1

Evaluation of Sustainability Performance of a Pulp and Paper Mill:

A Longitudinal Case Study

Abstract: Systematic performance evaluation is necessary in guiding a company

in moving towards the goal of sustainable development and also for identifying
the priority areas it has to address for achieving that goal. Presently the index
based performance measurement system in vogue have many draw backs such as
combining social, economic and environmental performance into a single index,
mixing of lagging and leading indicators in the performance measurement, use of
illogical weights for arriving at the index. The ideal sustainability performance
measurement system should be based on the principle that “a company uses all
its raw material and fuels from renewable sources and has zero impact on its
environment”. Based on this principle, this study developed a methodology for
evaluation the Industrial sustainability performance. This has been demonstrated
using 16 years of data from a pulp and paper mill. Further relationship between
sustainability performance and financial performance is also explored. Future
research directions are provided

Key Word: Sustainable Development, Industrial Sustainability Index,

Performance Evaluation, renewable resources, environmental impact, Pulp and
Paper Mills, value addition, correlation

1. Introduction

Industrial Revolution and subsequent knowledge revolution resulted in improved

life style of the human society at large. Growing population at the enhanced life
style caused production of more and more goods and services resulting in
depletion of natural resources and pollution of air, water and soil at an alarming
scale. Improvement in resource efficiency and reduction in pollution levels that
claimed by several industrial units are not sufficient to prevent the catastrophes.
Even with the diffusion of the most advanced technologies and the most
optimistic projections for increased resource efficiency in production, the current
rate of growth will certainly result in significant environmental damages and
depletion of natural resources. Hence Sustainable Development (WBCSD, 1987)
is inevitable.

Sustainability reports are emerging public evidences of the activities of

organization towards sustainable development. Global Reporting Initiative
(GRI) is the main standard followed by most of the companies across the globe
while there are other standards too (Azapagic et al 2002). Since the publication of
the first separate environmental reports in 1989, the number of companies that
had started to publish information on its environmental, social or sustainability
policies and/or impacts had increased substantially from 94 in 1003 to 276 in
2002 (Ans Kolk, 2004). Currently more than 2000 companies publish such
reports (Stefan et al 2006).

Arivalagan Arumugam, a.arivalagan@gmail.com, Tamilnadu India

 Mere reporting information does not mean that the company is moving
towards the goal of sustainable development. Thus, there is a necessity to
measure the progress of the sustainability performance achieved by a company,
so that areas that need to be focused can be ascertained and addressed for further
improvement. This study addresses this gap. In this paper, the relevant literature,
development of the “Natural Industrial sustainability Index”, its application in a
case study paper mill, the evaluation of sustainability performance with respect to
time, it relationship with financial performance of the case study mill are
discussed. Future research directions are provided.

2. Literature Review

Several initiatives were developed to drive the corporations towards sustainable

development. Some such initiatives are Environmental Management System ISO
14001, Life Cycle Assessment, Corporate Sustainability Management, Global
Reporting Initiative and the Natural Step. Environmental Management Systems
or ISO 14001 (EMS) (www.iso.ch) coordinate and systematize business
activities with the aid of defined and documented steering and control
mechanism towards achieving certain environmental policies and objectives. The
aim is to improve the company’s organization and performance and to support
compliance with legal requirements. Through the certification the company can
some extend influence its product image and exploit competitive advantage.
Therefore, it does not reveal in whether the company is moving towards the goal
sustainable development.

Life cycle assessment (LCA) is a method for registering, evaluating and

representing environmental impacts resulting from products, processes covering
the entire company (www.life-cycle.org). Examples of guides to performing life
cycle assessments are ISO standards 14040 to 14043. Life cycle begins with goal
and scope definition, and on the basis of flow chart of material and energy flows
it compiles an inventory of volume flows recorded (input-output analysis). In
case of life cycle assessment, the term analysis refers to flow parameters
measured in physical units. Then the inventory is classified into impact
categories such as climate warming, stratospheric ozone depletion, photosomg,
Eutrophication, etc. and are allocated to substances recorded and each energy
source. Valuation of different emissions is performed by multiplying the amount
emitted by a weighting factor. Compiling the inventory data often involves good
deal of time and financial resources. LCA require, a massive amount of input,
which means only large companies are able to bear the costs. Also the final use
and disposal cannot be estimated with certainty.

