Hi, everyone. My name is Peter Löfving , Vice President of Sustainable Finance. I would like to welcome you to this ESG engagement call. I want to thank you for the many questions that have been submitted. We will do our best to answer those today. We expect this call to take approximately 45 minutes. We will not be able to take any further question during the call. We welcome you to send any additional questions that you might have. Please send those to investor.relations@storaenso.com. We will respond to those. We would also welcome your feedback through a short survey that we will send out. Today, you will meet some of our sustainability experts who will respond to the questions you have submitted and walk through a number of important ESG topics.
Without further ado, I want to hand over to our Head of Sustainability, Annette Stube .
Thanks, Peter. I'm Annette Stube . I sit on our group executive team, I'm heading up sustainability in Stora Enso. For the sake of giving you an overview, I will briefly take you through our strategy and our sustainability ambition, I'll also give you some insight in terms of why we are working with sustainability the way that we do. I'll take you through a couple of examples of how we are integrating this in the machine room and how key decisions are made based on sustainability. First, I will introduce you to some of the key members of my team who will be responding to your questions today. First, we will have Antti, who will respond to questions regarding sustainable forestry and biodiversity. We'll have Johan, who will respond to questions around climate change and carbon.
Kenneth, who will talk about other environmental issues like water and materials residuals. Then we will have Uwe, who will respond to questions around human rights and socially responsible business practices. I hope that what we are doing today will bring some responses to your many questions, and thank you so much for bringing those to us. Otherwise, there's a lot of more data in our sustainability report that you can access anytime. First of all, I think it's appropriate that just to get us started, we are taking the planetary boundaries as our starting point for what we do. I'm sure you are familiar with this concept, which tells us about that we are, as a global society, reaching some of the boundaries for what nature can sustain.
The important message here is not so much that nature will be destroyed. The important message is that it will also destroy the way that we live our lives as a society. Nature will regenerate, but we will not be able to sustain our lives as a society, and that's what the planetary boundaries concept is telling us. That's an important point for us as a company as well because we believe that the winners in the future society, and hopefully it will not go as bad as some of the reports are projecting these days. We believe that the winners of this society that we will come to are the ones that can deliver the products that can help mitigate these changes and mitigate the negative impacts and even help reverse them.
That's how we've designed our strategy, that's how we are designing our products. This is why when we say that sustainability is integral to our strategy, it really is integral to our strategy, and we see sustainability as a way of future-proofing our business. We have divided our business into areas, into foundation areas and strategic growth areas. Our foundation businesses make the base and the platform for our growth in the strategic areas. Key here is that we are one of the world's largest private forest owners. The key strategic areas are chosen for their higher growth rates and for their higher margins and less cyclability. These segments involve higher degree of innovation and value-added products, and they are all delivering more sustainability to the world, which will further future-proof our business and strengthen our competitiveness.
Our ambition for 2050, which is a long way away but really important to have that view, is that all our products must be regenerative by this time. For us, this means being biodiversity net positive, so bringing more biodiversity around than we destroy. Being carbon net positive, taking more CO2 out of the atmosphere than we let out. Be fully recyclable, meaning that all our products are technically recyclable. This is actually a target for 2030 as well. By 2050, it will actually happen, meaning that the societal infrastructure will need to be in place to actually recycle the products, and we will work actively also outside our gates to make that happen.
For all of these ambitions, we have 2030 targets to keep ourselves on track, and my colleagues will get more into those as we go along here. I'll just give you a few examples from our machine room in terms of how do we make this come to life, to push innovation and integration into decision-making. I have a few examples for you here. One really powerful tool that we've started is quarterly reviews that we have with each of our product divisions or all of our divisions. We have our CEO, our Head of Strategy, and myself in a meeting together with the Head of Division, as well as the Head of Sustainability in the division. We talk about how each division is faring in terms of reaching our 2030 targets and any other topical issues there may be.
This is really powerful because it's a continuous reminder of how top of mind this is for the company. We also in the process of developing a scorecard, a product scorecard, which is going to keep track on us in terms of our entire product portfolio and how this is moving towards becoming increasingly more regenerative. We have sustainability included in our investment decisions, obviously in our strategy, when we create new outlooks for strategy. It's in our M&A due diligence, it's now part of our incentive structures, and it's a key part in how we are upgrading our people. We have a very large program that is being cascaded in the company right now to upgrade the entire workforce on sustainability.
