2024
Annual report
Photo: Carsten Dybevig
Our core values:
openness, honesty and cooperation
The Norske Skog of tomorrow is a
team effort and can only be realised
through external and internal
cooperation
.
Our business is by definition circular as it’s
based on renewable resources, aiming to
replace fossil alternatives. We increasingly
use recycled material. We are
honest
about
our processes, and strive to make all aspects
of our business sustainable.
This is something we realise through
innovation,
openness
to new
opportunities, competence and hard work.
It doesn’t come by itself. It’s up to us.
We provide
value
in many meanings
of the word: for society in general, for local
communities, for customers, for employees,
for shareholders.
Design
: BK.no,
Print:
BK.no
/
Paper:
Artic Volum white
Editor:
Carsten Dybevig
Cover photo:
All images are Norske Skog’s property and should not be used for other purposes
without the consent of the communication department of Norske Skog
About Norske Skog
5
Norske Skog - The big picture
5
Key figures
6
About Norske Skog operations
7
A glimpse of 2024
8
The history of Norske Skog
10
CEO’s comments
12
About Norske Skog Golbey
14
Board of directors
20
Corporate management
21
Share information
22
Report of the board of directors
26
Sustainability statement
33
General disclosures (ESRS)
34
Environmental information
54
Climate change (ESRS E1)
55
Pollution (ESRS E2)
73
Water and marine resources (ESRS E3)
77
Biodiversity and ecosystems (ESRS E4)
82
Resource and circular economy (ESRS E5)
90
Social information
96
Own workforce (ESRS S1)
97
Governance information
108
Business conduct (ESRS G1)
109
Appendix
112
Content index of ESRS disclosure requirements
113
List of data points in cross-cutting and topical standards that derive
from other EU legislation
116
Board of directors statement on corporate governance
121
The UN Sustainable Development Goals are an integral part of our strategy
128
Signatures from the board of directors
131
Consolidated financial statements
133
Notes to the consolidated financial statements
138
Financial statements Norske Skog ASA
181
Notes to the financial statements
185
Statement from the board of directors and the CEO
191
Independent Sustainability Auditor’s Limited Assurance Report
192
Independent Auditor’s report
196
Alternative performance measures
201
Contents
Norske Skog Golbey, paper warehouse
Photo: Cyrielle Nussbaum
Norske Skog Bruck, paper wearhouse
Photo: Carsten Dybevig
99%
certified wood fibres
91%
biomass resource inflows
-70%
reduction in Scope 1 and 2
GHG-emissions between
2015 and 2024
2 101
employees
-54%
reduction in Scope 1 and 2
GHG-emission per tonne
produced between 2015
and 2024
21%
female in top
management positions
10 173
NOK million
total operating income
736
NOK million EBITDA
Skogn, Norway
Saugbrugs, Norway
Golbey, France
Bruck, Austria
Boyer, Australia
(Discontinued in 2025)
Business units
in 4 countries
5
ABOUT NORSKE SKOG
Annual report 2024
I
Norske Skog
I
5
Key figures
RESTATED
NOK MILLION (UNLESS OTHERWISE STATED)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
INCOME STATEMENT
Total operating income
11 132
11 852
11 527
12 642
12 954
9 612
10 315
15 214
11 557
10 173
EBITDA*
818
1 081
701
1 032
1 938
736
662
3 105
2 062
736
Operating earnings
19
-947
-1 702
926
2 398
-1 339
-160
2 845
934
-60
Profit/loss for the period
-1 318
-972
-3 551
1 525
2 044
-1 884
-363
2 572
481
-982
Earnings per share (NOK)
-15.53
-11.46
-41.86
17.98
24.09
-22.21
-4.28
30.31
5.67
-11.57
CASH FLOW
Net cash flow from operating activities
146
514
404
881
602
549
191
2 040
1 928
-15
Net cash flow from operating activities per
share (NOK)
1.55
5.45
4.28
9.34
6.39
5.82
2.25
24.05
22.73
-0.18
Net cash flow from investing activities
-174
-105
-278
-188
-180
302
-891
-1 956
-2 689
-1 198
OPERATING MARGIN AND PROFITABILITY (%)
EBITDA margin*
7.30
9.10
6.10
8.20
15.00
7.70
6.42
20.41
17.85
7.23
Return on capital employed (annualised)*
5.20
8.90
6.60
14.10
28.50
2.10
-7.78
14.79
-12.50
-8.14
PRODUCTION/DELIVERIES/CAPACITY UTILISATION
Production publication paper (1
000 tonnes)
2 366
2 506
2 494
2 492
2 310
1 800
1 921
1 713
1 024
1 124
Deliveries publication paper (1
000 tonnes)
2 356
2 520
2 491
2 485
2 285
1 825
1 952
1 714
1 040
1 115
Production/capacity publication paper (%)
85
93
93
95
89
77
89
87
80
87
Production packaging paper (1
000 tonnes)
73
164
Deliveries packaging paper (1
000 tonnes)
65
162
Production/capacity packaging paper (%)
70
89
BALANCE SHEET
Non-current assets
9 620
7 184
4 939
4 789
5 248
4 084
4 538
7 069
9 068
10 037
Current assets
3 512
3 313
3 170
3 776
4 991
3 703
4 587
6 539
5 687
4 430
Total assets
13 133
10 497
8 109
8 565
10 240
7 787
9 125
13 609
14 755
14 467
Equity
4 729
2 090
-1 427
2 365
5 493
3 219
3 133
5 909
6 161
5 384
Net interest-bearing debt
4 528
5 038
5 717
2 268
919
725
1 054
1 092
2 590
4 119
*As defined in alternative performance measures.
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
0
500
1 000
1 500
2 000
2 500
3 000
3 500
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
0
1 000
2 000
3 000
4 000
5 000
6 000
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
15 214
11 557
10 173
3 105
2 062
736
1 092
2 590
4 119
TOTAL OPERATING INCOME
EBITDA
NET INTEREST-BEARING DEBT
ABOUT NORSKE SKOG
6
I
Norske Skog
I
Annual report 2024
About Norske Skog’s operations
PRODUCTION CAPACITY
in tonnes/year
Business unit
Newsprint
SC
(magazine paper)
LWC
(magazine paper)
Packaging paper*
Total capacity
Norske Skog Bruck
-
-
200 000
210 000
410 000
Norske Skog Golbey
320 000
-
-
550 000
870 000
Norske Skog Saugbrugs
-
200 000
-
-
200 000
Norske Skog Skogn
500 000
-
-
-
500 000
Total Norske Skog group
820 000
200 000
200 000
760 000
1 980 000
* The listed capacity is when full production has been reached.
STRATEGY
Norske Skog is a leading European producer of publication and packaging
paper with a business strategy:
1. Improve and optimise publication paper cash flows
: Enhancing efficiency
and profitability in the traditional newsprint and magazine paper segments.
2. Become a leading independent European producer of renewable packaging
paper:
Expanding into recycled containerboard production with converted
newsprint machines at Norske Skog Bruck and Norske Skog Golbey.
3. Integrate vertically within the entire value chain:
Securing long-term
competitiveness by controlling upstream (raw materials) and downstream
(distribution) activities.
This strategy aims to transform Norske Skog into a growing, high-margin
business while leveraging the existing infrastructure and expertise for
sustainable growth.
OPERATIONS
Norske Skog operates four mills in Europe (Norske Skog Skogn, Norske Skog
Saugbrugs, Norske Skog Bruck, and Norske Skog Golbey):
• Publication paper:
1.3 million tonnes annually (0.8 million tonnes newsprint,
0.5 million tonnes magazine paper) under brands like Nornews and Norcote
.
• Packaging paper:
Following conversions, Norske Skog Bruck (210
000
tonnes) and Norske Skog Golbey (550
000 tonnes, starting in 2025) will
produce 760
000 tonnes of recycled containerboard (Strato brand).
• Energy and bio-products:
Mills generate renewable energy, biogas at
several mills and innovative bio-products.
The company employs 2
101 people, is headquartered in Norway, and is listed
on the Oslo Stock Exchange (NSKOG). The Norske Skog Boyer mill’s
discontinuation in 2025 reflects a strategic shift to focus on European
operations.
MARKETS
• Publication paper:
In Europe, Norske Skog holds a 25% market share in
newsprint, 9% in SC magazine paper, and 6% in LWC magazine paper. Demand
decreased in 2024 (newsprint -1%, magazine paper -5%), but capacity
closures have stabilised supply-demand for some grades. Prices remained
steady, though raw material costs rose, offset by lower energy costs.
• Packaging paper:
The West-European recycled containerboard market
consumed 20 million tonnes in 2024, with a 3.4% demand increase
. Norske
Skog’s Bruck mill ramps up production (full capacity by second half 2025),
while Golbey’s delayed start targets cost-competitive output using green
energy. Margins remain pressured by industry overcapacity and rising
recycled fibre costs.
MAJOR SUSTAINABILITY MATTERS
Norske Skog prioritizes sustainability, aiming for net zero emissions by 2050,
aligned with the Paris Agreement. Key sustainability efforts include:
• Carbon Footprint
: In 2024, emissions were 250
000 tCO2e (Scope 1),
149 000
tCO2e (Scope 2, location-based), and 810
000 tCO2e (Scope 3),
with Scope 3 (67% of total) driven by transportation (48%). The Norske
Skog Boyer mill divestment will significantly reduce the group’s footprint in
2025.
• Emission reduction targets:
A 55% reduction in Scope 1 and 2 emissions
per tonne by 2030 (from 2015 baseline) was 54% achieved in 2024, aided
by investments like Norske Skog Bruck’s waste-to-energy boiler (150
000
tCO2e/year reduction) and Skogn’s TMP line (-4
000 tCO2e/year). Scope 3
efforts focus on shifting to low-emission transport (e.g., electric ferries at
Norske Skog Skogn).
• Renewable energy:
Mills leverage renewable sources (e.g., biomass boiler
at Norske Skog Golbey, saving 200
000 tCO2e/year), reducing fossil fuel
reliance. The energy mix shifted to 34% renewable in 2024, reflecting
updated ESRS accounting.
• Circularity and innovation:
Using recycled fibre (e.g., containerboard from
recovered paper) and developing bio-products enhance resource efficiency
and lower emissions.
Annual report 2024
I
Norske Skog
I
7
ABOUT NORSKE SKOG
ECOVADIS PLATINIUM TO SAUGBRUGS
We are proud to announce that our Norwegian
mill Norske Skog Saugbrugs once again has
received Platinum rating from EcoVadis!
This is a significant recognition of our on-
going commitment to sustainability, corpo-
rate social responsibility, and environmental
responsibility. EcoVadis is a global rating
platform that assesses companies’ sustaina-
bility efforts, and Platinum is the highest
distinction awarded to the top 1% of compa-
nies. We are honored to be among them!
A huge thank you to all our employees for
their dedication in making Norske Skog Saug-
brugs a greener and more responsible compa-
ny. Together, we are building a sustainable
future!
SUSTAINABILITY HONORS TO
NORSKE SKOG
Norske Skog is among the 18 of Norway’s 100
largest companies reducing emissions in line
with the Paris Agreement, according to the
PwC’s Climate Index 2024. Norske Skog has
cut emissions across the operations and
supply chains.
Partner in PwC, Hanne Løvstad, says: “Clear
climate leadership means that leaders make
decisions prioritising transition and long-term
competitiveness, and are willing to plan for
real emission cuts both in the short and long
term.”
According to the report, companies that
have established a climate transition plan are
making greater strides. The primary drivers
for
emission
cuts
are
new
regulations,
customer demands, and the desire to improve
reputation.
Norske Skog’s CEO Geir Drangsland says:
“At Norske Skog, business strategy and
sustainability go hand in hand. We have
integrated reduction of greenhouse gas
emissions as a key part of our business
strategy. Together with our business partners,
we can make a difference.”
SUBSTANTIAL EMISSION CUTS AT
SKOGN
The new thermomechanical production line
(TMP) replaces expensive recycled paper
with fresh fibre. More than 70% of the equip-
ment is second-hand, reducing our carbon
footprint with approximately 500 tonnes of
CO2, and major cost savings. It is estimated
that the fossil CO2 reduction will be around
80%. In addition, and the NOx emissions will
be reduced by around 40%. The ash reduction
is estimated at around 60%
“As a company, we are concerned about
sustainability at every step of the value chain.
The vast majority of the equipment is reused
from other mills in the industry, which have
chosen to close or convert their production.
Our
skilled
employees
have
seen
this
opportunity and utilised it to create a very
cost-effective project,” says Håvard Busklein,
Managing Director at Skogn.
OPENING OF NEW TMP-LINE AT SKOGN
The new thermomechanical production line (TMP) at Norske
Skog Skogn AS was officially opened yesterday. This was
celebrated with, amongst others, Skogn employees, external
companies which have contributed on the project, and the
Acting Mayor of Levanger Nina Bakken Bye.
Thanks to everyone who attended to celebrate this
important milestone with us! A special thanks to Norske Skog
Skogn employees and external companies which have been
key in order to complete this project on time and within
budget!
Arild Hegdal (Process Manager), Hågen Buran (project
Manager of the new steam converter) and Roger Mathisen
(Project Manager of Switch) have all had vital roles in the
realization of the new TMP line.
NORSKE SKOG ON FACHPACK
FachPack is a major European trade fair for
packaging, processing, and technology, held
annually in Nuremberg, Germany. It serves as
a key industry event for professionals in pack-
aging solutions, including materials, machinery,
logistics, and sustainability. Norske Skog had a
separate exhibition presenting the new con-
tainerboard products.
Marlen van den Berg, Vice President
Containerboard Sales was satisfied with the
three days event:
“It was a great Fachpack! We were packed
for 3 days. Great meetings, good talks and lots
of interesting opportunities were discussed.”
A glimpse of 2024
ABOUT NORSKE SKOG
8
I
Norske Skog
I
Annual report 2024
STRATO PRESENTATION AT MUNICH
PAPER SYMPOSIUM
Manager Director at Bruck, Enzo Zadra, and
Technical Manager, Klaus Eibl, presented the
successful rebuild of paper machine 3 or the
STRATO project at the International Munich
Paper Symposium (IMPS) in Munich.
There were around 380 participants from
25 countries from the paper production,
clothing, chemicals, mechanical engineering,
electrical automation and engineering.
The project success was made possible,
among other things, by the extremely close
cooperation between all departments and the
supplier Bellmer. The presentation was met
with great interest and positive feedback from
the symposium participants. In particular, the
machine safety concept presented was rated
by many as particularly innovative.
FROM VISION TO REALITY: NORSKE
SKOG GOLBEY’S SUSTAINABLE LEAP
Norske Skog Golbey stands on the brink of
commencing containerboard production on
the
converted
newsprint
machine
PM1.
Introducing Strato, our premium container-
board brand. Norske Skog Golbey will deliver
550 000
tonnes of containerboard alongside
330 000
tonnes of publication paper annually,
all based on 100% recycled paper collected in
France.
Our shift to recycled fibre is a cornerstone
of our sustainable development strategy,
focused on decarbonisation and leadership in
the circular economy. With the BOX project,
including the conversion of PM1, we’ve made
investments that:
• Recycle nearly 1 million tonnes of paper
and corrugated materials each year
• Optimise water usage
• Maximise renewable energy
•
Reduce CO2 emissions, contributing to our
‘Fit for 55’ goal of cutting the Norske Skog
Group’s carbon footprint by 55% by 2030
MEETING WITH THE NORWEGIAN MINISTER OF TRADE AND INDUSTRY
The Norwegian government invited 100 leading business leaders to a conference and workshop at
Kuben School in Oslo to discuss how to strengthen Norway’s industrial competitiveness and at the
same time developing a zero emission industry.
During a panel discussion with Minister of Trade and Industry, Cecilie Myrseth, Carsten Dybevig,
VP of Communication and Public Affairs at Norske Skog, outlined four key strategies to boost
Norway’s energy-intensive industries:
- Secure competitive power contracts for industrial players
- Prioritize energy efficiency to release more energy for other uses
- Maintain the CO2 compensation scheme (offsetting the CO2 surcharge in energy prices) to
prevent carbon leakage
- Enhance investment incentives for the green mainland industry
BCTMP AT SAUGBRUGS
Norske Skog plans to enter the pulp market,
and initiated a main study aiming to enter the
bleached
chemi-thermomechanical
pulp
(BCTMP) market by starting production at
Norske Skog Saugbrugs in Halden. The new
BCTMP line will produce approximately
300 000
tonnes of competitive pulp to meet
the growing demand, especially for products
in the packaging market.
“It is gratifying for equipment suppliers,
lenders, wood and other raw materials
suppliers, shareholders, and customers that
we are investing in and establishing a plant
for bleached chemi-thermomechanical pulp
at Saugbrugs. But those who have the most
reason to rejoice, are our employees at
Saugbrugs,” says Norske Skog’s CEO Geir
Drangsland.
Norske Skog Saugbrugs has adequate
access to green energy, and thus will continue
to deliver products with very low carbonfoot-
print. Norske Skog Saugbrugs will continue to
be a reliable supplier of SC-publication paper
also after the start of BCTMP production.
The net investment in BCTMP production
will range between NOK 1.5 to 2 billion
(EUR 140-180 million). The construction
period is expected to last for two years
starting in the second half of 2025.
Annual report 2024
I
Norske Skog
I
9
ABOUT NORSKE SKOG
The history
of Norske Skog
Norske Skog was established in 1962, but our Boyer, Bruck and Saugbrugs
mills have been in operation much longer. Until the 1990s, the company grew
in Norway, acquiring businesses in pulp, paper and wood-based construction
materials.
Through the nineties, Norske Skog expanded internationally, first with the
construction of a mill in France and later through acquisitions of other
newsprint and magazine paper companies all over the world. The activities
within other paper grades, market pulp, energy and construction materials
were sold off. In recent years, the company has entered into the recycled
containerboard market, and several projects related to energy and bio
products.
As of 2024, Norske Skog has five mills in four countries and is one of the
world’s largest producers of publication paper to newspapers, magazines,
periodicals and for advertising purposes. Norske Skog is listed on the Oslo
Stock Exchange, and had 2
101 employees at year-end 2024.
1996-1997
Purchase of paper mills in Austria
and the Czech Republic.
1962
Norske Skog was established by
Norwegian forest owners. The
purpose was to exploit timber
resources in central Norway, and a
newsprint mill was built at Skogn,
starting production in 1966.
1992
Expansion outside Norway, Start-up
of production in Golbey in France,
our first business outside of Norway.
2000
Sale of pulp mills in Norway.
Purchase of Fletcher Challenge
Paper in New Zealand, a firm with
operations in Australasia, South
America, Canada and Asia.
2001
Purchase of mills in Germany and
the Netherlands. Comprehensive
restructuring of the business, and
divestment of activities outside the
defined core area of newsprint and
magazine paper.
Expansion in Norway
1970 - 1990
Global expansion
1991 - 2005
Saugbrugs saw mill, 1887.
Photo: Norske Skog
ABOUT NORSKE SKOG
10
I
Norske Skog
I
Annual report 2024
2012
Sale of two mills in Chile and the
Netherlands, shut-down of Follum
paper mill in Norway.
2013
Sale of two mills in Brazil and
Thailand. Two machines idled at
Norske Skog Tasman in
New Zealand and Norske Skog
Walsum in Germany.
2014
Ramp-up of a converted newsprint
machine to LWC-products at Norske
Skog Boyer in Australia.
2009
Sale of two mills in China, shut-down
of one paper machine in Europe.
2018
New beginning with Oceanwood
purchasing the shares in Norske
Skog AS, which included
all the mills.
2021
Closure of the Norske Skog Tasman
mill in New Zealand. Expansion into
biocomposites and starting
construction of a waste-to-energy
plant at Norske Skog Bruck.
Financing the conversion of two
newsprint machines at Norske Skog
Bruck, and Norske Skog Golbey into
containerboard production.
2024
At Norske Skog Skogn, a new
thermomechanical pulp (TMP) line
was commenced, substituting
long-transported recovered paper
with local fresh fibre, thus reducing
the CO2- and nitrogen emissions.
The Green Valley Energie (GVE)
joint venture at Norske Skog Golbey
started production at the largest bio
energy plant of its kind in France.
2006
Five newsprint machines shut
down, shares in the Canadian
business sold.
2015
Closure of the Walsum mill in
Duisburg, Germany.
2019
New three-leg strategy within
publication paper, packaging paper,
and bio and energy related
products.
Norske Skog ASA was listed on the
Oslo Stock Exchange.
2022
Sale of Nature’s Flame 90
000
tonnes pellets facility in New
Zealand. Start-up waste-to-energy
plant at Norske Skog Bruck. At
Norske Skog Saugbrugs, a 500
tonnes bio-composite pilot plant
was officially opened by the
Norwegian Trade and Industry
Minister Jan Chr. Vestre. During
2022, the Norwegian based Byggma
AS and Drangsland Kapital AS
became the largest shareholder
group in Norske Skog.
2008
Sale of two mills in South Korea, sale
of property, shut-down of two paper
machines in Europe.
2017
The Royal Highness King Harald of
Norway officially opened new biogas
facility at Saugbrugs.
Norske Skogindustrier ASA was
delisted from the Oslo Stock
Exchange, and the mill portfolio
continued by Norske Skog AS.
2020
Sale of the Norske Skog Albury mill
in Australia and the forest in
Tasmania. Establishing commercial
activities within nanocellulose and
expansion in biopellets.
2023
Norske Skog Bruck commenced
recycled packaging paper
production in the first quarter of
2023. The production capacity of
containerboard at Norske Skog
Bruck will be 210
000 tonnes per
year. Oceanwood sold all of its
shares in Norske Skog.
Comprehensive restructuring
2006 - 2014
Financial restructuring
2015 - 2018
New beginning
2019 - 2021
Execution of
new strategy
2025
At Norske Skog Golbey, the
converted newsprint machine (PM1)
will start commercial production of
containerboard. Norske Skog Boyer
will be discontinued in 2025.
Annual report 2024
I
Norske Skog
I
11
ABOUT NORSKE SKOG
2025 will mark a historic milestone for the company. The completion and
commissioning of the converted newsprint line into a new packaging paper
line (PM1) at our Golbey mill in France represent the single largest investment
in the company’s history since 1962, at a cost of EUR 320 million. This bold
move is a testament to our commitment to innovation, sustainability, and
market diversification.
A TRANSFORMATIVE INVESTMENT
The new 550
000 tonnes packaging paper line at Norske Skog Golbey is a
game changer. Designed to meet the growing global demand for sustainable
packaging solutions, this facility positions Norske Skog as a key player in the
European packaging market. The investment underscores our dedication to
reducing dependency on traditional newsprint products while capitalising on
emerging market opportunities.
Golbey’s strategic location provides it with significant competitive advantages.
Situated in the heart of Europe, the mill benefits from excellent access to key
markets, an abundant supply of raw materials, and a highly skilled workforce.
Additionally, the integration of the new line with the mill’s existing and newly
built bioenergy capabilities enhances operational efficiency and supports our
sustainability goals.
While the project faced challenges, including budget overruns, the successful
completion of the packaging paper line signals a new era for Norske Skog.
This investment reflects our determination to evolve and thrive in a changing
industry landscape.
GLOBAL CHALLENGES AND LOCAL RESILIENCE
The past year has been characterized by significant global uncertainties,
including heightened political tensions, volatile energy markets, and the
ongoing impact of climate change. These factors have created challenging
conditions for the pulp and paper industry. However, Norske Skog has proven
its ability to adapt and respond effectively.
Energy costs and supply chain disruptions have been particular areas of focus.
We have prioritised investments in renewable energy and energy efficiency,
such as the 50 MW incineration plant at Norske Skog Bruck and our
participation in France’s largest bioenergy plant, which boasts a capacity of
125 MW. These initiatives not only mitigate energy cost volatility but also
reinforce our commitment to sustainability.
For 2024, EU also introduced a new ESG reporting framework to ensure
transparency and integrity in our operations. This framework emphasizes the
prevention of green washing and highlights Norske Skog’s genuine
commitment to environmental, social, and governance principles. By holding
ourselves to higher standards, we aim to build trust with stakeholders and
reinforce our reputation as a responsible industry leader.
ACKNOWLEDGING OUR EMPLOYEES
It is an important management task to challenge all the mills. The competitors
are improving their competitiveness so we should do the same, or even
more. Such changes are never easy, but they were undertaken with careful
consideration and a focus on long-term sustainability. Despite these
challenges, our employees have demonstrated extraordinary resilience and
dedication. Their hard work and adaptability have been instrumental in
navigating this transitional period.
We extend our deepest gratitude to all our team members in 2024 across
Europe and Australasia. Your efforts have ensured that Norske Skog remains a
trusted partner for our customers and a valued member of the communities in
which we operate. Training programs, diversity initiatives, and community
engagement have been key to maintaining a strong and inclusive culture
during these times of change.
ACKNOWLEDGING NORSKE SKOG BOYER AND A TRANSITION TO
EUROPE
As we move into 2025, Norske Skog will bid farewell to its Australian operations
with the sale of the Boyer mill. This marks the end of an era and the conclusion
of 25 years of ownership. We extend our heartfelt gratitude to the Boyer team
for their outstanding contributions and dedication over the years. Their efforts
have been vital in shaping Norske Skog’s legacy as a global leader in the pulp
and paper industry.
While Norske Skog will no longer have operations outside Europe, we remain
committed to serving customers worldwide. The sale aligns with our strategic
focus on strengthening our European operations, where we see significant
opportunities for growth and innovation.
LOOKING AHEAD
As we move forward, Norske Skog is well-positioned to embrace new
opportunities. The packaging paper line at Norske Skog Golbey is a
cornerstone of our strategy to diversify and grow, ensuring the company’s
relevance and competitiveness in a dynamic market. Our commitment to
sustainability, innovation, and operational excellence will continue to guide
our efforts.
With the dedication of our employees, the strength of our leadership team, and
the support of our stakeholders, we look ahead with optimism. Together, we
will shape a future defined by innovation, resilience, and sustainability,
strengthening Norske Skog’s position as an important supplier in the global
pulp and paper industry.
Geir Drangsland
CEO
Transforming Norske Skog
– the opening of Golbey’s packaging paper line
ABOUT NORSKE SKOG
12
I
Norske Skog
I
Annual report 2024
Together, we will shape a future defined by
innovation, resilience, and sustainability,
strengthening Norske Skog’s position as an
important supplier in the global pulp and
paper industry.
Photo:
Carsten Dybevig
We create green value from
sustainable fibre and energy for
the benefit of all stakeholders.
Intergration
Intergrating vertically in
the entire value chain
Packaging paper
Become an independent and leading
European producer of renewable
packaging paper
OPERATIONAL EFFICIENCY AMBITIONS
Achieve an EBITDA
margin over the cycle
+15%
Maintain an operating
rate of
Achieved in
2024, 7.2%
Achieved in
2024, 87%
95%
STRATEGY
Publication paper
Improve and optimise
publication paper cash flows
Annual report 2024
I
Norske Skog
I
13
ABOUT NORSKESKOG
Optimism among
the Golbey BOX-project team
Norske Skog has begun test runs of packaging paper at the Norske Skog Golbey mill, marking a historic
milestone in the transition toward sustainable packaging. The NOK 4 billion investment has converted a
newsprint machine to produce 550
000 tonnes of recycled packaging paper annually, strengthening
Norske Skog’s position as a leading independent supplier in Europe. With commercial production set for
early 2025, the project aligns with rising demand for eco-friendly packaging and will significantly enhance
the company’s long-term value and environmental impact. Here are 12 interviews with employees
working close to the conversion of PM1.
YAN VASSART
With a rich career spanning decades in the
paper industry, Yan Vassart has played a
crucial role in several major projects, from
the PM2 launch in 1997 to rebuilds in
Australia and the Netherlands. His expertise
in conversions and containerboard made him
a natural fit for the Golbey Box project in
2019. As project lead, he leveraged his
experience with both Valmet and Voith
technologies to oversee the transformation
of PM1. “It was a nice return to my starting
point, 18 years later!” he reflects.
Looking ahead, Vassart is confident in the
success of Testliner/Fluting production at
Golbey, emphasizing that it presents different
but manageable challenges compared to
newsprint. With the added advantage of
learning from Bruck’s operations, he trusts the
operational team to navigate issues such as
stickies and food contact requirements.
“I have full faith in our operational team on
site!” he states, underscoring his optimism
for the future.
VIRGINIE STRIBICK
Ensuring food contact safety certification
for
Golbey’s
new
containerboard
was
Virginie Stribick’s main responsibility. She
structured the process into three key steps:
selecting compliant chemicals, implementing
procedures and training, and conducting
independent lab analyses. “This thorough
preparation reflects our commitment to
providing high-quality corrugated paper,”
she explains.
Her focus is now on achieving a seamless
transition to high-quality, certified production
that
meets
market
expectations.
She
emphasizes the importance of producing
corrugated paper in the right quantity,
quality, and within deadlines to secure
profitability. “I hope we will soon produce
corrugated paper that meets our customers’
expectations,” she says, highlighting the
importance of a strong EBITDA to safeguard
jobs.
GRÉGORY GUILLAUME
Tasked with overseeing the installation and
startup of Reeler 5 and the MSB Line,
Grégory
Guillaume
had
to
anticipate
operational
challenges
without
prior
firsthand experience of the machines. He
worked extensively on procedures, main-
tenance planning, and SAP structuring.
“This type of project requires going beyond
your usual responsibilities,” he notes.
Now stepping into the role of technician
for the new Valmet reeler, his goal is to
ensure optimal operator support and inter-
departmental collaboration. Excited for the
future, he is eager to push performance
boundaries. “I’m especially looking forward
to the day when our machine breaks the
speed record and reaches 3
000 m/min!”
he enthuses.
ROMUALD OLRY & GAËLLE STEIN
Together, Romuald Olry and Gaëlle Stein
played a hands-on role in dismantling, relo-
cating, and refurbishing equipment, includ-
ing the rewinder and guillotine. They also
identified workflow improvements in the
Finishing area. Beyond technical tasks,
they maintained the workspace, ensuring a
safe and efficient environment. “We put in a
lot of hands-on effort sweeping, painting,
and even deep cleaning,” they say.
Both eagerly anticipate the rewinder’s
return to operation, aiming to contribute
fully to Golbey’s success. “Our partnership
worked well, allowing us to complete these
tasks in close coordination with our manag-
ers,” they affirm.
ROMAIN LOUIS
Romain Louis focused on optimising truck turn-
around, managing storage, and commissioning
the automated DEMAG warehouse. “I coordinat-
ed the work, the commissioning, and the startup
of the automated warehouse,” he notes.
His future goal is to enhance logistics as a
competitive advantage. “I look forward to fully
applying my logistics skills to support this mar-
ket entry,” he states.
ABOUT NORSKE SKOG
14
I
Norske Skog
I
Annual report 2024
CLARISSE VOIRIN
A machine operator, Clarisse Voirin was
deeply involved in PM1’s transformation,
from equipment dismantling to auxiliary
refurbishments. She also completed training
for the new machine and contributed to
circuit verifications during I/O checks. “I was
involved in activities related to the lockout
and tagging of equipment,” she notes.
At just 25, she sees this project as a
crucial step in securing the future of Golbey
and her own career. “I’d love to build my
career here because working on the machine
is something I truly enjoy,” she shares.
CHRISTOPHE GALLAUZIAUX
Initially disheartened by project delays,
Christophe
Gallauziaux
found
renewed
motivation as PM1 took shape. He utilised
downtime to deepen his understanding of
the
new
equipment
and
engaged
in
commissioning activities. “It wasn’t easy to
stay motivated while doing things like
painting, cleaning, and safety rounds,” he
admits.
With 27 years at Golbey, he is committed
to its future, emphasizing teamwork and
resilience. “We have the skills and now, the
machine. It’s just waiting to be put into
action!” he declares, advocating for strong
employee involvement.
THOMAS GILBERT
Joining
in
September
2023
as
an
Instrument Technician, Thomas Gilbert
quickly adapted, working on equipment
revisions, I/O checks, and troubleshooting.
“The key challenge was to maintain and
promote functional standards,” he explains.
Looking ahead, he hopes to see Golbey
establish itself as a European leader in
packaging production. “What I expect from
Norske Skog Golbey is for our Business Unit
to become a leading player in Europe in the
packaging market,” he states.
CYRIL ARTUSO
As the EAI OCC/DRUM/STEP responsible,
Cyril Artuso focused on electrical safety,
coordination, and commissioning. His role
balanced
deadlines,
quality,
and
cost
considerations. “My role is to ensure that
the EAI progresses safely, quickly, efficient-
ly, and within budget,” he summarizes.
He hopes for Golbey’s long-term finan-
cial success, ensuring optimal work condi-
tions and employee development. “I hope
our site will continue to develop and
become a true ‘cash machine,” he remarks.
FLORENT SIMEON
As
HSE
Supervisor,
Florent
Simeon
integrated safety into the BOX project,
supervising worksites and supporting risk
prevention strategies. “Together, we did
everything possible to ensure that safety
remained the priority,” he affirms.
He envisions Golbey as a model industrial
site, emphasizing values like openness,
honesty, and teamwork. “By perpetuating
these principles, we will consolidate our
achievements and evolve in harmony with
our environment and colleagues,” he says.
THIERRY DUBOIS
From PM1 Assistant Area Manager to
overseeing commissioning, Thierry Dubois
played a key role in structuring Golbey’s
future production organisation. “I acted as
the link between the BOX project and the
operations of the Business Unit,” he explains.
He hopes for a smooth startup and for
Golbey to regain its position as a European
leader. “We have all the assets to achieve this,
with a brand-new, state-of-the-art machine
ready to meet this ambitious challenge,” he
asserts.
PIERRE-FÉLIX VERDIE
Initially working on OCC processes, Pierre-Félix Verdie later took charge of commissioning in this
sector. Collaborating with key managers, he ensured the project’s final stages were well-executed.
“Together, we form the operational trio managing the end of the project for OCC,” he says.
He expects a smooth ramp-up, ensuring an efficient transition to operational status. “It is crucial that
the commissioning of the facilities takes place under the best conditions,” he emphasizes, reinforcing
the plant’s reliability and performance.
Annual report 2024
I
Norske Skog
I
15
ABOUT NORSKE SKOG
Norske Skog Golbey, winder
Photo: Carsten Dybevig
Photo: Carsten Dybevig
Photo: Carsten Dybevig
Norske Skog Golbey
conversion from newsprint to packaging paper
Here are some pictures from the Norske
Skog Golbey conversion of paper
machine (PM1) from newsprint to
packaging paper. Films that follow the
development of Golbey industrial site
can be seen on Norske Skog’s
LinkedIn account.
Photo: Carsten Dybevig
Photo: Carsten Dybevig
ABOUT NORSKE SKOG
18
I
Norske Skog
I
Annual report 2024
Photo: Nuit Blanche Production
Photo: Carsten Dybevig
Photo: Carsten Dybevig
Photo: Carsten Dybevig
Photo: Carsten Dybevig
Photo: Carsten Dybevig
Annual report 2024
I
Norske Skog
I
19
ABOUT NORSKE SKOG
Board of directors
ARVID GRUNDEKJØN
(1955)
Chair since 2023, Board member since 2018
Current election period:
Elected Board member
on 20 April 2023, for a two-year period
(2023-2025)
Independent:
Yes
Residence:
Oslo, Norway
Education:
Executive programme, Harvard
Business School (USA), Master of Law, University
of Oslo (Norway), Master of Business and
Economics, Norwegian School of Economics
(Norway)
Position:
Investor and professional board member
Directorships:
Currently on 18 different boards of
directors, ao. Chair of Infima AS, Chair of Creati
Estate AS, Chair of Cardid AS, Chair of Stiftelsen
Fullriggeren Sørlandet, Board Member KLP
Eiendom, Chair of AKO Art Foundation and Chair
of Strømme Foundation
Shares in Norske Skog ASA:
Owns and/or controls 101
617 shares
CHRISTOFFER BULL
(1976)
Board member since 2023
Current election period
: Elected Board member
on 20 April 2023, for a two-year period
(2023-2025)
Independent:
Yes
Residence:
Oslo, Norway
Education:
Maitrise de Sciences Economiques
(Master of Economics) from Université des
Sciences Sociales Toulouse 1, France (incl. one
term in Sydney, Australia), and a Management
Programme from HEC Paris, France
Position:
CEO Greenbit Energy AS
Directorships:
Subsidiaries in the Greenbit group
Shares in Norske Skog ASA:
Owns and/or controls 0 shares
TRINE-MARIE HAGEN
(1977)
Board member since 2019
Current election period:
Elected Board member
on 20 April 2023, for a two-year period
(2023-2025)
Independent:
Yes
Residence:
Oslo, Norway
Position:
Group CFO Felleskjøpet Agri SA
Education:
Four-year programme in economics
and business administration consisting of three
years at bachelor/undergraduate level and one
year at master/graduate level, Norwegian School
of Economics, Bergen (Norway)
First section of law studies, University of Bergen
(Norway)
Directorships:
Subsidiaries of Felleskjøpet Agri
SA and Bane NOR Eiendom AS
Shares in Norske Skog ASA:
Owns and/or controls 0 shares
TONE WILLE
(1963)
Board member since 2024
Current election period:
Elected Board member
on 11 April 2024, for a two-year period
(2024–2026)
Independent:
Yes
Residence:
Oslo, Norway
Position:
Professional Board member, former
President & CEO, Posten Bring AS
Education:
Master of Science in Business
Administration from the Norwegian School of
Economics and Business Administration (1986,
Bergen, Norway); International Baccalaureate
from Lycée International (Paris)
Directorships:
Chair of Avinor AS, Chair of
International Post Corporation SA, Chair of
Norled AS
Board member of Cermaq Global AS
Shares in Norske Skog ASA:
Owns and/or
controls 0 shares
TERJE SAGBAKKEN
(1973)
Board member since 2024
Current election period:
Elected Board member
on 11 April 2024, for a two-year period
(2024-2026)
Independent:
Yes
Residence:
Gjøvik, Norway
Position:
Managing Director, Raufoss
Aliminium AS
Education:
Master’s Degree in Sustainable
Production from the Norwegian University of
Science and Technology (NTNU) in 2016;
Bachelor’s Degree in Wood Technology from
Ingeniørhøgskolen i Gjøvik in 1996)
Directorships:
Board member of Byggma ASA
and Huntonit AS
Shares in Norske Skog ASA:
Owns and/or controls 0 shares
Observers
TORE CHRISTIAN ØSTENSVIG
(1976)
Observer since 2022
Position:
Main employee representative Norske
Skog Saugbrugs. Line operator pulp (TMP) mill at
Norske Skog Saugbrugs
ASBJØRN ANDRÉ DYPDAHL
(1972)
Observer since 2023
Position:
Main employee representative Norske
Skog Skogn. Winder operator Norske Skog Skogn
ABOUT NORSKE SKOG
20
I
Norske Skog
I
Annual report 2024
EINAR BLAAUW
(1980)
Senior Vice President General Counsel
In Norske Skog since 2014
Professional experience:
Vice President Legal, Norske Skog
Attorney, Advokatfirmaet Thommessen
Attorney, Clifford Chance
Education:
Attorney Practicing Certificate (Norway)
Master of Laws, University of Bergen (Norway)
Shares in Norske Skog ASA:
Owns and/or controls 0 shares
Synthetic options:
232 000
EVEN LUND
(1992)
Senior Vice President Corporate Finance
In Norske Skog since 2020
Professional experience:
Vice President Corporate Finance, Norske Skog
Investor Relations Manager, Norske Skog
Associate Corporate Finance, ABG Sundal Collier
Education:
Master of Financial Economics, Norwegian School of
Economics (Bergen, Norway)
Shares in Norske Skog ASA
:
Owns and/or controls 25
000 shares
Synthetic options:
176 000
ROBERT A WOOD
(1962)
Senior Vice President Commercial
In Norske Skog since 1987
Professional experience:
Vice President Commercial
Managing Director Central European Hub
Vice President European Sales
General Manager Norske Skog PanAsia (Shanghai)
Various positions in Commercial Consulting Co. Ltd.
(China), Herald and Times (Glasgow), Strathclyde
Police (Glasgow)
Education:
Bachelor of Science (1st Class Hons),
University of Strathclyde (Scotland)
Shares in Norske Skog ASA:
Owns and/or controls 5
263 shares
Synthetic options:
291 000
TORD STEINSET TORVUND
(1990)
Chief Financial Officer
In Norske Skog since 2020
Professional experience:
Auditor in KPMG AS
Various summer internships at Kværner ASA,
Norsk Hydro ASA and REC Silicon ASA
Education:
Master of Accounting and Auditing, Norwegian
School of Economics (Bergen, Norway)
Master of Financial Economics, Norwegian School of
Economics (Bergen, Norway)
CEMS Master of International Management,
Norwegian School of Economics (Bergen, Norway)
and St. Petersburg State University (Russia)
Shares in Norske Skog ASA:
Owns and/or controls 11
000 shares
Synthetic options:
176 000
GEIR DRANGSLAND
(1962)
Chief Executive Officer
from 1 September 2023
Professional experience:
CEO in Byggma ASA
CFO in Avantor AS, Elkjøp Norway AS and
Idun Industri AS
Education:
Master of Business Administration, BI Norwegian
Business School (Oslo, Norway)
Directorships:
Numerous subsidiaries in Byggma
and Norske Skog group
Shares in Norske Skog ASA:
Owns and/or controls 22
774 079
shares
Synthetic options:
272 000
Corporate management
Annual report 2024
I
Norske Skog
I
21
ABOUT NORSKE SKOG
Share information
INTRODUCTION
Norske Skog aims to provide long-term value growth and an attractive return
for its shareholders which exceeds that of relevant investment alternatives,
this ambition will be supported by a responsible capital allocation strategy and
a conservative capital structure. Norske Skog is listed on the Oslo Stock
Exchange where it trades under the ticker code NSKOG.
The Norske Skog corporate management and board of directors are committed
to serving all shareholders and potential new investors with consistent,
accessible, and immediate disclosure of relevant information through the Oslo
Stock Exchange, media, and financial newswires. Norske Skog has a policy of
equal treatment of all stakeholders to the group.
SHARES AND SHARE CAPITAL
On 31 December 2024, the share capital of Norske Skog was NOK 339
352 940,
consisting of 84
838 235
shares each with a par value of NOK 4.00
. All shares
have equal rights and are freely transferable.
The Norske Skog share price was NOK 24.50 on 30 December 2024,
representing a market value of approximately NOK 2
079 million. The return
for 2024 was negative NOK 16.90 or negative 40.8 percent
. The Oslo Stock
Exchange Benchmark Index (OSEBX) had a return of positive 9.1 percent in
2024. For Norske Skog, the highest share price in 2024, based on close-of-
trading, was NOK 43.42 on 5 July, and the lowest price was NOK 18.55 on
8 November. Norske Skog did not pay a dividend during the year.
VOLUME
In 2024, 81
492 191
Norske Skog shares were traded in the market, equivalent
to a turnover of NOK 2
624 million. The average daily trading volume was
325 969
shares.
DIVIDEND POLICY AND PROPOSAL
Norske Skog’s dividend policy is to pay dividends reflecting the underlying
earnings and cash flow while ensuring efficient capital allocation in the group.
When deciding the dividend level, the board of directors will among other
things take into consideration capital expenditure plans, financing require-
ments and maintaining the appropriate strategic flexibility of the group.
Dividend payments are restricted under the group’s financing facilities of
maximum up to 50% of net profit for the previous financial year, subject to an
incurrence test, maximum leverage ratio of 1.50x following dividend payment,
being met and only after 31 July 2025.
The board of directors did not request the authority from the Annual General
Meeting in 2024 to pay a dividend for the financial year 2023.
The board of directors will propose to the annual general meeting that no
dividend is distributed for the financial year 2024.
LONG-TERM INCENTIVE PROGRAMME
The board of directors has approved a synthetic option programme for senior
executive employees in Norske Skog. By end of 2024, 2
094 000
synthetic
options had been awarded. The programme is described in the guidelines for
determining salary and other remuneration to leading personnel, which are
available on company’s website www.norskeskog.com.
FUNDING AND CREDIT QUALITY
Maintaining a strong financial position is considered an important risk
mitigating factor, supporting Norske Skog’s possibilities for strategic
development of its businesses. Access to external financial resources is
required to maximise value creation over time, balanced with acceptable risk
exposure. Norske Skog targets, freely available and unrestricted cash and
cash equivalents of minimum NOK 100 million, EBITDA to net interest costs of
minimum 2.0:1, and book equity to total assets of minimum 25%, see
Note [28] Interest-bearing liabilities in the consolidated financial statements.
0.0
1.0
2.0
3.0
4.0
10
20
30
40
50
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Share price, NOK
Daily trading volume, million of shares
ABOUT NORSKE SKOG
22
I
Norske Skog
I
Annual report 2024
Norske Skog Saugbrugs, supercalender
Photo: Carsten Dybevig
MAJOR SHAREHOLDERS AND VOTING RIGHTS
Geir Drangsland is the controlling shareholder of Investor AS. The company’s largest
shareholders, Byggma ASA and Drangsland Kapital AS are under common control of
Investor AS and the three companies holds 22
774 079
shares combined,
corresponding to a 26.84% ownership share
.
On 31 December 2024, the foreign ownership was 21.49%
. Based on the information
in the Norwegian Registry of Securities, Norske Skog had a total of 12
290
shareholders on 31 December 2024 of which 198 resided outside of Norway.
SHAREHOLDING
INTERVAL
NO. OF
SHAREHOLDERS
NO. OF SHARES
% OF SHARE
CAPITAL
1 - 100
4 373
152 643
0.16
101 - 1
000
4 690
2 053 752
2.18
1 001
- 10
000
2 629
8 881 920
9.42
10 001
- 100
000
524
14 955 967
15.87
100 001
- 1
000 000
66
16 554 145
17.56
above 1
000 000
8
42 239 808
44.81
Total
12 290
84 838 235
90.00
SHAREHOLDER
CITIZENSHIP
NO. OF
SHAREHOLDERS
NO. OF SHARES
% OF SHARE
CAPITAL
Norway
12 092
66 610 461
78.51
Luxembourg
9
11 553 220
13.62
United States
16
1 879 597
2.22
Sweden
37
1 401 171
1.65
United Kingdom
20
1 035 309
1.22
Denmark
27
998 483
1.18
Belgium
7
608 696
0.72
Germany
13
237 623
0.28
France
11
167 484
0.20
Ireland
29
152 808
0.18
Cyprus
1
50 000
0.06
Finland
2
43 766
0.05
Switzerland
7
36 596
0.04
Singapore
4
24 201
0.03
Italy
2
15 800
0.02
Spain
2
9 040
0.01
Brazil
1
4 001
0.00
Australia
1
2 800
0.00
Estonia
2
2 709
0.00
Iceland
1
1 600
0.00
Other
6
2 870
0.00
Total
12 290
84 838 235
100.00
Annual report 2024
I
Norske Skog
I
23
ABOUT NORSKE SKOG
Photo: Carsten Dybevig
2025 ANNUAL GENERAL MEETING
The Norske Skog Annual General Meeting for 2025 will be held on Thursday 10
April 2025, at 13:00 CET. Shareholders who wish to attend are asked to follow
the instructions on the Notice of Annual General Meeting and to inform the
registrar by 16:00 CET on Monday 31 March
:
DNB Bank ASA
Registrar’s Department
P.O. Box 1600 Sentrum
N-0021 Oslo, Norway
You may also register electronically on our website www.norskeskog.com or via
VPS Investor Services. Any shareholder may appoint a proxy with written
authority to attend the meeting and vote on his or her behalf. The meeting will
be held online.
ANALYST COVERAGE
ANALYST
TELEPHONE
ABG Sundal Collier
+47 22 01 60 00
DNB Markets
+46 91 50 48 00
Pareto Securities
+47 22 87 87 00
Sparebank 1 Markets
+47 24 14 74 00
FINANCIAL CALENDAR
Norske Skog reserves the right to revise these dates.
20 March 2025:
Annual Report
10 April 2025:
Annual General Meeting
23 April 2025:
Quarterly Report - Q1
15 July 2025:
Quarterly Report - Q2
24 October 2025:
Quarterly Report - Q3
5 February 2026:
Quarterly Report - Q4
ABOUT NORSKE SKOG
24
I
Norske Skog
I
Annual report 2024
INFORMATION FROM NORSKE SKOG
Communicating with the stock market is given high priority, and Norske Skog
aims to maintain an open dialogue with market participants. Our objective is to
provide sufficient information on a timely basis to all market participants to
ensure a fair valuation of our shares. Information that is considered price sensitive
is communicated by news releases and stock exchange announcements. We host
regular meetings for investors, both in-person and virtually. All information about
Norske Skog is published on our website: www.norskeskog.com.
Our annual and quarterly reports are available on
www.norskeskog.com
.
Printed version of the annual and quarterly reports can be received at our
office at Sjølyst Plass 2, 0278 Oslo, Norway.
Three weeks before the announcement of quarterly results, Norske Skog
practices a “silent period”, meaning that contact with external analysts,
investors and journalists is limited. This is done to minimise the risk of
information leaks and potentially unequal information in the marketplace.
SHARE PRICE
2019
2020
2021
2022
2023
2024
Share price high (close-of-trading), NOK
43.99
44.00
43.00
75.70
75.80
43.42
Share price low (close-of-trading), NOK
37.00
24.10
29.30
37.30
39.06
18.55
Share price average (volume weighted average price), NOK
38.42
31.98
35.14
56.60
54.04
32.20
Share price year-end, NOK
43.70
38.70
38.40
67.25
41.40
24.50
Dividend paid per share, NOK
0.00
6.25
0.00
0.00
0.67
0.00
Market capitalisation year-end, NOK million
3 605
3 193
3 620
6 339
3 903
2 079
Volume (excluding off-market transactions and share repurchases)
Number of shares traded, million
10.68
38.05
90.99
125.23
148.67
81.49
Turnover, NOK million
427
1 217
3 186
6 951
8 130
2 624
Number of trades
12 359
68 834
166 577
267 136
265 213
133 016
Number of trading days
49
252
252
253
251
250
Average daily number of shares traded
217 995
150 983
361 074
494 995
592 319
325 969
Average daily turnover, NOK million
8.7
4.8
12.6
27.5
32.4
10.5
Average daily number of trades
252
273
661
1 056
1 057
532
Shareholders
Non-Norwegian ownership year-end, % share
15.74
9.70
27.89
30.20
17.01
21.49
Shareholding interval 1 - 100, % share
0.02
0.07
0.09
0.15
0.19
0.16
Shareholding interval 101 - 1
000, % share
0.64
1.41
1.62
1.76
2.59
2.18
Shareholding interval 1
001 - 10
000, % share
1.65
4.51
6.09
5.43
10.19
9.42
Shareholding interval 10
001 - 100
000, % share
3.63
6.29
9.11
9.28
15.77
15.87
Shareholding interval 100
001 - 1
000 000,
% share
19.75
9.28
24.27
24.52
17.79
17.56
Shareholding interval above 1
000 000,
% share
74.32
78.44
58.82
58.86
53.48
44.81
Top 5 shareholders, % share
71.77
72.02
42.21
45.77
42.11
42.62
Top 10 shareholders, % share
77.74
79.47
51.32
54.38
50.09
51.69
Top 15 shareholders, % share
82.50
83.20
57.73
59.92
55.13
55.28
Top 20 shareholders, % share
85.66
85.26
62.89
64.28
58.47
57.60
Top 25 shareholders, % share
88.14
86.63
66.91
67.70
61.16
59.48
Top 30 shareholders, % share
89.82
87.58
70.21
70.25
63.46
61.00
Number of shareholders
2 120
5 322
7 615
9 677
14 124
12 290
Outstanding shares year-end
82 500 000
82 500 000
94 264 705
94 264 705
94 264 705
84 838 235
Annual report 2024
I
Norske Skog
I
25
ABOUT NORSKE SKOG
Photo: Carsten Dybevig
REPORT OF THE BOARD OF DIRECTORS
Report of the
board of directors
Annual report 2024
I
Norske Skog
I
27
ABOUT NORSKE SKOG
Norske Skog is a leading producer of publication and packaging paper.
The company has publication paper production capacity of 1.3 million tonnes
across its four manufacturing sites in Europe, comprising 0.8 million tonnes of
newsprint and 0.5 million tonnes of magazine paper
.
Norske Skog’s packaging paper production in Europe commenced in the first
quarter of 2023 at Norske Skog Bruck and is expected to reach a full
production capacity of 0.2 million tonnes in second half of 2025
. Norske Skog
Golbey is set to begin production in the first quarter of 2025 and will when
fully ramped up have a production capacity of 0.6 million tonnes
. Combined
the mills will produce 0.8 million tonnes of recycled containerboard
.
During 2024, Norske Skog initiated a concrete sales process for its remaining
operations in Australasia which mainly comprises the Norske Skog Boyer mill.
The sale is expected to be completed in 2025.
STRATEGY
Norske Skog has adopted the following business strategy:
• Improve and optimise publication paper cash flows
• Become a leading and independent European producer of renewable
packaging paper
• Integrate vertically within the entire value chain
NORSKE SKOG IN 2024
Markets – publication paper
In 2024, demand for European publication paper declined at a slower rate than
the historical average of approximately 5-10%. This more moderate decline
followed a sharp contraction towards the end of 2022 and into 2023, which
was largely driven by high prices driving a further shift to digital and inventory
reductions as consumers adjusted stock levels after significant build-ups
during the 2022 energy crisis. Capacity closures within the industry have
helped rebalance supply and demand for certain paper grades, while others
continue to experience low capacity utilisation. On average, product prices
remained stable compared to year-end 2023. The cost of raw materials, both
pulpwood and recovered paper, have increased while energy costs decreased
during 2024.
In 2024 the annual demand for standard newsprint in Europe decreased by 1%
compared to previous year. For magazine paper the demand decreased by 5%,
with supercalendered paper decreasing 9% and lightweight coated paper
decreasing 2% compared to previous year. (Source: Euro-Graph).
Markets - containerboard
The Western European recycled containerboard consumption was approxi-
mately 20 million tonnes in 2024. Unlike the publication paper markets, the
packaging market experienced increased demand in the year which in turn
have improved the supply demand balance compared to 2023. However, the
capacity utilisation in the industry is still below historical averages, which puts
pressure on the profit margins for producers.
The prices for recycled containerboard were slightly higher in 2024 compared
to 2023, but as prices for raw materials, in particular recycled fibre, also
increased, the effect on profit margins were limited.
Norske Skog Bruck PM3 continued to increase the production and deliveries
of recycled containerboard in 2024 and is expected to reach full utilisation in
the second half of 2025.
In September Norske Skog announced that the containerboard production at
Norske Skog Golbey is expected to start during the first quarter of 2025, a
delay compared to the previously communicated second half of 2024. The net
investment amount has been increased to EUR 320 million from previous
EUR 300 million as a result of the revised time line and the additional work
required. Once fully ramped up the machines will have a total capacity of
760 000
tonnes of cost-competitive recycled containerboard.
The recycled containerboard production will be fully based on recycled fibre
and will utilise green energy generated from the new waste-to-energy facility
at the Bruck industrial site and a new biomass plant at the Golbey industrial
site. Reliable access to affordable sources of green energy will be crucial for
the long-term competitiveness at Norske Skog Bruck and Norske Skog Golbey.
Annual demand for recycled containerboard in Europe increased by 3.4% in
2024, compared to the same period last year. (Source: Fastmarkets RISI).
Discontinued operation
Due to the initiated sales process of Norske Skog Industries Australia Ltd, the
segment publication paper Australasia was classified as a disposal group held
for sale and as a discontinued operation on 31 December 2024. The figures
for 2023 in the income statement have been restated accordingly.
INCOME STATEMENT CONTINUING OPERATIONS 2024 (2023
RESTATED)
Norske Skog’s operating income was NOK 10.2 billion (NOK 11.6 billion)
. The
decrease was mainly due to mix effects reducing average selling prices, partly
offset by higher volumes. In other operating income insurance proceeds were
recognised with NOK 458 million (NOK 1.1 billion) primarily related to the
rockslide in 2023 on the Norske Skog Saugbrugs industrial site.
Distribution costs of NOK 1.0 billion (NOK 0.8 billion) were higher than the
previous year following the increased deliveries. Cost of materials of NOK 5
.9
billion (NOK 5.9 billion) are on the same level due to higher pulpwood and
recycled fibre prices, while energy prices decreased during the year despite
still being higher than historical levels before the energy crisis in 2022.
Employee benefit expenses of NOK 1.7 billion (NOK 1.8 billion) decreased
year-on-year because of a reduction in the number of employees and reduced
bonuses. Other operating expenses of NOK 803 million (NOK 1
.0 billion)
decreased as a result of prior year being impacted by clean-up costs following
the rockslide at Saugbrugs.
EBITDA decreased to NOK 736 million (NOK 2.1 billion), negatively impacted
by the poor operating environment in Europe both for publication paper and
packaging paper.
REPORT OF THE BOARD OF DIRECTORS
28
I
Norske Skog
I
Annual report 2024
Restructuring expenses in 2024 amounted to NOK 16 million (NOK 32 million)
and is mainly related to demanning at Norske Skog Saugbrugs. Depreciation
was NOK 481 million (NOK 464 million), an increase as a result of 2024 being
the first full year of depreciation of the containerboard assets in Bruck. An
impairment of NOK 121 million (NOK 27 million) was recognised in relation to
assets at Norske Skog Saugbrugs.
Derivatives and other fair value adjustments ended at negative NOK 178 million
(NOK 605 million) reflecting the impact of the change in fair value of energy
contracts in Norway.
Operating earnings ended at negative NOK 60 million (positive NOK 934). The
change primarily reflects lower other revenue from insurance compensation,
continued challenging market conditions for publication paper and container-
board in Europe, and negative impact from derivatives and other fair value
adjustments.
Net financial items in 2024 were NOK -441 million (NOK -275 million). Net
interest expenses of NOK 128 million (NOK 115 million) was above previous
year reflecting increased net debt. Currency loss of NOK 175 million (loss of
NOK 71 million) is due to weaker NOK during 2024 resulting in unrealized
losses on euro denominated debts and currency derivatives. Income taxes for
2024 amounted to NOK -94 million (NOK -110 million) reflecting lower
deferred tax assets recognized. Profit for the year was negative NOK 661 million
(positive NOK 535 million).
CASH FLOW 2024 (2023)
Net cash flow from operating activities ended at negative NOK 15 million
(positive NOK 1.9 billion)
. Cash from operations was NOK 200 million
(NOK 2.7 billion) a decrease primarily resulting from lower EBITDA and a
slight build-up of inventories compared to a decrease in inventories the prior
year. Taxes paid was negative NOK 1 million (paid NOK 598 million) because
of adjustments from prior years for Norske Skog Golbey.
Net cash flow from investing activities of NOK 1.2 billion (NOK 2.7 billion)
mainly reflects plant and equipment related to the conversions of Norske Skog
Golbey PM1 into recycled containerboard.
Net cash flow from financing activities of negative NOK 105 million (positive
NOK 549 million) includes refinancing of the EUR 150 million senior secured
bond issued in 2021 with a new senior unsecured bond of NOK 1
600 million
with maturity in June 2029 of which NOK 1
400 million is drawn, issue of a
NOK 500 million green term loan at Norske Skog Skogn, and scheduled debt
repayments mainly at Norske Skog Golbey and Norske Skog Bruck.
Publication paper Europe
Operating income was NOK 9.2 billion (NOK 11.1 billion) a decrease from the
previous year due to lower publication paper prices, less sale of excess energy
and lower revenue from insurance compensation. Insurance compensation
was recognised with NOK 458 million (NOK 1.1 billion) primarily related to the
rockslide in Norske Skog Saugbrugs in April 2023.
Distribution costs of NOK 904 million (NOK 804 million) increased on an
absolute and per tonne basis, driven by higher freight rates and higher
tonnage. Cost of materials of NOK 5
.3 billion (NOK 5.6 billion) decreased due
to lower energy costs, partly offset by increased costs of pulpwood on an
absolute and per tonne basis. Employee benefit expenses of NOK 1
.4 billion
(NOK 1.5 billion) decreased an absolute and on a per ton basis because of a
reduction in the number of employees and reduced bonuses.
Operating earnings ended at NOK 112 million (NOK 1.2 billion)
. The weakening
primarily reflects unfavourable market conditions for publication paper in
Europe during 2024 and recognized impairments at Norske Skog Saugbrugs.
Net cash flow from operating activities ended at NOK 228 million in 2024
(NOK 3.0 billion)
.
Capacity utilisation was 87% in 2024, an increase compared to the previous
year of 80%, underscoring our commitment to gain market share despite
challenging market conditions.
Packaging paper
Operating income of NOK 851 million (NOK 362 million) reflects continued
ramp-up and increased deliveries from Norske Skog Bruck PM3.
Distribution costs of NOK 101 million (NOK 40 million) increased on an
absolute level and is on the same level on a per tonne basis as prior year. Cost
of materials of NOK 527 million (NOK 248 million) decreased on a per tonne
basis reflecting efficiency gains of higher utilisation. Employee benefit
expenses of NOK 156 million (NOK 157 million) decreased slightly on an
absolute level and significantly on a per tonne basis. Other operating expenses
of NOK 61 million (NOK 64 million) decreased, also reflecting efficiency gains
as the machine ramps-up.
Operating earnings ended at NOK -113 million (NOK -221 million). Despite
being an improvement, operating earnings is still influenced by the machine
not being fully ramped up in addition to a challenging containerboard market.
Discontinued operations
The segment Publication paper Australasia was discontinued in 2024
following the initiation of a concrete sales process in December 2024. The
segment consisted of Norske Skog Boyer’s publication paper operations in
Australasia, the only domestic publication paper producer in the region. The
annual production capacity is approximately 0.3 million tonnes
.
Operating revenue of NOK 1.9 billion (NOK 2.0 billion) was in line with prior year
with similar delivery volumes and prices. Other operating income decreased as
2023 included a gain on sale of the Norske Skog Tasman industrial site. Total
operating expenses of NOK 2.2 billion (NOK 2.0 billion) increased due to
higher impairments and general cost inflation.
Operating earnings ended at NOK -305 million (NOK -38 million). Net cash flow
from operating activities ended at NOK -36 million (NOK -34 million). Capacity
utilisation was 89% in 2024, a decrease compared to the previous year of 91%,
mainly due to weaker local markets for the company’s products during the year.
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
29
BALANCE SHEET 31 DECEMBER 2024 (31 DECEMBER 2023)
Total assets were NOK 14.5 billion (NOK 14.8 billion) while total non-current
assets were NOK 10.0 billion (NOK 9.1 billion)
. The increase is mainly related
to investments in connection with the conversion to recycled containerboard
at Norske Skog Golbey, partly offset by reclassification of assets related to
Norske Skog Boyer to assets held for sale. Investments in maintenance of
property, plant and equipment amounted to NOK 219 million (NOK 363 million).
The group recognised a deferred tax asset of NOK 111 million (NOK 206 million).
Total current assets were NOK 4.4 billion (including asset held for sale)
(NOK 5.7 billion), with cash and cash equivalents of NOK 1.1 billion
(NOK 2.5 billion)
. In addition to the decrease in cash and cash equivalents,
trade receivables decreased in part as a result of all current assets at
Norske Skog Boyer being classified held for sale.
Total non-current liabilities were NOK 5.5 billion (NOK 5.7 billion)
. Non-
current liabilities decreased due to a higher share of the loans related to the
conversion projects at Norske Skog Bruck and Norske Skog Golbey being
classified as current. Total current liabilities were NOK 3
.6 billion (including
liabilities relating to assets classified as held for sale) (NOK 2.9 billion) an
increase driven by a higher share of interest-bearing debt being due within
one year.
Net interest-bearing debt of NOK 4.1 billion (NOK 2.6 billion) increased as a
result of capex in the Norske Skog Golbey conversion project leading to a
reduction in cash and cash equivalents. Equity was NOK 5
.4 billion at
31 December 2024 (NOK 6.2 billion)
. The decrease reflects loss for 2024.
RISK MANAGEMENT
The main exposures for the group are linked to demand development in key
paper grades within publication paper and packaging paper and capacity
management by the suppliers and thereby impacting prices. Prices for
publication paper and packaging paper relative to production cost is the most
important factor for the profitability in the industry. Negative demand
development and lack of or insufficient capacity management in the industry
could result in pressure on prices and profitability.
