mexico City, San Luis Potosí, and Estado de México.The program provides our employees with dietary assessment through healthy eating plans and monthly check-ups. In 2017, 2,570 consultations were given and our employees lost a total of 1,341 kg.

401-3. Parental leave

During 2017, 153 employees were given parental leave; 111 women and 42 men.

404-1. Average hours of training per year per employee

In 2017 the budget destined for training was of more than nine million pesos, increasing in more than a million pesos in comparison to the year before, which allowed giving 13% more training hours with a total of 160,356, which is equivalent to an average of 17 hours per collaborator.

Breakdown by gender		Breakdown by type of contract
Men	Women	Unionized	Non-unionized
29.5 average hours	40.1 average hours	44.9 average hours	27.3 average hours

*Note for audit: this year, the hours that belong to the corporate servibenefits training are not taken into consideration, because we do not currently support them.

404-2 Programs for upgrading employee skills and transition assistance programs

404-2. Programs for upgrading employee skills and transition assistance programs

In Grupo Herdez we are aware that to reach continuous organic growth it is imperative to constantly develop the abilities and aptitudes of our collaborators, thus throughout the year we took place in various training courses with varying subjects: technical knowledge, values, health and safety, administration, environmental awareness, and also: Workplace Health, 5’S, Manufacture Practice, Three Keys to have success as a leader, Principles and Qualities of Continuous Leadership and Reinforcement of the Ethical Code.

During 2017 the training projects with the most impact were the efficiency program WCM in Herdez del Fuerte, and the Ethical Code Reinforcement campaign in 40% of locations of the group:
Training programs -

Development program	Description of the benefits for the Company	Qualitative and quantitative impacts	Percentage of Full-Time Equivalent (FTE) who participated in the program
WCM Program Program of continuous improvement within Herdez del Fuerte, to improve the effectiveness in the time of operation, in the consumption of resources and in the labor force.	1) Effectiveness of the equipment and its efficiency. 2) Effectiveness in the consumption of resources. 3) Efficiency of time and workflow.	-Autonomy in the operation of the machines. -Teamwork. -Care and maintenance of assets. 140 SDS eliminated 255 ADA'S attended 80 improvements in weak points Quantitative Impact: $ 90,422,564.28 MXN	60% of the personnel involved
Reinforcement campaigns Code of ethics Program to reinforce the adherence of employees to the ethical principles of Grupo Herdez. Improve the understanding of the behavior of the Code of Ethics through face-to-face sessions and visual support on dining screens.	From the second semester of 2017, the reinforcement of the second part of the campaign was carried out at the national level, where 9 behaviors were reinforced: environmental responsibility; confidential information; discrimination and harassment; product integrity; drug and alcohol free workplace; honest accounting; neutrality in politics and religion; Health and security; protection and correct use of the assets of the company.	Reinforcement of the culture of legality, value and ethical behavior within the different business units.	40% of the locations involved

404-3. Percentage of employees receiving regular performance reviews

92% of our full time collaborators are evaluated regularly in reference to their work performance.

The performance and growth of our collaborators are evaluated at least once a year through different methodologies like administration through objectives, quarterly or tri-annually evaluations with the purpose of establishing incentives of productivity, promotions or horizontal changes inside de organization and for the rise in salaries. When it comes to unionized personnel, they are evaluated monthly in relation to the production indexes in plants and distribution centers in which each collaborator works.

Percentage of collaborators evaluated -

	% of total collaborators evaluated
By Gender
Female	40%
Male	52%
By type of contract
Unionized	34%
Non-unionized	59%

405-1. Diversity of governance bodies and employees

Structure and committee of corporate governance -

Government Organs	Women			Men
	Less than 30 years	30 to 50 years	More than 50 years	Less than 30 years	30 to 50 years	More than 50 years
Board of Directors	-	-	1	-	-	8
Audit Committee	-	-	6	-	-	4
Corporate Practices Committee	-	-	-	-	-	6
Risk Committee	-	-	-	-	-	7
Ethics and Transparency Working Group	-	-	-	-	-	6

Employees by gender

406-1. Incidents of discrimination and corrective actions taken

Throughout 2017, we reinforced the Code of Ethics using training sessions, communication campaigns, and visual material. One of the priority topics was Discrimination and Harassment; any form of harassment or discrimination due to ethnic origin, religion, nationality, gender, sexual preference, marital status, age, disability or for any other reason is prohibited across all our working activities.

During 2017, there were no cases of discrimination and/or harassment.

103-13. Management Approach

A priority for the Environmental Sustainability department is to identify the major impacts and risks that affect the continuity and transcendence of our operations. We therefore have agents of change in each of our business units who, in conjuction with other departments and our stakeholder groups, design strategies, guidelines and policies focused on actions to promote environmental care and protection through the efficient use of resources, closure of productive cycles, and reducing emissions and water consumption. In this way, we are able to create a culture of respect, care and synergy that allows us to overcome the climatic, social and political changes we face year after year.

303-1. Water withdrawal by source

Water extraction by source -

Water extraction by source	2017 Volume (m³)	2016 Volume (m³)	2015 Volume (m³)
Sewage from another organization	-	-	-
Municipal network	10,343	11,004	9,803
Rivers, lakes and oceans	686,175	716,969	656,314
Subterranean (wells)	854,876	834,613	678,563
Others	26,883	25,978	28,824
Total	1,578,277	1,588,565	1,373,504

Rainwater -

	2017 Volume (m³)	2016 Volume (m³)	2015 Volume (m³)
Rainwater (captured and stored directly by the organization)	75,633	75,634	67,331

Note: rainwater is captured in the gutters and storm drains located in the industrial complexes of Mexico and El Duque; it is only used as irrigation water, it is not used for process activities.
Total water consumption -

Total water consumption	Unit	2017	2016	2015	2014
A. Total water supplied from the municipal network	Millions of m³	0.010	0.011	0.010	0.008
B. Rivers, seas and lakes	Millions of m³	0.686	0.717	0.656	0.549
C. Underground	Millions of m³	0.855	0.835	0.679	0.753
D. Water returned to its extraction source with the same or higher quality (B and C)	Millions of m³	-	-	0	0
E. Net water consumption (A + B + C-D)	Millions of m³	1.58	1.56	1.34	1.31
Scope of information (%)	Millions of m³	85%	85%	85%	85%

Note for audit: due to the fact that we are not using rainwater within the production processes, we will be reporting separately. Likewise, an extra table was added to meet RobecoSam's requirement.

303-3. Water recycled and reused

We recycle and/or reutilize 2.65% of the total water volume that we use throughout the year, equivalent to 41,792 m³. The treated residual water that is reported as reutilized or reused includes the residual water that comes from the productive processes, as well as that of sanitary use and dining rooms.
At Grupo Herdez untreated or residual waters are never reused.

Water recycled and reused -

	2017 Volume (m³)	2016 Volume (m³)	2015 Volume (m³)
Water recycled in irrigation	41,792	55,568	59,580
Water recycled in other uses	-	-	-
Reused water	-	-	-
Total	41,792	55,568	59,580

Percentage of water recycled vs captured -

	2017	2016	2015
Percentage of water recycled vs captured	2.65	3.50	4.34

Measurement notes: In all the residual treated water discharges coming from productive processes we count with meters that read the volume of water discharged. The residual waters coming from dining rooms, bathrooms and showers are not generally measured directly, but rather from the estimate that all the water that is supplied for these services is what is discharged as residual water, meaning that these sources are measured estimating the total consumption of water, considering the evaporation levels are almost non-existent.

Note:Rain water is received in the gutters and pits of the industrial complexes of Mexico and El Duque, and is only used for watering, not for any process activities.

Note for audit: due to the fact we’re not using rainwater inside the productive processes it will be reported separately. In the same manner, an extra table was added to comply with the requirements of RobecoSam.

302-1. Energy consumption

Regarding energy consumption, in the following, the main renewable and non-renewable sources are broken down.
Use of energy -

Fuel type Non-renewable sources	2017 (GJ)	2016 (GJ)	2015 (GJ)
Diesel	2,786	3,918	8,136
Cleanbustoleo	2,576	-	-
Fuel oil	269,432	272,186	235,546
Gasolines	4,848	5,592	11,756
Gas L.P.	72,583	85,101	111,478
Natural gas	264,712	278,759	227,535
Marino diesel	421,725	432,513	471,553
Gas plane	8,639	11,399	11,399
Total non-renewable sources	1,047,302	1,089,468	1,077,402
Fuel type Renewable sources	2017 (GJ)	2016 (GJ)	2015 (GJ)
Does not apply	N/A	N/A	N/A
Total renewable sources	N/A	N/A	N/A
Total fuel consumption	1,047,302	1,089,468	1,077,402

The total consumption of all energetics was 1,337,403.66 GJ.
In 2017 we consumed 290,102 GJ, which is equivalent to 80,583,929 KWh of electric energy, so this information must be included.

302-3. Energy intensity

In relation to the electric energy consumed (1), an electric intensity of 156.62 kW/h/ton produced was registered, in other words, 2.31% more than the previous year, this increment was due to a greater production in the plants of San Luis Potosí, Barilla, and planta México, while in 2016, 78,382,686 KWh were consumed to produce 512,052.05 tons of produce; in 2017, 80,583,929 KWh were consumed to produce 514,509.73 tons.

In relation to the consumption of fuels, an energetic intensity of 13.58 m₃/ton produced was recorded, in other words, 4.9% less in comparison to 2015, this value expressing the total sum of all fuels used in Plants, Distribution Centers, and Fleets (tuna vessels and ground).

