Koninklijke A Ware Food Group (Royal A Ware)

Management Board

The Management Board consists of three executive members (0% women): CEO Jan Anker, CFO Antonio Rodriguez and COO Klaas de Jong. The Management Board is responsible for the overall management of Royal A-ware including all sustainability-related matters. The Management Board, chaired by the CEO, sets Royal A-ware's strategic agenda ensuring business continuity and long-term sustainable value creation.

Composition

• Jan Anker (CEO) - Grew up in the cheese business and took over part of his father's business in 2001. In the following years, Anker Cheese experienced significant growth under his leadership and eventually merged with the family-owned Bouter Cheese to form Royal A-ware.
• Antonio Rodriguez (CFO) - Has been CFO of Royal A- ware since January 2015. Before joining Royal A-ware, Antonio worked for more than 20 years in various financial management positions at larger Dutch (family) companies. Besides managing the financial disciplines, Antonio is also responsible for strategy, IT, HR, Legal and Procurement, among others.
• Klaas de Jong (COO) - Is an expert when it comes to the dairy market and has been responsible for all operational activities within the Royal A-ware management since 2012. He is also responsible for the relationship with dairy farmers.

Supervisory Board

The Supervisory Board consists of five non-executive members (40% female) acting both as supervisor of and sounding board for Royal A-ware's Management Board. The Supervisory Board has a diverse composition with broad experience across a wide range of matters, including sustainability. The Supervisory Board is briefed on sustainability related matters at least once a year.

Composition

The Supervisory Board consisted of supervisory board members mentioned below. In September, Jan Brouwer stepped down as member. In the same month, Carolina Wielinga joined and the chairmanship transitioned to Piet van Schijndel.

• Mr. Van Schijndel (Chairman) - Former member of the Executive Board of Rabobank
• Mr. Alblas - Former CEO of Lamb Weston/Meijer
• Mr. Bouter - Former owner of Bouter Group
• Mrs. Pon - Chair Supervisory Board of Pon and URUS and organic farmer
• Mrs. Wielinga - (President) Member Supervisory Board of NX Filtration and Gasunie, former CFO of various companies

Management competences

At management level, the necessary expertise and competencies are outlined in the role profiles for various positions. Individuals continuously develop their skills – including through vocational education - to fulfil their roles effectively and stay informed on sustainability advancements. At supervisory level, different members gained expertise and knowledge on sustainability topics during their career as executives.

The Supervisory Board is briefed on sustainability related matters at least once a year.

At the Royal A-ware Group level, several material sustainability topics are already incorporated into regular reports submitted to the Management Board and Supervisory Board. Departments such as Human Resources (HR) and Quality, Safety, Health, and Environment (QSHE) provide periodic updates, ensuring that these sustainability topics are an integral part of internal reporting procedures.

In 2023 and 2024, Royal A-ware developed Greenhouse Gas Reports for the Management Board, the Sustainability Steering Group, and the Supervisory Board. By 2025, all other material topics will also be fully integrated into standard reporting processes, becoming a fundamental component of internal management procedures.

The CEO is frequently informed on sustainability related matters by the ESG Director of Royal A-ware. The Management Board has delegated the implementation of the sustainability strategy to the Sustainability Steering Group. The Management Board receives quarterly updates, as well as ad hoc when necessary, on sustainability progress via structured monitoring reports.

Insights regarding sustainability-related matters are regularly communicated by the ESG director to the Sustainability Steering Group and the Management Board.

At present, Royal A-ware does not have a remuneration policy linked to the achievement of sustainability targets.

The Management Board is responsible for overall monitoring of sustainability impacts, risks and opportunities, including target setting.

In 2024, Royal A-ware initiated the development of specific controls and procedures, including data validation and segregation of duties, aligned with best practices in financial reporting. Further enhancements to these processes will be implemented in 2025.

At the Royal A-ware Group level, several material sustainability topics are already incorporated into regular reports submitted to the Management Board and Supervisory Board. Departments such as Human Resources (HR) and Quality, Safety, Health, and Environment (QSHE) provide periodic updates, ensuring that these sustainability topics are an integral part of internal reporting procedures.

While existing monitoring reports already provide the Management Board with insights on ESG risks, impacts and opportunities and progress towards targets on ESG topics, a more comprehensive monitoring mechanism is set to be introduced in 2025. Current monitoring reports cover specific topics such as Scope 1, 2 and 3, HR and Health & Safety.

Mission & Vision - The shortest route from consumer to cow

To create the most efficient and responsible supply chain, ensuring the shortest route from consumer to cow. By maintaining full control over our value chain, we can optimise processes, enhance efficiency, and align production with evolving sustainability requirements. This enables us to produce and transport goods effectively while managing milk streams in accordance with the diverse sustainability expectations of our customers.

We continue to witness growing demand for products that combine high nutritional value with minimal environmental impact. By prioritising customer needs and sustainability, we strengthen our market position and ensure long-term resilience.

To further enhance our sustainability impact, we are intensifying our focus on responsible sourcing, efficient processing, and close collaboration with dairy farmers. Our agility and innovative capabilities allow us to respond swiftly to developments across our cheese production, dairy products, and milk powder divisions. Moreover, we maintain a flexible approach in addressing customer requirements, sustainability challenges, and quality assurance across the entire value.

Strategy

We firmly believe in dairy as a source of essential nutrients and are committed to meet the growing global demand for dairy as a fundamental component of a sustainable and healthy diet. With a practical, result-driven approach and a strong passion for excellence, we deliver high-quality products to our clients in an efficient and sustainable manner.

Our overall strategy has a number of key elements:

• We are growing thanks to long-term partnerships: we are building the future with strategic partners who share the same goals.
• We manage efficient, sustainable agri-food chains: in recent years, we have invested in the development and management of the entire chain, from consumer to cow. This strengthens our independent position and flexibility.
• We have a demand-driven portfolio of products and services: customer needs are paramount in the development of our products.
• We manage our risks by offering and utilising different milk flows, products and sales channels.
• We combine sustainability and profitability: sustainability and profitability go hand in hand and ensure that we build a stable and financially healthy company for future generations.
• We constantly strive for improvement: going forward, we will continue to perform at the level that our customers have come to expect.
• We foster our entrepreneurial and flexible culture: this allows us to respond quickly to developments and customer requests.

Business Model & Value Chain

Royal A-ware is an international family-owned company with over 130 years of experience in food and 100 years of experience in logistics. In several countries, we produce cheese, daily fresh dairy, cream, milk powder and tapas entirely according to our customer's wishes. We produce dairy products with the highest possible nutritional value and the lowest possible impact on people, animals and the environment.

We are also a logistics partner in agri-, food- and special transport. For instance, we transport potatoes and other agricultural products, chilled food products, animal feed, flour and liquid dairy.

Together with dairy farmers and other partners in agri and food, we create and orchestrate efficient, sustainable chains. We always aim for the shortest route from consumer to cow, ensuring that all stakeholder in the chain enjoy long-term benefits. Every day, nearly 5,000 employees are committed to this worldwide.

Our inputs: milk, cheese and other raw materials

Besides milk and cheese, the main resources are transport equipment and fuel. Milk is mainly supplied by dairy farmers under contract to Royal A-ware. Thanks to our personal contact with dairy farmers and our no-nonsense approach, we continue to see growth in the number of dairy farmers supplying milk to us. Next to milk supplied by dairy farmers, we also buy externally available milk.

Our outputs: dairy products

We make various milk and cheese products: milk, yoghurt, mozzarella, whipped cream, different types of cheese, as well as grated and melted cheese. Royal A-ware produces mainly private label products and supplies the food industry, retail and food service customers. The main market for us is Europe, but we have customers worldwide. With our transport company, we are also specialist in transporting agricultural products, animal feed, chilled food products, dry and liquid food products.

How do we engage our stakeholders?

By structuring our organisation around customers and markets, we seek common ground to address societal challenges and foster partnerships. Our stakeholder engagement is deeply aligned with the company's purpose and strategy. We strive for open, meaningful and effective dialogue with both our internal and external stakeholders about not only our activities, but also about their needs and expectations. This approach enables mutual learning and ensures that diverse perspectives are taken into account and embedded in our ESG strategy.

We carefully evaluate stakeholder input while upholding our responsibility to safeguard the long-term continuity of Royal A-ware. In doing so, we emphasise the creation of long-term sustainable value. We acknowledge that stakeholders may have diverse and sometimes conflicting perspectives and interests. Insights regarding sustainability-related matters are regularly communicated by the ESG director to the Sustainability Steering Group and the Management Board.

Double Materiality Assessment - Stakeholders

The primary objective of our double materiality assessment was to gain insight into how our key stakeholders perceive the sustainability impacts, risks, and opportunities associated with our organisation. We identified and engaged with stakeholders who are directly affected by our business activities or who rely on information from our annual report.

These stakeholders include employees, dairy farmers, customers, suppliers, non-governmental organisations (NGOs), and governments, among others. Additionally, input from the Sustainability Steering Group was incorporated into the assessment. Dairy farmers were represented through a focus group in the Netherlands, while employees were represented by the established works councils.

