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Future Proofed PackagingIntroducIng the eloPak sustaInabIlIty strategy

Follow our endeavors on www.elopak.com

Contents

Towards absolute sustainability ..................................03

Introducing Elopak ....................................................................................04

Elopak´s business ....................................................................................07

The Carton

- the natural choice for packaging .........................08

The anatomy of an Elopak carton ..........................10

The progress we have already made.............12

Introducing FutureProof 2020 .........................................19

Renewable raw materials ..........................................................23

Sustainable energy .................................................................................25

Sustainable logistics .............................................................................27

Customer operation efficiency ....................................29

Total recycling......................................................................................................31

From good intentions

to tangible improvements ........................................................32

Published by Elopak AS Group HeadquartersP.O.Box 418 Skøyen, 0213 OsloNorway

Editorial Board: Sveinar Kildal, Dagfinn Hansen, Ingrid Lille ThorsenLayout: Signus, ElopakPrint: GrøsetPhoto: Elopak, Stora Enso, Grønt PunktIllustrations: The Alliance for Beverage Cartons and the Environment (ACE), Carbon Disclosure Project (CDP), TerrafinitiText: Elopak, Peter Halliday, Hans Olav Otterlei, TerrafinitiSecond edition

Future Proofed Packaging 3

Towards absolute sustainability

We have no choice.

To prosper in the future, Elopak has to be serious about sustainability.

It’s partly about our own beliefs and values. It’s partly about differentiating Elopak within a highly

competitive market. But, more fundamentally, it’s about adapting to the realities of a rapidly changing

business environment.

Within this new world, we need to meet ever more demanding customer expectations. We need to

prepare ourselves from the inevitability of regulatory action. And we need to break free from our

reliance on finite fossil resources.

In adapting to these realities we are in a fortunate position.

Already, our products are completely recyclable, our raw materials are largely renewable, and our

energy requirements are relatively modest.

Also, our journey towards sustainability began several years ago. We have already made significant

progress. And we understand the challenges ahead of us.

You could say that, so far, we have become relatively responsible. For the future, we are confident that

Elopak can become absolutely sustainable.

This document describes our strategy for sustainability. It outlines our ultimate aspirations, our

immediate commitments, the plans we will pursue, and the benefits they will bring.

Called FutureProof 2020, the strategy is provocatively ambitious – not just because of what we want to

achieve within Elopak, but also because of our wider aspirations for the ecosystem in which we operate.

We intend to be a company with zero net impact on the environment. We are setting very clear targets

for our people, our profits and our planet. And we are aiming for nothing less than 100 per cent.

Niels Petter Wright

CEO Elopak Group

Our susTainabiliTy visiOn

We want Elopak to achieve

absolute sustainability.

A company with zero net

impact on the environment.

And we are aiming for nothing

less. 10

0%

4 Future Proofed Packaging

introducing ElopakElopak is one of the world’s leading liquid packaging companies.

More specifically, we produce the ‘gable topped’ paperboard cartons which are used by and associated

with many premium beverage and retail brands.

Our company was founded in 1957, when we became the European licensee of the Pure-Pak® packaging

system (indeed, our name is derived from European Licensee Of Pure-PAK®). Then, in 1987, we

acquired the Ex-Cell-O Packaging Systems Division and the Pure-Pak® license. Now, drawing on more

than five decades of continuous development, Elopak is a truly global corporation, active in more than

100 countries worldwide.

Based in Norway, and wholly owned by the Ferd Group (one of Norway’s largest privately owned

industrial and investment groups), we continually develop our packaging solutions to match the

changing global demands for packaged liquid foods.

Our position in the market is as a premium provider. We produce high quality, gable topped cartons

– which enable our customers to effectively differentiate their respective brands, through visual

attractiveness, environmental advantages, superior quality and convenience.


The - Pure-Pak® carton presence

Elopak at a glance

Headquarters: OsloOwnership: Privately owned by FERDNet sales revenue: €930 million *Cartons sold annually: 13 Billion *Employees: 3,000Manufacturing plants: 15Sales to: 100+ countries worldwide

* 2011 data and all figures including 100% of non consolidated joint ventures

Alongside our manufacturing plants, a global network of sales and service personnel enables us to be

closer to our customers and markets – wherever they happen to be in the world.


Elopak’s businessWe develop packaging solutions and produce physical cartons, which we sell to beverage producers. Using Elopak supplied equipment; our customers will typically fill the cartons at their own facilities for onward distribution to retailers.

ProductsWe develop, manufacture and print a range of

carton designs and configurations, ranging from

0.2 litres right up to 5.0 litres. To differentiate their

products and brands, customers can specify a

range of different features, such as closures,

cut-out windows, curved features and printing

techniques.

