Sustainability report

Managing our sustainability commitments and ambitions For AAK, sustainability is about delivering on our framework for sustainable business – The AAK House of Sustainability – throughout the business and our operations, managing risks and opportuni- ties and strengthening relations with internal and external stakeholders. Our overall sustainability objective is to support business growth and profita- bility by delivering sustainability from plant to brand supported by our purpose Making Better Happen. Sustainability governance AAK’s sustainability work, commitments, ambitions and progress are based on conclusions from the stakeholder analysis (see page 65), and is governed by the framework for sustainable business (page 9). AAK's Board of Directors has the overall responsibility for the company’s sustainability progress and perfor- mance. This responsibility also includes risk assess- ments in relation to different sustainability areas and especially with regards to climate change risks and diversity. The Board of Directors is informed regularly on sustainability and climate-related performance and AAK’s progress against set objectives and targets, risks and opportunities. The Board of Directors also approves the Sustianability Report. The Audit Committee deals with risk management, the integration of AAK Group procedures as well as with monitoring and following up on policies, codes and their implementation in the organization. The result of AAK’s sustainability and climate change risk assess- ments are presented to the Audit Committee annually where corrective actions are discussed and defined. Instances of non-compliance with policies, codes and corrective actions taken are presented to the Audit Committee on a quarterly basis. The main role of the Remuneration Committee is to assist and advise the Board on matters relating to the remuneration of the Board and senior management. This makes sure we can retain our executives and that AAK can attract the best talent in the market – to ultimately maximize shareholder value. During 2020, it was decided that ESG targets henceforth should be a qualifier for the Executive Committee's remuneration. Sustainability management The Executive Committee has the operational responsibility for AAK’s sustainability progress and performance. The responsibility for sustainability, environmental and climate-related commitments and ambitions are delegated from Board-level down to Executive Committee-level and further cascaded to the management of the organization. Monthly Exec- utive Committee meetings are held where progress and necessary actions are reviewed, including AAK’s sustainability ambitions. The Chief Strategy & Sustaina- bility Officer is a member of the Executive Committee and reports to the Board on sustainability matters. With responsibilities including sustainability, corporate strategy and people, the Chief Strategy & Sustainability Officer takes a holistic approach, involving internal and external stakeholders, to drive the sustainable strategy. Better Sourcing The Better Sourcing commitment and ambitions are guided by the AAK Group Code of Conduct, the Palm oil Policy and the AAK Code of Conduct for Suppliers of Raw Materials, risk assessments, supplier assessment tools, dashboards and procedures for due diligence. Active dialogue and engagement with suppliers and farmers are important tools in our improvement work. Progress is driven by the sustainable strategy, set commitments and ambitions. Activities are continu- ously monitored together with our Sourcing & Trading team driven by our Responsible Sourcing Managers together with specialist forums such as raw material task forces. Performance is continuously followed-up by our Global Sustainability and Global Sourcing teams. AAK Sustainability Report 2020 66