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ORKLA BÆREKRFTSRAPPORTsustainability report / 2012 / 2012 contents

Highlights in 2012 03 Foreword 04 Orkla’s corporate responsibility 06 Food, People and the Environment 06 Anti-corrution and competition law 09 Awards to Orkla companies 10 Stakeholder dialogue in 2012 11 People 12 People and leadership 12 Building a strong company 17 Environment, Health and Safety 18 Safe workplases 18 Preventing sickness absence 20 Safety culture at Stabburet 20 Safety in sales work at Nidar 21 Environment 22 Responsibility for the environment 22 Energy recovery at Procordia 25 Conscious use of packaging 26 Packaging development at Lilleborg 27 Food Safety 28 Consumer confidence through safe products 28 Food safety in purchasing 31 Orkla’s approach to modern gene technology 31 Nutrition and Health 32 Food enjoyment in a balanced diet 32 Responsible marketing 38 Dutch bread with less salt 39 Responsible Purchasing 40 Collaboration based on ethical, sustainable principles 40 Workers’ rights 41 Cocoa production in West Africa 43 Textile manufacturing in Asia 44 Fish oil production in Peru 45 Sustainable purchasing 46 Palm oil 47 Sustainable fishing 47 About the report 48 Sponsorships 49 Associated Non-core Business areas company

Orkla Sapa Confectionery Orkla Home Orkla Orkla Food Jotun (part of future JV) Aluminium profiles Orkla Foods & Snacks & Personal International Ingredients (42,5 %) and building systems EBITA1 (NOK million): Stabburet Chips Group Lilleborg MTR Foods Idun-group Procordia Göteborgs/Sætre Lilleborg Orkla Brands KåKå-group 233 Profesjonell Russia Abba Seafood Nidar Odense Marcipan Pierre Robert Felix Austria Sapa Heat Transfer Beauvais foods Panda Group Credin bageripartner Rolled aluminium Orkla Foods Kalev Axellus-group products Fenno-Baltic Credin-group EBITA1 (NOK million): Dragsbæk- group 309 Orkla Foods Romania Hydro Power Sonneveld Group EBITA1 (NOK million):

Operating revenues Operating revenues Operating revenues Operating revenues Operating revenues Operating revenues* 208 (NOK million): (NOK million): (NOK million): (NOK million): (NOK million): (NOK million):

7.972 4.794 4.025 2.133 5.435 11.351 Shares and financial assets EBITA1 EBITA1 EBITA1 EBITA1 EBITA1 EBITA* Value (NOK billion): (NOK million): (NOK million): (NOK million): (NOK million): (NOK million): (NOK million): 3,6 1.114 780 702 -5 228 1.126 Orkla Eiendom (real estate) Number of Number of Number of Number of Number of Number of Book value man-years man-years man-years man-years man-years man-years (NOK billion): 3.061 2.231 1.787 4.432 2.224 6.379 1,8 Corporate Centre and support functions

* Figures on a 100% basis. 1 Operating profit before amortisation and other income and expenses.

Design and production: Cox Design, Oslo | Photo cover: Mari Svenningsen | Print: TS trykk AS. The leading Operating revenues Group operating revenues Nordic branded totalled NOK 30.0 billion. consumer 30.0 goods company Earnings per share Orkla ASA is an international group listed on the Oslo Earnings per share Stock Exchange and headquartered in Oslo, Norway. were NOK 1.6 in 2012. The Group is the leading Nordic supplier of branded consumer goods and concept solutions to the grocery and out-of-home sectors. Orkla also holds several strong positions in India, Russia and Austria. Moreover, Orkla Food 1.6 Ingredients is a major supplier to the European bakery market.

In addition to its branded consumer goods business, Orkla 1 still operates in the real estate, hydropower and aluminium EBITA sectors and has financial investments. Group EBITA1 totalled NOK 3.3 billion. As of 31 December 2012, Orkla had around 28,000 employees, of whom some 14,000 were employed in its branded consumer goods business. In 2012, the Group 3.3 had a total turnover of around NOK 30 billion. 1 Operating profit before amortisation and other income and expenses.

SALES REVENUES BY CAPITAL EMPLOYED PER SALES REVENUES PER GEOGRAPHICAL AREA GEORGAPHIC AREA BUSINESS AREA

Norway 9,239 (32 %) Norway 9,944 (41 %) Orkla Foods 7,839 (27 %) Nordic region excl. Norway 10,096 (35 %) Nordic region excl. Norway 10,293 (42 %) Orkla Confectionery & Snacks 4,760 (17 %) Central and Eastern Europe 3,679 (13 %) Central and Eastern Europe 2,166 (9 %) Orkla Home & Personal 3,986 (14 %) Rest of Europe 2,282 (8 %) Rest of Europe 547 (2 %) Orkla International 2,077 (7 %) Asia 2,694 (9 %) Asia 1,477 (6 %) Orkla Food Ingredients 5,378 (19 %) America/Rest of the world 569 (2 %) America/Rest of the world 28 (0.1 %) Other Business 4,519 (16 %) Total sales revenues NOK 28,559 million Total capital employed (capitalised) Total sales revenues NOK 28,559 million. NOK 41,944 million 3

Responsible sourcing pro­ cedures were introduced in 10,000 companies that account for 80% of Orkla’s purchasing1

tonnES of palm oil used in food products have 10% been replaced by rapeseed and sunflower reduction in seed oil as a result of product development in the period 2008–2012 consumption of packaging1 35% 740 of the management staff in Orkla’s branded managers and key personnel underwent training in corporate responsibility and consumer goods business were women business ethics

Close to 50% of Orkla’s sales of beverages derive from sugar-free products

8% reduction in greenhouse No serious incidents gas emissions from 2011 to 2012 related to food safety

The Lost Work Day Rate (LWDR)2 More than 26% 90% of waste was reduced of Orkla’s food sales derive is recycled or from 4.6 in from products that offer used for other health benefits or have a purposes1 2011 to 3.6 reduced content of sugar, in 2012 saturated fat or salt

1Applies to Orkla's branded consumer goods business from 2011 to 2012 2Number of injuries leading to absence per million hours worked 4 Orkla sustainability report 2012 foreword Building the future together

Orkla is on its way to becoming a focused branded consumer goods company. Through profitable growth and sustainable products we will create a better future for our consumers, customers, employees, shareholders and communities.

Orkla’s transformation from a complex approach to the use of new ingredients; Population growth, climate change industrial group into the strongest branded for instance, we do not use raw materials and water shortages in large parts of the goods company in the Nordic region has or ingredients that have been produced world put growing pressure on the brought our sustainability agenda to the using gene technology. We accept the production of agricultural raw materials. fore. Consumers must be able to trust our extra cost that this entails in order to Although Orkla does the bulk of its pur- brands and the way in which they are be able to offer consumers the safety chasing in the Nordic region, we are also produced. As a leading food and beverages they desire. dependent on raw materials that present producer, we have a farm-to-fork responsi- certain challenges. Abba Seafood’s bility. We therefore focus attention on Every day, Orkla’s food products can be commitment to sustainable fishing working conditions and the working found on the breakfast and dinner tables and Nidar’s use of certified cocoa are environ­ment in the supply chain, the of thousands of consumers. That is why examples of efforts that play an im­ environment, health and safety perfor- we are committed to promoting the portant role in ensuring a stable food mance of our own operations, sensible enjoyment of food and good dietary supply in the future. use of raw materials and ways in which habits. Orkla companies are engaged we can help consumers adopt a healthier in systematic efforts to develop products Orkla has been a member of the Global lifestyle. that make it easier to maintain a balanced Compact since 2005. I am proud of what diet, and 26% of our food sales derive we have achieved since we signed this Food safety is fundamental to responsible from products that offer health benefits important initiative, and enthusiastic food production. Safe food necessitates or have a reduced content of sugar, satu- about the future. We at Orkla believe that vigilance and effective quality procedures rated fat or salt. In the last four years the road to a sustainable future lies in the all along the value chain. Orkla has estab- alone, our companies have cut their willingness of trade and industry, public lished safe food production processes annual consumption of palm oil by authorities and society at large to think based on an internationally recognised around 10,000 tonnes, replacing it with creatively, the constructive interaction standard at all our factories. Every year, healthier vegetable oils. In the years of these parties and, above all, hard work. we invest substantial resources in in-­ to come, we will further intensify our Creating a sustainable society is a shared house training programmes, food safety efforts in the field of nutrition. responsibility, and we must all begin with audits, quality control and improvement ourselves. measures. We take a precautionary

Åge Korsvold President and CEO 5 P hoto: Guri Dahl/tinagent.no 6 Orkla sustainability report 2012 orkla's corporate responsibility Food, people and the environment

As one of the Nordic region's largest food producers, our responsibility extends from farm to fork. P hoto: Mari Svenningsen 7

Orkla and our companies are dependent on consumers, investors, authorities and the Orkla and the community general public trusting that we have sound Many of the Orkla companies have a strong position in their markets procedures for food safety and for handling the sustainability challenges in the value and local communities. The companies contribute to strengthening the chain. Our products must have a taste and local communities by partnering with local authorities, schools and quality that never disappoint, and be pro- organisations in the spheres of sport, culture and humanitarian work. duced in a responsible manner that does no harm to people or the environment. Results in 2012 In 2012, Orkla and the Group companies3 contributed NOK 22 million Priority areas in financial support to activities in the spheres of sport, humanitarian In light of an appraisal of our responsi­ work, culture, education and work to bring about improvements in the bilities to our stakeholders, and the risk supplier chain. Important measures in 2012 were: we perceive to be associated with impor- tant sustainability trends, we have identi- fied the following main topics for Orkla's • Swedish Procordia joined forces with the organisation Friends, to sustainability work: support their work to prevent bullying. The company also supported a project for training woman entrepreneurs in Swaziland. • Human resource development and corporate culture • Stabburet is the main sponsor for Fredrikstad Football Club, and was • Safety and working environment engaged in the club's Street Team, which aims to give substance abusers • The environment a better quality of life through fellowship and physical exercise. • Food safety • Nutrition and health • Lithuanian Suslavicius-Felix involved itself in a variety of youth • Responsible sourcing projects, including a joint project with the organisation Maisto Bankas to promote healthy eating habits and physical activity Driven by ambitious goals and by means of systematic development work in these at Lithuanian schools. areas, Orkla creates value for society and long-term, profitable growth for the • Latvian Spilva supported education of youngsters with disabilities Group. Engaging in these topics is there- in collaboration with Latvijas Bérnu Fonds. fore more than fulfilling a responsibility; it contributes to sound operations. • Lilleborg supported UNICEF and its work in developing water and sanitary conditions in North Korea. Sustainable food production • Dutch Sonneveld supported the foundation Bake for Life and its work Orkla promotes sustainable food production to establish bakeries in Africa, where people who are challenged in by setting stringent requirements for food various ways receive training in the bakery business. safety, carrying out development work in connection with food and health, making

Our approach We want to assume responsibility for the impact of our activities on the community around us. At the same time, we wish to contribute to a more sustainable future through product development and improvements that create value for both society and Orkla.

Our principles are based on the recognition that we are responsible for running our operations with respect for people and the environment, and that we are in a position to create positive ripple effects for the community around us.