Within our plants, we assemble the various

components which go into these cartons. We also

finish and print them on behalf of our customers.

The finished items (which we refer to as ‘blanks’)

are then sent, flat-packed to our customers.

solutionsWe develop, provide and service the carton filling

machines which our customers use. We also

provide secondary packaging solutions for the

onward distribution of filled cartons. And we

provide a range of additional services (for example,

providing advice to customers on the most

appropriate packaging configurations, and offering

a web-based service for customers to develop the

design of their cartons).

From our state-of-the art research and development

centre in Norway, we also offer pre-marketing and

concept testing services . For example, we can

test new packaging concepts, containing from

milk to wine. We also have a sophisticated

laboratory for the advanced testing of many

different variables – from predicting filling

performance, through to package integrity, product

quality and required shelf life.


The carton – the natural choice for packaging

From a sustainability perspective, the paperboard carton has inherent and significant environmental benefits over all alternative forms of packaging.

At Elopak we have a genuine conviction that the

paperboard carton is the very best option for

protecting, displaying and transporting beverages

such as milk and juice.

It brings functional benefits to beverage providers

and retailers alike. Consumers like the convenience

and, in particular, the easy opening, the easy

pouring and the safe re-closing of an Elopak

carton. And the environmental credentials are

beyond doubt.

Just like the alternatives, such as plastic and glass,

the carton is fully recyclable. But it also offers a

number of additional benefits. For example, the

main raw material, wood fibre, is inherently

renewable, and is sourced from responsibly

managed forests. Also, the production process

has by far the lowest CO2 footprint and water

consumption of any comparable packaging.

And the uniform shape of the carton optimises

transportation to retailers and customers.

Four reasons why the paperboard carton

is the environmentally superior choice

renewable The primary main raw material for any beverage carton is timber

– an entirely renewable resource that mainly comes from certified,

traceable sources.

recyclableAll beverage cartons are fully recyclable. The challenge is to make national

collection and recycling facilities more widely available and easy accessible.

responsibleVarious independent studies, including full life cycle assessments, show

that cartons have a lower CO2 footprint and entail less water consumption

than alternatives – and there is continued focus to bring more environmental

efficiency to both the production and distribution processes.

TransportableThe rectangular footprint of the carton provides more space efficiency

during transport and storage. In addition, the carton is transported prior to

filling as a flat pack, further reducing transport cost and environmental im-

pact. The challenge is to bring more efficiency to the distribution process.



The anatomy of an Elopak carton

Typically, an Elopak carton will be composed of the following ingredients:

· 75% paperboard to provide the structure of

the carton – by its very nature this is a renewable

resource. We already source as much as we

can from FSC (Forest Stewardship Council)

certified sources (in 2011 nine per cent of the

global total). Most of the remainder comes from

forests that are managed according to FSC

Controlled Wood standards. And we are 100 per

cent committed to achieving 100 per cent FSC

certification for all our supply of paperboard.

· 15% polymers, to prevent leakage and water

penetration – currently this is primarily made

up of oil-based plastics such as polyethene but,

together with our peers, we are pressing our

suppliers to develop alternative, renewable solu-

tions.

· 10% aluminium, to protect drinks from light

and oxygen penetration – currently a micro-

scopically thin layer of aluminium is required to

protect certain types of beverages (so called

aseptic or long life foods). Again, we are encouraging

our suppliers to develop alternative, renewable

solutions.


sector approach for environmental performance ACE – The Alliance for Beverage Cartons and the Environment – provides

a platform for beverage carton manufacturers (including Elopak) and their

paperboard suppliers to benchmark and present cartons as renewable,

recyclable, low-carbon packaging solutions.

A wide range of additional information about the environmental benefits

of cartons can be found at www.beveragecarton.eu


At Elopak, we have always regarded ourselves as

a responsible company that has a moral obligation

to do the right thing by our customers, our em-

ployees and our wider stakeholders. And we have

always been completely confident that the paper-

board carton represents the most sustainable

form of beverage packaging.

We also recognised that, in the medium-to-long

term, there would be a clear business imperative

to respond to customer demands for more

sustainable and transparent business practices.

We realised that we would inevitably encounter

stricter regulatory regimes. And we wanted to

reduce our reliance on finite non-renewable

resources – and to insulate ourselves from any

related cost implications, caused by any future

volatility in raw material- and energy prices.

The progress we have already made

Elopak’s journey towards sustainability began several years ago. We have already brought significant improvements to our business. We have a very clear understanding of our net environmental impact. And we have a full appreciation of challenges that lie ahead.


