Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Responsibility
• Environmental Responsibility
• Social Responsibility

Environmental Achievements

• Reduced greenhouse gas emissions by 53 percent
• Improved energy efficiency
• Lower organic waste to landfill
• Lower raw material waste through process reuse
• Sourced 100 percent of wood from regional North American wood baskets

Social Achievements

• 25 percent reduction in safety incidents
• Each employee averaged over 60 hours of training
• Increased community support through education and training initiatives

Governance Achievements

• Established a Sustainability Council and Steering Committee with defined responsibilities and accountability
• Aligned sustainability strategy and goals with business plans

Climate Goals & Targets

Environmental Challenges

• Less than ten percent of the world’s forests are certified to a credible standard
• Industry research shows that adding recycled fiber to certain grades of paper can actually raise the carbon footprint
• Challenges related to dust and fuel contamination from using construction and demolition wood as alternative fuel

Mitigation Strategies

• Support inclusive policy positions based on multiple standards and strive to expand certification across the supply chain
• Promote a practice of “best use” for recycled fiber in paper products
• Ongoing modification of operational procedures to successfully burn CDW fuel

Supply Chain Management

Responsible Procurement

• Sourcing 100 percent of wood and market kraft pulp from well-managed forests
• Adherence to SFI® Fiber Sourcing standard and FSC® Controlled Wood standard

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Global Reporting Initiative’s G3.1 framework, UN Global Compact

Certifications: FSC®, SFI®, PEFC chain-of-custody certifications, OHSAS standards (for safety)

Awards & Recognition

• Henry A. Benoit Award

Environmental Metrics

ESG Focus Areas

• Prosperity
• People
• Planet

Environmental Achievements

• Reduced specific energy intensity (GJ/adt) by 0.187
• Increased renewable energy share to 46.8%
• Reduced specific process water extracted by 3.8% over five years
• Reduced specific indirect (Scope 2) emissions by 13.34%
• Reduced specific direct (Scope 1) and indirect (Scope 2) emissions by 3.4%
• Reduced specific particulate matter emissions by 10.4%
• Reduced specific NOx emissions by 12%
• Reduced specific landfilled waste (t/adt)

Social Achievements

• Launched Verve, a new brand for dissolving wood pulp
• 85% participation rate in Employee Engagement Survey
• Average of US$500 spent on training per employee
• Improved safety performance in SNA and SSA, despite two fatalities
• Launched several new sustainable packaging products
• Implemented various community investment initiatives (ZAR64.3 million in SSA)
• Expanded speciality and packaging paper capacity by 160,000 tons through the acquisition of Cham Paper Group

Governance Achievements

• Established a new Group Supplier Code of Conduct
• Implemented ongoing Code of Ethics awareness and training programs
• Achieved Level 3 BBBEE compliance in South Africa

Climate Goals & Targets

Environmental Challenges

• Two fatalities in 2018 (one employee, one contractor)
• Disappointing safety performance despite overall improvement in LTIFR
• Supply chain disruptions due to low water levels in Europe
• Climate change impacts on South African plantations (pests, diseases, fire)
• Social unrest in South Africa impacting business
• Tough labor negotiations, particularly in South Africa

Mitigation Strategies

• Implemented various safety initiatives (Project Zero, Stop and Think Before You Act)
• Developed alternative sourcing strategies for woodfibre
• Adjusted tree breeding strategy to mitigate climate change impacts
• Invested in community development programs (Abashintshi, Sappi Khulisa)
• Proactive engagement with trade unions

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Group Supplier Code of Conduct
• Group Woodfibre Procurement Policy
• Sappi Khulisa enterprise development scheme

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (drought, fire, frost)
• Pests and diseases

Transition Risks

• Carbon taxes
• Regulatory changes

Opportunities

• Development of energy-efficient products
• Growth in sustainable packaging market
• Development of bio-based products

Reporting Standards

Frameworks Used: GRI Standards, King IV Code on Corporate Governance

Certifications: FSC, PEFC, SFI, OHSAS 18001, ISO 14001, ISO 9001, EMAS (Europe), ISO 50001 (Europe and South Africa)

Third-party Assurance: KPMG (limited assurance on selected KPIs)

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 15: Life on Land
• Goal 17: Partnerships for the Goals

Various initiatives described throughout the report contribute to these goals.

