The challenges and devastations of climate change, alongside growing populations and increasing consumption, are putting a enormous pressure on the world’s natural resources as well as society.
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Global leaders are focusing on, among other things, delivering against limiting global warming to 1.5-degrees. Countries as well as companies should have proof of actions that will deliver this goal. However, there is still a gap that the UN has identified: the current trajectory is moving towards close to 3 degrees or at best 2.5 with all current pledges.
It’s clear that urgent actions are needed to strengthen implementation and close the gap with a common aim to create a resilient planet. What is hazy are the best and most viable paths of execution – reduction of energy consumption, greener infrastructures and equipment, smarter supply chains and transport, recycling and reuse, protection of communities and habitats and measure, measure, measure. Alongside global leaders, these are steps Stora Enso is already taking.
We categorically share the ambition to curb climate warming, however, propose that the conversation could be changed. 192 countries plus the European Union have joined the Paris Agreement. Companies and investors are showing an ever-growing commitment, and younger generations are demonstrating an iron will to fight climate change.
Today, most of the conversation focuses on what we should do less of, reduce or completely stop. While that is important, it will not create a future climate-resilient economy where 10 billion people can prosper. We need to also focus on what we should do more of, what we need to invest in and scale. We know this, to a large extent, when it comes to energy – but it also implies a material transition, a food system transition and an entirely new way of building and developing urban areas.
Stora Enso’s foundation is sustainable forestry and creating renewable products and solutions that serve ever-increasing societal needs. Products from trees store carbon and can have multiple lifetimes. Fiber-based packaging is a strong viable alternative to fossil-based plastic. Wooden building provides a new model in creating a better carbon equation in the raw material, construction process and carbon capture.
Innovation in biomaterials is picking up pace to provide solutions that can, for example, replace energy-intensive graphite in electric batteries.
Renewable materials have significant benefits for society. As companies already today are choosing to replace fossil-based materials, Stora Enso prevents millions of tons of CO2e from entering the atmosphere annually. Our business and success depends on our ability to respond to global challenges with our forests and our renewable solutions.
Climate change can change patterns of temperature, wind and rainfall. Well-managed forests can make entire ecosystems more resilient to negative impacts of climate change, and benefit from positive ones. Forest health and growth must be ensured by managing forests sustainably throughout the forest life cycle.
Sustainably managed forests are fundamental to maintaining our carbon sinks and our climate change mitigation efforts. We actively manage climate risks in our own and managed forest assets, and support our suppliers’ work in sustainable forest. For instance, diligent eucalyptus plantation planning is used to avoid frost-sensitive areas, and tree breeding and R&D programmes are applied to increase tolerance to extreme temperatures. We maintain diverse forest types and structures and enforce diversification in wood sourcing. In addition, we have developed technical solutions to adapt wood harvesting and transportation to changing conditions, such as soft soils caused by milder winters in Northern Europe. In 2020, we developed a scenario analysis with qualitative assessment of physical climate impacts on the Nordic forests and our business until 2050, based on the business-as-usual scenario by the International Panel for Climate Change (RCP 8.5 scenario) that would deliver a temperature increase of 4–5 degrees Celsius by the end of the century.
The climate change attributes considered were pests, diseases, droughts, wildfires, floods, periods of frost, water scarcity, changes to precipitation patterns, rise in sea level and changing temperatures. In 2021, the work with physical climate impacts continued by a deeper analysis of measures improving resiliency of the forests against the negative impacts of global warming. Results show that sustainable forest management practices as well as possibilities to monitor and react to events such as forest fires and diseases play an important role in mitigating the negative impacts of climate change.
During 2021, Stora Enso assessed the business impacts for 2030 according to the global transition scenario required to limit the global average temperature increase in line with the Paris agreement of 1.5 degrees (RCP 1.9). The assessment was done utilising the transition risk and opportunity categories in the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The scenarios showed that potential new regulations and market mechanisms could impact Stora Enso’s operating costs by limiting wood harvesting volumes or forest management practices. These potential regulations and market mechanisms could also increase costs for greenhouse gas emissions and energy.
During 2022, a quantitative resilience analysis was conducted for tree plantations in South America against three global Shared Socioeconomic Pathway (SSP) scenarios: SSP1-1.9 (Sustainability – Taking the Green Road), SSP2-4.5 (Regional Rivalry – a Rocky Road) and SSP5-8.5 (Fossil-fuelled Development – Taking the Highway). Results show a relative resilience of Stora Enso's tree plantations in all the three scenarios. Financial impacts are not expected to be material in SSP1-1.9 and SSP2-4.5 scenarios but in SSP5-8.5 scenario the growth conditions of tree plantations would be affected resulting in potentially material financial impacts. Stora Enso's disclosures with reference to TCFD recommendations are listed in an index table with references to those locations where these issues are addressed in the Group's annual reporting.
