OUR KEY
RELATIONSHIPS

We believe that building relationships with our stakeholders in a spirit of trust and mutual respect enables more tangible business value creation.

  • Strengthen the means of implementation and revitalise the global partnership for sustainable development.



  Our stakeholders  

We view stakeholder engagement not as a once-off annual intervention but an ongoing dynamic process that enables us to respond to the changing nature of shared priorities of parties who are interested in, and affected by, our business. To enhance our understanding of, and communication with, our stakeholder groups we consider: expectations, existing relationships, cultural context and capacity to engage (language barriers, IT literacy, access to digital resources).

Our approach to engagement with all stakeholder groupings is based on inclusivity and the principles of:

  • Materiality: Identifying the legitimate interests and material concerns of stakeholder groupings
  • Relevance: Focusing on those issues of legitimate interest and material concern to our stakeholders and to Sappi, and identifying how best to address them for mutual benefit
  • Completeness: Understanding the views, needs, performance expectations and perceptions associated with these legitimate and material issues, and assessing them against prevailing local and global trends
  • Responsiveness: Engaging with stakeholders on these issues and giving regular, comprehensive, coherent feedback.

Our stakeholder work is aligned to the governance outcomes of King IV, namely ethical culture, performance and value creation, adequate and effective control and trust, good reputation and legitimacy.

In terms of feedback loops, we assess the quality of our relationships both formally (employee engagement and customer surveys, as well as Poverty Stoplight in South Africa and community forums) and informally (ongoing regular engagement with suppliers, investors, industry bodies and business, government, civil society and media).

Employees

We invest in future talent while challenging and enabling our people so that they are able to leverage the opportunities presented by our strategic direction and a changing world.

Shared priorities     Our response
       
Resources that enable our people to grow intellectually, fulfil their potential and drive innovation in Sappi     Invested an average of US$525 per person in training and development
       
       
Connection with Sappi's strategic goals and high levels of engagement     We conduct engagement surveys every second year (see Key material issues for more detail). At group level, leadership and direction as well as image and customer focus were identified as areas needing attention. Accordingly, we have introduced new leadership development programmes at senior and executive levels and are working to further entrench our One Sappi culture. We provide regular updates on progress towards our 2020Vision business strategy.
       
       
Effective safety, health, wellness and recognition programmes    
  • The theme for Global Safety Awareness week was 'We value safety'. The message was reinforced by toolbox talks, safety games, competitions, addresses by media personalities and self-defence classes
  • Wellbeing and wellness programmes are tailored to the needs of each region
  • Our recognition programmes include:
    Sappi Limited:
    • Technical Innovation Awards
    • CEO Award for Excellence
SEU: Annual Coryphaena Award
SNA: TOUTS Recognition Awards and periodic regional President's Awards
SSA: Excellence in Achievement Awards (EAA)
Sappi Trading: SMART Awards.
       
       
Encourage employee volunteerism through initiatives like:    

SEU: Support of various local education, cultural and environmental projects based on annual requests and identified needs.

SNA: The Employee Ideas that Matter initiative through which we provide grants to employees to fund their individual projects to support good in local communities.

SSA: Employee wellbeing committees at each mill support local community projects and support Mandela Day.

 
  Employees  
Opportunities for value creation
  • Employees who understand and buy into our 2020Vision are pivotal to the success of our business – alignment with our strategic direction enables our people to contribute more positively to the business as well as their personal and career development
  • By building our human capital, we establish a base of technical skills needed by the industry
  • An increased commitment to safety delivers benefits at personal, team and operational levels
  • By establishing an ethical culture where corporate citizenship is promoted, we ensure the ongoing viability of our business, enhance reputation and become an employer of choice.
 

Challenges for value creation

  • Recruitment and retention of key skills
  • Loss of institutional memory.
 

Unions

Given challenging global economic conditions and current socio-economic dynamics across the world, particularly in the South African labour market, we prioritise our relationship with our employees and their representatives.

Shared priorities     Our response
       
Freedom of association and collective bargaining     Sappi endorses the principles of fair labour practice as entrenched in the United Nations Global Compact and Universal Declaration of Human Rights. At a minimum, we conform to and often exceed labour legislation requirements in countries in which we operate. We promote freedom of association and engage extensively with representative trade unions.
       
