Planet

6 Clean water and sanitation | Icon

Ensure availability and sustainable management of water and sanitation for all.

7 Affordable and clean energy | Icon

Ensure access to affordable, reliable, sustainable and modern energy for all.

13 Climate Action | Icon

Take urgent action to combat climate change and its impacts.

 15 Life on land | Icon

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.

Material issue See targetsSee risk 10

Energy

Background Given the high energy intensive nature of our industry, the cost and availability of energy is a key consideration for the pulp and paper industry.

Our response

Energy self-sufficiency (%)

Employee (Own) and Contractor LTIFR | Graph

We leverage the significant opportunities inherent in our business and processes to help us reduce energy usage and impact:

  • Using a high proportion of renewable energy as a fuel source, most of it self-generated in the form of black liquor
  • Operating combined heat and power (CHP) plants in many of our mills. These plants not only generate electricity but also heat, which is used at the paper machines to dry the paper. Such efficiencies mean our CHP units are twice as energy efficient as conventional power plants
  • Improving the energy efficiency of our mills, and
  • Selling surplus electricity from Alfeld, Ehingen, Gratkorn, Maastricht and Stockstadt Mills in SEU; Cloquet, Somerset and Westbrook Mills in SNA and Ngodwana Mill in SSA.

We track purchased energy costs as a percentage of cost of sales to assess whether we are succeeding in this regard. In 2018, globally energy costs in relation to cost of sales remained stable, largely due to reduced global energy costs in SEU which offset the sharp increase in SSA.

Purchased energy costs as a percentage of cost of sales.

Purchased energy costs as a percentage of cost of sales | Graph

Our focus is on reducing externally purchased power to reduce costs and also on reducing our reliance on fossil fuels. Over time, we have slowly but steadily reduced our use of purchased energy (electricity and fossil fuel) and also reduced specific energy intensity. Globally, over five years, energy self-sufficiency has increased by 5.6%.

In addition, we have increased our use of renewable energy―an approach which ultimately results in a reduction in greenhouse gas (GHG) emissions and has positive economic implications. Our use of renewable energy in 2018 was 46.8%, of which 71.5% was own black liquor. This not only help to reduce GHG emissions, but also separates our operations from the volatility of energy prices. We are committed to increased use of renewable energy, but we are constrained by own black liquor availability which is our main renewable fuel source.

Reduction of specific energy consumption (GJ/adt)

Reduction of specific energy consumption (GJ/adt) | Graph 1 Specific total energy (STE).

Value impact

We acknowledge that our industry is energy-intensive and that we generate GHG emissions, we believe that this is mitigated by the carbon sequestration of the plantations and forests from which we source woodfibre.

Material issue See targetsSee risk 7

Woodfibre certification

Background Forestry and mill Chain of Custody certification assures consumers that the forest products they buy originate from legally harvested and sustainably managed forests and plantations.

Our response

With only 10% of the world’s forests certified, we work hard to expand our certified woodfibre basket and have targets in each region, as well as a global target in place to achieve this. Globally, 75.2% of fibre supplied to our mills is certified.

In SEU, all mills are FSC®- and PEFC™-certified. In SNA, Sappi includes fibre sourced from the Certified Logging Professional and Maine Master Logger programmes. Cloquet, Westbrook and Somerset Mills are FSC-, SFI®- and PEFC Chain of Custody-certified. We source only from controlled, non-controversial sources and 100% of wood and pulp is purchased in according with the SFI Certified Sourcing Standard. The standards we use are a critical element of Sappi’s due diligence for Lacey Act compliance. In South Africa, 100% of Sappi’s owned and managed plantations are FSC-FM-certified, while Ngodwana, Saiccor, Stanger and Tugela Mills and Lomati Sawmill are FSC Chain of Custody-certified.

Stacked wood log image

In SSA, we recognised that we needed to obtain certification over and above the FSC Group Scheme certification, based on the difficulty of getting small growers certified and on customers’ requests for PEFC labelled products. PEFC endorses national certification schemes, which meant South Africa had to develop a new certification scheme including a forest management standard. This is now known as the South African Forest Assurance Scheme (SAFAS). We await the finalisation of our SAFAS certification and as soon as PEFC endorses SAFAS, we will be able to label our woodfibre as being PEFC-certified.

