Sappi is steadfast in its commitment to climate action, driving sustainable innovation and reducing environmental impacts as we transition toward a low-carbon future.

We report in line with the TCFD recommendations to ensure transparency on how we manage climate-related risks and opportunities, demonstrating our commitment to sustainable growth and resilience. Through this framework, we provide clear disclosures on the integration of climate considerations into governance, strategy, risk management, and performance, outlining our actions to adapt to a low-carbon economy, reduce environmental impacts, and leverage opportunities from the global sustainability transition.

A summary of our climate-related activities is provided below, with the full TCFD Report available online for a comprehensive view of our approach to managing climate risks and opportunities.

Governance

In order to unlock the power of renewable resources to benefit people, communities and the planet, we need to do so from a foundation of trust. This foundation is reinforced by our robust sustainability governance framework summarised below.

Sappi sustainability governance framework

Sappi board
Committees
	Other board committees
Social, Ethics, Transformation and Sustainability (SETS) Committee	Audit and Risk	Remuneration and Compensation		Executive Committee		Group Sustainable Development Council (GSDC)		Regional Sustainability Councils
Chaired by an Independent Non-executive Director	Chaired by an Independent Non-executive Director	Chaired by an Independent Non-executive Director		Chaired by the group CEO		Chaired by the Group Head: Sustainability and Investor Relations		Chaired by regional CEOs and sustainability leads
Purpose
Oversees the group's sustainability strategy, commitments, policies and performance against targets	Oversees the group's corporate financial reporting, internal control systems, risk management, and relationship with the external auditor	Ensures that incentives drive the appropriate behaviours that deliver our strategy		Management responsibility for execution of sustainability strategy and policies guided by the SETS Committee		Provides expert insights and support to the business on sustainable development matters		Oversees the integration of sustainable development into the operations
Responsibility
Responsible for the governance of matters related to sustainable development, including environment, climate change, biodiversity, product stewardship, labour, human rights, diversity, and transformation and ethics. Ensures alignment to best practice and disclosure standards	Oversees the group's corporate financial reporting. Oversees the risk management process, including sustainability risks. Monitors effectiveness of internal control systems, including hotline reporting platform	Aligns remuneration to performance against key sustainability targets and focus areas		Prioritises capital allocation and ensures business unit line management holds primary responsibility and accountability for sustainability performance		Keeps abreast of best practice and regulatory compliance requirements. Develops sustainability-related strategy and policies for the group		Develops action plans aligned with strategy and policies and monitors progress towards sustainability targets and commitments. Ensures integration of sustainability requirements into operational systems and processes
Oversight				Accountable		Advisory		Execution

At board level, the Social, Ethics, Transformation and Sustainability (SETS) Committee plays an independent oversight role. Comprised mainly of Independent Non-Executive Directors, it guides management and monitors progress on key issues, including climate, nature, equity, diversity, ethical conduct, and social impact. The SETS Committee also reviews the group's sustainability strategies, targets, and public disclosures to ensure transparency and alignment with global best practice.

Supporting the board and SETS Committee, the Audit and Risk Committee oversees sustainability-related risks within the broader risk management and reporting processes and the resolution of any unethical behaviours reported through Sappi's confidential, independently operated hotline. The Remuneration and Compensation Committee ensures that incentive structures are tied to performance against sustainability commitments. The Nomination and Governance Committee is responsible for ensuring that the board and executive management teams have the appropriate skills to manage climate-related issues.

Operational accountability lies with the Sappi Executive Committee, chaired by the group CEO, which integrates sustainability into business strategy, capital allocation, and performance delivery. Sappi Executive Committee reviews progress against sustainability commitments and targets regularly and ensures strategic alignment before matters are escalated to the SETS Committee.

Specialist advisory bodies further strengthen governance. The Group Sustainable Development Council (GSDC) tracks global and regional trends, shaping strategy and policy. Meanwhile, Regional Sustainability Councils in Europe, North America, and South Africa translate global commitments into local action plans, ensuring delivery on the ground.