Stakeholder Engagement Overview

How we engage stakeholders by topic:

Greenhouse gases

• The Sustainability Steering Group is informed via monthly meetings about the progress and findings surrounding Royal A-ware's sustainability policy
• With the Livestock Affairs department (Netherlands) and the Dairy Affairs team (Belgium), there is frequent consultation on reduction plans and possible measures on dairy farms
• With dairy farmers who supply us, regular consultation takes place through the focus group
• Discussions are ongoing with Farmdesk on the rollout of the tool that calculates the milk footprint among our (Belgian) dairy farmers

Raw materials

• Employees from different divisions with knowledge of packaging were consulted for setting up the policy around packaging
• Environmental coordinators, waste service providers, the Procurement department and plant managers were involved in understanding the waste streams
• Consultation of (potentially) affected communities involved in raw material sourcing (upstream value chain) is part of the due diligence policy

Material impacts, risks and opportunities

Based on the outcomes of the double materiality assessment, each material topic is reported in accordance with the disclosure requirements per standard. Royal A-ware has evaluated at data point level if these were material.

For Royal A-ware, climate change is a material topic and therefore we will report on ESRS-2. As this is the first double materiality assessment for Royal A-ware, no changes can be reported from the previous period.

The risk and opportunity assessment for the purpose of establishing double materiality is also taken into account when assessing risk management measures at strategic level.

Double Materiality Assessment Results

Stakeholders identified 'greenhouse gases' and 'employee health and safety' as top priorities for Royal A-ware. Additionally, within dairy operations, 'more sustainable packaging' was highlighted as an important focus area.

Material themes leading to pillars

Based on the outcomes of the double materiality assessment, the Sustainability Steering Group identified the pillars of the sustainability strategy: Greenhouse gases, Product, Raw materials, Dairy farming, Employees and Respectful collaboration. Our sustainability strategy is based on these pillars.

Interaction between risks and opportunities in relation to strategy

Royal A-ware has identified the following risks and opportunities:

Impacts, risks and opportunities of own operations

• Dairy production: Covers all activities from the transport of raw milk to the production of various dairy products
• Facilities: Dairies, packing plants and warehouses
• Transport: Covers all transport activities of mainly agricultural products
• Transport facilities: Trucks

Impacts, risks and opportunities of value chain

• Dairy farming: Keeping dairy cows to produce milk and producing their own (rough) feed
• Facilities of dairy farming: Barns, arable land and pastures
• Arable farming: Growing crops on land
• Facilities of arable farm: Barns and arable land

Opportunities

• Royal A-ware has state-of-the-art production sites. This allows us to use energy efficiently which helps reduce greenhouse gas emissions
• Organising the value chains efficiently and sustainably helps reduce greenhouse gas emissions in the chain
• Reducing greenhouse gas emissions in the supply chain contributes to achieving our climate ambitions and those of our customers

Royal A-ware has conducted this analysis on impacts risks and opportunities in relation to ESG-topics for the first time. As a result, no changes of material impacts, risks and opportunities from the previous reporting period can be reported.

Double Materiality Assessment Process

To comply with Environmental, Social and Governance (ESG) standards, Royal A-ware assessed its impact using a double materiality assessment. The results of this analysis served as the foundation for the identification and establishment of our strategic pillars. In 2023/2024, we conducted the double materiality assessment (DMA), looking at the importance of different sustainability themes from two perspectives.

Firstly, the 'inside-out' perspective, which deals with the impact of Royal A-ware's activities on people and the environment. Secondly, the 'outside-in' perspective, where we evaluate the impact and opportunities of sustainability developments on the organisation. The Double Materiality Assessment and due diligence are on-going practices that responds to and may trigger changes in the company's strategy, business model, activities, business relationships, operating, sourcing and selling contexts.

Sustainability topics assessment process

Our objective is to address relevant sustainability topics across our value chain. Sustainability issues are assessed in terms of their impacts, risks, and opportunities, which may be positive or negative, actual or potential, and often interconnected. These effects can manifest in the short, medium, or long term and can influence various activities within the value chain. Identifying relevant sustainability issues and their associated impacts, risks, and opportunities also requires analysing where they occur within the value chain.

Based on an environmental analysis, including an inventory of trends and developments, Royal A-ware has compiled a comprehensive list of relevant sustainability matters—our material topics. In this process, qualitative materiality thresholds were applied to assess whether a specific European Sustainability Reporting Standard (ESRS) topic, sub-topic, or sub-sub-topic is relevant to Royal A-ware or its value chain. If a topic was deemed non-relevant, it was classified as below the materiality threshold.

The ESG team, in collaboration with the Sustainability Steering Group, further refined this list into a prioritised shortlist.

Stakeholder engagement in the process

The refined shortlist was then distributed to our stakeholders via a digital questionnaire, requesting them to prioritise the material issues. To assess whether the impact of each issue is positive or negative, we posed the following question: "If Royal A-ware does not alter its operations, what will be the long-term impact on people and the environment?"

In addition to stakeholder input, further insights were obtained through discussions with the Ministry of Agriculture, Fisheries, Food Security, and Nature, as well as desk research on sustainability topics derived from sector-specific international standards, peer benchmarks, and expert analysis from the ESG team. Sustainability themes outlined in the Corporate Sustainability Reporting Directive (CSRD) were also incorporated.

Results and calculation

We calculated an average impact score for each material topic based on the following factors:

• Scope: how widespread is the impact of this issue?
• Scale: how serious/favourable is Royal A-ware's impact on people and/or the environment if nothing changes in the operation?
• Irremediability: can Royal A-ware recover the impact?
• Likelihood: is the impact potential or actual?

The stakeholder consultations confirmed that the identified material topics align with Royal A-ware's strategic direction, eliminating the need for modifications to our business model. An updated double materiality assessment is scheduled for 2025.

List of Disclosure Requirements and related Data Points

Based on the Double materiality assessment (including the IROs), the ESRSs relevant to Royal A-ware have been determined. Finance and the ESG team then determined. The material topic 'Nutritional value in relation to environmental impact' does not follow the structure of an ESRS and has been added as its own focus area within Royal A-ware's sustainability strategy.

Material topics identified

Based on the materiality analysis, the Sustainability Steering Group identified the pillars of the sustainability strategy: Greenhouse gases, Product, Raw materials, Dairy farming, Employees and Respectful collaboration. Our sustainability strategy is based on these pillars.

ESRS Standards covered

The following ESRS standards are covered by Royal A-ware's sustainability statement:

• ESRS 2: General Disclosures - All material general disclosures are reported
• ESRS E1: Climate Change - Material as greenhouse gases are a key priority
• ESRS E5: Resource Use and Circular Economy - Material for packaging and waste management
• ESRS S1: Own Workforce - Material for employee-related topics
• ESRS G1: Business Conduct - Material for governance and business ethics topics

Topics assessed as not material

Several ESRS topics were assessed as below the materiality threshold:

• ESRS E2: Pollution - Not identified as material in the double materiality assessment
• ESRS E3: Water and Marine Resources - While water management is addressed, not identified as material in the assessment
• ESRS E4: Biodiversity and Ecosystems - Not identified as material in the assessment
• ESRS S2: Workers in the Value Chain - Not identified as material in the assessment
• ESRS S3: Affected Communities - Not identified as material in the assessment
• ESRS S4: Consumers and End-Users - Not identified as material in the assessment

The sustainability statement may not include every impact, risk and opportunity or additional entity-specific disclosure that each individual stakeholder (group) may consider important in its own particular assessment.

Climate Transition Plan

Through our Climate Transition Plan, we aim to significantly reduce greenhouse gas emissions. The targets set by Royal A-ware for Scope 1, 2, and 3 emissions—covering both our operations and supply chain—are partially based on scientific research.

The Climate Transition Plan has been formally adopted by the Management Board, with the Sustainability Steering Group responsible for its implementation. Integrating the plan within the Sustainability Steering Group ensures that it is embedded in our regular business planning cycle. This approach encompasses the key drivers of our low-carbon transition, as well as our strategy for addressing climate-related risks.

In the coming years, we will closely monitor and evaluate the effectiveness of our approach in achieving our objectives. Based on these evaluations, we may refine our plans or adjust our strategic direction as necessary.

As 2024 marks Royal A-ware's first year of reporting on this topic, it is not yet possible to assess the impact of portfolio adjustments or the introduction of new technologies within our operations and value chain. However, progress in implementing the Climate Transition Plan will be reflected in our ability to achieve our greenhouse gas reduction targets.

Net Zero Commitment

For our dairy operations, we aim to achieve a 'net zero supply chain' by 2050. This means reducing greenhouse gas emissions in the chain from cow to packaged product by at least 90 percent (compared to 2021).

By 2050, we intend to offset any remaining emissions, where feasible, through carbon sequestration in soil by dairy farmers. For any residual emissions that cannot be mitigated through current measures, we anticipate that future innovations and technological advancements will provide viable solutions, which we will actively explore and implement as they become available.

SBTi Validation

The targets for our dairy production have been validated by Science Based Targets initiative (SBTi) and are in line to meet the ambitious emissions scenario of 1.5°C emission scenario. We are committed to developing these objectives for our transport activities as well. For this, we are awaiting specific guidelines for the transport sector SBTi.

