Professional Documents
Culture Documents
GERMS HIDE?
Already time for puberty?
Adaptable business
Nils-Petter Ekwall
Illustrator, Sweden
Im a borderline compulsive hand gel user. I wash my hands frequently and particularly before eating. Ialways carry a bottle of hand gel with me. Its not that Im afraid of illness, but Id rather be well than unwell. Nils-Petter has illustrated the article on germs on pages 2427.
Anna McQueen
Contributors
SCAS SOCIAL MEDIA SITES
Youtube.com/ SCAeveryday shows commercials and videos from SCAs press conferences, presentations and interviews with executives and employees. Facebook.com/SCA is intended to attract talent, engage users and provide information in a way that complementssca.com. Twitter.com/SCAeveryday provides continious communication from SCA with a focus on sustainability. Slideshare.com/ SCAeveryday is for investors and analysts, who can download presentations from quarterly reports and annual general meetings. Scribd.com/ SCAeveryday makes some 50 publications available, including SCAs sustainability report, its Hygiene Matters report and Shapemagazine. Instagram/SCAeveryday SCA photos from all across the globe.
GERMS HIDE?
Already time for puberty?
Adaptable business
CONTENTS
06. Spying on the future
Making contingency plans for multiple scenarios is crucial to success for lots of companies.
32
N I L S - P E T T E R E K WA L L
BORN DRAGONS During 2012 an unusual number of babies were born with high expectations from their parents.
ALSO....
12 HOURS with Omar Flores page 28 SHAPE UP pages 3031 ANNUAL GENERAL MEETING page 38 NEWS FROM SCA pages 40 43
DO YOU KNOW...
that wet hands harbour up to 1,000 times more germs than dryhands. Find out more on page 24.
UPDATED
CAS MILL in Ortmann, Austria, works with a local energy provider to supply heat to 80 private and public buildings using only waste heat from the mill. The buildings that receive the mills excess heat include a kindergarten, a civic center, schools and a Red Cross station. Using heat exchangers, waste heat from the mill warms the water of the heating system to as high as 105 degrees Celsius, contributing to a carbon dioxide reduction of1,500tons per year. The project is an excellent example of resource saving and is a valuable contribution to energy conservation, says Stephan Pernkopf, who is responsible for energy affairs of the provincial government. Factories that invest in renewable energy create added value in the region and deserve our support. The number of district-heated households is increasing, and this year the system will expand to cover another neighboringcommunity.
PHOTO: ISTOCKPHOTO
Communications, responsible for Investor Relations within SCA. VP Investor Relations, got top marks International Investor, a consultwhen investors and analysts ing rm focused primarily on inmade their own assessments ternational nance, conducted of companies CEOs and the ranking. The 860 portfolio investor relations profesmanagers and 1,580 sell-side sionals. analysts surveyed could nomAn open and professional inate up to four candidates in dialogue with investors and the categories Best CEO, Best analysts is a high priorCFO, Best IR Professional and ity, says Josphine EdwallBest IR Company. Bjrklund, SVP Corporate Jan Johansson, CEO
DIVESTMENT APPROVED
SCAs divestment of former Georgia-Pacic units has now been approved by the EU Commission. The commission imposed requirements concerning the divestment when SCA announced its acquisition of GeorgiaPacics European tissue operations in July 2012.
SUSTAINABILITY REWARDED
SCA CONTINUES TO BE a member company of the global
sustainability index FTSE4Good for the 13th consecutive year. This year, the company was placed at the top among comparable organisations in the personal and household goods sector. FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognized corporate responsibility standards.
The number of people over 60 is expected to grow from 600 million in 2000 to 2 billion in 2050. Source: UN
Companies today face so many uncertainties that they cant wait for things to happen before they decide how to act. Thinking hard about the future and making contingency plans for multiple scenarios are crucial to success.
text NANCY PICK photo MITCHELL FUNK
The corporate
crystal ball
G
LOBAL BUSINESS is full of what-ifs. What if the euro collapses? What if Chinese workers start demanding higher wages? What if a rival invents a sexier product? In a world of uncertainty, rapid change and fierce competition, large companies are devoting considerable time and resources to thinking about the future. Their profits and every companys long-term survival depend on it. Paul Saffo, a leading US expert in futures thinking, works for DISCERN Investment Analytics in San Francisco. In essence, he says, the practice of forecasting comes down to a single question: How do you avoid surprise in an ever more complex and uncertain world? Over the past 20 years, long-range forecasting has become an important trend. Futures thinking has gone from this exotic thing associated with weird California consultants to an unremarkable fact of business life, Saffo says. Where companies once turned to outside consultants for help with business forecasting, the trend now is to devote in-house resources to making sense of the future, with increasing sophistication.
