ANNUAL REPORT 2015 19 CORPORATE SOCIAL RESPONSIBILITY

DOING THE RIGHT THING – THE RIGHT WAY

We are a progressive and viable group with belief of Norske Skog. We monitor activities in structure and Operating Model. These provide in the company, the products and the future. order to achieve sustainable products and the basic framework for our mandates and processes throughout the entire value chain. activities. The Steering Documents describe OUR CORE VALUES We continuously strive to maintain our status in general how Norske Skog employees are Our core values of openness, honesty as the most attractive industry partner for expected to carry out activities and operations. and cooperation as well as our policies suppliers and customers. The Power of Attorney structure, as set out and guidelines build on the UN Universal by the Board of Directors to the CEO and Declaration of Human Rights and the 10 Our group has been a pioneer in setting a further delegated through the organisation, principles of UN Global Compact. Our values global standard for social responsibility and describes financial empowerment to individual openness, honesty and cooperation guide worker-management relations. We were positions. The Operating Model establishes our business activities and sustainability work the first international paper manufacturer the functional roles, responsibilities and across regions and are, together with our to sign an agreement with the International dependencies for organisational bodies and leadership principles, the fundament to ensure Federation of Chemical, Energy, Mine and top management positions in Norske Skog. ethical and competitive business conduct General Workers’ Unions (ICEM) and the within and on behalf of Norske Skog. Norwegian United Federation of Trade Unions Norske Skog’s business units have a high concerning employee rights on a global degree of independence and accountability. OUR BUSINESS GOALS AND basis. We were also an early adopter of the 10 Local managers are responsible and RESPONSIBILITY principles in the UN Global Compact. Through accountable for decisions and results within The group’s aim is to maximize shareholders’ our development programme for managers their unit. However, we apply a uniform value through operations within the and employees, the whole organisation is basis for our operations across countries publication paper industry and other related being familiarised with the values, ethical and cultures with regard to HESQ (health, industrial investments. Our attitude and standards and good business conduct on environment, safety and quality), people ability to be entrepreneurial, empower each which we build our business. development, financial reporting and legal other and behave consistently, define our compliance. In these areas, our conduct must results in changing and challenging markets. To meet the future sustainability expectations, be based on the same sustainable principles Through reliable, responsible and sustainable we conduct our business mandates and to promote the shared interests of Norske conduct, we will win the trust and confidence activities according to internally developed Skog and our stakeholders. of our stakeholders, both within and outside Steering Documents, Power of Attorney

ANNUAL REPORT 2015 19 NORSKE SKOG CORPORATE SOCIAL RESPONSIBILITY

BUSINESS CHALLENGES communities where we operate, investors compared to the industry average. The Norske Skog still faces some major challenges and owners, creditors and lenders, our key commercial organization in Norske Skog that must be resolved: declining demand and suppliers, and regulatory authorities. regularly performs customer surveys. The handling of the significant debt maturities. most important customers are followed up The fall in demand in recent years is due to In the materiality analysis, all 46 aspects of closely for each delivery. both to changes in macroeconomic conditions the GRI G4 guidelines are assessed on how (so-called cyclical reasons) and structural important they are for Norske Skog and how The picture on the next page depicts the changes in the industry, such as changing important they are for our key stakeholders. impact to both the stakeholders and the firm reading habits and the phasing out of soft The aspects cover the three main categories in a scale from low to high impact. Green demand or free distribution of newspapers. Economic, Environmental and Social. The area indicates the lowest level of reporting The fall in demand has led to major capacity Social category in turn covers the sub- necessity, whereas the red area depicts cuts in the industry and in Norske Skog. categories Labour Practices and Decent the necessity to increase reporting and However, the large gap between demand Work, Human rights, Society, and Product description of the issues in concern. and supply of paper has decreased, due to Responsibility. The materiality analysis high­ substantial capacity reductions. Increased lights areas of opportunity and risk that will COMPLIANCE capacity utilisation at our plants both improves be a fundamental to the group’s strategy and The risk of non-compliance may entail profitability and increases the opportunities integrated in daily operational activities. unethical conduct and legal and financial for price increases for our products. consequences, and may affect our reputation The three main categories Economic, negatively. Norske Skog emphasizes that SUSTAINABLE FUTURE Environmental and Social represent vital the line organisation has the responsibility Norske Skog is committed to contributing to but differentiated impacts on the group. The to comply with the Steering Documents. sustainable development. Customers, suppliers economic category reflects the fundamental Compliance must take place where the and the world at large can rely on us. We have a ramifications and market conditions that risk lies, primarily in the production and serious intention to produce and deliver products encompass the underlying business case for commercial operations and their associated in a sustainable manner in collaboration with Norske Skog’s operations. The environmental activities. customers, suppliers and local communities. issues have been a concern to a great number of stakeholders since the start-up Norske Skog has common standards Our business units are often cornerstones of Norske Skog in 1962. The aspects of the of conduct for all business units and all of local communities. These facilities work environmental category have undergone employees. This strengthens the quality of our closely at the local level with communities to a substantial quality improvement and the operations and promotes our predictability assist with other needs. Social responsibility group has achieved significant results in and credibility with customers, suppliers involves remaining sensitive to the needs of collaboration with stakeholders, governmental and other partners. In this manner, the local communities and aware of the impact authorities and employee initiatives. compliance work strengthens the company’s our operations have upon them. It means commercial position. Compliance is included maintaining an open dialogue and responding The outcome of the materiality review is shown a specific topic in the group’s risk reporting, with local measures. It also means showing in the picture on the next page. It shows that and is followed up centrally in order to ensure respect for, and building upon, local cultures economic performance, water, effluent and systematic follow-up locally. and traditions. waste, anti-corruption and occupational health and safety have the most vital impact for the The company has established a system where STAKEHOLDER AND MATERIALITY firm and our stakeholders. Further, the aspects a compliance officer for the group ensures that ANALYSIS and forced and compulsory labour have that the Steering Documents are up to date Norske Skog reported last year according to high impact to the stakeholders. For Norske and ensures that adequate internal control the GRI G4 sustainability reporting guidelines Skog, both raw materials, emissions and anti- systems exist globally and locally. Norske and we carried out an in depth stakeholder and competitive behavior will have serious impact Skog has for a number of years maintained materiality analysis. Corporate management on daily and long-term business performance, a whistle-blowing channel, where employees and key stakeholders have this year reviewed whereas aspects such as market presence, can report irregular conditions or matters he/ the result together with the input from our employment, security practices, marketing she finds difficult to confront with superiors. Enterprise Risk Management process. communications, customer privacy and compliance have the least impact for both Norske Skog considers it important that each The stakeholders affect Norske Skog’s stakeholders and the firm. employee is ensured confidential and serious decisions, activities and performance in many treatment of reported issues. Whistle blowing ways. In the stakeholder analysis part we have The impact on the firm and the stakeholders can be reported to: assessed to what extent different stakeholder has some geographic differences described groups are affected by our activities and/ in the respective chapter in the CSR-report. [email protected]. or to what extent they are affecting our Norske Skog has through the year been sustainability work and performance. In our nationally recognized for its labour practices opinion, our most important stakeholders are and decent work environment, and the our own management and employees, local outstanding health and safety performance

