Climate Change Data

Environmental Metrics

ESG Focus Areas

• Greater well-being
• Reduced environmental impact
• Sustainable sourcing

Environmental Achievements

• Improved energy consumption (though it increased slightly in 2016 compared to 2015), waste volume decreased by 3.0%
• 83% of waste recycled

Social Achievements

• Launched Let's Talk, a language training app downloaded by over 32,000 people
• Improved Trust Index in Great Place to Work survey in several countries (though lower in Italy)

Governance Achievements

• Adopted a new anti-bribery and -corruption policy
• Complied with the Swedish Code of Corporate Governance

Climate Goals & Targets

Environmental Challenges

• Occupational accidents increased in 2016, not meeting the target
• Challenges in sustainable sourcing of raw materials (palm oil, sugarcane, shea butter)
• Increased energy consumption in 2016
• Competition in the confectionery market
• Consumer trends related to health and sugar

Mitigation Strategies

• Developed a new safety standard for implementation in all factories
• Implemented sustainability programs for cocoa and palm oil, with programs for sugarcane and shea butter under development
• Switching to RSPO-segregated palm oil and removing palm oil from glaze
• Focusing on product innovation, quality, and brand loyalty to compete
• Offering sugar-free products and increasing the share of natural ingredients

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier codes of conduct
• UTZ-certified cocoa
• RSPO-segregated palm oil

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Core

Certifications: BRC Global Standard for Food Safety, ISO 14001 (seven of twelve factories)

Third-party Assurance: KPMG AB (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Sugar-free products
• Products with natural ingredients

Awards & Recognition

• Listed Company of the Year (Aktiespararna and Kanton)
• Best CFO within Investor Relations (IR Nordic Market Awards)
• Best Investor Relations Officer (IR Nordic Market Awards)
• First place in Comprend’s Webranking
• Best reporting about value creation (PwC)

Environmental Metrics

ESG Focus Areas

• Greater well-being
• Reduced environmental impact
• Sustainable sourcing

Environmental Achievements

• Carbon dioxide emissions per produced kilogram decreased
• Recovery rate increased

Social Achievements

• Number of occupational injuries fell
• Interval between LTAs improved by 57% to an average of 26.1 days

Governance Achievements

• Adopted an even stricter insider policy with a clearer set of rules

Climate Goals & Targets

Environmental Challenges

• Fire in factory in Turnhout, Belgium, destroyed one production line, resulting in lower volumes, higher production costs and lost sales
• Organic sales decreased during the year, mainly due to specific challenges in a couple of markets
• Operating profit decreased

Mitigation Strategies

• New production line expected to be installed during the second quarter of 2018
• Implemented Lean 2020 programme to increase efficiencies, lower costs and reduce energy consumption, waste and emissions
• Focus on profitable growth

Supply Chain Management

Responsible Procurement

• Cloetta’s Code of Conduct for suppliers
• UTZ-certified cocoa
• RSPO-segregated palm oil
• Sustainable shea butter

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 Core level standards

Certifications: BRC Global Standard for Food Safety, ISO 14001, OHSAS 18001

Third-party Assurance: KPMG

Sustainable Products & Innovation

• Sugar-free products
• Products with less sugar
• Products that promote dental health

Awards & Recognition

• Best Annual Reports in the World by Reportwatch
• Best corporate website award

Environmental Metrics

ESG Focus Areas

• Consumer first
• Employee development and health
• Reduced climate impact
• Responsible sourcing

Environmental Achievements

• Reached 2020 carbon dioxide target in 2019 (5% reduction compared to 2014 levels)
• Energy consumption in relation to the volume produced decreased from 1.83 MWh/tonne to 1.79 MWh/tonne
• 87.8% recycling rate

Social Achievements

• Launched Employee Journey, a strategic review of the Group’s focus areas within HR
• Introduced Cloetta Tasting, a new introduction program for employees
• Implemented Cloetta Energy program to promote employee well-being

Governance Achievements

• Board endorsed a revised Code of Conduct
• Implemented share-based long-term incentive plan

Climate Goals & Targets

Environmental Challenges

• Loss-making pick & mix business in Sweden in 2018
• Higher costs and weaker SEK
• Changing consumer dietary preferences
• Competition from private labels
• Sugar taxes
• Climate change (transition and physical risks)
• Social conditions in the supply chain
• Relocation of manufacturing lines

Mitigation Strategies

• Price increases in Swedish pick & mix business
• Activities to make in-store merchandizing more effective and reduce warehousing and distribution costs
• Offering sugar-free and lower-sugar products
• Active pricing, product innovation, and marketing
• Continuous monitoring of business operations and adapting them to changing rules
• Program and certification for prioritized raw materials
• Systematic work within the company’s environmental management system
• Experienced and efficient organization for handling relocation of production lines

Supply Chain Management

Supplier Audits: 25 audits in 2019

Responsible Procurement

• Code of Conduct
• Supplier Guiding Principles
• Cloetta Quality Agreement
• UTZ certified cocoa
• RSPO segregated palm oil
• AAK sustainability program for shea butter

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions and natural catastrophes

Transition Risks

• Changing rules and taxation

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: BRC, ISO 14001, IFS Food, UTZ, RSPO

UN Sustainable Development Goals

• Goal 2
• Goal 3
• Goal 8
• Goal 12
• Goal 13
• Goal 15
• Goal 16
• Goal 17

Sustainable Products & Innovation

• Sugar-free and lower-sugar products
• Products that promote dental health

Awards & Recognition

• 3rd place for Best Group website
• Best IR & website

Environmental Metrics

ESG Focus Areas

• For You
• For People
• For the Planet

Environmental Achievements

• CO2e reduced with 7 per cent compared to 2019 baseline.
• PlantPack accounting for approximately 3 per cent more of packaging compared to 2021.

