CDP 2015 Climate Change 2015 Information Request · 2016. 9. 8. · Dissolving wood pulp is...

CDPCDP 2015 Climate Change 2015 Information RequestSappi

Module: Introduction

Page: Introduction

CC0.1

IntroductionPlease give a general description and introduction to your organization.

Sappi is a global pulp and paper company operating in a number of countries. The company is split into three regions: South Africa, Europe and North America. Thenature of the operations differs substantially in each region with respect to the management of GHG emissions. Globally Sappi works closely with customers, bothdirect and indirect, in over 100 countries to provide them with paper, paper-pulp, speciality- and packaging paper, as well as dissolving wood pulp products andrelated services and innovations. All of these are based on woodfibre, a renewable natural resource grown in sustainably managed forests and plantations. Sappi’smarket-leading range of paper products includes: coated fine papers used by printers, publishers and corporate end-users in the production of books, brochures,magazines, catalogues, direct mail and many other print applications; casting release papers used by suppliers to the fashion, textiles, automobile and householdindustries; and in the Southern African region the paper grades include newsprint, uncoated graphic- and business papers, premium quality packaging papers,security papers and paper grade pulp. The paper pulp needed for the group’s products is either produced within Sappi or bought from accredited suppliers.Dissolving wood pulp is produced by Sappi Southern Africa and Sappi North America and is used worldwide by converters to create viscose fibre, acetate,pharmaceutical products as well as a wide range of consumer products. Across the group, Sappi is close to “pulp neutral”, meaning that we sell almost as much pulpas we buy. The Sappi group has:

• 13 064 employees in 20 countries• Sales in over 100 countries• Manufacturing operations on 3 continents• Paper production capacity of 5. 6 million tons per annum• Paper pulp production capacity of 3.7 million tons per annum• Dissolving wood pulp production capacity of 1.3 million tons

In FY2014:• Sappi North America (SNA)accounted for 25% of our sales• Sappi Europe (SEU) accounted for 51% of our sales• Sappi Southern Africa (SSA) accounted for 24% of our sales

The responses below need to be seen in the context of Sappi being a global company operating in a number of countries and regions, all of which have diverseregulations relating to emissions and climate change. For the company as a whole there is therefore no one single strategy, approach or conclusion to achieve ouroverall long-term commitment of reducing our GHGs. Unless otherwise indicated, all the data given hereunder refers to the Sappi 2014 reporting year. Thiscommences on 1 October 2013 and ends on 30 September 2014.Acronyms:• AF&PA: American Forests and Paper Association• AEII Alliance of Energy Intensive Industries• BAT Best available technology• BUSA Business Unity South Africa• CC: Climate Change• CDM: Clean Development Mechanism (Kyoto Protocol)• CEPI: Confederation of European Paper Industries• COP21: 21st Conference of the Parties• DWP Dissolving wood pulp• EPA US Environmental Protection Agency• EU: European Union• EU ETS: European Union Emissions Trading Scheme• EXCO: Executive Committee• FICAT Forestry Industry Carbon Assessment Tool• GHGs: Greenhouse gases• GJ: Giga joule• GMO: Genetically modified organism• GTMT: Group Technology Management Team• IPCC: Intergovernmental Panel on Climate Change• KAM Kretsloppsanpassad Massafabrik• NA: North American (USA) Sappi operations• NBI: National Business Initiative (South Africa)• NCASI: National Council for Air and Stream Improvement.• PAMSA: Paper Manufacturers Association of South Africa• PAPTAC Pulp and Paper Technical Association of Canada• RSC: Regional Sustainability Council• SEU: Sappi Europe• SNA: Sappi North America• SSA: Sappi Southern Africa• TAPPI Technical Association of Pulp and Paper Industries• Ton: Metric ton• TPA Tons per annum

CC0.2

Reporting YearPlease state the start and end date of the year for which you are reporting data.The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first.We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reportingyear if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have beenoffered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reportingperiods here. Work backwards from the most recent reporting year.Please enter dates in following format: day(DD)/month(MM)/year(YYYY) (i.e. 31/01/2001).

Enter Periods that will be disclosed

Tue 01 Oct 2013 - Tue 30 Sep 2014

CC0.3

Country list configuration

Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward to assistyou in completing your response.

Select country

GermanyAustriaBelgiumUnited States of AmericaNetherlandsSouth AfricaFinland

CC0.4

Currency selection

Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency.

USD($)

CC0.6

ModulesAs part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or autocomponent manufacture sub-industries, companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors andcompanies in the food, beverage and tobacco industry group should complete supplementary questions in addition to the main questionnaire.If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below butwill automatically appear in the navigation bar when you save this page. If you want to query your classification, please email [email protected] you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If youwish to view the questions first, please see https://www.cdp.net/en-US/Programmes/Pages/More-questionnaires.aspx.

Further Information

Module: Management

Page: CC1. Governance

CC1.1

Where is the highest level of direct responsibility for climate change within your organization?

Board or individual/sub-set of the Board or other committee appointed by the Board

CC1.1a

Please identify the position of the individual or name of the committee with this responsibility

The Social, Ethics, Transformation and Sustainability (SETS) Committee, a statutory board committee, has final responsibility for climate change. The SETScommittee has an independent role with accountability to the Board. The role of the SETS Committee is to assist the Board with the oversight of sustainability issueswithin the company and to provide guidance to management’s work in respect of its duties in the fields of social, ethics, sustainability and transformation. In eachregion where Sappi operates, climate change-related responsibilities form part of the function of the Regional Sustainability Councils (RSC) in North America,Europe and South Africa. These RSCs feed into the Global Sustainability Council which in turn reports to the SETS Committee.

The individual within Sappi with the highest responsibility for climate change is the Group Head Technology who reports directly to the Group CEO.

CC1.2

Do you provide incentives for the management of climate change issues, including the attainment of targets?

No

CC1.2a

Please provide further details on the incentives provided for the management of climate change issues

Who is entitled to benefit fromthese incentives? The type of incentives Incentivized

performance indicator Comment

Further Information

Page: CC2. Strategy

CC2.1

Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities

Integrated into multi-disciplinary company wide risk management processes

CC2.1a

Please provide further details on your risk management procedures with regard to climate change risks and opportunities

Frequencyof

monitoringTo whom are results

reported?Geographical areas

considered

How far intothe future are

risksconsidered?

Comment

AnnuallyBoard or individual/sub-setof the Board or committeeappointed by the Board

Regions in which Sappioperates and from whichit sources fibre.

3 to 6 years

The Global Risk Cluster presents key risks on an annual basis to theSappi Global- and Regional Executive Committees, the GroupTechnology Management Team and the Group Risk ManagementTeam, which in turn reports regularly on risks to the audit committeeand the Board.

CC2.1b

Please describe how your risk and opportunity identification processes are applied at both company and asset level

At a company (group) level, the Regional Risk Management Councils meet bi-annually to identify, assess and discuss risks. The top risks are then identified andplotted on a graph in terms of likelihood and severity. Risks, including indirect climate change risks, are monitored and publicly reported on annually. We currentlyhave a general process for determining materiality and priorities of all Sappi’s risks. Climate change risks considered include regulatory, reputational, weatherrelated (fire and pests), forest management, operational resource management (water, energy), licence to operate and customer behavioural change.

At asset (regional and operating unit e.g. mills) level, risks pertaining to that specific asset are assessed and mitigation actions are managed by the managementteam of that specific asset. The risks to assets are reviewed on a six-monthly basis by the management team responsible for the asset and all major assets arecovered by insurance. On an annual basis, the risks associated with Sappi’s non-forestry assets are reviewed by external consultants who visit each operationinclusive of Sappi’s warehouses. The results of these reviews are converted to mitigation action plans, if required. The results of these reviews are used togetherwith the internal survey results of the company’s forestry assets, to buy insurance to mitigate risk as required.

CC2.1c

How do you prioritize the risks and opportunities identified?

Climate change risk and opportunity factors such as regulatory, reputational, weather related (fire and pests), forest management, operational resourcemanagement (water, energy), licence to operate and customer behavioural change are assessed together with other non-climate change related risks and areplotted bi-annually on a risk matrix according to the probable severity of the monetary impact and the likelihood of occurrence, to determine possible risk exposure.The risk matrix is updated bi-annually.

CC2.1d

Please explain why you do not have a process in place for assessing and managing risks and opportunities from climate change, and whether you planto introduce such a process in future

Main reason for not having a process Do you plan to introduce a process? Comment

CC2.2

Is climate change integrated into your business strategy?

Yes

CC2.2a

Please describe the process of how climate change is integrated into your business strategy and any outcomes of this process

Sappi’s strategy encompasses three broad themes:•Growing Sappi’s existing high margin businesses by increasing its customer base and product portfolios in Sappi’s three key business areas:-Specialised cellulose

-Packaging-Speciality paper

•Optimising and improving the profitability of the mature graphic paper business.•Developing complementary industrial products and processes.

Key to this strategy is the reduction of input costs. Sappi is seeing a downward trend in energy costs as a percentage of cost of sales due to actions we have taken.However, energy is still one of Sappi’s key inputs, together with woodfibre, chemicals and water. Aggressively managing energy-use and increasing energyefficiency, positively impact profitability and environmental performance with reduced emissions and a smaller carbon footprint. Globally, Sappi’s use of renewableenergy, mostly black liquor, increased to approximately 54%, an increase of 10.8% over five years. In FY 2014, globally enhanced energy efficiency and greater useof own renewable fuels resulted in a decrease of specific purchased energy of 16.5%.

Rising energy prices, potential carbon taxes in South Africa, costs associated with emission rights, consumer concerns about global warming, the potential impact onwater and fibre supply – among Sappi’s key inputs – in each region have influenced Sappi’s business strategy in a direction which favours climate changeremediation and which seeks to maximise the use of renewable energy, thereby reducing the usage of fossil fuels – one of the major causes of climate change.

In addition, Sappi’s plantation assets are a growth pillar of the company’s strategy. Forest research is being conducted into species improvement in order tomaximise yield under different climate change scenarios. Trees use water and sunlight to convert CO2 into carbohydrates, through the process of photosynthesis toprovide energy and the building blocks for growth. Carbon removed from the atmosphere is effectively stored in plant material and wood, i.e. trees act as carbonsinks. Consumer concerns about global warming have given Sappi the opportunity to develop and market ‘green’ products.

In the short term (i.e. less than five years), the most important components of Sappi’s strategy are the opportunity to reduce energy costs and take advantage ofcogeneration opportunities. With energy costs rising over time, it makes sense for Sappi to aggressively manage energy usage and promote the use of renewableenergy. Globally, 54% of energy used in Sappi’s mills is derived from renewable sources – an increase of 10.8% over five years. Over five years, specific Scope 1and 2 emissions have reduced by 7.5% and 25.6% respectively.

In the long term (i.e. more than five years), Sappi aims to reduce its carbon footprint by improving energy efficiency and decreasing its reliance on fossil fuels. Sappihas, and will continue to achieve this by making process changes, installing Best Available Technology (BAT) which is more energy efficient, reducing purchasedenergy (electricity and fossil fuel) by increasing our use of renewable energy – an approach that ultimately results in a reduction in CO2 emissions.