Several years ago, we decided to turn some

of these broad convictions into firm commit-

ments. And, in 2008, we publicly announced a

programme of environmental initiatives and we

pledged to reach a very challenging target

– namely a 15 per cent reduction in our total

CO2 emissions in the course of just three years.

reducing our CO2 emissions Our immediate short-term focus was to reduce

our energy consumption, as this is by far the

largest contributor to our CO2 emissions.

Taking 2008 as our baseline year, we committed

to reduce emissions in our own operations by 15

per cent in only three years.

We have been successful in meeting this goal.

By the end of 2011, across all of the

subsidiaries that are 100 per cent owned

by Elopak, we successfully achieved a

reduction of CO2 emissions of 18%

per produced carton and an absolute

emission reduction of 10% compared to

2008.

Across the Elopak group as a whole (and taking

account of all emissions from our joint venture

operations) , the results have been less satisfac-

tory. Among the carton producing operations of

our joint ventures, we achieved a five per cent

reduction in absolute emissions and an eight per

cent reduction in emissions per produced carton.

In the production of plastic products, primarily

used for caps (or closures), the performance has

been disappointing. Here we have seen a 20 per

cent increase in emissions, which has distorted

the performance of the Elopak Group as a whole

– bringing the total emissions reduction down to

five per cent.

It is perhaps worth stressing that our method-

ology for assessing our CO2 footprint, complies

with the Greenhouse Gas Protocol, and takes full

account of our direct emissions (Scope 1), all

indirect emissions from the generation of

purchased heat and electricity (Scope 2), and

also other indirect emissions including air and

taxi travel (Scope 3).

by the end of 2011, across all of the subsidiaries that are 100 per cent owned by Elopak, we successfully achieved a reduction of CO2 emissions of 17% per produced carton and an absolute emission reduction of 10% compared to 2008.


0 20 40 60 80 100

Elopak

Stakeholder Engagement

Emission Management

Emission Reporting

Opportunities

Risk

Governance & Strategy

Total Score

5033

9061

9869

5036

6842

7074

7351

Average

Source: CDP rating 2011

benchmarking our performanceTo understand how our performance compares

to a range of other leading companies, we joined

the Carbon Disclosure Project – an independent

not-for-profit organisation

that holds the world’s larg-

est database of primary

corporate climate change

information.

We were the first ever

packaging company to join

this initiative – and we are

still (as of mid-2012) the

only Norwegian company

to have done so.

Elopak’s carbon ‘score’

has been evaluated and ranked in comparison to

more than 1,000 other reporting companies (who,

by virtue of the participation in the initiative, tend

to be environmentally aware). In general, the find-

ings have been very reassuring. See graph below.

Engaging with stakeholdersTo help us along our journey towards sustainability,

we have identified the NGO community as important

stakeholders, and have established some formal

partnerships.

In 2008, we entered into a cooperation agree-

ment with WWF Norway, to whom we regularly

present progress reports. In addition, we have been

accepted as a member of the World Wildlife Fund

Climate Savers. This global ini-

tiative includes as its members

several of the world’s largest

enterprises, including Sony,

Nike, Coca Cola, IBM, Nokia

and National Geographic, and

supports the political process

to fight climate change.

In order to be accepted within

the initiative, we had to pre-

sent our strategy for reducing

Elopak’s environmental impact

– and our continued member-

ship requires us to meet certain specific reduction

targets.

supporting responsible forestryWe follow the Forest Stewardship Council’s (FSC)

international certification and labelling system,

which guarantees that paper and wood products

carrying its label come from an environmentally

sound and sustainable source. This is a voluntary

tool for forest conservation that tracks products

from forest to recycling.

The absolute CO2 emission from the total Elopak group by end 2011, inclusive 100% of emissions from part owned companies shows a 5% reduction compared to 2008.

Carbon Disclosure Project rating - peer review 2011


Recycling in Europe is steadily increasing and status in 2010 is that 64% of cartons are recycled and recovered.

