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RepRisk Director's Brief
Stora Enso OYJ
September 2016
What is the Director’s Brief?
The RepRisk Director's Brief
The RepRisk Director’s Brief is a corporate benchmarking report. It assesses your company’sexposure to environmental, social, and governance (ESG) risks, and benchmarks it with acustomizable peer list. The Brief is a data-driven strategy and decision-making tool designedfor board members and executives, investor relations and corporate affairs professionals, aswell as CSR and sustainability teams.
The RepRisk Rating
The cornerstone of the Director’s Brief is the RepRisk Rating – a proprietary risk metric,ranging from AAA to D, that captures and quantifies a company’s risk exposure related to ESGissues. It combines a company’s own ESG risk exposure with the ESG risk exposure of thecountries and sectors in which the company has been exposed to risks.
The RepRisk Rating facilitates corporate benchmarking and ESG integration, and providesdecision support in risk management, compliance, investment management, and procurement.Based on RepRisk’s strict, rules-based methodology, the Rating is updated daily for allcompanies in the RepRisk ESG Risk Platform.
AAA AA A
Low ESG Risk Exposure
RepRisk Rating
BBB BB B
Medium ESG Risk Exposure
CCC CC C
High ESG Risk Exposure
D
Very high ESG RiskExposure
Director’s Brief: Stora Enso OYJ September 2016 2
ESG Risk ExposureCompany: Stora Enso OYJ
The current RepRisk Rating of Stora Enso OYJ is A, denoting a low risk exposure. Thetimeframe of this report is the last two years (October 2014 to September 2016).
Top ESG Issues Top ESG Topic Tags Top countries with ESG risk exposure
1. Human rights abuses, corporatecomplicity
1. Genetically modified organisms(GMOs)
1. Pakistan
2. Child labor 2. Land grabbing 2. India
3. Supply chain issues 3. Negligence 3. China
4. Forced labor 4. Uruguay
5. Violation of national legislation 5. Brazil
The next pages provide further details on the RepRisk Rating, the top ESG Issues and top ESGTopic Tags of Stora Enso OYJ and its peers, as well as about the countries where Stora EnsoOYJ has been exposed to ESG risks.
Director’s Brief: Stora Enso OYJ September 2016 3
Peer benchmarking ESG RiskExposureCompany: Stora Enso OYJ
The overall ESG risk exposure of a companyis measured by the RepRisk Rating. TheRepRisk Rating is made up of two factors:
The Company-specific ESG Risk captures theexposure due to risk incidents reportedspecifically about the company (X-axis). Thisrisk is measured by the company’s RepRiskIndex (RRI), RepRisk’s proprietary measureof ESG risk exposure.
The Country-Sector ESG Risk measures thecompany’s international risk exposure takinginto consideration its sector and the locationof the company’s headquarters, as well asthe countries where the company has beenexposed to ESG risk incidents (Y-axis).
Both of these risk metrics range from zero to100. The higher the value, the higher therisk exposure.
Company and Ranking RepRisk Rating Company-specificESG Risk
Country-SectorESG Risk
UPM-Kymmene OYJ AA 24 20
Stora Enso OYJ A 29 24
International Paper BBB 35 29
Samling Global BBB 31 37
Celulosa Arauco y Constitucion BB 28 42
Holzindustrie Schweighofer B 39 41
Veracel Celulose B 23 61
Empresas CMPC B 46 40
Vicwood Group CC 50 57
Societe Industrielle et Forestiere du Congo D 39 88
Director’s Brief: Stora Enso OYJ September 2016 4
ESG IssuesCompany: Stora Enso OYJ
The heat map below highlights the ESG Issues that have been mostly associated with StoraEnso OYJ in the last two years. The Issues are highlighted in relation to both the number andseverity of the risk incidents.
The 28 ESG Issues in the heat map comprise the core of RepRisk’s research scope. TheseIssues were selected and defined in accordance with the key international standards related toESG, such as the World Bank Group Environmental, Health, and Safety Guidelines, the IFCPerformance Standards, the OECD Guidelines for Multinational Enterprises, and the ILOConventions. In particular, the scope covers the Ten Principles of the UN Global Compact(UNGC).
