CSR

REPORT
2020

Leading the industry’s

transition towards true circularity

Faerch Group A/S

 Content

Content

Leading the industry’s transition towards circularity 4

Sustainability governance structure 6

Assessing our areas of priority 8

Our focus areas & ambition levels 10

Case: The Extended Producer Responsibility - A game changer in the European circular economy 12

Case: Legislation and tax - How to speed up a circular economy 14

Case: Full transparency - Helping customers assess sustainability in food packaging 16

Sustainability in our value chain 18

Sustainable development goals 20

Supporting international standards 22

Performance progress on the focus areas 24

Data Basis for Sustainability 34

CSR Report 2020 - Faerch Group A/S 3

 Sustainability

Leading the industry’s

transition towards true circularity

50 million rPET trays in one month

Our recycling business is yet another important pillar on
our industry’s journey of making food packaging truly
Thomas Bak Thellesen circular. With the acquisition of 4PET Recycling in 2018, we
Director Group Sustainability &
External Affairs successfully closed the loop on food trays, offering tray-
to-tray recycling on an industrial scale. At the beginning
of 2020, we took over the remaining 4PET shares and
initiated a comprehensive investment programme to
Food packaging plays a crucial role in ensuring the optimise our tray-to-tray recycling capacity. Our aim is
safety of food products. But we need to be mindful of that the tray line will serve as a blueprint for scaling tray-
the impacts that our activities can have on the world to-tray recycling into additional regions.
around us. As a leading provider of food packaging and
PET recycling, we are aware of our responsibility to With positive results from the investment programme
address the challenges our industry is facing. Responsible the ramp-up in volume will gradually move towards an
business practice and sustainability have long been at the annual capacity of 25,000-30,000 tonnes during 2021.
heart of our DNA, business strategy and daily operations, As an indication of this, the total recycling amount
and we are committed to helping drive our industry corresponded to 25 million post-consumer trays in August
towards true circularity. 2020, which progressively moved towards 50 million at the
end of the year in December 2020. The target is to reach
Over the years, we have been at the forefront of leading 800 milliontrays end of 2021.
technology, expert knowledge and best practice within
the packaging industry. We have introduced products A need for industry transparency
with market-leading shares of post-consumer recycled While we have continued to demonstrate significant
content, and with our recycling facilities at 4PET in the progress in designing the right products for circularity,
Netherlands, we have become the only food packaging we strive to achieve more. For circular packaging, the
company in the world to operate as an integrated tray share of recycled post-consumer content is the most
recycler, allowing us to recycle used food trays back into important indicator for sustainability. At Faerch, we
new food grade products at industrial scale. believe that more transparency is needed in the industry
to help customers compare and access products properly.
Over the course of 2020, we continued our focus on Consequently, we have started to offer third party
making food packaging circular. With food trays made validated certificates outlining the rPET percentages of
from up towards 100% post-consumer recycled content, our recipes based on post-consumer content. Our aim
we are proud to claim that true circularity in food is to set a new industry standard allowing customers
packaging is not a distant vision but a reality at Faerch and consumers to identify and distinguish the real
today. The Evolve by Faerch concept is a perfect example sustainability level of a food packaging product.
of how to achieve a circular economy. The trays are made
from European post-consumer recycled content and are Learn more about our initiatives and progress on the
fully recyclable into new food grade trays of the same following pages.
quality – again and again.

Thomas Bak Thellesen

Director Group Sustainability and External Affairs

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 EXTERNAL A
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CSR Report 2020 - Faerch Group A/S 5

 Sustainability

Sustainability governance structure

Sustainability is core to Faerch’s values both in terms of and it sets a clear framework for our priorities, roles
our business thinking and practices. Doing business with and responsibilities. The structure makes sure that our
integrity has always been part of the way we operate. It sustainability strategy and targets are continuously
defines how we behave, and it guides how we do business. developed and anchored across the Group. It enables us
We work with responsibility, fundamental respect for to embed sustainability into our business-agenda - from
labour rights, environmental and climate consideration, our long-term, corporate strategy to our daily operations
principles of anti-corruption and fair competition. and priorities.

We support the principles of the UN Global Compact, The governance structure is divided into four levels:
OECD’s Principles of Corporate Governance, the UN The executive management level, business unit level,
Sustainability Development Goals and comply with regional level and local level. Through policies, standards,
recognised best practice. management systems, procedures and risk management,
we ensure that sustainability is truly embedded across the
Managing performance Faerch Group.
Our sustainability governance structure provides the
platform for keeping our goals and ambitions on track,

Executive management level

- Setting direction for the comprehensive long-term work related to Faerch’s sustainability development.

Business unit level

- Resource allocation to enhance continuous sustainability development in the individual business units
- Reporting on non-financial data.

Regional level
- Specific focus areas supporting Faerch’s ambition levels and priorities
- Stakeholder engagement and collaboration.

Local level
- Implementation of concrete initiatives and improvements in line with the Group’s overall long-term plans
and vision.

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 Sustainability

CSR Report 2020 - Faerch Group A/S 7

 Sustainability

Assessing our areas of priority

Faerch operates in a constantly changing world, and we need to be aware of and

react to the external changes that can impact our business. Assessing materiality
helps us identify and prioritise the sustainability issues that matter the most to our
business and stakeholders. And it helps us channel our resources and activities to
Our key
the areas where we can have the strongest impact.
stakeholders
As part of our materiality assessment identifying our main economic, - Our customers (food
environmental, ethical and social impacts, a set of key areas were identified. producers, distributors
The assessment engaged both external and internal stakeholder groups. The and retailers)
materiality matrix below shows the 14 most important areas that were identified, - NGOs
their relevance to our stakeholders, their influence on our business, as well as - End-users
their link to the UN Sustainable Development Goals. We still believe that these 14 - Employees
issues are relevant and important to Faerch today as an overall guidance, and they - Local communities
therefore continue to form the basis of our defined five focus areas. - Academia

