STRATEGY STRATEGY

Martin Bauer Group

SUSTAINABILITY REPORT

1 SUSTAINABILITY AT THE MARTIN BAUER GROUP

4 THE COMPANY

17 OUR SUSTAINABILITY STRATEGY

24 VALUE CREATION

29 NATURE

Dear customers, dear partners, dear colleagues! 40 SUPPLY CHAIN It all began 90 years ago with locally grown peppermint and chamomile. We would like to thank all of you for sharing our passion for plants 53 every day since then. Your great ideas and tireless EMPLOYEES commitment have helped us take an even more & COMMUNITY sustainable approach to our work. We are not there yet, but we are looking forward 62 GRI INDEX to embarking on that path with you – and to the 71 ABOUT THIS REPORT | PUBLISHING INFORMATION next 90 years!

2 3 THE COMPANY THE COMPANY PASSION AND EXPERTISE

The two main ingredients in all our products

TEAS BOTANICAL EXTRACTS BOTANICAL EXTRACTS, RAW BOTANICAL RAW MATERIALS FOR FOOD AND BEVERAGES MATERIALS AND POWDERS AND POWDERS We are tea experts who develop, blend and refine all types of tea – black, FOR ANIMAL NUTRITION green, rooibos, mate – and a remarkably Our diverse portfolio features more than Our portfolio includes over 200 carefully varied range of herbal and fruit teas. 550 different tea, herb and fruit extracts, Our natural ingredients support selected botanicals. with each one providing a special touch animal health and wellbeing. Our specialists design tailored product – be it a distinctive taste, a beautiful We process our botanicals into high- concepts, picking up on current trends color, or added functional benefits. Our botanical extracts, raw materials and quality powders in different grain sizes, and creating new ones. We create powders play an important part in provid- with various bulk and tapped densities. sophisticated blends for classic tea bags, We develop our high-quality extracts to ing animals with a balanced and healthful Each powder has a unique function: it pyramid bags, pods, capsules, and loose specific requirements from conventional diet. They have various functions such as can offer health benefits, give a dash of teas in fine, special and coarse cuts, uti- or organic botanical raw materials, pro- stimulating the appetite, aiding digestion, beautiful color, or add exciting flavors. lizing our expertise with various leaf sizes. ducing them as dried extracts or as pastes providing natural color, or acting as an that dissolve in hot or cold water, or as antioxidant or stabilizing agent. We offer a large selection of classic Our blends are suitable for both hot and our “Strong Infusions,” freshly brewed botanical powders for a wide range of cold infusions and can be enriched as leaf teas or botanicals – not made from different applications. Upon request, they required with extra ingredients such as concentrate – for premium products. y BOTANICAL EXTRACTS can include GMP-certifiedingredients or vitamins, trace elements and minerals. Our FTNF natural tea flavors give a unique y BOTANICAL RAW MATERIALS organic ingredients. taste to many different products. y BOTANICAL POWDERS

y HERBAL AND FRUIT TEAS FOR FOR y MEDICINAL TEAS y TEAS, HERBAL AND FRUIT EXTRACTS ❱ PET FOOD ❱ BAKED GOODS AND CEREALS y BLACK AND GREEN TEAS y STRONG INFUSIONS ❱ ANIMAL FEED ❱ CONFECTIONERY AND ICE CREAM y DECAFFEINATED TEAS y TEA FLAVORINGS ❱ AQUA FEEDS ❱ DIETARY SUPPLEMENTS ❱ ALCOHOLIC BEVERAGES FOR FOR ❱ DAIRY PRODUCTS ❱ TEAS ❱ BEVERAGES ❱ BEVERAGES ❱ CONFECTIONERY AND ICE CREAM ❱ BAKED GOODS AND CEREALS ❱ DAIRY PRODUCTS ❱ BABY FOOD

4 5 THE COMPANY THE COMPANY IT’S OUR BUSINESS SEALS OF TO KNOW APPROVAL

Anyone processing foodstuffs bears a great responsibility. To ensure Our commitment to sustainable product quality our products are safe, we work according to exacting standards, is certified by the following quality seals. and regularly subject ourselves to independent monitoring, This is what they say about our products: as well as carrying out our own daily checks.

The EU ORGANIC LABEL is displayed on or- ganically produced foodstuffs that fulfil the KEY FACT EU Eco Regulation and are not produced, for example, using synthetic pesticides or These six certification genetically modified organisms. Foodstuffs partners and others with this label do not use synthetic ingredi- regularly check our ents. A total of 228 of our supply partners adherence to their KEY FACT have been awarded the EU Organic Label. standards.

We use 100 analytical FAIR FOR LIFE has some of the most compre- instruments to monitor hensive and demanding criteria of any quality our product quality. standard, including fair working and living conditions for primary producers, environmental protection, fair trade, following local traditions, and respect for customers. Four of our sup- ply partners have Fair for Life certification.

The FAIRTRADE seal is given to manufac- The Martin Bauer Group stands for deli- turers who secure safe working conditions cious and high-quality natural products. and fair, long-term trading relations. Small Each of them has very precise specifi- farmers receive guaranteed prices for their The RAINFOREST ALLIANCE standard for sus- cations. We seek outstanding qualities produce that cover costs even when world tainable agriculture is awarded to producers and properties for our products in their market prices are unstable. Thirty-seven of our that protect natural resources and biodiversity origin, cultivation, and harvesting. supply partners have Fairtrade certification. and that focus on improving livelihoods and human wellbeing. The standard requires con- Quality management is our most im- The FAIRWILD certification standard champions tinual improvement on the journey to more portant task. It starts in the countries the fair and sustainable collection and trading sustainable agriculture. In 2018 the Rainfor- where our botanicals are sourced and of wild plants. The Martin Bauer Group had an est Alliance merged with the UTZ sustainable continues throughout every step in their advisory role in the development of the standard. farming program. Sixty-four of our supply processing and transportation right It governs when plants can be collected and when partners have Rainforest Alliance certification. up to the moment they are enjoyed by they should be given time to recuperate, and our customers. Our consistent quality what parts of a plant can be taken and should The UTZ program stands for socially responsible and safety concept allows us to live up not be taken in order to avoid irreparable dam- and environmentally friendly products. to the great responsibility we bear. age. The standard also ensures collectors are It enables farmers to learn better cultivation paid a fair wage, as these people are often methods, improve their working conditions, and Our customers have high expectations of among the poorest in their region. Seven of our take better care of their families and the environ- us. Strict product monitoring has enabled supply partners have FairWild certification. ment. It also ensures supply chain transparency. us to gain their trust and continue to be All products sourced according to the Martin worthy of it. PhytoLab, an independent, Bauer Group’s mabagrown standard can also accredited laboratory for plant analysis display UTZ certification(for more information that is affiliated with the nature network, see page 46). Sixteen of our supply partners monitors our product quality. Each day are UTZ certified. the laboratory assesses 200 samples and gives clear information about the quality and purity of our products.

6 7 THE COMPANY THE COMPANY SAYS BY THE WHO? NUMBERS

In this report, the Martin Bauer Group presents all its facts and figures relating to sustainability. 200 BOTANICALS FROM MORE THAN

MB-HOLDING LEGAL FORM: GmbH & Co. KG LOCATION: Vestenbergsgreuth, Germany 80 COUNTRIES NO. OF EMPLOYEES: 40 MAIN OPERATIONS: Management of the Group > 550 PLANT EXTRACTS > 100 % 6,500 FINZELBERG 100 % HERBAL AND MARTIN BAUER GROUP Active botanical ingredients FRUIT TEA BLENDS NO. OF EMPLOYEES: 2,300 2019 REVENUE: > €500 million MAIN OPERATIONS: Expertise in teas, extracts and botanicals > 2,300 AFFILIATED COMPANIES: EMPLOYEES WORLDWIDE Martin Bauer GmbH & Co. KG, Germany Plantextrakt GmbH & Co. KG, Germany Martin Bauer Services GmbH & Co. KG, Germany PHYTOLAB Martin Bauer Argentina S.A. 100 % > Martin Bauer Hayleys (Pvt.) Ltd., Sri Lanka* Safety in laboratory and regulatory Martin Bauer SpA, Italy services for herbal products 20 MB Med S.r.l., Italy LOCATIONS Martin Bauer Japan K.K. Martin Bauer Plant Extracts (China) Co., Ltd, China* Martin Bauer Polska Sp. z o.o. Martin Bauer A.S., Turkey Martin Bauer, Inc., U.S.A. BI Nutraceuticals, Inc., U.S.A. Plantafarm S.A., Spain Strong Brews LLC, U.S.A.* EUROPLANT GROUP 90YEARS OF EXPERIENCE 100% Innovation in herbal products for pharmacies * Majority holding > €500 MILLION IN REVENUE IN 2019

8 9 THE COMPANY THE COMPANY WHERE WE CAME FROM AND WHERE WE ARE GOING

THE PRESENT

1980

1952

1960

1970 2010 1990 1930

1930 1950s 1960s 1970s 1980s 1990s 2010s TODAY

Aged 28, Martin Bauer, That same decade, In the post-war period, At this time, the teabag The company’s own fields Medicinal and herbal teas An extraction facility We open additional loca- Martin Bauer enters the The Martin Bauer Group a farmer’s son from Vest- the company acquires a the company becomes becomes the new norm. can no longer keep up expand the range. starts operation in Vesten- tions in Europe and grow Latin American and Asian maintains its global enbergsgreuth in Bavaria, tobacco-cutting machine, a vegetable and herb Hans Wedel responds with demand, so Hans The company’s expertise bergsgreuth, producing globally. By entering the markets. We build a large reputation as a producer founds his own company: allowing it to produce wholesaler. At this time, to the trend by adapting Wedel personally tours in the production and plant extracts for the food Eastern European market extraction facility in China. of the very best botanical Martin Bauer, Heilpflanzen- special cuts for pharma- herbal teas are a popular production methods. Eastern Europe on the laboratory analysis of industry. we lay the foundations for ingredients for teas, food, Anbau und Verarbeitung. cies. These are delivered and inexpensive beverage. The newly developed search for suitable supply medicinal herbs grows today’s Europlant Group. beverages, and animal The Bauer family hand in person, usually by bike. cutting machines finely partners. Some of the rapidly. From 1986 it also produces At this time, the company nutrition. picks peppermint, cham- Bauer’s daughter Sofie cut 10,000 kg of herbs business relations estab- phytopharmaceutical also begins focusing on omile, lemon balm and marries Hans Wedel, every day, and the com- lished during that time extracts and decaffeinates the U.S. market. marigolds. Demand soon who joins the company pany gets established continue to this day. black tea. In 1989, plant- outstrips what the family in 1952. This dynamic, as the world’s leading based pharmaceutical PhytoLab is formed as a can pick on their own. far-sighted entrepreneur producer of herbal and company Finzelberg joins spinoff from the Martin transforms the wholesale fruit teas. the Martin Bauer Group. Bauer laboratory. Today business into a manufac- it is an accredited, turing company. From 1956 independent laboratory onwards, Martin Bauer specializing in the analysis dedicates his time to local of dried plants. politics, becoming mayor of Vestenbergsgreuth.

