The business case for sustainability

Our paper and packaging products must be produced sustainably to ensure a long-term future for our business. Our business case for sustainability rests on long-term access to raw material, through resource efficiency to ensure our competitiveness, the continuation of our operating licences in our chosen host countries of operation and the retention of competent and capable people. In 2010, 28% of our input material was recovered paper. Looking at this more closely, at Mondi we believe that we benefit from pursuing sustainable development in two basic ways - by driving cost efficiencies, and by generating top-line growth. Specific examples are discussed below: Saving costs: Cost savings from improved operational performance and efficiencies. These include bottom line costs savings through environmental operations and practices (improved resource efficiency translates into doing more with less water, energy and raw materials), as well as incremental savings from reduced utility, materials and waste costs. Essentially, companies that satisfy and exceed regulatory compliance requirements develop better relations with regulatory agencies. Costs avoided by minimising business risks and improving safety (i.e. risk management, including regulatory risk, licence to operate, supply chain/security of supply and reputational risk). We believe that corporate responsibility provides the means by which we are better able to understand and manage legal, financial, environmental and societal risks. This in turn helps us to operate our mills and plants without interruption, and to enter new markets using sustainability efforts and community dialogue to engage citizens. Our supply chain is also likely to be better-secured by engaging in community welfare and development, and avoiding negative publicity by addressing sustainability issues. Cost savings from improved recruitment and retention of talented employees, as well as improved productivity as a result of our training initiatives. Cost savings and income produced through improved employee morale and productivity. Generating growth Generating growth by developing new markets and products, finding new customers and achieving greater market share, through innovation and a superior reputation/differentiation. Sustainability is an intangible asset that has the potential to enhance corporate reputation and differentiate a brand and is founded on values such as trust, credibility, reliability, quality and consistency. Our Green Range is an excellent example of this. Improved customer loyalty. Sustainability provides an opportunity to develop a better understanding of customer expectations which leads to more closely targeted solutions, products, and services. The development of our Terra Bag is an example of this. See the case study: Mondi's Terra Bag - the first industrial bag with biodegradable film and certified compostability. Improved access to capital, as a result of our improved reputation with investors and sustained positive performance, bond agencies and banks. Our ranking in the CDP survey and various sustainability indices provides examples of this. Improved supply chain management. As an active participant in the World Business Council for Sustainable Development (WBCSD) Mondi was party to and is supportive of the WBCSD’s Vision 2050. As part of this project, 29 WBCSD member companies developed a vision of a world well on the way to sustainability by 2050. In its report on the subject, the WBCSD addresses three questions: What does a sustainable world look like? How can we realise it? What are the roles business can play in ensuring more rapid progress toward that world? The Vision 2050 work provides a basis for interaction with other enterprises, civil society and governments about how a sustainable future can be realised

Investment in the future

The Group is coming to the end of a significant asset modernisation programme with most large operations having now been overhauled, and more than €2 billion having been spent over the past 10 years, underpinning our long-term emerging market strategy. During the year, around €140 million was spent at Syktyvkar in Russia, bringing this €545 million investment to completion.

Last change: 11.03.2011