This decrease is due to the fact that in 2017, on a group level, less industrial diesel was consumed, less LP gas, in the Planta del Duque less natural gas was consumed and less tuna was fished for which less marine diesel was consumed.

The total energetic intensity of the group in GL/Ton produced was of 2.60, 2.9% less in comparison to last year.
Energy intensity -

	GJ/Produced Ton
2017	2.60
2016	2.68
2015	2.94

This considers the sum of electric energy coming from the Comisión Federal de Electricidad (CFE) and the energy coming from wind sources.
Notes: The energetic intensity is expressed based on the tons produced in 2017, in the case of the units presented in kW/h/ton produced, the electric energy and fuel energy consumed are reported separately. In the latter, even though in the total fuel consumption the consumption of the tuna vessels and distribution centers is taken into account, to obtain the energetic intensity we only take into account the total sum of production coming from all the plants, because the tuna fleet and distribution plants do not manufacture finished products.

In the case of the total energetic intensity expressed in GJ/Ton, both supplies (electric energy and fuel consumption) are homologated into caloric units.

302-4. Reduction of energy consumption

In the San Luis Potosí plant, the air compressors were replaced with electric compressors and their injection lines were reduced. In the same manner, the regular lighting was replaced with LED lighting, and “mole” mills.
In the Chiapas plant, the use of equipment was optimized to be used in high demand schedules to reduce unnecessary consumption, and a compressor that was out of use was replaced with a newer and efficient, 150 HP one. Additionally, electricity consumption meters were installed in the substation that powers the frick chamber, to measure its consumption and that of its complementary equipment, with the purpose of optimizing the process and reducing consumption.

A new water-ammoniac trap was installed in the ammoniac line to boost operative efficiency and a thermal covering in the ammoniac line in the CEMIFI chamber was applied to reduce temperature differences in the system and to reduce or eliminate work overload in 355 HP and 255 HP compressors, alternating their use to increase efficiency.

The lighting control cabinets in the electric control room for the tuna cleaning motors were substituted to optimize the use of energy and to avoid energy leaks.

In the Villagrán plant, regular lighting was replaced with LED lighting and photocells were installed for the switching of the luminaries.

In the distribution center in Cuautitlán, awareness campaigns took place to foment the proper use of lighting in offices, movement sensors were installed for the switching of some of the luminaries and some regular luminaries were replaced by LED luminaries.
Reduction of energy consumption -

Reduction initiative	2017 (GJ)	2016 (GJ)
Process redesign (electric power)	22	2,527.11
Conversion and adaptation of equipment (electric power)	2,158.09	N/A
Changes in staff behavior	N/A	N/A
Others (savings actions in consumer equipment)	N/A	N/A
Total saving	2,180	2,632

As well as the reduction of emissions, the reduction in energetic consumption was affected due to the increase in the energy consumption coming from CFE, and at the same time, the wind park that provides renewable power suffered important damages to its operation derived from the earthquakes that took place on September of 2017.

This results are compared to base year 2016.

305-1. Direct (Scope 1) GHG emissions

Direct emissions fixed sources -

Direct emissions from fuel consumption in fixed sources
Fuel	2017 ton CO₂ equivalent	2016 ton CO₂ equivalent	2015 ton CO₂ equivalent
Natural gas	13,944	14,684	11,985
Fuel oil	20,649	19,128	16,553
Industrial diesel	178	215	197
Gas	3,352	3,986	5,542
Gasoline	-	-	-
Total	38,123	38,012	34,277

Direct emissions mobile sources -

Direct emissions from fuel consumption in mobile sources
Fuel	2017 ton CO₂ equivalent	2016 ton CO₂ equivalent	2015 ton CO₂ equivalent
Gas	1,038	1,144	1,178
Marino diesel	35,259	36,161	39,425
Diesel	16	57	367
Gasoline	320	369	776
Gas plane	599	790	790
Total	37,231	38,521	42,536

Direct and indirect emissions -

Direct and indirect emissions
Type	2017 ton CO₂ equivalent	2016 ton CO₂ equivalent	2015 ton CO₂ equivalent
Total direct GEI emissions	75,353	76,533	76,813
Total indirect GEI emissions	33,899	31,684	21,614
Total	109,252	98,217	98,427

Note: The gases that have been included in the calculations are CO₂, CH₄ and N₂O. The emission factors and global warming potentials used are the recommended by the IPCC. The focus of consolidation corresponds to the operational control which is of 100%.
Total Direct Emmissions -

Total direct emissions
2017	2016	2015
75,353	76,533	76,813

305-2. Energy indirect (Scope 2) GHG emissions

Indirect emissions -

Indirect emissions
Tipo	2017 ton CO₂ equivalent	2016 ton CO₂ equivalent	2015 ton CO₂ equivalent
Indirect emissions	33,899	21,684	21,614

Note: The indirect emissions reported correspond to the energy consumption supplied from CFE. The emission factor used is the one recommended by SEMARNAT which is at the same time reported annually by the CRE and that for 2017 was 0.582 Tons of CO2/MWh.

Direct and indirect emissions -

Direct and indirect emissions
Type	2017 ton CO₂ equivalent	2016 ton CO₂ equivalent	2015 ton CO₂ equivalent
Total direct GEI emissions	75,353	76,533	76,813
Total indirect GEI emissions	33,899	31,684	21,614
Total	109,252	98,217	98,427

305-4. GHG emissions intensity

Considering the emissions from plants, distribution centers, and the tuna fleet, and taking into account direct (mobile and fixed sources) and indirect emissions, in 2017 we reported an emission intensity of 0.198 ton of CO2e/ton produced, 3.2 percent higher than in the previous year. This was due to the increase in electrical power sourced from the Federal Electricity Board (CFE) after the energy supply from the wind farm was compromised by damages to the network caused by the September earthquakes.
Emission intensity is expressed as the total (direct and indirect) emissions over units produced. For direct (fixed and mobile) emissions, we consider the sum of all fuels used in plants, distribution centers and fleets (tuna and land) with their respective emission factors. For indirect emissions, we consider the total electrical energy consumption sourced from the CFE and the relevant emission factor.

Note: Gases included in the calculation are CO₂, CH₄, and N₂O.

305-5. Reduction of GHG emissions

In 2015, Grupo Herdez began the Energía para Conservas (EPC) project, which was created to develop, execute and supervise energy optimization projects.

The initiative included the implementation of the Energy Management System: ISO 50001, led by the National Commission for Efficient Energy Use and the Danish Energy Agency, beginning with the identification of various areas of opportunity to improve energy performance in the Barilla and McCormick San Luis Potosí plants.

During 2017, we achieved a reduction of 277 ton CO2e, due to a decrease in the use of fuels for energy in the San Luis Potosí, Chiapas, and Celaya plants, the Tijuana and Cuautitlán distribution centers and the tuna fleet.

Similarly, by using the energy management system mentioned above, we achieved a reduction of 2.8 ton CO2e; we began to see results at the end of 2017 and estimate that the benefits for 2018 will be approximately 77.87 ton CO2e.

The reduction in 2017 was not higher due to the increase in electricity sourced from the CFE, while at the same time the wind farm that provides electricity suffered significant damage in the September earthquakes.

305-6. Emissions of ozone-depleting substances

Grupo Herdez does not produce or release CFC-11 (R-11)-type emissions from ozone-depleting substances. Some of our refrigeration and air conditioning systems use R-22 or chlorodifluoromethane, however, these substances are inside closed cycle systems which have presented no leaks to date.

Since 2016, we have campaigned to replace and eradicate the use of this substance and will continue to do so during 2018 and probably into 2019 since, with the new acquisition of the ice cream line, we have identified several pieces of equipment that continue to use R-22 refrigerant and which will have to be replaced in the near future.

During 2017, no record was kept of the measurement and substitution of this type of refrigerant, but it will be followed up in the coming years until it is totally eradicated within the Group.

305-7. Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions

NOX, SOX and other atmospheric emissions -

Atmospheric emissions	2017 (Ton)
CO	37.73
PS	2.38
COT	2.66
COV	0.61
SO₃	0.85
SO₂	4,748.26
NO_x	949.45
Filterables PS	6.60
NMCOV's	0.50

The used methodology is the direct determination one, using specific emission factors for every type of contaminant as recommended by the Green House Gas Protocol (GHGP) for emissions that come from direct sources whether it be fixed (stationary) or mobile.
To determine the emission factors to be used, the established in the UK Department for Environment, Food and Rural Affairs (DEFRA), the US Environmental Protection Agency (EPA) and the Intergovernmental Panel on Climate Change’s (IPCC) 2006 Guidelines for National Greenhouse Gas Inventories was considered, through the Mobile Combustion GHG Emissions Calculation Tools and the Stationary Combustion GHG Emissions Calculation Tools which can be consulted in the GHG Protocol Website.

On the other hand, even though the data represents the concentrated GH consumption, the estimation is based on specific data given by each installation, considering the consumption of fuels –measured directly- in fixed and mobile GH sources. Similarly, conversion factors were used in accordance to the international metric system for the conversion of kilograms to tons.