The group Is also exposed to movements in the prices of key input factors
such as energy, recovered paper, wood and chemicals. During 2024 costs of
raw materials has been high compared to previous years. Thus, efforts to
continue to improve efficiencies and develop purchasing strategies and
having a contract structure that matches production are key to mitigate these
risk factors and reduce the impact on the group’s profitability.
Norske Skog is not vertically integrated into forest resources and must
therefore source wood from third parties. The supply of wood is to a certain
extent covered by medium to long-term contracts which reduce cost exposure
and increase supply certainty. For the remaining part the price development of
wood is linked to the activity in the pulp and paper sector with lower activity
and pricing giving lower cost and opposite when activity is high.
The group’s revenues and costs are partly hedged operationally from a
currency point of view; providing some risk reduction but significant
movements, particularly of NOK vs GBP, USD an EUR, pose a financial risk for
the group.
Norske Skog’s operations are predominantly production of publication paper,
but with increasing exposure to packaging paper. The demand for publication
paper will likely continue to decrease and the market balance is over time
dependent on future closures of production capacity either permanently or
through conversions to other paper grades. Exposure to both newsprint and
magazine paper grades give some product diversification for the publication
paper segment, while the conversion of Norske Skog Golbey PM1 will provide
further product diversification into recycled containerboard, which is expected
to be a growing market.
Financial risk management includes currency and liquidity planning. Currency
volatility is to a certain extent mitigated by natural hedging where income and
expenses are matched in the same currency, but the group may also enter into
currency contracts to hedge currency risk. Norske Skog has loans
predominantly denominated in EUR, matching cash flows from the EUR based
European market. Liquidity is ensured by maintaining sufficient cash balances
and open credit lines linked to trade receivables facilities. Norske Skog
continuously assesses the most competitive funding sources for the group.
Norske Skog performs credit evaluations of counterparties. The group’s
insurance program covers property damage, business interruption, product
and environmental liability, crime and cyber and is managed centrally through
a well-established insurance program.
Norske Skog ASA has a directors and officers liability insurance for the parent
and its subsidiaries. The insurance covers defence costs and potential legal
liability for directors and officers arising out of claims made against them while
serving on a board of directors and or as an officer. The insurance renews
annually, and the sum insured was USD 50 million at 31 December 2024.
Risk factors are further discussed in Note 5 Financial Risk in the consolidated
financial statements.
CORPORATE GOVERNANCE
Norske Skog considers good corporate governance to be a prerequisite for
value creation, trustworthiness, and access to capital. Norske Skog believes
that good corporate governance involves openness, honesty and cooperation
between all parties involved in and with the group: the shareholders, the board
of directors and executive management, employees, customers, suppliers,
public authorities, and society in general.
To secure strong corporate governance and value creation in a sustainable
manner, it is important that Norske Skog ensures good and healthy business
practices, reliable financial reporting and an environment of compliance with
legislation and regulations across the group.
Norske Skog has governance documents setting out principles for how
business shall be conducted. These apply to all group entities. The Norske
Skog governance regime is approved by the board of directors of Norske
Skog. Further details are described in the corporate governance section in the
annual report and on www.norskeskog.com.
REPORT OF THE BOARD OF DIRECTORS
30
I
Norske Skog
I
Annual report 2024
TRANSPARENCY
In June 2021 the Norwegian Parliament passed the Transparency Act (In
Norwegian: “Åpenhetsloven”), which entered into force on 1 July 2022. The
purpose is to promote companies’ respect for fundamental human rights and
decent working conditions in connection with the production of goods and
services, and to ensure the general public access to information on how
companies handle negative consequences on fundamental human rights and
decent working conditions.
The act applies to large enterprises that are domiciled in Norway, which offer
goods and services inside or outside Norway. Norske Skog complies with the
obligations under the scope of this act and further information is disclosed on
www.norskeskog.com.
RESEARCH AND DEVELOPMENT
Norske Skog’s research and development work is performed at the individual
business units and in cooperation with other external companies and/or
external research institutions. There is a continued focus on evolution of
paper products and new innovative green alternatives to replace existing
materials and substances that often are based on petrochemical products.
Investments into projects for alternative use of fibre and development of bio-
chemicals are being made in the form of pilot or demonstration plants that, if
successful, can contribute to growth when commercialised.
At Norske Skog Skogn, 2024 has been a year where focus on incremental
product development and launch of new products has been a key topic. This
resulted in NorStrato – a wrapping paper certified for direct food contact,
which was successfully introduced to the market in third quarter. Developments
towards new graphical products to new market segments has also been in
focus. Two research projects supported by the Norwegian Research Council
has been ongoing at the TMP pulp mill with the aim to improve process
control, reduce energy consumption and in addition provide flexibility for new
products in the future. There have also been activities towards increasing
value from sidestreams and potentially from biogenic CO2.
GOING CONCERN
In accordance with the provisions in the Norwegian Accounting Act, the board
of directors has assessed the going concern assumption as basis for preparing
and presenting the financial statements. At 31 December 2024, the equity of
the company is NOK 5.4 billion giving an equity ratio of approximately 37%
.
Based on the results for the company and group for 2024, the solidity and
available liquidity, the board of directors confirms that the assumption applies
and that the financial statements have been prepared on a going concern basis.
OUTLOOK FOR 2025
The development in the global economy is important for consumer spending,
and this impacts the publication paper and packaging paper industry, and
thus Norske Skog’s operations and results. Norske Skog’s deliveries have
increased across all grades in 2024, both in publication paper and packaging
paper, resulting in higher market share in the industries we operate.
The raw material and energy markets, which are important for both publication
paper and packaging paper production, are expected to remain uncertain.
Energy prices decreased in 2024 but are still on a high level compared to
historical averages. Cost of pulpwood has increased, but the prices are
expected to remain stable at current level. Recycled paper prices decreased in
the last months of 2024, but are expected to gradually increase again during
2025.
The level of input costs and demand for paper will continue to influence paper
sales prices in Europe. Both publication and packaging paper markets see
some excess capacity, and capacity reductions are required to tighten the
markets. Industry utilisation is expected to remain below the historical average
until capacity is reduced. Norske Skog is able to maintain a higher utilisation
rate than the industry average.
The production of recycled containerboard at Norske Skog Bruck PM3 is
expected to increase in line with plan over the coming quarters. The EBITDA
from the packaging paper segment was positive in 2024 but is expected to be
negative in 2025 due to allocation of fixed costs relating to Norske Skog
Golbey PM1 from the first quarter of 2025.
Norske Skog Saugbrugs continues to progress with the design phase of a new
bleached chemi-thermomechanical pulp (BCTMP) line, with expected
completion of the main study in the first half of 2025. In addition, Norske Skog
Saugbrugs is also reviewing the future opportunity for SC magazine paper
production from the damaged PM6.
The Norwegian mills, Norske Skog Saugbrugs and Norske Skog Skogn, have
received written notices from the Norwegian Environment Agency stating that
they will not be included in the EU Emissions Trading System from 2026 to
2030. This is because emissions from biomass combustion accounted for
more than 95 percent of the mills’ total average greenhouse gas emissions
during the reference period 2019–2023.
During December 2024, Norske Skog initiated a concrete sales process for its
operations in Australasia. The transaction is expected to close in 2025.
Norske Skog continues to monitor its financial position closely and has several
ongoing initiatives to secure its liquidity and financial performance going
forward. There is also a clear emphasis on reducing production cost and
working capital to improve the group’s competitive position and cash flow
from operations. Norske Skog will continue to develop its industrial sites with
new fibre projects based on efficient use of certified fibre and renewable
energy, both on a stand-alone basis and in partnerships.
THE PARENT COMPANY - NORSKE SKOG ASA
The parent company, Norske Skog ASA, is incorporated in Norway and has its
head office at Skøyen in Oslo. The activities of Norske Skog ASA consist of
holding shares in the operating companies and conducting the head office
functions of the Norske Skog group. On 31 December 2024 the company had
23 employees.
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
31
INCOME STATEMENT AND CASH FLOW 2024 (2023)
Operating revenue NOK 90 million (NOK 116 million) is primarily from the
services
provided
within
the
group.
Employee
benefit
expenses
NOK 70 million (NOK 97 million) a decrease of NOK 27 million mainly due to
demanning and reduced bonuses at the head office. Other operating expenses
NOK 62 million (NOK 62 million) are related to the head office functions and
IT cost. Restructuring cost of NOK 4 million (NOK 28 million) relates to
demanning at the head office.
Total financial items amounted to NOK -154 million (NOK 768 million) reflecting
dividends of NOK 875 million received from subsidiaries (NOK 978 million),
impairment of investments in subsidiaries of NOK 624 million (NOK 39 million),
currency loss of NOK 174 million (loss of NOK 74 million) and net interest and
other financial expenses of NOK 230 million (NOK 96 million).
Income taxes NOK -145 million (NOK 174 million) relates to change in deferred
tax assets recognized. Loss for the year was NOK 432 million in 2024 (profit
of NOK 851 million). Net cash flow from operating activities was negative
NOK 200 million (NOK -264 million) with net interest payments of NOK 88 million
(NOK 62 million).
Net cash flow from investing activities was negative NOK 175 million
(NOK -107 million) with the decrease reflecting increased share capital in
Norske Skog Bruck GmbH and higher receivables. Net cash flow from financing
activities was negative NOK 481 million (positive NOK 1 million) reflecting
decrease in payables and net loan repayments.
BALANCE SHEET 31 DECEMBER 2024 (31 DECEMBER 2023)
Total assets were NOK 6.4 billion (NOK 8.0 billion)
. Total non-current assets
were NOK 4.7 billion (NOK 5.5 billion) a decrease due to impairment of shares
in Norske Skog Bruck GmbH and Norske Skog Industries Australia Ltd. and
decreased deferred tax assets. Total current assets were NOK 1
.7 billion
(NOK 2.6 billion) a decrease primarily due to reduced cash and cash
equivalents.
Total non-current liabilities were NOK 1.4 billion (NOK 1.5 billion) while
current liabilities decreased to NOK 1.0 billion (NOK 2.0 billion)
. Equity was
NOK 4.1 billion (NOK 4.5 billion)
. The decrease in equity is due to the loss for
the year.
HEALTH AND SAFETY
Lost-time injuries per million working hours, was 0 in 2024 (0) in Norske Skog
ASA. The company had an absence rate due to sickness of 1
.4% in 2024
(1.2%)
.
RISK MANAGEMENT
The risk factors described for the group are also relevant for the parent
company. Furthermore, Norske Skog ASA is also exposed to the risks of
funding from the cash generating operations not being available for the
company when required, whether by way of intragroup loans or other capital
transactions such as dividend payments.
On 31 December 2024 the total number of shareholders was 13
034
(14 124).
PROFIT/LOSS ALLOCATION
The loss for the year for Norske Skog ASA (the parent company) was
NOK 432 million (profit NOK 851 million). The loss for the year was allocated
to retained earnings.
DIVIDEND PROPOSAL
The board of directors will propose to the annual general meeting that no
dividend is distributed for the financial year 2024.
SUSTAINABILITY STATEMENT
Norske Skog’s sustainability statement is presented on pages 34 through 129.
The board of directors’ signatures endorsing the sustainability statement can
be found on page 131.
REPORT OF THE BOARD OF DIRECTORS
32
I
Norske Skog
I
Annual report 2024
Photo: Carsten Dybevig
Sustainability
statement
Norske Skog Skogn, control room
Photo: Carsten Dybevig
General disclosures
(ESRS)
1. Basis for preparation
Our sustainability statement has been prepared on a consolidated basis,
aligning with the scope of the financial report for 2024. This report is our
mandatory annual statutory sustainability reporting in accordance with the
Corporate Sustainability Reporting Directive (CSRD) is (EU 2022/2464) and
Article 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation).
The scope of our sustainability statement mirrors that of our financial statements,
ensuring consistency and comprehensive coverage of our operations and
activities. Our sustainability statement covers our own operations, and both
upstream and downstream aspects of our value chain, encompassing suppliers,
production processes, distribution, product use, and end-of-life considerations.
All data points found in the topical standards have been subject to a double
materiality assessment (DMA). For a detailed description of the scope,
methodology and assumptions of our DMA process, see section 4 on impacts
risks and opportunity management in this chapter. The Sustainability
statement follows the categorization of short-, medium- and long-term time
horizons as defined in ESRS 1, section 6.4
.
No information corresponding to intellectual property, know-how or the
results of innovation has been omitted from the sustainability statement.
CHANGES IN THE PREPARATION OR PRESENTATION OF
SUSTAINABILITY INFORMATION
Norske Skog has aligned its sustainability reporting structure in line with the
adaptation to the CSRD and the ESRS. These modifications include:
•
New disclosures and metrics required by the ESRS. The DMA now includes
environmental,
social
and
governance
related
impacts,
risks
and
opportunities, in addition to ESRS-aligned policies, actions, metrics and
targets.
• Furthermore, the layout of the sustainability report has been revised to
comply with the ESRS reporting demands.
•
The sustainability statement is included in our annual report in line with the
ESRS requirements.
•
On 7 February 2025 an agreement to sell Norske Skog Industries Australia
Ltd with subsidiaries was signed. The sale is expected to be completed in
2025.
SOURCES OF ESTIMATION AND OUTCOME UNCERTAINTY
The assessment of future impacts, risks and opportunities are by nature
subject to estimations and outcome uncertainty. In line with ESRS requirements,
the sustainability statement include forward-looking statements and assess-
ment of the impact of climate change on Norske Skog performance in the
short-, medium- and long-term. These forward-looking judgments relate to
potential future events that are beyond the control of Norske Skog and
difficult to predict. Norske Skog does not assume any responsibility for the
accuracy of such future-looking statements.
THIRD PARTY VERIFICATION
All of Norske Skog’s business units are certified in accordance with ISO 9001
(Quality Management Systems). All other third party verification is handled in
the respective sections.
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
34
I
Norske Skog
I
Annual report 2024
2. Governance
Responsibility allocation in governing bodies for environmental policy and sustainability
BOARD OF DIRECTORS
The board of directors holds the overarching responsibility for Norske Skog’s
environmental policy and sustainability strategy. This includes:
•
Defining and annually reviewing environmental policies, goals, and strategic
priorities.
•
Ensuring that environmental and sustainability aspects are fully integrated
into the company’s overall strategy.
•
Receiving regular reports on environmental performance, including green-
house gas emissions, energy efficiency, circular economy, and biodiversity.
• Ensuring compliance with international agreements such as the Paris
Agreement and the Montreal Protocol.
•
Evaluating and approving investments and projects with significant environ-
mental impact.
• Delegating specific tasks related to environment and sustainability to the
audit committee and corporate management.
• Ensuring that relevant sustainability competence exists in the audit
committee and corporate management.
AUDIT COMMITTEE
The audit committee, led by the board chair, functions as a supervisory body
for the company’s environmental risks, reporting, and governance. Its
responsibilities include:
• Monitoring environmental risks and opportunities, as well as assessing
related financial implications.
•
Ensuring that sustainability reporting aligns with European and international
standards, including ESRS.
• Reviewing and approving procedures for environmental and sustainability
reporting.
• Reporting to the board on identified environmental risks, compliance, and
areas for improvement including oversight of impacts, risks and opportunities.
CORPORATE MANAGEMENT
Corporate management is operationally responsible for implementing the
board’s environmental strategy and ensuring that environmental consider-
ations are integrated into daily operations. This includes:
•
Identifying, evaluating, and managing environmental risks and opportunities
at the corporate and business unit levels.
•
Establishing specific goals and strategies for emissions reduction, renewable
energy, circular economy, and natural resource management.
• Ensuring that business units have the necessary resources, training, and
tools to effectively implement the environmental policy.
•
Reporting to the board and audit committee on environmental performance
and continuous improvement measures.
HEAD OF SUSTAINABILITY
The head of sustainability plays a key role in coordinating and overseeing the
company’s sustainability initiatives. Main responsibilities include:
• Developing and implementing the corporate sustainability strategy in
collaboration with corporate management.
• Ensuring that sustainability goals align with international regulations and
best practices.
• Leading internal training programs and ensuring sustainability principles
are understood and followed throughout the organisation.
• Coordinating sustainability reporting and working closely with the audit
committee to ensure accurate and transparent reporting.
•
Engaging in stakeholder dialogue, including with authorities, investors, and
customers, to promote Norske Skog’s environmental and social responsi-
bility.
BUSINESS UNITS
The business units are responsible for the practical implementation of
environmental initiatives in their respective operations. This includes:
• Integrating environmental considerations into daily operations, including
energy efficiency, resource use, pollution control, and waste management.
• Implementing corporate management’s strategies and goals at the local
level.
• Ensuring that employees are trained in environmental and sustainability
principles and have the necessary competence to perform their work in line
with company requirements.
• Reporting any serious environmental deviations immediately to corporate
management and regularly reporting progress on environmental goals.
• Ensuring that suppliers and partners comply with Norske Skog’s environ-
mental standards and sustainability requirements.
COMPETENCE AND EXPERTISE IN GOVERNING BODIES
The various governing bodies of Norske Skog possess broad competence in
sustainability, risk management, and environmental governance. Specific
areas of expertise include:
• Board of directors: Experience in technology, sustainability, finance, and
global markets. The board of directors consists of 5 non-executive,
independent members and two employee observers. The board has 40%
female representation.
• Audit committee: Expertise in risk assessment, compliance, and sustain-
ability reporting.
• Corporate management: Operational management of environmental and
sustainability strategies. The corporate management consists of 5 male
members, where the CEO is not independent. Corporate management has
0% female representation.
• Head of sustainability: Specialised knowledge in climate risk, circular
economy, and environmental standards.
• Business units: Practical experience in implementing sustainability goals
within production and the value chain. Expertise in operational manage-
ment, strategy, sustainability, finance, accounting, legal, commercial,
broad industrial background from fibre processing.
Through clear responsibility allocation, Norske Skog ensures that its
environmental policy is embedded throughout the organisation from strategic
governance to operational execution, continuously improving environmental
performance in alignment with global sustainability goals.
In addition to its financial reporting, audit, internal controls and compliance
responsibilities, the audit committee has delegated responsibility for
overseeing all matters relating to business conduct. As required with reference
to the guidelines that at least one member of the audit committee has recent
and relevant audit, legal or compliance expertise to enable it to discharge
these responsibilities effectively.
Material impacts, risks, and opportunities are reported to the corporate
management, and audit committee through regular updates provided by the
head of sustainability. Reporting occurs quarterly during audit committee
meetings ensuring continuous oversight.
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
35
The corporate management, and audit committee evaluate the implementation
of due diligence, effectiveness of policies, and the outcomes of actions,
metrics, and targets adopted. Reviews are conducted annually, with special
sessions convened when significant changes occur or when new risks emerge.
Impacts, risks, and opportunities are integrated into the governing bodies’
discussions on the business’s strategy, major transactions, and risk
management processes. Our acquisition strategy requires the consideration
of sustainability matters such as health & safety and locked-in emissions in
our due diligence process when acquiring other businesses. These
considerations involve comprehensive analyses that weigh trade-offs
associated with various impacts, risks, and opportunities to make informed
decisions aligned with sustainability objectives.
Throughout the year, the corporate management and business unit
management consistently monitor various impacts, risks, and opportunities.
To guarantee effective performance monitoring, the corporate management
addresses key targets relevant to our business in relevant board meeting.
Health and safety risks are a routine topic of discussion at the board meetings
(refer to the Social section on for more information). Similarly, climate-related
risks and our efforts towards decarbonization and achieving net zero emission
goals in scope 1 and 2 are monitored and reviewed when necessary by the
governance bodies (for additional details, see the Environment section).
Compensation scheme including sustainability-linked remuneration:
•
All performance contracts, for corporate management, mill directors and all
other personnel with performance contracts, include sustainability goals
that cover environmental, health, and safety issues. The performance is
assessed on a general basis and is not assessed against specific targets.
•
The proportion of the variable remuneration is 2.5% of the total performance
contract score. The board of directors approves the level and content of the
performance contracts.
Risk management and internal controls over sustainability reporting
HEAD OF SUSTAINABILITY – RESPONSIBILITIES AND REPORTING
STRUCTURE
The head of sustainability is responsible for facilitating and developing
comprehensive group reports on sustainability issues and ESG metrics. This
responsibility includes organizing and leading essential activities such as the
consolidated Disclosure on Management Approach (DMA), evaluating climate
risks, and managing data collection and conversion processes for sustainability
reporting.
DATA COLLECTION AND REPORTING STRUCTURE
The gathering of relevant data and information for the annual sustainability
report is a continuous process that involves multiple data sources and
reporting levels within the organisation. Data is collected at the business units
(mills) through:
•
Measuring instruments: Automated and manual sensors monitor emissions,
energy consumption, water usage, and other key environmental parameters
at each mill.
• Physical counts or measurements: Manual inspections and physical
assessments verify waste management, raw material usage, and safety
compliance.
• Incident reports:
o Every work-related accident or serious injury is reported immediately to
the relevant leader and business unit management. Within 24 hours, the
report is escalated to: Corporate management, head of sustainability and
VP communication.
o Incidents related to breach of environmental permits or hazardous waste
is reported to proper authority without delay and to corporate
management, head of sustainability and VP communication.
Each mill has designated Health, Safety, and Environmental (HSEQ) managers
responsible for sustainability-related matters. Their key responsibilities include:
• Ensuring compliance with sustainability policies through regular follow-up
and reporting.
• Providing sustainability competence and quality assurance at the mill or
business unit level.
•
Overseeing monthly reporting of health, safety, and environmental data to
business unit management.
• Participating in monthly business review meetings with corporate
management to discuss performance and compliance.
STANDARDISED DATA FRAMEWORK AND RISK MANAGEMENT
A key challenge in creating unified sustainability disclosures across multiple
business units is mitigating human errors and data misalignment. To address
this, the head of sustainability oversees a unified data framework for the entire
group, ensuring:
•
Standardised definitions and calculations for emissions, waste, and energy
metrics.
• Compliance with the GHG Protocol through accurate emission factor
assessments.
•
A systematic risk prioritisation methodology to enhance data integrity and
reliability.
•
Centralised quality assurance, where the head of sustainability functions as
an information hub, identifying and rectifying inconsistencies in data
submitted by business units.
INTEGRATION OF A SUSTAINABILITY REPORTING TOOL
To further enhance data management and reporting, Norske Skog introduced
a specialised sustainability reporting tool in 2024. This tool is designed to:
•
Structure sustainability data for accurate and efficient reporting.
•
Monitor adherence to reporting standards.
•
Support real-time tracking of environmental performance indicators.
Initial configuration of the tool for manual data entry commenced at the end
of 2024, with further developments planned throughout 2025, including the
integration of supplier-specific Scope 3 data for a more comprehensive
sustainability assessment. Additionally, Norske Skog has consolidated
sustainability data into a central group data platform, improving accessibility
to sustainability reports and supporting sustainability-driven decision-
making across various functions.
ALIGNMENT WITH ESRS AND GOVERNANCE REPORTING
As of 2024, all sustainability data follows the accounting principles outlined
by the European Sustainability Reporting Standards (ESRS). The head of
sustainability plays a pivotal role in ensuring compliance and regularly informs
the CFO and CEO about the progress of sustainability reporting. The CFO and
CEO, in turn, provide updates to the board of directors, ensuring that
sustainability efforts align with Norske Skog’s long-term strategic goals.
Through this structured approach, Norske Skog ensures high-quality,
transparent sustainability reporting that supports informed decision-making
and regulatory compliance.
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
36
I
Norske Skog
I
Annual report 2024
Norske Skog Bruck, recovered paper handling
Photo: Carsten Dybevig
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
37
3. Strategy, stakeholders, material impacts, risks and opportunities
(IRO)
KEY ELEMENTS OF GENERAL STRATEGY
• Products: Norske Skog produces publication paper, recycled packaging
paper, energy, and bioproducts. In 2023, the group expanded into recycled
containerboard production with the commissioning of new machines at
Norske Skog Bruck and in Norske Skog Golbey from 2025.
• Markets: Norske Skog serves publication paper customers across Europe
and Australasia. The new packaging paper segment primarily targets the
European market. Key customer groups include publishers, retailers, and
commercial printers.
•
Employee headcount: The group employs 2
101people, with FTEs allocated
as follows:
o Publication paper: 1
500–1 700
o Packaging paper: 200–400 (expected to rise with full-scale production)
o Bioproducts: <50
• Banned products: Norske Skog does not produce or distribute products
banned in any markets.
BUSINESS ACTIVITIES IN SPECIFIC SECTORS
• Fossil fuels: Norske Skog is not active in coal, oil, or gas production. The
group has transitioned to renewable energy, including a 50 MW waste-to-
energy boiler at Norske Skog Bruck and 10% partnering in a 125 MW project
at Norske Skog Golbey supplying the mill with energy.
• Chemicals production: Not applicable.
• Controversial weapons and tobacco: Norske Skog has no involvement in
these sectors.
SUSTAINABILITY-RELATED GOALS
• Publication paper: Improve and optimise resource efficiency, reducing
emissions and energy use.
• Packaging paper: Establish a leading position as an independent recycled
containerboard producer.
• Vertical integration: Explore up- and downstream synergies to enhance
sustainability and operational efficiency.
ASSESSMENT OF CURRENT MARKETS AND PRODUCTS
• Publication paper remains core, but the shift towards packaging paper
diversifies revenue streams and reduces dependency on declining print
markets.
Our sustainability initiatives are embedded in the main strategy:
•
Optimising publication paper cash flows – improving resource efficiency and
environmental compliance.
• Becoming a leading producer of renewable packaging paper – expanding
sustainable packaging solutions.
• Vertical integration in the value chain – strengthening supply chain
sustainability and traceability.
KEY SUSTAINABILITY COMMITMENTS
•
55% reduction in GHG emissions across scope 1 and 2 per tonne produced
by 2030, compared with a 2015 baseline. And net zero emissions by 2050,
across the same scopes.
•
Zero ash to landfill by 2030.
• 100% certified wood sourcing.
KEY SUSTAINABILITY CHALLENGES AND SOLUTIONS
1. Climate change and energy efficiency – Investing in renewable energy,
efficiency projects, and process optimisation.
2. Circular economy and waste management – Expanding the use of certified
wood and recycled paper, optimising fibre utilisation, and minimising waste.
3. Water resource management – Enhancing wastewater treatment and
adopting water recycling technologies.
4. Sustainable packaging production – Expanding containerboard production
at Norske Skog Golbey and Norske Skog Bruck to meet the demand for
renewable packaging.
5. Employee health and safety – Continuous training, risk assessments, and
advanced workplace safety technologies.
Our operations span the entire value chain, from responsible raw material
sourcing to advanced manufacturing and distribution, ensuring high-quality
products for customers while minimising environmental impact.
INPUTS: RESPONSIBLE SOURCING AND RESOURCE MANAGEMENT
Our primary inputs include certified wood, recycled fibre, energy, and water.
We source wood and wood chips exclusively from certified sustainable forestry
operations (FSC® and PEFC™), ensuring traceability and environmental
responsibility. Recycled fibre plays an increasing role in our packaging paper
production, aligning with circular economy goals. Energy efficiency is a key
focus, with increasing investments in renewable energy sources to reduce
emissions and reliance on fossil fuels.
OUTPUTS AND VALUE CREATION
Norske Skog delivers high-quality publication paper and containerboard
products to a global customer base. Our ongoing transformation towards
packaging paper and bio-based products ensures long-term value creation for
stakeholders:
• Customers: We provide sustainable and cost-effective paper solutions to
publishers, packaging converters, and industrial users.
• Investors: By transitioning to growth markets such as packaging and bio-
products, we secure long-term profitability and resilience.
• Communities and environment: Our commitment to sustainable forestry,
waste reduction, and energy efficiency benefits local economies and
reduces environmental impact.
VALUE CHAIN AND MARKET POSITION
Norske Skog operates across the upstream and downstream value chain,
collaborating with key stakeholders:
•
Upstream: Our raw materials are sourced from certified forestry operations
and recycling partners. Suppliers include wood procurement companies,
pulpwood providers, energy suppliers, and logistics partners ensuring
sustainable and efficient delivery.
• Production: Our strategically located mills in Europe and Australasia
produce publication and packaging paper with a focus on resource
efficiency and sustainable production methods.
• Downstream: We serve a diverse customer base, including publishers,
commercial printers, and packaging manufacturers. Products are distributed
through direct sales, wholesalers, and large industrial customers, reaching
end-users in publishing, retail, and consumer goods industries.
As Norske Skog continues its transformation, we remain committed to
innovation, sustainability, and operational efficiency, ensuring long-term
success in the evolving pulp and paper industry.
STAKEHOLDERS
Engaging actively with stakeholders shape our understanding of material
issues and supports the creation of solutions and initiatives that form our ESG
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
38
I
Norske Skog
I
Annual report 2024
Upstream
Operations
Downstream
Raw materials
extraction
and
processing
Tier 1
supplier
Upstream
transport &
distribution
Own
operations and
sales
Downstream
raw materials
distribution
Customers
End users/
consumers
End of life
Activities/
suppliers
Forest owners
Harvesting
activities
Incoming
transport of
raw materials
Manufacturing
Sales
Administration
Outgoing
transport
finished
products
Printers
Publishers
Containerboard
customers
Newspaper
Magazine
Containerboard
Packaging
end users
Recycling
Landfill
Energy
recovery
Locations
Norway
Sweden
Austria
Germany
Australia
Norway
Sweden
Austria
Germany
Australia
EU
Australia
Norway
France
Austria
Australia
Germany
United Kingdom
Switzerland
Worldwide
Worldwide
Worldwide
Worldwide
Affected
stakeholders
Ecosystems
(environmental
organisations)
Ecosystems
Workers
harvesting
Nature
Workers
transportation
Employees
Local
communities
Ecosystems
Workers
transportation
Workers
processing of
sold products
Local
communities
Workers waste
handling
Local
communities
commitment and goal roadmap. Engagement generally involves the public
affairs and investor relation teams, corporate management and mill
management teams.
The table on the following page showcases our most significant stakeholders,
methods of engagement and organisation, and the objectives and applications
of these interactions. Stakeholder perspectives are essential features of our
materiality assessment. The perspectives of key stakeholder groups inform
our strategy and business model in the following ways:
- Regular engagement with our employees drives key parts of our people
strategy and informs our approach to sustainability. Norske Skog integrates
results from the employee engagement into our HR management processes
and into sustainability decision-making, especially at mill levels.
-
Norske Skog informs about procurement obligations and initiatives to the
suppliers. Regular engagement with suppliers ensures dialogue and insight
on supplier specific conditions and impact sourcing decisions.
- Central to our business model, Norske Skog’s mills engage directly with
local communities. Through regular collaboration, Norske Skog ensures
insights into plans affecting the respective communities.
- Engagement with customers and end-users affects product and service
development.
Insights
from
regular
B2B-customer
affects
product
development ensuring Norske Skog’s products continue to meet customers’
needs.
- Norske Skog communication with stakeholders is reported to adequate
managerial level and to proper governing bodies. The board of directors
receives regular status on material matters regarding outcome of the
communication with relevant stakeholders, especially when concerning
operational and investment plans.
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
39
Stakeholders
How engagement is organised
Purpose of engagements
Outcomes of engagements
Own workforce:
• Employees
• Apprentices
•
Continuous dialogue with
union representatives and
HR engagement
•
Employees & contractors can raise
concerns through direct contact
with the management and our
online whistle-blower system
•
Lowest possible score on health
and safety concerns
•
Foster a collaborative and
meaningful workplace
•
Include employee/contractor input
into internal mechanisms
•
Developing fair labour practices
and sustainability initiatives
•
Addressing workers’ rights and
concerns
•
Improved and engaged business
culture
•
Updates of internal policies
•
Improved health and safety
performance
Affected communities
•
Regular community consultations
•
Local affected community
representatives
•
Developing community
engagement and support
•
Addressing financial, social and
environmental impacts
•
Ensure alignment of business
operations with community needs
and environmental standards
•
Positive community relations
•
Strengthened social license to
operate
Customers
•
Direct contact with customers
•
Feedback from sales organisations
•
Understanding consumer
needs and preferences
•
Ensuring products meet
sustainability standards and
consumer expectations
•
Enhanced product quality
and customer satisfaction
•
Increased brand loyalty
and market share
Existing investors
•
Conference calls
•
Board meetings
•
Quarterly reports
•
Annual and sustainability reports
•
Annual general meetings
•
Maintain transparent
communication
•
Meeting the needs of financial
stakeholders for sustainability
data
•
Upholding our duty to keep
investors informed of ESG-related
information.
•
ESG rating improvement plans
•
Responses to investor queries
•
Aligning communication of our
(sustainability) strategy
to investors
Suppliers
•
Direct through engagement with
suppliers
•
Feedback from suppliers
•
Supplier audits
•
Annual ESG reports
•
The supplier code of conduct
•
Day to day correspondence
•
A continual dialogue with our
suppliers is critical to maintain
our sustainability targets
•
Monitor our suppliers’ ESG
progression in order to assist
in the assessment of ESG risks
and pinpoint suppliers who
demonstrate best practices
•
Managed supplier expectations
•
Ensuring suppliers adhere to
our business conduct standards
and maintain the collaborative
decarbonisation plans of
Norske Skog
Industry bodies and regulators
•
Member-only conferences
•
Joint initiatives and programmes
•
Developing industry standards
on sustainability
•
Understanding and engaging
with value chain workers’
representatives
•
Ensure compliance with existing
and future legislation
•
Maintaining industry knowledge
of best practices
BRIEF DESCRIPTION OF MATERIAL IROS AND THEIR CONCENTRATION
IN THE BUSINESS MODEL
Norske Skog has identified several material impacts, risks, and opportunities
(IROs) through its materiality assessment, which affect both the operations
and the upstream and downstream value chain.
• Negative impacts:
Norske Skog’s operations generate air and water
pollution, greenhouse gas (GHG) emissions, and consume significant
amounts of energy and water. Additionally, the sourcing of wood contributes
to land degradation and deforestation, while industrial accidents pose a
health and safety risk to employees.
• Positive impacts:
The group contributes positively by utilising renewable
and recycled resources, generating bio-based energy from waste, and
promoting circular economy principles.
• Risks:
Major risks include potential exclusion from the EU ETS market,
fluctuating energy prices, water shortages, stricter regulatory permits, and
dependency on natural resources like wood and recycled fibre. Reputational
risks related to unethical business practices and poor gender diversity are
also material.
• Opportunities:
Norske Skog can capitalise on the demand for low-emission
products, bio-based alternatives, and new business areas such as
nanocellulose and bio-composites.
The concentration of these IROs varies across Norske Skog’s value chain:
•
Upstream: Wood sourcing, energy supply, and transportation.
• Operations: Mills’ emissions, water usage, energy consumption, and
employee safety.
• Downstream: Product recyclability, transportation, and evolving customer
preferences.
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
40
I
Norske Skog
I
Annual report 2024
FINANCIAL EFFECTS AND STRATEGIC RESPONSES
Norske Skog has already adapted its strategy to mitigate negative impacts
and leverage opportunities.
• Financial effects: Exclusion from EU ETS and volatile energy prices could
lead to significant cost increases. Water scarcity and stricter environmental
regulations may raise operational costs. However, investment in bio-based
alternatives and recycled packaging paper diversifies revenue streams,
reducing dependence on declining publication paper markets.
• Strategic responses:
o Transition towards renewable energy sources and increased energy
efficiency.
o Expansion into recycled containerboard production (Norske Skog Bruck
and Norske Skog Golbey).
o Strengthening responsible sourcing practices and biodiversity conser-
vation efforts.
MATERIAL IMPACTS AND THEIR CONNECTION TO STRATEGY AND
BUSINESS MODEL
(i) Impact on people and the environment
• Negative impacts: Pollution and emissions contribute to environmental
degradation and health concerns, while industrial risks impact employee
safety.
• Positive impacts: Circular economy initiatives and renewable energy pro-
duction reduce the company’s carbon footprint and contribute to resource
efficiency.
(ii) Origin and connection to strategy
• Norske Skog’s reliance on energy-intensive manufacturing and natural
resources is integral to its business model, necessitating mitigation strategies.
• Sustainability efforts are embedded in Norske Skog’s long-term strategy
through increased use of recycled fibres and reduced fossil fuel dependency.
(iii) Time horizons of impacts
•
Short-term (<1 year): As referenced in table on the following page.
•
Medium-term (1-5 years): As referenced in table on the following page.
•
Long-term (>5 years): As referenced in table on the following page.
(iv) Business relationships involved
•
Norske Skog is involved through direct operational activities (mill
emissions,
sourcing) and indirect relationships (transport, suppliers). Close collabora-
tion with suppliers, regulators, and customers is key to mitigating risks and
capitalizing on opportunities.
CURRENT AND ANTICIPATED FINANCIAL EFFECTS OF MATERIAL RISKS
AND OPPORTUNITIES
•
Short-term: As referenced in table on the following page.
•
Medium-term: As referenced in table on the following page.
•
Long-term: As referenced in table on the following page.
PLANNED STRATEGIC ACTIONS
•
Continued investment in renewable energy and bio-based products.
•
Diversification into recycled packaging paper.
• Strengthening sustainable sourcing policies.
•
Investing in water-efficient production technologies.
•
Developing low-carbon business models to ensure long-term financial resilience.
RESILIENCE OF STRATEGY AND BUSINESS MODEL
Norske Skog’s business model is resilient due to:
•
A diversified product portfolio, reducing reliance on publication paper.
•
Investments in bio-based alternatives and energy-efficient processes.
•
Strong regulatory engagement and sustainability commitments.
•
Long-term financial planning, including capex in new technologies.
Quantitative resilience analysis considers scenarios related to carbon pricing,
energy availability, and climate change adaptation, ensuring the company can
withstand market fluctuations and regulatory shifts.
CHANGES IN MATERIAL IROS COMPARED TO THE PREVIOUS
REPORTING PERIOD
•
Increased focus on recycled packaging paper as a new revenue stream.
•
Enhanced climate resilience strategy, particularly regarding water and energy
efficiency.
•
Greater emphasis on biodiversity conservation and responsible sourcing.
SPECIFICATION OF IROS COVERED BY ESRS DRS VS. ENTITY-SPECIFIC
DISCLOSURES
•
ESRS DRs coverage: GHG emissions, energy consumption, water use, pollution,
biodiversity, human rights (worker safety, diversity, ethical practices).
• Entity-specific disclosures: Circular economy innovations, bioproduct
developments, industry-specific sustainability challenges, and political
advocacy on EU ETS inclusion.
CONCLUSION
Norske Skog’s material IROs are closely linked to its business model, driving
strategic adaptations and investments. The company’s resilience stems from
its commitment to circular economy principles, energy efficiency, and
sustainable
sourcing.
By
addressing
impacts,
risks
and
leveraging
opportunities, Norske Skog aims to ensure long-term sustainability and
competitiveness.
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
41
Norske Skog Bruck, wastewater treatment plant
Photo: Stein Johnsen
MATERIALITY ASSESSMENT PROCESS
During 2024, Norske Skog conducted a double materiality assessment based
on the requirements of the ESRS. The foundation of such an assessment
involved identifying and objectively assessing impacts, risks and opportunities
(IROs). The impacts, risks and opportunities identified in the DMA are
described under the relevant topical ESRS in this report.
DMA-PROCESS METHODOLOGY
Identification of sustainability matters: Norske Skog’s DMA process began
with evaluating its business activities, value chain, and stakeholders to identify
relevant sustainability topics, ensuring alignment with ESRS 1 and excluding
non-material issues.
Assessment of Impacts, Risks, and Opportunities (IROs): IROs were evaluated
based on impact materiality (environmental and social impacts) and financial
materiality (risks and opportunities) using a scoring methodology considering
severity, likelihood, and financial magnitude over short-, medium-, and long-
term horizons.
Decision-making and integration: The results were validated through a dual
bottom-up (mill level) and top-down (corporate level) process, discussed with
the board of directors, and integrated into corporate strategy, with annual
reviews to ensure continuous improvement and adaptation.
MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
In the DMA-process, Norske Skog has evaluated these IROs to be material:
Impacts, Risks and Opportunities (IRO)
Type
E1
Climate change
Climate change mitigation
GHG emissions across the value chain
Impact, negative
x
x
x
x
x
x
Low-emission products
Opportunity
x
x
x
x
x
x
Exclusion from the EU ETS market
Risk
x
x
x
x
Energy
Energy consumption
Impact, negative
x
x
x
x
Energy prices
Risk
x
x
x
x
E2
Pollution
Pollution of air (SOx and NOx)
Pollution of air from boilers
Impact, negative
x
x
x
x
Pollution of water
Discharge of process water
Impact, negative
x
x
x
x
E3
Water and marine
resources
Water withdrawal
Water intensive production process
Impact, negative
x
x
x
x
Potential water shortage
Risk
x
x
Water discharge
Stricter permits levels
Risk
x
x
x
x
E4
Biodiversity
and
ecosystem
Ecosystem services
Dependency on natural resources: sourcing of wood
Risk
x
x
x
x
Dependency on natural resources: process water
Risk
x
x
x
x
Land degradation
Degradation of land through felling of forests
Impact, negative
x
x
x
x
E5
Resources and
circular economy
Resource inflows including use
Utilisation of renewable and recycled resources in production of products
Impact, positive
x
x
x
x
Availability of recycled fibre for production of products
Risk
x
x
x
x
Resource outflows related to products and services
Production waste
Impact, negative
x
x
x
x
x
S1
Own employees
Working conditions
Industrial accidents
Impact, negative
x
x
x
x
Advocate for improved working conditions through freedom of association
Impact, negative
x
x
x
x
Equal treatment and opportunities for all
Attract and keep top talent though training and skills development
Risk
x
x
x
x
Poor gender diversity
Risk
x
x
x
G1
Business
conduct
Corporate culture
Unethical business practice
Risk
x
x
x
x
Protection of whistleblowers
Failure to protect whistleblowers
Risk
x
x
x
x
x
x
Upstream
Chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
4. Impacts, risks and opportunity management
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
43
IDENTIFYING SUSTAINABILITY MATTERS
The initial phase focussed on evaluating Norske Skog’s activities and business
relationships, value chain and affected stakeholders to pinpoint relevant
sustainability issues as outlined in ESRS 1, paragraph AR16. This approach
ensured a thorough examination of critical sustainability topics in the pulp and
paper industry, alongside the exploration of company-specific matters.
Irrelevant sustainability topics and sub-topics that did not align with Norske
Skog’s business model were excluded from the analysis.
STAKEHOLDER ENGAGEMENT
The DMA process engaged several key personnel, corporate and mill
management to evaluate Norske Skog’s sustainability and business matters
that have a material impact on future business unit operations in respective
locations and their impact at group level. The following engagement was done
to identify material risk and opportunities:
At mill level:
•
Internal experts: The mill DMA teams are made up by the mill manager and
other key personnel in different functional areas, including finance, human
resources (HR), business development, health, environment and safety
supply chain management and marketing with local knowledge on topics
with strategic importance to the mills.
• External experts: Each mill has regular contact with local external
stakeholder groups such as customers, suppliers, national permit agencies,
NGOs, professional national trade organisations, local communities and
forest owner association that support the identification and assessment of
topics with strategic and financial importance.
At corporate level:
•
Internal experts: The corporate management team has unique knowledge of
financial, strategic and operational matters for the entire group. The Head
of Sustainability and VP Communication and Public Affairs play a vital role
in the DMA-process..
•
External experts: The corporate management team has regular contact with
key stakeholder groups for the group including policy makers, financial
institutions, board of directors, shareholders, industry associations, key
customers and suppliers.
Norske Skog did not organize separate stakeholder interviews as part of the
DMA process. Norske Skog has continuous engagement with different
stakeholder groups throughout the year regarding sustainability topics and
this input was used actively throughout the DMA process.
ASSESSING IROS RELATED TO BUSINESS PRACTICES
The basis for identification of company specific IROs was the business model,
strategy and value chain of Norske Skog. Company specific IROs identified in
the DMA conducted in 2023 were used as a starting point for the 2024 DMA-
process and linked with the long list of sustainability matters (ESRS topics,
sub-topics and sub-sub-topics). No entity’s specific sustainability matters
were added to the list.
Certain segments of Norske Skog’s supply chain received extra attention
through cross managerial and cross function discussions, especially those
with a significant potential impact and relevance to Norske Skog’s operations.
These areas included business risk related to production process, waste-
water treatment, water availability, wood logging timing, as well as sustainable
energy availability and product development according to market environ-
mental expectation.
The assessment of climate-related impacts, risks, and opportunities was an
integral part of the DMA concerning sustainability issues. Norske Skog carried
out a revision of the identified climate-related risks and opportunities following
the Task Force on Climate related Disclosure Framework (TCFD) in 2023. As
part of this process, a climate-related scenario analysis was carried out in
cooperation with CEMAsys, a Nordic ESG Consulting firm. Both processes
supported the identification and assessment of physical and transitional risks
and opportunities across different time frames.
The identification of IROs concerning business practices involved mapping
out geographic areas with heightened potential impacts, risks and
opportunities associated with corruption, bribery, and human rights issues.
The process also revisited business conduct risks previously identified in
Norske Skog’s corporate standards and continuous compliance programme.
MATERIALITY SCORING APPROACH
The assessment of impacts, risks, and opportunities (IROs) followed ESRS 1
requirements, evaluating impact materiality (effects on people and the
environment) and financial materiality (risks and opportunities). Impact
materiality was scored from 1-5 based on severity (scale, scope, irremediability)
and likelihood, prioritising human rights impacts. Financial materiality was
scored separately on magnitude and likelihood, considering drivers like
regulations, market, and reputation.
Scores were calculated by multiplying severity with likelihood (max 25) for
impact materiality and magnitude with likelihood (max 25) for financial
materiality. Issues surpassing a set threshold were classified as material.
Assessments covered short- (<1 year), medium- (1-5 years), and long-term
(>5 years) horizons, integrating strategic, budgetary, and due diligence data,
including human rights and climate risk assessments.
A dual bottom-up (mill-level) and top-down (corporate-level) approach
ensured comprehensive evaluation. Mills assessed local IROs with site-specific
financial thresholds, while corporate teams consolidated results in validation
workshops with sustainability, communication, and public affairs teams.
Findings were presented to the board of directors. Continuous stakeholder
engagement informed the process, involving 30-50 representatives across
investors, suppliers, NGOs, and regulators.
DECISION – MAKING AND INTERNAL CONTROLS
Critical decisions in the process included scoring IROs, and the final
assessment of sustainability matters in the workshop. Internal control
measures were implemented throughout the process, ensuring that the
scoring methodology was followed. Each IRO was documented to justify its
materiality.
FUTURE STEPS – INTEGRATION, MONITORING, AND REVIEW
Norske Skog integrate results from the DMA process into the corporate
strategy and incorporate responses to impacts, risk and opportunities into mill
and corporate level monitoring and management processes. This may affect
future type of investments, and level of capital expenditure.
Norske Skog commits to annually revisiting the DMA process for identifying,
assessing, and prioritising IROs, considering evolving trends, underlying
assumptions, context, and regulatory changes. A comprehensive review of the
DMA will be conducted annually to ensure its efficacy and relevance. The DMA
process will adjust to changes in climate related issues and company specific
needs. However, the steps in the DMA methodology and stakeholder groups
have been the basis for the latest assessment periods.
Each year the corporate and mill management will undergo and revise the
DMA process. During the year, the head of sustainability at corporate level and
local sustainability managers will monitor and report on action plans to
adequate governing body.
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
44
I
Norske Skog
I
Annual report 2024
Norske Skog Skogn, winder
Photo: Carsten Dybevig
As described in ESRS SBM-3, Norske Skog updated its materiality assessment
which is based on the concept of double materiality. The assessment
objectively scored impacts, risks and opportunities (IROs) as a basis for
determining whether sustainability matters were material or not. This section
describes the process applied to identify and assess material IROs. Norske
Skog does not have a separate enterprise risk management tool (ERM) in
performing a risk assessment process. The risk assessment is part of the
business unit’s process to prepare the DMA-evaluation, annual operational
plans and long-term strategy.
Description of the process to identify and assess
material climate-related IRO’s
E1 CLIMATE CHANGE
In 2024, Norske Skog assessed its climate-related IROs, facilitated by the
updated DMA. The identification and assessment of climate-related impacts
focused on Norske Skog’s GHG emissions from own operations as well as up-
and downstream in the value chain. The GHG emission inventory served as the
main source of information to identify drivers for climate related impacts in
relation to the current and future business strategy. Recent assessment report
from the Intergovernmental Panel on Climate Change (IPCC) and other
international research provided context on GHG emissions impact on people
and the environment.
The identification and assessment of climate-related risks and opportunities
was supported by the revision of the Task Force on Climate related Disclosure
Framework (TCFD) carried out in 2023, evaluating physical risks (acute and
chronic), transition risks (policy, legal, technology, market, reputational) and
opportunities (resource efficiency, energy source, products and services,
markets, resilience).
With increased focus on climate change and its implications on current and
future financial performance, Norske Skog carried out a climate-related
scenario analysis in 2023, in cooperation with CEMAsys, a Nordic ESG
Consulting firm. The scenario-analysis assessed access to process water and
electricity in line with the recommendations laid out by the TCFD. The
assessment used the IEA’s Net Zero Emissions (1.5°C), IEA World Energy
Outlook (WEO) 2022 and IPCC SSP1-2.6 “Sustainability” scenario to assess
how our assets and business activities may be exposed to physical risks. For
the assessment of transition risk IPCC’s SSP5-8.5 scenario (4.0°C) was
applied. The Net Zero 2050 scenario limits global warming to 1
.5°C and
includes stringent climate policies and rapid technological change to reach
net zero CO2 emissions by 2050. Carbon price level EUR 250/tCO2e in 2050.
IPCC’s SSP5-8.5 scenario (4.0°C) assumes that only policies that have already
been introduced are preserved, leading to high physical risks. Emissions
continue to grow until 2080, resulting in up to 4.0°C of warming and severe
physical risks, including irreversible changes such as higher sea levels.
As part of the scenario analysis CEMAsys conducted workshops and
interviews with relevant leaders across the company as part of the process to
make the analysis. Identifying climate-related risks and opportunities involved
a top-down approach, as well as an ‘outside-in’ analysis of risks and
opportunities specific to pulp and paper industry.
The findings from the scenario analysis were presented to the mill and
corporate management team and will be considered as part of Norske Skog’s
strategy process to improve its resilience. The climate-related risks that were
identified through the scenario analysis exercise have been incorporated into
the annual strategic review process by Norske Skog’s mills and the corporate
management.
The timeframe used in the TCFD assessment and scenario analysis defined
short-, medium- and long-term as 2025, 2030 and 2050 respectively. The
2030 timeframe aligns with Norske Skog’s GHG emission reduction target and
the 2050 timeframe align with Norske Skog’s commitment to net-zero
emissions by 2050, in accordance with the goal of the Paris Agreement.
Both the TCFD and scenario analysis evaluated the situation at each business
and the entire organisation. The climate scenarios and related assumptions
are compatible with the financial statements in this report.
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
45
Photo: Carsten Dybevig
Impacts, Risks and Opportunities (IRO)
Type
ESRS E1 Climate change mitigation
GHG emissions across the value chain
Impact, negative
x
x
x
x
x
x
Norske Skog has a negative impact throughout the value chain on the climate. The upstream emission are
connected to the logging activities and transportation of wood from the forest into the mill with trucks
and train. The production process consumes large amount of heat from bioenergy and electrical power to
transform the wood log into pulp for the production of paper. Emissions from both inbound and outbound
transporters, and production process foster potential negative climate impact.
Low-emission products
Opportunity
x
x
x
x
x
x
Norske Skog has an opportunity related to the finished goods which have relative emission level compared
to other fossil alternatives. The containerboard production will deliver packaging paper to the market and be
in direct competition with fossil plastic products. All the containerboard production in the group located in
Norske Skog Bruck and Norske Skog Golbey, are based on recycled old corrugated case material. Similarly,
the nanocellulose and biocomposites produced at Saugbrugs are based on wood logs, which is a renewable
source. The opportunity to for capturing and delivering for storage the biogenic carbon emissions will reduce
the finished goods carbon footprint and thus become more acceptable product for the consumers.
Exclusion form the EU ETS market
Risk
x
x
x
x
The tentative exclusion of the two Norwegian mills, Saugbrugs and Skogn, from the Energy Trading System
(ETS) poses a risk of severe financial impact. This exclusion of Norske Skog’s Norwegian mills will, with a
CO2 price of EUR 70, have a tentative, negative financial impact for the entire group. The share of biomass in
producing heat from the bioboiler is above 95% and is thus above the ETS qualification level. Norske Skog has
politically opposed the tentative exclusion.
Energy
Energy consumption
Impact, negative
x
x
x
x
Norske Skog’s energy consumption has negative impact on the climate. The energy is used to process
raw material into finished paper products using a mix of renewable and fossil energy sources. The energy
consumption contains several sources of energy like hydro power, bio mass, production waste, natural gas
and oil to produce heat to the production process in addition to electrical power from the grid, which also has
elements of fossil sources from coal, LNG and oil. Norske Skog’s energy intensive manufacturing processes in
all mills require substantial energy sources. Non-renewable energy sources used in production has a negative
impact on the environment.
Energy prices
Risk
x
x
x
x
Norske Skog faces a competitive risk related to fluctuations in energy prices. The energy prices in Europe are
mainly driven by supply and demand for energy. The volatility in energy prices derives from the last marginal
supply of energy, which for the last years has been the price expectations of LNG.
Norske Skog has entered into long- and medium term contracts with energy suppliers for most of the production capacity. Norske Skog will either have a non-cash profit or loss related to energy contracts depending on the actual
energy price fluctuations.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
46
I
Norske Skog
I
Annual report 2024
E2 POLLUTION
Norske Skog is committed to addressing pollution-related impacts, risks, and
opportunities across our operations and value chain. Norske Skog conducted
a materiality assessment applying elements of the LEAP approach, focusing
on pollution of air, water, soil, microplastics, substances of concern, and their
dependencies on ecosystem services to evaluate their materiality and
significance.
Screening Methodologies and Assumptions: To identify actual and potential
pollution-related impacts, Norske Skog undertook a screening process across
business units within our operations, assessing the interface with nature. This
involved an evaluation of emissions from our direct assets, upstream, and
downstream. The screening methodologies included detailed data collection
on pollutant emissions, their severity, and likelihood of impacts on the
environment and human health. The results provided a basis for comparing
the environmental performance.
Consultations and community engagement: Norske Skog’s commitment to
transparency extended to consulting with affected communities to better
understand their concerns and the potential impact of our operations on their
environment and Norske wellbeing. The business units engaged in dialogue
with local authorities and public and requested feedback from stakeholders
residing near the sites and along the value chain. These dialogues help us
gather valuable insights, build relationships, and foster a better understanding
of the local concerns and expectations related to pollution and its management.
Assessment of Risks and Opportunities: The above written approach guided
our assessment, enabling the identification of transition risks and opportunities
across the operations and the value chain. This involved evaluating policy and
legal aspects, technological advancements, reputation changes, and potential
physical risks arising from pollution incidents.
Opportunities were identified to access green financing, build resilience, and
improve our reputation through proactive pollution prevention and control
measures. The outcome highlighted specific site locations and business
activities where pollution emerges as a material issue, enabling us to revisit
the business strategy and prioritize actions to mitigate risks and leverage
opportunities effectively.
Here is an overview with the materiality matrix of the material impacts, risks
and opportunities for ESRS E2 pollution. Norske Skog has ensured the
consideration of geographical areas, types of assets, inputs, outputs and
distribution channels when describing upstream and/or downstream value
chain material IROs.
Impacts, Risks and Opportunities (IRO)
Type
Pollution of air
Pollution of air from boilers
Impact, negative
x
x
x
x
All Norske Skog mills emit various pollutants, including volatile organic compounds (VOCs), sulphur dioxide
(SO2), nitrogen oxides (NOx), and particulate matter (PM), during operations linked to production of heat with
company owned boilers. The source of heat for the boilers contain a mix of renewable and non-renewable
sources. These emissions contribute to air pollution, may lead to respiratory problems and environmental
degradation.
Pollution of water
Discharge of process water
Impact, negative
x
x
x
x
The discharge of process water from the production process of publication paper and packaging paper
causes a negative climate impact. A substantial amount of fresh water is needed to produce pulp and mix
pulp with chemicals and other raw materials, which is used as input to produce the finished goods. The excess
water from the production process is then processed through a wastewater treatment plant before the water
is discharged to the nature. Only about 1% of the fresh water absorbed from the external source is used in the
final products, the rest is discharged to the nature.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
47
E3 WATER AND MARINE RESOURCES
As part of our DMA process, Norske Skog have implemented processes to
identify and assess material impacts, risks, and opportunities related to water
and marine resources in our operations and value chain.
Norske Skog has applied elements of the LEAP approach to assess water and
marine resources-related IROs by screening site locations and business
activities to identify potential impacts on water and marine resources.
Norske Skog used historical statistics, feedback from experts and authorities
in the water risk assessments, and marine resource evaluations to conduct
this screening. In addition, Norske Skog mills conduct monthly environmental
reporting (E-Index) to the corporate management and board of directors
using Best Available Technology (BAT) reference values for paper and pulp
production published by the EU Commission under the Industrial Emissions
Directive. This data was also assessed during the process.
The climate-related scenario analysis carried out in 2023 that outlined future
precipitation and climate change analysis was also used as a key source. Key
areas of focus included locations with high water stress, potential water
shortage and operations interfacing with marine resources. The discharge to
water at all units follow strict reporting schedule to the authorities with
specific attention to breach of permit. Breach of permit is severe and may be
followed up sanctions from the proper authorities.
Norske Skog business units conducts regular consultations with affected
communities on water-related topics.
Norske Skog’s materiality assessment covered:
• Water use: Evaluated our consumption of surface and groundwater,
including withdrawals and discharges, and water shortage and effluence
issues at different sites.
• Marine resources: Assessed our use of marine resources and their impact
on ecosystem health.
The driving assumption of using the above process is to first identify potential
sites and/or business activities that have the potential to impact water and
marine resources. Norske Skog identified negative impact on water use and
physical risks related to periodic water scarcity and potential stricter permit
level, and potential water restrictions in certain periods caused by climate
change.
Here is an overview with the materiality matrix of the material impacts, risks
and opportunities for ESRS 3 water and marine resources.
Impacts, Risks and Opportunities (IRO)
Type
Water withdrawal
Water intensive production process
Impact, negative
x
x
x
x
The water intensive production process has a negative impact on the climate because of the large quantity
of fresh water needed to produce publication paper and packaging paper. The process needs large amount
of water to dissolve and mix the different input factors together into mechanical pulp and deinked pulp to
produce finished goods. The water usage is about 100 times larger than the actual water being absorbed into
the finished products.
Potential water shortage
Risk
x
x
A potential water shortage, either permanent or temporary, may be a risk to stable production of publication
paper and packaging paper. Water shortage due to uneven rainfall, increased drought and shrinking snowpacks
have negative impact on the climate and may cause severe risk to the production process. Some areas will
face excessive quantities of rainfall and higher temperatures causing challenging the logging periods and
availability of clean water.
Water discharge
Stricter permits levels
Risk
x
x
x
x
The political and mainstream public increased attention to the environment and climate change results
in stricter permit levels and poses a risk for the long-term existence and financial soundness of the pulp
and paper industry. In areas with drought, uneven rainfall and shrinking snowpack combined with higher
temperatures will affect the availability of fresh water. Fresh water will be a scarce resource in some areas.
To avoid contamination of scarce water resources, the authorities have and will continue to impose stronger
restrictions for the use of water, and thus, in the discharge of processed waste water being returned back into
the main water resources.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
48
I
Norske Skog
I
Annual report 2024
E4 BIODIVERSITY AND ECOSYSTEMS
Norske Skog have undertaken a review of our processes to identify and assess
material impacts, risks, and opportunities related to biodiversity and
ecosystems across our operations and value chain.
Norske Skog systematically screened all site locations and business activities
to identify actual and potential impacts on biodiversity and ecosystems,
including transition and physical risk. Systemic risk will be considered in the
upcoming transition risk review. This process included the following key steps:
•
Methodologies and tools: Tools used to identify biodiversity sensitive areas
close to own operations include the IBAT biodiversity assessment tool.
Norske Skog collaborate with forest associations and industry partners in
the value chain through certification bodies like PEFC and FSC to enable
the mapping and assessment of the ecological sensitivity of forest
harvesting and the impact it has on biodiversity and ecosystems.
• Regular interactions: There are regular interaction through supplier and
customer relationship with forest owners and through membership industry
associations to evaluate the reports describing any breach of the
certification standard. In addition, Norske Skog gather through dialogue
with NGOs, research institutes like NIBEO in Norway and the authorities an
extensive overview of the environmental impact, risk and opportunities
related to biodiversity and ecosystems.
•
Assumptions: The assessment assumed that all operations and sourcing of
wood from areas within or near biodiversity hotspots and protected areas
pose a higher risk to biodiversity. Norske Skog prioritised these areas for
detailed assessment.
• Screening results: The screening identified areas where our operations
intersect with sensitive ecosystems, particularly in regions where land-use
change, pollution, and freshwater use are significant concerns. Plans are
being developed for how to monitoring, and specific mitigation plans are
being developed.
Regular dialogue and consultations have been conducted with affected
communities and other stakeholders as part of the screening process. This
supported gathering insights on local ecological context and dependencies on
ecosystem services. The following areas were paid attention to during the year:
• Supply chain: Evaluate how timber harvesting affects local ecosystems,
focusing on sustainable forest management including mitigating activities
and effectiveness of certification schemes like FSC or PEFC.
• Operations: Assess effluent management, and water usage at production
facilities and their effects on local biodiversity.
•
Land use: Consider land occupation and conversion, especially in areas near
protected habitats or biodiversity-rich zones.
In alignment with AR 4 and AR 6 of the ESRS E4 guidelines, our materiality
assessment focused on the following aspects:
Contribution to direct impact drivers on biodiversity loss:
•
Climate change: Norske Skog evaluated our greenhouse gas emissions and
their contribution to climate change, which is a driver of biodiversity loss.
•
Land- and water use change: Our operations’ impact on land- and water-use
change.
• Direct exploitation and pollution: The effects of resource extraction and
pollution from our operations were examined.
• Invasive species: The potential for our activities to introduce or spread
invasive alien species was considered like the spread of bark beetle.
Impacts on species and ecosystems:
• Species population and extinction risk: Norske Skog considered our
operations’ impact on local species populations and their global extinction
risk, focusing on endangered species.
•
Ecosystem condition and services: The extent and condition of ecosystems
in proximity to our operations were evaluated, including the impact on
essential ecosystem services such as water purification and climate
regulation.
Here is an overview with the materiality matrix of the material impacts, risks
and opportunities for ESRS 4 biodiversity and ecosystems.
Impacts, Risks and Opportunities (IRO)
Type
Ecosystem services
Dependency on natural resources: sourcing of wood
Risk
x
x
x
x
Norske Skog has mills that are entirely dependent on sourcing of wood, which causes a risk due to possible
future scarcity of forest resources. The availability may be affected by overexploitation due to high demand,
deforestation issues, climate change, loss of biodiversity, erosion and high and volatile market price of wood.
Also social conflicts, such as land use disputes, stricter environmental regulation and revised certification
mechanism will affect the sourcing of wood.
Dependency on natural resources: process water
Risk
x
x
x
x
The availability of fresh water for the process to produce publication paper and packaging paper is a business
risk for Norske Skog. Higher temperatures regardless of future climate scenario, the climate change will result in
precipitation changes. Some mills will encounter periods with increased drought, uneven rainfall and shrinking
waterfall causing a risk of not having adequate water to justify industrial production before the general public.
Lack of water resources may cause ecological and biodiversity threats followed by stricter water usage
restrictions.
Land degradation
Degradation of land through felling of forests
Impact, negative
x
x
x
x
Norske Skog consumes large quantities of forest resources which is having a negative impact on the climate.
The felling of forest has several negative impact on degradation of land. This exacerbates loss of sequestration
through loss of CO2 absorption and release of stored carbon. In addition, the logging cause deforestation and
thus soil erosen and loss of soil fertility. Other consequences are loss of biodiversity and ecosystems imbalance.
