In The Green Bag you will find our keystones – They are our foundation and the answer to why we exist.
THE GROUP OF COMPANIES IN BRIEF 10-11
The business models of the Herenco Group
COMMUNITY INVOLVEMENT 13
We are actively involved in all the local communities in which we operate.
MATERIALITY ANALYSIS 14-15
An analysis has been conducted to identify the highest risk areas for negative effects or impact.
WORK WITHIN ALL BUSINESS AREAS 26-33
The companies are proactively working to reduce energy consumption.
ACTIVITIES FOR SUSTAINABILITY 35-36
Community activities on a local level, including work directed towards personnel and the environment in general.
INFO
The report concerns the Swedish companies of the Herenco Group. This sustainability report was prepared separately from the annual report in accordance with ÅRL 6:11.
THE PHOTOS IN THE SUSTAINABILITY REPORT SHOW A FEW OF OUR 1,500 CO-WORKERS WHO, ON A DAILY BASIS, CREATE GREAT VALUE FOR OUR CUSTOMERS.
Over the past year the concept of sustainability has become increasingly common in our daily routines – in meeting with customers and suppliers, in board meetings and in conversations with colleagues at the coffee break. The concept covers a large number of topics including the environment, as well as working conditions and societal responsibility.
Producing and distributing our products in a resourceefficient manner and in a working environment that is good for our co-workers, benefits all of us, and this is the aim of our efforts. We also aim, through our products, to create value for our customers in order to let them, in turn, make a better use of their resources. All goals cannot be achieved at once, but if we all improve ourselves on a day to day basis, we will move forward in our work towards becoming an even more sustainable business.
Our guiding light – Always create future – shines on our aim to act sustainably and to create a long-term profitability.
Lovisa Hamrin, Owner Herenco
MORGAN AUGUSTSSON, PRESS OPERATOR, EMBALLATOR ULRICEHAMNS BLECK.
The Green Bag
The Green Bag is an important instrument in our long-term work towards sustainability and lays the foundation for our innovation and development. The Green Bag contains the following:
OUR KEYSTONES
They are our foundation and the answer to why we exist. Profitability – Society – Customers – Co-workers.
OUR ENERGY
The fuel and energy to drive us forward. Innovation – Personal commitment – Long-term commitment – Courage.
OUR DNA
The foundation for our behaviour as leaders and co-workers. Warm heart – Clean hands – Cold head.
The Green Bag lays the foundation for the jointly prepared sustainability policy that is well established in all our various business operations.
More information is available on our website, herenco.com, where you can see our owner, Lovisa Hamrin, discussing these topics.
CONTENTS SUSTAINABILITY REPORT
One of the companies of the Herenco Group is by law required to prepare a sustainability report; Emballator Ulricehamns Bleck AB. The Herenco group of companies has chosen to jointly prepare a sustainability report, seeing that this is a subject that is important to us, as well as our stakeholders.
The companies primarily conduct business in packaging, trading, and property management. Since the operations are so different in nature it has felt natural to us to divide the report into sections. By way of introduction we present the sections that are shared by all the companies, followed by those that are essential to each operation – these sections primarily deal with the environment aspect.
The report is concluded with examples of actions taken and activities made during 2018.
SOFIA LUNDÉN, GRAPHIC DESIGNER, HALL MEDIA CREATIVE.
The group of companies in brief – our business models
THE HERENCO GROUP OF COMPANIES HAS DURING 2018 CONSISTED OF:
EMBALLATOR (METAL AND PLASTIC)
A producer of metal and plastic packaging at nine units, primarily in the south of Sweden, but also including one unit in England and one in Finland. Products include pails and pots in plastic and metal, as well as capsules and tubes. Customers are mainly producers of paint, chemical products, food, pharmaceuticals and cosmetics.
PACSON
The companies are wholesalers of industrial packaging, tissue paper, office supplies etc. and operate on more than 10 locations in Sweden.
VÄTTERN INDUSTRIER
Consists of three minor and mediumsize niche companies dealing in fire protection, ventilation, and window renovation.