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STAKEHOLDER AND MATERIALITY ANALYSIS

14 1 4 16 15 5 6

24 9 7 22 26 19 20 12 13 2 10 25 11

27 3 30 23 18 21 17 28 8

31 35 36 32 34 29 33

39 38 40 37 LOW IMPACT ON STAKEHOLDERS HIGH 42 46 41 43 44 45

LOW IMPACT ON COMPANY HIGH

1. Economic Performance 17. Anti-competitive Behavior 33. Public Policy 2. Materials 18. Diversity and Equal Opportunity 34. Grievance Mechanisms for Impacts on Society 3. Water 19. Supplier Human Rights Assessment 35. Transport 4. Effluents and Waste 20. Compliance (local communities) 36. Assessment (human rights) 5. Occupational Health and Safety 21. Supplier Assessment for Impacts on Society 37. Market Presence 6. Anti-corruption 22. Procurement Practices 38. Overall (environmental investments and costs) 7. Product and Service Labeling 23. Products and Services (environment) 39. Employment 8. Energy 24. Indirect Economic Impacts 40. Labor/Management Relations 9. Biodiversity 25. Non-discrimination 41. Training and Education 10. Emissions 26. Local Communities 42. Investment (human rights) 11. Indigenous Rights 27. Supplier Environmental Assessment 43. Security Practices 12. Compliance (environment) 44. Marketing Communications 28. Environmental Grievance Mechanisms 13. Supplier Assessment for Labor Practices 45. Customer Privacy 29. Human Rights Grievance Mechanisms 14. Freedom of Association and Collective Bargaining 46. Compliance 30. Customer Health and Safety 15. Child Labor 31. Equal Remuneration for Women and Men 16. Forced or Compulsory Labor 32. Labor Practices Grievance Mechanisms

ANNUAL REPORT 2015 20 NORSKE SKOG ANNUAL REPORT 2015 21 NORSKE SKOG CORPORATE SOCIAL RESPONSIBILITY

HEALTH AND SAFETY contractor – is accountable for the company’s These Standards are applicable to all opera- Health and Safety has the highest priority for health, environmental and safety performance. tions, throughout Norske Skog, which have Norske Skog, twenty four hours a day, seven the potential to adversely affect the health days a week. Norske Skog’s health and safety The Process for Safety Excellence (PSE) is an and safety of people, including employees, programme at the business units, called “Take ongoing, structured process integrated into contractors, visitors and the public. Care 24 hours”, is adapted to our different the day-to-day business of the company. Its cultures, requirements and local requirements aim is to achieve the highest level of health, The objectives of these Standards are as where we operate, but shall always meet safety and environmental performance. It follows: the requirements of our health and safety applies to every organisation within Norske • To define the minimum requirements for the standards for international activities. Our goal Skog and every activity carried out by its Health and Safety Systems at all levels of is a safe working environment where health employees and contractors. PSE focuses operation, and safety receive equal attention in planning on three management components, people, • To provide a framework for Health and Safety and in the daily operations of the company. assets and systems. Each component Systems measurement, includes ten elements (standards), which • To encourage a consistent approach to Health All employees in Norske Skog must take provide the framework for health, safety and and Safety Systems, re­ sponsibility­­­ for improving the working loss prevention efforts. • To assist with the identification and sharing ­environment for themselves, their colleagues, of current best practice between Mills/ visitors and sub-contractors. Internal coop- Our identified nine key elements (standards) Units, eration, involving sharing of experience and are: • To provide the Mills/Units the opportunity best practice, enables us to adapt preventive • Leadership commitment to assess themselves against the Standards ­activities to all our Business Units. Through • Employee participation and safe behavior and continually improve their systems, the activities in Take Care 24 hours, the group • Training and competence • To enable inter-Mill/Unit reviews to provide an stimulates and encourages the same attitudes • Hazard and risk management external perspective and recommendations and behaviour at work and during our spare • Management systems, reviews, audits, for improvement. time, for our own employees and their families. inspections At Norske Skog, we believe that issues relating • Performance measurement and reporting Where Norske Skog has no operational to health, safety and the environment must be • Emergency prep. and response responsibility, but has an equity stake, or where fully integrated into all our activities at every • Health significant Norske Skog assets are involved in level and not managed as a separate and dis- • Contractors a subcontracting site, arrangements shall be tinct function. That is why everyone working • PPE, Personal Protective Equipment made to ensure that comparable standards in Norske Skog – whether an employee or of safety are maintained. We strongly believe

DOCUMENT STRUCTURE NORSKE SKOG

APPROVED B Y COMMON AND GOVERNING THE BOARD BINDING DOCUMENTS THROUGHOUT NORSKE SKOG

HEALTH FINANCIAL BUSINESS MANGAMENT OTHER SAFETY PEOPLE ENVIRONMENT CORPORATE PRACTICES AND STANDARDS SECURITY REPORTING

PROCEDURES BINDING THROUGHOUT

AND BEST NORSKE SKOG BUT LOCAL PRACTICES, ETC ADJUSTMENTS OCCUR

APPLICATIONS FOR COMPLIANCE REPORTING SYSTEMS REVISIONS

ANNUAL REPORT 2015 22 NORSKE SKOG ANNUAL REPORT 2015 23 NORSKE SKOG CORPORATE SOCIAL RESPONSIBILITY

SUBJECT TARGET 2015 RESULT 2015 COMMENTS

Health & Safety H1 0 1 Same as in 2015 H2 < 7.43 9.7 Improved from 2015 Absence due to illness < 3.6 3.8 Same as in 2015

in Behavioral Based Safety Observations and The IA Agreement and Norske Skog’s company and the employees, with as many Audits. These are observations of people’s operational objective is to develop targets for different groups as possible from within the workplace behaviour that enables positive our work to prevent sickness and absence organisation represented. If the organisation feedback for safe behavior, recognition and and to establish verifiable activity targets has Occupational Health Services, it should correction of unsafe acts. to achieve a professional attitude to both also be represented on the committee. preventive and reactive health care in the Occupational Health Services should be Norske Skog had an absence rate due to company. an advisory and independent body, and sickness of 3.8 per cent in 2015, an increase represent the interests of both the employer compared to last year. We achieved an H1 The IA Agreement has been renewed and the employees. level, lost time injuries per million working until 2018 and continues the operational hours, of 1.0 compared to 0.97 in 2014. objectives for the cooperation: Norske Skog has used Synergi Life for many • Reduction of sick leave years. Synergi Life is an operational risk Our Norwegian business units have signed • Lower employee dropout rates and increase management tool from DNV GL. We have a a letter of intent regarding a more inclusive employment of people with functional monthly Management Focus Report (MFR), workplace (IA Agreement) (with supplementary impairments which is distributed to all business units for agreements). Although the IA Agreement is a • Increase the retirement age internal distribution and includes type of injury distinctly Norwegian concept, it is fair to say and rates of injury, occupational disease rate, that our other Business Units operate under Our work with the IA Agreement has been lost work days accidents, absenteeism, total similar conditions with the aim of reducing extended to apply to all of Norske Skog’s number of work-related personal injuries and sickness absence rates and increasing focus local business units and is intended to be an fatalities, by region, gender and business unit. on job attendance for all employees. The IA integral part of our targeted HSE work. All business units report this information Agreement builds on a tripartite cooperation in Synergi, which is also a source for the between the national authorities, the trade All our business units also have local HSE transfer of experience and sharing of best unions and the company. This cooperation forums where the company and trade unions practices. Reports from Synergi are analysed ensures the participation of all parties involved. have regular meetings to address local HSE and form the basis for our internal HSE audits issues. At these meetings, there should be conducted by our HSE&Q staff at the group an equal number of representatives from the level.