Without proper climate actions, it may trigger reduced regrowth and irreversible transformations of land.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
49
E5 RESOURCE USE AND CIRCULAR ECONOMY
Norske Skog have assessed the operations and the value chain to identify
material impacts, risks, and opportunities related to resource use and the
circular economy. The process involved a comprehensive screening of our
assets, activities, and relationships within our upstream and downstream
value chain.
Relevant assumptions for reviewing the impact, risk and opportunity
assessment:
1. Concentration of impacts in the business model and value chain
o Norske Skog’s positive environmental impacts are integrated across its
operations and value chain. In the upstream segment, the company
sources fresh fibre from sustainably managed forests and recovered
paper from recycling suppliers. The efficient use of these materials
supports the circular economy and minimizes environmental impact.
Within its operations, Norske Skog’s mills optimise energy and raw
material utilisation while repurposing production waste for energy
generation and product development. Downstream, the company’s
recycled and renewable products contribute to reducing reliance on
virgin raw materials, aligning with global sustainability goals and
regulatory frameworks.
2. Current and anticipated effects of impacts on business model and
strategy
o The focus on renewable and recycled resources is a cornerstone of
Norske Skog’s long-term strategy. The increasing demand for sustainable
products has led to diversification into recycled containerboard and bio-
products, reinforcing the company’s market position and resilience. The
shift from fossil-based materials to bio-composites and circular resource
use aligns with regulatory trends and consumer preferences, driving
continued investment in energy efficiency and waste reduction initiatives.
The new thermo-mechanical pulp line at Norske Skog Skogn is an
example of ongoing strategic adaptation to enhance resource efficiency
and reduce emissions.
3. Description of material positive and negative impacts
o Norske Skog’s sustainability initiatives have direct positive effects on the
environment, including reduced carbon emissions, lower landfill waste,
and decreased dependency on fossil fuels. The integration of recycled
materials into production decreases deforestation pressures while
promoting a circular economy. However, a key risk is the availability and
cost of recycled fibre, which could impact profitability and production
stability. If demand for recycled fibre increases due to regulatory
requirements or alternative uses in other industries, Norske Skog may
face supply chain challenges. These impacts are closely connected to the
company’s strategic focus on sustainability and resource efficiency. The
expected time horizon for these impacts ranges from immediate
operational adjustments to long-term industry transformations.
4. Resilience of strategy and business model
o Norske Skog’s strategy is resilient to environmental and market risks
through continuous innovation, diversification, and vertical integration
within the value chain. Norske Skog employs a qualitative and quantitative
approach to assessing resilience, including investments in waste-to-
energy technologies, bio-product development, and process optimisation.
Norske Skog’s resilience is further strengthened by its ability to adapt to
regulatory changes and evolving market preferences. By securing access
to renewable energy, improving and raw material efficiency, Norske Skog
ensures long-term sustainability and competitiveness.
Screening methodologies: Circular economy aims to reduce impacts on nature,
by minimising the environmental impact of products, materials and other
resources, minimising waste and the release of hazardous substances.
Regarding E5, the assessment utilised methodologies applied under ESRS E1
(including energy consumption), ESRS E2 (pollution), ESRS E3 (water) and
ESRS E4 (biodiversity, ecosystems, raw materials) to evaluate dependencies
and impacts, identifying resource inflows, outflows, waste generation, and
their environmental impact.
Consultation and engagement: Dialogue with affected communities, NGOs
and value chain partners played a pivotal role in our assessments, which
provided invaluable insights into community perspectives, enabling a more
holistic evaluation of our impacts and risks. Norske Skog mill personnel and
group directors maintain regular engagement through personal meetings,
Teams calls, and site visits with customers, suppliers, local authorities, and
relevant NGOs.
Material Risks And Opportunities: Assessing material risks and opportunities
was a critical aspect of our process. This involved identifying transition risks
and opportunities across policy and legal, technological, market, and
reputational aspects. Physical risks such as resource depletion were also
carefully evaluated. Opportunities emerged in the nature of the finished good,
in resource efficiency, alternative markets, waste handling, resilient strategies,
and reputation enhancement, emphasising a shift toward circularity and
reduced resource dependence. The nature of the finished product, especially
considering the carbon footprint and the level of reusable raw material, in
addition to the energy production with household and production waste, give
specific commercial advantages for the buyers.
Methodologies and tools utilised: In assessing our impacts, risks, and oppor-
tunities, Norske Skog relied on internal calculations, investment strategies,
environmental footprint data and other analysis. These frameworks provided
robust analytical support, enabling a comprehensive evaluation of our operations
and value chain. In addition to our process identifying and assessing resource
use and circular economy-related IROs, Norske Skog measures and reports on
the waste, process leftover and water discharge generated from our operations.
Outcomes of the assessment: The nature of Norske Skog’s business model is
to use renewable sources of energy and 100% recycled material for packaging
paper production and a mix of renewable and virgin materials for publication
paper production.
Waste from the production process, waste from the wastewater treatment
plant and bark from the wood may be used as a source of energy to the bio
boiler. However, the ash from the bio boiler is either commercially exploited or
disposed in public deposits. There are special internal control routines
handling all hazardous waste, which is being controlled and sent to officially
certified public deposit.
Norske Skog’s commitment to sustainability and circular economy principles
is deeply embedded in its business model, operations, and upstream and
downstream value chains. The company’s use of renewable and recycled
resources, waste-to-energy initiatives, and waste utilisation for product
development contribute significantly to reducing its environmental footprint
while enhancing economic efficiency. However, there are also risks associated
with the availability of recycled fibre for production due to market demand and
policy influences.
Here is an overview with the materiality matrix of the material impacts, risks
and opportunities for ESRS 5 resources and circular economy.
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
50
I
Norske Skog
I
Annual report 2024
Norske Skog Bruck, recovered paper handling
Photo: Stein Johnsen
Impacts, Risks and Opportunities (IRO)
Type
Resource inflows including use
Utilisation of renewable and recycled resources in production of products
Impact, positive
x
x
x
x
x
Norske Skog uses renewable and recycled resources in the production of finished goods, which have several
positive impacts on the environment up- and downstream in the value chain. By reusing the finished goods and
using renewable resources, Norske Skog lowers the carbon footprint and help store carbon in the product life
cycle. Recycling materials also help establish circular economy in which materials are being reused encouraging
reduced demand for virgin raw materials. In addition, less waste is being sent to landfill by
reusing materials lessening environmental contamination.
Availability of recycled fibre for production of products
Risk
x
x
x
x
Because the authorities' climate change policy encourage use of recycled fibre in the production of paper
products, it is a risk that there will be scarce availability at sustainable price level to produce paper products
due to the purchasing power of our customers. Also, the use of recycled fibre may find other alternatives to
paper products causing scarcety.
Resource outflows related to products and services
Production waste
Impact, negative
x
x
x
x
x
Waste generated from the production process, if not properly managed, can have several negative
environmental impacts. Landfilling production waste, such as bark, sludge, and ash, can contribute to soil and
water contamination, releasing harmful substances into surrounding ecosystems. Additionally, decomposing
organic waste in landfills produces methane, a potent greenhouse gas that contributes to climate change.
Improper waste disposal can also disrupt local biodiversity and ecosystems by altering soil composition and
contaminating water sources.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
51
S1 OWN EMPLOYEES
Norske Skog identifies material impacts, risks, and opportunities related to its
employees by considering various criteria, including health and safety
standards, which are paramount in ensuring a secure working environment.
The company evaluates potential safety hazards in the process industry and
pulp and paper as a key element in the assessment.
Other criteria which are central in the assessment process is working
conditions, employee wellbeing and development. Norske Skog mills conduct
regular surveys and feedback sessions to understand employee needs and
concerns. This helps identifying areas for improvement in work-life balance,
professional growth opportunities, and overall job satisfaction.
Additionally, Norske Skog considers diversity and inclusion as essential
factors in its assessment process. The company reviewed its hiring practices,
promotion policies, and workplace culture related to equality and zero
tolerance for discrimination.
Through regular consultations and structured dialogues with trade unions and
employee representatives, Norske Skog gathers insights on employee
concerns, workplace conditions, and potential risks. This collaborative
approach ensures that management remains informed about the needs and
expectations of its workforce, allowing the company to address issues
proactively and leverage opportunities for improvement. By integrating
feedback from unions into its assessment process, Norske Skog fosters a
transparent and inclusive environment that prioritizes employee wellbeing
and organisational resilience.
Here is an overview with the materiality matrix of the material impacts, risks
and opportunities for ESRS S1 own employees:
Impacts, Risks and Opportunities (IRO)
Type
Working conditions
Industrial accidents
Impact, negative
x
x
x
x
Norske Skog has a negative impact on the health and safety of own workforce related to relevant risks within
our industry and type of operations. Employees working in operations (process operators) are exposed
to heavy machinery, hot media, harmful chemicals and risk of fires 24/7 due to shift work and continuous
operations. This can lead to work related accidents and loss of life. Process operators are exposed to highest
risk and other employee categories at mill sites are exposed to moderate risk. The negative impact is systemic
for our industry.
Advocate for improved working conditions through freedom of association*
Impact, negative
x
x
x
x
Freedom of association, collective bargaining and work councils has a strong position our industry, especially
in France, Norway and Austria where the majority of Norske Skog employees are located. The existence of
work councils and collective bargaining has a positive impact on worker's ability to advocate for improved
working conditions such as working time and wages.
Equal treatment and opportunities for all
Attract and keep top talent though training and skills development
Risk
x
x
x
x
Norske Skog is dependent on expertise and knowledge of its employees for value creation. By investing
in apprentice programs, cooperate with educational institutions and offer technical and soft skills training
throughout the career Norske Skog has identified an opportunity to attract and keep top talent (opportunity
evolving from a risk).
Poor gender diversity
Risk
x
x
x
The rate of female workers in the process industry and in Norske Skog is low compared to other sectors. Poor
gender diversity can lead to reputational risk and negatively impact recruitment, customers and financing.
The risk is considered systemic and derived from the impact "poor gender diversity".
* The following sub-sub-topics have been combined into one sub-sub-topic, “Freedom of association and collective bargaining” as they overlap and often addressed as one topic:
1) Freedom of association, the existence of works councils and the information, consultation and participation rights of workers
2) Collective bargaining, including rate of workers covered by collective agreements
3) Social dialogue
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
REPORT OF THE BOARD OF DIRECTORS
/
SUSTAINABILITY
52
I
Norske Skog
I
Annual report 2024
Norske Skog Bruck, packaging paper line
Photo: Stein Johnsen
G1 BUSINESS CONDUCT
Norske Skog identifies material impacts, risks, and opportunities related to
business conduct matters through a comprehensive process that considers
various criteria. The group
evaluates the location of its operations, recognizing
that regional regulations and socio-economic conditions can significantly
influence business conduct. For instance, operations in areas with stringent
environmental laws require more robust compliance measures. Additionally,
Norske Skog assesses the activity type, such as manufacturing or distribution,
to determine specific risks and opportunities associated with each operational
phase.
The sector in which Norske Skog operates is another critical criterion. As a
major player in the international publication paper market, the company must
adhere to industry-specific regulations and standards, ensuring ethical and
sustainable practices throughout its value chain. This sectoral focus helps in
identifying unique risks, such as those related to deforestation and carbon
emissions, and opportunities like advancements in recycling technologies.
Finally, the structure of the transaction is scrutinised to ensure transparency
and integrity. This includes evaluating the nature of business relationships,
such as partnerships and supply chain agreements, to mitigate risks of
corruption and ensure compliance with anti-trust laws. By integrating these
criteria into their assessment process, Norske Skog aims to uphold high
standards of business conduct and sustainability.
Here is an overview with the materiality matrix of the material impacts, risks
and opportunities for ESRS G1 business conduct:
Impacts, Risks and Opportunities (IRO)
Type
Corporate culture
Unethical business practice
Risk
x
x
x
x
Norske Skog is a global company, and engaging with international business partners inherently carries the
risk of unethical practices. Within our own operations, the sales and procurement organisations face an
elevated risk when securing contracts. Such incidents could result in fines and reputational damage, potentially
undermining trust and relationships with customers, suppliers, and employees.
Protection of whistleblowers
Failure to protect whistleblowers
Risk
x
x
x
x
x
x
Failure to protect whistleblowers could lead to reputational damage and undermine trust and relationships with
customers, suppliers, and employees. A failure to uphold the anonymity principle may result in job insecurity
and negatively impact the whistleblower's wellbeing.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
SUSTAINABILITY
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
53
Photo: Carsten Dybevig
ENVIRONMENT
1
TAXONOMY ELIGIBLE AND ALIGNED ACTIVITIES
The main economic activities of Norske Skog, production of publication paper
and containerboard, are not yet included in the EU taxonomy.
In 2024 the Norske Skog group carried out its first assessment of side-stream
activities listed in the EU taxonomy economic activities and identified 4
eligible activities to report on. The internal mapping of activities and related
assessment of eligibility and alignment has been carried by Norske Skog
teams at the headquarter and at the mills, with technical guidance from
external topic matter experts.
The activities have been assessed for eligibility under all environmental
objectives and have been found to only be eligible under Climate Change
Mitigation. No costs have been found eligible under climate change
adaptation.
None of the identified eligible activities meet the alignment criteria. The
reason for this is lack of the following documentation at the time of publication
of this report:
• CCM 4.13 Manufacture of biogas and biofuels for use in transport:
Substantial contribution criteria number 2. and 3 and do no significant harm
(DNSH) criteria on pollution prevention.
•
CCM 4.24 Production of heat/cool from bioenergy: Substantial contribution
criteria number 2 and do no significant harm (DNSH) criteria on pollution
prevention.
•
CCM 4.25: Production of heat/cool using waste heat: do no significant harm
(DNSH) criteria on pollution prevention.
•
CCM 4.30 High efficiency co-generation of heat/cool and power from fossil
gaseous fuels: Substantial contribution criteria number 2 and do no
significant harm (DNSH) criteria on pollution prevention.
During 2025 Norske Skog will evaluate necessary processes to assess
alignment for selected eligible activities.
Climate change
(ESRS E1)
EU TAXONOMY
Code
Economic activity
Mill
Description
CCM 4.13
Manufacture of biogas and biofuels for use in
transport and of bioliquids
Saugbrugs
Biogas production produced from wastewater streams related to
manufacturing of publication paper. The biogas is sold and used
for utility vehicles in Halden, Norway.
CCM 4.24
Production of heat/cool from bioenergy
Skogn, Bruck
Waste streams (e.g. bark, sludge) from production process are
utilised for production of heat in bio boilers. The heat generated
is utilised in own production processes of publication paper and
containerboard.
CCM 4.25
Production of heat/cool using waste heat
Bruck
Heat exchangers in production extract heat that is sold as
district heating to the local community. The operator of the
district heating network is an external third party.
CCM 4.30
High-efficiency co-generation of heat/cool and
power from fossil gaseous fuels
Bruck
Natural gas is utilised for cogeneration of heat and power in bio
boilers. Generated power and heat is utilised in production of
publication paper and containerboard.
ACCOUNTING PRINCIPLES
KPIs for turnover, capital expenditures (capex) and operational expenses
(opex) are presented in separate tables.
Turnover
The total turnover in the Taxonomy calculation is in line with the total
operating revenue presented in the consolidated financial statements and
cover continued operations. This includes external sales only.
Contributing activities:
• CCM 4.13 Manufacture of biogas and biofuels for use in transport and of
bioliquids: Turnover from Norske Skog Saugbrugs, Norway.
• CCM 4.24 Production of heat/cool from bioenergy: Turnover from Norske
Skog Bruck, Austria. Turnover is not related to sale of energy, but external
sale of ash which is utilised as an input factor in production of cement.
Opex
The taxonomy opex includes costs related to maintenance, optimisation, short
term lease, non-capitalised research and development and other direct cost
related to running operations such as consultants and services in production.
opex is derived from Cost Center of the respective activities in SAP and
include direct non-capitalised costs related to the economic activities.
Categories that should not be included according to the EU taxonomy, and
that are easy to identify in the existing accounts, have been excluded from the
calculations, such as cost of raw materials and energy, and admin costs not
related to production.
Contributing activities:
• CCM 4.13 Manufacture of biogas and biofuels for use in transport and of
bioliquids.
•
CCM 4.24 Production of heat/cool from bioenergy
.
•
CCM 4.25 Production of heat/cool using waste heat
.
•
CCM 4.30 High-efficiency co-generation of heat/cool and power from fossil
gaseous fuels.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
55
TURNOVER
Financial Year 2024
2024
Substantial contribution
criteria
DNSH criteria
(Does Not Significantly Harm)
Economic activities
Code
Turnover
Proportion
of turnover
2024
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Minimum safeguards
Proportion
of
taxonomy
aligned
or eligible
Turnover,
2023
Category
enabling
activity
Category
transitional
activity
NOK
%
Y;
N;
N/
EL"
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
NA
Of which enabling
NA
E
Of which transitional
NA
T
A.2 Taxonomy eligible but not environmentally sustainable activities (not taconomy-aligned activities)
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
High-efficiency co-generation
of heat/cool and power from
fossil gaseous fuels
CCM 4.30
0.00
0.00%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
NA
Manufacture of biogas and
biofuels for use in transport
and of bioliquids
CCM 4.13
2.99
0.03%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.01%
Production of heat/cool from
bioenergy
CCM 4.24
4.75
0.05%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.02%
Production of heat/cool using
waste heat
CCM 4.25
0.00
0.00%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
NA
Turnover of taxonomy eligible
but not environmentally
sustainable activities (not
Taxonomy-aligned activities)
(A.2)
7.74
0.08%
%
%
%
%
%
%
0.04%
A. Turnover of taxonomy
eligible activities (A.1+A.2)
7.74
0.08%
%
%
%
%
%
%
0.04%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Turnover of taxonomy non-eligible
activities
10 156.26
99.92%
TOTAL
10 164.01
100%
Y –
Yes, taxonomy-eligible and taxonomy-aligned activity with the relevant environmental objective
N –
No, taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective
N/EL –
Not eligible, taxonomy non-eligible activity for the relevant environmental objective
EL -
Taxonomy-eligible activity for the relevant objective
Capex
The total capex in the Taxonomy calculation is in line with the group’s total
capital expenditure in 2024, presented in the consolidated financial
statements, note 17 and 18. Capex from the Norske Skog Boyer mill in
Australia, has been excluded from the calculation of opex, in line with reporting
of discontinued operations in the financial statements. The Taxonomy-eligible
capex include investments related to the assets and processes related to the
reported economic activities.
Contributing activities:
•
CCM 4.24 Production of heat/cool from bioenergy at Norske Skog Skogn,
Norway.
Minimum safeguards
Norske Skog has started the assessment of minimum safeguards in the EU
taxonomy and will continue the assessment in parallel with the alignment
criteria in 2025.
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
56
I
Norske Skog
I
Annual report 2024
CAPEX
Financial Year 2024
2024
Substantial contribution
criteria
DNSH criteria
(Does Not Significantly Harm)
Economic activities
Code
CapEx
Proportion
of turnover
2024
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Minimum safeguards
Proportion
of
taxonomy
aligned
or eligible
CapEx,
2023
Category
enabling
activity
Category
transitional
activity
NOK
%
"Y;
N;
N/
EL"
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
NA
CapEx of environmentally sustainable
activities (taxonomy-aligned) (A.1)
NA
Of which enabling
NA
E
Of which transitional
NA
T
A.2 Taxonomy eligible but not environmentally sustainable activities (not taconomy-aligned activities)
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
High-efficiency co-generation
of heat/cool and power from
fossil gaseous fuels
CCM 4.30
0.00
0.00%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
NA
Manufacture of biogas and
biofuels for use in transport
and of bioliquids
CCM 4.13
0.00
0.00%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
NA
Production of heat/cool
from bioenergy
CCM 4.24
104.45
7.45%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
3.81%
Production of heat/cool
using waste heat
CCM 4.25
0.00
0.00%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
NA
CapEx of taxonomy eligible
but not environmentally
sustainable activities (not
taxonomy-aligned activities)
(A.2)
104.45
7.45%
%
%
%
%
%
%
3.81%
A. CapEx of taxonomy
eligible activities (A.1+A.2)
104.45
7.45%
%
%
%
%
%
%
3.81%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
CapEx of taxonomy non-eligible activities
1 297.50
92.55%
TOTAL
1 401.95
100%
Y –
Yes, taxonomy-eligible and taxonomy-aligned activity with the relevant environmental objective
N –
No, taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective
N/EL –
Not eligible, taxonomy non-eligible activity for the relevant environmental objective
EL -
Taxonomy-eligible activity for the relevant objective
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
57
OPEX
Financial Year 2024
2024
Substantial contribution
criteria
DNSH criteria
(Does Not Significantly Harm)
Economic activities
Code
OpEx
Proportion
of turnover
2024
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Minimum safeguards
Proportion
of
taxonomy
aligned
or eligible
OpEx,
2023
Category
enabling
activity
Category
transitional
activity
NOK
%
"Y;
N;
N/
EL"
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y;
N;
N/
EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
NA
OpEx of environmentally sustainable
activities (taxonomy-aligned) (A.1)
0.00
0.00%
%
%
%
%
%
%
NA
Of which enabling
0.00
0.00%
%
%
%
%
%
%
NA
E
Of which transitional
0.00
0.00%
%
NA
T
A.2 Taxonomy eligible but not environmentally sustainable activities (not taconomy-aligned activities)
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
EL;
N/
EL
High-efficiency co-generation
of heat/cool and power from
fossil gaseous fuels
CCM 4.30
0.14
0.03%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.04%
Manufacture of biogas and
biofuels for use in transport
and of bioliquids
CCM 4.13
0.23
0.05%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.05%
Production of heat/cool from
bioenergy
CCM 4.24
8.43
1.99%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
1.63%
Production of heat/cool using
waste heat
CCM 4.25
0.44
0.10%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.11%
OpEx of taxonomy eligible
but not environmentally
sustainable activities (not
taxonomy-aligned activities)
(A.2)
9.24
2.18%
%
%
%
%
%
%
1.83%
A. OpEx of taxonomy eligible
activities (A.1+A.2)
9.24
2.18%
%
%
%
%
%
%
1.83%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
OpEx of taxonomy non-eligible
activities
414.40
97.82%
TOTAL
423.64
100%
Y –
Yes, taxonomy-eligible and taxonomy-aligned activity with the relevant environmental objective
N –
No, taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective
N/EL –
Not eligible, taxonomy non-eligible activity for the relevant environmental objective
EL -
Taxonomy-eligible activity for the relevant objective
Row
Nuclear energy related activities
1.
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that
produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available
technologies.
NO
3.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the
purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
NO
Fossil gas related activities
4.
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous
fuels.
NO
5.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using
fossil gaseous fuels.
NO
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using
fossil gaseous fuels.
NO
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
58
I
Norske Skog
I
Annual report 2024
Norske Skog Bruck, wood log conveyer
Photo: Carsten Dybevig
Leading international institutions like the United Nations (UN) and the
International Panel on Climate Change (IPCC) have documented how climate
change poses as a significant challenge to our planet, impacting ecosystems,
weather patterns, and human livelihoods and stressed the need to limit global
temperature increases to 1.5OC compared with pre-industrial levels
. The
decisions and consensus from related international conferences has an impact
on the way we operate, from industrial facility operations to the entire value
chain, including raw material sourcing, energy use, production and distribution.
Norske Skog recognizes its responsibility to mitigate efforts of climate change
through sustainable business practices and commits to create shareholder
value while delivering on ambitious emission reduction targets and supplying
low-emission products, aligning with the goal of the Paris Agreement. Our
strategy is designed to meet these global changes, enhancing our group’s
valuation and local reputation. Norske Skog will strive to achieve net zero
emissions in scope 1 and 2 by 2050, positioning us as a competitive leader in
a net zero economy. Norske Skog’s environmental policy is an integral part of
the strategy to achieve Norske Skog’s business goals.
The strategic ambition of Norske Skog is to “Create green value”, and for all
business units to:
1. Reduce greenhouse gas (GHG) emissions in own operations and across the
value chain
2. Operate on renewable energy
The reduction of greenhouse gases was integrated as a key part of the
business strategy and the business model in 2020. This ambition drives the
commitment across the group to reduce energy consumption, increase the
share of renewable energy sources and to optimise transport to reduce
emissions and impact on the climate.
Greenhouse gas emissions occur primarily from energy generation processes.
All mills have their own boilers or incinerators producing thermal energy from
production waste, like bark, and other residues. Fossil fuels in the form of
natural gas, oil and coal may also be used. The main emissions associated with
these activities include carbon dioxide, particulates, sulfur dioxide and
nitrogen oxides. Such emissions have a negative impact on climate change.
TRANSITION PLAN FOR CLIMATE CHANGE MITIGATION
Norske Skog does not currently have a climate change transition plan.
However, Norske Skog is in the process of developing a transition plan
compliant with the requirements in ESRS E1-1 by 1 January, 2026. Norske
Skog has established an environmental policy to prevent, mitigate and
remediate actual and potential impacts in order to address risks and to pursue
opportunities. The policy is available on www.norskeskog.com/sustainability.
1. Strategy
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
59
2. Impacts, risks and opportunities
CLIMATE CHANGE IMPACTS
The materiality assessment outlined in ESRS IRO-2 identified the following
material impacts:
Emissions from own operations and value chain
Norske Skog’s manufacturing processes of publication paper and container-
board products require substantial amount of energy. Part of this energy
consumption is covered by fossil energy sources which release GHG emissions.
The emissions from Norske Skog’s own operations have a negative impact on
the climate with 250
000 tCO2e of Scope 1 emissions and 149
000 tCO2e of
scope 2 emissions (location-based accounting) emitted during 2024, and
810 000
tCO2e of Scope 3 emissions emitted across the value chain over the
same period. This negative impact is a consequence of energy infrastructure
in our mills, the grid mix and business relationships with suppliers and
customers. The impact occurs in the short-, medium- and long-term.
The source of Scope 1 emission is mainly related to the coal fired boiler at the
Boyer mill on Tasmania in Australia, which represented 63% of group Scope 1
emissions in 2024. Similarly, 74% of Scope 2 emissions (location based) is
from the Boyer mill. Scope 3 emissions represent 67% of Scope 1, 2 and 3
emissions combined for the group where transportation and distribution in the
entire value chain represent 48% of the group Scope 3 emissions.
Norske Skog mitigates its material climate change impacts by implementing
measures on reducing Scope 1 and 2 emissions from its operations through
energy efficiency measures and increasing the use of renewable energy
sources and scope 3 by engaging with up- and downstream value chain
partners, particularly transporters of wood logs for pulp production, household
waste for the energy boilers and finished goods to end-customers to address
and minimize Scope 3 emissions, acknowledging the significant role of GHG
emissions from logistics in pulp and paper industry.
Energy consumption
The production of publication and packaging paper is an energy-intensive
process. Norske Skog’s manufacturing processes in all mills require substantial
resources that can have a negative impact on the environment and people.
The energy is used to process raw material into finished paper products using
a mix of renewable and fossil energy sources. The energy consumption
contains several sources of energy like hydro power, biomass, production
waste, natural gas and oil to produce heat to the production process in
addition to electrical power from the grid, which also has elements of fossil
sources from coal, LNG and oil. Non-renewable energy sources used in
production has a negative impact on the environment.
Energy is used mainly for two purposes:
•
To separate, process and transport fibre and water (electrical energy). The
electricity is sourced from external suppliers. Most of the electricity is used
to mechanically convert roundwood and wood chips into fibres, called
thermomechanical pulping (TMP) process.
• To provide process heat and to dry the paper (thermal energy). Thermal
energy is used for the heating and drying of paper. In contrast with electrical
energy, thermal energy is mostly generated within the mill.
Climate change risks and opportunities
With increased focus on climate change and its implications on Norske Skog’s
current and future financial performance, Norske Skog carried out a revision
of the identified climate-related risks and opportunities following the Task
Force on Climate related Disclosure Framework (TCFD) in 2023. As part of
this process, a climate-related scenario analysis was carried out in cooperation
with CEMAsys, a Nordic ESG Consulting firm focusing on Norske Skog’s own
operations. These two processes informed the double materiality analysis
carried out in 2024.
The materiality assessment outlined in ESRS IRO-2 identified two material
transition risks and one opportunity.
Impacts, Risks and Opportunities (IRO)
Type
E1
Climate change
Climate change mitigation
GHG emissions across the value chain
Impact, negative
x
x
x
x
x
x
Low-emission products
Opportunity
x
x
x
x
x
x
Exclusion form the EU ETS market
Risk
x
x
x
x
Energy
Energy consumption
Impact, negative
x
x
x
x
Energy prices
Risk
x
x
x
x
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
ESRS E1 CLIMATE CHANGE
Material Impacts risks and opportunities
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
60
I
Norske Skog
I
Annual report 2024
RESILIENCE ANALYSIS
Norske Skog has initiated a high-level resilience analysis in relation to the
material risks and opportunities disclosed, to assess the resilience of the
strategy and business model. Non-material risk was not included in the
analysis. The evaluation is integrated into Norske Skog’s double materiality
assessment and results are discussed in annual strategy meetings and budget
plans by mill and corporate management.
The scope of the analysis conducted in 2024 focused on access to process
water (physical risk) and energy (transition risk) for all mills in our own
operations, using Norske Skog’s climate-related scenario analysis (2023) as a
key source. Climate policy and regulatory transition risk was carefully assessed
focusing on resilience of related financial impact. The value chain perspective
of the resilience analysis included sourcing of strategically important raw
materials such as fresh fibre and recovered fibre, in relevant geographies.
Norske Skog has not yet conducted a climate-related scenario analysis for
sourcing of biomass, but plan to do so in the coming years.
The results of the resilience analysis show that Norske Skog’s own operations
are largely resilient to physical climate risk due to robust infrastructure.
However, impacts from extreme weather events like flooding and water
shortages may impact operations in the long-term. Norske Skog will evaluate
and implement appropriate measures related to water withdrawal and
recycling in the coming decade to strengthen the climate resilience of own
operations (ESRS E3 for details). While such physical risk is expected to have
limited impact on own operations it has the potential to materialise in specific
geographies of the value chain related to sourcing of fresh fibre in the long
term. Recent investments in containerboard production made from 100%
recovered paper target this risk and contribute to a resilient business model
for individual mills and the group.
In terms of transition risk related to pricing of and access to energy, the results
of the resilience analysis reflect that the resilience of Norske Skog’s business
model is strengthened based on recent capital investment in low emission
energy generation at Norske Skog Bruck and Norske Skog Golbey, These
investments has contributed to important risk mitigation related to the
dependency on fossil sources while improving
the share of renewable sources
in the energy mix and avoiding long term energy pricing risk. Norske Skog will
continue to evaluate opportunities related to energy generation and efficiency
going forward to improve its future resilience.
Current and future value creation of Norske Skog is mainly based on circularity
and low emission operations and products, supported by recent major capital
investment in climate mitigating measures. This reflects a business model
resilient to meet global climate targets. However, the dependency on natural
resources in our business model is challenged by stricter climate policies, both
expected and unexpected. Future resilience relies on predictability and
political support to mitigate financial effects.
Despite future uncertainties related to climate policies, energy markets,
biomass and water-stress, Norske Skog has the necessary organisational
framework and priorities in place to adapt, build and maintain a climate-
resilient business model over the short-, medium- and long-term. In terms of
green financing, the group is using its unique position to evaluate possibilities
and has completed a green loan for Norske Skog Skogn in 2024. The group
assess additional opportunities going forward.
The time horizons applied in the analysis aligns with the time horizons of the
DMA and GHG emission reduction targets. Going forward, Norske Skog plan
to establish a robust resilience analysis in line with criteria in ESRS.
Based on the IROs identified and assessed in the resilience analysis 2024, no
major capital allocation plans, asset write-downs, or similar measures have
been made. Norske Skog group does not have locked in GHG emissions or
assets and business activities that are incompatible with a transition to a net
zero emission in scope 1 and 2 economy.
Climate-related transition risks
How Norske Skog’s business model and/or strategy mitigate risks
Exclusion from the EU ETS market
Norske Skog’s revenue model
Policy & legal
In 2024, Norske Skog’s Norwegian business units were given
prior notice by local authorities of a potential exclusion from the
EU Emission Trading Scheme (ETS) from 2026, since more than
95% GHG emissions are derived from biomass.
Norske Skog will have a competitive disadvantage if not being
able to receive free allowances in the period 2026 to 2030. The
phasing out of EU ETS schemes represents a financial risk that
will lead to increased operating costs.
The revenue model of Norske Skog’s Norwegian business units
are exposed to income sources linked to free allowances received
under the EU ETS which are sold in the open market.
Norske Skog needs to be defined within the EU-ETS due to the
use of not certified wood for the years 2019-2022.
Energy prices
Norske Skog’s strategy and revenue model
Market
Being in an energy intensive industry, Norske Skog is strongly
impacted by changes in the energy systems and its related
mechanisms. Increasing energy prices and price fluctuations is a
risk to increased operating cost.
Norske Skog need to have access to stable and predictable
energy sources. Norske Skog has invested in low-emission
energy generation in Norske Skog Bruck and Norske Skog Golbey
and will continue to evaluate opportunities going forward to
reduce exposure to low emission energy prices in the market.
Climate-related opportunities
How Norske Skog’s business model and/or strategy can realise the
opportunity
Low emission products
Norske Skog’s strategy to offer low emission products
Products
Norske Skog sees shifting consumer preferences and trends
towards low emission paper and packaging solutions as well
as bio-products. As more consumers and businesses prioritise
environmental concerns, Norske Skog will leverage this
opportunity by continuing to lower emission along the value
chain. In the long run this include Bioenergy with Carbon Capture
and Storage (BECCS).
Norske Skog has partly adapted to changing market dynamics
by investing in low-emission production processes and
products, demonstrating its commitment to environmental
stewardship. Going forward Norske Skog will continue to tap
into this opportunity and evaluate opportunities as they become
commercially viable.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
61
Norske Skog Bruck, winder
Photo: Carsten Dybevig
12%
67%
21%
Total GHG emissions
Share of scope 1, 2 ,3
Scope 1
Scope 2
Scope 3
0
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
6 000 000
7 000 000
8 000 000
9 000 000
2024
2023
2022
2021
2020
ENERGY CONSUMPTION GWH
(output model)
Consumption of recovered heat
Consumption of self generated steam
- from biomass, municipal waste
Consumption of purchased electricity
- without energy attribute certificates (EACs)
Fuel consumption from natural gas
Fuel consumption from coal
+ 10%
13%
21%
50%
6%
10%
2024
2023
2021
2022
2020
350 000
300 000
250 000
200 000
150 000
100 000
50 000
0
Biogenic emissions, Scope 1 and 2
Mills located in Norway
Scope 1
Scope 2 (location-based)
Biogenic emissions
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
62
I
Norske Skog
I
Annual report 2024
POLICIES
Norske Skog’s environmental policy outlines the approach to management of
environmental performance and sustainability efforts. The policy aims to
achieve sustainability in natural resource development and environmental
management, aligning with global commitments such as the Paris Agreement
and the Montreal Agreement. The policy is addressing climate change
mitigation by including Norske Skog’s commitment to reduce GHG emission to
net zero emissions in scope 1 and 2 by 2050. By covering all emissions scopes,
the policy applies to emissions from Norske Skog’s own operations, as well as
emission upstream and downstream in the value chain.
The policy sets the direction of how to addresses key material impacts, risks,
and opportunities related to climate change mitigation and adaptation, energy
efficiency, renewable resource efficiency, pollution, water management,
biodiversity, and deforestation. Monitoring is conducted through Corporate
Standards, annual target setting, progress reviews by the board of directors,
and adherence to internationally recognized environmental management
systems. The policy is accessible to all staff through Norske Skog’s intranet.
Scope and exclusions
The policy applies across Norske Skog’s operations, including upstream and
downstream value chains, covering raw material procurement, production, and
distribution globally. Stakeholders such as employees, suppliers, customers,
and local communities are directly involved. The policy has no specific
exclusions but emphasises heightened attention in areas with material
environmental risks, such as water-stressed regions.
Senior accountability
The board of directors holds the highest accountability for policy imple-
mentation, including setting objectives, annual target reviews, and monitoring
performance. Key leading operational personnel and business unit managers
are responsible for integrating the policy into strategic and operational
decisions. The policy undergoes regular review by the group corporate
management team, the global head of sustainability and the vice president of
communication and public affairs.
Third-party standards and initiatives
The policy incorporates commitments to third-party standards, including the
Paris Agreement, Montreal Agreement, EU’s Action Plan “Towards Zero
Pollution for Air, Water, and Soil,” and the European Sustainability Reporting
Standards (ESRS). It also promotes forest certification including PEFC and
FSC standards and prioritises certified suppliers.
Stakeholder consideration
The policy reflects the interests of key stakeholders, ensuring respect for
social and cultural values in operational regions. Norske Skog engages actively
with stakeholders through open dialogue, transparency, and collaboration,
addressing
community
concerns,
promoting
customer
environmental
objectives, and managing upstream and downstream impacts.
ENVIRONMENTAL POLICY DETAILS
(a) Climate change mitigation
Objectives and specific targets for reducing GHG emissions and increasing
GHG removals are set periodically. Policies include plans for supplier
engagement to ensure the same environmental standards are maintained
across the value chain. Annual assessments of material risks and opportunities
are performed at the corporate and business unit levels, with reporting to the
board. The board oversees performance on climate adaptation metrics
through an environmental index system based on EU BAT (Best Available
Technologies) for our industry.
(b) Climate change adaptation
Policies address the integration of climate adaptation strategies into oper-
ations and procurement processes. Business units receive resources for
training, emergency handling, and necessary health and safety measures to
adapt to climate risks.
(c) Energy efficiency
Energy efficiency is highly prioritised in all production units, with annual
improvement targets established for each business unit. Continuous resource
allocation ensures operational efficiency and progress toward energy-saving
goals.
(d) Renewable energy deployment
Policies emphasise resource deployment to enhance renewable energy use
across all business units. Annual objectives focus on increasing the share of
renewable energy in the company’s energy mix.
(e) Other
1. Renewable resource efficiency:
1.1
Targets are set for circular raw material usage and waste minimisation,
promoting resource efficiency along the upstream and downstream
value chains.
2. Pollution management:
2.1
. Policies align with the EU’s Action Plan “Towards a Zero Pollution for
Air, Water, and Soil” to minimize air and water pollution.
3. Water management:
3.1
. Special attention is given to water-stressed areas to reduce consump-
tion and manage risks.
4. Biodiversity and deforestation:
4.1
. Policies promote forest certification and anti-deforestation efforts
through supply chain engagement. These policies are integrated into
Norske Skog’s strategic and operational decisions, reviewed annually
by the board, and aligned with stakeholder interests and international
sustainability standards.
ACTIONS AND RESOURCES
Norske Skog is committed to reducing GHG emissions for scope 1 and 2 per
tonne product by 55% by the end of 2030 with 2015 as the baseline and to
achieve net zero emissions in scope 1 and 2 by 2050. The approach towards
climate change mitigation in own operations encompasses a diverse array of
strategies categorised by decarbonisation levers, including energy efficiency
and reduction of energy consumption, improving the energy mix by phasing
out fossil energy sources and investing in new business areas and low emission
products. These levers represent the key actions undertaken during the
reporting year and planned future actions to significantly reduce the group’s
carbon footprint. For instance, Norske Skog has intensified its efforts in
promoting renewable energy adoption across all facilities and have
implemented energy-efficient technologies to optimise consumption patterns.
Actions to reduce GHG emissions and energy consumption
All Norske Skog mills have energy efficiency programmes targeting
continuous reduction in energy consumption and improved energy
efficiency. This includes utilising recovered energy from Thermomechanical
Pulping (TMP) the effluent treatment processes to produce biogas,
combustion of bio-residues from the production processes. Production of
3. Impact, risk and opportunity management
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
63
Photo: Carsten Dybevig
paper and containerboard based on recovered paper and old corrugated
containers (OCC) require less energy than production based on fresh fibre
because the fibre from recovered paper is more easily separated than those
within wood.
Norske Skog has achieved 83% reduction in scope 2 emissions (location-
based accounting) since 2015 as a result of this strategy, including
divestments in mills with high share of fossil sources in the electricity mix.
Norske Skog does not purchase any Energy Attribute Certificates (EACs) due
to the political position of the Norwegian trade and industry association. The
classification of renewable sources in the electricity mix has been updated in
2024 in line with the requirement of the ESRS, which classifies electricity
without EACs as electricity from fossil sources. This led to a large drop in %
share of renewable energy sources from 85% to 36% for 2023. The share of
renewable energy sources in Norske Skog’s total energy consumption in 2024
was 34%.
Actions to reduce energy prices and GHG emissions
Norske Skog is improving this by converting from non-renewable stationary
energy to renewable and low emission energy sources leading to reduction in
Scope 1 emissions. The Norske Skog Bruck mill in Austria have converted
from natural gas to waste from households. This conversion started in 2022
with the construction of the fully owned on site waste-to-energy boiler (WtE)
and was finalized when the boiler reached full production capacity in 2024.
The Norske Skog Golbey mill in France is undergoing a conversion from
natural gas to heat based on certified biomass. The Norske Skog Boyer mill in
Australia will be discontinued in 2025. This will have a positive impact on the
group’s energy mix and transition to renewable sources.
Actions to invest in new business areas and low emission products
Norske Skog is investing in bio products made from renewable and recycled
resources, responding to growing demand and customer preferences towards
low emission products. Norske Skog Skogn mill is collaborating with Ocean
GeoLoop for developing biogenic C02 capture technologies which can lead to
positive impact on climate change mitigation in the long run.
To evaluate the outcome of our climate change mitigation actions, we provide
comprehensive insights into the achieved and expected reductions in GHG
emissions resulting from these actions. By tracking and assessing our emission
reductions, we ensure transparency in illustrating the tangible impact of our
initiatives in combating climate change. Our focus remains to achieve
measurable reductions aligned with our targets, allowing us to consistently
assess the efficacy of our strategies and drive continuous improvement.
Actions to reduce GHG emissions across the value chain
Incoming raw materials like wood and wood chips for publication paper
production and outgoing paper and containerboard products is partly
transported by fossil fuel-based trucks, vessels and railway.
Norske Skog aims to reduce scope 3 emissions by moving transport of
upstream and downstream services from trucks and fossil vessels to electrical
railway, trucks and vessels running on renewable energy sources.
Norske Skog prioritises engagement with individual suppliers that represent a
large share of Scope 3 transport related emissions and procurement spend
but is also engaging with business partners across all Scope 3 categories. The
rationale for the prioritisation is to engage with key suppliers to efficiently cut
Scope 3 emissions. This approach does also contribute to reduction of
business and climate risks related to large procurement spend with individual
suppliers.
Actions to reduce the risk of exclusion from the EU ETS market
The Norwegian Environmental Agency has informed Norske Skog about a
tentative exclusion of the two Norwegian mills, Saugbrugs and Skogn, from
the Energy Trading System. (ETS) poses a risk of severe financial impact.
Norske Skog will work directly with the Norwegian government and indirectly
through trade and industry federations to minimise the financial impact of the
exclusion.
SPECIFIC ACTIONS - IMPLEMENTED AND PLANNED
Norske Skog has 4 business units in Europe with individual programs for
climate change mitigation. The list below includes actions implemented
during 2024 and future planned actions.
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
64
I
Norske Skog
I
Annual report 2024
OWN OPERATIONS
Energy efficiency
• 2024:
o Norske Skog Skogn: The Norske Skog Skogn mill started operating a new
reboiler targeting reduced fuel consumption and improved energy
recovery. The investment will lead to an estimated annual 25 GWh
reduction in energy consumption and 73 tonnes NOx emissions. The
boiler was purchased from a closed down paper mill in Sweden.
• Future planned actions:
o Norske Skog Golbey: reduced energy consumption per tonne product
produced due to conversion from fresh fibre to recovered fibre as the
main raw material in production processes.
o All mills: Evaluate reuse of heat in production processes
Improving the energy mix by phasing out fossil energy sources
• 2024:
o Norske Skog Bruck: Continued reduction in CO2 emissions from the
waste-to-energy boiler. Fuel source switched from natural gas to
incineration of nearby household waste. The achieved total reduction in
emissions from this project is 150
000 tonnes/year. No emissions are
allocated to operations from this energy generation, in line with the EU
ETS regulation and related accounting principles.
o Norske Skog Skogn: A new thermomechanical pulping line (TMP)
replacing recycled paper with fresh fibre as the raw material in publication
paper production; hence, reducing CO2 emissions by 77% (4
000 tonnes
CO2e/year), NOx emission by 36% (91 tonnes per year) and ash to landfill
by 57% (10
000 tonnes/year) per year.
• Future planned actions
o Norske Skog Golbey: Through the Green Valley Energie (GVE) project,
construction of a 125 MW biomass boiler will supply Gobey with steam
and significantly reduce the carbon footprint of the group by an estimated
261 000
tonnes CO2e/ year. Green Valley Energie is a JV between
Norske Skog (10%), Veolia (10%) and Pearl Infrastructure (80%), where
Norske Skog will be sole offtaker of steam under a long-term contract.
o Norske Skog Boyer: The initiated sale of the Norske Skog Boyer mill in
Australia will have a large impact on the group’s conversion away from
coal and fossil energy sources.
Investing in new business areas and low emission products
• 2024:
o Norske Skog Skogn: Continued partnership with Ocean GeoLoop to
develop biogenic carbon capture technology with the purpose to remove
all bioCO2 emissions through CCS storage facilities. Potential CO2
savings not quantified.
• Future planned actions
o Norske Skog Skogn: Bioenergy with Carbon Capture and Storage
(BECCS) will continue to be a developing project. Potential to contribute
to a strong positive impact in the long run in case of successful piloting
and future investments. Potential CO2 savings not quantified.
o Norske Skog Saugbrugs: The BCTMP main study at Norske Skog
Saugbrugs commenced in 2024 with support from engineering
consultants and vendor dialogues. Final investment decision is expected
during the first half of 2025.
o Norske Skog Saugbrugs: Considering restarting PM6, which was hit by a
rockslide in 2023. This will result in lower thermal and electrical
consumption. Lower thermal consumption results in lower CO2 emissions,
both fossil and biogenic.
VALUE CHAIN
Reducing transport related emissions in 2024:
• Norske Skog Skogn: Reduction in Scope 3 CO2 emissions through
collaboration with transporters of incoming fibre on electrical ferries:
Compared with the oldest ferries in the fleet the supplier has informed
Skogn that the electrical ferries can deliver up to 50% reduction in CO2
emissions and 95% reduction of NOx emissions.
•
Norske Skog Skogn: Reduction of scope 3 CO2 emissions by collaborating
with finished goods transporter to electrify the ferries from Skogn to the
ports in Europe and UK. The impact of the investment in the vessel has
delivered a 20% reduction in CO2 emissions in 2024 compared to a 2021
baseline.
• Norske Skog has invested in train carriages and led a national project to
build a new timber terminal located close to the timber harvesting area in
Norway by cooperating with local authorities and business partners. This
terminal in Hauerseter, Norway, will be operative from 2027 and will serve
the entire wood processing industry in Norway. When the terminal in
Hauerseter becomes operative in 2027, this will cut our gross Scope 3
emissions from upstream transport and distribution with an estimated 20%.
CAPITAL EXPENDITURE (CAPEX) AND OPERATIONAL EXPENDITURE
(OPEX) (EU 1-3, AR 19-22)
In 2024, we allocated EUR 100 million towards capex and EUR 5 million
towards opex directly contributing to the achievement of our sustainability
targets. This includes investments in new refiner and heat modification at the
Skogn mill, new containerboard product line at Golbey mill including renewable
energy installations, and efficiency improvements at all the mills.
Future capex is projected at EUR 5 million, with opex expected to incur to EUR
2 million annually, supporting our continued commitment to decarbonisation
and sustainability initiatives along the entire value chain. In addition to the
programs for Scope 1 and 2, Norske Skog will pay special attention to the
scope 3 emission over the next years.
When the terminal in Hauerseter becomes operative in 2027, Norske Skog will
handle about 200
000 m
3
through this terminal, giving a savings potential of
NOK 10 million.
RECONCILIATION WITH KPIS AND REGULATORY REQUIREMENTS
The significant amounts allocated for capex and opex are consistent with our
sustainability KPIs and align with the requirements of Commission Delegated
Regulation (EU) 2021/2178. Differences in projected versus actual spending
are attributed to evolving market conditions and technological advancements,
ensuring our actions remain both effective and adaptive.
RESOURCE ALLOCATION AND IMPLEMENTATION DEPENDENCY
Our ability to implement these actions depends on the continuous availability
and strategic allocation of resources, including financial investments,
technological innovation, and collaboration with our partners. We are
committed to transparently managing these resources to maximise our
impact on climate change mitigation and adaptation.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
65
TARGET - SCOPE 1 & 2 GHG EMISSIONS
Norske Skog is dedicated to managing the environmental impact responsibly
and to deliver growth while reducing GHG emissions. This commitment is
supported by the emission reduction goal and environmental policy.
As part of the emissions reduction plan, Norske Skog set an intensity target in
2020, and committed to cut GHG emissions across Scopes 1 and 2 (location-
based accounting) by 55% per tonne produced before 2030, with ongoing
reductions every decade aiming for net-zero emissions across Scope 1 and 2
by 2050.
The ambition level of this intensity target is in line with goal of the Paris
agreement to limit global warming to 1.5 degrees and the criteria of the
Science Based Targets initiative (SBTi). The target is not approved by Science
Based Targets initiative (SBTi). Norske Skog had ambitions to do so during
2024, but due to the temporary suspension of the wood and fibre pathway by
SBTi and the anticipated publication of the GHG Protocol Land Sector and
Removals Standard and Guidance and related forest carbon accounting
resolution the ambition has been extended to 2025.
Decarbonisation levers related to this target include:
- Improve energy efficiency
- Improve the energy mix by phasing out fossil energy sources in own
operations
-
Invest in new business areas and low emission products
By taking future developments into account, Norske Skog’s current emission
reduction target for Scope 1 and 2 are based on emission intensity (tonne
product produced). This approach ensures our targets are adaptive to the
future trajectory of our business model, including new technologies and
factors that may increase emissions as our business expands. Together with
an annually updated TCFD assessment, we are planning to effectively evaluate
the future developments that could impact Norske Skog, as well as understand
the influence of Norske Skog’s activities on future developments.
This target was developed by corporate and mill management in 2020 and
approved by the board. External stakeholders such as customers and investors
were consulted during this process.
TARGET - SCOPE 3 GHG EMISSIONS
Scope 3 account for 67% of total emissions (Scope 1, 2 and 3 combined) with
48% linked to upstream and downstream transportation and distribution
across the value chain.
Norske Skog is committed to reduce Scope 3 emissions by collaborating with
business partner up and downstream in the value chain. Mills are actively
working with suppliers and customers on identifying and implementing levers
to reduce Scope 3 emission, especially related to incoming and outgoing
transport services. The group is also targeting supplier specific emissions to
improve the quality of Scope 3 inventory.
Decarbonisation levers on Scope 3 include:
-
Move transport of incoming raw materials and outgoing finished products
from trucks and vessels running of fossil fuel to low-emission transport
-
Prioritise engagement with suppliers that represent large share of Scope 3
emissions and procurement spend
Norske Skog had an ambition to define a quantitative emission reduction target
for Scope 3 target during 2024 and evaluate commitment to the Science Based
Targets initiative (SBTi) in the same process targeting all scopes (Scope 1, 2 and
3). This ambition is extended to 2025 to align with the temporary suspension of
the wood and fibre pathway by SBTi and the anticipated publication of the GHG
Protocol Land Sector and Removals Standard and Guidance and related forest
carbon accounting resolution. In 2025, Norske Skog plans to set target for scope
3 including mid-term and net zero target.
TARGET PERFORMANCE – SCOPE 1 & 2 GHG EMISSIONS
In 2024 the target achievement was 54%. Norske Skog is very close to meet
the 55% intensity target in GHG Scope 1&2 emissions (location based)/ tonne
product produced.
The equivalent reduction in absolute Scope 1 and 2 emissions in 2024
compared to 2015 is -70%. Performance on both absolute emissions and
Norske Skog’s intensity target is illustrated in the same graph.
Due to heavy investment in low emission energy generation Norske Skog
expect to reach the 2030 target of 55% reduction ahead of time. Key
investments implemented include:
-
Norske Skog Bruck: Investment in low emission energy generation utilising
residual waste
-
Norske Skog Golbey: New bioenergy plant and biogas production
In 2024, Norske Skog’s absolute emissions in Scope 1 and 2 emissions
accounted for 33% of our total emissions (Scope 1, 2 and 3 combined).
Approximately 21% of these emissions are linked to the use of stationary
energy sources in our mill (scope 1), 12% is linked to sourcing of electricity
from third parties and used in the production process (location-based
accounting).
TARGET PERFORMANCE – SCOPE 3 GHG EMISSIONS
In 2024 Norske Skog mills have continued to work with transport suppliers
targeting emission reduction possibilities up-and downstream in the value
chain.
OTHER TARGETS
Norske Skog has not set specific, metric targets for low emission products,
exclusion from the EU ETS markets and energy consumption and prices.
However, each mill has actions to reduce energy consumption, obtain the best
available energy price and specific for the Norwegian mill to work for inclusion
in the EU ETS market.
4. Metrics and targets
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
66
I
Norske Skog
I
Annual report 2024
ACCOUNTING POLICIES
SCOPE 1
Norske Skog has applied the Corporate Standard by the Greenhouse gas
protocol to measure and disclose GHG emissions for Scope 1. The reporting
boundary and consolidation approach for emissions are disclosed according
to operational control. The source of the emission factors and the global
warming potential (GWP) rates used is from the IPCC Fourth Assessment
Report (AR4 - 100 year).
All mills located in Europe are covered by EU Emission Trading Schemes (ETS)
and reporting of Scope 1 emissions follow the EU ETS methodology. 100% of
Scope 1 emissions from these European mills are covered by EU ETS.
SCOPE 2
In 2023, Norske Skog applied the location- and market-based accounting for
Scope 2 emissions, according to the GHG protocol, which was applied to data
covering 2021 to 2023 to allow for comparison. Norske Skog does not source
any Energy Attribute Certificates (e.g. Guarantees of Origin) as part of our
Market-based Scope 2 accounting.
The emission factors for Scope 2 accounting are derived from AIB (Association
of Issuing Bodies) reflecting the energy mix delivered to the European markets
and electricity purchased through the physical grid. These emission factors
have been applied to ensure the same methodology across all markets. For
reporting on 2024 the most recent set of emission factors have been applied
2023 | AIB.
For Australia, we have applied emission factors from the Australian National
Greenhouse Account Factors for Tasmania published by the Department of
Climate Change, Energy, the Environment and Water in Australia. National
Greenhouse Accounts Factors: 2024 - DCCEEW. We have applied the location-
based emission factor for both location- and market-based Scope 2 emission
accounting as no standardized residual mix factor is available for Australia.
SCOPE 3
Norske Skog has applied the GHG protocol Corporate Value Chain (Scope 3)
Accounting and Reporting. Standard to measure and disclose GHG emissions
for Scope 3.
Category 1
- Purchased goods and services: Data cover direct materials like
forest and recycling operations as well as non-wood based raw materials like
chemicals and fillers. Emissions related to purchased goods and services have
been calculated based on purchased volumes of direct materials (primary
data) and the use of generic emission factors from trusted sources (secondary
data). Percentage of emissions calculated using data obtained from suppliers
or value chain partners: 0%.
Category 2
- Capital goods: Emissions from capital goods was added to the
Scope 3 inventory in 2024, and reported annually for 2022, 2023 and 2024.
Emissions have been based on annual capex (primary data) and emission
factors from DEFRA (secondary data). Percentage of emissions calculated
using data obtained from suppliers or value chain partners: 0%.
Category 3
– Fuel and energy related activities (not covered in Scope 2):
Emissions have been calculated based on volumes of direct energy
consumption (primary data) and the use of generic emission factors from
Defra and CEPI/ Euro-graphs user guide. Percentage of emissions calculated
using data obtained from suppliers or value chain partners: 0%.
Category 4
- Upstream transportation and distribution: Emissions have been
calculated based on volume of goods transported (primary data), distance
travelled and the use of generic emission factors from EcoTransit (secondary
data). Outbound logistics services purchased by Norske Skog has been
categorised as upstream because they are a purchased service. This is in line
with requirements of GHG protocol technical guidance for category 4
Upstream Transportation and Distribution. Percentage of emissions calculated
using data obtained from suppliers or value chain partners: 0%.
Category 5
– Waste generated in operations: Emissions have been calculated
based on transport emissions from waste materials, in line with GHG protocol
guidance. Emissions have been calculated based on transported volumes of
waste (primary data), distance travelled and emission factors for applied
transport modes from Eco Transit (secondary data). Percentage of emissions
calculated using data obtained from suppliers or value chain partners: 0%
Category 6
– Business travel: Emissions cover air travel emissions collected
from travel agencies delivering business travel services to Norske Skog
(primary data). Data reflects supplier specific reports based on fuel
consumption. Percentage of emissions calculated using data obtained from
suppliers or value chain partners: 100%.
Category 7
– Employee commuting: Emissions have been estimated based on
number of employees (primary data) and average estimated commuting
distance of 30 km per working day using a car with 180g CO2/km.
Category 9
– Downstream transportation and distribution: Downstream
transportation cover distribution from the printing house to the final customer
for printed magazines and printed newspaper. Emissions have been estimated
based on annual production volume (primary data) and emission factors from
published by VTT Technical Research Centre of Finland for printed products.
The emission factor is from 2010. To adjust for increase in low emission
vehicles, we have applied an assumption and deducted 20% on the emission
factor. Percentage of emissions calculated using data obtained from suppliers
or value chain partners: 0%.
Category 10
- Processing of sold products: This category cover emissions
generated during the printing process. Emissions have been estimated based
on annual production volume (primary data) and emission factors from
published by VTT Technical Research Centre of Finland for printed products.
The emission factor is from 2010. To adjust for increase in low emission
vehicles, we have applied an assumption and deducted 20% on the emission
factor. Percentage of emissions calculated using data obtained from suppliers
or value chain partners: 100%.
Other Scope 3 categories; The following Scope 3 categories are not applicable
to Norske Skog’s value chain operations and therefore not disclosed; category
8 Upstream leased assets, category 12 End of life treatment of sold products,
category 13 Downstream leased assets, category 14 Franchises, category 15
Investments.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
67
BIOGENIC EMISSIONS
Biogenic emissions in own operations are related to energy production from
biomass boilers at Norske Skog Golbey, Norske Skog Skogn and Norske Skog
Saugbrugs, and waste-to-energy at Norske Skog Bruck. Biogenic emissions
are not included in Scope 1 but reported separately.
GHG EMISSION REDUCTION TARGET
2015 was selected as the base year, after a comprehensive restructuring of
the mill portfolio, in the calculation of the 55% CO2 reduction target within
2030, which is congruent to evaluations done by the EU and the Norwegian
Federation of Trade and Industries.
Recalculation of base year value follow the guidelines laid down in the GHG
Protocol Corporate standard. Norske Skog aim to update of its emission
reduction target in 2025, reflecting the initiated sale of Norske Skog Boyer
mill in Australia.
SOURCES OF ESTIMATION AND OUTCOME UNCERTAINTY
The assessment of future impacts, risks and opportunities are by nature
subject to estimations and outcome uncertainty. In line with ESRS requirements,
the
sustainability
statement
include
forward-looking
statements
and
assessment of the impact of climate change on Norske Skog performance in
the short-, medium- and long-term. These forward-looking judgments relate to
potential future events that are beyond the control of Norske Skog and
difficult to predict. Norske Skog does not assume any responsibility for the
accuracy of such future-looking statements.
THIRD PARTY VERIFICATION
All of Norske Skog’s business units are certified in accordance with ISO 14001
(Environmental Management Systems). In addition, Norske Skog Saugbrugs,
Norske Skog Skogn and Norske Skog Golbey hold ISO 50001 (Energy
Management Systems) certificates. Disclosure on data and processes related
to the corresponding topics follow the standards reflected in these
verifications.
FINANCIAL EFFECTS
Norske Skog exercises the right, as per the ESRS Phase-in option, to begin
reporting on this disclosure in the subsequent year.
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
68
I
Norske Skog
I
Annual report 2024
Photo: Carsten Dybevig
Norske Skog bruck
Photo: Carsten Dybevig
2022
2023
2024
2021
2020
2019
2018
2015
200 000
0
400 000
600 000
800 000
1 000 000
t CO2e
1 200 000
1 400 000
1 600 000
60%
50%
40%
42%
54%
51%
44%
41%
11%
13%
0%
30%
20%
10%
0%
EMISSIONS, GHG PROTOCOL
(tonne CO
2
)
base year
Scope 1
Scope 2 (location-based)
% reduction in CO2e achieved
EXPLANATIONS TO THE TABLE:
Scope 1
Direct emissions from owned or
controlled sources
Scope 2
Indirect emissions from the generation
of purchased energy
Scope 3
Result of activities from assets not
owned or controlled by the reporting
organisation, but that the organisation
indirectly affects in its value chain
Base year
2015
Mid term target
2030
Long term target
2050
E 1-4
GHG emission reduction target
Type
Unit
Number
%
Number
%
Number
Scope 1
+ Scope 2 emissions - location based
Intensity
kg CO2e/tonne product produced
567
-55
255
-100
0
EMISSION TARGET
ENERGY
E1-5
Energy Consumption and Mix
Unit
2020
2021
2022
2023
2024
% change
2023-24
Total energy consumption*
MWh
7 616 699
8 141 508
7 162 469
6 035 854
6 627 126
10%
Total fossil energy consumption
MWh
5 371 790
5 735 557
4 957 892
3 893 056
4 400 006
13%
Fuel consumption from coal
MWh
594 429
661 480
660 195
655 353
682 193
4%
Fuel consumption from oil
MWh
2 677
5 865
5 317
6 351
3 438
-46%
Fuel consumption from natural gas
MWh
942 280
1 073 059
424 182
250 900
420 534
68%
Consumption of purchased electricity - without energy
attribute certificates (EACs)
MWh
3 832 405
3 995 152
3 868 197
2 980 453
3 293 841
11%
Share of fossil sources in total energy consumption
%
71%
70%
69%
64%
66%
Consumption from nuclear sources
MWh
-
-
-
-
-
Share of consumption from nuclear sources in total energy
consumption
%
0%
0%
0%
0%
0%
Total renewable energy consumption
MWh
2 244 909
2 405 951
2 204 577
2 142 798
2 227 120
4%
Consumption of self generated steam - from biomass.
municipal waste
MWh
1 170 693
1 226 578
1 166 118
1 404 641
1 376 442
-2%
Consumption of purchased electricity from renewable sources
MWh
-
-
-
8 352
10 583
27%
Consumption of recovered heat
MWh
1 074 216
1 179 372
1 038 459
729 805
840 095
15%
Share of renewable sources in total energy consumption
%
29%
30%
31%
36%
34%
Total energy production - consumed on site
MWh
2 313 164
2 497 313
1 989 349
2 081 598
2 157 437
4%
Non-renewable energy production
MWh
1 142 471
1 270 735
823 232
676 957
780 995
15%
Renewable energy production
MWh
1 170 693
1 226 578
1 166 118
1 404 641
1 376 442
-2%
Energy intensity ratio - high climate impact sectors
1 030
970
540
522
651
23%
* Total energy consumption from activities in high climate impact sectors per net revenue from activities in high climate impact sectors
2030 target
MWh/net revenue
(NOK million)
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
70
I
Norske Skog
I
Annual report 2024
Retrospective
Milestones and target years
E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
Unit
2015
Base year
Scope 1
and 2
2023
2024
% change
2023-24
2025
2030
2050
Annual%
target
/base
year
Scope 1 GHG emissions
Gross Scope 1 GHG emission
tCO2e
474 946
257 268
250 372
-3%
N/A
N/A
N/A
N/A
% of Scope 1 GHG emissions from regulated
emissions trading schemes
%
30
60
100%
Scope 2 GHG emissions
Gross location-based Scope 2
GHG emission
tCO2e
865 236
180 648
148 632
-18%
N/A
N/A
N/A
N/A
Gross market-based Scope 2 GHG emissions
tCO2e
1 195 272
1 503 357
26%
N/A
N/A
N/A
N/A
Significant Scope 3 GHG emissions
Total Gross indirect (Scope 3) GHG emissions
tCO2e
773 290
811 552
5%
N/A
N/A
N/A
N/A
1. Purchased goods and services
tCO2e
118 020
134 460
14%
N/A
N/A
N/A
N/A
2. Capital goods
tCO2e
142 090
82 941
-42%
N/A
N/A
N/A
N/A
3. Fuel and energy-related activities
tCO2e
6 230
12 015
93%
N/A
N/A
N/A
N/A
4. Upstream transportation and distribution
tCO2e
174 387
203 571
17%
N/A
N/A
N/A
N/A
5. Waste generated in operations
tCO2e
1 385
1 157
-16%
N/A
N/A
N/A
N/A
6. Business travel
tCO2e
240
350
46%
N/A
N/A
N/A
N/A
7. Employee commuting
tCO2e
3 062
3 062
0%
N/A
N/A
N/A
N/A
8. Upstream leased assets
tCO2e
-
-
9. Downstream transportation
tCO2e
163 379
185 651
14%
N/A
N/A
N/A
N/A
10. Processing of sold products
tCO2e
164 496
188 344
14%
N/A
N/A
N/A
N/A
11. Use of sold products
tCO2e
-
-
12. End-of-life treatment of sold products
tCO2e
-
-
13. Downstream leased assets
tCO2e
-
-
14. Franchises
tCO2e
-
-
15. Investments
tCO2e
-
-
Total GHG emissions
Total GHG emissions (location-based)
(tCO2eq)
tCO2e
1 340 182
1 211 205
1 210 556
0%
N/A
N/A
N/A
N/A
Total GHG emissions (market-based)
(tCO2eq)
tCO2e
474 946
2 225 829
2 565 282
15%
N/A
N/A
N/A
N/A
Biogenic emissions
tCO2e
484 569
571 374
18%
N/A
N/A
N/A
N/A
GHG emissions intensity
Location-based
**
tCO2e/ million net
revenue (NOK)
105
119
13%
N/A
N/A
N/A
N/A
Market-based
**
tCO2e/ million net
revenue (NOK)
193
252
31%
N/A
N/A
N/A
N/A
* N/A refers to GHG emission targets and values not applicable to Norske Skog. Norske Skog does not have absolute mission reduction targets, but intensity targets as presented in Target section of E1.