Social Achievements

• Team efforts toward safety awareness and a safe working environment contribute to outstanding results, reflected in our Lost time incident rate (LTIR) which surpasses our target.
• Targets set for 2025 were also formulated during 2022 to better implement our strategy in social sustainability.

Governance Achievements

• Approved science-based targets and improved Cloetta Climate Action Programme.

Climate Goals & Targets

Environmental Challenges

• The economic environment in which we operate has yet again changed dramatically. We have to navigate in an environment with high inflation, high interest rates and lower disposable income among consumers – and it will be a big adaption for us to navigate through that.
• Challenges will remain. There will possibly be a recession, which means that we can not only look at pricing as a tool in a tough economy – but also cost savings and making our operations even more efficient.
• Climate impacts on access to raw materials
• Disruptions in transportation and production caused by extreme weather
• Failing to act on climate crisis, deforestation, or biodiversity may influence relationships with customers and attractiveness to investors

Mitigation Strategies

• In an inflationary environment, we believe that price increases in combination with cost savings remain the only sustainable strategy and during 2022, this strategy has enabled us to protect our profit despite the increasing input costs.
• We are taking further pricing actions during the beginning of 2023 to address the continuing inflation.
• Cloetta is raising the ambition level to improve its total environmental footprint through the work in our sustainability agenda.
• The future of agricultural production is of utmost importance to the future of any food company. Therefore, Cloetta joined the Science Based Targets initiative to set targets and action plans to reduce our carbon footprint throughout our value chain, not only our own operations.
• We will cooperate with our stakeholders to find solutions that can tackle this enormous challenge.

Supply Chain Management

Supplier Audits: 14 on-site audits

Responsible Procurement

• Supplier Code of Conduct
• Cloetta Quality Agreement

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather conditions and natural catastrophes that could impact Cloetta’s access to raw materials and disrupt business operations directly or indirectly

Transition Risks

• changing rules and taxation

Reporting Standards

Frameworks Used: GRI Standards

Certifications: BRC, ISO 14001

Third-party Assurance: PwC

UN Sustainable Development Goals

• #12
• #5
• #8
• #13
• #15
• #17

Sustainable Products & Innovation

• Ahlgrens bilar Gröna bilar
• Tupla Crispy Puffs
• Läkerol Lemon
• PlantPack

Awards & Recognition

• award for best Sustainability report 2021

Environmental Metrics

ESG Focus Areas

• Climate Action
• Sustainable Sourcing
• Less and Better Packaging
• Employee well-being
• Community engagement
• Human and labor rights

Environmental Achievements

• Total CO₂e emissions decreased by approximately 10% compared to 2019 (base year).
• PlantPack accounted for approximately 12% of plastic packaging (3% increase from 2022).
• Total waste decreased to 102 kg/tonne produced (from 106 kg/tonne in 2022).
• Maintained 100% Rainforest Alliance certified cocoa and RSPO Segregated Certified palm oil.

Social Achievements

• Continued work towards zero work-related accidents (despite a slight increase in LTIR).
• Developed portion control communication for candy bags (to be rolled out in 2024).
• Continued engagement with communities in various markets, supporting initiatives for children with long-term diseases/disabilities.
• Vegan candy portfolio reached 37% (significant increase from 23% in 2022).

Governance Achievements

• Initiated a double materiality assessment in accordance with the EU Corporate Sustainability Reporting Directive (CSRD).
• Submitted the first Transparency Act Report on human rights and labor practices.
• Extended loan facilities by one year.

Climate Goals & Targets

Environmental Challenges

• High inflation and increased input costs (raw materials, packaging, freight, energy).
• Competition from private labels and other confectionery companies.
• Consolidation of the grocery retail trade leading to price pressure.
• Climate change impacts (transition and physical risks).
• Supply chain disruptions due to geopolitical events and extreme weather.
• Health trends and consumer preferences shifting towards natural ingredients and less sugar.

Mitigation Strategies

• Successful pricing execution to offset increased input costs.
• Strengthening core brands and improving in-store execution.
• Investing in efficiency programs (VIP+, Perfect Factory, Net Revenue Management).
• Investing in a new greenfield facility in the Netherlands (fully electric, reducing emissions and costs).
• Improving data collection for scope 3 emissions and structuring initiatives to accelerate scope 1 and 2 emission reductions.
• Expanding vegan and fruit-based candy options.
• Improving supplier engagement and monitoring.
• Implementing a new financial reporting and consolidation system.

Supply Chain Management

Supplier Audits: 14 quality and food safety audits/year

Responsible Procurement

• Supplier Code of Conduct
• Cloetta Quality Agreement
• 100% certified cocoa and palm oil

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions and natural catastrophes impacting raw material access and operations.

Transition Risks

• Changing rules and taxation.

Opportunities

• Development of energy-efficient products and processes.

Reporting Standards

Frameworks Used: GRI Standards

Certifications: BRC Global Standard for Food Safety, ISO 14001

Third-party Assurance: PwC

UN Sustainable Development Goals

• #5 Gender Equality
• #8 Decent Work and Economic Growth
• #12 Responsible Consumption and Production
• #13 Climate Action
• #15 Life on Land
• #17 Partnerships for the Goals

Initiatives across three pillars (For You, For People, For the Planet) contribute to these goals.

Sustainable Products & Innovation

• PlantPack packaging
• Vegan candy options
• Fruit-based candy variants