3Applies to Orkla excluding Sapa (part of a future joint venture). 8 Orkla sustainability report 2012 orkla's corporate responsibility

conscious choices in the use of natural health hazard, and maintain an The companies also place emphasis on resources and working to bring about active dialogue with relevant research good consumer guidance, consumer improvements in the supply chain. communities and supervisory authorities. services and responsible marketing.

Food safety is a sine qua non for all food Orkla has a wide-ranging and varied port- Population growth, consumer growth production in Orkla, and the Group's food folio of food products which span from and climate change combined are placing safety standard ensures that both food dietary supplements via food staples to increasing pressure on natural resources production and sourcing of raw materials products for pure indulgence. In those and there is a growing need to shift food and packaging take place in accordance market segments where it is natural and production in a more sustainable direction. with stringent quality requirements. The possible, the companies develop food pro- Orkla's sourcing of raw materials is based Orkla Food Safety Standard was revised ducts that can promote a healthier diet. In on the principle of sustainable production. in 2011, and the new and stricter version the course of the last five years, Orkla has The Orkla companies are also working was implemented in 2012. In the interests reduced the content of salt, sugar and actively on measures to increase energy of consumer health, the Orkla companies saturated fat in a considerable number efficiency and reduce water consumption practice a precautionary approach to the of food products, and thereby made an and food waste. use of ingredients that may be a potential important contribution to public health.

Governing principles for corporate responsibility and business ethics Orkla companies have independent responsibility for operations which also includes corporate social responsibility. The work is followed up through business reviews and other internal reporting, internal audits and risk management procedures. Orkla places emphasis on continuous improvement, where resources are focused on the areas with greatest risk and opportunity. Decisions and activities are based on the precautionary principle.

Results in 2012 • In 2012 Orkla developed a method of analysing sustainability- related risk and tested it on selected companies, with good results. The method is designed in such a way that it allows mapping of the company's responsibility to important stakeholders through the

entire value chain. 20000

• A new web portal that gives all the Group companies and employees easy access to Orkla's governing documents 15000 was launched in 2012. 17,7 10000 • The Group's corporate responsibility function assists the companies with training and guidance in corporate responsibility and business ethics, as a supplement to the training conducted by the companies 5000 themselves. A total of 740 managers and key personnel took part in training in corporate responsibility and business ethics in 2012, NOK milllion compared with approximately 150 in 2011. This represents about 11 12* 3% of the total number of employees. ECONOMIC VALUE CREATION FOR SOCIETY Goals for 2013/2014 Employee wages (payroll expense) • A broad roll-out of the risk mapping method To society in the form of taxes (Tax charge) To Orkla shareholders in the form of dividends and buyback/sale of treasury shares • Revision of the procedures for training in corporate responsibility * Orkla without Sapa (part of future JV) and business ethics. 9

The Global Compact Orkla has been a participant of the UN initiative Global Compact since 2005. Orkla's corporate responsibility principles are based on those of the Global Compact, on the UN Guiding Principles on Business and Human Rights and on the OECD Guidelines for Multinational Enterprises.

Anti-corruption and competition law

Orkla aims to develop a corporate culture characterised by good judgement and the ability to handle difficult situations to avoid becoming involved in corruption and breach of competition rules.

Value creation in Orkla must take place in conformity with our ethical guidelines and with current legislation. As a conse­ training quence, Orkla has zero tolerance for Orkla attaches importance to preventing corruption, and anti- corruption. Corruption is an obstacle to corruption is a regular theme in Orkla's management training economic development, inhibits competi­ and in the Group's general corporate responsibility training. This tiveness and undermines both the rule of is additional to the companies' own training activities. law and democratic processes in society. Results in 2012 Orkla was involved in no cases relating • A total of 99 managers and key personnel underwent anti- to anti-corruption rules in 2012.4 corruption training. This represents 0.3% of the Group's total Orkla Brands Russia was involved in one number of employees. case concerning competition rules in 2012. In March 2011, Moskovskaya Konditer- • Competition law is also a regular topic in Orkla's sales and skaya Fabrika "Krasniy Oktyabr" (KO) filed purchasing competency programmes. The Group's legal depart- a suit against Orkla Brands Russia claiming ment also held training for managers and key sales and purchasing unfair competition and infringement of personnel in Orkla's Norwegian companies. All in all, 166 mana- trademark rights belonging to KO. The gers and key personnel underwent training in competition law. case was dealt with by the Russian Federal This represents 0.6% of the Group's total number of employees. Antimonopoly Service, which upheld KO's claim in July 2012. Orkla Brands Russia appealed the ruling to the Moscow Arbi- Goals for 2013/2014 trazh Court, which maintained the decision. • The procedures for anti-corruption and competition law training Orkla Brands Russia has appealed the case are to be revised. further to the Ninth Arbitrazh Court of Appeals. Orkla has also taken the matter up with Russia's political leadership.

4According to annual internal reporting of disputes, lawsuits, supervisory issues and similar matters by the business areas to the Group. 10 Orkla sustainability report 2012 orkla's corporate responsibility Awards to Orkla companies

In 2012, Orkla was on the Dow Jones Sustainability Europe Index for the second year in a row. Several Orkla companies also achieved external recognition of their work on environmental and social responsibility in 2012.

• Stabburet was given the "Gullpalmen" 2012, partly for its good work with the • KiMs (Denmark) received the Enterprise award by the Rainforest Foundation and environment, health and safety and its Award for 2011 for social inclusion and Grønn Hverdag for replacing palm oil engagement in sustainability challenges corporate responsibility. The award was with sunflower seed oil in all its pro- in the cocoa sector. The award was made made by the Nordfyn Employment ducts, and thereby avoiding exacerba- by the Confederation of Norwegian Council for the company's contribution ting the environmental challenges associ­ Enter­prise (NHO) in collaboration to creating a good working environment ated with the cultivation of palm oil. with representatives of manufacturing, and for helping unemployed persons employee unions, politicians and the into work by making work experience • Nidar was chosen as "Food and Beverage trade press. placements available. Manufacturer of the Year" in Norway in

Orkla's partners

SOS Children's Villages The Ethical Trading Initiative Orkla has been the main sponsor for SOS Children's The Ethical Trading Initiative (ETI) is a member- Villages since 2000. Orkla's contribution for the based resource and competency centre for ethical period 2009–2014 is earmarked for building a trade consisting of companies, public sector enter- children's village in Pleiku, Vietnam. A number of prises and organisations. The objective is cooperation Orkla companies have contributed to this project. on trade that promotes human rights, worker rights, development and the environment. ETI membership commits members to concrete, targeted efforts to Transparency International achieve improvement over time. Orkla has been a member of Transparency Inter­ national Norway since 2005. Through its member­ Orkla became a member in 2012 after Group ship, Orkla contributes financial support for the companies Nidar, Lilleborg and Pierre Robert Group organisation's important work of countering had already been members for some years. Orkla corruption, while at the same time gaining has contributed to the ETI's work by auditing the valuable input for our own anti-corruption work. organisation's reporting templates and has also had discussions with the organisation about the ongoing work on responsible sourcing. 11

Stakeholder dialogue in 2012

A good dialogue with stakeholders is important for understanding the society of which we form a part, obtaining ideas and input for further development of our operations, and creating confidence in our companies and products.

Cooperation with other companies, autho- Orkla also took part in 2012 in a discussion Credin and Credin BageriPartner rities, research communities and organi- with the Norwegian authorities on the participated in the Danish authorities' sations may be important as a means of formulation of future rules for marketing whole grain campaign, and Sonneveld learning and for meeting complex challen­ food to children. Our approach to this was involved in the development of ges. An active and open dialogue with issue is described in the section on a food safety information and audit stakeholders is therefore a key principle nutrition and health. system in the Dutch bakery sector. for Orkla's corporate responsibility work. Orkla has also taken part in the food Orkla received NOK 7.5 million in Promoting corporate industry's dialogue with the Danish au­ government support and grants for responsibility thorities on the effect of the tax on satura- research, investment, improvements In 2012, Orkla had an active dialogue ted fat that was introduced in Denmark in and other aspects of operations in 20125. with the Norwegian Ministry of Foreign 2011. The tax was abolished in 2012 with Affairs and a number of organisations effect from 2013 because it had a limited and companies on various issues associa- effect on health, had the effect of distor- ted with corporate responsibility. Orkla ting competition and was difficult to ad- President and CEO Åge Korsvold atten- minister for both manufacturers and the ded a Round Table Conference on corpo- authorities. In 2012, the Danish authorities rate responsibility in the autumn of 2012. also considered extending the tax on choc­ The conference was chaired by the Nor- olate and sugar to other sugar-containing wegian Foreign Minister, Espen Barth products. This proposed extension was Eide, and Orkla was in the Ministry's also quashed by the Danish Folketing reference group in connection with (parliament). Beauvais foods took part the planning of the international CSR in the Danish food industry's dialogue conference in Oslo in November. with the authorities on these taxes.

Relevant issues in 2012 In 2012, Stabburet, KiMs Norge, Sætre Orkla calls for framework policy condi- and Nidar had discussions with the orga- tions that encourage cooperation between nisations Grønn Hverdag (a Norwegian the authorities and the business sector on voluntary organisation promoting sustai- meeting society's sustainability challen- nable living) and the Rainforest Founda­ ges. In 2012 we held dialogues with the tion Norway regarding the companies' Foreign Ministry, NORAD, Minister of handling of the environmental challenges Trade and Industry Trond Giske and presented by palm oil. In Sweden, Göte- other key politicians on the possibility of bergs Kex had a similar dialogue with the establishing a public-private sector colla- environmental organisation Swedish So- borative project on the sustainability chal- ciety for Nature Conservation. These dis- lenges posed by Côte d'Ivoire's cocoa sec- cussions have provided the companies tor. More generally, we see a need to lay with valuable input and support for their down framework conditions that make efforts to reduce the use of palm oil and possible this type of public-private sector replace conventional palm oil with collaboration on development issues. certified oil.

5Applies to Orkla excluding Sapa (part of a future joint venture). 12 Orkla sustainability report 2012 people

People and leadership

In order to be successful as a company, we need to extract the full potential of all our human resources for the good of the individual, Orkla, our customers and the community. P hoto: Sofie B rovold 13

We know people thrive when they have an opportunity to use their skills, develop and form part of a good fellowship. Enab- ling this to happen is a responsibility, but above all it is a sound investment. Good results are created when all our employees master their existing tasks and stretch themselves to conquer new ones.

We as a company must constantly stretch ourselves to satisfy the changing expecta- NUMBER OF EMPLOYEES, NUMBER OF EMPLOYEES, tions of consumers, customers and the BY BUSINESS AREA BY GEOGRAPHICAL AREA community as a whole. In our work to Orkla Foods 3,162 (21 %) Norway 3,082 (21 %) strengthen Orkla's position as the leading Orkla Confectionery & Snacks 2,336 (15 %) Nordic region excl. Norway 4,880 (33 %) Nordic branded consumer goods compa- Orkla Home & Personal 1,793 (12 %) Central and Eastern Europe 4,614 (31 %) Orkla International 4,123 (28 %) Rest of Europe 517 (3 %) ny, we have therefore defined 'people and Orkla Food Ingredients 2,234 (15 %) Asia 1,886 (13 %) leader­ship' as one of our strategic pillars. Other Business 1,332 (9 %) America/Rest of the world 0 (0 %) This is about competency development, Number of employees 14,974 Number of employees 14,974 but also about corporate culture, working environment, dialogue, involvement and teamwork.