306-1. Water discharge by quality and destination

Discharge streams -

Discharge streams (water discharges)	2017 Volume (m³)	2016 Volume (m³)	2015 Volume (m³)
Discharge to federal drainage	500,595	217,559	242,968
Discharge to municipal network	515,939	428,167	517,336
Discharge to the subsoil	70,109	76,513	72,264
Total	1,086,643	722,239	832,568

Total volume by type of discharge -

Total volume by type of discharge	2017 Volume (m³)	2016 Volume (m³)	2015 Volume (m³)
Process wastewater	972,279	613,242	698,078
Gray water (sanitary services, showers, dining room, etc.)	114,365	108,996	134,491
Black waters or other	-	-	-
Total	1,086,644	722,239	832,568

Residual water volume -

Volume of wastewater according to treatment	2017 Volume (m³)	2016 Volume (m³)	2015 Volume (m³)
Treated water	793,271	553,077	556,214
Untreated water	293,372	169,161	276,354
Grey waters	-	-	-
Total	1,086,643	722,239	832,568

Total percentage of treated wastewater -

	2017 (%)	2016 (%)	2015 (%)
Percentage of treated wastewater vs total wastewater generated	73.0%	76.6%	66.8%

Quality of discharged water

It’s worth mentioning that the data shown below applies to the quality of water of the volume that’s been monitored before its discharge or re-use, independent from if they were previously treated or not.

For 2017, the estimated quantity of poured waste that is channeled via sewage that is treated at Grupo Herdez expressed in tons is:

GREASE AND OILS: 6.00 Ton

BOD: 31.37 Ton

COD: 133.66 Ton

TSS: 28.85 Ton

TDS: 144.22 Ton

SS: 0.16 Ton

306-2. Waste by type and disposal method

Total weight of waste generated -

Type	2017 (Ton)
Dangerous residues	133
Non-hazardous waste (except waste water)	36,722
Total waste generated	36,856

Total weight of hazardous waste -

Method of elimination	2017 (Ton)
Recycling	61
Other (controlled final disposal, includes hazardous waste)	73
Total	134

Total weight of non-hazardous waste -

Method of elimination	2017 (Ton)
Recycling	27,183
Others (landfill, includes special handling waste and unimproved urban solid waste)	9,540
Total	36,723

Reuse -

Reuse	2017 (Ton)
Recycling	27,183
Composting	-
Recovery (including energy)	-
Incineration (massive combustion)	-
Injection in deep wells	-
Dump	-
On-site storage	-
Other (controlled final disposal, includes hazardous waste)	-
Others (Landfill, includes special handling waste and unimproved urban solid waste)	9,540
Total	36,722

Total weight of waste 4 years -

Waste discarded (incinerated, landfill)	Unit	2017	2016	2015	2014
Total waste	Metric tons	36,856	40,999	30,596	41,420
Scope of information	%	85	85	85	85

2017 reduction goals -

Scope	Metrics	Base year	% reduction expected to be achieved in the target year	Target year	Comments
Canned food plants	Prod Ton/Ton	2015	5	2020	The targets were established based on historical data and estimates (projections) of reduction of operational projects established in each facility, and consolidated into divisions.
Frozen plants	Prod Ton/Ton	2015	6	2020
CEDIS	Prod Ton/Ton	2015	3	2020

409-1. Operations and suppliers at significant risk for incidents of forced labor

Our Code of Conduct for Suppliers contains the minimum requirements for our current and potential suppliers in terms of the social and environmental conditions for the development of their operations and services. The document is based on the standards of the International Labor Organization (ILO), the ten principles of the United Nations Global Compact, and the Human Rights Policy and Code of Ethics of Grupo Herdez, which establishes that Grupo Herdez rejects, without exception, all forms of forced or compulsory labor, any form of child labor for whatever purpose, whether full or part-time, including remunerated or otherwise.

103-5. Management Approach

Effective communication that encourages a healthy lifestyle

Our broad portfolio of brands and strict parameters on quality and harmlessness, promote a healthy lifestyle for our clients and consumers. Our labeling, based on the best national and international practices, communicates graphically and effectively the nutritional content and energy contribution of each of our products, enabling our customers and consumers to make informed decisions.

416-1. Assessment of the health and safety impacts of products

The research and development areas of Grupo Herdez, Helados Nestlé, and Nutrisa are responsible not only for conceptualizing future products and those that adapt to changing lifestyles but also for making the necessary adjustments to our existing product portfolio in terms of health, safety, quality, and nutrition.

In 2017, 4.92 percent of Nutrisa products underwent health and safety screening. Churritos were reformulated to reduce the fat content and yogurt was added to the Walnut ice cream and the Cucumber and Chia ice popsicle, already low in fat and sugar content.

All the products designed and manufactured under the Nestlé brand are screened under NUTRITIONAL FOUNDATION criteria which define strict parameters of calorie content (kcal), added sugar (g/portion), total fats (g/portion), saturated fats (g/portion), sodium (mg/portion) and fructose (g/portion). Compliance with these criteria is mandatory for any product targeted to children.

416-2. Incidents of non-compliance concerning the health and safety impacts of products

Food supplements were immobilized at the Patio Hermosillo branch for containing Cannabis Sativa.
At the close of this report, none of the cases had resulted in a fine, monetary reprimand or product destruction.

PI-1. Customer Relations

Contact points:
Lines 01-800: each brand has an assigned number in which quality problems, complaints or suggestions about the products are solved. During the year, a total of 8859 calls and 3,887 emails were received; each one generated a follow-up report, and in the case of complaints about the products, there was also a status and/or resolution process.

Digital media: we have official websites for most of our brands, where consumers and customers can find out all the information about them. We also have more than 20 profiles on brand social networks, where the interaction of "questions and answers" also allows us to monitor our successes, concerns, and doubts of our consumers
.

	www.	Facebook	Twitter	Youtube	Instagram	Others
Grupo Herdez	X		X	X
Aires del Campo	X	X	X		X	+1
Barilla	X	X	X	X
Blasón	X	X			X
Búfalo	X	X	X	X	X
Carlota	X
Chi-Chi's	X	X			X
Del Fuerte	X	X		X
Don Miguel	X	X
Doña María	X	X
Herdez	X	X				+1
McCormick	X	X		X
Helados Nestlé		X			X	+2
Herdez Brand	X	X				+1
Nutrisa	X	X	X		X
Vesta
La Victoria	X	X	X	X	X	+2
Wholly Guacamole	X	X	X	X	X	+2
Yemina	X
Distribution agreements
Kikkoman México	X	X		X
Ocean Spray	X	X
Reynolds	X	X		X

Monitoring points:
Sensory studies: we check that our formulas have a preference higher than the average on the part of the consumers, and in case that this goal is not met, the product is reformulated.

Tracking brand health: we take care of that knowledge, the image and confidence of our consumers to recommend us stays at a constant or growing level. If the above is not met, adjustments are made to the media campaigns and the particular causes for which consumers do not recommend a certain brand are investigated.

Home panels: we take care of the presence and the frequency with which our products reach Mexican homes. Throughout the year we continue to work to reach greater penetration within homes.

Tailor-made market studies: we constantly monitor the displacement of our products, we verify their stock and we check general public prices. Likewise, we verify the satisfaction of our customers and clients through specialized investigation agencies.

Concept proof: We evaluate how attractive a new product might be before its launch. This helps us keep developing it, adjusting it or discarding it.

Produce test: we test the level of satisfaction with the proposed product with our potential consumers. A statistically representative sample is taken that will help us balance its assertiveness and cost.

Test of launched product: we verify that after a launching to the market, the product is of entire satisfaction for our consumers. Thanks to the obtained information with this test, the recipe of our “Básicos Picados” was reformulated.

206-1. Legal actions for monopoly practices

In 2017, there were no complaints of monopoly or unfair practices. However, despite there being no cases of this kind in recent years, the first draft of the Anti-trust and Economic Competition Policy was drawn up in 2017 and is under revision by the Ethics Committee.

417-1. Requirements for product information and labeling

Our labels are the main form of communicating the most important information about our products to our customers. This information includes the origin of the product's components, nutritional information—especially saturated fats, sugars, sodium, and calorie content—net content, safety instructions and the best way to dispose of or recycle the packaging.

All our labels meet the regulations applicable in the country of destination. In the case of Mexico, all are designed in accordance with Sanitary Control Regulations for products, NOM-050-SCFI-2004: Commercial Information; General Product Labeling and NOM-051-SCFI/SSA1-2010: General labeling specifications for pre-packaged food and non-alcoholic beverages-Commercial and sanitary information.

417-2. Incidents of non-compliance concerning product information and labeling

During 2017, three incidents occurred related to product information and labeling, of which only one resulted in a verbal reprimand.
Aires de Campo: Teas in Commercial Mexicana stores were immobilized because the labeling contained the description of therapeutic properties. However, an agreement was reached with the authorities since the product packaging is being redesigned and will no longer carry the said description.

Nutrisa: body creams were immobilized in the Plaza Cuernavaca branch for not showing an expiry date and the product was withdrawn pending modification. At the close of this report, a decision had still not been made by the authority.

Food supplement was immobilized in the Plaza Satélite branch, Estado de México, for containing therapeutic properties on the label. Information was presented to discredit the claim and the product was released.

At the close of this report, none of the cases had resulted in a fine, monetary reprimand or total product destruction.

417-3. Incidents of non-compliance concerning marketing communications

This year there were two incidents of non-compliance with marketing communications, both on the Nutrisa web site, regarding the advertising of some food products without the relevant advertising permits. The said content was taken down and the incident was closed without further reprimand from the authorities.

103-7. Management Approach

Through the detection and management of new business opportunities, constant innovation, brand diversity, strategic distribution alliances and proper management of environmental and social resources, we have been able to overcome a constantly shifting market, uncertain economic scenarios and other challenges to achieve steady growth and cross borders.

Furthermore, having a sustainable development approach through the adoption and management of sustainable development goals and our sustainability and social responsibility initiatives, we have positioned as one of the top processed food companies, one of the major players in the ice cream segment in Mexico, and among the leaders of the Mexican food segment in the United States, as well as being present in 17 countries around the world.

