16 BIOGAIA SUSTAINABILITY REPORT 2021 Materiality and risks In order for BioGaia to contribute to a healthier society, it is essential that the impacts of products on the surrounding community are considered. A significant part of BioGaia’s environmental impact is derived from the production of the products, which includes processing and packaging of the products and rawmaterials. There is also a risk that packaging material leads to pollution and creates waste further down the value chain, which risks having a negative impact on the environment and on human health. It is important that BioGaia takes responsibility for its purchasing, since there is a risk that this may indirectly contribute to environmental degradation and violations of human rights. Through its choice of raw materials and suppliers, the company can influence both the environment and society. BioGaia has an opportunity to avoid the negative impact and instead contribute to the positive development of the supply chain (read more in the section “Responsible suppliers” on page 26). How work is conducted BioGaia strives to improve the products from an overall sustainability perspective. The ambition to integrate social and environmental considerations in product development is documented in BioGaia’s internal Code of Conduct. The result from the life-cycle assessment conducted in 2020 according to guidelines in ISO 14040 and ISO 14044 confirmed that a significant part of the environmental impact from BioGaia’s products stems from packaging and ingredients. More sustainable packaging is a prioritised area and work to identify alternative packaging solutions continued during 2021. The challenge is to find a packaging solution that can be produced in a more sustainable way, with more sustainable materials and with low negative impact at end-of-life, without compromising the need for the packaging to safeguard quality and shelf-life of the contents. During the year, BioGaia conducted a comparative life-cycle assessment (LCA), together with external consultants, in order to study whether blister packs or bottles are the best type of packaging from an environmental and climate perspective. The results found that a blister pack (up to about 90 tablets in the current packaging) is slightly better than a bottle. The analysis also created a scenario to model changes to environmental impact by increasing the proportion of recycled and/or biobased material. The analysis found that the greatest change can be achieved by reducing packaging material. The life-cycle assessments also resulted in more accurate data on the company’s environmental impact and will be used as a basis for the packaging strategy and future measures to reduce the environmental footprint from packaging.The assessments provide BioGaia with a tool to assess the environmental impact of individual products and therefore better assess environmental impacts of decisions made early in product development. During 2020, the recyclability of each packaging was assessed for improvements. Initiatives to improve recyclability by moving towards more mono-materials continued in 2021. BioGaia Production is actively working to minimize the use of unnecessary packaging material, for example the stretch film still being used consists of 51% recycled plastic with 19% lower environmental impact than similar alternatives. It is moreover completely recyclable. BioGaia already primarily purchases environmentally certified paper products. In 2022, the Group will study the potential to certify the packaging under FSC labeling. With respect to ingredients, the life-cycle assessment identified palm oil as the ingredient with the greatest impact on people, the climate and biodiversity. BioGaia is, therefore, actively working to completely phase out palm oil. At the end of 2021, BioGaia could offer palm oil-free variants of the tablet product range worldwide. Oil drops in a palm oil-free variant can now be ordered in the European market. For regulatory reasons, an alternative recipe for palm oil-free drops will be offered to markets outside the EU. The products will be introduced in 2022/2023. The phase out of the drops outside the EU will follow the same model as other phase outs. However, replacing products takes time. In 2021, 26% of tablets and 5% of oils were sold as palm oil free. For the amount of palm oil used today, BioGaia buys credits from RSPO-certified independent smallholders in accordance with RSPO’s Book and Claim system. Progress and priorities going forward This year’s additional life-cycle assessment provided valuable insights into how BioGaia can work to reduce the company’s environmental impact from packaging. The next step is to develop packaging solutions that also meet the require- ments of retaining quality and sustainability for the products. BioGaia will continue to review, improve and test new packaging alternatives based on the new packaging strategy. BioGaia’s aim is that the company will have stopped selling any products with palm oil as an ingredient by 2025. The phase out of palm oil takes time as the products are sold Material and raw material management (GRI 3-3) Healthy products CONTENTS
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