Social, Ethics, Transformation and Sustainability Committee Report
Objectives of the committee
The role of the SETS Committee is to assist the board with the oversight of the company and to provide guidance to management’s work in respect of its duties in the fields of SETS. The committee relies on international best practice as well as the laws and regulations under which Sappi’s businesses operate to ensure that the group not only complies with, but also fully implements all requirements. The committee addresses issues relating to corporate social investment, ethical conduct, diversity, transformation and empowerment initiatives and targets and ongoing sustainability practices to ensure that our business, our environment and our people can prosper on an ongoing basis. The responsibilities include monitoring the company’s activities, having regard to any relevant legislation, other legal requirements and prevailing codes of best practice. The committee meets a minimum of three times each year.
Membership of the committee
The members of the SETS Committee during the 2021 financial year were:
- Mr MV Moosa (Chairman from 01 March 2016)
- Mr SR Binnie
- Dr B Mehlomakulu
- Mr BR Beamish
- Mr JM Lopez
Four members of the committee were independent non-executive directors and one the CEO. In addition, the Chairman of the board and the Chairman of the Audit Committee attends committee meetings ex officio. The regional CEO, the Group Head Strategy and Legal, the Group Head Technology, the Group Head Human Resources, the Group Head Corporate Affairs, the Executive Vice President Dissolving Wood Pulp and the Group Head Investor Relations and Sustainability attend meetings by invitation.
Committee activities reviewed and actioned during the year
- Reviewed and revised the committee terms of reference and annual work plan
- Approved the corporate citizenship policy
- Reviewed and endorsed the public affairs and corporate citizenship programmes
- Reviewed the UN SGDs most relevant to Sappi
- Reviewed Sappi’s standing in terms of:
– The principles set out in the United Global Compact Principles
– The OECD recommendations regarding corruption
– The Employment Equity Act, and
– The Broad-based Black Economic Empowerment (BBBEE) Act
- Reviewed the Code of Ethics, ethics programme and their effectiveness
- Obtained feedback from the ethics reporting hotlines
- Reviewed the South African skills audit as well as the training and development plan
- Reviewed the staff training progress
- Reviewed the company performance relative to the Employment Equity Act, BBBEE Act and the company’s transformation strategies
- Reviewed the Sappi Southern Africa Transformation Charter
- Reviewed Sappi’s policy and standing in terms of the International Labour Organization protocol on decent work and working conditions
- Reviewed the group safety programmes, safety performance and actions being taken to improve the safety performance of the group
- Reviewed the group unfair discrimination and equality policy
- Reviewed the group sustainability charter and environmental policy
- Reviewed the material indicators of the group’s environmental performance
- Reviewed regional sustainability performance against goals for 2021
- Reviewed regional and global public policy matters affecting the group and its operations
- Reviewed the various production unit operating efficiencies, reliability and unscheduled downtime metrics for 2021
- In depth review and approval of 2030 Scope 1 and Scope 2 science-based decarbonisation target and associated capital plans prior to submission to SBTi for validation
- In-depth review of carbon intensity of Sappi business units and operations against peer group companies
- In depth review of global energy intensity profiles, fuel sources and associated carbon emissions
- Reviewed the SETS Committee report for the annual integrated report as well as sustainability information presented in the annual integrated report
- Reviewed the external verification update report on selected group sustainability metrics.
At certain meetings, a topic is selected for an in-depth review, typically matters which in the view of the committee represent key risks or opportunities for the business. This year the focus area was on the company’s response to climate change, more specifically decarbonisation. In 2020 we committed to set a well below 2 degrees science-based 2030 decarbonisation target. In May 2021 The Scope 1 and Scope 2 emission intensity target was approved by the SETS Committee and Sappi Limited board prior to submission to SBTi for validation. In addition, a dedicated decarbonisation capital plan was developed and presented which will be continually updated to ensure that the targets are met.
The committee confirms that the group gives its SETS responsibilities the necessary attention. Appropriate policies and programmes are in place to contribute to social and economic development, ethical behaviour of staff towards colleagues and other stakeholders, fair labour practices, environmental responsibility and good customer relations. In fulfilling their mandate, the committee has sought to ensure the needs of a wide set of stakeholders, including employees, local communities, customers and shareholders are considered and that key sustainability risks are identified and managed.
There were no substantive areas of non-compliance with legislation and regulation, nor non-adherence with codes of best practice applicable to the areas within the committee’s mandate that were brought to the committee’s attention. The committee has no reason to believe that any such non-compliance or non-adherence has occurred.
Social, Ethics, Transformation and Sustainability Committee