Sustainable Food Responsible People & Business

packaging safety operations organisation ethics

Recycled plastic
High

Meeting regulatory regulations

Effective production
Safe workplace

Employee development Food safety

Importance to stakeholders

Reduction of Reduction of CO2 emissions

food waste

Reduction of transport impact

Technical solutions for waste sorting

Anti-corruption & fair competition

Supplier management

Diversity

Biodegradability
Low

Low Impact on Business success High

8 CSR Report 2020 - Faerch Group A/S

 Sustainability

Our focus areas & ambition levels

At Faerch, we recognise the severe economic, social and Development Goals where we believe we can create the
environmental challenges our planet is facing. As a leading biggest impact.
company within rigid plastic packaging and recycling
for the food industry, we are committed to acting as a Each focus area has a long-term level of ambition
responsible company and define priorities and actions for supported by actions. Our ambition is to be the leader in
our business, now and in the future. sustainable packaging and food safety. Each focus area
has defined KPIs supporting our long-term ambition and
We have chosen to dedicate our focus to five specific sustainable development.
areas that are directly linked to our core business. These
focus areas are directly linked to five UN Sustainable

Sustainable Food safety Responsible People and Business

packaging operations organisation ethics1

Lead the way Be the leader To minimise CO2 To secure To ensure orderly
in creating true in methods and emissions from own workplace with and responsible
circularity in food products, which activities focus on employee business practice
packaging protect food, extend development
shelf life and reduce
food waste

Level of ambition Level of ambition Level of ambition

LEAD DEVELOP COMPLY
“To lead” means we will create competitive “To develop” means we will strengthen and “To comply” means
advantages and market differentiation through ensure our position and good practice by being a that we will adhere
innovative and sustainable products. responsible producer and company. to legislation and
applicable standards
within responsible
1 and ethical business
The focus area “Business Ethics” is covered in section “Governance”.
practice.

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The UN Sustainable Development Goals

In 2015, the United Nations drew up a roadmap for peace and

prosperity for people and the planet, now and in the future.
This resulted in 17 Sustainable Development Goals (SDGs) that
represent an unprecedented opportunity to take sustainability
to a new level.

While we support all the SDGs, we focus our efforts on the

goals and targets that are the most important to our business
and where we believe we can make the most meaningful
contribution. As we move forwards,
we will continue to add actions
and initiatives to support the
SDGs.

Our priority SDG’s

CSR Report 2020 - Faerch Group A/S 11

 Sustainability

THE EXTENDED PRODUCER RESPONSIBILIT Y

A game changer in the

European circular economy

To truly achieve circularity, we need to rethink our challenges that we are facing. Instead of implementing
use of resources collaboratively and collectively. recycled content from other industries, we, as an industry,
Products need to be designed in a way that allows need to look at our own products and how they can be
them to remain a valuable resource after use. integrated into the circular economy. A true circular
Over the past decade, we have seen an important economy where applications are recycled into the same
transition within the food packaging market quality and product type - again and again. Instead of
towards mono-materials. Due to this transition, implementing recycled content from the bottle industry, an
the PET market has grown causing a shift from the essential focus on closing the loop is vital, hence tray-to-
use of virgin materials to post-consumer recycled tray recycling is the final frontier in a circular PET economy.
material (PCR) from plastic bottles. However,
further action is needed to build a true circular Leading by example
packaging economy. “One of the key enablers of circularity is to design with
recycling in mind. As producers we must think in holistic
Faerch took the first steps toward true circularity in 2018, systems and continue to work tirelessly towards taking
where 4PET Recycling became part of Faerch Group. complexity out of our products to allow true circularty. An
Since then, the Extended Producer Responsibility (EPR) important milestone in the systemic transition was the
has started to play a more essential part in the packaging addition of our tray recycling facility in the Netherlands
industry’s navigation and targets. By December 31st, allowing us to offer tray to tray recycling on an industrial
2024, EPR must be introduced to all EU countries , and scale”, says Thomas Bak Thellesen, Director Group
producers’ responsibility for their products will be extended Sustainability & External Affairs
beyond its current scope – to also include the post-
consumer phase of a product’s lifecycle. Faerch invites all industry and public stakeholders to focus
on the source of their post-consumer recycled content and
CASE

Faerch Group regards the Extended Producer to join the aim for a circular PET economy based on tray-
Responsibility as a gamechanger in the European circular to-tray circularity.
economy, as it pushes the industry to design products
made for circularity. Within the packaging industry, using
recycled flakes from bottles has been an important first
step, but it does not solve the climate or environmental

Mono-material PET allows for true circularity, as it can

be recycled back into food grade products again and
again – without compromising on functional properties,
in particular food safety.

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 Sustainability

Tray content is a type of PCR. It is made exclusively from recycled pots, tubs
and trays material, not recycled bottles. This is beneficial for the environment
because bottle grade rPET should be preserved for bottle-to-bottle recycling
in order for beverage producers to meet their own demanding recycled content
targets, and valuable food contact material from trays should be reintroduced in
the circular PET economy as new trays – again and again.

