A CENTURY OF RESPONSIBILITY

ESG at Palsgaard: Striving for compliance isn’t enough

At Palsgaard, we’ve always been focussed on the personal, environmental and societal impact of our actions. Simply striving for compliance and meeting industry expectations isn’t enough. We aim higher and set our own ambitious ESG targets.

OUR ESG COMMITMENT RESPONSIBLE SOURCING ESG REPORTING

ESG and Palsgaard's Heart Working Heritage: Responsibility at its core

ESG – Environmental, Social, and Governance – might sound like a modern term, but at its core, it reflects principles that have been part of our business for as long as we can remember.

In fact, we’ve built our heritage on responsibility, meaningful connections and a genuine commitment to doing things personally – the only way we know how, as ‘Heart Working People’.

For us, ‘Heart Working People’ encapsulates precisely how we do business. And how we go the extra mile and approach every challenge with humanity and care. This deeply personal and collective way of working is at the core of everything we do – including how we approach ESG.

In this way, our recent Double Materiality Assessment has helped us decide which ESG topics are most important for our business and future reporting. Thanks to the valuable input of our stakeholders, we’ve been able to embed our Heart Working approach into a thoughtful and responsible strategy.

This strategy now lives within our Heart Working Commitments, a clear and ambitious expression of how we continue to integrate ESG into the fabric of how we work.

Palsgaard ESG leaves

Heart Working Commitments

We call these ambitious targets our ‘Heart Working Commitments’, because they demand all our heart working effort to live up to. As a team of over 700 colleagues across the world, we do everything we can to ensure that our impact is positive and strive to set an example for the rest of our industry to follow.

An impact far and wide

On the world stage, we’re a small company. And our plant-based products only make up a tiny portion of the foods, polymers and personal care products they go into. Yet when it comes to caring for our people and planet, we know that even the smallest things can have a big impact.

Heart Working Commitment #1

To put safety, health and well-being first and set high standards for human & labour rights

What we will do

Ensure all our workplaces maintain the highest level of mental, physical and social employee well-being
Continue to invest in a global culture that protects the health and safety of all employees, guests and stakeholders to ensure all get home safe

What we already do

Consistently work to develop a safe working space with the involvement of all our colleagues
Give one extra vacation week to all employees globally
Conduct yearly employee satisfaction surveys and follow-ups
Develop annual training and development plans for each employee (People Development Dialogue)
Provide health and life insurance for all employees
Offer a unique pension scheme to all employees in DK since 1941
Received labour union 3F’s ‘Workplace of the Year 2023’ award (DK)
Align practices with the UN Universal Declaration of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work
Work with Sedex to promote responsible and ethical business practices across our supply chain

Heart Working Commitment #2

To support customers in minimising food loss, waste and scarcity through R&D

What we will do

Help customers reduce production food loss by providing products that improve raw material efficiency
Minimise food waste in final goods by extending product shelf life
Help prevent food scarcity by innovatively using raw materials in our own and customers’ products
Continue to develop innovative products and application methods
Collaborate with Aarhus University to develop plant-based egg replacement products

What we already do

Create emulsifiers that help customers ensure product stability and consumer appeal, extend shelf-life and produce affordable products by reducing the use of expensive raw materials
Develop plant-based anti-fogging additives that help to extend the shelf-life of packaged foods and reduce food waste
Support the UN’s SDG #2: ‘end hunger, achieve food security and improved nutrition, and promote sustainable agriculture’

Heart Working Commitment #3

To reduce CO2e emissions and energy consumption

What we will do

Reduce CO2e emissions in scope 1 & 2, and work with stakeholders up- and downstream to reduce scope 3 emissions (baseline 2023)
Explore options for committing to the Science Based Targets Initiative and develop Life Cycle Analysis (LCA) for our products
Reduce our energy consumption and further invest in renewable energy, such as building a 52-hectare/59 GWh solar plant in Denmark