Together, this multi-layered governance framework provides robust oversight, drives accountability, and ensures that Sappi's sustainability commitments are consistently embedded in strategic decision-making and operational practice.

Strategy

Sustainability lies at the core of Sappi's Thrive strategy, shaping how we operate, innovate and grow, while ensuring the responsible use of natural resources. Guided by our 4P framework (Principles, Prosperity, People and Planet) and informed by double materiality assessments, we adopt a holistic approach that recognises the interconnection between climate, forests, water and biodiversity.

Our climate strategy supports the four pillars of Thrive (grow our business, sustain our financial health, drive operational excellence, and enhance trust) by linking climate action to innovation, efficiency, financial resilience, and social responsibility. We prioritise the development of low-carbon, biobased products, continuous improvement of our energy and resource efficiency, investment in renewable energy, and strong partnerships that promote transparency and a just transition.

Using climate scenario analysis and risk tools, we identify, mitigate and adapt to climate-related risks, embedding sustainability in strategic decision-making. Integrated across governance, operations and long-term planning, this approach underscores our commitment to a resilient and inclusive transition to a low-carbon economy.

We have a validated 2030 (well-below-two-degree) science-based Scope 1 and 2 decarbonisation target as a key milestone in our transition. Our Scope 3 approach focuses on engagement and collaboration across our value chain to drive collective climate action. We use our influence to encourage key suppliers to set science-based targets (SBTs) and are actively working with them to collect primary emission factors to improve the accuracy of our Scope 3 inventory. While we have made progress, we recognise that supplier maturity levels vary significantly, and challenges remain in accurately disaggregating product-level emissions. At this stage, we do not yet have sufficient primary data to set a quantified Scope 3 reduction target. However, we continue to build capacity, share best practices, and collaborate through industry platforms and sector associations to strengthen supplier engagement and advance Scope 3 decarbonisation efforts over time.

Sappi fully supports the principles of the Paris Agreement and aspires to achieve net-zero greenhouse gas emissions by 2050. However, structural challenges in South Africa's coal-dependent energy system currently prevent us from setting a formal group-wide net-zero target. Our South African operations, which account for the majority of our Scope 2 emissions, remain reliant on Eskom's coal-based grid. The recently approved IRP 2025¹ confirms that South Africa does not yet have a credible, net-zero-aligned decarbonisation pathway, with ongoing constraints in transmission infrastructure, renewable capacity, and policy reform.

Despite these challenges, Sappi continues to advance decarbonisation through direct renewable investments, efficiency improvements, and active participation in national just transition initiatives such as the National Business Initiative's Climate Pathways Study and the JET Skilling for Employment Programme. We remain steadfast in our commitment to reducing our Scope 1 emissions, advocating for collaborative, equitable solutions for Scope 2 abatement, and positioning Sappi as a resilient, low-carbon business ready to thrive in a sustainable future.

¹ https://www.dmre.gov.za/mining-minerals-energy-policy-development/integrated-resource-plan/irp-2025.

Sappi's key decarbonisation levers and transition pathway

In the short and medium term, Sappi's decarbonisation strategy focuses on abatement investments to continuously reduce emissions from high-emitting assets and reduce energy intensity using best-available technology. In the longer term, Sappi will evaluate emerging technologies and collaborate with strategic partners to understand feasibility and cost of new technologies that will reduce hard-to-abate emissions.

The graph below illustrates Sappi's current 2030 transition pathway, showing achieved abatement from 2019 to 2025 and the potential contribution of decarbonisation levers towards 2030. This pathway reflects the projects currently identified within our plan, which is reviewed annually to ensure alignment with business priorities and evolving market conditions. All decarbonisation projects are evaluated on their individual merits within regional contexts as well as at a group level and are prioritised based on their return on capital and CO₂ abatement potential. We estimate the cost of our transition at US$60 million to US$70 million per annum. The plan remains dynamic and continues to evolve as opportunities and technologies develop, while progress is highly dependent on the availability of capital to support these investments. Our short and medium-term focus is on direct abatement of emissions from our operations and value chain.