203-1. Infrastructure investments

In 2017, we invested 433 million pesos in the development and continual upgrading of our plants and distribution centers with the expansion of the salsa line in San Luis Potosí to meet the growing demand of MegaMex, and the acquisition of two water cooling towers at the Santa Rosa Tomatoes plant.

In addition, we invested in new freezers to further the development of the Frozen division.

419-1. Non-compliance with laws and regulations in the social and economic area

For Grupo Herdez, significant fines are those which amount to or exceed one million pesos. During 2017, no incidents of non-compliance with the laws or social and/or economic regulations resulted in significant fines.

201-1. Economic value generated and distributed

Table shortcode reference GRI 201-1:Economic value generated and distributed -

	2017
Income + (cash flows) sale of real estate + cash flows generated in financing activities	20,064,915.00
Other Income (dividends collected, interest collected, resources for sale of AF and royalties)	906,297.00
Direct economic value created (DEV)	20,971,212.00
Operating costs (operating costs)	12,272,876.87
Salaries and social benefits for employees	2,445,541.00
Payments to suppliers of capital (dividends paid, interest paid, payments of long-term bank loans)	5,767,450.00
Payments to governments (taxes on profits)	961,246.00
Investments in the community	44,204.89
Distributed economic value (DEV)	21,491,318.76
Economic value withheld (EVW)	-520,106.76

103-9. Management Approach

Innovation is one of the five strategic pillars upon which we have built sustainable and responsible growth over more than 100 years. A decisive factor in that growth has been the ability to clearly understand the present and future needs of our clients and consumers and provide solutions with unique value through our extensive (and growing) portfolio of products and services.
Through a continuous creation process and idea-to-launch methodology, our innovation area conceptualizes, develops and markets our products and services, allowing us a culture of disruptive product innovation, to a position as customer-focused, high-performance leaders and to anticipate and manage market risks and thus transform quickly, profitably and successfully.

103-11. Management Approach

DMA: Health, safety and risk prevention.

Culture of safety and risk prevention

Through the unification of strategies and continuous improvement processes, managed by the Environmental Control, Safety and Hygiene (CASH for its initials in Spanish) area, we safeguard the integrity and well-being of our employees; we prevent and mitigate incidents that affect the environment, and maintain a culture of safety and risk prevention, thereby ensuring the continuity of our operations.

403-2. Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

Since 2012, the area of Control of Environmental and Hygiene Security operates under a strategic plan of incidence follow-up and prevention of workplace accidents and environmental damage.
Thanks to this continuous effort, during 2017 we managed to reduce the rate of accidents by 4%, as well as reducing by 21% the rate of absent days.
Accident rate 2017 -

Year	Gender	Accidents	Accident rate*	Days lost due to accidents	Rate of days lost due to accidents**
2017	Female	68	1.50	1,024	22.52
	Male	147	2.00	2,423	33.02
	Total	215	1.81	3,447	29.00

Accident rate 2016 -

Year	Gender	Accidents	Accident rate*	Days lost due to accidents	Rate of days lost due to accidents**
2016	Female	101	2.14	2,164	45.85
	Male	117	1.74	2,094	31.11
	Total	218	1.9	4,258	37.18

(*) The rate of accidents expresses the number of accidents during the year in relation to the total man-hours worked multiplied by the factor 200,000.

(**) The rate of absent days is expressed comparing the total of lost days during the year with total man-hours worked multiplied by the factor 200,000.

The information here presented covers all the collaborators of Grupo Herdez, considering the company doesn’t count with sub-hired personnel.

The total number of accidents we report is based on the Report of the Unified Self-Determination System (SUA in Spanish), that includes workplace accidents, workplace sickness, and relapses.

The presented accidents and days match with the report given to Social Insurance.

It includes only those indicators that the company manages and that are calculated based on the methodology of the Global Reporting Initiative version G4 considering:

PI-4. Healthy Eating

This year, the Healthy Eating Program was extended to our units in Los Mochis, Sinaloa, bringing the number of locations which run the program to four, along with Mexico City, San Luis Potosí, and Estado de México.
The program provides our employees with dietary assessment through healthy eating plans and monthly check-ups. In 2017, 2,570 consultations were given and our employees lost a total of 1,341 kg.

103-12. Management Approach

One of Grupo Herdez' priorities is to provide a working environment where our employees can develop their personal and professional abilities to the full. It is, therefore, highly important to attract, develop and retain the best talent, through training plans, ongoing development and feedback, merit awards, respect for collective bargaining and a culture of ethical performance.

401-1. New employee hires and employee turnover

The following tables contain the new hires and the employee turnover segmented by age group, genre and region during 2016.
New male hirings -

Male
	<30	30 - 50	>50	Total
Administrative	169	119	2	290
Operations	313	54	9	376

New hires for women -

Female
	<30	30 - 50	>50	Total
Administrative	139	43	1	183
Operations	377	89	13	479
				1,328

Casualties during the male year -

Male
	<30	30 - 50	>50	Total
Administrative	192	317	46	555
Operations	1,333	166	23	1,522

Casualties during the female year -

Female
	<30	30 - 50	>50	Total
Administrative	124	106	12	242
Operations	1,459	292	43	1,794
				4,113

New hires by gender

Male rotation -

Male
	<30	30 - 50	>50	Total
Administrative	28%	19%	18%	21%
Operations	138%	26%	21%	88%

Female rotation -

Female
	<30	30 - 50	>50	Total
Administrative	29%	17%	41%	23%
Operations	138%	35%	9%	83%
Total	102%	23%	18%	53%

Turnover by gender

Turnover: Number of employees that leave the company voluntarily or by retirement/fired (number of leaves/labor force) * 100.

In the turnover, only personnel with indefinite contracts is contemplated, the 53% turnover represents the joint turnover of Grupo Herdez, Helados Nestlé, and Nutrisa, so the individual turnover of Grupo Herdez was 20%, Helados Nestlé 14%, and Nutrisa 140%, this last one being affected mainly from the turnover in stores, natural behavior in retail.

Nutrisa® continues to work in the development of strategies for the capture of talent in stores and so reduce turnover.

Region: for Grupo Herdez the region is determined based on the location and payment type of our collaborators with indefinite contracts, the administrative personnel is all the personnel that can be found in corporate facilities and receive a biweekly payment, the sales collaborators and tuna vessels are grouped in this section due to the variability in quantity and the fact that they’re not adhered to collective agreements, in the case of the operative collaborators they are all those that perform operative tasks in plants, distribution centers, and Nutrisa stores, the majority of these receiving payment per-line, and/or taking part in collective agreements.

401-2. Benefits provided to full-time employees that are not provided to temporary or part-time employees

The welfare benefits offered to our employees are above the mandatory benefits provided for in the Federal Labor Law (Ley Federal del Trabajo, LFT) and are a common denominator across all companies in the Group.

Employee Benefits

All personnel is offered life insurance, public health services, disability coverage, maternity or paternity leave, grocery vouchers and pension fund. Major medical insurance is offered only to managers and directors.We have a Gender Equality Policy to promote equality in the workforce. The salary for each category or vacant position is set without gender distinction.

102-52. Reporting cycle

Year after year, our Integrated sustainability report presents the results, programs and actions in the areas of finance, social and environment that took place during the period.

102-53. Contact point

Corporate Offices
Monte Pelvoux 215, Col. Lomas de Chapultepec, Del. Miguel Hidalgo, C.P. 11000 México, D.F., México

Telephone: +52(55) 5201-5655

Grecia Domínguez Leyva

gdominguezl@herdez.com

102-54. Description of the degree to which the GRI standards have been applied

The sustainability information has been compiled in accordance with the Global Reporting Initiative (GRI) Standards, Core option, the Sustainable IPC of the Mexican Stock Exchange, the principles of the United Nations Global Compact and the United Nations Sustainable Development Goals.

It should be mentioned that the report covers all the Group's strategic areas and that the information contained therein was obtained through the social responsibility committees, key areas, and senior management, who provided consolidated data for each indicator.

102-55. GRI content index

GRI content index

102-56. External assurance

For the fourth consecutive year, our sustainability information has been audited by Ernst & Young México (EY).

103-1. Management Approach

In Grupo Herdez we continue to work on strengthening a culture of legality with workers, clients, suppliers and civil society organizations. Year after year, we reinforce the knowledge and diffusion of the Code of Ethics and grievance mechanisms, such as the 01 800 Confianza line. Through training sessions, communication campaigns and initiatives we strengthen the standards and values under which we operate, thus encouraging ethical behavior in our value chain.

Furthermore, we recognize the importance of having employees and strategic partners who share our integral approach to ethics, allowing us to have regulatory agents that reject and denounce illegal acts, such as corruption, bribery and any breach of human rights; key social issues which we are facing every day and which prevent us from having fair, peaceful and inclusive societies.

*In order to achieve this goal, this year we joined forces with México Unido Contra la Delincuencia (Mexico United Against Crime), a non-profit association working on causes and actions in favor of security, justice, and legality.

*Goal number 16 of the 17 sustainable development goals of the United Nations.

205-1. Number and percentage of operations assessed for risks related to corruption and significant risks identified

The Human Resources Department, in conjunction with Internal Audit, is responsible for monitoring complaints of non-compliance with the code of ethics, including complaints and grievances related to corruption, breach of human rights and money laundering.

We do not currently perform a formal risk analysis on these topics, however, this monitoring enables us to detect the incidents that occur most frequently, for example, breach of confidence, supplier preference, undue payments and acceptance of gifts.