Sappi’s strategy includes seeking growth opportunities by producing innovative performance materials from renewable resources. Accordingly, the group’s treeimprovement research focuses on improving sustainable supply of wood fibre. Sappi’s announcement in 2015 that it would be building a pilot-scale plant for low-costCellulose NanoFibrils (nanocellulose or CNF). Products produced using Sappi’s CNF will be optimally suitable for conversion in lighter and stronger fibre-reinforcedcomposites and plastics, in food and pharmaceutical applications, and in rheology modifiers as well as in barrier and other paper and coating applications.Lightweight products are important in view of the impact on climate of transporting heavier products.

In addition, Sappi believes that climate and food security risks will affect cotton availability in the future. As dissolving wood pulp (DWP) is a raw material used in themanufacture of viscose, a direct competitor to cotton, the group has identified DWP as a high growth, high margin business of the future. In 2013, the groupsuccessfully commissioned two projects to expand DWP capacity from 800 000tpa to 1,34m tpa.

There is a high level of consumer awareness, in all regions where Sappi operates, of the need to reduce fossil fuel emissions. In Sappi North America, use ofrenewable energy currently stands at approximately 80% which is a significant competitive benefit not just in terms of costs, but also in terms of customers choosingpapers with a lower environmental footprint (the industry benchmark in this region is 62%). Globally, Sappi’s use of renewable energy stands at 54% - an important

strategic advantage in terms of marketing and in the light of possible carbon taxation and/or carbon levies.

Sappi’s leading position in the dissolving wood pulp market gives it an edge over our competitors in this segment.

While driven by economic, rather than climate change considerations, Sappi has focused on reducing energy costs/emissions for some time now: Globally Sappi isoperating five hydro, two gas and 31 steam turbines which generates around 800MW of renewable power on 14 sites across seven countries.The South African Government’s Renewable Energy Independent Power Producer Programme (REIPPPP) is the result of the Government’s need to increaseenergy capacity and reduce carbon emission. Sappi submitted the Energy Biomass Project Ngodwana Mill in Mpumalanga province, South Africa to REIPPP andwas selected as preferred bidder. The project involves the supply of biomass from local plantations to Ngodwana Mill and using the biomass as fuel to a boiler andproducing steam to generate 25MW of electrical energy which will be fed into the national grid.During 2014, Sappi’s Somerset Mill in North America completed a US$24 million conversion of the lime kiln (an integral component of the chemical recoveryprocess) to use natural gas. Natural gas has replaced #6 fuel-oil previously used in the lime kiln, equivalent to 80,000-100,000 barrels of oil per year. Carbon dioxideemissions from natural gas are 30% lower than fuel-oil equivalent energy. Additional enhancements to the lime kiln have improved the overall efficiency therebyfurther reducing total energy consumption.

Sappi has taken the decision to understand the challenges and risks of GMO tree crops as Sappi’s competitors in the wood fibre space have started utilising thetechnology. While Sappi sees potential environmental, social and reputational risks with GMO’s, it also sees GMO’s as a potential method to adapt its plantations toa potentially rapidly changing climate and as a renewable source of chemicals, energy and fibre.

CC2.2b

Please explain why climate change is not integrated into your business strategy

CC2.2c

Does your company use an internal price of carbon?

No, but we anticipate doing so in the next 2 years

CC2.2d

Please provide details and examples of how your company uses an internal price of carbon

CC2.3

Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all thatapply)

Trade associationsFunding research organizationsOther

CC2.3a

On what issues have you been engaging directly with policy makers?

Focus of legislation Corporate Position Details of engagement Proposed legislative solution

CC2.3b

Are you on the Board of any trade associations or provide funding beyond membership?

Yes

CC2.3c

Please enter the details of those trade associations that are likely to take a position on climate change legislation

Trade association

Is yourposition

on climatechange

consistentwith

theirs?

Please explain the trade association's position How have you, or are you attempting to, influence theposition?

American Forestsand PaperAssociation (AF &PA)

Consistent

Over the last few years, the US Environmental ProtectionAgency (EPA) has been drafting an accounting frameworkfor biogenic carbon dioxide (CO2) emissions that AF & PAbelieves should establish this industry’s use of biomass ascarbon neutral and distinguish biomass emissions fromfossil fuel emissions. Towards the end of 2014, the EPAreleased the accounting framework and policymemorandum. This recognises the industry’s use ofmanufacturing residuals as carbon neutral – a decisionSappi has been welcomed.

By supporting AF & PA’s position through Mark Gardner,CEO and President of Sappi North America who is thechairman of AF&PA. (as from January 2015)

Confederation ofEuropean PaperIndustries (CEPI)

Consistent

The Renewable Energy Directive sets binding targets for EUMember States. To reach these binding renewable energytargets, Member States have put in place financialincentives (e.g. green certificates or feed-in tariffs). Thesupport for the direct burning of wood to create renewableenergy increases pressure on wood markets. While CEPI isa strong supporter of renewable energy, it does not supportthe direct use of wood for energy. A study shows that thewealth creation in the pulp and paper industry value chain ismainly market driven and five times that of the energyalternative (and provides seven times more jobs).

Through proactive and public support by the CEO of SappiEurope, Berry Wiersum, who is on the CEPI board.

Bio-basedIndustriesConsortium (BIC)

Consistent

Through financing of research and innovation projects, theBBI will create new and novel partnerships across sectors,such as agriculture, agro-food, technology providers,forestry/pulp and paper, chemicals and energy. The aim ofthe BBI is to use Europe's untapped biomass and wastes asfeedstock to make fossil-free and greener everydayproducts.

Sappi believes that this public-private partnership structureincreases the likelihood for more sustainable Europeanindustry.

Alliance of EnergyIntensive Industries Consistent

The European Union is proposing the phasing out ofprovisions against carbon leakage and free allocation ofcarbon credits post 2021.

Sappi shares the view that here should be no direct andindirect cost at the very least at the level of most efficientEuropean installations in sectors at risk of carbon leakage.The effect of the cross sectoral factor (CSCF) is that even thebest performers cannot achieve these levels due toeconomic, technical or thermo-dynamical limits. Ignoring this

Trade association

Is yourposition

on climatechange

consistentwith

theirs?


turns the EU ETS into a penalty system and simply causescarbon leakage.

CEPI Consistent

The European Union has proposed the removal of supportfor co-firing of wood in coal plants which only produceelectricity. The subsidies for the direct burning of wood tocreate renewable energy increase pressure on woodmarkets and distort them.

Sappi concurs with CEPI’s view that the current averageefficiency of coal plants is between 30% and 35%. Burningwood, the main biomass source, in coal plants at theseefficiencies is a waste of raw material, not a climate reductionmeasure. The same applies to biomass fired power stationswithout combined heat and power throughout the year.

PaperManufacturers’Association ofSouth Africa(PAMSA)

Consistent

The South African government appears adamant thatcarbon tax will be implemented in 2016. The impact to Sappiwill be in the region of US$12.12 million in 2016 (with a taxshield of 65%).based on 2015 half year CO2 emissions(This includes Scope 2 carbon tax, i.e. indirect charge-through by the state power utility, Eskom).

Sappi has engaged the Department of National Treasury viaour industry representative, PAMSA), to motivate the carbontax design to incorporate rebates for carbon sequestration.Sappi’s process starts with the planting of trees and our totalsupply chain is carbon neutral. In addition, PAMSA is drivingthe development of a local factor to input into the carbonaccounting method that applies to the unique circumstancesof plantation forestry in South Africa. The initiative is beingdeveloped in conjunction with the Department ofEnvironmental Affairs and local research institutions, and issupported by a portion of the grant allocated to sectorresearch and development, supplied by the Department ofScience and Technology. As a PAMSA member, we areactively driving the development of the methodology which issubject to approval from the Department of EnvironmentalAffairs. The department will then make a recommendation toNational Treasury on the extent to which paper companiescan counter their fossil fuel-based greenhouse gas emissionswith plantation carbon absorptions. This research is likely onlyto be completed by the end of 2015. Should NationalTreasury accept PAMSA’s premise that the pulp and paperindustry’s absorptions exceed its emissions; the industrymight be available to avail itself of carbon emissionabatements – as distinct from offsets.

Trade association

Is yourposition

on climatechange

consistentwith

theirs?


National EnergyEfficiency Accord Consistent

In South Africa, Sappi is a signatory to the National EnergyEfficiency Strategy which stipulates a national final energydemand reduction of 12 % by 2015, expressed as apercentage reduction against the projected national energyuse in 2015, with a final energy demand reduction target forthe industry and mining sector as a whole of 15 % by 2015.

Sappi’s regional energy efficiency target “Reduce specificpurchased fossil fuel energy by 15 % by 2015 (base year:2000)” is aligned with this strategy.

Business UnitySouth Africa(BUSA)

Consistent

There are three issues at stake: i) South Africa’scommitment to the United Nations Framework on ClimateChange (UNFCC), on the table at COP 21 in Paris later thisyear; (ii) Carbon tax and (iii) carbon budget (emissionscap) i) UNFCC BUSA is concerned that developed countrycommentators and negotiators who advocate greater actionfrom developing counties show very little understanding ofthe realities that face developing countries, such as SouthAfrica, nor of the energy realities that are required forsustaining economic growth and raising standards of livingin such economies. The economic realities of theseeconomies are that they, for the foreseeable future, requiresecurity of supply of electricity at the most cost effectivepossible prices in order to raise their economic growth ratesand thereby their standards of living in a modern competitiveglobal economy. Given the current economic climate, BUSAsees no reason for South Africa, which faces significantdevelopmental challenges and contributes less than 1% tototal global emissions, to take a lead in climate changemitigation by being one of the few countries, and the firstdeveloping country, to introduce a carbon tax, particularly inthe light of the fact that the earliest date of implementation ofan international agreement will be 2020. ii and iii) Carbontax and cap South Africa is unique in attempting tointroduce two distinct mitigation approaches. Adoption ofthis dual system without alignment will result in double costsfor companies South Africa’s priorities are job creation andaddressing income inequality, which are both premised on

Involved through our membership of BUSA and ourparticipation in engagement with the Department of Tradeand Industry.

Trade association

Is yourposition

on climatechange

consistentwith

theirs?


economic growth. Business believes that a balancedapproach between the need for “greener growth” and theneed for labour creating economic growth advocated in theNew Growth Path should be reflected in a more cautiousapproach to the imposition of a carbon tax.

CC2.3d

Do you publicly disclose a list of all the research organizations that you fund?

No

CC2.3e

Do you fund any research organizations to produce or disseminate public work on climate change?