Sustainable Products & Innovation

• Verve DWP
• Seal packaging paper
• Spectro C1S and Proto Litho C1S paperboard
• Fusion Uncoated topliner
• Fashion White shopping bags
• Atelier folding boxboard
• Valida nanocellulose
• Symbio biocomposites

Awards & Recognition

• Sunday Times Top 100 Companies (2nd place)
• GAPP Print Quality Awards
• Pulp and Paper International International CEO of the Year
• AF&PA Leadership in Sustainability Award
• Governor’s Award for Business Excellence
• Gold Quill Award of Excellence
• Kruger Lowveld Chamber of Business and Tourism’s Annual Environmental Award
• Absa Business Day Supplier Development Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Stewardship
• Waste Management
• Forestry
• Workplace Safety
• Diversity & Inclusion
• Responsible Sourcing

Environmental Achievements

• Reduced specific GHG (Scope 1+2) emissions by 18% by 2025 (target)
• Increased share of renewable and clean energy (various targets by region and year)
• Reduced specific landfill solid waste (various targets by region and year)
• Increased proportion of certified fibre supplied to mills to 75% (target)
• Kirkniemi Mill in Finland converted to renewable energy, reducing direct fossil greenhouse gas emissions by 90%
• Modernization of a boiler at Gratkorn Mill in Austria increased renewable energy share from 41% to 56%

Social Achievements

• Achieved zero workplace injuries (LTIFR) from own employees and contractors (target)
• Increased proportion of women in management roles (various targets by region and year)
• Increased share of procurement spend with declared compliance with Supplier Code of Conduct to 80% (target)
• Employee Engagement Survey participation >85% (target)
• Percentage of staff fully engaged with our business >75% (target)
• Launched products with defined sustainability benefits (25 products target)

Governance Achievements

• Established Regional Sustainable Councils (RSCs) and Group Sustainable Development Council (GSDC)
• Established Sappi Sustainable Financing Committee (SSFC)
• Social, Ethics, Transformation and Sustainability (SETS) Committee with majority independent non-executive members

Climate Goals & Targets

Environmental Challenges

• Reducing Scope 3 emissions
• Limited availability of renewable energy for purchase in South Africa
• Water scarcity in South Africa

Mitigation Strategies

• Working on establishing Scope 3 targets
• Exploring opportunities for Private Partnership Agreements (PPAs) with independent renewable energy providers in South Africa
• Various smaller capital projects at manufacturing sites to improve water efficiency
• Water Stewardship agreement with WWF South Africa

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• EcoVadis methodology for supplier sustainability evaluations

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SBTi

Certifications: FSC, PEFC, ISO 9001:2015, ISO 14001:2015, ISO 22000:2005, ISO 45001:2018, ISO 50001:2011/2018

Third-party Assurance: KPMG South Africa

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 1

Sustainable Products & Innovation

• Verve dissolving pulp

Awards & Recognition

• Platinum Level in sustainability performance by EcoVadis (2023)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Circular Economy
• Water Stewardship
• Safety
• Employee Well-being
• Workforce Diversity
• Community Investment
• Ethical Behavior
• Responsible Procurement
• Supply Chain Transparency

Environmental Achievements

• Increased renewable energy share to 54.4% (68.3% from black liquor)
• Reduced waste sent to landfill by 7.6% year-on-year
• Increased percentage of solid waste beneficiated from 72.08% to 75.3%
• Improved water use efficiency by approximately 17%

Social Achievements

• Improved safety metrics across all three regions
• Implemented extensive employee well-being services in response to Covid-19
• Launched various community support initiatives in response to Covid-19
• Continued investment in training and development (US$434 per employee)

Governance Achievements

• Implemented comprehensive ethics training across all regions
• Rolled out Group Supplier Code of Conduct
• Established a malus and clawback policy
• Improved disclosures on remuneration policy

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic impacting demand for graphic paper and dissolving pulp
• Depressed dissolving pulp prices
• Increased debt levels and leverage
• Declining demand for graphic papers
• Social unrest in South Africa
• Land restitution challenges in South Africa
• Climate change impacts on forestry and operations

