Sappi Limited, being headquartered and listed in South Africa (SA), is a member of the Ethics Institute of SA and has also signed the Business Leadership South Africa Integrity Pledge, thereby committing the group to actively combat corrupt practices wherever encountered, preventing anti-competitive behaviour, adopting a zero-tolerance approach to corrupt behaviour and protecting whistle-blowers.

Sappi Limited is an active participant in the National Economic Development and Labour Council (Nedlac) Companies Amendment Bill Task Team, where representatives of labour, government and business meet to discuss and seek consensus on the major amendments proposed to the current South African Companies Act and governance codes, as well as changes related to board Social and Ethics Committees.

We engaged throughout the year with the SBTi until our targets were validated in June 2022.

See Responding to climate change for more about ESD work.

We are a project member of the WBCSD Forest Solutions Group. This collaborative platform enables companies from across the forest and forest products sector to support the development of Net Zero and Roadmap to Nature Positive, for the forest sector. The 2022 work priorities for the group included: Roadmap to Nature Positive, the GHG protocol, TCFD reference scenarios and phase two of the net zero roadmap. The Roadmap to Nature Positive economy, aligns with guidance from the Science Based Targets Network (SBTN) and the Taskforce on Nature-related Financial Disclosure (TNFD); the first draft has been completed and will be published at COP27.

The Programme Leader Land Management and Wood Properties, Sappi Forests, spearheaded the carbon calculation and flows methodology related to forests, as well as the quantification and development of mitigating strategies for climate change as related to forests for Sappi. This individual is a member of the World Resources Institute technical working group on GHG Protocol Carbon Removals and Land Sector Initiative Project, which is developing new guidance on how companies account for and report land use, land use change, carbon removals and storage, bio-energy and other biogenic products. Sappi Forests is participating in the GHG pilot for Scope 1 emissions reporting from own land holdings in South Africa using a cradle-to-mill gate system boundary.

The TE launched its Climate+ strategy in 2019, with a goal to reduce GHG emissions in the textile value chain by 45% by 2030, while addressing other climate-related impact areas, like water, biodiversity and soil health. To accelerate progress towards the Climate+ objective and to drive collective action, Sappi was one of 40 global brands that participated in a discussion with the Climate Board. The latter was appointed by the TE to uncover industry best practice in terms of reducing GHG emissions. Sappi is also a member of the TE man-made cellulosic fibre roundtable and climate sub-committee, being developed alongside the SBTN to reinforce consistency in language, frameworks and measurements.

In the build-up to COP27 (climate change) Sappi joined the Africa Business Leaders Coalition and signed its Africa Business Leaders’ Climate Statement which was presented at COP27.

Global

Sappi Pulp was an advisory partner in the development of the Biodiversity Benchmark for the TE.

Shortly after year end and in preparation for COP15, Sappi joined other companies from 56 countries in signing the Business for Nature Statement calling for mandatory assessment and disclosure on nature to be included in the Global Biodiversity Framework.

In SNA’s sourcing areas, a significant portion of forestland is owned and managed by private landowners, often averaging less than 10 hectares. This presents challenges for forest health and biodiversity conservation. The Sappi Maine Forestry Program and the Sappi Lake States Private Forestry Program, staffed by SNA foresters, offer a wide range of services to landowners including contracting with experienced loggers and providing plans to enhance wildlife habitat and forest health.

SNA also supports the University of Minnesota Sustainable Forests Education Cooperative.

SSA supports South African National Biodiversity Institute (SANBI), Birdlife SA and WWF-SA. In this region we have seven declared nature reserves on our landholdings in Mpumalanga and KwaZulu-Natal. These proclaimed nature reserves are part of SANBI, are based on partnerships between landowners, provincial conservation authorities and NGOs, and are aimed at securing and enhancing biodiversity. The sites are declared where important biodiversity or ecosystem services have been identified.

Global

As a member of the Sustainable Apparel Coalition (SAC), we support the Higg Index developed by the apparel industry to evaluate materials, products, facilities and processes based on environmental performance, social labour practices and product design choices.

SEU

In FY2022 we participated actively in the 4Evergreen Alliance, which is focused on improving fibre-based packaging circularity and climate performance. The collaboration published Circularity by Design Guidelines, which offers a collective view from experts across the value chain on how different components of fibre-based packaging impact the paper recycling process in standard recycling mills, together with the different ways in which they can be classified. The collaboration also published the Collection & Sorting Guideline, together with three annex materials which aim to improve the use and execution of the Confederation of European Paper Industries (CEPI) harmonised test method for recyclability.