SCA SHAPE 2 2013 7
Forecasting has been a victim of its own success, Saffo says. People no longer need experts to collect data they can find data for themselves on the Web. New analytics tools make it easier than ever for non-specialists to apply futures thinking to their work. Many companies that once hired outside futurists now do their own forecasting in-house, typically through their divisions of public affairs, strategy or business intelligence, Saffo says. The goal is for companies to identify long-range threats and opportunities, marshal their resources and then implement successful strategies. Data is key. Not only do companies have access to more data about their clients and consumer behavior than ever before, but companies business intelligence departments also have greater ability to analyze that data in ways that can drive profits. When interpreted wisely, that data can be used to make good predictions. Although Saffo knows many examples of companies profiting from smart forecasting, he is obliged to keep them secret. Its a measure of the success of the process, he says. Companies consider this something they shouldnt share with anybody.
Future thinking has gone from this exotic thing to an unremarkable fact of business life. Paul Saffo
The oil giant Royal Dutch Shell is something of an exception. Shell pioneered the use of forecasting scenarios back in the 1970s, and the company does make some of its successes public. Predictive analytics is hot right now. The practice was popularized by the movie Moneyball, in which the management of an American baseball team used players statistics to put together a ragtag winning team on a paltry budget. Analytics uses computer algorithms to look for patterns that may predict future trends.
SURVEYS SUGGEST that analytics can be a powerful tool. When MIT Sloan Management Review surveyed some 3,000 executive managers worldwide in 2010, they found that top-performing companies were three times more likely than lower performers to use sophisticated analytics. Experts say that analytics can help companies better predict who their customers are, what those customers want, and what they require in order to remain customers.
In some companies, public affairs departments are also playing an increasingly important role in shaping future priorities. For a company working in disparate locations around the globe, public affairs can serve a vital role in collecting and communicating information companywide, to make sure there are coordinated strategies in place.
WHAT-IF SCENARIOS are another important tool
for businesses, which need to be prepared for such developments as a change in currency exchange rates, a rise in oil prices, or even catastrophes like a tsunami or a war. When the financial software company Quantrix conducted a survey on budgeting and forecasting in 2011, it found that large companies typically develop more than a dozen what-if scenarios a year, often devoting considerable time and resources to them. One prediction seems certain to come true: large companies will continue to make predictions.
Top-performing companies are three times more likely to use sophisticated analytics.
as customers increasingly focused on the origin of products. Nike saw the value of CSR early and hopped on the recycling trend by posting videos such as Nike Shoe Recycling Sustainability on YouTube, Mankert says. Nike has realized that it no longer only is a question of minimizing negative effects, she says. The company has gone one step further by moving from CSR to CSV, or Creating Shared Value, and places its products in the bigger picture. By showing that using running shoes makes people move and that exercising prevents problems like obesity and diabetes, they show that their products contribute to a common good. Mankert is convinced that this move from shareholder value to stakeholder value is a step that many companies will have to take to succeed. Unilevers diversied distribution network in India and other emerging markets is a win-win business example, she says. The winners include not just Unilever, which gains increased sales, but the millions of small-scale businesses and individual sellers around the world who derive an income from those sales. SUSANNA LINDGREN
AUL SAFFO lives in a fitting place for a professional forecaster: perched on the edge of a canyon near San Francisco, three miles from the San Andreas fault. Over the next 20 years, the probability of a major earthquake striking there is nearly 65 percent. Ive spent way more on seismic upgrades to my house than a reasonable person should, Saffo says. Given his line of work, he ought to take risk seriously. Saffo works for DISCERN Investment Analytics in San Francisco, holding the unusual title managing director of foresight. He also teaches in the business school at Stanford University. The science of prediction is currently experiencing a major breakthrough. We have ever-faster processors, steadily improving algorithms and, most importantly, a vast and growing pool of digital data, Saffo says. On the other hand, this is a bad time to be a futurist if youre not a math whiz. In the past you didnt need to know calculus to be a forecaster, Saffo says. Now youd better be comfortable with it, and youd better know how to write [computer] code, or your career as a forecaster will be very short. Citing a dramatic example, Saffo points to statistician Nate Silvers successful prediction of the winner in all 50 US states ahead of the
2012 presidential election. All the traditional pundits were sitting around like stunned raccoons, Saffo says. Silver demonstrated that statistics-based analytics now works better than traditional political analysis.