A milestone in this journey was the approval of our climate targets by the Science Based Targets initiative (SBTi), confirming that our efforts align with global greenhouse gas reduction goals. We are proud to be the first Dutch family-owned dairy company to receive this approval — an important validation of our commitment to sustainability.

Key Decarbonisation Actions

Our transition plan includes the following key decarbonisation levers:

Energy Efficiency and Renewable Energy

• Installing almost thirty thousand solar panels at our production sites
• Start laying new power cable at our cheese factory in Heerenveen
• Procurement of Guarantees of Origin (GvO)
• By 2024, electricity consumption at six of our locations has been fully transitioned to renewable energy

Supply Chain Engagement

• Promotion of knowledge among dairy farmers
• Financial incentives for further sustainability measures on dairy farms supplying to Royal A-ware through A-ware Duurzaam programme and footprint premium
• Carbon storage in soil grassland of our dairy farmers (carbon pool)

Transport Optimisation

• Optimisation of our drivers' driving style
• Testing alternative fuels including Bio-LNG, hydrogen, HVO, and electric vehicles
• 50 Bio-LNG trucks were on the road in 2024, with 75 more coming in 2025

Climate Change Policies

We aim to continuously improve the sustainability of our operations, particularly by reducing greenhouse gas emissions. As climate change is one of our material topics, we have prepared a Climate Transition Plan. In this, we identified our impact, risks and opportunities, our climate ambitions and the action plan to reduce emissions in scope 1, 2 and 3.

In addition, we have established an ambitious sustainability strategy for both our dairy and transport operations. Part of this is the validation of climate targets by SBTi. The targets set by companies through the SBTi are directly linked to the global goals of the Paris Climate Agreement. By having these targets validated by the SBTi, Royal A-ware is demonstrating that it is actively taking climate mitigation measures in line with the Paris Climate Agreement's goal of achieving net-zero by 2050. In this, we follow the regulations and protocols of the GHG Protocol and SBTi.

Mitigation and Adaptation Approach

Our mitigation policy focuses on medium-term scope 1, 2 and 3 emission targets, with a target year of 2030. This way, we have the greatest potential to make a substantial contribution to reducing our emissions and have the most representative data to monitor our performance.

Based on the calculated CO2 footprint of our operations, we have identified key areas that can support the decarbonisation of our facilities, transport and operations:

• Scope 1 and 2 emissions: energy and fuel consumption
• Scope 3 emissions: milk (cheese), packaging and waste management

With this focus, we address both direct and indirect climate impacts. After all, scope 3 of Royal A-ware is the largest and are largely determined by the CO2 footprint of milk. Our policy, besides mitigation policies, also focuses on energy efficiency and renewable energy rollout. We do not actively pursue climate adaptation policies ourselves.

Supply Chain Engagement

The emissions generated by the dairy farmers who supply us are classified under Scope 3. These emissions, associated with milk production, represent the largest share of Royal A- ware's Scope 3 emissions. Therefore, we highly value the continuous efforts of our dairy farmers to enhance the sustainability of their farms.

To support these efforts, we introduced the A-ware Duurzaam programme back in 2015. Through this programme, we provide a premium of €0.50 per 100 liters of milk to dairy farmers who implement measures that exceed regulatory requirements in areas such as animal welfare, animal health, and biodiversity.

In 2023, we introduced an additional premium in the Netherlands: the footprint premium. This premium incentives dairy farmers to reduce their own greenhouse gas emissions. Our dairy farmers inform us about the sustainability measures they have already implemented and those they plan to take. To qualify for the premium, participating dairy farmers must adopt at least one measure in feed, manure management, or energy. In 2024, the footprint premium was also introduced in Belgium.

Actions and Resources for Climate Change

Our actions in 2024

• Installing almost thirty thousand solar panels at our production sites
• Start laying new power cable at our cheese factory in Heerenveen
• Procurement of Guarantees of Origin (GvO)
• Promotion of knowledge among dairy farmers
• Financial incentives for further sustainability measures on dairy farms supplying to Royal A-ware
• Carbon storage in soil grassland of our dairy farmers (carbon pool)
• Optimisation of our drivers' driving style

Energy and Transport Initiatives

Solar Energy Implementation

Since 2024, a state-of-the-art solar installation has been in operation at Royal A-ware's packaging facility in Almere. This system comprises 4,458 solar panels powering seven high-capacity batteries.

Figures:

• Number of solar panels: 4,458 units
• Total capacity: 1.9 MWp (megawatt peak)
• Energy storage: 7 batteries of 50 kWh
• Expected annual yield: 1,624 MWh (megawatt hours)
• CO2 savings: 500 tonnes per year

Alternative Fuel Testing

From Bio-LNG to hydrogen, from HVO to electric. All possible alternative fuels are tested for our transport activities. The goal: a CO2 reduction of at least 40 per cent by 2030. We are testing:

• Bio-LNG trucks: 50 Bio-LNG trucks were on the road in 2024, with 75 more coming in 2025
• Hydrogen trucks: Five trucks running on hydrogen are being tested
• Electric trucks: Being used to see which products they are best suited for
• HVO (diesel from frying fat and waste animal fats): Under testing

Supply Chain Actions

A-ware Duurzaam Programme

Through this programme, we provide a premium of €0.50 per 100 liters of milk to dairy farmers who implement measures that exceed regulatory requirements in areas such as animal welfare, animal health, and biodiversity. All our dairy farmers in the Netherlands and Belgium actively participate in this programme.

Footprint Premium

In 2023, we introduced an additional premium in the Netherlands: the footprint premium. This premium incentives dairy farmers to reduce their own greenhouse gas emissions. To qualify for the premium, participating dairy farmers must adopt at least one measure in feed, manure management, or energy. In 2024, the footprint premium was also introduced in Belgium.

Carbon Sequestration Projects

In 2018, in collaboration with Albert Heijn, we launched the 'Beter voor Natuur & Boer' programme, establishing long-term commitments to climate, nature conservation, and animal welfare. We have established a carbon pool with dairy farmers across various milk streams. We conducted a large-scale pilot project in which we measured and analysed carbon levels at both depths (0–30 cm and 30–60 cm) across 20,000 hectares of our dairy farms.

Resource Allocation

We are making significant investments in renewable energy and efficiency improvements across our operations, including:

• Solar panel installations across production sites
• Investment in alternative fuel vehicles for transport operations
• Premium payments to dairy farmers for sustainability measures
• Research and development into carbon sequestration technologies

Climate Change Targets

Dairy Operations Targets (SBTi Validated)

For our dairy operations, we aim to achieve a 'net zero supply chain' by 2050. This means reducing greenhouse gas emissions in the chain from cow to packaged product by at least 90 percent (compared to 2021).

Medium-term targets (2030):

• Scope 1 and 2: Absolute reduction target aligned with 1.5°C scenario
• Scope 3: Significant reduction in emissions intensity per tonne of product
• Renewable electricity: 100% renewable electricity by 2025

Transport Operations Targets

AB Texel Transport Targets:

• CO2 reduction of at least 40% by 2030 (per tonne/kilometre transported, relative to 2021)

Due to the different nature, Royal A-ware has set specific targets for its transport activities. We are committed to developing SBTi-validated objectives for our transport activities as well. For this, we are awaiting specific guidelines for the transport sector from SBTi.

Progress Tracking

Renewable Electricity Achievement: In 2024, electricity consumption at six of our locations has been fully transitioned to renewable energy, achieved through a combination of purchasing green electricity and acquiring Guarantees of Origin (GVOs). Additionally, preparations have been made to further electrify production processes and procure additional GVOs, ensuring we remain on track to achieve our 2025 sustainability targets.

Scope 3 Reduction Achievement: Scope 3 often presents the greatest challenge, and this is also true for Royal A-ware, as we have no direct influence over it. Nevertheless, we are making significant progress thanks to investments in A-ware Duurzaam and the efforts of our dairy farmers, achieving a substantial 38% reduction within Scope 3. With this reduction compared to 2021, we are well on track to meet our 2030 target.

Target Methodology

The targets set by Royal A-ware for Scope 1, 2, and 3 emissions are partially based on scientific research and have been validated by the Science Based Targets initiative (SBTi). The reduction targets align with the scope of reporting CO2 emissions in accordance with ESRS E1.

Target coverage:

• A-ware Dairy's net zero target covers all the sub scopes reported
• Royal A-ware's target on renewable electricity relates to sub scope 2.1
• A-ware Dairy's target reduction in scope 1 and 2 relates to sub scopes 1.1, 1.2, 1.3, 2.1 and 2.3
• A-ware Dairy's scope 3 target covers all sub scopes in scope 3 reported
• AB Texel's target relates to the sub scopes on which AB Texel reports

By 2050, we intend to offset any remaining emissions, where feasible, through carbon sequestration in soil by dairy farmers. For any residual emissions that cannot be mitigated through current measures, we anticipate that future innovations and technological advancements will provide viable solutions, which we will actively explore and implement as they become available.

Energy consumption and mix

Renewable electricity coverage

In 2024, electricity consumption at six Royal A-ware locations has been fully transitioned to renewable energy, achieved through a combination of purchasing green electricity and acquiring Guarantees of Origin (GVOs).

