6. ESG

This ESG chapter is part of Avebe’s integrated annual report for the 2024/2025 financial year (1 August 2024 to 31 July 2025). The report covers the activities of Coöperatie Royal Avebe U.A. and its subsidiaries, including relevant parts of the value chain where material sustainability topics have been identified. A further step has been taken to align the sustainability information with the upcoming CSRD requirements and the associated European Sustainability Reporting Standards (ESRS). Where applicable, elements of the Global Reporting Initiative (GRI) standards have also been integrated. The reporting boundaries are aligned with Avebe’s financial consolidation scope. For material topics with impact beyond the organisation, information is also included about upstream and downstream activities in the value chain. This scope is based on the outcomes of the double materiality analysis conducted.

In the 2022/2023 financial year, we launched the ESG-CSRD project with a dedicated project group. 

The team consists of employees from the Finance, Internal Audit, and Sustainability departments, under the responsibility of the Chief Financial Officer (CFO). A broad group of internal experts is involved in the process, and external support is also utilised. Below is the organisational chart of the project structure:

The board, executive committee, and supervisory board attend multiple annual meetings focused on sustainability topics, both internal and external. Program managers report on material impacts, risks, and opportunities within their strategic programs. Topics discussed include sustainable agriculture, energy management, biodiversity, waste, transport, and (future) legislation.

Sustainability strategy is embedded in Avebe’s planning and control cycle. Monthly reports are submitted to the board, executive committee, and supervisory board on key performance indicators related to sustainability. Knowledge from strategic sustainability programs is periodically shared by experts in water, energy, circularity, sustainable procurement, and sustainable agriculture.

Specialised sustainability knowledge, developments, and applicable legislation are managed by the ESG-CSRD project team and the sustainability office under Operations. They report periodically to the board and supervisory board on CSRD implementation progress, ESG developments, and performance monitoring.

Climate change, with a focus on CO₂ reduction, affects both our own operations and our value chain. The production of (modified) starch and protein requires energy and results in CO₂ emissions - both direct and indirect. Key risks include climate-related regulatory changes and legislation aimed at reducing emissions in production and agricultural activities. CO₂ emissions also incur substantial costs, such as purchasing emission rights. By saving energy and switching to sustainable energy sources (cost-effectively), we can reduce CO₂ emissions.

Our Accelerate and Strengthen strategy outlines our sustainability goals for 2030, a key milestone toward climate neutrality by 2050. Avebe aims to align its CO₂ reduction targets with a maximum global warming of 1.5°C, in accordance with the Paris Agreement. For the period 2023–2030, we target a 30 per cent reduction in CO₂ emissions, using 2022/2023 as the baseline. This target applies to scope 1 emissions: direct greenhouse gas emissions from our operations. Scope 2 emissions (indirect emissions from purchased electricity and heat) are already zero, and we aim to maintain this through 2030. Our scope 1 and 2 emissions (market-based scope 2) are composed as follows: 99 per cent of the emissions result from the combustion of natural gas. Of this, 57 per cent is related to electricity generation in the combined heat and power plants, 36 per cent to steam production for manufacturing processes, and 6 per cent to directly fired dryers and central heating systems.

For our Scope 3 emissions (indirect CO₂ emissions caused by third-party business activities), we also have the ambition to reduce them by 30 per cent compared to the reference year. By making this distinction in scope, we align with the way governments formulate targets for the reduction of greenhouse gases. Scope 3 emissions include indirect emissions from, among other things, the procurement of raw materials, transport and packaging materials. These categories represent a significant part of our total CO₂ footprint. In our strategy, we have included the CO₂ and energy reduction program "Towards climate neutral", and Scope 3 is incorporated into the "Sustainable procurement" program.

From the strategic program, a concrete plan has been drawn up to meet the reduction targets for Scope 1 (and 2) emissions. This plan is divided into two parts: a 30 per cent reduction by 2030, supported by an action plan with specific required measures and investments.