CARDBOARD BOXES

PAPER CORES

CARRIERBAGS

OFFICE STATIONARY

GYPSUM BOARD

ALUMINIUM POWDER

ALUMINIUM PRODUCTS

THE WOOD FIBRE CAN BE RECYCLED UP TO

6 TIMES

ENERGY RECOVERY

COMPOSITE MATERIAL

CEMENT

FUEL & GAS

PARAFFIN WAX

HEAT ELECTRICITY

INDUSTRIAL RAW MATERIALS

WOOD FIBRE

POLYMERS

POLYMERS & ALUMINIUM

ALUMINIUM

RECYCLING OF CARTONS IN EUROPE64%

RECYCLING & ENERGY RECOVERY

30%ENERGY RECOVERY

34% RECYCLING

EU-27 , NORWAY & SWITZERLAND TOTAL

CARTONS ARE RECYCLED OR USED FOR ENERGY RECOVERY, REDUCING RAW MATERIAL USE AND CARBON EMISSIONS

OVER

12BILLION

BEVERAGE CARTONS

RECYCLED

IN 2010


CARDBOARD BOXES

PAPER CORES

CARRIERBAGS

OFFICE STATIONARY

GYPSUM BOARD

ALUMINIUM POWDER

ALUMINIUM PRODUCTS


6 TIMES

ENERGY RECOVERY

COMPOSITE MATERIAL

CEMENT

FUEL & GAS

PARAFFIN WAX

HEAT ELECTRICITY


WOOD FIBRE

POLYMERS


ALUMINIUM



30%ENERGY RECOVERY

34% RECYCLING



OVER

12BILLION

BEVERAGE CARTONS

RECYCLED

IN 2010

Source: ACE

recycling in Europe is steadily increasing ‒ status in 2010 was that 64% of cartons are recycled and recovered

recycling of cartons in Europe



CARDBOARD BOXES

PAPER CORES

CARRIERBAGS

OFFICE STATIONARY

GYPSUM BOARD

ALUMINIUM POWDER

ALUMINIUM PRODUCTS


6 TIMES

ENERGY RECOVERY

COMPOSITE MATERIAL

CEMENT

FUEL & GAS

PARAFFIN WAX

HEAT ELECTRICITY


WOOD FIBRE

POLYMERS


ALUMINIUM



30%ENERGY RECOVERY

34% RECYCLING



OVER

12BILLION

BEVERAGE CARTONS

RECYCLED

IN 2010

All of our main European operations are fully

Chain-of-Custody (CoC) certified by the FSC and,

across the wider group, we continue to increase

the proportion of certified wood supplies.

Wood is our most important raw material and FSC

certification guarantees that forests are harvested

in the most sustainable way, so that:

· Waterways, wildlife habitats and species are

protected

· High conservation forests are preserved

· Forest management practices are monitored

· Genetically modified trees are not used

· Indigenous people are involved in forest

management and their rights are respected

We are determined that all of paperboard should

come from FSC managed forests. Today, however,

the supply of certified board continues to be a

limiting factor.

increased recycling ratesCarton recycling has played an important role in

our sustainability initiatives – thereby capturing

precious raw materials which can be re-used in a

number of different ways.

Recycling rates across Europe have been steadily

increasing and it is estimated that, in 2010, some

64 per cent of all cartons are recycled and

recovered.

Through our own initiatives, and through partici-

pation with various industry alliances, Elopak is

actively engaged in increasing the recycling rate in

all of the markets in which we operate.

Source: ACE


studying the bigger pictureWe are acutely aware that our own operations represent one aspect of a much larger picture. To

become truly sustainable, we need to understand and respond to the performance within our wider

value chain. We also need to understand the environmental impact of our products throughout

their entire lifecycle.

To this end, we have been engaged in several initiatives. For example:

Complete Lifecycle Assessment

In partnership with an external consultancy

company, we have developed a technique to

compare different types of packaging, and

their total environmental impact from cradle

to grave.

The purpose of this tool is to give an indication

of the total footprint of different cartons –

and to focus our attention on those issues

which merit the most immediate attention.

This shows that it is actually the retail distri-

bution end of the value chain that has the

biggest impact on the total CO2 footprint. In

particular, the cooling process of filled car-

tons in retail stores entails substantial energy

consumption, and tends to be the main

contributor to total CO2 emissions.

Supply Chain Evaluation

As part of our wider involvement with the

Carbon Disclosure Project, we have begun

to participate in the related Supply Chain

Project. This is helping us to get a much

clearer understanding of the environmental

strategy and actions of our most important

suppliers – to more accurately quantify the

extent of ‘embedded’ CO2 emissions within

their respective goods and services, and to

compare our own supply chain performance

with that of other leading companies.

At the same time, we anticipate that the

environmental initiatives of our peers within

the packaging industry will put greater collec-

tive pressure on the supplier base at large

to develop more renewable components for

our cartons.

Source: ACE

Businessas usualBusinessas usual

2020

FutureProof

Packaging



introducing FutureProof 2020

Based on our progress, and in recognition of our changing business environment, Elopak has developed an ambitious vision and strategy for sustainability.

This goes well beyond the question of CO2

emissions which, in itself, is a challenging issue

to confront.

Rather, it covers the full range of sustainability

issues confronting our company. And its clear

purpose is to build business value for Elopak –

enabling continued, profitable growth, and

supporting our positioning as a premium player

in the ever-more competitive and discerning

packaging market.

In short, our vision is for absolute sustainability.

