Responsible wood procurement

1
Responsible wood procurement

• Anna-Liisa Myllynen,
• VP, Forest Environment
• Wood Supply Europe
• 08 March 2005

2
Stora Enso in Brief
Paper
Forest Products
Packaging Boards

• A world leader
• 15.7 million tonnes of paper and board
• 7.4 million m3 of sawn and processed wood
  products
• Three core product areas
• Paper, Packaging Boards and Forest Products
• Sales EUR 12.2 billion
• Approximately 43 000 employees in 40 countries
• Market capitalisation EUR 9.3 billion
• Shares listed on Helsinki, Stockholm and New York
  stock exchanges

3
Balancing aspects of sustainability
Sustainability (Corporate Responsibility)
Environmental
Social (CSR)
Economic
Accountability Transparency, Stakeholder dialogue
4
Major wood procurement areasmeasured in million
m3 solid under bark (sub)
Othercountries
15.2
Canada
0.4
Finland
15.9
0.9
Sweden
4.7
6.0
4.7
2.5
Russia
The BalticCountries
US
7.1
ContinentalEurope
Portugal
0.8
Total consumption of woodin Stora Enso's own
mills in 2003 was approximately44 million m3.
The total figure includes deliveries to joint
ventureand subsidiary companies.
Wood flows between procurement areas
Total amount of wood procured in the region(The
wood is either consumed inside the region or
delivered to other areas.)
x.x
5
Forestry benefits fromstrong law enforcement

• Forest industry needs a stable business
  environment to secure long-term investments and
  supply of raw material
• Illegal logging
• Undermines long term sustainability
• distorts competition
• adversely affects public image of the entire
  industry
• Different definitions of illegal logging by
  different stakeholders
• Unauthorised harvesting
• Unsound economic mechanisms and business
  practices
• Unsustainable forest management

6
Stora Enso position

• Stora Enso actively works to combat illegal
  logging wherever the Group operates. Stora Enso
  also acts to prevent any other illegal activities
  related to the wood supply. Where Stora Enso
  cannot directly prevent such illegal incidents,
  the Group co-operates with the authorities and
  other stakeholders in order to improve the
  working environment.
• Illegal logging Wood harvesting in violation of
  national laws and state laws

7
Strategies to fight unsound practices

• Clear corporate policies and ethical codes
  support ethical business
• Recognize and analyse the risks related to
  legality and sustainability
• Focus on long term partnerships and investments
• Have local representative network to control and
  verify
• Increase own logging operations
• Keep the supply chains as short as possible
• Partnership and training to promote suppliers
  awareness/performance
• Have active stakeholder dialogue and cooperation
• customers and suppliers
• governmental and public authorities
• NGOs
• research institutes
• media

8
Traceability our most important instrument in
verifying the origin

• Traceability systems
• Cover 98 of the wood flows
• Verify wood origin
• Verify compliance with corporate policies and
  national legislation
• Can be third party verified through EMAS, ISO
  14001, Chain-of-Custody

Contracts
A
Wood origin data
B
Auditing
C
External audits
D
9
Traceability system case Russia

• Tool for verifying compliance with
• corporate policies and legislation
• Third party verified through
• ISO 14001 and EMAS
• since 1998-1999

10
Stora Enso targets to maximise wood coming from
certified forests

• Promoting forest certification where ever Stora
  Enso operates
• Today less than 5 of the forestsof the world
  are certified
• About 45 of wood used by Stora Enso comes from
  certified forests
• Also Traceability systems needed toverify the
  origin
• Stora Ensos traceability systemscover 98 of
  wood

11
Conclusion Joint efforts to prevent illegal
logging

• Public authorities and the working environment
• Develop legislation and law enforcement
• Well functioning controls systems are effective,
  cost-efficient, based on analyses and focussed
  into preventing and punishing illegal actions
• Private sector and ethical business practices
• Corporate policies and guidelines to support
  ethical behaviour
• Traceability systems third party verified through
  EMAS, ISO14001, ISO 9002 and Chain-of-Custody are
  strong tools in ensuring legality
• Cooperation and partnership
• Partnership along supply chain between suppliers
  and customers
• Cooperation between public authorities,
  companies, NGOs and researchers help recognise
  risks and increase transparency and effectiveness

12
For more information, visit

• www.storaenso.com ? sustainability