10 11 THE COMPANY THE COMPANY WHAT MAKES US THRIVE

Roots provide plants with water and nutrients and anchor them to the ground. Our roots Our founder, Martin Bauer, was a man as a family business do the same thing. They are a source of strength and inspiration, of action, with a passion for herbs. “These values have been He collected wild herbs and cultivated our guiding light since connecting each new generation with Martin Bauer’s founding idea. special varieties himself: Franconian Mitcham peppermint, and Franconian we were founded in 1930. chamomile. For the rest of his life he They have led us through retained vivid memories of the scent that hung in the air over the village when the all the company’s transi- peppermint was being processed. OUR VALUES tions and have made WE CARE us what we are today. TAKING Together, we are keeping y People are our focus. these values alive.” RESPONSIBILITY y We are driven by passion for our Martin Bauer’s dream was to create products. Adolf Wedel something meaningful and lasting for y We pull together – achieving more by Managing Director of MB-Holding | the future. Today, in the third and fourth working as a single, committed team. 3rd generation of the founding family generations of this family business, we feel equally committed to that idea. WE ARE CONSCIENTIOUS It is our goal to continue to develop the AND CAPABLE company and leave it even stronger for the next generation. y We consciously accept our responsi- bility to business partners. FOR FUTURE GENERATIONS y Our name stands for expertise, and we see that as an obligation to Naturally, we take responsibility for all deliver. We are constantly expanding our business activities, and act as sus- our knowhow, through further tainably as possible. We do not think in training and lifelong learning. terms of business quarters, but in terms of generations. We always gauge the long- WE ARE SUSTAINABLE AND FAIR term impact that our activities are likely to have. The revenue we generate is invested y Our business strategy is sustainable back in our company. and value-oriented. We create new things that may not pay y We use resources responsibly. off in the short term but that will prove y We ensure the entire supply to be a success after several years. Our chain is fair, all the way back to actions are prudent, and focus on contin- the countries where we source uous development, even in times of our natural ingredients. upheaval and change. WE ARE GOOD PARTNERS AND GOOD PERFORMERS

y We always work in a spirit of mutual respect and esteem – for colleagues and for business partners. y We regard challenges as opportunities to develop and grow, together. y Every day we endeavor to do our best.

12 13 THE COMPANY THE COMPANY A LOVE OF NATURE SHARING KNOWLEDGE

Martin Bauer has a global reputation for providing the best botanical The Martin Bauer Group is committed to sharing its knowledge and experience. ingredients for tea, food and beverages, and animal nutrition. In our globalized world, we can only come up with long-term, sustainable solutions if we work with others. We collaborate with the following organizations, among others:

It all began 90 years ago at a small farm AMERICAN BOTANICAL COUNCIL in southern Germany. Today – after various is an independent nonprofit organization adress- business developments and success stories ing research and educational issues related to – we have more than 20 sites on four herbs, teas, and medicinal plants. It provides continents. We can look back with pride information to consumers, physicians, research- at our achievements, and look forward ers, educators, businesses, and the media. into the future with confidence. BRINGING OUT THE BEST AMERICAN HERBAL PRODUCTS Our range includes more than 6,500 vari- ASSOCIATION (AHPA) eties of herbal and fruit tea blends, and NATURAL AND SUSTAINABLE is the national trade association and voice of the TEA AND HERBAL ASSOCIATION AN INSPIRATIONAL TEAM more than 550 plant extracts. Thanks to herbal and botanical products industry in the OF CANADA (THAC) careful processing, the natural ingredients Working for the good of people and United States. Its 350 members are growers, is the leading voice of the Canadian tea in- We have a team of over 2,300 employees retain their taste and quality. Each ingre- nature lies at the heart of what we do processors, manufacturers and marketers of dustry, representing its interests, and provid- who speak more than ten different dient provides an important element – be and is a fundamental part of our identity. herbs and herbal products. ing PR & communication to consumers and languages. Thanks to this passionate and it a distinctive taste, an appealing color, or We always consider the needs of our researchers on all things tea and herbal. enthusiastic global team, customers can added functional benefits for the health customers, employees, supply partners, B.A.U.M. (Bundesdeutscher Arbeitskreis count on high quality, innovative power, and wellbeing of humans and animals. and society. Sustainability is one of our für umweltbewusstes Management e. V.) TEA AND HERBAL INFUSIONS EUROPE (THIE) a flair for trends, and our many years’ core principles: we wish to pass on an is Europe’s largest corporate network for sus- is a European association representing the inter- expertise. intact world to future generations. tainable economic activity. It has more than 500 ests of producers and traders of teas and herbal members. Each year it awards an environment extracts. THIE was formed from the European and sustainability prize, the Umwelt- und Nach- Tea Committee (ETC) and the European Herbal haltigkeitspreis. The Martin Bauer Group has Infusions Association (EHIA). Its focus is on com- been a member of B.A.U.M. since 2019. municating with European policymakers on issues relating to tea and herbal infusions, especially CHINA BEVERAGE INDUSTRY quality assurance, food safety, the relevant ASSOCIATION (CBIA) legislation, nutrition, and cooperation with tea- represents the interests of more than 500 com- producing countries. The Martin Bauer Group panies and institutions in the Chinese beverage is a founding member of THIE. industry. The Martin Bauer Group has been a member of CBIA since 2013. TEA ASSOCIATION OF THE U.S.A. INC. has represented the U.S. tea industry for 120 years. DEUTSCHER TEE- UND KRÄUTERTEE VERBAND It has around 100 members, covering 85 to 90 is currently being formed from a merger between percent of the U.S. market. the Deutscher Teeverband e.V. and the Wirtschafts- vereinigung Kräuter- und Früchtetee e. V. The new UNION FOR ETHICAL BIOTRADE (UEBT) association will be a network of companies that is a non-profit association whose member com- import, manufacture, package, or market tea. The panies are committed to sourcing with respect for Martin Bauer Group is a founding member of the people and biodiversity. UEBT began in 2007 as a Wirtschaftsvereinigung Kräuter- und Früchtetee. United Nations initiative to advance business con- tributions to the Sustainable Development Goals. The Martin Bauer Group has been a member of UEBT since 2014.

14 15 THE COMPANY A FEW WORDS

For us, becoming more sustainable means addressing grand goals on a daily basis. OUR

“One of our corporate SUSTAINABILITY values is to act sustain- ably in all that we do. That has given us a lead- ing position within our STRATEGY industry, and this leading “Sustainability rhymes “For the nature network, role is what drives us to with persuasion: person- sustainability has always continually come up with ally, and professionally. been a fundamental prin- sustainable innovations.” It’s the opposite of a ciple and not a trend – an Sebastian Sieben rhetorical stance, it’s the attitude and not an end CEO of Martin Bauer Group Europe lifeline to our tomorrow, in itself. Sustainability is as people, and as an not achieved for nothing, enterprise. Martin Bauer nor is it achieved for free! has not only endorsed this It’s about taking action, vision but morphed it into but it’s also about what is policy, modus operandi, achievable.” a pervasive corporate cul- Albert Ferstl ture, and – what matters Managing Director of MB-Holding most – daily focus and endeavors.”

Ennio Ranaboldo CEO of Martin Bauer Group North America

16 STRATEGY STRATEGY GREAT NEEDS SHOWING Our planet faces serious economic, social and environmental challenges. THE WAY In order to meet those challenges, we must achieve important goals by the year 2030. Doing business in harmony with nature and humankind has been These goals are known as the Sustainable Development Goals (SDGs). one of our basic principles ever since Martin Bauer started the company 90 years ago. Since then, we have achieved much along our entire value chain. Our sustainability strategy has taken us on a journey that has shown us what we have achieved and The 17 Sustainable Development Goals given us a clear view of what challenges await. represent a unique opportunity to OUR MAIN GOALS KEY FACT eradicate extreme poverty and preserve We consulted 30 carefully our ecosystems. The SDGs were adopted selected stakeholders who by 193 countries of the United Nations in 2 | Zero hunger together have more than September 2015. Achieve food security and improved nutrition, 1 STATUS QUO ANALYSIS 650 years of professional and promote sustainable agriculture 1 experience. The Martin Bauer Group is committed We conducted an analysis to assess our current to implementing the SDGs. They give us status in regard to sustainable action. Our find- good orientation for our own goals and ing: sustainable business practices are a natural initiatives, allowing us to tweak their part of daily life at the Martin Bauer Group. content and make them more effective. 8 | Decent work and economic growth However, we still face important challenges in 2 STAKEHOLDER SURVEY As part of our reporting on sustainability, Promote sustained, inclusive and sustainable our future work. 2 we continually check whether our economic growth,­­ full and productive employment, Intensive discussions with stakeholders is another goals correspond with the SDGs. and decent work for all tradition in our family business. To help form our sustainability strategy, we held more than 30 In an initial step, we have selected six discussions, mostly personal conversations with SDGs that reflect the areas where our 3 MARKET AND CONTEXT ANALYSIS 3 individuals. The survey allowed us to gain com- business activity has the greatest impact. 12 | Responsible consumption and production prehensive insight and perspectives from outside Ensure sustainable consumption What trends can be observed in our markets? the business, and to develop a shared under- We are using the SDG Compass to hone and production patterns What are the current and future demands standing of our priorities and challenges. our sustainability strategy. The Compass within our sector? How is the topic of sustain- We hope to continue and intensify these was developed by the Global Reporting ability advancing? In order to find answers to discussions. Initiative (GRI), the UN Global Compact, these questions, we drew on a diverse range of and the World Business Council for studies, analyses and regulations from which Our most important stakeholder groups 13 | Climate action Sustainable Development (WBCSD). Take urgent action to combat climate change we were able to distill various insights. and its impacts y Customers y Supply partners y Industry experts 4 SUSTAINABILITY STRATEGY 4 y NGOs y Regional decision-makers 15 | Life on land We aim to drive forward new solutions for y Employees Protect, restore and promote sustainable use sustainable development and to successfully y Potential employees of terrestrial ecosystems, sustainably manage forests, advance our business, responsibly and combat desertification, halt and reverse land degradation, economically. and halt biodiversity loss With that goal in mind, we have honed our 5 5 GOALS AND MEASURES sustainability strategy on the basis of the analyses. This led to the creation of our four We subsequently defined goals and measures 17 | Partnerships for the goals core pillars. (More on this on page 22) that we hope will heighten our positive influence Strengthen the means of implementation on nature and humankind and minimize any and revitalize the global partnership negative impacts of our actions. for sustainable development

18 19 STRATEGY STRATEGY WHAT REALLY MATTERS HAVING AN EFFECT

A sustainable approach allows us to fulfill our obligation to the planet, and it also We do not rest on our laurels. We are convinced that our commitment represents an economic opportunity, as more and more consumers care about where to sustainability is essential: it ensures the integrity of our value chain products come from and how they are made. Our strategy therefore reflects and limits the associated risks. Only in this way can our company thrive. the heightened expectations of our stakeholders.