The transformation into the new Orkla In the years ahead, Orkla will further develop its position in the Nordic region, Our position on human rights while utilising opportunities for profitable Fundamental to human rights work is an understanding growth in the other markets in which of what respect for human rights means in practice for the Orkla has a presence. The change from individual company, our employees and our business partners. a diversified manufacturing group to Equal opportunities, diversity, consultation and employee a branded consumer goods company entailed a number of structural changes involvement are core values for Orkla. We do not accept in 2012: breaches of human and workers' rights.

• Borregaard was listed on the Stock Orkla's human rights policy was drawn up in 2011. The Exchange and Orkla reduced its holding document contains concrete principles that guide managers in the company to less than 20%. The and employees of Orkla companies in understanding which interests of the employees were an issues they should be aware of in their daily work. important factor in the decision to list the company. Orkla has procedures for appointments and working conditions that ensure that employee rights are in conformity with local • Orkla signed a joint-venture agreement legislation and Orkla's requirements. Among other things, with Hydro with the ambition of estab- we require that all employees have written terms of service lishing a world-leading supplier of alu- minium systems. The agreement involves contracts, regulated working hours and good working a merger of the two Orkla-owned compa- conditions. There is no child labour or forced labour in nies Sapa Profiler and Sapa Building Group companies. Systems with Hydro's extrusion operation. The new company will be established in Orkla was involved in no cases relating to indigenous rights 2013 providing that it is approved by the in 2012.6 Nor were Group companies involved in any legal competition authorities. In this process, disputes concerning breach of privacy protection or of data Orkla has attached importance to good storage rules.6 internal communication and dialogue with the employee representatives.

• Orkla acquired the branded consumer goods company Jordan and integrated the company into the Group's activities.

6According to annual internal reporting of disputes, lawsuits, supervisory issues and similar matters by the business areas to the Group. 14 Orkla sustainability report 2012 people

As a result of good planning and active employees losing their jobs. The permanent staff are covered today by initiatives to find new work for those company has drawn up a restructuring procedures that include an annual who became redundant, there was no plan in close consultation with the performance review, and our ambition is need for dismissals in the wake of the employee representatives. that all employees should receive regular, integration. constructive feedback on the work they • In 2012, Beauvais foods decided to move do. All Group managers are also followed • Orkla acquired the food company Rieber some of its manufacturing from the up with respect to their results in the & Søn ASA, and will integrate Rieber & plant in Svinninge, Denmark, to facilities spheres of personnel development and Søn into Orkla's activities in 2013, provi- at other Orkla companies. The change the cooperation climate. ding that the acquisition is approved by will be made in 2013 and will lead to the competition authorities. Orkla has about 50 employees losing their jobs. Competency development placed weight on open communication, The company has drawn up a Orkla's Human Rights Policy states that and has involved the employees and restructuring plan in consultation the Group companies should give the management of both companies in plan- with the employee representatives. employees opportunities to contribute ning the integration. Competency mapping to the company's value creation and to in both companies has provided a good Diversity and equal develop their personal competencies basis for further discussions regarding opportunities over time. This is a matter of fundamental staffing. Diversity and a corporate culture charac- respect for human dignity and worth. At terised by respect and equality are impor- the same time it is a simple recognition • Orkla Brands Russia continued the tant for success in the competition for that involvement and competency extensive restructuring of the company labour, and for utilising the potential of development are essential to the that commenced in 2011. One of the employees in the best interests of the creation of good results. company's four plants is being closed Group and the individual. Orkla aims to down, and its production transferred to avoid discrimination and promote greater the others. The change will bring about diversity by taking a clear stand, raising important improvements in terms of the management awareness and following up working environment and safety, but at Group companies. In 2012 there were no the same time it will result in around cases relating to equal opportunity and 300 employees losing their jobs. The non-discrimination legislation7. company has launched a number of initiatives to help the employees find Consultation and new jobs and to arrange for a smooth employee involvement transitional process. Good internal communication and coope- ration between management and employees • Göteborgs Kex carried out a major is crucial to Orkla's success, and to restructuring of its production in employee job satisfaction and a good Kungälv which will result in some 70 working environment. Most of Orkla's

Courses and training Orkla holds courses in leadership development Orkla Brands Russia has developed its own and important competency areas. leader­ship development programme, which is held in Russian, and the first group completed the course in 2012. In 2012, MTR Foods conducted Results in 2012 an extensive training programme for first-line A total of 540 employees took part in these central production managers. competency-building programmes in 2012, compared with 625 the previous year. In addition to Orkla's central course activities, the companies held courses Goals for 2013/2014 and training in a number of fields, such as hygiene Extend Orkla's central competency programmes and quality assurance work, EHS, sales, project management and labour law.

7According to annual internal reporting of disputes, lawsuits, supervisory issues and similar matters by the business areas to the Group. 15 yrre Lien yrre P hoto: K

Corporate democracy All Orkla companies have employee involvement Directors and Corporate Assembly and to schemes. Employees are represented on Orkla's the boards of the Norwegian companies. Board of Directors and other governing bodies. In 2012, Indian MTR Foods has contributed to results in 2012 the competency development of the employee Part of Orkla's restructuring entailed the elimination representatives' leaders, and has entered into of Orkla Brands as an administrative unit. In order to a new three-year agreement with the employee safeguard the employees' right to exercise influence, representatives. Orkla decided to strengthen the consulting role of the business areas’ liaison committees. Orkla held a Goals for 2013/2014 corporate democracy election in 2012 which elected Adapt Orkla's corporate democracy system employee representatives to Orkla's Board of to the Group's new organisational structure. 16 Orkla sustainability report 2012 people

Equal opportunities Orkla aims to maintain a good gender balance, • The share of woman managers at all levels of and attaches importance to this in the Group's the Group's activities was 26%, as against 25% recruitment. Orkla requires that at least one in 2011. The corresponding figure for Orkla woman candidate be nominated in connection excluding Sapa (part of future joint venture) with recruitment to managerial positions at was 34.7 % in 2012. company or business area level, and women receive priority when it comes to participation Goals for 2013/2014 in Orkla's leadership development programmes. Identify measures for increasing the number of woman managers through the project "Gender results for 2012 Balance". The project involves internal mapping • At the end of the year, 9,581, or 33.8%, of our in Orkla, Hydro, Statkraft, Telenor, NSB and Deloitte employees were women, compared with 33% Norway of the conditions that promote a favourable in 2011. The corresponding figures for Orkla gender balance among managers. The study is excluding Sapa (part of future joint venture) taking place in collaboration with the Administrative were 7,040 and 47% in 2012. Research Fund of the Norwegian School of Economics (AFF) and will be completed in 2013. • The share of women managers at Group, business area and company level at year-end was 23.5%, compared with 21.5% the previous year. The corresponding figure for Orkla excluding Sapa was 28.6%, compared with 26.8% in 2011.

60 50

50 40

40 30 30

20 20

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% % SHARE OF WOMEN EMPLOYEES IN EACH BUSINESS AREA SHARE OF WOMEN LEADERS IN EACH BUSINESS AREA Orkla Foods Orkla Confectionery & Snacks Orkla Foods Orkla Home & Personal Orkla Confectionery & Snacks Orkla International Orkla Home & Personal Orkla Food Ingredients Orkla International Other business Orkla Food Ingredients Other business 17 T R hoto: M P hoto:

Building a strong company

Building on a long history of dedication to quality food, the vision of MTR Foods is to become an indispensible companion in every kitchen to help create authentic and delicious Indian food.

To build an organisation capable of In 2010-11, the entire MTR organisation MTR Foods has also organised a delivering on the vision, MTR Foods was involved in the development and broad range of training programmes invests significantly to develop people roll-out of the company’s new Vision, for managers and employees to build capability and competence. Over the last Mission and Values. The objective was awareness, increase functional expertise three years, MTR Foods has invested in to set direction for the organisation and and develop leadership competence. a number of organisational development align the employees to the overall purpose. In total, 32,700 hours of training were activities to support the company’s conducted from 2010 to 2012, or 30 hours growth ambitions. The first step was to “We called the process “Building Our per employee. The training has included develop the right organisational structures Future”, and involved employees across the leadership and managerial development and policies to deliver on the strategy. organisation in developing the new vision programmes, food safety, occupational through various engagements like wall health and safety, as well as interpersonal “We have restructured the management writing, focus groups, one-on-one interaction collaboration and life skills. layers in the organisation and introduced and workshops. Then, the vision and values a number of business-linked policies and were rolled out to the entire organisation To attract talented students, MTR started procedures, but perhaps even more through a roll-out ceremony, interactive campus programmes in 2010. Two pro- importantly, we work systematically theatre and posters. It was a great initiative grammes for young professionals and grad­ to engage our employees and build in aligning the employees to the Vision, uate engineers have been designed to grow strong corporate values,” says Tuhin Mission and Values,” says Tuhin Biswas. in-house technical and managerial talent to Biswas, VP HR & Administration. meet future organisational requirements. 18 Orkla sustainability report 2012 environment, health and safety Safe workplaces

We never compromise when it comes to safety. Our vision of zero injuries is a core principle at Orkla. ongsøre P hoto: Rasmus K 19

A safe working environment for all our promotes the health and well-being undesirable incidents, and are thus a key employees, contract personnel and suppli- of our employees. element of our environment, health and ers is essential to creating sustainable value. safety (EHS) work. Understanding risk is The working environment also affects Training in crucial to preventing hazardous situa- the sickness absence rates. It is not just a understanding risk tions. We provide our employees with question of bringing people on sick leave Risk assessments form the basis for deter- EHS training and enable them to share back to work faster; but also to ensure a mining what action must be taken to pre- their experience and continuously improve good, healthy working environment that vent the occurrence of injuries or other their expertise and performance.

Our approach At Orkla we are committed to our employees’ health and safety. Our activities must be organised in such a way that we operate without endangering life or health. Preventing harmful effects is our key priority. Our employees are our most important and most valuable resource.

Quarterly monitoring of EHS performance The same reporting procedures apply throughout The recorded sickness absence rate at Orkla was 3.2% the Group, and a central reporting system has been in 2012, on a par with the previous year. The sickness developed in which important health and safety absence rate for the businesses in Norway was 5.5%, indicators are recorded on a quarterly basis. The which is a clear improvement from 6.5% in 2011. status of EHS efforts is also reviewed by Orkla’s Nonetheless, this rate is too high, and there is Board of Directors every quarter. continuous focus on improvement.

Results in 2012 Goal for 2013/2014 The Lost Work Day Rate (LWDR)8, showed a Our vision is zero injuries (LWDR and TRR = 0). positive trend – from 4.6 in 2011 to 3.6 in 2012. Our goal is a sickness absence rate of less than 4%. The Total Recordable Rate (TRR)9, was 8.4.

