Sustainability – integral part of Fazer’s business
Fazer, as The Food Experience Company, brings joy and well-being through its high-quality products and services to people in the Nordics, Baltics, Russia and beyond to some 40 different countries. Fazer focuses on the bakery, confectionery, non-dairy and plant-based food markets. The company is also a major player in the Nordic grain milling market and increasingly in foodtech.
Sustainability is at the very heart of Fazer. The company creates shared value as a Group and through its businesses. Fazer develops food as a solution for a more sustainable planet and business. Fazer is committed to four sustainability Core goals that give the company direction: 50% less emissions, 50% less food waste, 100% sustainably sourced and More plant-based by 2030. Fazer’s product portfolio and offering development take into account these goals and are based on deep consumer insight and research.
Fazer’s operative work is defined by operational excellence, efficiency, a high-performance culture and effective performance management. The company embraces an inclusive, motivating and safe working culture. Fazer cooperates with a variety of stakeholders from educational and research institutions to farmer associations and NGOs.
Sustainability risks and their management
The main sustainability risks are related to e.g. food safety and sourcing certain raw materials from high risk countries. These risks are addressed by certified food safety management systems (such as FSSC 22000) and buying raw materials, such as cocoa, according to strict procurement sustainability criteria either via certified sources or via farmer programmes.
Fazer evaluates and analyses the Group’s sustainability risks within the framework of its risk management policy and takes action to mitigate these risks. Business areas and business units are responsible for the operative QEHS (Quality, Environment, occupational Health and Safety) management, including related risk management, while the Group sustainability team’s focus is on the sustainability Core goals and related roadmaps as well as reporting the progress. Issue management teams identify the potential sustainability issues in different markets and proactively prepare for them.
For more information on risk management, see the Governance section of the Annual Review.
Key policies and principles
Fazer’s operations and sustainability work are governed by the company’s values, and ethical principles as well as its Sustainability Policy, Human Rights Policy and QEHS Policy. Fazer’s governance practices are based on the ten international principles of the UN Global Compact and the company is committed to supporting the implementation of the United Nations’ Sustainable Development Goals (SDGs).
In 2020, Fazer renewed its values and the linked behaviours, which take them into practice in daily work. During the year, Values & Behaviours discussions were held among Fazer employees to make the renewed Fazer values – Northern Liberty, True Relationships and Fearless Creativity - visible in their work. In its sourcing, Fazer applies a Supplier Code of Conduct, and expects compliance from its raw material and service providers.
Management and governance
Fazer applies management and governance processes to ensure that policies are systematically followed. Fazer’s continuous sustainability work is managed by the sustainability team, sustainability and QEHS network and steered by the Sustainability Leadership Forum. At Board level, the Audit Committee monitors QEHS matters.
The OHS management systems of Fazer sites are as minimum based on the local legislative requirements and most of them also hold the ISO 45001 certificate. All Fazer’s internal production sites have food safety management certifications (FSSC 22000, IFS) approved by the Global Food Safety Initiative (GFSI). Concerning the risk management, the actions to mitigate food fraud risks and to improve food defence, such as access control systems, continued.
Employees and third parties can report observed or suspected cases of misconduct through a whistleblowing channel. 21 cases were reported through the whistleblowing channel and investigated. These cases were related, for example, to HR, QEHS, conflicts of interest and misuses of company assets. Two cases are still open.
For more information about functions and responsibilities governing sustainability matters, see the Managing Sustainability section in the Annual Review.
The environmental impacts of Fazer’s operations stem from production, packaging, logistics and indirectly from raw material production. Fazer strives to curb climate change and reduce emissions, increase recycling and reuse of materials and reduce waste generation. The company drives sustainability across its value chain, from sourcing to packaging and logistics.
One of Fazer’s sustainability Core goals is 50% less emissions by 2030. The majority of Fazer’s emissions comes from raw material production. In 2020, Fazer improved its energy efficiency by 18% from the 2011 baseline. 82% of the company’s energy use was from renewable sources. Total energy consumption was 529 970 MWh (507 418 MWh in 2019). The total emission intensity was 2.11 CO2e tonnes/produced tonne (2.29 CO2e tonnes/produced tonne in 2019).
Reducing food waste is a high priority for Fazer, and the company aims to reduce food waste by 50% by 2030. In 2020, food waste generation decreased due to new bread order legislation in Russia and improved efficiency of production in large volume units in Finland. Of all waste generated by Fazer, 98.5 % was reused or recycled.
Fazer’s target is to use 100% sustainable raw materials by 2030. This goal includes environmental as well as social sustainability aspects, and the company is constantly working with suppliers to reduce the emissions from its raw material production. As an example, Fazer has partnered with Baltic Sea Action Group (BSAG) and Reaktor to create a Farmers’ training platform for regenerative farming in order to turn the agricultural soil from an emission source into a CO2 sink, sequestering carbon in soil, and to prevent eutrophication of the Baltic Sea by minimising nutrient loads from fields to waterways.