It is our responsibility to be as sustain 3 “We are absolutely com- 13 able as possible in all our actions and approaches. As a company with strong mitted to sustainable 14 10 local roots and a global reach, we aim practices. Our revised 7 to promote sustainability at every level. very high very 4 strategy enshrines sus- 11 tainable action even more 1 5 OUR STRATEGIC APPROACH 8 deeply and effectively 15 2 Our botanical raw materials come within our company.” Marketing and labeling ● 6 from more than 80 different countries. 17 That means we can make a quantifi- 20 able, broad-ranging contribution to Anne Wedel-Klein 12 19 development in the places where we Member of the Management 18 do business. Our specially developed Board of MB-Holding | Responsible 9 Rights of indigenous peoples ● 16 In dialogue with our stakeholders, we pin- sourcing standard mabagrown under- for sustainability | 4th generation ● Non-discrimination pointed and weighted various issues relating to scores our commitment to this goal. of the founding family Market presence ● ● Effluents and waste sustainability. This has given us new impetus KEY FACT Employment ● and enabled us to prioritize our commitments. As our supply chains start in the coun- ● Anti-corruption ● Customer privacy ● Energy Emerging from that dialogue, we have identified tries where we source our raw mate- Since 2019, a four-person team 20 different topics within four strategic focuses. rials, that is where we wish to initiate has been working to promote ● Freedom of association and collective bargaining sustainability within the ● Labor/management relations targeted projects to improve social IMPORTANCE FOR EXTERNAL STAKEHOLDERS EXTERNAL FOR IMPORTANCE ● Group. Indirect economic impacts ● Socioeconomic compliance Our materiality analysis is derived from the GRI and environmental conditions. ● Environmental compliance standards and is based on how much we believe ● Security practices a topic matters to our external stakeholders Getting sustainable behavior estab- ● Procurement practices ● Anti-competitive behavior (y-axis) and to our internal stakeholders (x-axis). lished in every department at a com- high ● Public policy pany can be a long process. We have put energy and conviction behind our decision to work toward realizing the Sustainable Development Goals. high IMPORTANCE FOR INTERNAL STAKEHOLDERS very high Our understanding of who we are, and the expectations of our custom- ers and employees are clearly ex- VALUE EMPLOYEES & pressed in our four “core pillars”: CREATION NATURE SUPPLY CHAIN COMMUNITY

1 Economic performance 4 Resources and materials 10 Traceability 18 Education and training y VALUE CREATION y NATURE 2 Product safety 5 Water 11 Human rights 19 Diversity and equal rights y SUPPLY CHAIN 3 Customer health 6 Biodiversity 12 Forced/compulsory labor 20 Occupational health y EMPLOYEES & COMMUNITY and safety and safety 7 Nature and soil conservation 13 Child labor 8 Chemical pesticides 14 Working conditions 9 Emissions 15 Local community 16 Suppliers’ social standards 17 Suppliers’ ecological standards

20 21 STRATEGY STRATEGY OUR THE GOALS CORE PILLARS OF OUR SUSTAINABILITY STRATEGY

SUPPLY CHAIN We are working to sustainably source GOAL WHAT WE ARE DOING TIME FRAME raw materials and ensure the greatest VALUE CREATION possible transparency in the supply chain. We implement social and environmental To systematically y We select appropriate key indicators to assess We strive for long-term, value-adding projects to improve working and living monitor our sustain- our sustainability commitment. conditions in local communities. We aim able development growth, allowing us to be a reliable part- y ner for our customers, suppliers, to increase the number of sustainable and continually We use a key indicator system and employees and to offer a secure, supply chains. develop our key for regular data collection. SINCE long-term perspective. We work closely indicators 2017 We are advancing in the following areas: y We are gradually expanding our data and respectfully with all the partners in our value chain and always adhere to y Sustainable botanical raw materials collection to include sites abroad. laws and standards. Our company is eco- y Transparent supply chains nomically successful and will be passed y Involvement in local communities on to the next generation even stronger To regularly report y Our reporting is in line with the Global Reporting on our activities than it was before. Our goals › p. 41 Initiative (GRI) and the Sustainability Code according to (Deutscher Nachhaltigkeitskodex – DNK). FROM We are advancing in the following areas: established 2020 y y Compliance sustainability Our reporting is in line with the UN Global Compact y Standards and certification standards and we integrate the UN Sustainable Development y Procurement strategy Goals in our communications on sustainability. y Strategy for adapting to climate change

To expand dialogue y We will inform customers, employees and › Our goals p. 25 with our stake- other stakeholders about our goals and the EMPLOYEES holders and use measures that have been implemented. FROM & COMMUNITY that to enhance 2020 our sustainabil- y We will hold roundtable discussions on We are expanding our commitment to ity strategy selected topics. our employees and to society. We offer a positive working environment, actively y We will involve our employees in the implementation promoting education and training, recon- and further development of our strategy. ciliation of work and family life, diversity, NATURE and equal opportunities. We actively sup- port local people at our locations to help We act responsibly and considerately ensure a strong and vibrant community. toward nature and our environment. Our business practices preserve resources We are advancing in the following areas: so that they will still be around for future y Training and development generations. We are significantly reducing y Health and safety our ecological footprint. y Diversity and equal opportunities We are advancing in the following areas: Our goals › p. 54 y Saving resources y Energy efficiency y Climate-relevant emissions y Biodiversity and soil preservation

Our goals › p. 30

22 23 VALUE CREATION OUR GOALS WITHIN THE VALUE CREATION CORE PILLAR CORE PILLAR VALUE GOAL WHAT WE ARE DOING TIME FRAME

To identify the y We will analyze the impact of climate change ON- CREA- opportunities and on our business model and botanicals supply. GOING risks associated with climate change y We will develop a strategy for managing the challenges and opportunities associated with FROM TION climate change, and implement concrete measures. 2020 To secure a y We are spreading risk by sourcing our materials reliable supply of from various geographical regions, carrying out natural ingredients selective breeding, and pursuing other R&D methods. y We are strengthening our partnerships by signing long-term contracts. ON- y We safely and appropriately store large quantities GOING to allow us to meet our delivery commitments.

To support and y We offer advice on cultivation in order to optimize promote our yield. suppliers, helping them to secure y We are initiating breeding programs and cultivating their livelihood optimal varieties. ON- y We offer advice on tackling weeds, and provide GOING assistance with the gentle processing of harvested crops.

To enhance our y We will further enhance our compliance management. compliance management y We will hold training sessions on the topic of compliance. FROM 2020

24 25 VALUE CREATION VALUE CREATION ON THE SAFE SIDE GLOBAL CHANGES

We want our products to be healthy for humans and animals. The consequences of climate change will also have an impact on the natural resources To that end, we have developed an integrated management we use in our products. The better we understand the challenges and opportunities of system to ensure the safety of our products. climate change, the more effectively we can address them.

Our products and services must comply with national and international laws, with regulations and certification HELPING SUPPLIERS ADAPT standards, as well as with the needs of our customers. CHALLENGES AND We are working with our supply partners to initiate adaptive measures. The precise We aim to live up to all these demands at OPPORTUNITIES OF measures selected will depend on the all times, in a way that is transparent and actual conditions on site. We are helping open to scrutiny. CLIMATE CHANGE our partners to make effective use of OPPORTUNITIES: their knowledge about crop cycles and OUR MONITORING SYSTEM IS BASED rainfall distribution, and advise them ON THE FOLLOWING STANDARDS AND y Possible to cultivate new plant species on the best varieties, sowing dates, and APPROACHES: y Longer growing seasons crop rotation. We must stand shoulder y Hazard analysis and critical y Earlier and/or more frequent harvest to shoulder with well-trained suppliers control points (HACCP) times per year if we are to minimize the risks of climate y Certification schemes: y Increased yields change and make use of the opportunities. Food Safety System Certification 22000, CGMPs as per 21 CFR Part 117 (FSMA) CHALLENGES: y Quality risk management: y Reduced crop quality EU GMP Parts I & II; German y Reduced harvest or crop failure WHAT WILL THE Medicinal Products Act Section 13 y Farmland becomes infertile FUTURE BRING? “Manufacturing authorization” y Competition for cropland from other y Food defense system (TACCP) crops needed for food, feed, and What challenges await us, and how will y Food fraud system (VACCP) energy production we respond to them? Our risk manage- y FAMI-QS y Increasing prices for raw materials ment system helps us to identify impor- y GMP+ y Diminished workforce due to tant risks at an early stage and make y Various product certifications rural flight sure we are prepared to tackle negative y Social instability in growing regions consequences with concrete measures. Crucially, our risk management system provides the right information at the right BECOMING MORE RESILIENT time. It gives us a good overview and a ETHICAL BUSINESS high degree of transparency. It allows us PRACTICE We are assessing the impact of climate to maneuver easily and to stay in control change on product quality, product secu- of processes at all times. Our business practice is founded on the rity, and product availability. On the basis Ethical Trading Initiative’s Base Code. of that, we are pursuing a robust strategy We are a registered member of SEDEX to enable us to adapt. We are implement- and regularly undergo self-assessments. ing targeted measures that will make In addition, for several years now our business more resilient to climate we have been audited by the SMETA change. We are sourcing our botanicals methodology. SMETA stands for Sedex from various geographical regions across Members Ethical Trade Audit. As well the world and are safely and appropri- as considering ethical, social and other ately storing large quantities to allow us sustainability aspects, a SMETA audit to meet our delivery commitments. scrutinizes occupational health and safety, and environmental management.

26 27 VALUE CREATION DOING IT TOGETHER

We have set a course for the future of our raw material sourcing. We invest strategically in selected supply partners and are already CORE PILLAR cooperating closely with them today on the important topics of tomorrow. NATURE KEY FACT WHAT WE ARE ACHIEVING In 2019 we pro- y We are establishing reliable cessed 85,000 met- partnerships with suppliers of ric tons of botanical our most important ingredients. raw materials. y We are assisting our suppliers to devise and implement strategic development measures. y We are growing in concert with our partners.

“Access to the best botanical raw materials HOW OUR PARTNERS is a top priority. We are BENEFIT safeguarding that access y They have a guaranteed market. by sustainably investing y They benefit from our business in our partners.” strategy knowledge and experience. y They have access to liquid funds Martin A. Wedel and can invest in the further Member of the Management Board of development of their business. MB-Holding | Responsible for backward integration | 4th generation of the founding family

28 NATURENATUR NATURE OUR GOALS OUR MOST IN THE NATURE CORE PILLAR VALUABLE RESOURCE Natural resources are the foundation of all our products. That means that the prosperity of the Martin Bauer Group is directly linked to the diversity, availability and good health of the plant kingdom. GOAL WHAT WE ARE DOING TIME FRAME

To strive toward y We will calculate our corporate carbon footprint according to established making our company standards and will develop key indicators for regular monitoring. climate neutral and to produce a feasibility y We will devise a plan to reduce greenhouse gases and energy consumption, BY study to that end and launch concrete projects. 2023 y We will draw up a carbon offset scheme for our greenhouse gas emissions, WHAT IS BIODIVERSITY? integrated into our own supply chain projects where possible. y y We will develop a feasibility study for our goal of achieving carbon neutrality Diverse range of biospheres “The cultivation and wild and initiate additional project steps. y A rich wealth of species y Genetic diversity within species collection of herbs open up many opportunities for To develop a system y We will calculate our product carbon footprint for selected products, BY WHY SHOULD WE CONSERVE conserving and enhancing to identify product- according to established standards. 2021 related carbon BIODIVERSITY? biodiversity.” footprints BED AND Food security: We humans eat up to Andrea Rommeler BY 5,000 different food plants. Biodiversity BREAKFAST helps farmers and wild collectors to To help our suppliers y We will develop a concept for overseeing climate-relevant ­emissions in our 2021 is crucial for the survival of human FOR BEES recognize, conserve and enhance implement climate supply chains. populations around the world. biodiversity. protection measures We are not the only species that y We will develop measures in cooperation with our supply partners for saving ON- Natural resources: We humans use as loves herbs and medicinal plants – resources, using energy and water efficiently, and avoiding waste; GOING many as 30,000 medicinal and aromatic bees and other pollinators do too. and we will assist them in implementing those measures. plants. Biodiversity ensures these In the agricultural landscapes of the resources will continue to be available. modern age, bees and other insects To develop a y We will analyze the travel patterns of our employees and consider ways often have to fly a long way on sustainable trans- in which they could be improved. Balance: Biodiversity keeps ecosystems their search for nectar and pollen. portation strategy healthy. If one species in a healthy, Fields with chamomile, fennel, y We will develop a concept for the use of bicycles and e-bikes. biodiverse ecosystem is lost, another mallow and/or echinacea are an BY 2021 species can fill its role without the oasis of nectar-rich flowers and y We will develop a concept to reduce the ecological impact of our fleet, entire system becoming endangered. nutritious pollen. Here, pollinators our company cars, and business trips. can find what they need to fill their Inspiration: The richer the wealth of pantries, enabling them to survive. species, the more we can learn from To conserve and y We will continue to ensure that: nature for our own advancement. In 2019, we sowed an additional 8,000 m² enhance biodiversity x Our supply chains remain free of genetically modified plants of bee pasture at our Vestenbergsgreuth x Cropland is not created through forest clearance site. We selected a mix of various annual x Laws and licensing rules relating to products collected in the wild are adhered to and perennial wild herbs that keep ON- the pasture well stocked with tempting y We will continue to advise our suppliers on sustainable modes of production GOING bee treats from April to November. and ways to conserve biodiversity. In 2014 our large bee hotel opened by the waste water treatment plant, y We will give advice on choice of crop variety, seeds, crop rotation, soil fertility, offering comfortable accommodation fertilizer, and avoiding pesticides. to countless wild bees and bumblebees.