SAFFO TYPICALLY works on the ragged edge between qualitative and quantitative methods. The art of forecasting today is knowing when to trust the computer, and when to trust ones intuition, he observes. Hes constantly seeing advances made possible by programming. Such tools, Saffo says, deliver insights that would otherwise be overlooked. The first step, before you even start doing a forecast, is to check in and examine your own bias. This might be as simple as: are you a glasshalf-empty or glass-half-full kind of person a pessimist or an optimist? Most forecasts go off the chart right at the beginning because people hold unexamined assumptions that blind them to the most important potential outcomes. Once you examine your assumption, it moves from being a bias something bad to an intuition, something good. As far as earthquake preparedness goes, Saffo considers himself something of a moderate. If the big one hits, he says, I may not be fully prepared, but at least I wont be surprised.
Ive spent way more on seismic upgrades to my house than a reasonable person should.
Polish cows having a siesta outside SCAs rst production facility in Europe to manufacture products using only renewable energy.
Thinking about
GETTY IMAGES
involve developing renewable energy sources, creating a single European energy market or becoming a world climate champion. Meanwhile, short-term changes can bring regulatory shocks, such as Germanys overnight decision in 2011 to close its nuclear power plants. Many of SCAs costs are linked to energy prices, von Keyserlingk notes. SCA is a paper producer, but the company also generates power from natural gas, wind and biofuels, uses a lot of wood and has vast forest holdings. We have a lot of different interests in energy. Thats why its so important that we network across Europe and develop a coordinated energy plan across our businesses.
www.lights-by-tena.fr
Forest swap
to create Swedish nature reserve
Valuable forestland changes hands as 23,000 hectares of SCA property, worth SEK 1 billion, becomes nature reserves.
Its very gratifying that weve now made a breakthrough in swapping land.
Maria gren, director general of the Swedish Environmental Protection Agency
CA AND THE Swedish Environmental Protection Agency have agreed to a land swap, an important part of efforts to meet the environmental objective of sustainable forests. The transaction involves the takeover of 23,000 hectares of productive SCA forestland by the Swedish agency for a nature reserve, equivalent to 50,000 soccer fields. In exchange, SCA will obtain 32,000 hectares of productive forestland from the agency. Land swaps are a rational, time-saving and cost-effective way for central government to protect land for the creation of nature reserves. The land on each side of the transaction has been valued at around 1 billion Swedish kronor (120 million euros). Productive land is often considerably more
interesting to both large and small forest owners than money, says Lars Rubensson of SCAs land surveying department. SCA voluntarily sets aside land equivalent to one-tenth of our forests. We therefore consider it reasonable to receive replacement land from the government when we relinquish areas with the very highest natural and financial values. Maria gren, director general of the Swedish Environmental Protection Agency, says the deal marks a milestone in the agencys efforts to create nature reserves. Its very gratifying that weve now made a breakthrough in swapping land for reserves with the big forest companies, she says. The land were swapping was originally obtained by the Swedish Environmental Protection Agency from Swedens largest forest owner, Sveaskog, through a parliamentary resolution, to be used for precisely this type of transaction. All the land to be swapped is located in the four northernmost counties of Sweden, except for an area in the northernmost part of Gvleborg County, some 300 kilometers north of Stockholm.
SCA SHAPE 2 2013 15
P H O T O : S W E D I S H E N V I R O N M E N TA L P R O T E C T I O N AG E N C Y
10 QUESTIONS
The protector
of forests
The worlds forests are under threat. Deforestation, biofuel demand and a changing climate contribute to a complex array of pressures. Peter Holmgren has moved to Indonesia to work with these issues as director general of the Center for International Forestry Research.