From the functional point of view corporate sustainability management

(CSM) had been described to steer ecological, social and economic impacts of
business activities in such a way that an enterprise develops in the direction of
sustainability (Stefan Schaltegger et al, 2006). Stefan desired that business
enterprises should reduce the absolute environmental burden caused by the
business activity, minimize social undesirable impacts, implement both the above
 Evaluation of sustainability performance of a pulp and paper mill
at low cost while increasing the profitability and share holder value and
integrating the these challenges in the economic management process. Stefan
emphasized that integration of the environmental and social management in
conventional economically oriented management. .

GRI has harmonized, developed a widely accepted guidelines for

sustainability reporting which is now “World’s Standard for Sustainability
Reporting” by the industries. Several industrial corporations follow the GRI
2002 guidelines and published their sustainability reports. Such companies
publish stories about their companies’ activities in environmental, social and
economic aspects and also related performance indicators, according to their will
and wish. Investors in developed countries use these reports while taking
decision on their investments. GRI based reports do not reveal prima fascia
whether the company is moving in the direction of sustainability. Further analysis
is required to know the answer.

‘The Natural Step’ (TNS) framework (Karl-Henrik Robèrt, 1991) that described
sustainability as the scenario in which the industry is in unison with nature as a
cyclical process similar to what nature has for millions of years (e.g. carbon
cycle). TNS holds that in a sustainable society, nature won’t be subject to
systematically increasing:
 Concentrations of substances extracted from the earth’s crust;
 Concentrations of substances produced by society;
 Degradation by physical means; and, in that society,
 Human needs are met worldwide.
This school of thought argues that sustainability does not constitute the
aspects of economics and that is it is applied to a society, a region, or a country.
It need to be modified to suit to a manufacturing company. Further as pointed out
by another researcher (Susan Burns 2000) social goal such as labor rights,
community care, and non-discrimination, while very important to many people; it
is not minimum socioeconomic condition for sustainability. In other words, they
should be pursued, but they are not minimum conditions for sustainability. An
opposite criticism is that system condition four goes too far; that a fair and
equitable distribution of resources is not something companies can embrace as a
goal. .

There were several studies on measuring the Environmental / sustainability

performance. These also include Hart & Ahuza 1996, Frans Berkhout 2001,
Sonja Lyn Odam 2001, Frank Figge et al 2004, David Burdick 2005, Dow Jones
2003, etc. One of the methods was the corporate sustainability index, developed
primarily for guiding the investor community in USA and Europe. These include
Dow Jones Sustainability Index (Dow Jones 2003), Ethibel sustainability Index,
(Ethibel, 2003), (www.Ethibel.be) etc. By using these indexes as a proxy for the
performance of the organizations with regard to sustainable development, several
studies (White Mark 1996, Christopher 2002, Mark et al 1997, Marcus Wagner
2000 and 2005, Martin Bennett et al 1999, Lois Mahoney et al 2002 and Ganzi
John et al 2004) explored the relationship between sustainability or
environmental performance and financial / social performance. Shirish Sangle et
al, 2007 described evaluating sustainability practices in terms of Stakeholder
Satisfaction.

However, these indexes did not depict the real sustainability of the
organizations due to reasons such as combing the economic and social
performance with environmental performance, mixing of the indicators used in
arriving at the index that are logically in correct and Illogical weights used in
arriving at the index.

Hence there is a need to determine the real or true or natural composite

index, which is free from all the above drawbacks. This research developed a
new Index based on the conditions of TNS considering Industrial unit as an
entity. Hence, it is limited to a firm or unit level. It is called “Natural Industrial
Sustainability Index’ (NISI). Further evaluation of sustainability performance
carried out with respect to financial or social performance, in the past involved
only one or two or a combination of few indicators as a proxy for performances.
But evaluation of the sustainability performance should be done over time and
not with financial or social performance. In other words, earlier researchers were
of the view that a company is sustainable company if its sustainability
performance is positively correlated with the financial performance or social
performance. But this is not true. There is no ‘business case’ approach in Natural
Sustainability performance, as human society cannot value precious natural
resources, such as fossil fuels, natural forest, minerals and metals, etc. Therefore
the Natural Industrial sustainability performance is to be evaluated over time
(years) i.e. if the NISI is improving over a period of time then the company is
said to be moving towards the goal of sustainable development, sustainability.

