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Valio Group Corporate Responsibility, Values and Operating Policy

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Valio Group Corporate Responsibility, Values and Operating Policy VALIO GROUP CORPORATE RESPONSIBILITY, VALUES AND OPERATING POLICY COMPANY Our mission : We create well -being and taste sensations responsibly. Our values: Personal responsibility; Listening to customers and consumers, and exceeding their expectations; Caring for people, animals and the environment, succeeding together. Our goal: International profitable growth with world class value added. Promise Implementation We promote Finnish milk production. • We pay all our profit to our owners, Finnish dairy farmer entrepreneurs. • From our owners’ perspective, the goal is to pay the highest raw milk price in Europe to the owner entrepreneurs. We generate financial well -being in • In 2015, Valio Group generated income of over one billion euros in Finland. Finland. • We employ directly and indirectly around 30,000 Finns. • We secure the vitality of the countryside in Finland. • We favour domestic suppliers whenever feasible in terms of quality, availability, and sustainable business. We have identified and take our • We take our stakeholders’ expectations into account in the development of our stakeholders’ expectations into business operations. account in our business operations. • We grant, on consideration, political subsidies according to the equality principle, to candidates who we believe act in a manner that promotes Valio’s business environment. • We have reviewed our operations’ value chain and societal impact, and update the goals for responsible operations on the basis thereof. We have identified risks in our • We continuously develop risk evaluation and management procedures to business operations and manage them ensure the safety of products and operations, and the continuity of business accordingly. operations. • We regularly map, working together with insurance companies, the accident risks related to our business operations and production plants. The risks have been insured in accordance with Valio’s insurance guidelines. • We take the continuity of our business operations into account, on a broad front, especially in milk steering, and in securing the operation of production and commodities systems. • To handle exceptional situations, we have drawn up plans for product recalls, crisis communications, and production rearrangement, as well as specific restart plans for the production plants. We comply with the ten principles of • In all our operations, we are committed to the core values related to human the UN Global Compact, and rights, principles at work, the environment, and anti-corruption activities, in consequently the following: accordance with those declarations. • Universal Declaration of Human Rights • ILO Declaration on Fundamental Principles and Rights at Work • Rio Declaration on Environment and Development • United Nations Convention Against Corruption We comply with Finnish and EU • Countries in which we have our own company we comply with local legislation legislation as well as contracts made and contracts made with our customers. with our customers in domestic and • We continuously monitor the legislation and ensure ongoing compliance in our international sales. operations. • Our communication is timely, truthful and interactive. • We do not disclose Valio’s or its partners’ business secrets. VALIO GROUP CORPORATE RESPONSIBILITY, VALUES AND OPERATING POLICY SUPPLY CHAIN We know our supply chain and promote its responsib le operati on . Promise Implementation All dairy products sold in Finland under • The raw milk we use is sourced locally – the average transport distance to the the Valio brand are made in Finland dairy is 74 kilometres. from Finnish milk. We use high quality raw milk , • The milk farmers undertake in the Valio quality agreement to apply the Valio produced applying good production milk quality system, which obliges them to comply with the directions for good practices. milk production practices. • At least 5% of the dairy farms are audited annually. • The milk farmers have farm-specific statutory in-house control instructions, and they track the quality of the raw milk they produce per cow and in the farm tank (temperature, sensory quality, microbial drug residue). We ensure the well -being of co ws. • The Valio milk quality system instructs on animal health, well-being, and sufficient feeding. • We promote building free stall barns, grazing for cows, and systematic animal health care. • Valio Ltd and Valio Group dairy co-operatives support the milk farmers in developing cattle well-being e.g. by organising training on the topic. The dairy co-operatives’ production advisory services are available to all Valio milk producers free of charge. We do not use genetically modified • Valio Group does not permit genetically modified components in the feeding of feed in feeding Valio dairy cows. cows, heifers and/or calves. • The food products we manufacture do not contain or comprise genetically modified organisms as determined in EU Regulations 1829/2003 and 1830/2003. We run an efficient and • All milk collection lorries are properly certified and operate under in-house environmentally sound milk collection supervision. system from dairy farms to production • The milk lorry driver checks the temperature, aroma and appearance of the plants. raw milk at the dairy farm before pumping it into the lorry. The driver also takes farm-specific milk samples, which are analysed for bacteria and cell counts on a regular basis. • We optimise milk collection routes. We know the origin of our products. • In case of a defect we can trace the raw milk back to an individual farm. • We can trace all ingredients and packaging materials used for the products. • We evaluate the tracking process annually by implementing product recall and traceability drills at all Valio sites. We purchase only from suppliers that • We operate an approval process for new suppliers, evaluate all suppliers operate responsibly and have passed annually, and audit the suppliers on the basis of assessed risk. our approval procedures, and we also • We are an AB member of Sedex (Supplier Ethical Data Exchange), through take ethical standpoints into account which we aim to promote attention to responsibility in the supply chain. in our purchasing. • We are committed to the ETI Base Code (Ethical Trading Initiative). • We examine and evaluate our suppliers through separate supplier surveys and the Sedex system, and act on any faults detected. We are developing a process to ensure the responsibility of suppliers from risk-bearing countries. • We do not use palm oil in Valio consumer products, and do not use seafood species determined as endangered by the WWF for our range of trading products or our own consumer products. • We purchase only certified palm oil from suppliers that are members of RSPO (Roundtable on Sustainable Palm Oil). VALIO GROUP CORPORATE RESPONSIBILITY, VALUES AND OPERATING POLICY EMPLOYEES Valio is a safe and fair place of work where the employees’ well -being is taken into account. Promise Implementation Our goal is to eliminate or minimise • Occupational safety development is a group-level strategic indicator at Valio. hazards to the personnel, • We handle safety issues regularly at various management meetings. operations and immovable • We identify hazards and assess their associated risks. property. • We continuously improve the workplace environment and safe methods of operation. Our goal is zero accidents. • All personnel shall report on any hazards they notice and act on unsafe practices. • We always comply with safety regulations and instructions. • All dangerous incidents, injuries and accidents are investigated. • We improve our personnel’s safety consciousness, and know-how concerning safety. • Valio sites have rescue plans in case of emergency, and emergency drills are arranged regularly. • We develop our operations in order to speed recovery from any major deviations from the norm. We promote our employees’ well - • We develop Valio’s business expertise, supervisory work, work communities, and being. well-being at work, through training, occupational health care services, and well- being at work activities. • Our well-being at work activities comprise goal-oriented development, one of whose indicators is the development of the number of long-term healthy employees. • We also support well-being at work by offering staff canteens and occupational health care services. • We offer personnel benefits, such as performance based rewards, rewards for reaching goals set, for birthdays, and for years of service. We comply with the guidel ines of • We do not hire persons under 15 years-of-age. the International Labour • All employees have a written employment contract. We comply with employment Organization (ILO) Declaration on contracts and collective agreements. Fundamental Principles and Rights • The personnel has freedom of association, and interaction between the company at Work. and the personnel operates smoothly. • There is regular interaction between the company’s management and personnel. • We comply with data security principles in handling information related to individuals. • We do not condone any kind of forced labour. • We do not condone discrimination or bullying. We identify and eliminate any • We comply with good administrative practice at all organisation levels. No corruption in our operations. member of staff can, for example, approve their own invoices. • We report on illegal or unethical activities to the appointed person responsible at HR. • We act with honesty. • Ethical operating principles
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