** Reference to consolidated income statement, total operating income NOK 10 173 million
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
71
Norske Skog bruck
Photo: xx
GHG emission intensity scope 1 & 2
kg CO2e/ tonne*
Business Unit
2022
2023
2024
Norske Skog Bruck, Austria
402
267
258
Norske Skog Golbey, France
131
155
127
Norske Skog Saugbrugs, Norway
15
30
4
Norske Skog Skogn, Norway
19
28
8
Norske Skog Boyer, Australia
1 258
1 326
1 125
Total Norske Skog group
276
327
262
* Location based method
Breakdown of Scope 1 and 2 GHG
emission by business unit
Scope 1
Scope 2*
Scope 2**
Biogenic CO
2
Total
Scope 1 & 2*
Share
Scope 1 & 2*
Production
Emission intensity
Scope 1 & 2*
2024
t CO
2
e
t CO
2
e
t CO
2
e
t CO
2
e
t CO
2
e
%
tonnes
kg CO
2
e/tonne
Norske Skog Bruck, Austria
63 788
28 746
158 629
149 983
92 534
23%
358 613
258
Norske Skog Golbey, France
25 638
10 554
13 960
163 382
36 192
9%
284 128
127
Norske Skog Saugbrugs,
Norway
760
-
368 007
87 036
760
0%
185 628
4
Norske Skog Skogn, Norway
3 650
-
853 428
170 973
3 650
1%
460 112
8
Norske Skog Boyer, Australia
156 536
109 332
109 332
-
265 868
67%
236 279
1 125
Total Norske Skog group
250 372
148 632
1 503 357
571 374
399 004
100%
1 524 760
262
*
Location based method
** Market based method
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
72
I
Norske Skog
I
Annual report 2024
Pollution
(ESRS E2)
ASSESSMENT OF ENVIRONMENTAL IMPACTS AND STRATEGIC
RESPONSES:
Norske Skog operates in the publication paper and packaging paper industry
and utilises chemicals commonly used within this sector. The company is
committed to minimising its environmental impact and ensuring compliance
with all relevant regulations. Key pollutants include sulfur dioxide (SO2),
nitrogen oxides (NO2), carbon dioxide (CO2), suspended solids (SS), chemical
oxygen demand (COD), nitrogen (N), phosphorus (P) and other chemicals.
These pollutants are primarily generated as emissions from production
processes, including bio boilers used for heat generation and the discharge of
process water following paper production. Norske Skog continuously invests
in cleaner technologies and improved wastewater treatment to mitigate these
impacts.
These emissions are subject to strict monitoring and compliance regulations
in accordance with EU environmental directives.
Norske Skog does not use bleaching chemicals containing chlorine at any of
its mills, thereby eliminating the creation of chlorinated organic compounds
such as AOX (adsorbable organic halides). Additionally, Norske Skog adheres
to strict sourcing policies to ensure compliance with EU regulations on
hazardous substances.
Substances of concern/ very high concern are not defined as material.
Waste-related IRO are addressed in ESRS 5 (Resource use and circular
economy).
Impacts, Risks and Opportunities (IRO)
Type
Pollution of air (SOx and NOx)
Pollution of air from boilers
Impact, negative
x
x
x
x
All Norske Skog mills emit various pollutants, including volatile organic compounds (VOCs), sulphur dioxide
(SO2), nitrogen oxides (NOx), and particulate matter (PM), during operations linked to production of heat with
company owned boilers. The source of heat for the boilers contain a mix of renewable and non-renewable
sources. These emissions contribute to air pollution, may lead to respiratory problems and environmental
degradation.
Pollution of water
Discharge of process water
Impact, negative
x
x
x
x
The discharge of process water from the production process of publication paper and packaging paper
causes a negative climate impact. A substantial amount of fresh water is needed to produce pulp and mix
pulp with chemicals and other raw materials, which is used as input to produce the finished goods. The excess
water from the production process is then processed through a wastewater treatment plant before the water
is discharged to the nature. Only about 1% of the fresh water absorbed from the external source is used in the
final products, the rest is discharged to the nature.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
73
POLICIES
(a) Key contents of the policy, including general objectives and material
IRO(s) addressed, as well as monitoring process
Norske Skog’s environmental policy is centered on responsibility, account-
ability, and sustainability. It sets objectives for reducing environmental impact
through measures in climate change mitigation and adaptation, energy
efficiency, circular economy, pollution control, water management, and
biodiversity protection. The policy aligns with global agreements such as the
Paris Agreement and the Montreal Agreement.
Material Impact, Risk, and Opportunity (IRO) areas covered include climate
change, pollution control, sustainable resource use, and biodiversity. The
policy mandates continuous improvement and adherence to international
environmental standards. Monitoring is carried out through annual reviews by
the board of directors, reporting from business units, and corporate-level
performance tracking, including the Norske Skog Environmental Index.
Business units must report severe deviations immediately.
(b) Scope and exclusions
The policy applies to all business units and covers the entire value chain,
including raw material sourcing, production, and distribution. There are no
specific exclusions mentioned, and it extends to suppliers and subcontractors
to ensure high environmental standards throughout the supply chain.
(c) Most senior accountable level
The board of directors holds the highest responsibility for implementing the
environmental policy. The corporate management ensures its execution at the
operational level.
(d) References to third-party standards and initiatives
Norske Skog commits to the Paris Agreement (net zero emissions), the
Montreal Agreement (biodiversity), and the EU Action Plan “Towards a Zero
Pollution for Air, Water, and Soil.” The company also adheres to internationally
recognized environmental management systems and certification standards.
(e) Consideration of stakeholder interests
The policy integrates stakeholder interests by supporting customers’
environmental objectives, engaging in dialogue with local communities, and
ensuring transparency in environmental reporting. Suppliers are expected to
meet the same environmental standards as Norske Skog’s operations.
(f) Availability of the policy
The policy is communicated internally through training and reporting mechanisms.
Externally, it is available to stakeholders, including customers, suppliers, and
regulators, ensuring alignment across the value chain, and also on:
https://www.norskeskog.com/sustainability/environment/environmental-policy
ADDRESSING POLLUTION, HAZARDOUS SUBSTANCES, AND
EMERGENCY SITUATIONS:
(a) Mitigating pollution
Norske Skog aligns with the EU Action Plan on pollution reduction. The
company sets annual targets to limit air and water pollution (SOx, NOx,
particulate matter, suspended solids, and chemical oxygen demand in
discharged wastewater). Emergency response plans are in place to manage
pollution incidents and will correspondingly be reported immediately both
internally and externally. Every breach of permit is reported within 24 hours.
(b) Avoiding and managing incidents
Preventative measures, including training and emergency preparedness, are
implemented to minimise environmental accidents. If an incident occurs,
immediate containment measures are required to reduce environmental and
human impact. Norske Skog collaborates with authorities to ensure a
coordinated response to environmental emergencies.
ACTIONS AND RESOURCES
Norske Skog Skogn has taken major steps in 2024 to reduce pollution of air,
emissions and improve energy efficiency. The key initiative encompasses the
purchase and installment of a:
•
New thermomechanical pulp (TMP) production line and
•
Steam turbine at Norske Skog Skogn, part of the Switch project.
These two projects are a NOK 180 million investment, including NOK 48
million in NOx Fund grants, replaces costly recycled paper with fresh fibre,
cutting costs and emissions.
Expected outcomes include an 80% reduction in CO2, 40% lower NOx
emissions, and a 60% decrease in ash production, aligning with Norske Skog’s
environmental goals. These efforts impact the entire value chain, improving
sustainability in raw material sourcing and reducing energy use.
The TMP line is set to be fully operational within a year, with the steam turbine
following soon after. Emission reductions and energy efficiency improvements
will be monitored over the coming years. Norske Skog also continues to
address past environmental impacts by investing in cleaner technologies and
aligning with industry best practices.
The Switch project highlights how strategic investments drive both economic
and environmental benefits, reinforcing Norske Skog’s commitment to
pollution prevention, sustainability, responsible resource management.
Significant actions to reduce effluents to water during 2024:
- Norsks Skog Saugbrugs: The landslide on April 27th 2023 led to reduced
production at Saugbrugs and changed conditions for running the water
treatment plant. Actions action were put into keeping effluents levels under
control during 2024. Discharge to water have shown good development
during 2024.
- Norske Skog Skogn: discharge levels have been high throughout the year
and local actions and resources have been focused on solving the challenges
related to the wastewater-treatment plant.
1. Impact, risk and opportunities management
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
74
I
Norske Skog
I
Annual report 2024
POLLUTION-RELATED TARGETS AND MANAGEMENT APPROACH
Norske Skog has established time-bound and outcome-oriented targets to
mitigate pollution impacts and enhance environmental performance. These
targets align with our environmental policy and broader sustainability
commitments, ensuring compliance with international frameworks such as the
EU Action Plan “Towards a Zero Pollution for Air, Water and Soil.”
Targets presented in this chapter were established by Norske Skog in 2020.
No new targets have been defined in 2024. In 2025 Norske Skog will evaluate
updating targets in accordance with elements of MDR-T in ESRS for material
IROs.
Pollution of air
Main objective: Prevent, control and reduce pollution of air from sulphur
dioxide (SO2) and nitrogen dioxide (NOx) from our operations.
o Target: Reach the as low as possible emission but at least below the
environmental permit given by the authorities.
o Relevance to policy: Supports Norske Skog’s policy by reduce air pollution
from industrial processes.
o Ambition: Ensure compliance with emission permits and regulations.
o Activities: Perform mill activities related to SO2 and NOx improvements.
o Target Scope: Applies to all Norske Skog mills.
o Measurement: Absolute reduction in tonne SO2 and NOx emissions.
o Base and target year: no base or target year defined.
o Methodology: Based on scientifically validated methodologies and aligned
with EU and international climate policies.
o Monitoring & Review: Progress is tracked annually through corporate
sustainability reports.
o The air pollution is quantified through automated measuring systems. No
data has been estimated.
Pollution of water
Main objective: Prevent, control and reduce pollution of water from our
operations.
o Target:
1. Reach the as low as possible chemical oxygen demand (COD) but at least
below the environmental permit given by the authorities.
2. Install anaerobic wastewater treatment and biogas at all European mills by
2030.
o Relevance to policy: Reduces pollution to water and improves overall water
quality by adopting sustainable water management practices.
o Ambition: Reduce Chemical Oxygen Demand (COD) to water recipient.
o Activities: Invest in equipment enabling target achievement.
o Target Scope: Covers Norske Skog’s European mills.
o
Measurement: Reduction of Chemical Oxygen Demand (COD) in wastewater
discharges.
o Baseline & Milestones: Implementation milestones set for 2025.
o Monitoring & Review: Regular water quality assessments and compliance
with EU water regulations.
o The air pollution is quantified through automated measuring systems. No
data has been estimated.
Pollution control and compliance measures
1. Air pollutants control: Norske Skog monitors and reduces emissions of SOx,
NOx, and particulate matter through investments in bio-boiler efficiency
and clean energy sources.
2. Water emissions control: Compliance with EU water discharge standards,
treatment plant upgrades, and ongoing water recycling initiatives.
3. Substances of concern: Norske Skog follows strict regulations on chemicals
used in production, ensuring minimal environmental harm.
Stakeholder Involvement and Continuous Improvement
1. Stakeholder engagement: Norske Skog collaborates with industry partners,
regulatory bodies, and local communities to refine environmental targets.
2. Tracking & reporting: Performance against targets is evaluated through
sustainability disclosures, with transparent reporting on progress and
challenges.
3. Alignment with global agreements: Targets are based on EU environmental
directives, national policies, and internationally recognised sustainability
standards.
By setting these targets, Norske Skog demonstrates its commitment to
pollution reduction and environmental stewardship.
POLLUTION OF AIR, WATER AND SOIL
Emissions to air are always monitored and reported annually in the annual
report. Deviations from permits are reported directly to proper national
authority. The business units’ environmental permits will dictate the monitoring
locations, frequency and methodology and legal reporting requirements.
Norske Skog reports discharges of organic substances (COD), discharges of
suspended solids (SS), and discharge of wastewater (m3 per tonne of paper).
In addition, Norske Skog reports on SO2 and NOx.
POLLUTANTS
Norske Skog generates emissions to air and water through its paper production
processes. The primary pollutants include:
•
Air emissions: sulphur dioxide (SO2), Nitrogen oxides (NOx).
• Water emissions: suspended solids, nitrogen and phosphorus compounds,
dissolved organic material.
• Microplastics: Norske Skog does not produce or use microplastics in its
manufacturing processes. The group’s processes focus on using natural
fibers, and there are no synthetic polymer additives in paper production.
AMOUNT OF POLLUTANTS EMITTED
Norske Skog reports the following emissions per facility, in compliance with
Annex II of Regulation (EC) No 166/2006:
•
Dissolved organic material (COD) increased by 26% from 2023
• Suspended solids increased by 58% due to unstable production at the
wastewater treatment plant at Skogn.
•
Nitrogen and phosphorus increased respectively by 8% and 21%.
CONSOLIDATION OF EMISSIONS DATA
The emissions data reported includes facilities under Norske Skog’s financial
and operational control, including Norske Skog Skogn, Norske Skog Saugbrugs,
Norske Skog Boyer, Norske Skog Golbey, and Norske Skog Bruck. Only mills
exceeding the threshold values in Annex II of Regulation (EC) No 166/2006
are included.
CONTEXT AND METHODOLOGIES
a. Changes over time:
Emission reductions have been observed in CO2
equivalents due to energy efficiency improvements and process optimisations.
SO2 and NOx emissions in 2024 decreased with respectively 13% and 16%.
2. Metrics and targets
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
75
b. Measurement methodologies:
Norske Skog follows EU BREF standards for
measuring emissions. Continuous monitoring systems (AMS) are in place for
air emissions. Water quality and pollutant discharge are measured using on-
site and third-party laboratory testing.
c. Data collection processes:
Data is collected from automated monitoring
systems and third-party accredited sources. Norske Skog Boyer has imple-
mented third-party verification for SO2 and NOx to rectify previous
underreporting.
EXPLANATION OF METHODOLOGIES USED
Direct measurement methods are used for air and water emissions at facilities.
Indirect estimation methods are used only when continuous monitoring is not
feasible. Norske Skog Boyer’s historical SO2 and NOx figures were
underreported until 2023, resulting in a threefold increase as reflected in data
table E2-4. New methodologies from accredited third-party sources have
ensured more accurate data since 2023.
UNITS AND BREAKDOWN
Emissions data is reported in tonnes. The report provides emissions on a
group level, but site-level data is available upon request.
This disclosure ensures compliance with relevant environmental regulations
and Norske Skog’s commitment to transparency in pollution reporting.
ANTICIPATED FINANCIAL EFFECTS FROM POLLUTION-RELATED IROS
Norske Skog is dedicated to disclosing the potential financial implications
arising from pollution-related IROs as part of our commitment to transparency
and sustainable operations. In 2024 there were no major incidents of this kind.
Going forward this section will be in line with phase-in provisions of ESRS E2.
0
2
4
6
8
10
12
14
2024
2023
2022
2021
2020
Europe
Australasia
Total
DISCHARGES OF ORGANIC SUBSTANCES (COD)
Kg per tonne of paper
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2024
2023
2022
2021
2020
Europe
Australasia
Total
DISCHARGES OF SUSPENDED SOLIDS (SS)
Kg per tonne of paper
0
10
20
30
40
50
60
2024
2023
2022
2021
2020
Europe
Australasia
Total
DISCHARGES OF WASTEWATER
m
3
per tonne of paper
Pollutant
Unit
2020
2021
2022
2023
2024
% change
2023-24
Released to air
Sulphur oxides (SO2)
tonnes
297
401
360
1 030
896
-13%
Nitrogen oxides (NOx)
tonnes
701
879
709
1 230
1 028
-16%
Released to water
Chemical oxygen demand (COD)
tonnes
8 283
8 958
9 989
7 701
9 704
26%
Suspended solids (SS)
tonnes
1 259
1 746
2 030
1 711
2 701
58%
Total nitrogen
tonnes
262
268
275
249
268
8%
Total phosphorus
tonnes
29
30
27
25
30
21%
E2-4 POLLUTION OF AIR AND WATER
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
76
I
Norske Skog
I
Annual report 2024
Water and marine resources
(ESRS E3)
1. Impacts, risks and opportunities
Impacts, Risks and Opportunities (IRO)
Type
Water withdrawl
Water intensive production process
Impact, negative
x
x
x
x
The water intensive production process has a negative impact on the climate because of the large quantity
of fresh water needed to produce publication paper and packaging paper. The process needs large amount
of water to dissolve and mix the different input factors together into mechanical pulp and deinked pulp to
produce finished goods. The water usage is about 100 times larger than the actual water being absorbed into
the finished products.
Potential water shortage
Risk
x
x
A potential water shortage, either permanent or temporary, may be a risk to stable production of publication
paper and packaging paper. Water shortage due to uneven rainfall, increased drought and shrinking snowpacks
have negative impact on the climate and may cause severe risk to the production process. Some areas will
face excessive quantities of rainfall and higher temperatures causing challenging the logging periods and
availability of clean water.
Water discharge
Stricter permits levels
Risk
x
x
x
x
The political and mainstream public increased attention to the environment and climate change results
in stricter permit levels and poses a risk for the long-term existence and financial soundness of the pulp
and paper industry. In areas with drought, uneven rainfall and shrinking snowpack combined with higher
temperatures will affect the availability of fresh water. Fresh water will be a scarce resource in some areas.
To avoid contamination of scarce water resources, the authorities have and will continue to impose stronger
restrictions for the use of water, and thus, in the discharge of processed waste water being returned back into
the main water resources.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
The double materiality assessment described in IRO-1 determined the
following water and marine resources-related material impact.
Assessment of environmental impacts and strategic responses:
Norske Skog operates in the publication paper and packaging paper industry
and utilises large quantities of water in the production process. The group is
committed to minimising its environmental impact by reducing the amount of
water and ensuring compliance with all relevant regulations.
The material impacts are concentrated in Norske Skog’s operations:
•
Water usage: The production of paper, especially publication and packaging
paper, requires large quantities of water in the pulping, bleaching, and
heating processes. This consumption is concentrated in the production
facilities, particularly in mills located in regions where water availability may
be impacted by climate change.
•
Wastewater discharge: Wastewater management is a significant focus, with
treatment plants in each facility designed to minimize the discharge of
pollutants into local water bodies, see E2.
The current and anticipated effects business model, value chain, strategy,
and decision-making are:
• Water shortage risks: Anticipated water scarcity (especially in the Norske
Skog Golbey and Norske Skog Bruck mills due to higher temperatures and
drier summers) could lead to production disruptions, forcing the company
to consider water rationing or find alternative water sourcing methods.
• Climate change and water availability: A wetter climate in Norway and
Australia reduces water risks in those locations. However, regions in Europe
and Australia could face higher operational costs related to water sourcing
and wastewater treatment.
Norske Skog has adopted the following response to the impact:
o Water management efforts: Norske Skog has committed to minimising
water usage and reusing more water in the production process. In
Golbey, the water usage per tonne produced is at a material lower level
than the other paper mills. The company’s environmental policy focuses
on ensuring sustainable water sourcing and waste management
practices, particularly in areas at water risk.
o Water circularity and reuse: With a transition to a higher degree of water
circularity, Norske Skog aims to mitigate environmental risks and lower
dependence on external water source.
The material negative impact of water intensive production process will affect
people or the environment and their connection to strategy and business
model in the following manner:
1. Environmental and social impacts:
o Water scarcity: Reduced water availability in key production areas could
disrupt operations, leading to potential layoffs or production halts. Long-
term water contamination risks could impact local communities
dependent on freshwater sources, harming both local ecosystems and
human populations.
o Wastewater discharge: Improper treatment of wastewater could lead to
environmental contamination, negatively affecting water bodies and
marine ecosystems near production facilities.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
77
Photo: Carsten Dybevig
2. Connection to strategy:
o The group commitment to sustainability, particularly with water and
marine resources, is directly linked to its broader strategy of improving
and optimising operations, reducing its carbon footprint, and ensuring
long-term competitiveness through eco-friendly innovations in bio-
products and renewable energy.
3. Time horizons:
o Short-term:
Immediate risks from water quality issues and water
rationing are not immediate concern, although the national authorities
may set forth periodic water limitation measures.
o Long-term:
As climate change intensifies, the long-term risks to water
availability and marine ecosystems could increase, leading to more
stringent regulatory requirements and operational disruptions. Only the
Norwegian mills will have more water availability in the long-term
scenario contrary to the other mills in the long term perspective.
The Norske Skog strategy and business model are resilient and do adequately
address impacts and risks (including opportunities) (ESRS 2 SBM-3 (48f)):
• Resilience analysis:
o Water usage:
Norske Skog’s commitment to minimising water consump-
tion and improving water recycling processes enhances its resilience to
water-related risks. The ongoing efforts to develop and implement
better water management strategies ensure the business unit’s ability to
adapt to climate-induced water shortages.
• Time horizon for resilience:
o Short-term
: Immediate focus on improving water sourcing efficiency
and wastewater treatment to comply with existing environmental
regulations. The wastewater treatment plant will have to improve
circularity instead of discharging water into the recipient.
o Long-term:
Increased circularity of water will reduce water usage with
an important effect of reducing the energy needed to heat water for the
production process.
o There is no changes compared to previous period except there is an
increased awareness of water risks, particularly in areas like Golbey and
Bruck, where climate change may exacerbate droughts and water
shortages, according to CEMAsys study (2023).
The entity-specific disclosures for Norske Skog would primarily focus on:
o Water and wastewater management:
Detailed reports on water usage,
wastewater discharge, and compliance with local environmental
regulations.
Risks related to water availability and quality: Detailed analysis of water risks
in Norske Skog’s mills, especially considering climate change impacts (water
rationing, droughts, flooding).
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
78
I
Norske Skog
I
Annual report 2024
POLICIES
Norske Skog’s environmental policy focuses on mitigating negative impacts
from water usage, ensuring responsible sourcing, and reducing water pollution.
It targets water efficiency, wastewater management, and prevention of water
pollution from operations. The policy emphasises compliance with international
standards and continuous improvement in water management.
The policy addresses material IROs such as water consumption, sourcing, and
wastewater management. It sets targets for water efficiency and action plans
to reduce consumption, especially in water-stressed areas. The business units
collaborate with local authorities to meet legal requirements and ambitious
water permit goals where relevant.
Efficacy is monitored through regular, annual reports on water usage,
wastewater treatment, and deviations from targets, which are submitted to
corporate
management.
Business
units
are
responsible
for
ongoing
improvements and reporting progress.
The board of directors is accountable for policy implementation, while
operational personnel ensure integration into daily activities. Norske Skog
adheres to international frameworks like the EU Water Framework Directive
and engages with stakeholders to consider their concerns.
The policy is accessible to employees through internal communications and
training, and to external stakeholders on the Norske Skog web page for
transparency and accountability.
Norske Skog’s policies address water-related issues in the following areas:
• Water management: The group aims to reduce water usage by optimising
processes and improving recovery, while ensuring responsible water
sourcing. Wastewater is treated in plants before discharge to minimise
pollution and ensure compliance with regulations.
• Commitment to reduce consumption: In water-stressed areas, the Norske
Skog plans to implement measures to ensure responsible water use due to
risk of water shortage, stricter permit levels and reduced water heating
costs.
Norske Skog’s facilities are for the time being not in high-water-stress areas
and this is not specifically covered by the policies. However, some European
mills may in the long-term face risks due to climate change and water
availability. The group is monitoring these impacts and developing action
plans to ensure resilience and will periodically review its water management
policies.
Norske Skog’s policy promotes sustainable marine practices, focusing on
minimising impacts on marine ecosystems and ensuring responsible water
use, especially in areas where discharges affect fresh water and brackish
water bodies. Norske Skog works with both with national and local authorities
to protect marine environments.
Norske Skog integrates water and marine resource policies into its broader
environmental strategy, aiming to reduce water withdrawals, minimize
discharges, and protect aquatic ecosystems. These policies align with the EU
Water Framework Directive and the Paris Agreement’s climate goals.
Norske Skog’s policies concentrate on preserving water bodies’ quality,
reducing pollution, and safeguarding biodiversity. The company’s operations
comply with EU regulations and international standards, ensuring minimal
environmental impact. Efforts to reduce water usage and pollutant discharge
help maintain the health of surrounding ecosystems.
ACTIONS AND RESOURCES
Norske Skog has taken significant steps to mitigate the negative impact of its
water-intensive production processes and address the risks associated with
water shortages and increasing regulatory requirements. The group remains
committed to ensuring sustainable water usage through continuous
improvements in wastewater treatment, collaboration with authorities, and
strategic investments in infrastructure.
KEY ACTIONS TAKEN IN 2024 AND PLANS FOR THE FUTURE
1. Enhanced water treatment facilities:
o Norske Skog Golbey upgraded its water treatment facility to
accommodate the new packaging paper production line. This investment
improves the quality of treated wastewater before discharge and
ensures compliance with stricter environmental regulations.
o Norske Skog Skogn resolved technical challenges at its wastewater
treatment plant, restoring optimal performance and reducing the
discharge of organic substances and suspended solids.
2. Collaboration with authorities for environmental protection:
o Norske Skog Skogn collaborates with national and local authorities to
protect land and marine resources in the delta of Hotranvassdraget. The
partnership with the authorities safeguards aquatic ecosystems
especially protecting the bird sanctuary.
3. Long-term climate risk mitigation measures:
o The group recognises the risk of water shortages in areas like Golbey
and Bruck due to climate change. Plans are in place to periodically
review climate risks and implement adaptive measures such as water
conservation strategies and alternative water sourcing options.
o In areas where water abundance is expected (Norway and Australia),
Norske Skog is preparing strategies to manage excess rainfall and
potential flooding that may impact operations and raw material supply
chains.
The scope of the actions covers Norske Skog’s core production activities,
primarily focusing on mills located in high-risk water areas such as Golbey and
Bruck. The measures affect to a small degree the upstream suppliers, but
affect downstream stakeholders, including local communities and regulatory
bodies, by promoting cleaner water discharge and ecosystem protection.
TIME HORIZONS AND REMEDIES
Short-term actions (2023-2025) include completing water treatment
upgrades at Norske Skog Golbey, monitoring the new thermomechanical pulp
line at Norske Skog Skogn, and continuously improving wastewater treatment
efficiency. Medium-term actions (2025-2030) involve implementing further
water conservation measures in high-risk mills, upgrading infrastructure, and
maintain collaboration with authorities. Long-term actions (2030 and beyond)
emphasis on adaptation strategies for climate change-driven water shortages
and excess rainfall challenges across all mills.
Norske Skog actively manages permit breaches by working closely with
supervisory authorities to address any deviations and implement corrective
actions. The resolution of wastewater treatment challenges at Norske Skog
Skogn has led to improved water discharge quality, ensuring compliance with
local environmental standards.
2. Impact, risk and opportunity management
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
79
Norske Skog Bruck,
wood saw table
Photo: Carsten Dybevig
PERFORMANCE
Quantitative results from 2024 demonstrate the following in wastewater
treatment:
• Discharged process water from waste-water treatment slightly increased
from 28.1 to 29.7 million m³
.
•
Organic substance discharges (COD) increased from 7
701 to 9
704 tonnes.
•
Suspended solids (SS) increased from 1,711 to 2,701 tonnes.
•
Phosphorus (Tot-P) and nitrogen (Tot-N) discharges increased, due to 10%
increase in production output.
FINANCIAL AND OTHER RESOURCES ALLOCATED
• Norske Skog has allocated substantial financial resources (about EUR
10 million) towards water treatment upgrades, particularly in Golbey and
Skogn, ensuring compliance with evolving regulations and reducing
environmental impact.
• Future investments will focus on further efficiency measures, potential
water recycling initiatives, and climate adaptation strategies.
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
80
I
Norske Skog
I
Annual report 2024
TARGETS
Norske Skog’s commitment to environmental sustainability is underscored by
the establishment of robust water and marine resources-related target aligned
with international standards and regulatory frameworks. Norske Skog will
invest in anaerobic wastewater treatment at all European mills by 2030.
Norske Skog has set no specific quantity targets for water consumption or
water discharge. The risk factors being potential water shortage and stricter
permit levels will be handled individually at each mill and will receive full
attention in the long-term horizon.
However, Norske Skog aims to support UN SDG number 6 about water and
clean sanitation by improving water quality, reducing pollution, minimising
hazardous chemical releases, and adopting sustainable water management.
These efforts enhance environmental stewardship, ensure compliance, protect
public health, and support long-term sustainability.
WATER CONSUMPTION
In 2024, the total water consumption amounted to 1.76 million cubic meters
(m³), marking a 4% decrease from the previous year. The disclosed metrics and
related calculation have been updated in accordance with definitions provided
in ESRS. This led to a large difference in disclosed figures as the reporting in
prior years incorrectly reflected total water input. In 2024 the disclosure has
been updated to cover the share of total input that is not discharged back into
the water recipient (river/fjord). The total water consumption cover
evaporation and water content in sold paper and containerboard products.
A substantial portion of the commitment to sustainable water management
lies in using less water but also in recycling and reusing water resources. All
Norske Skog mills recycle and reuse considerable amounts of water, equal to
~20% of the water input. This figure has been estimated as there are currently
no established KPIs to measure recycled and reused water. This will be
implemented during 2025. During 2025 Norske Skog Golbey will increase the
share of reused and recycled water to up to 50%.
In accordance with the requirements of ESRS, we applied the Aqueduct Water
Risk Atlas tool of the World Resources Institute (WRI) to assess areas of high-
water stress. Based on this methodology, no mills are in regions of high-water
stress.
Recognising the critical role of process water in operations, Norske Skog have
implemented, and will continue to implement, further water conservation and
efficiency measures. The approach includes monitoring of water basins’
quality and quantity, adhering to established standards and methodologies for
data compilation. The data is primarily sourced from direct measurements.
In 2024, Norske Skog had a total water consumption of 2.0 million m³ per
million EUR net revenue in own operations. This ratio demonstrates a potential
to reduce water consumption per unit of economic output.
In addition to consumption, Norske Skog recognise the importance of water
withdrawals and discharges, metrics we have included in this chapter. These
aspects are integral to the sustainability strategy, and Norske Skog are
actively exploring ways to minimise withdrawals while ensuring responsible
discharge management. Through continued diligence and investment in water
conservation, Norske Skog aim to further reduce the environmental footprint
and contribute positively to the communities and regions where Norske Skog
operate.
Norske Skog does not have water consumption in areas at water risk, including
areas of high-water stress according to ESRS definition. Norske Skog has not
established KPIs tracking recycled and reused water, but will do so going
forward. Norske Skog does not store any water.
ANTICIPATED FINANCIAL EFFECTS
As per the ESRS Phase-in option in ESRS E3, we will begin to report on
anticipated financial effects from water and marine resources-related IROs in
the subsequent years.
3. Metrics and targets
E3-4 Water consumption
Metric
Unit
2020
2021
2022
2023
2024
% change
2023-24
Water withdrawals
*
Volume
million m
3
102 369
109 033
99 441
87 832
84 703
-4%
Water discharge
**
Volume
million m
3
100 265
103 442
98 341
86 816
82 940
-4%
Total water consumption
***
Volume
million m
3
2 104
2 042
1 888
1 509
1 763
17%
Share of the measure obtained from direct
measurement, from sampling and extrapolation,
or from best estimates
Percent
%
100
100
100
100
100
0%
Water intensity ratio
Intensity
million m
3
/NOK mill
0.28
0.24
0.14
0.13
0.17
31%
*
Include the sum of all sources of water drawn into the boundaries of Norske Skog including surface water, ground water, public water as well as water content in wood, pulp, DIP and chemicals.
**
Include the sum of effluents and other water sources leaving Norske Skog boundaries including discharged cooling water, treated water from effluent treatment plants.
*** Water consumption include the total amount of water drawn into the boundaries of Norske Skog and not discharged back to the water environment or a third party over the course of the
reporting period. Sources include water evaporation and water in product .
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
81
STRATEGY
In Norske Skog’s commitment to sustainable forest industry practices, we are
dedicated to aligning our business model with the global efforts to protect and
restore nature. Norske Skog will in 2025 complete a transition plan to
enhancing the resilience of Norske Skog’s operations and contributing
positively to biodiversity and ecosystems.
ASSESSMENT OF IMPACTS, DEPENDENCIES, RISKS, AND
OPPORTUNITIES
Norske Skog recognises the significant impact its operations have on
biodiversity and ecosystems, especially through land and water use changes,
raw material harvesting practices, and the emissions associated with industrial
production. As a group that depends on ecosystem services like water supply,
climate regulation, and protection from natural hazards, it is essential to
understand how these impacts can trigger changes in our strategy and
business model.
1. Biodiversity and ecosystem impacts:
o Land and water use change: The demand for fresh water for paper
production and potential disruptions due to climate change such as
reduced precipitation in regions like Bruck and Golbey pose risks to the
availability of this critical resource. In addition, shifts in land use due to
the harvesting of raw materials affect local biodiversity, particularly
around forest ecosystems.
o Raw material harvesting: Although 95% of our wood fibre is certified by
FSC and PEFC, sustainable sourcing practices are vital for ensuring the
conservation of biodiversity, preventing deforestation, and protecting
habitats.
2. Dependencies and risks:
o Water availability and ecological impacts: The water sourcing risks due
to climate change, such as increased drought and changing precipitation
patterns, are a significant challenge. Water scarcity could trigger both
regulatory and operational disruptions, particularly in regions like
Golbey and Bruck.
o Resource scarcity: Overexploitation of forest resources due to climate
change, deforestation, and market volatility may impact our wood supply
chain, threatening business continuity and driving the need for more
diversified and sustainable sourcing strategies.
3. Opportunities for strategy adaptation:
o Circular economy and resource efficiency: By adopting circular economy
principles, we can reduce waste, enhance resource efficiency, and
minimise the environmental footprint. Innovations packaging also offer
potential avenues for growth while aligning with sustainable practices.
o Biodiversity
conservation
initiatives:
Collaborating
with
local
stakeholders, certification bodies like PEFC and FSC, and conservation
groups, especially in Norway, allows us to enhance habitat restoration
efforts and promote sustainable forestry practices. These initiatives
align with both environmental regulations and global biodiversity
targets.
As such, these biodiversity and ecosystem challenges present not only risks
but also opportunities for Norske Skog to enhance its sustainable practices,
innovate in product offerings, and strengthen its relationships with
stakeholders.
RESILIENCE OF STRATEGY
1. Resilience assessment:
o Current business model resilience: Norske Skog’s business model is
relatively resilient to biodiversity and ecosystems-related risks, as it
integrates sustainability into its core operations through certified wood
sourcing, habitat restoration projects, and a strong focus on minimising
water and energy consumption. However, increasing climate change
risks (e.g., water scarcity and changing forest conditions) and stricter
regulations on biodiversity and ecosystem services require adaptation
of the model.
o
Upstream and downstream analysis: The resilience analysis encompasses
the entire supply chain, from sourcing certified wood and managing
forest habitats to the downstream impacts of product lifecycle and
waste disposal. Our commitment to FSC/PEFC certifications, circular
economy principles, and collaborating with local stakeholders in areas
like Tasmania and Norway strengthens our supply chain resilience.
2. Scope of resilience analysis:
The CEMAsys (2023) analysis includes the operations of Norske Skog’s
mills, with a particular focus on the water risks at all our mills, as well as the
sourcing of raw materials. The entire value chain is considered, especially in
relation to the potential scarcity of forest resources and ecological threats
such as deforestation and soil erosion.
3. Key assumptions:
o Water availability and ecological impact: Assumes that climate change
will lead to more frequent water shortages in some regions, which will
require a shift toward more closed-loop systems and water conservation
strategies.
o Forest health: Assumes continued dependence on certified and
sustainably sourced wood fibre, with increasing emphasis on forest
restoration and biodiversity conservation initiatives.
o Regulatory landscape: Assumes that global and local policies regarding
biodiversity and deforestation will become more stringent, necessitating
better traceability and reporting practices in the supply chain like the
EU’s Directive on Deforestation requiring traceability of wood log geo-
location in the finished product declaration from 2026.
4. Time horizons:
The CEMAsys resilience water availability analysis covers both short-term
(1–5 years) and long-term (10–30 years) time horizons. There is no
immediate risks of water shortage, due to water availability and regulatory
permits, while the long-term horizon considers concludes with less water
availability causing water shortage and restrictive governmental water
conservation programs. The certification bodies like PEFC and FSC will
have to consider the broader impacts of forest regeneration, climate change
adaptation, and biodiversity restoration efforts in revision of their standards.
5. Results of the resilience analysis:
o Short-term resilience is moderately high due to existing sustainability
practices and certifications, but risks related to water availability and
forest resource scarcity remain a concern.
o Long-term resilience is dependent on proactive climate adaptation
strategies, ongoing collaboration with stakeholders, and continuous
improvements in resource efficiency and circularity. These initiatives are
critical to maintaining business continuity in the face of biodiversity and
ecosystem-related risks.
Biodiversity and ecosystems
(ESRS E4)
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
82
I
Norske Skog
I
Annual report 2024
Norske Skog Boyer, wastewater treatment plant
Photo: Carsten Dybevig
6. Stakeholder involvement:
o Indigenous and local knowledge: In regions like Tasmania, Norske Skog
engages with local authorities and environmental organisations to
ensure that biodiversity conservation initiatives are informed by local
knowledge and practices. Similarly, in Norway, Norske Skog collaborates
with local regulatory authorities and environmental agencies to ensure
sustainable water and forest management practices.
o Consultation with experts: Ongoing consultations with environmental
authorities and experts, industry associations (e.g., CEPI, TFB, FSC and
PEFC), and conservation groups ensure that Norske Skog’s strategies
are aligned with best practices and global biodiversity frameworks.
ALIGNING WITH GLOBAL INITIATIVES
In alignment with the Kunming-Montreal Global Biodiversity Framework and
the EU Biodiversity Strategy for 2030, Norske Skog commits to achieving its
biodiversity and ecosystem-related goals by 2050. Our strategy integrates
climate change adaptation and biodiversity conservation into the business
model through improved resource efficiency, water management, sustainable
sourcing, and habitat restoration. By supporting global biodiversity goals,
Norske Skog aims to minimize its impact on ecosystems and align with
planetary boundaries related to biosphere integrity and land-use change.
Norske Skog is committed to maintaining transparency in reporting the
progress towards these goals and engaging with stakeholders to ensure that
the strategy remains adaptable to the evolving environmental landscape.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
83
Norske Skog’s operations have notable impacts on biodiversity and eco-
systems, primarily in the operations and across the value chain. Key areas of
concern include:
1. Operations:
o All sites are linked to water use, wastewater discharge, and raw material
harvesting, all of which affect local ecosystems.
o Forest sourcing, governed by FSC/PEFC certifications, aims to mitigate
environmental risks, though poor logging practices can cause habitat
loss, species disruption, and soil degradation.
2. Upstream and downstream:
o Upstream: The sourcing of certified fibre (95%) helps reduce risks of
deforestation and forest degradation. However, climate change and
overexploitation threaten long-term fibre availability.
o Downstream: Norske Skog collaborates with customers to minimise
impacts during the product lifecycle, especially through recycling and
waste management practices.
Impacts on business model:
• Current risks:
o Sourcing of wood: Forest overexploitation and habitat destruction could
disrupt supply chains, increasing costs and impacting production.
o Water availability: Climate change may lead to water shortages, affecting
operations, especially in areas like Bruck and Golbey.
• Anticipated risks:
o Regulatory pressures: Stricter environmental regulations could raise
operational costs and harm the company’s reputation.
o Supply chain disruptions: A shortage of raw materials, driven by climate
change and deforestation, could lead to cost volatility.
• Responses:
o Norske Skog is adapting by focusing on sustainable forest management,
water system improvements, and closer collaboration with certification
bodies to safeguard biodiversity.
Effects on people and the environment:
• People: Operations may harm local communities through pollution and
deforestation, affecting health and livelihoods. Increased sourcing costs
may impact job security.
• Environment: The main environmental effects include biodiversity loss,
habitat destruction, and climate change exacerbated by deforestation.
Norske Skog’s strategy and business model:
Norske Skog’s strategy emphasizes sustainability with a focus on fibre
certification, circularity, and biodiversity protection. The company integrates
biodiversity risks into its long-term planning with an eye on reducing
environmental impacts and ensuring resource availability.
• Time Horizons:
o Short-Term (0-5 years): Immediate challenges include regulatory
changes and water scarcity.
o Medium-Term (5-10 years): Tighter certification standards and
enhanced biodiversity monitoring will shape business decisions.
o Long-Term (10+ years): Risks like raw material depletion and water
shortages may necessitate a business model shift, potentially toward
alternative bio-products and increased finished product circularity.
2. Impacts, risks and opportunities
Impacts, Risks and Opportunities (IRO)
Type
Ecosystem services
Dependency on natural resources: sourcing of wood
Risk
x
x
x
x
Norske Skog has mills that are entirely dependent on sourcing of wood, which causes a risk due to possible
future scarcity of forest resources. The availability may be affected by overexploitation due to high demand,
deforestation issues, climate change, loss of biodiversity, erosion and high and volatile market price of wood.
Also social conflicts, such as land use disputes, stricter environmental regulation and revised certification
mechanism will affect the sourcing of wood.
Dependency on natural resources: process water
Risk
x
x
x
x
The availability of fresh water for the process to produce publication paper and packaging paper is a business
risk for Norske Skog. Higher temperatures regardless of future climate scenario, the climate change will result in
precipitation changes. Some mills will encounter periods with increased drought, uneven rainfall and shrinking
waterfall causing a risk of not having adequate water to justify industrial production before the general public.
Lack of water resources may cause ecological and biodiversity threats followed by stricter water usage
restrictions.
Land degradation
Degradation of land through felling of forests
Impact, negative
x
x
x
x
Norske Skog consumes large quantities of forest resources which is having a negative impact on the climate.
The felling of forest has several negative impact on degradation of land. This exacerbates loss of sequestration
through loss of CO2 absorption and release of stored carbon. In addition, the logging cause deforestation
and thus soil erosion and loss of soil fertility. Other consequences are loss of biodiversity and ecosystems
imbalance. Without proper climate actions, it may trigger reduced regrowth and irreversible transformations of
land.
The environment is affected by deforestation, loss of biodiversity, depletion of non-renewable raw materials, excessive use of fossil solutions. The entire value chain may meet stricter permit levels regarding logging methods, means
of transportation, production process and content of finished goods.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
84
I
Norske Skog
I
Annual report 2024
Photo: Carsten Dybevig
The group’s environmental policy aims to ensure resilience against biodiversity
risks. Its focus on renewable energy, sustainable sourcing, and reforestation
strengthens long-term business resilience.
Main disclosures:
•
Material sites: Key sites in Skogn, Halden, Golbey, and Bruck are focused on
water management and sustainable harvesting, with specific attention
given to biodiversity-sensitive areas in proximity to the sites..
• Land degradation: Forestry practices are designed to minimize land
degradation, although unsustainable practices may still contribute to soil
erosion.
• Impact on threatened species: The Forest Owner Association, from whom
we purchase the wood, monitors and mitigates effects on endangered
species through restoration projects in collaboration with the authorities,
certification bodies, and wildlife organisations.
This analysis highlights Norske Skog’s commitment to reducing environmental
impacts while maintaining a resilient strategy that addresses biodiversity,
climate change, and resource sustainability.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
85
POLICIES
Norske Skog’s environmental policy guides biodiversity and ecosystems
management, focusing on raw material sourcing, water use, pollution control,
and biodiversity preservation. The group ensures sustainability through
responsible forest management, FSC/PEFC certification, and deforestation
minimisation. Regular monitoring includes annual performance reviews by the
board, with business units tracking progress and reporting deviations. This
aligns operations with global environmental goals like the Paris and Montreal
Agreements.
The policy covers Norske Skog’s entire value chain, emphasising biodiversity-
sensitive areas near forests and water. It promotes sustainable forestry,
pollution control, and circular economy principles. All stakeholders, including
employees, suppliers, communities, and regulators, must adhere to high
environmental standards. The board and senior management oversee
implementation, ensuring compliance with evolving regulations like the EU’s
EUDR and ISO 14001. Norske Skog engages stakeholders through transparent
dialogue and publicly shares policy details, reinforcing employee awareness
via training programs.
DISCLOSURES
Aligned with ESRS 2 and ESRS E4, Norske Skog’s policies address biodiversity
risks and sustainable sourcing, ensuring raw materials contribute to ecosystem
resilience. The group monitors biodiversity, mitigates climate risks (water
availability, deforestation, habitat loss), and follows global sustainability
agreements. Operations in biodiversity-sensitive areas adhere to stringent
conservation and sustainable forestry standards, minimising marine and
aquatic impacts through responsible water management. Committed to zero
deforestation, Norske Skog balances economic growth with environmental
and social responsibility.
ACTIONS AND RESOURCES
Norske Skog addresses the material negative impact, and the two risk factors
related to biodiversity and ecosystems in the following manner:
Material negative impact: degradation of land through felling of forest
(a) Key Actions taken and planned for the future
1. Sustainable forestry practices:
o Action taken: Norske Skog has collaborated with the value chain, forest
associations, environmental organisations, and governing bodies like
FSC and PEFC to ensure responsible sourcing of wood fibre.
o Expected outcomes: Reduced impact on biodiversity in the surrounding
forests, with an emphasis on forest regeneration and ecosystem
preservation.
o
Future plans: Continue strengthening partnerships with forest certification
bodies and expand monitoring of forest health in collaboration with
partners in the value chain.
o
Policy contribution: Contributes to the achievement of sustainable forestry
practices, supporting SDG 15 (Life on Land).
2. Reforestation and habitat restoration:
o Action taken: Active reforestation and habitat restoration projects have
been initiated, including transferring significant areas of birdlife habitats
to the Norwegian Environmental Agency (Skogn).
o Expected outcomes: Restoration of biodiversity, including the protection
of endangered species. Improved carbon sequestration.
o Future plans: expand reforestation efforts, especially in areas affected by
forest harvesting.
o Policy contribution: Supports SDG 13 (Climate Action) by promoting
carbon absorption through restored habitats.
3. Wildlife monitoring and water management:
o Action taken: Regular wildlife monitoring and water quality assessments
are conducted, especially in Norway, in collaboration with the National
Authorities and Norwegian Institute for Water Research (NIVA).
o Expected outcomes: Protection of local wildlife and improved water
quality in nearby fjords and rivers.
o Future plans: Expand monitoring efforts, focusing on water ecosystems
and long-term biodiversity impacts.
o Policy contribution: Contributes to SDG 6 (Clean Water and Sanitation)
and SDG 15 (Life on Land).
The scope of actions covers Norske Skog’s global operations, including
facilities in Norway, France, Austria, and Australia. The focus is on sustainable
sourcing of wood fibre through certification schemes like FSC, Controlled
Wood, and PEFC. Direct stakeholders include forestry value chain partners,
environmental NGOs, local regulatory authorities, and the communities
surrounding the mill sites. Norske Skog works closely with local authorities,
conservation organisations, and community groups to support remediation
efforts. Sustainable forestry practices and reforestation are ongoing with
continuous improvements and specific milestones set for the next 3-5 years
to increase forest regeneration, while wildlife and water management involve
ongoing monitoring with a major review every 2 years to assess biodiversity
and ecosystem recovery.
Risk Factor 1: Availability of water resources
(a) Key actions taken and planned for the future
1. Water usage management:
o Action taken: Norske Skog monitors water usage and quality in all its
production sites.
o Expected outcomes: By implementing a closed-loop water system in
certain facilities, Norske Skog aims to ensure that water availability
remains stable despite potential climate changes.
o Future plans: Expansion of water recycling systems and implementation
of closed-loop systems to reduce dependency on external water sources.
o Policy contribution: Supports SDG 6 (Clean Water and Sanitation) and
contributes to more efficient resource usage in the face of climate
change.
2. Engagement in climate action initiatives:
o Action taken: The company is actively participating in industry groups
that focus on climate change mitigation and water preservation.
o Expected outcomes: Reduced environmental footprint and improved
resilience to water scarcity.
o Future plans: Increasing participation in regional climate action groups
to drive collective efforts on water conservation.
o Policy contribution: Helps mitigate climate risks and supports SDG 13
(Climate Action).
The scope of actions covers facilities in regions at risk of water scarcity,
especially Bruck and Golbey, and involves collaboration with local governments,
environmental groups, and water resource management bodies. Water
3. Impact, risk and opportunity management
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
86
I
Norske Skog
I
Annual report 2024
Norske Skog Golbey, air condenser tank
Photo: Carsten Dybevig
management systems involve immediate actions with completion expected
within the next 2 years for closed-loop water systems, while climate action
participation is ongoing with key milestones every 3 years to track progress.
Risk factor 2: Dependency on natural resources: sourcing of wood
(a) Key actions taken and planned for the future
1. Sustainable sourcing and certification:
o Action taken: 95% of purchased fibre is certified through FSC and PEFC,
ensuring that wood is sourced from responsibly managed forests.
o Expected outcomes: Reduction in deforestation and forest degradation,
contributing to the long-term sustainability of wood fibre supply.
o Future plans: Reach 100% of certified wood sources, collaborating with
forest owners in reaching the target, and strengthen partnerships with
forest certification organisations.
o Policy contribution: Contributes to SDG 12 (Responsible Consumption
and Production) and SDG 15 (Life on Land).
2. Monitoring and enhancing raw material harvesting:
o Action taken: Continuous monitoring of raw material sourcing and
improvements to harvesting practices.
o Expected outcomes: Improved environmental impact from wood fibre
sourcing and a reduction in land degradation.
o Future plans: Expand efforts to improve sourcing practices and engage
in industry-wide initiatives to reduce overexploitation.
o Policy contribution: Supports SDG 12 and SDG 15.
The scope of actions focuses on Norske Skog’s supply chain, particularly in
regions where deforestation and overexploitation are concerns, involving
sourcing partners, certification bodies (FSC, PEFC), and local communities
affected by forestry practices. Sustainable sourcing is ongoing with full
certification of all wood fibre by 2027, while raw material harvesting monitoring
is ongoing with incremental improvements every 2-3 years.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
87
TARGETS
Norske Skog’s commitment to environmental sustainability is underscored by
the establishment of robust biodiversity and ecosystems-related targets
aligned with international standards and regulatory frameworks.
In 2020 Norske Skog established a set of ambitious targets to mitigate
negative environmental impacts, enhance positive contributions to bio-
diversity, and manage material risks and opportunities associated with its
operations. These targets align with the group’s environmental policy and are
designed to address its material dependencies, risks, and impacts across the
entire value chain, ensuring a sustainable and responsible approach to forestry
and paper production.
No new targets have been defined in 2024. In 2025 Norske Skog will evaluate
upadting targets in accoordance with elements of MDR-T in ESRS for material
IROs.
REDUCTION OF NEGATIVE IMPACTS
Norske Skog has committed to ensuring that 100% of the wood used across all
mills is certified under internationally recognized schemes such as FSC and
PEFC. This target directly supports the group’s policy objectives by promoting
sustainable forestry practices, reducing deforestation risks, and preserving
biodiversity. The baseline for this target was set in 1995, with the goal of
achieving full compliance by 2030. This commitment applies to all mills,
including Norske Skog Skogn, Norske Skog Golbey, Norske Skog Bruck,
Norske Skog Saugbrugs, and Norske Skog Boyer, ensuring sustainable
sourcing and minimal ecosystem disruption.
To further limit negative environmental impacts, Norske Skog has set a goal of
sending zero ash to landfill by 2030. This absolute target is measured in
tonnes of ash diverted from landfills and is part of the company’s broader
circular economy efforts.
Additionally, Norske Skog continuously monitors its water usage and
wastewater treatment efficiency. The group aims for 100% of its production
process waste to be treated through wastewater systems, reducing pollution
and mitigating risks associated with industrial water discharge. Compliance
with the EU Water Framework Directive ensures that all discharged water
meets regulatory standards, protecting local ecosystems and aquatic
biodiversity.
ENHANCING POSITIVE IMPACTS
Norske Skog actively contributes to ecosystem restoration through habitat
conservation initiatives. The company has undertaken reforestation projects
and habitat restoration efforts in partnership with organisations such as FSC
and PEFC. At Skogn, a significant birdlife area has been transferred to the
Norwegian Environmental Agency, demonstrating Norske Skog’s commitment
to preserving biodiversity in industrially affected regions.
In Tasmania, Norske Skog Boyer sources wood exclusively from sustainably
managed plantations, ensuring that no native forests are exploited. The
company’s collaboration with local environmental authorities supports
conservation efforts, reinforcing its role in maintaining biodiversity at a
regional level.
MANAGING MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
Norske Skog recognizes the risks posed by climate change and resource
scarcity. Freshwater availability is a critical factor in production, and climate
change-induced droughts pose a significant operational risk. To mitigate this,
the group has implemented water efficiency measures and invested in
wastewater treatment technologies. Norske Skog Saugbrugs, for instance,
collaborates with The Norwegian Institute for Water Research (NIVA) to
monitor and mitigate potential impacts on local water bodies.
The group also acknowledges the risk associated with forest resource
availability due to overexploitation and regulatory changes. By securing long-
term agreements with certified suppliers and prioritising PEFC/FSC-certified
wood, Norske Skog aims to minimize exposure to sourcing risks and ensure
sustainable supply chains.
STAKEHOLDER INVOLVEMENT AND SCIENTIFIC BASIS
All targets set by Norske Skog are based on conclusive scientific evidence and
aligned with international environmental frameworks, including the Paris
Agreement and the Montreal Agreement. The group engages with stake-
holders, including investors, regulators, and environmental organisations, to
ensure that targets are robust and feasible. Targets are monitored through
regular internal audits, third-party verifications, and annual reporting.
By setting these ambitious goals, Norske Skog aims to balance industrial
growth with environmental responsibility, ensuring that its operations
contribute positively to biodiversity conservation while mitigating climate
risks and resource dependencies.
4. Metrics and targets
Performance metrics and targets in tabular format
Baseline value (year)
Target level
Measurement unit
Target year
Current progress
98% (2023)
100%
% of certified wood used
2025
99% achieved
Baseline (2022)
0%
Tonnes of ash sent to
landfill
2030
Ongoing
Ongoing
100%
% of production waste
treated
Continuous
Compliant with EU
standards
Ongoing
Reduced water use
m³ per tonne of paper
Continuous
Implemented at all mills
Achieved
100% sustainable
plantations
% of sourced wood
Continuous
Fully compliant
Ongoing
Active reforestation
projects
Number of hectares
restored
Continuous
Various projects in progress
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
88
I
Norske Skog
I
Annual report 2024
METRICS
Norske Skog consumes large quantities of forest resources, which has a
notable impact on climate and land degradation. The logging of forests
reduces carbon sequestration, leading to increased CO2 emissions and stored
carbon release. Additionally, deforestation contributes to soil erosion, loss of
soil fertility, biodiversity loss, and ecosystem imbalances. If not mitigated
through sustainable forestry practices and climate action, this could lead to
reduced regrowth rates and irreversible transformations of land.
Risk 1: Water availability for production processes
Norske Skog relies on fresh water for the production of publication and
packaging paper. Climate change-induced temperature rises are expected to
alter precipitation patterns, leading to periods of drought, inconsistent rainfall,
and shrinking water sources. This poses a business risk as it may result in
water shortages that impact production capacity and raise concerns over
industrial water usage compared to public needs. Additionally, water scarcity
could trigger ecological and biodiversity risks, leading to stricter regulations
on water usage.
Risk 2: Availability of forest resources
Norske Skog’s mills are dependent on a consistent supply of wood. The
availability of forest resources is threatened by overexploitation, deforestation,
climate change, biodiversity loss, erosion, and fluctuating wood prices. Social
conflicts, such as land use disputes, stricter environmental regulations, and
revised certification mechanisms, could further impact sourcing, making it
more challenging to secure sustainable raw materials.
NORSKE SKOG’S APPROACH TO BIODIVERSITY AND ECOSYSTEM
CONSERVATION
Norske Skog acknowledges the impact of its global operations and associated
value chain on biodiversity and ecosystem services. The primary drivers of
nature loss related to its business include land and water use changes, climate
change, pollution, and raw material harvesting practices. The group is
responsible for managing ecosystem risks within its operations and broader
business activities.
Stricter regulations on biodiversity and ecosystems could impact Norske
Skog’s financial standing, increasing costs and potentially affecting investor
confidence. As a result, Norske Skog follows stringent national and
international laws to minimize its environmental footprint.
BIODIVERSITY MANAGEMENT BY REGION
Halden, Skogn, and Golbey:
•
Implementing sustainable forestry practices in collaboration with FSC and
PEFC to ensure responsible wood sourcing and habitat preservation.
• Engaging in reforestation and habitat restoration projects, including
transferring significant land areas to environmental agencies.
• Conducting regular wildlife impact assessments and implementing
mitigation measures as necessary. Monitoring of water recipients is carried
out in accordance with the EU Water Framework Directive.
Bruck:
• Following strict environmental management systems that integrate
biodiversity conservation into operational practices.
•
Collaborating with local conservation organisations to identify and protect
biodiversity hotspots.
Tasmania:
• Ensuring no wood fibre is sourced from native forests, relying solely on
sustainably managed plantations.
•
Partnering with environmental organisations and Tasmanian authorities to
support biodiversity conservation efforts .
REPORTING AND MONITORING OF BIODIVERSITY IMPACTS
To ensure transparency and accountability, Norske Skog discloses material
biodiversity impacts through verifiable and scientifically robust metrics. The
company assesses its operations not in proximity to biodiversity-sensitive
areas and implements strategies to minimise negative effects Norske Skog
reports the status annually.
METHODOLOGIES AND ASSUMPTIONS
• Metrics and scope: Norske Skog applies internationally recognised
methodologies to assess biodiversity impact, covering corporate business
units, site-level operations, and raw material sourcing.
• Data reliability: The group relies on a mix of primary, secondary, and
modelled data sources, supplemented by expert judgment.
•
Regulatory compliance: Metrics are aligned with EU biodiversity directives,
FSC, PEFC certifications, and other relevant environmental regulations.
• Monitoring and adaptive management: Biodiversity data is updated
continuously, ensuring adaptive strategies are implemented to mitigate
identified risks.
BIODIVERSITY BASELINE AND THRESHOLDS
Norske Skog establishes biodiversity baselines based on planetary boundaries
and ecological thresholds. Continuous monitoring ensures that any significant
environmental changes are addressed through adaptive management. The
group works with regulatory agencies, scientific institutions, and industry
associations to maintain compliance and improve biodiversity conservation
efforts.
By integrating biodiversity management into its long-term sustainability
strategy, Norske Skog aims to mitigate negative environmental impacts while
ensuring responsible forest resource utilisation. Norske Skog’s commitment to
100% certified wood sourcing, habitat restoration, and sustainable water
management underscores its proactive approach to biodiversity conservation.
FINANCIAL EFFECTS
Norske Skog exercises the right, as per the ESRS Phase-in option, to begin
reporting on this disclosure in the subsequent year.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
89
1. Impacts, risks and opportunity management
Resource use and circular economy
(ESRS E5)
Norske Skog’s commitment to sustainability and circular economy principles
is deeply embedded in its business model, operations, and upstream and
downstream value chains. The group’s use of renewable and recycled
resources, waste-to-energy initiatives, and waste utilisation for product
development contribute significantly to reducing its environmental footprint
while enhancing economic efficiency. However, there are also risks associated
with the availability of recycled fibre for production due to market demand and
policy influences.
Through strategic attention on optimising raw material use, energy efficiency,
and waste reduction, Norske Skog demonstrates a strong commitment to
sustainable business practices. The approach ensures resilience to external
risks while reinforcing its competitive position in the evolving global market
for renewable and recycled materials.
POLICIES
Norske Skog’s resource use and circular economy policy is designed to reduce
environmental impact by increasing the use of recycled and renewable
resources. Implementation is closely monitored through environmental
management systems and annual sustainability reporting to ensure continuous
improvement.
The policy applies to the entire value chain, encompassing raw material
sourcing, production processes, and end-of-life product management. All
business units are required to comply with resource efficiency guidelines, and
there are no significant exclusions from this policy.
Accountability for the policy rests with the board of directors, which provides
oversight, while corporate management is responsible for its implementation
at the operational level. Norske Skog aligns its practices with internationally
recognised third-party standards, including ISO 14001, FSC, PEFC, and the
EU’s Zero Pollution Action Plan, ensuring adherence to best environmental
practices.
Stakeholder engagement is a critical component of the policy. Norske Skog
actively collaborates with governmental bodies, NGOs, suppliers, and
customers to align interests and drive sustainability improvements across the
industry. To maintain transparency, the policy is publicly available through
sustainability reports and corporate documentation.
A key aspect of Norske Skog’s sustainability strategy is the transition from
virgin to recycled resources and sustainable sourcing. Norske Skog
continuously enhances its recycling processes to increase the use of
Impacts, Risks and Opportunities (IRO)
Type
Resource inflows including use
Utilisation of renewable and recycled resources in production of products
Impact, positive
x
x
x
x
x
Norske Skog uses renewable and recycled resources in the production of finished goods, which have several
positive impacts on the environment up- and downstream in the value chain. By reusing the finished goods
and using renewable resources, Norske Skog lowers the carbon footprint and help store carbon in the product
life cycle. Recycling materials also help establish circular economy in which materials are being reused
encouraging reduced demand for virgin raw materials. In addition, less waste is being sent to landfill by reusing
materials lessening environmental contamination.
Availability of recycled fibre for production of products
Risk
x
x
x
x
Because the authorities' climate change policy encourage use of recycled fibre in the production of paper
products, it is a risk that there will be scarce availability at sustainable price level to produce paper products
due to the purchasing power of our customers. Also, the use of recycled fibre may find other alternatives to
paper products causing scarcety.