Mitigation Strategies

• Implemented cost-saving measures, including production curtailment and deferred capital expenditure
• Negotiated covenant suspension with lenders
• Closed or restructured underperforming assets
• Focused on growth in higher-margin packaging and speciality papers
• Engaged with communities through various initiatives
• Developed a climate change strategy and committed to science-based targets
• Implemented risk mitigation strategies for climate-related risks

Supply Chain Management

Supplier Audits: 61% of spend covered in Europe, 10% in North America, 1% in South Africa

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Forest disturbances (wildfires, storms)

Transition Risks

• Carbon taxes and regulations

Opportunities

• Development of energy-efficient products
• Expansion of renewable energy sources

Reporting Standards

Frameworks Used: IIRC's International Framework, GRI standards, UNGC

Certifications: FSC, PEFC, ISO 14001, ISO 50001, ISO 9001, OHSAS 18001, EMAS

Third-party Assurance: KPMG

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 17
• SDG 1
• SDG 4

Sappi's initiatives contribute to these goals through responsible resource management, renewable energy use, ethical labor practices, sustainable product development, emissions reduction, biodiversity conservation, partnerships, poverty reduction, and education.

Sustainable Products & Innovation

• Symbio bio-composite
• Valida nanocellulose
• High-barrier papers
• r-PET lidding film
• Ultracast Viva casting paper
• Raw graphic paper

Awards & Recognition

• SEAL Business Sustainability Award (Cloquet Mill)

Environmental Metrics

ESG Focus Areas

• Climate change
• Water stewardship
• Renewable energy
• Workforce safety
• Workforce diversity
• Employee engagement
• Responsible consumption and production
• Sustainable forestry
• Partnerships
• Economic growth

Environmental Achievements

• Reduced specific total energy consumption by 7.2%
• Achieved 80.7% renewable energy use
• Decreased specific GHG (Scope 1 and 2) emissions
• Reduced specific landfilled solid waste
• Increased share of certified fiber to 49.3%
• Cloquet Mill achieved 84% on Higg Facility Environmental Module verification audit

Social Achievements

• No lost-time injuries in the fourth quarter
• 21% of women in senior management positions
• 53% share of procurement spend with suppliers declaring compliance with Supplier Code of Conduct
• Launched Ultracast Viva®, a sustainable product

Governance Achievements

• Partnership with EcoVadis to assess supplier sustainability performance

Climate Goals & Targets

Environmental Challenges

• Increased lost-time injury frequency rate in the first quarter of 2021
• COVID-19 related business complications and supply chain disruptions
• Anaerobic reactor downtime at Matane Mill impacting landfill use
• Pandemic hampered product launches

Mitigation Strategies

• Renewed focus on safety protocols and leadership training
• Improved operational efficiencies and Lean Six Sigma projects
• Improved data tracking procedures and emphasis on certified fiber
• Adaptation to changing market conditions and mitigation of supply chain challenges

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sappi Supplier Code of Conduct
• Partnership with EcoVadis

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G4, UNGC

Certifications: FSC, PEFC, SFI

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• UNSDG 6
• UNSDG 7
• UNSDG 8
• UNSDG 12
• UNSDG 13
• UNSDG 15
• UNSDG 17

Sappi's Thrive25 sustainability targets are aligned with these goals.

Sustainable Products & Innovation

• Ultracast Viva®

Awards & Recognition

• FTSE4Good Index constituent
• ISS-oekom Prime classification
• EcoVadis Platinum rating

Environmental Metrics

ESG Focus Areas

• Safety
• Financial Performance
• Sustainability
• Employee Engagement
• Decarbonization
• Circular Economy
• Supplier Code of Conduct
• Biodiversity
• Responsible Forestry
• Renewable Energy
• Emissions Reduction
• Waste Reduction
• Water Management
• Workforce Diversity
• Community Investment

Environmental Achievements

• Decreased specific total energy consumed (GJ/mt) by 9.0%
• Achieved 76.7% renewable energy use
• Decreased GHG emissions intensity (kg CO2e/mt) significantly
• Reduced specific landfilled solid waste significantly
• Increased share of certified fiber to 52.6%
• Improved chemical recovery efficiency in Cloquet Mill

