Fossil carbon emissions and resilience to global warming

Summary for 2020 – aligned with the TCFD

 

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As a leading renewable materials company with access to carbon neutral biomass, we are in a unique position to combat global warming. The use of renewable materials enables us to contribute towards a low-carbon economy. Trees in sustainably managed forests absorb carbon dioxide (CO2) from the atmosphere and, together with wood-based products, act as carbon storage. Our products help our customers and society at large to reduce fossil CO2 emissions by providing low-carbon alternatives to solutions based on fossil fuels and other non-renewable materials.

Governance

Combatting global warming is promoted by Stora Enso’s Board of Directors, CEO, and Group Leadership Team (GLT). The CEO has the ultimate responsibility for the successful implementation of our sustainability strategy, including combatting global warming. The work is led by the EVP, Sustainability, who reports to the CEO and is part of the GLT. The Board of Directors’ Sustainability and Ethics Committee oversees the implementation of our sustainability strategy and the ethics and compliance strategy. For more details on our governance see our Corporate Governance Policy.

A resilient strategy

Resilience to global warming is guided by our Energy and Carbon Policy. This ensures a continuous supporting process to develop resilience to global warming for different transition scenarios. Our ambition is to drive down fossil fuel use so that we get as close to zero as possible within the decade using technically and commercially feasible means, and we seek to substitute fossil-based and other non-renewable materials with our renewable products.

Our raw material is renewable, recyclable and fossil-free. Ensuring access to wood fiber from sustainably managed forests is therefore fundamental to maintaining our carbon sinks and our global warming mitigation efforts. Our strategy to future-proof supply includes active management of climate risks in our own and managed forest assets, as well as supporting 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. Stora Enso also maintains a diversity of forest types and structures and enforces diversification in wood sourcing to secure supplies. 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.

Our strategy to support the global warming resilience of production assets focuses on risks and opportunities related to energy supply. It is very important for our operations to secure clean, affordable and safe energy sources for production. We must also continuously increase energy self-sufficiency and reduce energy consumption. Measures include energy efficiency initiatives, the use of carbon-neutral biomass fuels and maximising the utilisation of combined heat and power.

Our aim is to help society at large become more global warming resilient by offering a strong portfolio of low-carbon products based on renewable materials. We aim to leverage our raw materials, market-leading expertise and market insight to ever greater extents to support product substitution of fossil-based materials with our bio-based solutions, which are renewable, recyclable and low-carbon. We are investing in innovation and R&D and increasing sales in new applications, products and services. Our long-term target is to have 15% of our sales to come from new products and services, which would mean us effectively renewing our product portfolio every ten years with low-carbon products.

Risk and opportunity management

To sustain a climate change resilient strategy, it is crucial that we maintain a systematic, holistic and proactive approach to the management of risks and opportunities. Risk management is a core capability and an integral part of all Group activities, securing a risk-aware corporate culture that is fostered in all decision making. Through consistent application of dynamic risk analysis, we realise our competitive advantage.

Our risk management approach is guided by the latest global warming data from the Intergovernmental Panel on Climate Change (IPPC), and their greenhouse gas concentration pathways.

Sensitivity analyses have been used to estimate the order of magnitude of the financial impacts of risks and opportunities1. Our 2020 Enterprise Risk Management results in relation to global warming are summarised in Financials 2020.

Stora Enso published its first TCFD-aligned reporting in the Report of Board of Directors in 2019. During 2020, our work focused on a qualitative scenario assessment for physical climate-related risks and opportunities in the Nordic forests. For more information on Stora Enso’s reporting according to TCFD recommendations, see Financials 2020.

Metrics and target

Our science-based target (SBT) is, by 2030, to reduce fossil CO2 and other greenhouse gas emissions from operations by 31% per saleable tonne of board, pulp, and paper produced, compared to a 2010 baseline.

Our science-based targets have been informed by the IPCC’s ”well below 2 degrees” scenario and the Sectoral Decarbonization Approach (SDA). A key tool in the scenario assessment and the establishment of reduction targets was Stora Enso’s internal Carbon Neutrality Roadmap, which details the reduction opportunities in our mill units for the upcoming years.

We also report our key metrics and targets related to our sustainable use of wood, energy and water in the Sustainability section of the Report of the Board of Directors in Financials 2020.

2020 highlights

  • In 2020, our CO2-e emissions per saleable tonne of board, pulp, and paper were 26% lower than the 2010 benchmark level (25% lower in 2019). During 2020, our performance was positively affected by the less fossil-intensive electricity purchased for our mills in Finland as well as energy efficiency improvements and further reductions of fossil fuel use at several mills.
  • By substituting fossil-based materials, Stora Enso’s products saved an estimated 18 million tonnes of CO2 in 2019, which is comparable to the average annual CO2 emissions of 5 million cars.
  • Stora Enso issued its first Green Bonds in February 2019. In April 2020, we issued a new five-year SEK 1.7 billion green bond and a volume increase to the same bond in June 2020, with the total size of SEK 3.4 billion. In November 2020, we issued our first euro green bond with a ten-year maturity and EUR 500 million in size. By the end of 2020, the total amount of Stora Enso’s outstanding green bonds amounted to EUR 1 506 million (EUR 670 million in the end of 2019). 
  • Our total energy self-sufficiency rate was 67%2 in 2020 (67% in 2019). The share of biomass in internal energy production was 82% (82%).
  • Our central energy and water efficiency investment fund is another important part of our work. In 2020, this fund amounted to EUR 7 million (EUR 10 million in 2019) and was earmarked for energy efficiency investment projects at our mills. We estimate that the projects generate annual energy savings of at least 123 GWh.
  • We began using sustainability criteria in the tendering phase of our sourcing process in 2018. As part of the criteria, suppliers now need to respond to a set of questions about their CO2 emissions, contributing to our science-based targets. These criteria are part of every tender, regardless of previous contracts with the same supplier.
  • Drivers for sustainable profitable growth include next-generation packaging solutions, micro-fibrillated cellulose (MFC), bio-barriers, bio-composites, dissolving pulp, building components and systems, lignin, and future bio-based chemicals. These are all products which provide alternatives to fossil-based materials.  

External recognition

  • In February 2021, the Transition Pathway Initiative (TPI)3 assessed how 23 paper producers globally are preparing for the transition to a low-carbon economy. For the fourth time in a row, Stora Enso was top-ranked in both management quality and carbon performance.
  • The international non-profit organisation CDP has included Stora Enso on its 2020 Climate List, which identifies the global companies that are taking leadership in climate action.

 

1. Sensitivity analyses for wood, energy, products, and significant assumptions have been published in Financials 2020.
2. Includes electricity from Pohjolan Voima Oyj (PVO), where Stora Enso is a minority shareholder, is considered as own electricity production in the figures
3. Asset owner-led initiative supported by Grantham Research Institute and London School of Economics.

TCFD (The Task Force on Climate-related Financial Disclosures)

Quick links

Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden construction and paper. We employ some 23 000 people and have sales in more than 50 countries and our shares are listed on the Helsinki (STEAV, STERV) and Stockholm (STE A, STE R) stock exchanges.

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