ANNUAL REPORT 2015 22 NORSKE SKOG ANNUAL REPORT 2015 23 NORSKE SKOG CORPORATE SOCIAL RESPONSIBILITY

Norske Skog and local communities

Our activities affect employees, suppliers, The list shows that Norske Skog is important inform about paper production, engagement customers and partners in many countries, for many parts of society. Down-stream the in nature protection projects, support to local regions, towns and villages. Our decisions and value chain, our paper is a vital source of museums, involvement in sports and cultural activities, production and sales have an impact income for newspapers and magazines, with initiatives, support to charitable organizations, on a multitude of individuals, groups and all their journalists and other contributors, and as well as integration of immigrants and companies, both financially and otherwise. We a natural source of ideas for business people disabled persons through vocational training. recognize our impact and consider this when and other readers throughout the world. This We encourage employees to take part in local making decisions. network of businesses, communities and community work as many of them do. Most individuals generates significant value in the business units cooperate with educational Sales revenue from production in Norske public and private sectors, as well as stability institutions at different levels, such as visits Skog in 2015 traced back to key stakeholders: and other benefits to all affected individuals. To from schools, colleges, high schools and • Purchase of goods and services: improve and maintain our role in society and as universities, scholarships for students, trainees NOK 9.0 billion an important employer in local communities, and apprentices working at our mills or engaged • Capital expenditures: NOK 0.2 billion our business units are encouraged to be in project work. • Salaries: NOK 1.5 billion active and open in their communication and • Taxes and public fees: NOK 0.4 billion contact with local stakeholders. Examples • Financial costs and working capital: include reports to neighbors and other local NOK 1.3 billion stakeholders, open days for the public to

Key figures – employees

AVERAGE AVERAGE AGE SENIORITY OF NUMBER OF EMPLOYEES (FTE) OF ORDINARY ORDINARY BUSINESS UNIT END OF DECEMBER 2015 EMPLOYEES EMPLOYEES % FEMALE

Other Ordinary employees Total End 2015 End 2015 End 2015

Norske Skog Albury 174 10 184 47.9 17.4 8.0 Norske Skog Boyer 259 39 298 47.6 21.3 5.3 Norske Skog Tasman (NZ) 161 22 183 49.0 20.5 11.0 Australia non mills 20 3 23 47.7 13.9 34.8 Australasia total 614 74 688 48.1 19.7 8.5

Norske Skog Saugbrugs 464 60 524 45.0 21.0 8.0 Norske Skog 346 27 373 48.0 22.0 5.2 Corporate headquarter 38 4 42 48.1 10.2 26.3 total 848 91 939 46.4 20.9 7.7

Norske Skog Bruck 399 48 447 44.3 21.0 8.8 Norske Skog Papier Rcycling 26 - 26 45.8 15.4 11.5 Norske Skog Golbey 365 27 392 47.7 19.1 14.8 Sales offices in Europe 65 - 65 45.1 11.3 62.9 Europe total 855 75 930 45.9 19.3 15.6

Norske Skog group total 2 317 240 2 557 46.6 20.0 10.8

ANNUAL REPORT 2015 24 NORSKE SKOG ANNUAL REPORT 2015 24 NORSKE SKOG CORPORATE SOCIAL RESPONSIBILITY

Paper production

Norske Skog has the capacity to produce 2.7 The highly simplified diagram below illustrates paper are more easily separated than those million tonnes of publication paper each year, the paper production process. In reality, the within wood. In the , the consisting of 1.8 million tonnes of paper machines differ quite significantly. Main passes along a web, firstly through a wet and 0.9 million tonnes of . input materials are wood and/or recovered section, then a press section and finally paper, as well as electricity and chemicals. through a drying section. The paper is finally The figures in this report contain the 100% Wood and recovered fibres are separated rolled up on reels and then cut to the sizes owned mills at the end of December 2015 and during pulp production in two different ordered by the customer. During this process, figures compared to the same 100% owned processes. Pulp production based on recovered more than 90% of the wood fibres in trees are mills in 2014. paper consumes less energy than production converted to paper products. from fresh fibre because the fibres in recovered

RAW MATERIALS

RECOVERED PAPER

CHEMICALS WATER ELECTRICITY

ROUNDWOOD PULP

HEAT

RAW MATERIALS SAW MILL CHIPS

Production capacity TONNES PER BUSINESS UNIT 31.12.2015

NEWSPRINT SC LWC TOTAL CAPACITY (INCLUDING IMPROVED NP) (MAGAZINE PAPER) (MAGAZINE PAPER) BUSINESS UNIT

Norske Skog Skogn 520 000 0 0 520 000 0 485 000 0 485 000 Norske Skog Golbey 595 000 0 0 595 000 Norske Skog Bruck 125 000 0 265 000 390 000 Total Europe 1 240 000 485 000 265 000 1 990 000

Norske Skog Tasman (NZ) 150 000 0 0 150 000 Norske Skog Albury 275 000 0 0 275 000 Norske Skog Boyer 150 000 0 130 000 280 000 Total Australasia 575 000 0 130 000 705 000

Total Norske Skog group 1 815 000 485 000 395 000 2 695 000

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Evaluation of our environmental performance

