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Directors Report & Group Result 2021
GRIEG MATURITAS
In 2019 we incorporated the UN’s Sustainable Development Goals in our business strategy because doing good is the obvious business opportunity.
The Grieg Group derives from a long and proud maritime tradition, operating within seafood, shipping, shipbroking, maritime innovation, technology, logistics and investment services. Profitable growth throughout our history has made us capable of building sustainable businesses and giving back to the societies in which we operate.
2021 was a record year overall for the Grieg Group. Even though the pandemic still affected us throughout the year, all businesses performed very well. It is safe to say that when leaving 2020 behind, these results were not at all on our minds. Luckily, markets have improved, and operations are more streamlined, securing solid financial results across all companies in the Grieg Group. Thanks to our dedicated colleagues, we face a future of development and financial performance following our Group strategy.
In 2021, Group turnover was MNOK 7 392, operating profit (EBIT) MNOK 896, and the profit after tax and discontinued operations MNOK 1 234. Versus a loss of MNOK 1 107 in 2020.
We believe our people are our most valuable resource, they are vital in building our success. Several new colleagues joined us in 2021, and with that, the Grieg Group is well-positioned for the future. In 2021 we have further developed Grieg Maturitas, working with strategic priorities within Communication, Sustainability and Public Affairs. We work together across companies within the Group to achieve specific goals, especially following our commitment to the UN SDGs, which we implemented as part of our strategic framework in 2019. Facing the challenges of the pandemic has also brought us opportunities. With the demand for more digitalisation in the maritime sector, and futher efforts to deliver zero-emission solutions to the maritime industry, we genuinely believe we will play a crucial part in the future. Using the crisis as an opportunity is not new to us because it is part of our culture to seek new opportunities which will have a better impact society.
GRIEG MARITIME GROUP The pandemic has been a challenge for the shipping industry, and many of the Grieg Star’s crew members had to stay onboard our ships for too long due to national and international restrictions in relation to Covid-19.
Grieg Maritime Group has been working continuously to try to solve this unprecedented situation, working to fulfil our commitment to the Neptune Declaration on Seafarer Wellbeing and Crew Change.
In addition, Grieg Maritime Group established a fund to provide salary to crewmembers who were banned from travel on board our ships due to local restrictions. Even though the pandemic has dawned for many of us, seafarers are still struggling with local restrictions
1 649
Employees
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Operating Revenue
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1 234
Profit after tax
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and Covid-19 at sea.
Early in 2021, Grieg Star Group renamed its Group of companies to Grieg Maritime Group. Grieg Green was reorganised, tied closer to Grieg Maritime Group, and Grieg Edge has further strengthened its position, investing in maritime start-ups, and developing ongoing projects such as M/S Green Ammonia together with Wärtsila. They were recently granted approval from DNV to build the vessel, and with that, we continue to move towards a green maritime shift together with important industry partners.
2021 did not only mark a new group set up, but the company also delivered its most significant financial result in a decade.
Covid-19 continues to interfere with, and challenge the daily operations of the Grieg Maritime Group. However, the world’s return to a new normality and the effects of pent up demands, has brought strong market earnings to shipping activities, and has meant that the Grieg Maritime Group in 2021 managed to deliver their strongest result in a decade.
The rising call to action to move towards a zero-emission world brings green business opportunities to Grieg Edge, as it builds its reputation and partnerships. The enterprise value of this is likely to be considerable, although it is not yet visible in the financial accounts, as the company is still in a development phase.
The more challenging part of 2021, has been the restructuring of Grieg Green, carving out a revised, but sustainable strategy to reflect the changing market needs.
Based on good overall results from the operational activities, topped with profit from the sale of dry bulk vessels, Grieg Maritime Group delivers a consolidated profit before tax for 2021 of USD 38.0m (USD -105.1m). With improved asset values and strengthened liquidity, the Group is well positioned in developing its business activities for the coming year.
