Our material issues within a global context

We are operating in a world of constrained resources, facing environmental and social challenges which are global in scale and local in nature. These challenges affect our business, our stakeholders and the communities in which we work, and our response contributes to our future sustainability.

It is important for us and for our stakeholders to identify and understand our material sustainability issues within this global context. We believe that being part of the solution secures the future prospects of our business and our communities.
As we explore opportunities for new markets and
innovative products, we work together with
our stakeholders to address sustainability
challenges across the value chain.

Our material issues within a global context [graph]

Environment and natural capital

The Millennium Ecosystem Assessment1 found that 15 of the 24 ecosystem services evaluated had been degraded over the preceding half century. A rapid and continuing rise in the use of fossil fuel-based energy and an accelerating use of natural resources continue to affect key ecosystem services, threatening supplies of food, fresh water and wood fibre. More frequent and severe weather-related disasters, including drought and famine, are also impacting communities around the world.

Climate change, water and materials

Climate change represents one of the greatest threats to our environment, society and economy. The Intergovernmental Panel on Climate Change (IPCC) regards global warming as ‘unequivocal’2. It assesses the observed increases in global average air and ocean temperatures, widespread melting of ice and snow, and rising global average sea levels, all very likely to be caused by the emissions of greenhouse gases (GHG) induced by human activities.

An increasing replacement of the use of fossil fuels with renewable energy sources is key in decreasing GHG emissions. In addition, responsible management of forests and associated ecosystems can contribute to a deeper global understanding of the role of forests in climate protection and maintaining the health of ecosystems.

In addition one third of the world’s population is affected by water scarcity (World Health Organization 2009), and if trends continue, this will increase to nearly half of the total population by 2030 (Organisation for Economic Co-operation and Development 2008). Responsible water management is therefore critical for society.

Materials consumption, especially on an industrial scale, brings additional burden on natural resources, not just through increasing resource depletion but also through waste generation. Products that are designed to be more efficient, last longer and use less material can in part address this. Packaging can be optimised to help products last longer and to deliver more functionality. Recycling can be increasingly integrated into business models. Even waste water can be considered a resource and reused or recycled to decrease the pressure on natural water systems. All of these activities require on-going commitment to research and development.

Given the state of the ecosystems and natural environment, the urgency and serious nature of global challenges such as climate change and the importance of managing water and material consumption, we have identified Increasing our products’ eco-efficiency and Understanding and minimising our contribution to climate change as two of our material issues.

Land use, forests and biodiversity

The International Union for Conservation of Nature (IUCN) highlights the importance of what it describes as ‘nature-based solutions’ and calls for more effective stewardship of natural capital. The IUCN believes that individuals, communities, governments and the private sector are under-using the potential power of nature and the solutions it can provide to global challenges associated with climate change, food security and social and economic development.

Land is being converted to human use all over the planet, mainly for agricultural purposes. This land-use change is one driving force behind the serious reduction in biodiversity and the impacts on water flows.

Loss of forests is a key example of how land-use change can have adverse impacts on our natural and social systems. Forests are an essential component of life, supplying wood, fibre and non-timber forest products as well as providing an extensive range of ecosystem services. They are also vital to watershed protection and soil formation, and play a major role in regulating climate.

As the world’s population grows, unless consumption patterns change dramatically, our forests will have to produce more fibre for wood, paper and fuel. Overall wood use may triple in the next three decades. At the same time, increasing competition for land for food, bio-energy crops and livestock is putting our natural forests under increasing pressure. New Generation Plantations, intensively-managed forest plantations that maintain ecosystem integrity and protect and enhance high conservation value areas, can contribute to bridging the gap between demand and supply.3

Issues related to the loss of forests and reduction in biodiversity is directly linked. The Economics of Ecosystems and Biodiversity (TEEB) study highlights the growing costs of biodiversity loss and presents a compelling economic case for the conservation of ecosystems and biodiversity.