We also participated in the Forests Dialogue (TFD), which leads multi-stakeholder dialogue processes among key stakeholders, to overcome conflict and spur collaborative action on the highest priority issues facing the world’s forests.

Contributing to the Pulp and Paper Value Chain Information System (P&P-VIS)

Together with other members of the CEPI and the European Paper Chemicals Manufacturing Industry Group, SEU contributed to the launch of the P&P-VIS in 2022. The system embodies two essential elements of sustainability transformation: collaboration and transparency. By working together to agree on a harmonised questionnaire and develop an online platform, important information can now flow accurately and efficiently between chemical suppliers and their pulp and paper manufacturing customers.

The information shared supports our ability to ensure our products comply with requirements related to food contact, Ecolabel, declarable substances, together with other regulatory and market requirements. Through
P&P-VIS, the paper industry has enhanced its capacity to react rapidly to new product safety regulations and to efficiently implement them throughout the value chain.

SNA

Sappi continues to be a sponsor of the Paper & Packaging Board’s How Life Unfolds^® campaign, which highlights our commitment to innovative, sustainable products.

We are a founding partner of The Recycling Partnership and support their work to transform recycling nation-wide and increase materials recovery.

SSA

Together with PAMSA and another industry member, we sponsored Primestars to develop an infotainment programme for high school learners from under-resourced communities. The programme was aimed at highlighting opportunities in the green economy.

• Sappi Biotech collaborated with Frankfurter Brett and Kegelmann Technik to launch a sustainable kitchen console made from Sappi Symbio
• In the light of growing consumer demand for sustainable packaging, SEU and packaging machine manufacturer Kallfass signed a collaboration agreement to develop a sustainable, paper-based alternative to film-based primary and secondary packaging in the non-food packaging sector
• SNA is the co-lead of the committee operating under the auspices of the Alliance for Pulp and Paper Technology Innovation to demonstrate and deploy membrane-based technology for black liquor. Other members of the committee include the Georgia Institute of Technology (Georgia Tech), members of the US forest products industry and membrane system/process developers. The work has progressed to mill scale trials and we continue to help fund patent protection for the invention.

SEU

The European Green Deal aims to lead the world in achieving climate neutrality under the Fit for 55 legislative package. Our industry supports the objectives of the European Green Deal and is leading the way in taking concrete actions to achieve deep emissions reductions. Our main position in the context of EU policy related to decarbonisation is to ensure a predictable and enabling policy framework for EU industry. We engage through CEPI.

One of the most recent proposals was to establish a broadened framework for eco-design requirements for sustainable products. The horizontal framework for eco-design requirements will cover the broadest possible range of products, including intermediate products and components, but excluding food, feed, medicinal products, living plants and animals. We are following the process closely.

Together with other members of the European pulp and paper industry, we have been actively contributing to and keenly monitoring the development of the new EU Forest Strategy and the proposal for a regulation concerning certain commodities and products associated with deforestation and forest degradation.

SNA

In the USA, extended producer responsibility (EPR) legislative activity has gathered momentum. The biggest impact of such legislation is likely to be increased costs to our customers and possible mandates for greater recycled content, which could disadvantage and add costs to Sappi products. The state of Maine, where our Somerset and Westbrook mills are located, was the first state to pass EPR legislation. We are engaging through our trade association, the American Forest & Paper Association, who appointed a consultant to inform and influence the conversation among the media, policymakers, and the public surrounding EPR proposals.

See Our engagement with regulators regarding carbon taxes

SSA

We supported PAMSA in its engagement with the Department of Forestry, Fisheries and the Environment (DFFE), which resulted in the granting of an exclusion for specific waste streams from the definition of waste to promote beneficiation opportunities of the likes of paper sludge and ash in various products such as brick and block manufacturing, soil conditioners, biofuels and cement production.

SNA

We belong to the Cooperative Forest Research Unit based at the University of Maine, where scientists conduct applied research that provides Maine’s forest landowners, forestry community and policymakers with the information needed to ensure both sustainable forestry practices and science-based forest policy.

We continued our ongoing participation in Emerald Ash Borer surveys and other pest/pathogen/invasive species quarantines and studies.