3. Development of the Natural Industrial Sustainability Index

In the literature review, it was observed that sustainability was measured as a

function of end results of sustainability actions and also the actions by which
these results were achieved. But Sustainability is measured in this study as a
function of only end results, i.e. the actions are not considered in the
measurement. Industrial sustainability involves two major components –
Conserving natural resources and protecting the environment. Under these twin
objectives there are number of aspects to be addressed. The composite ‘Natural
Industrial sustainability index’ (NISI) is developed using the non-sustainability
indicators and the weights for impacts as defined as follows:

Natural Industrial Sustainability Index= NISI = 100 -  (NSI#I x I)

Where NSI#I is the non-sustainability indicator score for aspect I as defined in

section 3.1, I is the weight for impact of the aspect I as defined in
section 3.2 and I ranges from 1 to 14.
 Evaluation of sustainability performance of a pulp and paper mill
3.1 Sustainability aspects for pulp and paper mill and measuring using
the non-sustainability indicators.

To arrive at the list of indicators, the sustainability reports of 21 international

pulp and paper mills from USA, Canada, Brazil, Europe, Japan and Indonesia are
studied. It was observed that not all companies use all the indicators suggested by
GRI. Further many companies do not use social indicators beyond accidents and
training programs to employees. Keeping in mind the principle of TNS, the
prominent aspects used by more than 45% (i.e. more than 9 companies and
above) of these 21 foreign paper mills are selected (Table 1) for the study.

TABLE 1 SUSTAINABILITY ASPECTS SELECTED FOR THE STUDY

S.no Sustainability Aspects % of companies that

used the indicator
1 Percentage of wood from certified forest 80%
2 Percentage of waste paper/Agricultural raw 65%
material used
3 Renewable energy used 80%
4 Air Emissions CO2 from fossil fuels 70%
5 Air Emissions SPM 45%
6 Air Emissions NOX 65%
7 Air Emissions SOX 65%
8 Water Recycled 75%
9 TSS in Waste Water 70%
10 BOD in Waste Water 70%
11 COD in Waste Water 55%
12 AOX in Waste Water 50%
13 Waste to reuse 45%
14 Lost time injury frequency - Accidents 60%

An aspect can be measured using a sustainability indicator or non-sustainability

indicator. The indicators are designated with a specific code for easy reference
throughout the study. A prefix of ‘SI’ is used to identify a sustainability indicator
with a running decimal number. Similarly a prefix of ‘NSI’ is used to identify a
non sustainability indicator with a running number. The value of Non
Sustainability Indicators is 100 less Sustainability Indicators, since both are
represented in percentages.

Raw Material

Wood from Plantations Vs Rain Forest

The raw material used for manufacturing of paper should be from renewable
resources, for achieving sustainability. In case of wood, it should be from
manmade plantations and not virgin or natural or rain forest. Hence if the wood is
not from plantations, then it would lead to negative impact on the environment.
A typical paper mill uses various raw materials such as wood, agricultural
residues, waste paper, etc. Since the quantity of pulp made various among
different raw materials, the pulp produced is used as a basis for determining the
proportions of raw materials. Measuring this aspect of sustainability is described
below.
Let
WPP Quantity of wood pulp made during a time unit by using wood from
plantations
WPT Quantity of wood pulp made during a time unit from all sources
The sustainability indicator SI#1 is defined as percentage of wood pulp from
plantations
Therefore SI#1 = (WPP)/ (WPT)) x 100 (1)
If SI#1 is zero, if all the wood pulps are from natural rain forest and is 100% if
all the raw materials are from plantations. Now the Non-Sustainability can be
easily computed as
NSI#1= ((WPT-WPP)/WPT) x 100 (1a)
Wood Vs Agricultural raw material or Waste Paper

Use of waste paper or agricultural raw materials such as bagasse, straw, etc
reduces the destruction of forest and leads to conservation of forest and eco-
system. Hence use of non-wood fiber for production of paper leads to
sustainability. Measuring this aspect of sustainability is described below
Let WP = quantity of wood pulp produced
NWP= quantity of non-wood pulp produced
Then we define SI#2 as percentage of non-wood pulp which is given by
SI#2 = Percentage of non-wood pulp = (NWP/ (WP+NWP)) x 100 (2)
If SI#2 is zero, if all the pulps are from wood fiber source and is 100% if all the
pulps are from non-wood fiber source. Now the Non-Sustainability can be easily
computed as
NSI#2= (WP/ (WP+NWP)) x 100 (2a)

Energy

Energy (fuel & electricity) used for manufacturing should be from renewable
resources for sustainability. As the non-renewable energy sources such as fossil
fuels are depleting, sustainability can be achieved if and only if the use of fossil
fuel is eliminated. Measuring this aspect of sustainability can be achieved by the
following method.
Let
RE Quantity of energy from renewable sources used during a time unit
NRE Quantity of energy used during a time unit from non-renewable or
depleting resources
Then SI#3 = (RE/ (RE+NRE)) x 100 (3)
Non-sustainability is measured as
NSI#3= (NRE/ (RE+NRE)) x 100 (3a)

Air Emission - CO2

 Evaluation of sustainability performance of a pulp and paper mill

Carbon dioxide emission from fossil fuels (direct/indirect) is the major reason for
the Global Warming. For sustainability, emission of carbon dioxide due to use of
fossil fuels should be zero.

Then the let

CO2EFF = Quantity of CO2 emission from fossil fuels during a time period
CO2ERF = Quantity of CO2 emission from renewable fuels (non-fossil)
during
a time period
SI#4 = Percentage of CO2 emission from non-fossil fuels
Then SI#4 = CO2ERF/ (CO2EFF+CO2ERF) x 100 (4)
A Company is sustainable if it reduces the CO 2 emission from fossil fuel, i.e.
SI#4 to zero.
Therefore NSI#4 = CO2EFF/ (CO2EFF+CO2ERF) x 100 (4a)

Air Emission - SPM

For sustainability to be achieved the SPM emission should be brought down to

zero level. The emission of SPM for each year is used for constructing this
indicator. Suppose we have data for five years on the quantity of SPM emission,
as given below

Year 1998-99 1999-00 2000-01 2001-02 2002-03

SPM in tonnes X1 X2 X3 X4 X5
per year
Maximum SPM among the data available years = MAX (x1,x2,x3,x4,x5)
Then we define the NSI#5 = percentage of SPM emission as follows
NSI#5 = (Xi /MAX(x)) x 100 (5)
SI#5 = 100 – NSI#5 (5a)

Air Emission - SOx

For sustainability to be achieved the SOx emission should be brought down to

zero level. The emission of SO x from a company for each year is used for
constructing this indicator. Suppose we have data for five years on the quantity of
SOx emission, as given below

Year 1998-99 1999-00 2000-01 2001-02 2002-03

SO x in tonnes Y1 Y2 Y3 Y4 Y5
per year

Maximum SOx among the data available years = MAX (y1,y2,y3,y4,y5)

Then we define the NSI#6 = percentage of SO x emission as follows
NSI#6 = (Yi /MAX(y)) x 100 (6)
SI#6 = 100 – NSI#6 (6a)
Air Emission - NO x

For sustainability to be achieved the NO x emission should be brought down to

zero level. The emission of NO x from a company for each year is used for
constructing this indicator. Suppose we have data for five years on the quantity of
NO x emission as follows per unit of production, as given below
Year 1998-99 1999-00 2000-01 2001-02 2002-03
No x in tonnes Z1 Z2 Z3 Z4 Z5
per year

Maximum NO x among the data available years = MAX (z1,z2,z3,z4,z5)

Then we define the NSI#7 = percentage of NO x emission as follows
NSI#7 = (Zi /MAX(z)) x 100 (7)
SI#7 = 100 – NSI#7 (7a)

Water

There are many methods and technologies are available for reducing water
consumption including recycling the waste water after suitable treatment within
the plant. A Company is sustainable if it recycles wastewater and eliminates its
dependency on fresh water. Therefore the sustainability index for water
consumption is defined as follows
SI#8= Percentage of Water recycled
SI#8= (Recycled Water / (Fresh water + recycled water) 100 (8)
NSI#8= (Fresh Water / (Fresh water + recycled water) 100 (8a)
A company achieves sustainability when it reduces its fresh water consumption
to zero level by use of efficient technologies including recycling of its own waste
water or waste water from other sources.