Circular economy concepts and the utilisation of side streams are essential in Fazer’s sustainability work and business solutions. The construction of a new xylitol factory in Lahti, which uses side streams from oat milling to produce xylitol, proceeded. The entire Lahti factory area will be heated by a new facility that uses oat hull mass from oat xylitol production as its fuel. Fazer will strengthen its approach to packaging and innovations for reducing plastics. In early 2021, Fazer launched a bread bag made partially from oat hulls derived as a side stream of the oat milling process.
In 2020, Fazer’s total water consumption increased by 15% and its wastewater output increased by 19%. This was mainly due to construction works of the Lahti xylitol factory and a machinery breakdown in Fazer Bakery Sweden. Fazer continues to work towards reducing its water usage and wastewater production in all operating countries.
Fazer creates joy and well-being through meaningful food experiences. The company’s social responsibility work encompasses the well-being, work safety and development of own employees, the work conditions of suppliers as well as the impacts Fazer as a company and its products have on society.
To help during the COVID-19 pandemic, Fazer donated products to health care professionals in hospitals, healthcare and paramedic units. Through NGO partners, Fazer delivered considerable amounts of products to food aid, elderly people in isolation as well as to families in need.
Well-being, product quality and development
One of Fazer’s four Core goals is to provide more plant-based food, as the company strives to support the well-being of people and the planet. Fazer develops innovative plant-based products that serve consumers looking to enhance their well-being through food solutions. Fazer is constantly developing a broad range of foodtech initiatives representing innovation leadership in e.g. oats. In 2020, Fazer made a further investment in its partner Solar Foods, a Finnish foodtech start-up that has developed a novel protein ingredient Solein®, and became the largest shareholder of the company.
Fazer has in place various controls to ensure food safety and consistent quality at all times. The company has high quality standards for raw materials and systematic quality assurance processes for finished products. In 2020, there were three product recalls regarding food safety. Product recalls were made due to allergen cross-contamination.
Personnel and employment
Fazer provides employment directly and indirectly. In 2020, Fazer employed on average 7,316 people in eight countries. Fazer’s indirect employment impacts stem from sourcing, partnerships and e.g. investment projects. The company offers employees various career and competence development opportunities.
Safety of personnel is naturally a priority for Fazer. In 2020, due to the COVID-19 pandemic, Fazer’s focus was to ensure the safety of personnel and the business continuity of production. In 2020, Fazer’s LTAF (lost time accident frequency) was at 4.7, which is better than last year´s performance (6.5) and ahead of the Group LTAF target for 2020, 5.0.
Fazer launched a Diversity & Inclusion e-learning to help employees recognise potential biases and challenge them. Fazer achieved excellent results in the People Pulse personnel survey, improving in every measured area and all businesses. Actions were planned within teams and functions to further improve on specified areas.
Due to the changes in Fazer’s operating environment and the pandemic, the company had to carry out several collaboration negotiations which resulted in permanent and temporary layoffs. Fazer supported those whose employment was terminated and helped them find new employment.
In 2020, Fazer carried out significant internal work towards the Core goal of having 100% sustainably sourced raw materials across suppliers and value chains by 2030. This internal work set the framework for reaching the goal, including defining sustainable sourcing, establishing a Supplier Code of Conduct among suppliers and developing sustainable procurement processes. Of Fazer’s total external spend, 52% was from suppliers who have signed the Code of Conduct by the end of 2020.
The sustainable sourcing related Core goal also includes social aspects, which Fazer works on through e.g. training programmes for local communities and cocoa farmers and controls to prevent child labour in Fazer’s raw material production. Cocoa is a key raw material for Fazer, and the company uses 100% sustainable cocoa. Of the sourced cocoa, 69% is certified by UTZ, Rainforest Alliance or the Fairtrade cocoa programme and 31% through farmer programmes.
Fazer only uses certified palm oil in its production. In the Nordic and Baltic countries, almost 100% of the palm oil used is Segregated, the most sustainable option in the Roundtable for Sustainable Palm Oil (RSPO) certification system. In Russia, Fazer used Book & Claim palm oil in 2020 but increased the share of the Smallholder farmer credits from 3% to 50% of the purchased palm oil volume.
Respect for human rights, anti-corruption and preventing bribery
Upholding human rights is of utmost importance to Fazer. In 2020, Fazer developed further the collaboration with European Works Council (EWC). The company also embraces human rights through the Core goal 100% sustainably sourced, which takes into account social and human rights dimensions of sustainability. Fazer is updating its Supplier Code of Conduct based on the feedback from an external human rights assessment.
Fazer does not accept bribery or corruption in any form, in its own operations or in those of its suppliers or partners. Fazer continuously educates personnel to ensure compliance with its Anti-bribery programme and relevant legislation in its operating countries. In 2020, Fazer held an anti-bribery e-learning for employees to help them recognise and prevent bribery.