Stora Enso ESG Investor presentation - Q4 2021
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Stora Enso ESG Investor presentation Q4 2021
Disclaimer It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or similar expressions, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Since these statements are based on current plans. estimates and projections, they involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development, acceptance of new products or services by the Group’s targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group’s patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group’s products and the pricing pressures thereto. price fluctuations in raw materials, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group’s principal geographic markets or fluctuations in exchange and interest rates. 2 10 February 2022 Stora Enso ESG investor presentation
• Needed: a balancing act of global wellbeing of the planet and
A dual challenge people
• Stora Enso can, and will, provide solutions that contribute to this
balance
• We need to consider what the world needs and focus our resources
and innovation on what makes the biggest difference
3 10 February 2022
Stora Enso ESG investor presentation
We are a solution for consumers’ new demands Everything that’s made with fossil-based materials today can be made from a tree tomorrow Sustainable development is at the heart of our business strategy 4 10 February 2022 Stora Enso ESG investor presentation
Sustainable development goals - the roadmap to 2030
guides our actions
CO2 Circular Biodiversity
Upgraded Science Based Target Products and value chains Expanding scope and actions
• Aligned with a 1.5-degrees • Circular Design Guidelines by • Detailed action plan towards
scenario 2025 2030
• Scope 1, 2 & 3: 50% • 100% of our products • Active biodiversity
absolute reductions recyclable by 2030 management with >15
(2019 baseline) indicators
5 10 February 2022
Stora Enso ESG investor presentation
Climate change
Stora Enso’s annual estimated climate impact¹ 1) Negative value indicates a net removal from atmosphere. Calculated by the Swedish University of Agricultural Sciences (SLU) based on Stora Enso’s forest and production figures: Climate effects of a forestry company – including biogenic carbon fluxes and substitution effects (2021 update). 2) Net annual carbon sequestration with forward-looking simulation in Stora Enso’s forest assets. Excludes purchased wood from third-party forest owners, whose forests are estimated to have an additional net carbon sequestration of –5 million tonnes of CO2 annually. For more information, see also Carbon in Stora Enso’s forests. 3) Stora Enso’s fossil CO2e emissions in 2021 including direct emissions from our operations, emissions from purchased energy as well as emissions from other sources along our value chain (Scope 1, 2, and 3). Calculated based on the guidance provided by the Greenhouse Gas Protocol. 7 10 February 2022 Stora Enso ESG investor presentation
Climate change – targets to reduce CO2
emissions by 50%
• Stora Enso has science-based targets to
reduce its greenhouse gas (GHG) emissions
• Our target is to reduce absolute scope 1 and 2*
greenhouse gas (GHG) emissions from
operations by 50% by 2030 from the 2019 base-
year, in line with the 1.5-degree scenario
• Stora Enso is also committed to a target to
reduce scope 3* GHG emissions by 50% by
2030 from the 2019 base-year
8 10 February 2022 *Scope 1: Direct fossil CO2e emissions from production. Scope 2: indirect fossil CO2e emissions related
Stora Enso ESG investor presentation to purchased electricity and heat. Scope 3: Emissions from other sources along our value chain.
CO2 emissions down by 14% in 2021
• Ambitious targets for our operations
• Targets in line with 1.5-degree scenario
• In FY2021, our greenhouse gas emissions (scope
1 and 2) were 14% lower compared to the 2019
base year level
Q4 2021 Interim Report
9 10 February 2022
Stora Enso ESG investor presentation
Our products have a lower carbon footprint
Carbon footprint CO2 emissions PureFiber™ has Fibre-based
of lignin is of a CLT-frame 75% lower CO2 beverage carton
around 80% building are 75% footprint has 45% lower
”
lower than the lower compared compared to CO2 emissions
carbon footprint to a concrete plastic or than a PET plastic
of phenol frame building bagasse bottle
10 10 February 2022
Stora Enso ESG investor presentationBiodiversity
Biodiversity – committed to achieve
net-positive impact on biodiversity
• Stora Enso commits to achieving a net-positive
impact on biodiversity in its own forests and
plantations by 2050 through active biodiversity
management
• A set of actions towards 2030 has been
developed and initiated to improve biodiversity
at species, habitats and landscapes levels
• To achieve this, we are focusing on
− Active and adaptive biodiversity management,
using our own forest as development platform
− Indicators (>15) to holistically measure the state of
biodiversity and the quality of our work
− Biodiversity knowledge sharing with forest owners
and other key stakeholders
− Online reporting on Stora Enso website during 2022
12 10 February 2022
Stora Enso ESG investor presentationSustainable forestry operations
100% 77%
of our wood proportion of
comes from third-party
sustainable certified wood in
sources wood supply
99% 12%
of lands owned of our wood
and managed by comes from
us are covered certified tree
by certification plantations
Sustainable forestry operations help
safeguard forest health and biodiversity
13 10 February 2022
Stora Enso ESG investor presentationBiodiversity management practices in Nordic forests
Decaying wood High stumps Retention trees Forest structure
Decaying wood During harvesting, Provide continuum of Variation in forest structure
provides an important we make artificial decaying wood for forest helps to maintain species
habitat for a wide snags to increase the species, such as birds Protection of and habitat diversity.
variety of forest species. amount of deadwood. who need it for nesting. valuable sites
In forest management
planning, we identify and
protect ecologically and
culturally valuable sites.
