METSÄ BOARD Annual review 2024
Outflows related to products and services In the circular economy for fibre-based packaging material, Metsä Board’s task is to provide markets with premium fresh fibre paperboards as resource-efficiently as possible, help replace fossil-based materials and reduce the carbon footprint of packaging. Ensuring and developing the recyclability and compostability of paperboards is of key importance As a rule, all Metsä Board’s packaging materials, as well as its paper- boards, mainly produced from renewable raw materials, can be recycled, depending on local recycling systems. Except for the PE-coated grades, all the company’s paperboards are certified as industrially compostable in accordance with the DIN EN 13432 and/or ASTM D6400 standards, and as home compostable in accordance with the NF T 51–800 standard. The company’s R&D focuses on reducing the weight of paperboard and developing bio-based barrier coating for end-uses in food packaging. Further information is available in the Report of the Board of Directors, under R&D and innovation . Through its 360 Services, Metsä Board offers customers services in fields like R&D, sustainability and packaging design to help customers improve the recyclability and material efficiency of their packages through packaging life-cycle calculations, data-based comparisons of the environ- mental impacts of different materials, and tangible packaging solutions. Product category rules (EPD International PCR) compliant with the ISO 14040 and ISO 14044 standards are used in the life-cycle assessments of all the company’s products. The calculation model of the company’s life-cycle assessments has been verified by an external partner, and two of the company’s products have an environmental product declaration (EPD), stating the comparable results of the paperboard product’s life-cycle anal- ysis. With respect to Metsä Board’s field of business, product repairability or durability compared to the industry standard in practice is not relevant to product use when accounting for resource outflows. Metsä Board is one of the founding members of the 4evergreen initiative, launched in 2019. 4evergreen brings together members across the packaging value chain with a goal of raising the recycling rate of fibre-based packaging in the EU to 90% by 2030. Waste and side streams Waste generated at Metsä Board’s production units include wood-based fractions, organic and inorganic sludge, ash, paper and paperboard waste, metals, and small amounts of plastic and glass waste, as well as energy waste from sorting at the mills. Examples of hazardous waste include oil and oily waste. Crushed concrete and metal waste are generated in construction and demolition. Most of the production side streams are utilised. Wood-based waste, sludge, ashes and lime are used in soil improvement and landscaping, fertilisers, chemicals industry applications, and in energy generation. Only a small share of production side streams are disposed of in landfills (see the table Waste use and disposal ). The utilisation of side streams often leads to additional expenses, but the decrease in landfill management fees also offers cost savings. Some production units have their own waste management area, where operations are subject to an environmental permit. The environmental impacts of the mills’ own waste management areas are minimised in accordance with the environmental permits. Part of the waste is delivered
Metsä Board’s 2030 sustainability targets, and their setting and moni- toring, are discussed in greater detail under Sustainability governance and strategy and Material sustainability-related impacts, risks and opportunities . The target of 0 tonnes of process waste delivered to landfill, presented under section E5 , concerns resource outflows. The target is based on Metsä Board’s intention to steer all production side streams for reuse, thus eliminating all landfill waste. This can be achieved by identifying a purpose for all process waste. In the waste hierarchy, this is categorised as waste recovery. Because the target’s achievement requires all side streams to be utilised, it indirectly contributes to a product design based on the circular economy. The utilisation of side streams is discussed in more detail under Waste and side streams . The target is therefore indirectly related to increasing the utilisation rate of recycled materials through the use of side streams but not to the sustainable procurement and use of resources, or to the minimising of primary raw materials. Target setting complies with leg- islative guidance, and the target is based on the EU’s Waste Directive and the targets set in it. Comprehensive system-level metrics for the circular economy are under development internationally. Metsä Board follows the development of metrics and participates in testing and development work. The targets related to water and energy use are discussed under E1 – Climate change and E3 – Water and marine resources . Progress in targets • Process waste to landfills – The reduction of Metsä Board’s landfill waste has progressed as planned towards the 2030 target. In 2024, only a single batch of process waste was delivered to landfill. The identification and assessment of material impacts, risks and opportunities The material impacts, risks and opportunities related to resource use and the circular economy have been identified in a double materiality assessment based on the principles of the company’s risk management process. The materiality assessment is discussed on pages 26–28. The impacts, risks and opportunities related to Metsä Board’s resource use and the circular economy have been assessed across the value chain. They are related to the procured materials, resource efficiency and side streams of the company’s own production units, and product upgrading and end use. In the assessment, attention was paid to various raw materials, production units, side streams and product groups, and product packaging materials. Ensuring undisturbed and uninterrupted operations in all conditions is key in the risk assessment of production units. The assessment process of production units’ environmental risks is guided by the ISO 14001 and ISO 50001 management systems. The key identified risks are included in the company-level risk management process. The production units’ resource efficiency and waste management are considered in the environmental impact assessments of investment projects and during the environmental permit processes. The need for environmental impact assessments is determined by the local EIA authority. After any environmental impact assessment, the production units operate in accordance with their environmental permit and the com- pany’s operational management system. The production units’ waste
