2020 GROUP SUSTAINABILITY REPORT

Safeguarding and restoring biodiversity

Why it’s material

The UN Biodiversity Summit in September 2020 highlighted the urgency of action at the highest levels in support of a post- 2020 global biodiversity framework that contributes to the 2030 Agenda for Sustainable Development and places the global community on a path towards ‘living in harmony with nature’ – the 2050 Vision for Biodiversity. Science tells us that about 25% of our assessed plant and animal species are threatened by human actions, with a million species facing extinction, many within decades. In addition, US$44 trillion of economic value generation – over half the world’s total gross domestic product (GDP) – is moderately or highly dependent on nature and its services and, as a result, exposed to risks from nature loss. As our primary input, woodfibre is a renewable natural resource, Sappi depends on ecosystem services such as healthy soils, clean water, pollination and a stable climate. Accordingly, biodiversity is a key focus area.

How this issue links to other aspects of our business

Our global priority SDGs

Our top ten risks

	4	Sustainability expectations
	9	Climate change

Our strategic fundamentals

• Grow our business
• Drive operational excellence

The global forces shaping our Thrive25 strategy

• The move towards a circular economy
• Climate change continuing to impact
  businesses and reshape societies
• Resource scarcity and growing concern for natural capital

OUR 2025 TARGET

ENHANCE BIODIVERSITY IN CONSERVATION AREAS 10% IMPROVEMENT

Biodiversity is the foundation of our business and we work to enhance it on our lands and promote awareness of the importance of this issue among our stakeholders.

FAST FACTS1

Human activity is eroding the world’s ecological foundations

¹ Source: World Economic Forum https://www.weforum.org/agenda/2020/05/5-reasons-whybiodiversity- matters-human-health-economies-business-wellbeingcoronavirus- covid19-animals-nature-ecosystems/

Our approach

In South Africa, where we are one of the country’s major landowners, we have a particular responsibility to manage biodiversity in accordance with best practice principles. Of our 394,000 hectares of owned and leased land, approximately one third is managed for biodiversity conservation.

We entrench our commitment to biodiversity by:

• Maintaining 160 Important Conservation Areas (ICAs) and seven nature reserves on our plantations (Read more: Connecting with nature)
• Monitoring water quality and fish species present: We use the aquatic biomonitoring SASS (South African scoring system) methodology to determine the composition of macroinvertebrate fauna present in rivers on our landholdings, as well as river health. Understanding what fish species occur within our smaller river systems helps us understand the importance value of aquatic ecosystems and where possible to implement corrective actions to reduce our impact on the natural environment. We also involve local schools in mini SASS monitoring programmes.
• Developing and implementing long-term integrated weed management plans on all our plantations as invasive alien plants are widely considered as a major threat to biodiversity, human livelihoods and economic development.
• Maintaining and enhancing soil function – a crucial component of sustainable forest management and biodiversity, because soil is the foundation of the forest system. The trees we grow in our plantations are long-lived with little or no mechanical cultivation occurring. As a result, the structure of soils is maintained or improved, while topsoil nutrients are increased as nutrients and minerals are taken up deep within the soil profile. Trees are also able to take up nutrients from relatively acidic soil (soil with low pH) and are thus able to grow on degraded soils that are unsuitable for agriculture.

Key developments in 2020

We signed up to Business for Nature’s call to action, a global coalition of non-governmental organisations (NGOs) and business groups including the International Chamber of Commerce, WWF, We Mean Business, the World Business Council for Sustainable Development (WBCSD) and the International Union for Conservation of Nature (IUCN).

Business for Nature’s campaign ‘Nature Is Everyone’s Business’ has particular relevance for Sappi, given that our business is dependent on sustainably sourced woodfibre.

We made progress in terms of our Thrive25 target by addressing our first biodiversity objective underpinning this task – understanding what types of vegetation are present on our plantations, as well as their importance value. This enables managers to develop appropriate management plans for implementation. It is also important, from a conservation management perspective, to identify those vegetation types that are least protected, in order to prioritise efforts to safeguard the vegetation type from possible extinction.

Our potential contribution to conserving vegetation types at the provincial level can be calculated by comparing what is present on Sappi property with the vegetation types in the province.

• In Mpumalanga, of the fifteen vegetation types present on Sappi land, six are well represented, enabling a potential contribution of between 9 – 18% of hectares conserved for the vegetation type in the province.
• In KwaZulu-Natal, of the twenty vegetation types present on Sappi land, four are well represented, enabling a potential contribution to conserving the vegetation of between 8 – 13.5% in this province.