Electrification and process optimisation
One example is the planned investment in an electric steam boiler at our production site in Foxhol in 2025, which will result in CO₂ savings in the 2025/2026 financial year. In addition, we are seeking further improvements in our processes and activities aimed at increasing the efficiency and effectiveness of our production. This will save us approximately 1.5 per cent energy (and also CO₂) per year. For the target of becoming climate neutral by 2040, we have mapped out the options available to Avebe for completely CO₂-neutral production. We are closely monitoring developments in this area. The first steps towards electrification have been taken through the implementation of membrane technology and electric steam boilers. There are plans for further electrification.

Grid capacity and renewable energy
Grid congestion poses a potential bottleneck for further electrification and the expansion of renewable energy generation. At present, two solar parks at Avebe sites are already connected via Avebe’s electricity grid. We are exploring the possibilities for further connection of local renewable electricity production.

Sustainability in the supply chain
For our Scope 3 emissions, we already have a clear view of the most important categories for us. Therefore, we have already initiated several projects, including initiatives in the areas of chemicals, transport and packaging materials. We also achieve savings by taking these factors into account in tendering processes with suppliers. In an increasing number of procurement processes, we apply minimum sustainability criteria and sustainability is systematically considered in our selection and contracting processes. In the coming year, we will continue with the ongoing projects and keep looking for structural improvements in our supply chain.

We have translated energy management into the availability, affordability and consumption of energy at Avebe. Excessive costs make us vulnerable because we consume a large amount of energy. Due to our high energy consumption and the resulting CO₂ emissions, we have a negative impact on the environment and climate change. An important risk is climate-related changes in legislation and regulations. This could result in rising costs for energy consumption. It could also create difficulties in obtaining permits for future investments. Grid congestion may pose a risk to the future availability of electricity, especially if our combined heat and power plants are phased out during the energy transition.

Energy management is closely linked to the theme of climate change mitigation (see section above). For the strategic period 2023-2028, we have set sustainability goals for 2030, as that year is a key milestone for us. In addition to CO₂ reduction, we aim to save at least 1.5 per cent in energy consumption annually at each production site. Our strategy includes the CO₂ and energy reduction program “Towards Climate Neutral.”

Our members face increasing challenges in cultivating starch potatoes. Climate change, stricter regulations, rising cultivation costs, and competition for farmland are putting pressure on raw material supply. Avebe needs early insight into potential changes in raw material availability and must respond with fair payout for members, robust potato varieties, and a proactive role in promoting sustainable starch potato cultivation. Insufficient progress in these areas risks making cultivation less attractive. A decrease in starch potato volume also has financial implications, affecting factory coverage and potential sales volumes.

At the same time, Avebe, through its members, also impacts the environment. That’s why we actively promote sustainable cultivation, including through robust varieties developed by our breeding company Averis and through knowledge sharing.

Avebe continuously monitors the development of starch potato acreage in the short, medium, and long term. Based on this, we anticipate market developments with our value-added strategy. Our goal is to rapidly and significantly improve the financial attractiveness of cultivation and maintain acreage at a healthy level for the cooperative.

We actively collaborate with members and chain partners to ensure profitable and sustainable starch potato cultivation. This focuses on yield and profitability within a sustainable cultivation plan. We maintain healthy soil, minimise environmental impact, and promote positive effects wherever possible.

A strong performance indicator with fair payout for our members is essential to keep cultivation attractive, especially in the context of rising costs and increasing competition in the field. Therefore, we focus on robust potato varieties that are more resistant to drought and disease pressure, require fewer crop protection products, and deliver higher yields per hectare. These varieties are developed and marketed through our breeding company Averis. Key strategic goals include:

• Securing starch procurement/acreage at a strategic level;
• Reducing the footprint in farmers’ cultivation practices;
• Intensifying support for new varieties.

By combining efforts in profitability, robustness, and sustainability, we strengthen the foundation for a stable and future-proof raw material supply.

Breeding and logistics assurance
Avebe focuses on improving disease resistance in Averis varieties and developing and promoting robust varieties with lower climate impact, for example through reduced nitrogen requirements. We also continue to invest in our business setup with organised transport and strengthening our image as a reliable potato starch processor.