Social Achievements

• Achieved record low lost time injury frequency rate (LTIFR) of 0.18
• Exceeded goal for women in senior management positions (22%)
• Improved employee engagement score to 69%
• Launched several community outreach programs through Sustainability Ambassadors
• Implemented new recruiting tools and strategies to address labor shortages

Governance Achievements

• Committed to science-based targets through the Science Based Targets initiative (SBTi)
• Secured an EcoVadis Platinum sustainability rating for the third consecutive year
• Implemented the framework for the Task Force on Climate-related Financial Disclosures (TCFD)
• Expanded supplier code of conduct

Climate Goals & Targets

Environmental Challenges

• Inflationary pressures
• Rising energy costs
• Supply chain disruptions
• Labor shortages
• Port and rail congestion
• Extreme weather events
• Anaerobic reactor upset at Matane Mill
• Pulp washing issues at Somerset Mill
• Poor foul condensate stripper performance at Cloquet Mill

Mitigation Strategies

• Successful mix management
• Price realization
• Well-managed operational performance
• Shifting production capacity to meet demand
• Lean Six Sigma projects focused on energy savings
• Collaboration with transportation partner Schneider to track and reduce GHG emissions
• Shifting transport modes from truck to rail
• Addressing operational issues at Cloquet, Somerset, and Matane Mills

Supply Chain Management

Responsible Procurement

• Supplier code of conduct
• Science-based targets for suppliers
• Supplier GHG emissions survey

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Increased demand for renewable packaging solutions

Reporting Standards

Frameworks Used: GRI G4, UNGC, TCFD, SBTi

Certifications: FSC, PEFC, SFI, ISO 9001:2015, ISO 14001:2015, ISO 22000:2018, ISO 45001:2018

Third-party Assurance: DNV

UN Sustainable Development Goals

• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 17

Sappi's sustainability goals are aligned with the UN SDGs, focusing on areas such as renewable energy, economic growth, responsible consumption and production, climate action, life on land, and partnerships for the goals.

Sustainable Products & Innovation

• Arrio decorative laminate
• Proto Blister paperboard
• Ultracast Viva casting and release paper
• Biodegradable dish towels

Awards & Recognition

• EcoVadis Platinum rating
• Business Intelligence Group Product of the Year award (Ultracast Viva)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Water Stewardship
• Biodiversity
• Supply Chain Sustainability
• Community Development

Environmental Achievements

• Year-on-year decrease in specific Scope 1 and 2 emissions of 4.8%
• 77% certified fibre supplied to mills
• Over five years, the percentage of waste diverted from disposal has increased by 5.2%
• Solid waste to landfill has decreased by 19% over five years
• Specific process water extracted decreased by 1.7%

Social Achievements

• Record safety performance with zero fatalities
• 22.5% women in management positions (3.5% increase from 2019)
• Maintained Level 1 BBBEE contributor status in South Africa
• 74% of suppliers in compliance with Sappi Supplier Code of Conduct
• Significant progress on enterprise and supplier development in SSA

Governance Achievements

• Validation of 2030 decarbonisation targets by the Science Based Targets initiative (SBTi)
• Established a sustainability-linked finance framework
• Refreshed Code of Ethics

Climate Goals & Targets

Environmental Challenges

• Extreme weather events (floods in South Africa)
• Supply chain disruptions (port congestion, raw material shortages)
• Rising input costs (energy, raw materials)
• Geopolitical tensions and inflation
• Social unrest in South Africa

Mitigation Strategies

• Implemented price increases
• Secured breakbulk shipping alternatives
• Maximised operational efficiency and cost savings (US$110 million)
• Reduced net debt
• Developed alternative sourcing strategies
• Community engagement and investment

Supply Chain Management

Supplier Audits: 199 suppliers on EcoVadis platform (59% of global procurement spend)

Responsible Procurement

• Supplier Code of Conduct
• EcoVadis partnership
• Science-based targets for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Wildfires
• Drought

Transition Risks

• Carbon taxes
• Regulatory changes

Opportunities

• Development of energy-efficient products
• Renewable energy investments

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Global Reporting Initiative (GRI) standards, United Nations Global Compact (UNGC), UN SDGs

Certifications: Forest Stewardship Council™ (FSC™), Programme for the Endorsement of Forest Certification (PEFC), ISO 50001, ISO 45001, ISO 9001, OHS 18001

