AAK sustainability report 2018

38 Soy – a versatile raw material Soy as raw material The boom of soybean utilization for industrial purposes started in the 1940s, and has since then grown expo- nentially. The main producing countries are the US, Brazil, Argentina, India, and China, and the biggest consumers are China, the US, Argentina, and Brazil. Soybean is a summer crop and its full cycle ranges from 90 to 120 days. Crop rotation is usually made with winter crops such as corn, barley, wheat, and black beans. Yields can vary but on average 1 hectare produces about 3,000 kg of soybeans and 0.4 MT of oil. Importance for AAK The soybean oil is one of the most versatile commod- ities with a large number of applications besides food. The main one is as the source of SME (soy methyl esters), or biodiesel, but it is also used as raw material in feedstuff, pharma, paint, personal care, lubricants, plastics, resins, etc. From an AAK perspective, soybean oil is rich in polyunsaturated fatty acids. It is mainly used in baking fats, mayonnaise, frying oils, salad and cooking oils, as an ingredient in margarine and wihtin our segment Special Nutrition. From a volume perspective, soy is a rather small commodity for AAK, but because of the sustainability risks in the supply chain, especially deforestation, it has been included to the list of key raw materials for responsible sourcing in 2018. Sustainable soy According to the International Sustainability Unit, TFA, CDP and Climate Focus, soy is the second largest contributor, after beef, to global deforestation. It is not primarily produced for food, but the soy meal goes into the feed industry, and the oil is used for consumer goods products or biofuels. The country in focus when speaking about deforest- ation linked to soy production is Brazil. After making significant progress in environmental protection alarming statistics have been published by Reuters, measuring the deforestation in Brazil between July 2017 and July 2018. A record high for the past decade was measured with a 13.7 percent increase compared to the previous year. This is a worrying development and calls companies like AAK to action. We have set the target in our Policy for Responsible sourcing of Vegetable Oils, to only source raw materials that have been produced without High Carbon Stock deforestation, conversion of High Conservation Value areas, and development on peatland soils. Therefore, in 2018 we have mapped our supply chains and identified the traceability levels and risks of deforestation. 91 percent is free from risks of deforestation. In 2019, we will further work on improving this score. Free from deforestation risks 91% 38 Contributes to: