2020 GROUP SUSTAINABILITY REPORT



Attracting, developing and retaining key skills

Why it's material

We live and work in an environment where new skills emerge as fast as others fade and where yesterday's solutions do not solve tomorrow's problems. Under our Thrive25 strategy, one of our strategic fundamentals is to 'enhance trust'. We aim to meet the challenges of a constantly changing business environment to build mutual trust between our employees and our business. One of the ways we are achieving this is by developing and growing Sappi talent in a manner that meets the changing needs of every employee. It also means trusting that they will use these opportunities to contribute to our success.

How this issue links to other aspects of our business

Our global priority SDGs

Our top ten risks

  • 8 Employee relations

Our strategic fundamentals

  • Drive operational excellence
  • Enhance trust

The global forces shaping our Thrive25 strategy

  • Continued erosion of trust in business, coupled with increasing social activism
  • Globalisation and high levels of connectivity
  • Changing consumer and employee profiles


Our approach

The focus of training and development at Sappi is to invest in current and future talent and to grow the skills of people in three key areas: technical, behavioural and leadership competencies. Our consistent approach to learning is linked to talent management, succession, improving skill and productivity across our business and individual personal and career growth.

We make resources available to enable our people to grow intellectually and bring new ideas to fruition. Training and development programmes are reviewed continuously to ensure they remain relevant to the changing needs of our people, the business environment and Sappi.

Our approach to training is decentralised, with each mill, function, business unit and region taking responsibility for training. While we invest in formal training and development programmes, we realise that potential is not only developed through training courses that develop competencies and skills. We provide our employees with opportunities to gain new experiences and through individual development plans, based on creating the right conditions and circumstances that allow people to develop their careers.

Key developments in 2020

The attraction, development and retention of skills are all interlinked. As discussed under employee engagement, we recognise that current and future employees, in particular Generation Z-ers, want companies to have a positive purpose that improves the world in some way. We believe that the fact that we offer true circular economy solutions and that sustainability underpins everything we do, plays a key role in attracting and retaining key skills.

In terms of training and development, our focus is to invest in current and future talent and develop the competencies of our people in three categories; namely leadership, behavioural and technical competencies. Our emphasis on providing learning solutions aligned with an increasingly tech-savvy workforce is important in retention, as are our compensation programmes. These are designed to achieve our goals of building trust and attracting, motivating and retaining employees who can help to deliver value. The primary components of pay include base salary, benefits e.g. medical and retirement, annual incentive awards and long-term incentives. Compensation levels are set to reflect competitive market practices, internal equity as well as company and individual performance, including sustainability aspects of performance.

A key development was reshaping our people strategy in line with Thrive25 to focus on leadership and culture that enhances One Sappi; builds capability for current and future requirements; strengthens employee engagement and experience and builds a world class human resources team.

Percentage of employees with individual development plans

  2017   2018   2019   2020
SEU 42%   46%   46%   48%
SNA 51%
(of salaried
employees)
  70%
(of salaried
employees
  65%
(of salaried
employees)
  62%
(of salaried
employees)
SSA 36%   51%   67%   61%
Sappi Trading 53%   41%   40%   64%

Please refer to Our 2020 People indicators on www.sappi.com/2020GSDR-People-indicators for tables showing

  • Performance appraisals for all eligible employees by gender

SEU

In FY20 learning in SEU focused on six main pillars:

  • The 70:20:10 holistic development approach to ensure continuous learning and personal growth
  • Performance management processes to facilitate the definition and creation of an individual development plan for each employee, matching their needs and potential
  • Line manager as coach for people's growth and success (SLII and Team Coaching with GROW, 10 Agile leadership principles)
  • 5-0-5 coaching template supporting the transfer of learning
  • Global Leadership Framework to ensure growth and success as a leader in Sappi
  • Building a productive learning culture by delivering learning in a blended way, ie through classroom teaching, newsletters, readings, challenging projects, new responsibilities, assignments, and our digital learning platform "Universe"

The region also continued to:

  • Develop leaders through the Sappi Leadership Academy and launch of the 'Dynamo' leadership development programme – a structured organisational programme premised on eight Simple, Swift and Smart steps – to first level line managers in five languages
  • Train and develop over 200 young apprentices through a 3-4-year vocational training programme. This initially took place mainly at our German-speaking mills, but has now been introduced in Finland and Belgium. The aim is to build a technical talent pool that will replace staff going on retirement over the next 3-4 years
  • We built on last year's launch of the concept of agile leadership to support our ambition to become an agile organisation, with the leadership team exploring and defining what an agile mindset is and what enables an agile organisation. The exercise was conducted with external support
  • Promote capacity building on continuous improvement (CI) tools with the assistance of CI experts
  • Further embedding the coaching programme
  • Extending mastery and foundational sales training with in-house formulated online learning modules such as 'customer knowledge' and '1-on-1 printing'
  • Compiling a first line management programme based on initial programmes such as giving, receiving and acting on feedback, change, coaching, etc.

From apprentice to energy scout in Germany

At all our mills world-wide, we're on a continuous journey to reduce waste and maximise the use of materials and resources. These eco-effective operations are essential to accelerate the transition to the biobased, circular economy our planet demands.

At Ehingen Mill, four apprentices took this eco-effective mission to heart. They set out to determine how much compressed air was leaking inside the mill and offer solutions that would promote efficiency and consequently, reduce the mill's energy use. They conducted this research while social distancing during the Covid-19 pandemic – no easy feat.

