Contents. From our CEO Review of the year Skånemejerier Sustainable dairy farming PDF

Sustainability report 2016 Contents From our CEO Review of the year Skånemejerier... 6 Sustainable dairy farming Concern for the environment and climate Our products Purchase

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Sustainability report 2016 Contents From our CEO Review of the year Skånemejerier... 6 Sustainable dairy farming Concern for the environment and climate Our products Purchase responsibility in the value chain Our workplaces Our role in society Stakeholder dialogue and materiality analysis ABOUT THIS SUSTAINABILITY REPORT This is Skånemejeriers sustainability report, Here you will find information about our work with environmental and social issues for the years 2014 and 2015 and significant events leading up to publication in The report is inspired by the Global Reporting Initiative (GRI) guidelines for sustainability reporting. The sustainability report covers Skånemejerier s wholly-owned production units, that is to say Kristianstad Ostförädling AB, Kristianstads Mejeri AB, Malmö Mejeri AB and Hjordnära Mejeri AB. WHAT DO YOU THINK ABOUT OUR SUSTAINABILITY EFFORTS? Please feel free to send us your comments and points of view via: Skånemejerier s focus on sustainable development has become increasingly evident across the entire company. Sustainability issues have become more obvious and are emphasized throughout our daily operations. Our aim is to constantly reach new goals by finding constructive, long-term solutions that contribute to a sustainable future, caring for animals, the environment and you. Happy reading! 2 Care for animals, nature and you The world is facing a major climate challenge and it is our responsibility as a company to do what we can to contribute to a positive development. We cannot turn a blind eye to the fact that our business, like all food production, impacts the climate. It is important to maintain this insight so that we can work constructively to reduce our emissions. Today, around 400 dairy farms from Skåne and southern Sweden deliver their milk to us. The milk comes from healthy cows that receive the best care. It requires continuous work to ensure that the cows feel good, get their food and water and have a cubicle where they can lie down nice and dry. All this is done every day throughout the year by our dairy farmers. It actually goes without saying, because when the cows are healthy, the milk tastes better. Cows that supply milk to us receive GM-free feed and we ensure that any soy in their feed has been sustainably produced. Skånemejerier is the largest dairy in Sweden with third-party certified dairy farms. Because our products are made from natural ingredients, it is important for us to protect the environment and the climate. To reduce the need for fossil fuels is one of our long-term environmental targets. Over the last four years, we have achieved a 66% decrease thanks to investments in renewable energy. At the beginning of 2016, our diesel vehicles began refuelling with HVO at Malmö Dairy. HVO diesel is a 100% renewable fuel and provides carbon dioxide savings of up to 88% compared to fossil diesel. This will result in significant reductions in emissions from transport and help us achieve our environmental objective for the year The focus on healthy products continues and we have launched over 30 new quark products over the last two years. Due to substantial investments in the dairy in Malmö in 2015, we are now finally able to produce quark from Swedish ingredients. I am proud of the fact that, in 2015, Skånemejerier was ranked as the country s 16th most sustainable brand by Swedish consumers in the Sustainable Brand Index, Scandinavia s largest brand study on sustainability. By acting responsibly and maintaining an open, ongoing dialogue with our customers, consumers and other stakeholders, we create a firm basis for continued trust. We want our products to contribute to a better world for animals, for nature and for you. Björn Sederblad CEO Skånemejerier 3 Review of the year STRONG BRAND 2015 ended with Skånemejerier as the strongest dairy brand in Sweden at national level, according to the YouGov s Brand Index.* We enjoy strong confidence among consumers, who consider Skånemejerier to be a dairy company that cares about dairy farmers. * Read more on page 8 PACKAGING Skånemejerier works constantly to increase the proportion of renewable packaging materials. For example, Bravo s screw-top has been replaced with a renewable variant and Åsens 0.9 litre milk is being launched in renewable packaging materials, both being made of bioethanol from sugar cane. STAFF HEALTH In 2015, we undertook a specific health initiative aimed at our employees. Health profiles were created, lectures on diet, exercise, health and mindfulness were organised and more healthy food options were served in staff canteens. STRONG ORGANIC TREND In 2015, the growth of organic dairy products went up to 15%. Year-on-year growth was as high as 40%. Generally speaking, the eco trend extends over all food categories. The reason is an increased awareness among consumers about what food contains and how it is produced. PRODUCTION Relative carbon dioxide emissions from Skånemejerier s production has decreased by 66% from 2010 to 2015 owing to several investments in renewable energy. SUPPLIER AUDITS Skånemejerier follows up its suppliers on the basis of detailed quality factors such as product safety and environmental, ethical and social aspects In 2015, 11 suppliers were visited. These were selected on the basis of their importance in relation to the maintenance of good food safety. 