8 7

7 6

6 5 5 8 4 4 7 7 3 3 6 6 2 2 5 5 Orkla Global 1 1 Orkla Global 4 Branded Consumer 4 Goods Area 0 Branded Consumer % Goods Area 3 Orkla Norway 3 2009 2010 2011 2012 2009 2010 2011 2012

2 LOST WORKDAY INJURIES (LWDR) 2 SICKNESS ABSENCE RATE (%) Orkla Global 1 1 Orkla Global Branded Consumer Goods Area 0 Branded Consumer % 2009 2010 2011 2012 Goods Area 2009 2010 2011 2012 Orkla Norway LOST WORKDAY INJURIES (LWDR) SICKNESS ABSENCE RATE (%) 8 LWDR = the number of personal injuries leading to absence per million hours worked 9 T RR = the number of personal injuries leading to absence, a need for medical treatment or restricted work per million hours worked 20 Orkla sustainability report 2012 environment, health and safety Preventing sickness absence adapted workplace conditions are reducing sickness absence at KiMs in Denmark.

Orkla’s Danish snacks company is adap- is positive; it enables pregnant women, Corporate responsibility ting working conditions to enable persons for instance, to stay in their jobs longer The company’s efforts to promote a good on sick leave to return to a job situation because their workload has been adjusted. working environment have been noticed that is tailored to their individual needs. This helps to reduce sickness absence. outside the company as well. In 2012, KiMs was presented with the 2011 “We are trying to bring employees on A colleague network Enterprise Award for inclusion and social long-term sick leave back to work by As part of its preventive efforts, KiMs responsibility by the local employment offering them different duties and, in focuses attention on its employees’ well- office in Nord-Fyn. The reasons cited for some cases, shorter working hours. In being. The company has established what giving the award to the company were certain situations we draw up a fit-for- it calls a “colleague network”, consisting of its emphasis on a good working environ- work certificate, which is a tripartite agree­ employees within the organisation. “The ment and employee well-being and its ment between the employee, KiMs and network members have received training efforts to help unemployed persons the physician regarding the employee’s to give them insight into stress symp- find jobs by offering them work possibilities of active workplace partici­ toms, which will help them to recognise experience placements. pation,” says Personnel Manager Jan Jensen. stress-related behaviour among their The company’s experience with this system colleagues,” explains Jan Jensen.

Safety culture at Stabburet

Stabburet Brumunddal has drawn up a clear plan of action for EHS in 2013. The goal is zero injuries, and ensuring that workplace conditions do not cause sickness absence.

EHS has topped the agenda at Stabburet’s an employee survey and prepared a manager, the greatest progress has been factory in Brumunddal for several years, clear plan of action for 2013. made in their efforts to influence employee and in 2008 a process aimed at enhancing attitudes. Raising awareness of risk has EHS performance was launched throughout “It’s useful to have a common been a pivotal topic. the Stabburet organisation. Safety and standard that enables us to compare injury prevention were given particularly ourselves with others, both for learning “We have talked a lot about the ‘top ten high priority. Risk identification procedures purposes and to keep us on our toes. We risks’ for the factory and have carried out were carried out at all factories, and a have focused on improving our EHS per- risk assessments of the most important practical safety handbook was prepared formance for several years, but constantly working areas. We discuss critical items at to increase the organisation’s discover areas where we can do better,” meetings, and have drawn up additional in- expertise in this area and create a says Jens Erik Dobloug, Factory Manager structions for new and temporary employees common platform for activities. at Stabburet Brumunddal. with information on risk,” says Dobloug.

A common standard Involvement In 2012, there was one injury leading to In the autumn of 2012, Orkla Foods EHS is the first item of business at absence at Stabburet Brumunddal. For also introduced a common work management­ team meetings. Involving the Stabburet as a whole, the LWDR (num- safety standard. Since then, Stabburet employees, with the help of the employee ber of injuries leading to absence per mil- Brumunddal has conducted a self- representatives and safety delegates, is a lion hours worked) was 3.9. evaluation of the factory, carried out key objective. According to the factory 21 P hoto: Sofie B rovold

Safety in sales work at Nidar

With a work day that keeps you on the go, it’s important to think safety.

The 160 employees in Nidar’s sales that are secured when not in use,” relates a bank card, on which the telephone organi­sation do a lot of their work in Bente Resell, EHS Manager at Nidar. numbers of key EHS staff members in the stores. It is important, therefore, that company are listed. A prize of a Flax lottery they are aware of the need to create safe Identifying hazardous ticket is awarded for each matter reported. work conditions. Among other things, conditions Company-wide surveys are also conducted that means using the right tools. Environment, health and safety (EHS) to identify hazardous situations and ranks high on the sales organisation’s enable preventive action to be taken. “Everyone in our sales team has been agenda. It is a regular item of business at given a small, stable step ladder to keep all sales meetings, which are also attended “EHS improvement in the sales organisation in their car so they don’t have to use soft by representatives from the EHS began in the autumn of 2009, and we are drink crates to reach high shelves in stores. Department. seeing steady improvement in this area. They consciously choose the right foot- We often receive input and ideas from wear, and are aware that high-heeled All injuries, hazardous conditions and our sales personnel, and it is important to shoes and sandals should not be worn near-accidents must be reported, so that promote high employee awareness of this at work. Everyone is given gloves so that we can continuously make improve- aspect. The right behaviour and attitudes they have better grip and avoid cuts from ments. To simplify the reporting process, are absolutely essential in EHS work,” cardboard, as well as knives with blades everyone has been given a card the size of emphasises Resell. 22 Orkla sustainability report 2012 environment

Responsibility for the environment

Orkla is committed to reducing energy consumption and minimising greenhouse gas emissions all along its value chain. olourbox.no P hoto: C 23

Global climate changes are without a doubt the greatest environmental challenge now facing the world. The changes that we are experiencing will affect the very existence Our approach of the global population due to their im- The challenge presented by global climate pact on food production, access to water, health and the environment. The question changes requires concerted action by us then becomes how to secure social and economic development without causing all. Orkla is committed to sound, long-term, irreparable harm to the environment. sustainable operations. Our vision is to cause

Access to raw materials, water, energy and no harm to the environment. other resources is essential to our opera- tions. Orkla considers it important to take responsibility for the environment and to contribute towards reducing greenhouse gas emissions. We will minimise the environmental impact of our own activities at every stage of the value chain.

Energy In the near term, reducing our energy consumption is perhaps one of the most important climate-related measures that Orkla can implement. Several of the com- panies are mapping their consumption of energy and examining the possibilities of ENERGY CONSUMPTION (MWh) GREENHOUSE GAS using it more effectively. Moreover, we will EMISSIONS (TONNES) maximise the use of renewable energy Electricity 356,800 (27 %) District heating 304,200 (23 %) Process 5,800 (2,5 %) wherever possible. Orkla’s own hydropower Diesel 42,200 (3 %) Electricity 82,400 (38 %) production in Norway totalled 2.7 TWh Heavy oil 31,700 (2,5 %) Diesel 11,000 (5 %) in 2012. Energy consumption totalled 6.4 Natural gas 477,000 (36 %) Natural gas 77,600 (36 %) TWh, down from 6.6 TWh the year before. Propane/LPG 91,200 (7 %) Heavy oil 9,200 (4 %) Renewable fuels 18,000 (1,5 %) Propane/LPG 21,000 (10 %) In Orkla’s Branded Consumer Goods busi- Own vehicles 7,150 (3,5 %) ness, 1.3 TWh of energy was used in 2012, primarily as thermal energy in manufac- turing processes and for factory heating. emissions Every year Orkla prepares energy and climate accounts based on the international Greenhouse Gas Protocol Initiative. These accounts are also submitted to the Carbon Goals in 2013/2014 Disclosure Project (CDP). In 2012, green- • Initiate more activities to reduce energy consumption and house gas emissions from Orkla’s own to a greater degree use energy from renewable sources. operations totalled 615,000 tonnes of CO2 equivalent. If emissions from purchased • Establish systematic procedures for monitoring energy energy are included, emissions totalled consumption and prepare action plans. approximately 1.1 million tonnes of CO2 equivalent in 2012. This is a reduction of • Take action to improve control of and further reduce water about 8% from the previous year. For the Branded Consumer Goods business as a consumption. whole, emissions in 2012 totalled 215,000 tonnes of CO2 equivalent, which is a • Identify the environmental impacts along the value chain. reduction of around 3% from 2011.

Other emissions to air and water are monitored locally by necessary control systems and plans. Emissions to air 24 Orkla sustainability report 2012 environment P hoto: Mari Svenningsen

consist primarily of SO2 and NOx waste. More than 90% of recorded waste emissions from the burning of fossil fuels is re-used in the production of biogas and to produce thermal energy. Emissions to other energy, animal feed and materials water consist chiefly of COD and fat from recycling. A total of 96,000 tonnes of waste manufacturing processes, which are regu- was generated by the Branded Consumer lated by the local authorities. In 2012, no Goods business in 2012, which was a serious incidents were registered that reduction of around 10% from 2011. have resulted in follow-up action by local Reductions were primarily made in the or national authorities. amount of organic waste and cardboard/ paper. The amount of unsorted waste was also reduced by 25%. Water 3 Fresh water is an increasingly scarce WATER CONSUMPTION (m ) resource in many parts of the world, and Packaging Surface water 195,600 (3 %) water-related costs are expected to rise in Orkla companies strive to develop optimal Ground water 3,140,300 (42 %) Municipal water 4,096,600 (55 %) the long term. In the future. It will there- packaging solutions, and have gradually Other water supply 65,800 (1 %) fore be important for Orkla companies to decreased their packaging consumption reduce their water consumption and in- in the past few years. Packaging must be crease their knowledge of water resour- designed to provide adequate protection ces. In 2012, consumption of water in the for the product in terms of food safety Branded Consumer Goods business totalled and quality, while generating the least 7.5 million m3, which is a reduction of possible environmental impact. Effective about 5% from 2011. Around 20% of the product design not only reduces the water used is recycled in the companies’ quantity of waste, it also reduces emissions Raw materials own production processes. About 65% of during transport. In 2012, packaging In the overall value chain, raw materials discharge water is treated in municipal consumption in the Branded Consumer have the greatest impact on the environ- water treatment plants. Goods business was reduced by around ment since the cultivation of food crops and 10%, primarily in the form of less use animal husbandry generate substantial Waste of glass, cardboard and paper. Total amounts of greenhouse gases. It is therefore Our factories work continuously to consumption was approximately important that we maximise the yield from increase production yield and reduce 100,000 tonnes. raw materials while minimising wastage. 25

WASTE VOLUME (TONNES) WASTE VOLUME (TONNES) CONSUMPTION OF BY MATERIAL TYPE BY TREATMENT PACKAGING MATERIALS (TONNES) Organic waste 75,500 (79 %) Animal feed 20,400 (23 %) Mixed wood 2,400 (2,5 %) Waste used as fertilizer 13,800 (16 %) Paper/boards 41,414 (41 %) Paper/boards 5,700 (6 %) Waste for incineration 10,700 (12 %) Glass 30,042 (30 %) Plastic 1,250 (1 %) Waste for incineration 8,800 (10 %) Plastic 19,820 (20 %) Metals 1,900 (4 %) Biological treatment 26,700 (30 %) Metals 7,703 (8 %) Inorganic waste 3,200 (4 %) Landfill 8,100 (9 %) Wood 1,939 (2 %) Unsorted waste 5,800 (6 %) Hazardous waste 130 (<1 %) Glass 190 (<1 %) Hazardous waste 100 (<1 %) Electrical waste 60 (<1 %)

Energy recovery at Procordia

Potato peel from Procordia’s factory in Eslöv provides heat for more than 400 houses.