Environmental Social GovernanceEnvironmental Footprint Community Relations Employee Relations Corporate Governance
Global pollution (incl. climatechange and GHG emissions)
Human rights abuses,corporate complicity
Forced labor Corruption, bribery, extortion,money laundering
Local pollution Impacts on communities Child labor Executive compensationissues
Impacts on ecosystems andlandscapes
Local participation issues Freedom of association andcollective bargaining
Misleading communication,e.g. “greenwashing”
Overuse and wasting ofresources
Social discrimination Discrimination in employment Fraud
Waste issues Occupational health andsafety issues
Tax evasion
Animal mistreatment Poor employment conditions Tax optimization
Anti-competitive practices
Cross-cutting Issues: always in combination with one of the ESG Issues above
Controversial products and services
Products (health and environmental issues)
Violation of international standards
Violation of national legislation
Supply chain issues
Low risk Medium risk High risk Very high risk
Director’s Brief: Stora Enso OYJ September 2016 5
ESG Topic TagsCompany: Stora Enso OYJ
The heat map below highlights the ESG Topic Tags that have been mostly associated withStora Enso OYJ in the last two years. The Topic Tags are highlighted in relation to both thenumber and severity of the risk incidents.
The 45 ESG Topic Tags in the heat map are part of RepRisk’s research scope. Topic Tags arespecific and thematic ESG “hot topics” that are an extension of RepRisk’s core research scopeof 28 ESG Issues. Topic Tags are a dynamic concept, with the list expanding over time inresponse to emerging trends.
Abusive/Illegal fishing Agricultural commodityspeculation
Alcohol Animal transportation
Arctic drilling Asbestos Automatic and semi-automaticweapons
Cluster munitions
Coal-fired power plants Conflict minerals Coral reef Deep sea drilling
Depleted uranium munitions Diamonds Drones Endangered species
Forest burning Fracking Gambling Genetically modifiedorganisms (GMOs)
Genocide/Ethnic cleansing High conservation valueforests
Human trafficking Hydropower (dams)
Illegal logging Indigenous people Involuntary resettlement Land grabbing
Land mines Migrant labor Monocultures Mountaintop removal mining
Negligence Nuclear power Oil sands Palm oil
Pornography Predatory lending Privacy violations Protected areas
Rare earths Sea-bed mining Soy Tobacco
Water scarcity
Low risk Medium risk High risk Very high risk
Director’s Brief: Stora Enso OYJ September 2016 6
Country ESG Risk ExposureCompany: Stora Enso OYJ
In the last two years, ESG risk incidents for Stora Enso OYJ have been detected in 11 countries.The map below highlights these countries in relation to both the number and severity of therisk incidents.
Country and ranking
1. Pakistan 6. Finland
2. India 7. Korea; Republic of (South Korea)
3. China 8. Lao People's Democratic Republic
4. Uruguay 9. Sweden
5. Brazil 10. Latvia
Low risk Medium risk High risk Very high risk
Director’s Brief: Stora Enso OYJ September 2016 7
Peer benchmarking ESG IssuesCompany: Stora Enso OYJ
The two tables in this section compare Stora Enso OYJ and its peers according to their key ESGIssues in the last two years.
The table below displays the top five ESG Issues of Stora Enso OYJ in the last two years andbenchmarks the peers on these Issues. The Issues are highlighted in relation to both thenumber and severity of the risk incidents.
Benchmarking on Stora Enso OYJ's top ESG Issues
Company and Ranking Human rightsabuses,
corporatecomplicity
Child labor Supply chainissues
Forced labor Violation ofnational
legislation
1. UPM-Kymmene OYJ
2. Stora Enso OYJ
3. International Paper
4. Samling Global
5. Celulosa Arauco y Constitucion
6. Holzindustrie Schweighofer
7. Veracel Celulose
8. Empresas CMPC
9. Vicwood Group
10. Societe Industrielle et Forestiere du Congo
Low risk Medium risk High risk Very high risk
Director’s Brief: Stora Enso OYJ September 2016 8
Peer benchmarking ESG IssuesCompany: Stora Enso OYJ
The table below displays the top five ESG Issues that have been the most prevalent among thegroup of selected peers in the last two years and benchmarks Stora Enso OYJ and the peers onthese Issues. The Issues are highlighted in relation to both the number and severity of the riskincidents.
Benchmarking on the peers' top ESG Issues
Company and Ranking Impacts onecosystems
andlandscapes
Violation ofnational
legislation
Impacts oncommunities
Human rightsabuses,
corporatecomplicity
Localpollution
1. UPM-Kymmene OYJ
2. Stora Enso OYJ
3. International Paper
4. Samling Global
5. Celulosa Arauco y Constitucion
6. Holzindustrie Schweighofer
7. Veracel Celulose
8. Empresas CMPC
9. Vicwood Group
10. Societe Industrielle et Forestiere du Congo
Low risk Medium risk High risk Very high risk
Director’s Brief: Stora Enso OYJ September 2016 9
Peer benchmarking ESG Topic TagsCompany: Stora Enso OYJ
The two tables in this section compare Stora Enso OYJ and its peers according to their key ESGTopic Tags in the last two years.