Emissions through Waste Water - Total Suspended Solids (TSS)

For sustainability to be achieved the emission of TSS in waste water should be

brought down to zero level. The indicator defined below measures this aspect.
The emission of TSS from a company for each year is used for constructing this
indicator. Suppose we have data for five years on the quantity of TSS emission as
follows per unit of production, as given below

Year 1998-99 1999-00 2000-01 2001-02 2002-03

TSS in tonnes a1 a2 a3 a4 a5
per year

Maximum TSS among the data available years = MAX (a1,a2,a3,a4,a5)

Then we define the NSI#9 = percentage of TSS emission as follows
NSI#9 = (ai /MAX(a)) x 100 (9)
SI#9 = 100 – NSI#9 (9a)

Emissions through Waste Water - Biological Oxygen Demand (BOD)

 Evaluation of sustainability performance of a pulp and paper mill
For sustainability to be achieved the emission of BOD in waste water should be
brought down to zero level. The indicator defined below measures this aspect.
The emission of BOD from a company for each year is used for constructing this
indicator. Suppose we have data for five years on the quantity of BOD emission
as follows per unit of production, as given below

Year 1998-99 1999-00 2000-01 2001-02 2002-03

BOD in b1 b2 b3 b4 b5
tonnes/year

Maximum BOD among the data available years = MAX (b)

Then we define the NSI#10 = percentage of BOD emission as follows
NSI#10 = (ai /MAX(a)) x 100 (10)
SI#10 = 100 – NSI#10 (10a)

Emissions through Waste Water - Chemical Oxygen Demand (COD)

For sustainability to be achieved the emission of COD in waste water should be

brought down to zero level. The indicator defined below measures this aspect.
The emission of COD from a company for each year is used for constructing this
indicator. Suppose we have data for five years on the quantity of COD emission, as given
below
Year 1998-99 1999-00 2000-01 2001-02 2002-03
COD in c1 c2 c3 c4 c5
tonnes per
year

Maximum COD among the data available years = MAX (c1,c2,c3,c4,c5)

Then we define the NSI#11 = percentage of COD emission as follows
NSI#11 = (Ci /MAX(c)) x 100 (11)
SI#11 = 100 – NSI#11 (11a)

Emissions through Waste Water - Adsorbable Organic Halogen (AOX)

For sustainability to be achieved the emission of AOX in waste water should be

brought down to zero level. The indicator defined below measures this. The
emission of AOX from a company for each year is used for constructing this
indicator. Suppose we have data for five years on the quantity of AOX emission as
follows as given below
Year 1998-99 1999-00 2000-01 2001-02 2002-03
AOX in d1 d2 d3 d4 d5
tonnes per
year

Let Maximum AOX among the data available years = MAX (d1,d2,d3,d4,d5)
Then we define the NSI#12 = percentage of AOX emission as follows
NSI#12 = (di /MAX(d)) x 100 (12)
SI#12 = 100 – NSI#12 (12a)

Solid Waste Discharge

A Company is sustainable if it recycles all its solid wastes and eliminates

discharge to land fill. Therefore we define the sustainability indicator for solid
waste discharge as follows
SI#13= Percentage of solid waste recycled
SI#13= Recycled Waste/(waste to land fill + recycled waste) x100 (13)
NSI#13
= Waste to land fill/(Waste to land fill + recycled waste) x 100 (13a)
A company achieves sustainability when it reduces its solid waste discharge to
land fill to zero level by use of efficient recycling technologies.

Employee Accidents

For sustainability to be achieved the accidents at workplace should be brought down

to zero level. The indicator defined below measures this. The number of accidents in each
year is used for constructing this indicator. Suppose we have data for five years on the
accidents as below
Year 1998-99 1999-00 2000-01 2001-02 2002-03
Accidents e1 e2 e3 e4 e5

Maximum accidents among the data available years = MAX (e1,e2,e3,e4,e5)

Then we define the NSI#14 = percentage of accidents as follows
NSI#14 = (ei /MAX(a)) x 100 (14)
SI#14 = 100 – NSI#14 (14a)
Here it considered that, if the accidents lead to fatality at work place, then for
such year the SI#14 would be forced to set to 0.
Thus Equations 1 to 14 describes the sustainability indicators and Indicators 1a to
14a describe the non-sustainability indicators used for this research.

3.2 Weights for non-sustainability indicators

In order to determine the weights, the non-sustainability indicators are to be

ranked on the basis of their impacts. For this purpose the ISO 14001 certified
case study mills, line managers (operation) and functional managers
(engineering, environment, quality, utility, safety) are consulted. All these
managers are the members in the company’s Environmental Management
Steering Committee. The impacts due to non-sustainability of each of the aspect
are discussed in detail and arrived (Table 2).