Value impact

  • Ensures strong environmental credentials and promotes environmental responsibility.
  • Enhances reputation.
  • Meets customer needs.
  • While certification undoubtedly adds value, the drive for certification can negatively impact on small growers, who help to promote healthy forest and plantation landscapes, but for whom the costs of certification are onerous.
 

Material issue See risk 7

Climate change

Background The fifth IPCC assessment report indicates that each of the last three decades has been successively warmer at the Earth’s surface than any preceding decade since 1850. The globally averaged combined land and ocean surface temperature data, as calculated by a linear trend, show a warming of 0.85 (0.65 to 1.06) °C over the period 1880 to 2012. Anthropogenic GHG emissions have increased since the pre-industrial era to levels that are unprecedented in at least the last 800,000 years. Their effects, together with those of other anthropogenic drivers, have been detected throughout the climate system and are extremely likely to have been the dominant cause of the observed warming since the mid-20th century. The effects of climate change are already noticeable in changing weather patterns.

Our response

In 2018, there were record high temperatures in Europe. There were also major wildfires in northern England, Sweden and Greece. The 2017 fire year in the United States of America (USA) was one of the most destructive on record and the most expensive in USA history, with damage estimates topping US$10 billion. To date, the damage in the 2018 season has also been extensive, with extreme temperatures across large parts of North America.

While our business is wholly dependent on woodfibre, given SEU’s general risk mitigation strategy of sourcing pulp and woodfibre from a variety of sources and regions, we do not anticipate any material impact to raw material supply from climate change in the short- to medium term. In SNA, our operations do not currently face material risks associated with climate change. With the exception of fibre from Brazil for Westbrook Mill, we source from northern hardwood and softwood baskets that have not suffered under any drought conditions or from fire.

However, the situation is different in SSA, where Sappi Forests owns and leases 379,000 hectares of land, with contracted supply covering a further 129,181 hectares. Climate change has already impacted some of our plantations and has the potential to significantly impact our woodfibre base.

Accordingly, we take concerted action to mitigate the risk, beginning with understanding where the largest risks of climate change will be to Sappi, how climate is likely to change further into the future and to formulate a multi-pronged response which involves:

  • Climate change investigations: To determine which plantations are most at risk, and also to identify which climatic variables are likely to change, as well as the magnitude and direction of such change. A preliminary study showed that maximum temperatures are more likely to increase than minimum temperatures, especially during spring and summer. It is also likely that spring rainfall will decrease, with more high-intensity rainfall during summer. The combined effect of higher temperatures and lower rainfall in spring is likely to exacerbate tree stress, thereby increasing susceptibility to pests and diseases, as well as fire (see Planet – Mitigating climate change).
  • Replacing pure species with hybrids: On the Mpumalanga highveld, Sappi experienced the impact of the changes described above with Eucalyptus (E.) nitens becoming unsuitable due to pest and disease issues, on plantations with the highest risk of climate change. E. nitens has a very narrow ideal temperature range and is very sensitive to changes in temperature. Subsequently, after evaluating management options and associated risks across the entire value chain, the decision was taken to replace E. nitens in KZN by replacing it with E. grandis x E. nitens hybrid varieties.
  • Adjusting and directing our tree breeding strategy: Through the use of modelled future climate data. Traditional tree breeding is a relatively slow process and in order to keep up with environmental changes, Sappi’s tree breeding programme is producing and selecting the most optimally suited hybrid varieties for each climatic zone. Our tree breeding division has a target of developing a hybrid varietal solution for all our sites by 2025. We are also making use of genetic tools, like DNA fingerprinting, to enhance and accelerate their breeding and selection process.
  • Facilitating the production of more rooted cuttings: As pine and eucalypt hybrids are more successfully propagated through rooted cuttings rather than seed, a strategy is being rolled out to meet future requirements. In addition to the recent construction of Clan Nursery and the re-build of the Ngodwana Nursery, we plan to upgrade Richmond Nursery in 2023 to enable the production of additional hybrid cuttings as well as seedlings.
  • Implementing rapid detection techniques: Together with rapid understanding of the relative tolerance/susceptibility of our growing stock to newly introduced pests or disease, these techniques are critical in successfully managing the viability of our woodfibre base. Accordingly, we have instituted a series of Sentinel trials across various climatic regions. These trials are made up of many genotypes―both currently commercially planted and also pre-commercial varieties. In addition to different genotypes, different ages (life stages) of trees are also represented. Using these trials, our objective is to rapidly identify a new pest or disease, and immediately determine which genotypes are susceptible or tolerant, and also which life stage of the tree is impacted. This puts us in a position to react very quickly.