What we already do

Purchase UN-supported climate compensation to ensure that our factories are CO2-neutral in Scope 1 & 2
Reduce our global energy consumption per kg finished product by 18% from 2016 – 2021
Reduce our global water consumption per kg finished product by 24% from 2016 – 2021
Use straw from our own fields for comfort heating in Denmark since 2005
Plant forests in the Baltics to compensate for CO2 emissions from travel
Insulated several kilometres of piping at our Danish facility to reduce the amount of gas needed for heating
Installed solar panels in Mexico, Brazil, and the Netherlands
Boosted heat recovery efficiency by over 30% in Denmark through regenerative heat exchangers
Converted all boilers at the Denmark factory from heavy fuel to natural gas
Support the UN’s SDG #13: ‘take urgent action to combat climate change and its impacts’

Heart Working Commitment #4

To cut resource consumption and waste

What we will do

Cut raw material consumption and waste during production without compromising on food safety or product quality
Reduce consumption of all our resources, as well as reuse and upcycle waste for the highest value product possible (following the waste hierarchy)

What we already do

Ensure that we comply with the FSSC 22000 standard and have rigorous measures in place to detect food fraud
Recorded a 50% reduction in water consumption at our Malaysian site in 2019, done by optimising cleaning procedures and production planning
Use a plant-based wastewater treatment facility in Mexico
Convert waste products into animal feed
Support the UN’s SDG #16: ‘ensure sustainable consumption and production patterns’

Palsgaard ESG & CSR reporting

At Palsgaard, transparency and accountability are cornerstones of our approach to sustainability. Since 2011, we have published annual CSR reports, sharing progress and challenges on the environmental, social, and governance topics that matter most to our stakeholders.

These reports have offered a clear view of how we turn our values into actions, highlighting our achievements and identifying areas for continuous improvement.

Access our report archive here.

As part of our ongoing journey, we’re proud to extend this tradition to include the first ESG report for Schou-Fondet, Palsgaard’s owner. This step strengthens governance and transparency across our value chain, reflecting our shared commitment to responsible business practices.

Our reporting aligns with emerging global standards, including the Corporate Sustainability Reporting Directive (CSRD), to ensure that stakeholders – from customers and employees to partners and communities – have a comprehensive, credible view of our sustainability performance. The 2024 report is the first step in our transition to CSRD.

READ OUR CURRENT ESG REPORT

Schou-Fondet ESG report 2024

Setting our own standards since the very beginning

1908 – 1925: Einar Viggo Schou

As far back as 1908, long before ‘Corporate Social Responsibility’ (CSR) or ESG was ever a thing, our founder Einar Viggo Schou established a strong culture of looking after those around us.

At this culture’s core were the values of loyalty, diligence and persistence, values which are still very much alive in everything we do today. The progressive efforts he made over nearly two decades help remind us that we all have a personal responsibility to do what’s right.

1925 – 1957: Herbert Schou

Following in his father’s footsteps, Herbert Schou took charge of Palsgaard in 1925.

From building community houses to establishing the first pension scheme of its kind in Denmark in 1941, he broadened our understanding of how we can all play a role in improving the world around us.

Schou-Fondet: 1957 – present

Set up by Herbert and his wife Gudrun, Schou-Fondet (the Schou Foundation) has owned Palsgaard since 1957, helping to ensure we operate independently and with maximum impact.

The Foundation's work not only supports our communities locally and globally through responsible, socially minded action but also reinforces our century-long commitment to delivering outstanding results for our customers.

The power of focus

Today, this commitment is best embodied in the Focus 27 Strategy, which drives our ambition to become the global leader in value creation and sustainability within the emulsifier industry.

