H1. General accounting principles

Reporting principles

The social and environmental data reported pertains to the 2021 calendar year unless stated otherwise. The figures included comply with relevant reporting and consolidation principles in accordance with the principles applied in the financial statements. The figures cover Essity Group’s wholly owned subsidiaries and subsidiaries in which Essity owns at least 50%. If ownership in the Group company is at least 50% or more, the entire company is included in the reporting.

As a general rule, all social and environmental data for all companies that are part of the Essity Group is included. For the Chinese company Vinda, a Group company with significant non-controlling interests (see Note F2), social data, such as employee figures, employee turnover and some health and safety data in notes H12 and H13 are reported. Some other social data is not included, for example Note H2 Code of Conduct data, as this company has its own Codes of Conduct. Environmental data includes, as a general rule, Vinda’s Personal Care operations. Greenhouse gas emissions according to Scope 1, 2 and 3 are not included for Vinda’s Tissue operations. Vinda publishes an Environmental, Social and Governance (ESG) report, which is available at vinda.com.

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 data from divested companies is excluded in its entirety as of the divestment date. Historic data for discontinued units is retained.

The section on Sustainability governance describes how Essity ensures that the company delivers on its sustainability targets. The H-notes present the results in recent years.

Data collection

Data provided in the report is compiled through various systems, primarily Essity’s reporting system for sustainability data and the Group’s financial consolidation system. The data in this report includes, as a general rule, all companies. The targets in the report apply, as a general rule, to wholly owned companies. Environmental reporting encompasses 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 data for the tissue plant.

Each unit reports the following data to the system:

  • raw material consumption
  • incoming and outgoing shipments
  • production volumes
  • energy use broken down by electricity, steam and fuel
  • fuel consumption broken down by biofuels and fossil fuels
  • air emissions, including data on fossil and biogenic carbon dioxide
  • water emissions
  • production waste

The calculation of greenhouse gas emissions for Scope 1, 2 and 3 of Science Based Targets encompasses carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). Conversion factors used:

  • Greenhouse gas emissions from incineration are calculated using emission factors for the fuel’s thermal value. Source: IPCC Guidelines 2006. (Scope 1 emissions)
  • Greenhouse gas emissions from purchased electricity are calculated using the country’s emission factor published by the International Energy Agency (IEA), 2018. (Scope 2 emissions, location-based)

Comparability

This is Essity’s fifth integrated Annual and Sustainability Report. The previous year’s report is from February 18, 2021. Figures from previous years are reported in parenthesis. Certain adjustments of environmental data for previous years, notes H10–H11, have taken place to adjust for acquisitions, divestments and updated location-based emission factors in line with the GHG protocol. Minor updates also took place following the integration of earlier acquisitions into Essity’s global reporting system for sustainability data.

Environmental impact

Essity conducts operations requiring a permit through its production facilities. Such operations impact the environment through emissions to air and water, solid waste and noise.

GRI reporting

Essity reports sustainability information in accordance with the Global Reporting Initiative (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 20 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 on all GRI indicators that are identified as material and on a relevant level. In addition, Essity reports a number of general standard disclosures 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 Sustainability Report has been reviewed by EY. Additional information about Essity’s work on social and environmental issues is available at www.essity.com/sustainability. The index can be found in the chapter Indexes.

The UN Guiding principles

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

Task Force on Climate-related Financial Disclosures (TCFD)

Essity is publishing its second TCFD index in this report to allow investors and other stakeholders easy access to TCFD-related information for comparisons or decision-making. The index is presented in the chapter TCFD Index.

Sustainability Accounting Standards Board (SASB)

Since 2020, Essity has applied the standards applicable for the Household and Personal Products sectors. A detailed index with references to sections where Essity reports in relation to specific disclosures is available in the chapter SASB Index.