Yes

CC2.3f

Please describe the work and how it aligns with your own strategy on climate change

Sappi North America is a member of The Agenda 2020 Technology Alliance. This collaboration promotes the development of new technologies for the paper andforest industry through collaborative R&D programmes financed in part with public funds. The technology roadmap for this programme covers the following areas:

- Reducing energy consumption and carbon emissions- Reducing water intake in mills- Assuring supplies of sustainably-grown wood- Getting more value from woody biomass

- Enabling new products and product features- Improving reuse of waste paper and wood products

Sappi Forests is a founding member of the Tree Protection Co-operative Programme (TPCP) based in the Forestry and Bio-technical Institute (FABI:http://www.fabinet.up.ac.za/) at the University of Pretoria. Through the TPCP we are also members of the internationally collaborative programme BiCEP (BiologicalControl of Eucalyptus Pests) (http://bicep.net.au/) at the Australian Centre for Industrial and Agricultural Research (ACIAR).

We also belong to the Eucalyptus Genome Network (EUCAGEN) based at the University of Pretoria. Sappi is a founding member of the Two Sides campaign inEurope, Australia, South Africa, Brazil and the USA. This is aimed at exposing the myths and highlighting the realities of using paper.

Since 2009, Sappi North America has participated in the US Environmental Protection Agency’s (EPA) SmartWay® Transport Partnership aimed at helpingbusinesses move goods in the cleanest, most efficient way possible.

CC2.3g

Please provide details of the other engagement activities that you undertake

Sappi participated as a member in the General Assembly of the Forest Stewardship Council® (FSC®)*, held in September 2014. In North America, Sappi is amember of the economic chamber of both FSC®* US and SFI®. As such we actively engage with these organisations through a variety of working groups andcommittee activities. In South Africa, Sappi is a member of the local WWF organisation as well as FSCTM and provides support across a number of projects toBirdlife South Africa.

In North America, the Sustainability Customer Council is made up of Sappi customers, representing multiple customer segments of the coated papers and releasepapers business, including merchants, printers, publishers, corporate paper buyers and graphic designers. In semi-annual meetings, the Council provides valuableinput on emerging issues.

CC2.3h

What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climatechange strategy?

At the Regional Sustainable Development Councils (Europe, North America and South Africa), Global Sustainable Development Council and the Social EthicsTransformation and Sustainability (SETS) committee meetings, policy and legislative items that can or do affect the sustainability of Sappi’s business, includingclimate change, are discussed and appropriate actions are agreed.

CC2.3i

Please explain why you do not engage with policy makers

CC2.4

Would your organization's board of directors support an international agreement between governments on climate change, which seeks to limit globaltemperature rise to under two degree Celsius from pre-industrial levels in line with IPCC scenarios such as RCP2.6?

Yes

CC2.4a

Please describe your board's position on what an effective agreement would mean for your organization and activities that you are undertaking to helpdeliver this agreement at the 2015 United Nations Climate Change Conference in Paris (COP 21)

This would mean continued focus on energy efficiency and Sappi already supports various industry and business groupings (such as NBI, BUSA etc.) that lobby forjust such an agreement.

Further Information

Page: CC3. Targets and Initiatives

CC3.1

Did you have an emissions reduction target that was active (ongoing or reached completion) in the reporting year?

Absolute and intensity targets

CC3.1a

Please provide details of your absolute target

ID Scope% of

emissions inscope

% reductionfrom base year

Baseyear

Base yearemissions

(metrictonnes CO2e)

Targetyear Comment

Abs1 Scope1+2 60% 24% 2000 4106040 2015

The South African target follows an SA industry initiative toachieve a 15% reduction in specific purchased fossil fuelsby 2015.

CC3.1b

Please provide details of your intensity target

ID Scope% of

emissionsin scope

%reductionfrom base

yearMetric Base

yearNormalizedbase yearemissions

Targetyear Comment

Int1 Scope1+2 31% 3.9%

metric tonnesCO2e permetric tonne ofproduct

2011 0.531 2017

Sappi Europe’s 2017 target is the reduction of specific directfossil CO2 emissions (i.e. kg of CO2 per tonne of sold pulp andsaleable paper), as well as reducing purchased poweremissions (calculated at 400g/kWh), by 5%. Increase inemissions mainly due to reduced productions in EU.

Int2 Scope1+2 9% 0%

metric tonnesCO2e permetric tonne ofproduct

2011 0.293 2016 Reduce the amount of total energy expended in making eachton of product by 10% by 2016.

CC3.1c

Please also indicate what change in absolute emissions this intensity target reflects

ID

Direction ofchange

anticipated inabsolute Scope1+2 emissions

at targetcompletion?

% changeanticipated in

absolute Scope1+2 emissions

Direction ofchange

anticipated inabsoluteScope 3

emissions attarget

completion?

% changeanticipated in

absolute Scope3 emissions

Comment

Int1 Decrease 8.5 No change 0Due to major projects planned in near future for Sappi Europe, emissionsare expected to stabilize. Scope 3 emissions not being reported in detail yetand no Scope 3 target exists.

Int2 Decrease 1.8 No change 0Sappi North America is focused on achieving a 10% energy reduction targetwhich includes reduction of both fossil and renewable fuels. Scope 3emissions not being reported in detail yet and no Scope 3 target exists.

CC3.1d

For all of your targets, please provide details on the progress made in the reporting year

ID%

complete(time)

% complete(emissions) Comment

Abs1 93% 100%Sappi Southern Africa has exceeded its emission reduction targets due to the positive impact of two significantexpansion/upgrade projects at Saiccor and Ngodwana mills. Sappi is investigating renewable energy generationopportunities and these projects should come on stream in two – three years’ time.

Int1 50% 78%

Sappi Europe’s 2017 target is the reduction of specific direct fossil CO2 emissions (i.e. kg of CO2 per tonne of sold pulp andsaleable paper), including purchased power emissions (calculated at 400 g/kWh), by 5%. The increase of integrated pulpproduction has helped Sappi to reduce specific CO2 emissions by 3.9%. In 2014 Sappi achieved the ISO 50001 energymanagement standard certification at all its European mills. Sappi has successfully implemented numerous energy savingsprojects that have all contributed to this achievement. Further improvement projects are planned for 2015.

Int2 60% 0%Sappi North America has initiated significant changes to its operating strategy since establishing its 2011 baseline. AtCloquet Mill, Sappi converted the pulp mill to manufacture dissolving wood pulp in 2013. In 2014 Sappi began runningcampaigns between both kraft pulp for internal consumption on its paper machines as well as dissolving wood pulp for

ID%

complete(time)

% complete(emissions) Comment

market sales. At Somerset Mill Sappi has also reduced the amount of purchased pulp and has become more internallyintegrated. As such the baseline is not reflective of current operating conditions and Sappi is revisiting its energy baselineand targets. In the meantime the operations continue to focus on energy reduction strategies and capital investment plans.

CC3.1e

Please explain (i) why you do not have a target; and (ii) forecast how your emissions will change over the next five years

CC3.2

Does the use of your goods and/or services directly enable GHG emissions to be avoided by a third party?

Yes

CC3.2a

Please provide details of how the use of your goods and/or services directly enable GHG emissions to be avoided by a third party

Scope 2 emissions can be avoided by a third party. Most Sappi mills generate power on site from fossil- or renewable resources for internal consumption. In someinstances (Westbrook Mill (North America), Gratkorn- and Maastricht Mills (Europe) and Ngodwana Mill (South Africa)), excess energy is generated which is soldback into the power grid. This energy is used for district heating in the vicinity of Sappi’s plants and for export into the public grid, thereby replacing fossil fuels.Roughly 103,000 metric tonnes CO2e emissions avoided during the past five year cycle.

The emissions avoidance value was calculated by taking each regional power utility’s emissions factor and comparing it with Sappi’s internal power generationemissions factor. The difference between the two factors indicates that Sappi’s internal power generation is less carbon intensive in certain regions and therefore

results in carbon emission avoidance.

CC3.3

Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and/or implementationphases)

Yes

CC3.3a

Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings

Stage of development Number of projectsTotal estimated annual CO2e savings in metric tonnes

CO2e (only for rows marked *)

Under investigation 2To be implemented* 7 983Implementation commenced* 14 1547Implemented* 13 85516Not to be implemented 2

CC3.3b

For those initiatives implemented in the reporting year, please provide details in the table below

Activitytype Description of activity

EstimatedannualCO2e

savings(metrictonnesCO2e)

Scope Voluntary/Mandatory

Annualmonetarysavings

(unitcurrency

- asspecifiedin CC0.4)

Investmentrequired

(unitcurrency -

asspecifiedin CC0.4)

Paybackperiod

Estimatedlifetime of

theinitiative

Comment

Energyefficiency:Processes

In 2014 at Sappi’s SomersetMill in North America a multi-fuel boiler was modified toallow for the combustion ofnatural gas as an alternativefuel to No. 6 fuel oil. Carbondioxide emissions from naturalgas are 30% lower than theequivalent amount of energyfrom fuel oil.

9979Scope1 Voluntary 4000000 1-3

years16-20years

The modification toenable the use naturalgas occurred late in ourfiscal year. As a resultonly 0.7 % of the mill’senergy was derived fromnatural gas whereas7.1% of the energy wasderived from fuel oil.Savings and emissionsreductions will beachieved in subsequentyears.


In FY 2014 Ngodwana Mill inSouth Africa commissioned aSaalasti crusher to increase theconsumption of bark in theboilers, displacing bought-infossil fuels. The energy sourceof the No2 Chemical RecoveryFurnace (CRF) induced draft(ID) fan was also changed fromsteam to electrical power toreduce coal consumption andincrease power generation. FY2014 has also been the first fullyear of operations since thecommissioning of ProjectGoCell, which has improvedthe mill’s overall energyefficiency.

48941

Scope1Scope2

Voluntary 458057 500497 1-3years

11-15years

All Sappi mills in allregions are continuouslyimplementing energysaving projects thatresult in CO2 emissionreductions. In thissection only the biggestprojects werementioned.

Activitytype Description of activity

EstimatedannualCO2e

savings(metrictonnesCO2e)

Scope Voluntary/Mandatory

Annualmonetarysavings

(unitcurrency

- asspecifiedin CC0.4)

Investmentrequired

(unitcurrency -

asspecifiedin CC0.4)

Paybackperiod

Estimatedlifetime of

theinitiative

Comment


Kirkniemi Mill in Finland: 3Galileo diamond surfacegrinding stones were installedduring 2012-2014 (11 GWh/asavings each).

7722Scope2 1527412 2122085 1-3

years16-20years

All Sappi mills in allregions are continuouslyimplementing energysaving projects thatresult in CO2 emissionreductions. In thissection only the biggestprojects werementioned.

CC3.3c

What methods do you use to drive investment in emissions reduction activities?