As our 2030 climate transition plan continues to evolve, we are also assessing our longer-term abatement opportunities toward 2050, with a particular focus on identifying and advancing Scope 1 emission reduction levers within our South African operations. While we do not believe that a net-zero commitment is appropriate at this stage, we remain committed to progressively developing our transition plan in line with emerging technologies, policy developments, and sectoral progress. We recognise that as we approach 2050, some residual emissions may remain unavoidable, and we will evaluate credible neutralisation solutions to address these in a responsible and transparent manner.

Sappi Group 2030 transition pathway

The role of forests in climate action

Trees and forests play an integral role in the global carbon cycle. Through sequestering carbon dioxide from the atmosphere and storing it in forest biomass and soils, forests store vast amounts of carbon and release oxygen back into the atmosphere. Recent studies point to the further contribution that trees and forests could deliver to mitigate climate change if afforestation, reforestation, and restoration efforts were scaled up substantially. Managing forests for wood production can help maximise their contribution to carbon sequestration. Forest management practices, which rely on scientific knowledge of silvicultural best practices applicable in respective vegetation zones, promote growth and carbon sequestration. In our plantations in South Africa and in the managed forests from which we source our wood raw material, the cycle of regeneration, growing, thinning and harvesting is actively managed to enhance biodiversity, resilience, and maintain functional ecological condition. Deforestation negatively impacts ecosystem services and climate. It also increases the transmission risk of zoonotic diseases. In addition to helping to respond to climate change and protect soils and water, forests hold more than three-quarters of the world's terrestrial biodiversity. This means that deforestation has serious negative impacts on both biodiversity and climate change.

The pulp and paper industry provides dependable markets for responsibly grown woodfibre, thereby incentivising long-term sustainable forest management. This assurance of financial returns enables and encourages landowners to manage their forestlands as working forests, instead of selling the land for development or converting it to non-forest uses. Furthermore, the pulp and paper industry typically utilises different species and/or smaller diameter trees or portions of trees that are not desirable in the solid wood industry. By providing this market and revenue stream, the industry is supporting necessary holistic forest stand-improvement activities that are essential for maintaining and restoring forest health, species and age-class balance, wildlife habitat and biodiversity, wildfire mitigation and hazardous fuels reduction, watershed protection, soil conservation, and carbon sequestration. By ensuring forests and plantations are sustainably managed through high levels of certification and prioritising traceability, we can help combat climate change and enhance the ecosystems services that contribute to greater levels of economic and environmental wellbeing. Our opportunity is to invest in and promote healthy forests both for our benefit and the benefits they deliver to the planet.

Our commitment to deforestation free forestry operations and supply chains through wood sourcing from sustainably managed, healthy working forests with a high level of forestry certification enable us to offer products to our customers around the world that carry no risk of deforestation or forest degradation.

Forestry emissions and removals

Climate impacts within our own plantations, our manufacturing operations and our products are considered within our transition plan by using a double materiality impact approach. This holistic approach considers both the financial impact and environmental and social impact of carbon emissions and removals across our own operations and value chain, with land-based (forest) emissions and removals being a key component of our climate impact. Forests form an integral component of Sappi's transition plan due to the critical role they play in carbon sequestration, absorbing large amounts of CO₂ from the atmosphere and helping to mitigate climate change. Sustainably managed forests ensure a renewable supply of woodfibre for our operations while maintaining biodiversity and ecosystem health, which are essential for resilience against climate impacts. Additionally, by preventing deforestation and promoting sustainable forest management (SFM) practices, we can reduce emissions linked to land-use changes, contributing to global climate goals.

We monitor and report greenhouse gas (GHG) emissions and removals from our forestry operations in line with evolving global standards. The Greenhouse Gas Protocol's forthcoming Land Sector and Removals Guidance (LSRG) is likely to become the standard framework. Sappi has been actively engaged in shaping this guidance through technical working groups and pilot testing. Nonetheless, stakeholder misalignment has delayed finalisation of the LSRG. We continue to proactively monitor these developments.

