FULLTEXT DEL 2 AV 6
Årsredovisning 2024
Country-by-country information for financial year 2024
Australia 96 3 0 0 32 50 Sales
China 709 -369 1 2 2,340 703 Manufacturing, sales, support services, forestry Tax losses
Hong Kong 32 0 0 0 7 0 Support services
India 0 0 0 0 5 0 Support services
Japan 2 0 0 0 12 0 Sales, support services
Singapore 4 1 0 0 14 0 Support services
Austria 424 20 5 3 948 126 Manufacturing, sales
Belgium 388 7 8 9 502 113 Manufacturing, sales Timing differences
Germany 120 -35 1 1 492 7 Manufacturing, sales Tax losses
Estonia 206 20 0 2 532 31 Manufacturing, sales, support services Taxation not based on profit
Spain 2 0 0 0 14 0 Support services
Finland 6,066 131 9 3 5,211 2,979 Manufacturing, R&D, procurement, sales, group
management
Result includes non-taxable internal dividends
France 54 0 0 0 27 5 Sales, support services
Italy 6 3 2 1 26 0 Support services
Lithuania 116 4 0 1 309 20 Manufacturing, sales
Latvia 200 14 0 3 376 48 Manufacturing, sales
Netherlands 504 37 -3 0 786 303 Manufacturing, sales, support services Result includes non-taxable internal dividends
Portugal 0 0 0 0 0 0 Support services
Slovenia 23 1 0 0 5 2 Sales
Slovakia 1 0 0 0 1 0 Procurement
Czechia 367 12 -3 3 1,154 151 Manufacturing, sales
Denmark 11 0 0 0 4 0 Support services
Poland 831 13 2 6 1,908 407 Manufacturing, sales
Sweden 4,208 -2 44 2 3,550 7,352 Manufacturing, R&D, procurement, sales, group
management, forest ownership
Timing differences
United Kingdom 192 3 2 1 70 27 Sales, support services
Norway 112 0 0 0 4 8 Procurement
Turkey 0 0 0 0 2 0 Support services
Ukraine 0 0 0 0 1 0 Support services
Mexico 1 0 0 0 9 0 Support services
MEUR Total revenue
1 Profit/loss before
income tax
2 Income tax paid
(on cash basis)
3 Income tax accrued
(current year)
4
Number of employees
5 Tangible assets (other than
cash and equivalents)
8
Primary activity in jurisdiction
7 Main reasons for differences between current
tax accrued and tax as per statutory rate
8
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United States 86 20 0 0 33 17 Sales, support services Tax losses
United Arab
Emirates
1 0 0 0 7 0 Support services
South Africa 0 0 0 0 2 0 Support services
Brazil 171 -7 1 1 538 294 Manufacturing, forestry
Uruguay 635 208 7 7 313 1,835 Manufacturing, forestry Favourable tax treatment. Additional tax will be
due under Pillar Two minimum tax rules.
Stora Enso Group 15,573 87 78 44 19,233 14,480
MEUR Total revenue
1 Profit/loss before
income tax
2 Income tax paid
(on cash basis)
3 Income tax accrued
(current year)
4
Number of employees
5 Tangible assets (other than
cash and equivalents)
8
Primary activity in jurisdiction
7 Main reasons for differences between current
tax accrued and tax as per statutory rate
8
Names of the resident entities can be found in note 6.2 Group companies in the Financial Statements.
1 Revenues is the total amount of income (excl. internal dividends) from domestic and foreign parties of the entities in the jurisdiction.
2 Profit/loss before tax is the total amount of the group entities’ profit or loss before tax in the jurisdiction, as reported under IFRS. The reported amounts include temporary and permanent differences between accounting and taxation, such as non-taxable dividends from other group companies, and thus do not represent the taxable income on which
taxes are calculated in the jurisdiction’s taxation.
3 Corporate income tax paid on a cash basis contains the total of corporate income taxes paid during the reported period by the companies in the jurisdiction to the home jurisdiction and all other jurisdictions. The amount contains tax payments for previous years and excess payments refundable in following years.
4 Corporate income tax accrued on profit/loss is the IFRS reported current tax expense of the reported period. The amounts do not include deferred taxes from temporary differences and tax losses, and thus do not represent the total tax expense of the entities in the income statement. The amounts do not contain taxes from previous periods.
5 Number of employees is the total average number of full-time equivalents in the jurisdiction during the year.
6 Tangible assets other than cash and cash equivalents states the total of IFRS reported values of tangible assets in the entities of the jurisdiction.
7 Primary activities in the jurisdiction lists the main activities of all group entities in the jurisdiction.
8 Reasons for differences between income tax accrued and tax as per statutory rate explains the main reasons for the difference between the reported corporate income tax accrued for the year (4), and the amount of tax when applying the jurisdiction’s statutory corporate income tax rate to the profit/loss before tax (2). The reasons for differences
may come from several sources, many of which are reporting technical. For example, profit/loss before tax (2) may contain items that will become taxable earlier or later than they are recognised in bookkeeping, creating timing differences on which deferred tax is recognised. In addition, differences may be due to utilization of tax losses or incurring
new loss, for which deferred tax is also normally recognised. However, as per the standard, the accrued income tax (4) is reported here excluding deferred taxes, which creates a timing related difference between tax accrued and tax as per the statutory rate. Other main reasons for differences listed in this column may be tax exempt items such as
group internal dividends, costs not deductible for tax purposes, favourable tax treatments (see previous page), and taxes from previous years.
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Report of the
Board of Directors
Stora Enso introduction 54
Business model 54
Strategy 54
Year 2024 55
Markets and deliveries 56
Group financial result 57
Segment financial results 59
Capital expenditure 61
Innovation, research and development 61
Employees 61
Nature-related financial disclosures (TNFD) 61
Risk management 63
Our approach to risk management 64
Risk governance 64
Risk management process 64
Main risks 65
Sustainability Statement 69
General information 70
Environmental information 86
Social information 113
Governance information 124
Shares and governance 127
Share capital 127
Governance 128
Related party transactions 128
Legal proceedings 128
Changes in management 128
Changes in Group structure 128
Resolutions of the Annual General Meeting 128
Outlook 129
Market outlook 129
Sensitivity analysis 129
Short-term risks 129
Proposal for the distribution of dividend 130
Events after the reporting period 130
Alternative performance measures 131
Head office photos: Stora Enso / © Tuomas Uusheimo
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Introduction
Business model
The forest is at the heart of Stora Enso and we believe that
everything made from fossil-based materials today can be
made from a tree tomorrow. We are the leading provider of
renewable products in packaging, biomaterials, and wooden
construction, and one of the largest private forest owners in
the world. We create better choices for society by accelerating
the transition to a circular bioeconomy. We aim to contribute
positively to nature, and have the most effective use of fiber-
based renewable material.
Stora Enso had approximately 19,000 employees at the end of 2024. The
Group sales in 2024 were EUR 9 billion, with an adjusted EBIT of EUR 598
million. Stora Enso shares are listed at the Helsinki (STEAV, STERV) and
Stockholm (STE A, STE R) stock exchanges. In addition, the shares are traded
on OTC Markets (OTCQX) in the USA as ADRs and ordinary shares (SEOAY,
SEOFF, SEOJF).
Strategy
We create value for our shareholders by growing our leading positions in
packaging, biomaterials innovations, and building solutions, combined
with a strict capital allocation strategy, cost control, and other financial
measures. Global sustainability megatrends underpin our growth strategy.
We see the greatest potential for scalable innovation and
commercialisation of new products in the following three areas:
Renewable packaging
We have leading global market positions in high-value segments and
long-term customer partnerships in our packaging business. We continue
to see strong demand for plastic substitution and circular solutions. Fiber-
based packaging is the most sustainable option for many products as it
can be recycled, reused, or composted. It is the fastest growing packaging
material globally and is expected to outpace plastic alternatives in the
long term.
Sustainable building solutions
There are growth opportunities in the building industry, particularly with
wooden alternatives to materials such as concrete and steel, which have
larger carbon footprints. The global construction market is shifting towards
modular building methods that use less energy and reduce carbon
emissions. Mass timber products now enable the construction of safe and
sustainable high-rise buildings. We are well-positioned to capture more
value across the entire supply chain with our products and value-added
services, including prefabricated bespoke wooden elements, new
concepts, and digital services.
Biomaterials innovations
In Biomaterials, we focus on providing innovative and sustainable biobased
solutions for high-growth, high-margin markets. Through our expertise,
strategic collaborations and partnerships, we accelerate breakthrough
innovations in new fiber products, biochemicals, and lignin-based
applications, such as anode material for batteries and bio-based binders
for construction, which can replace fossil-based materials.
Forests are the foundation for our renewable solutions
Forest is a valuable, growing asset that facilities a long-term fiber supply
for our products. Our growth strategy is supported by cost-efficient wood
flows and resource optimisation. By streamlining these processes, we can
ensure a more efficient operation and better use of our resources.
Key targets
2024 2023 2022 Target
Financials
Sales growth -4 % -20 % 17 % >5% per annum
Adjusted ROCE¹ excl. Forest 3.6 % 1.0 % 20.4 % >13%
Net debt to adjusted EBITDA¹ 3.0 3.2 0.7 <2.0
Net debt to equity 37 % 29 % 15 % <60%
Dividend per share (EUR)
2
0.25 0.20 0.6 See below
3
Non-financials
Reduction of absolute CO2e emissions (Scope 1 and 2)
from 2019 base year
4
-53 % -43 % -28 % -50% by 2030
Reduction of absolute CO2e emissions (Scope 3) from
2019 base year
4
-39 % -35 % -24 % -50% by 2030
Forest certification coverage 99 % 99 % 99 % 96 %
Circularity
4
94 % 93 % 94 % 100% recyclable products by 2030
1 Last 12 months
2 Dividend proposal for 2024. The Board of Directors proposes that the dividend be paid in two instalments, during the second and fourth quarter of 2025.
3 To distribute 50% of EPS excluding fair valuation over the cycle.
4 Compared to the 2019 baseline. Historical figures are restated due to structural changes or additional data after the previous annual report.
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Year 2024
The year began with signs of a gradual market recovery compared to
2023, although high interest rates and consumer confidence issues
persisted. Stora Enso anticipated increased demand and higher prices for
board and pulp. However, the Company faced challenges such as higher
maintenance costs and strikes in Finland, which impacted profits. Despite
these short-term challenges, Stora Enso focused on efficiency,
decisiveness, and essential operations to navigate the market
uncertainties.
In the second quarter, Stora Enso’s performance met expectations,
reinforcing the upgraded 2024 guidance. The Company saw advances in
profitability and cash flow improvement initiatives, supported by more
favourable market conditions in some segments. Higher volumes and
reduced fixed and chemical costs contributed to the positive earnings
trend, despite rising wood costs and political strikes in Finland.
The third quarter witnessed a strong increase in Stora Enso’s financial
performance compared to the previous year. This was driven by higher
prices and volumes, particularly in the Packaging Materials division. The
Biomaterials division also performed well, although demand weakened
with decreasing pulp prices. The Forest division achieved record results
due to increased wood prices. However, challenges persisted in the Wood
Products division due to a weak construction sector, and the Packaging
Solutions division faced price lags and market overcapacity.
Towards the end of the year, Stora Enso anticipated a slowdown in market
recovery, with weak consumer board demand, overcapacity in corrugated
board, and ongoing weakness in the construction sector. High wood costs
continued to pressure margins. Despite these challenges, Stora Enso’s
profitability improvement initiatives positively impacted earnings, and the
Company remained confident in its ability to focus on long-term growth
opportunities.
Throughout 2024, Stora Enso navigated the market dynamics by focusing
on efficiency, profitability improvement initiatives, value accretive actions,
and strategic capital allocation. The Company remained committed to
investing in both human and capital resources to provide exceptional
service to customers and create robust shareholder value growth. This
commitment is expected to build a more profitable, competitive, and
valuable Stora Enso.
Main strategic actions
Actions to improve sourcing and operational efficiency as well as
commercial excellence, and the implementation of cost reductions across
the Company have borne fruit, enhancing profitability and
competitiveness. Despite facing macroeconomic uncertainties,
fluctuations in market demand, and rising wood costs, these actions have
progressed well.
In September, Stora Enso initiated the sale of approximately 12% of its 1.4
million hectares of forest assets in Sweden. This transaction aims to reduce
debt, highlighting the financial value of the Group’s forest holdings. The
sale is dependent on finalising terms with investors, including long-term
wood supply and forest management agreements.
The divestment process for the Beihai packaging board production site
and forestry business, announced in December 2022, was discontinued in
October 2024. Stora Enso is of the view that the value in own use of the
assets exceeded the achievable transaction value, and therefore retained
these operations within the Group.
In October, Stora Enso entered into an agreement to acquire 100% of the
Finnish sawmill company Junnikkala Oy. The total enterprise value for the
transaction is up to EUR 137 million, a significant part of it being contingent
upon achieving specific production milestones. The acquisition, subject to
customary closing conditions including regulatory approvals, aims to
secure a cost-efficient wood supply to Stora Enso’s packaging board site in
Oulu, Finland, and to support the Group’s wood products business with new
production assets.
Sales and adjusted EBIT margin
Sales, EUR millionAdjusted EBIT, %
2021 2022 2023 2024
0
3,000
6,000
9,000
12,000
15,000
0%
5%
10%
15%
20%
25% Net debt to adjusted EBITDA
Net debt, EUR million
Net debt to adjusted EBITDA
Target <2.0
2021 2022 2023 2024
0
1,000
2,000
3,000
4,000
0.0
1.0
2.0
3.0
4.0 Cash flow
Cash flow from operations, EUR million
Cash flow after investing activities, EUR million
2021 2022 2023 2024
0
500
1,000
1,500
2,000 Adjusted ROCE excl. Forest
Adjusted ROCE, % Target >13%
2021 2022 2023 2024
0%
5%
10%
15%
20%
25%
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Markets and deliveries
Global cartonboard consumption experienced a rebound in 2024 following
a challenging year in 2023. The demand recovery was particularly strong
in Europe and North America, driven by the end of a long destocking period
throughout 2023. However, demand recovery slowed down during the
second half of 2024 due to increased macroeconomic uncertainties.
Global containerboard demand increased in 2024. The growth was driven
by the end of destocking that occurred during 2023. Despite this growth,
increased economic uncertainties caused a slowdown in the demand
increase as 2024 progressed.
European paper demand was relatively stable in 2024 after a sharp
decline in 2023. During the second half of 2024, demand continued to
follow the long-term structural demand erosion.
In Europe, demand for corrugated packaging grew by 4% in 2024, mainly
due to growth in retail spending, driven by the ongoing recovery in
purchasing power in e-commerce and retail sales. Nevertheless, the
market is still facing an overcapacity originating from many capacity
expansion decisions made during the past years. The expected increase in
retail sales and lower interest rates are expecting to support a modest
growth in the European corrugated packaging demand going forward.
Global demand for chemical market pulp fell 2% in 2024. Demand for
hardwood pulp declined 1% whereas softwood pulp demand was down
3.5%. Demand for unbleached kraft pulp (UKP) continued to fall whereas
demand for fluff pulp was steady. Chinese demand dropped by 20% y-o-y
during the Q2-Q3 due to destocking in 2024 that followed stock building in
2023. Demand growth in other regions was not able to offset the decline in
Asia.
The global chemical market pulp capacity increased by 2% in 2024. The
hardwood pulp capacity increased by 5% thanks to new capacity ramping
up in South America. Softwood pulp capacity declined by 1.5% and UKP by
8% due to capacity closures. The overall shipment-to capacity balance
stood at 87%, 3 percent points down from 2023.
Global pulp inventories were considered balanced in H1 2024 but started to
elevate towards the end of the year. Softwood pulp inventories were on
low side in first half of the year, peaked after summer months before
balancing by the end of the year thanks to capacity closures. Hardwood
pulp inventories were balanced in H1 after which the inventories increased
due to weaker demand and new capacity ramping up.
After weak markets in 2023, global sawn wood consumption increased in
2024 by +1.3% according to FEA (Forest Economic Advisor), with weaker
development experienced in Europe. Through the 2024 market supply and
demand reached better balance (due to supply curtailments) which
stabilised prices in most markets. During 2024, interest rates decreased
somewhat but remained still at a high level in most markets, and
combined with unclear geopolitical situation, customer confidence
remained low, which resulted in further drops in the number of building
permits and housing starts in comparison to 2023.
Estimated consumption of board, pulp, sawn softwood, and paper in 2024
Tonnes, million Europe North America Asia and Oceania
Consumer board 10.9 9.2 33.3
Containerboard 35.8 32.1 97.9
Corrugated board (billion m
2
)
1
8.5 n/a n/a
Chemical market pulp 16.1 7.7 37.9
Sawn softwood (million m
3
) 75.3 100.0 71.5
Newsprint 2.6 1.0 4.8
Uncoated magazine paper 1.4 0.6 0.1
1 European focus markets (Benelux, FI, PL, SE)
Source: Afry, CEPI, Numera, ICCA, PPPC, Stora Enso, Forest Economic Advisors (FEA)
Production and external deliveries
2024 2023 Change % 2024–2023
Consumer board deliveries, 1,000 tonnes 2,778 2,691 3.3%
Consumer board production, 1,000 tonnes 2,793 2,593 7.7%
Containerboard deliveries, 1,000 tonnes 1,242 1,236 0.5%
Containerboard production, 1,000 tonnes 1,530 1,592 -3.9%
Corrugated packaging European deliveries, million m
2
1,205 1,167 3.2%
Corrugated packaging European production, million m
2
1,157 1,094 5.7%
Market pulp deliveries, 1,000 tonnes 2,029 2,220 -8.6%
Wood products deliveries, 1,000 m
3
3,892 3,897 -0.1%
Wood deliveries, 1,000 m
3
13,451 13,667 -1.6%
Paper deliveries, 1,000 tonnes 611 761 -19.7%
Paper production, 1,000 tonnes 592 752 -21.3%
.