4 SUSTAINABLE SOY PRODUCTION Skånemejerier is involved in the Swedish Soy Dialogue for responsibly produced soy, certified under ProTerra or RTRS (Round Table on Responsible Soy) rules. In doing so, we are ensuring that the cultivation of soy takes place with respect for people, nature and the environment. TRANSPORT At the beginning of 2016, our trucks began refuelling with HVO at Malmö Dairy. HVO diesel is a 100% renewable fuel and provides carbon dioxide savings of up to 88% compared with fossil diesel. This will result in significant reductions in emissions from transport and help us to achieve our environmental objective for the year THE BRAVO BEE EFFECT Juice, as we all know, comes from fruit, and it is owing to bee pollination that many fruits can grow. Unfortunately, the number of bees in the world has been significantly reduced. To draw attention to this development and increase bee health, Bravo has set up hives at various places in Sweden. KALVINKNATET Kalvinknatet is a running race for children with the aim of getting kids to exercise in playful ways. The race has been held since 2002 and the 2015 version was arranged at 20 locations in Sweden, setting a new record of almost 30,000 fun-running children. All surplus goes to sports clubs youth activities. AWARDS We won many fine awards for our products at the international dairy competition in Herning, Denmark, Lindahl s Quark was proclaimed Product of the Year 2014 for having rapidly achieved a significant market share and for developing the dairy segment. Skånemejerier Storhushåll (Skånemejerier Food Service) was named Supplier of the Year during the 2014 Restaurant Gala for its high quality products and close work with customers. Skånemejerier was ranked as the country s 16th most sustainable brand by Swedish consumers in the 2015 edition of the Sustainable Brand Index. 5 Skånemejerier OUR BUSINESS Our work is based on the key words closeness, taste and health. We advocate health and wellbeing by guaranteeing good animal welfare, high quality and 100% Swedish milk ingredients for the entire product line under the brand name Skånemejerier. We care about Swedish dairy farmers. Skånemejerier s dairy farmers receive higher renumeration per kilogram of milk than is paid by the market leader. For us it is important that dairy farmers are not only able to cover current expenditures on the farm, but that they are also able to invest for the future. Skånemejerier was founded in 1964 when four Scanian dairy associations merged to become the Skånemejerier economic association. The association is still owned by dairy farmers today and supplies its milk to Skånemejerier AB, which is owned in turn by the French dairy group, Lactalis. Lactalis invests in production and brands in a way that was not previously possible, ensuring a future for Swedish dairy production. Skånemejerier s dairy products (milk, yogurt, soured milk and cream products and quark) enjoy a market share of 71% in southern Sweden and 13% of the total Swedish market. It was also noted in 2015 how a growing interest in Swedish food led to increased demand for Skånemejerier s products outside of Sweden too. Since its foundation 52 years ago, Skånemejerier has grown to become an established option on Swedish dairy counters. This shows a trust in our products for which we are very grateful and which obliges us to make even greater efforts. Operations at Skånemejerier AB today encompass the production and marketing of drinking milk, soured milk products, cheese, fats, various fermented products and fruit drinks. The group s brands include Skånemejerier, Bravo, Allerum, the organic brand Hjordnära, Åsens Lantmjölk, Lindahls and Salakis. We employ over 600 employees directly and many more indirectly. About 400 dairy farmers in Skåne and southern Sweden deliver milk to our dairies. 