AAK's supplier scorecards are a valuable tool for tracking the progress of palm oil suppliers in adhering to policies. We are dedicated to sourcing palm oil responsibly, ensuring it is obtained without contributing to deforestation, peat clearance, or the exploitation of workers or communities. Since 2021, AAK updated the supplier scorecard to encourage even more transformation among suppliers.
The supplier scorecard outlines the requirements that our suppliers must fulfil to meet responsible sourcing commitments and enables us to systematically monitor suppliers’ performance through pre-defined KPIs. These include the signing of the AAK Group Policy and Code of Conduct for Responsible Sourcing of Plant-based Oils, an active RSPO membership, progress on traceability to plantation (TTP) and verified deforestation-free (VDF) volumes, implementation of timebound action plans, grievance mechanism, annual reporting, and No Deforestation, No Expansion on Peat and No Exploitation (NDPE) IRF reporting (see the figure below).
Through our policies, AAK Group Policy and Code of Conduct for Responsible Sourcing of Plant-based Oils, and contractual agreement, suppliers of AAK are required to meet commitments within production and procurement. Transparent and accountable reporting on KPIs and progress is a key part of AAK’s approach to responsible sourcing.
The scorecards provide AAK with greater transparency regarding supply chain commitments and progress, offering support to individual suppliers when needed. “Importantly, AAK's sourcing and trading team utilizes the scorecard to prioritize sustainability in their business dealings”, says Sengbee Ng, Sustainable Multi-Oil Manager at AAK.
The scorecard was introduced to suppliers through bilateral engagements and training workshops for Technical Palm Feed (TPF) suppliers as well as regional suppliers in China, India, and Turkey. In 2022 and 2023, our engagement extended to suppliers from Latin America and expanded globally.
“We succeeded with increasing awareness and progress towards achieving better sustainability performance amongst suppliers”, says Sengbee Ng. As a proof we have achieved overall Improvement op TTP by 7.4 percent tp 87% TTP in 2022 and 4.7% improvement in VDF volumes to 71% in 2022 from 67% in 2021.