Third-party Assurance: Independent practitioner’s limited assurance report included in the 2022 Sappi Group Sustainability Report

UN Sustainable Development Goals

• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 15
• SDG 17

Sappi's initiatives contribute to these goals through sustainable forestry, responsible resource management, community development, climate action, and partnerships

Sustainable Products & Innovation

• Verve DP
• Sappi Symbio
• Valida fibrillated cellulose
• Sappi Guard
• Sappi Seal
• Crystalcon

Awards & Recognition

• Business Intelligence Group’s 2022 Sustainability Awards (Ultracast Viva™)

Environmental Metrics

ESG Focus Areas

• Economic performance
• Environmental sustainability
• Social impact
• Governance

Environmental Achievements

• Reduced GHG emissions (Specific details and quantification missing from provided text)
• Increased renewable energy use (Specific details and quantification missing from provided text)
• Improved water stewardship (Specific details and quantification missing from provided text)
• Advanced circular bioeconomy and waste reduction (Specific details and quantification missing from provided text)

Social Achievements

• Improved employee safety (Specific details and quantification missing from provided text)
• Enhanced employee well-being (Specific details and quantification missing from provided text)
• Promoted diversity and inclusion (Specific details and quantification missing from provided text)
• Strengthened labor relations (Specific details and quantification missing from provided text)

Governance Achievements

• Strengthened ethics and compliance programs (Specific details and quantification missing from provided text)
• Improved board oversight of ESG (Specific details and quantification missing from provided text)

Climate Goals & Targets

Environmental Challenges

• Negative impact on biodiversity in South Africa at stand level (not plantation level)
• Managing water resources sustainably (Specific details missing from provided text)

Mitigation Strategies

• Partnerships with WWF-SA for water stewardship
• Implementation of forest certification systems to protect the rights of indigenous people
• Ongoing ethics training and supplier code of conduct assessments to address corruption risks

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• EcoVadis assessment for social and environmental performance

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Universal Standards 2021)

Environmental Metrics

ESG Focus Areas

• Safety
• Renewable Energy
• Emissions Reduction
• Water Management
• Waste Reduction
• Sustainable Forestry
• Biodiversity
• Employee Engagement
• Supplier Code of Conduct
• Product Sustainability

Environmental Achievements

• Achieved a 78.2% share of renewable energy in 2023.
• Cloquet Mill won the American Forest & Paper Association 2023 Leadership in Sustainability Award for its water management project, reducing total suspended solids (TSS) and biological oxygen demand (BOD).
• Reduced recordable injuries by 41.6% year over year for employees.

Social Achievements

• Achieved the lowest-ever lost time injury frequency rate (LTIFR) of 0.11 for Sappi employees in 2023.
• Employee engagement survey participation rate of 92%, exceeding the goal of 85%.
• 77% share of procurement spend with suppliers declaring compliance with the supplier code of conduct, surpassing the target of 70%.

Governance Achievements

• Earned a Platinum rating from EcoVadis for the fourth consecutive year.
• Achieved a top ESG ranking of 94% out of 32,648 companies assessed by MSCI.
• Received a Prime rating from ISS ESG for overall ESG corporate rating.

Climate Goals & Targets

Environmental Challenges

• Softening market conditions and inventory corrections resulted in lower EBITDA and RONOA.
• Commercial curtailment of pulp production led to inefficiencies and increased specific GHG emissions.
• Higher-than-normal increase of landfilled sludge at Matane Mill due to anaerobic wastewater treatment plan (WWTP) issues.

Mitigation Strategies

• Strategic pricing actions and cost management to maintain profitability.
• Dedicated initiatives to return to reduced emission levels.
• WWTP issues addressed, expecting performance to return to plan as market conditions improve.
• Capital improvements approved for 2024 to further reduce sulfur dioxide emissions at the Somerset Mill.

Supply Chain Management

Supplier Audits: All new wood suppliers screened for risk; returning suppliers reviewed annually.

Responsible Procurement

• Supplier code of conduct
• Sustainable forestry practices

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and processes.