Resource outflows related to products and services
Production waste
Impact, negative
x
x
x
x
x
Waste generated from the production process, if not properly managed, can have several negative
environmental impacts. Landfilling production waste, such as bark, sludge, and ash, can contribute to soil and
water contamination, releasing harmful substances into surrounding ecosystems. Additionally, decomposing
organic waste in landfills produces methane, a potent greenhouse gas that contributes to climate change.
Improper waste disposal can also disrupt local biodiversity and ecosystems by altering soil composition and
contaminating water sources.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
90
I
Norske Skog
I
Annual report 2024
secondary fibers and reduce dependence on virgin materials. Additionally,
Norske Skog ensures that all raw materials come from sustainably managed
forests, with a strong preference for FSC- and PEFC-certified wood.
To address material impacts, risks, and opportunities (IROs) throughout the
value chain, Norske Skog prioritises sustainable forestry practices and
responsible supplier selection upstream. Within the operations, Norske Skog
emphasises waste minimisation and circularity in production. Downstream,
Norske Skog works to improve the recyclability of its finished products and
actively promotes customer participation in circular initiatives.
Norske Skog adheres to the principles of the waste hierarchy, focusing first on
waste prevention through efficient material use. Norske Skog encourages the
reuse of byproducts wherever possible and maximises fibre recovery through
recycling. Waste-to-energy initiatives further contribute to resource efficiency,
while disposal is treated as a last resort to minimise landfill impact.
Circular economy principles are deeply embedded in Norske Skog’s operations.
Norske Skog prioritises material repurposing over recycling to extend product
life cycles and designs eco-friendly products that enhance recyclability and
circularity. Through these efforts, Norske Skog reinforces its commitment to
sustainability, ensuring resource efficiency and a reduced environmental
footprint across its entire value chain.
ACTIONS AND RESOURCES
Norske Skog is committed to optimising resource use and advancing circular
economy principles throughout its operations. Norske Skog has undertaken
several key actions to achieve its sustainability objectives, focusing on
increasing the utilisation of renewable and recycled resources, minimising
waste, and maximising resource efficiency across the value chain.
One of the primary initiatives is the increased use of renewable and recycled
materials in the production of its goods. By integrating these materials, Norske
Skog effectively reduces its carbon footprint while supporting a circular
economy where resources are reused, thereby lowering the demand for virgin
raw materials. This practice also mitigates environmental contamination by
reducing landfill waste. Norske Skog has observed a growing market demand
for products derived from recycled and renewable sources, particularly as
governmental policies impose tariffs on fossil-based alternatives. By meeting
this demand, Norske Skog actively contributes to climate mitigation efforts by
reducing reliance on high-carbon-footprint materials.
Another key initiative involves utilising waste as an energy source for both
Norske Skog’s operations and local communities. By repurposing production
waste, including bark, gas, and materials from wastewater treatment plants,
Norske Skog ensures that waste serves as a valuable energy source rather
than contributing to landfill accumulation. This practice aligns with Norske
Skog’s sustainability commitments by preventing environmental degradation
and reducing harm to ecosystems. Similarly, Norske Skog is utilising waste
materials for product development, particularly through the production of
biogas and the repurposing of ash from energy plants as a substitute for
cement. This approach not only reduces emissions but also minimises the
demand for materials with a high carbon footprint, such as traditional cement.
Despite these positive impacts, Norske Skog acknowledges the risk associated
with the availability of recycled fibre for production. Climate change policies
encourage increased use of recycled fibers in paper production, potentially
leading to supply shortages and unsustainable price levels. Additionally,
alternative uses for recycled fibre could divert resources away from paper
production, exacerbating the scarcity issue. Norske Skog continuously
monitors market conditions and collaborates with industry partners to
mitigate these risks.
To implement and sustain these initiatives, Norske Skog has established
Corporate Standards with detailed environmental and societal performance
improvement guidelines. Environmental considerations are integrated into
strategic and operational decisions, with oversight provided by the board of
directors. Business units are tasked with implementing actions that align with
energy efficiency and resource utilisation targets, ensuring that production
processes remain efficient and environmentally responsible.
A core focus of Norske Skog’s sustainability strategy is maintaining high yield
efficiency in raw material and energy use. All raw materials are sourced from
sustainably managed forests, with rigorous certification standards in place to
ensure compliance. Norske Skog actively participates in climate change
mitigation efforts by promoting circularity in raw materials, finished goods,
and waste resources. By continuously investing in innovative recycling and
energy recovery technologies, Norske Skog is enhancing its environmental
performance while supporting industry-wide sustainability advancements.
In its 2023 annual report, Norske Skog highlighted its commitment to resource
use optimisation and circularity, emphasising key achievements such as
recycling approximately 79% of its finished goods one of the highest rates
within the EU. Norske Skog has also begun producing containerboard
exclusively from recycled paper and developing bio-composites to replace
fossil-based plastics. Additionally, its energy recovery initiatives have allowed
it to reuse production waste efficiently, with sludge from wastewater treatment
plants repurposed as an energy source for bio-boilers.
Looking ahead, Norske Skog will continue to implement and expand its circular
economy initiatives, including further investments in renewable energy
deployment, waste recovery, and sustainable material sourcing. Norske Skog
aims to identify new applications for ash generated in its energy plants to
reduce landfill disposal. By adhering to its sustainability commitments and
continuously improving its environmental performance, Norske Skog
reinforces its leadership in sustainable resource management and circular
economy innovation.
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
91
TARGETS
Norske Skog has set ambitious targets aligned with our commitment to
resource efficiency, circular economy principles, and sustainability relating to
the three IROs. These targets serve as guiding benchmarks to reduce negative
impacts, drive positive impacts, mitigate risks, and foster innovation across
our operations and throughout our value chain.
In 2020, Norske Skog established targets to reduce negative environmental
impacts, advance positive contributions, and manage material risks and
opportunities within its operations. These targets align with its resource use
and circular economy policies and are fundamental in ensuring sustainable
and responsible operations across all business units. No new targets have
been defined in 2024. In 2025 Norske Skog will evaluate updating targets in
accordance with elements of MDR-T in ESRS for material IROs.
RECYCLED FIBRE
One of the primary targets is to achieve 100% recycled fibre as raw material in
packaging paper products. This initiative supports Norske Skog’s commitment
to circular economy principles, reducing dependency on virgin raw materials
and lowering the carbon footprint of production. The scope of this target
applies to all packaging paper production across Norske Skog’s operations,
and progress is measured relative to current levels of recycled fibre usage.
The baseline for this target is derived from prior years’ data on fibre sourcing,
with full achievement anticipated by a defined milestone year. Norske Skog
has a production capacity of 210
000 tonnes of packaging paper as of 2024
but will scale up production to 760
000 tonnes of packaging paper by 2027,
all based on recycled fibre.
CERTIFIED WOOD
Another key target is to ensure that 100% of the wood used in Norske Skog’s
mills is certified. This objective relates to sustainable sourcing and the cascading
principle of renewable resource use. The certification process guarantees that
all fresh fibre originates from responsibly managed forests, in alignment with
national and international sustainability goals. The scope includes all mills
utilising fresh wood fibre, with Chain of Custody certification systems in place
to track compliance. The baseline is Norske Skog’s current 96% certification
level, with the goal of reaching full compliance in the near future.
WASTE MANAGEMENT
•
Ash: In addressing waste management, Norske Skog aims for zero ash sent
to landfill. Instead, ash will be repurposed for industrial applications, such as
cement substitution and agricultural use. This initiative falls within the
waste hierarchy principles, prioritising reuse and recycling over landfill
disposal. Currently, 53% of ash is still landfilled, but Norske Skog is working
to identify new applications and align with regulatory frameworks to
minimize this percentage over time.
•
Waste production process: The group has also committed to ensuring that
100% of production process waste undergoes wastewater treatment. This
measure enhances environmental performance by preventing contamination
and supporting the recovery of valuable materials such as biogas. The
initiative is absolute in nature and applies to all Norske Skog mills globally,
with a clear methodology in place for monitoring and reporting compliance.
BUILDING MATERIAL
Another crucial target is that all inbound building materials to energy plants
must be certified. This ensures responsible sourcing and aligns with national
and EU sustainability policies. Norske Skog collaborates with suppliers and
stakeholders
to
guarantee
compliance,
reinforcing
transparency
and
accountability in the supply chain. The certification process helps minimize
environmental risks and aligns with broader sustainability initiatives in the industry.
REPORTING
Norske Skog monitors the effectiveness of these targets through structured
evaluation processes, including internal audits and external third-party
verifications. Progress is internally reported periodically and external reporting
annually, ensuring transparency and alignment with environmental policies.
Metrics and methodologies are refined based on internal system data,
regulatory requirements, and stakeholder expectation to ensure continued
progress toward sustainability objectives.
These targets are a combination of mandatory and voluntary commitments,
with certain initiatives driven by regulatory expectations and others by Norske
Skog’s ambition to lead in sustainable resource management. By integrating
these goals into the production, sourcing, and waste management practices,
Norske Skog reinforces a role in fostering a circular economy and mitigating
climate change impacts.
RESOURCE INFLOWS
Norske Skog is committed to responsible resource use, ensuring that raw
materials are sourced sustainably while optimising efficiency throughout the
production process. The primary inputs in our operations include fresh wood
fibres, sawmill chips, recovered paper, purchased pulp, and inorganic fillers or
coatings. These materials are sourced through a combination of direct
procurement from certified suppliers and the integration of secondary
materials to support a circular economy. The group prioritises the use of
certified wood, with 99% of roundwood fibres and sawmill chips originating
from sustainably managed forests under FSC and PEFC certification schemes.
This commitment supports biodiversity preservation and reduces the
environmental impact associated with raw material extraction.
The methodologies used to determine resource inflows are based on direct
measurement, supplier certifications, and verified tracking systems. Fibre
sourcing is conducted through a Chain of Custody (CoC) certification process
that ensures compliance with international sustainability standards. The use
of recovered paper and secondary materials is integral to Norske Skog’s
strategy to reduce dependency on virgin resources. In 2024, 0
.7 million
tonnes of recovered paper were used, contributing significantly to the
circularity of the production process. Additionally, sawmill chips accounted for
9% of fresh fibre inputs, promoting resource efficiency by utilising industry
by-products.
The total material usage in Norske Skog’s operations during the reporting
period was 1.8 million cubic meters of fresh fibre (0.85 million tonnes),
supplemented by 0.7 million tonnes of recovered paper
. The overall weight of
inorganic fillers and coatings utilised was 144
960 tonnes. The breakdown of
material inputs per mill highlights variations based on geographic location,
production capacity, and available resources. For instance, the Norske Skog
Skogn mill processed 842
000 million m3 (315
809 bdt) cubic meters of
roundwood, whereas Norske Skog Golbey relied entirely on recovered paper as
a fibre source. Such diversity in input sourcing aligns with Norske Skog’s
strategic objective of minimising transport distances and optimising material
use.
A key component of Norske Skog’s sustainability approach is the transition
towards greater use of recycled materials in packaging paper production.
3. Metrics and targets
92
I
Norske Skog
I
Annual report 2024
SUSTAINABILITY STATEMENTT
/
ENVIRONMENT
Norske Skog has set ambitious targets, including achieving 100% recycled
fibre in its packaging paper products and ensuring that all wood used is
certified. This aligns with broader industry goals and regulatory frameworks
aimed at reducing reliance on virgin materials and enhancing circularity. The
integration of nanocellulose and bio-composites into production at the Norske
Skog Saugbrugs mill further exemplifies innovation in sustainable material
use, substituting fossil-based plastic materials with renewable alternatives
that can be recycled and reused.
In terms of material sustainability, the proportion of secondary or recycled
materials in Norske Skog’s production processes is substantial. The average
recycling rate for finished goods stands at approximately 79%, the highest within
the EU according to CEPI figures. Additionally, containerboard production is
exclusively using recovered paper, reinforcing the group’s commitment to a
circular economy. Methodologies for assessing material use include supplier
declarations, third-party certifications, and internal tracking systems that
provide accurate and verifiable data. As Norske Skog continues to innovate and
implement sustainability measures, resource efficiency and material circularity
remain core priorities driving its environmental performance.
RESOURCE OUTFLOWS
Norske Skog is committed to optimising resource use and fostering a circular
economy in its operations, ensuring that material flows are effectively managed
to minimise waste and maximise recirculation. The company’s approach is
centered on efficient utilisation of raw materials, sustainable product design,
and continuous process improvements. By integrating circularity principles
into production, Norske Skog enhances resource efficiency, reduces waste, and
promotes sustainability throughout its value chain.
RESOURCE OUTFLOWS AND MATERIAL BREAKDOWN
The primary products of Norske Skog’s production processes are publication
paper and packaging paper, both of which are designed with circularity in
mind. In 2024, Norske Skog produced 1
516 533
tonnes of paper, utilising
1 793 338
m³ (701
766 bdt) of roundwood and 376
995 m³ (146
232 bdt) of
sawmill chips, with a certification rate of 99%. Additionally, 688
086 tonnes of
recovered paper were used as raw material, ensuring significant contributions to
circularity. By leveraging both fresh fibre and recovered paper, Norske Skog
balances sustainability with operational efficiency. The company also consumes
144 960
tonnes of inorganic fillers or coatings, which contribute to paper quality
and performance.
A key aspect of Norske Skog’s commitment to circularity is the recycling and
reuse of production residues. Approximately 47% of the waste generated in
2024 was repurposed as biofuel in bio boilers, significantly reducing reliance
on fossil fuels. In Europe, 55% of production waste was utilised for energy
recovery, while in Australia, 58% was repurposed for agricultural applications.
The sludge from wastewater treatment plants serves as an energy source, and
ash from bio boilers is repurposed for use in cement and fertilizer applications.
The ash generated from the combustion process totaled 109
264 tonnes, with
efforts underway to find additional applications to reduce landfill dependency.
CIRCULARITY IN PRODUCT DESIGN AND WASTE MANAGEMENT
STRATEGY
Norske Skog employs circular principles in its product design, ensuring that
finished goods are recyclable and reusable. Norske Skog collaborates with
partners in the upstream value chain, forest owner’s suppliers, and other
industry suppliers to improve forest management and increase the share of
certified fibers. The production of containerboard exclusively from recycled
paper products proves to Norske Skog’s dedication to sustainability. On
average, 79% of Norske Skog’s finished goods are recycled, making it one of
the highest recycling rates in the European market according to the European
Paper Recycling Council (EPRC) in 2023.
Norske Skog’s waste management strategy focuses on minimising landfill
waste and maximising resource recovery. In 2024, only 15% of total production
waste was sent to landfill, with the remainder repurposed for energy,
construction materials, or agricultural use. Norske Skog generated 413 tonnes
of hazardous waste, which was disposed of through authorized national
collection systems. The company aims to further reduce hazardous waste
through process improvements and enhanced resource recovery methods.
METHODOLOGIES AND REPORTING METRICS
Norske Skog employs rigorous methodologies to assess and report on
circularity and waste management. Norske Skog adheres to internationally
recognised certification standards, including ISO 9001 and 14001, ensuring
compliance with environmental regulations and industry best practices. Waste
and emissions data are collected through direct measurement at production
facilities, with periodic audits to verify accuracy.
By continuously refining methodologies and investing in sustainable
technologies, Norske Skog is well-positioned to achieve its targets of 100%
certified wood usage, zero ash to landfill, and complete integration of
production waste into circular systems. Norske Skog remains committed to
fostering a more sustainable and resource-efficient paper industry.
ANTICIPATED FINANCIAL EFFECTS
Norske Skog exercises the right, as per the ESRS Phase-in option, to begin
reporting on this disclosure in the subsequent year.
Roundwood
Wood chip
Pulp
Waste paper
Fillers/coating
0.8
mill m
3
wood
0.83
mill tonnes
other
41%
9%
1%
40%
9%
CONSUMPTION OF RAW MATERIALS
Sludge
Bark
Other
382 076
tonnes
waste
56%
35%
9%
SOURCES PRODUCTION WASTE
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
93
Norske Skog Skogn
Photo: Carsten Dybevig
Explanation to the diagram:
The highly simplified diagram above illustrates the paper production process.
Main input materials are wood and/or recovered paper, as well as energy and
chemicals. Wood and recovered fibres are separated during pulp production
in two different processes.
Pulp production based on recovered paper consumes less energy than
production from fresh fibre because the fibres in recovered paper are more
easily separated than those within wood. In the paper machine, the pulp
passes along a web, firstly through a wet section, then a press section and
finally through a drying section. The paper is finally rolled up on reels, and
then cut to the sizes ordered by the customer. During this process, more than
90% of the wood fibres in trees are converted to paper products.
Production process
Roundwood
Saw mill
chips
RAW MATERIALS
PRODUCTS
Recovered
paper
RAW MATERIALS
PAPER MILL
PAPER MACHINE
HEAT
Chemicals
Water
Paper
Biogas
Bio product
Energy
thermical
electricity
Electricity
PULP
REPORT OF THE BOARD OF DIRECTORS
/
ENVIRONMENT
94
I
Norske Skog
I
Annual report 2024
E5 - 4 Resource inflows
Unit
2022
2023
2024
% change
2023-24
Total
bdt
*
1 815 124
1 504 498
1 703 950
13%
Roundwood
bdt
*
886 032
646 620
701 766
9%
Wood chips
bdt
*
146 232
108 320
146 232
35%
Pulp
bdt
*
21 157
17 236
22 906
33%
Waste paper
bdt
*
565 783
596 171
688 086
15%
Fillers/coating
bdt
*
195 921
136 151
144 960
6%
Certified wood fibre, FSC/PEFC**
%
94%
98%
99%
1%
* bone dried tonnes (bdt). Standard measurement unit for fresh fibre in the wood processing industry
** Roundwood, chips, pulp
E5 - 5 Resource outflows
2022
2023
2024
Products put on market - recovered paper in containerboard production
Norske Skog Bruck, Austria
100%
100%
Total Norske Skog group
100%
100%
Recovered paper in newsprint production
2022
2023
2024
Norske Skog Bruck, Austria
77%
0%
0%
Norske Skog Golbey, France
68%
100%
100%
Norske Skog Skogn, Norway
12%
12%
6%
Total Europe
39%
45%
40%
Norske Skog Boyer, Australia
0%
0%
0%
Total Norske Skog group
34%
39%
34%
Recovered paper in magazine production
2022
2023
2024
Norske Skog Bruck, Austria
19%
23%
20%
Norske Skog Saugbrugs, Norway
0%
0%
0%
Norske Skog Boyer, Australia
0%
0%
0%
Total Norske Skog group
7%
7%
7%
Total
E5 - 5 Resource outflows - waste
Category/type
Unit
2022
2023
2024
Waste generated
tonnes
Non-hazardous waste diverted from disposal
tonnes
122 927
142 116
142 116
Recycling
Ash used in agriculture
tonnes
27 098
40 701
36 822
Recycling
Ash used in cement
tonnes
16 779
15 093
14 471
Recycling
Bed ash and other waste categories to recycling,
tonnes
79 050
86 322
90 823
Non-hazardous waste directed to disposal
tonnes
283 225
239 717
239 547
Incineration
Energy recovery, on site - sludge, bark
tonnes
223 165
181 585
178 615
Landfilling
Ash, plastic,
tonnes
60 060
58 132
60 932
Hazardous waste directed to disposal
tonnes
382
498
413
Landfilling
Asbestos to safe handling in municipal landfill
tonnes
-
-
54
Other disposal operations
Waste oil, electronics, paint etc. delivered collectors
tonnes
382
498
359
Non-recycled waste*
tonnes
283 606
240 214
239 960
Percentage of non-recycled waste
*
%
70%
63%
63%
Total amount non-hazardous waste
406 152
381 833
381 663
Total amount hazardous waste
382
498
413
Total amount of waste
406 533
382 331
382 076
* Energy recovery is not included in definition of recycling in ESRS
ENVIRONMENT
/
REPORT OF THE BOARD OF DIRECTORS
1
Annual report 2024
I
Norske Skog
I
95
SOCIAL
2
Norske Skog Golbey
Photo: Carsten Dybevig
Own workforce
(ESRS S1)
The Norske Skog group aims to build a strong, secure and safe organisation
founded on our core values, and our work to ensure their safety, fair treatment,
and rights is central to this.
The double materiality assessment identified material impacts, risks and
opportunities in relation to the following topics.
HEALTH AND SAFETY
Health and safety has the highest priority for Norske Skog, twenty-four hours
a day, seven days a week. The process industry and production of pulp, paper
and containerboard is exposed to inherent health and safety risks due to use
of heavy machinery, hot media, chemicals and risk of fires. More than 95% of
our workforce work in our production plants and the majority of these carry
out key functions related to production processes. Norske Skog is committed
to provide a safe working environment for our employees, contractors, and
visitors.
WORKING CONDITIONS
Ensuring our employees’ rights to a safe workplace, decent working conditions
including working hours, conditions of employment and wages is key to
employee wellbeing and a thriving business. Norske Skog is committed to
practice openness, honesty and cooperation in dialogue with employees and
has a long history of formal agreements with elected employee representatives
all levels in the organisation, on the exchange of information and consultation.
The group has developed a policy on cooperation with elected employee
representatives.
EQUAL TREATMENT AND OPPORTUNITIES FOR ALL
Having a workplace where all employees feel included and motivated is
important for employee wellbeing. Norske Skog’s goal is to maintain a
business-oriented, international organisation that attracts and retains highly
competent and motivated employees on all levels. We strive to give people the
opportunity to grow personally and professionally in a stimulating working
environment.
The below disclosures set out our policies, actions, metrics and targets to
address these topics.
All materially affected members of our workforce are included in the scope of
this disclosure.
1. Strategy
Impacts, Risks and Opportunities (IRO)
Type
Working conditions
Industrial accidents
Impact, negative
x
x
x
x
Norske Skog has a negative impact on the health and safety of own workforce related to relevant risks within
our industry and type of operations. Employees working in operations (process operators) are exposed
to heavy machinery, hot media, harmful chemicals and risk of fires 24/7 due to shift work and continuous
operations. This can lead to work related accidents and loss of life. Process operators are exposed to highest
risk and other employee categories
at mill sites are exposed to moderate risk. The negative impact is systemic
for our industry.
Advocate for improved working conditions through freedom of association*
Impact, negative
x
x
x
x
Freedom of association, collective bargaining and work councils has a strong position our industry, especially
in France, Norway and Austria where the majority of Norske Skog employees are located. The existence of
work councils and collective bargaining has a positive impact on worker's ability to advocate for improved
working conditions such as working time and wages.
Equal treatment and opportunities for all
Attract and keep top talent though training and skills development
Risk
x
x
x
x
Norske Skog is dependent on expertise and knowledge of its employees for value creation. By investing
in apprentice programs, cooperate with educational institutions and offer technical and soft skills training
throughout the career Norske Skog has identified an opportunity to attract and keep top talent (opportunity
evolving from a risk).
Poor gender diversity
Risk
x
x
x
The rate of female workers in the process industry and in Norske Skog is low compared to other sectors. Poor
gender diversity can lead to reputational risk and negatively impact recruitment, customers and financing.
The risk is considered systemic and derived from the impact "poor gender diversity".
* The following sub-sub-topics have been combined into one sub-sub-topic, “Freedom of association and collective bargaining” as they overlap and often addressed as one topic:
1) Freedom of association, the existence of works councils and the information, consultation and participation rights of workers
2) Collective bargaining, including rate of workers covered by collective agreements
3) Social dialogue
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
SOCIAL
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
97
2
We have identified the following material impacts affecting our workforce
through our double materiality assessment:
INDUSTRIAL ACCIDENTS (HEALTH & SAFETY)
Most of our workforce work in our plants where they face dangers such as
exposure to heavy machinery, potential exposure to harmful chemicals, and
hazardous equipment 24/7 due to shift work and continuous operations. This
can lead to accidents causing injury or loss of life. This negative impact affects
workers in all of Norske Skog mills and is considered systemic. Process
operators, employees working in servicing and maintenance, on-site logistics
and construction workers (contractors) are exposed to health and safety
hazards. This actual, negative impact occurs over the short, medium and long-
term.
A strong health and safety culture is directly connected to our business model
and strategy and a key contribution from Norske Skog to Sustainable
Development Goal 3 on “Good health and wellbeing”. Norske Skog is committed
to provide a safe working environment and has a long-standing history of
continuous learning through the health and safety programme at the mills
called “Take care 24/7”. The programme receives high continued support
across all operations and is supported by policies, procedures, training, risk
analysis root cause analysis and best practice sharing between mills and in the
industry.
WORKING CONDITIONS
Freedom of association, collective bargaining and work councils has a strong
position our industry, especially in France, Norway and Austria where most
Norske Skog employees are located. Globally, more than 90% of Norske Skog’s
workforce are covered by collective bargaining agreements. The existence of
work councils, collective bargaining has a positive impact on worker’s ability
to advocate for improved working conditions such as working time and wages.
The impact reflects Norske Skog’s values of openness, cooperation and
honesty and is part of Norske Skog’s approach to an inclusive and attractive
workplace. The actual, positive impact is in own operations and occurs over
the short, medium and long-term.
TRAINING AND SKILLS DEVELOPMENT
Norske Skog is dependent on expertise and knowledge of its employees for
value creation. By investing in apprentice programs, cooperate with
educational institutions and offer technical and soft skills training throughout
the career, Norske Skog has identified an opportunity to attract and keep top
talent (opportunity evolving from risk).
This opportunity evolves from a risk related to recruitment of new employees.
Investment in training and skills development increases employee job
satisfaction, reduces voluntary turnover rate and reduces recruitment costs.
The opportunity is related to own operations and occurs over the short,
medium and long-term.
GENDER EQUALITY – POOR GENDER DIVERSITY
The rate of female workers in the process industry and in Norske Skog is low
compared to other sectors. Shift work and unfavorable working hours have
been explanations for the low female share. In 2024, the female share of the
total workforce was 13%, the same share as in 2023:. Poor gender diversity
can lead to reputational risk and negatively impact recruitment.
Norske Skog is committed to search for female talents for a wider range of
roles in our company. Norske Skog recognises that further improvement is
needed, and we believe that our new strategic growth Initiatives will be
instrumental in terms of diversity.
The risk is considered systemic in our industry, is related to own operations
and occurs over the short-, medium- and long-term.
REPORT OF THE BOARD OF DIRECTORS
/
SOCIAL
98
I
Norske Skog
I
Annual report 2024
Norske Skog Bruck, packaging paper machine
Photo: Carsten Dybevig
POLICIES
Norske Skog’s core values of openness, honesty and cooperation as well as
our policies and guidelines build on the UN Universal Declaration of Human
Rights and the 10 principles of UN Global Compact.
Steering Guidelines
The Norske Skog Steering Guidelines is the overarching administrative
document for the Norske Skog group and provides the fundament for our
ethical, legal and sustainable conduct. It defines expectations of own
employees and applies to all employees, including temporary personnel, who
perform work for a company in the Norske Skog group. Norske Skog expect
similar conduct and ethical standards from our customers and suppliers, as
well as in partnerships, joint ventures and partially owned companies.
The Steering Guidelines addresses Norske Skog’s commitment to a safe
workplace, respect for labour rights and freedom of association, fair working
conditions, personal and professional development and equal treatment and
opportunities for all. As such the Steering Guidelines govern Norske Skog’s
approach to material impacts, risks and opportunities defined under S1.
In addition, the Steering Guidelines addresses the committed to respecting
fundamental labour rights and constructive employee relations through strict
adherence to international frameworks and conventions including the UN
Guiding Principles for Business and Human Rights, the OECD Guidelines for
Multinational Enterprises and the ILO Declaration on Fundamental Principles
and Rights at Work and to local legislation where we have operations. This
includes the commitment to non-harassment and discrimination on the basis
of gender, religion, race, national or ethnic origin, cultural background, social
group, disability, sexual orientation, marital status, age or political opinion. It
also includes support for human rights and care for vulnerable groups and
commitment to promote equal opportunities, diversity and inclusion by
providing equal employment opportunities and treat all employees fairly and
with respect.
Norske Skog’s business units have a high degree of independence and
accountability. Local managers are responsible and accountable for decisions
and results within their units. However, Norske Skog apply a uniform basis for
our operations across countries and cultures with respect to HESQ (health,
environment, safety and quality), people development, financial reporting and
legal compliance. In these areas, our conduct shall be based on the same
principles to promote a unified Norske Skog group.
The Steering Guidelines is available on Norske Skog’s webpage and its
complementary documents, such as corporate standards and procedures, are
available on the intranet. Steering Guidelines | Norske Skog
https://www.
norskeskog.com/sustainability/governance/steering-guidelines
The Steering Guidelines have been approved by the board of directors of
Norske Skog AS and the guidelines and its supporting documents are subject
to regular review and robust policy governance.
Health & Safety
The Steering Guidelines are complemented by the following HSE documents,
which are available on our intranet:
Health, safety and security:
•
Norske Skog Health & Safety Standards
•
Norske Skog Health & Safety Procedures
Norske Skog Health and safety standard covers all operations, throughout
Norske Skog, which have the potential to adversely affect the health and
safety of people, including employees, contractors, visitors and the public.
This objective of this standard is:
•
Define the minimum requirements for the Health and Safety Systems at all
levels of operation,
•
Provide a framework for Health and Safety Systems measurement,
•
Encourage a consistent approach to Health and Safety Systems,
•
Assist with the identification and sharing of current best practice between
Mills
• Provide the mills the opportunity to assess themselves against the
Standards and continually improve their systems,
• Enable inter-mill reviews to provide an external perspective and
recommendations for improvement.
This standard and related Norske Skog Health & Safety Procedures mandates
reporting of all personal injuries with absence (H1 and H2 cases), insurance
cases (damage), security breach, critical unwanted incidents including fires
and near misses shall be reported within 24 hours to local and corporate
management.
Root cause analysis of such incidents to continuously improve our health and
safety performance is mandatory. Reporting shall always be followed by a
report in Synergi Life, an operational risk management tool from DNV GL
which Norske Skog has used for years. Synergi, is also a source for the transfer
of experience and sharing of best practices and form the basis for our internal
HSE audits.
Norske Skog has monthly Management Focus Report (MFR), which is
distributed to all business units for internal distribution and includes type of
injury and rates of injury, occupational disease rate, lost working days due to
accidents, absenteeism, total number of work-related personal injuries and
fatalities, by region and business unit.
Norske Skog Supplier Code of Conduct also requires our suppliers ensure
worker safety in line with applicable International Labour Standards.
The CEO is accountable for implementation of the policy, which is subject to
periodic internal audit review to ensure it remains effective. All incidents are
escalated to group management level for information and guidance purposes.
All our business units also have local health, safety and environmental (HSE)
forums where the company and trade unions have regular meetings to address
local HSE issues. At these meetings, there should be an equal number of
representatives from the company and the employees, with as many different
groups as possible from within the organisation represented. If the organisation
has Occupational Health Services, it should also be represented on the
committee. Occupational Health Services should be an advisory and
independent body and represent the interests of both the employer and the
employees.
Norske Skog believe that issues relating to health, safety and the environment
must be fully integrated into all our activities at every level and not managed
as a separate and distinct function. That is why everyone working in Norske
Skog – whether an employee or contractor – is accountable for the health,
environmental and safety performance.
2. Impact, risk and opportunity management
REPORT OF THE BOARD OF DIRECTORS
/
SOCIAL
100
I
Norske Skog
I
Annual report 2024
Freedom of association/cooperation with employee representatives
The Steering Guidelines are complemented by the following people and
organisational documents, which are available on Norske Skog’s intranet:
• Agreement IndustriALL Global Union
•
The Norwegian National Collective Agreement between The Confederation
of Norwegian Enterprise and the Norwegian Labour Union
Norske Skog has signed and is committed to adhering to the Agreement
IndustriALL Global Union, fully supporting the individual employee’s right to
join a trade union and acknowledging the unions’ rights according to
international conventions and national regulations. Our commitment to
respecting the freedom of association is embodied in the Global Framework
Agreement on the Development of Good Working Relations, concluded by
Norske Skog and the IndustriALL Global Union. Additionally, Norske Skog
respects and supports the human rights of all individuals potentially affected
by our operations and subscribes to the United Nations Global Compact
principles.
Our Norwegian business units operate under the Norwegian National
Collective Agreement between The Confederation of Norwegian Enterprise
and the Norwegian Labour Union. This agreement ensures fair and equitable
working conditions, upholding workers’ rights in alignment with national labor
laws and international labor standards.
Furthermore, Norske Skog’s Norwegian business units have signed the IA
Agreement, which is designed to promote a more inclusive workplace by
reducing sickness absence rates and increasing job attendance for all
employees. The IA Agreement is a collaborative effort based on tripartite
cooperation between the Norwegian government, The Confederation of
Norwegian Enterprise, and the Norwegian Labour Union. Although the IA
Agreement is a distinctly Norwegian framework, our non-Norwegian business
units operate under similar conditions, aiming for an inclusive and supportive
work environment.
The IA Agreement and Norske Skog’s operational objectives include
developing measurable targets to prevent sickness and absence, as well as
establishing verifiable activity benchmarks to ensure a proactive and
professional approach to both preventive and reactive healthcare within the
company. The agreement outlines implementation measures and conflict
resolution mechanisms to maintain a stable and healthy working environment.
To supplement our policy framework, Norske Skog has established formal
agreements with elected employee representatives to facilitate information
exchange and consultation at all levels of our organisation. These
representatives play a critical role in advocating for the collective interests of
our workforce, identify improvements, discuss and define targets while also
supporting individual employees in safeguarding their rights.
However, the most valuable collaboration remains direct, face-to-face
communication and employee involvement in daily operations. This fosters
openness, visible leadership, and a corporate identity built on respect for each
employee as an individual.
To ensure efficiency and evaluate the effectiveness of these policies, each
Norske Skog mill has a structured and transparent process for cooperation,
information sharing, and consultation, based on local legislation and
agreements. A formal agreement is in place with all local unions in Norway to
define the structure and process for handling information and consultation on
common issues related to our business and operations.
The CEO is accountable for implementing the Agreement IndustriALL Global
Union policy and ensuring compliance with the Norwegian National Collective
Agreement and IA Agreement. These commitments are subject to periodic
internal audit reviews to maintain their effectiveness and alignment with
Norske Skog’s broader corporate responsibilities.
All employees of Norske Skog are paid an adequate wage, in line with
applicable benchmarks. All employees are covered by social protection,
through public programs or through benefits offered by Norske Skog, against
loss of income due to any of the following major life events: sickness,
unemployment, employment injury and acquired disability, parental leave,
retirement,
Training and development
Norske Skog believe in developing people through their entire employment
period in Norske Skog by providing training, job enrichment and career
opportunities. This commitment is addressed in the Norske Skog Steering
Guidelines.
Training and development at Norske Skog is focused on structured on the job
training which provide rewarding achievements, excellent career development
opportunities and good results for the group. A central element in our
approach to training, development and recruitment is the advanced programs
for apprentices run by all mills. These programs are the preferred source when
recruiting to our business and a key contribution from Norske Skog to
Sustainable Development Goal 4 on “Quality Education”.
Mechanisms to monitor and report the effectiveness of this commitment
include reporting on targets related to apprentice programmes and recruitment
of new ordinary employees recruited from apprentice programs. To support
the policy commitment on training and development for all employees, Norske
Skog has implemented processes and routines for assessing people
performance and creating professional development plan for employees.
Gender diversity
The Steering Guidelines cover our commitment to equal treatment and
opportunities for all including the commitment to promote gender diversity.
Mechanisms for managing, monitoring and reporting the effectiveness of this
include reporting of female representation in general workforce and leadership
positions.
Engaging with our workforce
As described in the section about policies in chapter S1, dialogue and
feedback mechanisms with our employees is crucial to ensure a workplace
that meets the needs and demands of our workforce and creates an
environment where people thrive every day. It is also vital to ensure our
employee’s perspectives are considered when making decisions and
developing policies, actions, metrics and targets and therefore is undertaken
both in reflection of and sometimes in advance of the development and
implementation of employee-related policies.
Mills monitor the progress and the wellbeing of our employees through regular
employee engagement survey. This is available to all employees. Results from
the surveys are shared with local mill management and with teams for follow
up. The local head of human resources is responsible for all overseeing
workforce engagement – this includes monitoring the actions implemented in
response to the survey and undertaking periodic evaluations to evaluate their
effectiveness.
SOCIAL
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
101
2
PROCESSES TO REMEDIATE NEGATIVE IMPACTS AND CHANNELS FOR
OWN WORKFORCE TO RAISE CONCERNS
Norske Skog has a reporting channel in place for all employees and non-
employees to report concerns and complaints. This is aligned to the UN
Guiding Principles on Business and Human Rights effectiveness criteria.
Reports can be submitted by email to compliance@norskeskog.com.
It is an important principle under the Steering Guidelines that the reporting in
good faith by employees of actual or suspected breaches or other concerns
within Norske Skog shall not have adverse consequences for the relevant
employee’s employment relationship with Norske Skog. It is equally important
to avoid misuse of the reporting mechanisms, which leads to unfounded or
unfair treatment or negative consequences for employees.
The Steering Guidelines are complemented by the following documents,
which are available on our intranet:
• Norske Skog Reporting Routine
•
Form for receiving a report on non-compliant circumstances
We ensure employees are aware of this channel by incorporating them into
management touchpoints and throughout the onboarding process. For
matters of legal or financial impropriety we also have in place whistleblowing
policies and procedures.
We take any issues raised seriously, and all reports are treated with upmost
sensitivity, and confidentiality is protected as far as possible. When a grievance
is received, we conduct a due diligence process to collect facts about the case,
and when verified, we seek to remedy any adverse impacts. The type and
nature of remedial action will depend on the nature of the impact.
The Senior Vice President General Counsel informs the corporate management
and bord of directors about grievances raised on an annual basis to understand
any trends over time, and monitor the effectiveness of the system. We track
trust in these mechanisms via dialogue with the local human rights and
compliance officers in the mills and regional sales offices.
ACTIONS
Health & safety
To meet the commitment to a safe and healthy workplace Norske Skog actions
focus on building a strong health and safety culture. Safety culture is built over
time and require continuous focus, maintenance and development to remain
effective.
To supplement our policy framework, Norske Skog has a health and safety
programme at the business units, called “Take Care 24 hours”. The programme
is adapted to different cultures and local requirements where we operate and
shall always meet the requirements of our health and safety standards for
international activities. Two mills, Norske Skog Saugbrugs and Norske Skog
Bruck, hold management system certificates for health and Safety (ISO
45001).
There are many elements that make up good health & safety management
systems and all mills have regular reviews of plant & equipment integrity, legal
compliance and safe working procedures. Equal important is to measure the
more intangible elements like leadership commitment, communication or
employee participation and safe working behaviour. Widespread awareness is
integral to the management and prevention of safety hazards. Actions related
all elements are in place in all mills and serve to reduce safety hazards.
Additionally, the health & safety policy and management system is available to
all staff via the intranet.
Norske Skog continue to evolve and improve its health and safety programme.
Below is a list of actions that was carried out in the reporting year
related to health and safety targets (S 1-5);
Zero injuries:
•
New PPE directive related to handling of hot media:
Ongoing implementation
of the new PPE directive on hot media rolled out in all mills.
•
Maintenance and repair: Improved routines for maintenance- and cleaning
stops due to identified high risk procedures at identified mills.
•
New procedures: Draft and implement new procedures and staff training for
new facilities and operations at Bruck and Golbey mill.
•
Visible leadership: Increased focus on safety walks centred around process
observation and behaviour, documentation and standards for H&S
leadership.
• Awareness-raising campaigns: Several mills have rolled out awareness-
raising campaigns related to Norske Skog health and safety programme
“take care 24/7”.
Reduce sick leave:
•
Medical centres: Continued operations of BU medical centres
•
Well-being: initiatives initiated at mills offering local fitness services, social
events
Knowledge sharing:
• Internal knowledge network: regular meetings with health and safety
managers from European mills focused on review of risk and sharing of
best- practices.
•
Training: Evaluation of mill health and safety training with increased focus
on new production processes and facilities at Bruck and Golbey.
These, and other local actions rolled out by the mills, help us to improve how
we address health & safety impacts, risks and opportunities. Norske Skog
continues to monitor the effectiveness of management systems and evaluate
necessary actions to keep all employees safe.
Freedom of association/cooperation with employee representatives
Throughout the year, business units have remained focused on measures that
can support improved working conditions. Actions include:
• Adjustment of wages based on job description and responsibilities in
cooperation with labour unions
• Employee surveys mapping working environment, mental and physical
stress and employee well being
•
Dialogue with employee representatives and unions related to organisational
changes, reduction in workforce and temporary employment
In addition to attractive working conditions, several of Norske Skog mills offer
employees’ pension- and insurance plans, subsidised lunch and gym access.
To support Norske Skog’s policy commitment and target to invest in our
employees, business units have implemented planned actions in the following
areas in 2024:
REPORT OF THE BOARD OF DIRECTORS
/
SOCIAL
102
I
Norske Skog
I
Annual report 2024
Photo: Carsten Dybevig
INVEST IN OUR PEOPLE THROUGH TRAINING AND DEVELOPMENT
Employee training and development plans varies depending on job profiles,
type of machinery and individual needs. Education and training are part of the
annual cycle at all mills. Local human resource management and respective
divisions keep track of all planned training and update schedules according to
needs. New employees are assigned to training programs according to their
job profile.
Over the last two years Norske Skog has been setting up a containerboard
knowledge network group to prepare the workforce for entering the packaging
paper market. Actions in this area has been maintained during 2024 and is
related to the business model and strategy of the group to diversify its
operations in new growth markets.
ATTRACT AND KEEP TOP TALENT
All business units cooperate with selected schools, colleges, and universities
in their region. The engagement embraces annual activities such as mill visits,
project work, diploma theses, trainee, and apprentices’ programs. Norske Skog
takes pride in delivering advanced programs for apprentices. These programs
are the preferred source when recruiting to our business.
All mills are increasing their efforts related to talent acquisition and develop-
ment. Key actions in the reporting year include dialogue and awareness raising
with managers. This includes approaches to stimulate mid-level managers to
improve the completion rate for annual performance reviews and development
plans. The mills are working to identify challenges and solutions to further
improve the execution of annual performance reviews development plans in
2025.
Gender diversity
Norske Skog mills are responsible for implementing local measures related to
inclusion and diversity, including gender diversity to support Norske Skog’s
policy commitment. All mills work systematically with locally defined annual
action plans and roll out appropriate measures.
Some mills have established Inclusion and Diversity Committees that hold the
main responsibility for this work. These committees typically consist of the
chief union representative, the chief safety delegate, representatives from
management, and HR (i.e., a joint committee). The committee has regular
meetings and works to investigate and evaluate risks of discrimination, plan
and implement measures. The committees are responsible for rolling out
annual initiatives aimed at strengthening diversity, preventing discrimination,
and creating an inclusive culture in the workplace.
An important part of the work to ensure equality and improve gender diversity
in the workplace takes place during recruitment processes (internal and
external).
In 2024, actions implemented in the mills have been focused on:
• Actively collaborating with educational institutions so that we become
visible to students early in their education. Especially the opportunities
available in vocational education, with a particular focus on recruiting
female employees.
• Motivating female employees to take on leadership positions, especially
process operators
• Ensuring that unconscious bias regarding gender, ethnicity, orientation,
age, and disability do not appear in the recruitment process.
•
Objective tests and selection criteria are applied used in the recruitment to
ensure that all candidates are evaluated on equal measures.
Norske Skog mills are actively working to increase the proportion of female
employees, and some mills have defined targets to increase the proportion of
women in their workforce and leadership positions.
SOCIAL
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
103
2
TARGETS
Health & safety targets
Norske Skog has set the following targets to meet the commitment to a safe
and healthy workplace and to support Sustainable Development Goal 3
related to “Good health and wellbeing”. The targets were set in 2020 and the
scope include all employees and contractors. During 2025 Norske Skog plans
to review targets in accordance with elements of MDR-T in ESRS.
Working conditions targets - Freedom of association/cooperation with
employee representatives
Norske Skog’s target related to working conditions are covered by our targets
related to health and safety and training and development.
Training & development targets
The Norske Skog group aims to be an attractive employer in our communities
where we operate. In 2020 we defined the following targets to support our
ambitions to attract and keep top talent. Norske Skog plans to review targets
and related planned actions in 2025.
Gender diversity
Norske Skog operates in a male-dominated industry. Improving the share of
female employees is a focus area in recruitment of new employees. The Norske
Skog group has not set formal targets at group level in this area.
3. Performance, metrics and targets
Focus area
Ambition/area
Target
Planned actions
Health & safety
Increase job attendance for all
employees
Reduce absenteeism
•
Provide medical assistance for injuries
•
Provide health and wellbeing programmes for employees
Health & safety
Reach zero personal
injuries (H1 and H2)
•
Develop leadership training program
•
Perform regular self–assessments to identify areas of improvement
Inspire others to learn from our
occupational health and safety
standards
Share knowledge
through relevant
professional forums
and industry
organisations
•
Participate in and share knowledge with membership association like
Federation of Norwegian Industries and CEPI (Confederation of European
Paper Industry)
•
Review and develop internal e-Learning HESQ-material for local training
•
Focus on Contractor Management contracts
Focus area
Ambition/area
Target
Planned actions
Learning and
development
Attract and keep top talent
Achieve at least 75% of new hired
skilled workers to be recruited from
apprentices programs by 2025
Implement advanced apprentice programs and extended training
programs at all mills.
Offer ten trainee positions or
internships for master degree
students annually
Cooperate with local schools and selected universities about relevant
programs
Invest in our people through
training and development
Provide training modules for
technical core skills, soft skills and
compliance skills
Offer training and supplementary education for all through their entire
job career
Achieve a 100% completion rate for
annual performance reviews and
development plans.
Stimulate mid-level managers to carry out performance reviews and
annual plans for training and development
REPORT OF THE BOARD OF DIRECTORS
/
SOCIAL
104
I
Norske Skog
I
Annual report 2024
ACCOUNTING POLICIES
Characteristics of own employees
Annual metrics reported in this chapter represent status per end of December
for each year.
Employee data on headcount is reported monthly in Adaptive, Norske Skog’s
finance reporting tool. Reporting on own workforce include full-time employees,
temporary employees, non-guaranteed hours employees, apprentices and
internal resources.
External contractors are considered non-employees in Norske Skog’s
workforce and include people not on Norske Skog payroll running their own
business or being employed by a contractor, agency or supplier company
working on a regular basis within the unit.
Full-time employees mean employees on ordinary/permanent employment
contract with Norske Skog. This includes employees on leave, holiday, and sick
absence but still on payroll. Employees on non-paid leave are included as long
as they have a formal employment with Norske Skog.
Temporary employees are employees on a temporary contract with Norske
Skog covering vacancies, holidays, projects, temporary workloads or other
special reasons. Temporary employees include apprentices.
Apprentices are normally younger people who are recruited on a temporary
employment contract with the main objective to develop their professional
skills and competence. Normal working tasks and responsibilities, “on the job
training”, might be a part of their development activities. This includes
trainees, apprentices or graduates on special graduate programs. Apprentices
can be fully or partly financed by external or public sources.
Top management is defined as employees in the following levels of the
organisation; corporate management team, mill management team and Hub
MD and inside sales managers. Other management is defined as management
level below top management that include personnel responsibility.
Breakdown of employee data by gender and employment type is reported by
headcount for 2024. Data for 2023 and 2022 is reported by FTE. Employment
type by gender and age group for 2022 and 2023 has been estimated based
overall gender split.
Health and safety
Reporting of incidents, root cause analysis and related data is reported in
Synergi Life, an operational risk management tool from DNV GL.
Rate of recordable work-related accidents (TRI): This includes total number of
fatalities, lost time injuries, substitute work, and other injuries requiring
treatment by a medical professional per million hours worked (H1 in Norway).
Lost days due to work-related injuries, ill-heath, accidents and fatalities (LTI):
This includes lost time injuries per million working hours (H2 in Norway).
Social dialogue and collective bargaining
Data is reported to corporate head quarter as part of the ESRS reporting on an
annual basis in Adaptive, Norske Skog’s finance reporting tool. Data reporting
started in Adaptive for 2024. Data for 2022 and 2023 was collected from
entities in excel based reporting tools.
Employees covered by collective bargaining agreements are those individuals
to whom Norske Skog is obliged to apply the agreement. Data for 2024 has
been reported by headcount in adaptive, data for 2023 and 2022 is covering
permanent employees only.
Workers’ representatives mean trade union representatives, namely represen-
tatives designated or elected by trade unions or by members of such unions.
Data has been reported in adaptive for 2024 and estimated for 2023 and
2022.
Training and development
Data is reported to corporate head quarter as part of the ESRS reporting on an
annual basis in Adaptive, Norske Skog’s finance reporting tool. Data reporting
started in Adaptive for 2024. Data for 2022 and 2023 estimated based on
2024.
Training hours have been estimated on hours allocated to annual training
programs and performance reviews. There is no consolidated summary tool
for counting the group’s actual hours.
Training hours include initiatives put in place by Norske Skog aimed at the
maintenance and/or improvement of skills and knowledge of own employees.
It can include different methodologies, such as on-site and on-the-job training,
and online training. Training can be conducted by internal or external staff.
Apprentice training (external and on the job) is not included. shall not be
counted in this category.
SOCIAL
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
105
2
APPRENTICES AND TEMPORARY EMPLOYEES
Headcount
0
20
40
60
80
100
120
140
160
2024
2023
2022
2021
2020
Apprentices
SHARE OF FEMALE EMPLOYEES
In organization and management positions (%)
0
4
8
12
16
20
24
2024
2023
2022
2021
2020
% Female
% female in top management
positions
Percent
S1-6 Turnover rate
Unit
2022
2023
2024
Employee turnover rate
%
14
11
11
Number of employees who left
Number
256
223
224
S1-6 Number of employees - by gender and
employment type
*
2022
2023
2024
Number of employees
Unit
FEMALE
MALE
TOTAL
FEMALE
MALE
TOTAL
FEMALE
MALE
TOTAL
Number of permanent employees
Number
252
1 640
1 892
255
1 691
1 946
247
1 653
1 900
Number of temporary employees
Number
13
84
97
8
55
63
25
160
185
Number of non-guaranteed hours employees
Number
3
16
19
2
10
12
3
14
17
Total
Number
285
1 855
2 140
283
1 878
2 161
275
1 827
2 101
Apprentices
Number
18
114
132
18
122
140
18
127
145
Number of non-employees
External contractors
Number
0
0
6
15
21
*
Data for 2024 reported by headcount, data for 2023 and 2022 reported by FTE.
Employment type by gender 2022 and 2023 estimated based overall gender split
S1-6 Number of employees - by country**
Number of employees
Austria
Number
486
510
513
France
Number
401
426
415
Germany
Number
17
15
12
Italy
*
Number
10
Norway
Number
907
893
839
United Kingdom
Number
10
10
10
Australia
Number
309
307
312
Total
Number
2 140
2 161
2 101
*
Office closed December 2022
**
Data for 2024 reported by headcount, 2023 and 2022 by FTE
S1-8 Collective bargaining and social dialogue
Unit
2022
2023
2024
Employees covered by collective bargaining agreements
*
%
88
90
86
Employees covered by workers representatives
**
%
80
80
81
*
Data for 2024 reported by headcount, 2023 and 2022 by FTE
**
Data estimated for 2022 and 2023
REPORT OF THE BOARD OF DIRECTORS
/
SOCIAL
106
I
Norske Skog
I
Annual report 2024
S1-8
Collective bargaining coverage
Social dialogue
Coverage rate
Employees – EEA
Employees – Non-EEA
Workplace representation
60-79%
Australia
Australia, Austria
80-100%
Norway, France, Austria
Norway, France
S1-9 Diversity
Unit
2022
2023
2024
Gender diversity
Women in top management
number
9
10
11
Women in top management
%
17
19
21
Women in other management positions
%
12
14
17
Distribution of employees by age group
*
Under 30 years old
%
15%
15%
15%
Between 30-50 years old
%
37%
37%
37%
Over 50 years old
%
48%
48%
48%
*
Distribution of employees by age group estimated for 2022, 2023
S1-13 Training and skills development
2022
2023
2024
% Participation in performance reviews
32%
40%
56%
Of which% were men
*
69%
69%
69%
Of which% were women
*
31%
31%
31%
Total performance reviews
682
862
1 181
Performance reviews per employee
1
1
1
% agreed reviews in the year (Target)
100
100
100
Total number of training hours
*
38 806
39 203
46 540
Men
34 315
34 742
42 143
Women
4 491
4 462
4 397
Average number of training hours
*
17
17
20
Men
18
18
23
Women
16
16
16
*
Data for
2022 and 2023 estimated based on 2024
S1-14 Health and Safety metrics
2022
2023
2024
% workforce covered by H&S management system (based on headcount)
100%
100%
100%
Number of fatalities
0
0
0
Employees
0
0
0
Value chain workers working on own sites
0
0
0
Number of recordable work-related accidents
26
23
36
Rate of recordable work-related accidents (H1)*
7.1
5.7
9.9
Number of days lost to work-related injuries. ill-heath. accidents and fatalities
3
7
8
Lost days due to work-related injuries. ill-heath. accidents and fatalities (H2)*
0.8
1.9
2.2
Absence due to illness
4.7
4.5
4.6
*
Total number of fatalities, lost time injuries, substitute work, and other injuries requiring treatment by a medical professional per million hours worked.
**
Lost time injuries per million working hours (LTI)
SOCIAL
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
107
2
CORPORATE
GOVERNANCE
3
Norske Skog Bruck, pulp tower
Photo: Carsten Dybevig
1. Material impacts, risks and opportunities
Impacts, Risks and Opportunities (IRO)
Type
Corporate culture
Unethical business practice
Risk
x
x
x
x
Norske Skog is a global company, and engaging with international business partners inherently carries the risk
of unethical practices. Within our own operations, the sales and procurement organisations face an elevated
risk when securing contracts. Such incidents could result in fines and reputational damage, potentially
undermining trust and relationships with customers, suppliers, and employees.
Protection of whistleblowers
Failure to protect whistleblowers
Risk
x
x
x
x
x
x
Failure to protect whistleblowers could lead to reputational damage and undermine trust and relationships with
customers, suppliers, and employees. A failure to uphold the anonymity principle may result in job insecurity
and negatively impact the whistleblower’s wellbeing.
Upstream
Location in
value chain
Time horizon
Own operations
Downstream
Short term
Medium term
Long term
ESRS G1 Business conduct
Material Impacts risks and opportunities
The materiality assessment identified the following impacts and risks relating
to business conduct to be material to Norske Skog:
BUSINESS CONDUCT
We are committed to conducting our business with integrity and ensuring
compliance with all applicable laws and regulations. We seek to embed a
strong compliance culture through regular training and awareness raising.
At Norske Skog, our material risks related to business conduct reveal both
negative and positive dimensions, tied to our business model, operations, and
value chain. Risk like unethical business practices, are concentrated within our
own operations particularly in sales and procurement where securing
contracts globally heightens exposure to risks like anti-competitive behaviour,
especially in regions with weaker regulatory frameworks. Upstream, our supply
chain faces risks from supplier non-compliance with ethical standards, while
downstream, customer trust could erode if our publication paper operations
are linked to unethical conduct. Measures to mitigate the risks are handled in
our robust Steering Guidelines, fostering a culture of openness, honesty, and
cooperation across all business units, enhancing our reputation as a “best in
class” partner. These risks influence our strategy by reinforcing zero-tolerance
policies and due diligence processes, with ongoing adjustments to training
and auditing to mitigate risks. Over the short term (1-3 years), reputational
damage or fines could disrupt operations, while long-term (5-10 years)
resilience hinges on sustained ethical performance. Our involvement arises
directly from our global activities and business relationships, necessitating
vigilant oversight of suppliers and joint ventures. To assess resilience, we
qualitatively evaluate compliance adherence and quantitatively monitor
incident reports, ensuring our strategy adapts to emerging risks over these
time horizons.
The effects of these risks are profound: unethical practices could harm
employee wellbeing, local communities, and environmental standards
particularly in resource-intensive regions while our ethical commitments uplift
stakeholder trust and support human rights, aligning with our business
model’s emphasis on sustainability and independence of local units. Material
risks may often originate from external pressures in high-risk markets. We
respond by embedding ethical principles into decision-making, with plans to
further integrate the Code of Conduct into supplier contracts. No significant
shifts in risks occurred compared to the last reporting period, reflecting stable
governance amid growing international exposure.
Material business-conduct risks at Norske Skog center on unethical practices
and whistleblower protection failures, while risk mitigating measures lie in
leveraging our ethical framework to strengthen market position. Risks are
concentrated in our own operations sales and procurement teams navigating
international deals and upstream, where suppliers in diverse geographical
areas (e.g., Asia or emerging markets) may flout anti-competitive norms.
Downstream, risks emerge if distributors or customers perceive inconsistent
ethical standards. These risks currently strain financial performance via
potential fines (estimated at 1-5% of annual revenue in severe cases) and
reputational costs. We respond by enforcing the Steering Guidelines.
Resilience is qualitatively assessed via stakeholder feedback and quantitatively
via compliance incident trends, projecting stability over short-term (1-2
years), medium-term (3-5 years), and long-term (10+ years) horizons.
Compared to the prior period, risks remain steady, though opportunities may
grow with increased supplier engagement.
Financially, risks could reduce cash flows by 2-3% (estimated figure) annually
in the short term if severe incidents occur, with medium-term recovery
dependent on mitigation investments. Current financial effects are minimal,
with no significant adjustments to assets or liabilities anticipated within the
next year. Our strategy’s resilience withstands risks through geographically
diversified operations and robust reporting, with qualitative evaluation of legal
exposure and quantitative forecasts of penalty impacts ensuring preparedness.
Anticipated effects remain manageable, with no transformative divestments
or acquisitions planned.
Business conduct
(ESRS G1)
CORPORATE GOVERNANCE
/
REPORT OF THE BOARD OF DIRECTORS
Annual report 2024
I
Norske Skog
I
109
3
PROMOTING A CULTURE OF INTEGRITY
Norske Skog’s policies addressing material business conduct impacts, risks,
and opportunities are rooted in our Steering Guidelines and Code of Conduct,
overarching frameworks approved by the board of directors. These guidelines
tackle unethical practices and whistleblower protection by mandating ethical,
legal, and sustainable conduct across all operations, with a zero-tolerance
stance on non-compliance. Key contents include anti-corruption measures,
compliance with laws, and robust reporting mechanisms, directly addressing
risks like reputational damage and fines from unethical behavior in sales and
procurement, as well as trust erosion from whistleblower neglect.
The policy applies universally to all employees, temporary staff, and, where
feasible, partly owned companies, with no exclusions, covering the entire value
chain. Implementation is overseen by the CEO, cascading through line
management, and aligns with the UN Convention against Corruption through
its bribery prohibition. Stakeholders’ interests, particularly employees and
business partners, are considered to foster trust, and the guidelines are
accessible via the intranet, supported by training and auditing to monitor
efficacy.
Our corporate culture of openness, honesty, and cooperation is established
and promoted through the Steering Guidelines, which every employee must
follow, reinforced by leadership’s commitment to model impeccable behavior.
We develop this culture via a people-oriented strategy, encouraging
professional growth and inclusivity, and evaluate it through regular training,
audits, and compliance reporting, ensuring alignment with our “best in class”
goal. Concerns about unlawful or unethical conduct are identified and reported
via multiple channels superiors, HR, HSE reps, or a confidential email
(compliance@norskeskog.com) accessible to internal and external stake-
holders. Investigations are prompt, independent, and objective, extending
beyond whistleblower reports, with the corporate legal department ensuring
rigor. External investigators will be used when appropriate and especially in
situations where members of the board or corporate management are reported
to the whistleblower function. Typical external investigator could be a lawyer,
auditor or other expert independent of Norske Skog and the persons involved.
Sales and procurement functions are most at risk for anti-competitive
behaviour due to global contract dealings, targeted by mandatory training.
This training, offered annually to all employees, covers ethical conduct in
depth, with records tracking participation and effectiveness.
Whistleblower protection is embedded in the Steering Guidelines, offering
confidential reporting channels and explicit non-retaliation guarantees per
Directive (EU) 2019/1937. We provide training to workers on reporting
processes and to staff handling reports, ensuring awareness and competence.
The guidelines’ efficacy is monitored via the Continuous Compliance Program,
with local management agendas and incident reports tracking progress. In
especially serious cases, the compliance officer will consult with the board of
directors to determine if any regulatory and/or authority will be reported to.
Empirical evidence proves that most of the whistleblower cases being reported
are human resource issues and handled accordingly. This comprehensive
approach, rooted in our core values, ensures accountability, protects stake-
holders, and upholds our ethical standards across all business conduct
matters.
2. Metrics and targets
No incidents related to fraud, corruption, bribery, breach of anti-trust,
competition laws and whistleblowing cases were reported in 2024.
Norske Skog did not receive any convictions or fines for violations of anti-
corruption or anti-bribery law in the year, nor has it been subject to any legal
action relating to corruption and bribery.
All employees have undergone annual training sessions both for new
employees and repetitive training for existing employees.