Procordia focuses systematically on factories in Örebro and Kumla are used to the Eslöv factory, the company itself can minimising waste from its own factories produce biogas to fuel buses. Apple waste now take delivery of and wash potatoes by find­ing new areas of application for from the factory in Tollarp is collected by for use in its production processes. This residual products. Potato and beetroot local farmers who use it in animal feed. has reduced its trucking needs by the peel from the company’s factories is equivalent of 29,000 km, or three quarters sent to a local biogas plant, where the Less transport of the world’s circumference. production waste is converted into gas Procordia has sought to reduce its carbon that is used to heat dwellings. Man­ footprint by reducing its use of transport. ufacturing residuals from Procordia’s Due to a new potato receiving facility at 26 Orkla sustainability report 2012 environment

Conscious use of packaging

To reduce its environmental impact, the Pierre Robert Group chooses to use recyclable packaging for many of its products.

Through the careful choice of packaging, gas emissions, lowering energy while providing them with adequate Pierre Robert Group (PRG) aims to reduce consumption and generating several protection. To reduce the environmental the company’s overall impact on the other positive environmental effects.10 impact, PRG chooses to use recyclable environment. Waste reduction is one of plastic wherever possible. the company’s three overarching environ- The requirements of the grocery sector mental goals, and as far as possible PRG with regard to product display differ from “Choosing recyclable types of plastic is therefore gives priority to packaging textile those of the specialised retail sector. In not just environmentally-friendly, it has products in cardboard or plastic packag­ the past few years, therefore, it has become also proved to offer a financial gain in the ing that can be recycled through the more common for textile manufacturers form of cost savings. We are always on Green Dot recycling scheme for used that supply products to the grocery sector the lookout for new materials and packag­ packaging. A total of 73% of the packag­ to use plastic packaging. The plastic packag­ ­ ing methods that reduce the impact on ing that is returned through this scheme ing is designed to display the products in the environment,” says Margrethe Vikanes, is recycled, thereby curbing greenhouse an attractive, informative way in stores, CSR and Quality Manager at PRG.

10Source: Norwegian Climate and Pollution Agency, September 2012 27

Packaging development at Lilleborg

Lilleborg aims to launch products that are optimal for the entire value chain.

Environmental gain is important when storage, and minimisation of air on the clear information and labelling on packa- Lilleborg develops new packaging. All pallet, while also offering practical packages ging, the company also seeks to encourage packaging must have optimal weight and for store distribution. This requires several consumers to sort and dispose of used design. That does not necessarily mean rounds of testing and close collaboration packaging in an appropriate manner. that there must be as little packaging as with a variety of stakeholders. The result possible, as this could result in damage is often a significant financial and envi- As a member of the Green Dot recycling and wastage, which in turn can have highly ronmental gain,” emphasises Merete Nes, system, Lilleborg has labelled its products negative environmental consequences. Packaging Developer at Lilleborg. with this logo. The fee paid by Green Dot members is intended to finance recycling “In optimising packaging, account must Recycling schemes and the collection and recycling be taken of several factors, such as produc- As far as possible, Lilleborg uses recycled of different types of packaging. tion efficiency, transport efficiency and and recyclable packaging. By providing

Packaging improvements in 2012 In 2012, Lilleborg improved its packaging in several ways that generated positive environmental effects since fewer pallets were required and thus less transport.

Comfort refill: • The number of refill bags in each distribution carton was increased from 8 to 10. That means 96 more refill bags per pallet = 160 fewer pallets in 2012.

Jif Mop Start-up Package: • Less cardboard and plastic are now used in the product packaging. There is also less air in the packaging, which increases transport efficiency at every stage. The number of units per pallet has been doubled = 1460 fewer pallets in 2012.

Jif Refill Spray: • A minor change was made in the height of Jif Refill products, making it possible to add another layer of products on each pallet = 191 fewer pallets in 2012. 28 Orkla sustainability report 2012 food safety

Consumer confidence through safe products

Orkla strives to be among the world's top companies in the realm of food safety P hoto: Mari Svenningsen 29

Consumer confidence is a prerequisite for brand building, and safe products are the very cornerstone of this work. Sound food The Orkla Food Safety Standard safety systems, applied consistently across • The Orkla Food Safety Standard is based on the internationally re- the board, therefore have the highest cognised British Retail Consortium Global Standard for Food Safety. priority in Orkla. • A new and more stringent version of the Orkla Food Safety Standard Modern food production involves a was introduced in 2012. complex value chain and makes great demands on key personnel with respect • The standard applies to all Orkla companies that produce food and to quality, food safety and sourcing. Orkla beverages. has taken an uncompromising stand on food safety. Our own Orkla Food Safety • Orkla has expanded the standard by adding a number of supple- Standard ensures a high, uniform stan- dard at all our factories, and we also mentary requirements to ensure consistency in company operations. insist that all our suppliers observe our stringent guidelines for safe production • Food safety improvements are constantly being implemented in all of raw materials. our companies.

How audits are conducted • Newly acquired companies are integrated more rapidly, thanks to a Orkla takes active responsibility for food uniform food safety standard. safety by conducting frequent audits. In a typical audit, the Orkla team will consider whether the production plant meets a series of criteria associated with food safety. The audit team makes physical Audits inspections of production facilities, Each year we conduct stringent internal audits of our companies to en­ including canteens, locker rooms, sure that the Orkla Food Safety Standard is being adhered to in all Orkla's storage premises and external areas. The food producing companies. Orkla sets the same requirements for product company's documented quality assurance quality and product safety in all countries in which we own companies. system is also examined. After all audits, binding action plans for corrective measures are drawn up, with assignment of responsi­ Results in 2012 bilities and deadlines. Our auditors then Since our own food safety standard was introduced in 2004, a grade the production facility according to food safety team has conducted a total of 532 audits of 113 factories the Orkla Food Safety Standard. and three head offices. A total of 64 audits were carried out in 2012, seven of them unannounced. Training Orkla has a team of ten highly qualified Goals for 2013/2014 internal food safety auditors. They receive The food safety team will pursue its efforts to ensure continuous regular training from external specialists. In order to raise the level of expertise of improvement through internal audits based on the Orkla Food key personnel in the field of quality and Safety Standard. food safety, Orkla has established the

Contingency planning results in 2012 Orkla has drawn up a contingency plan for appropriate There were no serious incidents associated with food handling of unforeseen, undesirable incidents. A safety in 2012. However, there were some cases of contingency exercise programme has also been products erroneously containing allergens that did not developed, and each year several of the companies' appear on the label. This led to some product recalls, management teams undergo training in crisis and but no consumers suffered any harm. In 2012, two contingency management. contingency exercises were carried out at the Orkla Production Academy in addition to the annual drills held at the factories. 30 Orkla sustainability report 2012 food safety

Orkla Food Safety Training Course. Since Safety Standard and internal audits in a its inception in 2010, 77 employees have systematic way. To ensure sound procedures completed the course. and further reduce the food safety risk associated with the operations of these Product responsibility companies, a separate standard similar in companies with no to the Orkla Food Safety Standard was food production developed in 2012. As for the Orkla Food So far, Orkla companies that are engaged Safety Standard, this standard is based on in the sale and distribution of food pro- a recognised BRC standard. The standard ducts, but do not have in-house production, will be introduced to the relevant have not been covered by the Orkla Food companies in 2013.

Allergens Consumers must always feel safe with Orkla • correct labelling of allergens and any allergen traces products. Most of our food and beverages do not target consumers with allergies in particular. Nevertheless, • training of personnel in handling of allergens. the product information and labelling shall always enable consumers with allergies to avoid particular results in 2012 allergens. • In 2012, a number of Orkla companies, such as Procordia and KiMs (Denmark), addressed issues All Orkla's producers of food and beverages observe connected to allergens. Procordia launched ParNut, procedures that ensure: a brand targeting the catering industry in 2012. The ParNut brand includes meatballs, minced-steak • assessment of allergens during the development patties and other meat-based products that are of new products and changing of existing products guaranteed not to contain gluten, lactose, or milk, soy or egg proteins. • information about allergens and possible contamination of raw materials • KiMs (Denmark) has introduced an "allergen box" on their packaging, which makes it simple for • production and handling of products that minimise consumers to see any allergens the product the risk of allergen contamination may contain.

Monitoring of suppliers Monitoring of suppliers through self-assessment forms The results of the physical audits show that 67% of and physical audits by Orkla's audit team ensures a high the audited factories maintain an approved standard level of awareness of the importance of sound food with respect to food safety. Other facilities must make safety standards. improvements in order to be able to continue supplying products to Orkla. The Orkla company that is the main purchaser from the supplier is responsible for auditing the production facility on behalf of the Group. goals for 2013/2014 The team for food safety in purchasing will continue results in 2012 its work of systematic risk assessment, approval and In 2012, 863 self-assessment forms were distributed follow-up of suppliers through the Orkla Food Safety to Orkla's suppliers, compared with 735 in 2011. In Standard in Purchasing. addition, 127 physical audits were conducted in 2012, compared with 98 in 2011. 31

Food safety in purchasing

Monitoring of Orkla's suppliers is crucial for ensuring that their production of raw materials is compliant with our stringent food safety guidelines.

Orkla has a large number of raw materials • Inherent product risk associated approval process. A common audit suppliers all over the world, and sets with use in Orkla framework has therefore been developed, stringent food safety requirements. • Country of origin with guidelines for food safety in • The supplier's self-assessment purchasing. We have also established Orkla has its own system for risk assess- • Our experience if the supplier already a training programme that all future ment, approval and follow-up of suppliers. has an agreement with Orkla auditors must undergo. The training This system covers suppliers of raw mate- • Result of previous audit programme consists of a two-day training rials, contract manufacturers of finished seminar in addition to a number of train­ goods and suppliers of packaging for food The outcome of the risk assessment ing audits that are conducted on suppliers' and beverages. The system is used by determines whether: premises with the assistance of an approved Group companies that manufacture and • The supplier is approved auditor. Since 2008, 190 persons from 44 sell food products, and is intended to • There is a need to obtain supplementary companies have completed the training ensure that what we buy is safe and legal. information programme, while 52 persons from 23 • An audit is necessary companies have been approved as food In our risk assessment of suppliers, safety auditors with permission to we assess the following: Training in supplier audit conduct supplier audits alone on behalf • Is this a new or existing supplier? Audits are an important part of Orkla's of Orkla. Orkla's approach to modern gene technology

Orkla's products shall be based on safe raw materials and be manufactured using methods that customers and consumers accept.