Royal A-ware has committed to 100% renewable electricity by 2025 for its dairy and transport activities. This target relates to sub-scope 2.1.

Scope

The energy consumption disclosures are embedded within the greenhouse gas emissions reporting framework. Energy-related information is reported through Scope 1 (direct fuel consumption) and Scope 2 (purchased electricity, heat, gas, or steam) categories following the GHG Protocol.

For own operations, only entities responsible for more than 0.1% of scope 1 and 2 emissions are included in the reporting boundary.

Disaggregated energy consumption data

No disaggregated energy consumption table by fuel type (coal, crude oil/petroleum, natural gas, other fossil sources, nuclear, renewable subtypes) or total energy consumption figures in MWh, GWh, or TJ were disclosed in the excerpts provided. The report focuses on GHG emissions (reported in CO2e tonnes) rather than energy consumption metrics.

The company reports greenhouse gas emissions from energy use but does not provide the underlying energy consumption data in standard energy units required by ESRS E1-7.

Gross Scopes 1, 2, 3 and Total GHG emissions

Royal A-ware greenhouse gas emissions – Dairy activities

Royal A-ware measures its carbon footprint in Scope 1 and 2 in absolute form (tonnes of CO₂ equivalents) and for Scope 3 in intensity form (tonnes of CO₂ equivalents per tonne of product). For Royal A-ware, the year 2021 serves as the baseline year at which progress is measured, as 2021 is the base year of the SBTi commitment for dairy operations.

Scope 1 and 2 emissions (absolute, tCO₂eq)

Note on increase since 2021: The increase in Scope 1 and 2 emissions is mainly due to the rise in the number of production sites since 2021. However, when comparing 2021 and 2024 on a like-for-like basis, there is a 14% decrease.

Scope 3 emissions (intensity, tCO₂eq per tonne of product)

Note: Royal A-ware achieved a substantial 38% reduction within Scope 3 compared to 2021, driven by investments in A-ware Duurzaam and dairy farmer efforts.

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Royal A-ware greenhouse gas emissions – Transport activities

In 2024, Royal A-ware made several major acquisitions, expanding transport activities and leading to an increase in emissions across all scopes.

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Detailed greenhouse gas emissions by sub-scope (Dairy and Transport combined)

Scope 1 sub-breakdown (tCO₂eq)

Scope 2 (location-based and market-based, tCO₂eq)

Scope 3 by GHG Protocol category (tCO₂eq)

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Total GHG emissions (all scopes, tCO₂eq)

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GHG intensity metric

Royal A-ware does not explicitly disclose a group-level GHG intensity metric (e.g. tCO₂eq per million EUR revenue) in the excerpts. For dairy operations, Scope 3 is reported as intensity per tonne of product (see above).

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Renewable electricity

In 2024, electricity consumption at six Royal A-ware locations has been fully transitioned to renewable energy, achieved through a combination of purchasing green electricity and acquiring Guarantees of Origin (GVOs).

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Biogenic CO₂ emissions

Royal A-ware acknowledges biogenic methane emissions from dairy cows. The company notes that biogenic methane is part of a closed-loop cycle and does not introduce additional greenhouse gases to the atmosphere as long as the number of cows remains stable. Royal A-ware reports biogenic emissions separately in line with GHG Protocol guidance but does not include them in Scope 1 totals. Specific biogenic CO₂eq figures are not disclosed in the provided excerpts.

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Accounting policies and methodology notes

Calculation method:
Greenhouse gas emissions are calculated in carbon dioxide equivalents (CO₂e) in accordance with the Greenhouse Gas Protocol Corporate Standard. Emissions are categorised into three scopes:

• Scope 1: All direct emissions within Royal A-ware's own operations under full control, including vehicle fleet, operational processes, and other direct business activities.
• Scope 2: Indirect emissions from purchased electricity, heat, gas, or steam. Reported using both location-based and market-based methods.
• Scope 3: All other indirect emissions outside direct control but linked to business activities, including production and transport of purchased goods and services, waste processing, and value chain emissions.

Global Warming Potential (GWP):
Conversion factors are based on the IPCC Sixth Assessment Report (2021):

• 1 kg CO₂ = 1 kg CO₂e
• 1 kg CH₄ = 28 kg CO₂e
• 1 kg N₂O = 265 kg CO₂e

Internal monitoring is based on GWP-total.

Scope and entities:
Data pertains to all operational production sites and facilities under operational control during the reporting period. For own operations, only entities responsible for more than 0.1% of Scope 1 and 2 emissions are included.

Baseline year:
2021 serves as the baseline year for Royal A-ware's Science Based Targets initiative (SBTi) commitment for dairy operations.

Estimates and uncertainties:
Emissions for Scopes 1.3, 3.6, 3.7 are based on actual emissions for 13 periods. Emissions for other scopes are calculated based on actual data for 12 periods with an extrapolation for period 13. Uncertainties in emission calculations may exist, especially when data is sourced from external suppliers or based on self-reported figures. Regular analyses and validations are conducted to verify data accuracy.

Acquisitions:
In 2024, Royal A-ware made several acquisitions. These acquisitions have been included as if they had been part of Royal A-ware for the full calendar year. Royal A-ware also closed sites in 2024, which are not included in the calculations.

Scope 3 categories not reported:
Royal A-ware reports Scope 3 categories 1, 2, 3, 4, 6, 7, 9, 11, and 12. The following categories are not disclosed: 5 (Waste generated in operations), 8 (Upstream leased assets), 10 (Processing of sold products), 13 (Downstream leased assets), 14 (Franchises), and 15 (Investments).

Locked-in emissions:
Royal A-ware identifies methane emissions from cows as an unavoidable category of greenhouse gas emissions due to the bovine digestive system. Biogenic methane emissions are an inherent byproduct of natural digestion and cannot be entirely eliminated, but exist within a closed-loop system. Consumer-related emissions (e.g. refrigeration, transport to/from supermarkets) are identified as locked-in emissions for the net-zero 2050 target but account for only 3% of total Scope 3 emissions.

Carbon sequestration:
Royal A-ware is conducting a large-scale pilot project measuring carbon sequestration at soil depths of 0–30 cm and 30–60 cm across 20,000 hectares of dairy farms. Baseline measurements have been completed, with follow-up measurements scheduled for 2025. CO₂eq removed and/or stored cannot yet be reported.

Carbon Sequestration and GHG Removals

Carbon Sequestration in Soil

In 2018, in collaboration with Albert Heijn, we launched the 'Beter voor Natuur & Boer' programme, establishing long-term commitments to climate, nature conservation, and animal welfare. Within this programme, participating dairy farmers actively work to reduce greenhouse gas emissions, including through carbon sequestration. Additionally, we have established a carbon pool with dairy farmers across various milk streams. Dairy farmers within the 'Beter voor Natuur & Boer' milk stream refrain from cultivating their land to enhance carbon sequestration.

We believe that directly measuring carbon sequestration provides a more reliable approach than relying solely on model-based calculations. As a result, we have opted for large-scale direct measurements at different soil depths to obtain a more precise understanding of carbon sequestration. This data-driven approach enables us to develop and implement more effective carbon sequestration strategies.

Globally, research often focuses on the top 30 centimeters of soil; however, our measurements indicate that a significant amount of carbon is also stored in deeper soil layers, between 30 and 60 centimeters. These findings result from a unique large-scale pilot project in which we measured and analysed carbon levels at both depths (0–30 cm and 30–60 cm) across 20,000 hectares of our dairy farms. The methodology used in this pilot is regarded as scientifically robust by Stichting Nationale Koolstofmarkt, the Dutch government's preferred organisation for validating carbon storage initiatives.

Current Status and Future Reporting

The baseline measurement of these projects has already taken place, but the follow-up measurements are scheduled for 2025 and so CO2eq removed and/or stored cannot yet be reported.

Integration with Net Zero Strategy

By 2050, we intend to offset any remaining emissions, where feasible, through carbon sequestration in soil by dairy farmers. For any residual emissions that cannot be mitigated through current measures, we anticipate that future innovations and technological advancements will provide viable solutions, which we will actively explore and implement as they become available.

Scientific Validation

The methodology used in this pilot is regarded as scientifically robust by Stichting Nationale Koolstofmarkt, the Dutch government's preferred organisation for validating carbon storage initiatives.

No Carbon Credits Currently

As of 2024, Royal A-ware does not report any GHG mitigation projects financed through carbon credits. Our focus remains on direct carbon sequestration measurement and implementation through our dairy farming partnerships.

Climate Risk Assessment and Financial Effects

Climate Risk Assessment Approach

Royal A-ware acknowledges the importance of identifying, assessing and mitigating climate- related risks and their potential impact on the continuity and resilience of our organisation. Through our double materiality assessment and scenario analysis, we have identified our climate-related risks and opportunities in 2024. Both our Management Board and the Sustainability Steering Group are involved in these studies. They assess climate risks once every two years.