TABLE 2 IMPACTS DUE TO THE NON-SUSTAINABILITY ASPECTS

 Evaluation of sustainability performance of a pulp and paper mill
SI no. Aspects Impact
1 Use of wood global warming, flooding, drought, loss of bio-
from Natural diversity, change in ecological balance. It affects
Forest present and future generations with possibility to
recovery if plantations is carried out by humans
2 Use of fossil Shortage to future generations. New inventions can
based energy provide solutions leading to possible recovery
4 Emission of global warming resulting in flooding, drought, etc.
CO2 from fossil Possible to recover if humans switch over to non-
fuels fossil source of energy. It has impact on present and
future generation.
5 Emission of get into the lungs of humans and animals resulting in
SPM from Stack breathing problems, asthma etc. Needs medical
treatment to recover back. It also settles on plants and
affect their growth
6 Emission of SO SO2 reacts with water in the atmosphere and fall down
x from Stack/ as acid rain. It affects plants and their growth
7 Emission of NO NO x reacts with water in the atmosphere and fall
x from Stack down as acid rain. It affects plants and their growth
8 Use of water Shortage for agriculture and domestic use. Recovery
from non- is possible if water sources are managed and recycling
recycled source is adopted
9 Emission of Reduce productive habitat. Fish gills can become
Suspended plugged, resulting in high mortality. It also reduces
solids in Water the penetration of light restricting the growth of phyto
plankton thereby affecting the aquatic chain
10 Emission of If BOD is more, then the dissolved oxygen is less
BOD in Waste leading to the death of fish and other aquatic
Water organism. Recovery is possible if BOD is
insignificant
11 Emission of If COD is more, then the dissolved oxygen is less
COD in Waste leading to the death of fish and other aquatic organism
Water . Recovery is possible if COD is insignificant
12 Emission of This is highly toxic to algae and can disrupt the
AOX in Waste aquatic ecosystem. If humans and animals drink this
Water water, then it can lead to health disorder.
13 Solid Waste The chemicals penetrate through the soil and get into
Discharge to the water sources. This affects the plant growth and
land fill soil fertility also pollutes the surrounding area
14 Employees Employees who met with accidents lose their health
accidents or human parts leading to permanent deformation

The criteria for evaluating the above impacts are occurrence of the impact
(frequency), spread of the impact (geographical), persistence of the impact
(time), living beings affected and intensity of impact (recovery to original state).
Each criterion is further divided into categories and the same are given below
with rating scale.
Code CRITERIA CATEGORIES
Occurrence of Rarely Few few few Once Conti
the impact times times times in a nuou
in a in a in a day sly
year month week
O   Rating Scale  5 10 25 50 75 100

Code CRITERIA CATEGORIES

 Spread of the Within Surroundin Regiona Global
Impact Compan g Area l
y
S Rating Scale  10 25 50 100

Code CRITERIA CATEGORIES

  Persistence of impact over generations Present Future
T Rating Scale  25 75

Code CRITERIA CATEGORIES

 Living Beings flor faun huma Scor
Affected a a n e
L Rating Scale  20 20 60 100

Code CRITERIA CATEGORIES

   Intensity (Recovery Possible Possible Impossib score
to original state) but not le
fully
 I  RATINGS 25 50 100  

The rating scale for various categories within each criterion is decided in
consultation with the managers of the case study mill. The applicable categories
under each of the criterion for the fourteen aspects have been arrived at after a
detailed discussion with the managers of the case study mill. The qualitative
rating is converted to numerical value by using the rating scale. Multiplication of
the scores of all the criteria gives the “impact value”. Sum of these ‘impact
values” across all the non-sustainability indicators are used for determining the
weights for each non-sustainability indicators. Weight for an aspect is obtained
by dividing impact value of the indicator by sum of the impact values of all
indicators (Table 3).

TABLE 3 – WEIGHTS FOR NON-SUSTAINABILITY INDICATORS

    SCORES FOR CRITERIA W= (W/∑W)
O*S*T*L*I  
 S.n Aspect O S T L I Overall weights
o  
 Evaluation of sustainability performance of a pulp and paper mill
    Score % Round
off
1 Not Planting of 100 100 100 100 50 5000000000 31.1 30
Trees and Use of
wood from
Natural Forest
3 Use of fossil based 100 100 100 60 50 3000000000 18.6 16
energy
4 Emission of CO2 100 100 100 100 50 5000000000 31.1 30
from fossil fuels
5 Emission of SPM 100 25 25 80 50 250000000 1.6 2
from Stack/
6 Emission of SOx 100 25 25 20 50 62500000 0.4 1
from Stack
7 Emission of NOx 100 25 25 20 50 62500000 0.4 1
from Stack
8 Use of water from 100 75 25 100 50 937500000 5.8 6
non-recycled
source
9 Emission of 100 75 25 20 50 187500000 1.2 2
Suspended solids
in Water
10 Emission of BOD 100 100 25 20 50 250000000 1.6 2
in Waste Water
11 Emission of COD 100 100 25 20 50 250000000 1.6 2
in Waste Water
12 Emission of AOX 100 50 25 80 100 1000000000 6.2 6
in Waste Water
13 Solid Waste 100 25 25 20 50 62500000 0.4 1
Discharge to land
14 Employees 75 5 25 60 50 28125000 0.2 1
accidents
TOTAL∑W 16090625000 100 100