GRIEG SEAFOOD ASA Struggle and hardship defined the beginning of 2021, and with Covid-19 and high operational costs, Grieg Seafood performed below expectations during the first quarters. Luckily, the last quarters looked completely different. At the end of 2021, with nearly all Covid-19 restrictions lifted, the company could release a harvest number they have never reached before. Grieg Seafood has managed to turn the company around, reaching several goals of the company’s 2025-strategy.
Grieg Seafood aims to harvest 130 000 tons in 2025 at a competitive cost level, and to evolve from purely a
commodity supplier to an innovation partner for selected customers. Sustainable farming practices are the foundation of Grieg Seafood’s operations. Achieving the lowest possible environmental impact and the best possible fish welfare is an ethical responsibility and a prerequisite for long-term profitability. To achieve sustainable growth and improve competitiveness, the Group focuses on reducing the time fish spend at sea, improving fish health and welfare, and providing digital decision-making support to its farmers.
The average spot price for the period was NOK 57,3 per kg, compared to NOK 45,1 per kg at the start of 2021, and up by NOK 3,6 per kg compared to the average spot price in 2020. The total harvest volume was 75 601 tons (ex Shetland). Despite being somewhat below the original expectation of 80 000 tonnes for the year, due to biological challenges, the Board is pleased with this performance.
In 2021, Grieg Seafood sold Grieg Seafood Shetland Ltd, which compromises the UK farming and sales operations (the Shetland assets), to Scottish Sea Farms Ltd. The transaction was announced on the 29th of June 2021, and approval was received from the relevant competition authorities in the UK in December 2021. The transaction was finalised on the 15th of December 2021. However, the closing settlement is expected to be completed in Q2 2022. Grieg Seafood classified the Shetland assets as assets held for sale in 2020 and throughout 2021 up until the sale. The operations in Shetland were presented as discontinued operations in 2020 and have been presented as such throughout 2021 up until the sale.
Since the outbreak of Covid-19, employee well-being has been the number one priority for Grieg Seafood. Crisis management teams have been operational at the head offices and in each region. The Group has followed the advice of the local authorities. Measures to lower the risk of transmission and safeguard business continuity have been implemented. These include strict rules at production sites and harvesting facilities to limit physical contact and encourage social distancing.
Working from home has been encouraged whenever possible, and business travel has been restricted. Despite the challenging circumstances, Grieg Seafood has been able to maintain efficient operations throughout the year. The pandemic has impacted the salmon market in the last two years, with a significant shift in demand away from hotels, restaurants, and catering (HoReCa), while the retail segment and home consumption have been boosted. The overall demand for Atlantic salmon has remained strong. Supply lines have remained largely open, though somewhat limited availability has made airfreight expensive. The bulk of the salmon supplied by the Group has been shipped by truck from Norway to European markets, or from Canada to the USA.
The Group’s diversified geographical presence has provided flexibility and reduced logistical challenges. Due to higher market uncertainty, the risk of bad debts increased during the pandemic. Grieg Seafood has good routines for collecting and managing trade receivables and has had an open dialogue with customers. A significant portion of the sales volume has been credit insured. The Group has not recorded any consequential loss on receivables in 2021. Ensuring financial stability has been a priority for the Group. No dividend was distributed in 2021 due to risk related to the pandemic and commitments to growth investments. At the beginning of 2022, the Group refinanced its bank loans, and has a solid financial position. The Group did not receive any government grants or support regarding Covid-19 in 2021.
Moving forward, Grieg Seafood scales its operations towards 2025 globally, through M&A activity, with costs at or below the industry average, with an ambition to reach 130 000 tons by 2025.
GRIEG LOGISTICS Grieg Logistics Group has, among all other companies, been affected by the pandemic and the uncertain market situation. They have continued their investments in Grieg Connect throughout the year, a company providing advanced technology to ports across Scandinavia. In 2021, they secured more technological partnerships through Grieg Connect, such as Bergneset Havn and a national, digital project led by Oslo commune. And since the dawn of the 2-year pandemic is a fact,
Highlights 2021
Grieg Group spoke on plastic reductions at UN Roundtable
Grieg Investor was named this year’s Nordic Investment Consultancy
Grieg Edge joined offshore desalination startup Ocean Oasis as partner and investor
Grieg Seafood joins forces with 17 leading industry and research institutions in the push to develop low-emission offshore aquaculture
Grieg Maritime Group signs declaration on Seafarer Wellbeing and Crew Change to support our seafarers facing the worldwide pandemic the strategic military operations are back to normal, securing higher activities for Grieg Strategic Services. At Mosjøen Industrial Terminal, business continues as usual. Grieg Logistics’ partnership with Alcoa and Inchcape has continued to develop during the year, with both partners satisfied with the current agreement.
