Asia Pulp and Paper (APP) Sinar Mas Shows How The Pulp & Paper Industry Can Incorporate CDP Standards
The pulp and paper industry is one that has been deeply impacted by the rise of the eco-conscious consumer. Whether a business produces disposable, reusable, or repurposable paper products, many pulp and paper companies continue to be placed under further scrutiny by consumers. Issues such as resource depletion and carbon emissions are common critiques of the industry, regardless of how useful or necessary their products may be.
At the same time, many pulp and paper companies such as Asia Pulp and Paper (APP) Sinar Mas have proactively moved towards comprehensively integrating sustainability outcomes into their overall operational strategy.
Seeking out awards and standards to integrate into your company’s sustainability strategy is the first step to officiating your business’ efforts, establishing trust with the consumer base, and providing transparency to stakeholders. The inclusion of reliable third-party standards or guidelines into long-term sustainability strategies such as Asia Pulp & Paper’s Sustainability Roadmap Vision 2030 not only provides an external source for validating the company’s claims, but also reassures skeptical consumers.
There is no shortage of internationally-recognised charities, non-profit organisations, and other organisations that provide strict standards that pulp and paper companies can integrate into their sustainability strategies. One such organisation is CDP, a not-for-profit charity that runs global disclosure and corporate environmental reporting systems dedicated to managing environmental impacts.
What is CDP?
Formerly known as the Carbon Disclosure Project, CDP is an international non-profit organisation that originally focused on encouraging individual companies to disclose their environmental impact and carbon emissions.
Today the organisation helps investors, businesses, cities, and governments evaluate their environmental impact and connects them to accredited solutions providers to take immediate action and create a sustainable economy.
CDP has three key areas of focus: Water Security, Forests, and Climate Change. Each of these categories has further criteria against which participating member companies are assessed and graded. Put together, this results in an overall score that can be a measure of a company’s environmental consciousness, advanced sustainability governance, and outspoken leadership in addressing climate change.
In its annual ranking process, CDP also rewards businesses that provide high-quality disclosure with a place on the so-called “A-list”.
Why should pulp and paper companies disclose with CDP?
CDP disclosure has various benefits for companies in any industry or sector. Compared to other certifications that have a complex and costly accreditation process, CDP primarily relies on audited self-reporting in line with its goals to make risk management and corporate environmental reporting a normative part of global business culture.
Businesses can easily participate in CDP membership provided they are willing to collect their own data and present it for a report – which can be seamless for a company that has already integrated CDP standards into its sustainability reporting.
Pulp and paper companies, in particular, stand to benefit from carbon disclosure and other environmental measures due to the resource-intensive nature of their industry. Under its “Forest” area of focus, CDP specifically recognises the timber industry (including pulp and paper companies) as one of the industries that drives deforestation and forest degradation globally.
To address this, CDP has introduced various critical steps and commitments that pulp and paper companies can adopt to improve the sustainability of their supply chains. This includes public commitments to sustainable development, traceability targets related to larger environmental commitments, and enforcing monitoring systems to assess and assure the company’s compliance.
CDP disclosure can also benefit pulp and paper companies in the following ways:
1. Greater Stakeholder Transparency
Environmental disclosure is highly sought for and in constant demand in today’s eco-conscious economy. Such demands are coming not just from consumers but investors and stakeholders at all levels.
CDP themselves report that 680+ investors with over US$130 trillion in assets and 200+ large purchasers with over US$5.5 trillion in annual procurement expenditure are now looking to CPD participating businesses as a benchmark for transparency and long-term sustainability.
Today’s investors understand the strong link between longevity and environmental sustainability; they want to invest in viable long-term business which, in the context of climate change and emerging sustainability regulations, is only possible with vetted sustainable businesses.
Participating in CDP disclosure standards isn’t just a moral or ethical imperative for companies anymore, but can have a positive impact on their business by improving their standing with stakeholders.
Businesses in the pulp and paper industry will benefit from the transparency that CDP offers when it comes to selling shares and corporate investment. This grading demonstrates a business’ willingness to report data on sensitive topics, and provides a benchmark against which concerned parties can measure progress in sustainability. Asia Pulp and Paper’s Sustainability Report 2020 is an example of self-reporting that other pulp and paper companies can look towards when crafting their own disclosure processes.
2. Improved Brand Reputation and Management
Brand reputation is one of the most important factors when it comes to consumer relations. Brands that destroy trust with their customers through superficial commitments to sustainable development or quality-control shortcuts could also suffer financially as sales decrease alongside their brand reputation.
Pulp and paper companies remain vulnerable to blows to their brand reputation in the context of increased consumer scrutiny, especially as more companies specialising in sustainable alternatives emerge onto the market. The industry can overcome concerning press coverage and the public’s concern around their resource usage by taking responsibility for the environmental impact of their enterprises, choosing transparency, and committing to third-party assessment by external international authorities such as CDP.
3. Keeping Pace with Regulation Standards
Climate change, human rights, and sustainable resource management are now global concerns that businesses of all sizes will need to address in order to stay afloat. State and federal governments are under increased pressure from consumer groups to set and achieve international sustainability goals, which means increased regulations for businesses operating in areas of concern.
In a world in which mandatory corporate environmental reporting and disclosure is gaining momentum, disclosing through CDP enables companies to meet reporting rules in multiple regions. It also provides an advantage over the local competition; by adjusting sustainability standards ahead of government regulations, pulp and paper companies following CDP’s standards have fewer adjustments to make if reporting becomes mandatory. This also allows organisations greater flexibility in redirecting their resources to more salient areas in line with larger policy changes.
4. Long-term Benchmarks of Success
Not all businesses are going to start CDP reporting with an A+ grade; sustainable businesses don’t grow overnight, and committing to a long-term sustainable development strategy takes ample time, resources, and effort at every level of an organisation.
Because progress can happen so slowly, it’s easy to lose sight of how far the business has come on a YoY basis. This is where CDP reporting can come in to offer third-party insight into a business’ sustainability progress over time, as well as accreditation in recognition of improved sustainability measures.
Asia Pulp and Paper has been transparent in its improvement in CDP grades across the years, beginning with an A- in supplier engagement and B scores in climate change and forest in 2020, and increasing to Asia Pulp & Paper receiving A- grading in CDP’s Forest category in 2021.
The organisation’s earlier efforts at implementing sustainability into its overall strategy have also been recognised as a case study on CDP’s website. The case study attributes the organisation’s success to various mechanisms within its Forest Conservation Policy including a sustainable and responsible forestry management plan, bottom-up consultations with stakeholders, and external community-focused projects such as the Desa Makmur Peduli Api (DMPA) programme.
This is an example of an organisation that has made tremendous efforts towards sustainability across multiple aspects of its organisational strategy, and is committed to finetuning its measures to improve its overall grading over time.
Pursuing Sustainable Development through CDP Disclosure
The CDP framework provides a point of reference for both businesses and consumers to assess an organisation’s environmental commitments, and can help all parties involved make better decisions about how resources are used as part of the production process.
Companies in the pulp and paper industry need to normalise corporate environmental reporting, carbon disclosure statements, and external auditing if they want to survive the new era of sustainability legislation and eco-conscious consumers and stakeholders. Businesses can also look towards projects by organisations that have already embraced CDP disclosure (such as Asia Pulp and Paper) as a blueprint for what steps to take next – whether or not these organisations have made it onto CDP’s A-List yet.