4. NISI for the case study mill

The primary data for the case study mill is collected for a period of 16 years
starting from 1990-91 to 2005-06. The values (Table 4) for the non-sustainability
indicators are computed from the primary data collected from the case study mill.
Fig.1 shows the NISI values for the 16 year period. The trend shows that there is
improvement over period of time.

TABLE 4 NON-SUSTAINABILITY INDICATORS (CASE STUDY

MILL)
 S. Indicator 90- 91- 92- 93- 94- 95- 96- 97- 98-
no Year 91 92 93 94 95 96 97 98 99
1 % of pulp not from 85.8 85.8 86.9 85.9 87.4 88.0 87.6 87.8 88.4
 own managed
plantation
2 % of pulp from 19.5 21.4 20.3 19.3 19.5 17.6 16.4 15.8 7.3
Natural Forest
3 % energy from fossil 77.6 74.1 68.8 63.6 56.5 53.8 58.1 56.3 50.5
fuels
4 % CO2 emission from 68.9 65.7 61.2 56.6 50.6 47.6 50.9 48.8 43.9
fossil fuels
5 Particulate emission 91.1 93.0 93.3 100. 97.6 72.2 65.9 11.7 9.1
index 0
6 SO2 emission index 91.6 92.9 93.2 100. 96.9 84.8 85.2 74.1 72.0
0
7 NOx emission index 91.6 92.9 93.2 100. 96.9 84.8 85.2 74.1 72.0
0
8 % of water from non- 0.0 12.6 12.6 14.9 14.8 21.4 25.3 21.6 21.0
recycled source
9 TSS index 100. 92.1 82.9 68.6 64.5 60.0 39.3 45.2 39.8
0
10 BOD index 100. 92.1 82.9 82.4 77.4 72.1 39.9 45.9 36.7
0
11 COD index 100. 92.1 82.9 82.4 77.4 72.1 48.8 56.1 52.9
0
12 AOX index 98.4 100. 99.2 96.0 93.5 96.8 84.7 76.6 70.2
13 % of solid waste not 9.6 8.9 8.5 8.0 7.4 6.8 6.2 4.2 7.1
recycled and disposed
to land fill
14 Employees Accident 100. 57.8 48.9 37.8 21.1 15.6 13.3 12.2 7.8
Index

 S. Indicator Year 99-00 00- 01- 02- 03- 04- 05-
no 01 02 03 04 05 06
1 % of pulp not from own 88.7 91.4 89.4 93.1 93.4 93.2 93.8
managed plantation
2 % of pulp from Natural Forest 7.3 4.1 4.4 4.0 0.0 13.9 9.3
3 % energy from fossil fuels 63.2 60.8 63.6 65.2 66.3 63.9 69.3
4 % CO2 emission from fossil 54.6 53.5 55.9 56.6 58.7 56.3 61.4
fuels
5 Particulate emission index 8.4 5.9 5.5 4.2 4.2 3.8 4.0
6 SO2 emission index 59.1 52.7 49.6 34.1 26.8 24.7 27.8
7 NOx emission index 59.1 52.7 49.6 34.1 43.2 34.4 36.6
8 % of water from non-recycled 21.1 26.2 27.2 29.4 32.0 29.4 27.2
source
9 TSS index 20.9 22.4 5.9 6.5 4.7 4.3 5.7
10 BOD index 4.9 2.2 3.0 1.7 4.2 3.8 4.0
11 COD index 16.7 20.9 11.7 10.2 9.9 9.6 11.0
12 AOX index 67.7 70.2 71.0 67.7 68.5 68.5 68.2
13 % of solid waste recycled and 6.4 8.6 7.3 7.8 8.9 18.9 27.1
disposed as land fill
14 Employees Accident Index 100 100 10.0 8.9 100 31.1 7.8
 Evaluation of sustainability performance of a pulp and paper mill

