The Business Case for Sustainability
By Hugh O’Brian
Sustainability initiatives in business have risen dramatically in recent years. In 2009, the CEO and president of IKEA, Anders Dahlvig, told me that when he took over as CEO in 1999 he saw it coming. There was, he said, “a very clear business case for being sustainable, since sustainability and low costs work hand in hand. By using less resources and saving energy and materials, you are going to save money.”
Anders, who happens to be a friend, has since moved up from IKEA which today has turnover of US$40 billion to become chairman of the parent company, Inter-IKEA Holding. But during his 10 years as CEO he was the driving force in instilling sustainability into many aspects of IKEA’s activities, helping it to become the iconic brand it is today, ranked among the Top 50 worldwide in terms of brand equity.
Closer to home in the tissue business, a good example of such voluntary drive and dedication to push the boundaries of sustainability is Sofidel, the Italian manufacturer which is today number 6 in the world in terms of production. While many people in the tissue sector have a general awareness of Sofidel’s diverse sustainability activities, this concise summary of the company’s major efforts may offer additional interesting insight, both for people within the tissue community and others further along the value chain.
Of course, collecting and summarizing all of the various initiatives, large and small, is a near impossible task. This is therefore certainly not meant to be a complete compendium but hopefully is a good start at highlighting Sofidel’s stepwise approach to improve sustainability: For today, for tomorrow and for long into the future.
New millennium meant new push
It is rather hard to say exactly when Sofidel’s focused emphasis on sustainability and the environment started. The company history, however, is much easier to pinpoint: It began in 1966 when the two founders Emi Stefani and Giuseppe Lazzareschi set up their first operation in Pracando, Italy, a tiny hamlet not far from Lucca, and about 20 km north from Porcari where the company headquarters is located today. Through the 1970s, 80s and 90s a period of rapid growth and international business expansion followed.
With the arrival of the new millennium in the year 2000, Sofidel started to formal work to document and systematically improve its environmental and social performance. A conscious effort was made to further strengthen its ethical approach to producing tissue paper products, while safeguarding our planet’s resources.
“Sofidel,” explains CEO Luigi Lazzareschi, “considers sustainability to be a strategic lever which can give us dual benefits. It increases our competitiveness, while at the same time promoting durable growth”.
As a first step towards achieving these aims, a corporate philosophy entitled “Less is More” was formally introduced, with the goal being more sustainable production based on strict policies limiting environmental impacts. The key parameters targeted were lowered greenhouse gas emissions and increased use of renewable energy.
WWF Climate Savers in 2008 – 1st Italian and 1st tissue company to join
Sofidel’s decision to join the WWF Climate Savers program in 2008 was clearly a major leap in its leadership efforts in this area. It was the first Italian company to join this ambitious voluntary program, and the first tissue company in the world as well. Is it still the only Italian member and, as far as tissue companies, only Procter & Gamble has since joined Climate Savers which it did in 2016, about eight years after Sofidel.
The starting point for its work with Climate Savers was to jointly develop targets with WWF to reduce CO2 emissions by 11% by 2013. This was successfully achieved, mainly based on increasing energy efficiency in its processes, installing heat and power cogeneration facilities, and increasing the use of renewable energy. Investments totaling over €25 million were carried out to support this, with the result giving a reduction of 186,000 tons of CO2 emitted.
In 2013, following this initial success, Sofidel and WWF set new, more ambitious targets to be reached by 2020. These call for a 23% reduction in CO2 compared to 2009, a 13% drop per ton of paper in indirect emissions from third-party suppliers, and 8% of the annual fuel consumption to come from renewable sources.
UN Global Compact as well — In 2010, going a step further, Sofidel also joined the United Nations Global Compact, which is an initiative founded on 10 principles broken into four categories (Human rights, Labor standards, Environment, and Anti-corruption) that is meant to encourage businesses worldwide to adopt sustainable and socially responsible policies, and to report on their implementation.