Once the priority topics are detected, Human Resources and Compliance set measures to reduce and prevent actions of this kind.

In 2017, we conducted a Code of Ethics reinforcement campaign in 40 percent of our locations, through training and communication tools in plants and offices. The sessions used video and education materials with 1,142 employees to reinforce knowledge of each of the points in the code of ethics, including anti-corruption and breach of human rights.

Similarly, throughout the year the Compliance/Legal area coordinated the following training and communication actions:

On-line training given by PricewaterhouseCoopers, S.C., called "Intelligence and Prevention of Illicit Transactions-Money Laundering, Fraud and Corruption" for the Treasury, Accounts Payable and Strategic Supply areas, and which was also taken by members of Supplier Development, Internal Audit, and Legal/Compliance areas. The aim of the training was to raise awareness of the negative effects of money laundering, fraud and corruption in companies and how they can be prevented.
Corporate announcement on the new obligations of legal entities according to the new General Law of Managerial Responsibilities.
Corporate announcement with link to video on money laundering prevention.
Training with an "Anti-corruption Course," in which Legal and Risk Prevention personnel assessed the Group's internal documents on the prevention of some illicit behaviors.
Code of Ethics training for Legal and Risk Prevention personnel which gave an overview of the code and other legal topics concerning anti-corruption at a national level and as it pertains to Grupo Herdez. In addition to the training, participants received copies of the Code of Ethics, and the policies on illegal payments and non-bribery, conflict of interest and gifts.

205-2. Communication and training about anti-corruption policies and procedures

In 2017, we conducted a Code of Ethics reinforcement campaign in 40 percent of our locations, through training and communication tools in plants and offices. The sessions used video and education materials with 1,181 non-union employees—equivalent to 12 percent of non-union personnel—and all 9 members of the board of directors to reinforce knowledge of each of the points in the code of ethics, including anti-corruption and breach of human rights.
Similarly, throughout the year the Compliance/Legal area coordinated the following training and communication actions:

On-line training given by PricewaterhouseCoopers, S.C., called "Intelligence and Prevention of Illicit Transactions-Money Laundering, Fraud and Corruption" for the Treasury, Accounts Payable and Strategic Supply areas, and which was also taken by 37 non-union employees and two members of the board of directors, representing 22 percent of the board. The employees came from the Supplier Development, Internal Audit, and Legal/Compliance areas. The aim of the training was to raise awareness of the negative effects of money laundering, fraud and corruption in companies and how they can be prevented.
Corporate announcement on the new obligations of legal entities according to the new General Law of Managerial Responsibilities.
Corporate announcement with link to video on money laundering prevention.
Training with an "Anti-corruption Course," in which Legal and Risk Prevention personnel assessed the Group's internal documents on the prevention of some illicit behaviors.
Code of Ethics training for Legal and Risk Prevention personnel which gave an overview of the code and other legal topics concerning anti-corruption at a national level and as it pertains to Grupo Herdez. In addition to the training, participants received copies of the Code of Ethics, and the policies on illegal payments and non-bribery, conflict of interest and gifts.

205-3. Confirmed incidents of corruption and actions taken

Incidents related to non-compliance with the Code of Ethics on topics of corruption and breach of human rights are reported confidentially through the Ética Herdez line, which is monitored by an external supplier, which periodically shares a consolidated report with the management of Human Resources and the general management of Internal Audit; Internal Audit is responsible for following up and investigating all complaints and making a decision which may range from a verbal or written reprimand to dismissal and legal action.
Taking this procedure into account, during 2017:

Seven cases of corruption were confirmed, four related to breach of confidence by accepting gifts or gratuities, one for transport supplier preferences, one related to undue payments and another for increased quotation prices for gain, through suppliers.
In addition, 13 employees were dismissed from the company as a follow-up to complaints filed during 2016.

415-1. Political contributions

In compliance with our Code of Ethics, which requires a strictly neutral stance in matters of politics and religion, Grupo Herdez and its subsidiaries make no financial and/or in kind contributions to political parties or related institutions; nor does it receive financial assistance from the government. The Group has an Ethics Committee made up of a team of six members from different areas, who join forces with our directors to provide guidance in favor of ethical and lawful conduct.

206-1. Number of demands for unfair competition, monopolistic practices against free competition and their result

201-2. Financial implications and other risks and opportunities due to climate change.

Being a leading company in the food industry, we have a high dependency on natural resources, mainly agricultural inputs and water. Therefore, to ensure the continuity of our operations and continued growth, it is vital to anticipate and manage the impacts of environmental changes.

In addition to our environmental actions to reduce air emissions and maintain biodiversities, such as reducing fuel consumption and the use of electrical energy, as well as the cogeneration of renewable energy and the Agriculture Sustainability Plan.

In 2017 we began to work on two highly challenging projects that will have a great impact on our business strategy: the Organizational Life Cycle Analysis and Climate Change Risks. These two projects will enable us to identify the key activities with the most impact, associated business risks, and efficiency opportunities, and to plan corporate environmental sustainability actions.

103-3. Management Approach

Strategic Supply

Our supply chain consists of all the activities we use to get our products and services onto the tables of clients and consumers with their characteristic reliability and quality. It includes the areas of Planning and Supply, Provisions, Production and Distribution, which work together under four strategic pillars: utility, innovation, productivity and risk management. This approach enables us to ensure the supply of necessary resources for our present and future operations and to establish mutually valuable relationships with our suppliers.

Similarly, through the Supply area and by following the guidelines of the Carbon Disclosure Project, we constantly monitor the impact of our consumption of raw materials that are highly vulnerable to environmental and forest risks, such as soy oil, palm oil, and wood.

204-1. Percentage of spending used for significant locations of operation that is spent on local suppliers.

Grupo Herdez defines local or national suppliers as those with manufacturing and transformation facilities located in Mexican territory.

Agricultural Raw Materials

All our agricultural suppliers have operations in Mexico; some suppliers of agricultural raw materials import products such as seeds to cover our supply needs, however, their operations and crops are located in Baja California, Campeche, Chiapas, Chihuahua, Coahuila, Durango, Guanajuato, Michoacán, Morelos, Puebla, San Luis Potosí, Sinaloa, Sonora, Tamaulipas, Veracruz, Yucatán and Zacatecas. In 2017, total spending on the purchase of local agricultural inputs was $1,000,000,000.00*.

Packaging Material

94.6 percent of total spending on packaging materials went to national suppliers, which is the equivalent of $2,633,108,329* and only 5.4 percent, $148,879,862*, went to foreign suppliers.

Raw Materials - Strategic Supply

Only 10.3 percent of non-perishable raw materials are purchased from foreign suppliers, equivalent to $415,366,961*, the remaining 89.7 percent, $3,610,758,863*, is from local suppliers.

*Figures expressed in Mexican pesos (MXN)

301-1. Materials used by weight and volume

During 2017, the total of renewable materials, including agricultural source materials used was:
Materials used by weight and volume -

Renewable materials	2016	2017
Raw Materials
Acids	640	665
ADB mixes	603	639
ADB Sales - Chilis	0	13
ADB Sales- Mustard mol	0	720
ADB Sales - Peppers	0	92
Alcohol	802	646
Almonds	42	48
Cereals and fibers	0	108
Chemicals	642	679
Cocoa	73	61
Cocoa	0	125
Coconut paste	3	0
Colors	107	107
Cookies	3,290	2,484
Corn oil	75	80
Concentrated lemon juice	413	384
Covers	833	1, 113
Cucumber Sting	120	100
Chocolates and derivatives	146	92
Dehydrated chilies	47	49
Dehydrated fruit	2	50
Dehydrated garlic	222	261
Dehydrated meat	28	28
Dehydrated onion	185	262
Edulcorate	15,868	15,055
Egg yolk	10,335	10,347
Egg yolk powder	0	1
Extracts	8	8
Fat	9	56
Flavors	159	278
Flours	114	0
Fruit concentrates	189	59
Frozen fruit	12	100
Grenetina	90	100
Green pea dehydrated	2,079	2,174
Gums	65	74
Ground mustard	688	0
Ice Cream	0	109
Ice cream cookies	0	910
Kernell oil	887	847
Lemon powder juice	2	2
Liquid lemon juice	45	100
Milk and derivatives	1,969	1,448
Monoglyceride	8	6
Mustard	1,260	1,260
Nut	30	25
Oils, fats and derivatives	29	33
Oil resins	37	37
Palm oil	24	34
Pectins	32	24
Peppers	207	121
Polydextrose	189	186
Refined salt	6,209	6,238
Salts	93	67
Seasonings	23	12
Seeds and cereals	0	107
Semolina	67,759	73,641
Sliced olives	2	2
Soy oil	104,356	104,136
Spices	219	199
Starches	3,189	3,164
Stabilizers	12	30
Stabilized fruit	2	160
Sugar	8,283	8,295
Sweeteners	0	5
Syrups	270	262
Tea	103	120
Textured soy	47	60
Toppings	64	103
Tomato paste	21,632	19,740
Vegetal protein	185	205
Vegetable shortening	0	30
Vinager	1,480	2,581
Vitamins and minerals	0	0
Vitamin premixes	23	21
Water resins	0	1
Wheat bran	552	586
Agricultural raw materials
Chamomile tea without sanitizing	2,073	52
Clara de costa honey	1,225	1, 329
Fresh whole onion Exp.	2, 399	3,155
Frozen sliced strawberry 4X1	209	112
Frozen whole strawberry 4X1	146	195
Green tomato Exp.	149	156
Ground pineapple 4X1	1,335	958
jalapeno pepper with tail	1,657	2,820
jalapeno pepper without tail	21,015	21,613
Large dried mild chili pepper 2nd	33,712	46,342
Large mild chili pepper in pieces 1st	1,651	975
Lemon tea without sanitizing	2,035	1,206
Mushrooms in pieces and sliced	3	15
Pasilla chili in piece 1st	668	701
Pasilla chili 2nd	704	700
Raw sesame seeds Exp.	9,176	11,712
Red tomato Exp.	653	690
Roasted peanuts Exp.	7,644	8,192
Strawberry puree with seed 4X1	2,112	1,189
Tomato for puree	181	141
Yellow sweet corn	1,744	1,699
Total in tons	347,602	365,920

Renewable Material: Renewable Material with abundant resources, that is quickly replenished by natural cycles and agricultural processes, in a way that the services of the resources and others related to them are not endangered and will be at the disposal of the next generation.