Knowledge sharing and cultivation support
We actively facilitate the exchange of knowledge and experience on topics such as climate, soil, water, crop protection, and weed control. We proactively support our members in finding solutions to cultivation challenges, aiming to make a valuable contribution as a cooperative. The Biodiversity Monitor pilot (see explanation below) contributes to future-proof cultivation. By providing insight into sustainability indicators at the farm level, we enhance the societal value of the cooperative and build broader legitimacy for starch potato cultivation.

To reduce the impact of our activities, we have set goals for reducing water intake for many years. Approximately 90 per cent of the water withdrawn by Avebe is surface water. The Aqueduct Water Atlas from the World Resources Institute provides information on water-related risks per location. For Avebe’s production sites, the water risk is rated as ‘low’, except for the Malmö site, which is rated ‘low-medium’. Other surface water-related risks include variations in availability and drought. These are rated ‘low-medium’ and ‘medium’ respectively for all six production sites.

Water availability poses a real and structural risk. This risk can be managed by reducing dependence on surface water intake. Avebe has included the importance of reducing and efficiently using water withdrawals in the strategic program “Every drop counts,” which is part of the broader strategic program “Plant-based sustainable growth.” The strategic goal for 2030 is to reduce salt emissions so that water intake can be lowered by 4.8 million cubic meters compared to 2022/2023.

Our primary focus is on reducing the salt content in wastewater to achieve our goals. We are rolling out concrete plans per production site, often tailored to specific products.

Site-specific implementation
For our largest production site in Ter Apelkanaal, the action plan has been completed, and we are halfway through the implementation phase. Under stable conditions, we expect water intake at this site to decrease by approximately 2 million cubic meters per year compared to the reference year 2022/2023. This result should be effective in the year 2027/2028. For our Malmö site, the action plan has now started. A quantitative estimate of the impact is not yet possible.

Optimisation of operational processes
We continue to focus on stable operations to minimise water intake. We also aim for optimal cooperation between our production sites to reduce overall water demand.

Avebe produces residual streams with a net negative economic value. We aim to prevent and valorise these streams as much as possible through applications with maximum economic and ecological value. This will minimise or eliminate the use of primary (new) raw materials, thereby increasing Avebe’s circularity. We illustrate this using the Lansink Ladder, which ranks waste processing methods from most to least environmentally friendly: prevention, reuse, recycling, energy recovery, incineration, and landfill. In our Accelerate and Strengthen strategy, we have included several objectives related to residual streams in our “Increasingly circular” program:

• Establish internal reporting on resource use and circular economy;
• Minimise the amount of residual streams;
• Improve the operational margin of our residual streams.

Initially, we mapped the net negative value of various residual streams and defined specific goals for each.

Our strategy focuses on maximising added value in the construction and food packaging industries. We achieve this through targeted growth in volume and margin within these segments, responding to sustainability trends and co-developing innovative product solutions with customers. Within the strategic program “Targeted industrial growth”, we emphasise safety, sustainability, and innovation as the foundation for our growth. The strategic focus is on strengthening our market position, accelerating product development, and improving operational efficiency.

Our approach is based on close collaboration between commerce, market development, and marketing teams. The action plans include:

• Business development: Identifying application areas where Avebe’s products and expertise offer unique solutions;
• Co-creation with customers: Joint development of solutions tailored to specific customer needs and market demands;
• Innovation and sustainability: Integrating circular principles and bio-based product development into our processes.

This approach enables us to proactively respond to market developments and increase our impact on people, the environment, and society.

Safety has been a key priority at Avebe for many years. We want all employees, suppliers, and visitors at our sites to be able to work safely and return home safely. Nevertheless, accidents do occur, negatively affecting the safety and health of our employees. A lack of safety measures poses risks to individuals and to Avebe as a whole. These consequences include production downtime, sanctions, legal liability, and reputational damage. This can undermine trust in Avebe and its products, potentially impacting revenue.

We strive for a safe workplace to effectively manage risks. Additionally, productivity and process efficiency improve when employees and visitors are well-informed about safety rules and protocols.