Annual Report 2020 - Faerch Group A/S 13

 Sustainability

L E G I S L AT I O N A N D TA X

How to speed up a circular economy

Faerch’s mission is to create a circular economy, The benefits of a circular economy

keeping materials in the loop and out of the The great potential for a European circular plastics
environment. Our aim is to design food trays made economy is widely recognised. Substituting virgin raw
from recycled materials that can be reproduced into material with post-consumer plastics will decrease CO2
new food trays of the same quality – again and again. emissions massively while preserving valuable materials in
circulation.
“This is not a distant vision. At Faerch, we are working on
making rigid food packaging truly circular. Our products are “As a society, we need to commit to moving faster towards
recyclable, and our PET products contain market-leading a circular economy for food packaging and as a company
shares of post-consumer recycled content – and with with more than 50 years of experience in the sector, we
our recycling facility in the Netherlands, we have become believe that PET is the fastest and most viable way for this
an integrated recycler and do tray-to-tray recycling on to happen. The transition can be further accelerated if it is
an industrial scale”, says Thomas Bak Thellesen, Director supported by legislation”, says Thomas Bak Thellesen.
Group Sustainability & External Affairs.
Key drivers to enable true circularity
“Across Europe, we see a growing commercial interest in - European countries to impose bonuses or fees on food
recycling PET food packaging into food grade material. packaging that does not contain a minimum percentage
But we need to speed up and increase our ambitions. We of post-consumer recycled tray material.
cannot expect the transition towards a circular economy - More focus on using mono-materials, as this is a
to be driven by consumer demand alone. We need action at prerequisite towards a circular economy
many levels, and at Faerch, we see a need for progressive - National regulators need to focus on building systems
legislation. We believe that a common European tax that incentivise the use of circular materials
on food packaging, that does not contain a minimum
In the beginning of 2021, France incorporated a
CASE

percentage of post-consumer recycled content, could

positively stimulate the industry and infrastructure . bonus structure incentivising the use of recycled
The aim should be to create incentives for making better materials derived from households, such as tray PCR.
mono-material waste streams. We welcome progressive
actions from decision makers around Europe and see
great potential in collection and sorting on a
European level”, he adds.

CO2 emissions

-60%
PET tray - 100% virgin material vs.
PET tray - 100% recycled material

14 CSR Report 2020 - Faerch Group A/S

Annual Report 2018 - Faerch Group A/S 15
 Sustainability

F U L L T R A N S PA R E N C Y

Helping customers assess

sustainability in food packaging

Using recycled content is an important strategy to materials it puts on the market and avoid material value
reduce the environmental impact of food packaging loss. This is fundamental to limiting environmental impact,
and to promote circularity. However, when talking including the use of virgin raw materials and its related CO2
about recycled content, it is important to be emissions.
aware of its source. When something is labelled
as being made with “recycled content”, it can be Faerch’s position on recycled content in food packaging
derived from two sources: Pre-consumer recycled When producers choose to include different material input
content and post-consumer recycled content. Both streams, it is important to provide full transparency to
sources are accepted as rPET, but it is important to allow an accurate comparison between the end products’
distinguish between the two, as their environmental material compositions. The aim is to avoid eroded
benefits are not comparable. unspecified rPET percentages, where internal regrind and/
or post-industrial content and/or internal pre-consumer
For circular packaging, the share of recycled post- content are being communicated as recycled content by
consumer content is the most important indicator for the packaging industry. These instances should not be
sustainability. However, to allow customers to compare compared with rPET percentages that are based on post-
products, an industry standard is needed. consumer content, which have a real environmental impact.

What is the difference between pre- and post-consumer “At Faerch, sustainable packaging embraces a circular
recycled content? economy approach that values the reuse of materials. To
Pre-consumer recycled content includes materials help our customers assess and compare the sustainability
diverted from the waste stream during the manufacturing performance of our products, we have launched an
process. Post-consumer recycled content refers to industry first initiative where we can offer certificates
materials that have been placed in the recycling bin by the outlining the PCR percentage in each of our recipes.
CASE

end-user after use, such as plastic bottles and food trays. The percentages are determined using strict calculation
These materials are then collected and transported to methods, and they are validated by an external and
recycling facilities where they are sorted and made into independent auditor.
new materials.
At Faerch, we will never include internal virgin scrap as part
Post-consumer recycled of the post-consumer or pre-consumer percentage. By
material (PCR) is the setting this new industry standard, we will create a unique
preferred source of benchmark for customers in the food packaging industry.”,
recycled content, as it says Thomas Bak Thellesen, Director Group Sustainability
allows the industry & External Affairs.
to continuously
cycle the

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 Sustainability

Annual Report 2018

2019 - Faerch Group A/S 17
 Sustainability

Sustainability in our value chain

Faerch is a leading manufacturer of plastic packaging into a valuable resource rather than waste. When a tray is
and we are aware that the scale of our business and our consumed, it is disposed, collected and processed into a
activities have far-reaching environmental, social and new tray – and the circle repeats itself.
economic impacts.
To reduce negative impacts and to make sure that we
A circular economy continue to add value and deliver competitive advantages
Creating circularity in food packaging has topped our to our customers, we have defined a set of actions to each
agenda for many years and in 2018, we took a significant stage in our value chain.
step in closing the loop on food trays with the acquisition of
4PET Group. The acquisition enables 100% recycling of the
same material, for the same use, turning used food trays

Suppliers & Sourcing Product Development Production:

• Supplier Code of Conduct • Delivering technical solutions for Extrusion/Thermoforming
• Supplier audits circularity • Raw material: Recycled plastic
• Responsible packaging activities • Packaging to extend food shelf life • Reducing energy consumption
and reduce food waste through specific environmental
• Reducing packaging weight projects
• Reducing stacking height • Minimising plastic waste in the
• Meeting high standards & going production
beyond food safety legislation • Investing in energy effective
• Innovative mono-material solutions technology
improving recyclability • Implementing specific activities to
reduce work-related accidents
• Training our employees in
occupational health

MAIN IMPACTS Minimising plastic waste

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 Sustainability

Logistics At the customer At the end-user

• Reducing shipment by producing • Helping customers to extend • Convenient packaging for single
trays closer to customer locations food shelf life and optimise their household, helping reduce food
• Compiling transportation by packaging solutions waste
delivering more trays in one • Working with retailers on improving • Long shelf life reducing food waste
truckload due to reduced stacking recycling rates of plastic trays • Positive food experience
height • Bringing new knowledge on
• Optimising vehicle motors sustainable packaging to our
• Reducing outer packaging customers
• Testing packaging used in a closed
loop system
• Helping customers reduce
their CO2 footprint by offering
alternatives to aluminium foil and
cans
• Training our employees in anti-
corruption and fair competition

Minimising CO2 emissions Reducing work-related accidents

CSR Report 2020 - Faerch Group A/S 19

 Sustainability

Sustainable development goals

The UN’s 2030 Sustainable Development Goals have Materiality Sustainable

Area Development Goal
created a framework for addressing sustainability issues
and creating a plan of actions in the areas of critical Reduction of CO2
emissions
importance to the global society.

