Sustainability Roadmap Libeert 27-07-2022.pdf - Lily Libeert

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SUSTAINABILITY REPORT 2022 Contents 1. Foreword ...................................................................................................................................................... 3 2. 100 years of chocolate passion ................................................................................................................... 3 3. Mission, values and vision ........................................................................................................................... 4 4. Our sustainable smiles roadmap ................................................................................................................. 6 5. Smiles through our products ....................................................................................................................... 7 5.1. Product Quality and Safety.......................................................................................................................... 7 5.2. Sustainable sourcing .................................................................................................................................... 8 5.3. Responsible consumption ......................................................................................................................... 10 6. Smiles by the people.................................................................................................................................. 11 6.1. Cocoa farmers ............................................................................................................................................ 11 6.2. Consumers.................................................................................................................................................. 12 6.3. Employees .................................................................................................................................................. 12 6.4. Suppliers ..................................................................................................................................................... 13 7. Smiles for the planet .................................................................................................................................. 14 7.1. Carbon footprint ........................................................................................................................................ 14 7.2. Sustainable packaging ............................................................................................................................... 15 8. Plastics........................................................................................................................................................ 16 8.1. Monomaterials........................................................................................................................................... 16 8.2. Dark coloured plastics ............................................................................................................................... 16 8.3. PVDC coating .............................................................................................................................................. 17 8.4. Plastic-free ................................................................................................................................................. 17 8.5. Cardboard................................................................................................................................................... 17 8.6. Product design and inks ............................................................................................................................. 17 9. Energy and water ....................................................................................................................................... 18 9.1. Electricity.................................................................................................................................................... 18 9.2. Water.......................................................................................................................................................... 18 10. Food waste ................................................................................................................................................. 19 11. Objectives and progress ............................................................................................................................ 19 Annex 1 - Monomaterials .................................................................................................................................. 20 Annex 2 - PVDC coating ...................................................................................................................................... 20 Annex 3 - 100% green electricity ....................................................................................................................... 20 Annex 4 - Environmentally friendly cooling installations ................................................................................. 21 1 Annex 5 - LED lighting. ....................................................................................................................................... 21 2 1. Foreword Libeert’s first sustainability report complements our financial reports by focusing on the social, environmental and economic aspects of sustainability, a pivotal theme to Libeert and to its stakeholders. The report particularises Libeert NV, with its registered office and production facilities located at Kastelenlaan 107a, 7780 Komen in Belgium. This document covers our sustainable path from the start all the way to today. Since we prioritise being transparent, it will be updated regularly to remain in line with our ambitions for the coming years. We are convinced that sustainability, health and wellbeing are fundamental for a business in order to be successful in a future-proof food industry. Starting from this principle, the United Nations Sustainable Development Goals set the framework for our roadmap. We intend to publish a sustainability report at least every two years and make it available for the SBTi (Science Based Targets Initiative) audit. 2. 