*Due to the trackability and effectiveness of our measurements regarding packaging materials derived from the number of resources and of different purchase units, from 2017 onwards, the total volume of packaging material will not be reported.

414-1. New suppliers that were screened using social criteria

414-2. Negative social impacts in the supply chain

408-1. Operations and suppliers at significant risk for incidents of child labor

As a measure to avoid the risk of employing child labor throughout our value chain, especially in the most vulnerable sectors like agriculture and fishing, we maintain strict control over our hiring processes on fishing vessels and have a purchasing policy and supplier code containing clauses that prohibit the hiring of suppliers who employ child labor or forced labor.

102-23. Chair of the highest governance body of the organization

The Chairman of the Board, Héctor Hernández Pons Torres, is also the Chief Executive Officer.

102-24. Nominating and selecting the highest governance body and its committees

Board members are ratified by shareholder vote at the Annual Meeting. To be selected, Board members must meet the following requirements: i) professional training in economic-administrative sciences, preferably with a master’s degree in those areas; ii) twenty years’ minimum professional experience in executive positions with consumer companies and/or the finance sector; iii) experience as a board member in manufacturing industry companies and/or the finance sector; and iv) belong to business organizations.

102-25. Processes for the highest governance body to avoid conflicts of interest

Each Board member signs a declaration of absence of conflict of interest, and each Committee has regulations that establish its functions and relationship with the Board of Directors. Furthermore, the Code of Ethics, a binding document that is obligatory for all employees, contains clauses to avoid conflicts of interest.

102-26. Role of highest governance body in setting purpose, values and strategy

The Board meets at least quarterly and has intermediate bodies in charge of overseeing the management and execution of the Company’s objectives. A sustainability performance report is presented during the board meetings, which covers environmental performance and quality of life indicators for employees.

102-29. Highest governance body’s role in identifying and managing economic, environmental and social topics and their impacts, risks and opportunities

102-31. Review of economic, environmental and social topics

102-35. Remuneration policies for the highest governance body

In accordance with Company bylaws, the remuneration received by Board members is three 50-peso gold coins (centenary commemoration coins) or their equivalent for attending each meeting; this remuneration is not dependent on the Group’s profits.

102-36. Process for determining remuneration of the highest governance body

The Corporate Practices Committee is responsible for determining the remuneration of the Company’s senior executives, including the Chief Executive Officer.

102-40. Stakeholder groups

To create long term relationships with mutual benefit with our collaborators, consumers, stakeholders, communities, internal suppliers and governments, is of upmost importance to secure success and transcendence of our strategies and social, environmental and economic objectives.

102-41. Percentage of employees covered by collective bargaining agreements

Besides promoting the labor inclusion, we also respect the right to collectively negotiate. Of our 9,523 collaborators, 38% of them are adhered to a collective contract, growing 1% from last year.
Total collaborators: 9523.
Contributors by type of agreement -

Number of employees by collective agreement	Number of non-unionized employees
3,602	5,921

102-42. Selecting stakeholders

Stakeholders are defined as those main internal and external actors with whom we have established a close win-win relationship that fosters the growth and sustainable development of both parties.

102-43. Approach to stakeholder engagement

Participation of interest groups -

Interest group	Participation approach	Key problems and evaluation	Communication channels	Frequency of participation
Shareholders	Interest regarding the impact of environmental and social risks on the performance of the Company	Continuous improvement of stock and sustainable performance	Annual report	Annual
	Positioning of the Group as a company committed to sustainable development		Web site	Permanent
			Quarterly meetings	Quarterly
Collaborators	Adequate management of resources and supplies consumed in production processes	Establish a competitive standard in our collaborators, generating talent development, confidence and commitment	Internal magazine "Hechos con Amor" Communication screens in all locations Informative brochures	Bimestral
		Execution of training programs and development plans	On-line platform Grupo Herdez University Internal printed and digital communications, with organizational and local coverage	Permanent
	Fundamental piece in the development of operations and achievement of objectives	Life programs focused on improving well-being	Survey of organizational climate and HerdezMan	Every three years
		Prestaciones y permanencia en el negocio 40/5000 Benefits and permanence in the business	Training and awareness courses	Permanent
Community	The Saber Nutrir® program is focused on improving nutrition conditions in Mexico. An important part of this movement is to improve the quality of life of the communities in which we operate, so we implement projects that boost the local economy, improve eating habits and promote food security.	Diversify projects in communities to achieve food security, as well as emphasize the purpose of it.	Web site: sabernutrir.com.mx	Permanent
		Nutritional guidance in families through projects	Web site: sabernutrir.com.mx
		Continuous monitoring of children with malnutrition	Quarterly operating report
Consumers	Positioning Grupo Herdez as a sustainable company, aware of its impacts on the environment	Transparency in our environmental and social performance	Campaigns in mass and digital media	Permanent
	Growing consumer interest in corporate sustainability practices, objectives and goals of the Company	Communicate the impact of our products on society and the environment	Web site
	Growing interest in the consumption of environmentally friendly products	Dissemination of social projects in which they can contribute to generate value	Participation in various forums (congresses, workshops, etc.)
	Promote responsible consumer practices in our customers and final consumers
Suppliers	Promote adequate procurement, use and efficient use of resources to ensure the sustainability of operations	Comply with the certification of the quality and safety system of Grupo Herdez, obtaining more than 80% of qualification	Questionnaire and feedback by email	Permanent
Suppliers		Obtain a performance evaluation (annual average) of more than 90% (quality, quantity and time)	Via email	Permanent

102-44. Key topics and concerns raised through stakeholder engagement

Table shortcode reference GRI 102-43 y 102-44:Participation of interest groups -

Interest group	Participation approach	Key problems and evaluation	Communication channels	Frequency of participation
Shareholders	Interest regarding the impact of environmental and social risks on the performance of the Company	Continuous improvement of stock and sustainable performance	Annual report	Annual
	Positioning of the Group as a company committed to sustainable development		Web site	Permanent
			Quarterly meetings	Quarterly
Collaborators	Adequate management of resources and supplies consumed in production processes	Establish a competitive standard in our collaborators, generating talent development, confidence and commitment	Internal magazine "Hechos con Amor" Communication screens in all locations Informative brochures	Bimestral
		Execution of training programs and development plans	On-line platform Grupo Herdez University Internal printed and digital communications, with organizational and local coverage	Permanent
	Fundamental piece in the development of operations and achievement of objectives	Life programs focused on improving well-being	Survey of organizational climate and HerdezMan	Every three years
		Prestaciones y permanencia en el negocio 40/5000 Benefits and permanence in the business	Training and awareness courses	Permanent
Community	The Saber Nutrir® program is focused on improving nutrition conditions in Mexico. An important part of this movement is to improve the quality of life of the communities in which we operate, so we implement projects that boost the local economy, improve eating habits and promote food security.	Diversify projects in communities to achieve food security, as well as emphasize the purpose of it.	Web site: sabernutrir.com.mx	Permanent
		Nutritional guidance in families through projects	Web site: sabernutrir.com.mx
		Continuous monitoring of children with malnutrition	Quarterly operating report
Consumers	Positioning Grupo Herdez as a sustainable company, aware of its impacts on the environment	Transparency in our environmental and social performance	Campaigns in mass and digital media	Permanent
	Growing consumer interest in corporate sustainability practices, objectives and goals of the Company	Communicate the impact of our products on society and the environment	Web site
	Growing interest in the consumption of environmentally friendly products	Dissemination of social projects in which they can contribute to generate value	Participation in various forums (congresses, workshops, etc.)
	Promote responsible consumer practices in our customers and final consumers
Suppliers	Promote adequate procurement, use and efficient use of resources to ensure the sustainability of operations	Comply with the certification of the quality and safety system of Grupo Herdez, obtaining more than 80% of qualification	Questionnaire and feedback by email	Permanent
Suppliers		Obtain a performance evaluation (annual average) of more than 90% (quality, quantity and time)	Via email	Permanent

102-45. Entities included in the consolidated financial statements

Grupo Herdez is structured in the following way:

102-46. Explanation of the process for defining the report content

In 2016, using GRI methodology and by involving our main stakeholders—suppliers, employees, and customers—in interviews, focus groups and scoring on a scale of 1 to 5, we updated our materials study to identify the topics with the greatest impact by and on the company.In 2017, we continued to work on the priority topics detected during 2016: ethics and anti-trust, risk management, supply chain management, environmental management and operating efficiency, customer health, legal compliance, business development, economic performance, innovation, product labeling, occupational health and safety, commitment and working conditions, and community engagement.Also during 2017, we held dialog sessions with the employees responsible for following up on each material topic to establish the management approach (DMA) for each one. These meetings addressed the how, why and what we are doing to mitigate the negative and enhance the positive impacts.The results of the meetings can be found in the management approaches of each section within the GRI content index.