And, to this end, we are pledging Elopak to a very

firm and precise set of commitments.

an analysis of our situationFor a business like Elopak, operating under

today’s circumstances, corporate sustainability

has to be embedded as a key thread of corporate

strategy, not merely a side activity performed by

“tempered radicals”.

We see it as an absolute prerequisite for operating

in markets and value chains in which:

• Customers and stakeholders need to be

convinced of environmental credentials,

demonstrable performance and the effective

management of risk.

• Regulatory regimes are certain to become

stricter, and increasingly likely to use pricing/

taxes as a means of incentivising progress –

and of penalising lack of progress.

• Dwindling supplies of fossil resources will mean

that businesses which are excessively reliant

upon them may become vulnerable to dramatic

fluctuations in their price and availability.


Elopak has made an analysis of the most impor-

tant trends and forces that are already playing out

within our market – and the reasons why Elopak

has no choice but to extend and accelerate our

sustainability initiatives. For a summary of these

forces and trends please see the tables at the end

of this brochure.

Our vision and strategyBased on this analysis, and drawing on our past

sustainability performance, we have set out:

• A vision which is deliberately and provocatively

ambitious

• A strategy which we know, from experience,

to be entirely viable

• A set of tangible plans, structured around five

facets (or pillars) of our business

Again, our vision is for absolute sustainability. We

intend to be a company with zero net impact on

the environment. We are setting very clear targets

for our people, our profits and our planet. And we

are aiming for nothing less than 100 per cent.

• 100 per cent renewable

– in our raw material and our energy use

• 100 per cent carbon neutral

– in our products and our operations

• 100 per cent recyclable

– in our finished cartons and all of our

raw materials

• 100 per cent recycled

– so that nothing we use or produce goes

to landfill

We call our strategy FutureProof 2020 – because,

by 2020, we want to have future proofed our

products and our business.

In broad terms, the sustainability mechanisms we

deploy will be three-fold:

• To reduce our environmental impact,

our use of non-renewable raw materials, our

wastage and our downtime

• To optimise the efficiency of our systems

and processes in order to deliver value for our

business, our customers and the environment

• To innovate by using our expertise, our

flexibility and our technical knowhow, in order

to adapt our products and our solutions to:

o Meet the evolving demands of our

customers and consumers

o Respond to the changing environmental

and economic pressures

The five facets of our strategyTo turn our aspirations into a tangible reality, our

strategy is structured around five facets. In each

case, we have set out our ultimate aspiration, we

have defined a binding target to reach by 2020, we

have identified the most important steps to take

us there, and we have assigned responsibility to a

member of our executive management team.

1. Renewable raw materials – no foil-no oil

2. Sustainable energy – a 25 per cent reduction

in energy use per produced carton

3. Sustainable logistics – a 15% CO2 reduction

per blank per km travelled

4. Customer operations efficiency – a 25 per

cent reduction in TCO21

5. Total recycling – zero waste

1. We use the term TCO2 to refer to a combination of Total Cost of Ownership (TCO) and Environmental Impact of Ownership (EIO) – and our aim is to reduce the cost burden and the environmental burden of owning and operating Elopak-supplied equipment.


FOREST STEWARDSHIP COUNCIL

1

NEW TREES ARE PLANTED OR GROW NATURALLY...

IS LEFT GROWING TO FULL MATURITY BEFORE FINAL FELLING...

WHEN SOURCED FROM RESPONSIBLY MANAGED FORESTS, WOOD FIBRE IS A RENEWABLE RESOURCE

HARVESTED TREES ARE USED FOR TIMBER, PAPER AND ENERGY

HARVESTED TREES ARE USED FOR TIMBER, PAPER AND ENERGY

FOR EVERY TREE HARVESTED...

70-90 YEARS

OF THESE ARE HARVESTED DURING TWO THINNINGS;

3to5

2to4

AT 25 - 35 YEARS

AT 40 - 50 YEARS

40-50 YEARS

25-35 YEARS


Our aspiration No foil-No oil – in any of our products

Our targets for 2020 • To use 100% renewable materials for all barriers

in our cartons and all caps

• To use 100% FSC paperboard

What we will measure

and manage

The percentage of renewable content in our products and

the tonnage of FSC paperboard sold to customers

The person taking responsibility Chief Technology Officer

With regards to renewable raw materials, we are in

a fortunate position.

By far our biggest raw material requirement is for

paperboard which, by its very nature, is renewable.

And, assuming that this paperboard is derived

from well managed forests, its production can

actually have a net positive environmental impact

(with young trees absorbing CO2 and emitting

oxygen). Across Europe, all of our paperboard

suppliers are already certified according to FSC

Chain of Custody and Controlled Wood standards.