       
Safety and wellness initiatives     Unions are involved in health and safety committees at each mill.
       
       
Remuneration, working hours and other conditions of service    

SEU: Collective labour agreements. In 2019, the overall industrial relations climate in Sappi Europe remained good, without any major issues.

SNA: Collective bargaining with hourly paid employees and labour agreements with various unions. In 2019, we settled labour agreements with all four unions at Somerset Mill, the trade unions at its Westbrook Mill and two small unions representing railroad workers at the Cloquet Mill railroad.

SSA: Employees (collective bargaining); forestry workers (sectoral determination/consultation)

In 2019, the region successfully concluded a separate collective bargaining framework agreement with the majority trade union, Chemical Energy Paper Printing Wood Allied Workers Union (CEPPWAWU) for forestry operations. This will effectively replace the ministerial or government determination and allow for annual engagement on wages and conditions of employment for forestry workers, similar to pulp and paper as well as sawmilling segments of Sappi Southern Africa operations. We also settled wage negotiations for pulp and paper staff.

       
       
  • Resolving grievances
  • Engaging on strategy
   
  • Well-established grievance channels and disciplinary procedures
  • We regularly engage with unions on economic conditions, market dynamics and growth plans.
 
  Unions  
Opportunities for value creation
  • Good employee/management relations enable us to resolve new and difficult labour issues as they develop
  • When employees understand strategic direction and operating context, they are more likely to be engaged, leading to a more stable labour force and higher levels of productivity.
 

Challenges for value creation

  • Multi-union landscapes, particularly in North America and South Africa, are adding to complexities in the labour environment.
 

Customers

We adopt a partnership approach, where we develop long-term relationships with global, regional and local customers. We also accommodate more transactional customers. Where relevant, we will conduct R&D and develop products to suit customers' specific needs.

In addition to the usual avenues of engagement, we engage through initiatives like the Sappi Football Cup (Sappi Europe); Ideas that Matter (ITM) and by sponsoring the Citrus Research Symposium (Sappi Southern Africa).

Shared priorities     Our response
       
High levels of service     We moved to a single customer relationship management (CRM) system across all regions. This enabled us to manage customer relationships more effectively and provide better service by leveraging customer data and sales processes across the globe.
       
       
New or enhanced products that meet rapidly changing market demand    

In 2019 we launched:

  • Atelier GC1 paperboard with the brand promise 'brilliance meets function'
  • Transjet Drive, a sublimation paper optimised for industrial printers with a glue-belt system
  • We relaunched Sappi OHG, the first paper wrapper for confectionery bars
  • We launched Sappi Seal, a paper-board packaging solution to replace heat-sealing laminates by material with a high share coming from renewable sources
  • Heaven 42 under the auspices of IGEPA which owns the brand
  • A range of new release paper textures including Selva, Optima and Fiesta.
       
       
Support for paper, packaging, DWP and sustainability goals    

For DWP, technical centres of excellence are located at Saiccor and Cloquet Mills; Sappi joined the Sustainable Apparel Coalition (SAC).

Customers can use the competence centre for speciality papers and paper laboratory at Alfeld Mill.

In North America, the Sustainability Customer Council provides candid feedback, identifies emerging issues and helps to establish goals.

In South Africa, we co-fund with Cellmark (through its Paperseed Foundation) projects in our Tugela Mill community. Funding is in the form of US$0.50 per ton of sales per partner.

       
       
Information and campaigns to promote print as a communication medium and encourage the use of packaging    

We showcased our brands at Fachpak, Nuremberg; FESPA, Munich; Interzum, Cologne; LabelExpo, Brussels; Luxe Pack Shanghai; Northwest Materials Show, Portland; Packaging Premiere, Milan and the PRINTING United tradeshow in Dallas.

Globally, we continue to participate in industry initiatives like TwoSides.

       
       
Information about the fibre sourcing and production processes behind our brands    

At the request of our customers, we participate in EcoVadis and Sedex in all regions.

SEU and SSA: We make paper profiles, wood origin declarations and information sheets available for our papers.