Safety is part of the healthy foundation of our Accelerate and Strengthen strategy and is therefore embedded in our operations. We aim to foster a safety culture based on trust, credibility, and transparency. Our main objectives are:

• Minimising injuries and other safety incidents;
• Ensuring continuity of our operations;
• Developing authentic leadership aligned with Avebe’s core competencies.

Our ultimate goal is to minimise the number of incidents, ideally achieving zero safety incidents.

Read more about our Accelerate and Strengthen strategy in chapter 4.

We apply the following approach:

Behaviour-based safety program
Last year, we began implementing a behaviour-based safety program across the organisation titled “Life Saving Rules.” These rules represent critical agreements and practices that Avebe does not compromise on. This means we always follow the Life Saving Rules, even when it’s difficult or may lead to production loss. By doing so, employees and other people working at our sites can return home safely at the end of the workday. The rules behind the Life Saving Rules concept already existed but were sometimes too generally formulated. Strict compliance requires clarity in these rules and resolving the barriers employees face in following them.

Safety training
We have defined which training courses are necessary for various roles to ensure safe and responsible working practices. All employees receive safety training at least once a year. These are offered through our internal digital learning platform and are mandatory. This ensures that every employee can work safely on-site with the right safety knowledge.

Digital work permits
A component of the Life Saving Rules is improving the quality of work permits. A work permit outlines how maintenance work can be carried out safely. We have implemented a digital work permit process at all Dutch production sites, replacing the paper version. The main advantage of the digital process is the mandatory workflow with required fields and checklists that are automatically triggered based on the type of work. In addition to its mandatory nature, it helps employees perform their tasks more easily. Last financial year, we developed a specific training for this component, including both theory and practical parts, to minimise the gap between training and real-world application. Approximately 500 employees have now been trained.

The composition of the workforce - now and in the future - is crucial. Avebe is facing an aging workforce in the coming years, while there is a shortage of skilled professionals in various fields. Additionally, the world is changing faster than ever: digitalisation, artificial intelligence (AI), climate change, the “challenge for talent”, and competition for agricultural land demand agility. Attracting, developing, and retaining sufficiently qualified personnel requires significant effort. Insufficient attention to this may result in reduced attractiveness in the labour market and an inefficient organisation. As an employer, we also have a major impact on our employees. Our impact lies in providing an inclusive working environment and facilitating development.

Safety is a foundational element of our Accelerate and Strengthen strategy and is embedded in our operations. We aim to foster a safety culture based on trust, credibility, and transparency. Our main focus regarding food safety is ensuring compliance with food safety regulations and customer requirements.

Read more about our Accelerate and Strengthen strategy in chapter 4.

We apply the following approach to implement our food safety strategy:

Building a food safety culture
Avebe continues to strengthen its food safety culture. Building such a culture goes beyond implementing protocols and procedures - it emphasises integrating a safety mindset into daily practices and employee attitudes. A strong food safety culture involves a commitment from everyone in the organisation to prioritise and uphold food safety standards. This includes attention to hygiene, cleanliness, and compliance with established food safety rules and guidelines. Our central QESH organisation (Quality, Environment, Safety, and Health) ensures consistent compliance through clearly defined procedures and work instructions.

Internal and external audits
In addition to annual external audits for food safety certification, Avebe actively conducts internal audits to monitor compliance with food safety rules.

Complaints procedure
To safeguard product safety, customers can report concerns through our complaints procedure. Food safety-related complaints are processed via our general complaints system but are flagged as food safety issues. Where necessary, corrective actions are taken, and a response is provided to the customer. Investigations are conducted internally and, if needed, externally to determine the cause and implement appropriate measures.

Within our Accelerate and Strengthen strategy, two programs are specifically aimed at growth in plant-based food products:

• Good food++: Focuses on accelerating the market introduction of our existing portfolio of plant-based food ingredients. This is done in close collaboration with (potential) customers, with co-creation at the core.
• New applications: Focuses on developing new application areas for potato starch and protein within the food industry. This increases our relevance in emerging market segments.