Method Comment

Compliance with regulatoryrequirements/standards

In addition to internal and regulatory standards, Sappi mitigates climate change-related risk by using external benchmarks tomonitor environmental performance and ensure compliance with best practice. In terms of energy, for example, Sappi usesbest practice energy consumptions indicated by the Technical Association of Pulp and Paper Industries (TAPPI) in the UnitedStates of American and the Pulp and Paper Technical Association of Canada (PAPTAC). The Swedish KretsloppsanpassadMassafabrik (KAM) organisation has indicated what the best practice energy consumption for an entire mill should be forvarious mill types. Key performance indices include the following: Specific purchased power; Specific purchased fuel; Specifictotal power consumed; Specific total fuel consumed; Percentage power generated from renewable fuel; Percentage energyused originating from renewable fuel; Percentage of waste that can be combusted for heat gain compared with that which canpotentially be combusted for heat gain. While performance against these parameters is not externally audited, a dedicated

Method Comment

energy and emissions specialist monitors the accuracy, reliability and consistency of the data provided by the operations.Targets are monitored on a quarterly basis. Sappi’s production processes and products are strictly regulated by legislation andexternal standards.

Financial optimizationcalculations

Profit Improvement Plans (PIPs) are managed at mill level by each section. These are smaller scale improvements/projectswhich require no or very little capital spend and can be implemented in a short period of time. In the last couple of years, thefocus in all regions has been on energy efficiency, energy self-sufficiency as well as water savings. We have establishedenergy platforms in each region whose task it is to continue to share knowledge on how to improve efficiency and drive theenergy strategy at each region.

OtherIn North America, Sappi has utilised PINCH technology and Lean Six Sigma techniques to optimize energy usage in the mills.Several investments in boiler technology, such as over-fire air modifications and allowance for higher utilisation of bio-fuels inboilers have been made.

Dedicated budget for energyefficiency

This is in place at some of Sappi’s mills in Europe and all mills in North America. Sappi North America has a stated goal toreduce energy intensity by 10% over the 2012-2016 period and capital will be spent to achieve this objective.

Employee engagement

Sappi North America has a Sustainability Ambassador programme that helps to support communications, training andeducation on environmental issues including energy savings and greenhouse gas reductions. Sappi Europe engages allemployees through its Sappi Performance Engine and Eco-Effectiveness approach which involves all employees in continuousimprovement activities. Sappi Southern Africa has developed an innovative e-platform, Sustainaville, for employees and otherstakeholders. At the LRMG FutureShip2030 conference held in 2014, Sappi Southern Africa received the award for the bestlearning programme for the Sustainaville game in the category Environmental Change.

CC3.3d

If you do not have any emissions reduction initiatives, please explain why not

Further Information

Page: CC4. Communication

CC4.1

Have you published information about your organization’s response to climate change and GHG emissions performance for this reporting year in placesother than in your CDP response? If so, please attach the publication(s)

PublicationStatus

Page/Sectionreference Attach the document

In mainstream financial reports buthave not used the CDSBFramework

Complete Pages 7, 39 - 47 https://www.cdp.net/sites/2015/90/16290/Climate Change 2015/SharedDocuments/Attachments/CC4.1/2014-Sappi-Integrated-Report.pdf

In voluntary communications Complete Pages 10, 22-26, 37,92-104

https://www.cdp.net/sites/2015/90/16290/Climate Change 2015/SharedDocuments/Attachments/CC4.1/2014-Sappi-Group-Sustainability-Report.pdf

In voluntary communications Complete Pages 10, 44 - 46 https://www.cdp.net/sites/2015/90/16290/Climate Change 2015/SharedDocuments/Attachments/CC4.1/2014-Sappi-Southern-Africa-Sustainability-Report.pdf

In voluntary communications Complete Pages 11, 30-35, 51,57

https://www.cdp.net/sites/2015/90/16290/Climate Change 2015/SharedDocuments/Attachments/CC4.1/sappi 2014 na sdr.pdf

In voluntary communications Complete Pages 9 -10, p. 16 –17, p. 24 – 29, p. 46

https://www.cdp.net/sites/2015/90/16290/Climate Change 2015/SharedDocuments/Attachments/CC4.1/2013 Sappi Fine Paper Europe SustainabilityReport.pdf

Further Information

Module: Risks and Opportunities

Page: CC5. Climate Change Risks

CC5.1

Have you identified any inherent climate change risks that have the potential to generate a substantive change in your business operations, revenue orexpenditure? Tick all that apply

Risks driven by changes in regulationRisks driven by changes in physical climate parametersRisks driven by changes in other climate-related developments

CC5.1a

Please describe your inherent risks that are driven by changes in regulation

Riskdriver Description Potential impact Timefra

me

Direct/

Indirect

Likelihood

Magnitude of

impactEstimatedfinancial

implicationsManagement

methodCost of

management

Carbontaxes

The South African government isattempting to drive a reduction incarbon emissions by imposing ancarbon tax rate of R120 per tonof CO2 emitted.

Increasedoperational cost

1 to 3years Direct Virtually

certain HighUS$11million/annum

Sappi isengaging withGovernment’sTreasuryDepartmentvia PAMSAfor a tax offsetmechanismwhichrecognisesthe carbonsequestrationeffect ofSappi’splantations.

Coveredunder Sappi’smembershipwith PAMSA

Fuel/energy taxesandregulations

The US Environmental ProtectionAgency (EPA) has recentlyestablished new air emissionrules for commercial andindustrial boilers. The rules relyon Maximum Achievable ControlTechnology (MACT) standards toachieve more stringent limits forseveral pollutants includingparticulate matter, hydrogenchloride, mercury and carbonmonoxide. Under the rules,companies have three years from



certain Medium Low

Sappi’sboilerscurrently meetmost limitsunder therules due topast capitalinvestmentsandoptimizationof fuel mix.Equipmentneeded for

Included inannualmaintenancespending


me

Direct/

Indirect

Likelihood

Magnitude of



methodCost of

management

the date of publication in theFederal Register (January 31,2013) to comply, but individualstates have the authority to allowan additional year forcompliance.

furtheremissionscontrol ateach of thethree mills inNorth Americais included inSappi’scapital plansas part of theannualmaintenancespending.

Otherregulatorydrivers

The European Union EmissionTrading Scheme covers CO2emissions from six sectors ofheavy industry, including pulpand paper. There are plans tophase out provisions againstcarbon leakage and freeallocation between 2021 and2030. This will result insignificantly increased directcosts and costs passed throughin electricity prices for heavyindustries.


Up to 1year Direct Virtually

certain High Not possibleto predict

ManagedthroughSappi’smembershipof CEPI

Covered inCEPImembership


The EU aims to get 20% of itsgenerated energy fromrenewable sources by 2020.Electricity generation companiesare competing for the same rawmaterials, namely wood andwood chips, in the same markets



certain Medium

Impossible topredictbecause gasprices willincrease onthe one sideand on the

As part of anenergy supplyand demandsystem, wedecide on adaily basis onour power

Not possibleto quantify


me

Direct/

Indirect

Likelihood

Magnitude of



methodCost of

management

from which Sappi sources woodfibre. This drives pricesupwards, especially during thewinter in the Northernhemisphere.

other side,power priceswill decrease.

generation forthosegeneratorswhere we candecide to usethem or idlethem.


The EU’s target of 20% of energyfrom renewable resources by2020 impacts the Europeanwood supply to Sappi’s mills,since using wood as an energygeneration source is incentivisedthrough subsidies over the use ofwood to create products. Forexample, consumption of woodpellet in Europe in 2014 rose by14% to 20.0m tonnes this year,more than double levels fiveyears ago.http://www.agrimoney.com/news/rising-eu-wood-pellet-use-drives-surge-in-imports--7246.html



certain High Not possibleto quantify

Minimising theimpact formspart of Sappi’spurchasingefforts. SappiEuropeparticipates inwood supplyagreementswith a numberof differentcompanies

Coveredunder generalmanagementcosts.


South African governmentrestrictions on new plantationcultivation are, to some extent,driven by climate changeconcerns. In global terms, SouthAfrica’s water resources areextremely limited and climatechange is expected to impact onwater availability. Even thoughcommercial forestry accounts for

Reduction/disruption in productioncapacity


certain Medium Not possibleto quantify

Encouragingentry into theindustry andhelping todevelop treefarmersconsolidatesthe industryand alignswith the South

In 2014,Project Growfarmerssupplied SSAwith 11% of itshardwoodfibre intake,valued atUS$16 millionWith regard to


me

Direct/

Indirect

Likelihood

Magnitude of



methodCost of

management

slightly less than 3% of SouthAfrica’s total water usage, ageneral perception exists thatforestry uses excessive amountsof water by reducing water runoffinto rivers and streams. This is akey factor in the restriction onnew plantation cultivation.

Africangovernment’sfocus on ruraldevelopment.SSA recentlyexpanded itssmall growerinitiative,Project Grow,beyond theborders ofKwaZulu-Natal provinceto the EasternCape atZAR169million. (Forfurther detailsplease refer tothe ProjectGrow FAQ,available onwww.sappi.com) info onwebsite Inaddition, SSAis workingwithcommunitiesin the EasternCape to helpthem obtainwater-uselicences for

funding, Sappihas compiledbusinessplans for mostof theseprojects andsubmitted thebusinessplans togovernment tosecurerecapitalisation anddevelopmentfunding. SSAis also in theprocess ofnegotiatingwith suitablefundingagencies tosecurefunding at areducedinterest rate.In associationwith the SouthAfricanInstitute ofEntrepreneurship (SAIE),Sappi hasdevelopedspecific


me

Direct/

Indirect

Likelihood

Magnitude of



methodCost of

management

theestablishmentof newplantations.To date, SSAhas assistedseveralcommunitiesin the EasternCape inobtaining atotal of7,654ha ofwater uselicences,including3,108ha ofnew licencesawardedduring 2014financial year.SSA is alsoassistingrecipients ofwater-uselicences tosecure grantfunding fromgovernment.SSA is activein the landreform areaand isassisting

traininginitiatives toassist with themanagementof theseprojects.


me

Direct/

Indirect

Likelihood

Magnitude of



methodCost of

management

several landreformbeneficiaries(communities)with themanagementof theirplantations,and havesigned supplyagreementswith 34 landreform/restitution projectstotaling4,710haplanted.


The South African governmenthas made a reductioncommitment to the UnitedNations Framework on ClimateChang UNFCC). Sappi sharesBUSA’s view that thiscommitment is not realistic interms of sustaining economicgrowth and raising standards ofliving in a developing countrywhose energy needs are metmainly by coal.


3 to 6years Direct Unknown Medium-

highNot possibleto quantify

Engagementwith theDepartment ofTrade andIndustrythrough BUSA

Membershipcost of BUSA

CC5.1b

Please describe your inherent risks that are driven by change in physical climate parameters

Risk driver Description Potential impact TimeframeDirect/Indirect Likelihood Magnitude

of impact Estimatedfinancial


methodCost of

management

Uncertaintyof physicalrisks

Climate changecould well alterthe suitability ofentire regions inEurope for certainforest types,forcing a shift innatural speciesdistribution andleading tochanges in growthof existing stands.In addition,extreme events(storms, forestfires, droughtsand heat waves)are expected tobecome muchmore commonand/or severe.

Reduction/disruptionin productioncapacity

UnknownIndirect(Supplychain)

More likelythan not

Low-medium

Unable toestimate

Influence forestpolicies throughCEPI and ourwood purchasingorganisations.

Coveredunderoperationalcosts.