It is important for us to identify our environ- For detailed information, see our web-page energy and for energy produced on-site. mental challenges, continuously improve our http://www.norskeskog.com/Products/News­ Purchased energy is mainly electrical energy environmental standards throughout the value print.aspx. And for general info on “Paper used for fibre processing and to operate chain and report openly on our performance. Profile” www. paperprofile.com. machinery. Energy produced on-site is mainly used to dry paper on the production line. In Environmental topics that the pulp and paper In a world where increasing demands are many cases, we use energy several times, industry focus on include fibre supply, energy being placed upon finite natural resources, through heat recovery systems. Reducing sources and use, greenhouse gas emissions, and the ecosystems which supply them greenhouse gas emissions mainly involves the efficiency of mill production processes, are more and more strained, it is important reducing the consumption of energy and/or and the fate of our products at the end of that our production processes are efficient changing the source of the energy we use. the life cycle. The importance of these topics and continuously improving. In addition to varies at local, regional and national levels. environmental management systems, Norske The forest-based industry has a unique Norske Skog uses a combination of fresh Skog has developed an internal environmental environmental position. The raw material is fibres and recovered paper as raw material, index to set targets and review our work renewable, the products are highly recyclable depending on local conditions. Both sources to improve our resource use efficiency and and both the raw materials and products are necessary to exploit the global fibre reduce our emissions on a continuous basis. store carbon. Sustainably managed forests resources in a sustainable manner. The goal is to use technology that meets the will absorb the carbon dioxide from the requirements of what the EU defines as the combustion of forest-based material. At the For Norske Skog it is important that our best available technology. The EU Commission end of their life cycle, the products can be suppliers are also aware of their impact on finalized the BAT conclusions under the used to produce bio-energy. their society and employees. Existing and new Industrial Emissions Directive 2010/75EU in suppliers are, through our general purchase September 2014. Norske Skog has since 2015 Norske Skog is committed to sustainable conditions, obliged to follow the laws and used revised BAT-levels in the environmental development of the environment and natural jurisdictions of their operating country, both index. We have also implemented a water resources including taking care of different for labour practices and human rights. profile tool to compare, optimise, and reduce aspects related to bio-diversity. This is our water consumption. The EU Water attained through close cooperation with local All our mills have traceability certificates for Framework Directive establishes a legal authorities and managing our operations the purchase of timber to ensure that they framework to protect and restore clean water within the framework of our operational come from sustainably managed forests. We across Europe and ensure its long-term, permits. do not source raw materials from controversial sustainable use. Our European operations areas. Our suppliers comply with local rules adhere to this directive and have established Norske Skog does not have any IUCN Red and regulations and, where possible, we source water management plans as required. List species and national conservation list wood locally to minimise costs and transport species with habitats in areas affected by our emissions. Our goal is to have a 100% certified Climate change is the environmental issue operations. wood supply. In Europe, the growth of forests is receiving the greatest attention today. In increasing in all countries where we purchase 2007, Norske Skog established a greenhouse At the in New Zealand there is wood. In Australasia, we source only fresh fibre gas reduction target of 25% in total emissions an area of wetland (6 ha) that has a Ramsar from plantations. by 2020. Greenhouse gas emissions differ Record from February 2001. This is a previous considerably between our mills. The main clarifier solids landfill area located adjacent to We use “Paper Profile” as our standard for reason for this lies in the different energy treatment ponds several km from the mill site disclosing our products’ environmental profile. sources used both for externally purchased that has been restored to wetland.

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Sustainable raw materials

Forestry and use of forest products play an the certification system used in the forests or To make the recovered paper value chain important role in the combat of climate change. plantations. Roundwood accounted for 72% sustainable, fresh fibre from forests, plantations For the forest value chain to be a part of the of our consumption of fresh fibres in 2015. or sawmill by-products must be added. climate change solution, the forests must Sawmill chips, a byproduct from the sawmill be managed sustainably. Norske Skog has industry, accounted for the remaining 28%. On a tonnage basis, our largest consumption several systems and processes to make sure The roundwood component of our fresh fibre of recovered paper takes place in continental that all wood used in Norske Skog’s products came from both forests (61%) and plantations Europe. The fibre source used at the comes from sustainably managed forests. All (39%). In all countries where Norske Skog different Norske Skog mills depends upon Norske Skog mills utilising fresh fibre have sources wood, forest areas are increasing. availability and economic considerations. The third-party verified Chain of Custody (CoC) minimization of transport distances and costs certification systems in place. The average The main global forest challenges are related is an increasingly important economic and share of certified fresh fibre in 2015 was to deforestation in developing countries and environmental consideration. 86%, an improvement of 3 percentage points forest biodiversity degradation through the compared to 2014. logging of high-conservation areas in many FORESTS AND CLIMATE CHANGE parts of the world. In order to meet these The main global challenges related to FRESH FIBRE challenges, we need to ensure that more of forest management and climate change In 2015, Norske Skog consumed 1.37 million the world’s forest areas are managed on a are deforestation in developing countries. tonnes of fresh fibre. Our goal is to have sustainable basis. Forest certification is an The use of forests, forest products and bio- 100% certified fibre in our products. Norske important tool in this context. energy can, however, be a sound climate Skog is not a significant forest owner. A very change strategy, depending on where and small proportion of the wood we use comes how the forest biomass is harvested. It is from our own forests in Australia. The ability CERTIFICATION OF FRESH FIBRE important to distinguish between forest types to increase the share of certified wood THROUGH THE VALUE CHAIN and the existing use of the forest. In forest therefore depends largely on decisions taken Forest owners have systems for sustainable areas where biomass is accumulated (annual by forest owners. Norske Skog encourages its forest management (SFM). Forest product growth exceeds annual harvest), the use of suppliers to adopt forest certification. These traders rely on chain of custody (CoC) forest resources for renewable products and certificates are the most credible way to certification. Traceability is important to energy will be possible while still keeping demonstrate our responsible procurement of ensure responsible purchasing, and to halt the forest stock stable. Forestland soil will wood fibre. The most environmentally friendly illegal logging. CoC tools make it possible to release carbon dioxide after harvesting, purchases are delivered by local, certified control and report the share of certified raw but this is partly compensated for through forests. Today, only a relatively small portion materials through the value chain from forest increased radiation reflection from the same of the global forest area is certified. The two to finished product. CoC systems also require area (the Albedo effect). As long as only the main global certification systems are the responsible purchasing of non-certified wood. net forest growth is harvested, the carbon Forest Stewardship Council (FSC), and the stock will remain stable and bio-energy and Programme for the Endorsement of Forest RECYCLED FIBRE forest products can substitute more carbon Certification (PEFC). Norske Skog regards Recovered paper is an important fibre source intensive products and fuels, thereby resulting the two systems as equally valuable tools for Norske Skog. In 2015, recycled fibre in a positive climate effect. to demonstrate responsible management made up 33% of the raw materials used in and stewardship of the forest resources our products. Mills utilising recovered paper There is a large potential in using forest that our company and customers rely upon. consumed in total 0.844 million tonnes in 2015. resources more efficiently. Currently, forest Both systems are based on inspections and ­residues - i.e. waste from the harvesting auditing by independent third parties. We Some customers want paper based entirely oper­ation - are not utilised fully. As long as recognise our responsibility as the purchaser on recovered paper. However, a value the ­removal of forest residues does not lead of wood through our global procurement rules. chain based only on recovered paper is not to loss of nutrients in the forest soil, these These state that all wood used in our paper sustainable. About one third of the paper is residues can be used for bio-energy ­purposes shall originate from sustainably managed lost in the recovered paper cycle. Factors such and to substitute fossil fuels. By-products forests. Such forests are defined as: as consumer awareness, waste disposal and from the forest value chain, such as sawmill • Certified forests – we recognise the systems collection systems and alternative uses for used chips, should be used for making products from FSC and PEFC. paper influence its collection rate. The structure before being used as bio-energy at the end • Forests declared to be managed according and strength of the fibres of paper degrade with of their life cycle. to national laws and regulations. successive use. Recovered paper fibres that are no longer suitable for papermaking are rejected All Norske Skog business units that buy fresh in our mill pulping processes and are generally fibre have traceability certificates. The choice used as a source of renewable energy. of the mill certification system depends on

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CONSUMPTION OF RAW MATERIAL CERTIFIED PROPORTION OF FRESH FIBRE (%) (Roundwood and chips)

