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AAK CEO and President Johan Westman

Building sustainability

today and tomorrow

Building sustainability into our everyday activities

During the past year, AAK has seen some important progress within the sustainability area. In our supply chains we have continued to build on our strong foundations of previous years, we have further reduced the environmental impact of our operations, and we have continued to educate and train our employees in different areas of sustainability.

Sustainable development 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. Building sustainability into our everyday activities is key to achieving our vision of being the first choice for value-adding vegetable oil solutions.

All of our CSR policies and codes are based on the UN Global Compact (UNGC) and furthermore aligned with many of our customers' requirements and values, strengthening our strategic alignment. We also play an active role in supporting the delivery on United Nations’ 17 Sustainable Development Goals, adopted in 2015.

To drive sustainability progress we focus our efforts within five areas: Our Customers, Our Suppliers, Our Planet, Our People, and Our Neighbours. Based on market analyses, our stakeholders’ objectives and our own ambitions and priorities, we continuously set and achieve objectives within these areas.

Our Customers

Through our unique customer co-development approach we are very close to our customers’ businesses and over the years we have established strong customer relationships built on mutual respect and trust. Food safety is an area which is hugely important both to our customers and ourselves and we are proud that all of our production sites are food safety audited and certified in accordance with one or more internationally recognized food safety standards. Furthermore, all of our production sites processing palm oil are RSPO (Roundtable on Sustainable Palm Oil) supply chain certified.

Another 2017 highlight has been the continued progress in the implementation of our Code of Conduct for Agents and Distributors. We have furthermore continued to develop different e-learning modules on sustainability which we have found to be an efficient way of engaging and training AAK colleagues and making them an even better partner on sustainability for our customers.

Our Suppliers

Another top priority among our customers is the sustainable sourcing of raw materials. Introduced in 2009, the AAK Supplier Code of Conduct is implemented with all of our direct raw material suppliers stipulating requirements within areas such as labor and human rights, environment and corruption.

In addition to our support and full engagement in the RSPO, we continue to implement our own sustainable palm oil policy. The policy outlines our commitments on sustainable palm in general and specifically requirements for no deforestation and no development on peatlands. Despite incorporating a number of new AAK factories, which require time to implement our palm oil policy, traceability to mill remains high. As for palm oil compliance we have during the year completed a qualitative risk assessment of all of our suppliers and geospatial risk assessment of all supplier mills. We also achieved our objective of completing at least five on-site verifications of supplier mills.

Our Kolo Nafaso program in West Africa continues to progress. Kolo Nafaso focuses on support, interest-free micro credits, training, and trading directly with shea-collecting women in the region. More than 130,000 women in Burkina Faso and Ghana are now involved in the program. This is a 10 percent increase compared to the year before and our clear intention is to continue to grow and develop this very successful program.

Our Planet

Our resource efficiency has improved over the last years and this trend continued in 2017. Energy consumption, calculated per unit processed material, decreased by 3.3 percent despite a strategic decision to increase the production of highly refined products which require more energy to process.

Total direct carbon dioxide emissions per unit processed decreased by 6.3 percent, and both water consumption and water discharge also decreased, by 4.4 and 3.7 percent respectively, when calculated per processed material.

Going forward, our dedicated and responsible global operations organization will continue to work hard to improve our resource efficiency even further.

Our People

At our production sites, 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, regrettably increased from 0.6 to 0.8. One third of our production sites did not have any Lost Time Injuries during 2017. Lost Day Rate, a measurement of the severity of incidents, decreased from 19.2 to 11.6.

Conditions are very different at our sourcing sites in West Africa and here, both LTIR and Lost Day Rate unfortunately increased compared to the year before.

Due to the undesirable development within safety we have decided to revitalize our Global Safety Team with intensified efforts in achieving a zero-accident culture and risk-free workplace environment in AAK and we expect to see improvements already in 2018.

Our Neighbours

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 this to truly become part of the communities. Therefore, we have for a long time been active in these communities through sponsorship or through direct participation in projects and activities. We see it as our responsibility and part of our social license to operate to maintain a good relationship with the local communities and to contribute where it makes sense. In 2017, AAK engaged in a variety of local activities and we will continue to secure integration with the local communities in the future.

Continued sustainable growth

Our efforts to continuously improve our work within sustainability have during the past year been recognized by a number of independent assessors. The Stockholm School of Economics published a report exploring how Sweden's largest listed companies communicate their sustainability work with AAK ranking near the top. We also received the 2017 Sustainability Pioneer Award for our work to promote sustainable sourcing of shea in West Africa via our direct sourcing program Kolo Nafaso.

Furthermore, we recently received a gold rating for our sustainability work from EcoVadis which operates the first collaborative platform providing sustainability ratings and performance improvement tools for global supply chains.

Going forward, we will continue to set and achieve ambitious objectives within our focus areas, we will continue to incorporate and integrate new AAK production sites in our global CSR system and approach, and we will, above all, continue to grow our business in a sustainable way.

Johan Westman

Discover our sustainability work

Responsible sourcing

Responsible sourcing in AAK aims to continuously progress on the positive impacts our procurement has on the environment, people’s livelihoods, and their communities.

Our House of Sustainability

Sustainable growth is the key objective of our strategy. For us, it is about our responsibility towards all of our key stakeholders—the local communities where we operate, our customers, our employees, our investors, and our suppliers.