Sappi's forestry biogenic CO₂ emissions/removals are calculated using the stock-difference method¹, which measures annual changes in carbon stocks between two inventory years across the more than 15,000 forest compartments making up our plantation landholdings in South Africa. Estimates are based on living biomass (above and below ground) using primarily Tier 1 IPCC methods, supplemented with country-specific biomass expansion factors². Field and LiDAR inventory data are combined with empirical modelling to estimate growing stock, while soil carbon, litter, and harvested wood products are excluded in line with GHG Protocol Agricultural Guidance. Our forestry emissions and removals are reported one year in arrears due to the timing of data availability. Detailed forestry activity data, including growth measurements, harvesting records, and land-use changes, are only finalised and verified early in the following financial year. This timing ensures that reported figures are based on complete and accurate datasets, maintaining the integrity and reliability of Sappi's greenhouse gas inventory and sustainability reporting. For FY2024, Sappi Forests reported 590,707 tons of net biogenic CO₂ removals, despite 912,672 tons of gross biogenic CO₂e emissions from natural disturbances. Our plantations represent a CO₂e living biomass pool of 40.7 million tons.

Non-biogenic forestry (fossil-based) CO₂e emissions are calculated following GHG Protocol Agricultural Guidance, covering all major forestry activities under a cradle-to-gate boundary, including establishment, management, fire prevention, harvesting, and transport. Emissions sources include fuel combustion, grassland burning for biodiversity and fire control, wildfires, burning of harvest residues, and land-use change where plantation areas were restored to natural habitats.

In 2020, the biogenic GHG pool became a net source of emissions following extensive wildfire damage that significantly reduced standing tree carbon stocks. Between 2022 and 2024, above-average rainfall drove exceptional tree growth, leading to strong biogenic carbon removals during this period. Over the past six years, these removals have, on average, been sufficient to offset non-biogenic emissions. Our overall objective, in line with sustainable forestry management practices, is to maintain a balanced carbon cycle in our plantations, where annual growth, harvesting, and natural disturbances are in equilibrium, and we achieve long-term net-zero biogenic emissions while ensuring forest health and productivity. Through sustainable forest management (SFM) and adherence to strict certification and traceability standards, we ensure that our woodfibre supply supports both climate action and ecosystem resilience.

As methodologies such as the GHG Protocol Land Sector and Removals Guidance and SBTi FLAG framework evolve, we continue to participate in their development, reinforcing our commitment to sustainable forestry as a cornerstone of our climate strategy.

Aligning our external engagement activities

Sappi's approach to external engagement is grounded in transparency, accountability, and alignment with global climate goals. Guided by our Code of Ethics, Sustainability Charter and commitments to the Paris Agreement and UN SDGs, notably SDG 7: Clean energy and SDG 13: Climate action. We engage with stakeholders through formal policy consultations, industry associations, and multi-stakeholder forums to advocate for effective, science-based climate policy. Climate and nature-related issues are regularly reviewed by senior leadership and regional sustainability councils to ensure alignment with our global strategy.

Emissions (removals) (t CO₂e)

Sappi forests' Scope 1 GHG emissions between 2019 and 2024, as well as the mean values over this period, are presented and separated into biogenic and non-biogenic GHG emissions. The total represents the sum of these two categories.

¹ This approach follows Equation 2.5 from the IPCC 2006 Guidelines for National Greenhouse Gas Inventories (Volume 4, Chapter 2, p. 2.9).
² Dovey, S., du Toit, B. and Crous, J., 2021. Tier 2 above-ground biomass expansion functions for South African plantation forests. Southern Forests: a Journal of Forest Science, 83(1): 69-78.

