SFPNA Sustainability Report 2012: Q&A with Jennifer Miller

2012 marks the fifth year that SFPNA has publicly reported its progress against sustainability goals; what do you see as the key issues that will define your company’s progress over the next five to ten years?

Economic sustainability is certainly the foundation. Will we be successful in responding to market dynamics in all three of our businesses and generate returns that attract reinvestment? In order to open up new markets and new growth potential, we are dedicated to attracting employees who will redefine and renew our business strategies. Furthermore,earning the business and trust of our customers depends on the thoughtful way we manage all of our operations, including avoiding waste and inefficiency and thereby reducing environmental impacts.

All of these issues are interrelated and I believe our stakeholders, whether customers, employees, communities or investors, understand that a more holistic approach to sustainable development will be the key to the future. It will no longer be just a matter of “green program” badges or “green product” labels. The bigger picture of what vision a company has for its future growth and success and exactly how it plans to get there—through strategies that account for both people and the planet—is far, far more important.

Has this holistic view influenced your goal-setting for the next five years?

Absolutely, starting with a prosperity goal of reaching and maintaining an overall company return on net operating assets of 12 percent, the level we have determined will attract reinvestment. In addition, the new waste reduction and energy efficiency goals will drive the right actions in all three of our businesses to lower costs and improve productivity and yield. All of these strategies are key to ensuring continued global competitiveness and minimal environmental impacts.

We remain committed to an average of 75 hours per year of meaningful training for all of our employees, hourly and management, to provide them with valuable skill sets for the future. And this commitment extends to our customers, where we have invested time in educational programs to make sure they understand not only the features and benefits of our products and services, but how together we can offer unique solutions for today’s and tomorrow’s markets. Finally, we take seriously our obligation to source responsibly with a key focus on wood sourcing—the essential raw material for all three of our businesses.

As a leading pulp and paper company, SFPNA must consider wood sourcing to be a critical element of your overall sustainability strategy. Where do you see this going in the next several years?

With only ten percent of forests third-party certified and with many customers demanding that level of assurance, we clearly must do much more in the way of helping our wood suppliers become certified. We detail many of those initiatives in this report and are proud of our activities in that arena. SFPNA is committed to sourcing 100 percent of our wood and market kraft pulp from well-managed forests. We are members of the Forest Stewardship Council® as well as the Sustainable Forestry Initiative—two of the world’s leading independent nonprofit organizations that are responsible for developing sustainable forestry certification programs. But it is as important, I believe, to promote better understanding of what it means to source wood from controlled sources.

What that means for us is that for 100 percent of the wood we buy, we know where it comes from. The landowner adheres to sustainable forest management principles, including all laws and regulations pertaining to harvesting activities, so that we know the wood we purchase doesn’t come from protected forests. Commitment to sustainable forestry practices is not only good for the environment, but is good business sense.

Building on the theme of efficiency driving sustainable results, what changes has SFPNA made in terms of logistics and operations planning?

Through a collaboration with the US Environmental Protection Agency’s (EPA) SmartWay® Transport Partnership, we are able to closely manage how our products move from the mill to the customer location. We have worked hard to plan our shipping and storage operations much more efficiently, reducing freight miles, eliminating redundant trips and shipping directly with full railcars or trucks as often as possible.

These activities not only improve on-time performance and reduce cost and damage, but they result in better fuel usage and lower carbon emissions. Less handling contributes to less opportunity for damage and less potential waste. Finally, we are working with several of our merchant partners to eliminate even more redundancy and waste by integrating our shipment planning. Again, this makes good environmental and business sense for us and our customers and improves the future for our entire industry segment by keeping transit times short and costs low.

Speaking of the future of your industry, how do you see the role of print changing and what should we expect to see from SFPNA in 2013 and beyond?

Print is definitely going to play a more focused and, frankly, higher value role in the media mix. Paper is still the most tactile media and the most effective in creating lasting emotional and positive brand associations. It can break through clutter in ways other media cannot and inspires consumers to act. The combined use of print and digital technology has become increasingly important in improving the overall effectiveness of a fully integrated media campaign. You can expect to hear a lot more from Sappi this year on new advocacy programs and sales tools on just how best to leverage the value of print. In addition, we will focus on programs showing how our unique coated paper offerings represent the higher end of the market in terms of tactile feel, color fidelity and image pop—true complements to the alternative media choices in the market.

We believe that the efficient, targeted use of paper remains one of the most cost-effective and high-return choices out there. And even more rewarding, it is 100 percent recyclable, produced by using high levels of renewable energy, and it supports sustainably managed forests.

In closing, what other steps is SFPNA taking to ensure a sustainable future for its employees, customers, local communities and shareholders?

We think hard about the investments we must make now in order to be a viable manufacturer and service provider for the future: investments in educational outreach at universities, trade schools and design centers; capital projects at our mill sites, like our recent investment in Somerset’s PM #3 and planned investment in new coaters at Westbrook for our specialties business; and new IT, logistics and e-business systems that are state-of-the-art and help lower costs of doing business with us and increase speed to market.

Looking further ahead, we are entering into an exciting growth market with our specialised cellulose business. Sappi Limited is currently the largest producer of chemical cellulose and with our major US$170M investment in Cloquet to be completed in 2013, we expect to produce an additional 330K metric tons per year. Going forward, we foresee the conversion will not only diversify our offering to a high-growth sector and improve the overall returns of our North American region, but will provide opportunities for further reinvestment in our coated, release and chemical cellulose businesses.

Read the full SFPNA Sustainability Report 2012 by downloading an online PDF version from our eQ microsite at: http://www.na.sappi.com/eQ/index.html