Physical Climate Risks

Our business activities are primarily divided into dairy production and transport operations. The vulnerability of dairy farms and agricultural enterprises to climate change is largely driven by their reliance on natural processes. Within our food processing value chain, dairy farming is the most susceptible to climate-related disruptions, given that raw milk is a critical resource for our operations. In contrast, our production facilities and transport activities exhibit greater resilience to the effects of climate change. While maintaining a refrigerated supply chain may become more costly due to rising temperatures, the overall impact remains relatively limited.

We also face indirect climate-related vulnerabilities, particularly in arable farming. As our transport operations primarily involve agricultural products, any climate-induced changes in crop yields could impact our logistics and supply chain efficiency.

Transition Risks

Royal A-ware mapped transition events, by screening our assets and business activities for potential exposure over the short-, medium- and long-term. This assessment considered factors such as probability, magnitude and duration.

Legislative changes are expected across all our operating markets, with some already announced and others still under development. These may include CO2 emissions taxes, restrictions on land use or agricultural activities, and mandatory climate or nutritional labelling on food products.

The long-term regulatory landscape remains uncertain, making it challenging to predict which policies will ultimately come into effect. Given this uncertainty, we consider it impractical to estimate the probability and potential impact of transition risks in the medium and long term, as such estimations would not provide meaningful insights for our climate risk analysis or strategic planning.

Climate Scenarios Analysis

Following the identification of both physical and transition-related climate risks, we conducted a comprehensive analysis using multiple climate scenarios to further assess potential impacts and risks. These scenarios, developed by the Royal Netherlands Meteorological Institute (KNMI), the Flanders Environment Agency (VMM), and various academic studies, have been classified into high and low emission pathways.

For this risk assessment, we utilise these high and low emission scenarios to evaluate the variation in risks under global warming scenarios of 1.5°C and 4°C. These assessments consider changes in weather patterns, such as droughts, as well as broader societal developments.

The climate scenarios have been analysed across short-, medium-, and long-term horizons. Short-term climate risks refer to those materialising within one year (by 2025), medium-term risks within five years (by 2030), and long-term risks within the period between 2030 and 2050.

Financial Impact Assessment

Our assessment has not identified any assets or business activities that are incompatible with, or would require significant modifications to align with, the transition to a climate-neutral economy. Specifically, we have not identified activities that would lead to substantial locked-in greenhouse gas emissions or that would be misaligned with the requirements of Commission Delegated Regulation (EU) 2021/2139 concerning the EU Taxonomy.

Furthermore, the aforementioned climate scenarios are consistent with the key climate-related assumptions underpinning our financial statements. In the preparation of the consolidated financial statements, management has carefully considered the potential financial impact of climate-related risks.

Opportunities

Royal A-ware has identified the following climate-related opportunities:

• Royal A-ware has state-of-the-art production sites. This allows us to use energy efficiently which helps reduce greenhouse gas emissions.
• Organising the value chains efficiently and sustainably helps reduce greenhouse gas emissions in the chain.
• Reducing greenhouse gas emissions in the supply chain contributes to achieving our climate ambitions and those of our customers.

Time Horizons

For the Climate Risk Assessment the time lines are defined as follows:

• Short-term risk: Potential and actual risks that effectuate within one year (by 2025).
• Medium term risk: Potential and actual risks that effectuate within five years (between 2025 and 2030).
• Long term risk: Potential and actual risks that effectuate between 2030 and 2050.

Qualitative Assessment

Instead of quantitative financial impact estimates, we are conducting a qualitative assessment of expected regulatory transitions in the short term to ensure adaptability and compliance. Additionally, we have not identified any specific climate-related opportunities arising from anticipated climate legislation at this time. The above assessment has resulted in a qualitative assessment of potential climate-related impacts, risks and opportunities.

Raw Materials and Circular Economy Policies

Our policy on the use of raw materials and waste has three components:

• Prevention: We use raw materials to the maximum to avoid waste and minimise waste.
• Reduction: We reduce the use of raw materials by adjusting recipes and using thinner packaging materials, for example.
• More sustainable sources/materials: We choose more sustainable alternatives where possible and depending on customer choice. This may also mean using fewer materials not previously used (virgin) and more recycled materials.

This policy applies to all production sites where Royal A-ware has operational control and has been formally adopted by management following preparation by the Sustainability Steering Group. While significant progress has already been made at certain locations, the raw materials and waste policy for the organisation as a whole remains in its early stages. The 2024 inventory will primarily serve as a foundation for further developing policies, defining objectives, and establishing potential measures in the near future.

Circular Economy Approach

We consider the transition to the fullest possible circular economy important because it lays the foundation for a more sustainable use of raw materials. We want to preserve the value of raw materials for as long as possible. We do this by:

• Using raw materials as efficiently as possible
• Avoiding waste
• Using renewable raw materials
• Upcycling waste streams

This also contributes to reducing the impact of our activities on the environment and to the long-term availability of our raw materials.

Material Flow Classification

We distinguish between biological and technical materials. This distinction is based on the Ellen MacArthur Foundation's model (the butterfly model). It was further refined by the World Business Council for Sustainable Development (WBCSD) while developing the Circular Transition Indicators (CTI). This model makes an additional distinction within biological materials: edible and non-edible streams. This makes it more suitable for food businesses. The classification allows us to categorise the various (waste) streams within the company, thus increasing the degree of circularity.

Renewable Packaging Policy

Royal A-ware is committed to using renewable packaging materials for consumer packaging. This means that packaging must be recyclable.

Recycling does not stand alone but is part of a chain approach. Currently, there is insufficient capacity at waste processors to collect recyclable materials. As a result, it is not yet possible for us to move towards 100 percent recyclability. Our focus is to offer only recycle-ready solutions.

High-Risk Raw Materials

In 2024, we formulated policies regarding the sourcing of high-risk raw materials and have conducted an initial risk analysis for selected key raw materials. Specifically concerning soy, one of the identified high-risk commodities used as a component in cattle feed, the Dutch dairy farming sector collectively committed in 2015 to sourcing sustainable soy through the Round Table on Responsible Soy (RTRS). In Belgium, only sustainable soy is used in animal feed.

Due Diligence Integration

Due diligence under the IMVO Food Covenant highlighted a number of high-risk raw materials, including soy, palm oil, cocoa, coconut, citrus, hazelnuts, cane sugar, rice, and spices. For further details, please refer to the Due Diligence chapter.

Actions and Resources for Circular Economy

General Measures

To optimise the use of raw materials and minimise waste, we have taken the following measures:

• We are working to reduce and upcycle our waste streams. We want to separate waste better and work with waste service providers to see how waste can be upcycled. In doing so, we contribute to maximum resource utilisation. Also, upcycling waste streams can lead to a lower carbon footprint of waste streams, reducing our scope 3 greenhouse gas emissions.

• To use as little packaging material as possible, packaging is made smaller and foils thinner wherever possible. Or different packaging is chosen. For example, some packaging for slices of cheese has been replaced by a thinner film or by another type of packaging that requires less film.

• For decades, we have been striving to reduce food waste. We use as many side streams as possible to make a new product. This includes cheese left over after slicing and dicing, for example. All these side streams are checked manually to see if they meet the strict food safety requirements. These side streams are used for grated or melted cheese.

Actions in 2024

• Waste stream mapping: We have accurately mapped our waste streams. This way, we have better insight and can take further steps to minimise and/or upcycle waste streams (e.g. chickpea moisture no longer burned, but disposed of as raw material for animal feed).

• Packaging innovation: By 2024, the first packaging lines have been validated where consumer products are packaged with recycle-ready packaging.

• Pallet securing method: We applied a new method of keeping crates on pallets together. Previously, pallets were wrapped in wrapping film that was discarded after use. In 2024 we introduced an alternative in a thin plastic strap.

• Loss monitoring system: We are working on a system that will give us a more detailed insight into loss of our cheese and white dairy.

Resource Allocation

• Employee engagement across different divisions with knowledge of packaging for setting up packaging policies
• Environmental coordinators, waste service providers, Procurement department and plant managers involved in waste stream management
• Investment in packaging line upgrades for recycle-ready materials
• Research and development into waste upcycling opportunities

Countering Food Waste

A great example of circularity is the maximum use of side streams in cheese production. Cheese rinds are not considered waste, but valuable material for other food products, such as processed cheese. Only the remaining coating is eventually considered waste and thus disposed of. This method of production contributes to better use of the materials milk and cheese, it minimises food waste and helps reduce the impact of our activities on the environment.

As the example shows, we consider all products that we cannot dispose as feed for humans or animals as losses. This is in line with the European definition of food waste. To stay focused on minimising food waste, Royal A-ware has also set an objective for this.

Case Study: Plastic Packaging Reduction

Together with Albert Heijn, Royal A-ware is aiming for a substantial reduction in plastic packaging. The target of 25 percent reduction by 2025 (compared to 2018) has already been met comfortably. Replacing plastic containers with bags, the biggest project in 2024, played a big part in this.

Project 'Zaanse pride' Results:

• Packaging weight reduction: From 13.5 grams (tray) to 5.5 grams (bag)
• Total plastic reduction: 400,000 kilos per year
• Plastic reduction: Up to 60 percent for certain products

All Albert Heijn packaging will be recycle-ready by the end of 2025. The packaging of grated cheese and sliced cheese is already recyclable.

