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Sustainability

By focusing on cartonboard and paper products, a responsible circular economy is a central part of our business. Our products are mainly made from renewable raw materials and are characterized by their high recyclability. 

The following information corresponds to the consolidated non-financial report 2022, from which further details can be obtained.

The MM Group stands for sustainability. Ever since the Company was founded in 1888, the idea of sustainability has always been present at MM due to its origin in forestry. With innovative, recyclable packaging and paper products made from renewable raw materials, we are at the forefront of the fight against plastic waste.

At the forefront we focus on our conviction that transparent sustainability management and the disclosure of progress (and failures) will enable us to be even more competitive and successful in the long term. The continuous open communication with our stakeholders is very important to us. While a comprehensive stakeholder dialog was conducted in 2021, which forms the basis of our sustainability strategy that we still apply today, we focused on the stronger involvement of internal stakeholders in 2022. This resulted in the “MM Message House”, in which we define our corporate purpose “securing a bright future for packaging, people and planet” and the pursuit of a unifying corporate culture with shared values.

In April 2022, our Science-Based Targets were officially recognized and have since served as the central orientation points of our sustainability strategy. In this connection, MM joined the global initiative “Business Ambition for 1.5°C” in 2021 in order to contribute to limiting global warming to 1.5 degrees by 2031 through appropriate measures. In addition, we succeeded in further improving our climate rating by the renowned CDP (Disclosure Insight Action) in the business year 2022. For the first time, we achieved “Leadership Status” in the “Climate Change” category with an “A” rating. We achieved a “B” rating in the “Forest” and “Water” categories, after having participated in all three assessment categories for the first time. This shows that ecological sustainability is implemented and documented holistically at MM in an effort to protect the climate, forests and water bodies. Through this exemplary performance and our transparent approach to sustainability, we offer our stakeholders and especially our customers a decisive added value. 

Circular economy has long been an intrinsic part of our business as we focus on cartonboard and paper products which are predominantly produced using renewable raw materials and are fully recycled after use. In spite of all efforts undertaken to increase recyclability, plastic will never be as recyclable as cartonboard. Therefore, we strive to offer new opportunities for the substitution of plastics and create an attractive future potential for MM in the ongoing discussion on packaging through increased innovation and sustainable investment activities in the Group and through competitive cartonboard and paper solutions.

We are aware that we can only improve systemic change together with our customers, suppliers and other stakeholders in order to make the value chain even more sustainable. Therefore, we are a member of the UN Global Compact and are committed to the United Nations Sustainable Development Goals (SDGs) and base this report on the standards of the Global Reporting Initiative (GRI standards option “in accordance”).

The fact that the MM Group is able to make continuous progress both economically and ecologically as well as in social matters is due to the high sense of responsibility and performance of the entire MM team. We would like to expressly thank our employees for their commitment.

MM is a global leader in consumer packaging. The Group provides packaging solutions for cartonboard and folding cartons with an attractive offer in kraft papers, uncoated fine papers, leaflets and labels. MM promotes sustainable development through innovative, recyclable packaging and paper products. 

The MM Group has an integrated structure with the two divisions MM Board & Paper and MM Packaging, which trade with each other on market terms. Cartonboard is the most important raw material for folding cartons, which are mainly used for the packaging of everyday consumer goods. With approximately 15,000 employees the Group has an annual production capacity of approximately 2.0 million tonnes of cartonboard, 260,000 tonnes of kraft paper and 390,000 tonnes of uncoated fine paper, as well as a production of approximately 4.2 billion m² of packaging. In 2022, including recent acquisitions, the MM Group achieved sales of approximately EUR 4.7 billion. MM is present in 27 countries with 6 cartonboard and paper mills, 64 packaging sites and one mechanical pulp plant and sales to over 140 countries worldwide, with Europe as the main market.

The wide range of products and services includes cartonboard grades for a variety of consumer goods industries in the food & specialities and premium sectors. Papers are used for packaging solutions and technical applications as well as for products in the office sector. In line with the product portfolio, virgin fibers account for about 52 % of the total fiber demand and recycled fibers for 48 %. In addition to fibers, the most important input factors in cartonboard production are energy, which is mainly obtained from natural gas, and coating chemicals for the cartonboard surface. Unprocessed cartonboard is mainly used in the packaging production. All cartonboard and paper products of MM Board & Paper are produced using renewable fibers. MM Board & Paper’s customers are folding carton producers, consumer goods manufacturers as well as traders.

MM Packaging is the number one producer of folding carton packaging in Europe with a leading position in several non-European countries. The focus is on the production of packaging for everyday consumer goods in the Food & Specialities and Premium markets. While the first market serves a broad spectrum of food and non-food applications, the premium business comprises highly specialized packaging markets such as pharma, healthcare, beauty, personal care, cigarette and luxury. Recycled and virgin fiber-based cartonboard are used in roughly equal parts as raw materials. In addition to cartonboard and paper, inks, varnishes and die-cutting tools are significant input factors in the packaging production, which is more labor-intensive but less energy-intensive than cartonboard and paper production. MM Packaging’s customers are both multinational and local consumer goods producers. 

