Aurora Organic Dairy 2015 Corporate Citizenship Report

Animals. People. Planet.

2015 CORPORATE CITIZENSHIP REPORT

PEPPER HEIFER FARM(Dublin)

COLDWATERDAIRY FARMS(Stratford)

PLATTEVILLE DAIRY FARM & MILK PLANT

ADDITIONAL CROPLAND

(Yuma County)

COLORADO

TEXAS

HIGH PLAINS DAIRY FARMS

6,200 organic acres*

PEPPER HEIFER FARM

4,300 organically managed heifers with 1,500 organic acres*

COLDWATER DAIRY FARMS

4,000 organic acres*

PLATTEVILLE DAIRY FARM & MILK PLANT

State-of-the-art, on-farm milk processing plant

1,400 organic cows and calves with 700 organic acres*

YUMA CROPLAND

10,400 organic & transitional feed crop acres*

As of March 2015

acres include land for pasture, crops & facilities

HIGH PLAINS DAIRY FARMS

(Gill)

Farm Number of Organic Cows

High Plains Dairy Farm

5,400

Little Calf Ranch & Dairy Farm

3,300 (includes calves)

High Meadow Dairy Farm

3,500

Ray-Glo Dairy Farm

2,000

Farm Number of Organic Cows

Coldwater East Dairy Farm

6,700

Coldwater West Dairy Farm

4,000

*

BOULDER HQ

WE ONLY HOUSE OUR ANIMALS IN FREE-STALL BARNS AND OPEN, LOOSE-HOUSING. TIE-STALL BARNS ARE NEVER USED.

Aurora Organic Dairy 1

2015 Corporate Citizenship Report

Table of Contents

DESCRIPTION PAGES

CEO LETTER 2

OUR SUPPLY CHAIN 4

CORPORATE CITIZENSHIP GOALS 6

20-YEAR COMMITMENT TO ORGANIC 10

ANIMAL HUSBANDRY IS A TOP PRIORITY 16

SUPPORTING PEOPLE & COMMUNITIES 22

People 24

Community 28

REDUCING OUR ENVIRONMENTAL IMPACT 30

Life Cycle Assessment of a Half Gallon of AOD Milk 32

Greenhouse Gas Emissions & Energy Use 35

Water Use & Recycling 38

Solid Waste & Recycling 40

APPENDIX 42

Goal-Setting Process 45

Stakeholder Engagement 46

Important Topics 49

Topics Related to Mission & Culture 50

Topics Related to Animals 52

Topics Related to People 54

Topics Related to the Planet 56

Governance & Oversight 61

GRI Index 62

If you are interested in additional GRI disclosures and information, please refer to the Appendix section, beginning on page 42.

Within the PDF - Click on the sections above to jump to that page.

WE ONLY HOUSE OUR ANIMALS IN FREE-STALL BARNS AND OPEN, LOOSE-HOUSING. TIE-STALL BARNS ARE NEVER USED.


Our Company was founded to bring the highest quality and freshest organic

milk to mainstream America, with more affordable pricing and improved

availability for consumers. It is this mission and our core Company values that

drive our day-to-day decision-making and overall vision of corporate citizenship.

Since we published our first Corporate Citizenship Report in 2013, we have

expanded our operations to meet the growing demand for organic dairy

products. According to the Organic Trade Association, the organic dairy

category now represents more than $5.4 billion in annual sales in the U.S.,

and reflects one of the fastest growing segments in organics, with 10%

growth in 2014.

To keep up with burgeoning consumer demand and help fill the gap in the

overall U.S. organic milk supply, we significantly expanded our business

in 2013 and 2014, and can now positively influence more of our supply

chain. We added one new farm – the High Meadow Dairy – in Gill, CO,

expanded capacity at our Platteville milk plant by 40%, built an on-site cold

storage facility at the plant, and launched a small organic beef business to

respond to customer needs.

Each of our major expansions over the last two years has not only supported

our mission, but has also driven environmental savings. For example, we

built our High Meadow Dairy close to our plant, which reduced the average

distance our raw milk is shipped for processing, saving transportation-

related emissions.

With the new on-site cold storage facility, built in 2014, we now ship

directly to retail customers out of our Platteville milk plant. This has greatly

reduced the number of transportation shuttles between our plant and

third-party off-site cold storage. Our state-of-the-art storage facility features

advanced robotics and equipment to conserve energy.

Greater efficiencies and the higher volumes of milk produced and processed

at our facilities have driven reductions in our greenhouse gas (GHG)

emissions and energy use per half gallon equivalent of milk. In areas that

have proven more challenging, such as waste recycling and farm water

measurement, we have placed renewed emphasis on investments in people

and technologies to ensure we improve our progress toward our goals.

Dear friends of Aurora Organic Dairy,

Marc Peperzak, Founder & CEO Platteville, CO

~MARC PEPERZAK, FOUNDER & CEO

Our vision for a sustainable future

is to tread more lightly on the planet,

treat our people and animals with

respect, and give back to our local

communities."

“



At Aurora Organic Dairy, corporate citizenship encompasses our three main

pillars of animals, people and planet. In the pages of this report, you will

learn more about our unique vertically integrated business model, and how

influencing more of our supply chain allows us to make a bigger overall

positive impact.

We are making progress toward our 2017 corporate citizenship goals

(please refer to pages 6-9), and will continue to develop and refine individual

goal areas. We will reduce our environmental footprint, further improve the

well being of our dairy cows, and support our communities and employees

into the future. We are also committed to transparent, comprehensive

reporting, and are proud to be recognized for these efforts. In fact, our first

Corporate Citizenship Report, published in 2013, was honored as the Best

First Time Report in the 2015 Corporate Responsibility Reporting Awards.

Thank you for your interest in our corporate citizenship program. We

recognize that we are learning as we go, and we appreciate your support as

our knowledge and ability to manage our various impact areas continue to

evolve. As one of our most important stakeholder groups – our cows – would

say … we will continue moooooooving forward toward our goals.

Sincerely,

Marc Peperzak, Founder & CEO

In total, the feed ration requirement of our cows supports more than

80,000 organic acres used for grazing and harvesting crops. Of this,

approximately 70,000 acres are operated by more than 120 independent

farmers, and 11,000 organic pasture and crop acres are operated by our

Company. In addition, we currently manage 12,000 acres of land used for

facilities and farmland we are actively transitioning to organic. This includes

7,700 acres under management we have added since our prior report was

published in 2013.

Because we actively grow feed crops and pasture, own cows and farms, and

process organic milk, we can introduce values-driven practices throughout

our supply chain. For example, animal husbandry is a top priority and we

developed standards across our farms to ensure our cows are treated with

respect. To confirm we are doing our best to care for our animals, we certify

our farms – and our raw milk and heifer suppliers – to high standards of

animal welfare through Validus, a third-party animal welfare certification

program. Going forward, we believe we have more opportunities to further

collaborate with our suppliers – such as feed growers and milk haulers –

on ways we can all adopt more sustainable practices.

Over the last two years, we have made great strides in providing our 550

employees with safe working environments, enhanced job training, better

communication, and competitive pay and benefits.

1976 Aurora Dairy Corp. founded in Jerome, ID

1984 HQ moves to Boulder, CO

1980 Phase 1 of Platteville Dairy Farm built

PROGRESS TOWARD 2017 GOALS

ENERGY USE

Platteville Dairy Farm, early 1980s

CO2e EMISSIONS

Per half gallon equivalent of milk in 2014 vs. 2012 baseline

12%

9%

Our Core Values: Cow Care • Organic • Environmental Stewardship • Integrity • People • Stakeholders • Satisfaction • Innovation • Returns

CROP GROWING + TRANSPORT

FARMS, COWS + PASTURE

PLANT + COLD STORAGE ORGANIC MILK + BUTTER

DISTRIBUTION

RAW MILK TRANSPORT



70,000+ total organic crop acres supported, primarily operated by 120+ independent farmers 2,000 organic crop acres operated by AOD, with more being transitioned to organic

FARMS, COWS + PASTURE100% Organic

100% non-GMO

Validus Animal and Worker Care Certified

9,000+ organic pasture acres operated by AOD

RAW MILKTRANSPORT

Full, efficient routes

1994Aurora‘s Idaho farm began producing organic milk for start-up organic dairy brands

2003 Commitment to 100% organic, store-brand focus; Platteville farm converted to 100% organic

2004 Platteville on-farm milk plant built, shipped first organic milk to store-brand retail customer

Our cow-to-carton supply chain drives corporate citizenship at every stage

Our Core Values: Cow Care • Organic • Environmental Stewardship • Integrity • People • Stakeholders • Satisfaction • Innovation • Returns


FARMS, COWS + PASTURE

PLANT + COLD STORAGE ORGANIC MILK + BUTTER

DISTRIBUTION

RAW MILK TRANSPORT



Our mission is to bring organic milk to mainstream America with the highest quality and freshness, more affordable pricing and improved availability for consumers.

PLANT + COLD STORAGE

Safe Quality Food Level III Certified - 97% quality score

Energy-efficient systems and robotics

78% of plant water recycled

DISTRIBUTION

Carriers EPA SmartWay certified

ORGANIC MILK + BUTTER

Organic and non-GMO

Award-winning quality

Greater value

Healthy and nutritious

2006 High Plains Dairy Farm developed as new greenfield model for organic dairy farms

2007 Coldwater Dairy Farm in Texas built to model High Plains Dairy Farm design

2007 Pepper Dairy Farm leased to meet growing customer demand for organic milk


Corporate Citizenship Goals Mooooooving forward

ENERGY USE– ON TARGET

2017 GOAL 2014 PROGRESS

15% 12%

farm and plant energy use per half gallon equivalent of milk vs 2012 baseline

PLANT WASTE + RECYCLING – ON TARGET


75% 54%

FARM WASTE + RECYCLING – OFF TARGET


25% 0%

diversion of landfill waste

We will keep our farm waste diversion goal and increase efforts to achieve a 25% diversion by the end of 2017.

In 2012, we had diverted 50% of our landfill waste, or 430 tons.

2008 First Life Cycle Assessment (LCA) conducted to determine environmental impacts

2008 Began tracking environmental footprint and developing corporate citizenship program

2009 Organic-born calf-rearing operations built and established at Little Calf Ranch in CO

diversion of landfill waste



GHG EMISSIONS – ON TARGET


FARM WATER USE – RESTATED GOAL

PRIOR 2017 GOAL 2014 PROGRESS

per half gallon equivalent of milk

Measurements not precise without proper technology

NEW 2016 GOAL

70% of irrigation pivots by end of 2015; 90% by end of 2016

Install remote operation technology on irrigation pivots

ENTERIC + MANURE GHG EMISSIONS – ON TARGET

2017 GOAL

Currently there are no proven, organic-approved methods to consistently reduce enteric emissions (from cow digestion), but we will continue to research this area.

While we have been estimating our farm water use, the data lacks precision. Additionally, our prior goal did not consider factors such as precipitation and soil composition. We are investing in irrigation technology that will enable us to remotely operate pivots and measure water use. This is the first step toward establishing water efficiency goals in the future.

Achieve best management practices to reduce cow emissions

2014 PROGRESS

Approx. 75% of all manure is managed using composting principles and best management practices in manure handling

PLANT WATER USE – ON TARGET


15% 18%

15% 9%

2012 Began purchasing additional cropland to grow more of our own organic feed crops

2012 Dairy built at Little Calf Ranch in CO

2012 CSR goals and baseline established

(2012 – 2014)

per half gallon equivalent of milk vs 2012 baseline

per half gallon equivalent of milk vs 2012 baseline

15%

Net of pretreated and recycled water


LAND MANAGEMENT – ON TARGET

2017 GOAL

Establish land management & acquisition criteria

2014 PROGRESS

Of our 23,000 acres under management, approximately 9,000 acres are pasture and the remainder is largely conventional farmland we are converting to organic.

All 7,700 additional acres since 2012 met established criteria for water, soil health & proximity to our dairies

2013 First corporate citizenship report published

2013 High Meadow Dairy Farm built in Gill, CO

2013 Pepper Dairy Farm becomes heifer raising farm

2018 GOAL

2015 GOAL NEW 2017 GOAL

2017 GOAL2014 PROGRESS

2014 PROGRESS 2014 PROGRESS

2014 PROGRESS

Achieve Validus Animal Welfare Certification for three 3rd party heifer growers

INCIDENCE OF LAMENESS

vs. 2012 baseline

3rd party monitoring of dairy farms

INDUSTRY LEADERSHIP IN ANIMAL CARE

Develop programs to minimize dehorning on farms

2 of 3 heifer growers have been Validus Certified

Video cameras installed at critical areas of farms, internal monitoring occurring

Using polled bull semen to minimize number of calves born with horns

24/720% 58%

ANIMAL CARE – ON TARGET & NEW GOAL ADDED

Corporate Citizenship Goals Mooooooving forward



9%

COMMUNITY + EMPLOYEE – ON TARGET

2017 GOAL

2017 GOAL

2017 GOAL

2017 GOAL

2014 PROGRESS

2014 PROGRESS

2014 PROGRESS

2014 PROGRESS

Demonstrate value of employee benefits to all employees

Enhanced training programs

Improve communication with bilingual employees

Develop a community center at a remote farm location

Face-to-face benefit enrollment meetings in English & Spanish at all locations

Comprehensive animal welfare and safety training programs & videos presented to all employees at all facilities

All pertinent company information and trainings offered in English & Spanish

Coldwater employee cafeteria and break room scheduled to be completed in 2015

WORKER HEALTH + SAFETY – NEW GOAL


As compared to prior three-year average number of incidents per 200,000 hours worked

*Based on AOD average number of farms and plant OSHA reportable incidents from 2012 - 2014 vs. 2011 - 2013. Note: Plant incidents in the current period were inflated due to the plant expansion and cold storage facility construction. In 2014, our plant reported 5.3 OSHA incidents per 200,000 hours worked, which is 17% lower than the dairy manufacturing industry average of 6.4 incidents.