There's a lot of things going to this, as you can hear, at all levels of the company. We've been reporting about our progress for many years, including with double materiality. We've been using several voluntary schemes like the GRI and SASB, this is putting us in a quite good position in terms of being well-equipped for the new legislation coming up in the EU, the Corporate Sustainability Reporting Directive. Over the years, we have been well-recognized by investors. As you can see here, we have an overview of how our performance is rating by the rating agencies. We believe that our reporting and our performance puts us among the top ESG performers in our industry. Quite a nice place to be. This was just a brief overview.
Now we'll dive into your questions. I will start by handing over to Antti to talk about sustainable forestry and biodiversity. Thank you.
Thank you, Anette. My name is Antti Marjokorpi, I'm heading Forest Plantations and Land Use Sustainability on group level in Stora Enso. I will tell you about our work on sustainable forestry and biodiversity. Wood is Stora Enso's most important raw material and a starting point for our strategic growth. We are committed to sustainable forest management and enhancing and protecting biodiversity. Stora Enso owns and manages some 2 million hectares of land, making the company one of the largest private forest owners in the world. 30% of our wood raw material needs are covered from our own sources and long-term supply agreements. The rest comes mainly from private forest owners in the Nordic countries. We also procure wood from Central Europe, where we have, for example, many of our sawmilling operations.
Importantly, 13% of our wood comes from tree plantations in Brazil, Uruguay, and China. They implement a very different land use model than what is used in Europe or in the Northern Hemisphere, especially in the Nordics. In the plantations, the wood production resembles more agricultural production than forestry. There are certain areas are used for intense wood production, while the others are used for protection of native ecosystems. The landscape is consists of mosaic of different land use types. We know the origin of our wood and that it comes only from sustainable sources. All wood we use is covered by traceability systems, 80% of our wood intake is certified, which is well above industry average. 99% of the forests we own and managed are certified.
We also work actively with the forest certification systems to promote forest certification globally and expand certification among our wood suppliers, for example, through management of group certificates and arrangement of certification training. This is a very important part of our work and promotion on forest certification. One and a half years ago, we started to advance our work to safeguard biodiversity and committed to achieving a net positive impact on biodiversity in our own forests and plantations by 2050. We aim at achieving this through biodiversity management, active management. This has been part of our forestry operations and practices for decades already, but now we think that more can and must be done. Therefore, we have taken additional measures and started so-called Biodiversity Leadership Programme.
We have received questions from you on this program. This program includes actions for 2030 using our own forests as a development platform, but gradually expanding it to other areas and then also for the sourced wood. The actions include, among others, new program for own forests. This includes testing different forest management practices, for example, for, and forest restoration activities, and so on. We also model and test the impacts of different management methods overall. We track the process through science-based indicators and provide attractive biodiversity services for forest owners we source wood from. This is the way to expand our impact beyond our own forests. As biodiversity is complex and always specific to location, our biodiversity management monitoring requires good data and granular data.
In our Precision Forestry program, we are developing various digital tools to provide that data and support to provide that data. It's very detailed and specific data to support our biodiversity and forest management. These Precision Forestry program tools include development programs includes various IT tools, remote sensing using drones, and so on. Monitoring the state of biodiversity and our impacts to it is an essential part of our Biodiversity Leadership Programme. We are using over 15 indicators, which cover three levels of biodiversity: ecosystems, habitats, and species. These are the commonly used hierarchical levels in biodiversity. These indicators, what we use are science-based and stem from disciplines such as landscape ecology and conservation biology.
We use indicators such as forest age class distribution, stands with, share of stands with high age, prioritized habitats, and very importantly, deciduous trees play a significant role in the forest ecosystems, especially in the boreal. Here, we are tracking the areas with deciduous trees where there are dominant, deciduous dominant stands. We are increasing amount of birch, which has been largely underrepresented in the Nordic forestry during the past 50 years, and so on. Very important for biodiversity in the boreal is dead wood. It's home for various insects and fungi, for example, which are totally dependent of different stages of dead wood. Therefore, we increase dead wood in our operations. Then we closely monitor amount of dead wood.