100 years of chocolate passion For 100 years now, driven by passion, we have been producing the most delicious chocolate, loved by every generation. Our story starts when our great-grandfather, Joseph Dequeker, son of an artisan pâtissier chocolatier and fascinated by/passionate about all things sweet, in 1923 discovers the world of chocolate during a trip to Italy and Switzerland. This beautiful product touched him to his core, so he decided to start making his own chocolate, straight from the cocoa bean, as well as starting up a business in Belgium named ‘Les Spécialités Suisses Italiennes’. His range of home-made chocolate consisted of top-quality chocolate figurines and bars. The second generation continued to develop the working methods and especially concentrated on the quality of the chocolate. Quality, Quality, Quality became the mantra – which boosted demand. The machine park also grew, allowing volume to increase. Of course, as long as the quality of the chocolate remained top notch. Focus 3 by then had switched to manufacturing chocolate figurines on an industrial scale, however, still with a level of quality and taste on par with artisan products. The chocolate retailers and confectionery wholesalers were thrilled, since they knew they were buying quality products while at the same time having less work. By then, the products’ brand changed to a more general name: ‘ITALO SUISSE’. The third generation thrived in this enthusiastic atmosphere of manufacturing and sales. Production kept evolving and further automation resulted in even better and nicer figurines. In the sixties, sales channels saw a huge leap as well, with self-service and supermarkets becoming mainstream. Because of these developments, demand for chocolate bars increased and clients from abroad also started showing interest in our unique chocolate figurines and bars. For a couple of years now, the business is being run by the fourth generation. In 2015, our company name changed from ‘Italo Suisse’ to ‘Libeert’. This fourth generation emphasises our engagement towards sustainable growth. The marketing and design approach is being refined, while the taste of our chocolate simply… tastes of more. The focus remains on the two most important product groups: chocolate figurines and chocolate bars. With the ‘Libeert’ chocolate figurines, made of sustainable chocolate, we boast our Belgian pride. We are market leader in this segment in Belgium, thanks to our large product range. We also produce numerous private label products for a large number of retail and chocolate partners. Again, sustainability is pivotal and we are in the position to help retailers in rendering their offering more sustainable as well. Innovation is an important driver at Libeert, not just when it comes to products, but also in terms of processing and technology. We constantly invest in sustainable production facilities, product quality, packaging and safety. The world’s population grows by millions each year, and we would love for all of them to get acquainted with our delicious Belgian chocolate. Challenges galore! 3. Mission, values and vision Libeert’s highest goal is to bring one of the most beautiful things in the world to life: a smile on the faces of all our stakeholders: consumers, colleagues, clients, suppliers and cocoa farmers. We want to do so by being the leading master chocolatier for everyone, who creates delicious and nice-looking chocolate products in a sustainable way. 4 Ambition Libeert’s ultimate ambition is to be the leading master chocolatier for everyone. Leading master chocolatier: ‘setting the tone’ with regard to taste, quality, design, packaging, precision, finishing, service, reliability, in short ‘being professional’ and targeting simply everyone. How we will get there We want to create Smiles by creating delicious and nice-looking chocolate products in a sustainable way. Delicious: without a doubt, taste is essential and something we hold dear, since we represent one of Belgium’s national symbols: chocolate. In many parts of the world, this delicacy invokes adjectives such as ‘Heavenly’ or ‘Unique’. At Libeert, that idea of being ‘Heavenly’ and ‘Unique’ is of tremendous importance. We taste the difference. Nice-looking: Beauty is in the eye of the beholder, a notion you could summarise as ‘a feast to the eyes’. Libeert equals details and precision, in production design as well as in packaging design. We aim to be a source of innovation for our clients and surprise our consumers – and that way, make them smile. Our in-house design team is unsurpassed and cross-departmentally, creative minds bring their ideas to the table, which is why we can make the difference. Chocolate products: Libeert specifically targets two product groups: premium chocolate bars and hollow figurines. 5 Sustainable: We aim to offer chocolate products that are as sustainable as possible and, in that sense, comply with our clients’ expectations. At the same time, we are actively committed to become even more sustainable in the future. We are ready to tackle this challenge, together with all of our stakeholders. Values Libeert’s values are the main drivers of our organisation. They embody our DNA and the foundation of our corporate culture. These values will probably sound familiar, since in fact we actually live by them every day, be it consciously or subconsciously. TOGETHER we make the difference The fact we can rely on a wide array of competencies, fields of expertise and experience within our organisation, combined with respect and trust, is the reason why we make the difference and are in fact complementary. ENTREPRENEURSHIP is daring to take initiative when an opportunity arises. At times, this might cause stressful moments or even fear. This is normal and even positive, since it is by taking on a challenge that growth occurs. We develop and take steps forward. When we motivate each other in such times, we will for sure make the difference even more. PASSION in what we do, and we do it wholeheartedly We go by the principle that anything you do should act as an energiser. When you radiate tangible energy that in turn triggers the people around you, or your colleagues: how fantastic! Obviously, not every day can be a good day. Sometimes, that passion might wane away and some days just don’t go as planned. That’s exactly when the people around you can give you that much-needed boost to pick yourself up again. ENGAGEMENT towards societal and sustainable entrepreneurship Being a family business, the next generation is