SNA: Has an updated eQ GHG calculator on the Sappi North America e-commerce portal. This online tool enables our salesforce and customers to calculate carbon savings achieved by buying our graphic and packaging products compared to the industry average.

See Our operating context for details of Sappi North America's investment in Forest in Focus, a joint undertaking of the American Forest Foundation and GreenBlue/soft-return Sustainable Packaging Coalition.

       
       
Providing technical information    

Globally, a series of technical brochures is available on our website www.sappi.com

SEU:

  • The Sappi Houston online knowledge platform for graphic paper
  • The PSP site to provide targeted information on packaging and speciality papers (www.sappi-psp.com)

SNA:

  • The POP site is aimed at marketers, creatives, designers and printers looking to innovate in their categories (www.sappipops.com)
  • Sappi etc is an educational platform for designers and printers (www.sappi.com/sappietc)

SSA: Our paper and paper pulp product offerings are supported by strong technical teams at each mill and the technology centre in Pretoria.

 
  Customers  
Opportunities for value creation
  • Meet customer needs for products with an enhanced environmental profile
  • Innovate to align with evolving market trends
  • Increase awareness of the importance of sustainability
  • Promote our customers' own sustainability journeys
  • Keep abreast of market developments
  • Showcase our products and promote the Sappi brand.
 

Challenges for value creation

  • Confusing harvesting with deforestation and lack of understanding about the manner in which the forests and plantations from which we source woodfibre help mitigate global warming.
 

Communities

We work to incorporate communities close to our operations into our journey of intentional evolution, which recognises the importance of sharing value with all our stakeholders; conserving natural resources and uplifting people so that they are well positioned to thrive in our increasingly interconnected world.

Community engagement meetings take various formats in our mills in the regions where they operate. These range from broad liaison forums for business, local government and communities to legally mandated environmental forums that form part of the licensing conditions of mills. In South Africa, there are local farmer and community forums related to our forestry communities.

Our initiatives are described in more detail in our 2019 Group Sustainability Report on www.sappi.com/sustainability.

Shared priorities     Our response
       
Community support including employment, job creation, business opportunities, economic and social impacts/contributions and community support    

SEU:

Mills offer support and financial sponsorships to local schools, sport and hobby clubs, forest products industry students, local safety/environmental organisations and support local charities. Supporting youth in our communities was a key priority in 2019. SOS Children's Villages International, Save the Children and Global Exploration were some of the charities that we contributed to. Engagement and contributions to local schools are also made.

SNA:

  • Each business unit has a lead sustainability ambassador who is responsible for supporting sustainability communication, conducting training and fostering community engagement through local projects
  • Education programmes are supported at targeted colleges and universities as are programmes to encourage study in fields relevant to our operations
  • Our employees supported initiatives like Living Lands and Waters and the Charles River Watershed Association focused on environmental stewardship and education
  • The Ideas that Matter programme, now in its 20th year, recognised and rewarded designers who support good causes
  • The Employee Ideas that Matter programme allows employees to apply for grants made by Sappi to their favourite non-profit or charity.

SSA:

  • Given South Africa's significant development needs, the bulk of community support is allocated to this region. Support is directed to education, environment and socio-economic development, based on helping communities help themselves. Initiatives include:
  • Sappi Khulisa, our enterprise development scheme for timber farmers
  • The Abashintshi Youth programme
  • Early childhood development
  • Education, including Khulisa Ulwazi, our training centre for small growers and two training centres for local unemployed youth, one at Saiccor Mill and the other at Ngodwana Mill
  • Support for local tourism through our mountain biking and trail running sponsorships and promoting recreational riding on Sappi land.
  • thern Africa, we have appointed a specialist team to drive local procurement.

In Sappi Southern Africa, we have appointed a specialist team to drive local procurement.

 
  Communities  
Opportunities for value creation
  • Enhanced licence to operate and thrive
  • Promoting socio-economic development which could, in the long term, lead to increased demand for our products
  • Initiation of real social mobilisation and change for the better.
 

Challenges for value creation

  • Community expectations for jobs and service delivery.
 

Sappi North America supports Living Lands & Waters, an Illinois-based environmental organisation established in 1998 to clean up America's rivers. It has become the only 'industrial strength' river clean-up operation of its kind in the world.