Reporting Standards

Frameworks Used: GRI G4, Science Based Targets initiative (SBTi), UNGC

Certifications: ISO 14001, ISO 45001, FSC, PEFC, SFI

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• UNSDG 6
• UNSDG 7
• UNSDG 8
• UNSDG 12
• UNSDG 13
• UNSDG 15
• UNSDG 17

Sappi's initiatives contribute to these goals through various sustainability programs and targets.

Sustainable Products & Innovation

• SBS paperboard for packaging products

Awards & Recognition

• EcoVadis Platinum rating
• MSCI ESG ranking of 94%
• ISS ESG Prime rating
• AF&PA Leadership in Sustainability Award
• SFI 2023 SIC Achievement Award
• TAPPI’s 2023 Woman of the Year Award (Beth Cormier)

Environmental Metrics

ESG Focus Areas

• Social
• Ethics
• Transformation
• Sustainability

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Stewardship
• Biodiversity
• Resource Efficiency
• Responsible Procurement
• Health and Safety
• Diversity and Inclusion
• Community Engagement

Environmental Achievements

• Reduced specific Scope 1 and 2 GHG emissions by 12.8% year-on-year.
• Reduced specific process water use by 9.7% year-on-year.
• Reduced total specific solid waste to landfill (on-site and off-site) by 27.7% year-on-year.
• Increased share of renewable energy to 63% in South Africa.
• Achieved 55% reduction in the carbon footprint of Galerie coated publication papers.
• Kirkniemi Mill transitioned from fossil fuels to renewable biomass energy, achieving a 91% reduction in GHG emissions intensity.

Social Achievements

• Launched global social media best practices training.
• Launched awareness campaign for updated Group Whistle-blowing policy.
• Exceeded enterprise and supplier development (ESD) spend target in SSA, sustaining 1,502 jobs.
• Sappi ranked seventh globally in Forbes World’s Best Companies for Women.
• Achieved proportion of women in management roles target for FY2024.

Governance Achievements

• Revision and approval of key policies, including Group Sustainability Charter and Group Environmental, Climate Change, Water Stewardship, and Woodfibre Policies.
• Introduction of a new Group Anti-Bullying and Psychological Harassment policy.

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic environment impacting demand.
• Production curtailments affecting energy and emission intensity targets.
• Supply chain disruptions.
• High water stress in South Africa.
• Illegal harvesting of indigenous medicinal plants in South Africa.
• Climate change impacts on forest health and availability.

Mitigation Strategies

• Strategic rationalisation of European business.
• Inventory optimisation and fixed cost savings.
• Focus on renewable energy investments.
• Water efficiency projects across mills.
• Tree improvement research for drought-resistant trees.
• Bulwer Muthi Plants Initiative to address illegal harvesting.
• Comprehensive climate strategy aligning with science-based targets.

Supply Chain Management

Supplier Audits: 1,404 suppliers shared EcoVadis scorecards; 431 in process.

Responsible Procurement

• Group Supplier Code of Conduct
• EcoVadis assessments
• Science-based targets for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water stress
• Wildfires

Transition Risks

• Regulatory changes
• Market shifts
• Increased compliance costs

Opportunities

• Development of energy-efficient products
• Renewable energy investments
• New revenue streams from biomaterials

Reporting Standards

Frameworks Used: GRI (Global Reporting Initiative) Standards (core option), King IV Report on Corporate Governance™ for South Africa, 2016

Certifications: FSC™ N003159, PEFC/01-44-43, SFI®, ISO 9001, ISO 14001, ISO 50001, EMAS, ISO 45001, BBBEE

Third-party Assurance: KPMG Inc.

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 15 (Life on land)

Sappi's initiatives contribute to these goals through renewable energy use, job creation, waste reduction, emissions reductions, and biodiversity conservation.

Sustainable Products & Innovation

• Recyclable barrier papers
• Biomaterials (Valida, lignin-based products, furfural)
• Sustainable packaging solutions

Awards & Recognition

• Time Magazine's World's Best Companies
• Forbes World's Best Employers
• Forbes World's Best Companies for Women
• SEAL Business Sustainability Awards' Environmental Initiative Award
• Communitas Award for Community Service and Corporate Social Responsibility

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Water Stewardship
• Resource Efficiency
• Waste Reduction
• Health and Safety
• Employee Wellbeing
• Diversity and Inclusion
• Responsible Procurement
• Ethical Behaviour
• Community Engagement

