To our Stakeholders:

I am pleased to confirm that Kalsec, Inc. reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labor, Environment and Anti-Corruption.
In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. The risks and challenges of the COVID-19 global pandemic have allowed Kalsec’s core values to remain as our true north and remain true to the principles of the UNGC. As we have for the past several years, we also commit to sharing this information with our stakeholders using our annual corporate social responsibility report, published on our public website and registered with the global reporting database.

Sincerely,

Scott Nykaza
Chief Executive Officer

Human Rights have a high importance and urgency to our stakeholders and high priority for our company to remain private and sustainable for the next 100 years. Our employee handbooks cover the expectations of our employee behaviors regarding human rights. Our responsible sourcing policy and statement on UK Anti-Slavery Act are available on our public website at www.kalsec.com.

Our gender balance is shared in our GRI Index available through our CSR report.
Company policy does allow employing minors.

We ensured workers are provided safe, suitable and sanitary work facilities, that includes COVID-19 protections and mitigation strategies. Employee engagement and adequate human and financial resources were deployed to assure safe and sanitary work environment for all employees. This included our work-from-home strategy for 30-50% of our workforce during the COVID-19 pandemic which affected our operations in Asia, Europe and the Americas. Kalsec installed improved and fully compliant potable water and waste water systems for one of our manufacturing facilities in North America.

Kalsec continues to protect workers from workplace harassment, including physical, verbal, sexual or psychological harassment, abuse or threats. Our facilities are 3rd party audited to Safe Quality Foods (SQF) Level II, British Retail Consortium (BRC) or Good Manufacturing Association(GMA), taking measures to eliminate ingredients, designs, defects or side-effects that could harm or threaten human life and health during manufacturing, usage or disposal of our products.

We visit and audit farms and suppliers for over 65% of our annual spend, targeting 70% of our annual spend

• Kalsec publicly shares our relevant indicators to measure outcomes via our Corporate Responsibility Report. The report includes global reporting initiative (GRI) index that meets core requirements of GRI. A few highlights we focused on in 2020 include:
o Demographics of all employees, including management, are broken down by diversity factors (e.g., gender, ethnicity, age, etc.)
o Rate of occupational diseases, injuries, and near-misses. This is reported as safety incident rate and days away or restricted time (DART)

Principle 3 - Kalsec upholds freedom of association and recognizes the right to collective bargain. Our bargaining agreement is posted to our internal web site for all employees. We have regular collaborative team meetings with mgmt and labor present to continuously improve.
Principle 4&5 - Our Supplier Code of Conduct and Responsible Sourcing Policy, and in high risk areas 3rd party auditing, assure forced labor doesn't exist in our supply chain. Our employee and governance policies assure no forced labor nor child labor exist in our supply chain.
Principle 6 - Kalsec follows regulations and laws regarding fair and equitable employment. We are working to define how we can be better and more inclusive.

•We ensure that Kalsec does not participate in any form of forced or bonded labor. We have used 3rd party audits in areas of high concern, and have developed a comprehensive Supplier Code of Conduct available on www.kalsec.com. The Code of Conduct includes specific reference to standards established by the International Labour Organization (ILO).
•We comply with minimum wage standards and have evaluated our global pay structure considering living wage information available where our employees are based.
•We ensure that employment-related decisions are based on relevant and objective criteria by following data-based criteria for screening, alignment with written job descriptions and job requirements and data-based evaluation methods.
•We became certified as a B-Corp in April of 2020. This people-centric standard of using a business for good creates a solid foundation for future generations to continue our legacy of taking into account the people impacted by our business, and ensuring that this impact is positive.

Rate of occupational diseases, injuries, and near-misses. This is reported as safety incident rate and days away or restricted time (DART)
every other year Company wide 3rd party engagement survey.

EEOC reporting in the US

Supplier Code of Conduct acceptances.
3rd Party auditing of high risk global regions.

Kalsec is a business-to-business manufacturer in the food and beverage industry. Our company is a major user of water, energy. Environmental Stewardship includes research and development into more green technology. We have completed our Scope 1 & 2 Greenhouse gas emission baseline and are working on setting Science Based Targets to reduce our GHG Emissions. We support and participate in carbon action planning for our community and via legislation.

•Kalsec seeks to avoid environmental damage via regular maintenance of production processes and environmental protection systems (air pollution control, waste, water treatment systems, etc.). Kalsec invested in 2020 to improve our wastewater management by installing new wastewater and re-use water systems.
•We reduced our hazardous air pollutants to below major source levels, while increasing production using greener processing methods.
•We maintained and improved emergency procedures to prevent and address accidents affecting the environment and human health.
•We minimized the use and ensured safe handling and storage of chemicals and other dangerous substances. We implemented an improved communication and evaluation system for risks that originate in agricultural fields, to assure our employees handling materials have best information available to mitigate possible exposure.

Air Emissions – focused on Hazardous Air Pollutants, VOC’s and Greenhouse gases. Kalsec achieved an 88% reduction in Hazardous Air Pollutants in 2020 when comparing 2019 to 2017.

Reporting and managing our waste streams, both in absolute values and intensity values. The specifics are reported within our CSR report. We added compostable plates, silverware, sample cups for our lunch rooms, conference areas and lab application areas. We compost about 3,000MT of production by-product annually at a Kalsec managed compost facility.

The long term success of Kalsec has been and will continue to be based on trust with our stakeholders throughout the supply chain. Our business requires global suppliers and global customers.

•We are members of Supplier Ethical Data Exchange (SEDEX) and have a 3rd party SMETA audit performed every three years. The audit results are available to our business partners.
•Employees and board of directors are trained to assess the risk of corruption when doing business. Kalsec’s financials are audited by a 3rd party to assure ethical business practices are maintained.
•Policies regarding “anti-corruption” and “ethical behavior” are in our employee handbooks and our supplier code of conduct.
•Kalsec ensures that internal procedures support the company’s anti-corruption commitment. One way we meet this commitment is through transparency with our financials and business ownership with all employees.

Legal review of contracts and agreements. Training for procurement and sales.