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MONDI PLC - Annual Financial Report

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Mondi plc

(Incorporated in England and Wales)

(Registered number: 6209386)

LEI: 213800LOZA69QFDC9N34

JSE share code: MNP ISIN: GB00B1CRLC47

LSE share code: MNDI

23 March 2021


The Mondi Group Integrated report and financial statements 2020 and the Notice of the Annual General Meeting of Mondi plc (the “Company”) have been issued and posted to shareholders today, 23 March 2021. The audited consolidated financial statements reported in the Integrated report and financial statements 2020 do not contain any material changes from the results published in Mondi plc’s preliminary statement (which were audited by PricewaterhouseCoopers LLP) issued on 25 February 2021.

In accordance with Listing Rule 9.6.1, copies of the following documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at:

  • Mondi Group Integrated report and financial statements 2020

  • Mondi plc Notice of Annual General Meeting 2021

  • Mondi plc Form of Proxy for 2021 Annual General Meeting

Mondi’s 2020 Sustainable Development report has also been published today. The report provides an overview of Mondi’s performance and approach to sustainable development and includes details on its Mondi Action Plan (MAP2030) for the next decade.

The Mondi Group Integrated report and financial statements 2020, Sustainable Development report 2020 and the Notice of Annual General Meeting of Mondi plc are available on the Mondi Group web site at

Annual General Meeting

The Annual General Meeting of Mondi plc (“AGM”) is due to be held at 10:30 (UK time) on 6 May 2021 at Mondi’s office, Building 1, 1st Floor, Aviator Park, Station Road, Addlestone, Surrey, KT15 2PG, United Kingdom.

In light of the ongoing restrictions on indoor gatherings and in order to protect the safety of our shareholders and employees, we have decided, in line with government guidance, that this year’s AGM will be held with a minimum quorum of shareholders (which will be comprised of members of Mondi’s management) in order to conduct the formal business of the meeting. This means that shareholders will not be permitted to attend the AGM in person but can be represented by the Chair of the meeting acting as their proxy. We encourage shareholders to submit their votes by proxy and to do so as early as possible, appointing the Chair of the meeting as their proxy.

Full details of the arrangements for the AGM, including a webinar facility to allow shareholders to listen to the AGM remotely, can be found in the Notice of AGM and on our website at

Regulated Information

An indication of the important events that occurred in 2020 and their impact on the consolidated financial statements and the consolidated financial statements themselves were included in the preliminary results announcement for the year ended 31 December 2020 released on 25 February 2021. Additional content forming part of the management report is set out in the appendix to this announcement.

This announcement should be read in conjunction with the Company's Preliminary Results announcement issued on 25 February 2021. Together these constitute the material required by DTR 6.3.5 to be communicated to the media in full unedited text through a Regulatory Information Service. This material is not a substitute for reading the Company's 2020 Integrated report. Page references and references to notes to the financial statements refer to those contained in the 2020 Integrated report.

About Mondi

Mondi is a global leader in packaging and paper, contributing to a better world by making innovative packaging and paper solutions that are sustainable by design. Our business is integrated across the value chain – from managing forests and producing pulp, paper and plastic films, to developing and manufacturing effective industrial and consumer packaging solutions. Sustainability is at the centre of our strategy and intrinsic in the way we do business. We lead the industry with our customer-centric approach, EcoSolutions, where we ask the right questions to find the most sustainable solution. In 2020, Mondi had revenues of €6.66 billion and underlying EBITDA of €1.35 billion.

Mondi has a premium listing on the London Stock Exchange (MNDI), and a secondary listing on the JSE Limited (MNP). Mondi is a FTSE 100 constituent, and has been included in the FTSE4Good Index Series since 2008 and the FTSE/JSE Responsible Investment Index Series since 2007.

Sponsor in South Africa: UBS South Africa Proprietary Limited.


Principal risks

The Mondi Group principal risks relate to the following:

1 Pandemic risk

Potential impact

  • A pandemic may cause the Group to experience material labour shortages, supply chain or operational interruptions, higher input costs, increased cyber security attacks or changes in demand for its products that, if experienced in the Group’s major facilities or on a widespread basis, could have a material adverse effect on the Group’s business.

  • As evidenced by COVID-19, a pandemic has the potential to impact the technical integrity of our assets as contractors, suppliers and employees’ restricted availability on our sites limit maintenance and capital works.

  • Increased safety risk to employees and contractors due to changes in shift patterns and less interaction by leaders on the mill or plant floor; general health and mental health risks are heightened by a pandemic.