important to us. Becoming a more sustainable business in a more sustainable environment is a must. Sustainability isn’t a tangible, well-defined subject. However, it is a subject we can all contribute to, be it a small or big way. GROWTH as a person, as a team and as a business Of everything we do, growth is at the centre. To us, it is important to activate growth as a person, as a team and as a business. It all starts with personal growth, which can be gained by training but also by giving and receiving feedback. To us, feedback is a gift that helps you grow. 4. Our sustainable smiles roadmap The core of our existence is to create a smile through our chocolate products. We wish to see that smile not only on the faces of the people around us, but also for our planet’s benefit. We value the fact people can enjoy our chocolate products, but we just as much value the fact our products are manufactured in the most sustainable way possible, respecting people and nature. 6 A first step in Libeert’s transition towards a sustainable business has been bringing together a team to actually work and frequently brainstorm on this sustainability topic. At the beginning, these sessions remained largely inspirational, based on daily life, literature and current affairs. After a while, these meetings became more methodical, as in we analysed our business processes and our current position, whilst also pinpointing opportunities to install improvements. The outcome of these sessions has been bundled in a first sustainability report which in turn defines our future sustainability roadmap. In second phase, we aim to define exactly what we will invest in in the coming years, for each of the building blocks of sustainable growth (People, Planet, Profit), in order to become a more sustainable business and contribute to a more sustainable future. Our road ahead will be managed and monitored by means of KPIs, indicators and results which in turn will be summarised every two years. 5. Smiles through our products The chocolate products Libeert produces daily are the result of 100 years of passion and know-how. We aim to continue this story in the coming century, whilst we also continue to focus on our raw materials, our process and our product. In order to do so, we have established what is important to us in order to continue to bring that smile on people’s faces. 5.1. Product Quality and Safety The power of our products is harnessed by the excellent product quality and safety we offer our clients. Since the year 2000, Libeert has been GFSI certified. GFSI, or Global Food Safety Initiative, is an initiative by the international retail industry and a certification body regarding food safety standards, with the aim to monitor and optimise food safety management systems applied by businesses. That way, the consumer is guaranteed safe food at all times. Two important GFSI standards within international retail, which are prerequisites to be a supplier, are the BRC and IFS standard. These are renewed annually, based on the outcome of an unannounced audit. To us, food safety is important and we expect the same attitude of our suppliers. We only engage suppliers that are GFSI certified. That certificate is an important requirement, by which we try to avoid any external risks. Raw materials delivered to us have to carry all required attestations or certificates. Next to that, raw materials are subject to internal checks, before being used in production. In case a quality or safety risk is detected, the raw materials in question are returned to the supplier. We put all these measures in place in order to guarantee product quality and food safety. In our production facility, hygiene and cleanliness are top priorities. Weekly checks make sure we can guarantee the quality and safety levels we want to promise our clients. Our employees receive regular training sessions on the most up-to-date food safety requirements. Each product that rolls off the production line is checked for deviations using predefined parameters. We also have a monitoring plan in place, which enables us to immediately detect possible risks, before the product leaves our warehouse. 7 Libeert always prioritises quality and safety. At each step of the production process, measures are put in place to produce products of the highest quality. This is something we want to maintain and optimise in the future. 5.2. Sustainable sourcing Creating responsible, delicious products is what we do every day at Libeert. We are passionate about chocolate and we want to offer our customers and consumers only the best. The best not only means top quality products, but it also means we create our products in a sustainable and responsible way, with respect for the people and our planet. Chocolate Chocolate is what we live for and therefore deserves the utmost attention. We purchase liquid chocolate as a raw material and process it into the chocolate products we offer you. The main ingredient of chocolate is cocoa. Cocoa is derived from the cocoa fruit which only grows around the equator, in a tropical climate. Approximately 70% of the worldwide cocoa volume is produced in West Africa, of which 60% comes from Ghana and Ivory Coast. Cocoa is mainly grown by a large number of small- scale farms. The cocoa from these farms is collected by cooperatives to be shipped to Europe for further processing and the use in chocolate production. Cocoa farmers face many social, economic and environmental challenges, which results in limited yields, a small income and a life in poverty. As a producer of chocolate, it is our duty to contribute to equality in the cocoa supply chain wherever possible. The more we consume sustainable chocolate, the more impact we have on the living conditions of the cocoa farmers. This is a commitment we made by signing the ‘Beyond Chocolate Initiative’, a partnership of the Belgian chocolate and retail sector, social impact investors, trade unions and universities with the ambition to make the Belgian chocolate industry more sustainable. In fact, we were one of the first members. By the end of 2021, about 65% of all our chocolate was purchased sustainably, which means we pay an additional premium price for the chocolate. That surplus is used to improve the living and working conditions of the cocoa farmers. The funds are managed by the certification body (Fairtrade, Rainforest Alliance, Open Chain, Cocoa Horizons). The annual volume of sustainable chocolate we purchase increases each year but is not yet sufficient. Our ultimate goal is to purchase 100% sustainable chocolate, in line with the ‘Beyond Chocolate’ goals. Cocoa Horizons We want to have a positive impact on the life of cocoa farmers. To this end, since 2019, we have been sourcing all chocolate for the Libeert brand via the Cocoa Horizons program. The program is an independent, non-profit, impact-driven organisation that sets out to improve the livelihoods of the cocoa farmers and their communities through promotion of sustainable, entrepreneurial farming, improved productivity and community development focused on protecting nature and children. 