2020 GROUP SUSTAINABILITY REPORT



Sharing value with our communities

Why it's material

While Covid-19 has highlighted the interconnected nature our being, as a responsible corporate citizen we recognised many years ago that our well-being and financial prosperity are inextricably linked to the communities in which we operate. Our corporate citizenship initiatives and programmes are in line with, and supportive of, our business strategy and are developed with input from key stakeholder groups. We have prioritised community support projects with a particular focus on education, environment, health and welfare. Our preference is for multi-year programmes that create sustained impact in our communities. The majority of our spend is allocated to South Africa, given the development needs of the country.

How this issue links to other aspects of our business

Our global priority SDGs

Our additional SSA priority SDGs

 

Emerging risks

  • Social unrest
  • Land restitution

Our strategic fundamentals

  • Enhance trust

The global forces shaping our Thrive25 strategy

  • Rising social inequality
  • Continued erosion of trust in business, coupled with increasing social activism
1 https://hbr.org/2018/11/9-out-of-10-people-are-willing-to-earn-less-money-to-do-more-meaningful-work
2 https://www.achievers.com/resources/white-papers/2020-engagement-retention-report/
3 The full report can be downloaded athttps://unstats.un.org/sdgs

The Sustainable Development Goals Report 20203 that was published in July 2020 highlights how Covid-19 has derailed progress in meeting the Sustainable Development Goals (SDGs). Among the key findings:

  • An estimated 71 million people are expected to be pushed back into extreme poverty in 2020, the first rise in global poverty since 1998.
  • 1.6 billion already vulnerable workers in the informal economy – half the global workforce – may be significantly affected, with their incomes estimated to have fallen by 60% in the first month of the crisis.
  • The more than one billion slum dwellers world-wide are acutely at risk from the effects of Covid-19, suffering from a lack of adequate housing, no running water at home, shared toilets, little or no waste management systems, overcrowded public transport and limited access to formal health care facilities.
  • Many countries have seen a surge in reports of domestic violence against women and children.
  • School closures have affected 90% of students world-wide (1.57 billion people). Lack of access to computers and the internet at home means remote learning is out of reach of many.
  • As more families fall into extreme poverty, children in poor and disadvantaged communities are at much greater risk of child labour, child marriage and child trafficking. The global gains in reducing child labour are likely to be reversed for the first time in 20 years.

Our approach

Our support for society is integral to the way we do business, and not something that stands separate. Accordingly, we identify societal challenges our sphere of operation and find ways of addressing these for the mutual benefit of our three primary stakeholder groups – employees, customers and the local communities in which we operate.

We prioritise projects that will make the most difference to communities and have meaningful, measurable impact in enterprise development and upliftment; education and the environment. In addition, support for activities associated with forestry continues to grow (indigenous tree planting and conservation efforts; use of forestry areas for mountain biking and bird watching).

The underlying goals of our programme are to create a stronger social licence to operate, help establish customer loyalty and attract talent, all underpinned by trust.

In SEU, at a local community level, our focus is to add to the well-being, safety and health of our communities. Employees are encouraged to nominate and participate in local community projects and events. There is a focus on SDG targets to engage and share with employees how they can become part of the global and regional drive as well as sharing with local communities and raising awareness of how our individual actions can collectively count towards a greater change. Mills and sales offices support various local schools, sports and hobby clubs, forest products industry students, local safety and environmental organisations and local charities.

In SNA, employees are encouraged to participate in outreach and community projects such as the Charles River Watershed Association and each unit has a Community Connections Group to channel local support. Education programmes are supported at targeted colleges and universities, as are programmes to encourage study in fields relevant to our operations, while corporate sponsorships are focused on environmental stewardship and education. The Ideas that Matter (ITM) programme continues to recognise and support designers who support good causes. Since 1999 the programme has funded over 500 non-profit projects and has contributed more than US$13 million to a wide range of causes around the world that use design as a positive force in society. As part of our commitment to the communities in which we live and work, we bring employees' charitable ideas to life by providing direct funding to funding to the value of US$25,000 annually to the non-profit organisations that they are most passionate about through the Employee Ideas that Matter (EITM) programme.

In SSA, employee well-being committees at each mill support local community projects based on annual requests and identified needs. These are coordinated via the annual Mandela Day (67 minutes) initiative. Community support at all operations is coordinated through a Community Management Committee (CMC). The CMC identifies shared value opportunities that help support local entrepreneurs and promote the sourcing of goods and services from local suppliers. The CMCs also report on the employment of locals and ensure investment in communities addresses specific needs. The CMCs aim to collaborate with government, NGOs and the private sector for scale.

Project support is provided to Sappi forestry communities including fresh water, ablution facilities, fencing, buildings and structures and vegetable gardens.

