Evolve

Evolution in the natural world is a slow process. But in the hyperconnected world in which we live and work, it’s
fast – and becoming faster all the time. As an example, twenty years ago, very few people had ever heard of the ‘Internet of Things’. Ten years ago, the term ‘Industry 4.0’ had not yet been coined. At the start of 2020, few people had paid attention to terms such as coronavirus, social distancing, lockdowns or infection waves. Yet today, these terms are part of our everyday vocabulary, showing just how fast the world around us is changing.

In response to our rapidly changing landscape, five years ago, we embarked on a strategy of intentional evolution, which involved diversifying our product portfolio in higher margin segments. By 2020, despite market challenges, we had essentially met and in many ways, exceeded this ambition.

Evolution is based on a series of events, processes and responses. Around the world, people are responding to natural resources constraints by seeking responsible alternatives to non-renewables and solutions that are truly sustainable from seed to final product.

We are responding to these needs by building on our success in intentional evolution to accelerate an enhanced journey of evolution aligned with our Thrive25 strategy. We are doing so from a foundation based on a coalition of diverse perspectives and expertise; as well as a history of seeking out and investing in breakthroughs that enable lasting outcomes for our partners and a lighter footprint on the world. We are building on these to ensure that every solution we create supports our goal of making everyday products more sustainable and that we accelerate meaningful change.

Reimagine

Stars form when celestial clouds collapse, feeding a rotating disc of gas and dust into a dense, hot central core. Amongst other things, pulsating stars give off carbon, a key ingredient for life as we know it. From chaos, something beautiful – and essential – is created.

We can view this as a metaphor for the coronavirus pandemic that infected and affected people regardless of nationality, class or wealth, leaving intense disruption in its wake. However, it also ushered in a global drive to reimagine our way of being on the planet. A new agenda for change is emerging, gaining traction and raising questions that will not go away.

Questions like: How do we reimagine a collective future where changed behaviours will allow us to live more in balance with nature than before? How do we

maintain and even intensify the sense of connection, caring and community that was one of the unexpected, but welcome, impacts of the pandemic? How do we deal with the uncertainty on the horizon when future surges of Covid-19 occur?

At Sappi we are taking bold, decisive action to respond to these challenges by extracting the full potential of trees and woodfibre to develop practical innovations for everyday impact and innovate what we should, not just what we can. We’re also establishing and maintaining proactive dialogue with all our stakeholders as well as working with and supporting local communities.

In doing so, we can not only create a more sustainable future, but also unlock significant long-term value for all our stakeholders.

Resilience

Rocks are the ultimate symbol of resilience. They are fused together over time from solid crystals of different minerals. These natural processes bind them all together, imparting strength and resilience. But even rocks are shaped and reshaped over time by natural forces like water, wind and sun.

They’re a reminder that none of us are impervious to the global forces shaping our world. Forces like climate change, urbanisation, social inequality and of course, the new reality brought about by the coronavirus pandemic and Covid-19.

We’ve proven our resilience to succeed in the ‘new normal’ and we will continue to do so as we work to accelerate our decarbonisation journey, meet the changing needs of rapidly urbanising populations while managing our environmental footprint and promoting a diverse, inclusive workforce.

At Sappi we operate across different geographies, meeting the needs of customers from New Zealand to New Mexico, but our common purpose makes us stronger and more resilient: Sappi exists to build a thriving world by unlocking the power of renewable resources to benefit people, communities, and the planet. This is our inspiration and our call to create a brighter future for the world and for our business.

Emerge

Collectively, the world is drawing a deep breath as we slowly emerge from the coronavirus pandemic and impact of Covid-19.

During the crisis, the safety of our people was our top priority. After which, like many enterprises across the world, our underlying goal was economic survival. To achieve this, we focused on the preservation of liquidity, lowering costs by deferring non-critical capex projects and postponing some annual maintenance shuts. We also took commercial downtime across all segments as required, in order to match supply to demand and prevent the build-up of inventory.

The verb ‘emerge’ is derived from the classical Latin ēmergere, meaning ‘to rise out or up’. We are proud

to say that we are rising from the impact of Covid-19 with strong growth in sales and profitability for the packaging and speciality papers segment, quickly recovering dissolving pulp market and steady month-on-month improvement for graphic papers.

As OneSappi we are steely in our determination to emerge from survival mode back onto a growth curve. A curve based on our strategy of diversifying our product portfolio into higher margin and growing segments – a strategy fully justified during the events of the past year.

Doing so is challenging, but we believe we can realise our vision of a thriving world by collaborating with all our stakeholders to create solutions for our collective needs and emerge stronger than ever before.

Momentum

Linear momentum is defined as the product of a system’s mass multiplied by its velocity. The greater an object’s mass or the greater its velocity, the greater its momentum. In other words, momentum is about both magnitude and direction.

It can be difficult to maintain momentum in times of profound change or crisis, but it’s important to do so. That’s because action creates movement which in turn can create unanticipated opportunities.

Recognising this, at Sappi we responded to the coronavirus pandemic and Covid-19 in order to keep our forward momentum. We swiftly implemented a comprehensive Covid-19 action plan that ensured the health and safety of our employees and enabled us to operate in a safe, uninterrupted manner where demand permitted. Working closely with our

customers and suppliers we systematically increased activity and output in response to improved market demand. Our support for local communities helped mitigate the impact of the pandemic and the ensuing socio-economic consequences on them.

