Sustainability report

A three-tiered approach to success Deeply understanding our supply base • We are improving traceability and monitoring of our raw materials, linked to countries, regions, juris- dictions, and ultimately the production base and farmers. • This is needed for risk assessment, which helps us to identify and prioritize the most important issues and the positive impact AAK can have. Engaging with suppliers and smallholders • We assess suppliers via supplier questionnaires and monitoring. • We aim to increase suppliers’ and farmers’ under- standing of and their current commitment to sustainable development. Suppliers must adhere to the AAK Group Code of Conduct for Suppliers of Raw Materials and we require them to sign specific policies (e.g. the AAK Group Policy Sustainable Palm Oil). Our focus is to progress from signing towards full implementation, including the roadmaps and action plans suppliers have in place and how we can help to make transformation happen. • We are furthermore working with supplier score cards, which serve as a monitoring and engagement tool. • Audits are conducted in the supply chain based on risk, performance and priority aligned with sourcing and trading. External audits are being conducted by the relevant auditing bodies related to specific certification standards (RSPO, Rainforest Alliance, ProTerra and ISCC). Driving impact beyond our supply base • Many of the sustainability issues are complex and require wider transformation at a regional or land- scape level, even beyond AAK’s supply base. AAK is actively participating in many industry initiatives. To mention a few: board member of the Global Shea Alliance, the RSPO Board of Governors and Market development standing committee, partnerships with Solidaridad and Forever Sabah, signatories of the Sustainable Coconut Charter. Palm oil Soybean Shea Rapeseed Coconut High priority* Low priority Indirect impact * Based on volumes and social/environmental risks in supply chain Direct impact Impacts and priorities in key raw material supply chains AAK Sustainability Report 2020 Better Sourcing | 19