Continuously improve workplace injury rates at our farms and plant*

Plant Farms

2014 Plant expansion and on-site cold storage facility completed

2015 Recognized for Best First Time Report (published in 2013) in the 2015 Corporate Responsibility Reporting Awards

INCIDENCE OF INJURY

5%


We produce organic milk, butter and non-fat dry milk powder for

our customers. Our white fluid milk is ultra-pasteurized and is

bottled at our plant in recyclable gallon plastic jugs and half gallon

cartons in non-fat, 1%, 2% and whole milk varieties. Our butter

and non-fat dry milk powder are processed at third-party facilities.

Our products are sold exclusively in the U.S. in all 50 states.

20-year Commitment to OrganicFor 20 years, Aurora Organic Dairy has produced organic milk.

In 1994 we began producing organic milk for the new start-up

brands in the organic dairy industry. In 2003, we committed

exclusively to organic. Since then, we have continued to expand

our operations to meet the growing consumer demand for high-

quality organic dairy products.

Platteville, CO



20-year Commitment to OrganicCore Value: Organic Organic agriculture removes the use of synthetics from food production, reduces our impacts on the environment and provides consumers a healthful choice they want.


WE BELIEVE ORGANIC IS BETTER FOR ANIMALS,

PEOPLE AND THE PLANET

Our Colorado farms are certified organic by the Colorado Department of

Agriculture, and our Texas farms and Colorado milk plant are certified by

Quality Assurance International (QAI). It is through this annual certification

process that we develop and adhere to our organic system plans and

demonstrate the many facets of our operations that make us organic.

Sustainable and responsible farming is central to our organization and is

important to our key stakeholders (please refer to page 46). We manage

the majority of our manure using composting principles and apply it to

our fields as organic-approved fertilizer, which provides environmental

benefits, including better water retention, higher soil quality and fertility,

and greater carbon sequestration. Other sustainable farming methods, such

as proper crop rotation, help to keep our soils rich and nutrient-dense while

suppressing insect pests and crop diseases.

Each year, we have participated in the transition of more acres of farmland to

organic. In total, we currently manage more than 23,000 acres of farmland

for pasture, crops and facilities. Much of our cropland was purchased as

conventional and is undergoing the three-year transition to organic. As we

manage more farmland for organic feed crops, we will continue to enhance

our data-driven sustainable farming standards and criteria to keep our soils,

water, air and animals healthy.

100%

ORGANIC

The USDA National Organic Program requires that producers and

manufacturers achieve a rigorous set of standards for agricultural crops,

livestock management and food processing. No synthetic pesticides,

herbicides, fertilizers or genetically modified organisms (GMOs) are used

to produce or manage crops and pasture we feed to our dairy cows. It also

means our animals are never treated with antibiotics, synthetic growth

hormones or other unapproved substances. Organic dairy cows must receive

at least 30% of their dry matter intake (DMI) from certified organic pasture

for a minimum of 120 days during the grazing season.

PREVENTION IS THE PRIORITY

Because organic cows cannot receive antibiotics to prevent or treat disease,

we have a comprehensive animal health and wellness program that focuses

on disease prevention. It includes high standards of sanitation at our

facilities, quality organic feed and bedding, organic-approved vaccines,

activity collars that help to identify when a cow is sick, and employees who

are trained to recognize when a cow needs attention. We evaluate our cows

daily for health indicators, and our nutritionist modifies feed rations for each

group of cows based on needs. In addition to our on-staff veterinarians, we

contract with local veterinarians who regularly visit our farms and help to

keep our animals healthy.

Stratford, TX



Input Organic Dairy

Organic PastureAlways

minimum 30% DMI for at least 120 days each year during grazing season

USDA Certified Always

Synthetic Pesticides Never Used

Synthetic Herbicides Never Used

Synthetic Growth Hormones Never Used

Antibiotics Never Used*

GMOs Never Used

We also maintain our animal care certification through Validus. Every

year since becoming Validus Certified, each of our farms has received

the highest rating of ‘Excellent’ (for more on Validus, please refer to

page 20).

OUR SUPPLIERS MUST MEET OUR STANDARDS

FOR ORGANIC EXCELLENCE

Our organic commitment provides a strong foundation for our business.

It reaches deep into the supply chain to our many organic feed, animal

and raw milk suppliers, and to providers of farm and plant operational

supplies. We support more than 120 independent certified organic

farmers, and require that they adhere to our farm sourcing policies. Our

sourcing policies stipulate that products must meet our quality standards

and be USDA organic certified. We expect competitive rates, open and

transparent communications, and reliable service. In return, we treat all

of our suppliers with integrity, provide a fair price and nurture long-term

relationships. Our first preference is to work with local farmers and

suppliers in the communities where we have facilities.

More than 80% of the milk we sell is produced on our own farms.

We also purchase milk from a few, select organic dairies once we

have ensured our milk quality and animal care programs are in place.

These producers are Validus Certified for animal care and must have

valid USDA organic certifications.

Companies supplying materials to our milk plant must adhere to our

Supplier Policy, which is reviewed annually by our Director of Quality.

Suppliers must undergo a comprehensive food safety audit and meet the

requirements of our Safe Quality Food (SQF) 2000 Level III Certification.

SQF is a comprehensive third-party food safety certification program that

goes beyond the standard food manufacturing requirements for food safety

and quality. In 2013 and 2014, all of our suppliers were compliant with our

sourcing policies for our farms, milk and plant.

THE ORGANIC DAIRY DIFFERENCE

Location, TX

*Except to preserve the animal’s life – once treated, the animal is sold to a conventional dairy


LEADERS IN FOOD SAFETY AND QUALITY

Our Platteville processing plant is 100% dedicated to organic milk

processing and is certified organic by Quality Assurance International (QAI).

Because we own much of our supply chain, we can focus on food quality

and safety from cow to carton. Our plant is staffed with quality experts

who provide ongoing feedback to our farms, which continuously improves

the quality of the milk we bottle. Whether it is sensory feedback related to

the diet of our dairy cows, or a result from the numerous quality tests we

conduct at eight stages along the supply chain, this continuous feedback

results in high-quality milk.

In addition to being organic certified by QAI, and meeting all the regulations

and requirements for dairy processing in the U.S., our milk plant is SQF

Level III certified. This is a voluntary program that exceeds standard

dairy manufacturing requirements. SQF Level III certified manufacturing

facilities are certified to comply with international and domestic food safety

regulations and, as a result, meet the highest standards for food processing,

preparation and handling. Our Platteville milk plant has participated in SQF

since 2009, and has received annual SQF audit scores between 97% -

99% for the last six years.

Our facilities are frequently visited by our stakeholders, including: Board

of Directors, banks and lenders, retail customers, regulators, suppliers and

insurers. Stakeholders visiting our facilities review our practices in a variety

of areas, including adherence to organic standards, employee benefits and

practices, codes of conduct, ethical sourcing, workplace safety and quality.

MAKING ORGANIC DAIRY MORE AFFORDABLE

We believe organic dairy products should be readily available and more

affordable for all consumers who choose them. In fact, it is our objective

to bring our high-quality organic dairy products to more people through

our vertically integrated supply chain, efficiencies, spirit of innovation and

exclusive commitment to retail store brands. These store brands are typically

more affordable than their name-brand counterparts and are oftentimes

available in stores that may not otherwise carry a large selection of organic

products. Our 100% commitment to organic, store-brand dairy products

is central to our organizational mission, and allows us to have a positive

influence on more organic acres, animals and people – both our employees

and consumers.

AWARD-WINNING ORGANIC MILK

1st Place for Ultra-Pasteurized Milk – World Dairy Expo, 2012

Best Fluid Milk Plant – All Star Dairy Association, 2008, 2012

Exceeds Industry Quality Standards – All Star Dairy Association, 2009 - 2012

We must earn our customers’ business every day by delivering relevant, high-quality products at an exceptional value.

CORE VALUE: SATISFACTION

http://www.sqfi.com/standards/

http://www.sqfi.com/standards/



MILK QUALITY SCORE OF

IN 2014

97%

based on a maximum score of 100% from annual SQF audits

Stratford, TX


above-and-beyond what is expected to ensure every employee,

supplier and facility participating in our milk production reflects

our high standards for animal care.

Animal Husbandry is a Top PriorityAt Aurora Organic Dairy, our dairy cows and employees are

our most important stakeholders. Animal husbandry is the

cornerstone of our dairy farm operations, and we go

Dublin, TX



Core Value: Cow Care The health and well-being of our dairy animals are our top priorities.

Animal Husbandry is a Top Priority


Year-round outdoor access

24/7 Supervision

& health evaluation

Nutritious organic feed &

pasture

Employee training & in-house

veterinarians

Disease prevention

Cow comfort

ANIMAL HUSBANDRY

Dublin, TX



IN-HOUSE ANIMAL HUSBANDRY EXPERTISE

A comprehensive animal care program, high standards for cleanliness, and

employee training are critical to maintaining animal health and well-being

in an organic system. We cannot rely on antibiotics to treat disease, so our

animal care protocols are crucial to keep our herds healthy. Throughout our

35-year history as dairy farmers, we have cultivated expertise and adopted

best practices in animal care. In fact, our Executive Vice President of Farm

Operations, Juan Velez, MV, M.S., DACT, has spent more than 30 years in

the dairy industry. During that time, he has developed many of the common

animal care protocols used in organic dairy production to ensure cows stay

healthy without the use of antibiotics.

Animal care is the responsibility of every employee on our farms. Several

times a year, each worker participates in comprehensive training that covers

key animal care and safety protocols. In 2013 we further enhanced our

employee training programs by developing various modules and supporting

materials – such as presentations and videos – that provide continuous

reinforcement to our employees regarding animal care and safe animal

handling best practices.

We have always employed on-staff veterinarians, and also have a dedicated,

full-time farm management position to oversee all animal husbandry

protocols. Dr. Hans Bothe, a long-time on-staff veterinarian, is our director

of herd health and ensures our dairy farms deliver the best in animal

care. Additionally, we consult with an outside nutritionist who continually

customizes the feed ration for each facility, cow group and developmental

stage to maximize animal health.

Our facilities are designed to optimize cow comfort and employee safety.

For example, walkways are lined with rubber mats to provide a cushioned

lane for cows and employees, and milking bays are raised to reduce back

strain in our milking staff. Our cows have year-round outdoor access and

are protected from the elements with open, loose-housing and free-stall

barns. They graze on organic certified pasture in the grazing season, and

eat a nutritionally dense diet of organic feed from our fields and the fields

managed by the more than 120 independent organic farmers we support.

For more detail on our rigorous animal health and management protocols,

please refer to page 53-54 of this report.

Healthy, stress-free cows contribute to higher quality milk.”

Gill, CO

HANS BOTHE, DVM, DIRECTOR OF HERD HEALTH

“


CERTIFIED FOR ANIMAL HUSBANDRY BEST PRACTICES

To ensure we maintain and continue to strengthen our commitment to

animal husbandry, each of our farms and processing plant are voluntarily

audited and certified by Validus, an independent USDA process verified

animal welfare certifier.

Our first farm was Validus certified in 2005, and we have since achieved

Validus certification for each of our farms and milk plant. The audits include

a thorough inspection of our animals, facilities, protocols and records.

Inspectors score all of our farms on more than 115 animal welfare metrics,

including: lameness, cleanliness, body condition, behavior, facilities,

protocols and management. Every one of our farms has consistently received

the top rating of “Excellent.”

As of the end of 2014, two of our three major heifer suppliers, and our

primary outside milk suppliers, have been Validus certified. Our goal is to

certify our remaining heifer grower by the end of 2018.

BE COMPASSIONATE / SEA COMPASIVO

DR. JUAN VELEZ, EVP OF FARM OPERATIONS

To reflect our core values of compassion towards animals and people, bilingual signs are posted throughout our dairy farms.

After a thorough review of all the animal

welfare certifications available, we selected

Validus because of their rigorous review and

audit process. Validus certifiers spend several

days on our farms. They review our standards,

practices and records, and observe our cows

in all areas of our facilities. We are scored on

more than 115 metrics related to animal care,

and our farms have consistently earned the

highest rating of Excellent.”

Platteville, CO

“



CONTINUOUS IMPROVEMENT IN ANIMAL HUSBANDRY

In 2012 we set additional animal care goals, including: minimizing

dehorning on our farms, reducing the rate of lameness in our herd, and

increased employee education and training. We set a goal to reduce the rate

of lameness in our herd by 20% by 2015. Since we established this goal

in 2012, the percent of cows with lameness characteristics within the herd

declined by more than half in 2014, already exceeding our 2015 goal.

In 2015 we added an additional animal care goal focused on 24/7

monitoring of our facilities to provide further assurance that our animal care

protocols are being followed at all times. We have installed video cameras

at key areas of our farms and are conducting internal monitoring. We plan

to add external monitoring of these video feeds by a third-party animal care

expert by 2017.

In 2013 we began using polled bull semen to minimize the number of calves born with horns on our farms.

Dehorning

Stratford, TX


innovation and the spirit of entrepreneurship upon which our

Company was founded. We recognize that our business cannot exist

without our talented and passionate people, and without our deep

relationships with our stakeholders and local communities.

