2020 GROUP SUSTAINABILITY REPORT



Sourcing woodfibre responsibly

Why it’s material

One of consumers' sustainability expectations is that their shopping baskets should not drive the destruction of the world’s tropical forests. Forests and forestry play an important role in mitigating climate change as reducing deforestation and forest degradation lowers greenhouse emissions. In addition, sustainable forest management can maintain or enhance forest carbon stocks and sinks, while wood products can store carbon over the long term and can substitute for emissions-intensive materials reducing emissions.

How this issue links to other aspects of our business

Our global priority SDGs

 
 

Our top ten risks

3 Evolving technology and consumer preferences
4 Sustainability expectations
9 Climate change

Our strategic fundamentals

  • Grow our business
  • Drive operational excellence
  • Enhance trust

The global forces shaping our Thrive25 strategy

  • Climate change continuing to impact businesses and reshape societies
  • Resource scarcity and growing concern for natural capital
  OUR 2025 TARGET
 

SHARE OF CERTIFIED FIBRE

>75%

With Sappi’s excellence in sustainable forest management and commitment to stewardship, we want to continue to increase our positive contribution to healthy landscapes. We practise sustainable forestry because it promotes sustainable forestry, provides clean air and water, protects biodiversity and defends against climate change, among many other critical benefits. Forest certification validates our forest management practices and those of our suppliers in the well-managed forests and plantations from which we source woodfibre. We strive to continually increase the share of certified woodfibre supplied to our mills.


Agricultural expansion continues to be the main driver of deforestation and forest degradation and the associated loss of forest biodiversity. It is the second-leading cause of climate change after burning fossil fuels and accounts for nearly 20% of all greenhouse gas emissions — more than the world’s entire transport sector.1

1 FAO 2020: The State of the World's Forests – Forests, Biodiversity and People 2020 http://www.fao.org/3/ca8642en/ca8642en.pdf

Our approach

We work to keep forestlands forested. What this means, in practical terms, is living up to our commitment of zero deforestation by ensuring that forests and plantations from which we source woodfibre are expertly tended, harvested and regenerated for healthy regrowth. We achieve this by utilising the following leading global certification systems: Forest Stewardship Council (FSC); Programme for the Endorsement of Forest Certification (PEFC); Sustainable Forestry Initiative® (SFI®) program, and other PEFC-endorsed systems. Using these systems means we know the origin of the woodfibre we use – a fundamental prerequisite for responsible woodfibre planet.

We strongly support forest certification, because transparency and traceability are powerful tools to enhance sustainable supply chains and to combat global problems like illegal logging and its dire consequences. The power of these certification systems is enhanced by the fact that they not only impact the level of forest practices in certified forests but also impose tough requirements on the non-certified wood that is being mixed with the certified material, and thus the impact extends far beyond the certified forests.

We require rigorous tracing practices and documentation of the origin of all woodfibre. Suppliers must provide evidence that all woodfibre is sourced from controlled, noncontroversial sources in accordance with the FSC Controlled Wood standard, as well as PEFC (and SFI® in the United States) risk-based due diligence systems (DDS). These systems comply with the requirements of the European Timber Regulation, the US Lacey Act and other regional jurisdictions. Information on the origin and tree species of any delivery within the CoC is accessible at any point along the supply chain.

In addition, we keep forestlands forested by:

Advancing transparent supply chains

We work with a wide range of partners to advance sustainable forest management practices and transparent, responsible supply chains. We are an active member of PEFC International, FSC’s economic chambers North and South, and SFI®, and engage with them through a variety of working groups and committee activities. Close engagement is maintained directly and through the industry organisations CEPI (Confederation of European Paper Industries) and American Forests and Paper Association (AF&PA). We also belong to the Forest Resources Association (FRA), the American Forest Foundation (AFF) and the Society of American Foresters (SAF). In South Africa, we belong to Forestry South Africa (FSA) and the Paper Manufacturers Association of South Africa (PAMSA).

Through our involvement in The Forests Dialogue steering committee we actively collaborate with multiple stakeholder groups, and work to build agreement on forest and land-use challenges. We are founding partners of both the 4Evergreen (an alliance of fibre-based packaging leaders) and the Recycling Partnership and an active board-level participant in the Paper and Packaging Board.