8 The main focus area of the program is based on three pillars: Productivity and prospering farmers Helping farmers earn a better income by increasing their yield and ensuring a lasting supply through farmer coaching (agricultural training, traceability, human rights, quality, health and safety, environmental protection), farmer support (premium, services) and farmer financing. Environment The Cocoa Horizons program is committed to a deforestation-free, carbon positive cocoa supply chain. This is managed by focusing on activities and farmers coaching that help increase carbon sequestration, reduce carbon emissions and ensure deforestation free sourcing. Community Besides improving the cocoa production, critical social challenges in farmer communities need to be tackled as well. The program focuses on child protection, empowerment of women and education through sensitisation, training, raising committees, interventions, school enrolment and supporting activities. More information on the program can be found online: https://www.cocoahorizons.org Ingredients Next to chocolate, Libeert also purchases other ingredients, such as nuts, fruit, cookies, grain, etc. Apart from the principle of only using GFSI certified suppliers, all purchased ingredients have to comply with a number of other conditions before being included in our ingredients portfolio: o non-GMO o non-irradiated o only RSPO MB or SG palm is accepted; preferably, products are palm oil free o sustainable sourcing and certificate where possible o natural aromas only o additives (E-numbers) are avoided as much as possible Parallel to chocolate, we are also looking to make our ingredients portfolio more sustainable in the coming years. 9 5.3. Responsible consumption Libeert wants to invest in a sustainable future and support its clients and consumers in making responsible choices and in adopting a balanced and sustainable way of living. That is why we, apart from our basic product portfolio, also offer sustainable products in which we continue to invest. Organic Making chocolate requires a rather complex production process. It all starts with the cocoa farms harvesting cabosse or cocoa fruits. These cocoa fruits are grown using mainly traditional farming methods, as well as a percentage of the cocoa fruits being of organic origin. In the latter case, alternative methods are applied, without any use of synthetic fertilisers or pesticides. Growing organic raw materials does have a number of advantages compared to conventional farming: Health: Organic chocolate is made from raw materials that are grown without the aid of chemical fertilisers, pesticides and herbicides. Alternative agricultural methods are used instead (crop rotation, natural fertilisers and pesticides. Environment: Organic farming methods help maintain the balance of the local ecosystem without any hazardous chemicals ending up in the environment. Just like cacao, other raw materials can be grown organically. We offer a large range of organic chocolate and ingredients and have a dedicated organic-only production line. About 7% of our annual chocolate production consumption is of organic origin and we aim to increase that percentage in the years to come. Plant-based A responsible choice entails opting for a healthier alternative. But to Libeert, making a responsible choice also means a choice that fits with your individual lifestyle and personal choices. Anno 2022, about 1 in 2 people worldwide is a flexitarian: consumers who do not eat meat on a daily basis, but opt to regularly replace meat by a plant-based alternative. Each person has their own personal reason as to why they make that choice, such as animal rights, health and the environment. Libeert offers clients and consumers the option to purchase a chocolate product that matches with their personal needs, including some plant-based chocolate couvertures and ingredients in our portfolio. We stand by this choice to do so and aim to further extend and optimise this portfolio. Health Chocolate is a product you can indulge in – many people eat a piece of chocolate just to create a small moment of happiness for themselves. To be able to create such feeling with our chocolate products is our reason for being and an absolute priority. Despite chocolate being so indulgent, we are very much aware of the impact chocolate can have on (mental) health when consumed in large quantities. In order to respect that indulgent nature and at the same time minimise the health impact, we are researching ways in which we can help our consumers to still enjoy chocolate responsibly. We already made a first step by nudging towards smaller portion sizes, having introduced small portion packs and indicating the recommended portion size on the packaging. In 10 the future, we will continue to invest in ways to keep the impact of our products healthier, whilst retaining top quality and taste. 6. Smiles by the people All stakeholders involved in the value chain are worth that smile. From the cocoa farmers, our supplier partners, the in-house Libeert team, our customers to the chocolate consumer: that smile represents their experience within the chocolate supply chain. In fact, a prerequisite for that authentic, genuine smile, is to continuously improve the chocolate experience. To Libeert, sustainability and enjoying sustainable chocolate products are pivotal contributors to make this happen. 