6 OUR CSR TEAM Skånemejerier s CSR team consists of representatives from different parts of the company, including senior management. During meetings, important aspects concerning sustainability and the company s work are discussed in relation to corporate responsibility. In 2015, the CSR team updated the company s Code of Conduct, which will be introduced to all our employees during CODE OF CONDUCT Skånemejerier s Code of Conduct is a collective document covering both our business and our employees. It describes how we are to act, behave and conduct our business in an ethically, socially and environmentally responsible way. Managers and employees are equally responsible for ensuring that the code of conduct is complied with. 7 OUR BUSINESS AND OUR ORGANISATION The bulk of the Skånemejerier group s sales to the Swedish retail industry are conducted through Skånemejerier Försäljning AB. This company houses the group s headquarters, management and other staff functions, all of which are located in Malmö. Sales operations to retail are also undertaken by Lindahls Mejeriprodukter AB and to the Swedish foodservice market by Skånemejerier Storhushåll AB. The group s production takes place at Malmö Mejeri AB, Kristianstads Mejeri AB, Hjordnära Mejeri AB and Kristianstad Ostförädling AB All subsidiaries are wholly owned by Skånemejerier AB. The parent company s main operation is to manage the group s milk purchases. The great majority of Skånemejerier s products is sold in the Nordic countries. A very limited amount is exported to other parts of Europe and the world. MILK SOUR MILK YOGHURT CREAM COTTAGE CHEESE BUTTER JUICE HARD CHEESE OTHER Product group distribution based on 2015 annual sales volumes for Skånemejerier Försäljning AB, Skånemejerier Storhushåll AB and Lindahls Mejeriprodukter AB. CONSUMER CONFIDENCE IS STRONG 2015 ended with Skånemejerier nationally ranked as the strongest dairy brand in Sweden in YouGov s so-called Brand Index *. We think that is just fantastic. We enjoy strong confidence among consumers, who consider Skånemejerier to be the dairy that cares about dairy farmers. This is a result of many years joint endeavor between dairy farmers and us. In addition, we enjoy great commitment from our consumers who want to see Swedish milk and milk products from a dairy that cares about their farmers and the milk cows. Every day, we receive questions and comments from engaged consumers in social media. * YouGov s Brand Index is based on six parameters: Brand recommendation, Satisfaction, Reputation, Value, Quality, Impression and Buzz (latest news). The results are summarised in terms of the difference between what one has heard to the positive and to the negative about the brand. 8 WE ARE WHERE OUR CONSUMERS ARE Today, almost all Swedes use the internet. Half of Sweden s internet users look at Facebook every day, 70% checking in at least once in a while. On average, Swedes spend almost 6.5 hours a week on social media. The services and channels used vary between age groups, but Facebook is the largest, in terms of the average for all ages, with Instagram a clear second. That is why we at Skånemejerier maintain a strong online presence; it is a way for us to build relations with our broader target group. We communicate with consumers via Facebook, Instagram and Twitter. Facebook is clearly our strongest channel, where we reach an average of 9.9 million people each month. In February 2016, we achieved a peak and reached as many as 11.2 million people. The digital channels, especially the social networks, are important to us for finding out what consumers have to say about us as a company and about our products. It is also an easy, rapid way of answering questions and concerns. In addition, we make sure to learn more about who our consumers really are. This is important and valuable; after all, it is for them that we make our products. Since the autumn of 2015, we have also been using LinkedIn to share everything from employee interviews and job ads to product news. We also spread our job listings news by means of videos on YouTube. These are two initiatives that have made our recruiting process more digital. Our intention is to reach more interested people. The various social networks are also platforms where we communicate our campaigns and product launches. When the cows are healthy, the milk tastes better is our animal welfare communication that we commenced with at the beginning of Our aim is to raise awareness of the extensive work with animal health, environment and quality that we and our farmers carry out. Social media have been important channels through which we reach out with this message. 9 Sustainable dairy farming All farms that deliver milk to us are quality-assured and certified. To be able to meet all the requirements and rules, everything done on the farm has to be informed by sustainability thinking. Dairy farmers and their employees make sure of the cows well-being every single day of the year. This work is primarily based on engagement, presence and experience, although modern technology may also lend a hand. If the cows feel good, the milk will be good too. HEALTHY COWS Outside or inside, efforts are constantly made to ensure that all is well with the cows. They need their food and water and somewhere to lie down that is nice and dry. All this is done every day throughout the year by our dairy farmers and their employees. Swedish animal protection law also ensures care for our animals, both large and small. Moreover, the use of antibiotics as a preventive measure has long since been banned; in other