Change inmean(average)temperature

According to theUS EnvironmentalProtectionAgency, warmingtemperaturescould increase thelength of thegrowing season offorests in theUSA. However,warming couldalso shift thegeographic


UnknownIndirect(Supplychain)

More likelythan not

Low-medium

Notestimated

Sappi routinelymonitors thehealth of theforests in itsprocurementareas.

Not known.




methodCost of

management

ranges of sometree species.Climate changecould alter thefrequency andintensity of forestdisturbances suchas insectoutbreaks,invasive species,wildfires, andstorms. Thesedisturbances canreduce forestproductivity andchange thedistribution of treespecies. In somecases, forests canrecover from adisturbance.

Change inmean(average)precipitation

Climate change isexpected to makethe Africancontinent drier,rather than wetter.Water shortagescould impact onSappi’s fibresources in SouthAfrica, whereSappi owns andleasesapproximately495,000 hectaresof land on which it


Unknown Direct More likelythan not

Medium-high

Not possibleto quantify.

Sappi’s exposureto climate changerelated risk inSouthern Africa ismoderated by thediversity ofcommercialspecies andhybrids which itcurrently deploysacross a widerange of climaticconditions. Sappicontinuallymonitors and

US$ 2.5million (forestresearch)




methodCost of

management

grows mainlyeucalyptus- andpine trees.

reviews forestbest practices inthe light ofchangingenvironmentalfactors, thushelping tomitigate anyincreased threatfrom watershortages ordrought. Sappi’smitigationactivities in thisarea include:•Maintaining widegenetic variabilityin our plantingmaterial, incl.drought resistantbreeds.•Measuringpermanentsample plotsannually(eucalypts) or bi-annually (pines)to determine theeffect of droughtfor use in longterm planning.

Change intemperatureextremes

The SouthernAfrican landscapeis prone to, andecologicallyadapted to,


Unknown Direct More likelythan not Medium Not possible

to quantify.

Sappi hasimplementedextensive fireprotectionstrategy through

The cost ofSappi’s fireriskmanagementplan in 2014




methodCost of

management

frequent fires.There is a highrisk ofuncontrolled firesentering andburning downsignificant areasof plantation.

which risks arenow managed viaan integrated FireRiskManagementSystem. Sappihas increasedcommunityparticipation infire prevention toreduce theincidents of firesthrough regionaland district FireProtectionAssociations. Inaddition,significantinvestment hasimproved firedetection, whilefire crew trainingand improvedequipment hassignificantlyimprovedresponse times tofires.

wasapproximatelyUS$12.5million

Change inprecipitationpattern

Climate changecould impactprecipitationpatterns whichcould mean thatareas which arecurrently suitablefor plantations


Unknown Direct More likelythan not

Low-medium


Breeding trees fora wide range ofclimateconditions.

US$ 2.5million




methodCost of

management

becomeunsuitable. SouthAfrica is a water-stressed regionand changes inprecipitationpatterns couldhave devastatingeffects on forestryand agriculture.

CC5.1c

Please describe your inherent risks that are driven by changes in other climate-related developments

Riskdriver Description Potential

impactTimefram

e

Direct/Indirec

tLikelihoo

dMagnitud

e ofimpact

Estimatedfinancial

implications

Management methodCost of

management

Reputation

Thereputationalaspect ofSappi’sbusiness isunderpressure,with someconsumersassociatingpulp andpaper

Reduceddemand forgoods/services

Up to 1year Direct Likely Medium-

high

Notpossible toquantify.

Sappi Europe is a member of TwoSides and supports Print Power. Bothof these organisations work to dispelmyths about the environmental impactof print, paper and paper packaging.SNA is a founding member ofTwoSides US and SSA supported thelaunch of the local Two Sidescampaign.

US$ 25,000


impactTimefram

e

Direct/Indirec

tLikelihoo

dMagnitud

e ofimpact

Estimatedfinancial

implications


management

productswithdeforestation ofendangeredtropicalforests andconcomitantglobalwarming.Theactivities ofa fewplayers inthe globalpulp andpapermarket arenegativelyimpactingthe image ofthe entireglobalindustry.

Changingconsumerbehaviour

Trends inadvertising,electronicdatatransmission and –storage, aswell as theinternet,could haveadverse

Reduceddemand forgoods/services

Up to 1year Direct Likely Medium-

high

Notpossible toquantify

In general terms, Sappi has changedits strategic approach to focus more onthe DWP market, adding over 500 000annual tons of capacity in 2014. Morespecifically: Sappi is working oncommunication campaigns withindustry associations in each regionwhere it operates and has published aseries of FAQs dealing with this andother topics. In North America a papercommodity Checkoff campaign has



impactTimefram

e

Direct/Indirec

tLikelihoo

dMagnitud

e ofimpact

Estimatedfinancial

implications


management

effects ontraditionalprint mediaand otherpaperapplications,includingSappi’sproductsand those ofitscustomers.Advertisingexpenditurehasgraduallyshifted awayfrom themoretraditionalforms ofadvertising(newspapers,magazines,radio andtelevision)which tendto be moreexpensive,toward agreater useof electronicand digitalforms ofadvertising

been established. The Paper andPackaging Board brings together thepaper and paper-based packagingsectors to promote and increaseconsumer appreciation for paper andpaper-based packaging, reduce guiltabout using these products anddeepen understanding of the industry’senvironmentally – friendly practices.SNA’s Chief Sustainability Officerserves as a member of the board andis the chair of themarketing/communications committee.http://www.paperandpackaging.org/about/


impactTimefram

e

Direct/Indirec

tLikelihoo

dMagnitud

e ofimpact

Estimatedfinancial

implications


management

(theinternet,mobilephones andotherelectronicdevices),which tendto be lessexpensive.

CC5.1d

Please explain why you do not consider your company to be exposed to inherent risks driven by changes in regulation that have the potential togenerate a substantive change in your business operations, revenue or expenditure

CC5.1e

Please explain why you do not consider your company to be exposed to inherent risks driven by physical climate parameters that have the potential togenerate a substantive change in your business operations, revenue or expenditure

CC5.1f

Please explain why you do not consider your company to be exposed to inherent risks driven by changes in other climate-related developments thathave the potential to generate a substantive change in your business operations, revenue or expenditure

Further Information

Page: CC6. Climate Change Opportunities

CC6.1

Have you identified any inherent climate change opportunities that have the potential to generate a substantive change in your business operations,revenue or expenditure? Tick all that apply

Opportunities driven by changes in regulationOpportunities driven by changes in physical climate parametersOpportunities driven by changes in other climate-related developments

CC6.1a

Please describe your inherent opportunities that are driven by changes in regulation

Opportunitydriver Description Potential

impact Timeframe Direct/Indirect Likelihood Magnitudeof impact Estimated

financialimplications

Managementmethod

Cost ofmanagement

Renewableenergyregulation

In the US,regulations thatarise fromgovernmentinitiatives toreduce the effectsof climate change

Premiumpriceopportunities


certain Low

Positive –consideredcompetitiveinformationand notdisclosedpublicly.

Sappi hasrepresentativesthat workdirectly withbrokers to sellcomplianceRECs.

Low – partialresponsibilityof existingemployees.




Managementmethod

Cost ofmanagement

presentopportunities forSappi to capitaliseon its use ofinternallygeneratedrenewable energyby sellingrenewable energycertificates.


Lanaken Mill inEurope enteredinto an AutomatedDemandResponse (ADR)agreement with anelectricityaggregator toachieve stability,lower costs andreduce overallCO2 emissions.Demand responsesystems allowpower suppliersand transmission-grid operators toapproachsignificant energyusers, likeourselves, toalleviate pressureon the energytransmission gridat peak times.



certain Low

Positive –consideredcompetitiveinformationand notdisclosedpublicly.

Managed aspart ofproductionplanning

Low




Managementmethod

Cost ofmanagement


Sappi is a partnerin an energyproject atNgodwana Mill(known asNgodwanaEnergy) in SouthAfrica since it hasbeen chosen as apreferred bidder inthe Department ofEnergy’s 4thwindowRenewableIndependentPower ProducersProcurementProgramme(REIPPPP). Theproject involvesthe generation of25MW per annumthrough thecombustion ofbiomass atNgodwana Mill.The energygenerated will besold into thenational grid from2018. Significantongoing value isbeing created dueto the nature ofbiomass projectsand the monetaryand job creation



certain High Medium high

NgodwanaEnergy SPV willoperate andmaintain theplant.

Still to beconcluded butnormallyaround 2% ofcapex will bethe annualcost ofoperating theplant.




Managementmethod

Cost ofmanagement

spend across theProject valuechain; fromcollecting biomassin the plantations,through plant andequipmentcontracts, tocommunity impactthroughCommunity Trustsand the economicdevelopment andsocio-economicdevelopmentspend as well asshareholderreturns.

CC6.1b

Please describe the inherent opportunities that are driven by changes in physical climate parameters


impact Timeframe Direct/Indirect Likelihood Magnitude



methodCost of

management

Change inmean(average)precipitation

Woodfibre, in commonwith other agriculturalcrops, can be negativelyimpacted by changes inweather. This represents

Reducedcapitalcosts


to quantify.

The Sappi ForestResearchdepartment is basedat the ShawResearch Centre in

US$2.5million





methodCost of

management

a risk and anopportunity. We mitigatethis risk and maximiseour competitiveadvantage bymaintaining a broadgenetic base. Forexample, currently theSappi breedingprogramme has one ofthe most extensivecollections of Eucalyptusdunnii material in theworld, comprising morethan 700 individualfamilies from 20 differentregions in Australia. Thisvaluable resource givesSappi breeders thegenetic flexibility toidentify the most suitablematerial for its end-usesin terms of growth andfibre properties. Thisgene pool will also allowfor some protectionagainst pests anddiseases that couldchallenge the species inthe future. Maintaining abroad genetic baseallows Sappi to respondto new challenges suchas pests, disease andclimate change whileproviding continuous

Howick, withsatellite offices atKwambonambi andNgodwana. Thereare three activeresearchprogrammes: •Treebreeding•Propagation •Seedorchards





methodCost of

management

genetic improvementover the long term.

Change inmean(average)temperature

Sappi’s programmes tobreed for specific pulpingcharacteristics andenhanced yields give it acompetitive advantage inthe light of pressure onglobal fibre supply causeby changes intemperature. A keydevelopment in FY2014was the development ofa new Eucalyptus cuttingpropagation method.Clonal deploymentrepresents the ultimatemeans of capturing thegenetic gain of theEucalyptus hybrids,recognised for their fastgrowth, diseasetolerance and volumeproduction. A newcutting system and theimplementation of novelhydroponic sand bedtechnology implementedin FY2014 resulted inrooting efficienciesincreasing from 30% toin excess of 80%. This inturn has led to significantsavings and a positiveimpact on thesustainability of Sappi’s

Increasedproductioncapacity


to quantify.

The Sappi ForestResearchdepartment is basedat the ShawResearch Centre inHowick, withsatellite offices atKwambonambi andNgodwana.

