Home > Social, Ethics, Transformation and Sustainability (SETS) Committee Report

Group overview

Delivering sustained value

Traction

Traction refers to the friction between a moving object and the surface it moves on. Just as traction allows a vehicle to move forward without slipping, it enables our business to progress steadily.

With the introduction of our Thrive25 business strategy in 2020, we moved through phases of Adapting, Advancing, and Reshaping. Now, having gained traction, our momentum is driving significant progress.

We also observe this traction in social settings, such as the growing consumer preference for renewable and recyclable products. In response, we continue to expand our range of renewable solutions, enabling society to meet sustainability goals and support the global transition to a low-carbon, circular economy.

We are also gaining traction in our efforts to extract value from the whole tree. Traditionally, papermaking used only half of the raw wood material. Sappi is continually developing new processes and applying innovative technology to extract more value from each tree. Our paper packaging reduces plastic use, and we utilise every part of the trees harvested – whether for our biomaterials, dissolving wood pulp, speciality papers, or bio-energy – finding eco-friendly alternatives for a better future.

Responding to our context

Pace

‘Keeping pace’ in nature, refers to the ability of organisms to adapt and evolve in response to environmental changes. For species to survive, they must continuously adjust to shifting conditions, such as climate change, availability of resources, and interactions with other species. It’s a dynamic process that requires resilience, flexibility, and the capacity to innovate.

At Sappi, we see this as our competitive agility – our ability not to be outpaced by market trends, technological advancements and consumer demands. Momentum in business involves maintaining a steady flow of progress and growth, which we achieve through continuous improvement, innovation, being close to our customers and strategic planning.

It is this ability that allows us to progress steadily and consistently while always keeping pace and staying abreast of market changes through continuous innovation and adaptation. By understanding and responding to the latest environmental regulations and market innovations, we comply to and integrate global sustainability standards, ensuring that we remain effective and relevant in our commitment to the planet and our efforts to advance a circular economy.

Diving deeper into our
performance and prospects

Headway

Much like ships of old navigated through uncharted waters to discover new lands, ours is often a journey of discovery as we find new ways to develop technologies that address critical challenges, driving progress in fields like renewable energy and biotechnology.

We are making headway in reducing our carbon footprint through renewable energy projects and we have made significant strides in our sustainability efforts. Our milestone Power Purchase Agreement with EnPower will appreciably reduce our Scope 1 and Scope 2 emissions – not only supporting our own decarbonisation objectives – but also contributing to the transformation of the South African electricity supply industry by providing cleaner and more affordable power.

Sappi is also making headway as we enter exciting new markets with our innovative technology for producing furfural using the hemicellulose co-product from our Verve cellulose operations. By utilising this co-product, we maximise the portion of the tree used to create renewable, value-added products. This approach ensures that our furfural production is supported by the same sustainability and forest stewardship credentials as our Verve production, much like navigating new waters with a trusted and reliable vessel.

Governance and compensation

Rise

In a world where companies pursue accelerated growth through irresponsible and short-term actions, activities like deforestation and pollution, place a collective toll on natural resources. As a company reliant on sustainable woodfibre, we recognise the critical role of ecosystem services. By investing in sustainable forestry practices, we build resilience, safeguard resources, and potentially reduce long-term costs, all while pursuing accelerated growth in a responsible manner.

It’s vital to focus not only on net-zero targets and reducing greenhouse gas emissions but also on a nature-positive approach. We future-proof our business by restoring biodiversity and regenerating ecosystems, aligning with the Taskforce on Nature-related Financial Disclosures (TNFD). We disclose our actions not just because we must, but because we believe it’s the right way to secure our existence as a company committed to the circular economy.

Our plantations are designed with sustainability at their core, supporting biodiversity and ecosystem services. We integrate conservation areas within our plantations, setting aside significant portions of land for active protection. These areas include indigenous forests, wetlands and grasslands that serve as habitats for local wildlife, supporting a variety of species, some endangered or rare.

While we pursue accelerated growth, we do so with foresight, mindful of the impacts of our actions and the measures needed to balance them. Embracing a nature-positive strategy enhances ecological outcomes and drives value creation, positioning Sappi to thrive in a future where nature, alongside carbon, becomes a central element of sustainability.

Appendices

Speed

In business, gathering speed is crucial for driving progress and achieving goals. Equally important is to control this speed to prevent things from spiralling out of control. This balance is essential for sustainable growth and long-term success.

In our efforts towards sustainability, speed determines whether we meet customer expectations and whether we are ready for new rules whether domestic or global. However, we must also keep a steady hand on the ship, steering it in the right direction towards success with careful planning and execution.

Our move towards digitisation exemplifies this balance. By streamlining our IT systems and processes for greater efficiency along our entire value chain – from procurement, through logistics, and into manufacturing systems like the Manufacturing Execution System (MES) at our mills – we are making headway in enhancing our operational capabilities. Additionally, aligning our Sales, Supply Chain, Logistics, and Finance processes through SAP marks a significant milestone in our journey towards a streamlined, data-driven future.