Orkla is responsive to its customers' and developed and processed without documentation and analysis, to make it consumers' views on the use of modern the use of modern gene technology. possible to verify the origin and quality gene technology in connection with the of products, for example the absence of production of food. There are no research Orkla companies are aware that some unintentionally introduced GMO material. results to indicate that it is harmful to eat traditional crops (primarily soy, maize and food containing genetically modified raw rapeseed) and products that are derived Orkla companies comply with EU and materials. Orkla has nonetheless decided from them may contain traces of genetically national legislation and the authorities’ not to use these, since a clear majority of modified material due to the unintentional requirements with respect to GMO, and consumers do not accept genetically introduction of seed, crop or product. The take all necessary steps to ensure that no modified raw materials and ingredients. maximum quantity of such traces that Orkla products require GMO labelling. If does not require GMO labelling is laid a company is considering marketing and Orkla's food producing companies use down in the European GMO legislation. selling products that require GMO label- only raw materials and ingredients that ling, the decision must be approved by are based on traditional production Orkla companies require suppliers to Orkla's Board of Directors. methods, where the plant or animal is establish verified systems for segregation, 32 Orkla sustainability report 2012 nutrition and health Food enjoyment in a balanced diet

Consumers are increasingly concerned with nutrition and health. At the same time, overweight is a growing social problem. We believe that a healthy lifestyle can be achieved through a varied and balanced diet combined with regular physical activity. P hoto: Mari Svenningsen 33

According to the World Health Organisation, 1.5 billion people are overweight, including 200 million Our approach to overweight children of school age. Surveys reveal a clear connection between overweight In the course of a day, we consume a variety of and a higher risk of cardiovascular different foods and beverages. Activity levels also disease, diabetes, high blood pressure and a number of other diet-related problems. vary from person to person. It is generally agreed that a person's weight increase is primarily a WHO recommends that people reduce their consumption of saturated fat, sugar result of an imbalance between intake and and salt, and that the food industry reduce the quantity of fat, sugar and salt consumption of energy; too many calories in manufactured foods and beverages. consumed and too low an activity level. Orkla WHO also recommends that the industry introduce simple, clear and consistent endorses this conclusion. We regard the growing labelling and information about products in order to influence consumer choices. obesity problem as a result of both unhealthy eating habits and less physical activity. However, Food enjoyment in a balanced diet we do not believe that a single product or product The global health challenges call for category is the reason for the overweight input from all spheres of society. As a leading producer of food and beverages, population. Orkla can make a positive contribution to global health by developing products that make it simpler for people to main- A good diet involves making wise choices, tain a balanced diet. Orkla companies observe the following general guidelines exercising moderation, and ensuring that the for the production of food and drink: body's need for different nutrients is met through • Orkla supports national recommenda- variation in our choice of food and beverages. tions regarding nutrition and upholds the overarching principle of promot­ A nutritious diet combined with physical activity ing a balanced, varied diet. boosts health and well-being and reduces the

• Orkla pays attention to the nutritional risk of becoming overweight and suffering and health aspect when developing other lifestyle diseases. new products and product information.

• Orkla aims to make it easy for consum­ ers to choose a balanced, nutritious diet by labelling its packaging with relevant, easily understood infor­ mation about the nutritional content.

• Orkla's marketing shall be based on food sales today derive from products Research projects the principle of responsibility. with health benefits or with reduced We are involved in various research pro- quantities of sugar, saturated fat or salt. jects aimed at finding satisfactory solu- • Orkla's dialogue with authorities, One of our goals when we develop new tions to the challenges we face, particularly universities and other commercial products is to give consumers a wider in relation to the content of saturated fat, and professional bodies shall be range of choices within an existing sugar and salt in our products. Stabburet characterised by openness. product category. We focus particular leads the project SALTO, a three-year attention on the following areas: re­search project in which leading Norwegian Innovations • Sugar manufacturers are working with researchers­ We consider it important to present • Saturated fat at the Norwegian food research institute innovations that delight consumers, while • Salt Nofima.T he project goal is to reduce by at the same time being compatible with • Fibre and whole grain 25% the quantity of salt in everyday a balanced diet. A total of 26% of Orkla's products such as cheese, boiled ham, 34 Orkla sustainability report 2012 nutrition and health

pâtés and forcemeat. Orkla is also of antioxidants and whole-grain products nutritional content on product involved in an EU project, the aim of was introduced into their diet. The packaging and information about health which is to reduce the content of fat, results were a sharp reduction in cholesterol and nutrition on the companies' websites sugar and salt in a number of categories level, a fall in blood pressure and a lower and through their consumer services. of interest to Orkla. risk of developing thrombosis. In 2012, several of Orkla's food companies A number of Orkla companies collaborate Information to consumers were in dialogue with national supervisory with the Antidiabetic Food Centre (AFC) Orkla's ambition is to make it easy to authorities to ensure that the companies' at Lund University in Sweden. AFC seeks choose a balanced, nutritious diet. We product information is in line with the to promote knowledge and expertise believe sound information about the new EU food labelling requirements. associated with the development of food nutritional value of products is crucial Procordia was ordered by the Swedish products that can help to reduce the risk for enabling consumers to make sensible National Food Agency to change the of obesity, age-related diabetes and choices. Information about the nutritional labelling of products containing the cardiovascular disease. content of a product must be based on natural sweetening agent steviol glycoxide. facts, simple and easy to understand and The matter did not result in any fine, and Researchers at Lund University have as accessible as possible. Orkla was involved in no other matters investigated the effect of a change in diet relating to labelling rules in 201211. for persons with a high risk of diabetes In recent years, Orkla's food companies and cardiac disease. A higher proportion have improved both the declaration of P hoto: Stabburet

11According to annual internal reporting of disputes, lawsuits, supervisory issues and similar matters by the business areas to the Group. 35

Saturated fat Orkla's existing and new products are to have a sunflower seed oil in products such as Nugatti favourable fat composition to the extent that taste and Sjokade (chocolate spreads). and other considerations allow. The Norwegian health authorities recommend that the total dietary • The reduction of saturated fat in bars from Axellus fat content should not exceed 30% of daily energy (Maxim and Nutrilett), puddings from Felix Abba intake. The total content of saturated fat in the diet (Jacky) and snacks from KiMs Norge, KiMs should be limited to a maximum of 10% of (Denmark) OLW and Chips. energy intake. • The launch by Põltsamaa Felix of light results in 2012 mayonnaise containing 90% less saturated fat. Palm oil contains a high proportion of saturated fat. A number of Orkla companies have stopped using Goals for 2013/2014 palm oil in their products. In the period 2008-2012, • Sætre aims to eliminate palm oil entirely from the companies reduced their annual consumption its Norwegian products in the course of 2014. of palm oil by 10,000 tonnes, replacing it with This will reduce palm oil consumption by a further rapeseed and sunflower seed oil. The most 500 tonnes and help to reduce consumption of important moves in 2012 were: saturated fat.

• Stabburet's replacement of palm oil, following years of development work, by the healthier

Sugar Overconsumption of food and drink that are rich in Goals for 2013/2014 energy is one of the greatest global health challenges. • We will continue our efforts to reduce the quantity At Orkla we want to reduce the fat and sugar content of sugar in our products where this is natural, and of our products as far as taste and commercial interests look at opportunities for launching more sugar-free allow. The Norwegian health authorities recommend alternatives. that sugar be limited to a maximum of 10% of daily energy intake. results in 2012 In most of Orkla's product categories with a high sugar content, we offer alternative options with a lower sugar content. Almost 50% of beverage sales are attributable to sugar-free alternatives.

During 2012, Orkla launched a number of products in the categories chocolate, beverages, sauces and vege- tables that contained either a reduced percentage of sugar, or were sugar-free. The most important were:

• Procordia's Fun Light cordial and Felix sugarless ketchup with sweetening from the stevia plant.

• A new variety of Paulún's breakfast cereal (coconut and apple) without added sugar and with 67% whole grain. 36 Orkla sustainability report 2012 nutrition and health

Fibre and whole grain Using ingredients with a high fibre content should Goals for 2013/2014 be considered wherever relevant. Examples are pizza, • We will strive for increased use of ingredients pies, pasta, bread and whole-grain biscuits. The with a high fibre content where this is natural health authorities recommend a daily fibre intake and relevant. of 25-35 grams per person.

results in 2012 In the course of 2012, Orkla launched a number of products with increased fibre content. The most important were:

• MTR Foods launched breakfast mixes with a high proportion of fibre and whole grain.

• Sonneveld launched bread mixes with a high fibre and whole-grain content.

• Credin launched a bread base with 100% whole-grain wheat.

• Procordia launched a new variety of Paulún's breakfast cereal (coconut and hazelnut) with a high fibre content and no added sugar.

Salt We do not want to use more salt than necessary in our goals for 2013/2014 products. When salt is important as a taste enhancer, • We will continue our active efforts to reduce we look for alternative ingredients that can function people's salt intake. Orkla is taking part in a as fully adequate replacements. The health authorities number of research projects aimed at finding recommend a daily salt intake of a maximum of 5 good replacements for salt in our products. grams per person.

results in 2012 Orkla observes the authorities' salt reduction targets for 2014. Salt content was reduced in a number of our products in the course of 2012, the most important being:

• Stabburet liver pâté • Stabburet pizza • Sonneveld bread mixes • The Fit4Life product range from Credin • Provencal mayonnaise from Spilva • Crisps from KiMs Norge and KiMs (Denmark) 37

Additives pasta without additives under the Felix brand and Consumers are increasingly concerned that we should yoghurt without additives under the Jacky Duetto reduce the amount of additives in our products. Orkla brand. always complies with acts, regulations and directives relating to the use of additives in food and beverages. Goals for 2013/2014 We use only EU-approved additives that have an • We will continue to maintain a restrictive important function in food products. Our products attitude to the use of additives in our products. are labelled with the additives that are used, in accordance with applicable regulations. results in 2012 The most important measures associated with the use of additives were:

• Stabburet, Põltsamaa Felix, KiMs Norge, KiMs (Denmark), OLW and Chips replaced monosodium glutamate (MSG) with more natural ingredients in a number of their products.

• The use of preservatives was reduced in many tomato products from Stabburet, Suslavicius-Felix and Spilva.

• Procordia launched additive-free Felix mashed potato.

• Felix Abba launched gherkins, frozen soups and

Labelling schemes Green Keyhole symbol throughout the Nordic GDA (Guideline Daily Amounts) region. We also aim to expand the labelling is a voluntary labelling scheme which most major food system to cover more product categories, for companies in Europe endorse, and which therefore example beverages and snack meals. provides consistent information on nutrition. The GDA scheme is intended to make it easier for consumers to The Danish Brødskala'n understand the nutritional content of food products by and Whole Grain Campaign transcribing scientific expressions into a more consumer- The Danish ingredient suppliers in the Orkla Group friendly language. Several Orkla companies have use the "Brødskala'n" labelling system for their introduced GDA labelling on their products. products to indicate the whole-grain content. Comprehensive guidelines have been drawn up The Green Keyhole symbol represents a system for the use of the labels, and their use is contingent of labelling that identifies the healthier products in on a written agreement between users of the various food product categories on the basis of crite- labelling and NHO Mat og Drikke, the Norwegian ria such as salt, sugar and fibre content. This is a member of FoodDrinkEurope. In Denmark, the criteria simple, clear labelling method that tells consumers for “choose whole grain first” are set by the Danish that products with the Green Keyhole symbol are a Whole Grain Campaign. They follow broadly the better nutritional choice than other products in the same guidelines as the Green Keyhole system, but same category. Orkla backs the introduction of the the requirements regarding whole-grain content are stricter. 38 Orkla sustainability report 2012 nutrition and health Responsible marketing

Orkla's marketing shall be based on the principle of responsibility.