Building on Grieg Logistics’ strategy, they will continue to develop their company towards a more digital and technology-driven future, aiming to provide more ports with advanced technology and solve obscure problems within the maritime and other industries. During 2021, they developed their collaboration with Yxney Maritime, releasing NoX Digital, a platform in which shipping and other offshore companies can track their NoX emissions, making reporting seamless. Grieg Logistic’s Ship Agent Services are the first ship agents to use the solution, hoping others will follow.
Grieg Logistics’ focus is to build more scalable solutions that can be both profitable, valuable, and sustainable. In 2021 Grieg Logistics Group‘s results before tax are -5 MNOK, versus 0 last year.
GRIEG SHIPBROKERS Grieg Shipbrokers was established in 1884 as the first company in the Grieg Group. We provide a full range of services, covering every aspect of vessel financing, contracting, sale and purchase, chartering and operations, backed by rigorous research and analysis.
Grieg Shipbrokers achieved a solid financial performance in 2021 thanks to our dedicated colleagues and strong shipping markets. With revenue growth of more than 50 % and the most profitable year in the company’s 138 year-long history, the company is well-positioned for sustainable development within our core segments.
We continue our endeavours to build a strong organisation and remain committed to attracting talented individuals that will complement the existing teams. During the fall of 2020, Grieg Shipbroker’s long-time Managing Director, Finn Engelsen jr., stepped down. Since his resignation, Morten Müller (COO) and Ivar Sandvig Thorsen (CFO) have been leading interim
management, providing the company with the necessary stability. In July 2021, Morten Müller became the company’s CEO, securing owner interest and the development of a solid organisation moving forward. Grieg Shipbrokers marks its highest income ever in 2021, celebrating a turnover of MNOK 182. We are confident that Grieg Shipbrokers is in a good position, both financially and organizationally, to continue to provide value-added shipbroking and financing services in the years to come.
GRIEG INVESTOR 2021 was Grieg Investor’s best year throughout history. For the first time, they managed assets of NOK 110 billion for more than 130 clients, including foundations, associations, family-owned companies, pension funds, insurance companies and municipalities. Their continuous focus on digitalisation and efficiency has made Grieg Investor a leader in key areas. Investment in responsible and sustainable assets continues and is a strong focus area both internally in our own organisation, towards customers, and towards the market in general.
Responsible and sustainable investments will play an increasingly central role for the company’s customers in the future. Therefore, it is strategically essential for Grieg Investor to take a clear position in this market and be perceived as a leading advisor with a high level of trust. With the entrance of the EU Green deal and EU taxonomy, Grieg Investor are well set for the future, counting 26 employees in 2021. They were also named the Nordic Investment Consultancy of the Year, consequently for the fourth time.
GRIEG KAPITAL Grieg Kapital is a combined investment and asset management company in the Grieg Group. The company will partly run liquidity management as a buffer for its core business, as well as new business areas. In addition, Grieg Kapital manages a portfolio of direct investments, including real estate and private equity. Despite many uncertainties during the year, the stock market proved highly robust in 2021. It has been a formidable year for financial markets where global and Norwegian equities were up well over 20 % in Norwegian kroner. Grieg Kapital exposed over 350 million NOK in the financial markets through its liquidity portfolio during the year and assured high returns through our collaboration with Grieg Investor.
Grieg Kapital has been facing overall satisfactory performance in the capital market in 2021, and they received a good return the past year, with a profit before tax of MNOK 57 in Grieg Kapital AS.
