AAK sustainability report 2018

6 President and CEO: Sustainable growth – fundamental to AAK Continued progress on sustainability within our sourcing operations, a solid environmental efficiency performance, and workplace safety improvements at our production sites – these are some of AAK’s sustainability highlights during 2018 that we proudly share with you in this annual sustainability report. Sustainable growth is fundamental to AAK’s business and a key objective of our strategy. For us, sustainable growth is about our responsibility towards our key stakeholders – global and local customers, investors, suppliers, employees, and the communities in which we operate. All of our policies and codes connected to our sustain- ability work are based on the United Nations Global Compact (UNGC) and furthermore aligned with our customers’ requirements and values. We also play an active role in contributing to delivering on the 17 SDGs (Sustainable Development Goals). To make continuous progress within sustainability, we have ambitions within five focus areas: Our Customers, Our Suppliers, Our Planet, Our People, and Our Neigh- bours. During 2018, we have made important progress within each of these areas. Our Customers Our 2018 global customer survey verified that our customers appreciate us as a partner on sustainability which, of course, is very important to us. One crucial area to both AAK and our customers is food safety. We are therefore very proud that all of our production sites are certified in accordance with at least one, often several, internationally recognized food safety standards. Having successfully implemented our Code of Conduct with all employees and our Supplier Code of Conduct with our raw material suppliers, we are now making great progress with our Code of Conduct for Agents and Distributors as well. During the year, we have also continued to develop our e-learning courses. This is an effective way to engage and train our colleagues within various sustain- ability areas, enabling them to be an even better partner to our customers. Our Suppliers Sustainable sourcing of raw materials is another top priority, and also important to our customers. Here we have made important progress during the year. For example, we now have smallholder projects within our shea, palm, coconut and soy supply chains which all contribute to improved livelihoods for these farmers. In Burkina Faso and Ghana, we have seen a continued increase in the number of women engaged in our direct shea sourcing program Kolo Nafaso. This means direct engagement with more than 134,000 women. We have also conducted a survey, covering almost 1,000 of these women. The survey verified that the women find our support very valuable and it has given us useful input on how we can further improve our collaboration in the future. As for sustainable sourcing of palm oil, we continue our strong engagement with our suppliers to drive and ensure sustainability in the supply chain. The upgrade of the RSPO standard to include, among other things, a halt to deforestation was an important step forward. The changed geographic footprint of our volumes represents an opportunity for us to contribute to driving change in newer and more fast-growing markets with less of a tradition for prioritizing sustainability. This is done through strong engagement with suppliers and actively supporting local RSPO activities. However, it also represents a challenge for us to keep up our palm sustainability standard already evident in more estab- lished markets. Increased transparency is a key tool for AAK in managing this challenge: on our website we now publish our universe of mills list as well as a grievance addendum. It is important for our key stakeholders and ourselves to openly communicate about and discuss our continuous improvement journey. Our Planet We have seen a solid environmental efficiency perfor- mance during 2018 with improvements for most of our Key Performance Indicators. However, there have been challenges in certain areas, particularly related to harsh weather conditions. For example, the East Coast of the United States, where we have two production sites, suffered signifi- cantly colder weather than usual, and the region where our production site in Karlshamn, Sweden is located