102-47. Material topics

In the following, we show the limits (coverage) for every material aspect.

	Material aspects	Limits (coverage)
		*Internals	**Externals
High relevance	Ethics and anti-corruption	Grupo Herdez	Suppliers and contractors
	Risk management	Grupo Herdez	Suppliers (contractors)
	Supply chain management	Manufacturing and marketing companies	Suppliers
	Operational efficiency	Manufacturing and marketing companies	N/A
	Consumer's health	Manufacturing and marketing companies	Marketer and transporters (Yes, third parties)
Medium relevance	Legal compliance	Grupo Herdez	N/A
	Business development	Grupo Herdez	Partner companies, financing entities
	Economic performance	Grupo Herdez	N/A
	Innovation (of products and processes)	Manufacturing and marketing companies	Suppliers of raw materials, equipment and technology
	Product labeling	Manufacturing companies	Authorities
	Safety and health of employees	Grupo Herdez	Contractors
	Commitment and work climate	Grupo Herdez	N/A
	Environmental management	Manufacturing companies	Agricultural and packaging suppliers

* Internal Limits: Subsidiaries were the aspect is material, in other words, the impact is significant.

**External Limits: Entities outside the company, but linked to the activities of it, in which the aspect is material, or in other words, where the impact is significant.

102-48. Effect of any restatements of information and the reasons for such restatements

There were no restatements of information.

102-49. Significant changes in scope

This year, due to the traceability of information we are not reporting the total volumes of our packaging materials.

This year, we are incorporating agricultural supply information into the supply chain information, as the total volume of raw materials acquired throughout the year and the total number of suppliers.

In the environmental topic, this year's report includes consolidated information from previous years to enable the reader to identify and understand the performance in 2017 compared to previous years.

Similarly, due to its final destination, we decided to report captured rainwater separately from our total captured water during 2017.

102-50. Reporting period

The scope of the information in this report is from January 1, 2017 to December 31, 2017.

102-51. Date of most recent report

The most recent previous report covered the most important events from January 1, 2016 to December 31, 2016.

102-1. Name of the Organization

Grupo Herdez, S.A.B. de C.V.

102-2. Primary brands, products and services

We are leaders in the processed food sector and one of the main players in the ice cream category in Mexico, and among the leaders in the Mexican food segment in the United States.
We participate in a wide range of categories, including burritos, canned vegetables, guacamole, home-style salsas, honey, ice cream, jam, ketchup, mayonnaise, mole sauce, mustard, organic foods, pasta, spices, tea, tomato puree and tuna.

We sell our products through a portfolio of exceptional brands, which include Aires de Campo®, Barilla®, Búfalo®, Chi-Chi’s®, Del Fuerte®,Don Miguel®, Doña María®, Embasa®, Helados Nestlé®, Herdez®, La Victoria®, McCormick®, Nutrisa®, Wholly Guacamole® and Yemina®.

In addition, we have distribution agreements in Mexico with Kikkoman®, Ocean Spray® and Reynolds®.

102-3. Location of the organization’s headquarters

Our corporate headquarters are located in Mexico City, at Monte Pelvoux 215, Lomas de Chapultepec, C.P. 11000.

102-4. Countries where the organization operates and markets served

We are present in 18 countries in 6 different regions around the world:
North America

Canada

Central America

Nicaragua
Costa Rica
Guatemala
Honduras
El Salvador

Caribbean

Dominican Republic
Cuba

Europe

Espain
United Kingdom
Russia
Czech Republic
Germany

Africa

Dubai

Oceania

New Zealand

102-5. Nature of ownership and legal form

We are a mercantile company which has traded on the Mexican Stock Exchange since 1991 under the symbol HERDEZ*, and since 1997 on the OTC market under the symbol GUZBY. We are also one of 30 companies that form part of the Sustainable Price and Quotations Index, which recognizes those companies with the best social, environmental and corporate governance practices.

102-7. Scale of the organization

15 plants
22 distribution centers
7 tuna vessels
9,523 employees
20,065 mp in Net Sales
3,295 mp EBITDA
1.9% in Social Investment (1)

mp: Million pesos
The Company was founded in 1914 and has been listed on the Mexican Stock Exchange since 1991 under the symbol HERDEZ * and on the OTC under the symbol GUZBY (Level 1 ADR).

102-8. Number of employees by employment contract (permanent and temporary), by gender

Year	Regions	Permanent	Temporary	Total
2017	Managerial	2,392	149	2,541
	Operations	5,319	1,663	6,982
	Total	7,711	1,812	9,523

For Grupo Herdez, the sites with significant operations are tuna vessels, distribution centers, offices, plants and Nutrisa® stores in Mexico.

73% of our collaborators belong to operational activities and the other 27% to administrative ones.The sales collaborators and tuna vessels are grouped in the administrative area, due to the variability of quantity and the fact that they’re not linked with collective agreements. In the operative area, collaborators from the Nutrisa® stores, plant personnel and personnel in distribution centers are being contemplated.

Year	Gender	Permanent	Temporary	Total	Percentage
2017	Men	4,408	1,083	5,491	58%
	Women	3,303	729	4,032	42%
	Total	7,711	1,812	9,523	100%

Year	Gender	Union	No union	Total
2017	Men	1,098	4,393	5,491
	Women	1,091	2,941	4,032
	Total	2,189	7,334	9,523

We do not manage part-time contracts, and all the collaborators including the ones with temporary contracts have a direct contract from the company, we also don’t count with reduced shifts.

Similarly, with the purpose of encouragement to include people with disabilities in the workforce, Grupo Herdez this year takes part in the “Éntrale” initiative (driven by the Mexican Business Council), in which the main objective is to foment an inclusive culture that permits the integration of any person with disabilities to the company. Today, we count with 19 collaborators with varied capabilities and locations, this alliance with the objective of increasing this number. Table shortcode reference GRI 102-8:Number of employees with disabilities -

Year	Gender	Type of disability	Age range	Total
2017	Men	Hearing disability (5) Visual disability (1)	27 - 40 years	6
	Women	Hearing disability (8) Motor disability (3) Intellectual disability (2)	21 - 42 years	13
	Total			19

102-9. Supply chain

For Grupo Herdez, the tracking of our prime materials and the relationship with our providers is of utmost importance to guarantee that our products reach our consumers’ tables in time and form, with the quality that distinguishes us.We count with a diversified supply chain, without depending on any supplier, that caters itself through two main axes: Agricultural Supply and Strategic Supply. In the former’s case the process of obtainment of agricultural supplies of the best quality is composed by six stages:

And in the case of strategic supply the process is composed of 4 stages:

We count with 129 suppliers of agricultural source materials distributed throughout Mexico, in the states of Baja California, Campeche, Chiapas, Chihuahua, Coahuila, Durango, Guanajuato, Michoacán, Morelos, Puebla, San Luis Potosí, Sinaloa, Sonora, Tamaulipas, Veracruz, Yucatán, and Zacatecas. In 2017, the purchase of agricultural supplies represented an investment of one thousand million pesos.
Similarly, we count with 3,839 suppliers of which 3,446 take part in our supply chain, providing us with raw materials, packing materials, manufacturing services and indirect services, with a value of more than fourteen thousand million pesos.

102-10. Significant changes to the organization and its supply chain

During 2017, there were no significant changes in the supply chain.

102-11. Indicate how the organization applies the Precautionary Principle

Grupo Herdez, aware of the environmental, safety and quality risks that may arise in the framework of its operations and to ensure that its impacts on society and the environment are positive, approaches the precautionary principle (environmental, safety and quality risks) in two stages.

Internally, through the Environmental Control, Safety and Hygiene (CASH) area, whose aim is to safeguard the integrity of employees and facilities, support operating continuity through compliance with applicable regulations and collaboration in the protection of assets.

Each of our locations has a work program aligned with the CASH goals of Grupo Herdez; the program is based on risk studies and backed by safety and hygiene regulations to measure risks pertaining to machinery, equipment, storage, chemical control, work environment, noise, and high and low temperatures.

Through CASH, i) we conduct an awareness study on the culture of safety, health and environment by interviewing employees and identifying situations of risk and offer solutions and/or recommendations to the authorities derived from environmental impact studies prior to starting new projects; ii) We perform Workplace Safety Analyses, with which we cover safety, health, and environmental risks.

In addition, we have environmental risk studies, injury prevention plans and internal civil protection programs.

Currently, the Safety and Hygiene Commissions meet monthly, bi-monthly or quarterly depending on the work schedule for each location. Each plant also has emergency brigades responsible for various topics, including environmental risk management and prevention of damage to personnel and installations.

Prevention Plans

Since 2016, CASH has been developing Environmental Control, Safety and Hygiene within the World Class Manufacturing (WCM) outline; the project is expected to be finished in 2018.

Similarly, we have a major emergency plan, designed to respond to any contingency in plants and distribution centers. The plan involves brigades which support and coordinate communication between affected, adjoining and corporate areas. Five contingencies arose in 2017.

Membership in Associations

In 2017, we coordinated with the Industrial Zone Users Union (UUZI) on mutually beneficial works concerning prevention, safety, hygiene and the environment. In addition, we participated in Coparmex as a consultant and adviser on safety and hygiene and environmental matters and were active members of the CONMEXICO safety committee.

Certifications

1. Environment

Clean Industry Certification, issued by the Federal Environmental Protection Agency (PROFEPA). In 2017, we maintained our certification in six plants and distribution centers. In addition, two sites have an Environmental Leadership program, as well as tobacco smoke-free space initiatives in eight sites, of which six have now been verified.

1. Safety

Safe Industry certification issued by the Secretariat of Labor and Social Welfare (STPS). In 2017, four plants and a distribution center joined the program.

1. Quality

Certification issued by the Federal Commission for Protection against Health Risks (COFEPRIS). In 2017, our seven fishing vessels retained their certificates.

1. Civil Protection

Every year, an internal protection program is run, audited by internal personnel and focused on the prevention of fire, spills, leaks and other risks.

1. CONAGUA

CONAGUA is a federal agency that regulates the use and exploitation of water, issues licenses for water withdrawal and oversees water quality.

102-12. Social, environmental and economic initiatives

Environment

Community Engagement

102-13. Membership of associations

Industry

Mexican Association of the Coffee Production Chain (Asociación Mexicana de la Cadena Productiva del Café, AMECAFE)
National Chamber of Metal Can Manufacturers (Cámara Nacional de Fabricantes de Envases Metálicos, CANAFEM)
National Chamber of the Food Preserves Industry (Cámara Nacional de la Industria de Conservas Alimenticias, CANAINCA)
Mexican Council of the Consumer Products Industry (Consejo Mexicano de la Industria de Productos de Consumo, CONMEXICO)
Consejo Mexicano de la Industria de Productos de Consumo (CONMEXICO)
National Agricultural Council (Consejo Nacional Agropecuario, CNA)
National Council of Organic Production (Consejo Nacional de Producción Orgánica, presided over by SAGARPA)
International Federation of Organic Agriculture Movements (IFOAM)
Mexican Organic Movement (Movimiento Orgánico Mexicano)

Business

Mexican Association of Electronic Business Standards (Asociación Mexicana de Estándares para el Comercio Electrónico, AMECE)
Foreign chambers of commerce: Canadian, British, Spanish and American
Confederation of Industrial Chambers (Confederación de Cámaras Industriales, CONCAMIN)
Business Coordinating Council (Consejo Coordinador Empresarial, CCE)

Sustainability

Mexican Center for Philanthropy (Centro Mexicano para la Filantropía)
Private Sector Study Commission for Sustainable Development (Comisión de Estudios del Sector Privado para el Desarrollo Sustentable, CESPEDES)
Business Commitment for the Integral Management of Solid Waste (Compromiso Empresarial para el Manejo Integral de Residuos Sólidos)
Basin Councils (Consejos de Cueca, in CONAGUA)
ECOCE, A.C.
Iniciativa GEMI
United Nations Global Compact

102-14. Statement from the Chief Executive Officer

Statement from the Chief Executive Officer

102-16. Values, principles, standards and norms of the organization

Mission

To place quality foods and beverages within the reach of consumers, under brands of growing prestige and value.

Vision

Grupo Herdez aims to consolidate, grow and position itself as a leading company in the food and beverage industry, recognized for the quality of its products and the effectiveness of its efforts in satisfying consumers’ needs and expectations, within a framework of optimal consumer care and service, under strict profitability criteria, strategic potential and sustainability.

Values

Honesty, results-based approach, teamwork and trust.

102-17. Mechanisms for advice and concerns about ethics

All levels of authority within the company and stakeholder groups, including suppliers and employees, are governed by our codes and policies (http://grupoherdez.com.mx/sustentabilidad/codigos-y-politicas/), which are constantly reinforced through training sessions, communications, and meetings.

To prevent any kind of unethical behavior or situation which undermines the integrity of our employees and/or suppliers, and consequently the company, we have grievance mechanisms that are monitored by an external supplier and assessed by the internal audit team and the Human Resources Department.

Our internal stakeholders can file complaints through:

E-mail: confianza@herdez.com, etica@nutrisa.com
E-mail and direct line to the supervisors of Human Resources, Internal Audit and Legal
Physical mailboxes inside different locations
Toll-free line 01 800 CONFIANZA (01 800 266 342 692) or (Nutrisa 01800 312 98 32)

These mechanisms are available 365 days a year, 24 hours a day.
The most used mechanism is the 01 800 CONFIANZA line which received more than 60 percent of the grievances or complaints filed; during 2017, 31 grievances and 55 complaints were received, of which 95 percent have been resolved, the remaining 4 complaints are in the process of review at the close of this report.

102-18. Corporate governance structure and committees

Government Organs	Women			Men
	Less than 30 years	30 to 50 years	More than 50 years	Less than 30 years	30 to 50 years	More than 50 years
Board of Directors	-	-	1	-	-	8
Audit Committee	-	-	6	-	-	4
Corporate Practices Committee	-	-	-	-	-	6
Risk Committee	-	-	-	-	-	7
Ethics and Transparency Working Group	-	-	-	-	-	6

In 2017, our corporate governance structure remained the same.All members of council are more than 50 years old, and 90% of them are male.

Functions of the Committees
Committee	Functions
Audit Committee	Provide support, opinion and advice on guidelines on control and internal audit, accounting policies, financial statements, contracting of external auditor, risks to which the company is exposed, information and communication policies with shareholders and the market.
Corporate Practices Committee	Provide your opinion about policies and guidelines for the use or enjoyment of the assets that make up the company's assets, the operations that the company intends to hold, the appointment and election of the CEO, policies for the granting of loans, loans or credits; dispensations so that business opportunities can be exploited; assist the Board of Directors in the development of the activities indicated in article 42 of the Securities Market Law and those indicated in the Code of best corporate practices.
Risk Committee	Identify the risks that affect the achievement of the objectives of the area (s) under their responsibility, measure them, analyze them and monitor them; formulate appropriate response mechanisms (controls) for the risks identified and implement them in an efficient manner; and establish the basis for reporting to the Risk Committee.
Ethics and Transparency Working Group	Dictate ethical behavior guidelines and guidelines; contribute to the ethical management of the Company through normative documents (policies and procedures); resolve controversies of appreciation, conflicts of interest, and conduct among interest groups.

Governing bodies
Intermediates	Interns
Audit Committee	Risk Committee
4 counselors (100% independents)	7 members
Corporate Practices Committee	Ethics and transparency working group
5 counselors (60% independents)	6 members

102-19. Process for delegating authority for economic, environmental and social topics from the highest governance body

During the quarterly Board meetings, a sustainability performance report is presented, which includes environmental performance and quality of life indicators for collaborators. The board members responsible for the report are:

Labor Practices: José Manuel Rincón Gallardo
Environmental Practices/Climate Change: Luis Rebollar Corona
Corporate Governance: José Roberto Danel Díaz

All Board members are over 50 years and 90 percent are men.

102-20. Executive-level responsibility for economic, environmental and social topics

Labor Practices: José Manuel Rincón Gallardo
Environmental Practices/Climate Change: Luis Rebollar Corona
Corporate Governance: José Roberto Danel Díaz

Name	Age	Members Since	Governing Bodies	Responsibility
Related patrimonial members
Héctor Hernández-Pons Torres	>50	1991	Corporate Practices Committee	Chairman of the Board of Directors and CEO
Enrique Hernández-Pons Torres	>50	1991	Corporate Practices Committee	Vicepresident
Flora Hernández-Pons de Merino	>50	2004	Corporate Practices Committee
Independent board members
Carlos Autrey Maza	>50	1991	Audit Committee
Enrique Castillo Sánchez Mejorada	>50	1991
José Roberto Danel Díaz	>50	2003	Audit Committee & Corporate Practices Committee	Corporate governance and corporate practices
Eduardo Ortiz Tirado Serrano	>50	2003	Comité de Auditoría	Corporate governance and corporate practices
Luis Rebollar Corona	>50	2004	Corporate Practices Committee	Environmental Practices
José Manuel Rincón Gallardo (EF)	>50	2005	Audit Committee & Corporate Practices Committee	Labor practices

All members of council are more than 50 years old, and 90% of them are male. Additionally, since 2016 in Grupo Herdez we count with an energy committee, which is integrated by the directives of the different areas of the firm, including the chairman and CEO Hector Hernández-Pons Torres, with the committee being responsible for defining the strategic objectives in energy matters, such as energy purchase, cogeneration, efficiency projects, etc., and takes part twice a year.

102-21. Consulting stakeholders on economic, environmental and social topics

In 2016, using the GRI indicator methodology and through interviews, focal groups and voting with a 1 to 5 scale, from our main interest groups: suppliers, collaborators and customers, we updated our study material with the final purpose of knowing the subjects of higher impact from, and to the company.In 2017, we continue to work in relation to the subjects considered priority during 2016: ethics and anticorruption, management of risks, management of the supply chain, environmental management and operational efficiency, consumer health, legal fulfillment, business development, collaborators, commitment and work environment and link with the community. Additionally, during 2017 dialogue sessions took part with the collaborators responsible of tracking every subject material to establish the management focus (DMA) of each one of them.

102-22. Composition of the highest governance body and its committees

During 2017, our corporate governance structure remained equal to last year.

Governing Bodies	Women			Men
	Less than 30 years old	30 to 50 years old	More than 50 years old	Less than 30 years old	30 to 50 years old	More than 50 years old
Board of directors	-	-	1	-	-	8
Audit Committee	-	-	6	-	-	4
Corporate Practices Committee	-	-	-	-	-	6
Risk Committee	-	-	-	-	-	7
Ethics and transparency working group	-	-	-	-	-	6

All members of council are more than 50 years old, and 90% of them are male.

Governing Bodies
Intermediates	Internal
Audit Committee	Risk Committee
4 counselors (100% independent)	7 Members
Corporate Practices Committee	Ethics and transparency working group
5 councerlors (60% independent)	6 members