And, by 2020, we are entirely confident that these

schemes will become more widely adopted

across more of the world – and that the supply

of FSC certified paperboards will become more

widely available.

With regards to ‘barriers’, such as plastics and

aluminium, and also to printing and finishing pro-

cesses, we do face a bigger challenge – but not

one which is insurmountable.

Alternative materials are already beginning to

emerge and, thanks to the sheer force of market

pressures, many more are set to follow. For our

part, we will actively encourage innovation among

our suppliers. We will rigorously test and implement

new raw materials as they become available. And,

we will prepare ourselves to overcome any related

technical or production implications.

Ultimately, we are committed to 100 per cent use

of renewable materials. We are fully committed

to a ‘no foil-no oil’ approach. And we feel sure that

we will have made substantial progress by 2020.

renewable raw materials


Our aspiration 100% carbon free

Our targets for 2020 • A 25% reduction in energy use – per produced unit

• To achieve 85% renewable energy


and manage

Monthly reporting and benchmarking of all of our facilities

and production plants

The person taking responsibility Chief Purchasing Officer

When compared to the production of other

comparable forms of packaging, our energy

requirements are really quite modest (as demon-

strated by a wide range of lifecycle analysis

studies). And, from our initial sustainability

initiatives, we know that we can really build on this

position of strength.

Most fundamentally, we know where and how we

can achieve energy savings – by improving the

design of our products and equipment, avoiding

unnecessary energy use, and implementing

additional energy efficiency measures.

We also know that we can make better use of

renewable energy sources, and further reduce our

reliance on fossil fuels. For example, a number of

our operations are based in countries which, like

Norway, have a high proportion of hydro-power

within their energy mix. And we are looking into

alternatives such as combined heat and power

(CHP), solar and bio based energy sources.

These two themes (the reduction in energy use

and the replacement of non-renewable energy

sources) will be our focus. However, in order to

neutralise our environmental impact, we do

accept that we may need to resort to some

‘offsetting’ or buying CO2 quotas from relevant

renewable energy projects – a strategy that we

would pursue from 2020, once all other avenues

have been exhausted.

sustainable energyreduce replace neutralise


Our aspiration A green supply chain – eliminate wastage on inbound

and outbound consignments

Our targets for 2020 • To achieve a 15% reduction in CO2 in emissions per blank

per kilometre travelled

• To achieve seamless systems integration with all

key customers and suppliers


and manage

Regular reporting of all transport costs and related CO2

emissions

The person taking responsibility Executive Vice President Board & Blanks Supply

Within our business there is a direct relationship

between logistics activity, cost and environment.

In simple terms, the more product there is on

each inbound or outbound shipment, the more

cost-efficient it becomes and the lower the

environmental impact.

The challenge, therefore, is to bring more

discipline and rigour to our logistics operations,

so that each consignment is optimised. Part of

the solution is to develop closer, more strategic

partnerships both with our customers and our

suppliers.

Part of it is to think more strategically about the

way we plan and manage our logistics require-

ments – including the type of transportation and

type of vehicle.

By increasing new forms of measurement such as

CO2 emissions, per blank, per kilometre travelled,

we have a way to monitor and manage the envi-

ronmental impact of our logistics – and also the

underlying business efficiencies.

sustainable logistics


Our aspiration A 25% reduction in TCO2* – to reduce the carbon cost

burden of operating our carton filling equipment

Our targets for 2020 • To engineer our filling equipment to achieve less

environmental impact and lower maintenance costs

• To establish a reduced consumption programme


and manage

An annual audit of all machine suppliers, and onsite measure-

ment programmes for facilities management operations

The person taking responsibility Chief Technology Officer

An important aspect of our business is what we

call customer operations – including the supply

and the servicing of our filling machines (which

are used to fill and seal Elopak cartons), the

consumption of related consumables (such as

steam, electricity, water and chemicals), and the

provision of packaging advice.

We recognise that the equipment we provide

places an additional environmental burden on our

customers. And that the activity of our support

and servicing teams has an impact on our own

performance.

We believe that there is potential to adapt existing

Elopak-supplied equipment, and to design new

equipment according to more environmentally

aware principles, such as:

• The ability to swap-out and repair key

components with minimal disruption

• Improved usage data to enable more tailored

servicing

• Greater accessibility to all parts of the

machinery

• Greater levels of consistency

• Lower consumable inputs

TCO2Overall, we believe that we are able to optimise the

design and operation of our equipment in order to

decrease both its Total Cost of Ownership (TCO)

and its Environmental Impact of Ownership (EIO)

– which we refer to jointly as TCO2.

We also believe that we can provide services and

support in a way that benefits the environmental

performance both of Elopak and our customers.