Supporting People and CommunitiesPeople are integral to our corporate citizenship program at

Aurora Organic Dairy. Our 550 employees, more than 120

independent farmers, our suppliers and our local communities

make it possible for us to achieve our goals. We embrace

Dublin, TX



Supporting People and CommunitiesCore Value: PeopleEmployee satisfaction and development are keys to our success.


HOME OFFICE

9%

EMPLOYEE DISTRIBUTION

550 EMPLOYEES. INDUSTRY-LEADING TEAMS

We are proud of the teams we have built across our organization, and strive

to attract and retain best-in-class employees in their respective fields. Our

leadership group is comprised of individuals who helped establish and

grow the organic dairy industry. Our comprehensive benefits, training &

development programs, and competitive pay allow us to hire and maintain a

consistent workforce with extensive knowledge and expertise in our industry.

WE WELCOME DIVERSITY

We embrace diversity at Aurora Organic Dairy. Approximately 60% of our

total employees are of Hispanic descent and predominantly speak Spanish

as a native language. As a result, we hire many managers who are bilingual,

and we provide all important company information and training programs in

both English and Spanish.

In terms of gender diversity, 20% of our total workforce is women, and of

the 88 professional and management-level employees across our farms,

plant and home office, 31 are women (35%). Both the High Plains and

Platteville Dairy Farms are managed by women.

COMPREHENSIVE BENEFITS FOR ALL EMPLOYEE LEVELS

We believe if we provide our employees with a rewarding work experience

and recognition, and treat them with respect, they will be more dedicated to

our shared success. We also provide competitive wages and comprehensive

benefits across all levels of our Company. As a result, our employees are

invested in our success and support the values of our organization.

All full-time employees have access to comprehensive benefits, including:

• Medical coverage with various options

• Dental & Vision coverage

• 401K with a company match

• Paid Time Off

• On-site housing for farm employees

• Competitive wages

• Life insurance

• Access to short-term disability coverage

• Tuition support

• Scholarships for family members seeking post-high school education

When I founded Aurora Dairy 39 years ago,

I committed to providing the same benefits

to all employees, regardless of job title or

level within the organization. Today, with

550 employees, I am proud to say that

we continue to embrace this commitment.

Regardless of whether you are milking cows,

processing and packing milk or working in

an office, you have the same access to

benefits as everyone else.”

MARC PEPERZAK, FOUNDER & CEO 550 full-time employees as of March 2015 (nearly 100% of total workforce)

“

PLANT

28%

New ideas and entrepreneurship from stakeholders, and talent across our organization drive industry leadership.

CORE VALUE: INNOVATION

FARMS

63%



EXCELLENCE IN EMPLOYEE CARE

The Validus Worker Care audit and certification program provides third-party verification that employees are legally hired, fairly compensated and treated, and have a safe working environment and sufficient training to ensure job competency. Each of our farms is audited and certified annually, and earns scores in excess of 90% out of 100%.

Stratford, TX


All farm employees participate in comprehensive training when they are

hired, and frequent job-specific training programs during their tenure with

the Company. Each of our farm employees must go through comprehensive

animal care training and regular refresher trainings throughout the year.

Our plant employees participate in food safety and quality training,

plant safety programs and specific training for various processing plant

job responsibilities and duties. We estimate that, in 2014, farm, plant

and home office employees participated in more than 10,575 hours of

comprehensive training programs, which is an average of almost 20 hours

of training per employee.

We also offer tuition assistance and other opportunities for job training

to encourage our employees to grow in their careers. Twenty-four percent

of our employees have been with Aurora Organic Dairy for five or more

years. We are not only proud of this longevity within our workforce, but

we encourage them to advance within our organization, and use the many

educational and training opportunities to accelerate that process.

WORKPLACE HEALTH + SAFETY– NEW GOAL


5%

As compared to prior three-year average number of incidents per 200,000 hours worked

*Based on AOD average number of farms and plant OSHA reportable incidents from 2012 - 2014 vs. 2011 - 2013. Note: Plant incidents in the current period were inflated due to the plant expansion and cold storage facility construction. In 2014, our plant reported 5.3 OSHA incidents per 200,000 hours worked, which is 17% lower than the dairy manufacturing industry average of 6.4 incidents.

Continuously improve workplace injury rates at our farms and plant*

Plant

9%Farms

TRAINING AND EDUCATION HELP OUR PEOPLE

SAFELY PERFORM AT THEIR BEST

Providing training and education for our employees is a critical aspect of

our business. Our farm employees work around animals and with farm

equipment, and our plant employees work in a manufacturing facility,

all of which have multiple hazards. Therefore, comprehensive training is

required to ensure the safety of our people and our animals.

CONTINUOUS IMPROVEMENT IN WORKPLACE

HEALTH AND SAFETY

In addition to keeping our facilities safe and clean, the training programs

we provide to our farm and plant employees help to minimize workplace

accidents and injuries. We believe it is our responsibility to support our

employees and minimize the risk for serious injury.

Because workplace health and safety is so important to us,

in 2015 we added a new goal area to continuously improve

workplace injury rates at our farms and plant. Progress against

this goal will be measured by a three-year average of OSHA

reportable incidents of injury per 200,000 hours worked. In

2014, using this methodology, our milk plant average number

of incidents increased by 5%, and our farm average number

of incidents declined by 9% (average incident rate from 2012

– 2014 compared to the average incident rate from 2011 –

2013). Our plant incidents in the current period increased as

a result of our 2013 and 2014 plant expansion and on-site

cold storage construction. Even with the construction and

expansion, in 2014, our plant reported 5.3 OSHA incidents

per 200,000 hours worked, which was 17% lower than the

dairy manufacturing industry average of 6.4 incidents.

Our retail customers and other key stakeholders require we provide

programs for our employees that meet their comprehensive

criteria for partnering with companies that have strong workplace

conditions and ethics. Several customers and other stakeholders

require code of conduct and workplace audits to ensure their

standards are being met. These audits of our facilities include

safety, proper storage of cleaning supplies, proper use of Personal

Protective Equipment, as well as worker care measures, such as

job satisfaction, hours worked, pay and overtime rates.

The auditors conduct individual interviews with randomly selected employees, and

review workplace procedures and records. The feedback we receive from these

audits is that our facilities have excellent standards for worker care.

Platteville Milk Plant, CO

RESEARCH TO IMPROVE DAIRY FARM WORKING CONDITIONS

In 2015 our Platteville Dairy began participation in a dairy farm worker health study with Colorado State University to determine ways to mitigate dust exposure at dairy farms. This is just one example of how we work with various academic and research institutions to support our industry.

INCIDENCE OF INJURY




COMMUNITY + EMPLOYEE– ON TARGET

2017 GOAL

2017 GOAL

2017 GOAL

2017 GOAL

2014 PROGRESS

2014 PROGRESS

2014 PROGRESS

2014 PROGRESS

Demonstrate value of employee benefits to all employees

Enhanced training programs

Improve communication with bilingual employees

Develop a community center at a remote farm location

Face-to-face benefit enrollment meetings in English & Spanish at all locations

Comprehensive animal welfare and safety training programs & videos presented to all employees at all facilities

All pertinent company information and trainings offered in English & Spanish

Coldwater employee cafeteria and break room scheduled to be completed in 2015


SCHOLARSHIPS SUPPORT HIGHER EDUCATION

Our scholarship programs include: Future Farmers of America high school

scholarships, Colorado State University organic agriculture scholarships,

and scholarships for family members of our employees who pursue

education beyond high school. We also provide cattle, milk and monetary

donations to local 4-H programs.

In addition to funding scholarships for students interested in pursuing a

career in organic agriculture, we have a robust internship program at our

farms. Since 2003, we have hosted more than 100 interns, representing

14 different countries. Several members of our farm management team

started as interns at our farms and, since supporting these various

scholarship programs, we have hired two employees who were recipients

of those educational funds.

RELATIONSHIPS BUILT ON TRUST AND INTEGRITY

We value our relationships with our stakeholders across our supply chain

and with the communities where we do business. We strive to work with

as many local and regional suppliers as we can, supporting them as they

transition their crops to organic. We treat our suppliers with integrity, pay

competitively and nurture long-term relationships.

COMMUNITY SUPPORT FOR AGRICULTURE,

EDUCATION AND HUNGER RELIEF

Our community support programs focus on hunger relief, local schools,

and education in agriculture and dairy sciences to support the future leaders

of our industry. We actively donate organic milk and butter to schools and

food banks, and provide monetary support to local non-profits and

educational programs.

In 2014, we contributed more than $97,000 in scholarships and cash

donations to nonprofit organizations. Our product donations in the

communities where we operate totaled a retail value of approximately

$318,000 – or 38,375 gallons of milk and 5,910 pounds of butter. We

also provide free organic milk to employees every payday, and each month

supply free organic milk to neighbors who live near our dairy farms.

We host educational tours of our facilities and our employees often lend

their expertise by speaking at local schools and community groups. Our

farms often serve as an educational facility for universities teaching

veterinary medicine and organic agriculture. We actively engage with and

support local community organizations.

CORE VALUE: INTEGRITY

Strong relationships are built on trust forged by openness and honesty.

38,375 5,910gallons of Organic Milk

pounds of Organic Butter

Donated in 2014

this equals (approximate retail value)

$318,000 in product donations

We also donated more than $97,000 in scholarships and cash to nonprofit

organizations throughout the year

Platteville, CO



RECOGNIZING FUTURE LEADERS

Since 2006, we have donated nearly $275,000 in funding through various scholarship programs to ensure a vibrant future for the organic dairy industry. In 2014, we donated approximately $36,000 in scholarships.

In 2011, we started our Barney Little Scholarship program, giving educational funds to family members of our employees. Our suppliers and other stakeholders make donations by sponsoring our annual charity golf tournament and, to date, we have provided nearly $100,000 in scholarships to our employees’ families. One star student (pictured here), who is the daughter of a 20-year Aurora farm employee, received a scholarship that helped pay for three years of her college education. Upon graduation, she was hired on our farm accounting team in 2014.

Since its inception, we have provided $20,000 a year in scholarships to the Colorado State University College of Agriculture organic program, funding scholarships, teaching assistants and experiential activities. We further support these students by offering internships, and have hired organic agriculture soil and crop scientists from the program to manage our farmland and grow high-quality organic pasture and feed crops.

Platteville, CO


This, along with the U.S. dairy industry’s efforts to reduce the

overall impact of dairy production and processing (U.S. Dairy

CSR), further heightened our awareness of our environmental

impact areas.

Reducing Our Environmental ImpactAs an organic dairy company, we have always been conscious

of our impact on the planet. The affect of agriculture –

particularly livestock operations – on global warming and

overall environmental degradation has been widely publicized.

Platteville, CO

http://www.usdairy.com/sustainability/reporting/us-dairy-sustainability-report

http://www.usdairy.com/sustainability/reporting/us-dairy-sustainability-report



Reducing Our Environmental ImpactCore Value: Environmental StewardshipWe will be conscious of our impact on the planet and preserve our natural resources for future generations.

GHG GOAL BOUNDARY

92014 PROGRESS

per half gallon equivalent of milk vs. 2012 baseline


15%2017 GOAL

%

CROP GROWING+ TRANSPORT

1.2 kg CO2e

31%

OF TOTAL GHG EMISSIONS

SUPPLIES+ MISC

0.4 kg CO2e

9%

0.2 kg CO2e

FARMS +PASTURES

4%

<0.1 kg CO2e

RAW MILKTRANSPORT

1%

0.2 kg CO2e

PLANT +COLD STORAGE

6% DISTRIBUTION

0.4 kg CO2e

10%

1.1 kg CO2e

COWS

26%

0.5 kg CO2e

13%

RETAIL +CONSUMER

4.0 kg CO2e

HALF GALLONAOD MILK

100% OF TOTAL GHGS


DAIRY INTEGRATION ALLOWS CONTINUOUS

MEASUREMENT OF IMPACTS IN SUPPLY CHAIN

In 2008, we completed our first Life Cycle Assessment (LCA) of a half

gallon equivalent of milk, which identified the GHG emissions and energy

expended at each life cycle stage – from feed growing and transport to

consumer consumption and packaging disposal. As a vertically integrated

dairy operator, we have a unique ability to track virtually every stage of the

process, and use primary data to determine the stages along the milk life

cycle where we can have the greatest positive influence.

We have updated our LCA every year since 2008, have added water use

and solid waste/recycling to our data tracking, and have refined our ability

to track and measure our environmental impact areas. We work with

external sustainability consultants to ensure our calculation and reporting

methods reflect industry-leading standards. Stratford, TX

2014 Life Cycle Assessment of AOD milk

For life cycle stages within our GHG goal boundary, we use primary data from our business operations. Remaining life cycle stages are calculated using a combination of both primary and secondary data. This LCA was conducted in accordance with ISO 14040 and 14044 standards, and the methodologies for estimating greenhouse gas emissions from cows and farm operations were based on the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. ISO recognizes that LCAs may use different system boundaries, allocation procedures, data sources and quality, and impact assessment methods. These differences may affect the results. For this reason, the ISO 14044 standard requires an evaluation of the system equivalence of methodologies before comparing with results from other LCAs.