Maintaining healthy ecosystem services

Revitalising a watershed in Finland

Kirkniemi Mill, located in a lakeside city just one hour’s drive from Helsinki, produces far more than exceptional coated papers destined for high-quality printers. Thanks to a project with the Länsi-Uusimaa Water and Environment Association, the mill is also supporting the revitalisation of threatened aquatic species in the nearby Mustionjoki River.

The project involves building fish passages to restore salmon stocks and freshwater pearl mussel populations in the river, which belongs to the Karjaanjoki watershed that provides Kirkniemi Mill with one of its most important raw materials, water.

The four power plant dams around the watershed have acted as an especially tough barrier to salmon fish migration. All are in the area of the Mustionjoki River, which flows from Lake Lohjanjärvi to the Gulf of Finland. By building the fish passages, the project enables salmon to bypass the dams on their important journey to and from the Gulf. Similarly, the passages also benefit the unique population of freshwater pearl mussels that have been threatened by the dams.

Project activities are part of the European Commission’s Freshabit programme to improve the ecological status, management and sustainable use of freshwater habitats. With its scenic lakeside vistas and old ironworks reflecting Finland’s proud industrial heritage, this project, co-funded by Sappi, also supports the recreational and tourist value of the region. Together, we’re revitalising a watershed that is important to all Finns – especially the 8,500 owners of summer cottages around the lake in addition to permanent residents.

Connecting with nature

Nature reserves are becoming more and more important in an increasingly urbanised world. Only by spending time in protected places do we have a sense of how rich our countryside could be. Without such benchmarks, we lose all sense of what we should cherish. We also lose all sense of the wild and our connection to it. Sappi Forests participates in the national stewardship programme through which we have seven proclaimed nature reserves on our land including:

• The Oosterbeek Nature Reserve and Angle Ridge Nature Reserve (2,997 hectares ha) are both located in the Highlands Management unit of Sappi’s Twello plantation. These reserves lie within the headwaters of the Mhlumati and Mtsoli Rivers within the InKomati Water Management Area, which is of strategic importance in supplying water to the region, including Mozambique. The value of these areas lies in the fact that they are areas of outstanding natural beauty and are part of the Barberton Centre of Endemism and Barberton Mountainlands, an ecosystem gazetted as Vulnerable.
• The Mount Morgan Nature Reserve, a grassland portion (1,013 ha) of the Montrose and Kempstone Management Units of Sappi’s Twello plantation, is an area of outstanding natural beauty planet serpentine outcrops with associated endemic species (unique serpentine flora: e.g. Berkheya coddi, species of Inezia) adapted to high levels of heavy minerals.
• The Ngodwana River Valley Nature Reserve is a grassland and woodland area (965 ha) of the Sappi Nooitgedacht plantation in Mpumalanga. The area is representative of a transition between two Endangered vegetation types – Northern Escarpment Dolomite Grassland and Legogote Sour Bushveld – and lies adjacent to Coetzeestroom Nature Reserve. Accordingly, it’s important for protected area consolidation and expansion.
• The 940 ha Clairmont Mountain Nature Reserve comprises several habitats with high conservation value including 811 ha of grasslands; 129.6 ha of indigenous forests: and 3.6 ha of wetland. Due to this diversity of habitats, Clairmont Mountain is also rich in biodiversity and home to a number of Critically Endangered, Endangered, Vulnerable and Red Data List species. It is also home to species of cultural importance, including a host of medicinal plants.
• The small Roelton Nature Reserve (118.3 ha) forms part of the KwaZulu-Natal Mistbelt Grassland Important Bird and Biodiversity Area (IBA). As an IBA, this site is recognised internationally as an importance site for bird conservation. Roelton hosts a breeding site of the Blue Swallow – a bird that is classified as ‘Critically Endangered’ on the International Union for the Conservation of Nature (IUCN). The reserve is also home to the Mistbelt Chirping Frog, currently listed as ‘Endangered’, by the IUCN Red List of Threatened Species.
• The Karkloof Nature Reserve, of which Sappi owns a portion, is a vital and significant area because of its biodiversity. The Reserve comprises predominantly Mistbelt Forest and Mistbelt Grassland.

Every year, we provide the Endangered Wildlife Trust with feedback on the numbers and locations of various species.