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Seeing the forest for the trees – redefining value in sustainability terms

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​How can we identify what really matters in a company’s sustainability work? Noel Morrin, Executive Vice President for Sustainability at Stora Enso, and Rodney Irwin, Managing Director for Redefining Value and Education at The World Business Council for Sustainable Development (WBCSD) are on a mission to define the true value of sustainability.

Bringing clarity to complexity

Over the last couple of years, many countries and organisations have introduced new voluntary standards, policies and overlapping initiatives relating to corporate sustainability. Navigating through the jungle of different frameworks can be a mind-boggling task, but Rodney Irwin and Noel Morrin agree that the key is to focus on credible, non-financial reporting and materiality – which means identifying the most relevant sustainability challenges and opportunities.

WBCSD’s Redefining Value program sets out to help companies enhance their sustainability work by developing innovative frameworks and resources. “We aim to bring clarity to the complex landscape and help companies measure, value and report their true value, true costs and true profits,” explains Rodney Irwin. In November 2016, Noel Morrin joined WBCSD’s Redefining Value Board. The Board provides strategic guidance and direction to the work of the Redefining Value program.

Materiality – more than a buzzword

If there is one thing that most sustainability frameworks agree on, it is the importance of materiality. This buzzword has many definitions, but it basically refers to the importance of identifying the economic, environmental, and social impacts of a company’s operations – especially those that are most relevant to stakeholders and which enable the company to realise its strategy and create value.

“One way to define materiality is to ask what a company needs to get right every single time,” explains Morrin. “For Stora Enso this means, for example, treating our employees and the communities around our operations with respect, and playing fair in business. Materiality is very much about common sense and setting priorities.”

The most important aspects of sustainability to Stora Enso are set out in the company’s Sustainability Agenda. Stora Enso has also committed to calculate the company’s ‘Total Contribution to Society’, in order to show how the non-financial elements of our Sustainability Agenda can be valued in financial terms.


Credible sustainability data in demand

The second key to meaningful sustainability work, according to Morrin and Irwin, is the effective reporting of non-financial data. “When the right data is collected, gathered and communicated internally and externally in a consistent way, this can drive better day-to-day decision-making throughout a company,” Irwin says.

“However, there’s still a credibility gap between financial data and non-financial data,” Morrin adds. “This can be seen in the external assurance levels of sustainability reporting. All companies report their financial performance at a level of assurance classed as ‘reasonable’, yet most companies only report their sustainability performance at the lower assurance classification of ‘limited’, or not at all.”

The Stora Enso Group’s annual sustainability reporting has been externally assured since 1998. In 2015, Stora Enso became one of only a small number of companies in the world to achieve ‘reasonable assurance’ for its direct and indirect CO<sub>2</sub> emissions data. Morrin stresses the importance of higher assurance levels: “We will not get investors to take a mainstream interest in sustainability until non-financial data is assured to the same standards as financial data.”

The final key: embedded sustainability

In the end, materiality and credible non-financial reporting are just steps in the right direction. Irwin and Morrin agree that sustainability must ultimately be embedded into everything that companies do, and sustainability specialists cannot achieve this task alone.

“Sustainability can only be the outcome of a carefully thought through business strategy, and not a separate job function, report or department,” emphasises Irwin.