BALANCE SHEET, FINANCIAL SITUATION AND CASHFLOW The Grieg Group has a strong financial position. Total current assets amount to 5 750 (MNOK 4 458), of which
12 000 OPERATING REVENUE MNOK
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MNOK 2 578 (MNOK 1 579) is made up of bank deposits, market-based financial investments and other financial investments. Current liabilities total MNOK 1 690 (MNOK 1 136), which gives positive working capital of MNOK 4 060 (MNOK 3 322). The Groups total fixed assets are MNOK 10 722 (MNOK 10 772), of which MNOK 6 108 (MNOK 7 552) is financed through loans from financial institutions, financial leasing, and other longterm debt.
CASHFLOW In total, the Group had a positive cash flow of MNOK 1 161 (MNOK 389) from operations. Due to investments in fixed and intangible assets, sales and the purchase of shares, the net cash flow from investing activities is MNOK 1 924 (vs negative of MNOK 1 265). The net cash flow from financing activities is negative at MNOK 2 053 (MNOK 802), due to loan repayment (MNOK 1 588), dividends and discontinued operations. In total, the Group had a positive cashflow of MNOK 1 032 vs negative cashflow of MNOK 74 in 2020.
FINANCIAL RISK AND RISK MANAGEMENT When operating in a global market across different business areas, the companies of the Grieg Group are exposed to several types and degrees of risk, ranging from market operations and financial risk to compliance and regulatory frameworks. Risk management is a continuous process and an integrated part of the Group’s governing model. Thus, we are constantly focusing on how to identify and monitor the risk areas in the Group companies, as well as developing strategies to mitigate such risks. For further information concerning financial risk, see note 17 to the Group accounts and risk management: Covid-19 and the War in Ukraine.
The members of the Board of Directors and the CEO are insured. The insurance provides liability cover for members of the Board of Directors and the CEO with respect to claims arising from decisions or actions they may take on behalf of Grieg Maturitas.
RISK MANAGEMENT: COVID-19 Even though we are well prepared as a group for uncertain times; we had no chance to prepare for the challenges following the pandemic that hit us both organisationally and financially in March 2020, continuing with us all through 2021. Managing Covid-19 has been one of the true challenges in the Grieg Group’s history, and to everyone who has contributed across our companies – we are truly grateful. In 2020 we established an Emergency Response Team led first by our CEO and then by GGR Legal, consisting of all Grieg Group companies. We developed plans, discussed measures, and communicated throughout the entire organisation. The Emergency Response Team has met regularly since then, providing expertise and knowledge. In addition, we support our CEOs and leaders with necessary information to employees and offer digital training sessions and social gatherings. The pandemic still affects us, but now we have embarked on a new normality.
As the restrictions and pandemic were coming to an end, a new crisis came upon us. The tragic Russian invasion in Ukraine affects us all, and we are sadly witnessing innocent people being affected.
In response to the crisis, the US, the UK, the European Union (and others) have imposed wide-ranging political and economic sanctions against Russia. Sanctions might impose international operations affecting the Grieg Group in one way or the other. Tensions are likely to increase, and sanctions against Russia are increasing every day. However, at this point, Russia does not want the armed conflict with Ukraine to spread to NATO countries and other parts of the EU. Currently, the threats from western allies are economical, only.
As a significant deep-sea Open Hatch-actor, Grieg Maritime Group has an essential role in transporting critical goods. According to the latest intelligence reports, company procedures, and rules, GMG shall continually evaluate emerging risks and perform its business safely.
In the short term, Grieg Maritime Group does not have any trades in or out of Ukraine, so their immediate business is not affected. However, they do see a dramatic increase in energy prices, which will affect bunkers. GMG’s team is constantly working with partners like “Den Norske Krigsforsikring for Skib (DNK)” and the Norwegian Shipowner’s Association to review the operational safety of their crew and assets.
Grieg Logistics provides ship agent services, terminal operations, and digital infrastructure to support Norwegian ports and terminals. In addition, they have a strategic collaboration with the Norwegian Armed Forces both in peace, crisis, and war. Following their cooperation with the Army, Grieg Logistics monitors the situation closely, providing company management and board with up-to-date risk analysis following the war in Ukraine. Their agreement with the Army does not include international operations, which means that no personnel from Grieg Logistics will be deployed outside the Norwegian border. Grieg Logistics personnel contribute to the NATO exercise “Cold Response,” which takes place in March 2022.