We are expanding our work on indicators to the tree plantations in Brazil, Uruguay, and China. This work and these indicators also operate on these three hierarchical levels: ecosystems, habitats, and species. We are reporting the results of the monitoring in a dedicated biodiversity indicators webpage, which includes information by the country and region we operate. You can go to and see this webpage and explore the indicators for each country. There you can also see why each indicator is important for biodiversity in that specific location. As said, we are continuously developing this part of our Biodiversity Leadership Programme, as well as the other parts, but specifically the indicators. We will add new indicators there on our website as they come into operation.
Our approach to biodiversity is aligned with international policy development and agreements such as Convention on Biological Diversity. We actively participate global biodiversity discourse. As forest is our foundation for value creation, our work on biodiversity has naturally started from forests. However, this is only the beginning of the journey, which we encourage you all to join us. Thank you for your attention. Over to you, Johan.
Thank you, Antti. Hi, all. I'm Johan Holm. I hold the position as Head of Carbon Neutrality at our group function Sustainability. In this section, I plan to cover our climate ambitions, targets, and performance. I will also say a few words about the concept of avoided emissions and how they are used to calculate our net climate impact. First, a recap on how we account for carbon. The emissions are calculated as CO2 equivalents and split into three categories according to the Greenhouse Gas Protocol. In Scope 1, you have CO2 emissions, which basically are the emissions from the fossil fuels we use at our sites. The Scope 2 emissions are the emissions from the electricity we purchase. The Scope 1 and 2 emissions are externally assured with reasonable assurance, which is the same high assurance level as for our financial reporting.
All other emissions are assured with limited assurance. Regarding Scope 1 emissions, we've received a question from the audience and on why we do not report details on our progress about phasing out our peat and coal use. What we can say here is that we don't distinguish between the different fossil fuels we use, and we therefore report the progress as fossil Scope 3, Scope 1 emissions. However, the detail on how we provide the data is reported on unit level, so there is a level of detail there. The third scope, the third category, Scope 3, include our emissions up and downstreams our operation, and it's much different to Scope 1 and 2 emissions since these emissions are someone else's Scope 1 and 2 emissions. When managing both the accounting and decarbonization actions, one have great challenges.
From an accounting point of view, there is a matter of accuracy since most of the calculations are done with generic factors from databases. Our aim here is to improve the amount of primary data in order to improve our accuracy. We're currently running a program to improve, we anticipate that this Scope 3 program will continue for a number of years. The other challenge of Scope 3 is related to carbon reduction actions and the fact that you need to influence your stakeholders along the value chain in order to improve. To do this, there is a need to change the way one do business and ensure CO2 emissions become a key business factor, and also including the establishing of partnership with both suppliers and customers.
We have high climate ambitions. We have, as part of our sustainability strategy, made a comment to become carbon regenerative by 2050. What this actually means is that not only do we aim for net zero, our products will remove more CO2 emissions than they emit before 2050. As an intermediate target to reach our climate ambition, we have an approved science-based target. We do have a long tradition of committing to and achieving CO2 reduction targets. Already in 2007, we announced our first CO2 reduction target as one of only handful companies in the world. This target was achieved and renewed in 2011. In 2017, we received, as the first forest industry company in the world, a science-based target.
When this target was achieved in 2021, we committed to our current science-based target, which is aligned with the 1.5-degree scenario. Our intermediate target is to reduce our Scope 1 and 2 emissions with 50% by 2030 using 2019 as the baseline. We have the same target for our Scope 3, but as said, the actions to reach the target are much different in nature compared to Scope 1 and 2. Not only that, the ambition itself is, according to external studies, one of the most challenging ones in our industry. When describing our current performance and dedication towards mitigating our CO2 emissions, I think it's worthwhile to quickly review our historical progress. Compared to 2006, we had last year actually reduced our Scope 1 and 2 emissions with close to 70%, which in itself is a fantastic achievement.
