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Assessing Impact to Improve Sustainability

Company: Stora Enso Oyj
Sector: Paper and Forest Products
Headquarters: Finland
Partners: UNDP China
Partnership location: China


Background

In recent years, ensuring stakeholder trust has been getting increasingly difficult harder for companies who act globally, and thus Stora Enso started to look for ways to improve the credibility of its sustainability work.

Stora Enso set up a plantation operation in Guangxi, China, in 2002. Conducting a thorough assessment of the environmental and social impact of any new project is a common practice for the company, to manage potential negative externalities resulting from the establishment of large new plantations. The assessment is a tool for identifying risks that could affect the project, and a way of showing stakeholders how the company is managing its environmental and social impacts.  The Environmental and Social Impact Assessment (ESIA) can also reveal development areas that are challenging and outside of the scope of the capabilities of a company to handle. To be successful in addressing these issues, Stora Enso has adopted a strategy to build long-term partnerships with credible and professional organizations that have similar goals to those of Stora Enso but who have complementary skills and resources to reach those goals.

Actions Taken

When the decision was made to conduct an ESIA on the company’s plantation operation in Guangxi, UNDP China was approached with a proposal to compile the report. UNDP China and Stora Enso agreed that UNDP would conduct the study independently and that the results would be made publicly available. The work consisted of analysing South Guangxi’s economic, environmental and social dimensions through data analysis and field visits. UNDP broadened the approach beyond a conventional technical analysis to also include the opinions of residents and other stakeholders on mitigation measures and development priorities.  The ESIA report was published in 2005. The report results, in addition to the company policies and principles, then formed the basis for Stora Enso Guangxi’s Sustainability Agenda and action plan.

Directly after publishing the report, UNDP China proposed a partnership to address the main areas identified in the report: engagement of local villagers and biodiversity protection.  UNDP China and Stora Enso signed a 5-year partnership agreement in November 2006. The partnership is jointly managed, but closely involves expert stakeholders and national, provincial and local government representatives.

Benefits

The partnership has been highly successful in gaining the trust of Stora Enso’s customers, investors, and other stakeholders in the company’s management of sustainability issues in its Chinese plantation operation. The ESIA report is a powerful communication tool but more importantly it has provided the company with an external view on where it should concentrate its sustainability activities. Bringing in an independent party to provide an “extra pair of eyes” has helped Stora Enso identify environmental and social issues that it might have missed, and to add transparency and credibility to its sustainability communications. Conducting ESIAs is not yet common practice in China. UNDP plans to establish this study as a model for future ESIAs of other large-scale commercial or public projects.

(Source: An Inspirational Guide to implementing the United Nations Global Compact, UNGCO 2007).

(Last Update: 02 January 2009)