Protecting biodiversity
We ensure that forests grow more
than they are harvested, and that
biodiversity is an integral part of
everyday forest management.
Controlled burning Soil and water protection Buffer zones
Creates suitable habitats for many Harvesting, soil preparation and road Protect watercourses, connect and provide
fire-dependent species and building are planned to minimize habitats for forest species and improve
enhances forest regeneration. adverse impacts to soil and water. visual quality of the managed landscape.
14 10 February 2022
Stora Enso ESG investor presentationBiodiversity management practices in tree plantations
Beekeeping Mosaic landscape Protection of
improve local Plantations are designed to protect valuable ecosystems
livelihoods, help valuable ecosystems and established Restoration Monitoring of such as remaining natural
protecting the only on degraded lands. of native flora and fauna forests and wetlands.
environment and ecosystems to collect
enhance pollination Ecological corridors connect and by preventing information on
as an important provide habitats for native species. disturbance developments in
ecosystem service. and planting the local habitats.
native species.
Protecting biodiversity
Plantations are designed and
managed in local land-use context.
Landscape typically consists of a
mosaic of areas for both intensive
wood production and biodiversity
conservation.
Multiple land-use Reintroduction Roadbuilding and soil preparation
such as cattle grazing and of native species Harvesting, soil preparation and road
collection of non-timber in protected areas building are planned to minimize adverse
forest products. Into their natural habitat. impacts to soil and water.
15 10 February 2022
Stora Enso ESG investor presentationWe use indicators at landscapes, habitats and species
level
Landscape level: Cohesive green Habitat level: A variation of different habitats Species level: The occurrence and abundance
infrastructures are needed to support with relevant structures are required for a thriving of species reflects biodiversity. Since it is
abundance and dispersal of many species. forest biodiversity. difficult to monitor all species, we focus on
those who can indicate or signal the presence
Indicators Indicators of other ones.
• Area of old forest • Deadwood volume in different stages of
• Forest age class distribution decomposition, standing and lying on the Indicators
• Protected set-aside areas ground in both sun exposed and shadowed • Monitoring of selected species, both rare and
• Tree species composition (%) environments endangered ones and more common ones
• Large old trees, mainly deciduous but also
16 10 February 2022 coniferous species
Stora Enso ESG investor presentationGroup forest assets fair value increased to €8 billion
equal to €10.10 per share in 2021
Group forest assets fair value Stora Enso productive forest land areas at end of 2021
€ billion
8.0 Swedish forests Tornator (41%)
1,141,000 ha Finland, Estonia &
7.3
Romania 271,000 ha
Veracel (50%) Guangxi, China
Brazil 47,000 ha (leased) 68,000 ha
Group’s total
productive land
ownership was
1,617,000 ha at
the end of 2021 Montes del Plata (50%)
Uruguay 90,000 ha
Q4/2020 Q4/2021
17 10 February 2022
Stora Enso ESG investor presentationCircularity
Circularity target to support
climate change
• Our target is to achieve 100% recyclable
products by 2030
• Flagship projects will help drive recycling at
scale
− This involves engagement along our value
chain to help achieve additional recycling
infrastructure and new circular business
models
• Our circularity target outlines the commitment
to transparent and circular material flows that
help minimise waste and combat climate
change
19 10 February 2022
Stora Enso ESG investor presentationOffering renewable and circular products
Efficient and Products with
sustainable production a low footprint
Sustainable
forestry
Circular
design
Renewability circle
Seedlings
Recycling circle
Ecosystem Value to consumers
services Value from and society
CO2 absorption circularity
20 10 February 2022
Stora Enso ESG investor presentationWhat circularity means in packaging? • Circularity means products that are optimised for recycling • We work together with our customers to find the best renewable and designed-for-circularity materials to replace fossil-based packaging • We innovate to create new high value end-uses for recycled fibre • We drive collaboration with our customers and the entire value chain to improve recycling opportunities • 83% of paper and board is recycled in Europe 21 10 February 2022 Stora Enso ESG investor presentation
Responsible business practices
Our business impacts people The Stora Our Human
Rights Policy
Enso Code
& Guidelines
>100,000 >20,000 Supplier Code of Conduct
forest owners suppliers Supplier assessments and audits
communities >22,000 >10,000
Speak Up Hotline employees customers
Community consultations Business Practice Policy
Safety standards and safety reporting
FPIC
Minimum requirements for labour conditions
Community investment
23 10 February 2022
Diversity and inclusion
Stora Enso ESG investor presentationCommitted to ensure a safe and
healthy workplace
• The health and safety of Stora Enso’s employees
is a key priority
• Goal is to provide an accident free and inclusive
workplace
• TRI* rate in Q4 2021 was 5.5
− Group safety milestone (4.0) for 2021 was not
reached
− The areas for improvement are being addressed
in the strategic Safety Roadmap from 2021
• Covid-19 impacts on employees and contractors