Good marketing of our products is vital for formulating these guidelines. In The ministries have proposed banning countering competition from other compa- accordance with these provisions marketing of unhealthy food and drink nies. At the same time, we consider it im- Orkla companies shall: to persons under the age of 18. portant to have a conscious and responsible approach to marketing, particularly with • not develop advertising for high-energy, Current Norwegian legislation, coupled respect to nutrition and health. Orkla has low-nutrient products that directly tar- with the industry's own self-regulatory sound procedures for quality assurance of gets children, or advertise such products system, makes the Norwegian regulations marketing and product information, and through media channels particularly on marketing that targets children the we have stringent requirements with re- designed for children most stringent in the world. spect to being able to justify claims. We are particularly cautious when it comes to mar- • exercise caution with respect to the use Overweight and obesity are a significant keting of products that appeal to children. of persons or characters who are well social problem, and are particularly serious known to children from television among children and adolescents. We are In 2010, WHO established a set of recom- programmes or films committed to developing the voluntary mendations on the marketing of foods guidelines further in cooperation with the and non-alcoholic beverages to children. • not advertise at schools or day-care centres industry­ and the authorities rather than Orkla supports WHO's recommendation introducing stricter government regulation. to reduce the marketing pressure associated • not offer vending machines for high- with products with a high content of energy, low-nutrient products to day- saturated fat, sugar and salt. care centres or schools below college/ Our approach university level Orkla has prepared internal guidelines to to responsible inform Group companies about consid­ • exercise caution with regard to entering marketing erations to take into account when develop­ into agreements concerning sponsorship We wish to protect children and ing marketing of food and beverages. and distribution of samples etc. at adolescents from marketing that events for children, or where children may be misleading or exert In 2012, Lilleborg was involved in a lawsuit are unaccompanied by adults undue pressure to buy on them. where a competitor, Colgate, maintained that claims used in marketing of Jordan • introduce procedures in connection with Children and adolescents have a toothpaste were in breach of marketing school visits to ensure that the contact less developed critical faculty legislation. The court found in favour of teacher obtains approval from parents than adults, a greater natural re- Lilleborg on most points, but the company in connection with the visit, and spect for authorities and a lesser was denied the future use of two claims permission to distribute samples. ability to understand humour that were printed on the back of the and irony. We therefore believe toothpaste tubes. The court decision did Marketing restrictions that it is natural to direct our not make it necessary to withdraw products Because of an increase in the prevalence sales message at adults. Parents from the stores and did not result in fines. of overweight children and adolescents, are in the best position to de­ This was the only case relating to marketing marketing restrictions are under discussion cide what their children should legislation in which Orkla was involved in a number of European countries. In eat and drink. In addition, in 201212. Norway, the Ministry of Health and the parents are most often the ones Ministry of Children, Equality and Social responsible for family shopping. Self-regulation Inclusion have circulated for comment a In 2007, the food industry drew up green paper on regulation of marketing of In marketing targeting adoles­ non-mandatory Norwegian guidelines food and beverages with a high content of cents we design the activity in for marketing of food and drink that energy, saturated fat, sugar and salt that such a way as to address the targeted children, which are now aligned targets children and adolescents. The older segment of the target with WHO's recommendations of 2010. purpose of this move is to reduce over- group as far as possible. Orkla was actively involved in weight among children and adolescents.

12According to annual internal reporting of disputes, lawsuits, supervisory issues and similar matters by the business areas to the Group. 39 P hoto: Sonneveld

Dutch bread with less salt

The Dutch Sonneveld Group has reduced the salt content in its bread mixes by 16%.

Salt consumption in many countries "We have worked systematically to prevent constipation. Fibre has also is higher than the recommended daily reduce the salt in our bread mixes in proved to have a counteracting effect intake of 5 grams per person. A high salt recent years. It was important to us to on type 2 diabetes, cardiovascular intake can increase the risk of high blood adjust the amount of salt well in advance disease and certain types of cancer. pressure, cardiovascular disease and of the introduction of the Dutch legislation obesity. Bread is one of the main on 1 January 2013," says Maarten Boonstra, "Wholemeal bread is an important source sources of salt. Sonneveld Director of Quality and of fibre.T he more whole grain, bran and Maintenance. wholemeal flour products contain, the Orkla Food Ingredients company higher their fibre content. In 2012, Son- Sonneveld has been a pioneer in adapting Higher fibre content neveld launched the Vitason product range, to the new Dutch legislation of January In addition to working actively to reduce in which the fibre content of several of 2013, which restricts the quantity of salt the quantity of salt in the products, the bread mixes was increased by over in bread from 1.8 to 1.5%. The result is a Sonneveld wants to increase the quantity 50%. We are now looking into the possi- 16% reduction in the salt quantity in all of fibre in its products. Fibre works on bility of developing more products with bread mixes. the bowel function, and may help to a higher fibre content," says Boonstra. 40 Orkla sustainability report 2012 responsible purchasing Collaboration based on ethical, sustainable principles

At Orkla we require all our suppliers to comply with our code of conduct with regard to working conditions, business practices and environmental management. olourbox.no P hoto: C 41

Orkla collaborates with suppliers all over the world. Regardless of the country concerned, we require that Workers’ rights they all comply with the Orkla Supplier Code of Conduct, which defines what we consider to be necessary for the proper conduct of business. Close monitoring of Respect for workers’ rights is a suppliers plays a crucial role in ensuring compliance with our strict guidelines. cornerstone of our corporate

Risk assessment culture, and essential to Orkla’s branded consumer goods companies sustainable operations. have a total of around 21,000 suppliers. This multitude of suppliers makes it important to give priority to monitoring Orkla holds the principles enshrined in the and will to the extent possible collaborate those considered to be most at risk of Universal Declaration of Human Rights and with suppliers to ensure better condi- failing to comply with our code of the ILO Declaration on Fundamental Princi- tions. Suppliers must show a willingness conduct. To identify these suppliers, ples and Rights at Work to be inviolable. to comply with our standards by docu- the companies carry out systematic risk These principles serve as the basis for our menting gradual improvement. In the assessments, in which certain countries, own Orkla Supplier Code of Conduct. event of serious breaches of our Supplier production methods and product categories Code of Conduct, or a failure to achieve are given a special risk weighting. A large Enforcement of improvement over time, we will consider part of the Orkla companies’ purchases our code of conduct terminating our partnership with the come from local suppliers located in the Orkla is committed to promoting continu- supplier in question. company’s home country. The Nordic re- ous improvement at the supplier level, gion and the Baltics are the primary mar- kets for Orkla’s branded consumer goods, and 58% of Orkla’s purchasing is from suppliers in the Nordic region and 25% from other parts of Europe. The inherent Our approach risk of breaches of workers’ and human As a minimum, all our suppliers are required to rights is assessed as high in connection with purchasing from suppliers in Asia provide a safe workplace, and to treat workers and in certain complex supplier chains with consideration and respect. for products such as cocoa, palm oil and fish. Orkla requires suppliers to provide wages and social benefits that are consistent with the national statutory level or industrial standard in the country concerned. The higher of the two standards shall apply. Wages must be high enough to meet the employee’s basic needs. Wage deductions may not be used as a disciplinary action.

ORKLA SPEND BY SOURCING REGION* Child labour is one of several forms of work that Nordics 58 % Rest of Europe 25 % Orkla does not accept. We require our suppliers Russia 11 % India 3 % to ensure that child labour does not occur, neither North and South America 1 % China 1 % in their own production processes nor in the Rest of Asia 1 % production processes of their subcontractors. *Concerns Orkla’s branded consumer goods business 42 Orkla sustainability report 2012 responsible purchasing

Audits Human resource Orkla companies conduct audits in order to gain an in-depth insight development into the operations of suppliers that have been identified as being Risk identification and supplier at particular risk of breaching our requirements. Carrying out a large monitoring call for the right number of audits is not a goal in itself. In order to achieve improve- type of expertise. The Re- ment, we consider it crucial to have a dialogue with suppliers and sponsible Sourcing Officers provide them with training. Nevertheless, audits are an important Network in Orkla was estab- tool for ensuring that critical issues are addressed. lished with a view to sharing experience and building ex- Results 2011/2012 pertise. Specialised training All suppliers13 of raw materials and packaging and other important is also provided by the Orkla suppliers have been subjected to a risk screening. Purchasing Academy and the Orkla Senior Management In 2011 and 2012, a total of 57 supplier audits were conducted in Programme. the branded consumer goods area. Based on these audits, we see that critical issues can be broken down into the following categories: Results in 2012 • A total of 1300 hours of • Health, safety and hygiene (53%) train­ing was provided for • Working hours (26%) 115 managers and purchas­ • Wages (12%) ing staff. Similar training • Other issues (9%) was provided the year before for 90 employees. The most common challenges related to health, safety and hygiene lie in the lack of adequate equipment or procedures • Responsible sourcing proce- for fire safety, first aid and noise protection. The main challenge dures were implemented by related to working hours is the excessive use of overtime. Examples Orkla in companies that ac- of wage-related issues include a lack of adequate guidelines,­ docu- count for a total of 80% of mentation or appropriate compensation for overtime. Orkla’s purchasing14.

We require that any issues identified are remedied within an • Orkla became a corporate agreed period of time. We follow up on the supplier to verify member of the Ethical that action has been taken to improve the situation. In 2012, Trading Initiative. no serious issues were identified leading to the termination of a supplier relationship. Goal for 2013/2014 • Establish procedures in all Goals for 2013/2014 Orkla companies and provide • Establish risk assessments for selected categories and improve- training for all purchasing ment measures for the largest, highest-risk categories of products staff and key personnel. purchased, such as cocoa, palm oil, fruit and berries and fish products.

• Continue efforts to conduct systematic risk assessments and monitor suppliers.

13I mportant suppliers are identified on the basis of the size of the purchase and the product’s significance for operations.

14Concerns Orkla’s branded consumer goods business 43 ertified Z C P hoto: UT

Cocoa production in West Africa

Projects Nidar has committed to switching Poverty, weak infrastructure and a to certified cocoa through the UTZ lack of farming knowledge increase Certified programme. The UTZ pro- gramme enables cocoa farmers to the risk of breaches of workers’ and make a living from cocoa, and en- sures that the cocoa is cultivated human rights in West Africa. under decent conditions. All the co- coa in Nidar chocolate is now UTZ certified. Panda and Kalev also buy West Africa accounts for close to 70% of Due to such factors as small farms, cocoa through this programme. the world’s cocoa production. There are poor farming skills, illiteracy and poor a total of around 1 million cocoa farms, infrastructure, the income of many In partnership with UNDP and a most of which are small and family-run. cocoa farmers is too low, children and Due to their inadequate knowledge of adolescents work on the farms, and number of other chocolate and efficient cultivation techniques, many many children do not attend school. food manufacturers in the Nordic farmers obtain lower yields than they countries, Orkla is planning a sig- could and their income is uncertain. The Orkla does not tolerate children being nificant development project in countries of West Africa suffer from poor exposed to danger or participating in the cocoa sector in Côte d’Ivoire. infrastructure, such as poor road links their family’s work at the expense of their This process is being carried out in between several regions and commercial schooling. We are committed to ensuring close dialogue with the Govern- centres along the coast. As a result, middle­ that the fundamental rights of children ment of this West African country. men are often involved in the sale and are observed, and we wish to help improve The project is intended to promote transport of cocoa. A large percentage of cocoa farmers’ income opportunities and the coherent development of the the adult population has difficulty read- living conditions. cocoa sector, and to support the ing and writing, a disadvantage that can create unnecessary problems when reform process initiated by the harvests are bought and sold. new government of Côte d’Ivoire. 44 Orkla sustainability report 2012 responsible purchasing ierre Robert P hoto: P ierre

Textile manufacturing in Asia

Pierre Robert Group has worked closely with Chinese suppliers in the textile industry for several years.