management is also regulated by the conditions in the environmental permits. Some production units have their own waste management area subject to an environmental permit, the environmental impacts of which are monitored and managed in accordance with the permit conditions. Risks related to waste management are assessed as part of regular risk assessments. The engagement of local communities in the production units’ opera- tions from an environmental perspective is discussed under E2 – Pollution . Policies As part of Metsä Group, Metsä Board is committed, through Metsä Group’s environmental policy, to regenerative forestry, the efficient use of raw materials, water and energy, and the continuous development of operations. The side streams generated in production processes are used primarily as raw material or energy. The company takes advantage of synergies between its production units and develops industrial cycles and the recyclability of products. Metsä Group’s environmental policy is followed worldwide by all Metsä Group companies and legal units, and the impacts of the Group’s operations have been identified across the value chain. Metsä Board’s policies concerning resource use and the circular economy are linked to themes important to the company’s stakeholders. Regarding stakeholder engagement in policy drafting, Metsä Board collects stakeholder feedback twice a year and uses it in its double materiality assessment and in setting its 2030 sustainability targets based on the materiality assessment. Metsä Board’s stakeholder cooperation is discussed in more detail under Interests and views of stakeholders . Environmental management and continued environmental performance are guided by the requirements of the production units’ certified quality, environmental management and energy management systems. The production units systematically conduct internal and external audits in accordance with the ISO 14001 and ISO 50001 standards. In its operations, the company follows circular economy principles, safe- guarding nature’s capacity for renewal, minimising waste and emissions, and keeping natural resources used by society in use for as long as possible and as valuable as possible. As the complete recycling and reuse of materials are impossible, maintaining the material cycle also requires the addition of primary raw materials to the cycle. Fresh fibre is therefore needed to replenish and maintain a functioning recycling for fibre-based packaging. Primary renewable resources can be obtained while safeguarding nature’s capacity for renewal, as required by circular economy principles. Metsä Group’s wood supply is based on regenerative forestry, which is discussed under E1 – Climate change and E4 – Biodiversity and ecosystems . In the Leader in sustainability strategic programme, the focus concern- ing the circular economy is on achieving the strategic sustainability targets for fossil-free production units and products, water and energy efficiency, and expanding the company’s role in the circular economy. The goal of the Efficient Innovation programme is to ensure the long-term competitiveness of Metsä Board’s products. Its focal areas include reducing the weight of paperboard and developing fossil-free recyclable products such as dispersion-coated paperboard.
All Metsä Board’s paperboards are produced from renewable and recy- clable fresh fibre. Fresh fibre paperboards do not interfere with the smell or flavour of the product they cover, and they are a safe choice for fibre-based packaging designed for food and other demanding end uses. Actions Metsä Board’s key continuous strategic actions related to resource use and the circular economy are the following: • As part of Metsä Group, committing to regenerative forestry principles and promoting regenerative land use in production unit areas. This action improves the state of forest nature and helps strengthen biodi- versity in the built environment. Further information is available under E1 – Climate change and E4 – Biodiversity and ecosystems . • Reducing water use by developing production processes and deploying new technologies. Further information is available under E3 – Water resources . • Transitioning to fully fossil-free energy in production to reduce fossil-based GHG emissions. Further information is available under E1 – Climate change . • Improving energy efficiency by using electricity, heat and fuel more efficiently. Further information is available under E1 – Climate change . • Transitioning to fully fossil-free raw materials and packaging materials by 2030, enabling Metsä Board to move from a fossil-based economy to a circular bioeconomy in its use of chemicals and materials. Further information is available under E1 – Climate change . • Reducing the environmental impacts of packaging through product development such as by reducing the weight of paperboards and by offering customers services in areas like sustainability and packaging design to reduce environmental impacts across the life-cycle of packaging. Further information is available in the Report of the Board of Directors, under R&D and innovation . • Promoting recycling by participating in international initiatives such as 4evergreen. Participation in international initiatives contributes to a stronger European and global circular economy and to Metsä Board’s products remaining in use longer. Further information is available under G1 – Political influence and lobbying activities . • Developing new purposes for production side streams jointly with partners to make wood use more resource-efficient and reduce the products’ environmental impact per product produced. Resource inflows, including resource use Raw materials are used efficiently to avoid waste in production. The main raw material, renewable wood, is used fully. Log wood, the most valuable part of the tree, is used for wood products produced by Metsä Group’s other business areas, while thinner tree parts and the smaller trees obtained during thinnings are used as the main raw material of pulp and paperboard mills. The branches and felling residue are used in the produc- tion of renewable energy. Metsä Board’s mills are continuously improving their recovery processes to avoid the generation of waste in pulp and paperboard production. For example, increasing process water recycling makes energy use more efficient and reduces the loss of fibre material.
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Strategy and financial targets
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Value creation
Financial development 10 Key figures 12
Report of the Board of Directors
20 20 37 70 89 96
• Sustainability statement
General information
E – Environment
S – Social responsibility
G – Governance
Annexes to the Sustainability statement
98 Consolidated financial statements 102 Notes to the consolidated financial statements 150 Parent company financial statements 153 Notes to the parent company financial statements 166 The Board’s proposal to the Annual General Meeting for the distribution of funds 167 Auditor’s Report 171 Sustainability statement assurance report 173 Shares and shareholders 177 Ten years in figures 178 Taxes 179 Production capacities 181 Calculation of key ratios and comparable performance measures Corporate governance 183 Corporate governance statement 190 • Board of Directors of Metsä Board 194 • Corporate Management Team of Metsä Board
196 Remuneration report 201 Investor relations and investor information
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Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2024
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