30 31 NATURE NATURE

IT’S GOOD TO BE DIFFERENT Biodiversity used to be normal through- out the ecosystems of this planet, but now it is under threat, with species disappearing at an alarming rate. That is why we are working hand in hand with our mabagrown-certified partners, BIODIVERSITY contract farmers, and wild collectors to conserve and enhance biodiversity. IN WILD COLLECTING

Nature’s treasure troves are vast, but BIODIVERSITY IN FARMING they are not inexhaustible. That is why we draw up a sustainability report The way that cropland is worked has for every mabagrown collection area. a decisive impact on biodiversity. This “Resource Assessment” (RA) must We therefore maintain close personal be presented before our mabagrown contact with our growers and offer partners can begin collecting. them targeted advice. The RA examines the natural resource Since 2015 we have been developing and evaluates the risks. Where does the individualized biodiversity action plans plant grow? In what quantities? How is (BAPs) for each of our mabagrown part- it collected? How do the collectors live? ners. These are updated regularly. The How many of these plants can be col- BAPs highlight what our contract farm- lected without endangering the species ers are doing to conserve and enhance or leading to a decline in its numbers? biodiversity – quite a lot, as it turns out. Next, a “Management Plan” (MP) is Our herbs are often cultivated on small created to ensure responsible and sus- fields. As a perennial crop, they provide tainable use of the natural resources. a rich soil life, as well as shelter for birds The collectors are registered and and small animals. In addition, their rich trained. Area maps are drawn up and variety of blossoms provide food and a the quantities collected are recorded. natural habitat for countless pollinators. Neighboring fields and farmers also In many countries, the collecting of wild benefit. plants is not monitored or regulated. With its regular assessments, supervision and monitoring, our mabagrown standard is doing important and pioneering work.

32 33 NATURE NATURE ENERGY EMISSIONS

It is becoming increasingly important to use energy efficiently and to obtain We explore all possibilities for reducing our emissions. it from renewable sources. The Martin Bauer Group keeps a close eye on its Our long-term goal is to become carbon neutral and to consumption – including in the modernization of production facilities, the keep our greenhouse gas emissions to a minimum.* construction of new buildings, the operation of its fleet, and in its logistics processes.*

OUR ENERGY CONSUMPTION OUR ENERGY MANAGEMENT CO2 emissions in the three areas (Scopes 1 through 3) We have set ourselves the goal of calcu- make up the overall carbon footprint of our company. We use natural gas, electricity, diesel, The German sites of the Martin Bauer Group lating our “corporate carbon footprint” – heating oil, gasoline and district heating have been certified to ISO 50001 since the carbon footprint for all of a company’s to manufacture our high-quality products 2014. We document how we use and business activities – by 2023. CO SF CH N O HFC PFC and run and maintain our sites. Our total reuse energy, and evaluate the efficiency 2 6 4 2 S S energy consumption in 2019 was around of our energy use. Our multi-site energy We will base this on the GHG Protocol SCOPE 1 134,024 MWh, a slight reduction on the management system enables us to sys- Corporate Accounting and Reporting DIRECT previous year. The savings effects from tematically identify potential for improve- Standard. The analysis will consider all SCOPE 2 SCOPE 3 Notes INDIRECT INDIRECT our energy management program, added ment and to leverage that with targeted our direct greenhouse gas emissions to production fluctuations, led to lower measures. (Scope 1), indirect emissions from electric- Production Employees’ energy consumption than in 2018 – with ity use (Scope 2), and our indirect emis- Company- business travel Purchased owned of purchased savings of 5,133 MWh. We cannot currently sions resulting from value chain activities electricity vehicles materials calculate the amount of energy used in Measures and savings in recent years (Scope 3). We can then use the analysis for own use Supply Waste disposal our transportation and supply chain but to devise further measures for saving partners are working on being able to do so. Measure Site Saving and offsetting CO2 emissions and to test the feasibility of our long-term goal to Fuel combustion Vehicles owned by Achieved hydraulic balance in the heating system Vestenbergsgreuth 235 MWh/a become carbon neutral. supply partners

Consumption in MWh for each energy Made use of residual heat from the compressor Vestenbergsgreuth 168 MWh/a In this package of measures, we will also source in 2018 and 2019 consider our supply chains. Since energy Installed a heat recovery system in the venti- consumption outside the Martin Bauer lation system of one of the production facilities Kleinostheim 43 MWh/a Energy source 2018 2019 Group cannot currently be quantified due Direct and indirect energy-related greenhouse gas emissions Decommissioned drying room for to a lack of available data, it is not yet in metric tons of CO equivalents Natural gas 114,375 108,238 Alveslohe 25 MWh/a 2 plant-based pharmaceuticals possible to calculate the greenhouse gas Electricity 20,322 20,719 Added insulation in roof areas Vestenbergsgreuth 25 MWh/a emissions in our supply chains. However, GHG emissions 2018 2019 Notes Diesel 3,556 3,645 Replaced two electric water boilers since the cultivation and drying of our y According to the Kyoto Protocol, greenhouse gases with heat exchangers that use the heat Vestenbergsgreuth 20 MWh/a natural ingredients leads to considerable Scope 1 24,304 t 23,226 t Heating oil 593 1,046 are: carbon dioxide (CO2), methane (CH4), nitrous generated from production processes emissions of greenhouse gases, we will oxide (N O), hydrofluorocarbons (HFCs), perfluoro- Gasoline 269 333 2 Lighting converted to LED technology Alveslohe 10 MWh/a work with our supply partners to reduce Scope 2 10,205 t 10,404 t carbons (PFCs), and sulfur hexafluoride (SF6). District heating** 42 43 climate-relevant emissions in our supply y Scope 1 covers direct emissions from heating oil, chains also. This will allow us to make fuels, process gases, coolants. Total 139,157 134,024 Total 34,509 t 33,630 t y Scope 2 covers indirect emissions associated with a further contribution to protecting our the use of electricity, gas and district heating. ** From the biogas CHP at the Demantsfürth site Natural gas Natural gas climate. Electricity Electricity Diesel Diesel In 2019 our CO emissions were Energy consumption Energy consumption 2 40,000 Heating oil Heating oil 33,630 metric tons of CO equivalents, 2018 2019 2 35,000 Gasoline Gasoline a slight reduction on the previous year. 30,000 District heating District heating Production fluctuations and further 25,000 improvements to our heating network led 20,000 Direct GHG emissions (Scope 1) Consumption in MWh for each energy source in 2018 and 2019 to reduced natural gas consumption (Scope 1) and thus to a 900 metric ton 15,000 Indirect GHG emissions (Scope 2) 10,000 reduction in CO2 emissions. 5,000 2018 2019 0

* The facts and figures on pages 34 to 35 relate to the Martin Bauer Group’s sites in Germany (Vestenbergsgreuth, Alveslohe, Kleinostheim, Demantsfürth, Gerhardshofen). 34 35 NATURENATUR NATURE WATER WASTE

Alongside our natural ingredients, water is the key resource Avoiding, recycling and disposing of waste – we aim to use materials that we need to make our products. We use this valuable as efficiently as we can and to produce as little waste as possible.* resource sparingly and responsibly.*

Naturally, water plays a decisive role in Fresh water and waste water in m³ the cultivation of our ingredients. But we also use water to refine our products – Water withdrawal according to source 2018 2019 WHAT WE ARE DOING Our waste in metric tons according to type and disposal method for example, for extraction, cooling, clean- Total 357,032 361,941 ing, and hygiene purposes. We also need y We are examining options for Type of waste and disposal method 2018 2019 y Ground water (well) 199,878 182,415 it as drinking water for the staff members avoiding waste. Non-hazardous waste at all our sites. y Municipal water supply 157,154 179,526 y Where possible, we reuse packaging. Total 33,823 30,964 Waste water according y Recycling 688 636 2018 2019 WHAT WE ARE DOING to place of discharge y We are examining options for y Composting 31,392 28,076 reutilizing or recycling waste if Total 252,402 247,587 y Incineration 1,665 1,876 y We use fresh, potable water whenever the material cannot be reused. y Municipal waste water disposal this is necessary for reasons of hygiene 142,745 148,467 y Landfill 78 376 (indirect discharge) or product quality. y The plant waste in the farm operations y Plant’s own waste water treatment at our sites has a very useful function – Hazardous waste 109,657 99,120 y Where possible, we reuse water within (direct discharge) as natural fertilizer for the cropland. Total 11 8 a circulation system. y Incineration 11 8 y Our residual waste is disposed of y We have introduced water-saving meth- correctly by certified service companies. y Landfill 0 0 ods in our operations. That includes in our production, but also in our sanitary y We run a recycling depot at our facilities – for example, through the use Vestenbergsgreuth site. of water-saving faucets.

y We strictly monitor the quality of the In 2019 our sites generated 30,964 metric waste water that we discharge. tons of non-hazardous waste and eight metric tons of hazardous waste. In both cases that represents a reduction on the We used 361,941 m³ of water in 2019, a previous year, which is a result of produc- slight increase on the previous year. To tion fluctuations. The increased amount reduce well water consumption, during of waste being sent to landfill was due spikes in use we had to access the munic- to the construction waste that was gener- ipal supply for use in our liquid extracts, WASTE WATER TREATMENT There are two main steps ated during demolition and rebuilding which contributed to the increase. to the treatment process: measures at the Vestenbergsgreuth site. In 2012 we inaugurated a waste water In 2019 around 5,700 m³ more waste water treatment facility at our Vestenbergs- y 1. Anaerobic treatment was disposed of via the municipal waste wa- greuth site. This facility treats our process through the exclusion of oxygen ter disposal system, and around 10,500 m³ waste water, making it clean enough y 2. Biological treatment less was directed into the company’s own to discharge safely (according to legal through membrane activation waste water treatment system at the Vest- requirements). enbergsgreuth site. This is primarily due to Step 1 produces biogas, which we use production fluctuations. to generate electricity and heat in a CHP unit or a boiler. We use that energy to

operate the facility, thus reducing CO2 emissions and saving operating costs.

* The facts and figures on pages 36 to 37 relate to the Martin Bauer Group’s sites in Germany (Vestenbergsgreuth, Alveslohe, Kleinostheim, Demantsfürth, Gerhardshofen). 36 37 NATURE NATURE WHAT WE ARE DOING HOW MUCH ENERGY TO SAVE ENERGY DOES COLD BREW SAVE?

Visible successes are the best motivation to keep working toward saving energy and reducing our CO2 emissions. We have made a good start.

120 MIN. 90 MIN. PREHEATED

In the production of our extracts the same thing happens as when you cook in the kitchen at home – large quantities of heat are generated. This heat is too valuable to simply be lost, unused. 3 MIN. 60 MIN.

