Step by step towards a sustainable future
Magnus Groth, SCA’s President and CEO, and Kersti Strandqvist, SCA’s SVP Group Sustainability, can look back on an eventful 2016. It was the year when SCA initiated work to divide the company to form one hygiene and one forest products company, the year we signed an agreement to acquire the medical solutions company BSN medical, the year we completed and integrated the acquisition of the tissue company Wausau Paper and the year when we began the journey toward becoming the thought leader in hygiene.
Magnus, what are your thoughts on the past year?
MG: If the Annual General Meeting approves the separation of SCA into one hygiene and one forest products company, then this would signal the start of a new era in the history of the company. This will entail new business opportunities and each company can focus on its operations in a completely different way. A separation is the best method to create shareholder value and customer benefits in the future.
The acquisition of Wausau Paper involves a significant strengthening in the North American Away-from Home market and the integration has exceeded expectations, both in terms of synergies and margins. The announced acquisition of BSN medical at the end of the year will be our largest ever acquisition. This means we are entering the field of medical technology, which opens up new business opportunities.
During the year, we developed a new vision and our strategic framework based on the needs of our stakeholders, which of course includes customers and consumers. It is pleasing to have so many satisfied customers, which resulted in a number of awards (refer to chapter Satisfied customers and consumers). All this, at the same time as we have generated growth and profitability and launched 23 innovations in the market.
Health and safety are always a top priority and it is with deep regret that I note one fatality in our operations during the year. Occupational safety will remain high on the agenda and I welcome a 27% decrease in our accident frequency rate in 2016.
Why have you revised the strategic framework?
KS: We are proud that sustainability has been an integral part of our operations for many years and the new strategic framework will make it much clearer. Our new vision pursues the long-term goal, “Dedicated to improving well-being through leading hygiene and health solutions”, and we have formulated Group targets where we clarify our ambitions for customers and consumers, society and our employees. We are thereby strengthening our ambitions to raise the hygiene standards in the markets where we are active and consolidate our environmental ambitions under the objective to contribute to a sustainable and circular society.
In 2015, the United Nations introduced its global Sustainable Development Goals (SDGs) and in 2016 the world attempted to decide how these can be converted into action. What does this mean for SCA?
KS: Work aimed at fulfilling the SDGs will make the world a little better at the same time as they create good business opportunities for companies around the world. Not least in the fields of health, hygiene and sanitation, where we have outstanding expertise. We are determined to do what we can to contribute to achieving the 17 SDGs.
MG: For us, it is important to contribute with our business operations but also to take part in the global debate, which we mainly do via our Hygiene Matters initiative. Through Hygiene Matters, we want to raise hygiene standards worldwide, increase awareness of the link between hygiene, health and well-being and break the taboos surrounding areas such as incontinence. During the year, this took the form of a global hygiene survey and a hygiene report that we produced in cooperation with the UN’s Water Supply and Sanitation Collaborative Council (WSSCC). We presented the report in conjunction with the UN General Assembly Session in New York in September. We have also collaborated with the United Nations Foundation, which aims to bring together businesses, authorities and NGOs to cooperate on the UN SGDs (refer to chapter Better hygiene for better health).
"We are determined to do what we can to contribute to achieving the 17 UN Sustainable Development Goals.”
One of your new Group targets aims to contribute to a circular society, what does this mean for you?
MG: We have a long tradition of working in many areas, such as resource efficiency and innovation. We have reduced the environmental impact of all of our product categories and have worked with energy efficiency enhancements as part of our ESAVE program since 2010. We have now also initiated MSAVE, where we will optimize our raw material use at the same time as we minimize environmental impact and waste, and introduced a new target for production waste (refer to chapter Toward a circular society).
KS: Innovation has a crucial role to play in achieving a circular society, both our own activities and those we conduct in cooperation with others. To inspire new innovations and business solutions, we have joined the Circular Economy 100 (CE 100), an Ellen MacArthur Foundation program established to work toward a circular economy. We work with people and nature innovations where the criteria are that they should give rise to social and/or environmental improvements. Last year, 40% of innovations were for people and nature. The compact tissue Okay Compressé and Tork SmartOne, which reduces the consumption of toilet paper, are two examples of innovations that are good for both the environment and your wallet and where we help consumers make good choices.
KS: Post-consumer waste will be one of the major challenges we face in the future and we believe that cross-boundary cooperation, with customers, businesses and organizations, will contribute to new solutions. We are already running some projects together with our customers, where we collect and recycle paper towels, but we need to continue working to find other solutions, such as for baby diapers.
Any other important issues over the past year?
MG: We were fined for cartel activities in Colombia and Spain. I wish to emphasize that we have zero tolerance for this type of unethical behavior and we have intensified our efforts to help our employees do the right thing. In addition to mandatory e-learning courses, we have introduced a concept we call “Ethical Dilemmas”, where we offer employees the opportunity to participate in an in-depth discussion about challenges in day-to-day work. The concept aims to increase understanding and create a culture characterized by integrity (refer to chapter The Code shows the way).
Any thoughts about next year?
MG: 2017 will be an intensive and exciting year, with the proposed separation of SCA into two companies and the integration of BSN medical. We will continue to develop innovations that can help people in their everyday lives and work to establish ourselves as a thought leader in hygiene.