HAMHUS
A real estate company managing about 20 properties.
HERENCO INVEST
Established in 2017, assigned to finding and investing in new markets and business ideas.
HERENCO INNOVATION CENTER
Established at the end of 2018 to create a forum, digital as well as physical, for innovative ideas.
During the autumn of 2018 the stocks in Hall Media AB were sold to COJ Service AB, which in turn is owned by the Carl-Olof & Jenz Hamrin Foundation. Consequently, Hall Media AB will prepare its own sustainability report for the year 2018.
As shown by the summary, our companies operate in various fields and markets and our conditions differ, but our common aim is a great customer focus, to create value and progress in collaboration with our customers.
Our companies operate on local markets where we play an important part in the community by creating job opportunities, involvement and paying taxes. The group of companies – the origin of which is a company established in 1865 – aims for a long-term perspective and consequently, a sustainable approach to our environment is only natural. Herenco is family-owned and currently run and owned by the fourth generation.
Community Involvement
Herenco has since the 1980s contributed funds to the CarlOlof & Jenz Hamrin Foundation. Since its founding the foundation has sponsored research with a total amount exceeding 320 million SEK, most of which has been granted Jönköping University.
We are involved locally in the communities where we operate. Examples of actions taken during the past year is presented at the end of the report.
During 2017 a decision was made to invest in two schools in Colombia and Mexico in partnership with Ankarstiftelsen. The goal is to give children in vulnerable areas the opportunity to catch up and gain a place in society. During 2018 representatives from Herenco attended the opening ceremony of the school and witnessed the actual implementation of the project.
A new collaboration with Jönköping School of Engineering has been initiated on the subject of plastic, in the light of a large part of the industry in our region being directly or indirectly involved in plastic processing. To be able to take responsibility for a sustainable plastic industry, skills and research in the field are needed. More on this project will be presented in next year’s sustainability report.
Materiality Analysis
A materiality analysis has been conducted to identify the highest risk areas for negative effects or impact, as viewed from a sustainability perspective. Each of the companies in the group is responsible for its own operations and its everyday routines, while the parent company offers support through guidelines and help to meet the requirements of the law.
Overleaf you will find a materiality analysis for the group of companies in its entirety. The analysis was prepared during a common workshop with representatives from each company, where possibilities and risks were discussed from the perspective of the stakeholders as well as that of the companies. It resulted in highlighting various aspects that are of interest to our stakeholders. These aspects are distributed among five different groups of stakeholders (co-workers, suppliers, customers, society and owners).
Our primary goal is to work with matters where we can combine the greatest possible effect with the greatest importance as viewed from the perspective of our stakeholders, as shown in the second panel in the picture. It is obvious that our co-workers are an important resource and that creating a good working environment with committed co-workers is essential. The analysis also shows that we need close and well-functioning cooperation with customers as well as suppliers.
The risks within the field covered by the sustainability report vary between the companies. Risk assessments are performed continuously on internal processes as well as external circumstances with respect to, among other things, demand for and supply of eco-friendly products and alternative raw materials. In many cases development is undertaken in collaboration with the stakeholders to meet their needs and demands. The production units of the Herenco group all have the environmental permits required for their operations.
ECONOMIC RESPONSIBILITY AND LONG-TERM COMMITMENT
The economic results and financial status of the Herenco group is shown below. Profitability is a foundation for business longevity, which provides independence and freedom for the company. It entails paying taxes in the community where we operate, and it creates value and security for our co-workers.
2018 2017 2016
TURNOVER, MKR 3537 3505 3486
OPERATING RESULTS
EXCLUDING RESULTS FROM 205 248 220 SHARES IN ASSOCIATED COMPANIES, MKR
”Long-term commitment” is one of Herenco’s guiding principles and protecting our common environment is a natural part of a long-term approach. We are to be responsive to the demands of all our stakeholders for a sustainable development, and we will proactively work towards reducing the impact of our various operations on the environment. All our companies will be working towards a better environment, but as risks, work and goals within this field differ between the companies and their operations, these will be presented mainly under each company.