If we look at the most recent performance, which is Q1 this year, the performance remains on a good level. We're performing better than the linear annual reduction objective, with a performance of minus 32%. The main reasons for the results are improvements in energy efficiency, reducing fossil fuels, and increasing the use of biomass-based fuels. One novelty this year to maintain focus for our Scope 1 and 2 reduction was the link to our remuneration program. Future actions of the reductions will follow our carbon neutrality roadmap for our Scope 1 and 2 emissions. The actions in the roadmap make up several smaller and bigger upcoming actions. In a nutshell, one can say that the roadmap includes actions to source low carbon electricity, increase energy efficiency, and switch from fossil to biomass fuels.
Over to the performance of our Scope 3 emissions, which, at first glimpse had a fantastic development. However, the reduction of Scope 3 emissions with -25, you know, -27% compared to baseline 2019 were mainly related to business-linked activities and not connected to CO2 emission reduction actions. For example, the closure of two paper mills and the end of dissolving pulp sales to China. However, this does not mean that we don't work with Scope 3 reduction actions. On the contrary, much planning is going on in the divisions on how one should attack our Scope 3 emissions. To finish off, I wanted to quickly address the concept of our net climate impact, including avoided emissions.
The net climate impact calculations were developed by the Swedish University of Agricultural Sciences, it includes four elements: our value chain emissions, meaning our Scope 1, 2, and 3, the carbon removals of our forest, the carbon stored in our products, and the substitution effect, which is the avoided emissions from using our products. The latest assessment using last year's annual data showed that we made a positive climate impact of more than 12 million tons. With that positive note, I thank you so much for your attention, now over to Kenneth.
Thank you, Johan. My name is Kenneth Kolander, and I'm heading Environmental Affairs on group level in Stora Enso. I will elaborate further now on our nature and environment agenda and talk about the areas of water, materials, and beneficial use of residuals. Let me begin with a essential component of all life on this planet, water. Water has a fundamental role in the biosphere. It's regulating the amount of biomass and impacting the amount of carbon in the entire Earth system. A well-functioning water cycle is also closely linked to several global challenges, such as ecological crisis, climate change, zoonotic diseases, and geopolitical turbulence. This requires a systematic approach to freshwater consideration in both climate change mitigation and our sustainability other related actions. Freshwater plays a central role in Stora Enso's production and cooling processes. Naturally a key component in forest growth as well.
We mainly withdraw our process and cooling water to our industrial sites from surface waters, and 96% of the water we withdraw is then released back to the environment after use. We are not operating any large industrial assets in water stress areas, at least not considered material when assessed in a global context using the Aqueduct tool from the World Resources Institute. Only less than 0.01% of the water we withdrawn account from sites with high baseline water stress. Last year, we spent EUR 14 million on water-related improvements across all operations, and our central energy and water efficiency fund supported water investments of EUR 1.4 million at our sites in Imatra, Ingeroinen, and Skoghall, estimated to reduce the group's water discharges annually by 2.7 million cubic meters and costs with EUR 1.4 million.
We are hereby increasing the CapEx transparency for water investments, enabling focus on integrated performance improvements in both water savings and energy cost. To take the next steps, we target decreasing trend of total water withdrawal per saleable ton of pulp and board, our new 2030 target is to reduce process water discharges per saleable production ton by 17% from the 2019 baseline year by 2030. After the first quarter of this year, we have decreased our process water discharges by 4% from the base year. Regarding the question received in advance about the status of the oil spills at Skutskär mill in Sweden in 2018 and 2021.
Well, preventive actions were implemented for both the pitch oil and the tall oil, and these actions were comprising, for example, new procedures for storage tanks and containment, including new load plates for lorries, improved security system to handle spillage occurring within these systems, as well as introduction of instruments for measurement of both pitch and tall oil reaching the water or as the condensate. Finally, efforts have been made to educate colleagues in the upgraded spillage system. Looking ahead, we have recently implemented a new set of group water management requirements valid for all industrial plants to standardize water improvements across all industrial divisions. One action we are really proud of and was proven effective here was to execute site-specific workshops in our mills during 2022. We actually engaged more than 100 persons to identify water reduction actions.
All in all, these actions will continue to drive our performance improvements. Continuing on the environmental agenda, the next up here is the area of materials, waste, and residuals. As you are aware, our overall company strategy is about delivering products which substitute materials from fossil-based sources. Along those lines, we have an ambition to maximize the value of all type of material streams which we're managing from our wood raw material to different products following the wood cascading principle all the way to our process residuals. We address materials efficiency and beneficial use of residuals by active waste and residuals management. At the same time, we aim to reduce our process waste to landfill as close to zero as technically and commercially possible. Through the value chain collaborations, we aim to increase the value from these streams to be beneficially used on the market.