We are committed to making the SDGs operational and

Take urgent action to combat climate change
to identifying future business opportunities. By reviewing and its impacts
the areas of importance determined by the materiality Recycled plastic
assessment, we explore how we can support the SDGs
linking them to our value chain and our business.

Ensure sustainable consumption and

Currenctly, the Faerch business will focus on how we can
production patterns
make the biggest impact on the five UN SDG’s highlighted in
Technical solutions for
the table.
waste sorting

Build resilient infrastructure, promote

inclusive and sustainable industrialisation and
foster innovation

Reduction of food waste

Ensure sustainable consumption and

production patterns

Recycled plastic

Ensure sustainable consumption and

production patterns

Effecient production

Ensure access to affordable, reliable,

sustainable and modern energy for all

Safe workplace

Promote sustained, inclusive and sustainable

economic growth, full and productive
employment and decent work for all

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 Sustainability

Sustainable Faerch’s
Development Target Focus Area Faerch’s KPI Value chain involvement

13.2. Integrate climate change measures into CO2 emissions with increased use of Suppliers & Sourcing
policies, strategies and planning recycled plastic. Product Development
Production

Sustainable
Packaging

12.4. Achieve the environmentally sound Quantity of recycled plastic used in Production
management of chemicals and all wastes production Product Development
throughout their life cycle, and significantly
reduce their release to air, water and soil in
order to minimise their adverse impacts on
Sustainable
human health and the environment
Packaging

9.4. Upgrade infrastructure and retrofit Development of Cradle-to-Cradle Customers

industries to make them sustainable, with approach through a colour pigment - black End-users
increased resource-use efficiency and greater ID – to identify and sort black trays in the
adoption of clean and environmentally sound mixed household waste
technologies and industrial processes
Sustainable
Packaging

12.3. Reduce food waste at the retail and Number of reported cases of migration Suppliers & Sourcing
consumer levels and reduce food losses along tests Product Development
production and supply chains Customers
Improvement sealing properties of trays End-users
to prolong food shelf life and reduce food
Food Safety
waste

12.5. Substantially reduce waste generation Plastic waste as percentage of raw Product Development
through prevention, reduction, recycling and materials Production
reuse

Responsible
Operations

7.2. Increase substantially the share of Energy consumption Production

renewable energy ‘100% powered by electricity from Logistics
renewable energy sources’

Responsible
Operations

8.8. Protect labour rights and promote safe Accident frequency Production
and secure working environments for all
workers

People &
Organisation

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 Sustainability

Supporting international standards

Our progress and reporting are based on the principles of corruption, we therefore align our strategies, policies and
the UN Declaration of Human Rights, the ILO conventions procedures to its principles and guidelines.
and the UN Global Compact.
The table below illustrates how we approach and
Even though Faerch has not joined the UN Global implement the ten principles of the UN Global Compact.
Compact, we see it as an important framework for our
sustainability efforts. To meet fundamental responsibilities
in areas of human rights, labour, environment and anti-

How the Policy Supports

Our Policies Example of Policy Implementation
the UN Global Compact

• Sustainability Policy Ensuring continuous growth and development Anchoring sustainability by ensuring that roles
• Human Rights Policy supporting and respecting the protection of and responsibilities related to sustainable
• Statement on the Prevention of Slavery and internationally proclaimed human rights and development in Faerch are defined and
Human Trafficking good business ethics. communicated through Group Form on
• Trade Sanctions in the Product Supply Sustainability Governance.
Agreements for raw materials and packaging
Monitoring and measuring progress towards
sustainability through Group Procedure on
non-financial data on sustainable development.

Ensuring that our economic and financial

transactions are in line with the applicable
economic sanction laws and international trade
restrictions, including providing information to
our distributors about product final destination.

Supplier Code of Conduct Ensuring responsible supplier management, Carrying out supplier audits of top suppliers of
defining and communicating expectations to raw materials, additives, colours, packaging and
our suppliers in terms of developing responsible supplementary range.
business practices.

Environment, Health & Safety Policy Reducing own footprint, meeting high • ISO 14001 Management System
health & safety standards and creating a • Risk assessment of production equipment
workplace culture based on commitment and • Prevention of work-related injuries through
responsibility. analysis tools.

People Policies Ensuring equal opportunities at the workplace, Initiating health promoting initiatives;
• Health Promotion Policy eliminating discrimination in respect of performing external training; defining
• Employee Development Policy employment and occupation and recognising individual development plans (as a part of
the right to collective bargaining. Employee Performance and Development
Review); supporting employee intercultural &
professional development through international
secondments.

Legal Compliance Policy Working against corruption in all its forms, Training in fair competition and anti-corruption,
• Gifts Policy increasing employees’ understanding of the including e-learning programme.
• Anti-corruption Policy rules and minimising the risk of breaking the
• Fair Competition Policy rules.
• Procurement Policy

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 s
Supporting standard

CSR Report 2020 - Faerch Group A/S 23

 Sustainability

Sustainable packaging

The focus area “Sustainable packaging” involves processes and aim to integrate a truly closed loop where
everything we do to minimise the environmental impact used trays are collected and processed into new trays.
of our products. In terms of manufacturing, it is important This will help us reduce plastic waste and CO2 emissions.
that we look at the composition of our products and Our aim is to take a leading position in the use of recycled
continuously aim to increase the share of recycled PET plastic.
derived from trays in our product recipes and production

Scope Guidelines Impact Risk & challenges

Manufacturing and recycling of European Strategy for Plastics in a Impact waste Plastic waste management,
plastic trays creating a closed loop Circular Economy. Impact mitigation by optimising mainly outside Europe, remains
within food packaging. design proposals to minimise an immense challenge. We need
Reuse and recyclability of own material consumption, by to build a new mentality and
materials in own operational setup developing partitioned packaging, customer behaviour moving away
and the market, reaching a true and by designing trays with from the throwaway culture.
“closed loop”. smaller portion sizes to avoid
dispose of surplus food.