GHG GOAL BOUNDARY

92014 PROGRESS



15%2017 GOAL

%

CROP GROWING+ TRANSPORT

1.2 kg CO2e

31%

OF TOTAL GHG EMISSIONS

SUPPLIES+ MISC

0.4 kg CO2e

9%

0.2 kg CO2e

FARMS +PASTURES

4%

<0.1 kg CO2e

RAW MILKTRANSPORT

1%

0.2 kg CO2e

PLANT +COLD STORAGE

6% DISTRIBUTION

0.4 kg CO2e

10%

1.1 kg CO2e

COWS

26%

0.5 kg CO2e

13%

RETAIL +CONSUMER

4.0 kg CO2e

HALF GALLONAOD MILK

100% OF TOTAL GHGS



EXPANDING OUR GHG GOAL BOUNDARY

AND OUR COMMITMENT

In an effort to identify additional opportunities to reduce our environmental

impact, we expanded our focus beyond operations under our direct

ownership. To challenge ourselves, and simultaneously hold ourselves

accountable to this commitment, in 2014 we incorporated several more

LCA stages into our GHG goal boundary. The additional stages include:

third-party heifer raising operations, raw milk transport from farms to our

plant, finished goods transport from our plant to third-party cold storage

facilities, and cold storage facility energy use. The expanded boundary and

our improved data collection and analysis methods drove a restatement of

historical results to ensure accurate year-to-year comparability. As such,

some of our emissions and energy results have been updated since our

previous report, published in 2013. The update did not have a material

effect on our performance relative to prior years.Platteville Milk Plant & Cold Storage, CO


Our 2014 plant expansion and construction of an on-site cold storage facility incorporated energy-efficient systems throughout, including heat exchangers, low wattage lighting and efficient HVAC systems. For optimum efficiency, our cold storage facility uses robotics to place and retrieve pallets stacked 18 positions high. The energy used to move the cranes up the 120-foot height of the warehouse is partially offset by the energy captured as the system uses gravity to lower pallets to the ground.

We also incorporated a glycol system underneath the concrete of our outbound loading area at the cold storage warehouse. This system circulates glycol, which is warmed from heat recovered during milk pasteurization. Throughout the winter, the glycol heats the concrete slab at our loading bays, keeping them free of snow and ice (please see photo, next page).

ENERGY-EFFICIENT FEATURES THROUGHOUT PROCESSING & STORAGE




GHG EMISSIONS AND ENERGY USE DECLINED

Within GHG Goal Boundary

We report our GHG emissions and energy use in terms of "per half gallon

equivalent" of organic milk produced and processed. Normalizing our results

ensures year-to-year comparability as our sales grow, and allows us to set

meaningful sustainability goals for our business. Our 2014 reduction in

GHG emissions and energy use were largely driven by greater efficiency in

our business, as our overall volume of milk produced and processed has

increased. While we have added a new dairy farm, heifer farm and on-site

cold storage facility to our footprint since setting our 2012 baseline, the

increase in milk volume and efficiencies outpaced the energy use and GHG

impact of these new facilities.

RESULTS

PER HALF GALLON EQUIVALENT OF MILK

2012 BASELINE*

2014 PROGRESS

% CHANGE

CO2e emissions (kg) 1.65 1.51 9%

Farm and Plant Energy (MJ)

4.62 4.08 12%

*2012 data has been restated (please refer to page 33)

Platteville, CO


Recovered heat keeps loading bays free of snow and ice


EVOLVING OUR KNOWLEDGE OF ENVIRONMENTAL IMPACTS

Our companywide goals are to reduce GHG emissions and energy use per

half gallon equivalent of milk by 15% by the end of 2017. We have learned

a tremendous amount about our business and its environmental impact

since we conducted our first Life Cycle Assessment in 2008. As we move

beyond 2017, we will continue to develop goals that positively influence

both our operations and the operations of our suppliers, to reduce our overall

adverse impact on the environment.

We are optimistic we can achieve our current long-term goals. However,

we also understand that a large portion – 71% – of our companywide

GHG emissions are cow emissions from enteric fermentation and manure

management. While we have researched ways to reduce enteric emissions,

many of the methods available to the broader dairy industry are not allowed

in organic production. We will continue to research this area to identify

organic-approved inputs that may address enteric emissions.

Location, CO

LED LIGHTS FOR FARM BUILDINGS

In 2014, our farm locations began using energy-efficient LED lights for new buildings. Additionally, when traditional lighting needs to be replaced in existing buildings, where possible, we will install LEDs and timers.

Gill, CO

Emissions from manure management make up the remaining cow-related

emissions in a dairy farming system. Our manure management protocols follow

best practices, as we manage the majority of our manure using composting

principles, and use it as organic-approved fertilizer on our pastures and

croplands. While we have reduced manure-related emissions through best

management practices, we expect to identify additional opportunities in this area,

and will continue to research ways to reduce or offset cow-related emissions.

We believe innovation and sustainability work together to increase efficiency and

reduce our environmental impact. As such, we encourage employees to develop

innovative solutions and new practices that can be incorporated throughout our

organization. For example, in 2014 our High Plains Dairy Farms implemented a

unique canal system that uses gravity to separate bedding sand from manure. The

manure is composted and the sand is recycled, reducing the amount of new sand

needed and saving the associated GHG emissions.



REDUCED IDLING TIME

In 2014 we began using farm equipment that features an automatic shut off capability, as well as technology to monitor and report idling time. This allows us to quickly identify opportunities to reduce nonessential fuel consumption on our farms.

TRANSPORTATION BENEFITS BORN FROM FACILITIES’ EXPANSION

Another contributor to our GHG emissions is transportation. In our

supply chain, this includes feed transportation to our farms, raw milk

transportation to our plant, and packaged milk transportation to our

customers’ distribution centers, to retail stores and then to our consumers’

homes. In all, transportation makes up more than 15% of our Life Cycle

emissions. While we don’t own or directly manage these distribution

stages, transportation is an important area in our sustainability program.

In 2013 we built the High Meadow Dairy Farm in Gill, CO, which ultimately

reduced the average distance our raw milk is shipped for processing. As a

result, in 2014, we reduced the average distance our raw milk traveled by

580,000 trucking miles, saving 1,000 MT of CO2e emissions.

When we expanded our Platteville processing plant and added an

on-site cold storage facility in 2014, we also reduced our transportation

footprint. Prior to having our own cold storage, we had been shuttling our

packaged milk to Henderson, CO to be stored, and it was then shipped

to our customers’ distribution centers from there. Over the course of

2014, we have reduced those shuttles by 90%, saving an estimated

250,000 in trucking miles and 500 MT of CO2e emissions in 2014.

When we combine both transportation benefits, the savings is equivalent

to 3,500,000 miles driven in an average passenger vehicle (source:

EPA Greenhouse Gas Equivalencies Calculator).

To further reduce our finished goods' transportation emissions, we continue

to support the EPA SmartWay program and, since 2009, require that all

new carriers be SmartWay Certified.

We have added our farm-to-plant raw milk transport and plant-to-cold storage

transport into the CSR data tool we use to track and understand our impacts,

and the effectiveness of our reduction efforts. Additionally, we plan to adopt

a comprehensive transportation management software that will allow us to

more precisely track our packaged milk distribution across the U.S. When

available, this data will also be added to our CSR tool and will help us to

identify opportunities to improve our overall distribution efficiency.

Stratford, TX

Platteville, CO

http://www.epa.gov/cleanenergy/energy-resources/calculator.html


USING TECHNOLOGY TO DRIVE FARM WATER EFFICIENCY

Farm irrigation makes up more than 90% of our total water use. To ensure we use our water in the most efficient way possible, we are investing in innovative smart technologies that run our irrigation pivots remotely – from our smart phones and tablets – and respond to on-the-ground moisture conditions in real time.

Platteville, CO



78% OF OUR PLANT WATER IS RECYCLED

The water our plant uses to process milk comes from our local municipality.

This allows us to accurately track our water usage at the plant. Our on-site

effluent pretreatment facility pretreats approximately 78% of the

water we use, and returns it to the local sanitation district –

recycling the water for future uses. The plant’s remaining

water consumption is the result of evaporation from the

cooling systems and steam loss from the high temperatures

required during the milk pasteurization process.

CONSERVING WATER AS OUR MOST PRECIOUS RESOURCE

Water is becoming an increasingly scarce resource. Arid conditions in

Colorado and Texas where we operate farms, and – more severely – the

current drought in California, make water conservation and efficiency critical

in food production. As such, water conservation and making efficient

use of our scarce water resources are top sustainability priorities for

Aurora Organic Dairy.

REMOTE OPERATION TECHNOLOGY DRIVES GREATER FARM

WATER EFFICIENCY

The water we use on our farms goes primarily to pasture and crop irrigation,

and we also use water for facility wash-ups and cow drinking water. Our

water sources at our Colorado farms include municipal water, well and ditch

water, which is primarily snowmelt from the mountains. Our Texas farms use

well water. Water used in the milking parlors is captured and diverted to our

lagoons, which is eventually used a second time for irrigation.

With more than 90% of our companywide water use going to crop and

pasture irrigation, we have prioritized better management and tracking of our

irrigation water as our primary area of focus. Prior to 2015, we estimated

farm water use based on irrigation activity logs that did not allow for precise

measurements. In 2015 we began installing remote operation technology

on our irrigation pivots. This capability will allow us to better track and

monitor water usage, as well as implement customized water prescriptions

for each field. Over time, we will be able to optimize irrigation water use

by considering weather patterns and water retention characteristics specific

to each field.

We determined our previous goal to reduce our companywide water use by

15% was premature for our farms, given the data challenges mentioned above.

Therefore, we have removed our 15% water reduction goal from our farms’

sustainability performance metrics, and added a goal to install more remote

operation and water measurement technology (where compatible) on company-

operated irrigation pivots. It is our goal to have this technology installed on

70% of our pivots by the end of 2015, and 90% of our pivots by the end of

2016. Once we have the technology installed, we will be able to better track

and manage our water use and set longer-term water efficiency goals.

Compared with our 2012 baseline, our plant water use per half gallon

equivalent of milk declined by 18% in 2014, exceeding our longer term

goal. We are pleased with this progress and expect we will continue to

reduce our plant water use per half gallon equivalent of milk. Further

reductions will be the result of employee training and actions to reduce

overall water use (please refer to box below), as well as a continued focus

on efficiency and increased milk volumes being processed in our facility.

PLANT WATER USE*per half gallon equivalent of milk

2014 PROGRESS

18%vs. 2012 baseline

*net of pretreated and recycled water

SAVING WATER IN MILK PROCESSING

Inspired to reduce overall water use, in 2015 our plant employees utilized a solenoid valve and programming to incorporate pauses at appropriate times in the water flow at our gallon jug rinse station. This small step in the overall process saves more than 500,000 gallons of water a year.


BEST PRACTICES IN MANURE MANAGEMENT

What may sometimes be considered a waste stream - animal manure -

is actually a valuable input for our farms and crops. As an organic producer,

we recycle nearly 100% of our livestock manure, as it is managed with

composting principles and used as high-quality organic fertilizer for our

pastures. We first separate the liquids from the solids. Then, approximately

75% of the dry manure is managed with composting principles and the

remainder is applied directly to our fields. This approach – compared to a

liquid manure system – significantly reduces the amount of GHG emissions.

FARM SOLID WASTE & RECYCLING

The environmental impact of our waste may not be as great as other

environmental impact areas, such as GHG emissions or water use, but it is

important to our Company to reduce our waste and to increase our ability

to reduce, compost, recycle and reuse.

Waste streams generated by our dairy farms include packaging for

veterinary supplies to treat our dairy cows, feed bags, silage plastic,

bedding twine, nitrile gloves, filter socks and other materials. Our larger

dairies have reduced their need for disposable dairy wipes by switching to

reusable, washable microfiber wipes, which diverted approximately 70 tons

of waste from landfills annually. We continue to explore possible recycling

solutions and ways to reduce the amount of waste generated by our farms.

Because they are in rural locations, most of our farms do not have

municipal recycling programs available. As a result, we have not been

able to recycle materials at our farms, and have not made progress toward

our 2017 goal to divert 25% of our farm landfill waste. Despite these

challenges, we are committed to reaching our goal and pushing ourselves

to develop creative solutions for waste diversion at our farms in the future.

We will also work to help advance the recycling infrastructure in the

communities where we operate.

PRODUCT PACKAGING

68% of our milk is packaged in half gallon cartons made from Forest Stewardship Council Controlled Wood certified paperboard, and has a polyethylene coating. In 2015, more than 55% of U.S. households have access to milk carton recycling.

Visit www.recyclecartons.com for more information.

The remaining 32% of our milk is bottled in polyethylene (HDPE) gallon jugs that can be recycled where No. 2 plastics are accepted. In 2014 approximately 95% of the U.S. had access to No. 2 recycling centers. Our secondary packaging is corrugated cardboard, the majority of which is recycled by the retail locations that sell our milk.

http://www.recyclecartons.com



MORE THAN HALF OF PLANT WASTE RECYCLED

Our processing plant recycled 54% of the waste it generated in 2014.

This included corrugated cardboard, wood pallets, plastics from our gallon

milk jugs and barrels, and plastic wrap. In 2014, we recycled 787 tons of

these materials compared to 430 tons of materials recycled in 2012, which

represented a 50% diversion rate at that time.

The largest component of our plant landfill waste is our half gallon milk

cartons that contain milk residue. When customer ordering patterns change,

milk sometimes needs to be repackaged and the used milk cartons are

thrown away. Due to the milk residue on the cartons, our municipal recycler

found it challenging to recycle them. We are working to determine a solution

that would allow these cartons to be recycled – similar to carton recycling

offered by curbside recycling programs.

Once we find a solution to minimize this waste stream, we expect we will

further increase the plant recycling rate and move closer toward our goal of

recycling at least 75% of plant waste by the end of 2017.

Stratford, TX


confirm that we are focused on the right aspects of our

business, and ensure we always hold ourselves accountable.

As such, we have prepared this report 'in accordance' with

GRI G4 Guidelines (Core Option) and GRI’s Food Processing

Sector Supplement.