remained stable and under control during Q4
*Total recordable incident rate = number of incidents per
one million hours worked
24 10 February 2022
Stora Enso ESG investor presentationSustainable sourcing – above target in 2021
• We ensure that our suppliers are committed to high
sustainability standards
• Stora Enso has a rigorous supplier approval process
− 96% of our supplier spend is covered by signed
Supplier code of conduct, SCoC (Q4 2021), while
target is 95%
• We engage with suppliers to help them address
sustainability topics
Q4 2021 Interim Report
25 10 February 2022
Stora Enso ESG investor presentationWater – using natural resources with care
• Water availability is a global challenge and plays a central role
in our production
• Stora Enso’s strategic water goals aim to reduce impact on the
sites’ water sources
• Almost 96% of the water we withdraw from nature is released
back to the environment
− Only 4% is consumed in production processes
− We ensure the water is purified and safe
− Water is recycled within the site where feasible, reducing the
need for water intake
• Stora Enso mainly withdraws process and cooling water from
surface waters
• Stora Enso applies the WRI Water Aqueduct Tool to assess
water-related risks at its production units
26 10 February 2022
Stora Enso ESG investor presentationHuman rights – embedded in
the day-to-day activities
• When growing and harvesting trees, making
products or transporting materials, Stora Enso
has an impact on people
• Close cooperation with global and local
stakeholders
• Stora Enso is committed to the United Nations
Guiding Principles which require companies to
conduct due diligence to identify, assess, and
remedy the impacts that their activities may
have on people
• Relevant Stora Enso policies on human rights
include:
− Stora Enso Code, Human Rights Policy, Supplier Code of
Conduct, Human Rights Guidelines and Environmental
Guidelines
27 10 February 2022
Stora Enso ESG investor presentationCommunity – engagement with
local communities around the
world
• With a global presence in more than 30
countries, we engage with local communities
around the world
• Our operations are often in rural communities
that form an important stakeholder group
• We support and work with communities to help
them thrive economically, socially and
environmentally
• In total, the Group’s voluntary community
investments* amounted to EUR 2.0 million
(EUR 2.7 million) in 2021
*Including 50% of the community investments by
company’s 50/50 joint operations in Brazil and Uruguay
28 10 February 2022
Stora Enso ESG investor presentationStora Enso as a tax payer
• Stora Enso’s operations generate value through
taxes for governments around the world
• In 2021, Stora Enso paid app. EUR ~1.2 billion into
public sectors, including EUR 749 million in
collected taxes
• Stora Enso aims to be transparent with respect to
economic value generation
• Stora Enso makes a voluntary commitment to
openly provide details of the taxes paid by the
group to governments in its main countries of
operation
− This commitment to our stakeholders is fully in
line with Stora Enso’s values to ‘Do what’s right’
and ‘Lead’
29 10 February 2022
Stora Enso ESG investor presentationSustainability in our funding and reporting
Revolving Credit Facility Green Bond Framework Green Bonds
with a green aspect
Pricing incudes sustainability A loan-format to support Integrated sustainability
component based on ability sustainability-focused fixed agenda to our funding by
to reduce greenhouse gas income investors and to using Green Bond
emissions report environmental Framework
impacts
Sustainable Finance Climate-related financial Integrated reporting
strategy disclosure
The World Business Council for
The aim is to influence and CFO support for better disclosure Sustainable Development (WBCSD)
develop the financial markets of climate risks and opportunities Redefining Value Board and
and to secure funding partners based on recommendations by the programme: work on international
with sustainability agenda Financial Stability Board’s Task reporting frameworks, materiality
Force on Climate-related assessment standards, and data
Financial Disclosures (TCFD) assurance methodologies
30 10 February 2022
Stora Enso ESG investor presentationEU Taxonomy is still in its early days
• Forest industry and its main products are largely
out of the scope of the EU Taxonomy
• Therefore, only a few relevant economic activity
categories to report on
− The most relevant categories for Stora Enso are
forest management in its own forests, manufacturing
of wooden-based materials and components for
improving buildings’ energy efficiency, and bio-based
electricity and heat sales
Proportion of taxonomy eligible activities
Turnover 5%
CAPEX 4%
OPEX 6%
31 10 February 2022
Stora Enso ESG investor presentationOur leading performance in ESG is
recognised
(ESG rating agencies in alphabetical order)
• Climate A-, Forest A- • ESG rating increased
and Water B from AA to AAA (highest
possible score)
• Highest recognition level • ESG rating improved
(Platinum) received from 19.6 to 18.0* out of
40.0
FTSE • ESG rating increased Transition • Top-ranked in both
Russell from 4.1 to 4.2 out of 5.0 Pathway management quality and
carbon
Initiative
• ESG QualityScore • ESG rating improved
highest possible score in VigeoEiris** from 68 to 73 out of 100
Social & Environment
32 10 February 2022 *0 being the highest possible score
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