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Alternative performance measures
The alternative performance measures used by Stora Enso are explained in the chapter Alternative performance
measures.
Financial results – Group
Group sales decreased by 4% year-on-year to EUR 9,049 (9,396) million, due to by structural changes. Adjusted EBIT
was EUR 598 (342) million, and the adjusted EBIT margin was 6.6%. Adjusted EBIT increased mainly due to increased
sales volumes and prices, decreased fixed costs partly offset by increased wood costs. Earnings per share was EUR
-0.17 (-0.45) and earnings per share excluding fair valuations was EUR -0.56 (-0.73).
The IFRS operating result was EUR 93 (-322) million. The IFRS operating result includes a positive net effect of EUR 421
(positive 209) million from biological asset valuation from subsidiaries and joint operations. The positive impact
comes mainly from the increase in fair valuation in Stora Enso owned forests in Sweden, mostly driven by increases
in estimated wood prices and standing stock. There is also a positive net effect of EUR 52 (positive 136) million from
Stora Enso’s share of net profit of associated companies. The positive impact comes mainly from Finnish forests
operational profit, through Stora Enso’s 41% investment in Tornator.
Tangible and intangible asset (including goodwill) impairments amounted to EUR 746 (776) million.
The items affecting comparability (IAC) had an adverse impact of EUR 870 (895) million on IFRS operating result. The
main IACs in 2024 mainly relate to the impairments in Packaging Materials, Packaging Solutions and Wood
Products divisions as well as restructuring related costs. The IACs in 2023 mainly relate to the impairments in the
Packaging Materials, Biomaterials, Wood Products divisions and segment Other, restructurings related to Sunila, De
Hoop, Anjalankoski and Kvarnsveden sites and Group functions and Packaging Materials division, as well as
disposal of Nymölla, Maxau, Hylte and Wood Products DIY sites, and biocomposite business. Fair valuations and
non-operational items (FV) had a positive net impact on the IFRS operating result of EUR 364 (231) million. The main
IAC and FV items are presented in the chapter Alternative Performance Measures.
Net financial expenses at EUR 211 (173) million were EUR 38 million higher than a year ago. Net interest expenses, at
EUR 127 million, increased by EUR 14 million as a result of higher interest rates on borrowings and higher amount of
gross debt. Other net financial expenses, at EUR 64 million, were EUR 25 million higher, mainly due to write-down of
Russia related loan receivables and higher factoring and supply chain financing costs. The net foreign exchange
impact in respect of cash equivalents, interest-bearing assets and liabilities and related foreign-currency hedges
amounted to a loss of EUR 20 (loss of EUR 22) million, mainly due to revaluation of foreign currency net debt in
subsidiaries located in China.
The net tax totalled EUR -65 (64) million, equivalent to an effective tax rate of -55.4% (13.0%), as described in more
detail in note 2.5 Income taxes.
The loss attributable to non-controlling interests was EUR 48 (EUR 74) million, leaving a loss of EUR 136 (loss of EUR
357) million attributable to Company shareholders.
Adjusted return on capital employed was 4.3% (2.4%).
The Group capital employed was EUR 13,696 million on 31 December 2024, a decrease of EUR 360 million, mainly due
to impairments partly offset by investment projects, mainly the consumer board investment at the Oulu site, and
increase of the fair valuation of forest assets.
Key figures
2024 2023 2022
Sales, EUR million 9,049 9,396 11,680
Adjusted EBIT, EUR million 598 342 1,891
Adjusted EBIT margin 6.6% 3.6% 16.2%
Operating result (IFRS), EUR million 93 -322 2,009
Operating result margin (IFRS) 1.0% -3.4% 17.2%
Return on equity (ROE) -1.7% -3.8% 13.3%
Adjusted ROCE 4.3% 2.4% 13.7%
Adjusted ROCE excl. Forest division 3.6% 1.0% 20.4%
Net debt/equity ratio 0.37 0.29 0.15
EPS (basic), EUR -0.17 -0.45 1.97
EPS excluding FV, EUR -0.56 -0.73 1.55
Dividend per share
1
, EUR 0.25 0.20 0.60
Payout ratio, excluding FV -44.6% -27.4% 38.6%
Payout ratio (IFRS) -145.4% -44.2% 30.5%
Dividend yield, (R share) 2.6% 1.6% 4.6%
Price/earnings (R share), excluding FV -17.33 -17.17 8.46
Equity per share, EUR 12.86 13.93 15.89
Market capitalisation 31 Dec, EUR million 7,657 9,864 10,503
Closing price 31 Dec, A share, EUR 9.68 12.45 13.90
Closing price 31 Dec, R share, EUR 9.72 12.53 13.15
Average price, A share, EUR 11.54 12.82 16.58
Average price, R share, EUR 11.53 11.93 16.12
Number of shares 31 Dec (thousands) 788,620 788,620 788,620
Trading volume A shares (thousands) 1,199 968 1,174
% of total number of A shares 0.7% 0.5% 0.7%
Trading volume R shares (thousands) 425,082 476,654 455,952
% of total number of R shares 69.3% 77.8% 74.5%
Average number of shares, basic (thousands) 788,620 788,620 788,620
Average number of shares, diluted (thousands) 789,772 789,714 789,391
1 Proposed dividend. The Board of Directors proposes that the dividend be paid in two instalments. See the Board of Directors’ proposal for the distribution of dividend.
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Breakdown of capital employed change
EUR million Capital employed
31 December 2023 14,056
Capital expenditure excluding investments in biological assets
less depreciation 509
Investments in biological assets less depletion of capitalised
silviculture costs -6
Impairments and reversal of impairments -745
Fair valuation of forest assets 229
Unlisted securities (mainly PVO) -208
Associated companies 28
Net liabilities in defined benefit plans 35
Operative working capital and other interest-free items, net -180
Emission rights -35
Net tax liabilities 79
Acquisition of subsidiary companies 72
Disposal of subsidiary companies -8
Translation difference -107
Other changes -23
31 December 2024 13,696
Financing
Cash flow from operations was EUR 1,187 (954) million and cash flow after
investing activities was EUR 74 (-40) million. Working capital decreased by
EUR 283 (300) million, inventories increased by EUR 136 million and trade
receivables decreased by EUR 244 million. Trade payables increased by
EUR 115 million and thus had a positive impact on working capital.
Payments related to the previously recognised provisions were
EUR 100 million.
Operative cash flow
EUR million 2024 2023
Adjusted EBITDA 1,223 989
IAC on adjusted EBITDA -125 -126
Other adjustments -194 -210
Change in working capital 283 300
Cash flow from operations 1,187 954
Cash spent on fixed and biological assets -1,113 -989
Acquisitions of associated companies -1 -5
Cash flow after investing activities 74 -40
As at 31 December 2024, Group net interest-bearing liabilities were EUR
3,707 (3,167) million. The increase in net interest-bearing liabilities was
mainly driven by significant investments such as the consumer board
investment at the Oulu site in Finland. Cash and cash equivalents net of
bank overdrafts decreased to EUR 1,993 (2,464) million. The net debt/equity
ratio at 31 December 2024 increased to 0.37 (0.29). The ratio of net debt to
the last 12 months’ adjusted EBITDA decreased to 3.0 (3.2) due to higher
adjusted EBITDA. The average interest rate on borrowings for the full year
2024 increased to 4.1% (3.7%) with a run-rate of 4.0% as per the end of the
fourth quarter.
In July 2024, Stora Enso secured a EUR 435 million long-term loan from the
European Investment Bank to fund its EUR 1 billion investment at the Oulu
site in Finland. Loan repayment extends until 2037, and the loan is currently
undrawn.
During the second quarter, Stora Enso signed extensions of one to two
years for a total of EUR 350 million of its existing bilateral loans. The
Company also signed a two-year extension to its EUR 100 million
committed credit facility.
During 2024, Stora Enso’s total repayments of SEK bond notes amounted to
a nominal of EUR 135 million.
Stora Enso had in total EUR 800 million committed undrawn credit facilities
as per 31 December 2024. Additionally, the Company has access to EUR 830
million statutory pension premium loans in Finland.
The changes in the fair value of forest land, net of deferred taxes, which are
recognised in other comprehensive income (OCI) decreased the equity by
EUR 223 million (decreased by EUR 39 million) mainly due to increase in the
discount rate.
The changes in the fair valuation of equity investments fair valued through
other comprehensive income decreased equity by EUR 203 (decreased by
EUR 645) million. The decrease is mainly due to a lower fair valuation of the
Group’s shareholding in Pohjolan Voima Oy (PVO), explained especially by
lower electricity price forecasts. The changes in the fair valuation of cash
flow hedges fair valued through other comprehensive income decreased
equity by EUR 65 million, mainly driven by weaker SEK and stronger USD.
At the end of the year, the ratings for Stora Enso’s rated bonds were as
follows:
Rating agency Long/short-term rating Valid from
Fitch Ratings BBB- (stable) 26 July 2024
Moody’s Baa3 (stable) / P-3 21 November 2024
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Financial results – Segments
Packaging Materials division
The Packaging Materials division is a global leader and expert partner in
circular packaging providing premium packaging boards, made from
virgin and recycled fiber. Stora Enso helps customers reduce the use of
fossil-based materials by offering renewable and recyclable products for
their food, beverage, and transport packaging based on a wide selection
of base boards and barrier coatings.
EUR million 2024 2023
Sales 4,502 4,557
Adjusted EBITDA 472 267
Adjusted EBITDA margin 10.5 % 5.9 %
Adjusted EBIT 172 -57
Adjusted EBIT margin 3.8 % -1.3 %
Fair valuations and non-operational items (FV)
1
2 12
Items affecting comparability (IAC)
1
-343 -597
Operating result (IFRS) -169 -642
Adjusted EBIT, LTM 172 -57
Operating capital, LTM 3,490 3,580
Adjusted ROOC, LTM 4.9 % -1.6 %
Cash flow from operations 462 370
Cash flow after investing activities -323 -235
Board deliveries, 1,000 tonnes 4,920 4,963
Board production, 1,000 tonnes 4,916 4,843
1 The IAC for 2024 included asset impairments of EUR -141 million for China operations, EUR -90 million for the
Varkaus containerboard unit, EUR -47 million for the Langerbrugge paper unit, EUR -27 million for the Poland
containerboard unit, and EUR -38 million restructuring and other related to various units (mainly HQ,
Anjalankoski, Imatra, Swedish operations, China). The IAC for 2023 included impairments of fixed assets of EUR
-228 million for the Oulu containerboard unit, EUR -202 million for China operations, EUR -12 million for the
Anjalankoski site’s paper assets, EUR -26 million of goodwill impairments related to the Anjalankoski and De
Hoop sites, restructuring costs related to De Hoop site closure of EUR -79 million, closing down one paper line at
Anjalankoski site of EUR -26 million, restructuring program in division management and support functions of EU
-12 million and other restructuring costs of EUR -9 million, and other IAC cases of -3 million. The fair valuations
for 2024 included non-operational fair valuation changes of biological assets of EUR 2 (12) million.
The Packaging Materials division’s sales decreased by 1% to 4,502 (4,557)
million, but excluding structural changes, sales improved by 3% or
EUR 140 million driven by increased volumes.
Adjusted EBIT improved by EUR 229 million to EUR 172 (-57) million, driven by
structural changes and improved operating rates. Increasing fiber costs
were more than offset by decline in other variable costs (especially energy
and chemicals). Fixed costs were significantly lower due to structural
changes and positive impact from profit improvement actions.
Depreciations declined following the 2023 impairments.
Packaging Solutions division
The Packaging Solutions division is a packaging converter that produces
premium fiber-based packaging products for leading brands across
multiple market areas, including retail, e-commerce, and industrial
applications. Additionally, the division provides design and sustainability
services to help customers optimise material use, improve logistics, and
reduce CO2 emissions.
EUR million 2024 2023
Sales 987 1,077
Adjusted EBITDA 62 111
Adjusted EBITDA margin 6.3% 10.3%
Adjusted EBIT -15 43
Adjusted EBIT margin -1.5% 4.0%
Items affecting comparability (IAC)
1
-379 -26
Operating result (IFRS) -394 17
Adjusted EBIT, LTM -15 43
Operating capital, LTM 934 874
Adjusted ROOC, LTM -1.6% 4.9%
Cash flow from operations 78 145
Cash flow after investing activities 31 62
Corrugated packaging European deliveries,
million m
2
1,217 1,178
Corrugated packaging European production,
million m
2
1,157 1,094
1 The IAC for 2024 included asset impairments of EUR -371 million related to operations in western Europe, and
EUR -8 million restructuring costs related to various units. The IAC for 2023 included EUR -19 million restructuring
costs in China and EUR -16 million related to the acquisition of De Jong Packaging Group, and EUR -1 million
other cases.
The Packaging Solutions division’s sales declined by 8% to EUR 987 (1,077)
million, driven by price pressure due to soft demand and overcapacity.
Adjusted EBIT was EUR -15 (43) million. Volumes were higher, however,
margin pressure due to increased containerboard prices during Q2-Q3,
soft demand, and overcapacity, combined with the continued ramp-up of
the new De Lier site in the Netherlands, decreased profitability.
Biomaterials division
The Biomaterials division’s foundation is built on pulp, with the aim of
becoming customers’ first choice in selected grades. To unlock the full
potential of a tree the division also leverages all fractions to create
innovative biobased solutions, that replace fossil-based and other non-
renewable materials.
EUR million 2024 2023
Sales 1,587 1,587
Adjusted EBITDA 372 256
Adjusted EBITDA margin 23.4% 16.1%
Adjusted EBIT 231 118
Adjusted EBIT margin 14.6% 7.4%
Fair valuations and non-operational items (FV)
1
32 25
Items affecting comparability (IAC)
1
-7 -224
Operating result (IFRS) 256 -81
Adjusted EBIT, LTM 231 118
Operating Capital, LTM 2,480 2,625
Adjusted ROOC, LTM 9.3% 4.5%
Cash flow from operations 507 431
Cash flow after investing activities 332 234
Pulp deliveries, 1,000 tonnes 2,207 2,277
1 The IAC for 2024 included EUR -7 million restructuring costs related to various units. The IAC for 2023 included
restructuring expenses from the closure of the Sunila pulp production of EUR -116 million, impairments of fixed
assets of EUR -59 million for the Uimaharju site, impairment of goodwill of EUR -44 million for the Nordic Mills,
EUR -4 million of other cases. The fair valuations for 2024 included non-operational fair valuation changes of
biological assets of EUR 32 (25) million.
The Biomaterials division’s sales were EUR 1,587 (1,587) million. The impact of
higher pulp sales prices was offset by the impact of lower volumes due to
the closure of the Sunila site in 2023. Market conditions were better,
especially in the first half of the year.
Adjusted EBIT at EUR 231 (118) million increased by 96%, primarily driven by
higher sales prices and actions reducing costs.
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Wood Products division
The Wood Products division is Europe’s largest sawn timber producer and
a leading provider of sustainable wood-based solutions for the global
building sector. The division provides the building sector with renewable
and low-carbon wood-based solutions that help decarbonise the built
environment. Additionally, the division offers window and door
components, and co-products such as pellets made from wood residuals.
EUR million 2024 2023
Sales 1,522 1,580
Adjusted EBITDA 27 -17
Adjusted EBITDA margin 1.8% -1.0%
Adjusted EBIT -16 -64
Adjusted EBIT margin -1.1% -4.1%
Items affecting comparability (IAC)
1
-57 -22
Operating result (IFRS) -73 -86
Adjusted EBIT, LTM -16 -64
Operating capital, LTM 609 687
Adjusted ROOC, LTM -2.7% -9.3%
Cash flow from operations 45 43
Cash flow after investing activities -4 3
Wood products deliveries, 1,000 m
3
3,718 3,727
1 The IAC for 2024 included asset impairments of EUR -56 million related to the operations in northern Europe.
The IAC for 2023 included asset impairments of EUR -12 million related to the operations in northern Europe,
asset impairments of EUR -4 million related to the operations in southern Europe, EUR -4 million impact from
disposal of the Näpi site and EUR -3 million from disposal of Wood Products DIY unit, EUR 1 million other cases.
The Wood Products division’s sales were EUR 1,522 (1,580) million, down 4%,
due to the continued weak market demand and closure of two units.
Weakness in construction industry remained through the year, and the
number of building permits and housing starts in Europe declined further,
pressing the demand for the division’s products. To balance the lower
demand, production curtailments were implemented.
Adjusted EBIT remained negative, at EUR -16 (-64) million, but the result
increased 75%. Implemented fixed costs savings and lower variable costs,
except for raw material, delivered an improvement in the results.
Forest division
The Forest division is responsible for wood sourcing for Stora Enso’s Nordic
and Baltic operations as well as for B2B customers. It manages the Group’s
forest assets in Sweden and a 41% share in Tornator, whose forests are
primarily located in Finland. The division’s operations are based on
sustainable forest management encompassing planning, logistics,
harvesting, and forest regeneration.