6.1. Cocoa farmers The cocoa farmers are an important group of stakeholders within the chocolate value chain, who are overlooked far too often. However, they deserve the utmost respect, since without them, we would not be able to enjoy that chocolate bar. Libeert’s entrepreneurial culture respects the cocoa farmers and their work, whilst also contributing to society as much as possible. Child labour It is no longer a secret illegal child labour does happen in the cocoa industry. Children are illegally employed on the plantations to help earn a living for their family. A large-scale study* on the presence of child labour in cocoa-growing areas in Ghana and Ivory Coast has shown that 45% of the children in cocoa communities are working in the fields. Almost all of them (43%) are forced to work in hazardous conditions. To us, illegal child labour is unacceptable and fighting this practice is one of our main focus points. The Cocoa Horizons Program applies a risk-based approach on eradicating child labour. Cocoa farming communities are categorised as low, medium or high risk based on socio-economic data. Interventions are prioritised based on this risk-based approach. In 2020/2021, 18,529 cases of illegal child labour have been identified. Compared to the previous year 2019/2020, this is a decrease by 18% (22,519 cases). *Assessing Progress in Reducing Child Labour in cocoa-growing areas of Côte d’Ivoire and Ghana Scholarships through Cunina We think it is important for kids everywhere to have the opportunity to build a great future. Many of the cocoa farmers’ kids do not have that chance, because they have to work on the plantations and help provide. Just to give you an idea: in Ghana and Ivory Coast, the two most prominent cocoa countries which together grow about 60% of global cocoa production, at least 1.48 million children cannot attend school. In 2021, Libeert became partner of non-profit organisation Cunina: a private, non-governmental development organisation striving for better access to and quality of primary and secondary education, 11 independent of political, religious or societal convictions. Cunina offers underprivileged children the chance to solid education and as such a way out of the vicious circle of poverty. With a monthly contribution to Cunina, Libeert sponsors a pilot in which 50 kids from the very poor region of Chungui, Ayacucho in Peru are given the opportunity to enjoy primary and secondary education. In Libeert’s team, a number of employees have taken up the role of ‘godmother’ or ‘godfather’. 6.2. Consumers We believe that people deserve the best Belgian chocolate product when it comes to consuming chocolate. Libeert processes the finest Belgian chocolate to the most fun and creative hollow figurines and most delicious, indulgent chocolate bars based on no less than 100 years of expertise. One secret ingredient of the perfect chocolate product is the artisan way in which we manufacture our chocolate products, with respect for the product and creating that perfect ‘bite’. Consuming a piece of chocolate is all about creating a joyful moment for yourself or to share and cherish with your nearest and dearest. It’s about a great chocolate experience that is made from sustainably sourced cocoa beans and packed in sustainable packaging that keeps the chocolate in the best possible condition to preserve all its quality. Consuming a piece of chocolate is all about creating a joyful moment for yourself or to share and cherish with your nearest and dearest. It’s about experiencing great chocolate made from sustainably sourced cocoa beans and packed in sustainable packaging to keep the chocolate in the best possible condition to preserve all its quality. That’s what Libeert is all about: delicious and happy moments! 6.3. Employees Having the best people be part of a team is what makes all the difference. People are the heart and soul of a business. Our team is our company’s DNA and we feel responsible for everyone in our business. Libeert can rely on a multifunctional team with the right mindset and passion for what they do, so that every day we can make the difference. Safety At Libeert, we aim to create a safe and pleasant workplace for our colleagues. Our responsibility as an employer goes beyond ensuring technical safety. We promote colleagues’ awareness of unsafe behaviour. We perform regular workplace and occupational health risk assessments to implement preventive and protective measures in order to avoid incidents and accidents. Besides technical and procedural safety, a substantial effort goes into growing a high safety leadership level amongst all our associates, individuals and our team. We focus on attitude, peer-to-peer interaction, safety dialogues and constructive feedback. Wellbeing As an employer, it is also our duty to contribute to the wellbeing of our colleagues. We understand that wellbeing is a highly personal matter: what brings happiness to one person may not do so for another. 12 Therefore, we have outlined 5 values: together, passion, entrepreneurship, engaging in sustainability and growth as a person, as a team and as a company. In order to make this happen, continuous training, growth programs, the monitoring of a safe and healthy work environment and regular feedback are part of our daily work practices. Celebrate We all need a kind of food in our lives that is dedicated to celebratory moments. The secret to work satisfaction is working as a team, and to celebrate together as a team. We organise happy Friday events quarterly to share accomplishments, projects and to celebrate team members’ successes. Celebrating small wins is a great way to build confidence as an individual and as a team. Apart from these quarterly events, we also organise our annual ‘Great Team’ day to look back and more importantly to look forward. This day is all about exchanging experiences, laughter and enjoying time together. Equality Libeert aims to establish a work environment in which everybody, regardless of their age, gender, race, skin tone or sexual orientation, feels at home. By no means do we condone or tolerate any form of discrimination or racism. Libeert also appointed a confidential advisor, who can be notified anonymously of any breaches. We also introduced a Code of Ethics and Business Conduct, in accordance with the OECD Due Diligence Guidance for Responsible Business Conduct, which can be requested and consulted at all times by our stakeholders. Fit together Libeert wishes to be a healthy work environment for its employees. A place where people feel good, both physically and mentally. A healthy mind in a healthy body is an important go-to rule for us, which is why we regularly organise sports activities. Of course, this also benefits team spirit. 