An area that can be measured jointly is power consumption. The company currently making the largest impact on the environment is Emballator with its manufacturing units. They have a high material share in their products as well as a considerable power consumption in their manufacturing process.
Working to reduce the number of rejects and complaints is a way to reduce costs as well as material consumption, which in turn will have the positive effect of reducing the use of resources. All the companies in the group are working proactively towards reducing the number as well as the volume of rejects. Since the nature of the companies’ operations vary to a considerable degree, a common definition of the concept of rejects has proved difficult to establish. Consequently, for the time being, no common target has been set for the entire group of companies.
Transportation is another field that affects the environment, and alternatives for reducing the environmental impact as well as transportation costs include using the right means of transport, optimal packaging of products, and reviewing transport routes and frequency.
PERSONNEL AND SOCIAL CONDITIONS
Co-workers are the most important resource of our companies, regardless of where they work. Keeping, developing and attracting the right co-workers is a great challenge. Injuries and accidents are to be prevented through the right equipment, the right education and the right conditions. Minimising the number of accidents is an important goal.
Sick leave is one measure of our co-workers’well-being. Short-term as well as long-term absence is to be prevented as far as possible, and a follow-up of the outcome is an important acknowledgement of how we treat our coworkers.
Our goal is to have appraisals with all our co-workers at least once a year in order to get information about working conditions and feedback on leadership, as well as to inform the individual worker about development opportunities. Developing co-workers and providing the opportunity for up-skilling will affect the co-workers as well as the company in a positive way.
Investing in leaders and co-workers who grow and move forward is a prerequisite for always creating future.
The target numbers for sick leave and performed appraisals will be presented under each business category.
THE HERENCO ACADEMY
The academy was set up during 2016/2017 in order to provide people within the group of companies, who display a positive attitude and an inner drive, with an education to face the challenges of the future. The Green Bag is the foundation for the education. The academy is part of our ambition to continue developing and engaging our co-workers. Two sessions have been completed so far, and the third one is currently starting up.
HERENCO NEWS
A magazine for employees within the Herenco group comes out a couple of times a year. The magazine contains introductions to co-workers of interest, ongoing projects and other topics judged to be of interest to our companies.
HUMAN RIGHTS
Our aim is that we all, including our partners, respect and follow international conventions with regard to human rights. Last year we set a goal to contact and interview our suppliers, and those in particular operating in countries that are considered risk areas, geographically or businesswise. We have established that the number of suppliers in such areas is relatively low. Asian suppliers of, for example, sheet metal are paid visits regularly on a yearly basis, and in our judgement, we have found no significant risks in this area. Our common Code of Conduct helps us to clarify the demands we judge to be essential in working with our suppliers.
Within our companies we work towards equality and diversity, and everyone is to be given equal opportunity in their work, regardless of gender, age, ethnicity etc. The gender breakdown within the group of companies is as follows:
PATRICIA SVENSSON, ONLINE MANAGER, HALL MEDIA.
KAMILLA GRUND, SALES, PACSON PAUL HALL.
ANTI-CORRUPTION
We follow good practice in our business operations and respect our competitors and our customers. Our core values will help us act in an ethically correct manner and treat everyone fairly with a professional and businesslike approach.
CODE OF CONDUCT
A code of conduct has been prepared over the past year. The document contains fundamental guidelines for our behaviour in our everyday work. Using these guidelines in our dialogue with stakeholders will confirm the consensus between us and our customers, suppliers et al. on values.
WHISTLEBLOWER POLICY
Herenco will, during 2019, introduce a “whistleblower policy” which allows employees to anonymously report possible irregularities that they experience within our operations. These matters may concern social conditions as well as“corruption”.
A law firm has been chosen by the Herenco management to handle submitted matters.
Sustainability work within our respective business areas
EMBALLATOR
The companies in the Emballator group conduct the production of packaging made from sheet metal and plastic. The manufacturing process consumes a large amount of energy in the form of electricity and gas. By improving working methods and replacing older, energy-consuming machines the companies are proactively working towards reducing energy consumption.