EUR million 2024 2023
Sales 2,827 2,490
Adjusted EBITDA 364 305
Adjusted EBITDA margin 12.9% 12.2%
Adjusted EBIT 309 253
Adjusted EBIT margin 10.9% 10.2%
Fair valuations and non-operational items (FV)
1
342 206
Items affecting comparability (IAC)
1
-5 2
Operating result (IFRS) 646 461
Adjusted EBIT, LTM 309 253
Operating capital, LTM 5,989 5,740
Adjusted ROCE 5.2% 4.4%
Cash flow from operations 220 70
Cash flow after investing activities 171 19
Wood deliveries, 1,000 m
3
33,794 32,401
Operational fair value change of biological
assets 119 120
1 The IAC for 2024 included EUR -2 million related to environmental provision and EUR -3 million of restructuring
costs. The IAC for 2023 included a reversal of land related impairment of EUR 5 million and other provision
updates of EUR -3 million. The fair valuations for 2024 included non-operational fair valuation changes of
biological assets of EUR 382 (156) million, non-operational items of associated companies of EUR -34 (56)
million, and EUR -6 (-5) million impact from adjustments for differences between fair value and acquisition
cost of forest assets upon disposal.
The Forest division’s sales were EUR 2,827 (2,490) million, up 14%, due to
higher sales prices and increased demand.
Adjusted EBIT at EUR 309 (253) million increased by 22%. The increase was
due to the strong operational performance and higher sales prices in the
Group’s own forest assets.
Segment Other
The segment Other includes the divested paper sites until the completion
of the divestments, the reporting of the emerging businesses (including
Formed Fiber) as well as Stora Enso’s shareholding in the energy company
Pohjolan Voima (PVO), and Group Head Office and Global Business
Services.
EUR million 2024 2023
Sales 176 964
Adjusted EBITDA -63 18
Adjusted EBITDA margin -36.0 % 1.9 %
Adjusted EBIT -72 1
Adjusted EBIT margin -41.0 % 0.1 %
Fair valuations and non-operational items (FV)
1
-12 -13
Items affecting comparability (IAC)
1
-79 -28
Operating result (IFRS) -162 -41
Cash flow from operations -125 -105
Cash flow after investing activities -134 -123
1 The IAC for 2024 included EUR -45 million of consulting costs related to profit improvement programme, EUR -8
million other restructuring costs, EUR -4 million related to closure and disposal of De Hoop, EUR -7 million
related to closure and disposal of Sunila, EUR -8 million related to disposal of Selfly Store and EUR -7 million
related to updates in environmental provisions. The IAC for 2023 included EUR 29 million related to
restructuring of Kvarnsveden, EUR 9 million to restructuring of Veitsiluoto, and EUR -15 million to restructuring of
Group Functions, EUR 52 million related to disposal of Maxau, EUR -30 million to disposal of Nymölla, EUR -45
million to disposal of Hylte, EUR -14 million to disposal of biocomposite business, and EUR -6 million on disposal
transactions costs, EUR -14 million related to fixed asset impairments in Group Operations unit and EUR 6
million related to environmental provision updates. The fair valuations for 2024 included non-cash income
and expenses related to CO2 emission rights and liabilities of EUR -11 (-13) million.
Sales for the segment Other were at EUR 176 (964) million and adjusted EBIT
EUR -72 (1) million. The reduction from the previous year was mainly driven
by the sale of the paper production units in Sweden and Germany, but also
reduced energy market prices and decentralised operating model.
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Capital expenditure
Additions to fixed and biological assets including internal costs capitalised
in 2024 totalled EUR 1,090 (1,125) million. The total amount includes additions
in biological assets of EUR 81 (71) million.
The EUR 1 billion investment at the Oulu site in Finland to convert the
remaining idle paper machine into a high-volume consumer board line is
progressing according to schedule. Production is expected to start during
the first half of 2025. The investment supports the Group’s growth strategy
in renewable packaging by providing new capacity for growing packaging
segments. The targeted end-use segments are food and beverage
packaging, especially frozen and chilled, as well as dry and fast food,
mainly in Europe and North America.
The EUR 30 million Heinola boiler and fuel handling modification project
announced in February 2023, is ongoing and is expected to be brought into
use 2025.
The EUR 38 million investment in unbleached kraft pulp (UKP) production at
the Enocell site in Finland was finalised during the fourth quarter.
The EUR 42 million investment in improvements to fluff pulp production at
the Skutskär site in Sweden is ongoing, and is expected to be completed in
the first half of 2025.
The ramp-up of the new corrugated packaging site in De Lier in the
Netherlands is ongoing and is expected to be completed in 2026.
The EUR 30 million upgrade and expansion of the Ostrołęka corrugated
plant in Poland is ongoing and is expected to be completed in 2026.
Innovation, research and development
Stora Enso’s growth focus is on the development of sustainable and
resource-efficient packaging applications to replace fossil-based
materials, innovative biomaterials for high-end applications, and
sustainable wooden-based materials and components that store carbon
and improve the energy efficiency of buildings. Stora Enso actively
engages with young and growing companies that are developing
technology and solutions aligned with the Company’s core and growth
areas, using a venture client approach.
Stora Enso’s long-term science and research priority is to address early-
stage research at universities and institutes to enable breakthroughs and
build competence to meet the needs of its divisions. The Group’s
Innovation and R&D team works closely with strategic partner universities,
research institutes, and excellence centres to tackle key scientific
questions related to renewable materials. Stora Enso engages in multiple
research programmes along the value chain, from forests to products and
circular material flows.
Stora Enso’s total spend on innovation, research, and development in 2024
was EUR 78 (114) million, equivalent to 1.0% (1.2%) of total sales. Research and
development work is fundamental to staying relevant and competitive in
relation to customers. In 2024, Stora Enso employed approximately 330
people in research and development. The responsibility for product
innovations and development of services is with the business divisions.
Intellectual property (IP) is an important tool to support Stora Enso’s
development of innovative products and processes while safeguarding
the Group’s intellectual assets. In 2024, Stora Enso continued to strengthen
its patent portfolio by applying for patents for 50 new innovations,
primarily in the Biomaterials and Packaging Materials divisions. The
Biomaterials division focused on patents for Lignode, biobinders, biofoam,
and circular chemicals, while the Packaging Materials division filed for
patents related to barriers, board technology and circular packaging.
During 2024, the patent portfolio was streamlined, mainly in Packaging
Solutions, with the aim of saving costs and further adapting it to current
and future business needs. Several IP divestment and licensing activities
were initiated and/or concluded during the year. Stora Enso’s patent
portfolio now amounts to over 3,200 applications and granted patents.
Employees
On 31 December 2024, there were 18,558 (19,842) full-time employees in
the Group. The average number of employees in 2024 was 19,233, which is
1,589 less than a year before. At the end of 2024, the Group’s top four
countries in respect to the number of employees were Finland, Sweden,
China, and Poland.
Nature-related financial disclosures (TNFD)
The Taskforce on Nature-related Financial Disclosures (TNFD) is a science-
based initiative supported globally by national governments, businesses,
and financial institutions. It provides a framework for risk management
and disclosure to identify, assess, respond to, and disclose nature-related
issues. The TNFD recommendations align with the global policy goals
outlined in the Kunming-Montreal Global Biodiversity Framework and are
structured around four pillars: Governance, Strategy, Risk & Impact
Management, and Metrics & Targets.
In 2024, Stora Enso became a TNFD Early Adopter and committed to
publishing its first TNFD-aligned report for the financial year 2024. The
Group’s reporting under the Corporate Sustainability Reporting Directive
(CSRD) comprises nature-related disclosures, which are in line with the
TNFD recommendations. It is recognised that the nature-related
disclosures will evolve over time as more data and information become
available, enabling a gradual increase in detail, scope, and emphasis.
Stora Enso utilised the LEAP (Locate, Evaluate, Assess, and Prepare)
framework in the 2024 TNFD reporting to demonstrate how the Group
addresses nature-related impacts, risks, and dependencies. This approach
was complemented by in-depth analyses of individual mills and divisions.
The table below summarises the outcomes of the Group-level LEAP
exercise, which focused on Stora Enso’s direct operations, including its
forest assets.
Stora Enso’s ambition regarding nature is to establish, maintain, and
develop practises across its value chain that contribute to a nature-
positive impact on society. This approach aims to enhance the valuation
of nature, while mitigating environmental impacts and preserving
biodiversity. In 2025, the Group plans to explore its consolidated nature
offerings for customers within its nature framework.
The TNFD index table, available for downloading on storaenso.com/
annualreport, provides further references to relevant sections in
the Group’s Annual Report. This includes the Sustainability Statement
prepared in accordance with the European Sustainability Reporting
Standards (ESRS).
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Stora Enso’s TNFD Leap framework
Process Key outcomes
1.
Locate:
Interface
with nature
Mapping of Stora Enso’s direct operations, including forest assets, using geospatial data to
identify proximity to sensitive locations by utilising the Integrated biodiversity Assessment
Tool (IBAT) and WRI Aqueduct Water Risk Atlas.
Guiding questions:
• Which of the Group’s activities are located in sensitive areas?
Stora Enso manages its own and leased forest land, covering a total area of 2.1 million hectares worldwide. Largest part is boreal
forests located in Sweden (68% of total forest area) and in Finland and the Baltics (15%) via Tornator (41% ownership). Stora Enso
also owns and leases eucalyptus plantations in China (3%), Brazil (6%), and Uruguay (7%). Stora Enso's Forest Resources Information
Systems include locations of the Company's forest assets and sensitive areas, aiding in effective forest management and
conservation planning. Moreover, Stora Enso employs third-party verified wood traceability systems to know the origin of
procured wood and ensuring that it is not sourced from sensitive areas.
Stora Enso operates 57 production facilities mainly in Northern, Western, and Central Europe, but also has operations in China and
via joint ventures in Brazil and Uruguay. According to the mapping assessment, five of the Group’s units operate in regions with
High Baseline Water Stress and five units with High Biodiversity Significances. These units are defined as material locations and are
disclosed in the section "Sustainability data by production unit" of the Annual Report.
2.
Evaluate:
Dependencies
& impacts
Evaluation of impact drivers and dependencies relevant to Stora Enso using the TNFD
sector guidance for Forestry, pulp and paper.
Guiding questions:
• What environmental assets, ecosystem services, and impact drivers are associated
with the Group’s business processes, activities, and assessment locations?
• What are the dependencies and impacts on nature?
Stora Enso’s business depends on several natural capital inputs as raw materials, such as wood and fresh water, and are
supported by soil quality, alongside ecosystem services for bioremediation, forest disease, and pest control, as well as climate
regulation, among others. The Group's impact on living organisms, people, and the environment originates from use of land,
renewable and non-renewable resources, and the generation of waste, emissions, effluents, and noise.
Location-specific nature and environmental impact assessments are performed in local management systems (ISO 14001) where
significant environmental aspects are determined and prioritised. These systems also monitor compliance with environmental
permits and manage the chemical and ecological status in local recipient control systems.
Stora Enso has, as a business with over 20,000 suppliers around the world, an important role within global supply chains to
influence upstream suppliers positively on nature, biodiversity, environmental health, human well-being, and business
perspectives.
3.
Assess:
Risks &
opportunities
The basis for the risk and opportunities assessment was based on the TNFD sector
guidance for Forestry, pulp and paper and the double materiality assessment (DMA)
process implemented for the reporting according to Corporate Sustainability Reporting
Directive. This approach is also integrated into the ERM process, including climate scenario
analysis.
During 2024, Stora Enso executed in-depth assessments on Group-level, for two mills, and
an upstream pilot for one of the divisions.
Guiding questions:
• What are the nature-related risks and opportunities for the organisation?
• Which risks and opportunities are material and should be prioritised?
The scenario analysis recognises that long-term changes in precipitation patterns, periods of drought, frequent extreme weather
events, and higher average temperatures that increase the risk of forest fires and insect outbreaks, could cause damage to
operations, forests, and tree plantations. This would affect forests asset values and regional wood prices. More frequent extreme
weather events also increase the risk of disruptions in the production, logistics, and supply of raw materials and energy.
Reputational risks may arise as a consequence of incidents or non-compliant behaviour, including failure to comply with norms,
laws and regulations, or policy documents. Damage to Stora Enso’s reputation and brand may result in a loss of investor and
customer confidence leading to higher cost of capital and decreased revenues. There is a risk that new policies and regulations
for forestry and biodiversity could limit harvesting levels in EU forests, potentially resulting in significant increases in wood prices
and supply limitations. This could lead to reduced competitiveness of products.
Owning forests provides Stora Enso with strategic advantages, including securing a reliable and consistent wood supply, reducing
reliance on external suppliers, promoting environmental stewardship through sustainable forestry practices, preserving and
actively managing biodiversity, working with conservation of protected areas, and contributing to carbon sequestration efforts.
Stora Enso has adopted an adaptive approach to biodiversity management and monitors progress with indicators, and then
adapts actions accordingly. The Group also uses the latest technologies, data, and modelling to predict future biodiversity based
on current management practices.
4.
Prepare:
To respond
& report
Stora Enso’s TNFD disclosure includes core metrics set by the TNFD recommendations and
sector-specific metrics set by the TNFD sector guidance for Forestry, pulp and paper. The
process has been integrated into the DMA and the preparation of the Sustainability
Statement and ESRS E1-5.
Guiding questions:
• What risk management, strategy, and resource allocation decisions should be made?
• How will targets be set, and progress be defined and measured?
• What will be disclosed in line with the TNFD recommended disclosures?
• Where and how will the nature-related disclosures be presented?
Biodiversity initiatives aim for a net positive impact, with action programmes in place until 2030 to enhance biodiversity at
species, habitat, and landscape levels.
Stora Enso has set a target to reduce Scope 1, 2 & 3 emissions by 50% from the 2019 baseline as verified by Science Based Targets
initiative. Further to achieve Net Zero by 2040. Indicators are reported in the Sustainability Statement, section ESRS E1-5.
Next steps for future assessments, target setting, and disclosure:
• Further addressing material risks and opportunities at the Group’s production sites
• Advancing the assessment in the supply chain and for the Group's joint venture operations
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Risk management
In this section
Our approach to risk management 64
Risk governance 64
Risk management process 64
Main risks 65
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Approach to risk management
Risk is an integral element of business and corporate
governance, characterised by both opportunities and threats.
These factors can influence future performance, results and
the Group’s ability to meet social and environmental
objectives. Stora Enso is committed to systematic and
proactive risk management as a core organisational
capability, embedding it into its culture and decision-making
process. Through dynamic risk analysis and scenario planning,
Stora Enso enhances opportunities and mitigates risks to
achieve its business goals.
Risk governance
Stora Enso defines risk as the effect of uncertainty on the Group’s ability to
meet organisational values, objectives and goals. The Group Risk Policy,
approved by the Board of Directors, outlines the overall approach to
governance and risk management in accordance with the COSO
(Committee of Sponsoring Organizations) framework and aligned with ISO
31000. The Board retains the ultimate responsibility for the overall risk
management process and determines predominantly through Group
policies, the appropriate and acceptable level of risk.
The Board has established a Financial and Audit Committee to support the
Board in monitoring the adequacy of the risk management process within
Stora Enso, and particularly in the management and reporting of financial
risks. This oversight scope also includes monitoring cybersecurity risks.
The Sustainability and Ethics Committee is responsible for overseeing the
company’s sustainability efforts, ethical business conduct, commitment to
being a responsible corporate citizen, and contribution to sustainable
development.
The head of Enterprise Risk Management, reporting to the Executive Vice
President, Strategy and Sustainability, is responsible for designing,
developing and monitoring the top-down implementation of the Group
risk management framework. Each division and Group function head,
together with their respective management teams, is responsible for
executing the process and cascading the framework and guidelines
further down the organisation. The Internal Audit unit evaluates the
effectiveness and efficiency of Stora Enso’s risk management process.
Risk management process
Risk management is embedded in all decision-making processes, with
holistic risk assessments also conducted as part of all significant
investment decisions. In connection with the annual strategy process,
business divisions and Group service and support functions conduct a
holistic baseline risk assessment linked to their key objectives. Specific
guidance regarding the risk management process is outlined in the
enterprise risk management instructions.
Business entities and functions identify the sources of risk events including
changes in circumstances, their causes, and potential consequences.
Stora Enso’s risk model defines the overall risk universe which supports
holistic risk identification and risk consolidation, while also providing
taxonomy and consistency in risk terminology.
Risk analysis involves developing an understanding of risks to provide an
input for risk evaluation. The purpose of risk evaluation is to prioritise risks
and support decision-making in determining which risks require treatment
or actions. Risks are assessed based on their impact and likelihood of
occurrence, often using specific risk scenarios. The effectiveness of existing
risk reduction is factored in to define the residual risk level. Pre-defined
impact scales consider financial, safety, compliance, and reputational
impacts, on both a quantitative and qualitative basis.
Risk treatment involves selecting one or more risk management option,
such as avoidance, reduction, sharing or retention. Additional risk
mitigation actions are determined for risks which exceed the perceived
risk tolerance incorporating the assignment of responsibility, schedules,
and timetable for risk response actions.
Following the annual baseline assessment, prioritised and emerging risks,
along with the corresponding risk mitigation and business continuity plans,
are reviewed during divisional business review meetings on a semi-annual
basis.
Despite the measures taken to manage and mitigate risks, some risks
remain beyond the direct control of management. As such, there can be
no absolute assurance that risks, if they occur, will not have a materially
adverse effect on Stora Enso’s business, financial condition, operating
profit or ability to meet financial obligations.