Following the Strategy’s core pillars, we aim to:

Create customer value by tailoring solutions to customers’ specific needs
Become the industry innovative beacon by driving research that moves us far ahead our competition
Build a strong ESG profile by bringing the impact of our emulsifiers to more communities globally
Fund our future to guarantee new, integrated processes and safeguard our financial freedom
Execute on production expansions across our emulsifier sites to meet growing demand
Win with our people and culture by harnessing our niche expertise and personal, collaborative approach to business

Responsible sourcing

Our supply chain management is a critical component of our quality assurance system. We collaborate closely with suppliers to promote sustainable, ethical and socially responsible practices across our global operations. By ensuring the quality and reliability of raw materials and supporting suppliers in enhancing their processes, we maintain high standards while fostering responsible and sustainable supply chain practices.

RSPO-certified Emulsifiers, Polymer Additives and Personal Care ingredients

Sustainable ingredients play a crucial role in ensuring the long-term economic and financial success of food, polymer and personal care manufacturers. As a committed business partner, we see it as our responsibility to support manufacturers in making this vital shift. That’s why we offer a full range of palm-based emulsifiers and polymer additives produced with 100% RSPO-certified segregated (SG) or RSPO SCCS Mass Balance palm oil.

What we will do

Enhance our Responsible Sourcing Programme to further develop our:
- Ethical labour practices
- Environment sustainability
- Health & safety
- Business ethics & compliance
- Supplier engagement & development
Continue to collaborate with suppliers to set and achieve goals aligning with our strategic commitments

What we’ve already done

Formed the Responsible Resourcing Programme to work with suppliers on ESG topics
Evaluated our suppliers’ progress in following our Supplier Code of Conduct, and the UNGC's principles in Human Rights, Labour, Environment, and Anti-Corruption
Joined the Roundtable on Sustainable Palm oil (RSPO) in 2008, and developed our full produce range as RSPO SG-certified

2023 Workplace of the Year

In 2023, we won the prestigious ‘Workplace of the Year’ award at our site in Denmark as a recognition of our strong focus on the well-being of our employees. This important acknowledgement came from Danish labour union 3F, and we consider it further motivation to continue the crucial work of ensuring that our employees are able to realise their full potential both in and outside of work.

Investing in our future

We believe that building a better tomorrow starts with empowering the next generation. That’s why we’re committed to leveraging our resources, partnerships, and expertise to create meaningful opportunities for young people around the world. Whether through long-term charity collaborations, educational support or fostering innovation with future leaders, we aim to make a lasting impact.

Planbørnefonden

Palsgaard has partnered with Danish charity PlanBørnefonden for over 10 years, supporting their mission to improve children's and young adults’ prospects through activities aligned with UN SDGs.

Palsgaard's 5-year sponsorship includes annual contributions for sustainable development projects, focusing on children's education and local community development.

Connecting with tomorrow’s experts

We collaborate with educational institutions globally to promote food chemistry and technology. Palsgaard and Nexus, our R&D sister company, offer work placements and collaborate with international students on food development projects. We also offer onsite accommodation for our students.

Scholarship programme

Additionally, our scholarship program supports students in low-income families, covering tuition and other study-related costs. So far, we’ve supported students in Indonesia, South Africa, the Philippines, Vietnam, Thailand and Mexico.

ESG governance and policies

Ownership and accountability for Palsgaard's ESG efforts rest with the Executive Leadership Team, which defines the strategy and ambitions, monitors sustainability performance, and approves investments. The ESG Core Group, comprising ESG and QEHS specialists, is tasked with defining and implementing tactical initiatives.

Our ESG activities are supported by internal policies and guidelines, which align with the principles of the Schou Foundation, the UN Global Compact, and EU and local regulations, reflecting our commitment to transparency and accountability. After all, caring for our people and planet is an ongoing journey – one on which we’ll never consider our work completely “done.”

To ensure our ESG efforts remain effective, we take action in key areas alongside our Heart Working Commitments:

Accountability and improvement

We’ve established a global network of ESG experts dedicated to advancing our sustainability efforts. Recognizing that ESG is a shared responsibility, our global framework ensures accountability by continuously measuring, reporting, and refining our practices to stay aligned with our ambitious sustainability goals.