6.4. Suppliers We select our suppliers ‒ with whom we set up long-term partnerships ‒ not only based on the quality of their product, but also based on their values and vision. We go by what we perceive when meeting new suppliers and during conversations with existing suppliers. Our suppliers play an important role at every stage of the product lifecycle. From sourcing raw materials, helping to ramp up production volume, to finding alternative ingredients. We closely collaborate with our suppliers to get the best out of our cooperation and thus our end products. We believe that close collaborations foster innovation and that in doing so, both parties can improve their offering exponentially. Strong partnerships embrace feedback. On a regular basis, we provide feedback to our suppliers. As feedback becomes commonplace, suppliers can really get to grips with the inner workings of our collaboration and grow their understanding of what products or services might be of interest to improve business, to render it stronger and more sustainable. 13 7. Smiles for the planet The chocolate products we manufacture every day would not exist without the raw materials our planet has to offer. Since the Industrial Revolution, however, we are slowly depleting raw materials and natural resources, which in fact today has brought us to a point of no return. A business cannot focus solely on economic growth, but has to build and implement sustainable processes. Libeert fully subscribes to this principle and will place a lot of emphasis on this towards the future. 7.1. Carbon footprint As a family business since 1923, we feel responsible for ensuring the next generations can also live in a healthy environment. Libeert aims to operate ecologically and sustainably, by limiting, reducing and eliminating any harmful impact on the environment. We see it as an undisputable duty to contribute to continuously improve our environmental performance. Similar to all food manufacturing industries, the chocolate production process has an impact on CO2 emissions and as such on the environment. Libeert wants to measure and monitor their CO2 emission levels in order to take appropriate measures to reduce their CO2 emissions and eventually pursue CO2 neutrality. Even though we are not active in the chemical industry or any other heavily environmentally harmful industry, we recognise that our business activities inevitably have an impact on the environment. For Libeert, this mainly concerns the use of electricity (priority 1) and gas (priority 2) as well as water consumption (priority 3) but also CO2 emission in the upstream and downstream activities of the entire chocolate supply chain. Besides conscious use of energy and water resources, Libeert is committed to limit waste of edible ingredients during the manufacturing process and to use sustainable and recyclable packaging where appropriate. Overall, Libeert aims to comply with all applicable local, national and international environmental laws and regulations. In 2021, Libeert has started the process to select the appropriate partner to guide us through this exercise of carbon footprint measurement and detection of ways on how to reduce this, with the view to draw up the long-term approach rather than working on ad hoc considerations. 14 7.2. Sustainable packaging The use of packaging has an important value in the food industry. It protects the product from external factors such as oxygen, humidity, foreign objects and micro-organisms and as a result maintains the quality and safety of the product inside. Nevertheless, over the recent years, packaging has become a rather difficult topic because of its enormous environmental impact. For many years, the world has been run from the viewpoint of a linear economy, in which natural resources are used to create consumer goods. In turn, these goods give rise to waste products that are disposed in nature, even without recycling them. However, the shift towards a more circular economy in which natural resources are used, broken down and recycled for reuse, is taking place. Such a shift is a necessity to protect nature and at the same time maintain economic growth. Libeert has taken several initiatives to reduce packaging consumption and packaging waste. At the same time, we look into ways to increase recyclability, by turning around existing products as well as exploring environment-friendly options in new product development. Recyclability The EU has defined a target for all plastic packaging brought onto the market to be recyclable or reusable by 2030. Fevia, the federation of the Belgian food industry, states that all food packaging should be reusable, recyclable or compostable by 2025. The roadmap ‘Food packaging of the future’ mentions design for recycling as one of the important pillars to realise the transition to circular packaging. Recyclability goes beyond just being technically recyclable. There must be consumer access to a recycling program, a recycler must be able to process the material, and there must be an end market. Therefore, the International Plastics Recycling Groups announced a global definition of ‘Plastics Recyclability’. Plastics must meet four conditions for a product to be considered recyclable: 1) The product must be made with a plastic that is collected for recycling, has market value and/or is supported by a legislatively mandated program 2) The product must be sorted and aggregated into defined streams for recycling processes 3) The product can be processed and reclaimed/recycled with commercial recycling processes 4) The recycled plastic becomes a raw material that is used in the production of new products Compostability Compostability refers to the ability of materials to biodegrade naturally within a specified timeframe under controlled conditions. The overall compostability of a piece of packaging, labels included, directly relates to its components — inks, substrates and more — which must comply with a set of rules determined by official regulations. With regards to the carbon footprint plan, Libeert will start from the above definitions to define their approach and appropriate measures with respect to Scope 3. In the next subject, titled ‘Plastics’, you can find the actions already put in place to increase recyclability as well as sustainability. 