As the companies within the group experience an increase in production and delivery volume, it is not always possible to reduce the consumption in actual numbers, and the change in energy consumption needs to be measured in relation to the change in production volume. However, it has proved difficult to calculate this in a relevant and comparable manner, and for this reason the outcome is presented below in comparison to last year’s consumption. The aim has been to reduce consumption,
but since several of the companies have had an increase in production volume, a reduction in energy consumption has not been possible to achieve.
Another reason for the increase in energy consumption during 2018 is the cold late winter which required additional heating, as well as a very hot summer which in turn required substantial efforts to cool down the production sites.
Since the business operations vary also within the group, establishing metrics that can be applied to all units is something of a challenge.
All the companies in the Emballator group continuously work towards reducing the number of rejects and the amount of materials scrapped. As far as possible, the companies recycle their materials, either in their own production, or by selling them to recycling businesses.
Using plastic as a packaging material has recently been questioned, but there are several advantages to plastic and by working together towards reducing littering, overconsumption and overproduction we can reduce its negative impact.
We would like to see a collaboration with all our partners to optimise the flow. The use of alternative materials and focusing on the life cycle of our products from a recyclability perspective
are prerequisites for the development of plastic packages in years to come, and a daily challenge demanding a holistic approach to the points raised regarding the role of plastic.
In Emballator’s subsidiary companies in England and Finland similar actions are in progress based on their local regulatory framework and conditions. The objective of the work is basically the same, regardless of in which country the companies operate.
PACSON
PacsOn is a wholesale company selling industrial packaging, tissue paper, office supplies etc. to other companies. Distribution to customers is done with the company’s own lorries or with hired ones. Driving in an as eco-friendly way as possible benefits the environment as well as reduces diesel consumption.DHL is an important partner in distribution, and they have their own proactive environmental strategy.
The supply of eco-friendly products is on the rise but the customers’willingness to pay varies since these products are slightly more expensive that the traditional assortment.
The electricity consumption of the companies mainly refers to what is used in the leased premises, which are primarily owned by their sister company Hamhus and are included in their monitoring of energy consumption. In general, the group’s impact on the environment is limited and for the time being no specific targets have been set for this operation.
ANNICA STENBERG SALES / KAISAR NAMROOD INDUSTRIAL PLATER HAGAB.
VÄTTERN INDUSTRIER
The group consist of three companies operating in different fields. In brief, the impact of the units on the environment is judged to be limited. The companies conduct a certain amount of production and assemblage as well as trading materials. All three companies are building trade oriented.
LA Leif Arvidsson primarily deals in materials for window renovation. The company’s impact on the environment consists of transporting the products to customers, and also of the material in the products sold. During the past year investment has been made in a new and more easily surveyed method of measuring climate impact, in order to provide a more solid basis for decision-making.
Hagab Industri invested in a new kiln at the beginning of the year in order to reduce electricity consumption as well as improving the working environment for its employees.
Acticon deals in and delivers kitchen hoods and air inlet solutions for housing. The products improve both indoor and outdoor environment and reduce the energy consumption for ventilation in restaurants as well as homes.
The electricity consumption of the companies has over the year 2018 increased by 3.7% which is above the target. The main cause has been reasoned to be the weather conditions during the year. The outcome includes the consumption for the three remaining operations.
PERSONNEL/SOCIAL CONDITIONS
GLADYS EKMAN, PRODUCTION PLANER, EMBALLATOR ULRICEHAMNS BLECK.
HAMHUS
The property stock of the company consists of pieces of real estate in southern Sweden, most of which are situated in the Jönköping area. With aid from consultants, most of these properties have been reviewed and, where deemed necessary, measures have been taken. These include exchanging ventilation systems as well as servicing control systems, heating systems, restricted flow taps, etc.
With regard to recycling and waste separation, this is performed where Hamhus is responsible for waste disposal.