  • The various COVID-19 crisis lockdowns across the world can negatively impact the demand for some of our products, most notably uncoated fine paper, as more people work from home. Lower demand can lead to lower operating rates which can lead to pressure on prices. The impact of lockdown restrictions can also result in opportunities, such as increased demand for packaging for e-commerce.

  • New business development initiatives with customers could slow down where personal interaction or technical support at customer premises is required, as many companies have locked their facilities for visitors; internally, continued home-office of our own employees may hinder development of new ideas and team creativity.

  • A pandemic can have a severe economic impact which increases the risk of additional taxes being levied on businesses.

  • The COVID-19 pandemic has potentially enhanced the Groups reputational risk, as communities have become more vulnerable to loss of livelihoods and more dependent on major local businesses to secure jobs, safeguard employee and community health, help fund and supply local hospitals and clinics, and help local businesses survive.


  • A multi-function response team which closely monitors the latest developments, assessing risks, providing guidance, and implementing preventative policies in line with individual government regulations and recommendations in the countries in which we operate.

  • A responsible and effective pandemic response, including actions to safeguard employee and community health, secure jobs directly and indirectly, support and fund local clinics and hospitals, produce goods and services necessary in addressing the pandemic.

  • Continuous monitoring of the impact on business operations, such as the Group’s supply chain, credit risk events and business interruptions and implementing prompt interventions when necessary.

  • Manage supply risk by providing 3-months rolling forecasts to key suppliers in order to secure our supply chain.

  • Personal protection measures implemented at all of our sites with intensified hygiene and social distancing protocols that meet or exceed local and international guidelines, and, where possible, the option of remote working for employees.

  • Employees who work from home have effective digital collaboration tools to enable continued effective communication with their colleagues, customers and suppliers; we raise employee awareness to cyber security risks and implement additional security measures related to remote working, including additional monitoring and testing of our network and all relevant systems on a regular basis.

  • Implement cost controls with a slowed down capital expenditure timeline to protect cash flow and secure robust liquidity.

  • Maintaining a strong balance sheet, sufficient liquidity, investment grade credit ratings and good relationships with a broad range of banks.

  • For any new infectious diseases that are flagged as critical and could likely develop into a pandemic, the Group will employ its own internal monitoring and mitigating activities in line with our safety protocols, government regulations and additional measures developed during the current COVID-19 pandemic.

Strategic risks

2 Industry productive capacity

Potential impact

  • Market supply/demand balance is impacted by large incremental new capacity additions.

  • Unless market growth exceeds capacity additions, excess capacity may lead to lower selling prices.

  • Plant utilisation levels are the main driver of profitability in paper mills.

  • Investments in newer technology may lower operating costs and provide increased product functionality, particularly relevant in the converting businesses, which can increase competition and impact margins.


  • Monitoring industry developments in terms of changes in capacity, utilisation levels both short and long term, as well as market trends and trade flows in our own product markets, enabling us to establish target capacity utilisation levels in the short term and to evaluate capital investment projects in the long term.

  • Strategic focus on owning cost-advantaged assets, with consistent investment to secure our competitiveness, coupled with increasing our exposure to structurally growing markets.

  • Partnering with our customers for innovation, developing sustainable and responsibly produced products.

  • Continuous focus on operational performance, quality and service, including developing and applying digital platforms to drive performance in our operations and improve customer reach.

  • Maintaining strong relationships with machine suppliers to identify current market developments and technologies, coupled with a routine review our asset portfolio and capacity utilisation levels to identify underperforming assets and take decisive action to drive performance.

3 Product substitution

Potential impact

  • Demand for Mondi products is dictated by changes in our customers' needs and attitudes, influenced by increased public awareness of sustainability and increasing consumer purchasing power and consumption patterns driven by global socio-economic and demographic trends.

  • Increased penetration of digital channels and new ways of working may impact demand for our products.

  • The increased public and stakeholder focus on the impact of plastic-based packaging on marine and terrestrial ecosystems has led to heightened environmental considerations, changes in legislation and a shift in consumer attitudes towards packaging. While this could create opportunities for the Group, there is a risk of some of the Group’s products being substituted by different solutions that are not produced by Mondi.

  • Factors that may positively or negatively impact the demand for our products include the trend to reduce the weight of packaging materials, electronic substitution, demand for paper-based packaging, substitution of plastic packaging, substitution of rigid plastic by flexible packaging, demand for high-quality printed material, certified and responsibly produced goods, and changes in demand for specific material qualities such as recyclable/biodegradable packaging.