15 8. Plastics It takes a tremendously long time for plastics to deteriorate, and if left in nature, they form a threat to wildlife and continue to spread toxins. Plastic also contributes to global warming. Almost all plastics are made from chemicals derived from the production of planet-warming fuels (gas, oil and even coal). Once at sea, sunlight, wind and waves break down plastic into small particles, often less than one fifth of an inch across. These so-called microplastics have spread throughout every ocean and are being detected in every corner of the globe, from Mount Everest, the highest peak, to the Mariana Trench, the deepest trough. Microplastics continue to break down into increasingly smaller particles. Plastic microfibres, meanwhile, have been found in municipal drinking water systems and drifting through the air. Some key facts: - Half of all plastics ever manufactured have been made in the last 15 years. - Production increased exponentially, from 2.3 million tons in 1950 to 448 million tons in 2015. Production is expected to double by 2050. - Every year, about 8 million tons of plastic waste escapes into the oceans. This equals the content of five garbage bags per foot of coastline around the world. - Plastics often contain additives, making them stronger, more flexible and durable. Many of these additives in fact impair the way these plastics can be broken down, with some timeline estimates ranging to at least 400 years. The solution to environmental pollution by microplastics is to firstly prevent plastic waste from entering our rivers and seas. This could be accomplished by improving waste management systems and recycling, as well as by better product design, considering the short life of disposable packaging and reduction of unnecessary single-use plastics. In the next topics we describe our most recent actions in this respect. 8.1. Monomaterials In 2021, Libeert committed to only launch new products packaged in monomaterial films or multi-layer composite material in the same material type, more specifically PP (polypropylene) with OPP (oriented polypropylene) and BOPP (Biaxially oriented polypropylene) materials. These monomaterials can enter the recycling process. This is not the case with multi-layer materials which are hard to sort and recycle. For more detailed information on this subject, please refer to Annex 1. 8.2. Dark coloured plastics Since 2020, Libeert has stopped using dark coloured plastics, PVC and polystyrene. These are materials that are difficult to recycle. 16 8.3. PVDC coating In June 2020, Libeert has replaced its PVDC coated barrier films by a sustainable alternative, especially films which make use of EVOH technology. EVOH stands for Ethylene vinyl alcohol and whilst this material guarantees an excellent barrier for oxygen and moisture, it can also be recycled when used in a monomaterial OPP film (oriented polypropylene). For more detailed information about PVDC, please refer to Annex 2. 8.4. Plastic-free In 2021, Libeert launched 100% plastic-free packaging products made out of 100% cardboard instead of plastic inserts to fix the product and with a cellulose window rather than the usual PET window, to display the product. Cellulose is the main substance in the walls of plant cells, helping plants to remain stiff and upright. The wood pulp-based cellulose material offers the same transparent look and feel like plastic. It is sustainably sourced, biodegradable and made from a renewable resource: trees. When replacing plastic materials is not as straightforward, we make sure to select the right thickness of plastic materials and the right packaging dimensions in order to reduce plastic packaging usage to the fullest possible. Additionally, Libeert launched a paper-based flowpack option to replace the plastic one. As such, Libeert can now offer paper-based flow wrapped chocolate bars. 8.5. Cardboard The FSC label guarantees the commitment to sustainable forest management, meaning that the paper/cardboard-based packaging is renewable and responsibly sourced. At Libeert, all primary cardboard and paper wrappers for chocolate bars are sustainably sourced. 100% of the primary cardboard packaging is FSC certified and 100% of the primary paper packaging is FSC certified. Outer cases are FSC mix 70% and recycled material. 8.6. Product design and inks Designing packaging to provide the required functionalities with a minimum use of resources, thereby minimising product and packaging waste, remains key in a circular economy. It is, however, also important to design packaging that can be correctly disposed of, collected and efficiently sorted into suitable material fractions for recycling. These sorted material fractions must be recyclable in order to replace virgin material. 17 Inks When it comes to ink, ‘recyclability’ refers to how easily the ink can be removed from a recycled substrate during the repulping / melting and de-inking process. Studies have shown that soy and water-based inks are easier and cleaner to de-ink than solvent-based inks. The move from solvent carriers to water and plant-based carriers was a big step for the environment. However, pigments in these inks are still derived from fossil fuels. Artwork Libeert aims to limit the use of inks during the artwork development wherever possible. We reduced the number of printed surfaces, by printing only on the part used at the Point of Sale. Although the look and feel during artwork development might take some getting used to, we succeeded in reducing the use of ink by at least 50% without any impact on the look and feel in the stores. 9. Energy and water 9.1. Electricity Since 2020, 100% of the electricity used at Libeert is sourced from renewable energy (100% ‘Green energy’). Green energy is derived directly from wind turbines, solar panels and cogeneration. Just like any food manufacturing process, making chocolate requires energy. The tanks that hold liquid chocolate need to be heated, for instance, before the moulding stage. After dosing the liquid chocolate into the moulds, again energy is required to cool down and stiffen the chocolate product. At finished product level, chocolate requires to be stored in a temperature-controlled area between 12 and 18 degrees. In the upcoming years, Libeert will be monitoring the energy consumed during this process, to then evaluate how we can reduce the energy consumption as such or generate energy on site using natural resources. For more information on currently applicable best practices, please refer to annexes 3, 4 and 5. 