H1. General accounting principles

Reporting principles

The environmental and social data reported pertains to the 2018 calendar year. The figures included comply with relevant reporting and consolidation principles in the financial statements. The figures cover the Essity Group’s wholly owned subsidiaries and subsidiaries in which Essity owns at least 50%. If ownership in the subsidiary is at least 50% or more, the entire company is included in the reporting. Essity uses the global Greenhouse Gas Protocol standard for measuring, and calculating carbon data.

Subsidiaries with significant non-controlling interests (see Note F2), such as the Chinese company Vinda and the Colombian company Familia, social data, such as employee figures, employee turnover and health and safety data is reported in notes H14 and H15. Some other social data is not included, for example Note H13 Code of Conduct data as subsidiaries with significant non-controlling interests have their own Codes of Conduct. Vinda publishes an Environmental, Social and Governance (ESG) report, which is available at www.vinda.com. Familia reports in accordance with the GRI Reporting Standards. For more information, visit www.grupofamilia.com.co.

Newly acquired businesses are included in the reporting as soon as possible, though not later than when they have been part of the Group for one calendar year. The historic environmental and social data of newly acquired companies are included to the greatest possible extent in order to increase comparability. The data from divested companies is excluded in its entirety as of the divestment date. Historic data for discontinued units is retained.

A main site is a production facility that is wholly owned by Essity and that has 100 or more employees.

Data collection

Data provided in the report is compiled through various systems, primarily the Group’s financial consolidation system, Resource Management System (RMS) and Essity’s system for collection of social data.

Environmental data

The RMS encompasses more than 76 production sites, covering virtually the entire company’s environmental impact and resource utilization from production. Data from stand-alone tissue converting sites is included in the main mother reel supplying site.

Each unit reports the following data to the system:

  • raw material consumption
  • incoming and outgoing shipments
  • production volumes
  • energy consumption broken down by hydro-electric power, co-generation and power from the grid
  • fuel consumption broken down by biofuels, fossil fuels and electric boilers
  • air emissions, including data on fossil and biogenic carbon dioxide
  • water emissions
  • solid waste

The data is reported both internally and externally at the mill level and for the Group as a whole. The values calculated are carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). Conversion factors used:

  • Emissions of greenhouse gases from incineration are calculated using emission factors for the fuel’s thermal value. Source: IPCC Guidelines 2006.
  • Emissions of greenhouse gases from purchased electricity are calculated using the country’s emission factor published by the International Energy Agency (IEA), 2016.

Social data

Data is provided from different internal systems and tools depending on the nature of the data. HR data resides in Essity’ s HR system and other qualitative data is collected in Essity’s database for social data.

Comparability

This is Essity’s second integrated Annual and Sustainability Report. The previous year’s report is from February 21, 2018. Historical information is also obtained from previous publications of SCA’s Sustainability Reports. This information is adjusted to make Essity’s figures comparable. This applies for example to most of the GRI indicators and data encompassed by Essity’s sustainability targets, such as information on CO2 and health and safety. Figures from previous years are reported in parenthesis.

The results of the Group’s CO2 target and water target are adjusted each year in relation to production levels. Other environmental data is reported in absolute figures.

GRI reporting

Essity reports sustainability information in accordance with the Global Reporting Initiatives (GRI) guidelines for GRI Reporting Standards: Core. The Report has been structured in accordance with GRI principles, meaning that the content is determined by the issues that are most material to Essity and its stakeholders, and that the content provides a complete overview of the operations. Essity’s 21 subject areas in the materiality analysis are matched against GRI indicators, and they form the selection of the indicators that Essity presents in this report. Essity reports in accordance with all GRI indicators and on a level identified as material. In addition, Essity reports a number of general indicators according to the GRI Standards: Comprehensive option as this clarifies the information in the report. Any omissions or incomplete data are commented on directly in the GRI index. The entire report has been reviewed by EY. The report is aimed at specialist audiences with an interest in sustainability performance, including analysts, investors and NGOs. Additional information about Essity’s work on environmental and social issues is available at www.essity.com.

The UN Guiding principles

Essity uses the reporting framework for the United Nations Guiding Principles on Business and Human Rights (UNGPs) and has reported on the overarching aspects contained in the framework.