53% Wood (roundwood 100 and sawmill chips)

3% 80 Purchased pulp 32% Recovered paper 60 12% Inorganic fillers 40

20 RECOVERED PAPER IN NEWSPRINT PRODUCTION 0 2009 2010 2011 2012 2013 2014 2015 Norske Skog Albury, Australia 33 % Norske Skog Bruck, Austria 85 % Norske Skog Golbey, France 59 % Norske Skog Skogn, Norway 24 %

CERTIFIED FOREST RECOVERED PAPER

CERTIFIED SAW MILL CERTIFIED PAPER MILL BY-PRODUCTS

CERTIFIED WOOD PRODUCTS CERTIFIED PAPER

ANNUAL REPORT 2015 28 NORSKE SKOG ANNUAL REPORT 2015 29 NORSKE SKOG CORPORATE SOCIAL RESPONSIBILITY

NORSKE SKOG ENERGY CONSUMPTION (TOTAL AND BY REGION) Total 9121 GWh; 3.86 MWh/tonne of paper

NORSKE SKOG 53% EUROPE 52% AUSTRALASIA 55% Purchased Purchased Purchased electricity electricity electricity 16% 12% 23% Fossil Fossil Fossil 15% 21% 3% Bio Bio Bio 11% 14% 6% Recovered Recovered Recovered from TMP from TMP from TMP 5% 1% 13% Other Other Other

CONSUMPTION OF FOSSIL FUEL (KWh/TONNE OF PAPER)

Energy 1000 consumption 800

600 Norske Skog has comprehensive programmes in place to continuously reduce energy con- 400 sumption and to make it more ­environmentally friendly. We are already a large producer of 200 Coal bio-energy. Gas

Oil The production of paper is an energy- 0 2010 2011 2012 2013 2014 2015 intensive process. Energy is consumed mainly for two purposes: • To separate, process and transport fibre and water (electrical energy) • To provide process heat and to dry the (steam) purchased from third parties (5%). In include recovered heat from the thermo paper (thermal energy) 2015, 93% of electricity was purchased from mechanical pulping or effluent treatment the grid. A number of mills can generate a processes, combustion of mill residues, The major use of electrical energy in mills proportion of the electricity requirement purchased bio-fuel, oil, gas or coal. In some which process fresh fibre is the process which themselves, based on bio-fuel, natural gas or cases, the thermal energy is supplied by third mechanically converts wood chips into fibres. geothermal sources. Norske Skog is a large parties located externally to the mill or in the This process is called the thermo mechanical producer of bioenergy. Organic waste from form of geothermal energy. pulping (TMP) process. Paper production the production processes is used as bio-fuel based on recovered paper consumes less where possible. Some mills also purchase bio- The share of purchased electricity makes energy because the fibres from recovered fuel from external suppliers. up about half of the energy consumption paper are more easily separated than those in Europe and 55% in Australasia. There within wood. The group’s average energy Natural gas is the most commonly used fossil is, however, significant variation in thermal consumption per tonne of paper produced fuel, with a share of 63%, same as in 2014. Coal energy sources used between different in 2015 was a little higher than in 2014. Three constitutes 36% of fossil fuel consumption, geographic regions. The Australasian mills mills had lower or similar energy consumption down 0.1 percentage points from 2014. Oil mainly use fossil and geothermal energy. In per tonne of paper in 2015 compared to 2014. makes up 0.4%, which is up 0.1 percentage Europe, the mills use mainly bio-fuel, fossil fuel points compared to 2014. and heat recovered from the production of 53% of the total energy consumed by the thermo-mechanical pulp from fresh fibre. group is electricity. In 2015, the remaining Thermal energy is used for the heating and energy sources were fossil fuel (16%), bio-fuel drying of paper. In contrast with electrical (15%), heat recovery from TMP (11%) and other energy, thermal energy is mostly generated sources such as geothermal energy and heat within the mill. The sources of this energy

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Norske Skog’s greenhouse gas emissions

As a large industry player, Norske Skog Confederation of the European Paper Industries’ Based on the above scope and emission recognises its responsibility to reduce green­ (CEPI) tool developed in 2007. The CEPI carbon estimation processes, Norske Skog operations house gas emissions. In 2007, we established footprint is related to the products we make emitted 1.34 million tonnes of fossil fuel

our goal of achieving 25% lower greenhouse and covers the whole value chain, whilst the derived CO2-equivalents (including CO2, CH4

gas emissions within 2020, compared with Norske Skog reduction target is focused on and N2O) in 2015. The total emissions from our emissions in 2006. As of 2015, our emissions the paper production process and covers mills were reduced by 0.4% in 2015 compared were 26% lower than in 2006. Scopes 1 and 2 as shown in the figure. Both the to emissions in 2014. The main reason is Norske Skog emission reduction target and the lower paper production. The total emission Norske Skog has integrated reduction of carbon footprint are based on greenhouse gas reduction achieved to date, compared to our green­house gas emissions as a key part of our emission data from our 7 wholly-owned mills. base year 2006 is 26%. business strategy. The goal is to reduce energy consumption, change the sources of energy OUR REDUCTION TARGET The greenhouse gas emissions arising from and to optimise the use of process chemicals Norske Skog’s target for reducing greenhouse the combustion of bio-fuels are deemed to be and transport. gas emissions covers direct emissions (referred ‘carbon neutral’ as only the net forest growth to as ‘Scope 1’ in the Greenhouse Gas Protocol) is harvested from sustainably managed forests In the work to reduce greenhouse gas from the combustion of fossil fuels in boilers, and plantations, leaving the carbon stock stable. emissions, we report on a greenhouse gas re­ combined heat and power plants, infrared Direct emissions of biologically sequestered

duction target and our carbon footprint. The drying equipment, mobile machinery and CO2 from the combustion of organic residues reduction target is based on the WRI/WBCSD other mill site based equipment, and indirect such as wood and bark are estimated to be Greenhouse Gas Protocol, the Pulp and Paper emissions (‘Scope 2’) from the purchase of approximately 0.530 million tonnes. Workbook. The carbon footprint is built on the electricity and heat.