9.2. Water Water is a precious and finite resource that is critical to any ecosystem, to human life and the communities in which we live. The water usage on site is very limited since no water is used during the manufacturing process. The total amount of heating and cooling water used to heat the chocolate tanks or cool down during the moulding process runs inside a closed circuit. Additional water is solely used for cleaning machinery, tools and mixing units. In 2023, an investment is planned for a CIP (‘Cleaning in place’) system to further optimise the cleaning process and reduce the water usage to clean the mixing units and machinery tools. 18 10. Food waste Libeert is committed to limit their food waste during the manufacturing process as well as throughout the supply chain. Customised solutions perfectly guide the chocolate product throughout the packaging lines and minimise rejected product or product to be reworked. Moreover, Libeert also developed and installed tailor-made mixing units for chocolate and ingredients, in order to reduce the amount of product left over after a run, which would otherwise be lost in cleaning before a recipe changeover. The chocolate waste throughout the process is actually measured as a percentage of the total final chocolate products produced. We already have planned additional projects specifically aimed at further reducing the level of food waste throughout the process. 11. Objectives and progress During 2022, individual objectives will be translated into KPIs in order to objectively measure our progress. These KPIs will be defined on the 3 different levels of our sustainability strategy (product-people-planet): 1) Scope 1 – Direct – Reporting Company – Company facilities and company vehicles 2) Scope 2 – Indirect – Upstream activities – Energy resources 3) Scope 3 – Indirect – Downstream activities Scope 3 – Indirect – Upstream activities These objectives and KPIs will be defined in cooperation with the selected sustainability partner in order to set the right focus and goals, to ensure we work towards a significant impact on reducing the carbon footprint and increasing sustainability. 19 Annex 1 - Monomaterials Metallised films which are not recyclable should be avoided, even if they were preferred in the past because of a specific product look and feeling. BOPP film has a relatively low carbon footprint compared to other plastic film substrates such as polyester. After cellulose film, BOPP film is the second most preferred substrate in flexible food packaging because of its eco-friendly characteristics. Since BOPP film has a low melting point, it requires less energy to be converted from one state into another. Reprocessed granules of BOPP resin are widely used to manufacture injection moulded parts and household items such as sitting mats, chairs, tables, automotive spare parts, etc. Moreover, this low melting point is a unique property BOPP films have compared to all other commonly used flexible packaging films. Low density results into more yield during conversion and thus facilitates less plastic consumption per product. Low density also results in less weight per roll for the same length compared to other plastic film, which entails ease of material handling. Annex 2 - PVDC coating The acronym PVDC stands for ‘polyvinylidene chloride’ and is used as a coating on plastic films. This material works as a remarkable barrier for water, oxygen and aromas. Although PVDC as such is recyclable, most PVDC film is not recycled, mainly because PVDC is often used as a very thin coating which cannot be easily extracted afterwards. Annex 3 - 100% green electricity Since 2020, 100% of the electricity at Libeert comes from wind turbines, solar panels and cogeneration. Green energy is energy generated from clean, inexhaustible resources, in contrast to grey energy (dirty energy), which is generated by burning petroleum, natural gas or coal. When generating grey energy, harmful carbon dioxide (CO2) is released into the environment. In the long run, the supply of fossil fuel sources such as coal, gas and oil will run out. Economic advantage Green electricity is more expensive than traditional electricity, so it does not generate an immediate economic advantage. Environmental benefit No environmentally harmful CO2. Social benefit Lower environmental impact for production. Measurement indicator Electrity consumption (KwH) per ton of chocolate produced. 20 Annex 4 - Environmentally friendly cooling installations In 2012, Libeert conducted an energy audit through a third party. Following this audit, in 2014 and 2015, we invested in 4 new cooling installations. The former installations, still using R22 gas and consuming high levels of energy, have been replaced by more environmentally friendly and energy-efficient cooling installations (A134 gas). Economic advantage These new cooling installations require a high investment cost, however, with this change, Libeert chose to invest in environmentally friendly installations with lower energy consumption and lower energy costs. Environmental benefit By investing in these new cooling installations, less energy is used and the environmentally unfriendly R22 gas is abandoned and replaced by A134 gas. A preliminary study indicated that a potential reduction in consumption of 28.3% is realistic. Social benefit This investment ensures a more environmentally friendly work environment and a decrease in energy consumption. Measurement indicator Energy consumption and energy consumption per tonne of chocolate produced. Annex 5 - LED lighting. Each time fluorescent light bulbs are replaced, they are replaced by LED lighting. Economic advantage The initial investment cost of LED bulbs is higher than the cost of buying traditional light bulbs. However, LED lighting easily consumes up to 60% less energy compared to fluorescent tube lamps. Therefore, Libeert invests in environmentally friendly lighting with lower energy consumption and lower energy costs. LED lighting also has a longer lifespan compared to traditional lighting solutions, which, of course, is another benefit. Environmental benefit By replacing traditional lighting with LED lighting, less energy is used, which has a positive impact on the environment. Social benefit This investment ensures a more environmentally friendly work environment and a decrease in energy consumption. In addition, LED lamps do not flicker, which makes them easier on the eyes and provides a more pleasant work environment. Measurement indicator Energy consumption and energy consumption per tonne of chocolate produced. 21