CO2 emissions
Impact mitigation by increasing
the share of recycled plastic
in our product formulas and
manufacturing processes; by
rethinking product composition
in existing and new products,
material and processes.

Performance progress
CO2 emissions with increased use of CO2 emissions with increased use of Quantity of recycled plastic
recycled plastic (21g CPET tray)1 recycled plastic (12g APET tray)1 used in production 1252 1271
Kg/CO2 equivalents per 1,000 trays Kg/CO2 equivalents per 1,000 trays 2010 = index 100

Bottom bars =Emissions with initiatives Bottom bars =Emissions with initiatives 1057
Middle bars = Saved due to rPET Middle bars = Saved due to rPET
Top bars = Saved due to renewables Top bars = Saved due to renewables 943
847

16.7 16.7 16.7 16.7 16.7

7.5 7.5 7.5 7.5 7.5
14.2 14.0 14.6 15.5 15.5
10.4 10.3 10.3 10.9 10.7

62.0 62.2 61.6 60.7 60.7

34.4 34.5 34.5 33.9 34.1

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

1
Changed calculation principle. The historical figures were recalculated accordingly.

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 Sustainability

Food safety

Food safety is essential to our business, and even more safety requirements. Guaranteeing food safety is our key
so than ever, consumers should always be confident that priority. Without that, our efforts to achieve circularity
the food that they buy is packaged and designed for food and reduced environmental impacts will have no value.
contact. At Faerch, we therefore continuously develop methods
Our aim is to maintain a leading position within rigid and processes to ensure and validate food safety for our
food packaging while complying with the strictest food products.

Scope Guidelines Impact Risk & challenges

Continuously monitor methods FCM shall comply with Article 3 of Impact mitigation by developing It may be difficult for end-users
and approaches to improve or 1935/2004; this applies to all food food safe mono-PET packaging to distinguish between different
uphold food safety requirements. contact material. solutions with a high content types of plastic packaging and
of recycled material that their purpose. Hence, we will
Regulation (EU) 10/2011, explains additionally enables long shelf life, continue to promote and produce
in great detail “what plastic consequently reducing the carbon food safe mono-material PET
converters have to do in order to footprint from food waste and solutions and work with academia
comply” with 1935/2004. enabling circularity. on topics such as food safety and
circularity.

Performance progress

Number of reported cases of

migration tests

0 out of 24
tests in 2020
2019: 1 case out of 26 tests
2018: 0 cases out of 32 tests
2017: 0 cases out of 21 tests
2016: 0 cases out of 21 tests

CSR Report 2020 - Faerch Group A/S 25

 Sustainability

Responsible operations

The focus area “Responsible operations” involves To ensure that we significantly reduce the environmental
everything we do to ensure that our production is impact of producing, using and disposing our packaging
effecient. We are aware that the reach and scale of our solutions, we continuously pursue new ways and
activities can impact the environment, society and people. methods to reduce emissions and to improve resource
It is therefore important to keep our factory footprints as consumption and waste management.
low as possible.

Scope Guidelines Impact Risk & challenges

Ensure that our production is Group Quality Policy Plastic waste It is important that we strive
effecient in the way we utilise Impact mitigation by establishing to strike a balance between
resources and by this, minimising Group Environment, Health & a common solution for transparent sustaining a high level of product
our environmental footprint. Safety Policy and comparable reporting on quality while also ensuring
waste management. high production efficiency and
ISO 14001 Management System responsible manufacturing
CO2 emissions processes.
Impact mitigation by defining
and implementing specific
projects; investing in sustainable
technology, optimising
transportation and minimising
imperfections resulted in repeated
work.

Performance progress
Energy Consumption1 Plastic Waste
Mwh / tonne produced finished goods Plastic waste as a percentage of raw materials

1.67 1.66 1.66 1.64 1.66 2.0%

GOAL
1.7%
1.4% 1.4%
1.3%

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

1
Changed calculation principle. The historical figures were recalculated accordingly.

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 Sustainability

People & organisation

Health & safety

We strongly believe that it is our people and organisation We are committed to maintaining high standards of health
that bring our values to life and generate our business and safety across the Group’s business units and we
results. Their commitment to our business and our continue to implement new initiatives to help us ensure
customers is vital to the success and long-term growth that our workplace is attractive. We believe this is key to
of our business. People & Organisation is therefore an achieving our long-term objectives.
important focus area.

Scope Guidelines Impact Risk & challenges

Maintaining high standards of Environment, Health & Safety Work-related accidents/heavy It is important to continue
health & safety at our workplace. Policy lifting addressing safety performance as
Impact mitigation by automating a key element of our operations
Health Promotion Policy work processes in the operation and to prevent workplace hazards
areas and investing in equipment and occupational risk in a busy
to remedy risk of manual working environment.
movements and muscular strain.

Performance progress
Accident frequency
Total work accidents per one million working hours

19.2 20.01
15.4
13.6 12.3

2016 2017 2018 2019 2020

1
Including former CGL Pack (Faerch Lorient and Faerch Annecy) and 4PET

CSR Report 2020- Faerch Group A/S 27

 Sustainability

People & organisation

People

Scope Guidelines Tools Impact Risk & challenges

Ensuring our position Human Rights Policy incl. Employee Development We wish to develop our To scale up the organisation
as an ambitious and development, training Review employees to support and thereby continue to
responsible company by and diversity. our strong growth and support our strong growth, it is
focusing on employee Individual Development to be able to scale up the important that we develop our
development and People Policies incl. Plan organisation. people and structures further.
succession management. Employee Development
Policy. Career Development We will strengthen our core
Paths skills and competences in
and across specific functions
On-boarding Programme and expand our succession
management.