text ANNA MCQUEEN photo CHRIS STOWERS/PANOS
How did you come to care for forests? I was born and grew up in Gothenburg, Sweden, and as a teenager I spent a lot of time exploring the natural world with scouting friends and camping in the wilderness in all seasons. That must have inspired me because I went on to study forestry at the Swedish University of Agricultural Sciences in Ume, getting my MSc in 1987. I got interested in international work during my university studies, taking courses in international development and doing field studies in Africa. I was then fortunate to be able to work internationally with forestry issues in the Philippines, Kenya and Pakistan. Why is deforestation such a hot topic rightnow? Forests matter a lot to us. They purify our air, filter our water, provide timber, energy, food and medicine, and sustain
Peter Holmgren
Age: 50 From: Gothenburg, Sweden Occupation: Director general, Center for International Forestry Research (CIFOR) Career: Developed forest management systems for the Swedish forest industry. Spent 14 years at the United Nations Food and Agriculture Organization (FAO) in Rome. Joined CIFOR in 2012. Residence: Jakarta, Indonesia. Family: Married to Ann-Sofie, three children ages 18, 16 and 12. Hobbies: Photography, cooking. Favorite forest-related pastime: Reading I still prefer printed books! Secret talent: I think I can still maneuver a truck and trailer in tight spots.
10 QUESTIONS
local communities and landscapes. Forests absorb a sizable proportion of the carbon dioxide that people pump into the atmosphere, helping to reduce the impact of climate change, but scientists also worry that the trees themselves may fall victim to a changing climate. Forests also contain most of the biodiversity on land. So deforestation, which means converting forests to other uses, is of great concern to many people. Where is deforestation taking place currently? Recently there has been a lot of talk about deforestation in areas like Brazil and Southeast Asia, where there has been a major increase in land used for agriculture and livestock, which has encroached on forests. Current estimates suggest that global deforestation is running at 13 million hectares per year, or one hectare every 2.5 seconds. Historically, the same occurred in other regions such as Europe and North America, but as agriculture stopped expanding, thanks to economic development, urbanization and more efficient farming methods, forests have gradually returned.
SCA FORESTS
SCA is Europes largest private forest owner and manages 2.6 million hectares of forest, all of which is certied according to the FSC (Forest Stewardship Council) and PEFC (Programme for Endorsement of Forest Certication) SCA has set aside nearly 7 percent of its forests for ecological landscape plans. Inaddition, we keep at least 5 percent of the trees during harvesting to conserve biodiversity. Each year SCA grows more than 100 million seedlings.
Is the forestry industry doing anything aboutit? Around the world, there has been investment in planted forests, in part to supply raw material to the forest industry, but also to support small forestry farms and businesses. While deforestation continues and natural forests are still used for industrial logging in many places, production forests are also expanding. Worldwide, planted forests cover almost 300 million hectares, or 7 to 8 percent of the worlds forests, and they have the potential to provide most of the wood used for industrial purposes. However, some argue that planted forests can pose a threat to biodiversity and that local people do not tend to benefit from them. If well managed, planted forests make a lot of sense from a social, economic and overall environmental perspective, but there needs to be due consideration to all aspects. Is halting deforestation the key to reducing the impact of climate change? Recent years have seen considerable political focus on climate change and the role of forests, since as much as 12 to 15 percent of the greenhouse gas added to the atmosphere is due to forest losses. Compared with other ways of reducing our impact on the climate, it seems both smart and straightforward to call for a halt to deforestation and forest degradation. But while this ambition is high on the international agenda, we have also realized that its not possible to only manage forests in terms of climate, and also that it is impossible to halt deforestation without involving the agricultural sector and rural development aspects. Reducing the impact on the climate is one of many objectives and should be handled as such.
conducts research that enables more informed and equitable decision making about the use and management of forests in less-developed countries. The researchaddresses issues such as how tomanage forests in ways that enable us to mitigate and adapt to climate change and how people who depend on smallholder and community forestry can improve theirlivelihoods.
18 SCA SHAPE 2 2013
How do you think we should manage our forests? There has to be a healthy mix of products and services from forestry. Not just timber but other elements like food, energy and medicines, and ecosystem services such as water, biodiversity and local climate regulation that support landscapes and livelihoods. The forestry sector and its institutions should broaden their perspectives and embrace multiple goals. What about biofuels? The growth in production of biofuels is significant. The ethical debate over growing crops for energy rather than food is a little exaggerated in my opinion, but when governments in richer countries offer subsidies for biofuels from developing countries, the competition can become unfair and have unintended effects for poor people. If money can be made from biofuels, then land used for this purpose will grow. There is of course an interesting potential to produce biofuels from forests instead of agricultural land. Where are we at right now? Today the picture is mixed. Deforestation is slowing somewhat, but concerns over biodiversity and climate change remain high. Developments in agriculture, the role of agriculture for economic development and demand for agricultural products will determine the future of deforestation much
Forestry is not about trees, it is about people. And it is only about trees insofar as it serves the needs of people.