At our Vestenbergsgreuth site we use heat exchangers to transport that heat back into our heating network. The incidental heat generated by the compressors in our compressed air system also feeds into the network via our heat recovery system. NICE AND DRY Our heating network makes heat avail- able where it is needed, for example to Energy is needed to dry fresh botanicals. 14 MIN. 2 SLICES heat our premises. We also have a heat Depending on season and country of recovery system there – using the warm origin, it is not always possible to allow exhaust air from the ventilators to preheat them to dry naturally in the sun. the incoming air. Particularly in developing and newly in- We use an economizer in our steam gen- dustrialized countries, the machines used eration processes. This uses the residual to dry herbs are often rather old and out THAT’S COOL Our cold brew tea is infused using cold heat from exhaust gases to preheat feed of date, meaning that they are not very water. This is a simple process that also water, thus saving energy. At our Kleinost- energy efficient. If you want to drink tea, you have to boil saves energy. As the tea steeps, the herbal heim site we have installed a heat pump water, and that uses energy. The water essences gradually pass into the cool that takes heat energy from waste water We worked with our Hungarian partner must be boiled so that the tea is safe to water, developing complex aromas and so that it can be used in our heating to plan and develop a modern biomass drink and can develop its full flavor – until a delightfully refreshing taste. Our product system. thermal plant for drying chamomile, now, that is. We have come up with an development experts have created our very fennel and other natural ingredients. It alternative that is both innovative and own blends that are currently enjoying is primarily fueled by wood chips and is sustainable. great popularity in Europe, the United almost entirely carbon neutral. The Martin States, South America, Asia, and New Bauer Group funded this investment. Zealand.

38 39 SUPPLY CHAIN OUR GOALS IN THE SUPPLY CHAIN CORE PILLAR CORE PILLAR SUPPLY GOAL WHAT WE ARE DOING TIME FRAME

To continuously increase y We are looking for additional suppliers that can CHAIN the proportion of sustainably comply with our standards, and are working to ensure produced ingredients we use more of our supply chains are sustainably certified. ON- y We are expanding our portfolio of GOING mabagrown-certified botanicals.

To expand our social y We are improving occupational health and safety commitment in regions where through knowledge transfer and targeted advice. we source our ingredients y We try to ensure that the workers in our supply chains have a decent place to live, enough ON- to eat, and adequate healthcare. GOING y We are working to make jobs in herb cultivation and wild collection more attractive by improving working conditions, and giving these kinds of occupations a better image. y We acknowledge that children and young people are an important part of the local community, and involve them in our social projects.

To continue to fight child labor y We have developed a Supplier Code of Conduct and forced and compulsory labor and monitor adherence to it. ON- in our supply chains, and to GOING challenge human rights violations y We train employees and suppliers to recognize exploitative child labor and take action against it.

To increase transparency in y We regularly monitor all suppliers to check mabagrown supply chains compliance with the mabagrown standard. y We are continuing to develop the standard. ON- GOING y We are implementing a monitoring and evaluation system and developing it further.

41 SUPPLY CHAIN SUPPLY CHAIN

OUR TEN 1 Tea (Camellia sinensis) FROM THE BEGINNING Argentina, China, India, Indonesia, Kenya MOST IMPORTANT 52 % sustainably sourced* Everything begins with the right ingredients. How do we keep up ‚ BOTANICALS with our commitment to deliver the highest quality?

2 Hibiscus The Martin Bauer Group’s Procurement OUR PROCUREMENT STRATEGY 3 Peppermint Burkina Faso, Egypt, Nigeria, department ensures that the ingredients Egypt, Germany, Poland, Serbia, USA Senegal, Sudan for our natural products are available in The procurement of natural products will 78 % sustainably sourced* 22 % sustainably sourced* exactly the right quantity and quality. always be affected by the weather and the KEY FACT That is how we have gained an excellent quality of the harvest. Our procurement reputation for always delivering what strategy minimizes the associated risks. For our ten most our customers need. important botanicals, y We procure botanicals from 56 % of the amount All of our botanicals must come from various regions across the globe. we buy is already certified according supply partners that our Procurement y We choose cultivation areas where to sustainability department can trust. Where possible, cross-contamination is less likely. standards.* 4 Chamomile we purchase directly from the producers. y We ensure traceability – where Croatia, Egypt, Germany, Our relationships of trust are based on possible, all the way back to the field. Mexico, Poland, Serbia our strict quality standards, fair treatment, y We work with our supply partners 77 % sustainably sourced* and personal contact – but also on the to improve quality, providing them fact that we are prepared to commit to with targeted advice. 5 Fennel long-term contracts and guarantee to pur- y We are looking ahead and addressing Austria, Bulgaria, China, chase our partners’ produce, if the quality the likely challenges and opportunities Germany, Hungary, Serbia, Turkey is right. We believe that partners should of climate change in advance. 56 % sustainably sourced* be able to rely on one another, and where there is mutual trust, they can. This belief 6 Apple is confirmed in our excellent business Albania, Bulgaria, Georgia, relations, many of which have lasted for Germany, Turkey decades. 55 % sustainably sourced* 7 Rosehip Bulgaria, Chile, China, Georgia, Lesotho 89 % sustainably sourced*

“Responsible conduct towards our 400 supply partners around the world is firmly integrated 8 Lemongrass into our procurement Egypt, Paraguay, Thailand processes.” 68 % sustainably sourced*

Alfred Zink Managing Director of Procurement at the Martin Bauer Group 9 | Licorice root Georgia, Kazakhstan 61 % sustainably sourced*

10 Orange peel Egypt, Georgia, Paraguay, Senegal 69 % sustainably sourced* * These sustainability standards include the EU Organic Label, USDA Organic, Fair for Life, FAIRTRADE, FAIRWILD, mabagrown, Rainforest Alliance, and UTZ. 42 43 SUPPLY CHAIN SUPPLY CHAIN OUR VALUE CHAIN A FAIR CHANCE

When the Martin Bauer Group talks about quality, we aren’t just talking about the individual At Martin Bauer, our primary concern is for high quality and safe, reliable products. processing steps, but about the entire value creation chain: with botanicals at one end, With mabagrown, our own sustainable sourcing standard, we guarantee both from the and at the other the consumers who enjoy the finished product, and whose safety and wellbeing very beginning. are our top priority. Nothing seems more obvious that ensuring good quality, but achieving that is actually a complex task involving many different elements.

Sowing WILD CULT I- COLLECTION VATION Growth Quality assurance

Quality Quality assurance Harvesting assurance

WHAT DOES Processing Quality assurance MABAGROWN MEAN? Sustainable By using natural resources sparingly Safe and protecting biodiversity, we are By actively influencing the cultivation and securing the foundations of our future Quality assurance Transportation collection of plants on site we are able to procurement. We work with the people minimize product quality risks. We can in our supply chains in a spirit of mutual mabagrown quality depends on optimal avoid the risk of pesticide residues and respect and fairness, and our projects on conditions in the countries where we prevent an ingredient from being contam- the ground support local communities. source our ingredients, and on the com- inated on the field, during harvesting, Production Quality assurance mitment of our supply partners, small in storage, or during transportation. High quality holders and collectors. Therefore, we We consistently do our best to ensure purchase mabagrown raw material from Lasting availability the high quality of our natural ingredients long-term supply partners and not via By building up reliable partnerships – in the breeding of new varieties, in intermediaries. in sourcing countries, we are able to the cultivation of ingredients, and in the Transportation bolster our supply partners in the support offered by our experienced agri- Our supply chain is consistently guided by medium and long term. Thanks to our cultural consultants. We continue to keep the criteria of the mabagrown standard, foresighted procurement and warehous- a close eye on all further steps of the way CUSTOMER from the field or collecting areas all the ing approaches we are able to keep the – drying, processing, storing and trans- way to our clients’ premises. Each link in required quantities of our ingredients porting – because we know that all these the chain is documented, without gaps. readily available for longer periods. steps add up to a first-class product.

44 45 SUPPLY CHAIN SUPPLY CHAIN TAKING IT TO THE NEXT LEVEL WHERE QUALITY BEGINS

In 2011 we set ourselves a bold objective. We wanted to give our customers more than mabagrown quality is the result of many hands working hard every day. just a handful of sustainably certified products. It was our mission to create a whole array It calls on everyone in the supply chain to do their utmost. of teas and herbal products whose ingredients are all sustainably sourced.

“For me, mabagrown OUR THREE-STEP SYSTEM means three things: FOR SUPPLY CHAIN Since there were no suitable sustain- MANAGEMENT ability standards for herbal and fruit teas that we consistently at that time, we developed our own. And and sustainably stand To ensure that our botanicals fulfill the mabagrown remains a pioneer to this day. up for the quality and strict mabagrown criteria, we test them We continually improve our quality, safety, on three levels. and sustainability approach, enhancing safety of our valuable the mabagrown standard for the benefit products; that we fulfill Locally of our customers. our responsibility to the Our supply partners in the region use a monitoring system to continually check ecosystems in the places whether the smallholders and wild collec- where we source our tors fulfill the mabagrown requirements. THE STORY botanicals; and that we do our best for the people Regionally OF OUR SUCCESS A specially trained team of Martin Bauer 2014/15 in our supply chains, Group auditors regularly performs multi- 2011/12 y We develop the standard further in offering concrete day audits of supply partners in the y We develop our mabagrown standard. collaboration with UEBT and UTZ. regions where we source our ingredients. y We convince our partners y We introduce a new assessment system. solutions to improve to join the program. y We introduce additional criteria. their daily lives.” Independent external monitoring y We put the appropriate structures y We place higher demands on The mabagrown standard and compli- in place. documentation and auditors. Markus Wehr ance with it are regularly checked by y mabagrown premium is launched. Head of Strategic Procurement, an independent inspection body. Our 2012 Herbs and Fruits and mabagrown We like to visit our supply and cultivation management system is regularly inspected y We introduce mabagrown with selected FROM 2015 partners in person to ensure that the and random samples taken from suppliers supply partners and deliver the first y The Martin Bauer Group contributes quality of the natural ingredients, the in the countries where we source our mabagrown products to our customers. expert advice to the creation of working processes, and the management ingredients. the UTZ herbal tea program. are all as good as we want them to be. 2014 y The Martin Bauer Group becomes y The Martin Bauer Group becomes We use our visits to get acquainted with a fully approved and audited member the first producer to offer a com- production conditions, to train our suppli- of UEBT (more on page 15). prehensive range of herbal and ers, and to work with them to further the fruit teas with the UTZ label. special quality of mabagrown products. Direct, personal contact with the people 2015-19 in our supply chains over many years has y With our mabagrown premium we enabled us to develop a close and trusting contribute to the implementation of relationship. more than 60 sustainability projects with 26 partners in 18 different countries. KEY FACT

In 2019, more than 70 supply partners had mabagrown certification.

46 47 SUPPLY CHAIN SUPPLY CHAIN WORKING TOGETHER THE MABAGROWN AUDIT We initiate concrete projects that improve working conditions and The auditors check how our suppliers quality of life for the people who cultivate or collect our natural ingredients. work and do business. They visit the areas where plants are cultivated or In so doing, we share knowledge that can bring about positive change. collected, inspect the company premises, interview employees, and scrutinize the documents. Each visit is fully documented. WHERE WHAT’S y Paraguay Where necessary, binding improvement measures are agreed after the audit, THE BUZZ? WHEN usually to be implemented within the next y 2018 – present KEY FACT three months. We do not accept any hu- A mabagrown premium project: bees man rights violations, forced labor, com- help 104 families boost their income MABAGROWN PRODUCTS More than 60 sustain- pulsory labor or exploitative child labor y Wild collection: Orange and lemon peel ability projects have from our suppliers. These are all grounds San Pedro is in an economically under- y Cultivation: Lemongrass and lemon ver- been implemented for exclusion from the mabagrown developed part of Paraguay with few bena with mabagrown standard. sources of income for the people that premium since 2014. live there. We worked with smallhold- PROJECT PARTNER ers, wild collectors and the Traditional y Traditional Medicinals Foundation MABAGROWN Medicinals Foundation to learn about (TMF), our local supply partner AGRICULTURAL CONSULTANTS the needs of the local community and the challenges it faces. This enabled We stay in close contact with our supply us to carefully consider how their partners not only during harvest time but living situation might be improved. during the sowing and growing seasons, too. Our international team of agricultural Everyone involved wanted a substantive consultants give concrete advice on all and long-term solution that would up- questions relating to cultivation and hold the community’s independence. Our harvesting and conduct intensive training attention was drawn to honey produc- sessions. Working together, we not only tion as an additional source of income. optimize yield, we also improve quality Keeping bees gives local families extra and safety, and find the best ways to fulfill income and secures their livelihoods our customers’ requirements. as smallholders and wild collectors. In 2018 we began introducing the participating families to beekeeping, hive management, and the relevant first aid measures. In October of that year, delivery of the hives and bee colonies began. Our project team visited the site weekly in order to give the best possible support during this critical initial period. In the meantime, a committed beekeep- ing community has grown up, whose members share their experiences, help one another, and take beginners under their wing. Thanks to its great success we extended the project until 2021.