We will maximise new

employee integration through
enhanced on-boarding.

Performance progress
Our people are key to our success, and as a result of our rapid growth over manager and possible other stakeholders, and it helps measure progress
the last few years, we need to make sure that we support and develop our and success and ultimately reaching the long-term objective.
people in an adequate way.
We practice career development through internal recruitment. We see
With the acquisition of the Sirap business across five sites in Italy, Poland it as our responsibility to encourage employees to improve their skills
and Spain, we achieved our largest acquisition to date. This called for and remain aware of the opportunities available for their continued
further strengthening of our people development agenda, to reflect our development.
accelerated growth and addressing the following areas:

Our Culture and Heritage

As a rapidly growing company, we want to ensure our strong culture is
Employee Development
integrated into our acquired companies. Building on a deep technical,
material and operational knowledge, we know that our efficient production Career development, internal recruitments
set-up provides a competitive advantage. We are also very aware that our
unique culture of simplicity, agility, execution and decency will be essential 38%
in order to scale up our business even further and to go global. It is the 35%
30% 29%
foundation of our future success as a leader in sustainable packaging 27%
for the food industry and our ability to drive a closed loop model on an
industrial scale.

Employee and Career Development

To be able to provide support and development, we continue to assess
the strengths, preferences and needs of our key people. We also identified 2016 2017 2018 2019 2020
potential risks, e.g. in critical positions where no successor would have
been available when needed in case of retirement, promotion or job
rotation etc.

Therefore, our Employee Development Review process supports the

individual development of our employees.

The purpose of the individual development plan is to ensure a

structured approach in agreeing on, working with and following
up on long-term career development objectives. It provides an
overview of learnings and reflections from both employee,

28 CSR Report 2020 - Faerch Group A/S

Training Examples

Individual Regional Senior Team Site based & Middle

Development Coaching - Management Training Management Training

• Leadership training in the form of a 6 month • Situational Leadership • Understanding the role & expectations of the
individual development coaching • 4D clarity profiles Faerch Manager
• Assessment of the manager’s foundation based on a • Setting SMART goals & making them clear • Learning how to motivate, direct, coach and
personality profile • Diagnosing development levels performance manage people to maximise results
• Through dialogue, selection of top 2-3 priority • Flexible leadership styles & partnering for • Team dynamics & taking control
development areas using the IDP to drive and performance • Performance management using the 4P’s model
follow-up on development progress • Getting things done more effectively • Passengers / Prisoners / Protestors / Players
• Coaching combined with relevant leadership and – time management • Interactive workshop & across the region
management tools and training to support and push • Effective 1-2-1 reviews
for sustainable development • Getting people to self-diagnose and reflect
• Action learning with continuous follow-up based on
the daily leadership challenges

Graduate Programme and Trainees

Faerch’s Graduate Programme offers ambitious and aspiring people the The programme supports young talent in their career development and
opportunity to learn how to navigate in an international and fast-paced adds new knowledge and perspectives to our business.
organisation.
We offer an 18-month programme, in the course of which the graduate will
Initially, four tracks were developed – Operations & Engineering; Technical have an opportunity to learn about our company culture, getting insights
& Innovation; Supply Chain & Procurement and Finance & Transformation. into the different aspects of our business, and developing a strong toolbox.
Due to COVID-19, we have so far only recruited one graduate for the
Operations & Engineering track. We introduced the Faerch Graduate Additionally, with a placement at one of our locations in Europe, the
Programme in 2019, and the first graduate started in September graduate will gain international experience, broaden his or her own
2020.

CSR Report 2020 - Faerch Group A/S 29

 Sustainability

People & organisation

People (continued)

perspectives, and learn about our international markets, challenges and With the great insight into our business and our culture obtained through
opportunities. Through the entire programme, the graduate will have a the programme, further career opportunities will be possible for the right
career mentor to help and guide on his or her professional career path, candidates.
personal growth and development.

Trainees and Apprentices We employ trainees and apprentices to ensure development of

Faerch offers apprenticeships as a unique platform for future growth. competences. We especially focus on four areas:
At this year’s National Danish Entrepreneurship Festival, we were awarded
the winner of the Apprenticeship category. Automation Technician Apprentice Apprentice within plastics

To ensure the right level of technical To ensure the right competences

skills and possible promotion into NPI or especially in Extrusion
other technical roles

Sales apprentice/trainee Finance apprentice/trainee

To promote feeding system from Sales To promote feeding system from

Coordinator to external sales candidate accounting into controlling

Gender Proportion among the Members of the Board elected at the annual general meeting
Members of the Board of Directors
There was no requirement to appoint any new members of the Group’s
Board in 2020. The current members of the Board have not changed. The 20%
Group’s Board continues to be engaged in increasing the total number of women
female members.

100% 100% 100% 100% 100% 80%

men
2016 2017 2018 2019 2020 GOAL

Gender Proportion on Manager Level Manager level

By the end of 2020, the gender distribution among managers was 79%
men and 21% women, trending towards more men compared to women
in manager roles. This calls for an evaluation of our ability to attract
women to leadership positions and not least to retain women in leadership 26% 24% 21%
positions.

We report on the total gender proportion for all managers in the Faerch
2018 2019 2020
Group. In this connection, senior manager and manager represent one
reporting category. 74% 76% 79%

Diversity management at Faerch in general, in accordance with Danish Company

We are an international growth organisation, and we want to maintain our Act No. 610 of 28 April 2015, Section 13 9a.
reputation as a workplace committed to ensuring fair and equal treatment
and opportunities for all employees regardless of age, gender, nationality With a clear objective to enhance diversity in our workforce, we
etc. We foster a workplace culture where differences are respected and promote and encourage equal opportunities, ensuring that all aspects
valued. of our personnel practices promote women’s and men’s equal career
opportunities, including hiring procedures and conditions, recruitment and
Our policy on gender proportion aims to increase the number of women at parental leave conditions. Additionally, we strive, where possible, to find
management level and to improve the representation of women in both female and male candidates in both internal and external recruitment.