more than the forestry sector. Investment in forestry seems to be growing, and there is a significant trade in forest products, which account for around 2 percent of the global trade in commodities a key component in a future green economy. What are the biggest threats? In terms of the future, if we are only talking about food supply under current consumption patterns to a growing population, then I think demand for new land could slow down rather quickly because investment in agriculture can make productivity keep up. But if Western-style meat-heavy diets and high levels of food waste continue to spread, then the land requirements will grow. The pressure from a changing climate adds to the uncertainties. Consumption patterns and climate change could pose bigger problems than a growing population in the future. So what does the future look like for ourforests? There are factors that make it difficult to predict the future, but we are seeing a slowdown in deforestation at the moment, and I see no reason why it couldnt continue that way if policies for food and fuel production are carefully managed and rural people benefit from continued overall economic development. On a personal level, I am concerned for the role that forests have in our future. To quote celebrated forester Jack Westoby, Forestry is not about trees, it is about people. And it is only about trees insofar as it serves the needs of people.
Growing up fast
Young women today are getting their periods at an earlier age than their mothers did, and much earlier than their grandmothers. Over the past century and ahalf, the onset of menstruation has advanced by four years. Good nutrition is just one factor behind the change.
text SUSANNA LINDGREN
14 years old
when she got her rstperiod
13 years old
when she got her rstperiod
CHEMICALS BANNED
IN MARCH 2013 the European Parliament
backed a proposal to list endocrine disrupting chemicals as substances of very high concern because of their suspected interference with the hormone system. Endocrine disruptors have been linked to impaired sperm quality in boys and early breast development in girls, as well as to certain cancers and other disorders.
MARKET
G
GETTY IMAGES
IRLS IN THE 1850s were about 17 years old before they had their first period. For a long time the age of first menstruation fell rapidly, but this development has slowed down, says Claude Marcus, a professor of pediatrics and endocrinology at the Karolinska Institutet in Stockholm, Sweden. Girls in Scandinavia today get their first period at an average age of 13. When their mothers were teenagers, about 25 years ago, the equivalent age was 13.5. Many international surveys show that even if the age at the first period has stopped advancing so dramatically, puberty is still starting earlier. A Danish study found that girls develop breasts a year sooner than 15 years ago. An equivalent American survey found that girls in the US get breasts up to two years earlier than 40 years ago. As menstruation is seen as the climax of puberty, and since puberty generally extends over about two and a half years, girls today enter the world of hormones and changing bodies before they even hit their teens at age 11. THE MOST obvious explanation to why we reach sexual maturity earlier than our ancestors is improved living conditions. This is very much driven by nutrition, Marcus says. Women need to have a certain amount of fat for ovulation. The fat also provides enough energy to give birth and look after a child. Common evolutionary theories state that humans experience a late puberty because girls need to work with their mothers to gain the knowledge required to look after a baby, he says. To do that they need to reach a certain height, which also is the reason they grow faster than boys. Boys on the other hand need to learn how to handle their hormones and their libido before they get so big and strong that they can hurt somebody, Marcus says. Hence the different development of puberty between boys and girls. If nutrition, in the sense of access to vitamins,
SCA SHAPE 2 2013 21
MARKET
proteins and minerals, explains part of the changes over the past 150 years, other factors in our environment also have an impact on both puberty and reproduction. Many scientific surveys show a connection between chemical exposure and the hormone levels in our bodies, and this may contribute to earlier puberty, Marcus says. This is a hot topic and something that is taken very seriously. Endocrine disruptors are chemicals that interfere with the hormone system and can be found in foods we eat or things we use. Bisphenol A, or BPA, is a chemical that for precautionary reasons has been banned in baby bottles, as animal tests have shown that it has an impact on reproduction, organs and body weight. Obesity is also a type of endocrine disruptor, and its incidence has tripled in the last three decades. Fat induces early puberty, Marcus says. Hormones in the adipose tissue, like leptin, directly affect and initiate early puberty. How does earlier puberty affect us? Does it matter? It does not have any effect on how tall we get, Marcus says. We do still get taller and taller. Social factors have a greater impact, as young girls may be less ready for the sexual awakening that follows puberty. There are surveys that show negative social factors for girls who hit puberty early. Its important that girls and boys get educated about puberty at an earlier age so they are not taken by surprise.
P H O T O : B I L D BY R N S I LV E R
Is this what a uterus looks like? SCA has educational school programs in many countries. Heres a lesson in a Russian classroom.