Within both programs, concrete product-market combinations have been defined. Together with our customers, we work toward sustainable growth by developing plant-based solutions that meet the functional and nutritional needs of the market.

Avebe stands for fair and transparent business practices. This means we handle the interests and rights of employees, suppliers, farmer-members, customers, and our environment with care. A suitable corporate culture is crucial in this regard. It translates into being a reliable employer, supplier, and partner, and gives Avebe a strong societal role and position. We also stand for responsible lobbying and maintaining relationships with local and national politics. For us, ethical business conduct and responsible lobbying are very important. Strong business ethics allow us to positively differentiate ourselves within our sector. A risk is that Avebe may not be perceived as a company that upholds fair and transparent business practices.

As a cooperative, Avebe is known for its transparent and democratic business model with a long-term strategy. Therefore, Avebe applies the principles and best practices outlined in the Governance Code of the National Cooperative Council. This enhances transparency and the quality of governance and oversight within our cooperative.

Fair and honest business conduct with respect for people and the environment is central to our approach. This cannot be captured solely in procedures and guidelines. That’s why we actively promote a culture of respect and trust, where there is no room for undesirable behaviour or unethical conduct. We communicate our values and standards clearly and provide employees with channels for questions or reports.

Our approach includes training, confidential advisors, and complaints procedures, all supported by a solid foundation of policies and procedures that define Avebe’s values and standards.

Corporate Governance Policy
Our organisational structure, values, business principles, and behavioural standards toward stakeholders are outlined in our Corporate Governance Policy. All codes of conduct are shared with employees and published on our website.

SpeakUp and Whistleblower policy
Avebe has a SpeakUp policy that allows anyone to anonymously report serious violations that cannot be reported through other means. Reports can be made by phone or via a secure website, without human intervention. To ensure confidentiality, the SpeakUp service is operated by an independent external party. Avebe also has a whistleblower policy.

Responsible Sourcing Policy
We apply a responsible sourcing policy, which firmly embeds Corporate Social Responsibility (CSR) requirements for our suppliers. This is essential to how we conduct business. Responsible procurement and outsourcing are among the most important factors contributing to our CSR. Our business practices should improve the lives of people in our supply chain and must not unnecessarily harm the environment. Our Responsible Sourcing Policy (RSP) provides the guidelines we follow and describes the responsibility we take within our supply chain. CSR is an integral part of our business activities. The RSP is fully aligned with our Corporate Governance Code. We require our suppliers to comply with the principles outlined in the policy.

We apply the following approach regarding business ethics:

Training in business conduct
Employees receive various online training courses on responsible business conduct. These are offered via our internal digital learning platform and are mandatory. One example is the “Competition” training, which covers competition law and how to interact with suppliers, competitors, and other external partners.

Sanctions policy
Avebe has a sanctions policy under which all customers and suppliers are automatically screened daily against current international sanctions lists.

Stakeholder management and engagement
Avebe actively engages in advocacy and lobbying for our farmer-members and the cooperative on legislation related to agriculture, water, energy transition, and the future of plant-based products. Our efforts focus on:

• Agriculture: Avebe is involved in policymaking and regulation in agriculture. We strive for a balanced approach that supports both the earning capacity of our farmer-members and the sustainability of our products and farming practices, while ensuring national and European goals are met.
• Water: Avebe is involved in policymaking and regulation concerning water, including water quality (e.g. the Nitrates Directive and Water Framework Directive), prioritisation during shortages, and water availability at our production sites.
• Energy Transition: Avebe supports the shift to sustainable energy sources and works on more efficient energy use in our processes. We monitor developments in energy legislation and implement measures to reduce our ecological footprint across the supply chain.
• Plant-Based Future: As a producer of potato starch and protein, we contribute to the transition from synthetic and petrochemical products to plant-based alternatives. Avebe also collaborates with competitors and stakeholders to promote innovative solutions, such as through the Fascinating program.

A stakeholder table is included as an appendix, providing further details on our involvement in these topics.