  • A portfolio of paper-based and flexible plastic-based solutions, provides some protection from the effects of substitution between the substrates.

  • Engagement with customers and consumers to help understand and drive a more sustainable approach to their packaging requirements.

  • Development of sustainable, competitive and cost-effective products, such as our in-house functional paper specifications with distinctive barrier properties.

  • Continuous focus on products enjoying positive substitution dynamics and growing regional markets.

  • Regularly monitor trends, new developments and innovations in our product markets; conducting customer surveys to get a better insight into our customers’ needs.

  • Organisational collaboration to find solutions to our customers’ sustainability challenges by leveraging our customer-centric EcoSolutions approach.

  • Continued collaboration with stakeholders across the plastic value chain such as the Ellen MacArthur Foundation and CEFLEX.

4 Fluctuations and variability in selling prices or gross margins

Potential impact

  • Fluctuations in our key pulp and paper prices can have material profit and cash flow implications.

  • Selling prices are determined by changes in capacity and demand for our products, which are, in turn, influenced by macroeconomic conditions, competitive behaviour, consumer spending preferences, and bargaining power and inventory levels maintained by our customers.

  • Changes in prices differ between products and geographic regions and the timing and magnitude of such changes have varied significantly over time.

  • Gross margins in our converting operations are impacted by fluctuations in key input costs, such as paper packaging, which cannot be passed on to customers in all cases.


  • Strategic focus on higher growth markets and products where we enjoy a competitive advantage through innovation, proximity or production cost.

  • Continued investment in our high-quality, cost-advantaged asset base ensuring we maintain our competitive cost position, whilst developing businesses in higher growth markets with better long-term fundamentals.

  • Exposure to price volatility of key input costs is reduced by our high levels of vertical integration.

  • Financial policies and structures take the inherent price volatility of the markets in which we operate into consideration.

  • Regular review and monitoring of current market fundamentals, market demand trends and market prices enabling evaluation of price expectations in the short term and increased understanding of long-term trends.

  • Continuous monitoring of our order intake to identify changing trends and developments in our own product markets.

5 Country risk

Potential impact

  • The Group has operations across more than 30 countries with differing political, economic and legal systems. In some countries, such systems are less predictable than in countries with more developed institutional structures. Political or economic upheaval, inflation, changes in laws, protectionism, nationalisation, or expropriation of assets may have a material effect on our operations in those countries.

  • The current macroeconomic environment is impacted by a number of uncertainties, including the effects of increased protectionism, use of trade tariffs, economic sanctions, the stability of the Eurozone, and the uncertainty over the outcome of agreements between the UK and the European Union.

  • In South Africa, the Group is subject to land claims and could face adverse land claims rulings; in October 2020 the government published an updated draft of its land expropriation bill ahead of its official introduction to parliament, the bill is set to replace the current Expropriation Act of 1975 and details how and under which circumstances expropriation (with and without compensation) can take place in South Africa.


  • Our geographic diversity and decentralised management structure, utilising local resources in countries in which we operate, reduce our exposure to any specific jurisdiction.

  • Capital and debt is structured in each country based on assessed risks and exposures in order to mitigate the effect of country specific risks.

  • Regular review of our sales strategies to mitigate export risk in countries with less predictable environments and, where possible, obtaining credit insurance.

  • Country specific risk premiums are approved by the Board to be added to the required returns on investment projects in those countries where risks are deemed to be higher; new investments are subject to rigorous strategic and commercial evaluation.

  • Maintain a permanent internal audit presence and operate asset protection units in large operations in higher risk locations.

  • Continued assessment of the impact of the UK’s exit from the European Union, assessing the risks, analysing supply chain impacts and developing backup plans to manage any short-term disruptions, including the close monitoring of trade flows between the UK and the European Union. The direct trading exposure of the Group to the UK is limited and we do not expect Brexit to materially impact our ability to continue normal business operations.

  • In South Africa we continue to engage with government on land matters and monitor how the expropriation bill will be implemented. The Group has settled a number of land claims structured as sale and leaseback arrangements which provide a framework for settling future land claims.

  • Active monitoring in all countries and environments in which we operate, with regular formal and informal interaction with government officials, local communities, and business partners assists us to remain abreast of changes and new developments.

