BioGaia Sustainability Report 2021

26 BIOGAIA SUSTAINABILITY REPORT 2021 Materiality and risks It is important that BioGaia contributes to the improvement of suppliers’ sustainability work since most of the company’s impact stems from the supply chain. Suppliers do not operate directly under the control of BioGaia and accordingly there is a risk of indirectly supporting operations that do not comply with BioGaia’s values, for example, in the form of violations of human rights or shortcomings in working and safety standards. However, BioGaia can impose demands on its suppliers and can therefore influence them in a positive direction, one example of which is to require the prioritisation of more sustainable materials. BioGaia has a relatively small share of suppliers for culture, contract manufacturing, packaging and testing. By engaging in long-term and close relationships with these suppliers, BioGaia has a better opportunity to help improve the suppliers’ sustainability agenda. This work reduces sustainability risks in the supply chain. In addition to the subsidiary BioGaia Production, BioGaia AB has external suppliers for production and product packaging as well as culture suppliers and analytical services in Sweden, Denmark, Belgium, Italy, Spain and the USA. Suppliers of ingredients for the products are mainly located in Europe and the USA. However, BioGaia has second-tier suppliers from other parts of the world. Research is conducted mainly together with universities located in Europe and North America. How work is conducted According to BioGaia’s Code of Conduct, all parts of the value chain should be subject to continuous improvement to reduce negative impacts. BioGaia is committed to working to ensure that suppliers and partners adhere to standards of business conduct consistent with those of BioGaia. This includes compliance with laws, regulations, international agreements on human rights and decent working conditions according to internationally accepted labour standards (such as ILO). If unethical behaviour and/or non-compliance is detected in the value chain, it should be reported and suitable action taken. BioGaia conducts its work on sustainable sourcing through a risk-based assessment, the Supplier Code of Conduct, dialogue and monitoring. The Supplier Code of Responsible suppliers (GRI 3-3) Conduct specifies BioGaia’s minimum requirements within areas such as human rights, working conditions, environment, business ethics and anti-corruption. The Code is part of the business contract with suppliers. Suppliers with an assessed higher risk, for example based on the region of operation, are requested to complete a self-assessment in respect of their degree of compliance with the requirements of the Supplier Code of Conduct. These are then monitored jointly by BioGaia and the supplier and followed-up as part of the yearly Supplier Risk Assessments. The assessments are conducted in a structured manner to identify risks and take mitigating measures where deemed necessary (see Product quality and product safety, page 15). Sustainability impacts are also managed continuously in the ongoing dialogue with the suppliers. Progress and priorities going forward By the end of 2021, 100% (100) of BioGaia’s suppliers of analytical services, contract manufacturers and culture producers had signed up to the Code of Conduct or presented their own equivalent version. During 2021 no new suppliers of these services were contracted in regions with higher risk, which means no new assessments have been carried out. In the life-cycle assessment process in 2020, significant impact areas and possible opportunities for collaborations to reduce greenhouse gas emissions were identified and were further explored during 2021. These have, however, yet to result in any concrete measures. Key suppliers that have signed the Supplier Code of Conduct (BSD 6, GRI 414-1) 2021 2020 2019 Contract manufacturers and culture producers 100% 100% 100% Analytical services 100% 100% 100% New suppliers that have signed the Supplier Code of Conduct during the year1) 0 0 – 1) No new contract manufacturers, culture producers or analytical services were added during the year. Healthy networks CONTENTS