Climate-linked finance and remuneration

We embedded sustainability into our capital structure through instruments such as our EUR515 million sustainability-linked revolving credit facility and EUR300 million sustainability-linked 2032 bond, both tied to key performance indicators on GHG emissions, certified fibre sourcing, and waste reduction. These mechanisms reinforce accountability and demonstrate how sustainability performance directly influences financial outcomes. Given the strategic importance of sustainability, leadership remuneration is linked to their contribution to the overall success of our Thrive strategy. Specifically, a portion of the personal objectives within the short-term management incentive scheme (MIS) is directly linked to climate change through emission reduction, forestry certification and waste-to-landfill performance targets. Additionally, from FY2024, 10% of the long-term incentive (performance share plan – PSP) is linked to performance against our validated well-below-two-degree science-based target. This integrated approach ensures that climate action is embedded not only in strategy and governance, but also in financial and leadership accountability.

For further details on our remuneration policy, see our Remuneration Report.

Climate scenario modelling

Sappi adopts an integrated, science-based approach to climate scenario modelling to assess both physical and transitional risks and embed the findings into our business strategy, risk management, and action plans. Our modelling helps us understand how different climate futures could affect our operations, forests and value chain, thereby enhancing our ability to anticipate, adapt, and build long-term resilience. We have conducted physical risk modelling across all of our manufacturing and forestry operations using multiple climate scenarios (including RCP and SSP pathways), evaluating indicators such as heat stress, drought, flooding, and wildfire exposure. This has been supplemented with locally downscaled forestry modelling in South Africa and water risk scenario analysis to inform site-level adaptation measures and capital investment priorities. In parallel, we have conducted transition risk modelling in collaboration with S&P Global, assessing how evolving policy, market, and carbon pricing scenarios may affect our costs, competitiveness, and value chain. The outcomes of these analyses directly inform our climate transition plan, capital allocation, and strategic resilience initiatives, ensuring climate considerations are embedded into decision-making at every level.

For more detail on our climate scenario modelling and outcomes, please refer to our full TCFD Report.

Risks, opportunities and adaptation

Sappi has a comprehensive and integrated approach to managing climate-related risks, opportunities, and adaptation, fully embedded within our enterprise risk management and governance framework. Climate change is recognised as a principal strategic risk, and climate considerations are incorporated into strategic planning, financial decision-making, and capital allocation across our operations. Our annual risk evaluation process identifies and monitors both physical and transition risks, with site-level assessments led by regional risk managers and supported by environmental, regulatory, and R&D expertise. We have identified five physical risks, mainly linked to our South African plantations and woodfibre supply chains, and one key transition risk associated with policy and market shifts. Correspondingly, we see significant operational and transitional opportunities in advancing low-carbon and circular biobased solutions.

Sappi recognises that effective climate adaptation is critical to ensuring business continuity, safeguarding natural resources, and supporting community resilience. Our adaptation strategy builds long-term resilience across both manufacturing and forestry operations, guided by detailed climate risk assessments and scenario analyses. In manufacturing, adaptation actions focus on flood protection, water-use efficiency supported by investment in catchment management and contingency planning to maintain operational continuity. In forestry, we focus on climate-smart forestry management and tree breeding programmes to improve resilience against drought, pests, and disease, ensuring a sustainable fibre supply under future climate conditions.

Our adaptation efforts also extend beyond our operations. Through partnerships such as the WWF uMkhomazi catchment water stewardship project, Sappi works to enhance water security, ecosystem resilience, and community wellbeing. We have established integrated community forums around key South African sites to strengthen local preparedness, facilitate stakeholder collaboration, and prioritise climate adaptation initiatives.

Through this integrated approach, which links risk management, adaptation, and innovation, we aim to strengthen business resilience, protect the ecosystems and communities that sustain our operations, and contribute to a just and sustainable transition in every region where we operate.

At the same time, we view climate action as an opportunity for innovation and sustainable growth. By investing in decarbonisation and resource efficiency, we are advancing toward our 2030 science-based targets while positioning for leadership in the circular bioeconomy. Our expanding portfolio of sustainable packaging, speciality papers, and dissolving wood pulp (DWP) enables our value chains to transition from fossil-based to renewable products, supporting a global shift toward low-carbon, circular solutions.