REPORT OF THE BOARD OF DIRECTORS
/
CORPORATE GOVERNANCE
110
I
Norske Skog
I
Annual report 2024
Photo: Carsten Dybevig
APPENDIX
4
Norske Skog Golbey, pipes to air condenser
Photo: Carsten Dybevig
CONTENT INDEX OF ESRS DISCLOSURE REQUIREMENTS
List of material DRs
Reference
- section
in report
ESRS 2 - General disclosures
BP-1 General basis for preparation of the sustainability statement
General disclosures - Basis for preparation
BP-2 Disclosures in relation to specific circumstances
General disclosures - Basis for preparation
GOV-1 The role of the administrative, management and supervisory bodies
General disclosures - Governance
GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management
and supervisory bodies
General disclosures - Governance
GOV-3 Integration of sustainability-related performance in incentive schemes
General disclosures - Governance
GOV-4 Statement on due diligence
General disclosures - Governance
GOV-5 Risk management and internal controls over sustainability reporting
General disclosures - Governance
SBM-1 Strategy, business model and value chain
General disclosures - Strategy, stakeholders, material impacts, risks and
opportunities
SBM-2 Interests and views of stakeholders
General disclosures - Strategy, stakeholders, material impacts, risks and
opportunities
SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
General disclosures - Strategy, stakeholders, material impacts, risks and
opportunities
IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities
General disclosures - Impacts, risks and opportunity management
IRO-2 Disclosure Requirements in ESRS covered by the undertaking’s sustainability statement
General disclosures - Impacts, risks and opportunity management
E1 - Climate change
ESRS 2 GOV-3-E1 Integration of sustainability-related performance in incentive schemes
General disclosures - Governance
E1-1 Transition plan for climate change mitigation
Climate change (ESRS E1) - Strategy
ESRS 2 SBM-3-E1 Material impacts, risks and opportunities and their interaction with strategy and business model
Climate change (ESRS E1) - Impacts, risks and opportunities
ESRS 2 IRO-1-E1 Description of the processes to identify and assess material climate-related impacts, risks and
opportunities
General disclosures - Impacts, risks and opportunity management
E1-2 Policies related to climate change mitigation and adaptation
Climate change (ESRS E1) - Impacts, risks and opportunity management
E1-3 Actions and resources in relation to climate change policies
Climate change (ESRS E1) - Impacts, risks and opportunity management
E1-4 Targets related to climate change mitigation and adaptation
Climate change (ESRS E1) - Metrics and targets
E1-5 Energy consumption and mix
Climate change (ESRS E1) - Metrics and targets
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions
Climate change (ESRS E1) - Metrics and targets
E2 - Pollution
ESRS 2 IRO-1-E2 Description of the processes to identify and assess material pollution-related impacts, risks and
opportunities
General disclosures - Impacts, risks and opportunity management
E2-1 Policies related to pollution
Pollution (ESRS E2) - Impacts, risks and opportunity management
E2-2 Actions and resources related to pollution
Pollution (ESRS E2) - Impacts, risks and opportunity management
E2-3 Targets related to pollution
Pollution (ESRS E2) - Metrics and targets
E2-4 Pollution of air, water and soil
Pollution (ESRS E2) - Metrics and targets
E2-5 Substances of concern and substances of very high concern
Pollution (ESRS E2) - Metrics and targets
E1 - Climate change
ESRS 2 GOV-3-E1 Integration of sustainability-related performance in incentive schemes
General disclosures - Governance
E1-1 Transition plan for climate change mitigation
Climate change (ESRS E1) - Strategy
ESRS 2 SBM-3-E1 Material impacts, risks and opportunities and their interaction with strategy and business model
Climate change (ESRS E1) - Impacts, risks and opportunities
ESRS 2 IRO-1-E1 Description of the processes to identify and assess material climate-related impacts, risks and
opportunities
General disclosures - Impacts, risks and opportunity management
E1-2 Policies related to climate change mitigation and adaptation
Climate change (ESRS E1) - Impacts, risks and opportunity management
E1-3 Actions and resources in relation to climate change policies
Climate change (ESRS E1) - Impacts, risks and opportunity management
E1-4 Targets related to climate change mitigation and adaptation
Climate change (ESRS E1) - Metrics and targets
E1-5 Energy consumption and mix
Climate change (ESRS E1) - Metrics and targets
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions
Climate change (ESRS E1) - Metrics and targets
E2 - Pollution
ESRS 2 IRO-1-E2 Description of the processes to identify and assess material pollution-related impacts, risks and
opportunities
General disclosures - Impacts, risks and opportunity management
E2-1 Policies related to pollution
Pollution (ESRS E2) - Impacts, risks and opportunity management
E2-2 Actions and resources related to pollution
Pollution (ESRS E2) - Impacts, risks and opportunity management
E2-3 Targets related to pollution
Pollution (ESRS E2) - Metrics and targets
E2-4 Pollution of air, water and soil
Pollution (ESRS E2) - Metrics and targets
E2-5 Substances of concern and substances of very high concern
Pollution (ESRS E2) - Metrics and targets
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
113
List of material DRs
Reference
- section
in report
E3 - Water and marine resources
ESRS 2 IRO-1-E3 Description of the processes to identify and assess material water and marine resources-related im-
pacts, risks and opportunities
General disclosures - Impacts, risks and opportunity management
E3-1 Policies related to water and marine resources
Water and marine resources (ESRS E3) - Impacts, risks and opportunity
management
E3-2 Actions and resources related to water and marine resources
Water and marine resources (ESRS E3) - Impacts, risks and opportunity
management
E3-3 Targets related to water and marine resources
Water and marine resources (ESRS E3) - Metrics and targets
E3-4 Water consumption
Water and marine resources (ESRS E3) - Metrics and targets
E4- Biodiversity and ecosystems
E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy and business model
Biodiversity and ecosystems (ESRS E4) - Strategy
ESRS 2 SBM-3-E4 Material impacts, risks and opportunities and their interaction with strategy and business model
Biodiversity and ecosystems (ESRS E4) - Strategy
ESRS 2 IRO-1-E4 Description of processes to identify and assess material biodiversity and ecosystem-related impacts,
risks dependencies and opportunities
General disclosures - Impacts, risks and opportunity management
E4-2 Policies related to biodiversity and ecosystems
Biodiversity and ecosystems (ESRS E4) - Impacts, risks and opportunity
management
E4-3 Actions and resources related to biodiversity and ecosystems
Biodiversity and ecosystems (ESRS E4) - Impacts, risks and opportunity
management
E4-4 Targets related to biodiversity and ecosystems
Biodiversity and ecosystems (ESRS E4) - Metrics and targets
E4-5 Impact metrics related to biodiversity and ecosystems change
Biodiversity and ecosystems (ESRS E4) - Metrics and targets
E5- Resource use and circular economy
ESRS 2 IRO-1-E5 Description of the processes to identify and assess material resource use and circular economy-related
impacts, risks and opportunities
General disclosures - Impacts, risks and opportunity management
E5-1 Policies related to resource use and circular economy
Resource use and circular economy (ESRS E5) - Impacts, risks and
opportunity management
E5-2 Actions and resources related to resource use and circular economy
Resource use and circular economy (ESRS E5) - Impacts, risks and
opportunity management
E5-3 Targets related to resource use and circular economy
Resource use and circular economy (ESRS E5) - Metrics and targets
E5-4 Resource inflows
Resource use and circular economy (ESRS E5) - Metrics and targets
E5-5 Resource outflows
Resource use and circular economy (ESRS E5) - Metrics and targets
S1- Own workforce
ESRS 2 SBM-2-S1 – Interests and views of stakeholders
Own workforce (ESRS S1) - Strategy
ESRS 2 SBM-3-S1 - Material impacts, risks and opportunities and their interaction with strategy and business model
Own workforce (ESRS S1) - Strategy
S1-1 Policies related to own workforce
Own workforce (ESRS S1) - Impacts, risks and opportunity management
S1-2 Processes for engaging with own workforce and workers' representatives about impacts
Own workforce (ESRS S1) - Impacts, risks and opportunity management
S1-3 Processes to remediate negative impacts and channels for own workforce to raise concerns
Own workforce (ESRS S1) - Impacts, risks and opportunity management
S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing
material opportunities related to own workforce, and effectiveness of those actions
Own workforce (ESRS S1) - Impacts, risks and opportunity management
S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and
opportunities
Own workforce (ESRS S1) - Metrics and targets
S1-6 Characteristics of the undertaking’s employees
Own workforce (ESRS S1) - Metrics and targets
S1-7 Characteristics of non-employees in the undertaking’s own workforce
Own workforce (ESRS S1) - Metrics and targets
S1-8 Collective bargaining coverage and social dialogue
Own workforce (ESRS S1) - Metrics and targets
S1-9 Diversity metrics
Own workforce (ESRS S1) - Metrics and targets
S1-13 Training and skills development metrics
Own workforce (ESRS S1) - Metrics and targets
S1-14 Health and safety metrics
Own workforce (ESRS S1) - Metrics and targets
G1 - Business conduct
ESRS 2 SBM-3-G1 Material impacts, risks and opportunities and their interaction with strategy and business model
Business conduct (ESRS G1) - Impacts, risks and opportunity
management
ESRS 2 GOV-1-G1 The role of the administrative, management and supervisory bodies
General disclosures - Governance
ESRS 2 IRO-1-G1 Description of the processes to identify and assess material impacts, risks and opportunities
General disclosures - Impacts, risks and opportunity management
G1-1 Business conduct policies and corporate culture
Business conduct (ESRS G1) - Impacts, risks and opportunity
management
G1-3 Prevention and detection of corruption and bribery
Business conduct (ESRS G1) - Metrics and targets
G1-4 Incidents of corruption or bribery
Business conduct (ESRS G1) - Metrics and targets
REPORT OF THE BOARD OF DIRECTORS
/
APPENDIX
114
I
Norske Skog
I
Annual report 2024
Norske Skog Bruck, energy plant
Photo: Carsten Dybevig
Disclosure requirement and
related datapoint
SFDR reference
Pillar 3 reference
Benchmark regulation
reference
EU climate law
reference
Material/not material
Paragraph reference
annual report
ESRS 2 GOV-1 Board’s gender
diversity paragraph 21 (d)
Indicator number
13 of Table #1 of
Annex 1
Commission Delegated
Regulation (EU) 2020/1816,
Annex II
Material
Governance - Competence
and expertise in governing
bodies
ESRS GOV-1 Percentage of
board members who are inde-
pendent paragraph 21 (e)
Delegated Regulation (EU)
2020/1816, Annex II
Material
Governance - Competence
and expertise in governing
bodies
ESRS 2 GOV-4 Statement on
due diligence paragraph 30
Indicator number 10
Table #3 of Annex 1
Material
Governance - Competence
and expertise in governing
bodies
ESRS 2 SBM-1 Involvement in
activities related to fossil fuel
activities paragraph 40 (d) i
Indicators number 4
Table #1 of Annex 1
Article 449a Regulation (EU)
No 575/2013: Commission
Implementing Regulation (EU)
2022/2453 Table 1: Qualitative
information on environmental
risk and Table 2: Qualitative
information on social risk
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS 2 SBM-1 Involvement in
activities related to chemical
production paragraph 40 (d) ii
Indicator number 9
Table #2 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS 2 SBM-1 Involvement
in activities related to contro-
versial weapons paragraph
40 (d) iii
Indicator number 14
Table #1 of Annex 1
Delegated Regulation (EU)
2020/1818, Article 12(1)
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS 2 SBM-1 Involvement in
activities related to cultivation
and production of tobacco
paragraph 40 (d) iv
Delegated Regulation (EU)
2020/1818, Article 12(1)
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS E1-1 Transition plan to
reach climate neutrality by
2050 paragraph 14
Regulation (EU)
2021/1119,
Article 2(1)
Material
Climate change (ESRS E1) -
Strategy - Transition plan
ESRS E1-1 Undertakings
excluded from Paris-aligned
Benchmarks paragraph 16 (g)
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 1:
Banking book – Climate change
transition risk: Credit quality of
exposures by sector, emissions
and residual maturity
Delegated Regulation (EU)
2020/1818, Article 12.1 (d) to
(g), and Article 12.2
Not material
N/A
ESRS E1-4 GHG emission
reduction targets paragraph 34
Indicator number 4
Table #2 of Annex 1
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 3: Banking
book – Climate change transi-
tion risk: alignment metrics
Delegated Regulation (EU)
2020/1818, Article 6
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-5 Energy consump-
tion from fossil sources
disaggregated by sources (only
high climate impact sectors)
paragraph 38
Indicator number 5
Table #1 and Indica-
tor n. 5 Table #2 of
Annex 1
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-5 Energy consumption
and mix paragraph 37
Indicator number 5
Table #1 of Annex 1
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-5 Energy intensity
associated with activities in
high climate impact sectors
paragraphs 40 to 43
Indicator number 6
Table #1 of Annex 1
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-6 Gross Scope 1, 2,
3 and Total GHG emissions
paragraph 44
Indicators number
1 and 2 Table #1 of
Annex 1
Article 449a; Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 1:
Banking book – Climate change
transition risk: Credit quality of
exposures by sector, emissions
and residual maturity
Delegated Regulation (EU)
2020/1818, Article 5(1), 6 and
8(1)
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-6 Gross GHG
emissions intensity paragraphs
53 to 55
Indicators number 3
Table #1 of Annex 1
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 3: Banking
book – Climate change transi-
tion risk: alignment metrics
Delegated Regulation (EU)
2020/1818, Article 8(1)
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-7 GHG removals and
carbon credits paragraph 56
Regulation (EU)
2021/1119,
Article 2(1)
Not material
N/A
ESRS E1-9 Exposure of
the benchmark portfolio to
climate-related physical risks
paragraph 66
Delegated Regulation (EU)
2020/1818, Annex II Delegated
Regulation (EU) 2020/1816,
Annex II
Material
N/A - Phasing in
requirement
LIST OF DATAPOINTS IN CROSS-CUTTING AND TOPICAL STANDARDS THAT DERIVE FROM OTHER EU LEGISLATION
REPORT OF THE BOARD OF DIRECTORS
/
APPENDIX
116
I
Norske Skog
I
Annual report 2024
Disclosure requirement and
related datapoint
SFDR reference
Pillar 3 reference
Benchmark regulation
reference
EU climate law
reference
Material/not material
Paragraph reference
annual report
ESRS E1-9 Disaggregation
of monetary amounts by
acute and chronic physical
risk paragraph 66 (a) ESRS
E1-9 Location of significant
assets at material physical risk
paragraph 66 (c).
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 paragraphs 46 and
47; Template 5: Banking book
- Climate change physical risk:
Exposures subject to physical
risk.
Material
N/A - Phasing in
requirement
ESRS 2 GOV-1 Board’s gender
diversity paragraph 21 (d)
Indicator number
13 of Table #1 of
Annex 1
Commission Delegated
Regulation (EU) 2020/1816,
Annex II
Material
Governance - Competence
and expertise in governing
bodies
ESRS GOV-1 Percentage of
board members who are inde-
pendent paragraph 21 (e)
Delegated Regulation (EU)
2020/1816, Annex II
Material
Governance - Competence
and expertise in governing
bodies
ESRS 2 GOV-4 Statement on
due diligence paragraph 30
Indicator number 10
Table #3 of Annex 1
Material
Governance - Competence
and expertise in governing
bodies
ESRS 2 SBM-1 Involvement in
activities related to fossil fuel
activities paragraph 40 (d) i
Indicators number 4
Table #1 of Annex 1
Article 449a Regulation (EU)
No 575/2013: Commission
Implementing Regulation (EU)
2022/2453 Table 1: Qualitative
information on environmental
risk and Table 2: Qualitative
information on social risk
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS 2 SBM-1 Involvement in
activities related to chemical
production paragraph 40 (d) ii
Indicator number 9
Table #2 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS 2 SBM-1 Involvement
in activities related to contro-
versial weapons paragraph
40 (d) iii
Indicator number 14
Table #1 of Annex 1
Delegated Regulation (EU)
2020/1818, Article 12(1)
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS 2 SBM-1 Involvement in
activities related to cultivation
and production of tobacco
paragraph 40 (d) iv
Delegated Regulation (EU)
2020/1818, Article 12(1)
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS E1-1 Transition plan to
reach climate neutrality by
2050 paragraph 14
Regulation (EU)
2021/1119,
Article 2(1)
Material
Climate change (ESRS E1) -
Strategy - Transition plan
ESRS E1-1 Undertakings
excluded from Paris-aligned
Benchmarks paragraph 16 (g)
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 1: Banking
book - Climate change transition
risk: Credit quality of exposures
by sector, emissions and
residual maturity
Delegated Regulation (EU)
2020/1818, Article 12.1 (d) to
(g), and Article 12.2
Not material
N/A
ESRS E1-4 GHG emission
reduction targets paragraph 34
Indicator number 4
Table #2 of Annex 1
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 3: Banking
book – Climate change transi-
tion risk: alignment metrics
Delegated Regulation (EU)
2020/1818, Article 6
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-5 Energy consumption
from fossil sources disag-
gregated by sources (only
high climate impact sectors)
paragraph 38
Indicator number
5 Table #1 and
Indicator n. 5 Table
#2 of Annex 1
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-5 Energy consumption
and mix paragraph 37
Indicator number 5
Table #1 of Annex 1
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-5 Energy intensity
associated with activities in
high climate impact sectors
paragraphs 40 to 43
Indicator number 6
Table #1 of Annex 1
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-6 Gross Scope 1, 2,
3 and Total GHG emissions
paragraph 44
Indicators number
1 and 2 Table #1 of
Annex 1
Article 449a; Regulation (EU)
No 575/2013; Commission
Implementing Regulation
(EU) 2022/2453 Template 1:
Banking book – Climate change
transition risk: Credit quality of
exposures by sector, emissions
and residual maturity
Delegated Regulation (EU)
2020/1818, Article 5(1), 6 and
8(1)
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-6 Gross GHG emis-
sions intensity paragraphs
53 to 55
Indicators number 3
Table #1 of Annex 1
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 3: Banking
book – Climate change transi-
tion risk: alignment metrics
Delegated Regulation (EU)
2020/1818, Article 8(1)
Material
Climate change (ESRS E1) -
Metrics and targets
ESRS E1-7 GHG removals and
carbon credits paragraph 56
Regulation (EU)
2021/1119,
Article 2(1)
Not material
N/A
ESRS E1-9 Exposure of
the benchmark portfolio to
climate-related physical risks
paragraph 66
Delegated Regulation (EU)
2020/1818, Annex II Delegated
Regulation (EU) 2020/1816,
Annex II
Material
N/A - Phasing in
requirement
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
117
Disclosure requirement and
related datapoint
SFDR reference
Pillar 3 reference
Benchmark regulation
reference
EU climate law
reference
Material/not material
Paragraph reference annu-
al report
ESRS E1-9 Disaggregation of
monetary amounts by acute
and chronic physical risk
paragraph 66 (a) ESRS E1-9
Location of significant assets
at material physical risk para-
graph 66 (c).
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 paragraphs 46 and
47; Template 5: Banking book
- Climate change physical risk:
Exposures subject to physical
risk.
Material
N/A - Phasing in
requirement
ESRS E1-9 Breakdown of the
carrying value of its real estate
assets by energy-efficiency
classes paragraph 67 (c).
Article 449a Regulation (EU)
No 575/2013; Commission
Implementing Regulation (EU)
2022/2453 paragraph 34;Tem-
plate 2:Banking book -Climate
change transition risk: Loans
collateralised by immovable
property - Energy efficiency of
the collateral
Material
N/A - Phasing in
requirement
ESRS E1-9 Degree of
exposure of the portfolio to
climate-related opportunities
paragraph 69
Delegated Regulation (EU)
2020/1818, Annex II
Material
N/A - Phasing in
requirement
ESRS E2-4 Amount of each
pollutant listed in Annex II
of the E-PRTR Regulation
(European Pollutant Release
and Transfer Register) emitted
to air, water and soil, paragraph
28
Indicator number 8
Table #1 of Annex 1
Indicator number 2
Table #2 of Annex 1
Indicator number 1
Table #2 of Annex 1
Indicator number 3
Table #2 of Annex 1
Material
Pollution (ESRS E2) -
Metrics and targets
ESRS E3-1 Water and marine
resources paragraph 9
Indicator number 7
Table #2 of Annex 1
Material
Water and marine resources
(ESRS E3) - Metrics and
targets
ESRS E3-1 Dedicated policy
paragraph 13
Indicator number 8
Table 2 of Annex 1
Not material
N/A
ESRS E3-1 Sustainable oceans
and seas paragraph 14
Indicator number 12
Table #2 of Annex 1
Not material
N/A
ESRS E3-4 Total water recycled
and reused paragraph 28 (c)
Indicator number
6.2 Table #2 of
Annex 1
Material
Water and marine resources
(ESRS E3) - Metrics and
targets
ESRS E3-4 Total water
consumption in m^3 per net
revenue on own operations
paragraph 29
Indicator number
6.1 Table #2 of
Annex 1
Material
Water and marine resources
(ESRS E3) - Metrics and
targets
ESRS 2- SBM-3 - E4 paragraph
16 (a) i
Indicator number 7
Table #1 of Annex 1
Material
Biodiversity and
ecosystems (ESRS E4) -
Strategy
ESRS 2- SBM-3 - E4 paragraph
16 (b)
Indicator number 10
Table #2 of Annex 1
Material
Biodiversity and
ecosystems
(ESRS E4) -
Strategy
ESRS 2- SBM-3 - E4 paragraph
16 (c)
Indicator number 14
Table #2 of Annex 1
Material
Biodiversity and
ecosystems
(ESRS E4) -
Strategy
ESRS E4-2 Sustainable land/
agriculture practices or policies
paragraph 24 (b)
Indicator number 11
Table #2 of Annex 1
Material
N/A - Voluntary disclosure
ESRS E4-2 Sustainable oceans
/seas practices or policies
paragraph 24 (c)
Indicator number 12
Table #2 of Annex 1
Material
N/A - Voluntary disclosure
ESRS E4-2 Policies to address
deforestation paragraph 24 (d)
Indicator number 15
Table #2 of Annex 1
Material
N/A - Voluntary disclosure
ESRS E5-5 Non-recycled waste
paragraph 37 (d)
Indicator number 13
Table #2 of Annex 1
Material
Resource use and circular
economy (ESRS E5) -
Metrics and targets
ESRS E5-5 Hazardous
waste and radioactive waste
paragraph 39
Indicator number 9
Table #1 of Annex 1
Material
Resource use and circular
economy (ESRS E5) -
Metrics and targets
ESRS 2- SBM3 - S1 Risk of
incidents of forced labour
paragraph 14 (f)
Indicator number 13
Table #3 of Annex I
Not material
N/A
ESRS 2- SBM3 - S1 Risk of
incidents of child labour
paragraph 14 (g)
Indicator number 12
Table #3 of Annex I
Not material
N/A
ESRS S1-1 Human rights policy
commitments paragraph 20
Indicator number
9 Table #3 and
Indicator number 11
Table #1 of Annex I
Not material
N/A
ESRS S1-1 Due diligence
policies on issues addressed by
the fundamental International
Labor Organisation
Conventions 1 to 8,
paragraph 21
Delegated Regulation (EU)
2020/1816, Annex II
Material
Own workforce (ESRS S1)
- Policies
ESRS S1-1 processes and
measures for preventing
trafficking in human beings
paragraph 22
Indicator number 11
Table #3 of Annex I
Not material
N/A
REPORT OF THE BOARD OF DIRECTORS
/
APPENDIX
118
I
Norske Skog
I
Annual report 2024
Disclosure requirement and
related datapoint
SFDR reference
Pillar 3 reference
Benchmark regulation
reference
EU climate law
reference
Material/not material
Paragraph reference
annual report
ESRS S1-1 workplace accident
prevention policy or manage-
ment system paragraph 23
Indicator number 1
Table #3 of Annex I
Material
Own workforce (ESRS S1)
- Policies
ESRS S1-3 grievance/com-
plaints handling mechanisms
paragraph 32 (c)
Indicator number 5
Table #3 of Annex I
Material
Own workforce (ESRS S1)
- Policies
ESRS S1-14 Number of
fatalities and number and
rate of work-related accidents
paragraph 88 (b) and (c)
Indicator number 2
Table #3 of Annex I
Delegated Regulation (EU)
2020/1816, Annex II
Material
Own workforce (ESRS S1) -
Metrics and targets
ESRS S1-14 Number of days
lost to injuries, accidents,
fatalities or illness paragraph
88 (e)
Indicator number 3
Table #3 of Annex I
Material
Own workforce (ESRS S1) -
Metrics and targets
ESRS S1-16 Unadjusted gender
pay gap paragraph 97 (a)
Indicator number 12
Table #1 of Annex I
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS S1-16 Excessive CEO pay
ratio paragraph 97 (b)
Indicator number 8
Table #3 of Annex I
Not material
N/A
ESRS S1-17 Incidents of dis-
crimination paragraph 103 (a)
Indicator number 7
Table #3 of Annex I
Not material
N/A
ESRS S1-17 Nonrespect of UN-
GPs on Business and Human
Rights and OECD Guidelines
paragraph 104 (a)
Indicator number
10 Table #1 and
Indicator n. 14 Table
#3 of Annex I
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818 Art
12 (1)
Not material
N/A
ESRS 2- SBM3 – S2 Significant
risk of child labour or forced
labour in the value chain para-
graph 11 (b)
Indicators number
12 and n. 13 Table
#3 of Annex I
Not material
N/A
ESRS S2-1 Human rights policy
commitments paragraph 17
Indicator number
9 Table #3 and
Indicator n. 11 Table
#1 of Annex 1
Not material
N/A
ESRS S2-1 Policies related to
value chain workers paragraph
18
Indicator number 11
and n. 4 Table #3 of
Annex 1
Not material
N/A
ESRS S2-1 Nonrespect of UN-
GPs on Business and Human
Rights principles and OECD
guidelines paragraph 19
Indicator number 10
Table #1 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818,
Art 12 (1)
Not material
N/A
ESRS S2-1 Due diligence
policies on issues addressed by
the fundamental International
Labor Organisation
Conventions 1 to 8, paragraph
19
Delegated Regulation (EU)
2020/1816, Annex II
Not material
N/A
ESRS S2-4 Human rights issues
and incidents connected to
its upstream and downstream
value chain paragraph 36
Indicator number 14
Table #3 of Annex 1
Not material
N/A
ESRS S3-1 Human rights policy
commitments paragraph 16
Indicator number 9
Table #3 of Annex
1 and Indicator
number 11 Table #1
of Annex 1
Not material
N/A
ESRS S3-1 non-respect of UN-
GPs on Business and Human
Rights, ILO principles or OECD
guidelines paragraph 17
Indicator number 10
Table #1 Annex 1
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818,
Art 12 (1)
Not material
N/A
ESRS S3-4 Human rights issues
and incidents paragraph 36
Indicator number 14
Table #3 of Annex 1
Not material
N/A
ESRS S4-1 Policies related
to consumers and end-users
paragraph 16
Indicator number 9
Table #3 and Indica-
tor number 11 Table
#1 of Annex 1
Not material
N/A
ESRS S4-1 Non-respect of UN-
GPs on Business and Human
Rights and OECD guidelines
paragraph 17
Indicator number 10
Table #1 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II Delegated
Regulation (EU) 2020/1818,
Art 12 (1)
Not material
N/A
ESRS S4-4 Human rights issues
and incidents paragraph 35
Indicator number 14
Table #3 of Annex 1
Not material
N/A
ESRS G1-1 United Nations
Convention against Corruption
paragraph 10 (b)
Indicator number 15
Table #3 of Annex 1
Material
Business conduct (ESRS
G1) - Promoting a Culture
of integrity
ESRS G1-1 Protection of
whistle-blowers paragraph
10 (d)
Indicator number 6
Table #3 of Annex 1
Material
Business conduct (ESRS
G1) - Promoting a Culture
of integrity
ESRS G1-4 Fines for violation of
anti-corruption and anti-brib-
ery laws paragraph 24 (a)
Indicator number 17
Table #3 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II)
Material
Business conduct (ESRS
G1) - Metrics and targets
ESRS G1-4 Standards of an-
ti-corruption and anti- bribery
paragraph 24 (b)
Indicator number 16
Table #3 of Annex 1
Material
Business conduct (ESRS
G1) - Promoting a Culture
of integrity
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
119
Norske Skog Golbey, warehouse
Photo: Carsten Dybevig
Norske Skog ASA is the ultimate parent company of the Norske Skog group,
which is a paper manufacturing group with production and sales operations in
Europe. Norske Skog’s goal is to increase shareholder value, through profitable
and sustainable production of publication and packaging paper as well as
other fibre and energy related business. Norske Skog ASA is a Norwegian
registered public limited liability company listed on the Oslo Stock Exchange
and is subject to Norwegian law, including Norwegian and EU securities
legislation and stock exchange regulations.
The board of directors of Norske Skog has a strong focus on ensuring
compliance with applicable corporate governance standards. Norske Skog is
subject to reporting requirements for corporate governance pursuant to
Section 2-9 of the Norwegian Accounting Act and complies with the
Norwegian Code of Practice for Corporate Governance (the “Code”, see
www.nues.no, English pages). The Code was last revised on 14 October 2021.
Corporate governance principles as referred to in this statement define roles
and responsibilities, powers, and processes, between and within governing
bodies, such as the general meeting, the board of directors and the corporate
management. For further information on corporate bodies and corporate
governance matters, please visit Norske Skog’s website www.norskeskog.
com/sustainability/governance.
Corporate governance is continuously addressed by the board of directors,
and the board of directors has approved this corporate governance statement.
There are no material amendments to the corporate governance statement
compared to the corporate governance statement included in the annual
report for 2023.
1.
Implementation and reporting on corporate
governance
This corporate governance statement follows the structure of the Code
published on 14 October 2021. Deviations from the Code shall be explained
where relevant in this statement, together with a summary of all deviations in
this section 1.
There are currently no deviations from the Code.
The corporate governance principles adopted by Norske Skog are set out in
the company’s Corporate Governance Policy and are fundamental for the
company’s corporate governance and value creation. Norske Skog’s Corporate
Governance Policy is based on the Code and, as such, it is designed to
establish a basis for good corporate governance and to support achievement
of the company’s core objectives on behalf of its shareholders, including the
achievement of profitability for the shareholders of Norske Skog in a
sustainable manner. The way Norske Skog is governed is vital to the
development of its value over time.
Norske Skog believes that good corporate governance involves openness,
honesty and cooperation between all parties involved in and with the group:
the shareholders, the board of directors and executive management,
employees, customers, suppliers, public authorities, and the society in general.
By pursuing the principles set out in the Corporate Governance Policy, the
board of directors and management shall contribute to achieving the following
objectives:
•
Openness and honesty. Communication with the interest groups of Norske
Skog shall be based on openness and honesty on issues relevant for the
evaluation of the development and position of the company.
• Independence. The relationship between the board of directors, the
management and the shareholders shall be based on independence.
Independence shall ensure that decisions are made on an unbiased and
neutral basis.
•
Equal treatment. One of Norske Skog’s primary objectives is equal treatment
and equal rights for all shareholders.
• Control and management. Good control and corporate governance
mechanisms shall contribute to predictability and reduce the level of risks
for shareholders and other interest groups.
The development of, and improvements in, the company’s Corporate
Governance Policy are ongoing and important processes that the board of
directors and management have continuous focus on.
Deviations from the Code: None.
2.
Business
Norske Skog’s business purpose is set out in the Articles of Association, article
2: “The company’s objective is to conduct wood processing industry, investing
activities and activities related to this, as well as providing headquarter
services for the group, including raise of external loans and conducting group
financing arrangements.” The Articles of Association are available on the
company’s website, www.norskeskog.com/investors/articles-of-association.
The business of the company is conducted in accordance with the targets,
strategies and risk profile determined by the board of directors, within the
scope of the company’s business purpose, to realise value creation for the
shareholders in a sustainable manner. The board of directors considers the
targets, strategies, and risk profile of the company on a continuous basis.
The company has established guidelines and principles which are used to
integrate considerations to human rights, decent working conditions,
employee rights and social matters, the external environment and anti-
corruption and other compliance efforts in its business strategies, its day-to-
day operations and in relation to its stakeholders. This includes but is not
limited to the Norske Skog Steering Guidelines and the Code of Conduct.
Compliance with the Steering Guidelines and the Code of Conduct is
mandatory for all employees in the group and others acting on the group’s
behalf, and similar conduct and ethical standards are expected from suppliers,
customers, other business relations and in partnerships, joint ventures, and
partially owned subsidiaries. The Steering Guidelines and the Code of Conduct
can be found on the company’s website, www.norskeskog.com/sustainability/
governance/steering-guidelines.
Board of directors statement on
corporate governance
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
121
Sustainability and corporate social responsibility are integrated parts of the
group’s business and are described in the sustainability report section of the
annual report.
Deviations from the Code: None.
3.
Equity and dividends
SHARE CAPITAL
The share capital of Norske Skog is set out in the Articles of Association, article
4. The company’s share capital at year end 2024 was NOK 339
352 940,
divided into 84
838 235
shares, each with a nominal value of NOK 4.00
.
EQUITY
The board of directors is responsible for ensuring that the group is adequately
capitalised relative to the risk and scope of operations and that the capital
requirements set forth in laws and regulations are met. The company shall
have an equity capital at a level appropriate to its objectives, strategy, and risk
profile. The board of directors shall continuously monitor the group’s capital
situation and shall immediately take adequate steps if the company’s equity or
liquidity is less than adequate.
Norske Skog’s consolidated total equity as at 31 December 2024 was
NOK 5
384 million, which is equivalent to 37.2% of total assets (for Norske
Skog ASA, the total equity was NOK 4
062 million, which is equivalent to
63.1% of total assets)
.
DIVIDEND POLICY
It follows from Norske Skog’s Corporate Governance Policy that the company
shall, always, have a clear and predictable dividend policy established by the
board of directors. The dividend policy forms the basis for the board of
directors’ proposals on dividend payments to the company’s general meeting.
The company’s dividend policy has historically been to pay dividends
reflecting the underlying earnings and cash flow while ensuring efficient
capital allocation in the group. When deciding the dividend level, the board of
directors will among other things take into consideration capital expenditure
plans, financing requirements and maintaining the appropriate strategic
flexibility of the group. The group’s financing arrangements for the projects to
convert newsprint production capacity to recycled containerboard production
capacity include restrictions on dividend distribution in the period up to July
2025. The company’s dividend policy has therefore been suspended until
such restrictions do no longer apply. For financial years with particularly
strong financial performance, however, the company may consider requesting
consent from relevant financing providers to make dividend distributions.
CAPITAL INCREASES AND ISSUANCE OF SHARES
The general meeting in 2024 authorised the board of directors to increase the
share capital one or several times with an aggregate amount of up to
NOK 33
935 294,
equivalent to 10% of the company’s share capital. The
authorisation may be used for general corporate purposes, including, but not
limited to, financing of the company’s strategic plans and in connection with
acquisitions of companies or other businesses. The authorisation was granted
for the period up to the annual general meeting in 2025. As of the date hereof,
the authorisation has not been used.
The general meeting in 2024 furthermore authorised the board of directors to
acquire own shares with a total nominal value of up to NOK 33
935 294,
equivalent to 10% of the company’s share capital. The authorisation may be
used to optimise the company’s capital structure. The authorisation was
granted for the period up to the annual general meeting in 2025. As of the
date hereof, the authorisation has not been used.
The Articles of Association do not include provisions regarding share capital
increases, issuance of shares or purchase of own shares.
Deviations from the Code: None.
4.
Equal treatment of shareholders
The company has only one class of shares. Each share in the company carries
one vote, and all shares carry equal rights, including the right to participate in
general meetings. All shareholders shall be treated on an equal basis unless
there is just cause for treating them differently.
In the event of an increase in share capital through issuance of new shares, a
decision to deviate from existing shareholders’ pre-emptive rights to subscribe
for shares shall be justified. Where the board of directors resolves to issue
shares and deviate from the pre-emptive rights of existing shareholders
pursuant to an authorisation granted to the board of directors by the general
meeting, the justification will be publicly disclosed in a stock exchange
announcement issued in connection with the share issuance.
Any transactions in treasury shares carried out by the company shall be
carried out on the Oslo Børs, and in any case at the prevailing stock exchange
price. If there is limited liquidity in the company’s shares, the company will
consider other ways to ensure equal treatment of shareholders. Any
transaction in treasury shares by the company is subject to notification
requirements and shall be publicly disclosed in a stock exchange
announcement.
Deviations from the Code: None.
5.
Shares and negotiability
The shares of the company are freely negotiable and there are no limitations
on any party’s ability to own or vote for shares in the company.
Deviations from the Code: None.
6.
General meetings
The general meeting is the shareholders’ forum and the supreme governing
body of the company. The Articles of Association do not limit the shareholders’
rights as provided by the Public Limited Liability Companies Act. The board of
directors sets the agenda for the general meeting. The minutes from the
general meeting are published externally and on the company’s website, in
accordance with applicable laws and deadlines.
The board of directors shall ensure that as many of the company’s shareholders
as possible are able to exercise their voting rights at the company’s general
meetings, and that the general meeting is an effective forum for shareholders
REPORT OF THE BOARD OF DIRECTORS
/
APPENDIX
122
I
Norske Skog
I
Annual report 2024
and the board of directors, which shall be facilitated through the following:
• the resolutions and any supporting documentation shall be sufficiently
detailed, comprehensive, and specific allowing shareholders to understand
and form a view on all matters to be considered at the general meeting.
•
deadlines for shareholders to give notice of their attendance at the general
meeting shall be set as close to the date of the general meeting as practically
possible.
•
the board of directors and the chair of the nomination committee shall be
present at general meetings, while other members of the nomination
committee as well as the auditor shall be present at general meetings where
matters of relevance for such committees/persons are on the agenda; and
• the board of directors shall ensure that the general meeting can elect an
independent chair for the general meeting.
The shareholders shall be able to vote on each of the matters on the agenda
and shall be able to vote separately on each candidate at elections. Share-
holders who are unable to be present at the general meeting, or for other
reasons so desire, shall be given the opportunity to vote electronically through
VPS in advance of the general meeting, be represented by proxy and to vote
by proxy. The company shall in this respect:
•
provide information on the procedure for voting electronically in advance of
the general meeting.
•
provide information on the procedure for attending by proxy.
•
nominate a person who will be available to vote on behalf of shareholders as
their proxy; and
•
prepare a proxy form, which shall, to the extent this is possible, be set up so
that it is possible to vote on each of the items on the agenda and the
candidates nominated for election.
Deviations from the Code: None.
7.
Nomination committee
Pursuant to the Articles of Association, article 8, the company shall have a
nomination committee consisting of between one and three members. The
company’s general meeting elects the members and the chair of the nomination
committee and determines their remuneration. The majority of the members
of the nomination committee shall be independent from the company’s board
of directors and executive management. The members of the nomination
committee shall not be members of the board of directors or the executive
management, and not offer themselves for election to the board of directors.
The composition of the nomination committee should be such that the
interests of shareholders in general are represented. The nomination
committee currently consists of three members, Richard Heiberg, who serves
as the chair of the committee, Gert Steens and Rune Smestad.
The general meeting shall approve the instructions for the nomination
committee. These instructions set out the objectives, responsibilities, and
functions of the nomination committee, and provide guidelines for rotation of
its members. The company shall provide information regarding the composition
of the nomination committee, the members of the nomination committee and
any deadlines for submitting proposals to the nomination committee as part of
its recommendations to the general meeting.
The nomination committee shall recommend candidates for the election of
members and chair of the board of directors, candidates for the election of
members and chair of the nomination committee, and remuneration of the
members of the board of directors, its board committees, and the nomination
committee.
The nomination committee shall have contact with shareholders, the board of
directors on individual basis and the company’s executive personnel as part of
its work on proposing candidates for election to the board.
The nomination committee’s recommendation of candidates to the nomination
committee shall ensure that they represent a broad group of the company’s
shareholders. The nomination committee’s recommendation of candidates to
the board of directors shall ensure that the board of directors is composed to
comply with legal requirements and principles of corporate governance. The
nomination committee shall justify why it is proposing each candidate
separately. The proposals from the nomination committee shall include a
reasoning for its proposal, as well as a statement on how it has carried out its
work. The nomination committee’s proposal shall include information about
the candidates and shall be made available at the latest in accordance with the
21 days’ notice rule to call for a general meeting. Shareholders shall be given
the opportunity to submit proposals to the nomination committee for
candidates for election to the board of directors and other appointments in a
simple and practical manner. Any date for when such proposals must be
submitted to be considered by the nomination committee shall be
communicated. The nomination committee of Norske Skog are, however,
generally available to receive proposals for candidates or other input from
shareholders at any time throughout the year.
Deviations from the Code: None.
8.
The board of directors’ composition and
independence
According to the Articles of Association, the board of directors of Norske Skog
shall have between three and eight board members, and board members are
elected for a period of two years unless another term is determined by the
general meeting. The current number of board members is five, and in addition
there are two observers to the board of directors being union representatives
from each of the two Norwegian mills. The composition of the board of
directors should ensure that the board of directors has the expertise, capacity
and diversity needed to achieve the company’s goals, handle its main
challenges, and promote the common interests of all shareholders. Each board
member should have sufficient time available to devote to his or her
appointment as a board member. The number of board members should be
determined on this basis. Furthermore, individuals of the board of directors
shall be willing and able to work as a team, resulting in the board of directors
working effectively as a collegial body. Further requirements to the composition
of the board of directors are set out in the instructions for the nomination
committee, as further described in section 7 above. The company does not
have separate guidelines for equality and diversity in the composition of the
board of directors, management and control bodies and their sub-committees
for the reason that adequate regulations are considered to be provided for in
the Norwegian Public/Private Limited Liability Companies Act, the Norwegian
Equality and Non-Discrimination Act and the principles promoted in the
Norske Skog group on equality and diversity, as further described in the
sustainability statement in the report of the board of directors.
The board of directors shall be composed so that it can act independently of
any special interests. A majority of the shareholder-elected members of the
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
123
board of directors shall be independent of the executive management and
material business connections of the company. At least two of the members of
the board of directors shall be independent of shareholders that owns or
controls 10% or more of the company’s shares or votes, meaning that there are
no circumstances or relations that may be expected to be able to influence the
independence of the board members’ assessments.
The members of the board of directors and the chair of the board of directors
shall be elected by the company’s general meeting. No member of the
company’s executive management shall be a member of the board of directors.
At least half of the members of the board of directors shall reside in Norway or
another EEA country. Both genders shall be represented on the board of
directors in compliance with the gender representation requirements set out
in section 6-11a of the Norwegian Public Limited Liability Companies Act. The
term of office for the board members shall not be longer than two years at a
time. Members of the board of directors may be re-elected. The election of the
members to the board of directors should be phased so that the entire board
of directors is not replaced at the same time.
The following table summarises the roles of the members of the board of
Name (i)
Residence
Role
Committee memberships
Board meetings
attended
Board
member since
End of
term
Arvid Grundekjøn
Oslo, Norway
Chair
Audit committee and remuneration committee
10/10
2018
2025
Trine-Marie Hagen
Oslo, Norway
Board member
Audit committee and remuneration committee
9/10
2019
2025
Christoffer Bull
Oslo, Norway
Board member
N/A
10/10
2023
2025
Tone Wille
(iii)
Oslo, Norway
Board member
N/A
7/8
2024
2026
Terje Sagbakken
(iv)
Gjøvik, Norway
Board member
N/A
8/8
2024
2026
Johanna Lindén
(ii)
Gothenburg, Sweden
Board member
N/A
2/2
2022
2024
(i)
Please refer to the description in the board of directors’ section of the annual report for further information on the expertise, experience and independence of the members of the board of directors,
as well as the board members’ respective shareholdings in the company. Comments have been provided in the following for board members who have not served in their roles for the whole of 2024.
(ii)
Johanna Lindén served as a board member until the annual general meeting in 2024 and participated in 2 of 2 board meetings in 2024.
(iii)
Tone Wille was elected as a board member by the annual general meeting in 2024 and participated in 7 of 8 board meetings in 2024.
(iv)
Terje Sagbakken was elected as a board member by the annual general meeting in 2024 and participated in 8 of 8 board meetings in 2024.
directors and meeting attendance at board meetings held in 2024:
The board members have a statistic attendance at board meetings of close
100% as described in further detail in the schedule above.
Members of the board of directors are encouraged to own shares in the
company. However, caution should be taken not to let this encourage a short-
term approach, which is not in the best interests of the company and its
shareholders in the longer term.
The nomination committee’s proposal to the general meeting (as further
described in item 7 above) shall include detailed information on candidates for
the board of directors (both appointments and re-elections) and shall be
made available at the latest in accordance with the 21 days’ notice rule to call
for a general meeting.
Deviations from the Code: None.
9.
The work of the board of directors
The board of directors’ main tasks comprise the overall responsibility for the
management of the company and overseeing the daily administration and
operations of the company. The work of the board of directors is carried out in
accordance with the rules and standards applicable to the group, as described
in the company’s Corporate Governance Policy’s instructions to the board of
directors. The instructions to the board of directors include detailed
description of duties and responsibilities of the board members, as well as
working and meeting procedures. The Corporate Governance Policy’s
instructions to the board of directors and the instructions to the CEO include
procedures for how the board of directors and executive management shall
handle agreements with related parties, including whether an independent
valuation must be obtained. Agreements with related parties are described in
Note 31 Related parties in the consolidated financial statements.
The board of directors prepares an annual plan for its work, clearly setting out
strategic, financial, operational, and organisational matters for discussion and
resolution. In addition to addressing the matters on such plan, the board of
directors continuously addresses matters and processes which require the
board of directors’ involvement from time to time. Throughout 2024 and into
2025, the board of directors has in addition to recurring matters concentrated
a significant amount of time on the strategic development and projects of the
group. Among the most important strategic projects of the group worked on
by the board of directors during 2024 is the group’s conversion of a newsprint
paper machine to a recycled containerboard paper machine at the Norske
Skog Golbey mill in France. In addition, the board of directors allocated
significant time to optimise the financing structure of the group over the
course of 2024, as well as the sales process for the regional holding company
of the group in Australia. Furthermore, efforts and results within the areas of
health, environment and safety are annually reported comprehensively to the
board of directors, and the CEO reports on health, environment and safety,
operations, and market developments in every board meeting. The board of
directors actively manages the resources of the board of directors and its
committees in accordance with the relative strategic and commercial
importance of matters.
The board of directors has two sub-committees, an audit committee, as
REPORT OF THE BOARD OF DIRECTORS
/
APPENDIX
124
I
Norske Skog
I
Annual report 2024
required by the Public Limited Liability Companies Act, and a remuneration
committee. The members of the audit committee and the remuneration
committee during 2024 were Arvid Grundekjøn (chair) and Trine-Marie
Hagen. The company’s Corporate Governance Policy includes a set of
instructions for each of the committees, describing defined areas of
responsibility. The committees undertake preparatory discussions and submit
their recommendations to the board of directors.
The audit committee focused on the company’s financial reporting and
internal control function during 2024. The committee furthermore focussed
on the group’s first sustainability statement prepared in accordance with
CSRD. The external auditor, CEO and CFO attend the meetings of the audit
committee. The CEO attends the meetings of the remuneration committee,
except if excused for discussions on the CEO’s remuneration.
The following table summarises the meeting attendance of the board members
at board and committee meetings held in 2024:
The board members have a statistic attendance at committee meetings of
100%.
In 2024, the board of directors held ten meetings and one matter was resolved
by written resolutions. The audit committee held six meetings in 2024. The
remuneration committee held one meeting in 2024. The meetings of the board
of directors and its committees are held as physical meetings, with the
possibility to participate by video conference if board members are prevented
from participating in person. Representation at meetings of the board of
directors is nearly at 100% (see the schedule included under item 8 above for
further details) and representation at committee meetings is at 100%.
The board of directors shall annually evaluate its performance and expertise
for the previous year. This evaluation shall include the composition of the
board of directors and the way its members functions, both individually and as
a group, in relation to the objectives set out for its work. The report shall be
made available to the nomination committee.
Deviations from the Code: None.
10.
Risk management and internal control
The board of directors is responsible for ensuring that the company has sound
and appropriate internal control systems and systems for risk management,
and that these systems are proportionate to and reflect the extent and nature
of the company’s activities. Having effective internal control systems and
systems for risk management in place are important to prevent the group from
situations that can damage its reputation and financial standing. Furthermore,
effective, and proper internal control and risk management are important
factors when building and maintaining trust, to reach the company’s objectives,
and ultimately create value. Having in place an effective internal control
system means that the company is better suited to manage commercial risk,
operational risk, the risk of breaching legislation and regulations as well as
other forms of risk that may be material to the company. As such, there is a
correlation between the company’s internal control systems and effective risk
management. The internal control system shall also address the organisation
and execution of the company’s financial reporting, as well as cover the
company’s guidelines for how it integrates considerations related to
stakeholders into its creation of value. Norske Skog shall comply with all laws
and regulations that apply to the group’s business activities.
Norske Skog’s enterprise risk management processes are based on COSO’s
Enterprise Risk Management framework, and cover financial, operational,
market and organisational risks. By this delineation of risk control, all
sustainability and responsibility areas covered by Norske Skog’s Steering
Guidelines are also covered by its enterprise risk management processes and
is reported to the board of directors. The system is based on the management
teams in each business unit and in key corporate functions annually reporting
potential risk factors to the company’s risk management function, which in
turn provide a basis for the agenda of the corporate management meetings
and adequate follow-up measures. In addition, Norske Skog reports on
sustainability in accordance with CSRD. The review of the sustainability
statement is carried out by an independent and internationally recognised
audit firm, currently PwC. Further information on sustainability is provided in
the sustainability statement in the report of the board of directors
The internal control systems within the finance organisation primarily cover
the financial reporting structure and processes. Routines for internal control
over financial reporting are defined in Norske Skog’s internal control
documentation (Financial Reporting Manual, Financial Closing Manual and
Financial Closing Checklist). Responsibilities are clearly defined in terms of
execution, documentation, and control. As part of the continuous focus on
compliance, regular reviews of business processes, investments or other issues
are carried out. These compliance processes are carried out on the basis of risk
assessments and support the business in improving internal control and
achieving the set goals. The group also has a power of attorney structure
which describes and regulates financial empowerment to individual positions.
In addition, Norske Skog has implemented internal routines to ensure
continuous attention and efforts on maintaining high compliance standards
throughout the group. These internal routines are set out in Norske Skog’s
Continuous Compliance Program and include a number of compliance related
activities that shall be carried out over the course of a calendar year.
Name (i)
Committee memberships
Board meetings
attended
Audit committee
meetings attended
Remuneration committee
meetings attended
Arvid Grundekjøn
Audit committee and remuneration committee
10/10
6/6
1/1
Trine-Marie Hagen
Audit committee and remuneration committee
9/10
6/6
1/1
(i)
Please refer to the description in the board of directors’ section of the annual report for further information on the expertise, experience and independence of the members of the board of directors,
as well as the board members’ respective shareholdings in the company.
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
125
Norske Skog has clearly established channels and procedures for reporting
and handling instances of possible serious misconduct (whistleblowing). Such
channels are described on our website, intranet and in the Steering Guidelines.
It is the opinion of the board of directors that Norske Skog’s internal control
and systems for risk management are adequate and proportionate to the
nature and complexity of the company’s operations and financial situation.
Deviations from the Code: None.
11.
Remuneration of the board of directors
The remuneration of the board of directors is decided by the annual general
meeting on the basis of the nomination committee’s proposal. The committee
considers the level of responsibility, complexity and time consumption, as well
as the required expertise, for the board members. Proposals for annual
adjustments of the remuneration of the board of directors are based on
considerations to ensure that Norske Skog remains attractive and competitive
on the market for governing bodies’ competencies.
No board member has carried out specific tasks or commissions for the
company in addition to the directorship, and Norske Skog has not paid other
remuneration to any board member than the ordinary board remuneration.
Separate remuneration is set for the chair and members of the board of
directors and respective committees under the board of directors. The current
remuneration amounts are as follows:
1. The remuneration for the chair of the board is NOK 577
500 per year.
2. The remuneration for the other members of the board is NOK 325
500
per year.
3. The remuneration for the chair of the audit committee is NOK 130
000 per
year.
4. The remuneration for other members of the audit committee is
NOK 52
500 per year.
5. The remuneration for the chair of the remuneration committee is
NOK 31
500 per year.
6. The remuneration for other members of the remuneration committee is
NOK 21
000 per year.
7. Travel expenses in connection with board and committee meetings are
paid in accordance with the Norwegian Government’s Travel Allowance
Regulation.
The total remuneration for the board of directors in 2024, including committee
work, was NOK 2
002 000.
For further information, please refer to the report
on salary and other remuneration to leading personnel, which is available on
the
company’s
website,
www.norskeskog.com/sustainability/governance/
remuneration-of-leading-personnel
.
Deviations from the Code: None.
12.
Remuneration of executive personnel
The board of directors has adopted guidelines for determining salary and
other remuneration to leading personnel in accordance with Section 6-16 a of
the Public Limited Liability Companies Act and the Regulation on guidelines
and reporting on remuneration for leading personnel. In the preparation of the
guidelines and in any subsequent amendments to these, the focus of the
board of directors is to provide for that the guidelines are clear and easily
understandable, and that they contribute to the company’s commercial
strategy, long-term interests and financial viability. Furthermore, the
company’s arrangements in respect of salary and other remuneration shall be
simple and contribute to aligning the interests of leading personnel and
shareholders, with an absolute limit on performance-related remuneration.
The guidelines are presented for approval by the general meeting if significant
changes are made, and at least every fourth year. The current version of the
guidelines was approved by annual general meeting in 2021 and are available
on the company’s website, www.norskeskog.com/sustainability/governance/
remuneration-of-leading-personnel.
The CEO’s remuneration terms are reviewed and decided annually by the
board of directors following preparatory discussions in the board of directors’
remuneration committee. The remuneration consists of base salary, annual
performance bonus, pension, and other benefits. The decision on the CEO’s
remuneration takes into consideration the overall performance of the CEO and
the company, and the market development for CEO remuneration in companies
of similar complexity, size and industries. The remuneration of other leading
personnel is determined by the CEO, and the performance related remuneration
consist of the same elements as for the CEO.
Performance based elements are calculated on the basis of quantifiable
objective targets as well as on quantifiable targets falling within areas over
which the respective executives have a reasonable influence.
In addition, Norske Skog has established a long-term incentive program based
on synthetic stock options. The program mirrors the financial outcome of an
actual stock option with an initial “exercise price” (which corresponds to the
price per share set at the time of award of the options) and a mechanic to fix
a “fair market value” in the future when the options are exercised (3-5 years
following award of the options). The long-term incentive program is described
in the guidelines for determining salary and other remuneration to leading
personnel, which are available on the company’s website, www.norskeskog.
com/sustainability/governance/remuneration-of-leading-personnel.
The board of directors shall for each financial year provide for the preparation
of a report on salary and other remuneration to leading personnel in
accordance with Section 6-16 b of the Public Limited Liability Companies Act
and the Regulation on guidelines and reporting on remuneration for leading
personnel. The report is subject to an advisory vote by the annual general
meeting and is published on the company’s website, www.norskeskog.com,
following the annual general meeting. In addition, information about
remuneration of leading personnel is available in the financial statements, in
Note 10 Employee benefit expenses in the consolidated financial statements.
Deviations from the Code: None.
REPORT OF THE BOARD OF DIRECTORS
/
APPENDIX
126
I
Norske Skog
I
Annual report 2024
13.
Information and communications
The company has established guidelines for its reporting of financial and
other information based on openness and taking into account the requirement
of equal treatment in the securities market. These guidelines are set out in the
company’s Communication Policy and the Investor Relations Policy.
The company provides, timely and on a continuous basis, precise information
about the company and its operations to its shareholders, the Oslo Børs and
the securities market and the financial market in general. Such information is
published through the Oslo Børs’ information system and the company’s
website. Information is typically given in the form of annual reports, half-year
reports, quarterly reports, press releases, stock exchange notices and through
published investor presentations in accordance with what is deemed
appropriate and required at any given time. Financial reporting follows
International Financial Reporting Standards, and through open and proactive
communication with investors and financial markets, including through regular
presentations, Norske Skog ensures transparency and equality to facilitate
our stakeholders’ assessment of the company. The company furthermore
regularly provides information on its long-term potential, including strategies,
value drivers and risk factors. Information to Norske Skog’s investors will also
be published simultaneously through the Oslo Børs’ information system and/
or the company’s website.
The company publishes an annual, electronic financial calendar with an
overview of dates for important events, such as the annual general meeting,
interim financial reports, public presentations, and payment of dividends, if
applicable. The information is made available in English and Norwegian.
Unless there are applicable exemptions that is appropriate to utilise in the
specific situation, Norske Skog promptly discloses all inside information (as
defined in article 7 of the EU Market Abuse Regulation). In addition, Norske
Skog provides information about certain events, e.g. by the board of directors
and the general meeting concerning dividends, mergers/demergers or
changes to the share capital, the issuing of subscription rights, convertible
loans and all agreements of major importance that are entered into by Norske
Skog and related parties.
Separate guidelines have been implemented regarding handling of inside
information, and these follow from the instructions for handling of inside
information and the instructions for primary insiders. The rules of procedure
for the board of directors set out who in the board of directors that are entitled
to publicly speak on behalf of the company, and the Communication Policy
defines the responsibility of communications on behalf of the company in
various matters.
Deviations from the Code: None.
14.
Take-overs
The board of directors has established clear principles in the Corporate
Governance Policy for how it will act in the event of a take-over bid, including
that it will act in accordance with the Code and Norwegian law. The principles
emphasise the importance of equal treatment of existing shareholders. They
further warrant that the board of directors will ensure sufficient information in
time and content for the shareholders to assess a possible bid, including
issuing a statement to the shareholders with the board of directors’ assessment
of such bid, together with a valuation prepared by an independent expert. A
sale of a significant part of the company will require approval by the general
meeting. The board of directors will not without decision by the general
meeting attempt to hinder a take-over bid for the company.
Deviations from the Code: None.
15. Auditor
The auditor presents an annual audit plan, describing the auditor’s
understanding of the industry and significant risks, as well as the audit
approach to be applied. The auditor participates in audit committee meetings
when discussing the financial statements and other audit related matters. The
auditor furthermore attends board meetings at which the annual financial
statements are on the agenda and as otherwise requested. At such meetings,
the auditor is requested to report on any material changes in the company’s
accounting principles and key aspects of the audit, comment on any material
estimated accounting figures and report all material matters on which there
has been disagreement between the auditor and the executive management
of the company. The auditor annually confirms its independence in writing.
During 2024 and 2025, the auditor has participated in discussions with the
audit committee. Furthermore, the auditor has met with the board of directors
without the corporate management being present and reviewed the company’s
internal control procedures. The company has effective guidelines for the
ability of the auditor to perform non-audit services for the company upon
approval by the audit committee. The company informs the general meeting
about the auditor’s fees for audit and non-audit services.
The board of directors regularly assesses the quality and efficiency of the
work of the auditor.
Deviations from the Code: None.
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
127
The UN Sustainable Development Goals
are an integral part of our strategy
The UN Sustainable Development Goals (SDGs), adopted by world leaders in
September 2015, are a call for action for all countries and businesses to
promote prosperity while protecting the planet. Norske Skog supports all 17
SDGs but realise that some are more relevant to our business than others. We
believe that we can make the greatest difference and contribute positively
through the prioritised SDGs highlighted in the illustration. Norske Skog has in
2023 added one more prioritised SDG, which is number 6 regarding clean
water and sanitation, in addition to the already five prioritised SDGs in 2022.
Higher public awareness concerning clean water and despite effective
wastewater treatment plants, Norske Skog will face severe public attention in
occurrences of unwanted discharges or breach of wastewater emission
permits. We have summarized what the prioritised SDGs mean to us in one
sentence:
Norske Skog shall create value for people and society
in a responsible way, while promoting a sustainable
environment and principles of circular economy.
The 17 Sustainable Development Goals (SDGs) are important for Norske
Skog’s business operations for several key reasons:
• Alignment with global priorities: The SDGs represent a universal call to
action to end poverty, protect the planet, and ensure prosperity for all. By
aligning with the SDGs, Norske Skog demonstrates commitment to
addressing pressing global challenges and contributing to sustainable
development.
• Risk management: The SDGs highlight critical sustainability issues,
including climate change, social inequality, and environmental degradation.
By integrating the SDGs into our operations, our business units can identify
and mitigate risks associated with these challenges, safeguarding their
long-term viability and resilience.
• Enhanced reputation and brand value: Embracing the SDGs may enhance
our reputation and brand value by demonstrating our commitment to social
and environmental responsibility. Contributing actively to achieving the
SDGs may attract socially conscious consumers, investors, and partners,
gaining a competitive advantage in the marketplace.
• Innovation and market opportunities: The SDGs present significant
opportunities for innovation and market growth. Our ability to develop
sustainable products, services, and business models aligned with the SDGs
may drive customer loyalty and capture new revenue streams.
• Regulatory compliance and license to operate: Governments, regulatory
bodies, and international organisations increasingly incorporate the SDGs
into policy frameworks and reporting requirements. By integrating the
SDGs into our operations, we ensure compliance with relevant regulations,
maintain their social license to operate, and avoid reputational and legal
risks.
• Access to capital and investment: Investors are increasingly considering
environmental, social, and governance (ESG) factors when making
investment decisions. Aligning with the SDGs may attract sustainable
investment capital, access financing at favourable terms, and enhance their
appeal to socially responsible investors.
•
Supply chain resilience: Integrating the SDGs into supply chain management
practices enhance resilience, traceability, and transparency throughout the
value chain. Our business units may work with suppliers to promote ethical
sourcing, reduce environmental impact, and ensure social responsibility,
mitigating risks associated with supply chain disruptions and reputational
damage.
•
Employee engagement and talent attraction: We believe that embracing the
SDGs will foster employee engagement, satisfaction, and retention by
providing meaningful opportunities for employees to contribute to positive
social and environmental impact. Business units that prioritise sustainability
and social responsibility may also attract top talent aligned with our values
and mission.
The SDGs provide a comprehensive framework for our operations to address
sustainability challenges, manage risks, seize opportunities, and create long-
term value for stakeholders, society, and the planet. By integrating the SDGs
into our business strategy, we believe it will positively impact our operations,
foster innovation, and contribute to a more sustainable and prosperous future
for all.
Norske Skog business units have during the last 50 years been seeking best
environmental practice, and the reported figures show great progress in the
same period. The group has achieved significant results in collaboration with
stakeholders, national authorities, and employee initiatives. Norske Skog has
been nationally recognised for its labour practices and excellent work
environment. Norske Skog’s health and safety performance is outstanding
compared to the industry average for decades as result of tenaciously efforts.
Our operations must be based on sustainable sourcing by using certified wood
and chips documented through the Chain of Custody certifications and use of
recycled paper. Improved margins and reduced environmental impacts from
the value chain and the mills are achieved through effective resource and
energy management. We monitor activities to achieve sustainable products
and processes throughout the entire value chain.
In addition, Norske Skog continuously strives to maintain our status as the
most attractive industry partner for suppliers and customers. The corporate
strategy consists of three elements and gives us a well-defined foundation for
our work related to the prioritised SDGs:
•
Improve and optimise publication paper cash flows
•
Become a leading and independent European producer of renewable pack-
aging paper
•
Integrate vertically within the entire value chain
To make the SDG targets relevant for the board, management and the rest of
the group, the intention was to align and integrate the 6 prioritised sustainable
development goals to the resolved strategic goals already effectuated by the
board of directors.
The following six sustainable development goals that were selected to be
most relevant to the existing strategy:
REPORT OF THE BOARD OF DIRECTORS
/
APPENDIX
128
I
Norske Skog
I
Annual report 2024
SDG 3:
Good health and wellbeing (no change)
SDG 4:
Quality education (no change)
SDG 6:
Clean water and sanitation (new)
SDG 9:
Industry, innovation and infrastructure (no change)
SDG 12:
Responsible consumption and production (no change)
SDG 13:
Climate action (no change)
THE REASON AND ANALYSIS BEHIND THE SELECTION ARE:
SDG
Justification to prioritise the SDG
SDG
3
Good health and
wellbeing
Good health and wellbeing is not only a moral imperative but also a strategic decision that can benefit Norske Skog, its
stakeholders, and society as a whole. By investing in health and wellbeing initiatives, the company can create positive
impacts that extend beyond its operations and contribute to a healthier, more sustainable future.
SDG
4
Quality education
Investing in quality education enables Norske Skog to develop a skilled and knowledgeable workforce. By providing
employees with access to education and training programs, the company can enhance productivity, innovation, and overall
performance. By supporting educational initiatives, such as scholarships, vocational training, or school infrastructure
improvements, the company can help improve access to quality education for children, youth, and adults in these
communities. Quality education plays a critical role in succession planning and ensuring the long-term viability of Norske
Skog's business. By investing in employee training and development, the company can cultivate a pipeline of talent and
leadership capabilities to support future growth and continuity.
SDG
6
Water and clean
sanitation
Improve water quality by reducing pollution, minimising hazardous chemical release, and adopting sustainable water
management practices, is crucial for Norske Skog to promote environmental stewardship, comply with regulations, protect
public health, ensure sustainable operations, mitigate risks, and meet stakeholder expectations.
SDG
9
Industry,
innovation and
infrastructure
Industry, innovation, and infrastructure aligns with Norske Skog's commitment to sustainability, competitiveness, and
long-term business success. By investing in innovation and infrastructure, the company can drive positive social, economic,
and environmental impacts while positioning itself for future growth and resilience in a rapidly changing world.
SDG
12
Responsible
consumption and
production
Norske Skog works proactive to implement measures to improve production efficiency, optimise raw material usage, and
reduce energy consumption, leading to cost savings and enhanced competitiveness. Norske Skog adopts circular business
models, such as recycling paper, process residues, reusing by-products, and exploring alternative materials, contributing to
a more sustainable and resilient economy. Responsible consumption and production align with Norske Skog's sustainability
objectives, business values, and long-term viability. By adopting responsible practices, the company can drive positive
environmental and social impacts while maintaining competitiveness and fostering stakeholder trust and loyalty.
SDG
13
Climate action
Climate action is essential for Norske Skog to mitigate climate risks, reduce emissions, transition to renewable energy,
promote sustainable forestry practices, adapt to climate impacts, and meet stakeholder expectations, thereby contributing
to global efforts to address climate change and build a more sustainable future.
In the appendix, there is a matrix summarising our ambitions, targets and planned activities.
