Sustainability report

AAK Better Sourcing | 23 Sustainability Report 2020 Examples of actions taken during the year: • We have developed a global and regional sourcing strategy and plan to drive progress towards 100 percent traceability to plantation and a 100 percent verified deforestation-free supply base. • Supplier progress is being monitored twice a year with the help of scorecards. Focus is on implemen- tation plans and closing the gaps. • We have engaged with non-complying suppliers to discuss the issues and gaps, including agreeing on improvement plans to reach our requirements as well as suspension where appropriate. • 100 percent of our direct suppliers in Mexico and Colombia have completed a self-assessment, using our self-assessment platform. Proforest has supported with training programs and individual audits. Driving impact beyond our supply base Because of the complexity of the palm oil supply chain, involving millions of smallholder farmers, the environ- mental and social risks associated with it can only be solved by working together in cross-industry initiatives. At AAK, we engage and collaborate with everyone involved in the value chain – from our customers and suppliers to industry organizations, NGOs, local governments and smallholder initiatives – to make the palm oil supply chain more sustainable and safeguarding human rights. AAK has had a seat on the Board of Governors of the RSPO since the founding of the organization. The RSPO has played a foundational role in the understanding of sustainable palm production as well as in its contribution to sector-wide transformation. Actions in 2021 include: • Use of satellite monitoring covering our global supply base to real-time monitor the risk of deforestation in our supply base. • Continue our engagement in smallholder projects, including in Malaysia and Mexico, working with NGOs and governments. • We will collaborate in a new program in partnership with Nestlé and Musim Mas in the Leuser ecosystem in Indonesia. The program in Subulussalam is a unique oppor­ tunity to scale up the work being done with independent smallholders. The key to this work is improving small-holders’ economic security and assisting them on their journey towards sustainable production through training of village extension officers. • AAK will join the buyers action group in Tesso Nilo in Indonesia, facilitated by WWF. The pur- pose of the group is to preserve the landscapes through collective action of both producers and buyers.