48 49 SUPPLY CHAIN SUPPLY CHAIN IN BLOOM GOOD HEALTH Maßnahmenbündel verbessert die Two ecological demonstration farms are giving employment to 1,000 people. VersorgungA series of undmeasures medizinische are improving Betreuung the health and medical care Education centers are being set up, offering education and training to 5,000 smallholders, unsererof our farmFarmmitarbeiter, workers. This mabagrown- is a mabagrown and Fairtraide Premium project. 50 percent of whom are women. The initiative is co-financed by DEG. und Fairtrade-Premium-Projekt

In Zimbabwe, fertile soil and remark- WHERE WHERE ably different climate zones create ideal y Zimbabwe y Egypt conditions for agriculture, but because of political upheavals many farms in WHEN WHEN Zimbabwe are lying idle, and the country y 2015 – 2019 y Since 2016 is often dependent on food imports. MABAGROWN PRODUCTS WHAT We worked with Organic Africa Hold- y Cultivation: Nettle, chili, safflower, y Medical center established, with an an- ings (OAH) to monitor the conditions hibiscus, spearmint, dandelion, lemon nual investment in healthcare (€40,000) under which our herbs, spices, me- balm, peppermint, marigold, thyme, dicinal plants and aromatic plants are lemongrass y Initiated a hepatitis C campaign grown in Zimbabwe. We established directed at all employees two ecological demonstration farms in PROJECT PARTNERS two different parts of the country with y Organic Africa Holdings (OAH), y Annual provision of funds for school very different climates. The greater part Deutsche Investitions- und materials (70 % of total costs) of the cropland is intended for growing Entwicklungsgesellschaft (DEG) food crops and regenerating the soil. y Annual vacation trips offered to employees in turn A total of 1,000 people have found gainful employment at the farms. Since each farm y Two water treatment facilities installed also has an education center we have been able to educate 5,000 smallholders, y Soccer field laid out wild collectors and agricultural workers, imparting the basics of ecological agri- y Acquisition of bee colonies culture and sustainable plant collection. In the training sessions, they also learn MABAGROWN PRODUCTS methods for growing their own food y Cultivation: Aniseed, fennel, chamomile, that are adapted to climate change. spearmint, peppermint, lemongrass

Around 50 percent of the training partic- PROJECT PARTNER ipants are women, who are able to use y Our local supply partner what they have learned to feed and care for their families. Thus, a total of around 30,000 people are benefiting from the project.

KEY FACT

We are promoting ecological agriculture in Africa within an SDG Compact with the German federal government.

50 51 SUPPLY CHAIN

ONE, TWO, TREE! WHAT GOES To mark Arbor Day we provided 1,000 saplings and helped a team from EARTH AROUND COMES University to plant them. CORE PILLAR AROUND A school project is turning schoolchildren and their teachers into recycling experts A FEATHER who can pass on what they have learned IN THEIR CAP to others in their communities. EMPLOYEES & Reconstructed bird platforms provide nesting sites for black-headed herons, little egrets, reed cormorants, and African darters. COMMUNITY

WHERE y Paraguay

WHEN WHERE y 2015 – 2017 y Paraguay

WHAT WHEN y Workshops on the topic of waste y 2017 – present and recycling WHERE y South Africa WHAT y New refuse containers installed in y For the third year in a row, our part- schools to allow for waste separation WHEN ner assembled a 200-strong team of y 2017 schoolchildren, teachers and small- y Provision of informational material, holders to plant trees on Arbor Day, T-shirts, caps WHAT an occasion in May when one million y Reconstruction of bird platforms trees are planted around the world. y Schoolchildren and teachers encour- aged to pass on their new knowledge y Transportation of materials and y Each year, the participants plant employees to the workplace saplings on cropland and on open MABAGROWN PRODUCTS spaces within the community. y Wild collection: Orange and lemon peel MABAGROWN PRODUCTS y Cultivation: Lemongrass and lemon y Organic cultivation: Orange blossoms y We provide T-shirts, caps, and verbena drinking water for participants PROJECT PARTNER as well as the 1,000 seedlings. PROJECT PARTNER y Our local supply partner y Our local supply partner MABAGROWN PRODUCTS y Wild collection: Orange and lemon peel y Cultivation: Lemongrass and lemon verbena

PROJECT PARTNER y Our local supply partner

52 EMPLOYEES EMPLOYEES

OUR GOALS TEAM PLAYERS EMPLOYEES BY GENDER IN THE EMPLOYEES AND COMMUNITY CORE PILLAR Martin Bauer’s success is thanks to the passion, expertise and creativity of our employees. The high quality of our products is their achievement.* Women GOAL WHAT WE ARE DOING TIME FRAME

To promote and y We will involve our employees in the sustainable 26 % support sustainable development of our company. action on the part FROM of our employees y We will run campaigns to make employees more aware 2020 Men of sustainability issues and motivate them to participate. 74% To promote y We have signed the Diversity Charter and are EMPLOYEES BY AGE diversity and equal working to create a work environment free of opportunities prejudice where each individual is respected. ONGOING y We do not accept wage discrimination and remunerate employees regardless of gender. PERMANENT AND 30 to 50 To improve the y We are expanding our company Under 30 TEMPORARY EMPLOYEES health and safety health management program. FROM 22 % of our employees 2020 y We are expanding our training program 50 % with the goal of preventing accidents.

y We are developing a program to make managers and BY 2021 employees more aware of occupational health and safety issues. Over 50 28 % 97 % To enhance skills y We are optimizing our staff development concept. Permanent through initial and further education y We support employees who are working and and training studying at the same time. ONGOING y We consistently offer a wide range of training positions and take on those trainees who perform well. 3 % y We offer our trainees projects that fit with Temporary their needs (e.g. junior company JUMP). y We are integrating the topic of sustainability 1,073 Our team players in numbers in our education and training. EMPLOYEES FROM 113 Total Male Female y We are extending the range of courses on offer 2020 NEW HIRES at the MB Academy, particularly in the areas of Full-time employees 907 82 % 18 % digital learning and agile learning. 42 Part-time employees 166 31 % 69 % TRAINEES 8 Permanent employees 1,044 74 % 26 % To support local y We are precisely defining our donation and sponsoring concept TRAINEES STUDYING Temporary employees 29 93 % 7 % communities and will launch it throughout the entire Martin Bauer Group. PART-TIME On parental leave 23 35 % 65 % at our sites FROM y We are developing a corporate volunteering concept. 2020 54 New hires 113 73 % 27 % SEVERELY DISABLED Exits 78 77 % 23 % EMPLOYEES Trainees 42 88 % 12 % Trainees studying part-time 8 50 % 50 %

* The facts and figures on page 55 relate to the Martin Bauer Group’s locations in Germany (Vestenbergsgreuth, Alveslohe, Kleinostheim, Demantsfürth, and Gerhardshofen). 54 55 EMPLOYEES EMPLOYEES KEEP ON LEARNING A GOOD PLACE TO WORK

For the Martin Bauer Group, high-quality education and training is an important Healthcare and effective occupational health and safety have a top priority at the investment in the future. Our career paths are sustainable too: many of our employees Martin Bauer Group. This is true of our production facilities and our offices.* stay with us for decades or even their entire career.*

Occupational safety, key figures Office workers Production workers OUR OCCUPATIONAL OUR VOCATIONAL SAFETY STRATEGY Number of accidents in the 0.00 3.82 51.69 0.00 TRAINING y Comprehensive safety briefings workplace reported per 1,000 workers PROGRAM and instruction y Safety management of external We focus primarily on our home-grown Number of commuting accidents 4.22 3.82 5.35 0.00 companies reported per 1,000 workers talent when nurturing the next genera- y Job hazard analyses for all positions tion of skilled workers. In 2018, 97 young y Regular health and safety inspections people were learning the ropes as part Days lost due to accidents of our vocational training program. We y Establishing the causes of any in the workplace 0.01 % 0.08 % 0.39 % 0.00 % offer a varied learning and working en- accidents in the workplace so vironment and give our trainees a great as to avoid accidents in future start in twelve different occupations. y The next step: Launching an Absence rate 5.28 % awareness program aimed at all Our trainees contribute fully to the activ- management staff and employees ities in their designated area of the com- pany. In each department, an experienced Work-related fatalities 0 FURTHER TRAINING staff member takes on the role of mentor. AND KNOWLEDGE That person is there to answer questions and help solve problems. Our trainees are TRANSFER thankful for this high degree of personal OUR OCCUPATIONAL supervision and assistance, and praise the EMERGENCY We offer our employees targeted training positive atmosphere at the company. We HEALTH MANAGEMENT STRATEGY opportunities so that they can continue to familiarize all our trainees with our values RELIEF y develop their personal and professional and principles from the very start. A serious accident, a long illness, Facilitate ergonomic workspaces skills within the Martin Bauer Group. flooding or fire can quickly plunge the y Physical exercise opportunities, affected person into an emergency situ- e.g. yoga, hiking, soccer, Pilates, At the MB Academy we offer a program “JUMP,” OUR JUNIOR COMPANY ation. The Martin Bauer Group’s Social back therapy program of more than 30 seminars on topics like Fund offers quick and straightforward y Promotion of healthy eating, e.g. fruit assistance when its employees are hit by stress management and showing respect Here, trainees complete intensive available free of charge in the cafeteria for oneself and others at work. In 2019 training, learning by doing. They work such existential challenges. y we invested an average of 14 hours in independently, learning to organize Education and raising awareness, e.g. an annual “health week” the training of each employee. Of those, their time effectively and to think like Since 2011 the Social Fund has been fed with talks and taster courses ten hours are required by law and four an entrepreneur. In this way they gain by the fractions of cents that arise when KEY FACT hours are voluntary. first-hand experience of what it is to run wages and salaries are adapted to collec- a business. tive agreements. These tiny contributions Our trainees have Our Insider Live lecture series encourages from every individual in the company excellent chances employees to talk about their views and JUMP (Junior-Unternehmen mit Power – add up to an impressive sum – which the of being hired. experiences with one another, improving Junior company with power) takes care Martin Bauer Group doubles by matching the transfer of knowledge. In the lectures, of providing employees with tea from the each contribution with a donation. employees share their expertise in specific Greuther Teeladen. Also, on one day each areas with interested colleagues from Advent it organizes a fund-raising drive across the company. (more on page 60).

* The facts and figures on page 56-57 relate to the Martin Bauer Group’s locations in Germany (Vestenbergsgreuth, Alveslohe, Kleinostheim, Demantsfürth, and Gerhardshofen). 56 57 EMPLOYEES EMPLOYEES

WOMEN IN CHARGE VALUES LUNCH CAREER AND FAMILY STAFF DAYS

Companies that have both men Our values and principles are not So that our employees can successfully AND FAMILY DAYS and women in the top jobs perform just meant to be written down, they reconcile work and family life, we offer Our staff days are an opportunity for better. That is why Martin Bauer are intended to form a central part flexible working time options and the employees to interact in a relaxed atmos- has the explicit goal of placing more of everyday life in the company. opportunity to work from home. phere, sharing their knowledge and ex- women in management positions. perience with one another as they do so. Each month, the management board At the Vestenbergsgreuth site, we Since 2018 we have been building up members take turns to invite eight to ten have reserved a number of spaces at the When opening new sites, we invite the a network and a mentoring program for employees from anywhere in the entire local daycare center for children of our employees’ families to take a peek behind women in management and have devel- company to a shared lunch where they employees. We also contribute to the the scenes and find out more about what oped targeted further training for women. discuss current issues relating to our costs of daycare for employees’ children we do. corporate values and principles. aged two and under.