For reconstructions and extensions, the company chooses partners who use quality and environmentally qualified products and leftover construction waste is separated.
Since 2012 Hamhus has a collaboration with ÅF with regard to energy efficiency. The work includes everything from changing to restricted flow taps to exchanging control systems and other major measures taken. Since work began, the overall energy consumption has been reduced, see the graph overleaf.
The increase in energy consumption over certain months during 2018 was mainly caused by a cold late winter and a very hot summer.
CONSUMPTION kWh
1 500 000 kWh
1 250 000 kWh
1 000 000 kWh
750 000 kWh
500 000 kWh
250 000 kWh
0 kWh
JULIA LINHARD, JOURNALIST, HALL MEDIA.
BELOW WE PRESENT A SUMMARY OF SPECIFIC EXAMPLES OF MEASURES TAKEN IN THE VARIOUS COMPANIES DURING 2018. THESE MEASURES INCLUDE LOCAL COMMUNITY ACTIVITIES AS WELL AS WORK DIRECTED AT PERSONNEL AND THE ENVIRONMENT IN GENERAL.
EMBALLATOR
• Products (capsules) made from consumer recycled material have been developed.
• Changed to LED lightning in yet another section and control (start/stop) on our PVC kilns.
• A project to increase the filling ratio in boxes for outgoing deliveries and also to work out possibilities to doublestack our pallets for deliveries to customers in order to reduce the number of transports.
Two all-electric injection-moulds, reducing the energy consumption with 60% in comparison to currently used injection-moulds, have been ordered and will be delivered in early 2019.
• Modifying lines to optimise connection to purification centres and to reduce propane consumption.
• Increased focus on health preservation for employees in terms of company-organised competitions, pedometers, increased health preservation contributions etc.
Sponsored Mathivation, a mathematics project to increase the knowledge of and interest in mathematics among Swedish pupils from 4th grade up to the university level.
• Sponsored races contributing money to the Swedish Cancer Society and participation for our personnel.
• Sponsored a sports association for their work with disabled young people.
PACSON
• Certification according to ISO 45001 (occupational health and safety) has been approved.
• Increased use of digital tools in order to increase efficiency and reduce environmental impact.
VÄTTERN INDUSTRIER
• Changing the contents of the glaziers’ putty LAseal. An eco-friendlier kind of plasticizer has resulted in more favourable environmental assessments by, for example, Byggvarubedömningen (Building Material Assessment, BVB).
•Investing in a new and more easily surveyed method of measuring climate impact, in order to provide a more solid basis for decision-making.
Placing the production of kitchen hoods with the producer closest to the end customer in order to reduce transport emissions.
• Transports are partly performed by transport operators using only RME (rapeseed methyl ester) as fuel.
• Waste separation of materials from offices and labs. With a commercial card for recycling stations the company itself transports the fractions to the nearest recycling station.
• A new policy for refuelling company cars. All field sales reps have cards for a fuel supplier who provides diesel containing a great deal of renewable raw material. (Swedish made pine oil).
HAMHUS
Continuously following up and tuning up energy systems in order to reduce energy consumption per property, for example the following:
Exchanging control and regulation systems as well as heat exchangers in an industrial property.
• Exchanging ventilation in part of a property.
Exchanging display windows/part of the front of two properties.
SUMMARY
Within Herenco we continuously aim to develop our strategic work with regard to sustainability and discuss these topics in our daily work. The effort to refine and develop our sustainability work will continue, that is to say, that we will continue to always create future.
AUDITOR’S REPORT ON THE STATUTORY SUSTAINABILITY REPORT
To the general meeting of the shareholders in Herenco AB, corporate identity number 556306-8534
ENGAGEMENT AND RESPONSIBILITY
It is the board of directors who is responsible for the statutory sustainability report for the year 2018 and that it has been prepared in accordance with the Annual Accounts Act.
THE SCOPE OF THE AUDIT
Our examination has been conducted in accordance with FAR’s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.
OPINION
A statutory sustainability report has been prepared.