    In addition to these trials, we have recently completed a pilot study on the use of automated change detection using satellite imagery focused on rapidly detecting and reacting to damage―drought, pests, diseases, etc―to our plantations. The study entailed acquisition of Sentinel 2 imagery which gives a new image every five days. Newly acquired images are compared to the previous images via cloud processing using complex change detection algorithms. The resultant change is fed live to the Sappi GIS system, and integrated with enterprise data (age, species, tree size, etc). Given the success of the project, we are now rolling it out to all our plantations, while making use of the higher resolution and daily Planet satellite images (www.planet.com) which offer daily change detection.
  • Long-term soil monitoring: Under hotter and drier climatic conditions, the importance of soil organic matter will increase because of its ability to reduce soil temperature, and also to increase the soil water infiltration rate soil water holding capacity. A major barrier to monitoring slow-changing soil attributes is the scarcity of long-term data sets. Against this backdrop, in 2018, Sappi Forests established long-term soil monitoring plots through a collaborative research project managed by the Institute for Commercial Forestry Research. These monitoring plots will form part of the current inventory plot network (permanent sample plots) and will be used to interpret and relate changes in soil quality parameters to stand productivity and site management.

Value impact

  • Potential to impact our woodfibre base if we do not take concerted action.

Sappi Forests:

  • Rapid response to climatic conditions.
  • Enhanced soil and woodfibre productivity.
  • More sustainable woodfibre base.

Incubated plant | Image

Workers | Image

Critical to the sustainable production of timber is the impact that management operations have on the environment, and specifically the soil in which the trees grow. Because of its effect on physical, chemical and biological properties, soil organic matter exerts a dominating influence on crop productivity and environmental quality. The objective of our long-term monitoring programme is to overcome the scarcity of long-term data sets key to analysing forest site productivity questions.

Long-term monitoring provides an opportunity to assess changes across rotations and is an essential requirement for monitoring attributes that may change slowly or that are cumulative over time. A number of international forestry research organisations and companies have implemented long-term monitoring plots.

During June to August 2018, the first five long-term soil monitoring plots have been initiated on Sappi land holdings through a collaborative research project managed by the Institute for Commercial Forestry research based in Pietermaritzburg.

The goal is to establish 10 twin-plots per year (five on Sappi land and five on land owned by other collaborating members). On one plot, harvest residue will be removed and on the other plot harvest residue will be retained. The inclusion of this treatment will allow evaluation of the effect of biomass removal on growth and soil properties of the sites, providing additional information on site nutritional resilience and will assist with the extrapolation of results from a separate set of nutrient depletion studies.

These monitoring plots will form part of the current inventory plot network (permanent sample plots). Data from this monitoring network will be used to interpret and relate changes in soil quality parameters to stand productivity and site management. More detailed studies will be conducted at selected sites which will be aimed at developing a better understanding of the process that can be used to further refine indicators.

Material issue See risk 7

Water

Background Our operations are highly dependent on the use and responsible management of water resources. Water is used in all major process stages, including raw materials preparation (woodchip washing), pulp washing and screening, and paper machines (pulp slurry dilution and fabric showers). Water is also used for process cooling, materials transport, equipment cleaning and general facilities operations.

Our response

Most of our mills are situated in the vicinity of rivers from which they draw water. Withdrawal from surface sources (mostly rivers) accounts for the largest percentage of water use. This withdrawal is subject to licence conditions in each area where we operate.

The World Resources Institute has identified South Africa and Belgium as having high levels of water stress. We have embarked on a number of water efficiency projects in South Africa and in terms of Saiccor Mill, by having access to the Sappi-owned Comrie Dam where we completed a project to raise the dam wall in 2016 (see Planet – Using water responsibly, for more information and for our response in terms of Lanaken Mill (Belgium).