Targets for Circular Economy and Resource Use

Recycle-ready Packaging Target

Target: 100% recycle-ready packaging by 2025

The use of recycle-ready packaging is essential to improve the circularity of raw materials and materials. Of our more than 80 packaging lines, a large portion is already capable of handling recycle-ready packaging. This makes achieving the 2025 target realistic.

For the year 2024, we are not yet able to report on the percentage of recyclable packaging. This is due to lack of clarity around dates and differences in applicable laws and regulations in European countries.

Progress: By 2024, the first packaging lines have been validated where consumer products are packaged with recycle-ready packaging.

Food Waste Reduction Target

Target: Minimize losses in production process

We place great importance on reducing waste in the production process. Thanks to our efficient approach, our waste rate is low. While we have not yet reached our self-imposed target, it remains within reach.

Measurement: Losses in the production process is calculated as the percentage of total organic waste relative to the sales volume of cheese and daily fresh dairy products during the reporting period.

Target Alignment with Strategy

The objective on recycle-ready packaging aligns with the material outflow of packaging and increases the share of use of circular materials. The objective regarding losses is in line with the substantive material inflows of cheese and milk. An objective on loss has been set for material outflow of waste. It is thus part of the recent policy to upcycle waste as much as possible or find new uses for waste and side streams. In doing so, our objectives contribute to better waste management.

Recycle-ready packaging can be recycled into useful applications. And by reducing shrinkage, less waste needs to be collected, transported and processed.

Additional Targets

The above purposes are voluntary and not prescribed by law. The objective on the material inflow high-risk raw materials is, however, prescribed by law (EU regulation against deforestation).

Albert Heijn Partnership Target

Target: 25% plastic reduction by 2025 (compared to 2018) - Already achieved in 2023

Additional target: All Albert Heijn packaging will be recycle-ready by the end of 2025

Remaining projects for 2025:

• Imported cheeses
• Freshly packaged pieces of cheese
• Unrefrigerated pieces of cheese

Long-term Vision

Making packaging more sustainable is a process that is never finished. There is always room for improvement! And if it can't get any better, there are bound to be gains on ease of use. This is how we keep improving our packaging continuously.

Resource Inflows

Material Resource Inflows

Resource inflow includes purchased milk and cheese as a material resource inflow. In accordance with our due diligence policy, raw materials with a high risk for human rights and environmental impact were additionally identified as a material resource inflow.

Main Material Inflows:

1. Milk - Mainly supplied by dairy farmers under contract to Royal A-ware
2. Cheese - Purchased for further processing
3. High-risk raw materials - Including soy, palm oil, cocoa, coconut, citrus, hazelnuts, cane sugar, rice, and spices

Determining Substantive Material Flows

To identify and assess substantive material flows, we followed a structured step-by-step approach:

1. Identification of High-Priority Commodities

The process began with an evaluation based on the high priority commodity list developed by the Circular Transition Indicators (CTI). This list includes key categories such as animal products, crops, and rare earth elements. As a result of this assessment, milk, cheese, and plastic were identified as substantive material streams.

2. Economic Value Assessment

In the next phase, we quantified the economic significance of each material stream by analysing total procurement expenditure by category. We then calculated the percentage of total procurement expenditure attributable to each material stream. This analysis reaffirmed that milk, cheese, and plastic constitute substantive material flows.

3. Carbon Footprint Contribution Analysis

To validate our findings, we further assessed the contribution of each material stream to our overall carbon footprint. These calculations are based on previously established emissions data, which formed the foundation of our Science Based Targets initiative (SBTi) commitment. This analysis further confirmed that cheese, milk, and packaging are the most substantive material streams within our supply chain.

Sustainable Sourcing

For sustainable purchased milk and cheese, the reported certification schemes used include:

• 'Beter voor Natuur en Boer'
• 'Koe Bewust'
• 'Organic'

High-Risk Raw Materials

The identification of high-risk raw materials follows the covenant between government and food industry of high-risk materials. Due diligence under the IMVO Food Covenant highlighted a number of high-risk raw materials, including soy, palm oil, cocoa, coconut, citrus, hazelnuts, cane sugar, rice, and spices.

Soy Commitments:

• Dutch dairy farming sector collectively committed in 2015 to sourcing sustainable soy through the Round Table on Responsible Soy (RTRS)
• In Belgium, only sustainable soy is used in animal feed

Other Raw Materials

Besides milk and cheese, the main resources are transport equipment and fuel. Thanks to our personal contact with dairy farmers and our no-nonsense approach, we continue to see growth in the number of dairy farmers supplying milk to us. Next to milk supplied by dairy farmers, we also buy externally available milk. By combining these two, we can continue to purchase enough milk to produce our dairy products.

Scope of Reporting

Data pertains to all operational production sites and storage facilities under operational control during the reporting period. Material inflow includes all purchased kilograms of milk and cheese, as recorded in the purchase ledger. For high-risk raw materials, as identified in our due diligence policy, reporting is based on kilogram of purchased raw materials.

Resource Outflows

Main Product Outflows

We make various milk and cheese products: milk, yoghurt, mozzarella, whipped cream, different types of cheese, as well as grated and melted cheese. Royal A-ware produces mainly private label products and supplies the food industry, retail and food service customers.

End products include:

• Cheese and dairy products destined for our retail, industrial and food service customers
• Various cheese types (grated, melted, sliced, pieces)
• Fresh dairy products (milk, yoghurt, cream)
• Mozzarella and specialty cheeses

Whey as Valuable By-product

Whey: A by-product released during cheese production. Whey has several uses, depending on its quality:

• Food applications: Raw material for baby food and sports nutrition, among others
• Feed applications: Feed for animals
• Energy production: If an application as food or feed is not possible, the whey is fermented for energy production

Packaging Materials Outflow

Wherever possible, packaging is made of recycle-ready material to enable recycling.

Recycle-ready Packaging Progress:

• The classification of packaging lines as suitable for plastic recycle-ready consumer packaging is based on:
  • The current processing of recycle-ready materials on the packaging lines
  • Validation of the packaging line for processing recycle-ready material

Target Achievement:

• Target: 100% recycle-ready packaging by 2025
• By 2024, the first packaging lines have been validated where consumer products are packaged with recycle-ready packaging
• For Albert Heijn: All packaging will be recycle-ready by the end of 2025

Packaging Innovation Results

Major Packaging Project 2024 - 'Zaanse Pride':

• Replaced plastic trays with recyclable bags
• Weight reduction: From 13.5 grams (tray) to 5.5 grams (bag)
• Plastic reduction: Up to 60% for certain products
• Total impact: 400,000 kilos of plastic reduction per year

Already Achieved:

• Packaging of grated cheese and sliced cheese is already recyclable
• Target of 25% plastic reduction by 2025 (vs 2018) already met in 2023

Methodological Approach

The determination of recycle-ready packaging follows the KIDV guidelines. The Knowledge Institute for Sustainable Packaging (Kennisinstituut Duurzaam Verpakken, KIDV) has developed a tool to assess the recyclability of different material types. The KIDV recycle checks help companies evaluate packaging recyclability based on the current sorting and recycling infrastructure in the Netherlands.

Note on Geographic Variation: The KIDV's recycle-ready checks are based solely on the current recycling infrastructure in the Netherlands. As a result, packaging may not be recyclable in other markets due to differences in waste collection and processing infrastructure.

Future Packaging Improvements

Making packaging more sustainable is a process that is never finished. There is always room for improvement! Key areas for continued development include:

• Material composition optimization
• Label compatibility (labels must be made of the same material as packaging for recyclability)
• Ease of use improvements
• Progressive supplier development for sustainable label materials

Geographic Markets

The main market for us is Europe, but we have customers worldwide. Our outflows serve diverse geographic markets with varying sustainability requirements and recycling capabilities.

Waste

Waste management approach

Royal A-ware is committed to the transition to a circular economy. Our policy on the use of raw materials and waste has three components:

1. Prevention: We use raw materials to the maximum to avoid waste and minimise waste.
2. Reduction: We reduce the use of raw materials by adjusting recipes and using thinner packaging materials, for example.
3. More sustainable sources/materials: We choose more sustainable alternatives where possible and depending on customer choice.

Waste is ranked according to the waste hierarchy, which prioritises waste management methods in the following order: prevention, reuse, recycling, incineration and landfill.

Waste definitions

Waste is defined as materials discarded by Royal A-ware outside the organisation, where the final destination is not related to food for humans or feed for animals.

Classification of waste streams:

• Directed: Waste sent for incineration, landfilling or other forms of waste disposal
• Diverted: Waste that is recycled, reused or allocated to other disposal operations for useful purposes

Quantitative waste data

Scope: Data pertains to all operational production sites and storage facilities under operational control during the reporting period.

Data methodology

Waste data is periodically obtained from waste processors through direct export of the registration reports from the waste processors administration. If no registration report is available, data is sourced from invoices or other supporting documents.

Royal A-ware relies on manual data entry by individual locations, increasing the risk of errors. To mitigate this risk, control measures have been implemented to ensure data accuracy and reliability.

Total kilograms of waste are calculated based on actual data for 12 periods with an extrapolation for period 13.

