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.
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 sustainability 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 Neighbours. During 2018, we have made important progress within each of these areas.
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 sustainability areas, enabling them to be an even better partner to our customers.
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 established 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.
We have seen a solid environmental efficiency performance 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 significantly colder weather than usual, and the region where our production site in Karlshamn, Sweden is located experienced extremely warm weather during 2018. These incidents led to an increased consumption of energy and other resources. To be better prepared for the future, we will perform a climate change risk assessment at all our production sites before 2020.
We have welcomed four new sites into our reporting – two greenfields and two acquisitions. This has changed our baseline for environmental efficiency measures. From our site in Colombia, acquired in 2014, we know that by sharing best practices globally we can make a real step change in a relatively short period of time. Our site in Colombia has improved by between 28 and 68 percent on all environmental efficiency measures over the last three years.
Our Global Safety Program, aimed at achieving a zero-accident culture and a risk-free workplace environment at AAK, has been off to a good start. Lost Time Injury Rate (LTIR), defined as the number of work injuries that result in one or more days of sick leave per 200,000 working hours, improved by 25 percent across our production sites. One third of our production sites did not have any Lost Time Injuries at all during 2018.
At our sourcing operations in West Africa, where conditions are very different, LTIR has unfortunately increased compared to the year before. Safety and first aid training are ongoing in the region to reduce those figures.
During 2019, our Global Safety Team will continue to execute and improve our Global Safety Program.
As a global company, we contribute to the development of the many local communities in which we operate by creating jobs, paying taxes and doing business with local enterprises. But it takes more than that to truly become a part of the local communities. Therefore, we have been active in these communities for a long time through sponsorships or through direct participation in projects and activities.
In 2018, AAK engaged in a variety of local activities and we will continue to secure integration with the local communities going forward.
Recognized sustainability work
Our dedicated efforts to continuously improve our sustainability work have not gone unnoticed.
In early 2019, Corporate Knights Inc. released its 15th annual Global 100 list of the most sustainable corporations in the world. It ranked AAK as number 75. Corporate Knights, a Canadian based company specialized in media and investment research, had analyzed the sustainability performance of 7,500 companies.
We are of course very honored by this acknowledgement, which has been achieved thanks to our very dedicated and responsible AAK employees around the world. The recognition shows that we are on the right path with our determined and extensive sustainability work.
Whether resulting in awards or not, we will continue to drive our improvement work towards ambitions within our focus areas, we will continue to incorporate new AAK sites into our sustainability approach, and we will, above all, continue to grow our business in a sustainable and responsible way.
President and CEO