THESE 6 SDGS ARE AN INTEGRAL PART OF OUR BUSINESS STRATEGY:
Establish renewable
packaging
Improve and optimise
Intergrate vertically
Packaging paper
Publication paper
Up- and downstream
value chain
Ambition
Strategy
Prioritised SDGs
APPENDIX
/
REPORT OF THE BOARD OF DIRECTORS
4
Annual report 2024
I
Norske Skog
I
129
Photo: Carsten Dybevig
SKØYEN, 18 MARCH
2025
THE BOARD OF DIRECTORS OF NORSKE SKOG ASA
Arvid Grundekjøn
Chair
Trine-Marie Hagen
Board member
Christoffer Bull
Board member
Tone Wille
Board member
Geir Drangsland
CEO
Terje Sagbakken
Board member
Annual report 2024
I
Norske Skog
I
131
SIGNATURES
/
REPORT OF THE BOARD OF DIRECTORS
Norske Skog Bruck, packaging paper machine
Photo: Carsten Dybevig
Consolidated financial statements
Consolidated income statement
134
Consolidated statement of comprehensive income
134
Consolidated balance sheet
135
Consolidated statement of cash flows
136
Consolidated statement of changes in group equity
137
Notes to the consolidated financial statements
1
General information
138
2
Basis of preparation
138
3
Important accounting estimates and assumptions
139
4
Consideration of climate risk for the financial statements
139
5
Financial risk
140
6
Reporting segments
142
7
Revenue
144
8
Other operating income
145
9
Cost of materials
146
10
Employee benefit expenses
146
11
Other operating expenses
149
12
Derivatives and other fair value adjustment
149
13
Associated companies and joint ventures
150
14
Financial items
150
15
Income tax
150
16
Earnings and dividend per share
153
17
Intangible assets
154
18
Property, plant and equipment
155
19
Leases
158
20
Shares
159
21
Derivatives
160
22
Financial instruments
162
23
Receivables and other non-current assets
165
24
Inventories
165
25
Cash and cash equivalents
165
26
Discontinued operations
166
27
Pension and other employee obligations
170
28
Provisions
174
29
Interest-bearing liabilities
176
30
Trade and other payables, other current and non-current liabilities
178
31
Related parties
179
32
Events after the balance sheet date
179
Consolidated
financial statements
Annual report 2023
I
Norske Skog
I
133
CONSOLIDATED INCOME STATEMENT
RESTATED
NOK MILLION
NOTE
2024
2023
Operating revenue
7
Other operating income
8
Total operating income
Distribution costs
-1 005
-845
Cost of materials
9
-5 927
-5 863
Employee benefit expenses
10
-1 702
-1 768
Other operating expenses
11
-803
-1 019
Restructuring expenses
28
-16
-32
Depreciation
17, 18
-481
-464
Impairments
18
-121
-27
Derivatives and other fair value adjustments
12
-178
-605
Total operating expenses
-10 232
-10 623
Operating earnings
6
-60
Share of profit in associated companies and joint ventures
13
-65
-15
Financial income
14
Financial expense
14
-351
-297
Gains/(losses) on foreign currency
14
-175
-71
Profit/(loss) before income taxes
-566
Income taxes
15
-94
-110
Profit/(loss) after taxes
-661
Profit/(loss) from discontinued operations
26
-321
-54
Profit/(loss) for the period
-982
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
RESTATED
NOK MILLION
NOTE
2024
2023
Profit/(loss) after taxes
-661
Profit/(loss) from discontinued operations
26
-321
-54
Items that may be reclassified subsequently to profit or loss
Currency translation differences
Reclassified translation differences upon divestment of foreign operations
Total
Items that will not be reclassified subsequently to profit or loss
Remeasurements of post employment benefit obligations
-14
-8
Tax effect on remeasurements of post employment benefit obligations
Total
-13
-6
Other comprehensive income continuing operations
Other comprehensive income discontinued operations
26
-43
-57
Total other comprehensive income
Total comprehensive income
-777
Earnings per share from continuing operations
Basic earnings per share (NOK)
16
-7.79
Diluted earnings per share (NOK)
16
-7.79
Earnings per share
Basic earnings per share (NOK)
16
-11.57
Diluted earnings per share (NOK)
16
-11.57
CONSOLIDATED FINANCIAL STATEMENTS
134
I
Norske Skog
I
Annual report 2024
CONSOLIDATED BALANCE SHEET
NOK MILLION
NOTE
31.12.2024
31.12.2023
Assets
Deferred tax assets
15
Intangible assets
17
Property, plant and equipment
6, 18, 19
Investment in associated companies
13
Other non-current assets
23, 27
Total non-current assets
Inventories
6, 24
Trade and other receivables
6, 23
Other current assets
23
Cash and cash equivalents
5, 25
Total current assets excluding assets classified as held for sale
Assets held for sale
26
Total current assets
Total assets
Equity and liabilities
Paid-in equity
Other equity
-3 476
-2 700
Total equity
Employee benefit obligations
27
Deferred tax liability
15
Interest-bearing non-current liabilities
29
Other non-current liabilities
28, 30
Total non-current liabilities
Trade and other payables
30
Tax payable
15
Interest-bearing current liabilities
29
Other current liabilities
27, 28, 30
Total current liabilities excluding assets classified as held for sale
Liabilities relating to assets classified as held for sale
26
Total current liabilities
Total liabilities
Total equity and liabilities
SKØYEN, 18 MARCH
2025
THE BOARD OF DIRECTORS OF NORSKE SKOG ASA
Arvid Grundekjøn
Chair
Trine-Marie Hagen
Board member
Christoffer Bull
Board member
Tone Wille
Board member
Geir Drangsland
CEO
Terje Sagbakken
Board member
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
I
Norske Skog
I
135
CONSOLIDATED STATEMENT OF CASH FLOWS
NOK MILLION
NOTE
2024
2023
Cash generated from operations
6
Cash used in operations
-11 540
-11 156
Cash flow from currency hedges and financial items
-69
-25
Interest payments received
14
Interest payments made
14
-230
-211
Taxes paid
15
-598
Net cash flow from operating activities
1)
6
-15
Purchases of property, plant and equipment and intangible assets
6, 17, 18
-1 558
-3 084
Sales of property, plant and equipment and intangible assets
18
Proceeds from property damage insurance
8
Dividend received
13
Sales of shares in companies and other financial instruments
-91
Net cash flow from investing activities
-1 198
-2 689
New loans raised
29
Repayments of loans
29
-2 086
-346
Dividends paid
16
-57
Purchase of treasury shares
-415
Net cash flow from financing activities
-105
Foreign currency effects on cash and cash equivalents
Total change in cash and cash equivalents
-1 286
-187
Cash and cash equivalents at start of period
Cash and cash equivalents
Cash and cash equivalents included in assets held for sale
26
Cash and cash equivalents at end of period
25
1)
Reconciliation of net cash flow from operating activities
Profit/(loss) before income taxes from continuing operations
-566
Profit/(loss) before income taxes from discontinued operations
26
-321
-54
Change in working capital
-37
Change in restructuring provisions
28
-15
-16
Depreciation and impairments
18
Derivatives and other fair value adjustments
12
Gain and losses from divestment of business activities and property, plant and equipment
-57
Income from insurance compensation
8
-448
-122
Net financial items without cash effect
Taxes paid
15
-598
Change in pension obligations and other employee benefits
-35
-19
Adjustment for other items
Net cash flow from operating activities
-15
CONSOLIDATED FINANCIAL STATEMENTS
136
I
Norske Skog
I
Annual report 2024
Norske Skog Bruck, packaging paper machine
Photo: Carsten Dybevig
CONSOLIDATED STATEMENT OF CHANGES IN GROUP EQUITY
NOK MILLION
PAID-IN-
EQUITY
1)
OTHER PAID-IN
EQUITY
2)
TOTAL PAID-IN
EQUITY
RETAINED
EARNINGS
TOTAL
EQUITY
Equity 1 January 2023
-2 989
Treasury shares
3)
-38
-38
-377
-415
Profit/(loss) after tax
Other comprehensive income
Dividends paid
-57
-57
Equity 31 December 2023
-2 700
Profit/(loss) after tax
-982
-982
Other comprehensive income
Equity 31 December 2024
-3 476
1)
Paid-in equity consist of share capital NOK 339 million (84 838 235 shares with a nominal value of NOK 4.00) and share premium of NOK 6 272 million.
2)
Other paid-in equity arises from a de-recognition of debt in 2018.
3)
Following the share repurchase programme in 2023, in which Norske Skog ASA purchased 9 426 470 of its own shares, the shares were cancelled by capital reduction in 2024.
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
138
I
I
Notes to the consolidated financial
statements
General information
Packaging paper includes testliner and fluting and publication paper includes
newsprint and magazine paper. The annual production capacity of packaging
paper will be 0.8 million tonnes when fully ramped up during 2026-2027 and
the annual publication paper production capacity is 1.3 million tonnes
.
Packaging paper and publication paper are sold through sales offices and
agents. In addition to the traditional publication paper business and the new
packaging paper business.
The group had 1
771 employees at 31 December 2024 and the parent
company, Norske Skog ASA public limited liability company incorporated
in Norway Sjølyst
Basis of preparation
The consolidated financial statements comprise the financial statements of
Norske Skog ASA and its subsidiaries as at 31 December 2024. The
consolidated financial statements are prepared in accordance with IFRS®
Accounting Standards (IFRS Accounting Standards) as adopted by the
European Union (EU). The consolidated financial statements are presented in
English only. All amounts are presented in NOK million unless otherwise
stated. There may be some small differences in the summation of columns
and rows due to rounding. The corresponding amounts for prior year are in
parenthesis. The consolidated financial statements were authorised for issue
by the board of directors in Norske Skog ASA on 18 March 2025.
historical cost in all areas where there is no requirement to use fair value, as
modified by, available-for-sale financial assets and financial assets at fair
value through profit or loss. The policies have been consistently applied to all
periods presented, unless otherwise stated. They have been prepared under
The presentation of accounting policies are presented as part of the note
During 2024, Norske Skog initiated a concrete sales process for its remaining
operations in Australasia. Sale is expected to be completed in 2025. Norske
Skog Industries Australia Ltd with subsidiaries represented the segment
publication paper Australasia. On 31 December 2024, publication paper
Australasia was classified as a disposal group held for sale and as a
discontinued operation. With publication paper Australasia being classified
as discontinued operations, the segment is no longer presented in the
The financial statements of each of the group’s entities are prepared using
the local currency of the economic location in which the entity operates (the
“functional currency”). The consolidated financial statements are presented
in NOK, which is both the functional and presentational currency of the parent
company.
The table below shows the average monthly foreign exchange rates applied in
the income statement and the closing exchange rates applied in the balance
sheet for the most important currencies for the group.
INCOME STATEMENT | BALANCE SHEET | |||
2024 | 2023 | 31.12.2024 | 31.12.2023 | |
AUD | 7.09 | 7.02 | 7.03 | 6.91 |
EUR | 11.62 | 11.42 | 11.80 | 11.24 |
GBP | 13.74 | 13.14 | 14.22 | 12.93 |
USD | 10.75 | 10.56 | 11.35 | 10.17 |
b) Transactions and balances
Foreign currency transactions are translated into the entity’s functional
currency using the exchange rate prevailing on the date of the transaction.
Foreign exchange gains or losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at year-end exchange rates are recognised
in the income statement.
Exchange differences arising from the settlement of trade receivables/
payables and unrealised gains/losses on the same positions are recognised in
operating revenue/cost of materials respectively. Exchange differences
arising from the settlement of other items are recognised within financial
income/financial expenses.
Foreign exchange gains and losses that relate to borrowings and cash and
cash equivalents are presented in the income statement within financial
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
139
I
I
Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss.
c) Group companies
The results and financial position of all group entities which have a functional
currency different from the presentational currency are translated into the
presentational currency as follows:
i. Assets and liabilities for each balance sheet presented are translated at
the closing rate at the date of that balance sheet,
ii. Income and expenses for each income statement are translated at average
exchange rates on monthly basis,
iii. All resulting exchange differences are booked to comprehensive income
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities are booked as part of comprehensive income.
When a foreign operation is derecognized, such exchange differences are
booked out of comprehensive income and recognised in the income statement
NEW AND AMENDED INTERPRETATION AND STANDARDS ADOPTED
BY THE GROUP
a) New standards effective from 1 January 2024
Changes in standards and interpretations during 2024 has not had any
material impact on Norske Skog’s financial reporting.
b) New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and inter-
pretations which have been issued by the IASB that are effective in future
accounting periods that the group has decided not to adopt early.
The group does not expect the standards issued, but not yet effective, to have
Important accounting estimates and assumptions
The preparation of consolidated financial statements in conformity with IFRS
requires the use of accounting estimates and assumptions for the future. It
also requires management to exercise its judgment in the process of applying
the group’s accounting policies. Estimates and assumptions, which represent
a significant risk of a material adjustment in the carrying amount of assets and
liabilities during the coming financial year, are discussed below.
instruments
Norske Skog’s portfolio of energy contracts consists mainly of physical energy
contracts of which some contain embedded derivatives. The fair value of
embedded derivatives in physical contracts is influenced by price index
fluctuations.
Norske Skog has energy contracts in Norway that does not fulfil the criteria
for use of the “own use exemption”. Therefore, the contracts in whole are
treated as financial derivatives in the scope of IFRS 9 and measured at fair
value through profit or loss. The fair value of the contracts will vary dependent
on the market price for energy in Norway.
The fair value of financial instruments that are not traded in an active market
is determined by using valuation techniques. The group uses its judgment to
select methods and make assumptions that are mainly based on market
conditions existing at each balance sheet date. See Note 12 and Note 21 for
b) Recoverable amount of intangible assets and property, plant and
equipment (PPE)
The group performs impairment tests to assess whether there has been a
decline in the value of intangible assets and PPE if there are impairment
indicators present. These are written down to their recoverable amount when
the recoverable amount is lower than the carrying value of the asset. The
recoverable amount from assets or cash-generating units is determined by
calculating the higher of fair value less costs to sell and value in use. Value in
use is the present value of the future cash flows expected to be derived from
an asset or cash-generating unit. Calculation of value in use requires use of
estimates. See Note 18 for further information. The group conducts annual
reviews of the remaining economic life of PPE. An increase or decrease in the
remaining economic life will have an impact on future depreciation, as well as
affect the cash flow period for calculating value in use.
Deferred tax assets are recognised to the extent that it is probable that future
taxable profit will be available against which the deductible temporary
differences and unused tax losses can be utilised. For entities with a history of
recent tax losses, stronger evidence for utilisation is required when assessing
whether these assets should be recognized. See Note 15 for further
Several actuarial and economic assumptions are used in calculation of fair
value of pension liabilities. Changes in assumption used in the calculation
impact the estimated pension obligation. The assumptions are determined
locally for each individual pension plan and is normally reviewed annually. See
. Consideration of climate risk for the financial
statements
In preparing the financial statements, the board of directors have assessed
and considered the impact of climate change, particularly in the context of the
risks and opportunities identified in the Double Materiality Assessment in line
with the new EUDR requirements. The time horizons applied for the overall
assessment of risks and opportunities for the group is short term (< 1 year),
medium term (1-5 years) and long-term (> 5 years).
Norske Skog business units have during the last 50 years been seeking best
environmental practice and has one of the lowest emission levels compared to
industry averages.
The transformation to a larger, more diversified product portfolio with new
products will reduce the dependency on publication paper and thus reduce
the business and market risk. The current packaging production at Norske
Skog Bruck is based on renewable resources and the coming packaging
production at Norske Skog Golbey will also be based on renewable resources.
Production of publication and packaging paper resource intensive and
requires significant quantities of energy. The production process in general
has limited direct emission of fossil CO2. The goal is to continue to reduce
energy consumption in production, eliminate the use of fossil energy sources
and to optimise the use of process chemicals and transport. Our operations
are impacted by unstable energy markets and increasing carbon prices.
Norske Skog has included a reduction of greenhouse gas emissions from fossil
energy sources as a key part of our business strategy.
We have identified the following climate-related risks as the most significant:
•
Regulatory:
Norske Skog is subject to several regulatory requirements
relating to energy and emissions including the EU Emissions Trading
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
140
I
I
Scheme (ETS), which include both CO2 compensation schemes, and CO2
allowances. Due to the financial impact any changes in such regulations
may have on our business we monitor associated risks closely.
•
Physical:
The availability of sustainable and affordable biomass to produce
publication paper in Norway and Austria may be affected by longer-term
shifts in climate patterns in the future. Some of our mills are in areas where
drought/access to water and/or flooding might become a risk in the future
with a changing climate.
•
Market:
Shifting consumer preferences and trends may impact demand for
Norske Skog products made from biomass. This can impact market
development for publication paper, recycled containerboard, and related
capacity adjustments in the industry.
•
Reputational:
Compliance with environmental regulations and standards is
crucial for avoiding fines, legal fees, and reputational damage. Norske
Skog’s ability to manage regulatory risks may affect its financial stability
and long-term viability.
The financial statements may be impacted by climate related risk in the future
but are not considered to be key areas of judgement or sources of estimation
uncertainty in the current financial year. The effects may be related to:
•
CO2 compensation and CO2 allowances may be cut back and increase our
cost of production. This may affect the value of our main assets in Europe if
the increase in cost cannot be recovered in the prices of our products.
Implementation of the EU Carbon Border Adjustment Mechanism (CBAM)
coming into effect may, if effective, increase the probability of recovery of
any increased cost of carbon emissions.
• Impairment of our property, plant and equipment due to a change in the
profitability from cost increases for carbon emissions and price of energy or
due to shortened useful life due to physical risks that reduce the appetite
for reinvestment, thereby reducing the time horizon for certain plants. See
also Note 9 and 18.
Whilst there is currently no short-term impact expected from changes in
climate, the board of directors are aware of the risk changes in climate could
pose to the operations and the judgement and estimates made in preparation
Financial risk
FINANCIAL RISK MANAGEMENT
The main risk exposures for the group are linked to uncertainty to price and
volume developments for publication and packaging paper and the costs of
key input factors such as energy and fibre. Weaker demand than expected for
the group’s products can affect profitability and associated cash flows in a
negative way. The group operates in a multicurrency environment, where the
main currencies of importance for the business are EUR, GBP and USD.
Currency movements between these currencies, as well as against NOK, may
influence demand as well as product prices and costs of key input factors.
Liquidity is ensured by maintaining sufficient cash balances and credit lines
linked to trade receivables facilities. Norske Skog continuously assess the
most competitive funding sources for the group.
Uncertainty about future changes in the broader economic climate
development and more adverse developments than expected may influence
all of the above and future results. The factors are an inherent uncertainty
when the board makes its assessments.
The group has one cash pool for the European entities and the cash pool is
legally placed in Norske Skog ASA.
FINANCIAL RISK FACTORS
The group is exposed to various financial risk factors through the group’s
operating activities, including market risk (interest rate risk, currency risk and
commodity risk), liquidity risk and credit risk. The group seeks to minimise
losses and volatility on the group’s earnings caused by adverse market
movements. Moreover, the group monitors and manages financial risk based
on internal policies and standards set forth by corporate management and
approved by the board of directors. These written policies provide principles
for the overall risk management as well as standards for managing currency
risk, interest rate risk, credit risk, liquidity risk and the use of financial
derivatives and non-derivative financial instruments.
a) Interest rate risk
Interest rate risk is related to the financial risk related to changes in market
interest rates. Interest rate risk management is carried out to secure the
lowest possible interest rate payments over time within acceptable risk limits.
This includes having a portfolio of loans in the group with both floating interest
and fixed interest rates. The group may also use derivatives to manage the
interest rate risk in the group.
| 31.12.2024 |
31.12.2023 |
|||||
INTEREST- |
||||||
BEARING ASSETS |
||||||
AND LIABILITIES |
FLOATING |
FIXED |
TOTAL |
FLOATING |
FIXED |
TOTAL |
Interest-bearing |
||||||
liabilities |
4 521 |
725 |
5 246 |
4 277 |
776 |
5 053 |
Interest-bearing |
||||||
assets |
-1 127 |
0 |
-1 127 |
-2 463 |
0 |
-2 463 |
Net exposure |
3 394 |
725 |
4 119 |
1 814 |
776 |
2 590 |
All amounts presented in the table are notional amounts. Total interest-
bearing liabilities will therefore differ from booked amounts due to bond
discounts/premiums. Floating rate exposure is calculated without accounting
for potential future refinancing.
Interest rate sensitivity analysis
In accordance with IFRS 7 Financial instruments - disclosures, an interest rate
sensitivity analysis is presented showing the effects of changes in market
interest rates on interest costs and interest income, as well as equity where
applicable. The analysis is based on the following assumptions:
Floating rate debt is exposed to changes in market interest rates, i.e. the
interest costs or interest income associated with such instruments will
fluctuate based on changes in market rates. The impact of changes is
presented in the sensitivity analysis. The analysis assumes that all other
factors are kept constant.
Changes in market rates on fixed rate debt will only affect the income
statement if they are measured at fair value. Thus, fixed rate instruments
recognised at amortised cost will not represent an interest rate risk as defined
by IFRS 7. Such instruments will therefore not have any impact on the
sensitivity analysis.
Results are presented net of tax, using the Norwegian statutory tax rate of
22%.
The interest rate sensitivity analysis is based on a parallel shift in the yield
curve for each relevant currency to which Norske Skog is exposed.
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
141
I
I
PROFIT/(LOSS) AFTER TAX |
||
INTEREST RATE |
2024 |
2023 |
50 basis point downward parallel shift in the yield curve |
16 |
10 |
50 basis point upward parallel shift in the yield curve |
-16 |
-10 |
With a 50-basis point upward change in interest rate the annual interest
payments will increase with NOK 16 million (NOK 19 million). The upward
change will have a positive change in the value of derivatives carried at fair
value through profit or loss with NOK 9 million (NOK 0 million).
b) Currency risk
The group has revenues and expenses in various currencies. The major
currencies are NOK, EUR, GBP, USD and AUD. Transaction risk arises because
the group has a different currency split on income and expenses. In 2024
Norske Skog has hedged some of its cash flows in foreign currencies. The
result of the hedging is included in gains/(losses) on foreign currency in the
income statement. The cash flow hedges resulted in a realised loss of
NOK 3 million in 2024 (NOK 38 million). At year end 2024 Norske Skog had
Translation risk - net investment hedge
The group does not have any net investment hedges.
The following foreign exchange sensitivity analysis calculates the sensitivity
of derivatives and non-derivative financial instruments on net profit and
equity, based on a defined appreciation/depreciation of NOK against relevant
currencies, keeping all other variables constant. The analysis is based on
several assumptions, including:
• Norske Skog as a group comprises entities with different functional
currencies. Derivative and non-derivative financial instruments of a
monetary nature, denominated in currencies different from the functional
currency of the entity, create foreign exchange rate exposure on the
consolidated income statement.
•
Financial instruments denominated in the functional currency of the entity
have no currency risk and will therefore not be applicable to this analysis.
Furthermore, the foreign currency exposure of translating financial accounts
of subsidiaries into the group’s presentational currency is not part of this
analysis.
•
Sensitivity on commodity contracts and embedded derivatives is presented
separately under “commodity risk”.
•
Other currency derivatives that are recognised at fair value through profit
and loss will affect the income statement.
• Other non-derivative financial instruments accounted for in the analysis
comprise cash and cash equivalents, trade receivables. trade payables and
borrowings denominated in currencies different from the functional
currency of the entity.
•
Correlation effects between currencies are not taken into account. Figures
are presented net of tax.
NOK GAIN/(LOSS) FROM 10% |
||
APPRECIATION ON FOREIGN |
||
CURRENCY EXCHANGE RATES |
||
CURRENCIES AGAINST TO WHICH THE GROUP HAS |
||
SIGNIFICANT EXPOSURE |
31.12.2024 |
31.12.2023 |
EUR |
12 |
-87 |
GBP |
-70 |
-37 |
USD |
-31 |
-25 |
Other |
4 |
6 |
Total |
-85 |
-143 |
The effect of the sensitivity analysis on the income statement is mainly caused
by foreign exchange forward contract in GBP, USD and EUR for which there is
c) Commodity risk
A part of the commodity demand is secured through long-term contracts
limiting the exposure to changes in commodity prices. Some of the group
purchases contracts are defined as financial instruments, or contain embedded
derivatives, which fall within the scope of IFRS 9. These financial instruments
and embedded derivatives are measured in the balance sheet at fair value with
value changes recognised through profit or loss. The embedded derivatives
can be in physical commodity contracts and may comprise a wide variety of
derivative characteristics.
Changes in fair value of commodity contracts reflect unrealised gains or
losses and are calculated as the difference between market price and contract
price, discounted to present value. Some commodity contracts are bilateral
contracts or embedded derivatives in bilateral contracts, for which there
exists no active market. Therefore, valuation techniques are used with as
much use as possible of available market information. Techniques that reflect
how the market could be expected to price instruments are used in non-
observable markets. The fair value of embedded derivatives in physical
contracts depends on currency fluctuations.
Sensitivity analysis for commodity contracts
When calculating fair value of future and forward contracts, cash flows are
assumed to occur in the middle of the period. Currency effects arise when
contract values nominated in foreign currencies are translated into the
reporting currency.
NET PROFIT |
NET PROFIT |
|||
COMMODITY CONTRACTS |
FAIR VALUE |
AFTER TAX |
AFTER TAX |
|
WITHIN THE SCOPE OF IFRS 9 |
31.12.2024 |
- INCREASE |
- DECREASE |
|
Energy price |
change 10% |
-188 |
114 |
-114 |
Currency |
change 10% |
-188 |
-39 |
39 |
Price index |
change 2.5% |
-188 |
0 |
0 |
Sensitivity analysis for embedded derivatives
Embedded derivatives can be features in physical commodity contracts. The
most common embedded derivatives are currency.
NET PROFIT |
NET PROFIT |
|||
FAIR VALUE |
AFTER TAX |
AFTER TAX |
||
EMBEDDED DERIVATIVES |
31.12.2024 |
- INCREASE |
- DECREASE |
|
Currency |
change 10% |
-126 |
-108 |
108 |
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
142
I
I
The group is exposed to liquidity risk in a scenario when the group’s cash flow
from operating activities is not sufficient to cover payments of financial
liabilities. To effectively mitigate liquidity risk, Norske Skog’s liquidity risk
management strategy focuses on maintaining sufficient cash, as well as
securing available financing through committed credit facilities. Managing
liquidity risk is centralised on a group level.
To uncover future liquidity risk, the group forecasts both short- and long-term
cash flows. Cash flow forecasts include cash flows from operations,
investments, financing activities and financial instruments. The group had
cash and cash equivalents of NOK 1
127 million on 31 December 2024
(NOK 2
463 million). Restricted bank deposits amounted to NOK 255 million
on 31 December 2024 (NOK 643 million).
Scheduled repayments in Note 29 shows contractual maturities of non-
derivative financial liabilities. All amounts disclosed in the table are
undiscounted cash flows. Furthermore, amounts denominated in foreign
currency are translated to NOK using closing rates on 31 December 2024.
These amounts consist of trade payables and interest payments. Variable rate
interest cash flows are calculated using the forward yield curve. Projected
interest payments are based on the maturity schedule on 31 December 2024
without accounting for forecasted refinancing and/or other changes in the
liability portfolio. All other cash flows are based on the group’s positions held
on 31 December 2024.
SCHEDULED REPAYMENTS OF | ||||
FINANCIAL DEBT AND | OTHER | |||
INTEREST AT 31.12.2024 | INTEREST | LOANS | BONDS | TOTAL |
Not later than one year | 322 | 749 | 0 | 1 071 |
Later than one year and not | ||||
later than five years | 810 | 2 501 | 1 400 | 4 711 |
Later than five years | 29 | 529 | 0 | 558 |
Total | 1 161 | 3 779 | 1 400 | 6 340 |
Trade payables | 1 282 |
SCHEDULED REPAYMENTS OF | ||||
FINANCIAL DEBT AND | OTHER | |||
INTEREST AT 31.12.2023 | INTEREST | LOANS | BONDS | TOTAL |
Not later than one year | 314 | 483 | 0 | 797 |
Later than one year and not | ||||
later than five years | 549 | 2 204 | 1 530 | 4 283 |
Later than five years | 54 | 761 | 0 | 815 |
Total | 917 | 3 448 | 1 530 | 5 895 |
Trade payables | 1 035 |
The group makes a credit evaluation of all financial trading counterparties.
Based on the evaluation, a limit on credit exposure is established for each
counterparty. These limits are monitored continuously in relation to unrealised
profit on financial instruments and placements. The maximum credit risk
arising from financial instruments is represented by the carrying amount of
financial assets in the balance sheet.
The group procedures for credit management of European trade receivables,
and the authority to approve credit lines to customers of European business
units, are regulated by a policy drafted and maintained by a centralised credit
management function at the head office. The operational responsibility to act
Reporting segments
The activities in the group are separated into three reporting segments which
is in line with how the group is managed internally. Norske Skog’s chief
operating decision maker is corporate management, who distribute resources
and assess performance of the group’s operating segments. Norske Skog has
an integrated strategy to maximise profits for each segment. The optimisation
is carried out through co-ordinated sales and operational planning within each
segment.
Accounting policies applied in the segment reporting
Recognition, measurement and classification are applied consistently in
external and internal reporting.
Performance measurement
The group assesses the performance of the reporting segments based on a
measure of EBITDA. These items exclude the effects of expenditure not
deemed to be part of the regular operating activities of the segment, such as
restructuring expenses, impairments, changes in fair value of certain energy
contracts, embedded derivatives in energy contracts. See Alternative
Performance Measures (APM) for further information related to performance
measurement other than financial measure defined or specific in the IFRS
Accounting standards.
Intercompany transactions
The revenue reported per reporting segment includes both sales to external
parties and sales to other segments. Intra-segment sales are eliminated in the
consolidated financial statements. All sales transactions between reporting
segments are carried out at arm’s length prices as if sold or transferred to
independent third parties.
REPORTABLE SEGMENTS
Norske Skog group is a producer of publication paper and packaging paper.
Publication paper includes newsprint and magazine paper. Newsprint
encompasses standard newsprint and other paper qualities used in news-
papers, inserts, catalogues, etc. These paper qualities, measured in grammes
per square meter, will normally be in the range 40-52 g/m2. Magazine paper
encompasses the paper qualities super calendared (SC) and lightweight
coated (LWC). These paper qualities are used in magazines, periodicals,
catalogues and brochures. From 2023 Norske Skog group is also a producer
of recycled containerboard, mainly the grades testliner 3 and fluting. Testliner
3 and fluting are used by corrugators as outer and inner layers of packaging
material and will normally be in the range of 90-170 g/m2 for testliner 3 and
70-170 g/m2 for fluting.
Publication paper Europe
Publication paper Europe encompasses production and sale of newsprint and
magazine paper in Europe. All the four European mills and the regional sales
organisations are included in the reporting segment.
Packaging paper
Packaging paper was established as a new reporting segment in 2023. The
segment encompasses production and sale of recycled containerboard in
Europe. Norske Skog Bruck PM3 is included in the segment and started its
production at the end of the first quarter 2023 with sale to customers from
second quarter. During 2025 PM1 at Norske Skog Golbey will be included in
the packaging paper segment.
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
143
I
I
Other activities
Activities in the group that do not fall into the reporting segments publication
paper Europe or packaging paper are presented under other activities. This
includes corporate functions and sourcing solutions.
Publication paper Australasia has in 2024 been classified as a disposal group
held for sale and as discontinued operations and is therefore no longer
REVENUES AND EXPENSES NOT ALLOCATED TO OPERATING
SEGMENTS
Norske Skog manages non-current debt, taxes and cash positions on a group
basis. Consequently, financial items and tax expenses are presented only for
PUBLICATION | NORSKE SKOG | ||||
2024 | PAPER EUROPE | PACKAGING PAPER | OTHER ACTIVITIES | ELIMINATIONS | GROUP |
Operating revenue | 8 359 | 721 | 802 | -649 | 9 233 |
Other operating income | 807 | 130 | 4 | -2 | 939 |
Total operating income | 9 166 | 851 | 806 | -651 | 10 173 |
Distribution costs | -904 | -101 | 0 | 0 | -1 005 |
Cost of materials | -5 274 | -527 | -671 | 544 | -5 927 |
Employee benefit expenses | -1 446 | -156 | -101 | 2 | -1 702 |
Other operating expenses | -773 | -61 | -73 | 104 | -803 |
EBITDA | 769 | 6 | -39 | 0 | 736 |
Restructuring expenses | -12 | 0 | -4 | 0 | -16 |
Depreciation | -354 | -118 | -8 | 0 | -481 |
Impairments | -121 | 0 | 0 | 0 | -121 |
Derivatives and other fair value adjustments | -170 | 0 | -8 | 0 | -178 |
Operating earnings | 112 | -113 | -59 | 0 | -60 |
Share of operating revenue from external parties (%) | 100 | 100 | 26 | 100 |
PUBLICATION | NORSKE SKOG | ||||
2023 | PAPER EUROPE | PACKAGING PAPER | OTHER ACTIVITIES | ELIMINATIONS | GROUP |
Operating revenue | 9 591 | 246 | 428 | -373 | 9 891 |
Other operating income | 1 550 | 116 | 6 | -6 | 1 666 |
Total operating income | 11 140 | 362 | 434 | -379 | 11 557 |
Distribution costs | -804 | -40 | 0 | 0 | -845 |
Cost of materials | -5 579 | -248 | -281 | 245 | -5 863 |
Employee benefit expenses | -1 500 | -157 | -117 | 6 | -1 768 |
Other operating expenses | -1 006 | -64 | -77 | 129 | -1 019 |
EBITDA | 2 250 | -147 | -41 | 0 | 2 062 |
Restructuring expenses | -5 | 0 | -28 | 0 | -32 |
Depreciation | -379 | -77 | -9 | 0 | -464 |
Impairments | -30 | 3 | 0 | 0 | -27 |
Derivatives and other fair value adjustments | -605 | 0 | 0 | 0 | -605 |
Operating earnings | 1 232 | -221 | -77 | 0 | 934 |
Share of operating revenue from external parties (%) | 100 | 99 | 15 | 100 |
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
144
I
I
PROPERTY, PLANT AND EQUIPMENT PER GEOGRAPHICAL REGION
The table below shows property, plant and equipment allocated to Norske
Skog’s country of domicile and other regions in which the group holds assets.
The allocation is based on the location of the production facilities.
31.12.2024 |
31.12.2023 |
|
Europe |
9 723 |
8 385 |
Australasia |
0 |
182 |
Total |
9 723 |
8 567 |
CASH GENERATED FROM OPERATIONS
2024 | 2023 | |
Publication paper Europe | 8 847 | 11 503 |
Packaging paper | 846 | 331 |
Other activities | 775 | 398 |
Discontinued operation | 1 922 | 1 966 |
Eliminations | -651 | -379 |
Total | 11 740 | 13 819 |
NET CASH FLOW FROM OPERATING ACTIVITIES
2024 | 2023 | |
Publication paper Europe | 228 | 3 045 |
Packaging paper | 75 | -143 |
Other activities | -76 | -210 |
Discontinued operation | -28 | -27 |
Total cash flow allocated to segments | 200 | 2 664 |
Net financial items | -216 | -138 |
Taxes paid | 1 | -598 |
Net cash flow from operating activities | -15 | 1 928 |
PURCHASES OF PROPERTY, PLANT AND EQUIPMENT AND
INTANGIBLE ASSETS
2024 | 2023 | |
Publication paper Europe | 430 | 655 |
Packaging paper | 1 082 | 2 383 |
Other activities | 13 | 5 |
Discontinued operation | 33 | 42 |
Total | 1 558 | 3 084 |
Inventories include raw materials, work in progress, finished goods and other
production materials.
31.12.2024 |
31.12.2023 |
|
Publication paper Europe |
1 301 |
1 051 |
Packaging paper |
70 |
54 |
Other activities |
20 |
13 |
Discontinued operation |
0 |
242 |
Total |
1 390 |
1 360 |
TRADE RECEIVABLES
31.12.2024 | 31.12.2023 | |
Publication paper Europe | 402 | 298 |
Packaging paper | 9 | 11 |
Other activities | 63 | 47 |
Discontinued operation | 0 | 231 |
Total | 474 | 588 |
Provision for bad debt | -52 | -50 |
Total | 422 | 538 |
Revenue
Revenue from contracts with customers is recognised when control of the
goods or services are transferred to the customer at an amount that reflects
the consideration to which the group expects to be entitled in exchange for
those goods or services.
The timing of revenue recognition is based on the delivery terms for the
different markets and customers, and where revenue is recognised at a point
in time. It is important to make sure that all performance obligations are
fulfilled, and the customer can benefit on its own. If the customer cannot
obtain control of the good or service, the revenue will not be recognized.
Revenue in the group companies consist almost exclusively of sale of goods.
Contracts with customers are recognized upon satisfaction of a performance
obligation by transferring the promised goods to a customer and measured at
point in time for the sale of products to the customer. Sale of publication
papers, packaging paper and other products are non-interest bearing
receivables, generally on terms of 20-60 days.
Norske Skog’s terms of delivery are based on Incoterms 2020, which are the
official rules for the interpretation of trade terms issued by the International
Chamber of Commerce. The timing of revenue recognition is largely dependent
on these delivery terms: The sale of publication paper and packaging paper in
Norske Skog is mainly based on delivery terms C and D, with 8% (8%) and 83%
(82%) respectively.
C-terms, where the group arranges and pays for the external transport of the
goods, but the group no longer bears any responsibility for the goods once
they have been handed over to the transporter in accordance with the terms
of the contract. The point of sale is when the goods are handed over to the
transporter contracted by the seller.
D-terms, where the group delivers the goods to the purchaser at the agreed
destination, usually the purchaser’s premises. The point of sale is when the
goods are delivered to the purchaser. If the customer is invoiced before
delivery of the goods purchased, revenue is only recognized if the customer
has taken over a significant part of the gain and loss potential relating to the
MAJOR CUSTOMERS
No customer represents 10% or more of the operating revenue.
Norske Skog had a total sales volume of newsprint and magazine paper of
1 115 000
tonnes in 2024 (1
040 000),
of which sales to the group’s largest
customer constituted approximately 58
000 (65
000) tonnes. Total sales
volume in 2024 of newsprint and magazine paper to the five largest customers
in Europe amounted to approximately 207
000 (201
000) tonnes.
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
145
I
I
Total sales volume of recycled containerboard was 162
000 tonnes in 2024
(65 000).
Total sales volume in 2024 of recycled containerboard to the five
largest customers amounted to 59
000 tonnes (21
000).
The allocation of operating revenue by market is based on customer location.
2024 |
2023 |
|
Norway |
440 |
648 |
Rest of Europe |
8 209 |
8 697 |
North America |
217 |
170 |
Asia |
306 |
361 |
Africa |
61 |
16 |
Total |
9 233 |
9 891 |
Other operating income
Government grants
Government grants are recognised as income or as a cost reduction, dependent
on the basis for which the government grant has been awarded. Recognition will
be on a systematic basis over the period they have been granted for, or on a
systematic basis to the costs that they are intended to compensate for.
Government grants in the form of compensation for losses which have already
been incurred, or in the form of direct financial support, which is not directly
related to future costs, are recognised as income in the same period as they
are awarded.
Government grants related to assets are presented in the balance sheet as
deferred income or as a reduction of the cost price of the assets the grant relates
to. The grant is then recognised in the income statement either through future
CO2 allowances
The EU Emissions Trading System (EU ETS) was established in 2005 and is a
cap-and-trade mechanism that limits greenhouse gas emissions from key
sectors by setting a cap on total emissions and allowing companies to buy,
sell, or trade emission allowances. The pulp and paper industry is classified as
being at risk of carbon leakage, meaning it faces significant carbon costs and
international competition that could incentivize relocation to countries with
less stringent climate policies. To address this risk, operators in the pulp and
paper industry are allocated free CO2 allowances based on a carbon intensity
benchmark per tonne paper produced.
Free allowances are used to offset emission liabilities and are accounted for at
nil value upon allocation. Entities with a surplus of allowances meaning their
verified emissions are lower than their allocated free quotas can sell the excess
allowances on the carbon market. The expected revenue from these sales is
accrued monthly as a function of the paper production. At the end of each
month, the value of these allowances is remeasured at prevailing market prices,
ensuring financial statements reflect current carbon market conditions.
If an entity is in a net deficit of allowances, a provision for the required additional
allowances is recorded monthly at market value to reflect the cost of compliance.
Consumption of CO2 allowances is included in cost of materials (see Note 9).
Norske Skog received 274
000 CO2 allowances in 2024 (290
000) and sold
approximately 451
000 (210
000). Sold CO2 quotas include also CO2 quotas
from prior year in addition to quotas purchased during the year. EUs ETS
system currently covers the period 2021 to 2025. Norske Skog has received
written notice from the Norwegian Environment Agency stating that the
Norwegian mills Norske Skog Saugbrugs and Norske Skog Skogn will not be
included in the EUs ETS system from 2026 to 2030.
CO2 compensation
CO2 compensation is an arrangement provided to industries at risk of carbon
leakage that face higher electricity costs due to the EU carbon pricing
mechanism. Since power producers pass on the cost of EU ETS allowances to
electricity prices, energy-intensive industries receive compensation to prevent
relocation of production to countries with weaker climate policies. This is
included as reduction in energy cost and described in Note 9.
OTHER OPERATING INCOME
2024 | 2023 | |
Public subsidies and grants | 9 | 90 |
Gate fee | 125 | 112 |
Gain on sales of non-current assets | 3 | 6 |
Gain from sale of CO2 allowances | 222 | 229 |
Insurance settlement | 458 | 1 090 |
Other | 123 | 138 |
Total | 939 | 1 666 |
Public subsidies and grants in 2024 relates mainly to conversion projects in
Norske Skog Bruck and Norske Skog Golbey. In 2023 public subsidies and
grants consisted of approximately NOK 80 million in CO2 compensation for
2022 for Norske Skog Bruck that was recognised in 2023.
Other for 2024 and 2023 consist mainly of income from sale of steam, sludge,
grid and real estate rental.
Insurance settlement
On 27 April 2023 Norske Skog Saugbrugs was impacted by a rockslide that
destroyed parts of the building and damaged machinery and equipment
related to PM6. The damages to the building and infrastructure were extensive
and PM6 has been stopped from the time of the impact.
Norske Skog Saugbrugs is covered for both property damage and business
interruption as part of its group insurance program.
Work has been carried out to secure the site from further rockslide and
reinstate the building. The costs to secure rock formations and property
damage to building structures and cost of reinstatement of these will be
covered by Norske Skog Saugbrugs but fully reimbursed by the insurers.
An aggregate insurance settlement of NOK 448 million has been recognized
in other operating income in 2024 (NOK 1
090 million).
All of the NOK 448 million recognized in 2024 was related to property damage
(NOK 122 million). In 2023 NOK 850 million was recognized related to
business interruption and NOK 118 million recognized related to clean-up.
Business interruption was recognised in the financial statements for 2023 for
the full coverage period of 18 months as the amount was finally agreed and no
conditions were attached to the settlement.
NOK 2 million is expensed in other operating expenses (NOK 143 million).
On 31 January 2025 a settlement agreement was reached regarding all
remaining compensation related to the rockslide at Norske Skog Saugbrugs.
The settlement amounts to NOK 540 million. See further description in Note 32.
In addition NOK 10 million has been recognised as part of an insurance
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
146
I
I
Cost of materials
Cost of material are accounted for as they are consumed as part of the
production of products. Change in inventory reflects the cost of goods sold in
CO2 compensation
CO2 compensation is an arrangement provided to industries at risk of carbon
leakage that face higher electricity costs due to the EU carbon pricing
mechanism. Since power producers pass on the cost of EU ETS allowances to
electricity prices, energy-intensive industries receive compensation to prevent
relocation of production to countries with weaker climate policies. CO2
compensation covers a defined period but may be changed at the discretion
of the government as any compensation is decided on country level. Norske
Skog receives recurring CO2 compensation in Norway and France. The
compensation is dependent on energy consumption and average CO2 market
price in the previous year. As the production and earned CO2 compensation is
quite stable throughout the year, this is accrued for monthly in the year before
it is received. CO2 compensation is recognized as a reduction of energy cost
as the element of energy cost it compensates is consumed and incurred.
In 2024 the Norwegian government entered into an agreement with unions
and trade organisations regarding a new framework for the Norwegian CO2
compensation. The amended regulation applies for the period 2024 to 2030.
The agreement includes removing the price floor that previously existed in
addition to implementing at funding cap of NOK 7 billion and a requirement
that the companies eligible to the compensation spend 40 percent of the
compensation on climate- and energy initiatives. Norske Skog’s CO2
compensation is dependent on the production for all the companies eligible to
the CO2 compensation and Norske Skog recognises estimated entitled CO2
compensation as earned based on the approved regulation and expected
compensation level in relation to energy consumed. Application and payment
of compensation is to be done the first few months in the year following the
year of consumption of electricity.
The amount recognised for CO2 compensation for 2024 is NOK 478 million
(NOK 411 million) and are recorded as a reduction of energy costs in the line
cost of materials. An amount of NOK 140 million of the compensation recog-
nised for 2024 is contingent of Norske Skog to complete initiatives to reduce
CO2 emissions or improve energy efficiency for the equivalent amount.
CO2 allowances
Allocation of free CO2 quotas are based on the annual production. The free
quotas are used to settle liabilities arising from emission. If an entity is net
deficit of allowances (emissions exceed CO2 allowances received) provision
for quotas that needs to be purchased is done monthly as the production the
quotas is a function of is quite stable. At each month this is remeasured at
market value. Consumption of CO2 allowances in included in energy within
cost of materials. See Note 8 for further information.
COST OF MATERIALS
2024 | 2023 | |
Fibre | 3 023 | 2 209 |
Chemicals and additives | 917 | 828 |
Energy | 1 489 | 2 071 |
Other production material | 585 | 565 |
Change in inventory | -86 | 190 |
Total | 5 927 | 5 863 |
Employee benefit expenses
Bonus arrangements
The group accrues for bonus arrangements when there exists a contractual
obligation, or past practice has created a constructive obligation.
Norske Skog has a long-term incentive programme which falls within the
scope of IFRS 2 Share-based payments. The long-term incentive programme
is a cash-settled share-based programme in which the entity acquires services
by incurring a liability to transfer cash to the employee for those services for
amounts that are based on the price of the shares in the company. The
ultimate cost of a cash-settled share-based transaction is the actual cash paid
to the counterparty, which will be the fair value at settlement date.
The periodic determination of this liability is at each reporting date between
grant and settlement the fair value of the award. The fair value of the award is
determined in accordance with the specific requirements in IFRS 2. During the
vesting period, the liability recognised at each reporting date is the fair value
of the award at that date multiplied by the expired portion of the vesting
period. All changes in the liability are recognised in profit or loss. The fair value
of the liability is determined by applying an option pricing model, considering
the terms and conditions on which the cash-settled transaction was granted,
EMPLOYEE BENEFIT EXPENSES
NOTE | 2024 | 2023 | |
Salaries including holiday pay | 1 282 | 1 337 | |
Social security contributions | 346 | 362 | |
Pension and other long term employee | |||
benefits | 27 | 49 | 43 |
Other employee benefit expenses | 25 | 26 | |
Total | 1 702 | 1 768 |
NUMBER OF EMPLOYEES
2024 | 2023 | ||
Europe | 1 748 | 1 828 | |
- | Corporate functions | 23 | 26 |
Total | 1 771 | 1 859 |
Pursuant to 6-16 (b) in the Public Limited Liability Companies Act, and
associated regulations, Norske Skog publishes a separate management
remuneration report disclosing detailed information on remuneration to
corporate management (CM) and directors of the board. The remuneration
report will be published immediately after the annual general meeting on
10 April 2025 and will include detailed information on management
remuneration complementing the numbers presented below.
In accordance with the code of conduct for corporate governance recom-
mended by the Oslo Stock Exchange, salary, benefits in kind and bonus for
members of corporate management are specified below. In relation to the
long-term incentive program for corporate management NOK -4 million was
expensed in 2024 (NOK 15 million) and on 31 December 2024 the
corresponding liability was NOK 1.4 million (NOK 2.3 million)
. The long-term
incentive program is described in the guidelines for determining salary and
other remuneration to leading personnel, which are available on the company’s
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
148
I
I
2024 | Fixed | Variable | ||||||
(in NOK 1 000) | ||||||||
BENEFITS | CONTRIBUTION | RELATIVE | ||||||
CORPORATE MANAGEMENT | ANNUAL | SALARY | IN KIND | TO PENSION | TOTAL | PROPORTION | ||
MEMBER | BASE SALARY | EARNED 1) | ETC. 2) | STI earned 3) | LTI EARNED 4 | SCHEMES | REMUNERATION | FIXED/VARIABLE |
Geir Drangsland , CEO | 5 234 | 5 074 | 191 | - | 206 | 888 | 6 359 | 96%/4% |
Tord Steinset Torvund , | ||||||||
CFO since 1 March | 2 104 | 1 710 | 137 | - | -1 194 | 224 | 876 | 100%/N/A |
Robert A. Wood , 5) | ||||||||
SVP Commercial | 2 440 | 2 495 | 31 | - | -424 | 184 | 2 285 | 100%/N/A |
Einar Blaauw , | ||||||||
SVP General Counsel in | ||||||||
CM since 1 January | 2 445 | 2 421 | 179 | - | -337 | 440 | 2 704 | 100%/N/A |
Even Lund , VP Corporate | ||||||||
Finance in CM since 1 January | 1 894 | 1 875 | 144 | - | -1 194 | 225 | 1 050 | 100%/N/A |
Rune Sollie , CFO until 1 March | 2 325 | 1 331 | 85 | -605 | 159 | 970 | 100%/N/A | |
Amund Saxrud , | ||||||||
COO until 20 March | 2 325 | 2 957 | 143 | - | -605 | 345 | 2 840 | 100%/N/A |
2023 | Fixed | Variable | ||||||
(in NOK 1 000) | ||||||||
BENEFITS | CONTRIBUTION | RELATIVE | ||||||
CORPORATE MANAGEMENT | ANNUAL | SALARY | IN KIND | TO PENSION | TOTAL | PROPORTION | ||
MEMBER | BASE SALARY | EARNED 1) | ETC. 2) | STI earned 3) | LTI EARNED 4 | SCHEMES | REMUNERATION | FIXED/VARIABLE |
Geir Drangsland , CEO | ||||||||
since 1 September | 4 975 | 1 852 | 63 | 746 | 108 | 284 | 3 053 | 69%/31% |
Tore Hansesætre, | ||||||||
SVP Strategic projects/CEO | ||||||||
from 1 June until 31 August | 3 821 | 4 154 | 241 | 1 493 | 1 410 | 716 | 8 014 | 60%/40% |
Sven Ombudstvedt, | ||||||||
CEO until 31 May | 4 975 | 8 647 | 270 | 622 | 3 377 | 783 | 13 699 | 69%/31% |
Rune Sollie , CFO | 2 325 | 2 445 | 207 | 930 | 2 015 | 322 | 5 919 | 47%/53% |
Robert A. Wood, 5) | ||||||||
SVP Commercial | 2 378 | 2 378 | 45 | 927 | 2 015 | 287 | 5 652 | 45%/55% |
Amund Saxrud, | ||||||||
COO | 2 325 | 2 463 | 365 | 959 | 2 015 | 322 | 6 124 | 49%/51% |
Lars P. S. Sperre, | ||||||||
SVP Strategy | ||||||||
until 30 September | 3 745 | 3 987 | 229 | 1 125 | 1 592 | 604 | 7 537 | 61%/39% |
1)
Salary earned includes fixed salary and accrued holiday pay
2)
Benefits in kind includes car allowance, insurance, free telephone etc.
3)
Based on performance in the financial year, paid in the first quarter of the next financial year. There was no STI bonus earned for the financial year 2024
4)
Illustrates the expensed change in accrual of the corresponding liability and is not directly linked to actual payments. For 2024 LTI has been negative for most of the corporate management members
5)
Robert A. Wood was employed by Norske Skog ASA from 1 April 2024. Prior to this he was employed by Norske Skog UK Ltd. He has during his employment in Norske Skog UK Ltd. worked fully for Norske Skog ASA as SVP
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
149
I
I
Other operating expenses
NOTE | 2024 | 2023 | |
Maintenance materials and services | 8 | 429 | 630 |
Marketing expenses | 21 | 25 | |
Variable lease, short term and low value lease expenses | 19 | 21 | 17 |
Administration, insurance, travel expenses etc. | 105 | 89 | |
Losses from divestments of property, plant and equipment | 0 | 1 | |
Other expenses | 227 | 256 | |
Total | 803 | 1 019 |
Specification of losses on trade receivable included in other expenses
Receivables written off during the period
2
1
Change in provision for bad debt
0
2
Total
2
3
PARENT COMPANY | SUBSIDIARIES | |||
(in NOK 1 000, excluding VAT) | GROUP AUDITORS | GROUP AUDITORS | OTHER AUDITORS | TOTAL |
Audit fee | 1 887 | 3 237 | 82 | 5 206 |
Audit-related assistance 1) | 1 007 | 72 | 215 | 1 294 |
Tax assistance | 24 | 0 | 0 | 24 |
Other fees | 0 | 111 | 0 | 111 |
Total | 2 919 | 3 419 | 298 | 6 636 |
1)
Derivatives and other fair value adjustment
The group has derivatives in the form of currency forward contracts, used to
hedge currency risk, embedded derivatives related to currency in certain
energy contracts that are separated from its host contract and certain energy
contracts that are accounted for at fair value.
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently remeasured at their fair value.
Changes in the fair value of any of these derivative instruments are recognised
in the income statement. The group has selected to not designate any financial
instruments for hedge accounting.
The fair value of currency forward contracts is based on mark-to-market
reports (level 2) which are considered to be an approximation of fair value. For
the embedded derivatives and contracts valued at fair value there is no active
market, and the group applies valuation techniques to establish the fair value
(level 3). These may include the use of recent arm’s length transactions,
reference to other instruments which are substantially the same, and
discounted cash flow analyses defined to reflect the issuer’s specific
circumstances. Fair value includes the impact of credit risk and the adjustment
for credit risk is dependent on whether the derivative is in the money (asset)
or out of the money (liability). Credit value adjustment is applied to assets
positions based on credit risk associated with the counterparty. Debit value
adjustment is applied to liability positions, based on the groups own credit
risk.
2024 | 2023 | |
Changes in value – commodity contracts 1) | -127 | -514 |
Changes in value – embedded derivatives | -47 | -91 |
Realised gains/(losses) on contracts | -7 | 0 |
Total | -178 | -605 |
1)
Long-term financial contracts and commodity contracts that no longer meet the requirement in IFRS 9
related to own use are measured at fair value
Norske Skog’s portfolio of commodity contracts consists mainly of physical
energy contracts. The fair value of commodity contracts is especially sensitive
to future changes in energy prices. A sensitivity analysis of the impact on
profit after tax of fluctuations in energy prices, currency and price indices is
given in Note 5. The valuation techniques used are described in Note 21.
The loss in fair value of commodity contracts in 2024 and 2023 is mainly due
to the forecasted forward energy prices in Norway decreasing in 2023 and
2024.
The loss in embedded derivatives in 2024 is mainly due to the EUR/NOK
forward prices weakening from 2023 to 2024. The EUR/NOK forward price
was weakening during 2023.
Realised gain/(losses) on contracts consist of realised losses on financial
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
150
I
I
Associated companies and joint ventures
Associates are all entities over which the group exercises significant influence
but not control, generally accompanying a shareholding of 20% to 50% of the
voting rights. Investments in associates are accounted for using the equity
method of accounting.
Net profit from associated companies is included in 2024 with a loss of
NOK 65 million (NOK -15 million).
The carrying value of associated companies and joint ventures are
Circa Group AS
Norske Skog holds a 26% share of Circa Group AS that has been suspended
from trading on Euronext Growth following its filed petition for bankruptcy on
7 October 2024. Norske Skog has during 2024 impaired the shares to reflect
the market value of nil (NOK 65 million). Total loss in 2024 amounts to
NOK 65 million (NOK 15 million).
Circa Group AS is incorporated into the consolidated financial statement
based on continuity and the carrying value will therefore deviate from the
values shown in the financial statements of Norske Skog ASA.
Porsnes Uvikling AS
Norske Skog Saugbrugs held a 50% share of Porsnes Utvikling AS and received
Financial items
Interest income and expenses are recognised in the income statement as they
are accrued, based on the effective interest method. This is the interest rate
that gives a net present value of the cash flows from the loan that is equal to
Currency contracts
Forward currency contracts are recognized in the balance sheet and measured
at fair value at each balance sheet date with the resulting gain or loss
recognised in gain/(losses) on foreign currency.
FINANCIAL ITEMS
2024 | 2023 | |
Financial income | ||
Interest income | 84 | 93 |
Total | 84 | 93 |
Financial expenses | ||
Interest expense | -212 | -208 |
Other financial expenses | -139 | -89 |
Total | -351 | -297 |
Gains/(losses) on foreign currency | -175 | -71 |
Financial items | -441 | -275 |
Other financial expenses mainly consist of commitments fee and other
financing expenses. See Note 29. In 2024 other financial expenses include
NOK 43 million in transaction cost regarding refinancing of the 150 million
senior secured bond. In 2023 other financial expenses also includes write-
Income tax
The group’s income tax expense includes current tax based on taxable profit
for each jurisdiction. This is adjusted by;
• changes in deferred tax assets and liabilities attributable to temporary
differences arising between the carrying amount of assets and liabilities in
the consolidated financial statements and their tax bases and;
•
changes to unused tax losses that are expected to be utilised.
Tax is recognised in the income statement, except to the extent that it relates
to items recognised in other comprehensive income or directly in equity. In
this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively. Deferred tax assets are offset against deferred tax
liabilities only when the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority and there is a legally enforceable
right to set-off current tax assets against current deferred tax liabilities.
The tax charge is calculated based on the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the company’s
subsidiaries and associates operate and generate taxable income. The groups
operations are located in countries with ordinary tax regimes and there are no
Pillar Two
The Pillar Two model rules (Global Anti-Base Erosion rules) (“the rules”)
introduces a global minimum corporate tax of 15%. All jurisdictions Norske
Skog operates in has notified the implementation of the rules. The first
reporting of the rules will take place in the first part of 2026 for 2024.
For the financial year beginning 1 January 2024 Norske Skog is subject to the
rules in the jurisdictions where Norske Skog’s has operations. The group has
assessed the potential impact on income taxes of rules in relation to “top up
tax”.
The assessment is based on the tax reporting and country-by-country
reporting to local tax authorities and the financial statement of the entities
applied to the rules. The assessment has concluded that the effective tax rate
of the entities is above the threshold of 15% or within safe harbour rules. No
Pillar Two income taxes have been expensed in 2024.
Under IFRS there is a temporary exception to the requirements of IAS 12.
Norske Skog has applied this exemption to not recognise or disclose
information about deferred tax asset and liabilities related to Base Erosion and
Profit Shifting (BEPS) Pillar Two rules.
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
151
I
I
TAX EXPENSE | 2024 | 2023 |
Current tax expense | -4 | -178 |
Change in deferred tax | -91 | 68 |
Total | -94 | -110 |
RECONCILIATION OF THE GROUP TAX EXPENSE | 2024 | 2023 |
Profit/(loss) before income taxes | -566 | 645 |
Computed tax at nominal tax group rate of 22% | 125 | -142 |
Differences due to different tax rates | 3 | -16 |
Non taxable income/non deductible expenses | -3 | -2 |
Adjustment previous years | 0 | 38 |
Other items | -8 | -22 |
Deferred tax asset not recognised | -211 | 35 |
Total tax (expense)/income | -94 | -110 |
Effective tax rate | -17% | 17% |
CURRENT TAX LIABILITY | 31.12.2024 | 31.12.2023 |
Norway | 0 | 0 |
Rest of Europe | -11 | -11 |
Total | -11 | -11 |
DEFERRED TAX - MOVEMENTS | 2024 | 2023 |
Net deferred tax asset/(liability) 1 January | 4 | -72 |
Change in deferred tax in the income statement | -91 | 87 |
Tax on other comprehensive income | 1 | 1 |
Currency translation differences | -10 | -13 |
Net deferred tax asset/(liability) 31 December | -96 | 4 |
DEFERRED TAX ASSET AND DEFERRED TAX LIABILITY | 31.12.2024 | 31.12.2023 |
Norway | 111 | 206 |
Rest of Europe | 0 | 0 |
Deferred tax assets | 111 | 206 |
Rest of Europe | -207 | -202 |
Deferred tax liability | -207 | -202 |
Net deferred tax assets/(liability) | -96 | 4 |
DEFERRED TAX DETAILS | 31.12.2024 | 31.12.2023 |
Fixed assets | -74 | 124 |
Pension and other employee obligations | 10 | 13 |
Other non-current items | 39 | 88 |
Currency translation differences and financial instruments | 67 | 56 |
Current items | -15 | 14 |
Financial instruments | 16 | -14 |
Interest carry forward (Interest limitation rules) | 70 | 45 |
Tax losses to carry forward | 415 | 836 |
Tax losses and other deferred tax assets not recognised | -629 | -1 163 |
Tax credits | 5 | 3 |
Net deferred tax assets/(liability) | -96 | 4 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
153
I
I
LOSSES TO CARRY FORWARD AND TEMPORARY DIFFERENCES
31.12.2024 BY REGION
NORWAY | REST OF EUROPE | TOTAL | |
Tax losses to carry forward | 869 | 967 | 1 836 |
Temporary differences | 1 492 | -10 | 1 483 |
Tax losses and temporary differences not recognised | -1 855 | -957 | -2 812 |
Total tax losses and tax credits to carry forward (recognised) | 505 | 0 | 505 |
Deferred tax asset | 111 | 0 | 111 |
Tax rate | 22% | 23-25% |
LOSSES TO CARRY FORWARD AND TEMPORARY DIFFERENCES 31.12.2023 BY REGION
NORWAY | REST OF EUROPE | AUSTRALASIA | TOTAL | |
Tax losses to carry forward | 595 | 599 | 1 916 | 3 110 |
Temporary differences | 1 645 | -1 | 617 | 2 261 |
Tax losses and temporary differences not recognised | -1 303 | -599 | -2 532 | -4 435 |
Total tax losses and tax credits to carry forward (recognised) | 936 | 0 | 0 | 936 |
Deferred tax asset | 206 | 0 | 0 | 206 |
Tax rate | 22% | 19-32% | 28-30% |
Earnings and dividend per share
NOTE | 2024 | 2023 | |
Profit/(loss) from continuing operations | -661 | 535 | |
Profit/(loss) from discontinued operations | 26 | -321 | -54 |
Profit/(loss) for the year in NOK million attributable to owners of the parent | -982 | 481 | |
Weighted average number of shares in million | 84.8 | 84.8 | |
Basic earnings per share | |||
From continuing operations | -7.79 | 6.31 | |
From discontinued operations | 26 | -3.78 | -0.64 |
Total basic earnings per share | -11.57 | 5.67 | |
Diluted earnings/(loss) per share | |||
From continuing operations | -7.79 | 6.31 | |
From discontinued operations | 26 | -3.78 | -0.64 |
Total diluted earnings per share | -11.57 | 5.67 |
dividend for the financial year 2024. No dividend was paid in 2024 for the
financial year 2023. A dividend of NOK 0.67
per share was paid out 28
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
154
I
I
Intangible assets
Patents and licenses
Patents and licenses have a finite useful life and are recognised at historical
cost less accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate the cost of patents and licences over their
estimated useful lives.
Computer software
Acquired computer software licences are capitalised on the basis of the costs
incurred to acquire the specific software and bring it into use and amortised
over their estimated useful lives. Computer software development costs
recognised as assets are amortised over their estimated useful lives. Costs
associated with maintaining computer software are recognised as an expense
as they are incurred.
Norske Skog has no cash generating units (CGUs) with allocated goodwill or
assets with indefinite useful life that need to be tested for impairment annually,
OTHER INTANGIBLE | LICENCES AND | ||
INTANGIBLE ASSETS | ASSETS | PATENTS | TOTAL |
Acquisition cost 1 January 2023 | 65 | 91 | 157 |
Additions | 0 | 2 | 2 |
Disposals | -14 | 0 | -14 |
Reclassified from plant under construction | 1 | 0 | 1 |
Currency translation differences | 2 | 4 | 6 |
Acquisition cost 31 December 2023 | 54 | 97 | 151 |
Accumulated depreciation and impairments 1 January 2023 | 62 | 81 | 143 |
Depreciation | 1 | 4 | 5 |
Disposals | -14 | 0 | -14 |
Currency translation difference | 2 | 4 | 6 |
Accumulated depreciation and impairments 31 December 2023 | 50 | 89 | 139 |
Carrying value 31 December 2023 | 4 | 8 | 12 |
Acquisition cost 1 January 2024 | 54 | 97 | 151 |
Additions | 1 | 2 | 3 |
Reclassified to assets held for sale | -53 | 0 | -53 |
Reclassified from plant under construction | 0 | 2 | 2 |
Currency translation differences | 1 | 3 | 4 |
Acquisition cost 31 December 2024 | 4 | 104 | 107 |
Accumulated depreciation and impairments 1 January 2024 | 50 | 89 | 139 |
Depreciation | 1 | 4 | 5 |
Reclassified to assets held for sale | -52 | 0 | -52 |
Currency translation difference | 1 | 3 | 4 |
Accumulated depreciation and impairments 31 December 2024 | 0 | 96 | 97 |
Carrying value 31 December 2024 | 3 | 8 | 11 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
155
I
I
Property, plant and equipment
Property, plant and equipment (PPE) is presented at historical cost less
subsequent depreciation, write downs and impairments. Historical cost
includes expenditure directly attributable to the acquisition of the items. The
residual value of production equipment is defined as the realisable value after
deduction of the estimated cost of dismantling and removal of the asset. If the
estimated cost exceeds the estimated value, the net liability is added to the
cost of the related asset, and a provision is recognised as a liability in the
balance sheet.