In terms of climate opportunities, Sappi is well-positioned to lead in the transition to a circular, biobased economy by replacing fossil-based materials with sustainably sourced, fibre-based products. Our innovations in packaging papers, speciality papers and dissolving wood pulp (DWP) enable our value chains to reduce their carbon footprint while capturing growing demand for sustainable textiles such as lyocell, a leading next-generation cellulose fibre. Together, these efforts demonstrate Sappi's commitment to managing climate risks proactively, while unlocking new opportunities for sustainable growth and resilience in a changing global environment.

For more detail on our risks and mitigation actions, and on our opportunities and how we are realising them, please refer to our full TCFD Report.

Metrics and targets

We use a variety of metrics to measure the current and potential impact of our climate change-related risks and opportunities including metrics related to GHG emissions, water use, forestry certification and biodiversity.

Direct GHG emissions are from our energy plants through combustion of fuels to generate the power required for our manufacturing operations (Scope 1). We also purchase power from the grid (Scope 2) and have indirect GHG emissions throughout the value chain, mainly as a result of our purchase of raw materials, fuel and transportation, which make up the majority of our Scope 3 emissions. We are acting across all three scopes and working closely with our partners to reduce GHG emissions for our business and our value chain. In 2022, our 2030 science-based decarbonisation targets, including a Scope 3 engagement target, were approved by the SBTi. We remain committed to deforestation free woodfibre supply chains and to maintaining carbon pools in forestry through implementation of best forest management and silviculture practices.

Our performance against our planet targets, which have an impact on climate change, is shown below.

FY2025 group performance against climate targets

Global targets for 2025 for specific total energy and specific GHG emissions were not achieved. The primary reason for the poor performance against our targets is the market-related production curtailment that was required during the year, which significantly reduced the efficiency of our operations. In addition, the North American operations were negatively impacted by process instability introduced by the Somerset Mill PM2 conversion and expansion project, which was completed and commissioned during the year. However, the renewable and clean energy target was achieved, reflecting the strong progress made through our fuel-switching initiatives and renewable energy procurement strategy. The waste-to-landfill target was achieved and exceeded the 2025 goal. Specific water usage is an SSA-specific target. The target was not achieved due to incidences of unstable operating conditions during unplanned production outages and product quality challenges, which required additional water usage as well as lower production volumes than planned for 2025. The global certified fibre target of >75% was exceeded, and we achieved 78%. In terms of our biodiversity improvement target for our own forest operations, a cumulative improvement of 25% has been achieved from the 2020 baseline condition, well in excess of our 10% target.

Read more on Sappi's material issues relating to sustainable forestry, biodiversity, climate change, water stewardship, resource efficiency and minimising waste in our 2025 Sappi Group Sustainability Report.

Science-based targets (SBTs)

The 2025 Scope 1 and 2 emission intensity of 762 t CO₂e/adt was above our SBTi trajectory due to ongoing market-related production curtailments and the completion and commissioning of the Somerset Mill PM2 conversion and expansion project and its associated negative impacts on energy efficiency. However, we achieved a reduction of 5% versus 2024 and a 15% reduction from the 2019 baseline.

FY2025 and long-term GHG emissions data

Production curtailments continue to impact emission intensity since production is the denominator in the calculation. Sappi's absolute emissions have reduced by 34% since 2019 and benefited from the closures of Stockstadt and Lanaken Mills in Europe. The majority of the sales volumes from the two closed mills were transferred to Gratkorn and Ehingen Mills, which have lower emission intensity, thereby positively reducing both the absolute emissions and emission intensity of the European region.

Group absolute GHG emissions trend

Group absolute GHG emissions

Although the 2025 emission intensity remains above our SBTi target trajectory, this is to a large extent due to the production curtailments and the impact on operational efficiencies. The key abatement capital projects that have been completed in the last few years are demonstrating significant emission reductions.