The table below displays the top five ESG Topic Tags of Stora Enso OYJ in the last two yearsand benchmarks the peers on these Topic Tags. The Topic Tags are highlighted in relation toboth the number and severity of the risk incidents.
Benchmarking on Stora Enso OYJ's top ESG Topic Tags
Company and Ranking Geneticallymodified
organisms(GMOs)
Landgrabbing
Negligence N/A N/A
1. UPM-Kymmene OYJ
2. Stora Enso OYJ
3. International Paper
4. Samling Global
5. Celulosa Arauco y Constitucion
6. Holzindustrie Schweighofer
7. Veracel Celulose
8. Empresas CMPC
9. Vicwood Group
10. Societe Industrielle et Forestiere du Congo
Low risk Medium risk High risk Very high risk
Director’s Brief: Stora Enso OYJ September 2016 10
Peer benchmarking ESG Topic TagsCompany: Stora Enso OYJ
The table below displays the top five ESG Topic Tags that have been the most prevalent amongthe group of selected peers in the last two years and benchmarks Stora Enso OYJ and the peerson these Topic Tags. The Topic Tags are highlighted in relation to both the number andseverity of the risk incidents.
Benchmarking on the peers’ top ESG Topic Tags
Company and Ranking Illegallogging
Indigenouspeople
Monocultures Protectedareas
Endangeredspecies
1. UPM-Kymmene OYJ
2. Stora Enso OYJ
3. International Paper
4. Samling Global
5. Celulosa Arauco y Constitucion
6. Holzindustrie Schweighofer
7. Veracel Celulose
8. Empresas CMPC
9. Vicwood Group
10. Societe Industrielle et Forestiere du Congo
Low risk Medium risk High risk Very high risk
Director’s Brief: Stora Enso OYJ September 2016 11
About RepRisk
RepRisk is a leading business intelligence provider, specializing in environmental, social, andgovernance (ESG) risk analytics and metrics.
Harnessing a proprietary, systematic framework that leverages cutting-edge technology andhands-on human intelligence in 15 languages, RepRisk curates and delivers dynamic riskinformation for an unlimited universe of companies.
Since 2006, RepRisk has built and continues to grow the most comprehensive ESG riskdatabase that serves as a due diligence, research, and monitoring tool in risk management,compliance, investment management, corporate benchmarking, and supplier risk. The RepRiskESG Platform currently includes risk profiles for over 76,000 listed and non-listed companies,19,000 projects, as well as for every sector and country in the world.
Headquartered in Zurich, Switzerland, RepRisk serves clients worldwide including globalbanks, insurance providers, investment managers, and corporates, helping them to manageESG and reputational risks in day-to-day business.
RepRisk provides the transparency needed to enable better, more informed decisions. Formore information, please visit www.reprisk.com.
Disclaimer
Copyright 2016 RepRisk AG, Stampfenbachstrasse 42, 8006 Zurich, Switzerland. All rightsreserved. RepRisk AG owns all rights to its logos and trademarks used in connection with thisreport (“Report”).
The information contained in this report is not intended to be relied upon as, or to besubstitute for, specific professional advice and in particular, financial advice. Noresponsibility for loss occasioned to any persons and legal entities acting on or refrainingfrom action as a result of any material in this publication can be accepted. With respect to anyand all the information contained in this Report (“Information”), RepRisk makes norepresentation or warranty of any kind, either express or implied, with respect to theInformation, the results to be obtained by the use thereof or any other matter. RepRisk merelycollects information from public sources and distributes them in the form of this Report.
RepRisk expressly disclaims, and the buyer or reader waives, any and all implied warranties,including, without limitation, warranties of originality, accuracy, completeness,merchantability, fitness for a particular purpose and warranties related to possible violationsof intellectual property rights, trademark rights or any other rights of any third party. Thisreport may be quoted, used for business purposes, and may be shared with third parties,provided RepRisk ESG Business Intelligence www.reprisk.com is explicitly mentioned as thesource. RepRisk AG retains copyright and all originators’ rights to the content in this report.
© RepRisk AG
Director’s Brief: Stora Enso OYJ September 2016 12