The challenge

• Growth is not possible in an unsafe working environment.
• Globally, economic growth rates around the world – and in South Africa – have slowed, following economic shocks created by the Covid-19 outbreak and the war in Ukraine which have driven up food and energy prices.
• Our sustainability performance depends heavily on our supply chain.
• Women continue to be underrepresented in the pulp and paper industry and when employees are disengaged, business performance suffers.

The opportunity

• Safety: Promoting a safe working environment is not only a moral responsibility but can also improve productivity and lower costs.
• Growth: We need to help put our country on a growth path that will benefit all by increasing global competitiveness, accelerating shareholder value and driving positive social impact.
• Supplier responsibility: By encouraging our suppliers to become part of our sustainability journey, we encourage commitment to sustainable choices and the SDGs throughout our value chain.
• Diversity, inclusion and engagement: A diverse employee base and a working environment where every employee feels valued, supported and rewarded helps to drive retention, productivity and overall business performance.

The stakeholders

Sappi employees and contractors, Sappi suppliers, all South Africans, government, investors and shareholders.

Our actions

Safety

Safety performance in SSA continued to improve, with a best-ever combined employee and contractor LTIFR of 0.26 against a target of 0.29.

Performance in SSA was stable, with the best-ever combined LTIFR standing at 0.26 and promising contractor performance in certain forestry operations. There were 56 LTIs in the region.

Growth

• We completed our ZAR7.7 billion environmental upgrade and capacity expansion project at Saiccor Mill with the following results:
  - Expanded production by 110,000 tons per annum (tpa) – from 780,000 tpa to 890,000 tpa
  - Significantly reduced environmental footprint with the installation of a new recovery boiler and converting the calcium    line to magnesium. This will lead to a significant reduction in fossil fuel energy requirements and increase our    renewable energy usage in line with our commitment to SDG7: Affordable and Clean Energy and SDG13: Climate    Action.
  - Opened the way for forestry value chain participants, from timber growers to emerging suppliers and service providers    who support our activities
• Increased our range of kraft linerboard at Ngodwana Mill to include lower basis weights through machine enhancements – important at a time when our customers are looking to decrease their carbon footprints
• Expanded production at Tugela Mill through process improvements that have enabled the additional production and sales of Ultraflute amounting to 15,000 tpa and increased liquid lignosulphonate sales of 4,725 tpa
• Commissioned a furfural pilot plant at Saiccor Mill to prove the scalability of the Sappi technology for furfural extraction from magnesium oxide (MgO) black liquor

Supplier responsibility

In SSA, we have now assessed the performance of 58% of our suppliers against our global Supplier Code of Conduct.

Diversity, inclusion and engagement

We continued to make progress in terms of our diversity targets and to implement action plans to address gaps identified in our 2021 employee engagement survey. Progress against closing these gaps is regularly reported on to management. Our next employee engagement survey will be held in FY2023.

Performance against our Thrive25 target aligned with SDG8:

Decent Work and Economic Growth

Thrive25 target	2019 base	2022 target	2022 performance	Assessment of performance
Achieve zero workplace injuries (LTIFR) own employees and contractors	0.45	0.27	0.26
Increase proportion of women in management roles by 3.1%	18.%	20.1%	27.1%
80% share of procurement spend with declared compliance with Supplier Code of Conduct	0%	40%	58%
Participation in employee engagement survey to be above 85%	93%	85%+	95.5%
Percentage of staff engaged with our business ≥ 75%	76%	75%+	79%
Return on net operating assets to be 2% above WACC*	14.6%	10.4%	11.1%

* Weighted average cost of capital.