Understanding the value of compressed air

The mill uses compressed air for various purposes from moving products and operating pneumatic tools to pumping liquids. Compressed air is a clean, reliable, accessible resource that is often undervalued per unit compared to its other utility counterparts like water, gas and electricity.

Understanding not only the financial value per unit of wasted air but the financial impact of a less efficient system requires a stepchange in the perception of compressed air from being 'free' to just as valuable as other utilities.

More eco-effective use

Using 'sound' cameras, the apprentices were able to identify areas to optimise the compressed air and calculated potential energy savings of as much as EUR83,600 a year. In addition, this optimisation could further reduce Ehingen Mill's carbon footprint. With this analysis in hand, management is working on solutions to implement their recommendations and make the mill even more eco-effective.

This initiative shows the important contributions that apprentices make to our business and affirms their value in our global operations.


SNA

The following training initiatives were conducted in this region:

  • Expanded the internship programmes in place at our three mills to help create a pipeline for entry level talent – engineers and some functional positions – thereby offsetting the losses associated with the ongoing wave of retirements
  • Initiated the manager in training programme
  • Participated in the global leadership programme
  • Re-launched legal training for all salaried employees
  • Conducted targeted salesforce training for both the graphics and packaging and speciality groups
  • Expanded curriculum-based training using the convergence platform at Somerset Mill for both hourly employees and entry level engineers. This mill is also customising Cloquet Mill's supervisor training module for their own purposes
  • Continued with Westbrook Mill's multi-craft training to move to a single craft shop
  • Cloquet Mill completed six sessions of supervisor training and began introductory production training
  • Conducted OSHA 10-hour safety training for safety liaisons across mills
  • Continued with ongoing Lean Six Sigma training, with an emphasis on virtual Rapid Lean Six Sigma and quarterly refresher training for all green and black belts
FAQ

WHAT IS LEAN SIX SIGMA?

Lean Six Sigma is a method that relies on a collaborative team effort to improve performance by systematically removing waste and reducing variation. It combines lean manufacturing and Six Sigma – a set of techniques and tools for process improvement – to eliminate the eight kinds of waste: defects, over-production, waiting, non-utilised talent, transportation, inventory, motion, and extra-processing. Lean Six Sigma not only reduces process defects and waste, but also provides a framework for overall organisational culture change. It helps to change the mindset of employees and managers to one that focuses on growth and continuous improvement through process optimisation. This change in culture and mindset helps to maximise efficiency and increase profitability.

WHAT IS RAPID LEAN SIX SIGMA?

Rapid Action Tools complement traditional Lean Six Sigma methods with a just-in-time, simple to deploy process and toolset for engaging frontline employees in 60-day or shorter rapid improvement projects.

WHAT ARE THE 'BELTS' IN THE SIX SIGMA SYSTEM?

At the project level, a six sigma role varies from yellow belt and green belt to black belt and Master Black belt. The referencing of 'belts' by colour is a simple and effective way of quickly understanding the skill set and experience level. Green belts operate under the guidance of black belts in a Six Sigma project.


SSA

Key focus areas for SSA in FY2020 were the following:

  • The deployment of a new approach to performance management called 'performance enablement'. This is based on the setting of quality SMART goals, frequent coaching style feedback and simplified performance reviews.
  • Development and implementation – with input from mill managers – of a trainee production manager programme in order to build a pipeline of work-ready production superintendents. The programme comprises online learning, classroom learning and structured practical assignments. Full time candidates have two years to complete the programme, while part-time candidates have four years.
  • The development and deployment of a foreman-focused safety culture programme called Lean&Me in manufacturing operations. The programme incorporates refresher training on key manufacturing practices such as shift handovers and incident investigations, underpinned by visible leadership, coaching-style feedback and building relationships in teams.
  • The first group of potential leaders participated in LeadX, a recently launched two-year leadership development programme targeting future heads of department.
  • A refreshed Code of Ethics course.
  • The Sappi Skill Centres at Saiccor and Ngodwana significantly reduced trainee numbers due to lock-down restrictions significantly. Despite the constraints, a new venture was created to manufacture cloth masks for Sappi and local communities. Read more: Creating community-focused solutions during Covid-19.

Sappi Trading

In FY2020 the following training courses and programmes were attended by employees in our various sales offices:

  • 'Incoterms 2020: basics' online course was attended by employees in Hong Kong and Shanghai; 'Incoterms 2020' classroom training attended by employees in Mexico, Brazil and Colombia
  • 'Virtual selling' attended by Sales team in Australia, Brazil. Colombia Hong Kong, Mexico, Shanghai and South Africa
  • 'Employee central and applicant tracking system – user training' was attended by employees in the majority of sales offices
  • 'Antifraud and corruption' and 'competition law' attended by all employees in Mexico
  • 'Working from home webinar' attended by employees in Hong Kong and Mexico
  • 'Health and safety for Covid-19' was attended by employees in South Africa; while 'safety, health, environment and quality – occupational health' was attended by employees in Hong Kong
FAQ

WHAT IS INCOTERM 2020?

Incoterms 2020 rules are the official terms published by the International Chamber of Commerce (ICC). They are a voluntary, authoritative, globally-accepted, and adhered-to text for determining the responsibilities of buyers and sellers for the delivery of goods under sales contracts for international trade.