58 59 COMMUNITY COMMUNITY HELPING HANDS WELCOME We support many small TO A WORLD projects that make the locations where we do OF HERBS! business more appealing places to live. Our herb garden in Aischgrund and the KEY FACT herb trail present herb-growing traditions As a family business, we care about and allow us to share our knowledge. In 2019 the Martin community and social cohesion, and it Bauer Group donated comes naturally to us to support that more than €70,000 in any way we can. The social projects to civil society we are involved in are as varied as our initiatives. departments, locations, and staff mem- bers. Our projects help people to master challenges and encourage them to get passionate about an idea and go the HERB GARDEN extra mile. Even our trainees know how to work independently and make their The Martin Bauer herb garden in own special contribution. Vestenbergsgreuth introduces the public to the world of herbs and medicinal SOCIAL COMMITMENT plants. Visitors can learn about a hun- dred different plants with enchanting The numerous societies and charities scents, beneficial effects, and evocative at our locations contribute to improving names like spring adonis and lemon- quality of life. Of course, they require fi- scented thyme. The garden is open nancial assistance to perform their impor- daily and admission is free of charge. tant daily activities. We support initiatives in the areas of education and schooling, Visitors can choose to explore the garden social inclusion, intercultural exchange, on their own, or take part in a one-hour nature studies and nature conservation. tour with an herbalist from Greuth. The herbalists, who also care for the garden, SPORT AND CULTURE are trained by the Martin Bauer Group. They show visitors how balms are made Sport and culture invigorate and inspire and teas are blended, as well as letting us all. They bring us together and help us them sample herbal punch and other get along. For many years, we have spon- delicious plant-based treats. The herb sored sports clubs Greuther Fürth and garden was founded on the initiative TSV Vestenbergsgreuth and have provided of Hedi and Adolf Wedel. funding to classical music festival Klassik am See and the open-air museum and HERB TRAIL Large noticeboards between Mailach and stage at Fränkisches Freilandmuseum in Lonnerstadt inform walkers about the Bad Windsheim. The herb garden is also the starting point origin, cultivation and use of the plants for the 24 km long herb trail. The trail grown here, such as echinacea and TRAINEES DO THEIR BIT connects Vestenbergsgreuth with the lemon balm. The boards give details towns of Lonnerstadt and Uehlfeld, pass- about the herbs’ active ingredients and On one day in Advent each year, the ing through the heart of the Franconian medicinal uses. The herbal trail was es- trainees at the Vestenbergsgreuth site herb-growing region, established here tablished in cooperation with local herb transform our office building into a for centuries. The trail leads through farmers, countrywomen’s associations, sweet-smelling wafflery. They bake woods, meadows and typical Franconian local governments, the Agriculture Office as many as 600 waffles to sell to their villages, and passes by places of great in Höchstadt, and Lokale Aktionsgruppe colleagues, with the proceeds going to natural beauty like the Egelsbach Aischgrund. a social project such as childhood cancer Weiherkette (a chain of ponds). charity Elterninitiative krebskranker Kinder.

60 61 GRI-INDEX Indicator Topic See page Notes

The Global Reporting Initiative (GRI) publishes the GRI Standards, the most-referred to standards around the globe STRATEGY for sustainability reporting by companies and organizations. 102-14 Statement from senior decision-maker 13, 16, 21 - The GRI Index includes general disclosures (GRI 102) about the organization, and information about specific 102-15 Key impacts, risks, and opportunities 20, 21, 27, 28, Data on environmental and social impacts management approaches and their individual components (GRI 103). In addition, consideration is given to impor- 34-38, 45, 55, 57 relate to German sites. tant topics such as economic aspects (GRI 200), environmental aspects (GRI 300), and social aspects (GRI 400).

This is the first Sustainability Report compiled by the Martin Bauer Group. We have based it on the GRI standards ETHICS AND INTEGRITY from 2018, which are still valid today, and have selected the “core option.” The specific standard disclosures relate to topics identified as very relevant in the materiality process. Unless noted otherwise, all disclosures relate to all 102-16 Values, principles, standards, 13, 21, 22, 26, See our Code of Conduct companies belonging to the Group. We intend to expand our sustainability management system internationally and norms of behavior 41, 42, 45 and Supplier Code of Conduct: so that we can improve the availability of data and the scope of our GRI reporting. www.martin-bauer-group.com/ en/sustainability/ 102-17 Mechanisms for advice and 22, 25 See our Code of Conduct: GENERAL DISCLOSURES concerns about ethics www.martin-bauer-group.com/ en/sustainability/

Indicator Topic See page Notes GOVERNANCE

102-18 Governance structure 8, 13, 16, 21, 28 The governance structures and decision- ORGANIZATIONAL PROFILE making processes are defined within the remit of the legal entities named. 102-1 Name of the organization 8 - 102-19 Delegating authority Where necessary, delegating authority 102-2 Activities, brands, products, 4, 5, 14 For more information, visit is clearly defined and forms a part of and services www.martin-bauer-group.com. our management documentation and/ or integrated management system. 102-3 Location of headquarters 8, 71 - 102-20 Executive-level responsibility 13, 16, 21 Alongside the management of the Martin 102-4 Location of operations 8, 14, 34-37, - for economic, environmental, Bauer Group, Anne Wedel-Klein has also 54-59 and social topics been responsible for sustainability since 102-5 Ownership and legal form 8, 13, 71 - 2019 as a member of the management board of MB-Holding. 102-6 Markets served 4, 5, 14 For more information, visit www.martin-bauer-group.com. 102-21 Consulting stakeholders on economic, 7, 15, 19, 20, 23 - environmental, and social topics 102-7 Scale of the organization 8, 9, 55 - 102-23 Chair of the highest governance body 13 - 102-8 Information on employ- 9, 55 - ees and other workers 102-29 Identifying and managing economic, 19, 20, 23, 25, - environmental, and social impacts 30, 34-38, 102-9 Supply chain 9, 28, 33, 40-52 - 41, 42, 45 102-10 Significant changes to the organ- 8 - 102-31 Review of economic, environmental, 23, 25, 26, 30, Reviewing via reporting, data evaluation/ ization and its supply chain and social topics 34-37, 47, 48 KPI, audits of the company and the supply chain 102-11 Precautionary principle or approach 6, 7, 25-27, - 34-37, 42, 45-48 102-32 Highest governance body’s role 13, 16, 21, 67 - in sustainability reporting 102-12 External initiatives 7, 15, 23, 26, Nov. 2019: We signed an SDG Compact to 45-46, boost ecological and sustainable agriculture 49-52, 60 in Africa in partnership with the German Federal Ministry for Economic Cooperation STAKEHOLDER ENGAGEMENT and Development (BMZ) and the Deutsche Investitions- und Entwicklungsgesell- 102-40 List of stakeholder groups 19 Additional list: schaft (DEG). External: Customers, supply partners, industry experts, associations, NGOs, 102-13 Membership of associations 7, 15 - networks, regional decision-makers, suppliers, certifiers, the public, consumers, regulatory and approval bodies, financial partners, potential employees Internal: Employees, managers, works council, founding family

62 63 Indicator Topic See page Notes Indicator Topic See page Notes

STAKEHOLDER ENGAGEMENT PROCUREMENT PRACTICES

102-41 Collective bargaining agreements Germany: All employees are subject to the 103 Explanation of the material topic 13, 21, 22, 40-52 Our Supplier Code of Conduct defines regulations on collective bargaining agree- and its boundary. The management the minimum requirements on social, ments (Industry-wide collective agreement approach and its components. Eval- environmental, ethical and human rights of the Landesverband Groß- und Außen- uation of the management approach obligations and challenges that are to handel; association-specific collective be met by all our suppliers. agreement of BCE). See: www.martin-bauer-group.com/ en/sustainability/ 102-42 Identifying and selecting stakeholders 19, 20 Selected according to internal expertise and with the support of external consultants ANTI-CORRUPTION 102-43 Approach to stakeholder engagement 19, 20 We involved representatives of customer groups, associations and NGOs through 103 Explanation of the material topic 20, 26, 41 Alongside other sustainability standards, written and oral surveys and through and its boundary. The management our Code of Conduct gives guidelines on workshops. approach and its components. Eval- proper business conduct. 102-44 Key topics and concerns raised 20 - uation of the management approach See: www.martin-bauer-group.com/ en/sustainability/

REPORTING PRACTICE SPECIFIC STANDARD DISCLOSURES: ENVIRONMENT 102-46 Defining report content 18-21 - and topic boundaries MATERIALS 102-47 List of material topics 20-22 - 103 Explanation of the material topic 23, 30 Documentation and assessment according Restatements of information This is the first sustainability report 102-48 and its boundary. The management to our internal systems. Within our we have published. approach and its components. Eval- “Nature” core pillar, we have set ourselves 102-49 Changes in reporting This is the first sustainability report uation of the management approach the goal of establishing a KPI system with we have published. improved environmental and social KPI. 102-50 Reporting period Jan. to Dec. 2019 301-1 Materials used by weight or volume 9, 28, 43 Basic data have been provided. For reasons of confidentiality, and particularly because 102-51 Date of most recent report - of the very wide range of our products and ingredients, no detailed data have been 102-52 Reporting cycle 67 Annually, with an update report provided at this time. 102-53 Contact point for questions 67 - regarding the report ENERGY 102-54 Claims of reporting in accor- 62, 67 - dance with the GRI Standards 103 Explanation of the material topic 22, 30, 34 All German sites have an energy man- and its boundary. The management agement system certified to ISO 50001. 102-55 GRI content index 62-69 - approach and its components. Eval- uation of the management approach 102-5t External assurance Currently no external assurance 302-1 Energy consumption within 34 German sites only the organization SPECIFIC STANDARD DISCLOSURES: ECONOMY 302-4 Reduction of energy consumption 34, 30, 38, 39 German sites only

WATER AND WASTE WATER ECONOMIC PERFORMANCE 103 Explanation of the material topic 22, 36 Germany: Water consumption, the pro- 103 Explanation of the material topic 12, 13, 21, - and its boundary. The management vision of fresh water, and the disposal of and its boundary. The management 22, 25-28 approach and its components. Eval- waste water are subject to official require- approach and its components. Evalu- uation of the management approach ments, and the organization and technical ation of the management approach processes are comprehensively determined. 201-1 Direct economic value generated 9 - Options for optimizing water consumption and distributed and saving water are regularly explored and monitored. 201-2 Financial implications and other 27 - risks and opportunities due to 303-3 Water withdrawal 36 German sites only climate change 303-4 Water discharge 36 German sites only 303-5 Water consumption 36 German sites only

64 65 Indicator Topic See page Notes Indicator Topic See page Notes

BIODIVERSITY SUPPLIER ENVIRONMENTAL ASSESSMENT

103 Explanation of the material topic 30-33 Biodiversity is primarily a concern of our 103 Explanation of the material topic 40-48 Our sustainable sourcing standard maba- and its boundary. The management supply chain management, our agricultural and its boundary. The management grown and its certification process require approach and its components. Eval- consultancy, and our sustainable sourcing approach and its components. Eval- all suppliers included in the program to uation of the management approach standard mabagrown. The Martin Bauer uation of the management approach submit to an environmental assessment. Group has its own specialists in this area. 308-1 New suppliers that were screened 42, 47 - 304-2 Significant impacts of activities, 30-33, 42, 45, - using environmental criteria products, and services on biodiversity 47, 49, 50