6 Climate change related risk

Potential impact

  • Climate change has the potential to affect our business in various ways and while these may not be severe in the short term, we believe climate change related risks are likely to have a medium- and long-term impact on our business.

  • Our manufacturing operations are energy-intensive resulting in both Scope 1 and Scope 2 greenhouse gas emissions.

  • Fibre is the main raw material for our products and forests are an important carbon store, with sustainably managed forests having the opportunity to support a circular bioeconomy.

  • Customers and consumers are increasingly concerned about the consequences of climate change and are looking for solutions produced from renewable materials and reduced carbon footprints.

  • Our climate change related risks relate to the following transition and physical risks:

Transition risks:

  • Governments and regulators are likely to continue to take action to curb carbon emissions such as the introduction of carbon taxes. All of our European pulp and paper mills fall under the EU Emissions Trading Scheme (EU ETS) and post-2020, could receive lower CO2 allowances resulting in additional costs at a number of the Group’s mills. The European Union recently approved an update to the EU’s climate target for 2030, targeting a 60% reduction in emissions by 2030 on route to achieve carbon neutrality by 2050.

  • In South Africa, the government has introduced a carbon tax. A carbon tax is also under consideration in Russia.

Physical risks:

  • Changes in precipitation patterns and related droughts may result in water shortages in water-scarce countries (such as South Africa) which could result in lost production at our pulp and paper mills if there is insufficient water to service the mill.

  • The Group manages forestry land in Russia and South Africa and in addition, purchases timber externally. Increased severity of extreme weather events (such as changing precipitation patterns, windstorms and the emergence of pests and disease) may result in soil erosion and calamity wood leading to wood fibre yield losses resulting in a shortage of wood supply in the long term thereby driving up costs.

  • Pulp and paper mills are generally situated in close proximity to rivers or the sea due to the significant amount of water required as part of the production process. Certain mills are at risk of flooding if the region experiences extreme rainfall, rapid snow melting (due to higher than anticipated temperatures), or rising sea levels.

  • Rising average temperatures will result in higher water temperatures which will increase the amount of water required by our mills for cooling purposes resulting in additional water consumption fees and potential administrative penalties should water temperatures exceed pre-determined levels.


  • Through a combination of capital investment and ongoing efficiency programmes we reduce our GHG emissions by improving our energy efficiency, optimising the use of biomass-based fuels in order to reduce our use of fossil-based energy sources, and decreasing carbon-intensive energy sources such as coal.

  • Sourcing our wood from diverse regions and forest types mitigates the potential impacts of climate change on our wood supplies, in particular in Europe; in South Africa, we continue to investigate and develop wood species which require less water and are more resistant to pests and disease.

  • Our impact on climate change is monitored and measured, reporting on GHG emissions and energy is independently assured, we have science-based targets for our Scope 1 and Scope 2 emissions.

  • Through our participation in the WWF Climate Savers programme and the We Mean Business Coalition, which aims to catalyse business action, we support policy ambition to accelerate the transition to a low carbon economy.

  • Investigating and reporting on climate-related risks and opportunities in adherence to internationally accepted recommendations, such as those published by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).

  • We will continue to investigate the financial implication of our short-, mid- and long-term climate-related risks and opportunities using the International Energy Agency’s 2°C scenario and a business as usual scenario (RCP8.5). We are exploring a science-based GHG reduction target for our Scope 3 emissions, which takes into account the GHG emissions in our value chain.

Financial risks

7 Capital structure

Potential impact

  • A strong and stable financial position enables flexibility and provides the ability to take advantage of strategic opportunities as they arise.

  • Our ability to raise debt and/or equity financing is significantly influenced by general economic conditions, developments in credit markets, equity market volatility, and our credit rating.

  • Failure to obtain financing at reasonable rates could prevent us from realising our strategy and have a negative impact on our competitive position.


  • Our central treasury function operates under a board-approved treasury policy, targeting investment grade credit ratings and with access to diverse sources of funding with varying maturities.

  • The majority of our external debt is issued centrally.

  • Interest rate risk is mitigated by using a blend of floating and fixed rate debt contracts.

  • Regular reporting to the Board on our treasury management policies.

  • Our central treasury function monitors compliance with treasury policies at operating level and we engage external advisors to review the treasury function at regular intervals.

8 Currency risk

Potential impact

  • As a multinational group, operating globally, we are exposed to the effect of changes in foreign currency rates; the impact of currency fluctuations affects us because of mismatches between the currencies in which our operating costs are incurred and those in which revenues are received.