Our target to maintain process residuals utilization rate as high as 98% is also supporting our overall 2030 circularity target for recyclable core products. Our current performance on both targets is both high and stable. Circularity of materials is a key success factor which is measuring our capability to deliver sustainable profitable growth within the Planetary Boundaries. For us, as Stora Enso, our circular bioeconomy means an economy driven by materials that are both renewable and recyclable to combat climate change, to save natural resources, and to minimize waste. Our target is to achieve 100% recyclable products by 2030, and in the end of 2022, the technical recyclability of those were 94%. For Stora Enso, this also mean that we convert existing core material side streams to new products, for example, lignin, to generate circular revenue.
On the output of our production processes, the circular economy is also about exploring use of wastewater residuals in new products, for example, bioplastics, and to beneficially use residuals in the wider value chain, for example, wastewater treatment sludge, a soil improver, like we do in Anjalankoski in Finland and Skoghall in Sweden, where another example is, of course, demonstrates our capacity here to close material cycles is the Enocell in Finland, where we are recycling ash to be spread on forest land, which compensate for the removal of nutrients occurring from biomass removal. This secures both long-term production capacity and prevents acidification in the nature. Finally, utilizing side streams and waste can and should also bring added monetary value. Our revenues derived from process receipts amounted to EUR 221 million in 2022.
With these words, I'll be happy to hand over to Ylva. Thank you.
Thank you, Kenneth. My name is Ylva Stiller, I'm heading Social Impact and Transparency on group level in Stora Enso, I will share our approach to human rights and socially responsible practices. Our business impacts people every day in everything we do. As a global company, we impact a lot of people. Over 20,000 forest owners, 21,000 employees, 20,000 suppliers, and more than 10,000 customers. With operations around the world, we also impact a lot of communities. We take human rights into account across our operations from investment decisions and onwards, paying attention to vulnerable groups and making sure that our partners also do the same.
We engage with affected and potentially affected stakeholders to ensure that our approach stays valid, we work to raise awareness on human rights within our organizations, conducting human rights due diligence and report on our performance. We require our suppliers to respect human and labor rights and comply with our policies and guidelines. We also recognize that the areas that we operate are of value to other stakeholders, and that the operations that we may have an impact on the ways that they are accustomed to using those areas. That's why we have community consultations, including free, prior and informed consent, called FPIC, as a key element of our human rights due diligence and forestry operations, especially concerning land leasing and indigenous people's rights.
For instance, in central Sweden, we have a special agreement on land use with five Sámi communities since 1992, and that continues to maintain our good relationships with them. Working with human rights due diligence is a continuous effort, and with recent and upcoming EU regulation, such as the EU Taxonomy, the CSRD, and the CSDDD, we build on a strong foundational work. Over the last 10 years, we have matured our human rights work from policy to action and to make sure that our processes and procedures are aligned with emerging soft law and increasingly recent hard law. For instance, we opened up our grievance channel a couple of years ago to be accessible for all stakeholders, internal and external. We have identified our highest human rights areas, which we prioritize when we work with human rights.
Most recently, we did a number of deep dives into high-risk supply chains in local context to really understand how our processes and procedures and controlling mechanism work and make sure that they are fit for purpose. How do we then work with human rights due diligence? Well, we follow the logic of the UN Guiding Principles on Business and Human Rights and the OECD guidelines when we risk map, monitor, and manage impact and communicate on progress. For example, when we source products and services. All sourcing categories are risk-rated based on environmental and social governance criteria.
The category risk, together with geographic risk, steers the type of monitoring activities that we deploy, and we always use external auditors and whenever possible, accompanied by Stora Enso sourcing colleagues to make sure, of course, that the knowledge that we gain stay in the company. To pre-qualify as a supplier to Stora Enso, supplier must complete a questionnaire, submit confirmation that they comply with the Stora Enso Supplier Code of Conduct, provide data on their safety and CO2 performance, as well as completing a safety management training called Safety Trail. We use the data points, the CO2 and safety data points to make a more balanced sourcing decision, but also as a way to incentivize suppliers to really think about these topics and their sustainability performance. There is a number of topics covered in our Supplier Code of Conduct.