The revised SFI Forest Management, COC and Fiber Sourcing Standards went into effect on 1 January 2022. The new standards bring clarity and rigour in key areas of due diligence systems and avoidance of controversial sources, landscape biodiversity conversation and logger training together with new climate Smart Forestry practices and an optional climate change adaptation module.

We are a member of Minnesota Forest Industries (MFI), which meets quarterly with public agencies to discuss forest-related challenges, industry needs, workforce challenges, and trends/concerns/opportunities.

SSA

A milestone was reached last year when we were awarded the first-ever PEFC forest management certificate in the country. This means that all our plantations are now both FSC and the PEFC certified. In addition to PEFC forestry management certification, Ngodwana, Saiccor and Tugela Mills are now chain of custody certified.

The Sappi Forests Vice-President spoke at the 15th World Forestry Congress, held in Korea on the topic: Managing forests for the SDGs: Creating value, equality and resilience from forest products and ecosystem services.

We believe that creating value in standing forests is one of the best ways to combat deforestation in the long term. Engagement with participants along the supply chain from the forests to the customers is active, and Sappi advocates for the importance of sustainable forest management practices, and forest certification as assurance of the supply chain integrity. We are an active member of FSC International’s northern and southern economic chambers and PEFC’s international stakeholder member, and collaborates to promote and expand forest certification, but also to ensure that the systems continuously develop themselves to sustain the integrity and robustness of certified supply chains.

Sappi is a member of the SAC's policy advocacy task team responsible for providing commentary on the development of the EU textile strategy and associated policies, in line with the EU Green Deal directive. One of the key aims is to ensure that virgin wood-based raw materials are recognised as a sustainable option. This advocacy group is supported by the Federation of European Sporting Goods Industry and Global Fashion Agenda.

SSA has partnered with WWF-SA to proactively manage water resources in the uMkhomazi catchment, in which our Saiccor Mill is situated through multi-stakeholder collaboration across the landscape. This collaborative approach is an extension of an innovative structure, known as the ICF, which we pioneered and through which we engage with communities close to our areas of operation. Under this project, we launched the first community-based alien vegetation clearing and maintenance project with the Nzinga community.

• Our investor relations department engages with shareholders and analysts on an ongoing basis.
• Our Chairman and CEO also engage with shareholders on relevant issues
• We conduct ad hoc mill visits and road shows, and issue announcements through the Johannesburg Stock Exchange (JSE) – Stock Exchange News Services (SENS), in the press and on our website www.sappi.com/SENS
• We publish our Annual Integrated Report www.sappi.com/annual-reports and Sustainability Reports www.sappi.com/sustainability on the group website
• Shareholders can attend and participate in the Annual General Meeting as well as the four quarterly financial results briefings
• We engage with various ratings agencies, particularly in terms of ESG performance
• We participate in the CDP Climate and Forest disclosure projects every year, making our submissions publicly available. This year, for the first time, we participated in CDP Water
• Our Chief Financial Officer and Head of Treasury engage with bondholders, banks and rating agencies continually on the performance of the company. A key point of discussion was our international RCF of €515 million benefits from the group’s newly developed Sustainable Financing Framework.

SEU

We are actively working in various forest-sector collaborations to ensure a thriving forest bio-economy remains an integral part of the EU Green Deal. Through sustainable forest management practices, responsible sourcing, efficient use of resources and manufacturing innovation, the sector provides fibre-based and low-carbon solutions and products, thus boosting the transition into a circular economy.

SNA

We actively engage through various industry trade associations at the federal and state level to ensure that a thriving forest resources industry remains a vibrant part of the US economy. In August 2022, US President Biden signed the Inflation Reduction Act (IRA) into law. Our response is described in Our operating context.

SSA

• The Carbon Tax Act came into effect on 1 June 2019. The first phase from 1 June 2019 to 31 December 2022 applies to activities that directly emit GHG. The tax includes various allowances in the first phase, including a 100% allowance for forestry. We engaged with the DFFE, which agreed with our carbon sequestration calculation and SSA's carbon tax liability for the 2021 calendar year was zero. We also anticipate zero liability in calendar 2022
• We engage with government to assist in the development of rural areas, including the expansion of tree farms in the Eastern Cape
• As a member of Forestry South Africa, we previously participated in the development of the Masterplan for the Commercial Forestry Sector in South Africa 2020 – 2025 and the Public Private Growth Initiative. SSA is also participating in the Public Private Growth Initiative, a forum enabling business sectors to discuss economic growth plans with the presidency
• Amendments to the Employment Equity Act have been approved by parliament for public comments. SSA, together with other members of organised business, submitted consolidated comments, through Business Unity South Africa as well as Forestry South Africa. It is hoped that comments from business, particularly around concerns on the sectoral targets, will be incorporated in the final paper.