30 CSR Report 2020 - Faerch Group A/S

CSR Report 2020 - Faerch Group A/S 31
 Governance

Governance

We take on responsibility have received on-site training, including the majority

Faerch Group is an international organisation committed of relevant Directors, Managers, Sales and Purchasing
to acting as a proper and responsible company at all personnel, and other staff groups such as IT and
times, and we have imposed strict requirements on operational employees. The on-site training of employees
ourselves and our business partners through internal and is often done in smaller groups of 2-5 employees in order
external policies and guidelines. to obtain a good face-to-face dialogue. In addition, a total
of 158 employees have taken and passed the e-learning
Training in fair competition, anti-corruption and GDPR training course in anti-corruption law, and 190 employees
At Faerch Group, we actively support international have taken and passed the e-learning training programme
anti-corruption and fair competition efforts, and we are in competition law. The training enables our employees
dedicated to upholding the highest standards of integrity to execute business negotiations, attend meetings and
and business ethics among our employees and business social events with knowledge and understanding of basic
partners. competition law and anti-corruption law, in order to
protect themselves and the reputation of Faerch Group.
Faerch Group has a zero tolerance for corruption and
anti-competitive activities. At Faerch Group, we are processing personal data in
many areas. To support our employees’ understanding
By implementing guidelines, policies, e-learning and of personal data and how to manage it, Group Legal has
conducting on-site training for Executives, Managers, launched a GDPR e-learning programme in co-operation
Sales and Procurement departments etc., Faerch Group with Plesner (a Danish Law firm). In 2020, a total of 307
works actively to combat inappropriate business conduct. employees completed the GDPR e-learning programme.

In 2020, 15 employees were trained on-site in anti- Furthermore, Group Legal has prepared procedures
corruption and fair competition. A total of 231 employees to ensure basic data subject rights, e.g., right to access

Reported Reported cases Reported cases Reported cases

cases about about unfair about gifts over in our whistle-
corruption competition EUR 200 blower solution

0 0 3 3
2020: 0 cases 2020: 0 cases 2020: 3 case 2020: 3 cases
2019: 0 cases 2019: 0 cases 2019: 0 case 2019: 0 cases
2018: 0 cases 2018: 0 cases 2018: 0 cases 2018: 0 cases
2017: 0 cases 2017: 0 cases 2017: 4 cases The program was
2016: 0 cases 2016: 0 cases 2016: 3 cases launched in 2018

32 CSR Report 2020 - Faerch Group A/S

 Governance

personal data about themselves, right to rectify personal used by our business partners and employees to report
data about themselves and right to erase personal data suspicious, or knowledge of, unethical conduct and
about themselves. Any such data subject request will be criminal acts.
handled and answered by Group Legal.
The whistle-blower hotline was launched in December
Faerch Group has also established technical and 2018 and can be found on our website. In 2018 and 2019,
organisational measures to ensure i) that our personal no issues were reported through the whistle-blower
data is not accidentally or illegally destroyed, lost or hotline. However, in 2020 three cases have been reported.
changed, and ii) to ensure that personal data does not fall All three incidents were investigated by Group Legal
into the hands of unauthorised persons or in any other without finding any actual violations by the Faerch Group
manner processed in breach of the GDPR. or its employees, and the cases have all been formally
closed.
Overall, personal data is deleted when storage no longer
has a factual purpose, which is in line with our Privacy A good relationship with our suppliers
policies that are published on our website. Faerch Group values long-term supplier relationships
based on mutually trusting collaboration. As part of this
In 2021, Group Legal will have continued focus on collaboration, and to ensure that our suppliers adhere
providing training in Faerch Group policies and internal to the same guidelines as we do, Faerch Group has
guidelines within fair competition, anti-corruption developed a ‘Supplier Code of Conduct’.
and GDPR. Regarding GPDR, the following points will
be prioritised i) update the Group’s privacy policies The ‘Supplier Code of Conduct’ reflects the ten principles
according to latest practice, ii) review internal policies and of the UN Global Compact covering human rights, labour
procedures to ensure that they function in accordance rights, the environment and anti-corruption. Today, the
with the intentions, and iii) continued focus on mapping all Code of Conduct has been accepted and signed by more
processes where personal data is processed. than 500 suppliers (mostly suppliers who have a turnover
at Faerch of a least EUR 5,000).
Whistle-blower hotline
Faerch Group’s governance programme is designed to Each Site Director is responsible for ensuring that new
identify and prevent serious offences and criminal acts. suppliers sign Faerch’s ‘Supplier Code of Conduct’, and for
However, even the most effective compliance procedures making sure that all signed Code of Conducts are stored in
cannot fully protect against every conceivable situation. a local folder.

Consequently, Faerch Group has developed a whistle- Faerch’s ‘Supplier Code of Conduct’ was updated by
blower hotline in co-operation with Plesner that can be Group Legal in December 2019.

CSR Report 2020 - Faerch Group A/S 33

 Data basis for sustainability

Data basis for sustainability

Applied reporting practices • Faerch A/S
The reporting practices are based on the significance criteria, • Faerch UK Ltd. (three locations)
which were prepared in connection with certification in • Faerch Liberec s.r.o.
accordance with ISO 14001:2004, ISO 9001, BRC/IoP Global • Faerch Annecy
Standard and national health and safety regulations for selected • Faerch Lorient
production sites. This report also serves as compliance by Faerch • Faerch Buñol S.L.U.
with Sections 99a and 99b of the Danish Financial Statements • 4 Pet Holding B.V. (only incl. in People & organisation - People)
Act. There are specific thresholds for when different conditions
are deemed to be significant. The key figures and values in the This report is divided into topics relating to the five focus areas. The
report are calculated in accordance with the reporting practices data and reporting practices for each of the five focus areas are
described below. listed below. Demarcations are stated for the individual focus areas.