Spending up to nine months a year living and travelling on a barge, the Living Lands & Waters clean-up crew hosts river clean-ups, watershed conservation initiatives, workshops, tree plantings and other key conservation efforts. Through our corporate sponsorship, employees volunteer in river clean-ups.

To date, the organisation has removed around 4 million kilograms of rubbish and debris from 24 rivers in 21 states.

Industry bodies and business

We partner with industry and business bodies to provide input on issues and regulations that affect and are relevant to our businesses and industries. We also support and partner with industry initiatives aimed at promoting the use of our products.

One of our longest relationships is with the United Nations Global Compact, to which we have been a signatory since 2008.

Shared priorities     Our response
       
  • Issues that affect the sustainability of our industry including woodfibre base, carbon taxes, energy and emissions
  • Ethical issues impacting business
  • Energy issues in general and government proposals on carbon taxation in particular
  • The impact of increased regulations on business
  • The benefits of our industry and our economic contribution to society
  • Social and environmental credentials of our products
   

Globally in 2019:

  • We became a member of the Sustainable Apparel Coalition and will use its sustainability measurement suite of tools, the Higg Index, to drive environmental and social responsibility throughout our supply chain. With this membership, we join over 240 global brands, retailers and manufacturers, as well as government, non-profit environmental organisations and academic institutions that are collectively committed to improving supply chain sustainability in the apparel, footwear and textile industry
  • We continued our work with the Cambridge Institute of Sustainability and other partners on blockchain technology for timber certification (see Our key material issues for details of the Trado project) and developing new low-carbon pulp technology (deep eutectic solvents).

We are an investor in the Forests in Focus tool in the USA, which strives to assess and evaluate forest-based risks within wood baskets for customers, investors and stakeholders, using credible scientific public data collected by state and federal government agencies. https://greenblue.org/work/forests-in-focus-landscape-assessment/

We celebrated 20 years of partnership with Borregaard of Norway for our LignoTech South Africa joint venture which extracts lignin from Saiccor Mill's effluent stream. Output is sold in South Africa and exported to countries in Africa, Asia Pacific, Middle East and South America for a range of applications including dust suppression, concrete additives, pelleting agents in animal feeds and mineral granulation aids.

 
  Industry  
Opportunities for value creation
  • Develop sustainable, transparent supply chains
  • Maintain and expand markets for our products
  • Dispel myths and enhance understanding of our environmental and social credentials
  • Promote dialogue.
 

Challenges for value creation

  • High cost of membership and resource allocation involved in certain memberships.
 

Our membership of industry associations

Sappi Limited

Business Leadership South Africa, Cambridge Institute for Sustainability Leadership, Paris Pledge for Action, Programme for the Endorsement of Forest Certification (PEFC), Sustainable Apparel Coalition, Technical Association of the Pulp and Paper Industry (TAPPI), The CEO Initiative, The Ethics Institute, United Nations Global Compact

 

Sappi Europe

Confederation of European Paper Industries (CEPI), Eurograph, European Joint Undertaking on Biobased Industries, Print Power, Save Food, The Alliance of Energy-Intensive Industries, The Two Team Project (focusing on breakthrough technology concepts in the industry that could enable a more competitive future), TwoSides

 

Sappi North America

American Forests and Paper Association (AF&PA), Paper and Paper Packaging Board, Agenda 2020 Technology Alliance, Forest Products Working Group, Forest Stewardship Council (FSC), Sustainable Packaging Coalition (SPC), *Sustainable Forestry Initiative® (SFI ®) *The Recycling Partnership, TwoSides

 

Sappi Southern Africa

Business Unity South Africa. Public Private Growth Initiative, Energy Intensive Users' Group. Fibre Processing and Manufacturing Skills Education and Training Authority (SETA). Forestry South Africa, Forest Stewardship Council (FSC). Packaging SA. Paper Manufacturers' Association of South Africa (PAMSA), Recycle Paper ZA. Printing Industries Federation SA (PIFSA). Manufacturing Circle, South African Chamber of Commerce and Industry (SACCI) and local chambers of commerce and industry, TwoSides, National Business Initiative (NBI)

 

Sappi Forests

Institute for Commercial Forestry Research (ICFR), Founding member of the Tree Protection Co-operative Programme (TPCP), Biological Control of Eucalypt Pests (BiCEP) (www. bicep.net.au ), Eucalyptus Genome Network (EUCAGEN), CAMCORE

Investors

Our aim is to provide investors (shareholders and bondholders) and analysts with transparent, timely, relevant communication that facilitates informed decisions.