  • Key operating cost currencies that are not fully offset by local currency denominated revenues include the South African rand, Polish zloty, Swedish krona and Czech koruna; whilst the fluctuations in the US dollar, Russian rouble and Turkish lira can also have a material impact as our revenues in these currencies are greater than operating costs incurred.

  • Appreciation of the euro compared with the currencies of the other key paper-producing regions or paper pricing currencies, notably the US dollar, reduces the competitiveness of Mondi products in Europe compared with imports from such key paper-producing regions which can result in lower revenues and earnings.


  • Hedging is utilised for balance sheet exposures and material forecasted capital expenditures upon identification.

  • Diversification of the Group’s currency exposure creates natural hedges, as such we do not hedge our exposure to projected future sales or operating costs and our businesses respond to adverse currency fluctuations by increasing selling prices or increasing exports where competitiveness improves as operating currencies weaken; entities also borrow in their local currencies to minimise translation risk.

  • Continuous monitoring of exchange rate movements and sensitivities, and evaluation of the impact of exchange variances on our results.

  • Regular review of our prices and monitoring of import and export trade flows.

9 Tax risk

Potential impact

  • We operate in a number of countries - all with different tax systems, and an international tax environment which is becoming more onerous, requiring increasing transparency and reporting and in-depth scrutiny of the tax affairs of multinational companies, such as the Global Reporting Initiative’s Tax reporting standard.

  • We make significant intragroup charges, the basis for which is subject to review during tax audits.


  • A Board approved Group tax strategy is reviewed annually.

  • Appropriate and attentive management of our affairs with operations structured tax efficiently to take advantage of available incentives and exemptions.

  • Dedicated tax resources throughout the Group supported by a centralised Group tax team.

  • Arm’s length principles are applied in the pricing of all intragroup transactions in accordance with Organisation for Economic Cooperation and Development guidelines.

  • External advisory opinions are obtained where relevant, including for all major projects with potential tax consequences such as acquisitions and restructuring activities, with external benchmarks used where possible.

  • Regular engagement with external advisors to stay up-to-date with changes in tax legislation and tax practice.

Operational risks

10 Cost and availability of raw materials

Potential impact

  • The raw materials we use include significant amounts of wood, pulp, paper for recycling, polymers and chemicals, meaning access to sustainable sources of these raw materials is essential to our operations.

  • The prices for many of these raw materials generally fluctuate in correlation with global commodity cycles.

  • Wood prices and availability may be adversely affected by reduced quantities of available wood supply that meet our standards for credibly certified or controlled wood, increased frequency of severe weather events, changes in rainfall or increased instances of pest and disease outbreaks and increasing use of wood as a biofuel.

  • We have access to our own sources of wood in Russia and South Africa and we purchase wood, paper for recycling, pulp, and polymers to meet our needs in the balance of our operations.

  • Where raw materials are sourced in areas of weaker governance, we may face potential social and environmental risks, poor safety and labour practices and human rights issues.

  • Force majeure events can influence raw material supply and pricing, directly affecting the market production and supply balance.


  • We are committed to acquiring our raw materials from sustainable, responsible sources and avoiding the use of any controversial or illegal supply.

  • Multi-stakeholder processes address challenges in meeting demand for sustainable fibre; we encourage legislation supporting the local collection of recycled materials.

  • Sustainable management of our forestry operations is key in managing our social and environmental impact, helping to protect worker and community rights and develop resilient landscapes and ecosystems.

  • Our operations use multiple suppliers and our centralised procurement teams work closely with our operations in actively pursuing longer-term agreements with strategic suppliers; in Europe, we source our wood from diverse regions and forest types to mitigate the potential supply impacts of unforeseen events.

  • Strategic partnerships with suppliers of critical raw materials enable higher volume allocation in times of shortages, and a safety stock programme facilitates exchange of raw materials within our plant network.

  • Our responsible procurement process helps us to assess and evaluate the performance of our suppliers and their adherence to our Code of Conduct for Suppliers.

  • Wood and pulp suppliers are assessed as part of our Due Diligence Management System which addresses the main legal and sustainability risks.

  • Our strong forestry management resources in Russia and South Africa actively monitor and manage our local wood resources; we continue to certify our forests with credible external certifications.

  • In South Africa, we have tree improvement programmes in place to produce stronger, more robust hybrids that are better able to resist disturbances such as drought, pests and diseases; fire prevention and firefighting capacity are integrated into a fire management system with local Fire Protection Associations and neighbouring operations.

