Sustainability report

AAK Sustainability Report 2020 Progress, commitments and impact | 11 Our most material impact • AAK’s production process is resource intensive, depending on raw materials and energy with a high environmental impact. There are also risks for negative impact from our supply chain related to deforestation, greenhouse gas emissions and human rights violations. • We are proud of the significant positive impact from AAK’s value chain on sustainable development. Together with our customers, we drive sustainability to bring better solutions to market that deliver a great taste experience as well as sustainability benefits. 2020 – a year of raised ambitions In the consumer goods industry, sustainability standards are being raised as a result of increasingly conscious consumers and national and global policy initiatives, like the UN Sustainable Development Goals and the Paris Agreement. At AAK, we welcome these developments and work hard to meet and exceed the legal requirements and sustainability expectations of our stakeholders. Listening to our stakeholders Each year we monitor materiality, new and upcoming legislation and benchmark our sustainability practices against those of investors, retailers, customers and competitors, to ensure that we have our house in order and the right level of ambition. During 2020, we gained further insight by reaching out to many of our key customers with deep-dive interviews about their sustainability ambitions. This enabled us to identify areas where we can improve in order to further strengthen our position as a first choice for plant-based oil solutions. We have raised our ambitions within several key areas: • By 2025, our palm oil and soy supply chains shall be 100 percent traceable and verified free from deforestation and conversion. • We invest in new partnerships and platforms to make it possible to achieve full transparency in the palm oil supply chain. • We revisited our scope 3 greenhouse gas assess- ment in the supply chain and we are implementing Science Based Targets. • We have started analyzing the exposure to climate change-related risks on our sites in accordance with the Task Force on Climate-related Financial Disclo- sures (TCFD) recommendations. • We start to carry out human rights impact assess- ments across the supply chain. • We have started measuring the share of revenue contributing to the Sustainable Development Goals. • During 2021, we will analyze our business in relation to the EU Sustainable Finance Action plan and the EU taxonomy to make sure our reporting is in line with upcoming legislation and requirements on environment, social and governance (ESG) data. During 2020, AAK has made the following commitments: • We have signed the UN Global Compact’s Statement for Renewed Global Cooperation, emphasizing the urgent need for global cooperation to support peace, security, human rights, and sustainable development due to the impact of the Covid-19 pandemic. • We have signed the Science Based Targets initiative commitment letter. During 2021, we will set science-based targets through the Science Based Targets initiative (SBTi), driving the reduction of greenhouse gas emissions consistent with keeping global warming to 1.5°C above pre-industrial levels. • We have also signed the coconut industry’s first global Sustainable Charter, which aims to improve farmer livelihoods, lessen the carbon footprint of coconuts and boost supply to meet rising global demand.