AppendixWe take our corporate citizenship very seriously at Aurora

Organic Dairy. Our commitment to animals, people and the

planet drives our comprehensive corporate responsibility

program. Our adherence to the Global Reporting Initiative

(GRI) G4 guidelines and stakeholder engagement further

Gill, CO




APPENDIX

ORGANIZATION’S SCALE

As of the end of 2014, we employed 525 people at seven organic dairy

farms and one heifer farm, our fluid milk plant and headquarters office

(please refer to map, inside front cover). As of March 2015, we employed

550 full-time employees (100% of our workforce) at all facilities.

As a privately held company, we do not disclose some details requested by

GRI. In general, however, our sales and volume growth in 2014 accelerated

due to continued growth in overall consumer demand for organic dairy

products and an increasingly short supply of organic milk in the U.S. As

a result of strong demand, we continue to invest in our production and

processing capabilities. In 2013 we added our High Meadow Dairy Farm

and in 2014 we expanded our processing plant capacity. Our debt-to-equity

ratio at the end of 2014 was 1.10, compared with 0.95 at the end of 2012.

Dairy Farms & Pastures

Cows

Raw Milk Transport

Milk Plant & Cold Storage

GHG GOAL BOUNDARY

CORE VALUE: RETURNS

Financial health and return to shareholders are necessary to sustain our business and mission.

THIS APPENDIX PROVIDES GREATER DETAIL ON THE TOPICS COVERED

These transportation stages include: raw milk transport from our farms to

our milk plant, and transportation shuttles from our milk plant to off-site cold

storage. For year-over-year data comparability, we have incorporated into

our CSR data tracking tool and GHG goal boundary historical data for these

transportation stages, third-party heifer-raising and off-site cold storage.

Our prior goals boundary used in our first Corporate Citizenship Report

published in 2013 included company-owned and operated facilities. The

goals boundary for this 2015 report includes those LCA stages we largely

own, operate or directly control because of our increased vertical integration.

Therefore, our reporting boundary now includes the pasture we grow, our

heifer-raising operations and estimates for third-party heifer farms, our dairy

farms, raw milk transport from farms to our plant, our milk plant and cold

storage facility, and transportation shuttles between our plant and off-site

cold storage.

OUR CORPORATE CITIZENSHIP GOALS BOUNDARY

Aurora Organic Dairy is a vertically integrated organic dairy producer and

processor. We grow our own pasture and a portion of other feed crops for our

dairy cows, own and manage our own dairy farms and process our milk. All

company-owned entities included in our consolidated financial statements are:

High Plains Dairy Farms, Platteville Dairy Farm, Coldwater Dairy Farms, Pepper

Heifer Farm, Platteville Milk Plant & Cold Storage and our Boulder Headquarters.

Each of these facilities is included in our corporate citizenship data-tracking and

goal-setting. However, due to the minimal impact of our Boulder Headquarters

on key environmental impact areas (less than 1%), it is currently excluded from

our primary environmental stewardship reporting and goal-setting.

Due to the expansion of our business, in 2014 we incorporated Life Cycle

Assessment (LCA) stages into our Corporate Citizenship reporting that were

previously outside our GHG goal boundary. These include: third-party heifer-

raising in our “Cows” stage, cold storage in our “Milk Plant and Cold Storage”

stage, and transportation stages for which we control both out-going and

in-coming shipments, even though we use third-party distribution companies.




AGRICULTURE (crop and dairy farming)

Farm Energy and Fossil Fuel Emissions

Enteric and Manure Management Emissions

Farm Water Use

Farm Waste & Recycling

Land Management

Animal Care

PROCESSING (milk plant operations)

Plant Energy & Fossil Fuel Emissions

Plant Water Use

Plant Solid Waste

Plant Shrink (milk loss)

LOGISTICS (milk hauling & distribution)

Logistics-related Fossil Fuel Emissions

SOCIAL RESPONSIBILITY

Employee

Local Communities

CORPORATE CITIZENSHIP WORKING GROUPS

When we set our original CSR goals in 2012, we established multi-

level, multi-disciplinary CSR working groups to support key areas of our

CSR program. Our CSR program is led by our Corporate Sustainability

& Innovation Manager and CSR Steering Committee. The CSR Steering

Committee oversees Aurora Organic Dairy’s sustainability program, goal-

setting, investment and progress. It is comprised of the senior leadership

of the organization, including: CEO & Founder, co-Presidents, CFO, EVP of

Farms, VP of Plant Operations, Director of Human Resources, Director of

Communications and Corporate Sustainability & Innovation Manager.

The CSR Steering Committee meets frequently throughout the year (average

4-6 times) to discuss organizational sustainability metrics, projects, goals,

stakeholder engagement and materiality. This group also oversees the

work of the Company’s multi-level and functional CSR Working Groups.

As appropriate, CSR group leaders participate in Steering Committee

meetings and updates.

Our CSR Working Groups include 35 management and executive-level staff

from throughout the organization. These groups develop plans and projects

to help the Company meet its CSR goals in the following areas:

GOAL-SETTING PROCESS

In 2008 we conducted our first Life Cycle Assessment of a half gallon of AOD

milk. In 2009 we added water and solid waste & recycling estimates to our

CSR data tool. Then, in 2012, we set our baseline and, in 2013, published

our sustainability and social responsibility goals. At this point, we had the

benefit of four years' worth of GHG and energy data from our annual Life

Cycle Assessments. Our quantitative goals were largely based on our ability

to benchmark, track and influence our environmental performance in

these areas.

Companywide goals were set by our CSR Steering Committee. Goals related

to each individual area were developed by our CSR Working Groups to

support the achievement of company goals. The individual groups work

throughout the year on projects established and approved by the CSR

Steering Committee. Every year the Company hosts an annual Corporate

Citizenship Summit, which is a half or full day meeting devoted to sharing

our progress against goals. While feedback to the CSR Steering Committee is

ongoing throughout the year, the CSR Summit is another venue that brings all

teams together to present progress, discuss initiatives and receive feedback.

Based on our 2015 materiality assessment and stakeholder engagement

process, the CSR Steering Committee added new goals to our overall

corporate citizenship program and revised one existing goal, as detailed

throughout this report. While we are still tracking against the majority of our

five-year goals set in 2012, we have added goals to address worker health

and safety, and animal care, which are areas that scored highly among our

internal and external stakeholders.

For the farm water goal that was revised, the CSR Steering Committee

carefully examined available data and information prior to restating the

goal. The committee decided the priority should be to improve our ability to

accurately measure our water use. To better reflect our farm water uses and

sources, and to consider other factors, such as precipitation and crop yields

in any given year, we will set a smarter water goal in the future – one that

distinguishes between efficiency and waste.

Our current CSR goals primarily focus on areas within our control. However,

in the future, we plan to establish goals that support CSR improvement among

our suppliers and that cover other stages that are not in our direct control.

Stratford, TX

CSR GOAL AREAS


APPENDIX

STAKEHOLDER ENGAGEMENT

The following represents the stakeholder groups engaged by the organization:

STAKEHOLDER TIERS

CORE VALUE: STAKEHOLDERS

The needs of our stakeholders are as important as our own.

Tier

2:

Loca

l Com

mun

ities

, Non

-Gov

ernmental Organizations, Science & Research Groups, Trade &

Industry GroupsTi

er 1

: C

onsu

mer

s, In

vestors

, Regulators, Retail Customers, Suppliers

Core: Employees &Dairy Cows



This employee feedback also informed our goal-setting process in 2012 when

we set goals around improved bilingual communication, better explanation

of the value of our benefits plans, enhanced training programs and the

development of a community center at a remote farm location. Our next

employee survey is scheduled for late-2015. At that time we will include

specific CSR-related questions to further enhance our materiality assessment.

In 2015, we added cows to our core stakeholder group because their health

and well-being is critical to our business. We conferred with our on-staff

veterinarian and animal care staff to determine the topics that would be most

important to our cows.

Although we typically do not engage directly with consumers, we recognize

their needs are a top priority, as they are the ultimate users of our products.

We reviewed external consumer research to confirm the topics most

material to their decisions regarding the purchase and consumption of

organic dairy products.

In addition to Core and Tier 1 stakeholders, we collaborate directly and

indirectly with our Tier 2 stakeholders. For example, we interact with

trade and industry groups to further the interests of the overall organic

dairy community. In 2013 and 2014, Aurora Organic Dairy was an active

member and financial supporter of the Organic Trade Association and the

International Dairy Foods Association, and provided financial support to The

Organic Center and the Just Label It campaign. The Company also retains

memberships with the Private Label Manufacturers Association and the

Grocery Manufacturers Association.

Our stakeholder groups were identified and segmented based on an analysis

by our CSR Steering Committee, whereby we determined the role each group

plays in our future success and current operations. While each of these groups

is important to our business, the Core and Tier 1 stakeholders were considered

to have the greatest influence on our future success and, therefore, are

included in our direct stakeholder engagement and materiality assessments.

STAKEHOLDER INTERACTION

We engage directly with our Core stakeholders, as well as Tier 1 stakeholders,

and engage both directly and indirectly with our Tier 2 stakeholders.

We frequently interact with our Tier 1 stakeholders as part of our day-to-day

business activities. Our Board meets quarterly and we conduct quarterly

updates with our investors and bankers. We conduct face-to-face meetings

with our retail customers and suppliers to update them on our progress

towards business goals. We also learn of their concerns and priorities as they

relate to our business. Our regulatory group includes those organizations

that regulate our business, such as the Colorado Department of Health &

Environment, which provides oversight of our processing plant. This group

also includes organizations that support Aurora Organic Dairy in working

with the various regulatory bodies in the organic dairy industry.

As part of our materiality assessment, we developed a comprehensive

stakeholder engagement program in early 2015. In addition to conducting

a formal internal materiality assessment with our CSR Steering Committee

to determine what is most important to our Core stakeholders, we also

implemented telephone and electronic surveys with more than 30 of our

Tier 1 stakeholder organizations. They were asked to score the 20 highest

ranking topics of our business (based on our internal company materiality

assessment), as they relate to their decision-making processes when working

with Aurora Organic Dairy. The results of these stakeholder assessments are

detailed in the table on page 48.

For those stakeholders who fit into our Core and Tier 1 groups but did not

directly participate in our stakeholder engagement program, we took the

following approach:

To determine what is most important to our employees, we leveraged our

internal CSR Steering Committee materiality assessment and reviewed

past employee satisfaction surveys. We conduct comprehensive employee

satisfaction surveys every two-to-three years. Our response rates have been

90% or greater, and we offer the surveys in both English and Spanish to

ensure full participation and thorough feedback across our organization.

Through this employee feedback, we determine the areas that rank the

highest among our employees, as well as the areas that can be improved.

Based on results from our 2010 and 2012 employee surveys, we have

improved in key areas of: working conditions, work/life balance, training &

development, overall satisfaction, leadership, compensation, communications

and benefits. Platteville, CO


APPENDIX

Stakeholder Group Engagement Topics Most Important (in alphabetical order)

Core: CSR Steering Committee Materiality Assessment meeting and comprehensive exercise

Animal CareAntibiotics & Hormone PoliciesEthics & Culture Food Safety & QualitySustainable & Responsible Farming Water Use & AvailabilityWorker Health & Safety

Core: Employees CSR Steering Committee exercise and employee survey findings (note: employee surveys not specific to GRI topics)

Animal CareEthics & CultureFair Pay & BenefitsFood Safety & QualitySupervision & CommunicationTraining & EducationWorker Health & Safety

Core: Cows Monitor and interact with cows daily to ensure quality of life and health, and consultation with on-staff animal care experts

Animal CareEthics & CultureFood WasteSupplier Sourcing PoliciesSustainable & Responsible FarmingTraining & EducationWater Use & Availability

Tier 1: Consumers of Organic Dairy Products Review of secondary consumer research on drivers of organic dairy purchases

Animal CareAntibiotics & Hormone PoliciesEthics & CultureFood Safety & QualityHealthy Affordable FoodLabelingSustainable & Responsible Farming

Tier 1: Board of Directors, Investors, Banks

(all external Board members, primary investors and banking relationships represented)

In-person and electronic surveys sent to each external Board member and key banking relationships

Animal CareAntibiotics & Hormone PoliciesCompliance with Laws & RegulationsEconomic PerformanceEthics & CultureFood Safety & QualityWater Use & Availability

Tier 1: Regulatory In-person and electronic surveys Animal CareAntibiotics & Hormone PoliciesCompliance with Laws & RegulationsFood Safety & QualityLabelingManure ManagementTraining & Education

Tier 1: Retail Customers

(retail customers representing more than 85% of our sales volumes participated in a materiality assessment survey)

Electronic surveys and normal course of business meetings

Animal CareAntibiotics & Hormone PoliciesCompliance with Laws & RegulationsEthics & CultureFood Safety & QualityLabelingWorker Health & Safety

Tier 1: Key Suppliers

(primary farm suppliers of organic feed, heifers, bedding; plant suppliers of packaging and materials; and insurance/benefits suppliers)

In-person and electronic surveys Compliance with Laws & RegulationsEconomic PerformanceEmployment Opportunities & RetentionEthics & CultureFair Pay & BenefitsTraining & EducationWorker Health & Safety



TOPICS RELATED TO MISSION & CULTURE

Ethics & Culture

Affordable Food

Labeling

Food Safety & Quality

Sustainable & Responsible Farming

Compliance with Laws & Regulations

Supplier Sourcing Policies

TOPICS RELATED TO ANIMALS

Animal Care

Policies on Antibiotics & Growth Hormones

TOPICS RELATED TO PEOPLE

Fair Pay & Benefits*

Employment Opportunities & Retention*

Training & Education*

Worker Health & Safety

TOPICS RELATED TO THE PLANET

Water Use & Availability

Energy*

Greenhouse Gas Emissions*

Manure Management*

Solid Waste*

MATERIALITY DETERMINATION PROCESS

To define our report content, we conducted materiality assessments with our

Core and Tier 1 stakeholder groups. An original list of 55 potential topics

was identified through a review of GRI topics, the Sustainability Accounting

Standards Board (SASB) Dairy Survey and the Stewardship and Sustainability

Guide for U.S. Dairy 2013. Of the original 55 topics, those that were less

relevant to our business were eliminated and the list was narrowed down

to 33 topics.