The main global concerns related to forests and biodiversity are:

  • deforestation, illegal logging and the conversion of natural forests to agricultural crops or plantations;
  • loss of protected and high conservation value areas; and
  • loss of species and habitat biodiversity supported by natural forests.

Despite the efforts of various certification systems to address some of these challenges, the current level of global forest certification remains below 10%4. Although this figure is significantly higher in areas where Mondi operates, overall global certification is not growing enough to satisfy increasing demand. This makes it challenging to source an increasing proportion of certified wood. The shortage of certified wood in Europe has been exacerbated by subsidies for biomass.

Wood is one of our key raw materials, and we recognise the challenges the industry faces to ensure sustainable and responsible management of forests. We also acknowledge the inextricable link between forests and biodiversity. Within this context, we have identified a further two material issues, namely Securing access to sustainable fibre in the short, medium and long term to meet the needs of the business and our customers and Operating in a world of constrained resources and recognising concerns regarding biodiversity, water and ecosystem services..

People, societies and development

The United Nations (UN) estimates that by 2050 the global population would have increased to more than nine billion. With the majority of this growth happening in the developing and emerging world, the global middle class will rapidly expand. The future population is expected to become increasingly urban and diverse5.

As populations grow and income levels improve, significant opportunities will exist for business to help improve people’s livelihoods and lifestyles in more sustainable ways. Improving access to health and education as well as a more outcome-focused approach to such services is key to improving livelihoods.

The UN’s Food and Agriculture Organization’s strategic objectives include: helping eliminate hunger, food insecurity and malnutrition; making agriculture, forestry and fisheries more productive and sustainable; reducing rural poverty and increasing the resilience of livelihoods from natural disasters.

Also critical to societies’ wellbeing in the future is their economic productivity – the gross output of goods and services per person in the potential workforce, which shows a decline in coming decades largely in maturing economies. It will be increasingly difficult to create growth purely from services and, therefore, it is important to increase productivity within economic areas such as agriculture, forestry and fisheries by educating, attracting and retaining the future workforce in these sectors.

Similarly, the UN Development Programme refers to future ‘demographic challenges’ in societies. For example, as populations age, the percentage of the working-age population will be reduced, and countries that remain poor will struggle to meet the needs of an aging population. These challenges can be addressed by reducing unemployment, promoting labour productivity and increasing labour force participation. 6

All organisations have a responsibility to keep their people safe. In order to achieve this, a safe and healthy working environment must be provided and the right safety culture developed. Regarding culture, the Bradley curve shows that in order to realise sustainable zero harm, an organisation must establish a culture of interdependence. In order to achieve this, they need to move through three phases – moving from a supervisory culture where employees are dependent on being told what to do, through to the independent phase where employees take responsibility for their own safety, and finally to the interdependent phase where all employees take responsibility for each other’s safety. Leadership and line management must play a vital role in developing and sustaining the necessary safety culture and driving the continuous improvement efforts to achieve sustainable zero harm.

In light of the social context discussed above, and the anticipated trends regarding economic development and populations’ demographics, we have identified two of our material issues to be Safeguarding the wellbeing of employees and contractors and securing key talent and skills; and Maintaining our licence to trade by making a real and lasting contribution to the communities in which we operate.

FOCUS ON

WBCSD Action2020 7

In our 2012 Shaping our sustainable future publication, we reported on our sustainability performance within the framework of the World Business Council for Sustainable Development’s (WBCSD’s) pathway 2020 in support of its Vision 2050. The WBCSD encourages business through its ‘Action2020’ to move from vision to action by further defining what needs to be done by 2020, in order to ensure the vision of a sustainable world by 2050. It has identified the societal ‘must-haves’ to be met by 2020 within nine priority areas, including: climate change, ecosystems, water, basics needs and rights, skills and employment, sustainable lifestyles, and food, feed, fibre and biofuel.

We work with the WBCSD’s focus area and sector teams and within other global platforms, including the scientific community and NGOs as part of our stakeholder engagement and active dialogue approach.