Besides ensuring better working to improve their employees’ conditions Pierre Robert Group uses international conditions for textile workers, this of employment and working conditions. or local personnel to check that the code collaboration has proved to promote of conduct is adhered to, and by making higher, more stable quality in deliveries. Code of conduct visits itself to suppliers for this purpose. Textile manufacturing is often located As a prerequisite for entering into No serious breaches of the code of con- in countries where the risk of human cooperation with a manufacturer, Pierre duct have been found in inspections of rights vio­lations is high. Pierre Robert Robert Group requires that the supplier the company’s suppliers. Group is Norway’s largest supplier of comply with the company’s code of con- basic garments to grocery stores, and duct, which covers such issues as wage Pierre Robert Group has worked the company has a total of 42 suppliers, levels and general conditions of employ- purposefully for several years to raise most of whom are located in Asia and ment. It also requires that wages and social production process standards, and the Europe. Over 60% of the products are benefits be consistent with the minimum company sets strict requirements with manufactured in China. Over a period level required by national law or with the regard to working hours and working of several years, Pierre Robert Group industry standard in each country. The conditions in every contract that it has worked closely with its suppliers higher of the two standards shall apply. enters into with suppliers. 45

Fish oil production in Peru

Axellus sets stringent requirements for traceability for fish oil purchased from Peru in order to ensure that it comes from a sustainable stock and that workers have decent living conditions.

The fish stocks off the coast of Peru are Economic pillar health, safety, wages and working very strictly monitored by the national In Peru, the fisheries sector is considered conditions. Axellus will continue to authorities, who wish to ensure that their to be one of the pillars of the national impose stringent requirements on its fisheries sector is sustainable and holds economy. The fishing industry is ranked suppliers, carry out independent audits a leading position on the global market. third out of 18 sectors in wage statistics, and pay visits to Peru to quality assure Axellus has visited Peru and met with local and workers have the right to form trade the entire value chain for the company’s authorities, supervisory bodies and suppli- unions. Axellus considers it essential that omega 3 products. ers to obtain first-hand knowledge of con- the local population and persons working ditions in the fish oil industry.T he company in the fish oil industry have good living has also conducted quality audits of conditions. For several years, the company suppliers and visited several production has monitored its suppliers’ compliance facilities in Peru. with its code of conduct, which covers

Collaboration Orkla attaches importance to setting clear requirements Sedex is an international organisation that provides a as regards fair, sustainable working conditions, prohibi- standardised system for risk assessment and collection tion of discrimination and prohibition of child labour. In of data on working and environmental conditions in spite of these requirements, we know that a great deal suppliers’ operations. Orkla companies also use the of work remains to be done. In the vast majority of ca- Sedex Members Ethical Trade Audit (SMETA), which ses, there are challenges that must be solved through promotes a common supplier audit procedure across concerted efforts across the industry and the public sec- industries and geographical regions. tor. Orkla participates in several industry initiatives with a view to improving conditions in our supply chain. The Ethical Trading Initiative is an organisation for companies, organisations and public enterprises AIM-PROGRESS is a collaborative industry initiative which seeks to promote human rights, workers’ rights, aimed at promoting efficient, coordinated improvement development and environmental standards. Members efforts in global supply chains. AIM-PROGRESS consists of have a commitment to address challenges in their own 34 global branded goods companies, and its activities in- supply chains and report openly on the status and clude providing training for suppliers and manufacturers progress of their efforts. in issues related to responsible production conditions. 46 Orkla sustainability report 2012 responsible purchasing P rocordia P hoto:

Sustainable purchasing our approach The earth’s own natural resources constitute Orkla’s purchases of raw materials the basis of many Orkla shall be based on the principle of prod­ucts. Managing nat­ sustainable production. ural resources in a way that is not sustainable Sustainable development means meeting harvested and produced in a sustainable may have serious the needs of today’s population without manner, and that the negative impact on compromising the ability of future genera- the environment is minimised. conse­quences for the tions to meet their own needs. According to environ­ment and the UN population projections, the global popu- By mapping our own use of at-risk raw ma- lation was expected to exceed 7 billion in terials, we identify areas on which we must local communities in 2012. The UN expects this population figure focus extra attention. Several Orkla compa- to continue to rise to reach 9 billion in 2050. nies are actively involved in efforts to pro- which the raw materials mote sustainable production in the supply are produced. Orkla’s Global population growth and increased chain. Examples are Abba Seafood’s focus consumption are augmenting the burden on sustainable fishing and Stabburet’s ef- purchases of raw mate- on the earth’s natural resources. It is forts to replace the palm oil in its products rials shall be based on already evident that certain natural with healthier, more environmentally resources are being exploited. friendly fats. the principle of sustain­

Our area of responsibility able production. We have an obligation to ensure that the raw materials we buy are cultivated, 47

Palm oil Reduced use of palm oil Several Orkla companies have decided to eliminate palm oil Orkla supports certification systems from its products, in the inter- that help to reduce the environmen- ests of both public health and tal impacts of palm oil production. environmental protection. Results in 2012 • In 2010, Stabburet decided to Palm oil is used in a wide range of foods, Malaysia contain far more carbon than is replace the palm oil in all its such as cakes and pastries, margarine, found naturally in the atmosphere, and large products with other oils. In snacks, chocolate and breakfast cereals. amounts of CO2 are released when forests 2012, Stabburet eliminated Orkla uses palm oil in some of its products. are harvested. According to the Rainforest all use of liquid palm oil from The oil has unique properties that keep it Fund, deforestation is responsible for close its product portfolio. It has semi-solid at room temperature, unlike to 15% of global greenhouse gas emissions. other oils which would liquefy in such con- been easy to find a good al- ditions. The use of palm oil is controversial, Certification ternative for some products, both from an environmental and climate Systems have been established for the while a major development perspective and from a health perspective. certification of palm oil through the process was required for Roundtable on Sustainable Palm Oil, others. A substantial part of the global production among other organisations. These certifi- of palm oil takes place in Indonesia and cation systems are intended to ensure that Goal for 2013/2014 Malaysia. Rainforest areas are being replaced production is carried out in a sustainable • Sætre aims to eliminate palm by palm oil plantations, which have a nega- manner. Orkla supports certification sys- oil from all its products by the tive impact on biodiversity in the forests. tems that help to mitigate the environmen- end of 2014. Furthermore, palm oil production generates tal impact of palm oil production. Several substantial emissions of greenhouse gases. of Orkla’s food manufacturers purchase oil The forested areas of Indonesia and through the certification systems.

Sustainable fishing

Abba Seafood supports programme for sustainable fishing in Thailand

Abba Seafood in Sweden produces sea- cular challenges. Through contact with the Development Cooperation Agency (SIDA) food for the Swedish market and for Thai Ministry of Fisheries, the South-East was established to survey the fish stocks. export to many countries. The fish is Asian Fisheries Development Center), tin- A third-party evaluation of the fisheries bought from suppliers all over the world. ned food manufacturers and other organi- was also carried out, and the conclusions sations, the company discovered that very were presented and discussed with the Sustainable management of marine resour- little information was available on stocks of local fisheries authorities and other stake- ces is central to Abba Seafood’s production a tuna species called tonggol and on the holders. Furthermore, an improvement of seafood. Through the company’s collabo- management of these resources. plan has been established which describes ration with the World Wildlife Fund actions that must be taken to ensure the (WWF), the Marine Stewardship Council In 2010, to support the sustainable fishing future management of the fish stocks and (MSC) and KRAV, emphasis is placed on of tonggol in Andaman Lake, Abba Sea- natural resources. Abba Seafood and its traceability and fishing from sustainable food joined the Sustainable Fisheries Part- partners are currently trying to establish a stocks. From a sustainability perspective, nership. As a first step, a research project long-term, public-private cooperation the production of tuna has presented parti- supported by the Swedish International programme to implement the plan. 48 Orkla sustainability report 2012 about the report P hoto: Mari Svenningsen

About the Report

This report presents Orkla’s sustainability matters and activities, making a balanced relevance for Orkla’s operations and data work in the 2012 financial year.A s a presentation of the issues, and providing availability. The report should be read in consequence of Orkla’s structural change comparable figures. conjunction with Orkla’s Annual Report from a diversified industrial group to for 2012 and other information available a focused branded consumer goods com- The report is based on data collected from on the Orkla website. pany, the report primarily covers Orkla’s Orkla companies through several internal Branded Consumer Goods business. The reporting systems. Unless otherwise stated, Orkla’s Sustainability Report for 2012 key figures reported largely refer to the key figures are presented as at 31 Decem- shows the progress made in the Group’s entire Group15, while breakdowns display ber 2012. Data from earlier years to which sustainability performance by reference only the Branded Consumer Goods reference is made in this year’s report to the Global Compact’s Ten principles. A business. have not been restated in relation to detailed overview of Orkla’s reporting for previously reported figures. 2012 in relation to the GRI indicators and The report is divided into chapters that the Global Compact’s Ten principles may reflect the main topics addressed in Orkla has prepared this report in accord­ be found at www.orkla.com/sustainability/ Orkla’s sustainability work. It is based ance with GRI guidelines (G3). The results-and-reporting. on the Global Reporting Initiative’s (GRI) report has not been verified by an exter- principles for good reporting practice. nal third party. By our own assessment, Information on the sustainability work Our emphasis is on presenting an overall it satisfies the GRI Application Level B carried out by Sapa, Jotun and Borregaard picture of Orkla’s efforts to promote criteria. Indicators have been selected may be found in each company’s own sustainability, reporting on material on the basis of an assessment of their reports.

9I ncludes The Branded Consumer Goods business in addition to other activities in the real estate, hydro power and aluminium sectors and financial investments. Sponsorships

Orkla is a main sponsor of

The SOS Children’s Village in Valmiera, Latvia. Orkla has financed one of the family Orkla is fully funding the SOS Children’s Village in Pleiku, Vietnam, which will open in houses and a multipurpose building. Photo: Peter Tubaas. 2014. Photo: Orkla.

The SOS Children’s Village in Hemeiusi, Romania. Orkla has financed one of the family Support SOS Children’s Villages. Photo: Nina Edholm. houses. Photo: Katerina Ilievska.

Copyright notice: The content of this report is copyright SOS Children’s Villages is a non-political, non-religious protected material. The content may organisation that works in the spirit of the UN Convention on be freely distributed, reproduced and electronically stored. This consent is the Rights of the Child. SOS Children’s Villages works in more given on the condition that the source than 130 countries to support families and help children at of the material is correctly cited risk grow up in a loving home. ©2012 Orkla ASA ER JØM KE IL T Orkla ASA Office adress: M P.O. Box 423 Skøyen Karenslyst allé 6

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