NORSKE SKOG GREENHOUSE GAS EMISSIONS CO2 1 000 CH4 N2O CO2-equiv 1 000

Direct (Scope 1) Emissions Tonnes Tonnes Tonnes Tonnes Direct emissions from stationary fuel combustion 468 21 3 469 Direct emissions from transportation and mobile sources 5 0 1 6 Total direct emissions 473 21 4 475

Indirect (Scope 2) Emissions Indirect emissions from steam and power imports 865 0 0 865

Total Fossil Fuel Based Emissions (Direct & Indirect) Direct & Indirect 1 339 21 4 1 340

CO2 emissions from combustion of biomass * 530 0 0 0

* Wood and bark residues only

CO2 CH4 N2O SCOPE 2 SCOPE 1 SCOPE 3 INDIRECT EMISSIONS DIRECT EMISSIONS INDIRECT EMISSIONS

DELIVERED WOOD AND RECOVERD PAPER

COMBUSTION OF FOSSIL FUEL IN OUR MILLS PRODUCTION OF FUEL AND OTHER RAW MATERIALS

PURCHASED ELECTRICITY AND HEAT INTERNAL TRANSPORT TRANSPORT OF RAW MATERIALS OUR REDUCTION TARGET

OUR CARBON FOOTPRINT EMISSIONS ASSOCIATED WITH TRANSPORT OF PAPER PRODUCTS ARE CALCULATED FOR EACH CUSTOMER

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Our carbon footprint

Based on the CEPI carbon footprint tool, our is estimated to be contained in the product. As The carbon footprint varies considerably carbon footprint covers emissions from the seen in the figure, the largest contributor to between the mills and regions, depending on following elements of our value chain: our carbon footprint is purchased electricity the source of electricity and the type of fuel and heat, which make up 52% of the emissions used to produce process heat. The emissions • Pulp and paper production per tonne of paper. Pulp and paper production per tonne of paper production ranged from

• Forest and recycling operations makes up 29%, forest and recycling operations 296 kg CO2-equivalents/tonne of paper in

• Producing other raw materials and fuels 3%, production of other raw materials 12% and Europe to 1 762 kg CO2-equivalents/tonne in • Purchased electricity and heat transport to the mills 4% of the total emissions Australasia. • Transport – excluding transport to final per tonne of paper. customer which is calculated on a case by case basis • Carbon stored in forest products (biogenic carbon) is reported separately. NORSKE SKOG CARBON FOOTPRINT

KG CO2 /TONNE OF PAPER The average global carbon footprint per tonne of paper produced by the Norske Skog mills 500 in 2015 was 701 kg CO2 equivalents/tonne paper. This represents an increase of 2.5% 400 compared to 2014. 1 410 kg/tonne biogenic CO2

300

Pulp and paper production 200 Forest and recycling operations Producing other raw materials 100 and fuels Purchased electricity and heat Transport excluding transport 0 to final customer

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Continuously improving our production processes

Norske Skog’s environmental policy commits us Mill performance is measured in the index The table below shows the targets for 2015 to continuous improvement in the environmental against a standard which should be attainable and 2016 for the parameters included in the performance of our business units. with the use of Best Available Technology E-index, as well as the results achieved during (BAT) or best practice, as described in the the last four years. The EU Commission The wish to measure this continuous improve­ European Union IPPC reference document. An finalized the BAT conclusions under the ment in our mills and as a company over the index value of 1.0 or less indicates that the mill Industrial Emissions Directive 2010/75EU short and long term led us to implement an has an environmental standard which satisfies in September 2014. Norske Skog has environment index (E-index) several years ago. the ambitious levels which can be attained since 2015 used revised BAT-levels in the The E-index forms part of the regular reporting with BAT or best practice. The BAT level of environmental index. These figures represent by the mills to corporate management and performance is mill specific and is a function productionweighted averages for all mills. In the board. In addition to being a performance of age, technology, investment history and 2015, four mills reached their E-index targets. reporting tool it allows us to: operational performance. Increased amount of COD, suspended solids • establish and review mill specific targets The environmental index for the whole group and waste to landfill are the main reason for • identify areas for additional investment is calculated as an average of each mill’s index not achieving the 2015 target. The increase • demonstrate the environmental improve­ ­ score weighted by production volumes. is linked to periods with process stability ments following process changes or challenges in the water effluent plants. investments

KEY FIGURES ENVIRONMENTAL Achieved Achieved Achieved Achieved Target Target 2012 2013 2014 2015 2015 2016 FOR NORSKE SKOG’S WHOLLY-OWNED MILLS INDEX

Consumption of raw materials COD kg/tonne 3.7 3.9 4.3 4.2 3.6 3.6 Roundwood m3 2 452 000 Suspended solids Sawmill chips m3 934 000 kg/tonne 0.43 0.35 0.54 0.51 0.45 0.41 Recovered paper tonnes 844 000 Nitrogen oxides Purchased pulp tonnes 70 000 g/GJ 89 95 95 90 97 97 Inorganic fillers tonnes 320 000 Waste to landfill kg/tonne 16.8 14.8 14.4 19.4 16.8 16.8 Energy Total energy Electricity GWh 5 138 consumption GJ/tonne 12.5 12.2 12.3 12.3 12.3 12.2 Heat GWh 4 000 Environmental index 1.03 0.96 1.06 1.13 1.04 1.02

Discharges to water Discharged process water mill m3 43 Organic material (COD) tonnes 9 886 Suspended Solid (SS) tonnes 1 212 Phosphorus (Tot-P) tonnes 35

Emission to air

CO2-equivalents (direct) tonnes 475 000

SO2 tonnes 265

NOX tonnes 780

Production waste Sludge (dry) tonnes 258 000 Bark tonnes 104 000 Other tonnes 18 000

Products Newsprint grades tonnes 1 574 000 Magazine paper tonnes 791 000 Total tonnes 2 365 000

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Water footprint: the total water consumption in the paper value chain

Mankind’s increasing use of freshwater resources It is important to realise that the water footprint practices are within the boundaries of what a places a strain on global water resources. Policies figure itself does not reveal much about water catchment can sustainably support. and practices for sustainable use of this natural the actual impact of operations at the local resource are a prerequisite for a sustainable watershed level. A low water footprint could be Norske Skog will implement water footprint global development. To help assess the impact of less sustainable than a high water footprint. For reporting when an international standard has different products on water resources, different instance, the water footprint for paper depends been agreed upon. In the meantime, we will water footprint tools are under development. mainly on the time it takes for trees to grow. report our water profile. Water scarcity is not Water footprint accounting includes monitoring Trees use a lot of water to grow and paper will an issue in any of the forest or plantation areas of both direct and indirect use of freshwater, therefore have a large water footprint. Boreal supplying Norske Skog or in any area where measured over the full supply chain. For paper forests are characterised by a humid climate, our mills are located. 98% of the water entering products, this includes water evaporated during where precipitation is higher than evaporation. Norske Skog mills is returned to rivers and lakes tree growth (green water), water consumed Forests sustain and slow down the surface after treatment. during the production phase (blue water) and runoff, preventing flooding, erosion and leaching the water required to assimilate the discharged of nutrients. A sustainability assessment using pollutants based on existing ambient water many indicators is needed to gain understanding quality standards (grey water). of whether mill operation and forest management

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The Norske Skog water profile

The figure presents the 2015 water profile for WATER SUPPLY WATER USE Norske Skog. The profile has been developed The majority of fresh water used by Norske The majority of water which enters our mills by examining the major inputs and outputs of Skog’s mills (88%) originates from surface water (54%) is used to cool machinery and equipment water in the manufacturing process. The data sources. A further 10% is supplied from ground performing electricity or steam generation and/ presented is a combination of all eight wholly water supplies and a relatively small amount, or pulp and paper manufacturing activities. The owned mills and represents a ‘group average’. 0.1%, comes from municipal water supplies. rest of the water is used in the papermaking processes (“process” water). The total water use per tonne of paper in 2015 Water also enters the manufacturing process decreased by 5% compared to 2014. 98% of through the raw materials which are purchased. Most mill effluents are discharged to river and the water entering our mills is returned to rivers Fibre based raw materials (wood, wood chips, lake systems after treatment. No effluent is and lakes after treatment. Approximately 2% recycled fibre and purchased pulp) constitute discharged to groundwater aquifers. is returned to the atmosphere as water vapour, approximately 1.5% of water input. Non-fibre raw retained in the products or used for irrigation of materials (such as chemicals and steam) make forest plantations or agricultural areas. up the balance.