Through global collaboration, we are paving the way for enhanced productivity, transparency and operational excellence across our organisation. We are driving this transformation with a sense of urgency, but also with the necessary caution. By thoroughly testing systems and taking a phased approach, we ensure that our efforts are sustainable and effective.

Together, we are navigating new waters, gathering speed and steering our ship towards a successful and sustainable future.

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Social, Ethics, Transformation and Sustainability Committee Report

for the year ended September 2024

The members of the Social, Ethics, Transformation and Sustainability (SETS) Committee during the 2024 financial year were:

  • Mr MV Moosa
    (Chairman from 01 March 2016)
  • Mr SR Binnie
  • Dr B Mehlomakulu
  • Mr BR Beamish
  • Mr JM Lopez

Mohammed Valli Moosa
(Chairman SETS Committee)


Introduction

The SETS Committee presents its report for the financial year ended September 2024. This committee is a statutory committee with a majority of independent non-executive members, whose duties are delegated to them by the board of directors. The committee conducted its affairs in compliance with a board-approved terms of reference and discharged all its responsibilities contained therein.

Multi-functional Regional Sustainability Councils provide strategic and operational support to a Group Sustainable Development Council which in turn provides support to the SETS Committee in dealing with key sustainability issues.

For more information refer to the Governance section of our 2024 Sappi Group Sustainability Report.

During the financial year the committee formally met three times at which meetings it deliberated on all aspects relating to its terms. A 100% attendance record was achieved by board committee members Mr MV Moosa, Dr B Mehlomakulu, Mr BR Beamish, Mr JM Lopez and Mr SR Binnie, for 2024.

Objectives of the committee

In recent years, the world has faced a convergence of urgent and interrelated challenges: climate change has accelerated, driving global temperatures higher and triggering a cascade of extreme weather events – from devastating wildfires and floods to prolonged droughts and powerful hurricanes. These disruptions have strained ecosystems, endangered species, and reshaped the natural landscape, highlighting the pressing need for environmental stewardship. Beyond these impacts on nature, social inequalities are deepening, with income disparity growing, while geopolitical tensions and conflicts escalate. Additionally, unprecedented inflation has pushed economies to the brink of recession, exacerbating socio-economic divides and impacting communities worldwide.

These events have upended life as we know it, affecting not just our health, economy and society but the very ecosystems that sustain us. At Sappi, we recognise that the private sector has a pivotal role to play in confronting these shared global challenges. The SETS Committee takes on this responsibility by guiding our social and environmental initiatives, ensuring that the company upholds its commitment as a responsible corporate citizen. Through the SETS Committee's oversight, we focus on generating long-term stakeholder value by fostering sustainable, shared outcomes that protect and support both society and the environment.

The SETS Committee plays a critical role within Sappi's corporate governance structure by providing diligent oversight on matters affecting not only the company but also its wider stakeholders, including communities and natural ecosystems. In supporting the board, the SETS Committee directs management's focus on responsibilities within social responsibility, ethics, transformation and sustainability. This commitment goes beyond regulatory compliance; the committee promotes adherence to best practices in global standards, striving to lead with integrity and accountability.

Through initiatives such as corporate social investment, ethical governance, diversity and inclusion, transformation and sustainability programmes, the SETS Committee helps drive Sappi's efforts to minimise environmental impact and create shared value. By setting and monitoring our objectives, assessing legal requirements, and applying industry standards, the committee ensures that Sappi continues to operate in a way that benefits not only our business but also the environment and communities in which we operate. Meeting at least three times a year, the SETS Committee diligently assesses progress, guiding Sappi's sustainable growth and commitment to a responsible, resilient future.

Membership of the committee

Four members of the committee were independent non-executive directors and one the CEO. In addition, the Chairman of the board attends committee meetings ex officio. The regional CEOs, the Group Head Strategy and Legal, the Group Head Technology, the Group Head Human Resources, the Group Head Corporate Affairs, the Executive VP Sappi Pulp and the Group Head Investor Relations and Sustainability attend meetings by invitation.

The board approved the following changes to the committee which will take effect from January 2025:

Committee activities reviewed and actioned for FY2024

At each committee meeting a topic is selected for an in-depth review. Typically, the subject of these reviews are matters which the committee believes represent key risks or opportunities for the business. The review topics were:

Conclusion

The committee affirms that the group is fully committed to its responsibilities in social, ethics, transformation and sustainability. We have implemented comprehensive policies and programmes that contribute meaningfully to social and economic development, promote ethical behaviour among staff in their interactions with colleagues and stakeholders, uphold fair labour practices, prioritise environmental stewardship and foster strong customer relationships. In carrying out its mandate, the committee remains focused on addressing the diverse needs of a broad group of stakeholders, including employees, local communities, customers and shareholders, and on ensuring that key sustainability risks are carefully identified and effectively managed.

Over the past year, there were no significant instances of non-compliance with applicable laws, regulations, or codes of best practice in areas within the committee’s oversight. No concerns were brought to the committee’s attention, nor is there any reason to believe that such issues have occurred. This reflects our ongoing commitment to integrity and transparency in our operations.

MV Moosa
Chairman
SETS Committee