The circular economy has long been an intrinsic part of our business activities due to our core business: the production of cartonboard and paper products are manufactured using primarily renewable raw materials and are fully recyclable after use. Therefore, we strive to offer new possibilities for the substitution of plastics and create an attractive future potential in the ongoing discussion on packaging materials by developing innovative and competitive cartonboard and paper solutions. In connection with the EU Circular Economy Package, the Packaging and Packaging Waste Regulation (PPWR) and the Single Use Plastics Directive (SUPD) are of utmost relevance to MM. The aim is to reduce packaging waste and harmonize it across Europe. The MM Group sees this as a driver for innovation, especially with regard to in-creasing the recycling share and the substitution of single-use plastic packaging in the food service sector.

Sustainable value added and growth in the core business

We are committed to excellence in industrial production, innovation and technology leadership, and outstanding sustainability performance in areas such as resource use, circular economy, safety and development of our employees, respect for human rights and anti-corruption. Our strategy focuses on the sustainable generation of value and growth along the supply chain with a focus on the two core divisions MM Board & Paper and MM Packaging. Through our Group-wide sustainability management, we are able to systematically measure and develop MM’s sustainability performance and thus meet the high demands of the market and our customers.

We focus on the development and optimization of recyclable packaging solutions made of cartonboard and paper in the conviction that we can meet the expectations of the market in the long-term and achieve success with products that are produced sustainably and add value. In doing so, we open up new sales areas and penetrate existing markets with highly competitive and innovative products and processes. We strive for growth both organically and through acquisitions.

 

The strategic examination of non-financial topics in connection with business development allows for a holistic risk and opportunity management. For the MM Group, there are various cost and sales drivers in the areas of “Planet” (environment), “People” (employees) and “Prosperity” (society) which have or can have an impact on current and future business success.
 
A relevant sales driver is the focus on sustainable packaging solutions, which we try to use by continuously adapting our offer and innovation efforts to the changing market and consumer preferences. Our human capital, i.e., our employees, are a key value driver and the motor for ongoing necessary changes and adjustments. The MM Group’s multi-layered training and development programs as well as measures to retain and recruit employees help to ensure that the Group has a sustainable supply of qualified employees to secure its position, further development and growth. 

Costs in connection with non-financial matters arise in particular with regard to personnel, energy requirements, re-source consumption and waste generation of the MM Group, but also from raw material shortages as well as CO2 certificates. Due to the EU’s package of sanctions against Russia, the MM Group focused on rising energy and wood prices as cost drivers in 2022. Future cost drivers could arise primarily from regulatory changes, nationally or in the EU. Costs can also arise from cybersecurity risks, which MM counteracts with comprehensive security concepts.

In contrast, broad social developments represent future opportunities for the MM Group’s business model. For example, advancing digitalization and automation increase efficiency in production processes and consequently enable cost savings. Developments in the transport and logistics sector could contribute to fuel or personnel cost savings. The trend towards urbanization and smaller households as well as growing private consumption in emerging countries could con-tribute to sales increases in the future, e.g. through an increased demand for smaller product units. The acquisitions also significantly increased market shares in the resilient “Pharma” segment.

The current business development of the MM Group was characterized by a high level of resilience to the COVID-19 pandemic and a high degree of continuity. In addition, there were significant acquisition and investment decisions as well as necessary structural adjustment measures. However, taking into account the structural adjustments, the effects of non-financial topics and the correlations of related key figures with the annual financial statements did not show any significant changes or special conspicuous features for the reporting periods 2021 and 2022. We consider the measures taken within the framework of sustainability management to be effective in an overall view of non-financial and financial aspects with regard to minimizing risks and optimizing opportunities in the Group. 

The goals of the EU Green Deal, such as climate neutrality in Europe, can only be successfully achieved if money flows increasingly lead to sustainable investments. For this purpose, the EU Commission has elaborated the Taxonomy Regulation, which will make sustainability financially measurable and comparable, leading to increased transparency regarding sustainability activities. In the year 2021, the environmental targets “climate protection” and “adaption to climate change” were published, with four more environmental targets (on circular economy, water, biodiversity and pollution) to follow. As a listed Company, the MM Group is obliged to disclose its activities in accordance with the Taxonomy Regulation.

The MM Group has reviewed the economic activities already published by the EU Commission for the environmental objectives “climate change mitigation” and “adaptation to climate change” with regard to their relevance for its own economic activities. In accordance with Delegated Regulation (EU) 2021/2178, the key performance indicators (KPIs) related to turnover (Turnover KPI), capital expenditure (CapEx KPI) and operating expenditure (OpEx KPI) for 2022 are disclosed in the non-financial report.

The MM Group follows the framework of TCFD (Task Force on Climate-Related Financial Disclosures) to best integrate climate change-related risks and opportunities into existing reporting structures. The TCFD recommendations are divid-ed into the four areas of governance, strategy, risk management and metrics and targets and support companies in reporting climate-related risks and opportunities in a consistent and comparable way. As part of the TCFD-aligned reporting and to better understand the risks, impacts and opportunities associated with climate change, the MM Group conducted a global risk assessment in 2022.

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