We are a founding member of the Tree Protection Co-operative Programme (TPCP) based in the Forestry and Bio-technical Institute (FABI) at the University of Pretoria. Through the TPCP we also belong to the internationally collaborative programme BiCEP (Biological Control of Eucalyptus Pests). In addition, we belong to the Eucalyptus Genome Network (EUCAGEN) based at the University of Pretoria and to CAMCORE, an international, non-profit organisation dedicated to the conservation and utilisation of subtropical and tropical tree species.


FAQ

ARE THERE FORESTS ON SAPPI-OWNED LAND IN SOUTH AFRICA?

Yes, there are. Approximately 98% of the forest types originally identified on Sappi land still exist in their original form. These forests, which are protected, cover 9,500 hectares and include Drakensberg Montane Forests, Swamp Forests, Foothills Mistbelt Forest and Lydenburg Kloof Forest, among others. Natural forest has been successfully protected in South Africa since the early 1900s, so there has been no forest conversion in South Africa for the last 100 years. In this region, we only source from plantations, never from indigenous forests.


The certification process at a glance

Forest management     Chain of custody        

Accredited, impartial certification bodies conduct regular audits of our own plantations, as well as third-party and outgrowers’ plantations. All our owned and leased plantations in South Africa are FSC-certified for forestry management.

Promoting sustainable forest management with certification

We prefer to buy certified woodfibre and strive to continually source more. At minimum, we require our suppliers to provide evidence that all woodfibre is sourced from controlled, non-controversial sources in accordance with our Group Woodfibre Procurement Policy.

 

Sappi's mills' certified Chain of Custody systems enables us to track certified material from the forest through our production processes.

 

Forest certification provides assurance to our customers that our products originate from responsibly managed forests and plantations.

     

Globally in FY20, 73% of woodfibre supplied to our mills was certified, with these regional percentages SEU: 80%; SNA: 55%; SSA: 83%. The rest was procured from controlled, non-controversial sources.

“As the SAFAS standard is home grown, directly relevant to a range of South African conditions and more flexible with respect to group schemes, we hope that this move will facilitate the full involvement of small-scale growers and improve the sustainability of the forestry industry.”

Michael Peter, Executive Director of Forestry South Africa

Key developments in 2020

We continued to offer consumers an alternative to fossil-based packaging, based on wood from sustainably managed forests. Read more: Developing and commercialising innovations in addition to adjacent businesses.

In 2020, globally 73% of the woodfibre supplied to our mills was certified with the rest procured from controlled, non-controversial sources. Our owned and leased plantations in South Africa maintained FSC certification. The 100% coverage of the FSC, PEFC and SFI® Chain of Custody systems we use ascertains that all the woodfibre we purchase and process is traceable to its origin, and is sourced from legal, controlled, non-controversial sources.

Sappi has actively participated in the development of SAFAS (Sustainable African Forestry Assurance Scheme), which was endorsed by PEFC International in 2019. Following a two-stage audit process, Sappi Forests’ plantations expect to be PEFC-certified by December 2020, thereby supplementing the FSC certification already achieved. Our South African mills will soon be able to apply for PEFC CoC certification.

FAQ

WHERE DOES SAPPI’S WOODFIBRE COME FROM?

All suppliers are requested to provide the wood origin information (country of harvest and where applicable sub-national region and/or concession of harvest) and a list of tree species at least annually and/ or upon request in line with our Supplier Code of Conduct and Group Woodfibre Procurement Policy’s requirements.

Read more about the type of tree species we use at: https://www.sappi.com/files/ sappi-faqs-forests-matterpdf

Growing healthy forests and plantations, together

Our business depends on trusted relationships and active engagement with wood suppliers, forest owners and other stakeholders. We work with them to promote sustainable forestry that keeps forestlands forested for generations to come.

Ensuring best practice forestry management in North America

Our stumpage and wood supply agreements include requirements to comply with applicable laws, including the use of Best Management Practices (BMPs) to ensure that wood procurement operations adapt appropriately to seasonal adverse weather conditions and other weather events to ensure that soil productivity and water quality resources are protected. A key procurement provision is to build inventory at mills during the winter months to avoid logging activities during the spring breakup / mud season. We specify that wetlands and other wet areas should be logged when soils are in a frozen condition and that BMP guidelines appropriate to the site should be adhered to. We also identify, mitigate and avoid adverse impacts on Forests with Exceptional Conservation Value (FECV), which includes areas identified by NatureServe with a G1 (Globally Critically Imperilled) or G2 (Globally Imperilled) ranking for species and native plant communities.