Looking ahead, we are confident that we can accelerate our momentum to navigate forward: We have the mass in the form of wide-ranging expertise, extensive infrastructure, strong foundation of research and development, together with our range of sustainable solutions produced from renewable woodfibre. And we have the velocity in the form of our ambitious but achievable Thrive25 strategy, which allows us to take advantage of the changing dynamics between the environment, consumers and the products they require. Above all, our passionate, committed people provide the impetus to power us forward.

SDGs Q&A

CEO

Graeme Wild
Sappi Limited Group Head:
Investor Relations and Sustainability

Enhancing energy selfsufficiency, improving energy-use efficiency and decreasing our reliance on fossil fuels, thereby reducing our carbon footprint, are key strategic goals”

Q1

When did Sappi first commit to the United Nations (UN) Sustainable Development Goals (SDGs)?

We formalised our commitment in 2019 in alignment with the UN Summit on the SDGs – the first global summit since the adoption of the 2030 Agenda for Sustainable Development in September 2015. Having said that, as a signatory to the UN Global Compact (UNGC) since 2008, we have incorporated the UNGC’s Ten Principles across all business operations and supply chains for more than a decade – a good baseline for any company engaging with the SDGs. So, in a way, we were working to integrate the SDGs into our business well before they were finalised.

 

Q2

What did ‘formalising’ Sappi’s commitment to the SDGs involve?

We established a working group drawn from colleagues across all regions to prioritise the SDGs most relevant to our business, develop related action plans and translate them into specific business targets

 
 

Q3

Could you describe the SDGs you have prioritised and their relevance to Sappi’s business?

 

Let’s look at the SDGs we have prioritised at a global level first. SDG6: Clean water and Sanitation is relevant to Sappi because water, a life-giving natural resource, is one of our key process materials. In addition, our tree plantations in South Africa, while not irrigated, depend on rainfall to grow. In terms of SDG7: Affordable and Clean Energy , as an energy-intensive industry, Sappi’s fuel choices have a major impact on air emissions. Our related action plan is to increase the share of renewable energy within our total energy consumption and to continually improve and look for new energy solutions. To this end, we have established a 1.5 Future Energy Technologies & Decarbonisation ‘cluster’. This cluster is tasked with exploring and developing novel technologies for fuel shift and deep decarbonisation in terms of Scope 1 and 2 emissions, with a particular emphasis on energy, pulping, papermaking and bleaching.

SDG8: Decent Work and Economic Growth aligns with our focus on being a responsible corporate citizen by providing a safe working environment in which our employees can reach their full potential. We facilitate social and economic well-being by using labour drawn from local communities, and the services of small and medium enterprises situated in the areas around plantations and production facilities. We also have a best practice training programme and follow a shared value approach to business, which means that communities close to our operations benefit from our extensive socio-economic development programmes.

There are many points of relevance for how Sappi can contribute to SDG12: Responsible Consumption and Production, especially from the perspectives of manufacturing, product design and product use/end of life. Our manufacturing process begins with sustainably managed, renewable forest resources and we operate according to circular economy principles. We do so by using resources efficiently and reducing waste generation, from manufacturing processes through to end-of-life product recycling. With investments in research and development (R&D) and new product development, we continually strive to create new products and value from woodfibre and side streams. Not only does this work improve resource use, but in many cases, it also generates products that have superior sustainability credentials to the conventional products that they replace.

For Sappi the obvious and direct connection to SDG13: Climate Action is through our CO2 emissions. Enhancing energy self-sufficiency, improving energy-use efficiency and decreasing our reliance on fossil fuels, thereby reducing our carbon footprint, are key strategic goals. For each of our mills we are developing decarbonisation roadmaps to identify and plan for the necessary investments.

SDG15: Life on Land has particular relevance for Sappi, given that our business is dependent on sustainably managed and sourced woodfibre. Globally, we enhance sound forestry management practices by utilising credible, third-party verified forest certification schemes. We neither harvest nor buy woodfibre which originates from tropical natural forests and our wood sourcing causes zero deforestation. In South Africa, Sappi owns and leases 394,000 ha of land of which approximately 26% is managed for biodiversity conservation.

In terms of SDG17: Partnerships for the Goals, while Sappi is already engaged in and has been contributing to many partnerships and collaborations, there are many further opportunities in the sustainability field for us to become more involved. Over the past year, we became a founding partner of 4evergreen, an alliance of fibre-based packaging leaders in Europe, joined the Sustainable Apparel Coalition and committed to setting science-based emission reduction targets in collaboration with the Science Based Targets initiative (SBTi) in addition to many other collaborations.

     

Q4

What SDGs have you prioritised at local level?

 

Sappi is headquartered in South Africa which is a developing country. Accordingly, in this region we have also prioritised SDG1: No Povertyand SDG4: Quality Education, both of which align with our commitment to the national drive to promote socio-economic development.

     

Q5

Please explain the link between your priority SDGs and targets?

 

In 2020 we closed off our previous set of targets and set new 2025 targets under our new Thrive25 business strategy. The indicators we selected are aligned with our seven priority SDGs. We believe the targets set are sufficiently ambitious to enable us to accelerate progress and support the achievement of these SDGs. We see them as a way of entrenching sustainability further into our core business, while strengthening our connection to the 2030 global agenda. For example, the goal linked to SDG12: Responsible Consumption and Production involves the number of products launched annually with defined sustainability benefits.

     

Q6

Any closing thoughts?

 

Given the sheer complexity of sustainability, the SDG framework gives us focus. It also offers a common language to engage our employees and to guide our interaction with our customers and other stakeholders. Integrating the SDGs into our Thrive25 business strategy has also given us more clarity and purpose for unlocking the power of renewable resources to help build a thriving world.