Grieg Seafood trades salmon globally but has not since 2014 sold salmon to Russia. They have ongoing sales operations with Ukraine, but due to the war, cancellation of planned sales operations is a fact. There are no employees in Grieg Seafood directly affected by the conflict.
Russia has closed its stock exchange, RTS, and consequently, businesses with assets at RTS will not be able to sell stocks or funds. In addition, the Russian Central Bank has signalised that the stock market trading on the Moscow Exchange will be further suspended when this is written. Grieg Kapital no longer has any assets at the RTS.
Grieg Investor advises on a portfolio at the amount of NOK 110 billion. Considering Grieg Investor’s portfolio, the company has no ties to the RTS (Russia Trading System) or other Russian economic interests. Grieg Shipbrokers has a global client base, and their clients’ vessels trade worldwide except in war risk or sanctioned areas. Grieg Shipbrokers have carefully reviewed all business activities that may be affected by the current invasion of Ukraine and will continue to monitor the situation closely. There is no ongoing business with any customers based in Russia, and the company will not negotiate new contracts with Russian registered companies. Furthermore, if any companies outside Russia are affected by sanctions, any business will cease if the entity remains on a sanction list. It follows the company will perform due diligence on a new customer in line with their standard KYC policy. Grieg Shipbrokers have one Russian national working from the Bergen office.
ORGANISATION AND WORKING ENVIRONMENT Our people are our most valuable resource. Performing competitively in our business areas requires competent and empowered people working safely together across the Grieg Group companies. Sustainability Development Goal (SDG) 4, Quality education, is one of the Grieg Groups’ stretch goals.
The total number of employees in 2021 was 1 664. Their qualifications constitute a substantial part of the business capital. Keeping a diverse workforce and providing our employees with learning opportunities that promote competence aligned with their personal career goals, will ensure that we always have the best hands and minds on board.
DIVERSITY AND GENDER EQUALITY We believe that a diverse and balanced working environment is paramount for success, and we strive to be at the forefront of diversity within the businesses we operate. That is why we have chosen SDG 5 Gender Equality as a Stretch goal in our business strategy. We are committed to work towards gender parity at all levels of the organisation, and we promote gender equality and diversity among business and supply chain partners.
Gender equality, non-discrimination and inclusion are internationally recognised human rights and fundamental to achieve a just and sustainable society. Therefore we developed a new policy on Human Rights in the Grieg Group in 2021.
We still have work to do in several Grieg Group companies. In total, only 19 % of our employees worldwide are women. Counting only Norway, 25,06 % of the employees in total are women. Moving to the CEO level, 37,5 % of all CEOs within the main companies in the Grieg Group (only counting Norway) are women. In these companies 41 % of all board members are women.
The level of success in our work for gender equality is defined by the work in the different companies. All our companies measure gender balance and are committed to improving the gender balance among all employees. Similarly, all companies have a written policy against workplace discrimination. Transparency is key to success in reaching our goals. The Grieg Group companies use the SHE Index as a reporting tool on gender equality. The SHE Index consists of six categories focused on different aspects of gender equality; actual gender balance, policies and targets, action, gender pay gap, talent and recruitment and general diversity and inclusion. Grieg Maturitas II employed six women and one man. The board consists of four men and four women. The Chair /CEO is female. HUMAN RIGHTS We are committed to respecting internationally recognised human rights in our operations, our value (supply) chain, and in the communities where we operate. Our commitment to respecting international human rights is anchored in international human rights and labour standards, including those expressed in the International Bill of Human Rights and the Declaration on Fundamental Principles and Rights at Work. We are committed to the OECD’s guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights (UNGP).
By respecting human rights, we shall • not infringe on the human rights of others, • address adverse human rights impacts and, • ensure measures to prevent, mitigate and remediate such impacts.