It ranges from responsible business, safety, climate change, biodiversity, ethical recruitment, and many more. Actually, at the moment, we are testing a similar code to be used for customers to improve our downstream due diligence. That's quite new and exciting. Here, I also wanna pick up on our grievance mechanism, our SpeakUp hotline. I mentioned just a minute ago that we opened that one up for all employees and all external stakeholders. We actively promote this one for in all of our operations to all employees, but also all on-site contractors because we have a lot of them. We promote it to suppliers on our supplier platform and in our Supplier Code of Conduct. This is also referenced. Some of our operations have specific communication material that is distributed to community members when they engage with them.
That has had a really good response. Now we're looking into using the same kind of setup when we interact with other stakeholders. We use an independent, a third-party service provider to manage the SpeakUp hotline to enable anyone who wants to report a local complaint or concern or potential noncompliance anonymously to be able to do so. The hotline is available in 25 languages, and it's available 24/7. To give you a little bit of figures on this, last year we had 153 cases reported that led to 44 cases led to disciplinary actions, either legal action or process improvements, and 17 cases resulted in determination, the termination of business relationships. It is definitely an actively used hotline, and we take the consequences as well drawn from the findings.
Regarding some questions on Veracel, land invasions on private property are a long-running challenge in Brazil and has affected various actors that use land, for instance, forest and farming businesses. Some areas of our joint operation Veracel's land have been occupied ever since 2008. When Veracel is not the root cause of the problem that the landless people are facing, they wanna be part of the solution without stepping into the shoes of the state, of course. They strive to maintain a continuous dialogue with the landless movements and supports land allocations through so-called sustainable settlement initiatives. The first one was launched in 2011.
The Sustainable Settlements Initiative was facilitated by the government of the state of Bahia in cooperation with the National Institute for Colonization and Agrarian Reform, referred to as INCRA, as well as the representatives of six officially recognized landless people social movements. The aim was, of course, to solve the land conflict or the conflict of land invasion and find a solution for landless people to gain access to land and to grow food. In 2011, when the first agreement was set, Veracel designated 16,500 hectares of land to be purchased from the company by INCRA and then redistributed to the landless movement.
In 2018, another agreement was made where Veracel agreed to sell another 3,500 hectares of land to the social movements, also for the purpose of growing food. In total, Veracel voluntarily approved the transfer of around 20,000 hectares of land to benefit the landless people. But the agreement includes so much more than just land. It includes access to agri-agronomic training and advice, as well as technical support to build the needed infrastructure that a productive farming community needs. The success of the sustainable settlement agreements, and actually one of the largest ever reached with MST, is based on continuous dialogue. Today, Veracel has a team of dedicated community liaison managers who are in constant contact with surrounding communities, including those in the settlement communities.
At the end of last year, 182 hectares of productive land owned by Veracel remained occupied, but by those social landless movements who have not are included in the agreements. There's also an responsibility that Stora Enso has as a company when we decide to close down operations. In 2021, Stora Enso announced its plan to permanently close down a production site in Sweden, Kvarnsveden, affecting 440 employees. Stora Enso has since worked closely with other locations and stakeholders to find reemployment opportunities and training these affected employees. At the end of the year, almost a third of the employees had found a new position, and 20% of the redundancies had been managed through the pension agreements.
Stora Enso also offered financial outplacement support for affected employees, training support, relocation support, but also support if one wanted to start up a new business. We've also made sure that there are health services available, additional health services available for those affected employees. Last year, Stora Enso sold the industrial site to Northvolt, and the new operation is forecasted to create almost 1,000 new jobs in the community, which would again make the Kvarnsveden site an important employer in the local community. With that, I hand over to Peter.
I want to thank all participants for your interest and engagement in how we work with ESG matters and for listening in to this call. I also want to thank our experts for sharing your insights with us today. We are getting plenty of questions on our ESG efforts and ambitions. This was one way to address those questions. We are interested to hear your feedback in the survey that we will send out so that we can continue to improve our ESG communications. Thank you.