Risk management process
Monitor and
review
Establish the context
Communicate
and consult
Risk assessment
Identify
Analyse
Evaluate
Treat risks
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Main risks
Reputation Negative impacts on reputation often reflects the combined effects of various types of risks
and may result from incidents or non-compliant behaviour by employees, contractors,
suppliers or other business partners. This includes failures to comply with norms, laws and
regulations, or policy documents. Damage to Stora Enso’s reputation and brand could lead
to a loss of investor and customer confidence, resulting in higher cost of capital and
decreased revenues.
Policies such as the Stora Enso Code and Supplier Code of Conduct ensure that the Board
has oversight. Continuous and mandatory training sessions for employees and, occasionally
for, suppliers guarantee that the policies are being implemented, and audits are conducted
to monitor that Stora Enso’s requirements are met. Stora Enso has established a Speak Up
Hotline, through which employees and any third party globally can anonymously report
potential non-compliance cases. All reported cases are subject to an established
investigation and reporting process, with proven cases leading to actions. Stora Enso
continuously engages with its stakeholders to enhance relationships, to respond to
developing needs, and inform its strategy.
Stakeholder engagement, internal and external, is key to building and
fostering a strong corporate reputation. It ensures good
communication flows and solid collaborative alliances. Consistently
delivering high quality, compliant products and services is the
foundation of Stora Enso’s brand reputation. Stora Enso provides visibility
into its sustainability roadmap, deliver on its key commitments and
comply with the evolving regulatory framework through stringent
processes. Finally, the Group ensures strong community outreach and
involvement in the areas where is has operations.
Strategic risks
Macroeconomy,
geopolitics, and
currency rates
Changes in global economic conditions, such as sharp market corrections and foreign
exchange volatility, could have a negative and material impact on Stora Enso’s profit, cash
flows and financial position.
Stora Enso is exposed to several financial market risks, which the Group is responsible for
managing under policies approved by the Board of Directors. The objective is to achieve
cost-effective funding for Group companies and manage financial risks by using financial
instruments to reduce earnings volatility. The main exposures for the Group, besides
currency risk, are interest rate risk, liquidity risk, refinancing risk, commodity price risk and
credit risk.
Financial risks are discussed in detail in note 5.1 Financial risk management.
Stora Enso has a diversified portfolio of businesses which mitigates exposure to any one
country or product segment. The external environment is continuously monitored and
planning assumptions take into account important near- to medium-term and long-term
drivers and risks related to key macro-economic factors.
Compliance with the Board-approved risk appetite is closely monitored and cash flow and
liquidity are actively managed. Stora Enso hedges 15–60% of the highly probable 12-month
net foreign exchange flows in main currency pairs. Currency translation risk is reduced by
funding assets, whenever economically possible, in the same currency as the asset.
The divisions regularly monitor their order flows and other leading indicators, where
available, so they can respond quickly to a deterioration in trading conditions. In the event of
a significant deterioration in general economic condition and in main leading economic
indicators, the Group has the ability to implement cost reduction measures to offset the
impact on margins from a decline in sales.
Despite the volatility in the macroeconomy, global megatrends drive
the demand for renewable materials supporting Stora Enso’s growth
and value creation. A diverse business portfolio and geographical
presence, competitive strength and resilient balance sheet reduce the
Group’s risk exposures.
Climate change –
physical impacts
Long-term (25–30 years) changes in precipitation patterns, periods of drought, frequent
extreme weather events and higher average temperatures that increase the risk of forest
fires and insect outbreaks, could cause damage to operations, forests and tree plantations,
affecting forests asset values and regional wood prices. Milder winters could also impact on
the harvesting and transport of wood, as well as related costs in northern regions. More
frequent extreme weather events also increase the risk of disruptions in the production,
logistics and supply of raw materials and energy. In 2024, the focus was on deep dives into
specific physical risk impacts and further developing transition scenarios.
Physical risks are largely subject to risk transfer and therefore covered by Stora Enso’s
property and business interruption insurance programmes. With regards to forest and
plantation assets, Stora Enso benefits from strategic resilience through geographical
diversification within its asset portfolio. Diligent plantation planning ensures the avoidance of
frost sensitive areas, and R&D programmes are applied to increase tolerance to extreme
temperatures. Stora Enso maintains a diversity of forest types and structures and enforces
diversification in wood sourcing. Wood harvesting in soft soils involves the implementation of
best practices guidelines.
Nordic forests in Finland and Sweden could also benefit from increased
heat summation and longer growing seasons, leading to accelerated
forest growth with a direct positive impact on the value of Stora Enso’s
own forest assets and an indirect impact related to market wood
availability and costs.
Biodiversity loss Stora Enso’s forestry and industrial operations have an impact on biodiversity. At the same
time, Stora Enso’s business depends on raw material inputs from natural capital, such as
wood and fresh water. Biodiversity is essential for maintaining the stability of ecosystem
processes in changing environments. Biodiversity loss can negatively impact the value of
Stora Enso’s forest assets and acceptability of wood as a raw material. Read more in the
TNFD chapter.
Stora Enso is committed to achieving a net positive impact on biodiversity in its own forests
and plantations through active biodiversity management. Biodiversity management is an
integral part of all Stora Enso’s forest and plantation management practices. Operations are
supported by new technologies and digitalisation, as well as continuous research and
innovation. For example, Stora Enso’s forest units have established special programmes
focusing on biodiversity management. In addition, Stora Enso uses tools, such as wood
traceability and forest certification, and engages in collaboration with various stakeholders
to protect ecosystems and safeguard natural resources.
Sustainable forest management maintains forest health and vitality.
Active biodiversity management and conservation in Stora Enso’s forest
operations, such as spatially optimising the volume of deadwood and
protection of key habitats, contribute to a positive biodiversity impact.
Healthy and biodiverse forests improve resilience against external
calamities and a changing climate.
Competition and
market demand
The packaging, pulp, paper, and wood products industries are mature, capital-intensive and
highly competitive. Stora Enso’s principal competitors include several large international
forest products companies and numerous regional and more specialised competitors.
Customer demand is influenced by general economic conditions and inventory levels, which
in turn affect product price levels. Product prices, which tend to be cyclical, are affected by
capacity utilisation, which decreases in times of economic slowdowns. Price changes differ
between products and geographic regions. See Table 1 for the operating profit sensitivity to a
+/- 10% change in either price or volume for different segments.
The ability to respond to changes in product demand and consumer preferences and to
develop new products on a competitive and economic basis requires innovation, continuous
capacity management, and structural development. Risks related to factors such as
demand, price, competition, and customers are regularly monitored by each division and
unit as a routine part of business management. These risks are also continuously monitored
and evaluated at the Group level to gain a perspective on Stora Enso’s total asset portfolio
and overall long-term profitability potential.
Stora Enso, one of the largest private forest owners in the world, also
benefits from a strategic renewable resource base. The Group’s
expertise in wood and wood-based renewable materials is focused on
responding to changing customer and consumer preferences, driven
by climate change.
Products based on renewable materials with a low carbon footprint
help customers and society at large to reduce CO2 emissions by
providing an alternative to solutions based on fossil fuels or other non-
renewable materials.
Risk Description Mitigation Opportunity
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Regulatory changes Stora Enso’s businesses may be affected by political or regulatory developments in any of
the countries and jurisdictions where it operates, including changes to forest, biodiversity,
environmental, fiscal, tax or other regulatory regimes. Potential impacts include higher costs
and capital expenditure to meet new requirements, the expropriation of assets, imposition of
royalties or other taxes targeted at the industry, and requirements for local ownership or
beneficiation.
The EU Green Deal and its climate targets for 2030 and 2050 have resulted in a proliferation
of future legislation and may impact Stora Enso’s future operations. The policy initiatives from
the European Commission include policies and legislation on areas such as the EU Forest
and Biodiversity strategies, the Renewable Energy Directive, the EU Emission Trading System
(ETS), the European Sustainable Products Regulation (ESPR), the Packaging and Packaging
waste revision as well as EU taxonomy.
Political decisions on forest resources, could limit the availability of wood, increase costs and
reduce investment opportunities.
Stora Enso has been granted various investment subsidies and has made certain
investment commitments in different countries such as Finland, China and Sweden. If
committed planning conditions are not met, local officials may pursue administrative
measures to reclaim some of the previously granted investment subsidies or impose
penalties on Stora Enso. The outcome of such a process could result in a negative financial
impact on Stora Enso.
Active monitoring of regulatory and political developments in the countries where Stora Enso
operates as well as participation in policy development primarily through industry
associations and other partnership programmes are important risk mitigation measures
related regulatory changes.
Regulatory changes can also present significant opportunities by
driving market growth for sustainable products and creating
competitive advantage through resource efficiency and renewability.
Strategic
investments
To succeed in implementing its strategy, Stora Enso must understand the needs of its
customers and find the best way to serve them with the right offering and the right
production asset portfolio. Failure to complete strategic projects in accordance with the
agreed schedule, budget or specifications can, therefore, have serious impacts on Stora
Enso’s financial performance. Significant, unforeseen changes in costs or an inability to sell
the envisaged volumes or achieve planned price levels may prevent Stora Enso from
achieving its business goals.
Risks are mitigated through thorough and detailed pre-feasibility and feasibility studies
which are prepared for each large investment. Investment guidelines stipulate the process,
governance, risk assessment, management and monitoring procedures for strategic
projects, including climate related risk factors. The guidelines also require the calculation of
potential cost and income for CO2 emissions as part of the investment proposal,
Environmental and Social Impact Assessments (ESIAs) are conducted for all new projects
that could cause significant adverse effects in local communities. Post completion audits are
carried out for all significant investments.
Replacing fossil-based materials by innovating and developing new
products and services based on wood and other renewable materials.
Mergers, acquisitions,
and divestments
Failure to realise the expected benefits from the acquisition of a company or asset can have
serious financial impacts on Stora Enso. The Group may also find itself liable for past acts or
omissions of the acquired business, without any adequate right of redress. Failure to achieve
expected values from the sales of assets or deliveries beyond the expected receipt of funds
may also impact Stora Enso’s financial position. Divestments or business restructuring may
involve additional costs due to historical and unaccounted liabilities as well as reputational
impacts.
Rigorous M&A guidelines, including due diligence procedures are applied to the evaluation
and execution of all acquisitions. Structured governance and policies, such as the policy for
responsible right-sizing, are followed when making restructuring decisions.
A strong balance sheet and cash flow enable value enhancing M&A,
when the timing and opportunity are right.
Operational risks
Personal safety –
employees and wider
workforce
Failure to maintain high levels of safety management can result in harm to Stora Enso’s
employees and contractors, as well as to communities near our operations and the
environment. Impacts in addition to physical injury, health effects and environmental
damage could include liability to employees or third parties, damage to reputation, or an
inability to attract and retain skilled employees. Government authorities could also enforce
the closure of our operations on a temporary basis.
Personnel safety and security can never be compromised. Therefore, Stora Enso must be
aware of potential safety risks and provide adequate guidelines to people for managing risks
related to, for example, travelling, working, and living in countries with security or crime
concerns.
Stora Enso’s goal is to provide an accident-free workplace. Encouraging a Group-wide safety
culture means that everyone is responsible for making every workday healthy and safe –
from top management throughout the Group. The approach to safety extends to
contractors, suppliers, and on-site visitors. Everyone is encouraged to share feedback and
suggest ideas for further improving safety. Additionally, safety is promoted among
contractors and suppliers through a dedicated e-learning. The Group also emphasises the
importance of safety by asking suppliers to provide information on their safety performance
in the tendering process.
Stora Enso’s Health and Safety Policy defines the objectives for safety management, as well
as the governance model for managing health and safety topics in practice and integrating
them into annual planning and reporting.
Achieving strong health and safety performance can enhance Stora
Enso’s employer brand, as well as improve engagement, efficiency and
productivity.
Risk Description Mitigation Opportunity
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Physical assets The installed capacity of Stora Enso’s production facilities has an inherent risk of potential for
failure or off-specification operations, which could result in poor product quality, unplanned
production downtime, lower output, or increased production costs. It may also impact Stora
Enso’s ability to meet delivery commitments and business plan objectives. In some
instances, these risks arise from inherent design deficiencies, failures in the mode of
operation, or operating practices. The most significant asset risks are predominantly in
integrated pulp and board production and related energy generation.
Protecting production assets and business results is a high priority for Stora Enso. This is
achieved through structured methods of identifying, measuring and controlling different
types of process risk and exposure. Divisional risk specialists manage this process together
with insurance companies and other loss prevention specialists. Each year a number of
technical risk inspections are carried out at production units. Risk improvement programmes
and cost-benefit analyses of proposed investments are managed through internal reporting
and risk assessment tools.
Internal and external property loss prevention guidelines, fire loss control assessments, key
machinery risk assessments and specific loss prevention programmes are also utilised.
Planned stoppages for maintenance and other work are important to keep machinery in
good order.
Preventive maintenance programmes and spare part criticality
analyses are utilised to secure the high availability and efficiency of key
machinery.
Product safety Some of Stora Enso’s products are used for packaging liquids and food consumer products,
where any defects could affect health or packaging functionality, leading to costly product
recalls. Wood products are used in construction, potentially exposing Stora Enso to product
liability related to failures in structural design, product selection or installation. Failure to
ensure product safety could result in recalls involving significant costs including
compensation for customers’ indirect expenses, and reputational damage.
Mills producing food and drink contact products have established certified hygiene
management systems based on risk and hazard analysis. To ensure product safety, Stora
Enso actively participates in CEPI (Confederation of European Paper Industry) working groups
on chemical and product safety. In addition, Stora Enso mills have certified ISO quality
management systems. Contractual liability limitation and insurance protection further
mitigate Stora Enso’s risk exposure.
Stora Enso recognises the opportunity of differentiation and value
creation through superior product quality and the highest level of
product conformity.
People and
capabilities
Competition for personnel is intense and Stora Enso may, in the long term, not be successful
in attracting or retaining qualified personnel. The loss of key employees, the inability to
attract new or adequately trained employees, or a delay in hiring key personnel could
seriously harm Stora Enso’s business and impede reaching the Group’s strategic objectives.
Labour market disruptions and strikes, especially in times of restructuring and redundancies
due to divestments and mill closures or during labour market negotiations, could also have
adverse material effects on Stora Enso’s business, financial position and profitability.
Stora Enso manages the risks and loss of key talents through a combination of different
actions. Some of the activities aim towards making the Stora Enso employer brand better
known both internally and externally, globalising some of the remuneration practices and
intensifying the efforts to identify and develop talents. Finally, the Group actively focuses on
talent and management assessments, including succession planning for key positions. The
majority of employees are represented by labour unions under several collective
agreements in different countries where Stora Enso operates, thus relations with unions are
of high importance to manage labour disruption risks.
Stora Enso recognises that skilled and dedicated employees are
essential for success. Engaged, high-performing individuals drive the
implementation of transformation strategy and contribute to
commercial success.
Sourcing Increasing input costs or challenges in availability of materials, goods and services may
adversely affect Stora Enso’s profitability. Securing access to reliable, low-cost supplies and
proactively managing costs and productivity are key priorities. Reliance on external energy
suppliers also makes Stora Enso susceptible to fluctuations in energy market prices.
Additionally, the supply chain faces heightened risks of disruption due to cyber incidents,
political instability, and other factors related to global trade. See Table 2 for Stora Enso’s
major cost items.
In many areas Stora Enso depends on suppliers and their ability to deliver products or
services on time and at required quality. Key inputs include fiber, chemicals, energy, and
machinery and equipment for capital investment projects. Increased demand for carbon
neutral primary and secondary biomass fuels may drive up energy costs. Critical services,
such as transport and outsourced business support, are also essential. For some of these
inputs, reliance on a limited number of suppliers poses a risk.
Input cost volatility is closely monitored at the business unit, divisional and Group levels, and
a consistent long-term energy risk management approach is applied. Price and supply risks
are mitigated through increased in-house generation, shareholding in competitive power
assets such as PVO/TVO, physical long-term contracts, and financial derivatives.
Stora Enso hedges price risks in raw material and end-product markets and supports the
development of financial hedging mechanisms. A wide range of suppliers is utilised and
monitored to avoid situations that might jeopardise continued production, business
transactions, or development projects.
Suppliers and subcontractors are required to comply with Stora Enso’s sustainability
standards, as they form part of the Group’s value chain. These sustainability requirements,
along with audit schemes encompass raw materials, and other goods and services
procured. Suppliers are assessed for risks related to environmental, social and business
practices using an internal risk assessment tool. Supplier Code of Conduct audits are
conducted for high-risk suppliers, and findings from these audits are followed-up. If
mitigation is not possible, supplier contracts may be terminated.
Stora Enso also has the opportunity to add value and drive innovation
globally by building strong, measurable relationships with top suppliers,
enforcing harmonised sourcing processes to enhance capabilities,
improve tender quality, reduce costs, and nurture sustainable suppliers.
Risk Description Mitigation Opportunity
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Information
technology, security,
and digitalisation
Stora Enso is dependent on IT systems for both internal and external communications and
for the day-to-day management of its operations. Information systems, personnel, and
facilities are subject to cyber security risks, such as ransomware. In addition, the accidental
disclosure of confidential information due to a failure to follow information handling
guidelines, as a result of an accident or criminal act, may result in financial damage,
penalties, disrupted or delayed launch of new business lines or ventures, loss of customer
and market confidence, loss of research secrets, breach of data privacy regulations, and
other business-critical information.
The management of risks is actively pursued in the Information Risk Management System,
and best practice change management and project methodologies are applied. We actively
work to prevent cybercrime. Several security controls have been implemented to strengthen
the protection of confidential information and to ensure compliance with international
regulations.