Saving our most precious resource, Water
Water is critically important to human life, both directly for the proper functioning of our bodies, as well as for our food supply and many other items which impact our life and health. Clean running water is, for example, extremely important for human hygiene. In addition, it is one of the most important raw materials used in the papermaking process. Therefore, for all of these reasons, Sofidel has focused on minimizing its use of and demand for this most precious natural resource, H2O.
By investing in water treatment systems, and being very vigilant regarding the consumption of water in the paper process, Sofidel has been able to reduce its use of water per ton of paper produced to a very low level, much lower than the average consumption in the tissue industry. Since 2012 it has been running a specific project to reduce water consumption in all its production plants, with priority assigned to drought-sensitive areas or where large amounts of water are drawn for manufacturing or agricultural purposes, or for drinking water procurement.
These investments have produced significant results. In 2016 the specific average consumption for Sofidel’s operations was 7.0 liters of water per kg of paper produced, compared to 7.3 l/kg in 2015, and far below the sector benchmark of around 15-25 l/kg.
A great example is the new water recovery system in operation at Soffass Paper Mill in Porcari. The advanced technology used makes it possible to recover up to 75% of wastewater outflow, thereby reducing the amount of clean water extracted from the groundwater table. The €3 million investment involves three process phases: biological treatment, solid-liquid separation via MBR ultrafiltration and, finally, reverse osmosis for eliminating the remaining dissolved salts. The technology is currently one of the best and most innovative worldwide and helps save 300 million liters of fresh water annually.
Other such investments include the Intertissue plant in the UK, where recovery of rainwater from building roofs has reduced water use by 47 million liters a year.
A new partnership with Water Aid
In addition, as part of its ongoing efforts to reduce overall water use, Sofidel is committed to raising awareness among its stakeholders about respect for and protection of aquatic resources that are critical for guaranteeing hygiene and sanitation possibilities. This is in line with both Sofidel’s mission and Goal 6 of the UN 2030 Sustainable Development Goals.
In this respect, the Sofidel Group has recently announced a three-year partnership with WaterAid, the NGO whose mission is to ensure access to safe water, sanitation and hygiene services in some of the world’s poorest communities. Over the next three years Sofidel will support WaterAid’s operations, contributing to spreading better health conditions and enabling rural communities, schools and health centers to adopt and sustain good practices in hygiene and sanitation. Sofidel will also play an active role by involving its stakeholders in fundraising and campaigning activities for WaterAid.
“Sofidel is perfectly aware of how precious a resource water is, both for natural balance and human well-being and hygiene”, commented Luigi Lazzareschi. “This is the reason why we are already highly committed to using it responsibly in all our production sites and why we work on various levels to raise awareness among our stakeholders. The partnership with WaterAid supplements and reinforces our commitment in this area, and is another way to play a responsible role with respect to an issue of global interest.”
Energy: From Renewable and Innovative sources
Energy is just behind water in terms of precious natural resources used in papermaking. It is also a very costly item in tissue manufacture. Sofidel has invested heavily in building energy-generating capacity that is based on renewable resources. At the moment, the Group owns 3.8 MW of PV solar plants, 0.6 MW of mini-hydro plants and operates two biomass plants that generate 19.3 MW of steam, used for the production process.
Increased efficiency in energy use is a critical lever, as mentioned earlier. In this regard cogeneration plants using a turbine (also called CHP, meaning combined heat and power), designed to extract more useful power and thermal energy per unit of fuel input, are a key to this as they efficiently produce both electricity to drive the paper machine and process heat to dry the paper.
First in world with headbox turbine – Sofidel has also been a pioneer in using innovative technology such as Valmet’s ReTurne turbine that captures kinetic energy from the high-pressure water flow out of the headbox of the paper machine and generates electricity, which can be returned to the process. Sofidel was the first in the world to install this technology and now has three such turbines in use.
Pulp – 100% certified by independent third parties in 2016
Of course, no discussion about papermaking and the environment is complete without considering trees, forests, and wood fibers. Commonly called pulp, wood fibers are the main component of paper and, over the past 20 years or so as concern has arisen about deforestation and its impact on people and the environment, various certification systems have developed to protect old-growth forests and document the origin of wood used for manufacturing processes.