We provide support throughout the education value chain, beginning with Early Childhood Development (ECD). Under this initiative, in KwaZulu-Natal caregivers from Sappi communities receive training through the TREE (Training and Resources in Early Education) organisation while in Mpumalanga an ECD Centre of Excellence at the Sappi Elandshoek community has been developed with support from Penreach, a non-profit social impact organisation working towards educational excellence in disadvantaged rural communities.

The Sappi Skills Centres at Ngodwana and Saiccor Mills provide structured technical vocational skills training to increase employability and income generation. Candidates are also identified for artisan positions. In addition, we have established three Khulisa Ulwazi ('Growing knowledge' centres for Sappi Khulisa growers and land reform beneficiaries.

Our youth development project – Abashintshi ('The Changers') – continues to have significant impact in the target communities, having helped to change perceptions about Sappi, create open channels of communication between communities and Sappi and put in place systems to create economic opportunity. The project trains youth to mobilise their communities to develop themselves in line with the ABCD model (asset-based community development).

Khulisa, a shared value project that has leveraged Sappi's assets and core capabilities to generate economic value in a way that also produces value for society, continues to grow, as does our community honey project. The latter project trains community members in sustainable bee harvesting methods, offering mentoring, support and market access opportunities.

We provide support to various environmental organisations including Birdlife SA and WWFSA. The Pepper Bark Tree (Warburgia Salutaris) project has taken the lead in efforts to protect South Africa's most endangered tree by reintroducing the tree into communities. Sappi's intervention has enabled seedlings to be grown on a large scale. To date over 30,000 trees have been distributed to communities in Mpumalanga, Swaziland and KwaZulu-Natal. We have now established an annual target of 15,000 trees to ensure that it is reintroduced across many communities in sustainable numbers.

We use the Poverty Stoplight tool to measure aspects of multi-dimensional poverty in the families of community beneficiaries so that we can target, prioritise and develop initiatives that speak to real needs on the ground.


Key developments in 2020

Our social impact strategy rests on two pillars: shared value and corporate social investment. Our aim is to create positive, meaningful and sustainable systems change for the benefit of our communities, particularly for those at disadvantage as a result of complex, long-term systemic issues. In doing so, we enhance our social licence to operate, become a more attractive employer and build trust with customers and other stakeholders.

The coronavirus pandemic impacted our regular corporate citizenship programmes as regular activities were suspended. We responded swiftly to protect the safety of our stakeholders and meet community needs.

Spend in 2020

  • Sappi Europe: €100,000
  • Sappi North America: US$362,173
  • Sappi Southern Africa: ZAR40 million


Harnessing Gen Z's passion for sustainability at Maastricht Mill

Sustainability is a key focus across Sappi, but at Maastricht Mill in The Netherlands, the team has gone one step further. During 2019, Maastricht sponsored six young people to become the mill's sustainability ambassadors.

Once Covid-19 restrictions are lifted, the ambassadors are poised to have an oversees experience in a developing country, to learn and foster global citizenship with Dutch sustainability charity, Global Exploration. In the meantime, they have raised funds for their trip by helping to raise awareness of Maastricht Mill's sustainability projects and achievements.

The students conducted research and learned about sustainability-related activities at the mill. For example, one of the project teams explored the ways in which the mill collaborates with adjacent industries by sharing its state-of-the-art wastewater treatment plant. Another team gained insight into Sappi's research and development endeavours, familiarising themselves with the innovative ways we are expanding our use of woodfibre in adjacent markets, including cosmetics and the automotive industry.

The ambassadors then created posters that helped communicate the results of each project by sharing their posters and experiences on their social media channels from Facebook and Instagram to LinkedIn. The constant stream of posts is helping to expose their classmates and other Gen Z-ers to innovative Sappi sustainability projects that they most likely would not otherwise have encountered.


Creating community-focused solutions during Covid-19 in South Africa

Partnering with our stakeholders

The coronavirus pandemic highlighted the plight of many vulnerable people situated in the rural areas of South Africa and in our neighbouring communities. In line with our Thrive25 strategy, we reach out to communities and partnered with our stakeholders to create solutions.

We entered into a partnership with the Southern Lodestar Foundation (https://lodestar.org.za/), a non-profit organisation that provides innovative food solutions for children. Their highly nutritious instant porridge – known as A+ – is being used in school breakfast programmes. Together, Sappi, the Southern Lodestar Foundation and the Spar Group spearheaded a collaborative effort in terms of which 60,000kg of A+ instant porridge was distributed to vulnerable communities in KwaZulu- Natal and Mpumalanga.We used our knowledge and access to rural community health networks to ensure that the porridge was reaching those that needed it most in many peri-urban and rural areas adjacent to our mills and plantations.