Opportunities may arise from efficient operations, performance
optimisation, innovative product offerings. New customer services
through digitisation also present potential benefits. Additionally,
sophisticated IT systems, as well as new technologies offering
significant potential for higher level of process optimisation and
automatisation. These improvements can generate new business and
enhance value propositions for customers and consumers.
Ethics and
compliance
Stora Enso operates in a highly regulated business area and is therefore exposed to risks
related to breaches of applicable laws and regulations, including those related to capital
markets regulation, company and tax laws, customs, the environment, human rights, and
safety. This also covers areas addressed by policies such as the Stora Enso Code and
Business Practice Policy, including fraud, anti-trust, corruption, conflict of interests, and other
forms of misconduct. Breaches may lead to high compliance and remediation costs,
including prosecution costs, fines, penalties, and contractual, financial, and reputational
damage.
Stora Enso’s Ethics and Compliance Programme, which includes policy setting, promoting
values, training, knowledge sharing and grievance mechanisms, is continuously updated
and developed. Other compliance mechanisms include Stora Enso Group’s internal control
system and Internal Audit assurance, as well as the Supplier Code of Conduct in supplier
contracts, risk assessments, trainings and audits. In response to capital markets regulations,
Stora Enso’s Disclosure Policy emphasises the importance of transparency, credibility,
responsibility, proactivity and interaction.
Environmental risks are minimised through environmental management systems and
environmental due diligence for acquisitions and divestments, and indemnification
agreements where effective and appropriate remediation projects are required. Special
remediation projects related to discontinued activities and mill closures are executed based
on risk assessments.
Focusing on ethics in a wider sense, rather than merely complying with
laws and regulations, promotes a value-driven and more successful
business, fosters accountability, and enhances corporate reputation.
Risk Description Mitigation Opportunity
The table 1 shows the operating profit sensitivity to a +/- 10% change in either price or volume for different segments
based on figures for 2024.
Table 1. Operating profit: Impact of changes +/- 10%, EUR million
Segments Price Volume
Packaging Materials 418 102
Packaging Solutions 96 34
Biomaterials 145 57
Wood Products 147 28
Forest 279 11
The table 2 shows Stora Enso’s major cost items.
Table 2. Composition of costs in 2024
Operative costs % of costs % of sales
Logistics and commissions 11% 10%
Manufacturing costs
Fiber 36% 34%
Chemicals and fillers 8% 7%
Energy 6% 6%
Material 10% 9%
Personnel 14% 14%
Other 9% 8%
Depreciation 6% 6%
Total costs and sales 100% 94%
Total operative costs and sales in EUR million 8,538 9,049
Associated companies, operational 87
Adjusted EBIT (EUR million) 598
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Sustainability
Statement
In this section
General information 70
Environmental information 86
Social information 113
Governance information 124
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General information
In this section
Basis for preparation 70
Governance 70
Strategy 73
Impact, risk and opportunity management 76
General basis for preparation of the Sustainability
Statement (BP-1)
Stora Enso’s Sustainability Statement has been prepared on a
consolidated basis in accordance with Chapter 7 of the Finnish Accounting
Act and the European Sustainability Reporting Standards (ESRS). It follows
the same consolidation principles as the Financial Statements prepared in
accordance with the IFRS Accounting Standards. Unless otherwise stated,
the Group’s consolidated performance figures expressed in this report
relate to the parent company, Stora Enso Oyj, and all companies in which
the Group holds 50% or more of the voting rights, directly or indirectly. For
more information on Group’s structure, see Financial Statements, note 6.2
Group structure.
Joint control refers to the contractually agreed sharing of control of a joint
arrangement, which exists only when decisions on relevant activities
require the unanimous consent of all parties sharing control. Joint
operations are joint arrangements in which the parties with joint control
have rights to the assets, and obligations for the liabilities associated with
the arrangement.
Stora Enso has two joint operations, Veracel in Brazil and Montes del Plata
in Uruguay. In both companies, Stora Enso holds a 50% ownership. In the
Group’s Financial Statements, the joint operations are recognised and
consolidated based on Stora Enso’s share of the assets, liabilities, revenues,
expenses, and cash flows of the joint operation.
In its current adopted form, ESRS lacks guidance on the consolidation
principle for joint operations. Regarding its joint operations, Stora Enso does
not have full authority to introduce and implement operating policies,
practices, and targets, rendering most of the ESRS reporting requirements
invalid. The same principle applies to financial reporting, where the Group’s
joint operations follow their own financial risk policies, which may differ
from those of Stora Enso. Unlike financial reporting, where joint operations
comply with IFRS accounting standards, joint operations do not adhere
to ESRS.
To ensure consistency with Stora Enso’s financial reporting, the
Sustainability Statement covers information proportional to Group's
ownership in the joint operations in the following ESRS disclosure
requirements: E1-5, E1-6, E1-7, E2-4, E3-4, E4-5, E5-4, E5-5, and S1-6 (total
number of employees). These disclosures encompass all intensity ratios
related to the Group’s financial revenue. However, due to the lack of full
authority over daily operations, joint operations are not governed by Stora
Enso’s policies, internal controls, or targets.
Following the double materiality principle, Stora Enso’s Sustainability
Statement contains relevant upstream and downstream value chain
information where necessary to understand the Group’s material impacts,
risks, and opportunities and to provide information that meets the
qualitative characteristics outlined in the Corporate Sustainability
Reporting Directive (CSRD). In the descriptions of material topics, joint
operations are referred to as ‘joint operations’ to distinguish them from the
Group’s own operations, over which the Group has full authority regarding
the operating policies.
Due to the sensitivity of information, Stora Enso has exercised the option to
not to disclose specific details related to intellectual property, know-how,
or the outcomes of innovation. In accordance with the Finnish Accounting
Act chapter 7 13 § (21.12.2023/1249), Stora Enso does not disclose information
on impending developments or matters under negotiation. Following the
Finnish Accounting Act, Stora Enso has also opted to omit value chain
metrics and comparative data from previous periods for the first
reporting year.
This Sustainability Statement has been verified by an independent third-
party assurance provider in accordance with the Finnish Auditing Act.
PricewaterhouseCoopers Oy has provided a level of Limited Assurance,
using the ESRS Standards and the requirements of the delegated acts of
the Taxonomy Regulation serving as criteria, covering the Sustainability
Statement as defined under BP-1. PricewaterhouseCoopers Oy applies the
International Standard on Quality Management (ISQM) 1. Additionally, a
level of Reasonable Assurance, using the GHG Protocol as criteria, has
been provided for Stora Enso’s reporting on direct and indirect greenhouse
gas (GHG) emissions (Scope 1 and 2). The Assurance Reports are available
on page 216 of the Annual Report.
Disclosures in relation to specific circumstances (BP-2)
Stora Enso’s Sustainability Statement fulfils the characteristics of specific
circumstances in some of its disclosures.
Due to the nature of Stora Enso’s operations, the time horizons differ from
the definitions provided in the CSRD. For risks, Stora Enso defines short-term
as up to one year, medium-term as two to ten years, and long-term as ten
years or more. This definition aligns with Stora Enso’s enterprise risk
management process.
Stora Enso applies phase-in provisions in accordance with Appendix C of
ESRS 1 and does not disclose anticipated monetary impacts of
environmental risks for the financial year 2024. The phase-in provisions are
applied to E1-9, E2-6, E3-5, E4-6, E5-6, S1-7, S1-8 (covers only EEA countries),
S-11, S1-13, and S1-14 (88 d, e).
In cases involving value chain estimation, outcome uncertainty, and
disclosures stemming from other legislation or generally accepted
sustainability reporting pronouncements, the information is presented
alongside the accounting principles of each metric. In ESRS E1-6, the
metrics related to Scope 3 are subject to a higher level of measurement
uncertainty, due to the data encompassing the full value chain.
Unless otherwise stated, the metrics disclosed in the Sustainability
Statement have not been validated by an external body other than the
assurance provider.
The role of the administrative, management,
and supervisory bodies (GOV-1)
The Board and the President and CEO (CEO) are responsible for the
management of the Company. The Board supervises the operation and
management of Stora Enso and decides on significant matters relating to
strategy, investments, organisation, and finance. It is also responsible for
overseeing the proper supervision of accounting and the control of
financial and sustainability matters. The CEO is responsible for the day-to-
day management of the Company in accordance with the Finnish
Companies Act and the instructions and orders issued by the Board. Other
governance bodies have an assisting and supporting role.
The duties of the various bodies within Stora Enso are determined by the
laws of Finland and by the Company’s corporate governance policy, which
complies with the Finnish Companies Act and the Finnish Securities Market
Act. The working order of the Board sets out the Board’s working practices
of the Board, and the tasks and responsibilities of the Board committees
are defined in their charters. There is no employee representative on the
Board.
The Corporate Governance Policy addresses corporate governance within
Stora Enso. The Group Risk Policy outlines the overall approach to
governance and the management of risks in accordance with the COSO
(Committee of Sponsoring Organizations) framework and in line with ISO
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31000. Both policies are approved by the Board of Directors. The Board’s
work is supported by its committees:
Financial and Audit Committee (FAC): Supports the Board in maintaining
the integrity of the Company’s financial and sustainability reporting, as
well as the Board’s control functions.
People and Culture Committee (PCC): Responsible for recommending
and evaluating executive nominations and remunerations, and making
recommendations to the Board on management remuneration issues.
Sustainability and Ethics Committee (SECo): Responsible for overseeing
the Company’s sustainability and ethical business conduct, impacts, risks,
and opportunities; supporting the FAC in approval of the Report of the
Board of Directors; and approving sustainability targets.
The Board of Directors, the Sustainability and Ethics Committee, and the
Financial and Audit Committee charters were updated in 2024 to reflect
new regulatory requirements on sustainability reporting. In addition, the
Sustainability and Ethics Committee’s agenda was realigned to prioritise
material topics, and the Committee’s collaboration with the Financial and
Audit Committee was strengthened. The Sustainability and Ethics
Committee reviews, evaluates, and oversees Stora Enso’s double
materiality assessment, including the identified material impacts, risks,
and opportunities, was well as the associated targets and action plans.
The Board approves the double materiality assessment. Furthermore, the
Financial and Audit Committee reviews and supports the material content
of the Sustainability Statement, as recommended by the Sustainability and
Ethics Committee, for inclusion in the Report of the Board of Directors,
subject to Board approval.
As stipulated by the Board Diversity Policy, the merits of directors include
knowledge of the Company’s operational environment, its markets, and
the industry in which it operates. This may also encompass elements such
as financial, sustainability or other specific competencies, geographical
representation, and business background as required to achieve the
appropriate balance of diversity, skills, experience, and expertise on the
Board collectively. In 2024:
• The Board comprised eight members, all non-executive.
• Diversity: 50% gender balance, with an average ratio of female to male
board members being 1:1. The age range was 51 to 69 years, and the
members represented five different nationalities.
• 2/8 of the Board members had industry experience, 3/8 had specific
experience in emerging markets, and all members had experience in
global business and operational management.
• 100% of the Board members were independent of the Company. Three of
the Board members were independent of the Company but not of its
significant shareholders.
In 2024, five of the Board members possessed sustainability or ESG-related
expertise as their primary skill. Additionally, two of the Board members had
specific expertise in sustainability-driven innovation. These skills are
aligned with the material topics identified as part of Stora Enso’s transition
plans: Climate change, Biodiversity and Circularity. Two out of the three
members of the Sustainability and Ethics Committee possessed expertise
in governance and compliance as their primary skill, and all the members
of the Financial and Audit Committee held this expertise. All Board
committees are allowed to engage external consultants and experts when
necessary. To ensure access to sufficient and relevant sustainability
expertise and skills, the Group’s subject matter experts present
sustainability topics and updates to the committees. More details are
provided under ESRS 2 GOV-2.
The Sustainability and Ethics Committee comprises two to four Board
members who are nominated annually by the Board. At least one
Committee member is expected to have sufficient prior knowledge and
experience in handling sustainability and business ethics matters. To
ensure the Board’s insight and competence on the Company’s material
sustainability-related topics, the Board regularly reviews and discusses
material impacts, risks and opportunities, targets, and external reporting
as described below under ESRS 2 GOV-2.
The CEO is responsible for overseeing effective risk management and
internal controls over financial and sustainability reporting. The Group
Internal Control function, supervised by the CFO and Group Controller, is
accountable for internal control governance, processes and tools. Division
internal control functions execute the internal control processes within
their respective divisions. The head of Enterprise Risk Management,
reporting to the Executive Vice President of Strategy and Sustainability, is
responsible for designing, developing, and monitoring the implementation
of the Group’s risk management framework. To ensure control over the
management of impacts, risks, and opportunities, Stora Enso has set
procedures to update the Board on incidents related to safety and
environmental non-compliances. In addition, the Board is responsible for
annually approving the updated Double Materiality Assessment and
reviewing strategic and operational risks.
Sustainability work is led by the Executive Vice President (EVP) responsible
for strategy and sustainability, who reports directly to the CEO and is part
of the Group Leadership Team (GLT). The CEO holds ultimate responsibility
for the successful implementation of Company’s sustainability agenda.
The Sustainability Council, which includes Heads of Sustainability from the
divisions, steered Stora Enso’s sustainability efforts in 2024. Chaired by the
SVP, Group Sustainability, the Council’s work involves identifying longer-
term opportunities and challenges that may require a Group-wide
response, as well as the sharing of good practices. The EVP Legal, General
Counsel, is responsible for ethics and compliance matters at Stora Enso
and reports to the CEO. Both the Group Leadership Team and the Board of
Directors are regularly updated on sustainability progress and other
topical issues. Group functions leading the work in their specific areas
propose Stora Enso’s sustainability targets related to material impacts,
risks, and opportunities, which are then approved by the Board’s
Sustainability and Ethics Committee. The Board of Directors receives
quarterly updates on performance against the targets.
I n f o r m a t i o n p r o v i d e d t o a n d s u s t a i n a b i l i t y matters
addressed by the administrative, management, and
supervisory bodies (GOV-2)
The key role of the Sustainability and Ethics Committee includes agreeing
on sustainability focus areas based on materiality, approving sustainability
targets, supporting the FAC in providing recommendations for the Report
of the Board of Directors’ approval, and approving targets for the next year.
Furthermore, the Sustainability and Ethics Committee receives in-depth
updates twice a year on material topics, which are held together with
the divisions. This ensures that the Board is well-informed about these
significant topics and possesses the necessary expertise in relation
to them.
The main responsibilities of the Sustainability and Ethics Committee
include determining the key sustainability focus areas based on their
materiality, approving sustainability targets, and supporting the Financial
and Audit Committee in providing recommendations for the approval of
the Board of Directors’ Report. All non-compliance cases are reported to
the Sustainability and Ethics Committee upon completion, and cases
related to fraud or the integrity of financial reporting are also reported to
the Financial and Audit Committee. Significant non-compliances are
reported to Sustainability and Ethics Committee within 24 hours of their
occurrence.
The Sustainability and Ethics Committee receives regular updates and
engages in discussions with the management, as outlined below in the
table. This is done to ensure that the Board remains well-informed about
the material topics, follows a structured annual process for reviewing and
approving material sustainability issues, and possesses the necessary
expertise in relation to them.
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Quarterly updates and
discussions
• Safety (TRI and fatalities) statistics
• Ethics and Compliance incident reviews
• Review of the quarterly sustainability scorecard to
assess performance against sustainability targets
Bi-annual updates and
discussions
• Deep dives into material sustainability topics with
divisions on the management of significant risks,
impacts, and opportunities
• Sustainability focus areas: proposal and agreement
Annual updates and
discussions
• Integrated ERM and Double Materiality Assessment
review with the Financial and Audit Committee
• Approval of sustainability targets
• Review of the Sustainability Statement and support to
Financial and Audit Committee in providing
recommendations to the Board for the approval of
the Board of Directors Report
Matters addressed by Sustainability and Ethics Committee
In addition to the topics listed above, the Board receives updates and
discusses other material sustainability topics as needed. The updates are
provided by the GLT members and their teams, primarily Group
Sustainability and Group Legal. In 2024, these included the Company’s net
zero plan for 2040, an environmental incident at Stora Enso’s harvesting
site, the implementation plan for the due diligence process in accordance
with the Corporate Sustainability Due Diligence Directive, and an ESG
update on market information and international remuneration disclosure
practices. The description of the Board’s involvement in the double
materiality assessment and the setting of thresholds is presented under
ESRS 2 IRO-1 and the outcome of the assessment is disclosed under ESRS 2
SBM-3.
The Board supervises the operation and management of Stora Enso and
decides on significant matters relating to strategy, investments,
organisation, and finance. Information on the development of essential risk
areas, as well as executed and planned activities in these areas are
regularly communicated to the FAC. SECo receives regular updates on
material sustainability topics, including related impacts, risks and
opportunities as described above. The two Committees present a report
on each meeting to the Board to be utilised in the Board’s approval,
supervisory and decision-making processes. Risks are reviewed jointly with
the FAC and SECo to ensure a holistic approach to overseeing Company
risks. In accordance with the Board’s working order, matters handled in the
meetings include, among others, the approval of major investments and
divestments. The Group’s Investment Guidelines address sustainability
matters to be considered, but do not provide specific guidance on
potential trade-offs.