Sofidel has been an early adopter of these standards and in the latest data from 2016, Sofidel reports that 100% of its woodpulp raw material is certified by independent third parties with forest certification schemes like FSC®, FSC Controlled Wood, SFI®, PEFC™.
Alcohol Free Truck – for improving road safety
In addition to these steps to save natural resources and reduce emissions, sustainability quite often means simply keeping people alive. Safety is therefore another important point in these Sofidel sustainability programs.
One example is a program which was started last year regarding alcohol and road safety. Called “Alcohol-Free Truck”, drivers of vehicles entering Sofidel sites can have their alcohol level tested. The initiative is run in full compliance with relevant privacy regulations and has been set up in cooperation with Italian State Police and transport companies to prevent road accidents and guarantee the safety of transported goods. A secondary aim is to increase awareness about the risks associated with excessive alcohol consumption, ultimately to improve the health and safety of employees in the group’s plants.
Product innovation also aimed at sustainability
Clearly, Sofidel’s products themselves can have important sustainability impacts as well. A basic aim is to offer products with ever-increasing performance, thanks to superior functional qualities, based on an ever-shrinking ecological footprint that uses less natural resources.
Two examples are the Bio Tech and Dissolve Tech products for the Away-from-Home market. Bio Tech uses active “good” bacteria to cleanse sewage pipes, while Dissolve Tech is a paper towel that dissolves easily in the toilet without clogging it.
Both of these products ensure a better customer experience by eliminating washroom odors, clogs or closures. These benefits have been noted by numerous customers and Sofidel is proud to be the hygiene paper supplier to several international flag-carrier airlines in Europe, including British Airways flights from London.
Raising awareness of what lies behind paper as a product
Another important part of Sofidel’s sustainability effort is a commitment to spread awareness of the positive aspects and benefits of its “paper culture”. Although paper sometimes has an unwarranted bad image, this unique material is inherently a very positive since it is based on an easily-renewable raw material, wood fibers.
As part of its 50th anniversary celebrations in 2016, Sofidel partnered with National Geographic to produce a video called “Chasing Paper”. The 60-minute documentary is based on discussions with experts, historians and master papermakers to shows the secrets of paper production and explain why a world without paper is unthinkable. CLICK HERE for the Chasing Paper Video
Sustainability has in many ways been woven into the fabric of the company via numerous actions and processes. The strategic direction has initially been coming from the CEO, and transmitted through a tight network including a CSR committee, the chief technical and operating officers, human resources, and of course the operational plants to put this into practice. Even bonuses and compensation plans are partly based on meeting water, energy and emissions targets.
Not rich enough to buy cheap things
Many years ago, Sofidel’s co-founder Giuseppe Lazzareschi was quoted as saying: “I am not rich enough to buy a new paper machine made of iron.” Instead, even though he really couldn’t afford it, he saw the value in spending more money for higher-quality steel which would last much longer into the future. While Sofidel has moved on from those earlier and leaner days, the mentality has left its mark.
Quite simply, the business case for sustainability is becoming more and more convincing every year. And Sofidel has been at the forefront with respect to the tissue business, and it has been recognized for this. Honors include numerous awards, most recently including the WWF Environmental Paper Award for sustainability in the paper manufacturing sector in 2016. It also was selected as the best non-listed Italian company for action on Climate Change by the Carbon Disclosure Project, the only global disclosure system for managing information relating to environmental impact, which serves 827 institutional investors with assets over US$100 trillion.
Going a step further, Sofidel has also instituted sustainability awards of its own, by establishing the Sofidel Green Supplier Awards which recognize sustainability progress by third-party suppliers.
All in all it’s quite remarkable that this family-owned company, in a manner not dissimilar to IKEA but on a smaller scale, has voluntarily chosen to take the long-term view to unleash the numerous benefits, in terms of both business and humanity, that can result from investing wisely today – for a more sustainable tomorrow.