To our stakeholders:
I hereby confirm that Arcus-Gruppen reaffirms our support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this Communication on Progress report, we describe our CSR strategy, the main areas and our activities to improve the integration of the Global Compact and its principles into our daily operations. We also commit to share this information with the main company stakeholders using our annual report, our company website as well as other channels of communication.

Our main CSR focus this year has been on the execution of the Nordic Alcohol Monopolies (NAM) Code of Conduct, by implementation and following up the new digital reporting system to our suppliers of wines and spirits from South Africa and Mexico. 24 suppliers from these countries have joined the system by accepting the Code of Conduct through reporting into the database, and have been supervised and followed up by our company.
In addition to this, we have moved into our brand new production plant at Gjelleråsen, north of Oslo. The new production facilities gives our company a considerable improvement when it comes to energy consumption and CO2-emissions, particularly as our new geothermical energy plant covers almost 70 % of our total energy consumption. Thus, we have been able to reduce the energy consumption in our production from approx. 0,8 KWh/litre down to 0,35 KWh/litre.
In 2013, Arcus-Gruppen will continue our efforts in the focus areas Human Rights and Labour by implementing the NAM Code of Conduct to our suppliers from South America and Australia, in the focus area Environment by further reduce our CO2 footprint and in the focus area Anti-Corruption by implementing our new ethical rules for all employees.
Sincerely yours,
Otto Drakenberg
Chief Executive Officer

Human rights and workers' rights are defined as priority areas for the Wine and Spirits business areas in Arcus-Gruppen. This relates to the fact that the Nordic alcohol monopolies (NAM), Arcus-Gruppen's most important customer group, has developed a monitoring system for suppliers based on common guidelines for social responsibility (the NAM Code of Conduct). As a leading Nordic player, Arcus-Gruppen has taken an active role in this work since 2008.

During the period 2012-13 Arcus-Gruppen will implement the NAM Code of Conduct for all suppliers in South Africa, South America and Australia and to document this through the common monitoring system for the Nordic monopolies. This will be monitored by purchasing managers throughout the whole group and will give Arcus-Gruppen very good oversight and control over our own value chain. In turn, this will contribute to reassuring our customers that our products are produced in a responsible and sustainable way.

Through the NAM Code of Conduct system, we are able to monitor all our suppliers in South Africa and Mexico regarding the Human Rights area, and have made an evaluation on all our 24 suppliers from these countries. We have found no breaches regarding the Human Rights principles among our suppliers in these countries.

Our employees are Arcus-Gruppen's most important resource. Therefore a good working environment is an important foundation stone in the group's business strategy.

Arcus-Gruppen's strategic areas of priority in HR looking ahead towards 2016 are culture building, development of expertise and performance management. Together we shall develop a culture that creates shared commitment throughout the whole organisation, and which underpins the objective of becoming the leading wine and spirits company in the Nordic region.

Arcus-Gruppen is working continuously to prevent discrimination on the grounds of gender, ethnicity or disability. The group has a separate policy that addresses this. The group prioritizes the provision of equal opportunities for all employees, regardless of gender.

As an important part of the work of improving the working environment and further developing the group's managers and employees, quarterly employee measurements (BIQ12) were again carried out in 2012. Measurements of commitment, enthusiasm and leadership are included in this process. Despite changes in the job situation for most people in the organization as a result of the move to Gjelleråsen, the result of the year's four employee measurements were stable for the group as whole.
To maintain a good, safe working environment continuous improvement takes place on an ongoing basis. Both management and employees participate actively. HSE is an integrated part of Arcus-Gruppen's overall objectives.

In 2012, 91 injuries and undesirable incidents/dangerous situations were reported, compared with 52 in 2011. The number of injuries and undesirable incidents has increased as a result of increased attention being paid to reporting, in line with the group's objectives. The number of injuries resulting in absence increased from 5 to 9. These include incidents where the absence was only for the day of injury. In addition to day-to-day HSE activities, 5 meetings of the Working Environment Committee were held in 2012.

The group's environmental policy describes what the company is doing to reduce energy consumption and emissions of greenhouse gases and other environmentally damaging substances, i.e. the effects of our activity on the external environment.

We are working systematically at defining and implementing specific environmentally beneficial solutions in all central operational processes and large projects. We work continuously at preventing and reducing the environmental effects of our own activity and the products we market and sell. Our environmental work has a strong internal focus through defined line responsibility and is a part of our management and employee development

The new production facilities at Gjelleråsen gives our company a considerable improvement when it comes to energy consumption and CO2-emissions, particularly as our new geothermical energy plant covers almost 70 % of our total energy consumption.

In accordance with our action plans we have carried out work on packaging, pallet utilization and cooperation with suppliers to reduce costs and emissions in connection with transport.

Our new geothermical energy plant covers almost 70 % of our total energy consumption. In 2012, the energy consumption in our production plant was reduced from approx. 0,8 KWh/litre to 0,35 KWh/litre.

The flow of goods through the company increased by 5 % during 2012, while our CO2 emissions were reduced by 7.9 % compared with 2011. This gives a reduction in CO2 per litre of 13.8 %. The trend is in the context of targeted work to improve the utilization of load carriers in the transport system, as well as a more modern and energy-efficient building that has improved energy efficiency in production.

Arcus-Gruppen discharged approximately 27,000 m3 of waste water in 2012. Compared with 2011 the volume was reduced by around 10 %. To maintain awareness of waste management and source separation Arcus-Gruppen has kept its membership in the environmental reporting system 'Grønt Ansvar'.

Anti-corruption is defined as the third main area in the group's CSR strategy. It applies to the whole group. The group's CSR policy and ethical rules sets out clear requirements for the conduct of the group's employees.

The group's CSR policy, which was approved by the board in June 2012, sets out clear requirements for the conduct of the group's employees. New ethical rules were established for all employees and these will be included in contracts of employment. The regulations also cover employees' behavior on the Internet and in social media. A whistleblower telephone has been set up, which employees can use to report breaches of rules and regulations and other undesirable conduct internally - either openly, or with full anonymity.

Arcus Gruppen’s anti-corruption goals for 2012 include the implementation of new ethical guidelines, signed up by all employees. In addition, we will introduce checks through annual safety rounds in the company during 2013.