In Europe, exceptionally low water levels in most of the region’s rivers are not affecting our mills directly, but are having an impact on transport logistics.

In North America, our mills draw water from surface sources (rivers and lakes) and return treated water to the same primary sources. The areas in the two states where our mills operate have been identified as having low levels of water stress.

It is important to note that globally, 95% of the process water we use is returned to the environment. While it is difficult to improve this metric due to the nature of our processes, over five years specific water extracted has reduced by 3.8%.

Lanaken Mill
Lanaken Mill

Water used for pulp and paper production is mostly recycled in the system. However, minerals from woodfibre make it necessary to discharge some amount of water which is purified in high-end waste water treatment facilities.

Water and effluent testing are routinely conducted at mill sites.

Across the group, over five years, we have achieved a positive result in effluent concentration by reducing chemical oxygen demand (COD) by 5.2% and total suspended solids (TSS) by 17.2%. In accordance with previous years, Saiccor Mill has been excluded from the global trend COD reporting. The mill is building up the biodispersion COD dataset, which will be used for future reporting. This value, tested in the marine environment, supports the historical environmental impact studies and the recently conducted biodegradation test, performed on the waste water. The use of this value was also endorsed and used by Quantis for a recent lifecycle assessment (LCA) (see Planet – Improving effluent quality).

In terms of our plantations in South Africa, these are not irrigated and fertiliser use is kept to a minimum―being used only once in each rotation. This limits the potential impact on water sources in terms of nutrient load. In addition, our minimal use of pesticides is strictly controlled by the forest certification systems to which we conform.

Value impact

We do have an impact on water sources from which we draw and return water. However, this has to be offset against the high level of economic value added by our water usage and by the percentage of water (95%) returned to the environment.

Specific water returned to extracted (m3/adt)

Specific water returned to exteracted | Graph

 

On our watchlist

Land restitution

Sappi is currently engaged in 65 land claims in South Africa. Six claims have been settled and the extent of the land agreed, but we are waiting for finalisation from the KZN and Mpumalanga regional land claims commissioners. To date, 20 claims have been agreed to but the extent of the land still has to be finalised with the regional commissioners or claimants. Of the 65 claims, twenty have been referred to court, either because we questioned their validity or the extent of the claim. In the past ten years, we have settled 37 claims involving 8,151 hectares in which claimants took ownership of the land and claims for 11,629 hectares in which claimants preferred to seek compensation.

For many of the land claims in which we have been involved, and where there has been a change in ownership, we continue to buy the timber and help to manage those plantations.

While we support the land claims initiatives generally, we have been frustrated around the implementation of the policies and slow levels of bureaucracy. The forestry industry is a key driver of rural growth. If government could unlock some of the bureaucratic lagging, the attendant benefit will flow directly to rural communities

Social unrest

There have been incidents of social unrest in South Africa, the result of a disaffected population who are protesting about lack of service delivery and job opportunities. Officially, the country’s unemployment is standing at 27.5%. In certain regions of the country, particularly the rural areas, it is much higher.

We played a role in helping to alleviate the situation by spending ZAR8.3 million on upgrading infrastructure in villages close to our forests in 2018. We also promote socio-economic development in rural areas, in particular through our Abashintshi programme (see People – Sharing value) and our enterprise development initiative, Sappi Khulisa (‘Khulisa’ means ‘to grow’ in isiZulu). The latter initiative, which began in 1983, is aimed at community tree farming and has successfully uplifted impoverished communities in KZN and the Eastern Cape. The total area currently managed under this programme amounts to 27,080 hectares. In 2017, under the programme 483,359 tons (2017: 448,221 tons) worth approximately ZAR387 million was delivered to our operations. Since 1995, a total volume of 3,796,940 tons to the value of ZAR2.1 billion, has been purchased from small growers in terms of this programme.

As rotation times, and the associated cash flows in forestry are long, growers receive advances. In addition, qualified extension officers advise on all aspects of tree farming.

In recent years, we have expanded Sappi Khulisa beyond the borders of KZN to the Eastern Cape. We believe the government’s expedition of planting licences in this area where 100,000 hectares are available for planting would play a significant role in promoting rural development.

We are intensifying our focus on enterprise development to cover other areas apart from forestry and have appointed a specialist to drive this forward.