In an effort to ease the shortage of masks, we procured thousands of surgical masks for community clinics and health care centres in KwaZulu-Natal and Mpumalanga. However, there was also a need for thousands more re-usable cloth masks for our own employees who were continuing to deliver essential services during the national lockdown. We installed sewing machines at the Saiccor and Ngodwana Skills Centres, which meant that apprentices who were not able to continue with their normal training schedule due to the restrictions, sprang into action making cloth masks. These were distributed to own and contractor employees as well as to neighbouring schools. At year end, apprentices had produced just under 73,000 masks. The mask venture has progressed further into the manufacture of overalls.

To heighten awareness of the pandemic and promote understanding we created and distributed easy-to-understand illustrated infographics in English and Zulu within our own operations, the employees and families of our contractors and the broader public via the Abashintshi. The latter are a group of Sappi-sponsored young people who act as change agents within their communities. Read more: https://www-stage.sappi.com/abashintshiplanting-seeds-of-opportunity

Since sharing the infographics. I have been impressed to hear positive talks inside taxis, people expressing their commitment to obey the law and to take all the necessary precautions to fight the virus.

Phumlani Mhlongo, Abashintshi change agent

In keeping with the Typek brand message to 'Live a life of note', the public were encouraged to share their messages of hope and inspiration on how they were 'living a life of note' during the South African lockdown, using Facebook and Instagram. Entries in the Typek campaign stood a chance of winning ZAR1,000 a day, with Sappi pledging an additional ZAR1,000 a day to the Solidarity Fund. Sappi SA also donated a donation of Sappi Triple Green Tissue and Typek office paper to the Department of Trade and Industry (dti) for future distribution to deserving recipients.


Paying it forward in response to Covid-19 in North America

Past ITM winners stepped up and paid it forward to help a world in need.

MASS Design Group supports hospitals with Covid-19 Design Response team

Hospitals around the world are rapidly transforming their physical environments and systems to keep employees and patients safe. MASS Design Group, recipient of an ITM grant in 2010, has formed a Covid-19 Design Response team in support of this effort. Drawing on the valuable insight from lessons learned in the field, this team is responding to hospital and community healthcare partner needs by sharing strategies and rules of thumb with those retrofitting different spaces for infection control.

The Covid-19 Design Response team has partnered with the Mount Sinai Hospital and Ariadne Labs to conduct a three-week study to understand which spatial design interventions can help mitigate the risk of infection. As the team shares their conclusions, they hope to scale the research and collaboration between healthcare staff and designers to encourage thoughtful spatial interventions and literacy with Covid-19 units nation-wide.

Studio Usher secures internet access for five million virtual students

In 2013, Studio Usher received an ITM grant to develop communication materials in print, digital, and motion for EducationSuperHighway, an organisation providing advocacy and consultation to states and school districts in order to connect American public school classrooms to high-speed Internet. The organisation worked to bring broadband to 99% of all K-12 (ie ranging from kindergarten to 12th grade) public schools. The project had been slated to shut down in April 2020 as their mission was accomplished.

But in the face of Covid-19, with 55 million K-12 students sheltering in place and schools moving their classrooms online, this dynamic organisation hired back most of their staff to focus on connecting the five million students in the US who do not have access to the internet at home.


Paying it forward in response to Covid-19 in North America

Made by We supported sustainable farmers during Covid-19

In 2019, Made by We received a grant to support Farm Commons, an online community and platform filled with legal resources and tutorials for the sustainability-minded farmer. Made by We developed an all-in-one workbook with hands-on materials for both new and experienced farmers to help them become more comfortable with farm law. The workbook and kit paired in-depth information with hands-on learning techniques and serves as a physical reference for Farmers.

As the danger of Covid-19 became a reality, Made by We was able to quickly add a new section to the Farm Commons website. The non-profit released free Covid-19 resources for free on a regular basis, ranging from webinars to podcasts and other advice for farmers trying to understand their legal and financial options during the pandemic. By quickly and creatively pivoting their model, Farm Commons continued to support the farmers who rely on them for resources, services, and most importantly, community.

Supporting our people in SEU

Helping those facing real hardship

In response to Covid-19, the Sappi board of directors together with group and regional leadership teams (Europe, North America, Southern Africa and Sappi Trading) volunteered to take a 10% reduction in salary for three months.

Using the money generated in this way, SEU established a dedicated Hardship Fund to help employees who faced real hardship as a direct result of the impact of the virus. The fund was opened up to enable SEU employees to contribute towards and apply to the fund for themselves or on behalf of someone else. In the spirit of not only looking out for our own safety it was felt important to allow the open application to help support employees experiencing hardship directly caused by Covid-19 as e.g. extra medical and rehabilitation expenses not covered by an insurance and any loss of income.

There is a very human cost to this crisis, so we have established a fund to help those in special need, built by voluntary gifts. We hope this gesture goes some way to illustrate that the determination and commitment shown during this time is very much appreciated from the top down, and that we intend to support one another through this period.

Berry Wiersum
CEO Sappi Europe