US$2.5million





methodCost of

management

fibre base. Thedevelopment isparticularly important inview of the fact that,given the conversion ofNgodwana Mill toproduce 210,000 tonsper annum of DWP,Sappi will be using morehardwood (Eucalyptus)going forward.

CC6.1c

Please describe the inherent opportunities that are driven by changes in other climate-related developments

Opportunity driver Description Potential

impact

Timeframe

Direct/

Indirect

Likelihood

Magnitude of


implications

Management method

Cost ofmanagem

ent

Otherdrivers

At Saiccor Mill, a project which increasesblack liquor recovery is in progress. Theproject will increase the mill’s energy self-sufficiency thereby reducing its reliance onfossil based fuels and generating savings.

Reducedoperationalcosts

1 to 3years Direct Very

likely High

Notpossible todetermineat thisstage

Annualsavings areestimatedto beUS$6.03million basedon reducedheavy fueloil (HFO)and coalconsumptio



impact

Timeframe

Direct/

Indirect

Likelihood

Magnitude of


implications

Management method

Cost ofmanagem

ent

n as well asincreasedelectricalpowergeneration.Estimatedpayback is1.5 years,based on acapital costof US$8.234million.

Reputation

Globally, 54% of Sappi’s energy is derivedfrom renewable sources and the company hastargets this in all three regions to increase theamount of renewable energy used. This isexpected to cushion Sappi from the negativeeffects of future possible regulatoryrequirements and also to create opportunitiesin the form of tax and trading credits. Inaddition, the extent to which renewableenergy is used throughout Sappi’s operationsis a strong marketing tool, and hence this isan opportunity for Sappi’s products in thecurrent climate of GHG awareness and in thecontext of regulatory requirements.


Up to 1year Direct Very

likely High


Sappicontinues tofocus onopportunities toincreasethe usageofrenewableenergy.

Notpossible toisolate

Otherdrivers

Increasing energy prices have propelled theuse of anaerobic digestion as one of thetechnologies for effluent treatment. Thebiogas pro-duced can be used to produceener¬gy, which can be used or potentially soldto the National Grid. Saiccor Mill is looking atthis technology to treat its condensate, whichis rich in organic matter. If successful,


1 to 3years Direct Very

likelyMedium-high

US$11.358million.Operational costs tobedetermined

Bench-scale testwork isunderwayfollowing aliteraturereview.The aim of

Bench-scalestudy: US$47,324Pilot scalestudy: US$94,648


impact

Timeframe

Direct/

Indirect

Likelihood

Magnitude of


implications

Management method

Cost ofmanagem

ent

Saiccor will be able to treat its condensatefrom bisulphite pulping to produce biogas inthe form of methane. This has hugeimplica¬tions on the energy cost for Saiccor,as this condensate was evaluated to have thepotential to generate enough energy toreplace the 34t of coal per day. Therefore, asfossil fuel prices continue to rise, Saiccormight in fu¬ture be able to produce alternativeenergy.

the bench –scaleinvestigation is toprove theconcept.Technologyselectionwill be donebased onproposalsreceivedfromvendors.Technologywill betested onpilot-scale,with inputfromtechnologysuppliers torefinecapital andoperationalcosts andcomplete afeasibilitystudy.

(estimated)

Reputation

Renewable Energy Certificates (RECs) aretradeable environmental commodities thatrepresent proof that one megawatt-hour(MWh) of electricity was generated using arenewable energy resource. In the US, RECmarkets exist under both regulatory

Increaseddemand forexistingproducts/services

Up to 1year Direct Likely Low

Notestimated -an elementof overallbrand and

Renewalandcompliancereportsubmittedannually

Fees areless thanUS$ 25000 peryear


impact

Timeframe

Direct/

Indirect

Likelihood

Magnitude of


implications

Management method

Cost ofmanagem

ent

compliance schemes and as voluntaryprogrammes. In addition to generatingrenewable energy for own consumption,Sappi’s Westbrook and Somerset Mills arequalified to sell RECs as Maine Class I RECs.These RECs help local utilities companies tomeet Maine’s Renewable Portfolio Standard,which requires that at least 40% of electricitybe generated from renewable sources (Class Iand Class II) by 2017. In 2013, over half ofMaine’s net elec¬tricity generation came fromrenewable energy resources, with about 29%from hydroelectricity, 25% from wood and 7%from wind. Sappi’s Cloquet and SomersetMills generate electricity in compliance withthe voluntary Green-e® certificationprogramme. These certified RECs aregenerated on-site and subsequentlyconsumed by Sappi, allowing us to makeproduct level claims that 100% of theelectricity used to manufacture a selection ofproducts.

productpositioning

Otherdrivers

Process modifications at Tugela Mill allow themill to sell its black liquor as lignosulphonatewhich also results in a significant emissionreduction for the mill. A knock-on emissionsaving is also achieved : One ton oflignosulphonate displaces 26.6 tons of cementwhich results in a significant reduction ingreenhouse gas (GHG) emissions for thecement manufacturing industry Report by theCement Sustainability Initiative, available at:http://csiprogress2012.org/CSI_ProgressReport_FullReport.pdf Globally, Sappi reduced the

Newproducts/business services


certain Low UnknownPart ofeverydayoperations

Part ofnormaloverheads


impact

Timeframe

Direct/

Indirect

Likelihood

Magnitude of


implications

Management method

Cost ofmanagem

ent

amount of waste sent to landfill by 7%between 2013 and 2014.


Sappi works with the Carbon ReductionInstitute (CRI) to offer their leading Hanno Artbrand as a carbon neutral paper through oneof their Australian paper merchants, KWDoggett. The CRI helped calculate the CO2emissions involved in the production anddistribution of Sappi’s graphics papers. Sappineutralises these emissions by funding twoprojects that help save CO2 emission: theClean Energy from Biomass project in Indiaand the Reducing Deforestation withImproved Cook Stoves project in Ghana.Sappi is issued a carbon neutral certificate forthe volumes of Hanno Art that KW Doggettsells.


Up to 1year Direct Likely Low

Notestimated -an elementof overallbrand andproductpositioning

Offsettingallcalculatedemissionsassociatedwith theproduct anddelivery(Cradle tocustomer)with CERsin India andGhana.

Outsourced to CRIandsubstantial.


Rising transport costs and a focus on carbonfootprint have driven a trend towardslightweight packaging. This represents anopportunity for new products. To meet thistrend, in 2014, SSA launched Ultraflute, a newlightweight semi-chemical fluting. The highpercentage of virgin fibre in the productenhances its strength properties, resulting insturdier boxes and improved stackability.These attributes, together with high humidityperformance, enhance durability throughoutthe supply chain.

Newproducts/business services


certainMedium-high Unknown

Productdevelopment inresponse tomarkettrends

NormalR&D andmarketingcosts


The spectre of climate change has createdhigh consumer awareness of the role playedby forests and plantations in mitigating globalwarming. This represents a marketingopportunity for Sappi, within the context of thegroup’s high compliance with forest



certain HighNotpossible toquantify

Managed interms ofaudits byindependent certifyingbodies

US$92,071


impact

Timeframe

Direct/

Indirect

Likelihood

Magnitude of


implications

Management method

Cost ofmanagem

ent

certification systems. The percentage ofcertified fibre applied to Sappi’s mills in eachregion is as follows: SA: 82%, EU: 74.1%; NA:66%, with the balance procured from knownand controlled sources. In SA, 100% ofSappi’s owned and leased plantations arecertified by the FSC.

CC6.1d

Please explain why you do not consider your company to be exposed to inherent opportunities driven by changes in regulation that have the potential togenerate a substantive change in your business operations, revenue or expenditure

CC6.1e

Please explain why you do not consider your company to be exposed to inherent opportunities driven by physical climate parameters that have thepotential to generate a substantive change in your business operations, revenue or expenditure

CC6.1f

Please explain why you do not consider your company to be exposed to inherent opportunities driven by changes in other climate-related developmentsthat have the potential to generate a substantive change in your business operations, revenue or expenditure

Further Information

Module: GHG Emissions Accounting, Energy and Fuel Use, and Trading

Page: CC7. Emissions Methodology

CC7.1

Please provide your base year and base year emissions (Scopes 1 and 2)

ScopeBase year Base year emissions (metric tonnes CO2e)

Scope 1Fri 01 Oct 2010 - Fri 30 Sep2011 4610538

Scope 2Fri 01 Oct 2010 - Fri 30 Sep2011 1669028

CC7.2

Please give the name of the standard, protocol or methodology you have used to collect activity data and calculate Scope 1 and Scope 2 emissions

Please select the published methodologies that you use

The Greenhouse Gas Protocol: Public Sector StandardOther

CC7.2a

If you have selected "Other" in CC7.2 please provide details of the standard, protocol or methodology you have used to collect activity data andcalculate Scope 1 and Scope 2 emissions

From the time Sappi first started gathering CO2 emission data in October 1999, the GHG Protocol Public Sector Standard was used. Certain minor adjustmentswere included in subsequent years, which included changes in emission factors for some of the fuels used. It also included the emission factors calculated based onthe make-up of the fossil content of purchased power. Purchased steam Scope 2 emissions were added in 2004. Following a general realisation of the inadequacyof all the published methodologies mentioned in the drop down list in 7.2 above, it was decided to change to a methodology that took into account the somewhatunique attributes of the pulp and paper industry. This included sequestration of own developed- and cultivated plantations and the fact that an ever increasingproportion of energy was derived from biomass originating from Sappi’s operations (black liquor).

As a result, in 2009, Sappi decided to dispense with the older methodology due to its inadequacy for the pulp and paper industry and to adopt the methodology ofthe Forestry Industry Carbon Assessment Tool (FICAT). This tool is very comprehensive and is specifically applicable to the forestry- and pulp and paper industry.FICAT is a collaborative effort from the US National Council for Air and Stream improvement, the USA Technical Association of Pulp and Paper Industries, the Pulpand Paper Technical Association of Canada and the Confederation of European Paper industries.

CC7.3

Please give the source for the global warming potentials you have used

Gas Reference

CO2 Other: FICAT

CC7.4

Please give the emissions factors you have applied and their origin; alternatively, please attach an Excel spreadsheet with this data at the bottom of thispage

Fuel/Material/Energy Emission Factor Unit Reference

Biogas 63 Other: kg CO2e/GJ FICAT/IPPCBituminous coal 93 Other: kg CO2e/GJ FICAT/IPPCBituminous coal 74 Other: kg CO2e/GJ FICAT/IPPCCoke oven gas 60 Other: kg CO2e/GJ FICAT/IPPCDistillate fuel oil No 2 74 Other: kg CO2e/GJ FICAT/IPPCDistillate fuel oil No 6 79 Other: kg CO2e/GJ FICAT/IPPCElectricity 79 Other: kg CO2e/GJ FICAT/IPPCNatural gas 56 Other: kg CO2e/GJ FICAT/IPPCSulphite lyes (Black liquor) 95 Other: kg CO2e/GJ FICAT/IPPCWaste tire derived fuels 82 Other: kg CO2e/GJ FICAT/IPPCWood or wood waste 94 Other: kg CO2e/GJ FICAT/IPPC

Further Information

Page: CC8. Emissions Data - (1 Oct 2013 - 30 Sep 2014)

CC8.1

Please select the boundary you are using for your Scope 1 and 2 greenhouse gas inventory

Operational control

CC8.2

Please provide your gross global Scope 1 emissions figures in metric tonnes CO2e

3843342

CC8.3

Please provide your gross global Scope 2 emissions figures in metric tonnes CO2e

1360595

CC8.4

Are there are any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions that are within your selectedreporting boundary which are not included in your disclosure?