Circularity initiatives

Countering food waste:

Cheese rinds are not considered waste, but valuable material for other food products, such as processed cheese. Only the remaining coating is eventually considered waste and thus disposed of. All products that we cannot dispose as feed for humans or animals are considered losses, in line with the European definition of food waste.

Recycling waste:

We are working to reduce and upcycle our waste streams. We want to separate waste better and work with waste service providers to see how waste can be upcycled. In doing so, we contribute to maximum resource utilisation.

In 2024, we have accurately mapped our waste streams to have better insight and take further steps to minimise and/or upcycle waste streams (e.g. chickpea moisture no longer burned, but disposed of as raw material for animal feed).

Employee-related policies are not explicitly detailed as standalone policies in the available text. The report mentions that Works councils are closely involved in sustainability developments and that employee representation is structured through the Central Works Council (COR) which includes a delegation from the AB Texel Works Council and a the Joint Works Council (GOR) of A-ware Dairy.

The level of involvement of works councils is determined by national legislation in the countries where Royal A-ware operates. Royal A-ware ensured full compliance with these legal frameworks.

At the Royal A-ware Group level, several material sustainability topics are already incorporated into regular reports submitted to the Management Board and Supervisory Board. Departments such as Human Resources (HR) and Quality, Safety, Health, and Environment (QSHE) provide periodic updates, ensuring that these sustainability topics are an integral part of internal reporting procedures.

Taking action on material impacts on own workforce

Training Programmes for Young Talent

Action name and description: Royal A-ware offers two training programmes: management training programme and professional training programme. Trainees are given direct responsibility while working on their personal development.

Programme structure: The training programme consists of three blocks of eight months each:

• Master yourself
• Master your impact
• Master your leadership

Programme activities:

• Training sessions including 'Persuasive Influencing'
• Workshops
• Role-plays and peer discussions
• Coaching interviews
• Look-ahead days
• 360-degree development interviews, during which trainees actively seek feedback from colleagues, team leaders or other people in the organisation
• Buddy system with a buddy at a different branch
• Two-day meetings per block

Scope: Own operations (logistics team leaders at A-ware Ripening in Zeewolde mentioned as example)

Time horizon: Not explicitly specified; programme duration is 24 months (3 blocks of 8 months)

Resources allocated:

• Non-financial: External coaches, internal supervisors/coaches, buddy system, peer groups (example given of 6 trainees in a group)
• Financial: Not quantified

Expected outcomes: Development of leadership capabilities, increased self-awareness, faster discovery of personal leadership style, employee development and retention

Link to policy: Training programmes support finding, engaging and fascinating employees, and contribute to productivity and job satisfaction

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Diversity and Inclusion

Action name and description: Zero-tolerance policy against discrimination and intimidation in all forms, including discrimination based on race, ethnicity, skin colour, gender, sexual orientation, gender identity, disability, age, religion, political beliefs, national or social origin, or any other grounds covered under EU and national legislation.

Programme activities:

• Complaints mechanisms
• Access to confidential advisers for swift and effective action in the event of any reported incidents of discrimination
• Objective to increase representation of women in senior management and on the Supervisory Board (in response to the Growth Quota and Targets Act)

Scope: Own operations

Time horizon: 2025 evaluation planned to assess progress on gender representation targets

Resources allocated: Not quantified

Expected outcomes: Safe and inclusive work environment, increased representation of women in senior management and Supervisory Board, improved employee well-being and equity

Link to policy: Aligns with UN Human Rights Convention principles and due diligence policy. The company notes that should progress toward gender equality goals prove insufficient, specific policies will be introduced to further support these efforts.

Achievement status: Target for Supervisory Board has been met, but not yet for senior management as of 2024.

Workforce Characteristics

The average number of FTEs in 2024 amounts to 4,492 FTEs (2023: 4,358 FTEs). The majority of these FTEs are based in Almere and Culemborg (cheese packaging facilities) and transport entities.

The number of FTEs in 2025 is expected to be in line with 2024.

Every day, nearly 5,000 employees are committed to our operations worldwide. To create and orchestrate efficient sustainable chains, Royal A-ware is divided into several divisions. Each with its own activities and management teams. This allows us to be flexible and fast.

Characteristics of non-employees in the undertaking's own workforce

Definitions

Royal A-ware defines own workforce as consisting of:

1. Employees: People in an employment relationship with the undertaking ("employees").

2. Non-employees who are:

   • a) either people with contracts with the undertaking to supply labour ("self-employed people") or
   • b) people provided by undertakings primarily engaged in "employment activities" (NACE Code N78).

The Code of Conduct for Employees applies to: salaried employees, volunteers, interns, temporary workers, secondees, charters, and self-employed persons working within Royal A-ware, or within one of the affiliated companies.

Quantitative metrics

No quantitative data on the number, type, or characteristics of non-employee workers in the own workforce is disclosed in the sustainability statement.

Collective bargaining coverage and social dialogue

Employee representation structures

Employee representation at Royal A-ware is structured through:

• Central Works Council (COR) - includes a delegation from the AB Texel Works Council
• Joint Works Council (GOR) of A-ware Dairy
• Works Council for AB Texel

Works councils are closely involved in sustainability developments. The level of involvement of works councils is determined by national legislation in the countries where Royal A-ware operates. Royal A-ware ensured full compliance with these legal frameworks.

Consultation frequency

Each of the three consultative bodies (Central Works Council, Joint Works Council for A-ware Dairy, and Works Council for AB Texel) meets at least five times a year.

Topics of engagement

The Works Council is involved in the following topics:

• Sick leave
• FIT-conversations
• Diversity
• Risk notifications
• Absenteeism rate and number of risk reports
• Proposed changes in working conditions
• Relocation of branches
• Sustainability progress (quarterly updates on material topics)
• Safety policy implementation and 'near misses' reports

The Works Council is informed in a timely and complete manner, and where necessary, the director asks for advice and/or consent.

Employee voice mechanisms

Royal A-ware provides multiple channels for employees to communicate:

• Through their manager or supervisor
• Through Works Council members
• Via confidential counsellors
• Internal complaints mechanism
• Whistleblowing procedure (published in 2024)
• 100-day interviews (conducted 100 days after hire)
• FIT-conversations (twice yearly)
• Exit interviews
• Focus groups (within transport operations)
• Internal app AB Connect for transport operations

European Works Council

No mention of a European Works Council or other transnational social dialogue body is disclosed in the available excerpts.

Collective bargaining coverage

No quantitative data on the percentage of employees covered by collective bargaining agreements (overall, EEA, or non-EEA) is disclosed.

Compliance

The level of involvement of works councils is determined by national legislation in the countries where Royal A-ware operates, and the company ensured full compliance with these legal frameworks.

Management Board Diversity

The Management Board consists of three executive members (0% women): CEO Jan Anker, CFO Antonio Rodriguez and COO Klaas de Jong.

Supervisory Board Diversity

The Supervisory Board consists of five non-executive members (40% female) acting both as supervisor of and sounding board for Royal A-ware's Management Board.

Sustainability Steering Group Diversity

The Sustainability Steering Group consists of ten executive members (30% female) and is responsible for implementing Royal A-ware's sustainability strategy and all other matters related to sustainability.

Stakeholders identified 'greenhouse gases' and 'employee health and safety' as top priorities for Royal A-ware.

At the Royal A-ware Group level, several material sustainability topics are already incorporated into regular reports submitted to the Management Board and Supervisory Board. Departments such as Human Resources (HR) and Quality, Safety, Health, and Environment (QSHE) provide periodic updates, ensuring that these sustainability topics are an integral part of internal reporting procedures.

While existing monitoring reports already provide the Management Board with insights on ESG risks, impacts and opportunities and progress towards targets on ESG topics, a more comprehensive monitoring mechanism is set to be introduced in 2025. Current monitoring reports cover specific topics such as Scope 1, 2 and 3, HR and Health & Safety.

Incidents, complaints and severe human rights impacts

Complaints filed through grievance mechanisms

In 2024, no formal complaints were submitted through the grievance mechanism.

Severe human rights impacts

Through the whistleblower scheme and external complaint scheme, no serious violations were reported or linked to any of Royal A-ware's activities in 2024.

Compliance with UN Guiding Principles on Business and Human Rights (UNGPs), the International Labour Organisation Declaration on Fundamental Principles and Rights at Work or the OECD Guidelines for Multinational Enterprises with respect to employees in the value chain are part of Royal A-ware's due diligence policy.

Grievance mechanisms

Royal A-ware provides:

• Internal complaints procedures (separate procedures for dairy and transport operations)
• Whistleblower policy for reporting suspected wrongdoing
• External complaints procedure (broader scope, operational from 2025) designed for reports of negative impacts by Royal A-ware and its value chains on the environment, people and animals

Employees may submit complaints—including anonymously—to a manager, a confidential adviser, or directly to the Complaints Committee. Royal A-ware has appointed both internal and external confidential advisers.

The external complaints mechanism is open to employees in value chains, affected communities and other stakeholders. Contact forms are available in five languages: English, Dutch, Spanish, German and French.

