Corporate social responsibility (CSR)

Orkla’s primary goal is long-term value-creation for its shareholders, employees, other stakeholders and the communities in which the Group operates. All stakeholders should be able to have confidence in the Group, its products and the way it conducts its business. Orkla pursues business opportunities while respecting human and labour rights and continuously taking the social impact of its business operations into consideration.

CSR WITHIN AN ORKLA CONTEXT

• The document “Goals and Values” describes the basic attitudes and thinking upon which the entire Group and its business and operations are based
• The CSR Principles together with the Principles of Corporate Governance and the Code of Conduct describe the overall responsibilities to which the Group, the management and Orkla employees are committed.
• In addition Orkla has steering documents for specific
matters.

The basic principles for CSR in Orkla are described below. For the Group’s CSR reporting reference is made to www.orkla.com.

BASIC CSR PRINCIPLES

• Orkla is committed to running its business operations in conformity with the principles of the UN Global Compact, which is based on the Universal Declaration of Human Rights and the ILO Convention.
• Orkla’s main contribution to society is to grow profitable and value-creating businesses. This creates jobs and generates tax revenues, locally and nationally, to the benefit of employees, shareholders and society at large.
• Orkla wishes to engage in sustainable business and investment practices which contribute to long-term economic, environmental and social development in all the companies in the Group.
• Orkla will not discriminate on the basis of gender, religion, national or ethnic origin, cultural background, social group, disability, sexual orientation, marital status, age or political opinion.
• As the Group strives to follow and promote Orkla`s “Goals and Values” and other standards and principles, it recognises the intrinsic value of the various cultures in which it operates and will show respect for these cultures in its business practices. The Group believes that this will also enhance business success and when necessary is prepared to provide appropriate training in cross-cultural understanding. Recognition of local culture does not mean acceptance of any violation of basic human and democratic rights or business standards.
• Orkla will maintain a principle of openness and be honest and responsive when dealing with interested parties outside Orkla as well as society at large. This general policy of openness and transparency must not prevent the appropriate protection of information that may be of value to Orkla’s business interests.
• Orkla’s products and services must always be reliable with respect to their quality, origin and impact on personal health and the environment.
• Orkla will ensure that shareholders can have confidence in the company by means of good corporate governance emphasising openness, transparency, accountability, equal treatment and long-term perspectives. The very foundation of good corporate governance is a sound corporate culture underpinned by adequate operational control systems.
• To ensure that its activities are properly adapted to meet local conditions and generate positive benefits for both the Group and the community, Orkla will be open, honest and responsive when communicating and dealing with stakeholders.
• Orkla will maintain high standards of integrity. This means that the Group will be honest and fair in all its business dealings and neither permit nor tolerate any form of corruption. Orkla will promote the principle of free competition.
• Orkla will be sensitive to changes in society’s general expectations of acceptable business behaviour and evaluate and adjust its own practices when necessary.

ROLES AND RESPONSIBILITIES

• To ensure that Orkla’s business practices are in accordance with these basic principles, each business unit is responsible for considering and evaluating the social impact of its own business. If appropriate, operational guidelines for CSR will be developed in accordance with the specific challenges and characteristics of each business unit. Each business unit is responsible for developing and maintaining adequate organisational capabilities to ensure compliance with these corporate principles.
• Line managers are responsible for CSR implementation and for communicating the basic principles in this directive to all employees in their organisation.
• Each Orkla employee and board member is responsible for abiding by the fundamental principles set out in this directive and the Code of Conduct.

FROM PRINCIPLES TO PRACTICE

• Each business unit must evaluate the need for routines to identify potential conflicts of interest with respect to particularly sensitive functions, transactions or areas of responsibility.
• When they have considered and evaluated the long-term economic, environmental and social impact of their business, business units must carry out necessary improvements. When Orkla undertakes significant changes to its operations, the unit in charge must make an assessment of the impact the changes will have on the environment, relevant stakeholder interests and on society in general. This will help to ensure good management of potential long-term social consequences.
• To ensure implementation of this document by its employees Orkla will systematically build competence through introductory and training programmes.
• Orkla’s CSR principles will also be promoted vis-à-vis partly-owned companies and in other business relationships. To secure supplier standards, adequate procedures will be developed for monitoring, evaluating and/or selecting suppliers that conform to Orkla’s principles for social responsibility.

SPONSORSHIP AGREEMENTS

Orkla has entered into a couple of major sponsorship agreements, the aim of which is in some way related to the Group’s activities. The objective is multifaceted:

• Support humanitarian causes in countries in which Orkla operates.
• Create pride and identification with these causes internally in the Group.
• Utilise cultural aspects to underpin and support business relations.

Orkla’s sponsorship projects:

• Main sponsor of SOS Children’s villages. Orkla has financed the construction of five houses in two children’s villages in Russia, and is building two houses in a new children’s village in Latvia in 2005/2006.
• Orkla is a member of a group of companies sponsoring the Ibsen Year 2006, which commemorates the 100th anniversary of the world-renowned playwrighter’s death.
• Sponsorship agreement with the Norwegian National Opera, effective from the inauguration of the new opera house in Oslo.
• In relation to their anniversaries in 2004, Orkla (350th anniversary) and Elkem (100th anniversary) contributed with NOK 35 million and NOK 10 million respectively to various scientific research causes over the next 3 to 5 years.