In 2021 the Board of Grieg Maturitas adopted a Human Rights Policy. The policy outlines the Grieg Group’s commitment, approach, and responsibility to respect human rights. The human rights policy interlinks with other policy documents such as our Ethical guidelines, our Supplier Code of Conduct, and our grievance mechanisms. The companies within the Grieg Group ensure that human rights are respected in accordance with the expectations outlined in the policy.
HEALTH AND SAFETY The Grieg Group companies continuously focus on training and facilitating a safe working environment for all employees by identifying and evaluating potential risks on an ongoing basis.
In Grieg Maritime Group, records show no (0) injuries onshore in 2021. For the tenth year, there were no fatal accidents at sea, but there were 33 (40) crew injuries of which two (0) serious, leading to repatriation due to rib contusion and hand injury. In Grieg Seafood, absence rates are mainly related to long-term sickness. Working-related injuries are a total of 48 cases.
The sick leave percentage is still low overall in the Grieg Group. In 2021 the sick-leave percentage was at 2,32 %*. We focus on preventing sick-leave by creating a good working environment and conducting close follow-ups with our employees, also during this year with people working from home. The Group also facilitates participation in physical activities and are a long-term supporter of Aktiv mot Kreft and “Aktivt Kontor”.
INNOVATION Innovation, our stretch goal SDG 9, is vital to becoming sustainable. The Grieg Group companies engage in several research initiatives, especially in the shipping and seafood industries. In 2021, Grieg Maritime Group continued its work with maritime innovation through the establishment of Grieg Edge in 2020, and the participation in the ZEEDs initiative. In addition, they have invested in the offshore desalination startup Ocean Oasis as a partner and investor, and continued their work with M/S Green Ammonia, which was named “Best of What’s New” in 2021 by Popular Science Magazine. In early 2022 the M/S Green Ammonia was granted Approval in Principal from DNV.
Grieg Connect, the technology company of Grieg Logistics, has reached several milestones throughout the year, joining the ‘Norwegian Digital Port Infrastructure’ project, whose chief aim is to enhance the efficiency and environmental footprint of ports throughout Norway. In addition, NoX Digital, a digital emission reporting infrastructure for Norwegian and international shipping companies, was launched in September 2021. The platform has been developed by Grieg Connect and Yxney Maritime, in close collaboration with the NOx Fund. The solution will automatically detect if a vessel operates in taxable waters. Data on energy consumption and AIS data completes the picture, and everything becomes visible on a digital platform for each user.
Grieg Seafood is also leading in several innovation projects within the industry, focusing on technology to improve biology and fish welfare, reducing their impact and contributing to a better society. They ranked 2nd on the international FAIRR Protein Producer Index, and The Grieg Group is constantly working to improve and digitalise our tools and working methods. In 2021 the group has been working with a new financial reporting system called “Grieg Digital”, a tool for Group financial reporting and securing a sound basis for financial decision-making.
To become a driving force for sustainable development, we must create a purpose-driven organisation embedded in an innovative culture. Within the Grieg Group, we strive to collaborate across all companies in, inspiring, challenging and learning from each other. In addition, we believe sustainable business development only can derive from partnerships across sectors, companies, and industries, and hence SDG number 17 (partnership for the goals) is the most important one to us.
SUSTAINABILITY, CLIMATE AND ENVIRONMENT In the Grieg Group, sustainability and our commitment to the SDGs is integrated in our business strategy. For us, the 17 SDGs are interdependent and equally important. However, some of the sustainability themes are more relevant to the businesses we operate within, and it has therefore been natural for us to choose SDGs where we can have the greatest impact and where we also have the largest challenges at an industry level.
At the Group level, we have defined SDG 8, 16, and 17 as our license to operate, or our foundation. These goals represent the groundwork for how we run our businesses, with a focus on employee health and wellbeing, inclusive economic growth, transparency, and accountability, and partnering to achieve greater impact on the sustainability challenges facing the industries in which we operate.
In addition to this foundation, we have set ourselves five impact goals, or stretch goals, related to the areas where we can make a difference, and to help us focus our efforts in areas that are relevant for our business and our stakeholders. These goals relate specifically to SDG 4, 5, 9, 13, 14. We have set clear ambitions for all our prioritised SDGs.