Customer operation efficiency


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Our aspiration Zero waste – to prevent both our waste and our products

from going to landfill

Our targets for 2020 • To achieve 50% of household recycling

• To achieve 100% of recycling within Elopak


and manage

Annual recycling reporting for each manufacturing unit,

and monthly waste performance of all Elopak facilities

and markets

The person taking responsibility Chief Purchasing Officer

Within our own business, waste is a cost. It

generally arises from the inefficient use of raw

materials (leading to higher input costs), and its

management, removal and disposal all cost us

unnecessary money.

There are several ways in which we intend to

reduce our production waste. We will, for

example, engage more closely with our suppliers,

we will pursue new production efficiencies, and

we will minimise the use of transport. And, when

designing new products, waste reduction will

become a key consideration – alongside quality,

performance, safety and price.

Through this type of rigour and discipline we

know that we can significantly reduce the need

for waste in our own operations. But, where waste

truly is unavoidable, we will ensure that it is

recycled.

In terms of our cartons, ease of recycling is an

important strategic consideration. Consumer

perceptions of recyclability tend to dominate

perceptions of cartons per se. By successfully

extending recycling facilities, making them more

available and more convenient, the business

benefits could be disproportionately high.

Unfortunately there is little we can do in isolation.

We need to work in partnership with the local

authorities (or municipalities) who manage most

schemes. And, particularly in those countries

where we have a low market share, it makes

sense to do so via industry-level initiatives.

Also, with so many forces at play, approaches to

carton recycling will need to be adapted in different

countries. Nonetheless, this will become a definite

area of focus across all of the markets in which we

are most active.

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From good intentions to tangible improvements

Having a well thought through strategy and a set of challenging targets is one thing. But, as everyone who works in a large, complex organisation knows, executing them is quite another.

We have therefore paid particular attention to the way in which the process will be managed and realised.

We have developed a number of strategic

management principles to guide and support the

delivery of FutureProof 2020. These are derived

from international best practice in the organisation

and management of more sustainable business

practice – including the international management

standard ISO14001, the international guidance

standard ISO26000, and the principles of the

Global Reporting Initiative (GRI).

In particular, we are applying a structured and

systematic management approach, including:

• The integration of responsibility for the sustain-

ability goals within existing management roles

and remuneration systems.

• The identification of clear metrics and Key

Performance Indicators (KPIs) need to be

established - both for the short and long term

horizon.

• The development of reporting structures and

review procedures need to be put in place to

monitor progress towards the FutureProof 2020

Vision.

We also recognise that the successful implementation

of FutureProof 2020 will rely on the combination of

two types of leadership.


Member of CDP (Carbon Disclosure Project), which means that our subcontrac-tors are ranked and required to account for their own CO2 emissions

Elopak has international forest certification and use paper products from forests that are managed according to the strictest environmental standards

The mark ofResponsible forestry

FSC* C081801

Recognised by consumers as the environmentally friendly beverage container

Through close cooperation with WWF, we quality control our environmental work

Beverage cartons are recyclable

Implemented a life cycle analysis for Elopak’s aseptic systems, and calculated emissions for all environmental parameters.


• Management leadership In the way they talk and behave, our CEO and

his executive management team must deliver a

clear, consistent and unequivocal message to our

employees, customers, suppliers and stakeholders

– emphasising that sustainability is of strategic

importance to the future success of Elopak and

integral to all of their management focus and

activity.

• Technical leadership Our technical specialists (those people who are

most familiar with Elopak’s technologies and

processes) must be given the permission, oppor-

tunity, resources and freedom to drive innovation

in sustainable business practice.

seeing the true picture High standards of data quality and integrity have

been an essential pre-condition for quantifying

the starting point for FutureProof 2020, and will be

critical to evaluating our progress over the coming

years.

In particular, the consistent collection and review

of relevant sustainability data will ensure the

accurate measurement of our impacts and our

progress in a transparent and communicable

manner.

In order to achieve such standards, we are

committed to:

• Investing in systems and approaches which

allow us to identify and monitor key sustainability

performance data (such as CO2 emissions,

water and energy use).

• Using recognised, verifiable methodologies to

demonstrate the sustainability performance of

our products (including lifecycle assessment,

carbon and ecological foot-printing).

• Wherever appropriate, seeking third party input

to provide advice and perspectives both on our

approach to sustainability and on our progress.

This may include assurance and verification

providers, NGOs, stakeholders and other

experts.

Getting the message across Regular external reporting of our sustainability

ambitions and our performance is an important

way for us to demonstrate our commitment and

our progress. In particular, we will build on our

previous track record of environmental reporting

by publishing regular sustainability reports. We

will also be active in communicating our sustain-

ability vision, policies and performance to suppliers,

customers, retailers and NGOs though other

communication routes as appropriate.