Given our focus on zero harm in the workplace, we work with our contractors to ensure that they follow Sappi’s safety systems and regard their safety as just as important as that of our own people.

In South Africa, Sappi Forests continues to work closely with contractors and their workers to implement the innovative Stop and Think Before You Act safety initiative.

We continued to assess the sustainability performance of our suppliers through proactive ratings and evaluations using EcoVadis’ methodology. Under the EcoVadis banner, we have been submitting our own sustainability performance to our customers for many years now.

Globally, our procurement team made progress in assessing suppliers against our Supplier Code of Conduct: SEU, 83% of total procurement spend covered; SNA, 72% and SSA 58%.

SEU

In Europe, we procure wood through well-established wood sourcing companies and wood procurement partners in Europe (Metsä Forest in Finland, proNARO in Germany, Sapin in Belgium and Papierholz in Austria) all of which operate with an established pool of forest owners and wood suppliers.

In addition, we are a member of CEPI, which participates in actions supporting and promoting forest management and certification.

SNA

The Sappi Maine Forestry Program and the Sappi Lake States Private Forestry Program, staffed by SNA foresters, offer a wide range of services to landowners, including contracting with experienced loggers and providing plans to enhance wildlife habitat and forest health. The SNA stumpage programme assists landowners with developing harvest plans and timber stand improvement project plans with appropriate silvicultural techniques that ensure prompt regeneration after harvest. SNA stumpage foresters conduct inspections on all jobs to ensure compliance with laws, policies and best management practices to conserve soil and water quantity/quality, along with other values such as biodiversity conservation, aesthetics management, cultural resource protection, etc.

SSA

Qualified extension officers provide growers in our Sappi Khulisa enterprise development scheme with ongoing growing advice and practical assistance.

Khulisa Ulwazi (growing knowledge) training centres are targeted at Khulisa growers and land reform beneficiaries. Training covers entrepreneurship, fire management, harvesting planning, leadership and management development, as well as safety.

Sappi is involved in several land reform projects, helping beneficiaries to manage their land. Many of these properties previously belonged to commercial farmers who had supply agreements with Sappi. For many of the land claims in which we have been involved, and where there has been a change in ownership, we continue to buy the timber and help manage those plantations.

The high cost of certification has been an issue for small growers which we have helped to overcome by offering a group certification scheme. In 2022 there were 39 members in the scheme with plantations totalling 45,600.

Sappi was the first forestry company in South Africa to achieve PEFC certification through the Sustainable African Forestry Assurance Scheme (SAFAS). This incorporates a value-based platform (VBP) approach, which is designed to look at integrated risks across landscapes and is more suitable for smallholders.

Using the VBP approach, we are now assessing 13 grower groups, covering 4,443 hectares, for certification readiness.

Global

• Join key credible organisations as members
• Develop personal relationships and engage continually
• Provide support to and sponsorship for key organisations on issues of mutual interest.

SNA

• SNA engages in a variety of roles in diverse collaboratives as a participant, funder, partner and leader. Our staff serve in roles ranging from interested stakeholder for consultative purposes, committee members, leads/chairman and board of directors. One example is Minnesota Forest Industries, to which SNA belongs and which meets quarterly with public agencies to discuss forest-related challenges, industry needs, workforce challenges, and trends/concerns/opportunities.

SSA

• In terms of civil society, our forestry operations belong to several fire associations, given that fire is a key risk on our plantations
• Initiated in 2014, our project to re-establish the Warburgia salutaris (pepper-bark tree) in communities and the wild continues to gain traction. A major breakthrough for the project has been the discovery that the medicinal properties so highly prized in the bark, are also abundant in the twigs and leaves. Thus, the twigs and leaves of trees planted out in the field can be harvested within four years – much earlier than would be the case for bark harvesting which can only be done on an adult tree. This ensures that the trees can be harvested sustainably, providing health benefits and economic opportunities for traditional healers and muti (medicine) traders. Since inception of the project, together with our working group partners, we have propagated and provided over 60,000 seedlings to traditional healers and urban and rural communities and created seed orchards in safe and protected estates
• We are now following the same approach to three other species of tree, all of which, like Warburgia, can be used in traditional medicine and which are in danger of being over-harvested.