In terms of the abatement projects, we have achieved significant reductions in Scope 1 emission intensity from the four main projects listed below.

1. Kirkniemi Mill Scope 1 emission intensity reduced by 84% from the 2019 baseline, corresponding to an absolute reduction of 87%, driven primarily by the conversion of the coal-fired boiler to biomass.
2. Gratkorn Mill Scope 1 emission intensity reduced by 34% from the 2019 baseline, corresponding to an absolute reduction of 52%, due to the conversion of the coal-fired boiler to natural gas/biomass. Intensity will reduce even further as the final phase of the project to handle biomass is completed and the boiler converts fully to biomass.
3. Maastricht Mill Scope 1 emission intensity reduced by 6% from the 2019 baseline, corresponding to an absolute reduction of 15%, as e-boiler benefits were realised.
4. Saiccor Mill Scope 1 emission intensity reduced by 45% from the 2019 baseline, corresponding to an absolute reduction of 42%, due to the sustainability investments included in the recent expansion project.

In terms of our engagement target for Scope 3 to have 44% of our suppliers by spend with SBTs by 2026. In 2025, 23% of our suppliers by spend have set SBTs. By region, the performance was SEU 25%, SNA 19%, and SSA 25%. Delays in SBTi finalising their guidance for the chemical sector have constrained a number of our suppliers setting SBTs. We anticipate that more of our chemical suppliers will join SBTi after the guidelines are published for the sector – expected by the end of calendar year 2025.

Limited assurance

In 2025, we engaged KPMG to perform limited assurance on the following planet variables:

• Scope 1 and 2 GHG emissions
• Scope 3 GHG emissions: category 1 – purchased goods and services
• Solid waste-to-landfill
• Certified fibre
• Specific process water usage (SSA only).

Enabling a just transition

Sappi recognises that a just transition to a low-carbon economy requires not only technological change, but also social inclusion and capacity building beyond our own workforce. In South Africa, where the company's operations are deeply rooted, the shortage of technical and green economy skills presents both a challenge and an opportunity.

Sappi is fully committed to a just transition that places our people at the centre of our sustainability journey. In 2025, we implemented dedicated metrics to monitor and understand the impact of our transition on our workforce, ensuring transparency and accountability. Our goal is to achieve our climate and sustainability objectives without any direct job losses linked to this transition. Where changes to roles or operations are necessary, we are committed to reskilling and redeploying our employees, equipping them with the skills needed for a low-carbon, circular future, while maintaining meaningful employment across our operations.

Sappi Southern Africa is building green skills and economic resilience by advancing sustainable livelihoods and future-ready employment through targeted community skills development initiatives. Central to this effort is our artisan training programme, which offers comprehensive apprenticeships in key trades such as millwrighting, fitting and turning, electrical work, and boiler-making. Each year, between 105 and 120 apprentices are trained in Sappi's modern facilities, with more than 90% absorbed into the company or its contractors. To address educational barriers in rural areas, a pre-apprenticeship bridging course introduced in 2019 has helped over 60 young participants to date to strengthen foundational skills and transition into full apprenticeships. In the forestry sector, Sappi has trained 309 small growers and contractors in 2025 in silviculture, harvesting, and environmental certification across KwaZulu-Natal and Mpumalanga, enhancing alignment with international standards such as FSC^™ and PEFC while fostering local enterprise development. Together, these initiatives support a just transition by equipping communities with green economy skills, promoting inclusive economic growth, and reinforcing the link between climate action, social equity, and environmental stewardship.

Conclusion

A number of physical and transitional risks and opportunities have been identified related to climate change, and we continue to monitor developments with respect to legislation, markets, technology, and disclosure requirements.

We believe that we have the right strategy to address the risks and opportunities arising from climate change and will continuously enhance our scenario modelling to expand our thinking and ensure that our strategy and transition plan remains resilient. We recognise that the successful implementation of our transition plan depends on balancing abatement investments with capital availability and social impacts to ensure a just transition.