Drawing on our knowledge and expertise, we also

believe that we can play an important role in building

a wider understanding of the need for, and ben-

efits of, more sustainable business practice –

particularly within the wider packaging ecosystem.

We are acutely aware that there is only so much

that we can do on our own. Truly sustainable

businesses and supply chains can never be delivered

through the sole actions of any one company.

Rather, they require like-minded companies,

regulators, NGOs and customers to work

collectively for individual and collective benefit.


specification of trends and forces working on elopak and their potential impact on future business and sustainability.

Turn page to see our evaluations.

emissions

reductions

The interrelated trends which are set to have an increasing impact on our business

Category Trend Business impact Sustainability impact

New entrants

An increased emergence

of new direct competitors,

some of which use similar

designs and technologies.

Price competition from

new entrants will have a

direct impact on Elopak’s

business.

Superior environmental

credentials will be a useful

source of competitive

differentiation, particularly

at the premium end of the

market.

Regulation A focus on reductions

in energy use across

European markets, and a

likelihood of carbon taxes

and raising prices

for emissions.

Direct cost rises to Elopak,

combined with the need

to supply verifiable carbon

information and an

obligation to play a role in

reducing wider value chain

emissions.

By accelerating its

sustainability initiatives,

Elopak will be much better

positioned to compete under

these progressively

demanding circumstances.

Competitors Competition on

sustainability performance

is becoming an important

differentiator and, in many

cases, a requirement for

market entry.

Pressure from retailers to

drive ambitious targets in

the supply chain means

increased pressures to

compete on sustainability

performance, and the ability

to document performance.

By accelerating its




these progressively


Influences Increasing price volatility

of energy, raw materials

and water will have a

growing impact on supply

and distribution chains.

The cost pressures across

the supply chain are set to

place particular pressure on

any provider of high volume,

low margin products.

By reducing energy

consumption and shifting

focus to renewable resources,

Elopak can effectively

insulate itself from the

related price volatility.

Customers Increasing demands

for transparency in

sustainability performance,

will lead to the reduction

and integration of

ordering systems and

logistics networks.

Genuine year-on-year

sustainability performance

improvements will become

a decisive factor in selecting

and listing suppliers.

By accelerating its



positioned to compete

under these progressively


Consumers Consumers become

more interested in choos-

ing brands or products

that are seen to be more

sustainable - but are not

generally willing to pay a

higher price.

Consumers will be

increasingly inclined to

select more environmental

friendly products and to

avoid alternatives.

By accelerating its



positioned to compete

under these progressively


The interrelated trends which are set to have an increasing impact on our business

Category Trend Business impact Sustainability impact

NGOs/Pressure groups

Increasing pressure

for radical changes

in environmental perfor-

mance of manufacturing

and production – with

a particular focus on

reusability and recyclability

over disposability.

Companies will be

increasingly recognised and

rewarded for the substitution

of aluminium and oil based

plastics – yet cartons are

perceived by many to be a

difficult product to recycle.

By extending and

emphasising the

environmental benefits of

cartons – and emphasising

their recyclability – Elopak

will have a distinct business

advantage.

Substitute products

Plastics (such as PET

and HDPE containers)

represent strong compe-

tition for cartons (due to

their recycled content, and

the ability to provide many

forms and shapes).

Such products often have

more clearly defined and

convenient recycling

options than cartons –

and the plastics industry

continues to build its

recycling capacity.

By extending and

emphasising the wider

environmental benefits of

cartons – whilst also

emphasising their

recyclability – Elopak can

mitigate the competitive

threats from substitutes.

Communities Social media contributing

to changing consumer

expectations – with an

increased emphasis on

high supply chain

standards, with high levels

of transparency and

responsiveness.

The risk profile for B2B

companies is shifting – with

many activists focussed on

uncovering issues in the

value chains of retail

focussed companies.

By accelerating its




these circumstances – and

to mitigate the associated

risks.

Suppliers An increase in pulp and

paper prices to reflect an

increase in the costs and

the regulatory burden for

suppliers – forcing them

to seek improved ordering

and efficiencies.

Increased input costs and

competition for renewables

from alternative uses (land

for food) as well as other

industries – and a

requirement to co-ordinate

and share information with

suppliers.

Strategic sourcing strategies,

including seamless systems

integration must become an

integral aspect of Elopak’s

sustainability strategy.

Employees Increasing desire for

alignment between an

employer’s corporate

behaviour and employees’

personal values.

Employees work more

creatively and productively

for companies whose values

are aligned with their own.

Sustainability represents an

opportunity to reflect and

reinforce contemporary

employee values within

Elopak.


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