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Group Supplier Code of Conduct
• EcoVadis assessment for social and environmental performance

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards (2021)

Certifications: Null

Third-party Assurance: Independent Auditors Report

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability

Environmental Achievements

• Manufacturing from woodfibre sourced from sustainably managed forests and plantations, in production facilities powered, in many cases, with bio-energy from steam and existing waste streams
• Significant year-on-year fixed costs savings were achieved through our strategic rationalisation actions

Social Achievements

• Building a thriving world by acting boldly to support the planet, people and prosperity
• Closure of the Stockstadt and Lanaken Mills significantly reduced the fixed cost base and enhanced European capacity utilisation, contributing to improved profitability of the segment compared to the prior year.

Governance Achievements

• Board approved changes to the directorate
• Dividend of 14 US cents per share approved

Climate Goals & Targets

Environmental Challenges

• Subdued macroeconomic environment, ongoing low consumer confidence, and persistent geopolitical uncertainty
• Paper markets remained subdued, with the expected recovery in demand after the prolonged destocking phase of 2023 unfolding more slowly than anticipated
• Significant reversal in the fourth quarter due to lower hardwood timber market prices in South Africa
• Lower selling prices, leading to margin erosion for the segment
• Special items for the year reduced earnings by US$225 million
• Challenging global macroeconomic conditions and ongoing geopolitical tensions continue to cause disruptions in our markets. Additionally, supply chain instability and fluctuating input costs have added pressure to both production and pricing strategies, making market dynamics unpredictable.

Mitigation Strategies

• Proactive management of capacity utilisation to align with demand, along with inventory optimisation to maintain working capital, positively impacted earnings
• Strategic rationalisation actions
• Closure of the Stockstadt and Lanaken Mills significantly reduced the fixed cost base and enhanced European capacity utilisation
• Sharpening our focus on operational excellence by proactively managing capacity utilisation and vigorously pursuing cost saving opportunities

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS® Accounting Standards

Third-party Assurance: KPMG Inc.

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Prosperity

Environmental Achievements

• Reduced energy and fuel consumption by 680,000 GJ compared to 2016.
• Maintained 70% certified fibre share.
• Achieved an 8% reduction in specific COD over five years.
• Achieved a 15% specific reduction in landfilled waste in five years.

Social Achievements

• LTIFR of 0.77 (Maastricht Mill achieved zero).
• 87% participation rate in employee engagement survey (78% sustainable engagement rate).
• 5.9% employee turnover rate (2.5% voluntary turnover average).

Governance Achievements

• Implementation of SPE&i to improve efficiency and employee engagement.
• Continued focus on safety as an ethical imperative.
• Investments in existing assets to facilitate growth and profitability.

Climate Goals & Targets

Environmental Challenges

• Specific CO2 use increased by 3.9% compared to 2014 due to lower production capacity and high coal content in fuel mix.
• Difficulty in reducing NOx emissions without compromising energy efficiency.
• Maintaining cost, service, and product leadership while reducing graphic business capacity.

Mitigation Strategies

• 50 energy savings projects across European mills.
• Optimisation of wastewater plant operations at Kirkniemi, Maastricht, and Stockstadt mills.
• Investments in Alfeld, Ehingen, Maastricht, and Lanaken mills to improve efficiency and support growth.
• Capacity reduction in graphics business to maintain leadership.

Supply Chain Management

Supplier Audits: All wood and pulp suppliers are certified (FSC® and PEFC™)

Responsible Procurement

• Chain of custody certification for all wood and pulp suppliers.

Climate-Related Risks & Opportunities

Transition Risks

• Changes in energy prices
• Stringent regulations in Phase Four of the EU ETS

Opportunities

• Development of energy-efficient products
• Bio-energy production
• Biomaterials (nanocellulose, biocomposites)

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: FSC®, PEFC™, EMAS (DE-103-0012 for Stockstadt Mill)

Sustainable Products & Innovation

• Sappi Guard
• Galerie Brite Plus
• Algro Design
• Nanocellulose
• Symbio

Awards & Recognition

• German Packaging Award 2016 (Sappi Guard)
• WorldStar 2017 Awards (Sappi Guard Gloss OHG)
• National Award for Occupational Health Promotion 2017 (Gratkorn Mill)