1
We will assess climate effects in the same way and with the same system as we assess other risks and business risks the company is exposed to. Our sustainability leader analyzes climate risks, and findings and recommendations are presented and discussed in the management group. The board is responsible for risk management and follows up on assessments and targets in connection with the approval of the sustainability report.
We will consider both the short-term and long-term risks, and both physical risk and transition risk. We commit to conducting scenario analyses of the key risks in line with the recommendation from TCFD. In the coming years, we will attempt to quantify the financial effects of climate changes.
In addition to our focus on reducing our own CO2 emissions, as you can read more about in the topic on carbon footprint, we are heavily investing in the development of new technology. We are confident that this direction can solve today's urgent challenges in the industry, such as sea lice and mortality, but that this solution will also help avoid most of the negative risks associated with climate changes. Particularly, the risk of extreme weather, warmer and more acidic seas would be significantly reduced or entirely avoided by Watermoon. Because of this, we also see several opportunities.
We produce an annual climate account and measure reductions against the base year. The development of new technology has also come a long way, and we have conducted several successful production cycles in scale model tests, as well as built our first full-scale pilot. We have not yet quantified the financial consequences of climate changes. We have also not developed scenario analyses. This will be our focus in 2024.
2
We recognize and respect the basic human rights.
We have zero tolerance for all economic crime such as money laundering, embezzlement, extortion, price collusion, corruption and fraud.
We follow the rules that apply at the workplace, and we support and recognize the worker's freedom of trade union, freedom of religion and freedom of expression, as well as the right to a decent living wage.
We have zero tolerance for all forms of child labor and forced labor.
We expect all our partners, suppliers and subcontractors to also comply with these principles.
We are a small and transparent business, and our focus is to build and maintain good attitudes and relations based on mutual trust. Reliability is one of our core values, and we shall be trustworthy. We also expect the same from our customers, suppliers, partners and employees.
In addition to our core values, we have implemented policies and procedures to reduce the opportunities to break the rules and values. We ensure this through e.g., close involvement from owner to operator and segregation of duties between the farms and the office and with our external accountant.
Happy and healthy employees with a decent and fair salary also contribute to reduce the chance that someone might feel pressure or need to break the law or our internal procedures.
We have carried out a risk assessment for violations of human rights in our value chain in line with the requirements in the Norwegian Transparency Act and have published our statement about this work which is available on our website and in this report.
We have also carried out an internal risk assessment linked to the risk of corruption. This shows that the risk is greatest for employees who work in the hall, purchasing and business development, as well as for our managers. We have not carried out specific training in anti-corruption work among our employees, but we plan to complete such training for those employees where the risk is greatest.
We have established ethical guidelines which also cover our anti-corruption policy. These are communicated and made available to all our employees through our HSEQ management system.
We have not identified and cases or suspected cases of corruption or fraud in 2022, neither in the Eide group, nor with our suppliers.
3
100% of our facilities are certified according to the internationally recognized Global Gap standard, a global third-party certification that has a strong focus on both traceability, food safety and social conditions. Global GAP also audits our key suppliers.
Our feed includes marine raw materials in the form of fish oil and fish meal. Part of this comes from off-cuts and by-products, and part comes from wild fish that are unsuitable or unattractive for human consumption. All the marine raw materials in our feed come from fisheries that operate in line with FAO's principles for sustainable fisheries, including by-catch and by-catch, and do not originate from IUU fishing (illegal, unreported or unregistered) or from species classified as critically endangered or threatened in line with the IUCN's Red List.
The marine raw materials included in the feed consist of several species from different areas and have various third-party certifications, the most useful of which are MSC and MarinTrust, as well as fishery improvement programs such as FIP and MarinTrust IP. A small proportion are not certified, which can be attributed to various reasons, such as by-catch from certified fisheries, volume from fisheries where FIP is being established, or a short-term shortage of certified raw materials. According to our main feed supplier, 94% of the marine raw materials came from certified fisheries. You can read more about the marine feed raw materials in the topic on biodiversity.
Of the plant-based raw materials, soya has been the most controversial, usually in connection with the risk of deforestation. Eide therefore only uses European soy, and 100% of this is certified according to the Europe Soya standard. All plant-based raw materials in feed for our fish are GMO-free. Both marine and plant-based raw materials can be traced to our feed suppliers, at least to national level for origin.
4
The Eide family has a tradition of food production that dates back to the 17th century. For nearly 50 years, we have contributed to the development of the Norwegian aquaculture industry. Our perspective has always been long-term, and it will continue to be so.
Most of the salmon produced in Norway, about 90%, is exported to other countries. The EU is the largest market, while the USA is the largest single country. In total, Norwegian salmon is exported to over 100 different countries worldwide.
The Eide Group consists of eleven companies and 128 employees and had a turnover of 1.57 billion Norwegian kroner in 2023. Sea-based fish farming takes place in the subsidiaries Eide Fjordbruk AS and Norforsk AS. Smolt production takes place in the subsidiary Eide Smolt AS, as well as in the associated company Ænes Inkubator AS. Salmon Eye AS operates the group's visitor center Salmon Eye and restaurant Iris. Eide Seafood AS is the sales company of the group, while Eide Båt AS provides operational services to the production companies in the group. Watermoon AS is engaged in the development and commercialization of Eide's new technology for the future of aquaculture, Watermoon®.