Shared priorities     Our response
       
  • Information on Sappi's strategy, debt levels and key developments such as the acquisition of Matane Mill in Canada
  • Return on investment
  • Transparent information about risks, opportunities and environmental, social and governance (ESG) performance
   
  • Our investor relations (IR) department engages with shareholders and analysts continually
  • Our Chairman and CEO engage with shareholders on relevant issues
  • We engage with various ratings agencies, particularly on ESG performance. We conduct ad hoc mill visits and road shows and issue announcements through the JSE Stock Exchange News Services (SENS), in the press and on our website (see www.sappi.com/SENS)
  • We publish our annual integrated report (see www.sappi.com/annual-reports) and sustainability reports (see www.sappi.com/sustainability) on the group websit

Shareholders can attend and participate in the Annual General Meeting (AGM) as well as the four quarterly financial result briefings

  • Our Chief Financial Officer and Head of Treasury engage with bondholders, banks and rating agencies continually on the performance of the company
  • We participate in the CDP disclosure projects every year, making our submissions publicly available.
 
  Communities  
Opportunities for value creation
  • Understanding our strategic direction
  • Enhanced reputation
  • Greater investment confidence
  • Broader licence to invest.
 

Challenges for value creation

  • Global economic uncertainty, trade wars, reduced demand, lower pricing.
 

Government and regulatory bodies

We engage with government departments and regulatory bodies to provide input on issues and regulations that affect our industry. We also engage with regional and local governments and local authorities to obtain support for our operations and show how our activities contribute to local economic and social development.

Shared priorities     Our response
       
  • The social and economic benefits of our industry nationally and at a local level
  • Increased investment
  • Energy issues in general and government moves on carbon taxation, decarbonisation and recyclability in particular
  • The impact of increased regulations on business
   
  • In 2018 our group CEO made commitments at the first investment conference hosted by the South African President, announcing R2.7 billion to expand Sappi Saiccor Mill's dissolving wood pulp capacity by 110,000 tons per annum (for global textile markets); and R5 billion for upgrade projects at the mill to decrease production costs, introduce new technology, optimise processes, reduce environmental footprint and future-proof manufacturing systems at Saiccor Mill
  • Ongoing consultations with government departments and regulatory bodies in each region. In Europe we also regularly engage with the European Commission. (See Our operating context: Regulatory and environmental issues)
  • We brief legislators
  • We support specific government initiatives, including in South Africa the renewable energy drive; our biomass project at Ngodwana Mill is under construction.
 
  Government  
Opportunities for value creation
  • Promote understanding of issues and challenges, as well as the strategic value of our industry
  • Help create a more receptive regulatory and policy environment.
 

Challenges for value creation

  • Policies which do not take our high use of biobased energy into account
  • Administrative delays.
 

Suppliers and contractors

We are committed to establishing mutually respectful relationships with our suppliers and encouraging them to join our commitment to economic, social and environmental responsibility and creating a shared commitment to doing business with integrity and courage; making smart decisions which we execute with speed, underpinned by a commitment to safety. We aim to build long-term value partnerships, based on the importance of suppliers to a sustainable supply chain.

Shared priorities     Our response
       
  • Safety
  • Transparency
   
  • Given our focus on zero harm in the workplace, we work with our contractors to ensure that they follow our safety systems. In South Africa, Sappi Forests works closely with contractors and their workers in implementing its innovative Stop and Think Before You Act safety initiative
  • Rolled out our Group Supplier Code of Conduct (for further details see Our key material issues).
       
       
  • Increased value
  • Decreased costs
  • Security of fibre supply, certification, income generation and job creation
   

SEU: A joint sourcing partnership assists in negotiating better terms with timber and other suppliers. In addition, we are a member of the Confederation of European Paper Industries (CEPI), which participates in actions supporting and promoting the development of sustainable forestry management tools, including forest certification, globally, particularly in less developed countries.