GLOBAL AVERAGE WATER USE M3/TONNE OF PAPER

GROUND WATER 4.2 SURFACE WATER MUNICIPAL WATER 37.9 0.03

RECYCLED PAPER WATER IN AND PURCHASED PULP WOOD 0.03 0.6

CHEMICALS OTHER WATER WATER IN INPUTS PRODUCTS 0.04 0.09

PRODUCTION OTHER LOSSES 0.4

TO SURFACE WATER FROM EVAPORATION EFFLUENT TREATMENT 0.9 18.2

TO SURFACE WATER FROM COOLING 23.2

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Emissions to air and discharge to water

Manufacturing pulp and paper requires raw by the group in 2015 was 379 500 dry tonnes. number of treatment stages. These treatments materials and energy. Norske Skog’s environ­ This is a reduction of about 30 000 tonnes remove solid particles as well as dissolved mental policy requires us to make efficient use compared to 2014. In 2015, 142 000 tonnes of ash organic material, making the water suitable for of these resources and to work continuously to were generated from combustion, a decrease of safe return to the natural environment. In 2015, reduce our emissions and discharges. 1 000 tonnes compared to 2014. water discharge from the production process per tonne of paper was down 1% compared to 2014. SOLID RESIDUES AND EMISSIONS TO AIR The residues from the production processes The discharges of dissolved organic material Emissions to air occur primarily from energy are reused or disposed of in a number of ways and suspended matters per tonne of paper was generation processes, and the majority of as shown in the figure. Where possible, process down by 3% and 5% compared to 2014. The solid wastes occur from the processing of fibre residues are used to generate energy for the pulp discharge of nitrogen and phosphorus increased inputs (wood or recovered paper) and from and paper manufacturing process. In 2015, 78% by 9% and 1% compared to 2014. The difference the treatment of effluent (fibre and biological of the waste was used as bio-fuel, on the same in results from one year to the next is the result of solids). Most of our mills have their own boilers level as in 2014. Other residues, for example ash, many factors, including process improvements, or incinerators for producing thermal energy are used in concrete or brick making, or in road utilization of equipment, production issues and from these solid residues. Fossil fuels in the construction. Agricultural re-use is also an option product changes. form of natural gas, oil and coal may also be for some ash and organic materials. Part of the used. The main emissions associated with these production residues are deposited in landfills. During 2015, the mills Norske Skog Saugbrugs, activities include carbon dioxide, particulates, Many of our mills participate in projects to find Norske Skog Albury and Norske Skog Tasman sulphur dioxide and nitrogen oxides. A number alternative or additional methods of reusing the reported to the local authorities that they had of technologies are used to reduce and control by-products from the production processes. incidents resulting in exceeding permit limits these discharges. Ash residues result from Hazardous waste amounted to 314 tonnes linked to the quality of discharged water. None combustion processes involving solid fuels. in 2015, down 30% from last year. Hazardous of these overruns resulted in sanctions from the waste is disposed through authorized collection authorities. In 2015, the emission of sulphur dioxide per systems in accordance with national regulations. tonne of paper was up by 33% compared to 2014. Norske Skog does not use bleaching chemicals The emissions of NOx per tonne of paper were WATER DISCHARGES containing chlorine in any mills. Chlorinated down by 6% compared to last year. Water is generally used and recovered multiple organic compounds are therefore not created times through the pulp and papermaking and AOX is not included in our emission The total quantity of production waste generated processes before finally being discharged to a reporting.

PRODUCTION WASTE DISPOSAL OF MILL PRODUCTION WASTE Total 379 500 tonnes

68% 100 % Sludge

27% 80 % Bark 5% Other 60 %

40 % Sale/Delivered Norske Skog total Skog Norske Europa Australasia Agriculture 20 % Cement Industry Landfill 0 % Energy Recovery

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TRENDS IN DISCHARGES OF TRENDS IN DISCHARGES OF ORGANIC SUBSTANCES (COD) WASTEWATER per tonne of paper per tonne of paper

35 12

30 10

25 8

20 6 15 4 Europe 10 Australasia 2 South America 5 Asia 0 0 Total 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

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Mill figures

Bruck Golbey Saugbrugs Skogn Albury Boyer Tasman

PRODUCTION Paper 1 000 tonnes 374 509 413 416 261 249 144

CONSUMPTION Roundwood 1 000 m3 215 191 540 553 415 500 37 Sawmill chips 1 000 m3 0 304 154 174 10 0 291 Recovered paper 1 000 tonnes 197 428 0 123 96 0 0 Purchased pulp 1 000 tonnes 29 0 30 0 0 7 0 Pigments and fillers 1 000 tonnes 101 18 114 32 0 51 5 Electric power MWh/tonne 1.17 1.65 2.50 2.44 2.49 2.79 3.28 GWh 438 838 1 031 1 014 650 697 472 Thermal energy1) GJ/tonne 4.14 5.71 6.10 5.76 6.77 7.78 8.44 TJ 1 548 2 905 2 517 2 395 1 765 1 940 1 215

DISCHARGE TO WATER Treated process water m3/tonne 13.2 10.6 18.1 14.9 10.6 32.8 49.9 1000 m3 4 921 5 411 7 470 7 062 2 753 8 183 7 178 Organic material (COD) kg/tonne 3.0 1.7 6.5 4.1 2.3 10.4 2.2 tonnes 1 136 870 2 665 1 715 596 2 591 313 Suspended solids (SS) kg/tonne 0.3 0.1 0.8 0.6 0.1 1.4 0.8 tonnes 104 52 322 258 21 344 110 Phosphorus (tot-P) g/tonne 4.5 10.9 15.3 22.1 3.0 45.4 n.r. tonnes 1.7 5.6 6.3 9.0 0.8 11.3 n.r.