Pest and disease management experts will visit any private grower that reports pest and disease issues to SNA.

In this region, 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.


Positive feedback on our forestry programmes

The Sappi Maine Forestry Program and the Sappi Lake States Private Forestry Program, staffed by Sappi North America foresters, offer a wide range of services to private landowners. Sappi’s staff monitor the implementation of best management practices on harvest sites to ensure adequate regeneration, conservation of soil and water resources, and adherence to harvest plans.

David and Teresa Price, landowners in Maine, had the highest praise for Sappi:

“We recently had our 48-acre lot logged through Sappi’s Maine Forestry Program. We cannot speak highly enough about how positive our experience was. Sappi took a lot of time explaining the programme and exploring exactly what we wanted done. They walked the property and re-flagged property lines carefully. Whenever we emailed them, they responded immediately. The loggers were also excellent and took time to talk to us whenever we wanted and cleaned up after themselves.

Detailed descriptions of the logs that were harvested were sent to us on a regular basis. We love the view we have now and would highly recommend this programme.”


Walking the talk

Commenting on SNA’s 2020 external forestry certification audits, the auditor said: “Most companies talk the talk’ but it is not consistent throughout the company/ operations. Sustainability is obviously engrained in Sappi culture. This is impressive and refreshing to see”.

Under the audits, conducted by Bureau Veritas, a third-party certification body, the Allentown facility was added as a converting site under SNA’s multi-site CoC certificates and Westbrook was changed from a secondary manufacturing site to a converting site to reflect the shut-down of the paper machine and the use of basepaper from Cloquet and Somerset Mills.

In FY20, in this region we completed a detailed risk assessment of our wood basket against the FSC-approved and published national risk assessments (NRAs) for the United States of America and Canada. The results of the recently finalised NRAs confirm that our operations predominantly occur in areas at low risk for controversial sources. Within the United States of America, all our operations and supply areas are considered low risk across all five Controlled Wood Standard risk categories, thus no additional mitigation/ control measures are necessary to avoid controversial sources. Where ‘specified risk’ was determined in Canada, we identified and implemented control measures as needed to mitigate.


  FAST FACTS

Sustainable forest management is a critical element in the bid to close the emissions gap, and limit the global temperature rise to 1.5ºC above pre-industrial levels. In addition, forests:

Collaborating for sustainable forestry in the Umbagog Refuge

‘A national treasure’. That’s what the Umbagog National Wildlife Refuge, which straddles the New Hampshire and Maine border, has been called. And that’s why SNA was extremely proud to be selected by the US Fish and Wildlife Services to lead their timber harvest.

The benefits of sustainable timber harvesting

Timber harvesting is essential to maintain and restore resilient and sustainable forests. When planned and supervised by qualified foresters with input from the public and other resource specialists, responsible timber harvesting supports – and can even enhance – fish and wildlife habitat, improved water quality, reliable water supplies and recreation. Once the timber reaches our Somerset Mill, we transform it into renewable, recyclable and biodegradable woodfibre products as part of the circular economy. Timber harvests are also an important source of income for local and state governments.

About the harvest

The timber harvest in the Umbagog Refuge is designed to promote the US government’s long-term goal of a multi-aged, mixed species forest with more than 70% canopy closure. The harvest we were asked to assist with is the first of a series of harvests scheduled to occur in 15-year increments. Our harvesting procedures will promote and release the regeneration of red spruce, sugar maple and yellow birch, which have been marked for harvest. Some spruce, fir, white birch, sugar maple and American beech trees are also included. Our harvesting plan involves single tree and group selection harvesting. Group cuts are distributed throughout the harvest area with single tree selection used between groups.


Expanding knowledge and forestry certification in South Africa

In South Africa, a team of qualified extension officers works with growers in our Sappi Khulisa enterprise development scheme to ensure responsible planting and harvesting practices. In addition, we have established three Khulisa Ulwazi (Growing knowledge) training centres and developed training material in conjunction with the Institute of Natural Resources. Training is offered to all value chain participants, including land reform beneficiaries and covers all aspects of forestry, including core operational skills as well as safety, legal compliance and business management. A mobile grower app assists Khulisa growers in accessing their plantation information, financial statements and training material. Growers can also send Sappi requests or submit documents through the app

We have established a group FSC certification. There are currently of 44 members representing a total of 42,000 planted hectares. We pay growers in this scheme a premium for certified timber.