SNA:

  • The Sappi Maine Forestry programme and the Sappi Lake States Private Forestry programme assist forest landowners to meet their objectives for managing their woodland. Sappi's trained foresters are able to develop a forest management plan geared to the interests of the landowner including wildlife management and aesthetics, marketing timber to generate maximum return and providing an extensive network of environmental and marketing resources
  • Procurement practices extend far beyond avoiding controversial sources by requiring the promotion of biodiversity, logger training, forest research, landowner and community outreach, and implementation of best management practices for soil and water conservation, as evidenced by our conformance to the SFI® Fibre Sourcing Standard.

SSA:

  • Qualified extension officers provide growers in our Sappi Khulisa
  • enterprise development scheme with ongoing growing advice and practical assistance
  • We have established a training centre, Khulisa Ulwazi, for Khulisa growers. The objective is to develop growers' and contractors' skills so that they can conduct silviculture operations economically and to a good standard. Training material has been developed in conjunction with the Institute of Natural Resources and covers area like entrepreneurship, fire management, harvesting planning, leadership and management development, as well as safety
  • At the end of September 2019, Sappi was involved in 60 land reform projects, helping beneficiaries to manage approximately 18,320 hectares of land. Many of these properties previously belonged to commercial farmers who had supply agreements with Sappi. For many of the land claims in which we have been involved, and where there has been a change in ownership, we continue to buy the timber and help to manage those plantations
  • Sappi Forests pays small growers a premium for certified timber.
 
  Suppliers and contractors  
Opportunities for value creation
  • Security of woodfibre supply
  • Improved supplier relations
  • Better understanding of the requirements of the Sappi group
  • Expanded basket of certified fibre
  • Support for local economic development
  • Support for emerging supplier/contractor development.
 

Challenges for value creation

  • Balancing the need to support SMMEs with the need to source from suppliers with strong social and environmental credentials.
 

Civil society and media

We maintain an open relationship with the media, believing that an informed media is better able to serve public reporting and debate on any issue.

We continue to update the media on our strategic shifts to extract value from woodfibre in line with future trends. We engage with civil society organisations on issues of mutual interest and belong to key organisations relevant to our operations. We engage with various civil society groups on our societal and development impact.

Globally we interact and engage with a wide range of non-governmental organisations, especially through our participation with the forest certification systems (FSC, PEFC and SFI®). We actively contribute to the growth of forest certification world-wide and collaborate with diverse stakeholders. In South Africa, Sappi is a member of the local WWF organisation as well as FSC and has worked closely with PEFC to develop a forestry assurance standard, now known as the South African Forestry Assurance Standard (SAFAS).

Shared priorities     Our response
       
  • Business developments
  • The future of our industry
  • Our impacts on our communities
  • Protecting the environment
   
  • Join key credible organisations as members.
  • Develop personal relationships and engage continually.
  • We provide support to and sponsorship for key organisations on issues of mutual interest.

We have joined The Forest Dialogue whose unique purpose is to utilise a constructive dialogue process among key stakeholders, to build relationships and to spur collaborative action on the highest priority issues facing the world's forests.

SSA: In terms of civil society, in South Africa, our forestry operations belong to a number of fire associations, given that fire is a key risk on our plantations. We also provide funding for BirdLife South Africa and have established a project which coordinated efforts to re-establish the Warburgia salutaris (pepper-bark tree) in communities and the wild.

SNA: We support the Ruffed Grouse Society; the Dovetail Partners which works to promote bat habitat conservation efforts in the state and the University of Minnesota Sustainable Forests Education Cooperative.

SEU: We participate in the Save Food initiative, signalling a firm commitment to better protection of all foodstuffs globally. Save Food is a joint initiative of the Food and Agriculture Organization of the United Nations (FAO), the United Nations Environment Programme (UNEP), Messe Düsseldorf and Interpack, the world's leading trade fair for processes and packaging.

 
  Civil  
Opportunities for value creation
  • Opportunity to inform and educate media
  • Transparent, two-way communication and opportunity for dialogue with civil society and media.
 

Challenges for value creation

  • Misunderstanding of our environmental impacts.