In 2021 we revised our objectives and KPIs at Group-level. This was done in an inclusive process through the Grieg Group Sustainability Advisory Committee (SAC),
consisting of members of the top management teams from each Grieg company. The Grieg Group companies were also consulted individually. In December, the Board of Grieg Maturitas approved the new objectives and KPIs. The operationalising of the objectives and KPIs is delegated largely to each company. At the Group level, the strategy and sustainability objectives are monitored by the Board, which has the overall responsibility for ensuring strategic objectives are met. Progress is presented annually.
The Grieg Group is a member of the UN Global Compact, and we are committed to the ten principles of the UN Global Compact. We report annually on our progress, and our “Communication of Progress” is publicly available. We are also a member of UNGC Action Plattform for Sustainable Ocean Business.
The ocean connects our people, our businesses, our future, and our past. Recognising that nature must be managed on behalf of future generations, we were early movers making sustainability part of our strategy. On top of this, SDG 13, Climate Action, and SDG 14, Life Below Water, are our stretch goals. We have a vision of zero net emissions operations in all industries we operate. We will continue to advocate for zero-emissions operations in all relevant industries and increase awareness internally and in dialogue with key stakeholders.
Though Grieg Seafood has made progress in finding more sustainable fish farming methods in recent decades, many challenges remain to be solved. For farmed salmon to be part of a sustainable global food system, they must keep improving to ensure co-existence with nature and other species, improving fish welfare, finding sustainable feed ingredients, cutting carbon emissions, recycling resources and promoting human rights. While farmed salmon has a low carbon footprint compared to other animal proteins, the salmon industry must do its part to achieve the Paris Agreement. New solutions must be developed to cut emissions in operations and along the value chain. Direct emissions from Grieg Seafood’s production (Scope 1 and 2) account for less than 10% of their total emissions. More than 90% of their emissions originate from their value chain (Scope 3). Grieg Seafood’s greenhouse gas emission targets are classified as well below 2 C and 1,5 C (2050), aligned with the Paris agreement. Their emission targets have been approved by the Science Based Targets Initiative. For 2021, the CDP awarded Grieg Seafood an “A” score for their climate disclosures and efforts to transition to a low-carbon future.
Transporting about 90% of world trade, shipping is statistically the least environmentally damaging mode of transport when taking productivity into the equation. Still, its emissions of greenhouse gases (GHG) constitute about 2.5% of global emissions. In addition to compliance with the requirements of the International Maritime Organisation, Grieg Maritime Group intends to reduce GHG emissions per transported unit by a minimum of 40% by 2030 from 2008 levels. The ambition is to be net-zero by 2050. Over the course of 2021, a significant amount of work has been put into increasing awareness and competence for creating a decarbonisation road map for the Grieg Maritime Group’s vessels, moving the organisation from understanding the challenge to ideating solutions. Among specific actions is the preparation of individual carbon improvements plans (SEEMP) for each ship on how to keep their carbon intensity (CII) within gradually stricter limits after 2023. Defining various measures to reduce emissions are considered on a broad basis, of which several will need qualified testing. For example, the planning for testing biofuel as an alternative fuel for vessel propulsion started, with physical testing to be carried out on one of the open hatch vessels in early 2022.
Grieg Investor has, in 2021, continued to develop Enigma with a completely new transillumination module for climate risk and the UN Sustainability Goals. It is important for Grieg Investor to understand how to best can navigate in terms of both opportunities and threats, to take their work to the next level and ensure that customers have the necessary insight to be able to make informed choices and act as one guarantor against greenwashing.
In 2021 we have continued our partnership with WWF and Grieg Foundation to reduce plastics pollution in the Philippines. To solve one of the world’s biggest
challenges related to the Oceans, biodiversity and climate, we must provide solutions where the problem is at its largest. Due to this, we have set a clear ambition: 50 per cent reduction of plastic pollution in three Philippine port cities by 2023.