  • Where possible indexation clauses in revenue contracts allow the pass-through of major raw material price movements.

11 Energy security and related input costs

Potential impact

  • Electricity is generated internally and purchased from external suppliers to meet the significant demand of our operations.

  • Fossil-based energy sources could pose a sustainability and regulatory risk to our energy security as where we do not generate electricity from biomass and by-products of our production processes, we are dependent on external suppliers for raw materials such as gas, oil and coal.

  • Higher energy costs contribute significantly to increasing chemical, fuel, and transportation costs which are often difficult to pass on to customers.

  • As a business with high energy demand, operating globally and relying on global supply chains, we face potential physical, reputational and regulatory risks.


  • Investment in improvements to our energy profile and increased electricity self-sufficiency, including the use of renewable energy sources, strengthens the energy efficiency of our operations while reducing ongoing operating costs and carbon emission levels.

  • Where we generate electricity surplus to our own requirements, we may sell such surplus externally; we also generate income from the sale of green energy credits in certain of our operations at prices determined in the open market.

  • Our focus on optimising the use of biomass-based fuels enables a reduction in use of fossil-based energy sources, and to decrease carbon-intensive energy sources such as coal.

  • Energy costs are closely monitored and benchmarked against external sources and we monitor our electricity usage, carbon emission levels and use of renewable energy; most of our larger operations have high levels of electricity self-sufficiency.

  • We actively monitor the renewable energy market fundamentals and changes in legislation and maintain contact with local energy regulators.

  • We have undertaken detailed compliance assessments regarding Industry Emissions and Energy Efficiency Directives to determine future investment requirements.

12 Technical integrity of our operating assets

Potential impact

  • We have five major mills which account for approximately 75% of our total pulp and paper production capacity, and a significant Engineered Materials manufacturing facility in Germany. If operations at any of these key facilities are interrupted for any significant length of time, it could have a material adverse effect on our financial position or performance.

  • Incidents such as fires, explosions, or large machinery breakdowns or the inability of our assets to perform the required function effectively and efficiently whilst protecting people, business, the environment and stakeholders could result in property damage, loss of production, reputational damage, and/or safety and environmental incidents.

  • Regular maintenance and approved stay-in-business investments can experience delays in start-ups and ramp-up curves due to reliance on external suppliers and contractors for engineering services and equipment supplies.

  • We have established a central digital transformation function to drive operational efficiency through advanced analytics, automation and robotics.


  • Our capital investment programme supports the replacement of older equipment to improve both reliability and integrity, and our proactive repair and maintenance strategy is designed to improve production reliability and minimise breakdown risks.

  • We conduct detailed risk assessments of our high-priority equipment and have specific processes and procedures in place for the ongoing management and maintenance of such equipment.

  • We continue to develop our Asset Management system to ensure best practices for maintenance procedures and we have a maintenance training programme for our employees.

  • Benchmarking activities enable us to optimise our production throughout the organisation by learning from our best performing operations and to identify any emerging issues early.

  • Digital initiatives utilising advanced analytics, machine sensors and process automation enable improved operational efficiency and asset utilisation.

  • We actively monitor all incidents and have a formal process which allows us to share lessons learned across our operations, identify emerging issues, conduct benchmarking, and evaluate the effectiveness of our risk reduction activities.

  • We engage external experts to perform technical integrity assessments at our major sites and enhance our engineering and loss prevention competencies and capabilities; where possible we take out project insurance.

  • Our Fire Protection programme is supported by external experts and independent loss prevention audits and we take out property insurance cover for key risks.

13 Environmental impact

Potential impact

  • We are subject to a wide range of international, national and local environmental laws and regulations, as well as the requirements of our customers and expectations of our broader stakeholders. Costs of continuing compliance, such as Best Available Techniques (BAT), potential restoration and soil and groundwater clean-up activities, and increasing costs from the effects of emissions could have an adverse impact on our profitability.

  • We operate in a sector where the environmental impact of our business can be high and we need to manage the associated risks.

  • Our operations are water, carbon and energy intensive; consume materials such as fibre, polymers, metals and chemicals; and generate emissions to air, water and land. The water-intensive nature of our mills could pose a risk especially in water scarce and stressed areas.

  • The exponential growth of plastic waste in recent years is driving an increased demand for sustainable packaging solutions, and is a driving force behind emerging regulation by governments to tax or ban the use of certain plastics, particularly single-use plastics.