Global support for your ESG goals

Our products and practices are purposefully designed to help you achieve your ESG targets. With a team of niche experts worldwide, we offer reliable solutions tailored to your sustainability objectives, ready to collaborate and provide the support you need to successfully navigate your ESG journey.

Palsgaard's ESG policies

These efforts are further reinforced through a robust set of policies and guidelines – our Code of Conduct – that underpin our commitment to ethical, sustainable, and responsible practices across all areas of our operations.

Code of Conduct

This outlines our commitment to ethical business practices, emphasising human rights, employee welfare, environmental responsibility and anti-corruption measures.

Environmental Policy

We strive to minimise the environmental impact of our work by optimising production processes, utilising renewable energy sources and promoting the use of sustainable raw materials.

Occupational Health and Safety Policy

We ensure a safe workplace through compliance, process safety, training, monitoring, communication and continuous improvement of our safety culture.

Food Safety and Quality Policy

This commitment includes risk management, employee training, effective communication, continuous quality improvement and compliance with local food and ISO 9001 and FSSC 22000 safety standards.

Procurement Policy

We require vendors to comply with all applicable laws, treat employees with dignity and respect and manage their operations in an environmentally sustainable and responsible manner.

Employee Policy

At Palsgaard, our people are our greatest asset. We strive to provide a safe, inclusive and stimulating workplace, emphasising health and safety, education, equality and open communication.

Supplier Code of Conduct

We work only with honest suppliers who comply with all necessary laws, respect human rights, treat employees fairly, support local communities, act environmentally responsibly, reject corruption and promote renewable energy use.

Anti-corruption Guidelines

These measures enforce a zero-tolerance approach to corruption and cartels, with anti-corruption policies shared with all employees, agents and distributors, and included in written agreements.

Whistleblower Policy

Part of this policy is an ethics hotline that enables reporting of ethical non-compliance, managed by senior leadership and external auditors, with additional external support as needed.

Palsgaard uses EthicsPoint as an ethics hotline system, which allows any party to report ethical non-compliance. See more on how to make a report below.

MAKE A REPORT

Make a whistleblowing report

Palsgaard uses EthicsPoint as an ethics hotline system, which allows any party to report ethical non-compliance.

If you would like to report a legal or ethical concern, please use our whistleblower system. All reports are strictly confidential.

MAKE A REPORT

Our license to operate

While we’ll never stop striving to go above and beyond our in ESG efforts, we also recognise the value of aligning our practices with EU and industry regulations to effectively manage regulatory, legal and reputational risks.

It’s why we prioritise:

• Uncompromising food quality & safety to uphold our record of zero food safety-related recalls

• CSRD-compliant annual reporting from 2025

• Responsible sourcing and traceability

• Deforestation directive fulfilment

• Packaging directive fulfilment

• Exceptional water protection

• Responsible marketing

Solar panel park in Denmark

We are constructing a 52-hectare solar panel park in Denmark, designed to generate an impressive 59 GWh annually – more than enough to meet the current energy needs of our Danish operations, as well as support the planned factory expansion. Construction began in 2025, with the park expected to be fully operational by January 2026.

New energy-efficient plant in Denmark

In Denmark, we are in the early stages of developing our most energy-efficient emulsifier plant yet. Designed to run entirely on electricity, this state-of-the-art facility will set new benchmarks for energy efficiency and sustainability. The plant is scheduled for completion in 2025.

New ESG strategy

In 2024, we launched a new ESG (Environmental, Social, and Governance) strategy, introducing key strategic objectives such as our Heart Working Commitments. These commitments reflect our dedication to sustainability and responsibility while reinforcing our commitment to fostering a strong and responsible business culture.

ESG at Palsgaard: Striving for compliance isn’t enough

Read more about our CSR and ESG activities here

ESG at Palsgaard: Striving for compliance isn’t enough

RSPO-certified products

Non-palm Food Emulsifiers, Personal Care Ingredients and Polymer Additives

UN Sustainable Development Goals

Contact us