Integration of sustainability-related
performance in incentive schemes (GOV-3)
Stora Enso’s incentive programmes are designed to drive alignment with
common objectives and to create engagement by setting clear targets
that each business unit or employee can influence. They consist of both
financial and non-financial metrics. For short-term incentives (STI), targets
are set for one year and potential payout takes place annually. All of the
Group’s own employees are eligible to participate in a bonus plan.
The long-term incentive plan (LTI) is primarily targeted at individuals who
have the greatest impact on the Company’s long-term success and
performance. The purpose of the LTI plan is to incentivise and align
management with shareholder interests and the Company’s long-term
strategy. The targets for the LTI plan are set for a three-year period, and
payouts in Stora Enso shares are based on the Company’s performance
against set targets.
1
The Board’s remuneration is not directly linked to the Company’s
performance, but may be paid partly in Company shares, as decided by
the Annual General Meeting.
Since 2022, sustainability measures have been part of the Company’s
variable remuneration. Sustainability-related objectives are integrated
into the STI plans of all employees, currently focusing on occupational
safety measures. These objectives extend to the short-term incentive
programmes of the CEO
1
, CFO, other Group Executives, as well as division
and business unit management. For the STI 2024 (payable in 2025), 10% is
allocated to safety performance. The LTI plan encompasses around 300
key employees. In the LTI plan, sustainability metrics focus on carbon
emission reduction (10%), and improving gender balance (10%) with the
exception of the CEO Performance Share Plan (18 September 2023–30
September 2025), in which the sustainability metrics relate only to the
carbon emission reduction. The sustainability performance criteria align
with Stora Enso’s key sustainability targets and key performance indicators
(KPIs), thereby contributing to the overall fulfilment of the Group’s
sustainability ambition.
The Remuneration Policy describes Stora Enso’s main principles and the
decision-making process for the remuneration of the members of the
Board, President and CEO. The performance metrics defined in the policy
include sustainability targets as decided by the Board. The Board regularly
reviews and defines key performance indicators, both financial and non-
financial, to measure the progress of the Company and the completion of
strategic objectives. The Group’s remuneration programmes are based on
this set of key performance indicators. Shareholders at the Annual General
Meeting have established a Shareholders’ Nomination Board, which is to
exist until otherwise decided, and will annually prepare proposals for the
Annual General Meeting’s approval concerning the number of members of
the Board of Directors, the Chair, Vice Chair and other members of the
Board, as well as the remuneration for the Chair, Vice Chair and members
of the Board and its committees. The compensation of the President and
CEO is decided by the Board based on the evaluation and proposal by the
Board’s People and Culture Committee, and the Company’s Remuneration
Policy.
1 In accordance with the conditions outlined in the Remuneration Policy 2022, the appointment of a new CEO
allows for exemptions from the policy. The Board has decided to exercise this right in the context of
nominating the new CEO to ensure full focus on profit turnaround, cash flow improvements, and enhanced
competitiveness. The deviation pertains to the performance periods of incentive plans. Following the
conclusion of these performance periods, which are tied to the CEO’s appointment, the CEO’s incentive plans
will align with those of the Group Leadership Team, as periodically determined by the Board.
Statement on due diligence (GOV-4)
Stora Enso takes precautionary and systematic action to mitigate and
remedy potential adverse environmental and social impacts through, for
example, the following processes and tools:
• Due diligence, in which the Company evaluates the impact that current
or potential business operations may have on local communities and
the environment.
• Third-party certified management systems in place at production units
that apply international standards such as ISO 14001, ISO 45001, and ISO
50001.
• SMETA audits focusing on social matters and working conditions.
• Third-party forest management certification for the Group’s own forestry
operations and suppliers, such as FSC
1
and PEFC
2
, which also include
community considerations as a prerequisite.
• When necessary, restructuring processes and the closure of operations
are conducted in cooperation with the authorities to support
communities through related changes and to create opportunities for
new business initiatives.
• Grievance mechanisms are available for all external stakeholders,
including communities close to the Group’s operations.
Stora Enso recognises the human rights-related principles of the UN Global
Compact, relevant Children’s Rights and Business Principles, and the
OECD’s Guidelines for Multinational Enterprises. The core elements of Stora
Enso’s due diligence are further described in the following paragraphs:
1 Stora Enso Communications’ FSC® trademark license number is FSC-N001919.
2 Stora Enso PEFC trademark license number is PEFC/02-44-22.
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Core elements of due diligence Paragraphs in the Sustainability Statement
a) Embedding due diligence in
governance, strategy and business
model
ESRS 2 GOV-2, ESRS 2 GOV-3, ESRS 2 SBM-3
b) Engaging with affected stakeholders
in all key steps of the due diligence
ESRS 2 GOV-2, ESRS 2 SBM-2, ESRS 2 IRO-1, ESRS
MDR-P
c) Identifying and assessing adverse
impacts
ESRS 2 IRO-1, ESRS 2 SBM-3
d) Taking actions to address those
adverse impacts
ESRS 2 MDR-A
e) Tracking the effectiveness of these
efforts and communication
ESRS 2 MDR-A, ESRS 2 MDR-T
f) Third-party certified management
systems
ESRS E1-2, ESRS E4-3
Risk management and internal controls over
sustainability reporting (GOV-5)
In 2024, the responsibilities of the Board of Directors were extended to
cover sustainability reporting. Correspondingly, Stora Enso’s internal
control framework was extended to sustainability reporting. A set of
internal controls was designed to provide reasonable assurance
regarding the reliability of the sustainability reporting and adherence to
laws, regulations, policies, and guidelines. Stora Enso’s system of internal
control follows the principles of the framework issued by the Committee of
Sponsoring Organizations (COSO).
The Group’s purpose and values, policies, processes, and structures serve
as the foundation for carrying out internal control across the organisation.
The Board, supported by the Financial and Audit Committee, has the
overall responsibility for setting up an effective system of internal control
and risk management for sustainability reporting. The responsibility is
further delegated within the organisation. The Group Internal Control
function is responsible for internal control governance, processes, tools,
and internal control reporting. Divisional internal control functions are
responsible for executing the internal control processes in the divisions.
Divisions and various support and service functions are accountable for
operating effective internal controls. Internal control responsibilities for
sustainability reporting are described in Stora Enso’s Internal Control Policy.
In 2024, a project to implement internal controls for sustainability reporting
was carried out, encompassing the entire organisation. Risk assessments
were conducted for the end-to-end sustainability reporting processes and
risks were prioritised based on their impact and likelihood. The main risks
identified were related to the accuracy, timeliness, and completeness of
the reporting. To ensure that these risks are appropriately addressed,
internal controls were designed and implemented at potential points of
failure or error in the process, from the source data to consolidation and
disclosures. Control activities implemented include review and approval
processes, verifications, reconciliations, IT general controls, and controls
supported by IT systems. The Sustainability Statement and qualitative data
points are housed in a platform designed to support collaboration and the
structured collection of evidence for claims and data. Control activities
also include the policies, guidelines, procedures, and organisational
structures in place to ensure that management directives are carried out
and that necessary actions are taken to address risks related to the
achievement of objectives concerning sustainability reporting.
The effectiveness of the process for assessing risks and executing control
activities is monitored continuously. Stora Enso’s Internal Control function
oversees control design and effectiveness providing quarterly internal
control reports to management and bi-annual updates to the Board’s
Financial and Audit Committee. In addition, the Stora Enso Group Internal
Audit has an advisory role on governance, risk management, and the
internal control system related to sustainability reporting.
Strategy, business model and value chain (SBM-1)
Stora Enso provides wood-based, renewable products in packaging,
biomaterials, and wooden construction, and is one of the largest private
forest owners in the world. In 2024, the Group’s sales were EUR 9,049 million.
Stora Enso operates in the following ESRS sector groups and related
sectors:
Sector group: Agriculture. Sector: Forestry (code AFO)
Sector group: Manufacturing. Sector: Pulp, Paper & Wood products (MPW)
Stora Enso’s strategy is based on creating value in the circular economy
with renewable, fiber-based products. The Group’s forests serve as a
reliable and long-term source of fiber for its products. Stora Enso’s key
product categories include:
• Packaging materials: liquid packaging board, food service board, fresh
cartonboard, fresh and recycled containerboard, paper
• Packaging solutions: boxes and trays for packaging, packaging design
and automation, converting of carton and corrugated board
• Biomaterials: pulp, innovative bio-based solutions
• Wood products and building solutions: material for mass timber
construction (CLT and LVL), building concepts, sawn and planed wood
Stora Enso’s main market is Europe, accounting for approximately 69% of
sales. The second largest market is the Asia-Pacific region, contributing 13%
of sales. Stora Enso is a business-to-business company, and its key
customer segments include packaging converters, brand owners and
retailers, industrial component manufacturers, and construction
companies. Over half of the Group’s sales are directed toward consumer
end uses. The Group’s financial performance by division and external sales
by destination are presented in the Financial Statements, note 2.1
Segment information.
Stora Enso is a significant employer in its operating countries, employing
approximately 19,000 people at the end of 2024. The number of employees
by countries is presented under ESRS S1-6.
Stora Enso’s long-term ambition is to provide regenerative products and
solutions by 2050 across all markets, and product and customer
categories. This means providing renewable and circular products and
solutions that remove more carbon than they emit and support
biodiversity restoration. Currently, the long-term ambition aligns with the
significant products, markets, and customer groups within the Group. The
majority of the products are designed for reuse, recycling, or energy
recovery at the end of their lifecycle, underscoring the commitment to the
circular economy. Furthermore, Stora Enso has enhanced its metrics for
assessing biodiversity impacts and implemented measures aimed at
restoring biodiversity.
The key sustainability matters impacting the Company’s strategy are
climate change and biodiversity loss, which may adversely affect the
health and resilience of forests and tree plantations, the value of forest
assets, and wood prices. Conversely, the elements of the strategy that
impact sustainability matters are mainly related to the renewable, wood-
based products that serve as alternatives to fossil-based materials and
contribute to mitigating climate change and supporting the circular
economy. The main challenge in terms of sustainability matters lies in the
evolving regulatory landscape and political decisions on forest resources,
which could limit the availability of wood, increase costs, and reduce
investment opportunities.
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Stora Enso business model
Stora Enso is a business-to-business company focusing on three key growth areas: renewable packaging, sustainable building solutions, and biomaterials innovation. Pulp and traditional wood products, together with the Company’s
forest assets, form the foundation of the business. The Group procures wood from both internal and external sources, manufacturing it into a range of wood-based products and materials. A global sales and distribution network is used
to deliver products to customers worldwide for further processing. The majority of sales are directed towards consumer end uses. The main business actors include private forest owners, chemical suppliers, transportation and logistics
partners, and the key customer segments detailed in the illustration below.
Transport to Stora Enso production sites
Transport to customers
Securing a reliable supply of raw materials Stora Enso’s operations Renewable materials to global customer base
Wood as primary raw material Purpose Values Key customer segments
• Packaging converters, brand owners and retailers, industrial
component manufacturers and construction companies
Products
• Fiber-based packaging materials and solutions
• Materials for mass timber construction, building concepts, sawn
and planed wood
• Bio-based solutions focused on lignin, wood foams,
and biochemicals
• Pulp and traditional wood products
• Owned and leased forest land in Europe and China
• 50% ownership of eucalyptus plantations in Brazil and Uruguay
• Large network of private forest owners providing tactical flexibility
in wood sourcing
Do good for people and
the planet. Replace non-
renewable materials with
renewable products.
Lead.
Do What’s Right.
Other raw materials Production and conversion units worldwide
• Long-term relationships with key suppliers to ensure a reliable
supply of key raw materials
• Large, global supplier base for key raw materials, such as
chemicals, fillers, and energy
Focused on resource efficiency
• Utilising harvested trees, forestry residuals, and industrial side
streams in the most efficient way
• Developing recycled fiber into new products
• Dedicating efforts and investments towards reducing emissions,
water usage, and energy consumption
Skilled and engaged employees
• Safety as a top priority
• Focus on attracting and retaining top talent to secure future skills
as a purpose-driven, inclusive company
• Professional development with continuous learning and
career growth
Upstream Own operations Downstream
Outcomes and benefits
(current and expected)
Financial market
Focused capital allocation driving shareholder value and
sustainable profitable growth: dividends to shareholders, and
interest and principal payments to lenders
Customers and end-users
Helping customers meet consumer demand for low-carbon,
renewable products while maintain the highest product
safety standards
People and communities
Safe and inclusive workplace with opportunities for development
Large supplier network creating indirect employment opportunities
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Interests and views of stakeholders (SBM-2, incl. S1, S2, S3)
Stora Enso’s stakeholder engagement is rooted in both systematic and informal interactions, complemented by
regular surveys on topics such as customer and employee satisfaction. The Group also gains insights through its
established grievance mechanisms. Stakeholder engagement is conducted continuously and is being integrated
into existing engagement practices.
The purpose of the engagement is to:
• build trust and enhance transparency,
• identify market opportunities,
• address concerns and areas for improvement,
• recognise global trends and weak or silent signals,
• promote sustainable business practices, and
• advance industry standards.
Stora Enso engages regularly with affected stakeholders and users of the Sustainability Statement as outlined in
the table to the right. During these engagements, key stakeholders have highlighted the opportunities for Stora
Enso to advance circular economy through its wood-based products, which are aligned with the Group’s business
model. They also emphasised the importance of implementing responsible business practices throughout
operations and the value chain, as these are crucial for securing the long-term acceptability of the strategy.
The outcomes of stakeholder engagement are incorporated into the annual double materiality assessment
process. Moving forward, the Group Leadership Team and the Board of Directors will receive regular updates, at
least annually, regarding the perspectives and interests of affected stakeholders and users of the Sustainability
Statement. These updates will also include potential implications for Stora Enso’s strategy, operations, and
significant sustainability-related impacts.
Stakeholder group How engagement is organised
Affected stakeholders
Customers • Bilateral meetings, newsletters
• Trade fairs and conferences
• Customer satisfaction surveys
• Collaboration to create new services and solutions
Employees • Employee engagement survey, performance and development reviews
• Regular all-employee calls
• Engagement with union representatives, safety observations, and grievance channels
• Trainings, such as business ethics and safety
Suppliers and workers in the value chain • Continuous collaboration and trainings
• Supplier audits, human rights assessments
• Commitment to Stora Enso’s Supplier Code of Conduct and related criteria
• Grievance channels
Forest owners • Bilateral discussions on forest management, forestry services, and wood purchases
• Forest owner events and webinars
• Newsletters, forest owner magazines, and digital channels
• Forest management platforms, such as eMetsä in Finland
Local communities • Dialogue and collaboration via different communication channels and meetings
• Engagement with local authorities and local community councils
• Volunteering initiatives
• Group and local level grievance channels
Nature (silent stakeholder) • Presented via scientific research, ecological data, and data on the conservation of species
Users of Sustainability Statement
Investors and analysts • Investor calls and meetings, webinars, teach-ins
• Roadshows and conferences, Annual General Meeting, Capital Markets Day
• Engagement with ESG specialists and investor initiatives
• Analyst and investor perception studies, ESG ratings
Governments and policymakers • Public consultations, bilateral meetings and events
• Engagement in policy-making processes, advocacy through industry associations
• Supporting policymakers by providing industry insights and technological capabilities
Non-governmental organisations (NGOs) • Knowledge sharing and joint initiatives
Industry and trade organisations • Active participation to develop industry practices and collaboration in joint projects
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Material impacts, risks and opportunities and their
interaction with strategy and business model (SBM-3)
Stora Enso’s material impacts, risks, and opportunities, identified through
the double materiality assessment, primarily occur within its own
operations and upstream value chain. Summaries for each material topic
are provided below, with detailed descriptions of the identified impacts,
risks, and opportunities presented at the beginning of each topical
standard. These descriptions also include expected time horizons and
value chain locations.
Environment
In the short-term, Stora Enso has a direct negative impact on climate
change through its GHG emissions from its own operations and an indirect
impact through its value chain. Additionally, the Group has positive
impacts on climate through forest carbon sequestration, carbon stored in
its wood-based products, and substitution of fossil-based materials with
renewable alternatives. Stora Enso also identifies an opportunity related to
its high energy self-sufficiency. The current financial effects of climate
change consist of investments in new boilers and other equipment to
enhance energy efficiency and reduce carbon emissions. In the medium-
term, the Group recognises regulatory risks related to the treatment of
biogenic emissions and the challenge of meeting its Scope 3 reduction
targets. The resilience of Stora Enso’s strategy and business model to
climate change has been tested through various scenario analyses, which
are explained in more detail in ESRS E1. The analyses did not identify
significant risks before 2040.
Regarding pollution, Stora Enso’s industrial activities generate emissions to
air and water across short- to long-time horizons, posing risks of
environmental non-compliance and significant incidents. In addition, Stora
Enso is accountable for environmental provision related to pollution of soil
in Falun, Sweden, spanning a short- to long-term horizon.
From a short- to long-term horizon, Stora Enso’s own production sites rely
on water, especially in board, pulp, and paper production processes.
Although most operational units are in areas with low water stress, the
Group acknowledges the significance of water as a crucial factor in
achieving its objectives. Stora Enso also acknowledges the potential risk of
environmental incidents associated with water discharges, which could
negatively impact freshwater ecosystems. The current financial effects
related to negative impacts include the repayment of grants to
authorities in Belgium. This repayment stemmed from a 2019 legionella-
related incident, classified as an environmental infringement. The case
was resolved in court in 2024.