Our main office building, Grieg-Gaarden, is also certified as an Eco-lighthouse office building.
CORPORATE GOVERNANCE The Grieg Group always strive to do business in a fair and proper way. We apply the Norwegian Recommendation on Corporate Governance to ensure that the responsibility and roles between administration, the Board of Directors and the General Meeting are based on sound practice. Deviation may arise given the fact that the Group is privately owned.
Our SDG goals within corporate governance are SDG 8 (Decent work and economic growth), SDG 16 (Peace, justice, and strong institution) and SDG 17 (Partnerships for the goals). In 2021 the Grieg Group developed its partnership with the UN Global Compact, and we comply with the UN Global Compact principles in human rights, labour, the environment, and anti-corruption.
We will strive to be innovative to meet the challenges of the SDGs, through new partnerships and cross-sector cooperation. We do this by being honest, exchanging ideas and by seeking to understand and learn from our surroundings. We have an open-minded business approach and strive to create room for action and possibilities, which will enable strong partnerships from both public, and private parts of society.
Through Grieg’s more than 138 years of history, it is our capacity to manage the challenges of the times, and to innovate and adapt, that has put us in the position to drive the changes we want to see in the world today. GOING CONCERN The Board of Directors confirms that the annual accounts have been prepared on a going concern basis, and that this assumption is valid, based on the Group’s solid financial position and expectations of future profits. The Board believes that the submitted annual accounts give a correct picture of the result, cash flow and economic situation. No events have taken place after the balance sheet date that could materially affect the accounts. We expect that COVID-19 won’t influence the 2022 figures in the future, but the uncertainties in the world markets due to the crisis in Ukraine are affecting us all.
OUTLOOK When writing this, Ukraine has been at war with Russia for over six weeks. Even though the 2-year pandemic has dawned, shipping rates are moving upwards, and seafood prices are increasing, the effect of the war in Ukraine brings uncertainty across the entire international community.
Now, all companies within the Grieg Group are performing well end beyond expectations. Forecasts in the salmon industry indicate levels, where profit is reasonable and in addition, consumption and demand for salmon, are growing since all Covid-19 measures have been lifted.
The uncertainties in global markets affect our businesses overall, even though we see increased demands for the transportation of goods, and the salmon export worldwide. For Grieg Investor, changes in the financial markets will impact turnover, but as of now, international sanctions affect the company in a smaller manner. The same applies to Grieg Shipbrokers and Grieg Logistics.
We feel terrible when reading about the dreadful things happening in Ukrain at the moment. In light of the situation we have implemented the necessary measures, moving forward in all Grieg Group companies and at Group level, to secure employees, the financial situation, our customers, and our partners.
To become a positive driving force for sustainable development, we must think big and bold and create a purpose-driven organisation with a culture of innovation. To achieve this, we will continue promoting collaboration within and across all companies in the Grieg Group, inspiring, challenging and learning from each other. We will also seek cooperation both among our competitors and our existing partners, the ZEEDs initiative being a good example, and the newly established company North Ammonia, a collaboration between Grieg Maritime Group and Arendals Fossekompani.
As we advance, we will continue focusing and adapting to changing markets and pursue opportunities as they arise, given the uncertainty in the global economy. Securing our businesses, our employees’ health and our cash situation will be given the highest priority. But we still think supporting new business ideas and facilitating innovation initiatives within the Group is of even more importance. We are still using the UN Sustainable Development Goals (SDG) as our framework for our strategy, and we firmly believe that we will act as an inspiration to other companies, organisations, partners, and the rest of the community to join our pledge: We will restore our oceans.
The Board of Directors would like to express our thanks to all employees in all our companies for their solid dedication and contribution to the Grieg Group, especially during these challenging times.
Bergen, 21st of April, 2022 The Board of Directors of Grieg Maturitas AS
Elna-Kathrine Grieg Board Member
Camilla Grieg Board Member
Knut Nesse Board Member Elisabeth Grieg Chair & CEO
Nina W. Grieg Board Member
Rolv-Erik Spilling Board Member
Per Grieg jr. Board Member
Nicolai H. Grieg Board Member