Changes and updating of data Sustainable Packaging

The same measurement and reporting method is used at all CO2 emissions for Faerch trays are based on calculations made
Faerch locations. The accounting policies are changed compared by an independent consultant using the elementary calculation
to 2016 related to the figures for Gender distribution on manager requirements of ISO 16067:2018. The figures include – Raw
level (page 75). It is not possible to recalculate the historical Material Production, Manufacturing, Distribution to Customer
figures. and End-of-fife.

Management report CPET

This report contains, according to the Executive Management CO2 emissions per 1,000 trays are calculated on the basis of
opinion, the information that is necessary for the evaluation of average weight of produced trays in 2019 – 21 g.
the most significant social issues in the company’s activities. This
information is prepared in accordance with Act on Accounting APET
for Social Responsibility and the under-represented gender, cf. CO2 emissions per 1,000 trays are calculated on the basis of
Section 99a and 99b of the Danish Financial Statements Act. average weight of produced trays in 2019 – 12 g.

Management process The share of recycled content has been calculated using
In the winter of 2013, the Faerch board and management purchase data for our production sites. For CPET, 15% additives
adopted a policy whereby Faerch would work more explicitly have been assumed.
with its CSR communication, and thereby report annually on its
social responsibility activities. The management also conducted The savings from using renewable energy is applicable to all
an analysis to identify five focus areas assessed as being of Faerch production sites.
particular relevance to the company and its stakeholders. The
materiality assessment of focus areas was revised in 2016. The The CO2 from distribution to customer is calculated using
focus areas cover topics that are relevant now and that Faerch transportation distance of 1000km by truck and using Steel
believes will grow in importance in the years to come. The Cages as secondary packaging.
activities are all categorised under one of the five focus areas
and will be reassessed annually by the management to ensure End-of-life emissions are calculated using EU average End-of-life
that the categories reflect new influences in society and the scenario.
previous year’s CSR activities. Stakeholders’ interest in certain
issues is central to Faerch ’s choice of content. The collection Food Safety
of information and preparation of the report is carried out in Information in this section is based on approved certifications and
collaboration with the following group functions: HR, Finance, legislation.
Marketing, Legal, QHSE and Technology Development.
Regulation 10/2011 is complied with and all new plastic types are
Data basis for key figures tested internally and by an external analysis institute. All of the
Key figures are calculated by the company. The current report plastic types are tested and the data is stored internally.
comprises the following companies: The certifications, ISO 9001 for quality and BRC/IoP Global

34 CSR Report 2020 - Faerch Group A/S

 Data basis for sustainability

Standard for hygiene and product safety are followed and Demarcation
ensured through audits by external auditors. This report covering electricity consumption only applies to
Faerch’s eight factories. Energy consumption from Faerch’s two
Number of reported cases of migration tests foreign sales offices are deemed insignificant in this context, as
From 2016, in order to measure progress related to food contact it comprises a relatively small percentage of the Group’s total
safety, a quantitative target was introduced. energy consumption.

The target is zero breaches of the established limits. Faerch People & Organisation
reports the total number of tests completed during the year, as Accident Frequency
well as the amount of breaches. The number of work accidents is calculated as the number of
injuries in the given year that resulted in one or more days of
The tests are performed in accordance to Faerch’s migration absence from work. The accident rate is calculated as the number
test program, which continuously monitor products released for of work accidents per one million working hours.
production and encompass analysis of a product recipe involving
examination of different substances in each recipe. The accident frequency for the period 2016-2020 covers both
production and office employees.
Responsible Operations
Energy Sector Demarcation
The consumption of electricity and natural gas is measured in Temporary workers are not included in the report, but any work-
absolute amounts and reported by suppliers via invoices and by related accidents are reported to the Authorities.
reading energy consumption data on the company’s electricity
meters. Career Development
The results in relation to internal recruitment and career
The consumption of raw materials is calculated based on development are calculated on the basis of internal reports from
purchasing statistics and invoices from suppliers. the HR department in the form of a HR report. The total number
of internal recruitments and career development as a percentage
Energy from renewable energy sources were purchased for the of the total number of recruitments and career development in
year in relation to the actual energy consumption and for the total.
future in relation to budgeted amounts.
Governance
Plastic Waste The developed compliance program increases the employees’
Key figures for plastic waste in Denmark are calculated on knowledge about fair competition and anti-corruption and
the basis of statistics from the waste recipient Wastenet. The consists of employee training, e-learning, reviewing group
result is calculated as a percentage in relation to the share of policies and manuals.
raw materials and data is collected internally by the purchasing
department. Key figures for plastic waste in the Czech Republic, Information about the actual staff training is recorded in internal
Spain and the UK are provided and documented by the recipient registration system.
of the plastic waste and reporting from internal sources.
The ‘Supplier Code of Conduct’ reflects Faerch’s expectations
Plastic waste is defined as surplus plastic material in the to our suppliers and is based on the ten principles of the UN
production of plastic packaging that is not reused in production. Global Compact. Most of our major suppliers have already signed
Plastic waste is disposed and removed by a different actor than our Supplier Code of Conduct. Major suppliers are defined as
Faerch A/S. suppliers of items, materials etc. to Faerch.

Data for plastic waste is calculated for all sites covered by this
report.

CSR Report 2020 - Faerch Group A/S 35

 CSR/032020/GROUP

Faerch Group A/S

Rasmus Færchs Vej 1
7500 Holstebro
Denmark

Tel.: +45 99 10 10 10
Email: dk@faerch.com

CVR no. 38812424

(registration number with the Danish Business Authority)

36 CSR Report 2020 - Faerch Group A/S