Owning forest assets provides Stora Enso with strategic advantages. These
include securing a reliable and consistent wood supply, reducing
dependency on external suppliers, promoting environmental stewardship
through sustainable forestry practices, actively managing and preserving
biodiversity, and contributing to carbon sequestration efforts. The Group
has a positive impact through sustainable forest management in its own
operations and upstream value chain. At the same time, Stora Enso
recognises its negative impacts on biodiversity, such as damage to key
habitats or species. Identified risks are include biodiversity loss, non-
compliance with harvesting regulations, and the impacts of climate
change on forest ecosystems.
Stora Enso contributes positively to a circular economy through its
partnerships, and renewable products and solutions. Beyond its own
business activities, business relationships play a critical role in enabling
these positive impacts. However, the Group has also identified negative
impacts associated with raw material sourcing and waste generation.
Stora Enso’s strategy is closely aligned with the principles of the circular
economy, allowing the Group to effectively leverage its products. The
current financial effects from Stora Enso’s material opportunities are tied
to the revenue generated by its products. For instance, Stora Enso has
made a significant investment in expanding its board production capacity
at its Oulu site in Finland.
Social
With a workforce of approximately 19,000 employees, Stora Enso has a
direct impact on the safety and well-being of its people. Positive impacts
are mainly linked to the Group’s business model and focus on its own
operations. These include creating employment opportunities, supporting
professional development, actively promoting work-related rights,
advancing gender diversity, and offering training opportunities.
In addition to these positive impacts, the Group has identified negative
impacts related to occupational safety incidents, which still occur despite
preventive safety measures. The Group also acknowledges its
dependency on a talented workforce, and recognises risks associated with
attracting and retaining talent, as well as potential incidents of
discrimination or harassment.
Through its supplier relationships, Stora Enso is also connected to workers
in the value chain. The Group recognises risks related to breaches of its
Supplier Code of Conduct and safety incidents for workers across its
upstream value chain.
Stora Enso acknowledges that climate change may lead to controversies
with local communities and non-governmental organisations concerning
forest management practices, biodiversity, and land and water use. Stora
Enso is primarily involved in these community-related risks through its joint
operations in South America.
Governance
Business conduct is acknowledged as a fundamental aspect of
responsible global business, serving as the cornerstone of stakeholder
trust and legal compliance. Stora Enso upholds high business standards,
an ethical corporate culture, and a robust compliance programme, which
generate positive impacts for employees and business partners. However,
there are risks of non-compliance with laws, regulations, and internal
policies which could lead to significant costs and reputational damage.
The Group is exposed to these risks through its own operations and
business relationships.
Resilience
Stora Enso tested the resilience of its strategy and business model in 2021,
when it established transition plans, and introduced a new sustainability
agenda centred around three focus areas: climate, biodiversity and
circularity. This was preceded by an assessment of Stora Enso’s business
model and strategic resilience in relation to future key sustainability risks
and opportunities. The assessment’s time horizons were set to 2030 and
2050. The analysis indicates that, to future-proof the Group’s business
model and strategy, it is essential for operations and products to actively
remove carbon from the atmosphere and contribute to mitigating
biodiversity loss. As a result, Stora Enso has established a transition plan to
drive new opportunities and protects its business operations. For further
details, see ESRS E1-1 and ESRS E4-1.
The current effects of Stora Enso’s material impacts, risks, and
opportunities on its business model, value chain, strategy and decision-
making focus on climate mitigation, given the scientific consensus on the
urgency of taking action. Stora Enso’s emission reduction plans are aligned
with the 1.5-degree scenario. In addition to reduction actions, the Group
focuses on opportunities by optimising biodiversity management through
new technical solutions and driving the circular economy through
partnerships and product innovation. Due to the substantial
environmental footprint of forest management and the manufacturing
industry, many of the identified impacts and risks related to pollution,
water and biodiversity are predominantly addressed through responsible
business practices and resource efficiency rather than significant
changes to the Group’s strategy or business model. Similarly, the impacts
on employees and workers in the value chain are also primarily addressed
through robust employee management processes, and HR and
sustainable sourcing policies.
The current financial effects of Stora Enso’s material opportunities mostly
relate to its revenue from renewable products, the valuation of forest assets,
and investment in biological assets. For more details, see the Consolidated
income statement, Consolidated statement of financial position, and
Consolidated cash flow statement in the Financial Statements.
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The ESRS requirements addressing material impacts, risks, and
opportunities are listed in ESRS 2 IRO-2-56. In addition to the ESRS disclosure
requirements, Stora Enso has prepared entity-specific disclosures on
biodiversity. These disclosures include data on biodiversity impact
indicators and forest certificates.
Description of the process to identify and assess
material impacts, risks and opportunities (IRO-1)
Methodologies and assumptions
At the beginning of 2024, Stora Enso conducted a double materiality
assessment in compliance with the new Corporate Sustainability
Reporting Directive (CSRD) requirements. The main objectives of the
assessment were to identify sustainability topics that have a significant
impact on the Group’s business performance, risks, and opportunities
(financial materiality), highlight sustainability topics that reflect significant
impacts on people and the environment (impact materiality), and
determine the materiality of the information to be reported.
The process adhered to the requirements outlined in the European
Commission Delegated Regulation 2023/2772 on European Sustainability
Reporting Standards for conducting a double materiality assessment,
starting with an overview of Stora Enso’s activities, business relationships,
and operating context. It identified key stakeholders across the entire
value chain, both upstream and downstream. As a part of the process,
nature was recognised as a silent stakeholder.
After establishing an overview of the value chain and stakeholders, the
next step involved identifying the actual and potential impact, risks, and
opportunities associated with sustainability matters. The assessment
covered Stora Enso’s own operations and the impacts it is, or may be,
associated with through its value chain. Once the long list of impacts, risks,
and opportunities was established based on scientific research and
stakeholder input, it was compared with the full scope of European
Sustainability Reporting Standards’ environmental, social, and governance
matters to ensure the inclusion of all relevant topics. After completing the
list, the topics were assessed and rated. Since the Corporate Sustainability
Reporting Directive does not provide guidance on setting the threshold,
the proposal was aligned with the EU Taxonomy, where only economic
activities with a significant impact are included.
Due to an environmental incident in Hukkajoki, Finland (described in ESRS
E4-4), Stora Enso conducted a new double materiality assessment to
review and adjust the framework of material topics accordingly. The
update was also used as an opportunity to integrate the latest Enterprise
Risk Management (ERM) results to ensure that the Sustainability Statement
and risk reporting remain fully aligned.
The assessment methodologies varied based on topics, but included, for
example, interviews, workshops, and data analyses. As part of the
assessment finalised in early 2024, a broad representation of key internal
and external stakeholders were engaged in discussions and interviews to
ensure that the assessment covered all relevant impacts, risks, and
opportunities. The stakeholders represented both those affected by the
Group’s operations and users of the Sustainability Statement as well as
other stakeholder groups such as nature (silent stakeholder), public
authorities, and non-governmental organisations (NGOs). The focus of the
engagement was on open interviews to gain deeper insight into the actual
and potential impacts, risks, and opportunities related to Stora Enso’s
business, operations, and value chain. The outcome of the engagement
was consistent with Stora Enso’s strategy and business model. Moreover,
the Group Leadership Team and the Board’s Sustainability & Ethics
Committee discussed the double materiality assessment process and its
outcomes to provide their views on Stora Enso’s material topics.
The underlying assumptions relied on the latest scientific research,
according to which climate change and biodiversity loss are accelerating.
Climate change was also considered one of the underlying drivers of
financial risks.
Assessment of impacts, risks, and opportunities
Stora Enso’s assessment of impacts, risks, and opportunities followed
the process described below:
1) Impact materiality
Environment
To ensure as objective a view as possible, the identification of
environmental impacts began with a review of scientific research,
followed by an assessment of the relevance and materiality for Stora Enso,
with input from the Group’s subject matter experts.
The process for identifying climate-related impacts focused on the
Group’s own operations, which were considered to be more exposed to
possible risks, as well as its joint operations. For pollution and water, the
focus was on the Group’s own operations. In terms of biodiversity, forestry
sites located within the Group’s own forest land or in the upstream value
chain were included. Since Stora Enso and its upstream value chain are
responsible for raw material extraction, the downstream value chain was
not considered relevant for the assessment. For resource use and
circularity, the assessment covered impacts related to the Group’s own
resource use across its whole value chain due to the significant volumes of
resource inflows, outflows and waste (sourced raw materials, waste,
products produced, and end-of-life of products).
The overall process was complemented by additional steps to identify and
assess specific environmental matters:
Climate-related impacts
The analysis comprised impacts on climate change through the Group’s
own operations (Scope 1 and 2) and value chain (Scope 3) emissions as
disclosed in ESRS E1-6. Screening was conducted for all production sites
and material value chain emission categories. Stora Enso did not utilise
other drivers for climate-related impacts in the scenario analysis although
the Group recognises the Stockholm Resilience Centre’s Planetary
Boundaries framework and related tipping points in its sustainability work.
In addition to actual impacts, Stora Enso has estimated its potential
impacts based on production forecasts. Stora Enso’s locked-in GHG
emission are described in ESRS E1-1.
Water-related impacts
The analysis of water-related impacts was based on the WRI Aqueduct
Water Risk Atlas, which is used to annually assess water-related risks at
production sites, providing information on water scarcity, stress, flooding,
and water quality. According to the tool, five of the Group’s production sites
operate in regions with High Baseline Water Stress: Beihai in China,
Langerbrugge in Belgium, Wujin and Qianan corrugated units in China, and
Łódź in Poland. The assessment is conducted for Stora Enso’s own units
and does not cover the upstream or downstream value chain.
Biodiversity and ecosystems
The assessment considered biodiversity loss-related systemic risks to
society and business through scientific research, such as the Living Planet
2024 report and the Dasgupta Review 2021. Additionally, the assessment
examined the tree species used for re-planting and significant incidents
that negatively impact biodiversity. The impacts were identified through
long-term surveillance of the ecological status of the sites and three sets
of biodiversity indicators.
Some of Stora Enso’s industrial units are located near biodiversity-
sensitive areas, such as Natura 2000, but these sites do not actively
contribute to the deterioration of natural habitats due to strict
environmental permitting processes. The biodiversity-related impacts
and risks connected to industrial units are described in ESRS E2 and ESRS E3.
Whenever a new industrial unit is established or production capacities are
increased, Stora Enso ensures that the project plan undergoes an
environmental impact assessment including a thorough evaluation of
biodiversity-sensitive areas. The assessment is used to determine
significant impacts. To identify biodiversity-sensitive sites, Stora Enso
screened all site locations by applying the IBAT assessment tool to create
an overview of key biodiversity areas located in conjunction with its
industrial operations. Stora Enso’s impacts on biodiversity-sensitive areas
are described in ESRS E4 SBM-3.
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The Group’s own forests and upstream harvesting sites may be near or
located in biodiversity-sensitive areas. Despite strict rules in harvesting
operations, there have been incidents causing negative impacts to these
habitats and their species. In 2024, a significant local negative impact was
caused to an endangered species and its habitat near one of Stora Enso’s
harvesting sites in Finland. See further details in ESRS E4-4.
Stora Enso acknowledges the necessity of implementing measures to
mitigate any negative effects on biodiversity. These are part of the Group’s
ways of working and are further described in ESRS E4-3.
Resource use and circularity
The assessment of resource outflows and product-related impacts relied
on Life Cycle Assessments (LCAs) and Environmental Product Declarations
(EPDs) conducted by Stora Enso’s experts and customers, often in
collaboration with academia, expert organisations, or industry
associations.
People and Governance
When identifying the impacts on people, the process began by referring to
globally recognised human rights principles, such as the International
Labour Organisation’s Core Convention and the International Bill of Human
Rights. Stora Enso also took into account employee survey results,
occupational safety performance, and insights provided by the Group’s
subject matter experts. The identification of actual and potential impacts
involved interviews with the Group’s employees. In addition, Stora Enso
considered external studies conducted over the years, such as pay gap
analyses and adequate wage benchmarks. As described in ESRS 2 GOV-4,
Stora Enso’s due diligence consists of multiple processes and tools. These
processes were taken into account in the double materiality assessment
when identifying and assessing adverse impacts, such as ongoing
business restructurings, third-party certified management systems, and
third-party forest management certification.
Consultation of affected stakeholders
Stora Enso consulted with affected stakeholders on the topics related to
own employees as part of the double-materiality assessment process. For
other topics, Stora Enso did not directly consult the affected stakeholders.
Pollution in terms of air emissions and water effluents generated by Stora
Enso’s sites are regulated by the relevant authorities, with limits set through
environmental impact assessments and permitting processes, which
consider local conditions and relevant legislation. Consultations are not
conducted directly with affected communities, but indirectly through
these assessments and processes. For pollution-related impacts, Stora
Enso consulted with environmental managers from its industrial units to
determine compliance with environmental permit limits and associated
emission levels. The screening process relied on measured values,
calculations, or estimates from third-party assessments.
For biodiversity-related impacts, Stora Enso did not conduct consultations
with affected communities on sustainability assessments of shared
biological resources and ecosystems, since the engagement is otherwise
done on a regular basis. The Group’s engagement with affected
communities is further described in ESRS S3. The engagement is also
carried out in situations where a site, raw material production or sourcing
activity is likely to have an adverse impact on biodiversity and ecosystems.
Prioritisation of impacts
The different impact types were rated according to the below matrix, on a
scale from 1 to 5. Stora Enso applied EFRAG’s guidance on the severity of
the impact, with severity taking precedence over likelihood when
assessing potential impacts to people or the environment. In practice this
means that potential impacts that could be difficult to remediate were
always rated higher. Following the principle of significant impact, the risks,
impacts, and opportunities with “High or critical impact to environment
and people” or “Very high or catastrophic impact to environment and
people” were considered material from an impact perspective. On impact
materiality, scientific frameworks and global human rights principles
guided the rating. For example, impacts on planetary boundaries were
considered severe.
Impact type Scale Scope Remediability Likelihood
Actual positive
impacts x x
Actual negative
impacts x x x
Potential
positive impacts x x x
Potential
negative
impacts
x x x x
2) Financial materiality: Risks
The identification of financially material topics began by reviewing all
financial risks recorded in the Group’s Enterprise Risk Management (ERM)
process. Stora Enso classifies risks into two categories: strategic and
operational risks. Strategic risks refer to internal and external events that
may make it difficult, or even impossible, for the Group to achieve strategic
goals. These risks can have severe consequences that impact the Group’s
operations in the long-term. Operational risks refer to risks of losses
resulting from disruptions to day-to-day business operations and having
a shorter-term impact. While these risks can have significant financial
consequences, damage the Group’s reputation, and weaken the
Company’s compliance position, they do not impact the Group’s ability to
achieve long-term strategic goals.
In addition to the internally recognised risks, the assessment considered
scientific reports, global megatrend reports, and Stora Enso’s own
transition plans to identify all relevant risks and opportunities. The
transition plans were established in 2021, when Stora Enso introduced a
new sustainability agenda centred around three focus areas: climate,
biodiversity, and circularity. This was preceded by an assessment of Stora
Enso’s business model and strategic resilience in relation to future key
sustainability risks and opportunities. The assessment’s time horizons were
set for 2030 and 2050. The focus of the assessment was on transition
events, such as increasing legislation and external stakeholder pressure.
The assessment also incorporated findings from the Group’s ERM process,
which identified transitional risks associated with growing regulations.
Political decisions concerning forest resources could potentially limit wood
availability, increase costs, and hinder investment opportunities. Stora
Enso will be impacted by transition events on the medium term as the
European Commission implements new biodiversity and forest related
regulations. Stora Enso has formal traceability systems in place to ensure
that the origin of purchased wood and pulp is known. These traceability
systems are third-party verified through the FSC Chain of Custody/
Controlled Wood scheme, the PEFC Chain of Custody/Due Diligence
System, and ISO 14001. Stora Enso also purchases pulp from external
suppliers for reasons related to quality and logistics. Most of the pulp used
in operations is produced internally at the Group’s mills. In addition, pulp
purchased from external suppliers is covered by Stora Enso’s traceability
systems. However, the new European Deforestation Regulation (EUDR) will
also increase the requirements for Stora Enso.
Moreover, there is a potential risk of regulations that could restrict the
manufacturing of single-use products, even if they are made from fiber-
based materials. The growing demand for biobased materials, particularly
wood-based raw materials, can potentially lead to a shortage in the
supply of raw materials.
Stora Enso also considered dependencies related to the risks and
opportunities that may arise from those dependencies. These risks include,
for example, dependencies on a skilled workforce, raw materials, and their
availability. Stora Enso is dependent on biodiversity and ecosystems due to
wood being its primary raw material. Biodiversity loss can have a negative
impact on the value of Stora Enso’s forest assets, increase risks of
shortages in wood supply, and cause reputational damage. Stora Enso’s
climate scenario analysis primarily focused on physical and systemic risks
that could impact its forests. The ecosystem services considered in the
assessment included tree growth and forest health. The climate scenario
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analysis and results are described in ESRS E1 SBM-3. Stora Enso’s board,
pulp, and paper sites are dependent on water as the production
processes require substantial amounts of water, accounting for over 99%
of the Group’s total water withdrawal. These units predominantly draw
process and cooling water from surface water sources, with 98% of the
total water withdrawal derived from surface water in 2024. Approximately
2% is sourced from municipal or groundwater supplies. According to the
WRI Aqueduct Water Risk Atlas tool, five of the Group’s production units
operate in regions with High Baseline Water Stress.