Yes

CC8.4a

Please provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in yourdisclosure

Source Relevance ofScope 1 emissions

from this source

Relevance ofScope 2

emissionsexcluded from

this source

Explain why the source is excluded

Sappi Europe headoffice

No emissions fromthis source

Emissions are notevaluated

At present, Sappi only has the resources to collect emission information from productionfacilities such as the mills. This is not a production facility, i.e. no Scope 1 emissions, butthe power consumption (Scope 2 emissions) are yet to be evaluated. However, relative toSappi’s production facilities these emissions are not meaningful.

Sappi North Americahead office




Sappi SA forestsregional offices




Sappi Ltd. andSouthern Africa headoffice




Sappi Forest Division Emissions are notevaluated


At present, Sappi only has the resources to collect emission information from productionfacilities such as the mills. This is not a production facility but the equipment used forplantation harvesting will have Scope 1 and Scope 2 emissions, which are yet to beevaluated. However, relative to Sappi’s production facilities these emissions are notmeaningful.

Sappi TechnologyCentres in Europe,North America andSouth Africa



At present, Sappi only has the resources to collect emission information from productionfacilities such as the mills. This is not a production facility, but some pilot plants areoperated from time to time which will result in Scope 1 and Scope 2 emissions, which areyet to be evaluated. However, relative to Sappi’s production facilities these emissions arenot meaningful.

Sappi Lomati Sawmill –South Africa

Emissions arerelevant andcalculated, but notdisclosed

Emissions arerelevant but notyet calculated

While Sappi collects the emission data from annual measurements, these emissions arenot meaningful relative to Sappi’s production facilities and are therefore not disclosed.

CC8.5

Please estimate the level of uncertainty of the total gross global Scope 1 and 2 emissions figures that you have supplied and specify the sources ofuncertainty in your data gathering, handling and calculations

ScopeUncertainty range Main sources of

uncertainty Please expand on the uncertainty in your data

Scope1

More than 5% butless than or equalto 10%

Metering/MeasurementConstraintsSampling

Some of Sappi’s metering equipment has a measuring error in the range 5 - 10%. Not all of Sappi’s millshave online stack emission monitoring equipment and annual stack gas sampling can often result in a poorrepresentation of the actual boiler performance. One of Sappi’s largest purchased fuel types is coal. Thedelivery truck/rail mass metering equipment and -methodology takes into account existing stocks before andafter the delivery and this measuring period/methodology is often not very accurate.

Scope2

More than 5% butless than or equalto 10%

Metering/MeasurementConstraints

At two of Sappi’s mills, steam is purchased from an external supplier (Scope 2 emissions). Sappi has foundon a number of occasions that one of the supplier’s steam measuring equipment is faulty.

CC8.6

Please indicate the verification/assurance status that applies to your reported Scope 1 emissions

Third party verification or assurance complete

CC8.6a

Please provide further details of the verification/assurance undertaken for your Scope 1 emissions, and attach the relevant statements

Type ofverification

orassurance Attach the statement Page/section

reference

Relevantstandard

Proportionof reported

Scope 1emissionsverified (%)

Reasonableassurance

https://www.cdp.net/sites/2015/90/16290/Climate Change 2015/SharedDocuments/Attachments/CC8.6a/Verifizierung_Z100241_SappiEh_2014_Pruefplan_und_Bericht.pdf page 7

EuropeanUnionEmissionsTradingSystem(EU ETS)

32

CC8.6b

Please provide further details of the regulatory regime to which you are complying that specifies the use of Continuous Emissions Monitoring Systems(CEMS)

Regulation % of emissions covered by the system Compliance period Evidence of submission

CC8.7


Third party verification or assurance complete

CC8.7a

Please provide further details of the verification/assurance undertaken for your Scope 2 emissions, and attach the relevant statements

Type of verificationor assurance Attach the statement

Page/Sectionreference

Relevantstandard

Proportion ofreported Scope

2 emissionsverified (%)

Limited assurance https://www.cdp.net/sites/2015/90/16290/Climate Change 2015/SharedDocuments/Attachments/CC8.7a/full-integrated 2014.pdf page 181-182 ISAE3000 67

CC8.8

Please identify if any data points have been verified as part of the third party verification work undertaken, other than the verification of emissionsfigures reported in CC8.6, CC8.7 and CC14.2

Additional data points verified Comment

Progress against emission reduction target In SA, the Department of Trade and Industry and Deloitte are currently verifying energy data points at NgodwanaMill with regards to the 12L tax benefit.

CC8.9

Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization?

Yes

CC8.9a

Please provide the emissions from biologically sequestered carbon relevant to your organization in metric tonnes CO2

5620111

Further Information

Page: CC9. Scope 1 Emissions Breakdown - (1 Oct 2013 - 30 Sep 2014)

CC9.1

Do you have Scope 1 emissions sources in more than one country?

Yes

CC9.1a

Please break down your total gross global Scope 1 emissions by country/region

Country/Region Scope 1 metric tonnes CO2e

Africa 2203626EU15 1242853United States of America 396863

CC9.2

Please indicate which other Scope 1 emissions breakdowns you are able to provide (tick all that apply)

By business divisionBy facilityBy GHG typeBy activity

CC9.2a

Please break down your total gross global Scope 1 emissions by business division

Business division Scope 1 emissions (metric tonnes CO2e)

Sappi Southern Africa 2203626Sappi Europe 1242853Sappi North America 396863

CC9.2b

Please break down your total gross global Scope 1 emissions by facility

Facility Scope 1 emissions (metric tonnes CO2e)Latitude Longitude

Cape Kraft Mill, S. Africa. 199 -33.857 18.5223Enstra Mill, S. Africa. 196057 -26.20601 28.44676Ngodwana Mill, S. Africa. 1070383 -25.57803 30.66549Saiccor Mill, S. Africa. 530573 -30.18078 30.77091Stanger Mill, S. Africa. 205102 -29.36743 31.28908Tugela Mill, S. Africa. 201311 -29.15216 31.40536

Facility Scope 1 emissions (metric tonnes CO2e)Latitude Longitude

Alfeld Mill, Germany. 103893 51.98592 9.82076Ehingen Mill, Germany. 44483 48.26766 9.72712Gratkorn Mill, Austria. 376177 47.13333 15.33333Kirkniemi Mill, Finland. 190906 60.18815 23.94212Lanaken Mill, Belgium. 53098 50.877 5.6427Maastricht Mill, Netherlands. 116589 50.85857 5.69457Stockstadt Mill, Germany. 357707 49.80421 8.46762Cloquet Mill, Minnesota, USA. 150710 46.72288 -92.4384Somerset Mill, Maine, USA. 197166 44.70652 -69.63782Westbrook Mill, Maine, USA. 48987 43.68397 -70.35211

CC9.2c

Please break down your total gross global Scope 1 emissions by GHG type

GHG type Scope 1 emissions (metric tonnes CO2e)

CO2 3843342

CC9.2d

Please break down your total gross global Scope 1 emissions by activity

Activity Scope 1 emissions (metric tonnes CO2e)

Heavy fuel oils (HFO) 185952Coal 2915341Natural gas 801934Transport fuels (diesel, petrol/gasoline) 29984Renewable fuels (sludges, biomass, black liq.) 5620111

CC9.2e

Please break down your total gross global Scope 1 emissions by legal structure

Legal structure Scope 1 emissions (metric tonnes CO2e)

Further Information

Page: CC10. Scope 2 Emissions Breakdown - (1 Oct 2013 - 30 Sep 2014)

CC10.1

Do you have Scope 2 emissions sources in more than one country?

Yes

CC10.1a

Please break down your total gross global Scope 2 emissions and energy consumption by country/region

Country/Region Scope 2 metric tonnes CO2e Purchased and consumedelectricity, heat, steam or cooling

(MWh)

Purchased and consumed low carbon electricity,heat, steam or cooling accounted for in CC8.3

(MWh)

Africa 916091 2203148EU15 363103 3123371 1823253United States of America 81400 1397283 256283

CC10.2

Please indicate which other Scope 2 emissions breakdowns you are able to provide (tick all that apply)

By business divisionBy facilityBy activity

CC10.2a

Please break down your total gross global Scope 2 emissions by business division

Business division Scope 2 emissions (metric tonnes CO2e)

Sappi Southern Africa 916091Sappi Europe 363103Sappi North America 81400

CC10.2b

Please break down your total gross global Scope 2 emissions by facility

Facility Scope 2 emissions (metric tonnes CO2e)

Cape Kraft Mill, S. Africa. 76593Enstra Mill, S. Africa. 162629Ngodwana Mill, S. Africa. 33203Saiccor Mill, S. Africa. 319607Stanger Mill, S. Africa. 127422Tugela Mill, S. Africa. 196636Alfeld Mill, Germany. 53535Ehingen Mill, Germany. 83821Gratkorn Mill, Austria. 64797Kirkniemi Mill, Finland. 1096Lanaken Mill, Belgium. 60008Maastricht Mill, Netherlands. 1953Stockstadt Mill, Germany. 97893Cloquet Mill, Minnesota, USA. 22741Somerset Mill, Maine, USA. 58659Westbrook Mill, Maine, USA. 0

CC10.2c

Please break down your total gross global Scope 2 emissions by activity

Activity Scope 2 emissions (metric tonnes CO2e)

Purchased power 2096508Purchased steam 44600

CC10.2d

Please break down your total gross global Scope 2 emissions by legal structure

Legal structure Scope 2 emissions (metric tonnes CO2e)

Further Information

Page: CC11. Energy

CC11.1

What percentage of your total operational spend in the reporting year was on energy?

More than 5% but less than or equal to 10%

CC11.2

Please state how much fuel, electricity, heat, steam, and cooling in MWh your organization has purchased and consumed during the reporting year

Energy type MWh

Fuel 14340693Electricity 3027468Heat 0Steam 86610Cooling 0

CC11.3

Please complete the table by breaking down the total "Fuel" figure entered above by fuel type

Fuels MWh

Distillate fuel oil No 6 698071Bituminous coal 8707710Natural gas 4367835Other: Tyre derived fuel (TDF) 299339Other: Transport fuels (petrol, diesel, LPG) 128136Other: Sulphur 139657

CC11.4

Please provide details of the electricity, heat, steam or cooling amounts that were accounted at a low carbon emission factor in the Scope 2 figurereported in CC8.3

Basis for applying a lowcarbon emission factor

MWh associated with low carbonelectricity, heat, steam or cooling Comment

Supplier specific, backed byinstruments 2079536 Electricity supplied by national/state utilities which provide a breakdown of energy

generation breakdown of fossil, nuclear, hydro and wind power.