Our CSR Steering Committee represented our Core stakeholder group of

employees and cows, and participated in an internal materiality assessment

to score the 33 topics. After our internal materiality assessment, a list of the

top 20 topics was used in our Tier 1 stakeholder surveys. With the input

from more than 30 external stakeholders, combined with a review of our past

employee surveys, organic dairy consumer research and our internal surveys,

we were able to identify the 11 most important topics for our business.

*These topics did not meet our materiality threshold. However, we have elected to disclose additional detail due to their importance to our organization.

While 11 topics met our materiality threshold, as a Company, we also believe

that further disclosure around our overall impact on the environment and on

our people is important for our corporate citizenship tracking, reporting and

goal-setting. Therefore, in addition to the topics related to People and the

Planet that met our materiality threshold, we have added seven more topics

to our list (as noted in the table, this page) of important topics in these

two categories.

The 11 material and 7 additional topics informed the content of this

report. While many of the identified topics are also relevant outside of our

organization, the majority of our efforts are initially focused on the areas

we can directly influence. However, our longer-term approach involves

strengthening our relationships up and down the supply chain to promote

improvements beyond operations we largely control. Additional opportunities

for collaboration involve feed and bedding suppliers, heifer raisers, plant

suppliers and third-party distribution companies.

IMPORTANT TOPICS(grouped by topical area)

Stratford, TX


APPENDIX

DISCUSSION OF IMPORTANT TOPICS

IN ADDITION TO WHAT WE HAVE DISCLOSED IN PRIOR SECTIONS OF

THIS REPORT, THE FOLLOWING REPRESENTS ADDITIONAL DETAIL ON

OUR APPROACH TO MANY OF OUR IMPORTANT TOPICS. FOR A LIST OF

ALL TOPICS, PLEASE REFER TO THE TABLE ON PAGE 49.

TOPICS RELATED TO MISSION & CULTURE

For information on other important topics related to our mission & culture,

please see the organic commitment section of this report, beginning

on page 10.

ETHICS & CULTURE

Ethics, having a high standard of integrity, and creating a culture that reflects

our commitment to animals, people and the planet are at the foundation of

our business. We approach our business with integrity, and we have built a

strong culture of respect throughout the organization. Ethics & Culture ranked

highly among both internal and external stakeholders in our materiality

assessment. This foundation of ethics and integrity drives our pursuit of

continuous improvement and our desire to voluntarily seek third-party

certification in areas such as organic production and processing, animal

welfare, worker care and quality.

Since most of our employees and suppliers work in agriculture and

manufacturing, we are an organization that relies on face-to-face

communication with many of our stakeholders. We post our values and

mission throughout our facilities, and our employees participate in trainings

that support their understanding of our Company’s culture, high ethical

standards and values.

Our comprehensive employee handbook, updated annually, contains the

expectations of all employees of Aurora Organic Dairy. The handbook is

provided in both English and Spanish to every employee. Upon review of the

handbook, employees are asked to sign and return an acknowledgment page

confirming they have read and understand the expectations of employment

with Aurora Organic Dairy. The handbook details employee relations

policies, including harassment, conflicts of interest, compliance with laws

and regulations, benefits, safety and employee conduct, among others. It

contains the expectations we have of our employees to behave ethically and

responsibly.

All new employees go through comprehensive training programs unique to

their job responsibilities. These include – but are not limited to – animal care

and safety, workplace safety, machinery and equipment operation, job tasks

and certifications, and Aurora Organic Dairy mission and values training. All

employees participate in regular training updates covering key aspects of their

jobs throughout the year.

For suppliers entering our facilities, our supplier sourcing policies also detail

the expectations of our high ethical standards to treat each other and our

animals with respect. We have a zero tolerance policy when it comes to animal

or employee abuse, and organic regulatory compliance. Other, less serious

violations would result in a warning prior to terminating a supplier relationship.

AFFORDABLE FOOD

It is our mission at Aurora Organic Dairy to bring organic milk to mainstream

America with the highest quality and freshness, more affordable pricing and

improved availability for consumers.

Milk is a healthy, nutritious product and we have built our Company on

the vision that organic milk can be more affordable and accessible to more

people. Our vertically integrated supply chain drives efficiency, which

ultimately makes our products more affordable than branded organic dairy

products. Our major grocery, discount and club store chain distribution

makes our products readily available to more U.S. consumers.

CORE VALUE: INTEGRITY

Strong relationships are built on trust forged by openness and honesty.



To extend the nutritional benefit of our dairy products to lower income

populations and people battling hunger, we donate our products to local food

banks and hunger-relief organizations in the communities where we operate.

In 2014, we donated 38,375 gallons of organic milk and 5,910 pounds of

organic butter to local non-profit organizations, which totaled a retail value of

approximately $318,000. We plan to continue our commitment to producing

organic dairy products for the retail store-brand market, as this allows us to

provide healthy, affordable food to more consumers.

LABELING

As a dairy producer and processor, we are required to include specific

information on our product packaging as it relates to nutrition and food

safety. We follow all U.S. Food & Drug Administration (FDA) regulations for

labeling 100% of our products. Additionally, we choose to label our products

with information regarding our third-party certifications, including the USDA

Organic label and the logos of our organic certifiers, our Validus animal

welfare certification logo and Kosher certification insignia. We have had zero

issues of regulatory non-compliance in labeling our products.

The nutritional labeling on our products includes an ingredients statement,

information about added vitamins, and the nutrition facts panel. The nutrition

facts panel provides consumers with product-specific information on the

nutritional profile of our products.

We support transparency in labeling, and also understand that labeling

is important to help consumers make healthy choices. As an organic

company that is solely focused on nutritious dairy products, we include

all pertinent information on our packaging. The Dairy Food Group is an

important aspect of the USDA’s My Plate food and nutrition plan for children

and adults. Numerous health benefits are associated with milk and dairy

product consumption, as milk contains high levels of calcium, phosphorus,

magnesium, protein and other vitamins. Dairy products support healthy

bones and teeth, and when consumed as part of a balanced diet, milk and

dairy products have numerous other health benefits.

We process milk in four different fat contents: non-fat, 1%, 2% and whole

milk to meet consumer preferences. The lower fat content milk is lower in

both saturated and unsaturated fats. We also offer milk with added Omega 3

fatty acids for consumers who want to increase their Omega 3 intake. We do

not use artificial ingredients in our products.

2014 MILK SALES BY FAT CONTENT

FAT FREE

16% WHOLE

30%

1% MILK

34% 2% MILK

20% Platteville, CO


APPENDIX

TOPICS RELATED TO ANIMALS

For information on other important topics related to Animals, please see the

Animal Care section of this report, beginning on page 16.

ANIMAL CARE

Animal care is a top priority at Aurora Organic Dairy. We pride ourselves on

our high standards for animal care and well-being. As of March 2015, we

managed a total of 30,600 organic cows and calves (please refer to map,

inside front cover) on our Company-managed certified organic dairy farms,

calf ranches and heifer farms (excludes third-party calf and heifer farms that

supply us with animals).

The majority of these animals are Holstein cows bred for dairy production.

We also have a small percentage of Jersey bred dairy cows and Jersey/

Holstein cross-bred cows, which make up approximately 5% of our entire

herd. We use natural breeding and artificial insemination to breed our dairy

cows, and we – along with our select third-party heifer suppliers – raise our

calves as replacement animals for our herds.

We have invested in our own calf and heifer raising facilities to ensure we

have ample last-third-of-gestation organic-born cows to replace our herds.

Our animal care policies and procedures relate to both our dairy farms and

organic-born cows used for beef production

SUSTAINABLE & RESPONSIBLE FARMING

As an organic producer, we do not use synthetic inputs, such as pesticides,

herbicides or fertilizers on our feed crops or pasture. We use organic-approved

methods of farming, such as proper crop rotation and compost application.

Data about water, soil nutrients and inputs drive our farming decisions. While

our primary focus has been managing our pastures, growing crops for harvest

is relatively new. We have hired two crop and soil scientists to ensure our soils

are well maintained and are producing the best quality organic crops for our

dairy cows.

We are investing in smart solutions – such as our new initiative to install

irrigation pivot technology – to inform our sustainable farming practices. In the

future, we plan to enhance our sustainable farming practices and collaborate

with our agricultural suppliers to positively influence sustainable farming

techniques across our supply chain.

COMPLIANCE WITH APPLICABLE LAWS & REGULATIONS

Closely linked with our high standards for ethics and integrity is the need to be

compliant with all laws and regulations related to our industry. As an organic

dairy producer and processor, we must comply with various environmental,

food safety, organic certification and livestock handling requirements.

Additionally, our voluntary third-party audits and certifications, including

Validus Animal Welfare and Worker Care, SQF Level III Certification audits,

and the many code of conduct audits required by our stakeholders, make

compliance a material aspect for both internal and external stakeholders.

We are in compliance with all laws and regulations related to our business.

This includes requirements of the U.S. Environmental Protection Agency, the

Food and Drug Administration, the U.S. Department of Agriculture and their

National Organic Program, the Colorado Department of Public Health & the

Environment, the Texas Commission of Environmental Quality, the Texas State

Soil and Water Conservation Board and the Texas Department of State Health

Services. During the reporting period of 2013 and 2014 we had zero citations

for noncompliance with any laws and regulations related to our operations

and no monetary fines related to non-compliance.

SUPPLIER SOURCING POLICIES

Our sourcing policies, detailed on page 12 of this report, cover a variety

of areas, including product quality, organic certification and animal care

standards. While the organic regulations cover some practices related

to environmental stewardship and responsible farming practices, we do

not conduct a thorough environmental assessment with our suppliers of

agricultural products. Our management approach is to develop sustainable

and responsible farming protocols and metrics – based on farming our own

fields – and to then collaborate with our suppliers to implement improvements

across our supply chain.

Stratford, TX



ANIMAL HEALTH & MANAGEMENT

• No Branding – Since 2008, no branding – hot or freeze branding –

has been performed at our dairies, ever.

• No Tail Docking – No tail docking is performed at our dairies, and we

do not purchase animals that have docked tails.

• No Prods – Prods – electric or otherwise – are not used at our dairies,

except in the event of an emergency and use must be under the

supervision of the general manager of the farm.

• Minimizing Dehorning – To minimize the need for disbudding/

dehorning, in 2013 we began breeding cows with polled bull semen, so

that the offspring will have a greater likelihood to be born without horns.

• Always Minimize Pain – While we do not have the need to perform

many surgical procedures on our animals, when we do, we require

trained employees to use a local anesthetic, and aspirin or flunixin

to help minimize pain. In the event disbudding/dehorning procedures

are required, a local anesthetic and pain relief are also administered by

on-farm certified employees.

• No Synthetic Growth Hormones – Synthetic growth hormones are

never used at our dairies.

• Lameness Prevention – Preventing lameness is always a top priority.

We visually monitor our animals daily and use activity collars to detect

early signs of lameness, and individualized treatment for lame cows is

performed as needed.

• Quality of Life – Treatment for very sick – and/or non-ambulatory –

animals requires that an experienced employee carefully transfer the

animal to a clean, dry area. The animal is provided with clean, dry

bedding at all times, fresh food and water, protection from the elements

and health care. If organic-approved treatments are not successful, the

animal is removed from the herd and additional treatments are sought.

• Humane Euthanasia – If an animal is suffering and cannot be brought

back to health, humane euthanasia is performed by certified employees

to eliminate pain and suffering.

• 24/7 Supervision – Animal supervision is constant and Aurora Organic

Dairy is always focused on continuous improvement.

ANIMAL FEED & FACILITIES

• Animals are provided with clean feed and water.

• No synthetic pesticides, herbicides or fertilizers are used on the feed or

pasture provided to the animals. We require valid organic certifications

from all feed suppliers.

• At all of our dairy farms, cows receive no less than 30% of their dry

matter intake (DMI) from organic certified pasture for a minimum of

120 days during the grazing season (USDA Organic Regulations).

• Animals are not without feed and water for more than one hour at

a time (typically during milk harvesting).

• On-staff nutrition experts continuously monitor the cattle feed at all

locations. An external nutritionist reviews the herds every six weeks

and adjusts the feed ration as needed for the health of our animals.

• Animals are provided with a comfortable, dry place to lie down.

• Animals are provided with shade and protection from the elements,

as needed.

• Animals are provided with sufficient space for comfort and to display

natural behaviors. We only house our animals in free-stall barns and

open, loose-housing. Tie stall barns are never used.

• Calves are housed individually for the first 60 days of their lives to

enable dedicated care and attention, and for disease prevention.

• Our facilities are maintained with sanitary conditions to prevent

disease and infestations.

• To prevent injury to our animals, our facilities are maintained in good

condition, and our employees are trained in safety protocols.

• All walkways are kept clean and slip-resistant.

• Our milking parlors are kept clean with good airflow, and we use

cooling systems to provide comfort during periods of high temperatures.