Sustainability-related risks were marked and classified into ESRS sub-sub-
categories, and assigned to their corresponding value chain locations. The
financial materiality scores relied on the ratings provided by the divisions
in their original Enterprise Risk Management assessment, including
likelihood, magnitude and nature of effects. Following the principle of
significant impact, risks, impacts and opportunities with a 10% or higher
divisional EBITDA impact were considered financially material. The
divisional EBITDA impact was considered instead of the Group EBITDA to
focus on specific activities, business relationships, geographies or other
divisional factors that contribute to a heightened risk of adverse impacts.
Since sustainability is embedded into the Group’s strategy, many of the
sustainability-related risks are considered high and prioritised in the ERM
process due to strategic or operational importance.
Ethics and compliance risks are assessed as part of Stora Enso’s overall
risk assessment procedure, outlined in the Enterprise Risk Management
instructions. These assessments cover all of Stora Enso’s units and
compliance areas and are repeated regularly. The results are used by
divisional management teams and by the Group Ethics and Compliance
team to prioritise and create action plans. For matters related to business
conduct, the Ethics and Compliance Self-Assessment Tool (T.E.S.T.) provides
divisions and functions with an overview of their progress in implementing
policies and compliance measures, while also identifying and managing
possible gaps and risks. The results and subsequent actions are addressed
through Divisional Compliance Forums, comprising heads of key functions
in the divisions.
Assessment of physical and transition risks related to climate
Stora Enso has utilised multiple climate-related scenario analyses to
inform the identification and assessment of physical risks, and transition
risks and opportunities over the short, medium, and long-term. Due to the
nature of Stora Enso’s operations, the time horizons differ from CSRD
definitions. In strategic risks, Stora Enso defines short term as up to five
years, medium term as five to ten years, and long term as ten years or
above. This definition is in line with Stora Enso’s enterprise risk
management process.
• Climate-related physical risks: for the identification of hazards and the
assessment of exposure and sensitivity Stora Enso utilised global Shared
Socioeconomic Pathway (SSP) scenarios: SSP1-1.9 (Sustainability – Taking
the Green Road), SSP2-4.5 (Regional Rivalry – a Rocky Road) and SSP5-8.5
(Fossil-fuelled Development – Taking the Highway) and assessed how its
assets and business activities may be exposed and sensitive to these
climate related hazards, but did not identify material physical climate
change impact risks before 2040. Long-term (25–30 years) changes in
precipitation patterns, periods of drought, frequent extreme weather
events, and higher average temperatures that increase the risk of forest
fires and insect outbreaks could cause damage to operations, forests,
and tree plantations. More frequent extreme weather events also
increase the risk of disruptions in the production, logistics, and supply of
raw materials and energy. The assessment covered the Group’s own
operations that were considered more exposed to possible risks, as well
as its joint operations.
• Climate-related transition risks: identified climate-related transition
associated with new legislation and the need to adjust operations to
a lower-carbon and resilient economy. In 2021, Stora Enso assessed
a business impact scenario for 2030, based on the global transition
required to limit the global average temperature increase to 1.5 degrees
Celcius, in line with the Paris agreement of 1.5 degrees (RCP 1.9). The
assessment concluded that the transition to a low-carbon, circular
bioeconomy is well aligned with Stora Enso’s strategy. The scenario work
also indicated that potential new regulations and market mechanisms,
driven motivations to limit climate change and its effects on society and
the environment could impact Stora Enso’s operating costs. These
impacts could include limitations on wood harvesting volumes or forest
management practices, as well as increases in greenhouse gas
emission costs and energy prices. Sustainable product initiatives and
requirements may also influence the Group’s future market access,
product demand growth, and product development requirements. Due
to Stora Enso’s location in Europe, the mandates and regulations on
existing products and services are considered almost certain in the
medium term, as the European Union is implementing EU Green Deal and
related legislations. Recent legislation has focused specifically on
emission reduction, deforestation, biodiversity and circular economy,
all of which are central to Stora Enso’s strategy.
3) Financial materiality: Opportunities
The assessment of material opportunities relied on the transition plans
described in 2) Financial materiality: risks. The analysis indicates that to
future-proof Stora Enso’s business and strategy, it is imperative for its
operations and products to actively remove carbon from the atmosphere
and contribute to halting biodiversity loss. As an outcome, Stora Enso
established a transition plan designed to drive new opportunities and
future-proof the Group’s business in an environment that is constantly
changing at an accelerated pace. The development and progress in
the identified focus areas (climate change, biodiversity, and circularity) are
being closely monitored within the Group, and their status was also
factored into the double materiality assessment.
When identifying opportunities within the circular economy, Stora Enso
referred to the 2021 transition plans that identified financial opportunities in
the downstream value chain through the Group’s products and solutions,
which enable customers to respond to the growing consumer demand for
sustainable products. Stora Enso leverages its deep understanding of
customer needs and maintains strong relationships with customers to
design products that are functional and create value throughout
their lifecycle.
Stora Enso also identified two opportunities related to its dependencies. By
further optimising its material use, the Group has an opportunity to reduce
its impact on the environment, increase its yield, and lower the financial
costs related to raw materials. Stora Enso strives to maximise both
environmental and financial value by efficiently utilising side streams
generated during production processes. In addition, Stora Enso identified
an opportunity related to its dependency on water based on the WRI
Aqueduct Water Risk Atlas assessment. Majority of production sites are
located in areas with low water stress which contributes to consistent and
sufficient water supply and ensures operational stability and efficiency.
Moreover, it supports the Group’s long-term resilience against climate
change as areas with a low risk of water adequacy are less likely to
experience the adverse impacts of climate change, such as prolonged
droughts or water scarcity.
Input parameters used
Input parameters included scientific research, such as sector specific
impacts identified by the UN Environment Programme World Conservation
Monitoring Centre (UNEP-WCMC), the Planetary Boundaries framework by
the Stockholm Resilience Center, reports from the Intergovernmental Panel
on Climate Change (IPCC), the WRI Aqueduct Water Risk Atlas tool, and the
Science Based Targets for Nature Framework. Regarding impacts on
people, the input parameters included globally recognised human rights
principles, such as the International Labour Organization’s Core
Conventions and the International Bill of Human Rights.
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Outcome and reporting
The results of the two double materiality assessments conducted during the year were discussed and reviewed
with the Sustainability and Ethics Committee, the Financial and Audit Committee, the Sustainability Council, and the
Group Leadership Team in a total of nine meetings that took place between January 2024 and February 2025. A
third-party and the external assurance provider also reviewed the assessment’s results to ensure compliance and
the inclusion of material impacts, risks, and opportunities. The Board of Directors approved the double materiality
assessment threshold and results in February 2025. An internal control for the double materiality assessment was
established as part of the sustainability reporting control implementation project. The project is further described
in ESRS 2 GOV-5.
The outcome of the double materiality assessment aligns with Stora Enso’s strategy and business model. Based on
the results, the Group’s ambition to develop 100% regenerative solutions by 2050, along with its sustainability
agenda focusing on climate change, biodiversity, and circularity, remains valid. The results are described in more
detail in the section ESRS 2 SBM-3, and all material topics covered in this statement are listed in the Sustainability
Statement, ‘Requirements in ESRS covered by the undertaking’s sustainability statement (IRO-2)’.
In 2024, Stora Enso enhanced its process to ensure the monitoring of material impacts, risks, and opportunities, as
well as the annual review of the double materiality assessment’s results. The updated process was integrated with
the Enterprise Risk Management, the Corporate Sustainability Due Diligence Directive, and the Task Force on
Nature-related Financial Disclosures preparations. The update takes into account all actual significant impacts the
Group had on the environment and people during the year.
Requirements in ESRS covered by the undertaking’s
sustainability statement (ESRS IRO-2)
The below table presents a list of the disclosure requirements compiled in the Sustainability Statement. The
material information has been determined based on the material impacts, risks and opportunities resulting from
the Group's materiality assessment. After identifying material topical standards, the materiality was assessed on
disclosure requirement and data point level. The materiality assessment process and the use of thresholds is
described in ESRS 2 IRO-1.
General information
ESRS 2 BP-1 General basis for preparation of sustainability statements 70
ESRS 2 BP-2 Disclosures in relation to specific circumstances 70
ESRS 2 GOV-1 The role of the administrative, management
and supervisory bodies
70
ESRS 2 GOV-2 Information provided to and sustainability matters addressed by the undertaking’s
administrative, management and supervisory bodies
71
ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes 72
ESRS 2 GOV-4 Statement on due diligence 72
ESRS 2 GOV-5 Risk management and internal controls over sustainability reporting 73
ESRS 2 SBM-1 Strategy, business model and value chain 73
ESRS 2 SBM-2 Interests and views of stakeholders 75
ESRS Disclosure requirement Page
ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model
76
ESRS 2 IRO-1 Description of the process to identify and assess material impacts, risks and
opportunities
77
ESRS 2 IRO-2 disclosure requirements in ESRS covered by the undertaking’s sustainability statement 80
Environmental information
E 1 Climate change ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes 72
E 1 Climate change E1-1 Transition plan for climate change mitigation 91
E 1 Climate change ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model
91
E 1 Climate change ESRS 2 IRO-1 Description of the processes to identify and assess material climate-related
impacts, risks and opportunities
77
E 1 Climate change E1-2 Policies related to climate change mitigation and adaptation 92
E 1 Climate change E1-3 Actions and resources in relation to climate change policies 92
E 1 Climate change E1-4 Targets related to climate change mitigation and adaptation 94
E 1 Climate change E1-5 Energy consumption and mix 95
E 1 Climate change E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions 95
E 1 Climate change E1-7 GHG removals and GHG mitigation projects financed through carbon credits 97
E2 Pollution ESRS 2 IRO-1 Description of the processes to identify and assess material pollution-related
impacts, risks and opportunities
77
E2 Pollution E2-1 Policies related to pollution 98
E2 Pollution E2-2 Actions and resources related to pollution 98
E2 Pollution E2-3 Targets related to pollution 99
E2 Pollution E2-4 Pollution of air, water and soil 100
E3 Water and marine resources ESRS 2 IRO-1 Description of the processes to identify and assess material water and marine
resources-related impacts, risks and opportunities
77
E3 Water and marine resources E3-1 Policies related to water and marine resources 101
E3 Water and marine resources E3-2 Actions and resources related to water and marine resources 101
E3 Water and marine resources E3-3 Targets related to water and marine resources 102
E3 Water and marine resources E3-4 Water consumption 102
E4 Biodiversity and ecosystems E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy and
business model
103
E4 Biodiversity and ecosystems ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model
103
E4 Biodiversity and ecosystems IRO-1 Description of processes to identify and assess material biodiversity and ecosystem-
related impacts, risks and opportunities
77
E4 Biodiversity and ecosystems E4-2 Policies related to biodiversity and ecosystems 104
ESRS Disclosure requirement Page
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E4 Biodiversity and ecosystems E4-3 Actions and resources related to biodiversity and ecosystems 104
E4 Biodiversity and ecosystems E4-4 Targets related to biodiversity and ecosystems 105
E4 Biodiversity and ecosystems E4-5 Impact metrics related to biodiversity and ecosystems change 107
E5 Resource use and circular
economy
ESRS 2 IRO-1 Description of the processes to identify and assess material resource use and
circular economy-related impacts, risks and opportunities
77
E5 Resource use and circular
economy
E5-1 – Policies related to resource use and circular economy 109
E5 Resource use and circular
economy
E5-2 – Actions and resources related to resource use and circular economy 109
E5 Resource use and circular
economy
E5-3 – Targets related to resource use and circular economy 110
E5 Resource use and circular
economy
E5-4 – Resource inflows 111
E5 Resource use and circular
economy
E5-5 – Resource outflows 111
Social information
S1 Own workforce ESRS 2 SBM-2 Interests and views of stakeholders 75
S1 Own workforce ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model
113
S1 Own workforce S1-1 Policies related to own workforce 114
S1 Own workforce S1-2 Processes for engaging with own workforce and workers’ representatives about impacts115
S1 Own workforce S1-3 Processes to remediate negative impacts and channels for own workforce to raise
concerns
115
S1 Own workforce S1-4 Taking action on material impacts on own workforce, and approaches to managing
material risks and pursuing material opportunities related to own workforce, and
effectiveness of those actions
115
S1 Own workforce S1-5 Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities
116
S1 Own workforce S1-6 Characteristics of the undertaking’s employees 117
S1 Own workforce S1-8 Collective bargaining coverage and social dialogue 117
S1 Own workforce S1-9 Diversity metrics 118
S1 Own workforce S1-10 – Adequate wages 118
S1 Own workforce S1-14 – Health and safety metrics 118
S1 Own workforce S1-16 – Remuneration metrics (pay gap and total remuneration) 118
S1 Own workforce S1-17 – Incidents, complaints and severe human rights impacts 118
S2 Workers in the value chain SBM-2 Interests and views of stakeholders 75
S2 Workers in the value chain SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model
119
ESRS Disclosure requirement Page
S2 Workers in the value chain S2-1 Policies related to value chain workers 119
S2 Workers in the value chain S2-2 Processes for engaging with value chain workers about impacts 119
S2 Workers in the value chain S2-3 Processes to remediate negative impacts and channels for value chain workers to raise
concerns
120
S2 Workers in the value chain S2-4 Taking action on material impacts on value chain workers, and approaches to
managing material risks and pursuing material opportunities related to value chain workers,
and effectiveness of those action
120
S2 Workers in the value chain S2-5 Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities
120
S3 Affected communities ESRS 2 SBM-2 – Interests and views of stakeholders 75
S3 Affected communities ESRS 2 SBM-3 - Material impacts, risks and opportunities and their interaction with strategy
and business mode
121
S3 Affected communities S3-1 – Policies related to affected communities 121
S3 Affected communities S3-2 – Processes for engaging with affected communities about impacts 122
S3 Affected communities S3-3 – Processes to remediate negative impacts and channels for affected communities to
raise concerns
122
S3 Affected communities S3-4 – Taking action on material impacts on affected communities, and approaches 123
S3 Affected communities S3-5 – Targets related to managing material negative impacts, advancing positive
effectiveness of those actions
123
Governance information
G1 Business Conduct GOV-1 The role of the administrative, supervisory and management bodies 70
G1 Business Conduct ESRS 2 IRO-1 Description of the processes to identify and assess material impacts, risks and
opportunities
77
G1 Business Conduct G1-1 Business conduct policies and corporate culture 124
G1 Business Conduct G1-3 Prevention and detection of corruption and bribery 125
G1 Business Conduct G1-4 Incidents of corruption or bribery 126
ESRS Disclosure requirement Page
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List of data points in cross-cutting and topical standards that derive from other EU legislation
ESRS 2 GOV-1 Board’s gender diversity paragraph 21 (d) Indicator number 13 of Table #1 of Annex 1 Commission Delegated Regulation (EU)
2020/1816 ( 27 ), Annex II
71
ESRS 2 GOV-1 Percentage of board members who are
independent paragraph 21 (e)
Delegated Regulation (EU) 2020/1816,
Annex II
71
ESRS 2 GOV-4 Statement on due diligence paragraph 30 Indicator number 10 Table #3 of Annex 1 72
ESRS 2 SBM-1 Involvement in activities related to fossil fuel
activities paragraph 40 (d) i
Indicator number 4 Table #1 of Annex 1 Delegated Regulation (EU) 2020/1816,
Annex II
n/a
ESRS 2 SBM-1 Involvement in activities related to chemical
production paragraph 40 (d) ii
Indicator number 9 Table #2 of Annex 1 Delegated Regulation (EU) 2020/1816,
Annex II
n/a
ESRS 2 SBM-1 Involvement in activities related to
controversial weapons paragraph 40 (d) iii
Indicator number 14 Table #1 of Annex 1 Delegated Regulation (EU) 2020/1818 ( 29 ),
Article 12(1) Delegated Regulation
(EU) 2020/1816, Annex II
n/a
ESRS 2 SBM-1 Involvement in activities related to cultivation
and production of tobacco paragraph 40 (d) iv
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 ( 28 ) Table 1: Qualitative
information on Environmental risk and
Table 2: Qualitative information on
Social risk
Delegated Regulation (EU) 2020/1818,
Article 12(1) Delegated Regulation
(EU) 2020/1816, Annex II
n/a
ESRS E1-1 Transition plan to reach climate neutrality by 2050
paragraph 14
Regulation (EU) 2021/1119, Article 2(1) 91
ESRS E1-1 Undertakings excluded from Paris-aligned
Benchmarks paragraph 16 (g)
Article 449a
Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453
Template 1: Banking book-Climate Change
transition risk: Credit quality of exposures
by sector, emissions and residual maturity
Delegated Regulation (EU) 2020/1818,
Article12.1 (d) to (g), and Article 12.2
91
ESRS E1-4 GHG emission reduction targets paragraph 34 Indicator number 4 Table #2 of Annex 1 Article 449a
Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453
Template 3: Banking book – Climate
change transition risk: alignment metrics
Delegated Regulation (EU) 2020/1818,
Article 6
94
ESRS E1-5 Energy consumption from fossil sources
disaggregated by sources (only high climate impact
sectors) paragraph 38
Indicator number 5 Table #1 and Indicator
n. 5 Table #2 of Annex 1
95
ESRS E1-5 Energy consumption and mix paragraph 37 Indicator number 5 Table #1 of Annex 1 95
ESRS E1-5 Energy intensity associated with activities in high
climate impact sectors paragraphs 40 to 43
Indicator number 6 Table #1 of Annex 1 95
Disclosure requirement and related data point SFDR reference Pillar 3 reference Benchmark Regulation reference EU Climate Law reference Location in the Sustainability Statement
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Assured 82
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