The future is increasingly plant-based. Plant-based oils and fats are key to moving towards sustainable food systems, replacing animal-based fats, and creating sustainable, renewable, and biodegradable products in candles, personal care, and other industries that rely on fossil-based solutions today. At AAK, we are a part of this transformation and want to collaborate with customers to address global challenges and help them meet their sustainability targets. We have set our own clear sustainability goals with actionable plans to ensure our commitment to Making Better Happen™ throughout our business. Our freshly released Sustainability Report 2023 provides a chance to explore these further.
Prioritizing climate, biodiversity, and people
AAK’s sustainability strategy is clear. We focus on the areas where we have the most profound impact. Our sustainability efforts focus on three key areas: climate, biodiversity, and people. We believe we can deliver the most substantial impact in these areas, driving transformation across the industry and achieving enduring, scalable outcomes. In 2023, we made considerable progress towards our sustainability targets while enabling our customers and suppliers to evolve towards greener practices.
Climate targets approved by SBTi
As part of our commitment to sustainability, we have set ambitious climate targets for 2030, covering both our sourcing practices and operational activities. We are proactively cutting emissions in these areas, shifting towards renewable energy sources, and investing in initiatives aimed at reducing our carbon footprint.
In December 2023, we were informed that the Science Based Targets Initiative (SBTi) had approved our emission reduction targets. AAK is at the forefront of this movement, being among the first to receive approval for the Forest, Land, and Agriculture (FLAG) targets, which align with the objectives of the Paris Agreement. Cutting emissions in our supply chain is achieved through a multi-faceted approach that involves renewable electricity targets, sustainable sourcing, efficient distribution, waste reduction, sustainable solutions, and packaging innovation.
In 2023, we also completed the installation of the new bio-boilers at our production site in Aarhus, Denmark. This development is a crucial step in our commitment to reducing carbon emissions. The plant is expected to decrease the site’s carbon footprint by 90 percent. Annually, it will help reduce over 45,000 tons of carbon emissions and will also support the generation of green electricity for onsite use.
Committed to deforestation-free palm oil
Our commitments to sustainable agriculture and preventing deforestation are central to our strategy for biodiversity. Deforestation is recognized as a major contributor to GHG emissions and climate change. Historically, the rapid expansion of palm oil plantations has contributed to significant deforestation. Given that palm oil is AAK’s highest volume raw material, at more than 60 percent of total oil purchases, our sourcing thereof represents AAK’s most substantial opportunity to minimize environmental impact. By sourcing only deforestation-free palm, we are reducing greenhouse gas emissions and supporting biodiversity.
Our primary focus is on achieving 100 percent verified deforestation-free palm by 2025. We are committed to achieving 100 percent traceability to the palm oil source, as well as maintaining palm and soy supply chains that are verified free from deforestation and conversion. In 2023, our global palm traceability stands at 93 percent, and our verified deforestation-free status for palm has reached 83 percent. We are also committed to reforestation by planting new shea trees. In 2023, we reached a total of 144,833 trees, which is 96,5 percent of our 2025 target. These are just some examples of our commitment to sustainable practices and responsible sourcing throughout our value chain.
To safeguard biodiversity and protect forests and the ecosystem, we proactively satellite monitor 100 percent of the mills in our supply chain for palm and coconut in Malaysia, Indonesia, the Philippines, India, Papua New Guinea, African countries, and Latin America. The monitoring covers more than 15 million hectares of land area. The technology services help us to become aware of potential deforestation issues.
Advancing well-being and human rights
People are at the heart of our business. We emphasize human rights, employee safety, and well-being, promoting a diverse and inclusive workplace. In 2023, we devoted considerable effort to our culture transformation initiative aimed at strengthening team spirit.
Our commitment to a positive societal impact extends beyond the workplace, as we actively engage with the communities in which we operate. Within our supply chains, our focus lies on ethical sourcing, health and safety, and improving livelihoods. An example is the Kolo Nafaso program where we aim to empower women by directly sourcing our shea supply from them. In 2023 we engaged 241,188 women in the Kolo Nafaso program, about 8 percent of women in West Africa who collect and sell shea kernels. The program has been focusing on poverty alleviation and women’s empowerment through direct trade, interest-free micro-credits, and shea-collecting training. The Kolo Nafaso program presents a stable, long-term partnership with a guaranteed purchase agreement, but the women who participate in our program are completely free to sell their shea kernels to whomever they choose. The program is audited and verified by Proforest, an external non-profit organization that promotes responsible production and sourcing in agricultural commodities.
The journey ahead
AAK continues to proactively adapt to the changing regulatory landscape, preparing for new legal standards such as EUDR, CSRD, and CSRDDD. The EU Deforestation Regulation aims to reduce imports of products linked to deforestation by the end of 2024. AAK supports this initiative but is actively engaged in finding solutions to the practical challenges it creates. These include the volumes of disclosure per shipment, human rights and legal due diligence considerations, and the handling of by-products and oleochemicals.
Our commitment to positively transforming the global food supply chain is increasingly recognized, and during 2023 we have accelerated on our sustainability commitments. Yet there is more ground to cover. Making Better Happen™ is more than just a motto; it's a continuous journey involving the entire supply chain, from farm to table.
Would you like to know more about the sustainability work that happens at AAK? Take a look at our newly released Sustainability Report 2023.