EMISSIONS

103 Explanation of the material topic 20, 22, 30, Focus on climate-relevant emissions with SPECIFIC STANDARD DISCLOSURES: SOCIAL ISSUES and its boundary. The management 35, 38 the goal of becoming carbon neutral. approach and its components. Eval- For ways in which we are making our data uation of the management approach analysis and optimization more professional, EMPLOYMENT see our goals in the “Nature” core pillar. 103 Explanation of the material topic 54, 55, 58 - 305-1 Direct (Scope 1) GHG emissions 35 German sites only and its boundary. The management approach and its components. Eval- 305-2 Energy indirect (Scope 2) 35 German sites only uation of the management approach GHG emissions 401-1 New employee hires and employee 55 - 305-5 Reduction of GHG emissions 30, 34, 35 German sites only turnover 401-3 Parental leave 55 - EFFLUENTS AND WASTE

103 Explanation of the material topic 22, 36, 37 Germany: Waste management organized and its boundary. The management and implemented in accordance with the LABOR/MANAGEMENT RELATIONS approach and its components. Eval- Kreislaufwirtschaftsgesetz (Circular Econ- uation of the management approach omy Act) and official regulations; waste 103 Explanation of the material topic 54-60 Germany: Collective bargaining agreements water is dealt with in accordance with the and its boundary. The management in place; employee representation through Wasserhaushaltsgesetz (Federal Water approach and its components. the works council; agreements on various Act) and our specific authorizations; part topics made between employer and of the integrated management system employees 306-1 Water discharge by quality and 36 Germany: The amounts of various destination substances in the water are subject to OCCUPATIONAL HEALTH AND SAFETY regular internal and external monitoring according to official regulations. 103 Explanation of the material topic 26, 55, 57 Germany: Health and safety organization, 306-2 Waste by type and disposal method 37 Germany: Waste is disposed of by certified and its boundary. The management regulations, technical and organizational specialized waste management companies approach and its components. Eval- precautions and monitoring are carried only. uation of the management approach out in accordance with health and safety legislation; an integrated management 306-3 Significant spills No significant incidents or accidents system is installed. in the reporting period 403-1 Occupational health and safety 26, 57 Germany: System in accordance with management system health and safety legislation; integrated ENVIRONMENTAL COMPLIANCE management system 403-2 Hazard identification, risk assessment, 26, 57 Germany: Hazard identification and 103 Explanation of the material topic 26 Monitoring through regular inspection and incident investigation risk assessment within the integrated and its boundary. The management tours, internal and external audits, and management system; occupational approach and its components. Eval- technical and organizational measures health and safety uation of the management approach (no explicit environmental audits to date; however, general aspects form part of 403-3 Occupational health services 57 Germany: Responsibility of company the integrated management system and physician indi-vidual monitoring processes such as SEDEX/SMETA audits). 403-4 Worker participation, consultation, 57 Germany: Via health and safety organiza- and communication on occupational tion, company physician, works council, 307-1 Non-compliance with environmental At the date of publication, we know of no health and safety integrated management system laws and regulations legal violations or of any related monetary penalties or fines, and none are pending. 403-5 Worker training on occupational 57 Germany: Obligatory initial and regular health and safety training; further training options

66 67 Indicator Topic See page Notes Indicator Topic See page Notes

OCCUPATIONAL HEALTH AND SAFETY FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING

403-6 Promotion of worker health 54, 56, 57 German sites only 103 Explanation of the material topic 54 For details see our Code of Conduct and and its boundary. The management Supplier Code of Conduct: 403-7 Prevention and mitigation of occu- 26, 57 Germany: Extensive external and internal approach and its components. Eval- www.martin-bauer-group.com/ pational health and safety impacts documentation and monitoring systems; uation of the management approach en/sustainability/ directly linked by business relationship integrated management system 407-1 Operations and suppliers in which the 54 No risks to the best of our knowledge 403-8 Workers covered by an occupational 26, 57 German sites only; international right to freedom of association and health and safety management system locations are successively analyzed collective bargaining may be at risk and integrated with regard to their existing health and safety organization CHILD LABOR 403-9 Work-related injuries 57 German sites only 103 Explanation of the material topic 26, 42, 45, 54 For regulations, see the certification 403-10 Work-related ill health 57 German sites only and its boundary. The management standards, the sustainable sourcing approach and its components. Eval- standard mabagrown, and individual uation of the management approach regulations like our Code of Conduct TRAINING AND EDUCATION and our Supplier Code of Conduct www.martin-bauer-group.com/ 103 Explanation of the material topic 54, 56, 57 Germany: Education promotion system; en/sustainability/ and its boundary. The management obligatory training; further training options approach and its components. Eval- 408-1 Operations and suppliers at signifi- 54 No significant risk to the best of our uation of the management approach cant risk for incidents of child labor knowledge 404-1 Average hours of training 56 German sites only per year per employee FORCED OR COMPULSORY LABOR

404-2 Programs for upgrading 54, 56, 57 German sites only 103 Explanation of the material topic 26, 42, 45, 54 For regulations see the certification employee skills and transition and its boundary. The management standards, the sustainable sourcing assistance programs approach and its components. Eval- standard mabagrown, and individual uation of the management approach regulations like our Code of Conduct DIVERSITY AND EQUAL OPPORTUNITY and our Supplier Code of Conduct www.martin-bauer-group.com/ 103 Explanation of the material topic 54, 58 We are a signatory of the Diversity Charter. en/sustainability/ and its boundary. The management See: www.charta-der-vielfalt.de/en/signing- 409-1 Operations and suppliers at 54 No significant risk to the best of our approach and its components. Eval- the-charter/signatory-data-base/list/ significant risk for incidents of knowledge uation of the management approach See our goal “To promote diversity forced or compulsory labor and equal opportunities” and our program “Women in Charge” SECURITY PRACTICES 404-1 Diversity of governance 54, 55 Germany: Numerical data will bodies and employees be expanded in the next report 103 Explanation of the material topic 26, 42, 45, 54 Germany: Obligatory employee independently of the goals. and its boundary. The management training; trained internal auditors; 404-2 Ratio of basic salary and 54 Remuneration independent of gender, approach and its components. Eval- mabagrown auditing system remuneration of women to men there is no wage discrimination uation of the management approach 410-1 Security personnel trained in human 26, 42, 45, 54 Germany: Primarily internal supply NON-DISCRIMINATION rights policies or procedures chain auditors

103 Explanation of the material topic 54 We promote diversity and equality of HUMAN RIGHTS ASSESSMENT and its boundary. The management opportunity. approach and its components. Eval- 103 Explanation of the material topic 26, 42, 45, 54 For regulations see the certification uation of the management approach and its boundary. The management standards, the sustainable sourcing 406-1 Incidents of discrimination and 54 Not published for reasons of discretion approach and its components. Eval- standard mabagrown, and individual corrective actions taken and confidentiality uation of the management approach regulations like our Code of Conduct and our Supplier Code of Conduct www.martin-bauer-group.com/ en/sustainability/ 412-1 Operations that have been 8, 26, 54 No violations to the best of our knowledge subject to human rights reviews or impact assessments 412-2 Employee training on human 56 Basic standard training about the system rights policies or procedures for employees

68 69 STRATEGY ABOUT STRATEGY Indicator Topic See page Notes THIS REPORT This Martin Bauer Group Sustainability Validity LOCAL COMMUNITIES Report is the first report to provide In compiling this report, to the best of our 103 Explanation of the material topic 7, 21, 22, 25, Long-term trusting relationships comprehensive information about knowledge we have drawn on up-to-date and its boundary. The management 28, 33, 40-52 and programs with suppliers our sustainability commitment. sources and verified information. However, approach and its components. Eval- we cannot exclude the possibility that small uation of the management approach Reporting period discrepancies may have occurred. Our reporting on the environmental, social 413-2 Operations with significant 33, 49-52 Comprehensive support programs for and economic aspects of sustainability The four principles for defining report content: actual and potential negative our suppliers’ local communities relates to the 2019 business year (January impacts on local communities through December). In 2021 we will provide 1. Stakeholder Inclusiveness: We comprehen- an updated report for 2020. sively included our stakeholders in the further SUPPLIER SOCIAL ASSESSMENT development of our sustainability concept, Scope considering their expectations and interests. 103 Explanation of the material topic 7, 41, 42, 45-48 Internal and external auditing and This report is aligned to our sustainability and its boundary. The management certification systems strategy and covers all companies belonging 2. Sustainability Context: We sharpened approach and its components. Eval- to the Martin Bauer Group. We have noted our focus on the topic of sustainability uation of the management approach. cases where we only have the figures for and made the information we provide 414-1 New suppliers that were 7, 42, 47 All suppliers included in the mabagrown German sites of the Martin Bauer Group more precise. We clearly documented screened using social criteria sourcing standard and/or in external on the relevant pages. We will strive to expectations, opportunities and risks. certifications expand our scope in the long term. 3. Materiality: : We held interviews and work- 414-2 Negative social impacts in the 7, 42, 47 Findings from supplier audits and Standards shops to identify and prioritize aspects that supply chain and actions taken corrective action taken are not reported for reasons of discretion and confidentiality This sustainability report follows the current have particular relevance for our stakeholders. standards of the Global Reporting Initiative (GRI). We selected the core option, which 4. Completeness: The report covers all CUSTOMER HEALTH AND SAFETY focuses on the communication of material the material impacts of the Martin Bauer aspects. These aspects relate to the major Group along its value chain. Data from 103 Explanation of the material topic 6, 7, 26, 42-48 Product quality and product safety have economic, environmental and social im- all units was included, where available. and its boundary. The management top priority in our company. They are assured pacts that an organization may have and approach and its components. by internal and external quality assurance to aspects that significantly influence the If you have any questions or comments Evaluation of the management processes and trained staff members. approach assessments and decisions of stakeholders. about this report, please feel free to contact Almut Haase at 416-1 Assessment of the health and safety 6, 7, 26 All products are subject to comprehensive [email protected], impacts of product and service quality and monitoring regulations. Phone +49 9163 88-645 categories The assessment of potential impacts is part of our quality management and risk management systems.

Layout PUBLISHING Communications agency Schultze. Walther. Zahel. GmbH, INFORMATION Nuremberg, Germany www.martin-bauer-group.com/ Photo credits sustainability Adobe Stock: 24, 53; William Belliveau: 3, 29, This report is available on our website 40, 45; Steffen Boseckert: 32/33, 42; Brandical: along with additional information. 14; Andreas Brehmer: 6, 11, 13, 16, 21, 28, 43; Publisher Fotolia: cover photo, 4/5,18, 23, 43, 59, 64/65, MB-Holding GmbH & Co. KG 66/67; Getty Images: Titelbild, 4, 5, 8, 12, 13, Dutendorfer Straße 5-7 18, 21, 23, 26/27, 31, 43, 55, 59, 62/63, 68/69, 91487 Vestenbergsgreuth, Germany 70; Ricarda Horst: 50; iStock: 11, 12, 55; Martin www.mb-holding.com Bauer Group: 3, 4, 5, 11, 12, 17, 31, 36, 38, 47, 48, 49, 51, 52, 56, 60, 61; Mike Meyer: 28; Andreas Responsible for content Rumpf: 46; SWZ: 31, 39, 44; Thomas: 3, 6, 9, 11, Anne Wedel-Klein 37; Yu Qibin: 58/59; Sabine Wolfsgruber: 71 Editors Print Gisbert Braun, Almut Haase, Carolin Popp oeding print GmbH, Braunschweig, Germany Printed carbon neutrally on FSC® paper Translation Heather Kimber

70 71 STRATEGY STRATEGY

Martin Bauer Group

Martin Bauer Group www.martin-bauer-group.com [email protected]

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