  • Recycling infrastructure requires improvement and further collaboration between industry partners is needed. Circular economy principles are driving change, however the regulatory landscape is evolving at varying speeds across the regions we operate in.

  • We are the custodian of more than two million hectares of forestry landholdings. A decline in ecosystem functions and loss of biodiversity has the potential to impact on the natural resources that we rely on, including fibre and water.


  • We ensure compliance with all applicable environmental requirements where we operate; our own policies and procedures, at or above local policy requirements, are embedded in all our operations and are supported through the use of externally accredited environmental management systems.

  • We invest in our energy and manufacturing operations to meet environmental standards.

  • Our focus is on a cleaner production philosophy to address the impact from emissions, discharge, and waste; we manage our water resources responsibly to address risks related to water scarcity in some of our operations, and ensure equitable use of water resources among local stakeholders wherever we operate by, for example, conducting water stewardship assessments.

  • We emphasise the responsible management of forests and associated ecosystems and protect high conservation value areas, ensuring that we manage our forests responsibly and implement measures to protect biodiversity.

  • We collaborate with customers and supply chain stakeholders to better understand the concerns related to the impact of plastics in the environment, and to work together on scaleable, meaningful solutions to address this; our product design and innovation efforts focus on reducing the environmental impact of our products throughout their life cycle, by developing solutions to reduce the amount of plastic we use, increase the recyclability of plastic products and find alternative packaging solutions, such as fibre-based, which can still provide sufficient barrier functionality.

  • We will continue to monitor regulatory changes and customer demands and the related risks and opportunities for our products. We are developing sustainable packaging solutions by partnering with our customers as we leverage our customer-centric EcoSolutions approach.

  • We actively participate in international associations and engage with universities, NGOs and other organisations, such as Cepi, WWF, Alliance for Water Stewardship and WBCSD.

  • We organise specialist internal networks sharing best practice and comprehensively report and investigate major environmental incidents to avoid recurrence.

  • We monitor our environmental performance indicators and report our progress against our targets, with our GHG emissions independently assured to reasonable assurance level; we monitor regulatory developments to ensure compliance with existing operating permits and perform water impact assessments locally to better understand our local environmental footprint.

  • External verification and assurance of our sustainability reporting is obtained, including social, safety, forestry, environmental and product stewardship KPIs.

  • We conduct biodiversity assessments at our manufacturing and forestry operations to evaluate our impact on biodiversity and ecosystems, develop action plans to manage any impacts and align our activities with local and regional biodiversity priorities.

14 Employee and contractor health and safety

Potential impact

  • Accidents, incidents and exposure to occupational health hazards, such as noise and stress, may cause injury or harm to employees and contractors, property damage, lost production time, and/or harm to our reputation.

  • Risks include fatalities, serious injuries, occupational diseases, and substance and drug abuse.

  • COVID-19 increases these risks due to changes in shift patterns and less interaction by employees and contractors on the mill or plant floor.

  • General health and mental health risks are heightened by the Pandemic.


  • Responsible and effective hygiene measures implemented at all operations to reduce the risk of spreading COVID-19.

  • Continuous improvement of safety standards through monitoring incidents, major close calls and recordable case rates to transfer learnings across our operations with the goal of sending everybody home safely every day.

  • Embedded safety management systems including, among others, risk assessments, safety procedures and controls.

  • We have a goal of zero harm and aim to advance our 24-hour safety mindset and develop the desired safety culture as well as focusing on the social psychology of behaviour.

  • An employee assistance program is offered across the countries in which the Group operates in order to help employees with general health and mental health concerns.

  • Employee wellness initiatives are conducted throughout the Group to enable employees to improve their health and wellbeing.

  • We continue to engineer out the most significant risks in our operations supported by robust controls and procedures for operating those assets and conducting related tasks.

  • Our Permit to Work methodology across the Group supports us to achieve our safety targets.

  • Extensive training to ensure that performance standards and practice notes are communicated and understood and our incentives are impacted by the non-achievement of safety milestones (lag indicators) as well as achievement of lead indicators.

  • Our Task Risk Management Methodology provides a practical approach to conducting pre-task risk assessments, and our focus is on better understanding the high risk tasks in our operations.

  • We apply externally accredited safety management systems, with continuous benchmarking against global safety standards, and conduct regular audits of our operations to ensure our facilities remain fit-for-purpose.

15 Attraction and retention of key skills and talent

Potential impact

  • Our success is driven by our people and our ability to attract, retain, recruit and develop a skilled and committed workforce will be key to our long-term progress.