Protection measures

The whistleblower policy complies with the requirements of the Whistleblower Protection Act (implementation of European Whistleblower Protection Directive 2019/1937). Reporters will not be disadvantaged by Royal A-ware during and after the handling of the report. The identity of the whistleblower is strictly protected.

Protection of employees in the value chain who submit complaints through the external grievance mechanism (operational from 2025) will be further developed in 2025.

Codes of Conduct

The company voluntarily adheres to various codes of conduct.

In February 2021, the employers' organisation VNO-NCW announced in its Agenda 2030 "Entrepreneurship for broad prosperity" that the business community would develop a Code of Tax Governance. In May 2022, this Tax Governance Code was presented with the aim of increasing transparency regarding the tax position of Dutch (listed) companies. More than 40 large Dutch internationally operating companies have adopted this new Tax Governance Code. Royal A-ware is one of them and complies with the code.

Business Culture and Values

Royal A-ware is characterised by a no-nonsense attitude, entrepreneurship, flexibility and respectful collaboration. With our craftsmanship, smart use of technology and knowledge of current trends, we are constantly seeking for the best and most sustainable solution for our customers. We believe it is important to take the burden off the customer as much as possible.

We are practical and result-driven professionals with a hands-on mentality who provide our customers with the highest quality in an efficient and sustainable way.

Strategic Culture Elements

Our overall strategy includes fostering our entrepreneurial and flexible culture: this allows us to respond quickly to developments and customer requests.

By maintaining full control over the entire value chain —from consumer to cow— we optimise efficiency and sustainability. As orchestrators of the supply chain, we embrace our responsibility to drive sustainable progress. This commitment extends beyond our own operations; we actively engage suppliers and customers in advancing sustainability efforts.

Family Business Values

As an international family business, Royal A-ware produces high-quality dairy and food products and is a logistics partner in agri and food transport. With a clear vision and strategy, we create and direct efficient, sustainable chains from consumer to cow.

Our history goes back more than 130 years. At the cradle of Royal A-ware are the Anker and Bouter families. The businesses of these entrepreneurs developed rapidly, expanding their operations over the years. In 2010, the Anker and Bouter families decided to join forces: Anker Cheese and Bouter Cheese became A-ware Food Group.

Governance and Ethics

Our actions are guided by a commitment to long-term value creation, ensuring that dairy farmers can continue their operations, customers maintain confidence in our products and services, and employees thrive in a workplace where they feel valued and supported.

We carefully evaluate stakeholder input while upholding our responsibility to safeguard the long-term continuity of Royal A-ware. In doing so, we emphasise the creation of long-term sustainable value.

Management of Relationships with Suppliers

Dairy Farmers as Key Suppliers

Milk is mainly supplied by dairy farmers under contract to Royal A-ware. Thanks to our personal contact with dairy farmers and our no-nonsense approach, we continue to see growth in the number of dairy farmers supplying milk to us.

Key figures:

• 1,500+ own dairy farmers
• 2.8 billion kilograms of milk processed annually

A-ware Duurzaam Programme

We introduced the A-ware Duurzaam programme back in 2015. Through this programme, we provide a premium of €0.50 per 100 liters of milk to dairy farmers who implement measures that exceed regulatory requirements in areas such as animal welfare, animal health, and biodiversity. Additionally, we recognise and appreciate dairy farmers who engage with their communities by, for example, hosting school visits, maintaining their own informative website, or organising open farm days.

The A-ware Duurzaam programme is continuously evolving to support sustainable dairy farming. All our dairy farmers in the Netherlands and Belgium actively participate in this programme.

Footprint Premium

In 2023, we introduced an additional premium in the Netherlands: the footprint premium. This premium incentives dairy farmers to reduce their own greenhouse gas emissions. Our dairy farmers inform us about the sustainability measures they have already implemented and those they plan to take. To qualify for the premium, participating dairy farmers must adopt at least one measure in feed, manure management, or energy. In 2024, the footprint premium was also introduced in Belgium.

Supplier Engagement Process

• With the Livestock Affairs department (Netherlands) and the Dairy Affairs team (Belgium), there is frequent consultation on reduction plans and possible measures on dairy farms
• With dairy farmers who supply us, regular consultation takes place through the focus group
• Discussions are ongoing with Farmdesk on the rollout of the tool that calculates the milk footprint among our (Belgian) dairy farmers

Procurement and Supply Chain Management

CFO responsibilities include:

• Strategy, IT, HR, Legal and Procurement, among others

Employees from different divisions with knowledge of packaging were consulted for setting up the policy around packaging. Environmental coordinators, waste service providers, the Procurement department and plant managers were involved in understanding the waste streams and the first steps towards a group-level policy.

High-Risk Raw Materials Due Diligence

In 2024, we formulated policies regarding the sourcing of high-risk raw materials and have conducted an initial risk analysis for selected key raw materials. Specifically concerning soy, one of the identified high-risk commodities used as a component in cattle feed, the Dutch dairy farming sector collectively committed in 2015 to sourcing sustainable soy through the Round Table on Responsible Soy (RTRS). In Belgium, only sustainable soy is used in animal feed.

Consultation of (potentially) affected communities involved in raw material sourcing (upstream value chain) is part of the due diligence policy.

Collaborative Partnerships

Together with dairy farmers and other partners in agri and food, we create and orchestrate efficient, sustainable chains. We always aim for the shortest route from consumer to cow, ensuring that all stakeholder in the chain enjoy long-term benefits.

By structuring our organisation around customers and markets, we seek common ground to address societal challenges and foster partnerships. Our stakeholder engagement is deeply aligned with the company's purpose and strategy.

Incidents of corruption or bribery

Confirmed incidents

No convictions for violations of laws against corruption and bribery by 2024.

Convictions and fines

The amount of fines is zero.

Investigation and speak-up procedures

Royal A-ware has a policy aimed at preventing bribery and corruption. The Code of Conduct for Employees and Whistleblowing Policy are important tools to prevent, detect and act on allegations or incidents of corruption or bribery.

The corporate culture emphasizes that if someone sees something, they will say it. This is supported by the reporting requirement, as part of the Code of Conduct for Employees, which states that it is mandatory to report any wrongdoing. A reporting requirement is also included in AB Texel's Code of Conduct for Employees.

Where investigators or commissions of enquiry are investigating cases of corruption or bribery, these investigators are separate from the hierarchy involved in the corruption or bribery. The process for reporting outcomes of investigations is detailed in the whistleblowing policy, which includes procedures to investigate cases of corruption and bribery.

The whistleblowing policy complies with the requirements of the Whistleblower Protection Act, which is the implementation of the European Whistleblower Protection Directive 2019/1937. The reporter will not be disadvantaged by Royal A-ware during and after the handling of the report of suspected wrongdoing.

Employees who suspect wrongdoing may seek confidential consultation with a designated adviser, who is bound by a duty of confidentiality. The employer ensures that all information related to the report is handled with the utmost security and remains accessible only to those responsible for managing the report. The identity of the whistleblower is strictly protected.

Corruption and bribery risk assessment

As part of the policy on preventing corruption and bribery, the company conducted a risk assessment of the functions most exposed to these risks using 'The risk five-tier classification system'. Functions with risk ratings 1 and 2 were identified:

• Extremely high risk (1): Roles that could potentially lead to large-scale fraud or cause long-term damage to the company
• High risk (2): Similar to extremely high risk, but individuals in this role do not have the ability to suppress negative outcomes for themselves

At Royal A-ware, the following functions are involved:

• Royal A-ware: CEO, CFO, COO
• A-ware Dairy: Finance and Accounting Director, Directors
• AB Texel: CEO, CFO, Directors

Necessary internal control measures have been implemented to mitigate these risks. The company is exploring how to add anti-corruption or anti-bribery training to the training offer.

Additional measures

There is no reason to take additional measures following breaches of procedures and standards for combating corruption and bribery.

The Code of Conduct for Suppliers sets out how the company deals with corruption and bribery among suppliers.

Political influence and lobbying activities

Political engagement approach

Lobbying activities are mainly through the sector and industry organisations we are affiliated with (See stakeholders section). Through these organisations, we address challenges in the dairy and transport sector. With our expertise and experience, we provide valuable input for a better understanding of these sectors.

The focus of lobbying activities is related to our dairy activities in the Netherlands and Belgium.

The Director Public affairs coordinates Royal A-ware's lobbying activities.

Ethical standards and guidelines

In line with our policy, we never offer or give contributions to political parties.

Political contributions

Royal A-ware does not make political contributions to political parties.

Government relationships

None of the members of the Management Board, executive and supervisory bodies have held similar positions within government departments in the two years prior to their appointment.

EU Transparency Register

Royal A-ware is not registered in the EU Transparency Register or in Equivalent transparency register.

Payment practices

Policy on payment practices

Royal A-ware states that it "fulfils the agreements as laid down in IMVO and OECD guidelines" and therefore does not describe a separate policy to combat late payments.

Standard contractual payment terms

Royal A-ware's customers generally have payment terms of 30 to 45 days from the date of invoice. The contracts do not typically include a financing component as the period between the transfer of control of goods or services and payment is not extended beyond normal commercial terms.

Average payment time

Not disclosed.

Late payments and legal proceedings

Not disclosed.

Prompt payment code participation

Not disclosed.