AIR EMISSIONS 2)

CO2-e (fossil) (total direct) tonne/tonne 0.481 0.050 0.004 0.008 0.206 0.840 0.002

CO2-e (fossil) (indirect) tonne/tonne 0.000 0.124 0.015 0.015 2.217 0.335 0.891

CO2-e (fossil) (total) 1000 tonnes 181 88 8 177 9 632 293 129

WASTE 3) Waste to landfill kg/tonne 1.16 0.11 19.11 46.70 6.68 69.14 3.44 tonnes 432 56 7 886 19 400 1 743 17 244 495

MANAGEMENT SYSTEMS Environmental MS 4) Certificate ISO/EMAS ISO ISO ISO ISO ISO ISO CoC-systems Certificate PEFC/FSC PEFC/FSC PEFC/FSC PEFC/FSC PEFC FSC FSC

FORESTRY CERTIFICATION 5) Certified (PEFC or FSC) % 93 65 89 89 78 99 60

1) Includes heat recovered from the production process 2) Emissions from production, internal transport and purchased energy (Scope 1&2 / CEPI toe 3&6) 3) Production waste (organic and inorganic) 4) ISO = ISO 14001, EMAS = EU Eco management and audit scheme 5) Of the quantity roundwood + sawmill chips + purchased pulp

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Bruck Golbey Saugbrugs Skogn Albury Boyer Tasman

PRODUCTION Paper 1 000 tonnes 374 509 413 416 261 249 144

CONSUMPTION Roundwood 1 000 m3 215 191 540 553 415 500 37 Sawmill chips 1 000 m3 0 304 154 174 10 0 291 Recovered paper 1 000 tonnes 197 428 0 123 96 0 0 Purchased pulp 1 000 tonnes 29 0 30 0 0 7 0 Pigments and fillers 1 000 tonnes 101 18 114 32 0 51 5 Electric power MWh/tonne 1.17 1.65 2.50 2.44 2.49 2.79 3.28 GWh 438 838 1 031 1 014 650 697 472 Thermal energy1) GJ/tonne 4.14 5.71 6.10 5.76 6.77 7.78 8.44 TJ 1 548 2 905 2 517 2 395 1 765 1 940 1 215

DISCHARGE TO WATER Treated process water m3/tonne 13.2 10.6 18.1 14.9 10.6 32.8 49.9 1000 m3 4 921 5 411 7 470 7 062 2 753 8 183 7 178 Organic material (COD) kg/tonne 3.0 1.7 6.5 4.1 2.3 10.4 2.2 tonnes 1 136 870 2 665 1 715 596 2 591 313 Suspended solids (SS) kg/tonne 0.3 0.1 0.8 0.6 0.1 1.4 0.8 tonnes 104 52 322 258 21 344 110 Phosphorus (tot-P) g/tonne 4.5 10.9 15.3 22.1 3.0 45.4 n.r. tonnes 1.7 5.6 6.3 9.0 0.8 11.3 n.r.

AIR EMISSIONS 2)

CO2-e (fossil) (total direct) tonne/tonne 0.481 0.050 0.004 0.008 0.206 0.840 0.002

CO2-e (fossil) (indirect) tonne/tonne 0.000 0.124 0.015 0.015 2.217 0.335 0.891

CO2-e (fossil) (total) 1000 tonnes 181 88 8 177 9 632 293 129

WASTE 3) Waste to landfill kg/tonne 1.16 0.11 19.11 46.70 6.68 69.14 3.44 tonnes 432 56 7 886 19 400 1 743 17 244 495

MANAGEMENT SYSTEMS Environmental MS 4) Certificate ISO/EMAS ISO ISO ISO ISO ISO ISO CoC-systems Certificate PEFC/FSC PEFC/FSC PEFC/FSC PEFC/FSC PEFC FSC FSC

FORESTRY CERTIFICATION 5) Certified (PEFC or FSC) % 93 65 89 89 78 99 60

1) Includes heat recovered from the production process 2) Emissions from production, internal transport and purchased energy (Scope 1&2 / CEPI toe 3&6) 3) Production waste (organic and inorganic) 4) ISO = ISO 14001, EMAS = EU Eco management and audit scheme 5) Of the quantity roundwood + sawmill chips + purchased pulp

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TO THE MANAGEMENT OF NORSKE SKOGINDUSTRIER ASA Independent auditor’s report

We have reviewed the environmental infor­­ We believe that our work provides an appropri- • The environmental information for 2015 mation presented in Norske Skog’s 2015 ate basis for us to conclude with a limited level reported from a sample of two reporting Annual Report, pages 19 - 40 (“the Report”). of assurance on the subject matters. In such units (Norske Skog Golbey and Norske The Report is the responsibility of and has an engagement, less assurance is obtained Skog Albury) was reported according to the been approved by the management of the than would be the case had an audit-level procedures noted above and was consistent Company. Our responsibility is to draw a engagement been performed. with the source documentation presented conclusion based on our review. to us. CONCLUSION • Norske Skog applies a reporting practice for We have based our work on the international Based on our review, nothing has come to our its environmental reporting aligned with the standard ISAE 3000 “Assurance Engagements attention causing us not to believe that: Global Reporting Initiative (GRI) Sustainability other than Audits or Reviews of Historical • The environmental aspects presented in the Reporting Guidelines, version G4, reporting Financial Information”, issued by the International Report comprise the most significant ones principles. The GRI Index referred to on Auditing and Assurance Standards Board. The at corporate level. page 40 in the Report appropriately reflects objective and scope of the engagement were • Norske Skog has applied procedures, as where relevant information on each of the agreed with the management of the Company summarised on page 40, for the purpose elements and performance indicators of and included those subject matters on which of collecting, compiling and validating the GRI guidelines is to be found within the we have concluded below. environmental data from its reporting units Norske Skog Annual Report 2015. The UN for inclusion in the Report. Global Compact table referred to on page Based on an assessment of materiality and • The aggregated information accumulated 40, appropriately reflects where relevant risks, our work included analytical procedures as a result of the procedures noted above information is presented in the Norske Skog and interviews as well as a review on a sample is consistent with the data reported from Annual Report 2015. basis of evidence supporting the subject reporting units and appropriately reflected matters. in the Report.

Oslo, 31 March 2016 Deloitte AS Eivind Skaug Frank Dahl State Authorized Public Accountant Deloitte Sustainability

Environment and corporate social responsibility reporting

The environment report contains information monthly reports to the corporate management containing references to where in the annual which Norske Skog believes covers the material and to the board quarterly. The basis and report relevant information about the various environmental aspects of the value chain of methodology for the reporting on greenhouse aspects and indicators in GRI can be found. the company’s activities. Environmental data gas emissions and the Environmental Index In our opinion, our reporting for 2015 is in for 2015 includes the 100% owned mills at is described on pages 31 and 33. The figures accordance with level CORE of GRI-G4. 31 December 2015 and figures compared to in the environmental report are collated and the same 100% owned mills in 2014. processed to make the presentation of data as Norske Skog is committed to contribute to uniform and practical as possible. sustainable development. We have signed the Environmental data has been collected from UN Global Compact, are members of Global the mills using established reporting routines. Norske Skog also supports the work to Compact Nordic Network (GCNN), where These include monthly standardised reporting develop a global standard for reporting of participants from Denmark, Finland, Norway for the key environmental data as well as a sustainable development. We therefore use the and Sweden discuss common challenges and standardised collection of supplementary Global Reporting Initiative’s (GRI) guidelines for the implementation of the ten principles in information on an annual basis. The monthly reporting relating to sustainability as a tool in the UN Global Compact. There is a UN Global reporting includes production, consumption of our work to report environmental and corporate Compact table, with reference to where in the raw materials, energy consumption, emissions responsibility. Our reporting practice is, in our annual report relevant information about the and discharges and waste. Data from this view, for all practical purposes in line with the ten principles can be found, on our website reporting is collated by the environment GRI reporting principles. On our website, (www. (www.norskeskog.com/globalcompact.aspx). manager on the group level in standardised norskeskog.com/gri.aspx), there is a GRI table

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