• Our milking parlors are designed for optimum cow and employee

comfort. Rubber mats are used on most walkways and lanes to

maintain foot, leg, and hoof health and comfort.


APPENDIX

VENDOR ANIMAL CARE STANDARDS

• We provide an Animal Care Standards memorandum to all vendors,

which communicates our high animal care standards. It is expected

that all vendors who provide us with animals and/or interact with our

animals follow the same protocols that we follow. When vendors come

onto our facilities to work with our animals, they are monitored closely

to ensure proper animal care and treatment. For those who house our

animals, we visit them regularly and are in frequent contact regarding

the care of our animals.

• Our management team completes annual audits of each primary

vendor’s facility – including our beef processor – to ensure the animals

are properly cared for and handled.

• All beef processors are visited and audited by our animal welfare and

quality staff to verify humane euthanasia and proper animal care at

their facilities.

• Heifer growers who supply our farms with replacement animals and

animals for new facilities are visited at least twice a year to ensure high

standards of animal care. As of 2015, two of our three primary heifer

suppliers were Validus animal welfare certified, and we plan to have

the third one certified by 2018.

• We require a signed Cattle Hauling Agreement from any company

that hauls cattle for us. This agreement stipulates safe handling and

transport procedures. No animal that is too weak, too thin, has a high

fever, is blind or is severely lame is allowed to travel.

• If a vendor is found to be out of compliance with our animal

care, transportation or slaughter standards, we will terminate the

relationship.

To ensure we follow the highest standards for animal care and well-being,

100% of our farm employees are trained on animal care policies and

procedures throughout the year. Each dairy employee receives a copy of our

Animal Care Standards – which are available in both English and Spanish –

and we use training materials, such as videos, presentations and hands-on

procedures to ensure our employees understand the importance of animal

care. If employees are found to disobey these procedures, disciplinary action

will be taken, which may include job termination.

In 2013 we began to install video cameras throughout our dairy farms

and they are monitored internally by our farm management staff. We have

established a goal to begin external monitoring by an outside animal welfare

expert by 2017.

Our Validus animal care certification also provides additional reassurance that

we are following all the appropriate protocols and practices for the industry’s

highest standards of animal welfare (please refer to page 20 for more

information about Validus).

In summary, we are on track to achieve the animal care goals we established

in 2012, and continue to add goals to further strengthen this important area

of our corporate citizenship program.

TOPICS RELATED TO PEOPLE

For information on other important topics related to People, please see

the People section of this report, beginning on page 22.

WORKER HEALTH & SAFETY

Of our 550 employees (as of March 2015), 63% work on our dairy farms

and 28% work at our milk processing plant. These facilities and associated

job responsibilities present significant hazards to our employees. As a result,

worker health & safety is of critical importance to our business.

Both our dairy farms and milk plant place a high priority on worker health

and safety. We have had zero incidents of death at any of our facilities and

we work to continuously decrease our injury rates year-over-year. We report

our injuries, lost days and work transfer days, by gender and facility, to the

9.25 7.14

6.50

2010-2012 2011-2013 2012-2014

TOTAL FARM INJURIES AS REPORTED TO OSHA (Per 200,000 hours worked)

3-year averages



U.S. Occupational Safety & Health Administration (OSHA) each year. In

2014, our farms, combined, reported 27 injuries, 445 lost days and 284

work transfer days. Of the 27 injuries, 19 were male and 8 were female. Our

plant reported 8 injuries, 52 lost days and 38 work transfer days. Of the 8

injuries, 6 were male and 2 were female.

Typical plant injuries are related to working with the machinery in the

processing plant and cold storage facility, and most result in no missed work

days. Injuries that typically occur on our farms, such as contusions, sprains

and lacerations, are oftentimes related to interaction with dairy cows. Other

common farm incidents relate to skin or eye irritation from cleaning supplies.

Depending on the severity, these types of injuries can result in lost work

days, but many do not. In 2014 we had zero incidents of contractor injuries

or occupational disease.

Even with the addition of new farms and new employees, our incidents

of farm injuries as a percent of the total number of farm workers has

steadily declined over the last five years. We attribute this decline to an

increased emphasis on training programs that cover key safety protocols.

These include, but are not limited to: safety when working with our dairy

cows, proper use of Personal Protective Equipment, safety when working

with cleaning supplies, farm equipment and machinery safety, and the

identification of safety hazards on our farms. We also certify our farms

for worker care through Validus, which audits several aspects of worker

safety at our facilities (for more information about our Validus Worker Care

certification, please refer to page 25).

3.88

6.57 6.93

2010-2012 2011-2013 2012-2014

TOTAL PLANT INJURIES AS REPORTED TO OSHA (Per 200,000 hours worked)

3-year averages

In 2015, we established Worker Health and Safety as a CSR goal area.

The goal is to continuously improve our worker health & safety metrics.

The metrics include a three-year average of OSHA reportable incidents of

injury per 200,000 hours worked at all of our company-owned facilities.

When we review three-year averages for both our farms and plant, we are

pleased that our overall farm injuries per 200,000 hours worked have

declined. Our overall plant injuries have increased in recent years, which was

the direct result of the plant expansion and cold storage facility construction.

Having more new employees who are learning their jobs and construction-

related hazards caused a temporary increase in plant injuries during the

expansion. We expect our plant injuries to decline in coming years, and are

pleased that plant injury rates continue to be below food manufacturing injury

averages (please refer to page 26).

We will continue to focus on training and education to reduce our overall

OSHA reportable incidents, and to minimize workplace risks to our employees.

Stratford, TX


APPENDIX

TOPICS RELATED TO THE PLANET

For information on other important topics related to the Planet,

please see the Environmental Stewardship section of this report,

beginning on page 30.

WATER USE & AVAILABILITY

We use water throughout our supply chain to irrigate crops and pasture,

clean our facilities, provide our cows with ample fresh drinking water and to

process our milk. Our farms and processing plant are located in arid regions

of the Western United States, and much of the livestock feed we purchase

is also grown in the arid West. We have experienced drought conditions

in recent years, and the current drought in California will put increasing

pressure on food and feed production in the U.S. As such, water use and

availability has been identified as one of the most important sustainability

topics for our Company.

We estimate that greater than 90% of our Company’s total water use is for

pasture and crop irrigation. While we have been estimating our irrigation

water use since 2012, the data is approximated. We estimate that ditch

water (snow melt) is the source of more than 50% of our Company's

water use, more than 40% comes from well water and less than 10%

from municipal water sources.

Due to the fact that our current data is based on estimates, and annual

variations in precipitation affect the amount of water we need to irrigate our

fields, we have refined our management approach. We have removed our

goal to reduce normalized farm water consumption by 15% by 2017 vs.

our 2012 baseline. Our restated goal is to install remote measurement and

management technology on 70% of our irrigation pivots by the end of 2015,

and 90% by the end of 2016. Once we have more precise data regarding

irrigation water use, we will be able to establish water efficiency goals to

ensure we are optimizing our water use at our farms.

We source municipal water at some of our farm locations for milking parlor

wash ups and some cow drinking water. After the water is used for parlor

wash ups, it is diverted to our lagoons and recycled for pasture irrigation.

Our milk plant uses only municipal water, which is 100% sourced from the

Little Thompson Water District in Colorado. We have been using monthly

utility invoices to track our water use at the plant since 2009. The water at

the plant is used to process our milk. After we use the water, we pretreat

it at our on-site waste water pretreatment facility, and return it to the local

sanitation district, recycling it for future use.

In 2014, we recycled 78% of our water at the plant. The remaining

22% of water use was consumed as steam and condensation during

milk processing and bottling. During our plant expansion and on-site

cold storage construction in 2013, the percentage of water we were

able to recycle declined, as we had been using water for dust mitigation

during construction.

Our normalized water consumption at the plant in 2014 was 0.18 gallon

per half gallon equivalent of milk, an 18% decline compared with 0.22

gallon per half gallon equivalent of milk in 2012.

In 2013 we announced a five-year goal to reduce our normalized plant

water consumption by 15% by 2017 vs. our 2012 baseline. In 2014, we

exceeded that goal through our investments in efficiencies that allowed us

to process more milk in our existing facility. As a privately held company,

we do not disclose some of the additional details requested by GRI.

PERCENT OF PLANT WATER PRETREATED & RETURNED

78%

70%75%

Pretreated and Returned Plant Water Consumption

2012 2013 2014



While Energy, GHG Emissions and Solid Waste did not meet our

materiality threshold, as determined by our stakeholder surveys,

they are important elements of our environmental stewardship

program, and are included in our data tracking and reporting.

ENERGY

We rely on energy to run our business, and we realize we have opportunities

to increase our efficiency and our use of renewable energy sources. Throughout

our operations, we use electricity, natural gas, and other fuels to produce,

process and store our products. Our suppliers and the transportation

companies that distribute our products also use a significant amount of energy.

The majority (97%) of our farms' and plant energy use is tracked using primary

data from invoices and records (with the only exception being estimated data

for third-party heifer growers). The raw data is entered into our CSR data

tracking tool, which allows us to analyze our energy consumption over time.

In 2014, our farms and plant operations’ absolute energy use increased from

our 2012 baseline. This increase was driven by higher milk production and

processing volumes, as well as the addition of the new High Meadow Dairy

Farm in 2013. Additionally, since our prior report, we have added LCA stages

to our farms and plant energy tracking to better reflect the integration of our

supply chain. For example, we added third-party heifer raising and off-site

cold storage facilities. To ensure year-over-year comparability of results, we

have included historical estimates for these LCA stages in our CSR data tool.

2014 ENERGY USE(Based on MJ)

FARMS

45%

CORPORATE OFFICE

<1%

Dublin, TX

FARMS + PLANT ENERGY USE(MJ per half gallon equivalent of milk)

2012 2013 2014

4.62 4.734.08

Historical data restated (please refer to page 33)

PLANT & COLD STORAGE

55%


APPENDIX

Our normalized energy use in 2014 was 4.08 MJ per half gallon equivalent of milk, a 12% decline compared to our 2012 baseline of 4.62 MJ per half gallon equivalent of milk (restated). This decline was related to our investments in efficiencies to produce and process greater milk volumes through existing facilities in 2014.

At the plant, our electricity and natural gas breakdown in 2014 was 28% electricity and 72% natural gas. Since 2010, our plant has participated in a cooperative solar panel leasing program, which offsets a relatively small portion of our plant energy use. Additionally, the electric utilities in each of our market areas use some percentage of renewable energy in their grids. Beyond these resources, we do not directly purchase electricity or fuels from renewable sources, nor did we produce any renewable energy at our facilities in 2014. We will investigate opportunities to incorporate renewable energy into our operations going forward.

Plant Fuel Type(% distribution of MJ) 2012 2013 2014

Electricity 26% 26% 28%

Natural Gas 74% 74% 72%

PLANT ENERGY USE

ELECTRICITY

25%

2014 FARMS ENERGY USE (Based on MJ)

NATURAL GAS

28% DIESEL

33%

PROPANE

12%

GASOLINE

2%

GREENHOUSE GAS EMISSIONS

As a dairy producer, we understand the impact of livestock on climate change. As we grow our business and our sales of dairy products increase, our overall GHG emissions also increase, and we believe it is our responsibility to do what we can to minimize our emissions to slow climate change. Therefore, we have made it a priority to reduce our normalized GHG emissions per half gallon equivalent of milk and to focus first on the LCA stages we own, operate or largely control (please refer to page 32). Then we will work to influence those stages outside our direct control.

The stages of our LCA that we largely own, operate or control define our GHG goal boundary – the pastures we grow, heifer-raising operations, our dairy farms and cows, farm-to-plant transportation and cold storage shuttles, and our milk processing and cold storage. All other stages of the LCA were outside our GHG goal boundary in 2014. Because we expanded our boundary since our prior report, and have improved our data tracking and analytical methods, our historical numbers have been restated.

In 2014, our operations’ absolute GHG emissions within our GHG goal boundary increased relative to our 2012 baseline.

2014 CO2e EMISSIONS*

CORPORATE OFFICE

<1%

PLANT & COLD STORAGE

15% FARMS ENERGYEMISSIONS

11%

TRANSPORTATION

3%

COW-RELATED EMISSIONS

71% *Within GHG goal boundary



NORMALIZED GHG EMISSIONS*(kg CO2e per half gallon equivalent of milk)

1.65 1.68

1.51

2012 2013

*Within GHG goal boundary

Historical data restated (please refer to page 33)

2014

Our scope 1 emissions include fuel combustion emissions, as well as cow emissions from enteric fermentation and manure management. Cows’ stomachs contain bacteria that break down carbohydrates in the feed. The rumen – part of the cow’s digestive system – supports microbial fermentation, which allows ruminants the ability to digest cellulose. Methane gas (CH4) is released as a natural by-product of this digestion. In addition to CH4 released by the cows during enteric fermentation, our direct emissions include CH4 and nitrous oxide (N2O) from manure.

In 2012, we established a goal to review and research best practices to reduce enteric fermentation in organic dairy cows. To date, we have not determined a good, long-term solution to this industry-wide challenge. We will continue to stay abreast of the research in this area, and to experiment with organic-approved feed additives to determine if we can reduce our overall GHG emissions from enteric fermentation.

Our scope 2 emissions include off-site emissions from electricity used at our farms and plant. Our farms have undergone utility audits, and we are implementing initiatives to conserve energy use, such as LED lighting, weather-stripping, energy-efficient equipment upgrades, and technology to reduce idling time of farm equipment.

Our processing plant GHG emissions comprised approximately 15% of the total emissions within our GHG goal boundary. Our Platteville, CO milk plant was designed and constructed with energy-efficient features. In 2013, when we expanded our plant and built our on-site cold storage facility, we also incorporated energy-efficient systems and robotics in the new construction. We are now able to process more milk in this facility, which reduces our normalized GHG emissions per half gallon equivalent of milk.