  • Access to the right skills, particularly management and technical skills, is critical to support the performance and growth of our business.

  • Operations in remote locations or highly competitive markets make attracting and retaining skilled employees challenging.

  • Losing skills or failing to attract new talent to our business has the potential to undermine our ability to drive performance and deliver on our strategic objectives.


  • Our culture and values play a key role in empowering and inspiring our people, highlighted by various Inspire programmes and collaboration initiatives throughout our operations.

  • We have a zero tolerance policy towards discrimination and we provide equal opportunities for all employees.

  • The setting of sustainability commitments to 2030 and achieving most of our 2020 commitments supports our reputation as a Group that places significant importance on sustainability topics which assists in attracting and retaining our people.

  • We are investing in employer branding, engaging in fair and transparent recruitment practices and have diversity and inclusion, labour and human rights policies in place.

  • Competitive compensation levels through benchmarking and continue to support and invest in Group-wide as well as local training programmes.

  • Implemented measures to monitor and manage succession planning, staff turnover, internal placements and training.

  • Performed 360° feedback at a management level and regularly conduct performance and development reviews at a local level.

  • In addition to a Group-wide employee survey approximately every two years, regular pulse surveys provide focused fast employee engagement and feedback.

  • Through a confidential reporting hotline, Speakout, employees can raise concerns about conduct that may be contrary to our values.

16 Cyber security risk

Potential impact

  • Cybercrime continues to increase and attempts are increasingly sophisticated, the Group could experience targeted and untargeted cyber-attacks.

  • The consequences of successful attacks include compromised data, financial fraud, and system shutdowns.


  • We have a comprehensive IT Security Policy approved by the Board.

  • Extensive training and awareness programmes are provided for all our users.

  • Our IT infrastructure is regularly tested and our systems are based on well-proven products.

  • We conduct regular threat assessments and utilise external providers.

  • The Group’s core IT services are ISO 27001 certified.

  • Established incident response and business contingency plans are in place.

Compliance risks

17 Reputational risk

Potential impact

  • Non-compliance with the legal and governance requirements and globally established responsible business conduct in any of the jurisdictions in which we operate and within our supply chain could expose us to significant risk if not actively managed.

  • Failure to successfully manage relationships with our stakeholders could disrupt our operations and adversely impact the Group’s reputation.

  • Applicable laws include those relating to the environment, exports, price controls, taxation, competition compliance, data protection, human rights, and labour.

  • Fines imposed by authorities for non-compliance are severe and, in some cases, legislation can result in criminal sanction for entities and individuals found guilty.

  • Areas of weaker governance present the challenge of addressing potential human rights issues in our operations and supply chain; human rights legislation, such as the UK Modern Slavery Act 2015, continues to highlight the need to identify and address potential risks of child labour, forced or bonded labour, modern slavery, human trafficking and other human rights risks in our supply chain.


  • We operate a comprehensive training and compliance programme, supported by self-certification and reporting, with personal sanction for failure to comply with Group policies.

  • We engage with our local stakeholders through formal and informal processes such as our Socio-economic Assessment Toolbox (SEAT), community engagement, and social investments.

  • We perform screening of our suppliers for sustainability risk in accordance with our Code of Conduct for Suppliers to better align with our risk criteria and to enable us to more effectively enforce the Code.

  • We have collaborated with the Danish Institute for Human Rights to assess our governance of human rights issues and any potential risks in our operations and supply chain, assisted by the development of a human rights due diligence mechanism for our operations.

  • Our legal and governance compliance is supported by a centralised legal compliance team and is subject to regular internal audit review.

  • We have a confidential reporting hotline, enabling employees, managers, customers, suppliers, communities and other stakeholders to raise concerns about misconduct and irregularities.

18 Information technology risk

Potential impact

  • Many of our operations are dependent on the availability of IT services and an extended interruption of such services may result in a plant shutdown and an inability to meet customer requirements.

  • New IT systems may be implemented or existing IT systems are required to be updated from time to time which can increase the risk of system interruption or failure if system migration is not successful.

  • More employees work remotely, placing pressure on IT system capacities and tools.


  • The IT infrastructure is regularly tested and verified and where possible, we have redundancies in place, such as regular backups and testing of disaster-recovery procedures.

  • Our system landscape is based on well-proven products.

  • New IT system implementations and existing IT system updates or migrations are well planned with contingency plans in place for unexpected failures.

  • Secure remote access and regular monitoring of IT system capacities and tools.