words, giving healthy animals antibiotics is prohibited. Skånemejerier s farmers have healthy cows and very few antibiotics are used in Sweden in comparison with other countries. Statistics from the European Medicines Agency in fact show that Sweden has the lowest antibiotic use within the entire EU: Yet another reason to cherish our Swedish milk production. PASTURE AND FEED Being able to move around freely increases the cows well-being. During the summer months, all cows should be allowed to graze freely and enjoy each other s company. Sweden also has a law that says all cows should be allowed to graze outdoors; this is unique among European countries. The mild climate of southern Sweden means the cows can stay outside longer than in the north of the country. The cows that supply milk for us get GM-free feed, i.e. it is not genetically modified. Feed analyses are performed at the end of each season to determine the nutritional content of the feed. With the help of feed analyses, the cows feed composition is nutritionally balanced. 10 SUSTAINABLE SOY PRODUCTION Soy is an important source of protein in animal feed. The proportion of soy in Swedish milk cows feed is around 2 per cent on average. Skånemejerier have signed the Swedish Soy Dialogue s declaration of responsibility that all soy used in feed for the cows should be responsibly produced and certified in accordance with ProTerra or RTRS (Round Table on Responsible Soy). Certified soy embodies both physically certified soy and the purchase of soy certificates since both approaches contribute to responsibly produced soy. Thus, we do what we can to ensure that the cultivation of soy occurs with respect to people, nature and the environment. Certification means meeting a set of requirements including proper and safe working conditions on soy plantations, responsible use of agricultural chemicals and crop cultivation not taking place in unique natural areas such as the Atlantic rain forest, the Cerrado and the Amazon. The declaration of responsibility covers all Skånemejerier AB s subsidiaries, i.e. Skånemejerier Försäljning AB and Skånemejerier Storhushåll AB as well as Lindahls Mejeriprodukter AB. CROP PRODUCTION The crops to be grown each year are set out in a crop production plan, which states where the crop is to be grown, the expected harvest and thus the amount of fertiliser needed. The farms also carry out so-called land mapping to determine the plant nutrient content in the soil, levels of lime, the type of soil and humus content. This is done to be able to adjust fertilisation and liming as needed. The plant nutrient balance calculations begun on our farms in the 1990s, continue to be carried out today and are closely followed up on all our farms. The plant nutrient balance gives values for the difference between input and depletion of nutrients on the farms. The values are expressed as excesses or deficiencies in the nutrients phosphorus, potassium and nitrogen. The bigger the excess, the greater the risk of negative environmental impact and increased cost for the farmer. Owing to continuous monitoring using the plant nutrient balance, dairy farmers are able to reconcile and correct any excesses. LAND AND WATER Soil properties are extremely important for crops which are to provide feed for cows and food for humans. Cultivation takes place with careful consideration of water. No fertilisation may take place near water courses and all fertiliser must be spread to fields in accordance with strict rules. In Sweden, we have plenty of water at most locations. This is something unique which we need to protect. Water consumption on farms, is an area that our farmers have begun to document. The amount of water per kilo of produced milk can be estimated and become a key figure for efficiency and monitoring of water consumption. Efforts to reduce usage, also lead to less water needing to be pumped up. The procedures for cleaning milk tanks and stalls are being examined in order to reduce the amount of water used. 11 ENERGY AND CLIMATE Work in relation to energy and climate issues takes place at all our dairy farms. A dairy farmer can calculate the farm s emissions of greenhouse gases (CO 2 -equivalents) using the Klimatkollen, an advisory service of Greppa Näringen. The calculations provide information about which areas related to feed, nutrition, water and energy usage are most important to work with from a climate point of view. Mapping energy use and fuel consumption on the farm means that areas can be identified where energy savings can be made. Energy may be saved, for example, by reusing the heat from cooling milk to heat washing water or farm buildings. Many of our dairy farmers have undergone training in fuel-efficient driving (Eco-driving) that helps reduce fuel consumption when operating tractors, combine harvesters, loaders and other vehicles. Proper loading procedures are also part of the training. Burning less fuel results in lower carbon dioxide emissions and a s
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