Further Information

Page: CC12. Emissions Performance

CC12.1

How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to the previous year?

Decreased

CC12.1a

Please identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of them specify how your emissionscompare to the previous year

Reason Emissions value(percentage)

Direction ofchange Comment

Emissions reductionactivities 1 Decrease

The change is mainly driven by Sappi Southern Africa w.r.t the upgrade at Ngodwana millwith Project GoCell. The other Sappi regions remained more or less stable during thereporting year.

DivestmentAcquisitionsMergersChange in outputChange in methodologyChange in boundaryChange in physicaloperating conditionsUnidentifiedOther

CC12.2

Please describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tonnes CO2e per unit currency total revenue

Intensity figure Metricnumerator

Metricdenominator

% change fromprevious year

Direction ofchange fromprevious year

Reason for change

0.000859 metric tonnesCO2e unit total revenue 3 Decrease Increase in revenue combined with slightly reduced

Scope 1 and Scope 2 emissions.

CC12.3

Please describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tonnes CO2e per full time equivalent (FTE)employee


Metricdenominator



Reason for change

398 metric tonnesCO2e FTE employee 4 Increase Decreased Scope 1 and Scope 2 emissions combined

with reduced employees.

CC12.4

Please provide an additional intensity (normalized) metric that is appropriate to your business operations


Metricdenominator



Reason for change

0.86 metric tonnesCO2e

metric tonne ofproduct 2 Decrease Increased production combined with a decrease in

Scope 1 and Scope 2 emissions.

Further Information

Page: CC13. Emissions Trading

CC13.1

Do you participate in any emissions trading schemes?

Yes

CC13.1a

Please complete the following table for each of the emission trading schemes in which you participate

Scheme name Period for which data issupplied Allowances allocated Allowances purchased

Verified emissionsin metric tonnes

CO2eDetails of ownership

European UnionETS

Tue 01 Oct 2013 - Tue 30 Sep2014 1116360 181047 1384436 Facilities we own and

operate

CC13.1b

What is your strategy for complying with the schemes in which you participate or anticipate participating?

Sappi Europe has used the European Union ETS to try to reduce costs as far as possible.

CC13.2

Has your organization originated any project-based carbon credits or purchased any within the reporting period?

Yes

CC13.2a

Please provide details on the project-based carbon credits originated or purchased by your organization in the reporting period

Creditorigination

or creditpurchase

Project type Project identificationVerified to

whichstandard

Number ofcredits(metric

tonnes ofCO2e)

Numberof credits

(metrictonnesCO2e):

Riskadjustedvolume

Creditscancelled

Purpose, e.g.compliance

CreditPurchase

Energyefficiency:households

Reducing deforestation with improved cook stoves –Ghana Other: CRI 1492 1492 No Voluntary

Offsetting

CreditPurchase

Biomassenergy Clean energy from biomass – India Other: CRI 5968 5968 No Voluntary

Offsetting

CreditPurchase

Other: Carbonneutral paper

Sappi works with the Carbon Reduction Institute (CRI)to offer their leading Hanno Art brand as a carbonneutral paper through one of its Australian papermerchants, KW Doggett.

Other: CRI 1095 1095 No Other:Marketing

Further Information

Page: CC14. Scope 3 Emissions

CC14.1

Please account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions

Sources ofScope 3

emissions Evaluationstatus

metrictonnesCO2e

Emissions calculation methodology

Percentageof

emissionscalculatedusing dataobtained

fromsuppliers orvalue chain

partners

Explanation

Purchased goodsand services

Not relevant,explanationprovided

After a review and in relation to Sappi’s majoremissions (process and transport) this Scope 3emission is of an insignificant quantum and impact.As such it does not warrant the time, manpowerand expense to capture, record, monitor andmanage this parameter.

Capital goodsNot relevant,explanationprovided

During normal operating years, this is not material.In the event that a major project was done withinthe reporting year, we will provide this information.

Fuel-and-energy-related activities(not included inScope 1 or 2)



Upstreamtransportation anddistribution

Relevant, notyet calculated

Efforts in progress to collect this data fromupstream transportation suppliers. Resources areneeded to collect the data.

Sources ofScope 3


metrictonnesCO2e


Percentageof



partners

Explanation

Waste generatedin operations



Business travel Relevant,calculated 6375

Data obtained directly from the travel(flights and car hire) suppliers e.g.Europcar, Avis, Comair, British Airways etc.for SA business travel only. The generalflight- and car CO2 emission factors aremultiplied by the amount of flight hours orkilometres travelled by car to arrive at theScope 3 emission value.

21%

This category includes emissions for thetransportation of employees on business travellingby air or via car hire. The information has beensupplied by Sappi’s in house travel agency forSouth Africa only. Since no European or NorthAmerican values are being collected, it will bedifficult to determine the percentage of Scope 3emissions. Efforts will be made to obtain moreaccurate values for next year’s submission, whichwill allow Sappi to determine the percentage ofemissions better.

Employeecommuting



Upstream leasedassets



Sources ofScope 3


metrictonnesCO2e


Percentageof



partners

Explanation

Downstreamtransportation anddistribution

Relevant,calculated 23770

Data obtained from some South Africantransporters (moving 52% of pulp andpaper products). The average fuelconsumption of the truck is multiplied by theCO2 emission factor for diesel and thenmultiplied by the amount of kilometrestravelled. Conversion factors are applied toachieve final value in metric units.

79%

Not all transport companies have carbon footprintsavailable. Only those companies that had the datareadily available in South Africa were used in thisyear’s submission. Since no European- or NorthAmerican values are being collected, it will bedifficult to determine the percentage of Scope 3emissions it makes up. Efforts will be made toobtain more accurate values for next year’ssubmission, which will allow Sappi to determine thepercentage of emissions better.

Processing of soldproducts



Use of soldproducts



End of lifetreatment of soldproducts



Sources ofScope 3


metrictonnesCO2e


Percentageof



partners

Explanation

Downstreamleased assets



FranchisesNot relevant,explanationprovided


InvestmentsNot relevant,explanationprovided


Other (upstream)Not relevant,explanationprovided


Other(downstream)



CC14.2


No third party verification or assurance

CC14.2a

Please provide further details of the verification/assurance undertaken, and attach the relevant statements

Type of verificationor assurance Attach the statement

Page/Section referenceRelevant standard Proportion of Scope 3

emissions verified (%)

CC14.3

Are you able to compare your Scope 3 emissions for the reporting year with those for the previous year for any sources?

Yes

CC14.3a

Please identify the reasons for any change in your Scope 3 emissions and for each of them specify how your emissions compare to the previous year

Sources of Scope3 emissions Reason for change Emissions value

(percentage)Direction of

change Comment

Business travel Other: improved accuracyof data collection 99 Increase More suppliers of business travel and hotel accommodation were

included than previous year, i.e. increased accuracy.

CC14.4

Do you engage with any of the elements of your value chain on GHG emissions and climate change strategies? (Tick all that apply)

Yes, our suppliersYes, our customers

CC14.4a

Please give details of methods of engagement, your strategy for prioritizing engagements and measures of success

Through Sappi’s overall company commitment and programmes to act sustainably, there is a heightened awareness to minimise the company’s carbon footprintthroughout all the decisions Sappi takes. Sappi tries to source equipment and materials from companies who demonstrate commitment to operating sustainably,which positively impacts the products they supply.

Our Suppliers

In South Africa, PBS Timber Trucks was engaged by Sappi to reduce the number of trucks on the road and thereby reducing GHG emissions by 936 tons CO2 perannum (see Section CC6.1). Discussions are also underway with railroad companies, such as Spoornet in South Africa and European railroad transporters, to userail transport instead of road transport of raw materials and Sappi’s products, which will result in reduced GHG emissions.

In Europe, the move to intermodal transport (rail or canal rather than road) meant that 45% of all Sappi Europe’s finished paper is transported by rail or canals, whichare more energy-efficient methods of transport than by road. This reduced the number of truck deliveries by 5 000 per year as a result of using trains for longjourneys to deliver and collect materials.

Since 2009, Sappi North America has participated in the US Environmental Protection Agency’s (EPA) SmartWay® Transport Partnership, aimed at helpingbusinesses move goods in the cleanest, most efficient way possible. Since 2004, Smartway® partners have eliminated 51.6 million metric tonnes of CO2 emissions.Sappi has also successfully influenced major distribution partners to become SmartWay® certified (http://epa.gov/smartway/index.htm).

Our Customers

Sappi’s mills in Cloquet, Minnesota, and Skowhegan, Maine generate electricity in compliance with the Green-e® certification programme. As such, certified RECsare generated on-site and subsequently consumed by Sappi, allowing Sappi North America to make product level claims that 100% of the electricity used tomanufacture Sappi North America’s product is certified Green-e® renewable electricity. Paper buyers that select certified papers and use a printer that is also usingcertified electricity are now able to apply a logo to printed products reflecting their responsible choice.

Corporates and printers are part of the paper industry’s (and Sappi’s) global discussion “Story of Paper” which promotes the use of paper instead of othersubstrates, since Sappi is carbon positive due to the plantations that it owns. The industry initiative called “Two Sides” also promotes paper to customers on behalfof paper companies emphasising paper’s green footprint w.r.t. GHG emissions.

CC14.4b

To give a sense of scale of this engagement, please give the number of suppliers with whom you are engaging and the proportion of your total spendthat they represent

Number ofsuppliers % of total spend Comment

7 14% Delivery costs of raw materials and products account for a reasonable portion Sappi’s variable costs, which is why itis important to engage with suppliers to find ways to reduce not only costs, but also GHG emissions.

CC14.4c

If you have data on your suppliers’ GHG emissions and climate change strategies, please explain how you make use of that data

Howyou

makeuse of

thedata

Please give details

Other Sappi is a member of “Paper Profile” which is a uniform declaration of vital environmental product information supplied by paper companies. Upstreamraw material suppliers are contacted annually to provide Sappi with updated environmental information (CO2 emissions per ton of product, electricity

Howyou

makeuse of

thedata

Please give details

consumption per ton of product, etc.). The supplier information is combined with Sappi’s internal environmental information to produce a single-pagedeclaration which gives essential information regarding the composition of Sappi’s products and key environmental parameters, as well as informationabout environmental management and wood procurement systems.

CC14.4d

Please explain why you do not engage with any elements of your value chain on GHG emissions and climate change strategies, and any plans you haveto develop an engagement strategy in the future

Further Information

Module: Sign Off

Page: CC15. Sign Off

CC15.1

Please provide the following information for the person that has signed off (approved) your CDP climate change response

Name Job title Corresponding job category

Graeme Wild Group Head Investor Relations and Sustainability - Corporate Limited Business unit manager

Further Information

CDP 2015 Climate Change 2015 Information Request

CDP 2015 Climate Change 2015 Information Request · 2016. 9. 8. · Dissolving wood pulp is...

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