In 2023, the Eide Group had about 1,000 suppliers. The number of suppliers includes all suppliers of both goods and services to the group.
In 2023, all our operations were in Norway, and we primarily purchase our goods and services from local, Norwegian businesses. This category includes all our smolt suppliers, electrical and automation services, shipyards for repair and maintenance of boats, rental of boats for fish treatment, and purchase of slaughter services.
We also have some suppliers of goods and services in other European countries. Here, we also consider the risk to be low when the goods or service is based on advanced labor. In some cases, for example, when purchasing larger equipment like feed barges or boats, the hulls may be produced by subcontractors at foreign shipyards. This type of manufacturing involves a combination of advanced and manual labor.
Our work to manage the risk of human rights violations is anchored in our vision to "Set the standard for the future of aquaculture." In our view, it is not possible to set the standard for anything without a fundamental respect for human rights in everything we do.
The work is also anchored in our core values; Cooperative, Bold, Reliable, and Innovative. The value of being reliable means that we should trust each other and stand by what we say and do. The value of being fearless includes that we should dare to speak up when something is wrong and dare to go our own way. We expect the same from our suppliers.
We have also defined four promises that should guide how we run our business. We call these our four Fs; People, Fish, Fjord, and Future. The promise of People deals both with how we take care of the people in the business, both the employees and people at outsourced or suppliers, the relationship with people in the local communities where we operate, and the people who will ultimately eat the products we make.
In addition to these overarching guidelines, we have defined ethical guidelines for the business and our suppliers (Code of conduct).
The implementation of internal due diligence assessments for Eide is carried out in collaboration between the head of sustainability, quality, and procurement in the group, but the overall responsibility for implementation and compliance with legal requirements lies with the management and the board.
Monitoring of Suppliers in areas with higher risk is primarily managed through information gathering or site audits if needed. 2024 is the second year Eide has published a Declaration under the Transparency Act. Eide's declaration is based on annual risk assessments, continuous risk assessment of new suppliers, and special monitoring of suppliers within higher risk groups.
The process and declaration are anchored in company management, and the declaration is signed by the CEO and the board in its entirety. Eide's work with the Transparency Act is also reflected in Eide's annual and sustainability report, with a reference to where the declaration and other information about our due diligence are published.
Based on the work we have done, and the information we have received so far, we have not uncovered cases of actual violations of fundamental human rights or suspicion of such violations.
We have conducted a qualitative, risk-based assessment where we have reviewed the various processes and activities in our business and categorized inherent risks based on the country from which the goods or service is normally delivered and the type of labor used:
Regarding potential risks, our assessment is that the highest risk is related to two supplier groups:
Feed constitutes a large part of our costs and the raw materials for the feed come from a number of smaller subcontractors in various countries, several of which may be vulnerable countries and areas with a low degree of protection.
Production of netting and ropes requires a lot of manual labor and often occurs using subcontractors in low-cost countries, including in India.
Since the last declaration, we have acquired a new supplier within these supplier groups, and in 2023 we have a total of six suppliers within these two categories.
Even though these are areas of higher risk, we have not become aware of any specific cases with discovered negative consequences. Based on the information we have received, we assess that the suppliers have established routines and guidelines for risk assessment, procurement, and supplier control, as well as the conduct of audits and supervision where the risk is highest. All suppliers also have one or more third-party certifications that further reduce risk, under this including Global GAP, ASC, ISO 9001, or "Great Place to Work," and the suppliers are themselves subject to reporting requirements under the Transparency Act. Based on this, we assess that the risk after existing measures at our suppliers is acceptable.
In 2023, our main focus has been on further developing guidelines and requirements for our suppliers, as well as routines and systems for communicating these to suppliers.
We have continued to develop Eide's own general terms and conditions for the purchase of goods and services. Through these, we now set requirements related to the Transparency Act and compliance with our ethical guidelines for suppliers.
We have also worked on revising our ethical guidelines or Code of Conduct for suppliers, and the updated version of these has been published on our website. For the six suppliers we have within the groups identified as high risk, we will take an extra measure by obtaining a signed declaration on our ethical guidelines.
In addition to this, we will also continue the dialogue with the suppliers we have within the identified high-risk groups, and a new supplier within these will be particularly followed up in 2023 through the completion of due diligence actions, as well as risk mapping through dialogue with the supplier and any measures.
The measures we will continue to work on mainly revolve around further developing routines and systems for follow-up and implementation of due diligence assessments, and internal and external communication related to this.
In addition, we will specifically follow up suppliers within the groups of fish feed, and nets and ropes.
Based on our own risk assessments and the implementation of measures where the risk is greatest, we believe that the risk of human rights violations in our supply chain is essentially low.
From the measures we continue to work on, we expect to be able to keep the risk of future negative consequences low, and also ensure appropriate management of any actual consequences.