5. Evaluation of Sustainability Performance for the case study mill

The relationship between NISI and time period for the case study mill will
determine whether the company has improved its sustainability performance or
not over a period of time. Therefore the following hypothesis is proposed.
Null Hypothesis H10: There is no significant difference in between
‘Sustainability Index” and the time periods for the case study Mill.
Alternate Hypothesis H1a: There is a positive correlation between
“Sustainability Index” and the time periods for the case study mill.
Testing of Hypothesis:
The Pearson correlation coefficient of the NISI for the case study mill for the 16-
year period is 0.78403. In order to test whether collected data is indicative of
significant correlation, the student t test is used.
Statistic t = CC ((n-2)/ (1-CC2))0.5
Where CC= Coefficient of Correlation = 0.78403
N= sample size = 16
Substituting the values we get Statistic t = 4.726
From statistical tables for Student t distribution, for degrees of freedom equal to
14, the critical value of t is 1.761. I.e. Rejection region >= 1.761
Since the Statistic t is greater than Critical value of t, the null hypothesis is
rejected and the alternative hypothesis, namely the correlation is significant at
5% significance level, is accepted. Therefore it is concluded that the case study
mill’s ‘sustainability performance’ has shown improvement over the period of 16
years from 1990-91 (354%) to 2005-06 (55%).
In 1998-99 and then sustainability performance dropped to 48% 2005-06.
It gradually increased to 54.5% in 1998-99 due to following reasons
 Increase in pulp from non managed plantation
  Decrease in pulp from Natural forest
 Increase in energy from bio-fuels
 Decrease in CO2 emission from fossil fuels
 Decrease in solid waste disposal
However, due to reduction in quantity of renewable fuels and increased
dependency on imported pulp after the capacity expansion in the year 2000, the
sustainability index dropped to 48% in 2005-06 from 50% in 2000-01. The case
study mill is moving towards the goal of sustainable development.

6. Relationship between Sustainability Performance and financial

performance for the case study mill

As discussed in the literature review, earlier researchers studied the relationship

between the sustainability performance and financial performance. Hence the
following hypothesis for the case study mill is proposed.
Null Hypothesis H2o: There is no significant difference between Sustainability
performance and financial performance for the case study mill.
Alternate Hypothesis H2a: The NISI is positively correlated with financial
performance for the case study mill.
The value addition (equal to gross income less Manufacturing Expenses) is used
as a proxy for the financial performance for the case study mill (Fig.2).

Testing of Hypothesis
Person correlation coefficient of NISI with = - 0.08063
In order to test whether collected data is indicative of significant correlation I
use the student t test.
 Evaluation of sustainability performance of a pulp and paper mill
Statistic t = CC ((n-2)/ (1-CC2))0.5
Where CC= Coefficient of Correlation = - 0.08063
N= sample size = 16
Degrees of freedom = N-1=16-2=14
Substituting the values we get Statistic t = -0.3027
From statistical tables for Student t distribution, the critical value of t is 1.761.
i.e. Rejection region >= 1.761
Since the Statistic t is less than the critical value of t, the null hypothesis is
accepted and the alternative hypothesis that the correlation is insignificant at 5%
significance level is rejected. Therefore it is concluded that the sustainability
performance and financial performance are negatively correlated. i.e. though the
sustainability performance had shown improvement over the period of 16 years,
the financial performance did not. It is evident that case study mill in deed has
shown improvement in its sustainability performance by taking various measures
in spite of its declining trend in its financial performance.

7. Conclusions

A methodology for evaluating the sustainability performance for a paper

mill has been developed based on the concept of that “a manufacturing
unit is sustainable if and only if it uses all its resources from renewable
sources and has zero impact on the environment”. For the case study mill,
the index has shown positive correlation with the years for 16 years clearly
proving that it is indeed moving towards the goal of sustainable
development. The correlation between sustainability performance and
financial performance revealed that, though the case study mill has shown
improvement in sustainability performance but financial performance did
not. The methodology is useful in ‘what if analysis’ such as changes in
raw materials, fuels, process technology to reduce environmental
emissions, etc. The methodology is easy to understand and quick to
implement by the mill operating management in keeping track of
performance in line with goal sustainable development. This methodology
also applied to know whether the Pulp and Paper Sector as a whole in a
country is moving towards the goal of sustainable development. Such
possibilities are under investigation.

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