In 2014 we began operating our new, on-site cold storage facility. Prior to having this facility, we shuttled our finished goods to an off-site cold storage warehouse in Henderson, CO. Having our own facility adjacent to the milk plant reduces our transportation shuttles to off-site cold storage, saving 500 MT of CO2e emissions in 2014. However, the cold storage facility increases our overall energy use and associated Scope 1 and Scope 2 emissions. Therefore, to ensure our historical data is comparable, we have estimated the impact of off-site cold storage in our data model. We believe that, with our new state-of-the-art robotic facility, our cold storage energy efficiency is improved relative to the off-site warehouse. However, since we do not have precise utility data from the third-party facility, we have not assumed any energy-efficiency improvements in our results.

We have also added raw milk transport to our GHG goal boundary, and this stage accounts for approximately 3% of the overall emissions within this boundary. Even though we do not own these trucks, we manage milk production and processing, which are the two stages on either side of raw milk transport. Therefore, we believe we should strive for greater efficiency in this transportation stage.

We have established the most direct routes from our farms to our plant, and ensure the tankers are full before milk is transported. This reduces the miles the raw milk has to travel, which also helps to ensure quality and freshness.

In 2013, we added a dairy farm – the High Meadow Dairy – to our High Plains Farms in Colorado. This reduced the overall average distance our raw milk has to travel to our Platteville, CO milk plant, saving more than 1,000 MT in transportation-related CO2e emissions in 2014.

Our milk is sold in all 50 states, and we purchase organic feed primarily from suppliers across the Western U.S. However, we also source from feed brokers who will purchase feed from international feed growers, when necessary. We realize this has an impact on our overall emissions, and plan to improve our measurement data related to finished goods distribution and feed transportation in the future. Since 2009, all new finished goods distribution carriers are required to be EPA SmartWay certified to reduce transportation-related emissions. By 2017, we plan to invest in transportation management software, which will allow us to better track and manage our finished goods distribution to retail customers, and to identify opportunities to reduce our impact in this area. Over the long-term, we expect to add these stages to our GHG goal boundary and reduce our overall emissions related to transportation. Our absolute GHG emissions have grown since 2012, as we have increased our milk production and processing capacity through our expanded operations. However, due to greater efficiencies, our absolute GHG emissions did not increase at the same rate as milk production from our cows or milk processed in our plant. Therefore, our GHG emissions per half gallon equivalent of milk declined by 9% in 2014 relative to our 2012 baseline. Our normalized GHG emissions were 1.51 kg CO2e in 2014 versus 1.65 kg CO2e in 2012 (restated). This reduction was largely due to increased productivity of our cows, resulting from a more mature overall herd, and volumes of milk processed in our plant that outpaced the increase in absolute plant emissions.

1.75

1.65

1.55

1.45

1.35

1.25


APPENDIX

We use our custom CSR data tool to track primary data from our business, including cow populations by age, feed and pasture intake, feed types and utility data. This allows us to record monthly emissions inputs, which are then analyzed using the Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories to measure our greenhouse gas emissions (www.ipcc-nggip.iges.or.jp/public/2006gl). We work with external sustainability experts who ensure our calculation and reporting methods reflect industry-leading standards.

In 2012 we established a companywide goal to reduce our normalized GHG emissions by 15% by 2017 and, although challenging, we are optimistic we

will achieve that goal (please refer to chart, page 59). The investments we continue to make to increase our milk production and processing capacity are expected to incrementally reduce our CO2e emissions per half gallon equivalent of milk over the long-term.

MANURE MANAGEMENT

The manure produced by our dairy cows can oftentimes be considered waste, but we view it as a valuable by-product for our organic crop and pasture growing operations. Manure management is important to our business because of its value as fertilizer for our farmland, the volume of manure produced on our dairy farms, and GHG emissions associated with livestock manure. The emissions related to manure management comprise 6% of the total emissions within our GHG goal boundary. The way we handle our manure significantly reduces our emissions relative to traditional liquid manure systems.

Since we cannot use synthetic fertilizers on our pastures and crops, the manure from our cows provides a high-quality, nutrient-dense, organic-approved fertilizer we apply to our fields. We use 95% of the manure we produce on our farms. Approximately 75% of the manure is managed using composting principles, 20% is applied to fields without being composted, and the remaining 5% is loss. By using composting methods and separating liquids from solids prior to applying dry manure to our fields, we significantly reduce the emissions related to manure management.

In 2012, we set a five-year goal to research and confirm we were using best practices in manure management to reduce our emissions. We believe we have achieved this goal and employ best management standards, due to our composting methods. We will continue to research this area, and determine if there are new technologies that may help us further improve our manure handling and reduce the associated emissions.

SOLID WASTE

Solid waste includes the waste produced on our dairy farms and the waste produced by our plant. Typical waste includes packaging, paper and discarded materials used at our facilities, such as nitrile gloves, filter socks, medical supplies, twine, silage plastic, wood pallets, plastic barrels and plastic from our gallon jugs.

To the extent available, we recycle as much of our solid waste as we can. In 2014, our milk plant recycled 54% of its waste. Of approximately 1,445 tons of waste produced, 787 tons were recycled. Recycled materials include: cardboard, plastic stretch wrap, wood pallets, plastic barrels and plastic from our gallon jugs. We blow our own jugs on-site, and the excess plastic is worked back into the blow mold process, but some plastic ends up in the waste stream.

Currently, the largest component of our milk plant's landfill waste is half gallon cartons containing milk residue. The milk residue contaminates the cartons to the extent they cannot be accepted by many recyclers. In 2014, we disposed of nearly 2.5 million of these used cartons because we often need to respond to changes in customer orders and expectations. We continue to research other recycling companies and operational changes to identify opportunities to recycle these cartons. As a result, we expect we will still achieve our goal of recycling 75% of our plant waste by 2017.

Recycling and waste diversion at our farms has proven to be more challenging. In 2012 we set a goal of diverting 25% of our farm waste by 2017. Due to the remote locations of our farms, we have not been able to identify recyclers for our farm waste. We continue to research other strategies to reduce our overall waste. For example, before we set our five-year waste diversion goal, we switched from disposable paper udder wipes to reusable, washable cloth wipes. This has removed approximately 70 tons of farm waste from landfills each year. All new dairy facilities, such as the High Meadow Dairy, are built with washers and dryers to accommodate the reusable udder wipes.

We will continue to develop strategies to reduce farm waste. We believe that, despite the challenges of being in remote areas, we can develop programs to minimize our use of waste materials and/or work with our vendors to either reduce or recycle secondary packaging of their materials. Our CSR Steering Committee has committed to a renewed focus on our 2017 goal of 25% waste diversion for the farms.

PLANT RECYCLING 54%

PLANT WASTE RECYCLED

787 tons of waste recycled

658tons of landfill waste

http://www.ipcc-nggip.iges.or.jp/public/2006gl



RESTATEMENT OF DATA FROM PRIOR YEARS

In our internal tracking and goal-setting processes, we have improved our data management capabilities and have expanded our goal boundary. As a result, we have updated historical information, including our 2012 baseline data for energy use and greenhouse gas emissions. The impact of this restatement is minimal, and did not have a material effect on our performance relative to prior year comparisons. We are confident in our primary data, and will continue to broaden the scope of our goal boundary to include additional LCA stages upon which we can have a positive impact.

The historical information in this report represents our energy and GHG emissions results with the restated data.

GOVERNANCE & OVERSIGHT

At Aurora Organic Dairy, we operate our Company with integrity and high

ethical standards. We have developed a governance structure that is

appropriate for our business and provides abundant oversight to ensure

ethical operations.

We are a privately held company that is majority owned by an investment group. Our Board of Directors is comprised of five members. Marc Peperzak, our CEO and Founder, serves as our only internal director. Our external directors include three members from the investment group, and one outside director from the organic industry. Our Board participates in the strategic planning process and approves annual budgets.

Our Senior Leadership Team is responsible – pursuant to the Board’s mandate – for the strategic guidance of the organization, the effective monitoring of management, and the accountability of management to the broader organization and its stakeholders. The Senior Leadership Team is comprised of our Chief Executive Officer and Founder, President of Aurora Organic Farms, President of Aurora Organic Dairy Corp., Chief Financial Officer, Executive Vice President of Farming Operations and Director of Human Resources & Corporate Services.

Our Senior Leadership Team provides regular updates to our Board of Directors regarding economic, environmental and social impacts. Each member of our Senior Leadership Team serves on our CSR Steering Committee and is closely involved with setting our corporate citizenship strategies and goals, and sharing our progress with key stakeholders. Our Senior Leadership Team reports key CSR initiatives to our Board of Directors.

Corporate Citizenship is everyone’s job at Aurora Organic Dairy. The daily execution of our corporate social and environmental initiatives is managed by our Corporate Sustainability & Innovation Manager. This full-time role dedicated to corporate citizenship was created in January 2015. Prior to this, our CSR program was managed by staff on a part-time basis and by outside consultants. Since 2012, we have worked with outside sustainability experts who ensure our calculation and reporting methods reflect industry-leading standards, and who validate that our approach to corporate citizenship planning and reporting follows GRI guidelines.

Dublin, TX


APPENDIX

GRI G-4 INDEX – CORE LEVEL REPORT WITH FOOD PROCESSING SUPPLEMENT

GRI# DESCRIPTION PAGES/RESPONSE

STRATEGY & ANALYSIS

G4-1 CEO Statement 2-3

ORGANIZATIONAL PROFILE

G4-3 Name of the Organization Aurora Organic DairyG4-4 Primary Brands, Products & Services Organic milk and butter for numerous retail store brandsG4-5 Organization’s Headquarters Boulder, Colorado, USAG4-6 Countries Where Operating United States of AmericaG4-7 Nature of Ownership Privately held G4-8 Markets Served U.S. Food Retail Customers in all 50 statesG4-9 Scale of Organization 44G4-10 Employee Composition 24G4-11 Employees Under Collective Bargaining Agreements 0%G4-12 Organization’s Supply Chain 4-5G4-13 Significant Changes in Reporting Period 2-3G4-14 Precautionary Principle N/AG4-15 Economic, Environmental & Social Charters N/AG4-16 Memberships of Associations 47

IDENTIFIED MATERIAL TOPICS & BOUNDARIES

G4-17 Organizational Entities Covered in Report 44G4-18 Process for Defining Report Content 45G4-19 Material Topics 49G4-20 Internal Aspect Boundaries 32-33, 44G4-21 External Aspect Boundaries 32-33, 44G4-22 Restatements of Information Provided in Prior Reports 33, 61G4-23 Significant Changes from Previous Reports 2-3

STAKEHOLDER ENGAGEMENT

G4-24 Stakeholder Groups 46-48G4-25 Basis for Stakeholder Identification 46-48G4-26 Approach to Stakeholder Engagement 46-48G4-27 Topics & Concerns Raised through Stakeholder Engagement 46-48

REPORT PROFILE

G4-28 Reporting Period 2013-2014G2-29 Date of most recent previous report October, 2013G4-30 Reporting Cycle biennial

G4-31 Sustainability Contact Office of Sustainability: 720.564.6296 or [email protected] GRI Content Index 62-63G4-33 External Assurance none

mailto:sustainability%40aodmilk.com?subject=Aurora%20Organic%20Dairy%20Sustainability%20



GRI# DESCRIPTION PAGES/RESPONSE

GOVERNANCE

G4-34 Governance & Oversight 61

ETHICS & INTEGRITY

G4-56 Organization’s Values, Principles & Standards 4-5, 50

SPECIFIC STANDARD DISCLOSURES

Environmental

G4-EN3 Energy Consumption* 35, 57-58G4-EN6 Reduction of Energy Consumption* 35, 57-58G4-EN8 Total Water Withdrawal by Source (partial) 56G4-EN10 Volume Water Recycled and Reused (partial) 39, 56G4-EN15 Direct Greenhouse Gas Emissions* 58-60G4-EN16 Indirect Greenhouse Gas Emissions* 58-60G4-EN19 Reduction of Greenhouse Gas Emissions* 35, 58-60G4-EN23 Solid Waste* 40-41, 60G4-EN29 Environmental Compliance 52Manure Management* 40, 60

Sustainable and Responsible Farming 12, 52

SocialG4-LA2 Benefits* 24G4-LA6 Worker Health & Safety 26, 54-55G4-LA9 Training and Education* 26G4-SO8 Compliance and Fines 52

Food Processing Disclosures G4-DMA Healthy & Affordable Food 14, 50-51G4-FP1 Suppliers Compliant with Sourcing Policy 100%G4-FP5 Food Safety and Quality 13-14G4-PR3 Labeling Information by Product Type 51G4-FP9 Total Animals by Species 52G4-FP10 Animal Welfare Policies & Practices 53-54G4-FP11 Total Animals by Housing Type Inside Front CoverG4 FP12 Policies on Antibiotics & Hormones 13, 53G4-FP13 Transportation & Slaughter Standards 53-54

*Topics that did not meet our materiality threshold, but that are important to our business

This report has been prepared 'in accordance' with the GRI G4 Guidelines

(Core Option) and GRI’s Food Processing Sector Supplement.

Be kind to our leafy friends;only print this report

if you truly must.

Aurora Organic Dairy

1919 14th St., Ste. 300 Boulder, CO 80302

720.564.6296

[email protected]

© Aurora Organic Dairy, 2015. All Rights Reserved

Aurora Organic Dairy 2015 Corporate Citizenship Report

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