Tracing the origin of wood for sustainable operation Helena Jantunen CSR Co-ordinator STORA ENSO – Wood Supply Russia 12 April 2005

Total world forest territory 3.9 billion hectares Europe 188 million ha Oceania 198 million ha 5% South America 886 million ha 5% North America 549 million ha 23% 14% Asia 548 million ha 14% 22% Russia 851 million ha 17% Africa 650 million ha Source: FAO 08 March 2005

Stora Enso in Brief A world leader Paper Packaging Boards Forest Products A world leader 15.7 million tonnes of paper and board 7.4 million m3 of sawn and processed wood products Three core product areas Paper, Packaging Boards and Forest Products Sales: EUR 12.2 billion Approximately 43 000 employees in 40 countries Market capitalisation: EUR 9.3 billion Shares listed on Helsinki, Stockholm and New York stock exchanges 08 March 2005

Balancing aspects of sustainability (Corporate Responsibility) Economic Social (CSR) Environmental Accountability: Transparency, Stakeholder dialogue 08 March 2005

Major wood procurement areas measured in million m3 solid under bark (sub), 2003 Other countries 15.2 Canada 0.4 15.9 Finland 0.9 Sweden 4.7 4.7 6.0 2.5 Russia US The Baltic Countries 7.1 Continental Europe Portugal 0.8 Total consumption of wood in Stora Enso's own mills in 2003 was approximately 44 million m3. The total figure includes deliveries to joint venture and subsidiary companies. Wood flows between procurement areas Total amount of wood procured in the region (The wood is either consumed inside the region or delivered to other areas.) x.x 08 March 2005

Forestry benefits from strong law enforcement Forest industry needs a stable business environment to secure long-term investments and supply of raw material Illegal logging Undermines long term sustainability distorts competition adversely affects public image of the entire industry Different definitions of illegal logging by different stakeholders: Unauthorised harvesting Unsound economic mechanisms and business practices Unsustainable forest management 08 March 2005

Stora Enso position Stora Enso actively works to combat illegal logging wherever the Group operates. Stora Enso also acts to prevent any other illegal activities related to the wood supply. Where Stora Enso cannot directly prevent such illegal incidents, the Group co-operates with the authorities and other stakeholders in order to improve the working environment. Illegal logging= Wood harvesting in violation of national laws and state laws 08 March 2005

Strategies to fight unsound practices Clear corporate policies and ethical codes support ethical business Recognize and analyse the risks related to legality and sustainability Focus on long term partnerships and investments Have local representative network to control and verify Increase own logging operations Keep the supply chains as short as possible Partnership and training to promote supplier’s awareness/performance Have active stakeholder dialogue and cooperation customers and suppliers governmental and public authorities NGOs research institutes media 08 March 2005

Traceability system – case Russia Tool for verifying compliance with corporate policies and legislation Third party verified through ISO 14001 and EMAS since 1998-1999 Environmental clause in contracts ensure supplier’s commitment to Stora Enso policies Auditing Wood origin data Contracts C B A External audits D Internal audits for monitoring and development Supplier audits to verify Harvesting rights Environmental policies Worker safety polices Field audits to verify Documentation and origin Forestry practices and forest certification Biodiversity, conservation status Social aspects: Worker safety Wood origin data from each harvesting site to SE database GIS map system – Forest certification data Legal harvesting rights – Volumes Environmental values 08 March 2005

Stora Enso targets to maximise wood coming from certified forests Promoting forest certification where ever Stora Enso operates Today less than 5% of the forests of the world are certified About 45% of wood used by Stora Enso comes from certified forests Also Traceability systems needed to verify the origin Stora Enso’s traceability systems cover 98% of wood 08 March 2005

Conclusion: Joint efforts to prevent illegal logging Public authorities and the working environment Develop legislation and law enforcement Well functioning controls systems are effective, cost-efficient, based on analyses and focussed into preventing and punishing illegal actions Private sector and ethical business practices Corporate policies and guidelines to support ethical behaviour Traceability systems third party verified through EMAS, ISO14001, ISO 9002 and Chain-of-Custody are strong tools in ensuring legality Cooperation and partnership Partnership along supply chain between suppliers and customers Cooperation between public authorities, companies, NGOs and researchers help recognise risks and increase transparency and effectiveness 08 March 2005

For more information, visit www.storaenso.com  sustainability 08 March 2005