Borrowing costs, which are directly related to qualifying assets, are recognised
as part of the acquisition cost for the qualifying asset.
Subsequent costs are included in the asset’s carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the group and the cost of the item
can be measured reliably. The carrying amount of the replaced part is
derecognised. All other repair and maintenance costs are charged to the
income statement during the financial period in which they are incurred.
Depreciation on other assets is calculated using the straight-line method to
allocate their cost or revalued amounts to their residual values over their
estimated useful lives. Land is not depreciated.
The residual value and useful life of property, plant and equipment are reviewed
and adjusted if required.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and is included in the income statement line other
Review of impairment indicators are performed regularly, and if impairment
indicators are identified an impairment test of property plant and is performed.
Indicators of impairment will typically be changes in market conditions and
changes in the competitive situation. For the purpose of assessing impairment,
assets are grouped at the lowest level for which cash flows are separately
identifiable cash generating units (CGU).
An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and its value in use.
There is judgement required to determine CGU for impairment testing. For
property, plant and equipment the CGU can be a single machine or a
combination of machines on the facts and circumstances.
At the end of 2024 the market for magazine grades were unbalanced after a
considerable demand decline the preceding years and limited capacity
closures. The containerboard market is also experiencing some overcapacity
as new entrants is expected to outpace the growth in demand the coming
Assumptions applied when calculating the recoverable amount
Intangible non-current assets and property, plant and equipment (PPE) are
written down to their recoverable amount when this is lower than the carrying
value of the asset. The recoverable amount of an asset or CGU is the higher of
its fair value less costs to sell and its value in use. Value in use is the present
value of future cash flows expected to arise from an asset or cash-generating
unit. Norske Skog applies the value in use approach when calculating
recoverable amount for its CGUs. Norske Skog has identified the following
CGUs: Europe newsprint (Norske Skog Skogn and Norske Skog Golbey),
Europe super calendared (Norske Skog Saugbrugs), Europe lightweight coated
(Norske Skog Bruck) and containerboard (Norske Skog Bruck and Norske
Skog Golbey). These represent the six cash generating units that the group is
focusing on in its follow-up operationally and commercially as communication
with customers, suppliers, employees. The different mills within a CGU works
together to generate cash inflows.
The production machines have a long technical life, while useful lives are linked
to industry cost curves and the size of the market. The estimated remaining
useful life of the individual paper machines forms the basis for determining the
length of the cash flow period used in the value in use calculation. Estimated
remaining useful life for the individual publication paper machines in the group
varies from 1 to 8 years for publication paper machines and 20 year for
packaging paper machines. Sales volumes are reduced in accordance with the
estimated end of useful lives of the different paper machines in the group.
Norske Skog models the cash flows throughout the useful life of the paper
machines. The timing of capacity closures is based on an assessment of the
position on Fastmarkets RISI cost curve and market demand projections for
the produced grade. Fastmarkets RISI is the leading global source for forest
products information and data (www.fastmarkets.com).
Nominal cash flow is estimated in the functional currency in which it will be
generated. The value is calculated by discounting based on a required rate of
return on capital that is relevant for the cash-generating unit. The required rate
of return, or weighted average cost of capital (WACC), is based on the interest
rate on ten-year government bonds in the currency of the cash flow estimate,
an industry debt yield premium, industry beta and an equity risk premium. A
country-specific risk premium relevant to the cash-generating unit is also
included in the required rate of return on capital.
The key drivers of profitability in publication paper and packaging paper and
thus asset values for the group are product prices relative to production costs
i.e. EBITDA margin. EBITDA levels represents the operating profit (loss) before
depreciation and amortization. The starting point for any impairment test is
the financial budget for 2024 approved by the board of directors. The key
assumptions used in reaching the forecast figures are sales prices, volumes
and operating costs. Contracted prices/costs are reflected when applicable in
the budget.
The are no observable market prices for the group’s products, but there are
external sources such as Fastmarkets RISI and PPPC for which estimate prices
for publication paper and packaging paper, and these are used as a reference.
For operating cost related to raw materials and energy contract prices are used
when they cover longer periods, or a best estimate of cost based on historical
experience and any expected changes. Operating costs are based on budgeted
levels and adjusted for any approved efficiency initiatives.
The calculation of value in use takes into consideration any future changes in
both the CO2 quotas and the income from CO2 compensation going forward in
line with the relevant regulatory framework. Other than that no climate
legislation has currently been approved that impacts the group. There are
however expectations that new climate related legislation will be passed in the
future that may increase costs or reduce income and thereby impacting on
profitability is costs are not able to be passed on to customer or fully or partially
compensated by incentive schemes.
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
156
I
I
Expected useful life
In connection with the year-end closing process for 2024, Norske Skog
performed a review of the expected remaining useful lives of property, plant
and equipment. The useful life of most of the machines were reduced by one
year compared with last year assumptions.
Sensitivity to estimates of recoverable amount
The key uncertainty in the cash flows and profitability relates to future market
prices for Norske Skog’s products and input factors in the production and
prices and cost relative to each other. The estimation of recoverable amount is
based on assumptions regarding the future development of several factors.
These include price development for finished goods, sales volumes, currency
rates and interest rates. In relation to the assumptions made in a calculation of
the present value of future cash flows, recoverable amount is most sensitive to
changes in prices of finished goods, but also sales volumes and the discount
rate used but to a lesser extent.
Property, plant and equipment allocated to cash-generating units
The table below shows machinery and equipment and land and buildings
allocated to Norske Skog’s cash-generating units as of 31 December 2024.
MACHINERY AND | LAND AND | |
EQUIPMENT | BUILDINGS | |
Europe newsprint | 1 111 | 550 |
Europe super calendared | 191 | 123 |
Europe lightweight coated | 0 | 0 |
Containerboard | 1 900 | 586 |
Carrying value 31 December 2024 | 3 203 | 1 259 |
Impairment test
Norske Skog has identified impairment indicators related to the containerboard
and super calendared cash generating units. An impairment of NOK 121 million
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
157
I
I
MACHINERY | FIXTURES | ||||||
BIOLOGICAL | AND | LAND AND | AND | PLANT UNDER | RIGHT-OF- | ||
PROPERTY, PLANT AND EQUIPMENT | ASSETS | EQUIPMENT | BUILDINGS | FITTINGS | CONSTRUCTION | USE ASSETS | TOTAL |
Acquisition cost 1 January 2023 | 2 | 29 162 | 6 962 | 549 | 2 860 | 191 | 39 725 |
Additions | 0 | 32 | 1 | 0 | 2 950 | 55 | 3 038 |
Disposals | 0 | -5 995 | -468 | -28 | -42 | -24 | -6 556 |
Reclassified from plant under construction | 0 | 1 508 | 303 | 16 | -1 828 | 0 | -1 |
Currency translation differences | 0 | 1 123 | 241 | 32 | 145 | 8 | 1 549 |
Acquisition cost 31 December 2023 | 2 | 25 831 | 7 040 | 568 | 4 085 | 230 | 37 755 |
Accumulated depreciation and impairments | |||||||
1 January 2023 | 0 | 27 066 | 6 099 | 502 | 85 | 123 | 33 874 |
Depreciation | 0 | 357 | 93 | 16 | 0 | 42 | 509 |
Impairment | 0 | 53 | 5 | 0 | 30 | 0 | 88 |
Disposals | 0 | -5 995 | -461 | -26 | -42 | -24 | -6 548 |
Currency translation difference | 0 | 1 030 | 200 | 29 | 2 | 4 | 1 265 |
Accumulated depreciation and impairments | |||||||
31 December 2023 | 0 | 22 510 | 5 936 | 521 | 75 | 146 | 29 188 |
Carrying value 31 December 2023 | 2 | 3 320 | 1 104 | 47 | 4 010 | 84 | 8 567 |
Acquisition cost 1 January 2024 | 2 | 25 831 | 7 040 | 568 | 4 085 | 230 | 37 755 |
Additions | 0 | 39 | 106 | 0 | 1 436 | 107 | 1 688 |
Disposals | 0 | -2 | 0 | 0 | 0 | -94 | -96 |
Reclassified to assets held for sale | -2 | -4 802 | -538 | -21 | -42 | -63 | -5 467 |
Reclassified from plant under construction | 0 | 303 | 149 | 3 | -456 | 0 | -2 |
Currency translation differences | 0 | 639 | 185 | 23 | 187 | 8 | 1 042 |
Acquisition cost 31 December 2024 | 0 | 22 008 | 6 942 | 574 | 5 210 | 188 | 34 921 |
Accumulated depreciation and impairments | |||||||
1 January 2024 | 0 | 22 510 | 5 936 | 521 | 75 | 146 | 29 188 |
Depreciation | 0 | 361 | 92 | 14 | 0 | 45 | 513 |
Impairment | 2 | 205 | 28 | 0 | 37 | 25 | 297 |
Disposals | 0 | 0 | 0 | 0 | 0 | -92 | -92 |
Reclassified to assets held for sale | -2 | -4 772 | -514 | -21 | -37 | -30 | -5 374 |
Currency translation difference | 0 | 500 | 141 | 21 | 0 | 6 | 668 |
Accumulated depreciation and impairments | |||||||
31 December 2024 | 0 | 18 805 | 5 683 | 536 | 75 | 100 | 25 198 |
Carrying value 31 December 2024 | 0 | 3 203 | 1 259 | 38 | 5 135 | 88 | 9 723 |
SPECIFICATION OF DEPRECIATION AND IMPAIRMENTS
NOTE | 2024 | 2023 | |
Property, plant and equipment | 513 | 509 | |
Intangible assets | 5 | 5 | |
Depreciation from discontinued operations | 26 | -37 | -50 |
Depreciation from continuing operation | 481 | 464 | |
Property, plant and equipment | 297 | 88 | |
Intangible assets | 0 | 0 | |
Impairments from discontinued operations | 26 | -176 | -62 |
Impairments from continuing operation | 121 | 27 |
Land and buildings comprise mainly mills, machinery and office premises.
Buildings and other property are depreciated over a period from ten to 40 years.
Fixtures and fittings are depreciated over a period from three to ten years. Land
Right-of-use assets is further described in Note 19.
The difference between total additions in the table above and purchases of
property, plant, equipment and intangible assets in the consolidated statement
of cash flows is due to leases, capitalised borrowing costs and accruals for
payments. Norske Skog has capitalised borrowing costs of NOK 105 million in
2024 (NOK 16 million).
Disposals in 2024 and 2023 were primarily related to scrapping of fully
depreciated assets that no longer have any technical values.
At year end 2024 the group has contractual commitments for acquisition of
property, plant and equipment of NOK
530 million (NOK 700 million) that relate
to future periods. In 2024 total payments related to acquisition of property, plant
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
158
I
I
Leases
Norske Skog recognises a liability to make lease payments and an asset
representing the right to use the underlying asset during the lease term (“right-
of-use asset”). Exceptions for short term leases and low value leases have been
adapted by the group. At initial recognition the lease assets is measured at an
amount equal to the lease liability. Norske Skog separately recognises the
interest expense on the lease liability and the depreciation expense on the
The group’s leased assets are categorized and presented in the table below:
LEASES
MACHINERY | ||||
AND | LAND AND | FIXTURES AND | ||
EQUIPMENT | BUILDINGS | FITTINGS | TOTAL | |
Carrying value 1 January 2023 | 44 | 16 | 7 | 68 |
Additions | 27 | 28 | 0 | 55 |
Depreciations | -30 | -11 | -1 | -42 |
Currency translation differences | 2 | 1 | 0 | 3 |
Carrying value 31 December 2023 | 43 | 34 | 6 | 84 |
Additions | 101 | 6 | 0 | 107 |
Disposals | -2 | 0 | 0 | -2 |
Reclassified to assets held for sale | -32 | 0 | 0 | -33 |
Depreciations | -34 | -10 | -1 | -45 |
Impairment | -25 | 0 | 0 | -25 |
Currency translation differences | 1 | 0 | 0 | 2 |
Carrying value 31 December 2024 | 52 | 30 | 5 | 88 |
LEASE PAYMENTS MATURITY ANALYSIS | NOTE | 31.12.2024 | 31.12.2023 |
Not later than one year | 28 | 39 | |
Later than one year and not later than five years | 55 | 46 | |
Later than five years | 22 | 15 | |
Total | 105 | 100 | |
Future finance charges | 13 | 11 | |
Present value of liabilities | 29 | 92 | 89 |
Interest expense on lease liabilities amounts to NOK 6 million in 2023 (NOK 5 million).
CASH PAYMENT MADE FROM LEASES | 2024 | 2023 |
Principal payments on recognised lease liabilities | 32 | 29 |
Interest payments on recognised lease liabilities | 6 | 5 |
Payments on leases expensed in the period | 20 | 17 |
Principal, interest and leases expense payments from discontinued operations | 15 | 17 |
Total | 73 | 68 |
The group has decided not to recognise a lease liability for short term leases or for leases of low value assets. Payments made under such leases are included
in operating expenses. Certain variable lease payments are not permitted to be recognised as leases liabilities and are expensed as incurred.
VARIABLE LEASE, SHORT TERM AND LOW VALUE LEASE EXPENSES | NOTE | 2024 | 2023 |
Expense relating to variable lease payments not included in the measurement of lease liabilities | 5 | 5 | |
Short term leases exemption | 1 | 1 | |
Low-value leases exemption | 14 | 11 | |
Total | 11 | 20 | 17 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
159
I
I
Shares
SHARES IN SUBSIDIARIES OWNED BY
| SHARE CAPITAL | ||||
THE PARENT COMPANY | CONSOLIDATED COMPANIES | CURRENCY | (IN 1 000) | OWNERSHIP% |
Norske Skog Bruck GmbH, Bruck, Austria | EUR | 67 000 | 100% | |
Norske Skog Recycling GmbH, Bruck, Austria | EUR | 291 | 100% | |
Norske Skog Golbey SAS, Golbey, France | EUR | 62 365 | 100% | |
GV Bois SAS, Golbey, France | EUR | 100 | 90% | |
Green Valley Energy SASU, France | EUR | 2 301 | 64% | |
Norske Skog Skogn AS, Levanger, Norway | NOK | 115 230 | 100% | |
Norske Skog Saugbrugs AS, Halden, Norway | NOK | 115 230 | 100% | |
Saugbrugs Bioenergi AS, Halden, Norway | NOK | 3 000 | 100% | |
Norske Skog Industries Australia Ltd., Sydney, | ||||
Australia | AUD | 340 000 | 100% | |
Norske Skog (Australasia) Pty Ltd., Sydney, Australia | AUD | 21 000 | 100% | |
Norske Skog Paper Mills (Australia) Ltd., Tasmania, Australia | AUD | 7 539 | 100% | |
Nornews AS, Oslo, Norway | NOK | 300 | 100% | |
Norske Skog Deutschland GmbH, Augsburg, Germany | EUR | 520 | 100% | |
Norske Skog France SARL, Paris, France | EUR | 135 | 100% | |
Norske Skog (Österreich) GmbH, Graz, Austria | EUR | 35 | 100% | |
Norske Skog (Schweiz) AG, Zürich, Switzerland | CHF | 50 | 100% | |
Norske Skog (UK) Ltd., London, United Kingdom | GBP | 100 | 100% | |
Cebina AS, Oslo, Norway | NOK | 30 | 100% | |
Cebico AS, Oslo, Norway | NOK | 30 | 100% | |
SHARE CAPITAL | CARRYING | |||
SHARES IN ASSOCIATED COMPANIES AND JOINT VENTURES | CURRENCY | (in 1 000) | OWNERSHIP% | VALUE (NOK) |
Owned by consolidated companies | ||||
Porsnes Utvikling AS, Halden, Norway | NOK | 300 | 50% | 7 |
Green Valley Energie, France | EUR | 300 | 10% | 3 |
NorFibre Logistics SAS, France | EUR | 500 | 20% | 1 |
SEM, France | EUR | 879 | 10% | 1 |
Austria Papier Recycling GmbH, Austria | EUR | 182 | 33% | 1 |
Other | 1 | |||
Total shares in associated companies and joint ventures | 15 |
SHARE CAPITAL | CARRYING | ||||
OTHER SHARES | NOTE | CURRENCY | (in 1 000) | OWNERSHIP% | VALUE (NOK) |
Owned by the parent company | |||||
Ocean GeoLoop AS, Skogn, Norway | NOK | 527 | 2% | 5 | |
3K6 Skoginvest AS, Trondheim, Norway | NOK | 165 | 2% | 2 | |
Owned by consolidated companies | |||||
Exeltium SAS, Paris, France | EUR | 12 358 | 5% | 98 | |
Other | 1 | ||||
Total other shares | 23 | 106 |
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
160
I
I
Derivatives
Norske Skog’s portfolio of commodity contracts consist mainly of physical
energy contracts. The commodity contracts and embedded derivatives
classified as financial instruments within the scope of IFRS 9 contracts are
related to energy contracts in Norway. Fair value of commodity contracts is
sensitive to estimates of future energy prices. For further details about gains
and losses relating to level 3 instruments see Note 12.
The fair value of derivatives that are not traded in an active market (over-the-
counter derivatives) is determined using various valuation techniques. Interest
rate swaps, cross-currency swaps, forward rate agreements and foreign
currency forward contracts are all valued by estimating the present value of
future cash flows. Quoted cash and swap rates are used as input for calculating
zero coupon curves used for discounting.
The fair value of commodity contracts recognised in the balance sheet is
calculated by using quotes from actively traded markets when available.
Otherwise, price forecasts from acknowledged external sources are used.
Commodity contracts that fail to meet the own-use exemption criteria in IFRS
9 are recognised in the balance sheet and valued on the same principle as
financial contracts. Some of these are long-term energy contracts. In
calculating the fair value of embedded derivatives, valuation techniques are
used in the absence of observable market inputs.
The table below classifies financial instruments within the scope of IFRS 9
measured in the balance sheet at fair value, by valuation method. The different
valuation methods are described as levels and are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
Level 3: Inputs for the asset or liability are not based on observable market
data (i.e. unobservable inputs).
31.12.2024 | LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL |
Financial assets at fair value through profit or loss | ||||
Trading derivatives | 0 | 0 | 0 | 0 |
Derivatives used for hedging | 0 | 1 | 0 | 1 |
Commodity contracts and embedded derivatives | 0 | 0 | 9 | 9 |
Total | 0 | 1 | 9 | 10 |
Financial liabilities at fair value through profit or loss | ||||
Trading derivatives | 0 | -1 | 0 | -1 |
Derivatives used for hedging | 0 | -71 | 0 | -71 |
Commodity contracts and embedded derivatives | 0 | 0 | -324 | -324 |
Total | 0 | -72 | -324 | -396 |
31.12.2023 | LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL |
Financial assets at fair value through profit or loss | ||||
Trading derivatives | 0 | 0 | 0 | 0 |
Derivatives used for hedging | 0 | 63 | 0 | 63 |
Commodity contracts and embedded derivatives | 0 | 0 | 184 | 184 |
Total | 0 | 63 | 184 | 247 |
Financial liabilities at fair value through profit or loss | ||||
Trading derivatives | 0 | 0 | 0 | 0 |
Derivatives used for hedging | 0 | 0 | 0 | 0 |
Commodity contracts and embedded derivatives | 0 | 0 | -328 | -328 |
Total | 0 | 0 | -328 | -328 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
161
I
I
The following table shows the changes in level 3 instruments.
2024 | ASSETS | LIABILITIES |
Balance 1 January | 184 | -328 |
Gain and losses recognised in profit or loss | -175 | 5 |
Sales of instruments | 0 | 0 |
Currency translation differences | 0 | 0 |
Balance 31 December | 9 | -324 |
The following table is presented in accordance with IFRS 13.94, showing the fair value of all commodity contracts in level 3 within the scope of IFRS 9 given a change
in assumptions to a reasonably possible alternative.
FAIR VALUE OF DERIVATIVES IN LEVEL 3 GIVEN A REASONABLY POSSIBLE
ALTERNATIVE
31.12.2024 | 31.12.2023 | ||
Assets | |||
Commodity contracts | Energy price -20% | 0 | 39 |
Embedded derivatives | Energy price -20% | 0 | 0 |
Total | 0 | 39 | |
Liabilities | |||
Commodity contracts | Energy price -20% | -482 | -626 |
Embedded derivatives | Energy price -20% | -126 | -79 |
Total | -608 | -705 |
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
162
I
I
Financial instruments
The group classifies its financial assets or liabilities in the following two
categories: at fair value through profit or loss and at amortised cost. This
classification depends on the purpose for which the financial asset or liability
was acquired. Management determines the classification of its financial asset
or liability at initial recognition and re-evaluates this designation at every
This category has two sub-categories: held for trading, and those designated
at fair value through profit or loss at inception. A financial asset or liability is
classified in this category if it was acquired principally for the purpose of
short-term sale or if so designated by management. Derivatives are also
categorised as held for trading unless designated as hedges. Assets or
liabilities in this category are classified as current assets if they either are held
for trading or are expected to be realised within 12 months of the balance
sheet date.
Non-financial commodity contracts where the relevant commodity is readily
convertible to cash, and where the contracts are not for own use, fall within the
scope of IFRS 9 and such contracts are treated as derivatives. Embedded
derivatives are separated from the host contract and accounted for as a
derivative if the economic characteristics are not closely related to the
economic characteristics and risk of the host contract. See Note 5 and 21 for
more information. Commodity contracts within the scope of IFRS 9 are
classified as current assets unless they are expected to be realised more than
12 months after the balance sheet date. In that case, they are classified as
b) Amortised cost
Amortised cost includes cash, loans, and receivables, and are non-derivative
financial assets with fixed or determinable payments that are not quoted in an
active market. Items classified as amortised cost are current items maturing
less than 12 months after the balance sheet date and are presented as Trade
and other receivables or Cash and cash equivalents in the balance sheet.
Items maturing later than 12 months after the balance sheet date are
FAIR VALUE | ||||||
THROUGH PROFIT | TOTAL FINANCIAL | NON-FINANCIAL | ||||
31.12.2024 | NOTE | OR LOSS | AMORTISED COST | ASSETS | ASSETS | TOTAL |
Other non-current assets | 23 | 106 | 61 | 167 | 10 | 177 |
Trade and other receivables | 23 | 0 | 718 | 718 | 535 | 1 253 |
Cash and cash equivalents | 25 | 0 | 1 127 | 1 127 | 0 | 1 127 |
Other current assets | 23 | 10 | 0 | 10 | 19 | 29 |
FAIR VALUE | ||||||
THROUGH PROFIT | TOTAL FINANCIAL | NON-FINANCIAL | ||||
31.12.2024 | NOTE | OR LOSS | AMORTISED COST | ASSETS | ASSETS | TOTAL |
Interest-bearing non-current liabilities | 29 | 0 | 4 475 | 4 475 | 0 | 4 475 |
Interest-bearing current liabilities | 29 | 0 | 771 | 771 | 0 | 771 |
Other non-current liabilities | 30 | 204 | 0 | 204 | 321 | 525 |
Trade and other payables | 30 | 0 | 1 889 | 1 889 | 229 | 2 118 |
Other current liabilities | 30 | 196 | 0 | 196 | 22 | 218 |
FAIR VALUE | ||||||
THROUGH PROFIT | TOTAL FINANCIAL | NON-FINANCIAL | ||||
31.12.2023 | NOTE | OR LOSS | AMORTISED COST | ASSETS | ASSETS | TOTAL |
Other non-current assets | 23 | 136 | 58 | 194 | 9 | 203 |
Trade and other receivables | 23 | 0 | 1 090 | 1 090 | 545 | 1 635 |
Cash and cash equivalents | 25 | 0 | 2 463 | 2 463 | 0 | 2 463 |
Other current assets | 23 | 216 | 0 | 216 | 13 | 229 |
FAIR VALUE | ||||||
THROUGH PROFIT | TOTAL FINANCIAL | NON-FINANCIAL | ||||
31.12.2023 | NOTE | OR LOSS | AMORTISED COST | ASSETS | ASSETS | TOTAL |
Interest-bearing non-current liabilities | 29 | 0 | 4 536 | 4 536 | 0 | 4 536 |
Interest-bearing current liabilities | 29 | 0 | 517 | 517 | 0 | 517 |
Other non-current liabilities | 30 | 273 | 0 | 273 | 374 | 647 |
Trade and other payables | 30 | 0 | 1 871 | 1 871 | 385 | 2 256 |
Other current liabilities | 30 | 67 | 0 | 67 | 63 | 130 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
163
I
I
AND LIABILITIES
The table below classifies financial assets and liabilities instruments measured
in the balance sheet at fair value, by valuation method. The different valuation
methods are described as levels and are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
Level 3: Inputs for the asset or liability are not based on observable market
data (i.e. unobservable inputs).
31.12.2024 | CARRYING AMOUNT | FAIR VALUE | LEVEL 1 | LEVEL 2 | LEVEL 3 |
Derivatives | 0 | 0 | 0 | 0 | 0 |
Commodity contracts | 0 | 0 | 0 | 0 | 0 |
Miscellaneous other non-current assets | 167 | 167 | 0 | 0 | 167 |
Other non-current assets | 167 | 167 | 0 | 0 | 167 |
Trade receivables | 422 | 422 | 0 | 0 | 422 |
VAT receivables | 126 | 126 | 0 | 0 | 126 |
Other receivables | 170 | 170 | 0 | 0 | 170 |
Trade and other receivables | 718 | 718 | 0 | 0 | 718 |
Derivatives | 1 | 1 | 0 | 0 | 1 |
Commodity contracts | 9 | 9 | 0 | 1 | 8 |
Current investments | 0 | 0 | 0 | 0 | 0 |
Other current assets | 10 | 10 | 0 | 1 | 9 |
Cash and cash equivalents | 1 127 | 1 127 | 0 | 0 | 1 127 |
Interest-bearing non-current liabilities | 4 475 | 4 457 | 0 | 1 365 | 3 092 |
Interest-bearing current liabilities | 771 | 771 | 0 | 0 | 771 |
Total interest-bearing liabilities | 5 246 | 5 229 | 0 | 1 365 | 3 864 |
Derivatives | 111 | 111 | 0 | 0 | 111 |
Commodity contracts | 93 | 93 | 0 | 0 | 93 |
Other non-current liabilities | 204 | 204 | 0 | 0 | 204 |
Trade payables | 1 282 | 1 282 | 0 | 0 | 1 282 |
Other payables | 607 | 607 | 0 | 0 | 607 |
Trade and other payables | 1 889 | 1 889 | 0 | 0 | 1 889 |
Derivatives | 87 | 87 | 0 | 0 | 87 |
Commodity contracts | 105 | 105 | 0 | 72 | 33 |
Financial current liabilities | 4 | 4 | 0 | 0 | 4 |
Other current liabilities | 196 | 196 | 0 | 72 | 123 |
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
164
I
I
31.12.2023 | CARRYING AMOUNT | FAIR VALUE | LEVEL 1 | LEVEL 2 | LEVEL 3 |
Derivatives | 0 | 0 | 0 | 0 | 0 |
Commodity contracts | 30 | 30 | 0 | 0 | 30 |
Miscellaneous other non-current assets | 164 | 164 | 0 | 0 | 164 |
Other non-current assets | 194 | 194 | 0 | 0 | 194 |
Trade receivable | 536 | 536 | 0 | 0 | 536 |
VAT receivables | 144 | 144 | 0 | 0 | 144 |
Other receivables | 410 | 410 | 0 | 0 | 410 |
Trade and other receivables | 1 090 | 1 090 | 0 | 0 | 1 090 |
Derivatives | 63 | 63 | 0 | 0 | 63 |
Commodity contracts | 153 | 153 | 0 | 63 | 91 |
Current investments | 0 | 0 | 0 | 0 | 0 |
Other current assets | 216 | 216 | 0 | 63 | 216 |
Cash and cash equivalents | 2 463 | 2 463 | 0 | 0 | 2 463 |
Interest-bearing non-current liabilities | 4 536 | 4 600 | 0 | 1 576 | 3 024 |
Interest-bearing current liabilities | 517 | 517 | 0 | 0 | 517 |
Total interest-bearing liabilities | 5 053 | 5 117 | 0 | 1 576 | 3 542 |
Derivatives | 70 | 70 | 0 | 0 | 70 |
Commodity contracts | 203 | 203 | 0 | 0 | 203 |
Other non-current liabilities | 273 | 273 | 0 | 0 | 273 |
Trade payables | 1 035 | 1 035 | 0 | 0 | 1 035 |
Other payables | 836 | 836 | 0 | 0 | 836 |
Trade and other payables | 1 871 | 1 871 | 0 | 0 | 1 871 |
Derivatives | 9 | 9 | 0 | 0 | 9 |
Commodity contracts | 47 | 47 | 0 | 0 | 47 |
Financial current liabilities | 11 | 11 | 0 | 0 | 11 |
Other current liabilities | 67 | 67 | 0 | 0 | 67 |
The fair value of bonds (interest-bearing non-current liabilities) (Level 2) is
assessed by using price indications from banks at the reporting date. There is
some uncertainty associated with the calculated fair value of Level 3 interest-
bearing liabilities. The fair value calculation on other interest-bearing liabilities
(Level 3) is based on acknowledged valuation principles according to IFRS
but is not necessarily an estimate of the amount the group would have to
cover if it were to repay all its debt to all lenders.
The fair values of cash and cash equivalents, trade receivables and other
receivables, other assets, trade payables and other payables and other
current liabilities remain largely consistent with the book value due to the
short maturities of such positions. The fair value of derivatives and commodity
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
165
I
I
Receivables and other non-current assets
Trade receivables are amounts due from customers for goods sold or services
performed in the ordinary course of business. Trade receivables are held to
due date except for those that are covered by the factoring agreements
outlined below. Trade receivables are recognised at invoiced amount, less
provision for bad debt. The impairment model for financial assets under IFRS
9 require recognition of uncertain receivables allowances based on expected
credit losses. The group has an expected credit loss model for trade
receivables, whereby expected credit losses are recognized based on ageing
NOTE | 31.12.2024 | 31.12.2023 | |
Trade and other receivables | |||
Trade receivables | 474 | 588 | |
Provision for bad debt | -52 | -50 | |
VAT receivables | 126 | 144 | |
Prepaid expenses | 64 | 64 | |
Other receivables | 641 | 888 | |
Total | 1 253 | 1 635 | |
Other current assets | |||
Derivatives | 1 | 63 | |
Commodity contracts | 9 | 153 | |
Other current assets | 19 | 13 | |
Total | 29 | 229 | |
Other non-current assets | |||
Long-term shareholdings | 20 | 106 | 105 |
Commodity contracts | 0 | 30 | |
Pension plan assets | 27 | 10 | 9 |
Other non-current receivables | 61 | 58 | |
Total | 177 | 203 |
Norske Skog Bruck, Norske Skog Golbey, Norske Skog Skogn and Norske
Skog Saugbrugs have factoring facility agreements where the future cash flow
on certain trade receivables are sold. The facility has a limit of EUR 25 million
for Norske Skog Bruck, a limit of EUR 40 million for Norske Skog Golbey and a
combined limit of NOK 400 million for Norske Skog Skogn and Norske Skog
Saugbrugs. There are no financial covenants in these factoring facility
agreements. Trade receivables that have been sold are deducted from trade
receivables in the balance sheet. The utilisation at 31 December 2024 was
NOK 668 million (NOK 612 million).
At 31 December 2024 advances received from contracts with customers
amounted to NOK 0 million (NOK 0 million) and other revenue accruals for
invoice not sent amounted to NOK 0 million (NOK 0 million). In addition,
received advances from customers not invoiced NOK 0 million at 31 December
2024 (NOK 0 million).
The credit risk on trade and other receivables is continuously monitored,
independent of due date. The group’s sales are mainly to large customers with
a historically low degree of default. Collateral as security is not normally
requested. Further information regarding the group’s credit policy for sales is
provided in Note 5.
AGEING OF THE GROUP’S CURRENT RECEIVABLES
31.12.2024 | 31.12.2023 | |
Not due | 1 094 | 1 500 |
0 to 3 months | 166 | 140 |
3 to 6 months | 0 | 4 |
Over 6 months | 44 | 40 |
1) | ||
Total | 1 305 | 1 684 |
1)
Does not include provision for bad debt.
The maximum credit risk exposure at the year-end is the fair value of each
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
determined using weighted average cost. The cost of finished goods and work
in progress comprises raw materials, direct labour, other direct costs and
related production overheads (based on normal operating capacity). It
excludes borrowing costs. Net realisable value is the estimated selling price in
the ordinary course of business, less applicable variable selling expenses.
Other production materials include packaging materials, machine clothing,
maintenance materials, operating materials and certain spare parts. Spare
parts held as inventory are spare parts which do not meet the criteria for being
31.12.2024 | 31.12.2023 | |
Raw material | 278 | 230 |
Work in progress | 8 | 9 |
Other production materials | 577 | 638 |
Finished goods | 527 | 483 |
Total | 1 390 | 1 360 |
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks and other short-term, highly liquid investments with original maturities
31.12.2024 | 31.12.2023 | |
Bank and other deposits | 469 | 1 399 |
Restricted cash | 255 | 643 |
Money market fund | 404 | 421 |
Total | 1 127 | 2 463 |
For the purpose of the statement of cash flows, cash and cash equivalents
comprise the following at 31 December:
NOTE | 31.12.2024 | 31.12.2023 | |
Bank and other deposits | 469 | 1 399 | |
Restricted cash | 255 | 643 | |
Money market fund | 404 | 421 | |
Cash and cash equivalents attributable to | |||
discontinued operations | 26 | 50 | 0 |
Total | 1 177 | 2 463 |
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
166
I
I
Discontinued operations
The group classifies non-current assets and disposal groups as held for sale if
their carrying amounts will be recovered principally through a sale transaction
rather than through continuing use. Non-current assets and disposal groups
classified as held for sale are measured at the lower of their carrying amount
and fair value less costs to sell. Costs to sell are the incremental costs directly
attributable to the disposal of an asset (disposal group), excluding finance
costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the
sale is highly probable, and the asset or disposal group is available for
immediate sale in its present condition. Actions required to complete the sale
should indicate that it is unlikely that significant changes to the sale will be
made or that the decision to sell will be withdrawn. Management must be
committed to the plan to sell the asset and the sale expected to be completed
within one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or
amortised once classified as held for sale. Assets and liabilities classified as
held for sale are presented separately as current items in the statement of
financial position.
Discontinued operations are excluded from the results of continuing
operations and are presented as a single amount as profit or loss after tax
from discontinued operations in the statement of profit or loss.
The group includes proceeds from disposal in cash flows from discontinued
operations.
Additional disclosures are provided below. All other notes to the financial
statements include amounts for continuing operations, unless indicated
otherwise.
In December 2024 a concrete sales process was initiated for the sale of
Norske Skog Industries Australia Ltd with subsidiaries. The plan to sell was
approved by the board on 20 December 2024. On 7 February 2025 an
agreement to sell Norske Skog Industries Australia Ltd with subsidiaries was
signed. The sale of Norske Skog Industries Australia Ltd. is expected to be
completed within a year from the reporting date.
The business of Norske Skog Industries Australia Ltd with subsidiaries
represented the segment publication paper Australasia. On 31 December
2024, publication paper Australasia was classified as a disposal group held for
sale and as a discontinued operation.
Norske Skog has identified impairment indicators related to publication paper
Australasia. An impairment of NOK 176 million was recognised.
With publication paper Australasia being classified as discontinued operations,
the segment is no longer presented in the segment note. The financial
information relating to publication paper Australasia for the year are presented
DISCONTINUED INCOME STATEMENT
NOTE | 2024 | 2023 | |
Operating revenue | 1 855 | 1 894 | |
Other operating income | 9 | 72 | |
Total operating income | 1 865 | 1 967 | |
Distribution costs | -247 | -253 | |
Cost of materials | -1 176 | -1 152 | |
Employee benefit expenses | -326 | -320 | |
Other operating expenses | -196 | -162 | |
Restructuring expenses | -11 | -6 | |
Depreciation | 18 | -37 | -50 |
Impairments | 18 | -176 | -62 |
Total operating expenses | 2 169 | 2 005 | |
Operating earnings | -305 | -38 | |
Financial income | 5 | 6 | |
Financial expense | -19 | -16 | |
Gains/(losses) on foreign currency | -2 | -5 | |
Profit/(loss) before income taxes | -321 | -54 | |
Income taxes | 0 | 0 | |
Profit/(loss) from discontinued operations | -321 | -54 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
167
I
I
DISCONTINUED COMPREHENSIVE INCOME
2024 | 2023 | |
Profit/(loss) from discontinued operations | -321 | -54 |
Items that may be reclassified subsequently to profit or loss | ||
Currency translation differences | -36 | -62 |
Reclassified translation differences upon divestment of foreign operations | -7 | 5 |
Total | -43 | -57 |
Other comprehensive income discontinued operations | -43 | -57 |
Total comprehensive income discontinued operations | -364 | -111 |
Earnings per share from discontinued operations | ||
Basic earnings per share (NOK) | -3.78 | -0.64 |
Diluted earnings per share (NOK) | -3.78 | -0.64 |
The major classes of assets and liabilities of publication paper Australasia classified as held for sale on 31 December are as follows:
DISCONTINUED BALANCE SHEET
NOTE | 31.12.2024 | |
Assets | ||
Deferred tax assets | 0 | |
Intangible assets | 18 | 1 |
Property, plant and equipment | 18 | 91 |
Shares in subsidiaries | 0 | |
Investment in associated companies | 0 | |
Other non-current assets | 0 | |
Inventories | 242 | |
Trade and other receivables | 245 | |
Other current assets | 1 | |
Cash and cash equivalents | 25 | 50 |
Assets held for sale | 631 | |
Liabilities | ||
Employee benefit obligations | 3 | |
Deferred tax liability | 0 | |
Interest-bearing non-current liabilities | 46 | |
Other non-current liabilities | 101 | |
Trade and other payables | 267 | |
Interest-bearing current liabilities | 12 | |
Other current liabilities | 33 | |
Liabilities directly associated with assets held for sale | 462 | |
Net assets directly associated with assets held for sale | 169 |
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
168
I
I
The net cash flows incurred by publication paper Australasia are as follows:
DISCONTINUED STATEMENT OF CASH FLOW
2024 | 2023 | |
Cash generated from operations | 1 922 | 1 966 |
Cash used in operations | -1 950 | -1 994 |
Interest payments received | 5 | 6 |
Interest payments made | -14 | -12 |
Net cash flow from operating activities 1) | -36 | -34 |
Purchases of property, plant and equipment and intangible assets | -33 | -44 |
Sales of property, plant and equipment and intangible assets | 0 | 66 |
Sales of shares in companies and other financial instruments | -91 | 0 |
Net cash flow from investing activities | -124 | 22 |
Repayments of loans | -29 | -22 |
Change in cashpool payable | 30 | 73 |
Net cash flow from financing activities | 1 | 51 |
Foreign currency effects on cash and cash equivalents | -1 | -2 |
Total change in cash and cash equivalents | -160 | 38 |
Cash and cash equivalents at start of period | 210 | 172 |
Cash and cash equivalents at end of period | 50 | 210 |
1) Reconciliation of net cash flow from operating activities | ||
Profit/(loss) before income taxes from discontinued operations | -321 | -54 |
Change in working capital | 28 | 3 |
Change in restructuring provisions | 0 | -32 |
Depreciation and impairments | 213 | 111 |
Gain and losses from divestment of business activities and property, plant and equipment | 46 | -52 |
Net financial items without cash effect | 7 | 10 |
Adjustment for other items | -9 | -19 |
Net cash flow from operating activities | -36 | -34 |
Norske Skog Bruck, winder
Photo: Carsten Dybevig
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
I
Norske Skog
I
169
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
170
I
I
Pension and other employee obligations
Pension obligations
Group companies operate various pension schemes. These are generally
funded through payments to insurance companies, as determined by periodic
actuarial calculations. The group has both defined benefit and defined
contribution plans.
The liability recognised in the balance sheet in respect of defined benefit
pension plans is the present value of the defined benefit obligation at the
balance sheet date less the fair value of plan assets. The defined benefit
obligation is calculated annually by independent actuaries using the projected
unit credit method.
Actuarial gains and losses arising from experience adjustments and changes
in actuarial assumptions are charged or credited to equity in other
comprehensive income in the period in which they arise. Past-service costs
are recognised immediately in income.
A defined contribution plan is a pension plan under which the group pays fixed
contributions into a separate entity. These contributions are made to publicly-
or privately administered pension insurance plans on a mandatory, contractual
or voluntary basis. These contributions are recognised as an employee benefit
Other employee obligations
The groups other employee benefits are future benefits that the employees
have earned in return for their service in current and prior periods.
The leave obligations cover the groups liabilities for long service leave and
annual leave which are classified as either other non-current liabilities or
short-term liabilities. Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are recognised in the
EMPLOYEE BENEFIT OBLIGATIONS
2024 | 2023 | |
Pension obligations | 281 | 258 |
Other long-term employee benefit obligations | 15 | 36 |
Total employee benefit obligations | 296 | 294 |
A) PENSION OBLIGATIONS
Norske Skog has various pension schemes in accordance with local conditions
and practices in the countries in which the group operates. A total of 1
737
active and former employees are covered by such schemes. Of these, 503
people are covered by defined benefit plans and 1
234 people by defined
contribution plans.
The key terms in Norske Skog’s major defined benefit plans are shown in the
table below.
BENEFIT IN% OF | |||||
PENSIONABLE | YEARS OF | PENSIONABLE | EARLY RETIREMENT | ACTIVE | |
EARNINGS | SERVICE | AGE | AGE | MEMBERS | |
Norske Skog ASA | 65 | 30 | 70 | 62 | 0 |
Norske Skog Saugbrugs AS | 65 | 30 | 70 | 62 | 12 |
Norske Skog Skogn AS | 65 | 30 | 70 | 62 | 17 |
Norske Skog Golbey SAS | 0 | 43 | 64 | 60 | 370 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
171
I
I
The defined benefit plan in Norske Skog Bruck GmbH and Norske Skog
Deutschland GmbH is closed.
The defined benefit schemes in Norway cover people between 66 and
67 years of age, born before 1 January 1959 and who were employed before
1 January 2011 when the plan was closed. The defined benefit obligations in
Norway only encompass active members since they leave the defined benefit
scheme (having a paid-up policy) when they retire.
Plan assets of the pension schemes in Norske Skog ASA, Norske Skog
Saugbrugs AS and Norske Skog Skogn AS are managed by a life insurance
company and invested in accordance with the general guidelines governing
investments by life insurance companies in Norway.
When evaluating plan assets, it is based on the assumptions as at 31 December.
This estimated value is adjusted every year in accordance with the figures for
the market value of the assets provided by the insurance company.
When measuring the incurred obligations, it is based on the assumptions as at
31 December. This estimated obligation is adjusted every year in accordance
with the figures for incurred pension obligations provided by the actuary.
In addition to the benefit obligation funded through insurance plans, the group
has unfunded benefit obligations. The unfunded obligations include estimated
future obligations relating to the former Norwegian early retirement scheme
and pensions for senior management and directors. Obligations relating to
senior management pensions are partly funded through a supplementary
retirement plan with a life insurance company.
In addition to defined benefit plans, there are also various defined contribution
plans. Norwegian entities have a defined contribution scheme with a
contribution of 5% for earnings up to 7.1 G and 17% between 7.1 and 12 G
ASSUMPTIONS MADE WHEN CALCULATING FUTURE BENEFIT OBLIGATIONS | 2024 | 2023 |
Discount rate | 3.07% | 3.70% |
Expected return on plan assets | 3.03% | 3.70% |
Salary adjustment | 3.25% | 3.00% |
Inflation rate | 2.90% | 2.40% |
Pension adjustment | 2.08% | 3.00% |
The discount rate applied for the pension schemes in Norway for 2024 is based on the interest rate for covered bonds. Subsidiaries can deviate from these
assumptions if local conditions require this. The discount rates applied vary from 1
.80% to 3.50% and pension adjustments vary from 1.9% to 2.7%
. Norske Skog
has used the mortality table K2013BE in Norway, Richttafeln 2018G in Germany and AVO 2018-P in Austria.
NET PERIODIC PENSION EXPENSE | 2024 | 2023 |
Pension expense, defined benefit plan | 21 | 1 |
Pension expense, defined contribution plan | 42 | 44 |
Net periodic pension expense | 63 | 45 |
Net periodic interest expense | 10 | 7 |
High expense for defined benefit pension in 2024 is due to corrections of prior periods.
Estimated payments to the group’s defined benefit pension schemes in 2024 amounts to NOK 6 million (NOK 8 million).
PENSION PLANS IN THE BALANCE SHEET
SPESIFICATION OF PENSION PLANS IN THE BALANCE SHEET | 2024 | 2023 |
Pension assets in the balance sheet | 10 | 9 |
Pension liabilities in the balance sheet | -281 | -258 |
Net pension obligations | -272 | -249 |
Net unfunded pension plans | -275 | -255 |
Net partly or fully funded pension plans | 9 | 5 |
Pension assets is included in line other non-current assets and pension liabilities is included in the line employee benefit obligations.
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
172
I
I
UNFUNDED PENSION PLANS
CHANGES IN PENSION OBLIGATIONS FOR UNFUNDED PENSION PLANS, PROJECTED BENEFIT OBLIGATIONS | ||
INCLUDING NATIONAL INSURANCE CONTRIBUTIONS | 2024 | 2023 |
Balance 1 January | -255 | -110 |
Adjustment to opening balance (due to reclassification) | -3 | -132 |
Current year's service cost | -4 | -8 |
Current year's interest cost | -10 | -4 |
Pensions benefits paid | 24 | 18 |
Remeasurements (loss)/gain OCI | -14 | -3 |
Other changes | -1 | 0 |
Currency translation differences | -13 | -17 |
Balance 31 December | -275 | -255 |
PARTLY OR FULLY FUNDED PENSION PLANS
CHANGES IN PENSION OBLIGATIONS FOR PARTLY OR FULLY FUNDED PENSION PLANS, PROJECTED BENEFIT | ||
OBLIGATIONS INCLUDING NATIONAL INSURANCE CONTRIBUTIONS | 2024 | 2023 |
Balance 1 January | -106 | -104 |
Current year's service cost | -1 | -1 |
Current year's interest cost | -4 | -3 |
Pension benefits paid | 5 | 5 |
Remeasurements (loss)/gain OCI | 2 | -2 |
Other changes | -2 | 0 |
Balance 31 December | -105 | -106 |
CHANGES IN PLAN ASSETS FOR PARTLY OR FULLY FUNDED PENSION PLANS, PLAN ASSETS AT FAIR VALUE | 2024 | 2023 |
Balance 1 January | 111 | 111 |
Return on plan assets (interest income) | 4 | 3 |
Employer contribution including payroll tax | 4 | 4 |
Pension benefits paid | -5 | -4 |
Remeasurements (loss)/gain OCI | 0 | -5 |
Balance 31 December | 114 | 111 |
Net assets/obligations (-) partly or fully funded pension plans | 9 | 5 |
SPECIFICATION OF REMEASUREMENT GAINS/LOSSES IN OTHER COMPREHENSIVE INCOME (OCI) | 2024 | 2023 |
Actuarial loss/(gain) - change in discount rate | 0 | -5 |
Actuarial loss/(gain) - change in other financial assumptions | 9 | 7 |
Actuarial loss/(gain) - experience obligation | 0 | 4 |
Actuarial loss/(gain) - experience assets | 4 | 2 |
Investment management cost | 0 | 1 |
Asset ceiling - asset adjustment | 1 | -1 |
Remeasurements loss/(gain) in OCI | 14 | 8 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
173
I
I
2024 | 2023 | |||
INVESTMENT PROFILE FOR PENSION FUNDS | FUNDS | DISTRIBUTION | FUNDS | DISTRIBUTION |
Shares | 16 | 14% | 5 | 5% |
Bonds | 77 | 68% | 74 | 67% |
Properties and real estate | 17 | 15% | 15 | 14% |
Money market | 1 | 1% | 16 | 14% |
Other | 3 | 3% | 0 | 0% |
Total | 114 | 100% | 111 | 100% |
SENSITIVITY ANALYSIS
Norske Skog has performed sensitivity analyses of material group companies
for the most important assumptions related to defined benefit schemes to
predict how fluctuations will impact pension liabilities in the consolidated
balance sheet. In relation to the assumptions made in the calculation of
pension obligations the amount is most sensitive to changes in discount rate,
salary adjustment and pension growth rate. The sensitivity of the pension
obligation is shown in the table below:
SENSITIVITY
INCREASE | DECREASE | |
Discount rate - 0.5% | -5 | 6 |
Future national security - 1.0% | -5 | 1 |
Future pension - 0.5% | 4 | - |
The above sensitivity analyses are based on a change in an assumption while
holding all other assumptions constant. In practice, this is unlikely to occur,
and changes in some of the assumptions may be correlated. No data is
available for decrease of future pension adjustment. The sensitivity analysis is
based on actuarial calculations for the Norwegian schemes.
OTHER EMPLOYEE OBLIGATIONS
NET PERIODIC EXPENSE
2024 | 2023 | |
Net periodic expense/remeasurement | -14 | -1 |
Net periodic interest expense | 1 | 1 |
CHANGES IN OTHER EMPLOYEE BENEFITS
2024 | 2023 | |
Balance 1 January | -70 | -203 |
Adjustments to opening balance due to reclassification | -2 | 131 |
Current year's service cost | -1 | -7 |
Current year's interest cost | -1 | -1 |
Remeasurements (loss)/gain | 15 | 2 |
Payments made | 4 | 15 |
Other changes | 0 | -4 |
Discontinued operations | 37 | 0 |
Currency translation differences | -2 | -4 |
Balance 31 December | -15 | -70 |
OTHER EMPLOYEE BENEFITS IN THE BALANCE SHEET
2024 | 2023 | |
Other non-current employee benefit obligations | 15 | 36 |
Other current employee benefit obligations | 0 | 34 |
Total other employee benefits 31 December | 15 | 70 |
The obligation classified as current relates to employees that have completed
the required period of service and the group does not have an unconditional
right to defer settlement for these obligations. Based on previous experience,
the group does not expect all employees to take the full amount of accrued
leave or require payment within the next 12 months.
The current part is included in the balance sheet line other current liabilities.
The non-current employee benefit obligations is included in the balance sheet
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
174
I
I
Provisions
Provisions for environmental restoration, dismantling costs, restructuring
activities and legal claims are recognised when the group has a present legal
or constructive obligation as a result of past events, an outflow of resources is
more likely than not to be required to settle the obligation and the amount can
be reliably estimated.
Where a number of similar obligations exist, the likelihood that an outflow will
be required in settlement is determined by considering the class of obligations
as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the best estimate of the
expenditure required to settle the present obligation using a pre-tax rate that
reflects current market assessments of the time value of money and the risks
specific to the obligation. The increase in the provision due to passage of time
RESTRUCTURING | ENVIRONMENTAL | |
PROVISION | PROVISION | |
Balance 1 January 2023 | 43 | 168 |
Changes and new provisions | 39 | -6 |
Utilised during the year | -55 | -2 |
Periodic unwinding of discount | 0 | 5 |
Currency translation differences | 2 | 5 |
Balance 31 December 2023 | 29 | 169 |
Changes and new provisions | 16 | 7 |
Utilised during the year | -23 | 0 |
Classified as liabilities relating to assets held for sale | -8 | -143 |
Currency translation differences | -7 | 1 |
Balance 31 December 2024 | 7 | 34 |
RESTRUCTURING PROVISION
Restructuring provision is included in the balance sheet line other current
liabilities. This includes for example severance (redundancy) payments, early
retirement or other arrangements for employees leaving the company,
external costs to lawyers and legal advisors in relation to the restructuring
process, lease termination costs and onerous contracts. The restructuring
provision of NOK 7 million at 31 December 2024 includes various restructuring
activities included provision for severance payments and other costs
(Corporate functions NOK 0 million (NOK 14 million), publication paper
Europe NOK 7 million (NOK 8 million). The amount expensed in 2024 in
relation to restructuring activities amounted to NOK 16 million (Corporate
functions NOK 4 million (NOK 28 million),
and publication paper Europe
NOK 12 (NOK 5 million).
ENVIRONMENTAL PROVISION
The group’s provision for environmental obligations is presented in the
balance sheet as other non-current liabilities. The provision is related to
estimated future costs for cleaning up any environmental pollution caused by
Norske Skog production units. The provision will mainly be realised in a future
period upon a potential shut down of the production activities of any of the
Norske Skog production units. Increased environmental requirements from
local governments may also lead to realisation of this provision at an earlier
point in time.
Provisions for future environmental obligations amounted to NOK 34 million
at 31 December 2024 compared to NOK 169 million at 31 December 2023.
The decrease mainly relates to former segment publication paper Australasia
not being a part of the provision obligation at year end, due to the segment
being classified as held for sale in 2024. Resources spent on environmental
activities during 2024 was NOK 0 million (NOK 0 million).
The carrying value of the provision is the best estimate made by measuring
the expected value of the specific obligations, discounted to present value
using a long-term risk-free interest rate when the time value of money is
material. Changes in factors included in the expected value will impact the
carrying value of the obligation. To illustrate the sensitivity, a reduction in the
future discount rate by one percentage point would increase the provision by
approximately NOK 1 million. Changes in accounting estimates not related to
assets are classified as operating items in the income statement, and the
periodic unwinding of the discount is recognised within the income statement
line financial expenses.
DISMANTLING PROVISION
Provisions related to future dismantling costs arising from a future closing down
of production facilities amounted to NOK 0 million at 31 December 2024, and
NOK 0 million at 31 December 2023.
The total amount is normally classified as non-current and will only be
realised at the time of a future shut down of any of the Norske Skog production
units. The provision is the net present value of the future estimated costs,
calculated using a long-term risk-free interest rate. The periodic unwinding of
the discount is recognised in the income statement line financial expenses.
The opposite entry for dismantling provision and change in provision
estimates is property, plant and equipment.
Norske Skog is an international company that, through its ongoing business
operations, will be exposed to litigation and claims from public authorities and
contracting parties as well as assessments from public authorities in each
Norske Skog Saugbrugs, supercalender section
Photo: Carsten Dybevig
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
176
I
I
Interest-bearing liabilities
Borrowings are recognised initially at fair value, net of transaction costs incurred.
Borrowings are subsequently carried at amortised cost using the effective
INTEREST-BEARING DEBT, OUTSTANDING AMOUNTS | 31.12.2024 | 31.12.2023 |
Bonds | 1 400 | 1 530 |
Debt to financial institutions | 3 752 | 3 448 |
Factoring facilities | 27 | 0 |
Total | 5 179 | 4 978 |
CURRENCY AMOUNT | NOK | NOK | |
INTEREST-BEARING DEBT, OUTSTANDING AMOUNTS | 31.12.2024 | 31.12.2024 | 31.12.2023 |
EUR | 273 | 3 214 | 4 898 |
AUD | 0 | 0 | 15 |
Total interest-bearing debt in foreign currencies | 3 214 | 4 913 | |
NOK | 1 964 | 65 | |
Total interest-bearing debt | 5 179 | 4 978 |
Norske Skog issued a NOK 1
600 million senior unsecured bond in June 2024
to refinance its existing EUR 150 million senior secured bond. The bond
matures in June 2029 and has an interest rate of NIBOR (zero floor) + 4.5%
with quarterly interest payments. On 31 December 2024, Norske Skog had an
issued and outstanding amount of NOK 1
400 million under the bond
agreement.
In September 2024, Norske Skog Skogn issued a NOK 500 million loan with a
three-year maturity but option to extend for additional two years. The issue
resulted in the termination of the existing EUR 31 million Revolving Credit
Facility which was undrawn the time. On 31 December 2024, the new loan
was fully drawn.
Norske Skog has entered into credit facility agreements in an aggregate
amount of EUR 265 million to finance its investment to convert two paper
machines into producing packaging paper. EUR 193 million relates to Norske
Skog Golbey and EUR 72 million relates to Norske Skog Bruck. The borrowing
entities are Norske Skog Golbey SAS and Norske Skog Bruck GmbH, and the
facilities are fully guaranteed by Norske Skog ASA. The facilities in Norske
Skog Bruck have been fully drawn and repayment has commenced. The
facilities at Norske Skog Golbey have been drawn upon as capital expenditures
have been incurred. On 31 December 2024, the credit facilities had been
drawn by approximately EUR 228 million (EUR 250 million). The facilities
follow different repayment profiles ending during the period from 2027 to
2032.
The incineration boiler is financed by a EUR 54 million credit facility. The
facility is repaid in quarterly instalments up until the final maturity date in
2028. The borrower under the facility is Norske Skog Bruck GmbH and
Norske Skog ASA has provided a guarantee of EUR 20 million. At 31 December
2024, the outstanding amount under the credit facility was approximately
EUR 35 million (EUR 43 million).
The financial covenants applicable to Norske Skog on a consolidated basis
are (i) freely available and unrestricted cash and cash equivalents of minimum
NOK 100 million, (ii) EBITDA to net interest costs of minimum 2.0:1, (iii) book
equity to total assets of minimum 25%, and (iv) minimum last twelve months
(LTM) EBITDA of NOK 400 million. In addition, there are various company
specific financial covenants applicable to the subsidiaries acting as borrowers
under the respective credit facilities.
The EBITDA used in the calculation of financial covenants may differ from the
EBITDA shown in the financial reporting due to adjustment requirements in
the facility agreements.
The remaining financing arrangements for the group includes leasing,
factoring, and other credit facilities in the mill owning entities.
Norske Skog Skogn AS and Norske Skog Saugbrugs AS have pledged its
trade receivables in favour of its factoring provider. In addition, Norske Skog
Skogn AS and Norske Skog Saugbrugs AS have pledged certain parts of its
property and assets in favour of the NOK 500 million loan agreement at
Norske Skog Skogn AS. Saugbrugs Bioenergi AS, a wholly owned subsidiary
of Norske Skog Saugbrugs AS, has pledged certain parts of its property and
assets in favour of the lenders under a credit facility financing its biogas
facility. Norske Skog Golbey SAS has pledged certain parts of its property, in
an amount of up to EUR 13 million, in favour of a bank guarantor under a
guarantee to one of its energy suppliers. In addition, Norske Skog Golbey SAS
has pledged certain parts of its property and assets and Norske Skog ASA
has pledged the shares in Norske Skog Golbey SAS in favour of the lenders
under the packaging conversion facilities. Norske Skog Bruck GmbH has
pledged certain parts of its property and assets in favour of the lenders under
the incineration boiler facility and the packaging conversion facilities.
The average interest rate on 31 December 2024 was 6.2% (5.8%)
.
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
177
I
I
SCHEDULED REPAYMENTS OF THE GROUP’S FINANCIAL | ||||
DEBT AND INTEREST AT 31.12.2024 | INTEREST | OTHER LOANS 1) | BONDS | TOTAL |
2025 | 322 | 749 | 0 | 1 071 |
2026 | 279 | 616 | 0 | 895 |
2027 | 242 | 958 | 0 | 1 200 |
2028 | 189 | 638 | 0 | 827 |
2029 | 100 | 289 | 1 400 | 1 789 |
2030 | 22 | 282 | 0 | 304 |
2031 | 7 | 243 | 0 | 250 |
2032 -> | 0 | 4 | 0 | 4 |
Total | 1 161 | 3 779 | 1 400 | 6 340 |
SCHEDULED REPAYMENTS OF THE GROUP’S FINANCIAL DEBT | ||||
AND INTEREST AT 31.12.2023 | INTEREST | OTHER LOANS 1) | BONDS | TOTAL |
2024 | 314 | 483 | 0 | 797 |
2025 | 301 | 561 | 0 | 861 |
2026 | 129 | 528 | 1 530 | 2 186 |
2027 | 72 | 520 | 0 | 591 |
2028 | 49 | 596 | 0 | 645 |
2029 | 28 | 258 | 0 | 287 |
2030 | 18 | 258 | 0 | 275 |
2031 | 7 | 236 | 0 | 243 |
2032 | 1 | 9 | 0 | 10 |
2033 -> | 1 | 0 | 0 | 1 |
Total | 917 | 3 448 | 1 530 | 5 895 |
1)
Including full instalments for the EUR 54 million credit facility
The debt amounts set out above may differ from the carrying value in the
balance sheet due to the amortized cost principle and exclusion of debt items
related to leases. On 31 December 2024, the financial statements included
amortized cost in an amount of NOK 24 million (NOK 13 million), and the
amount of interest-bearing debt related to leases was NOK 92 million
(NOK 89 million). See Note 19.
Trade payables amounted to NOK 1
282 million on 31 December 2024
(NOK 1
035 million).
Drawn amounts from factoring arrangements is classified as interest-bearing
current liabilities. This amounts to NOK 27 million (NOK -11 million) in
scheduled repayments in 2025. The financed amount represents a group of
individual loans, which are settled individually at maturity of the trade
receivable. New loans are initiated on a consecutive basis based on new trade
receivable included under the factoring agreement. The liability is in its
nature current and Norske Skog does not have an unconditional right to defer
settlement beyond twelve months. The liabilities are liabilities that are settled
through its normal operating cycle. The corresponding trade receivable is
derecognised when the customer pays it.
On 31 December 2024, Norske Skog ASA and its subsidiaries had issued bank
guarantees on its behalf in an amount of NOK 282 million (NOK 192 million).
Norske Skog Skogn AS and Norske Skog Saugbrugs AS have pledged certain
parts of its assets and machinery, in an amount of up to NOK 200 million, to
its energy suppliers under long term energy supply agreements. The security
has priority behind the NOK 500 million loan at Norske Skog Skogn AS.
CONSOLIDATED FINANCIAL STATEMENTS
Norske Skog
Annual report 2024
178
I
I
INTEREST-BEARING NON-CURRENT LIABILITIES | NOTE | 31.12.2024 | 31.12.2023 |
Bond (amortised cost) | 1 376 | 1 517 | |
Debt to financial institutions | 3 029 | 2 964 | |
Leasing obligations | 19 | 70 | 55 |
Total | 22 | 4 475 | 4 536 |
INTEREST-BEARING CURRENT LIABILITIES | NOTE | 31.12.2024 | 31.12.2023 |
Debt to financial institutions and bond (amortised cost) | 749 | 484 | |
Leasing obligations related to right-of-use assets | 19 | 22 | 33 |
Total | 22 | 771 | 517 |
RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES | 2024 | 2023 |
Balance 1 January | 5 053 | 3 742 |
New loans raised | 1 981 | 1 366 |
Repayments | -2 086 | -346 |
New leasing debt | 107 | 55 |
Loss early repayment of bond and amortization of transaction costs debt issuance | 49 | 7 |
Liabilities relating to assets classified as held for sale | -58 | 0 |
Currency translation differences | 199 | 229 |
Balance 31 December | 5 246 | 5 053 |
Current | 771 | 517 |
Non-current | 4 475 | 4 536 |
30.
Trade and other payables, other current and non-current liabilities
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Trade payables are
2024 | 2023 | |
Trade and other payables | ||
Trade Payables | 1 282 | 1 035 |
Accrued labour cost and taxes | 331 | 500 |
Accrued expenses | 485 | 689 |
Other interest-free liabilities | 20 | 32 |
Total | 2 118 | 2 256 |
Other current liabilities | ||
Other current employee benefits | 0 | 34 |
Restructuring provision | 7 | 29 |
Accrued financial expenses | 4 | 11 |
Derivatives | 87 | 9 |
Commodity contracts | 105 | 47 |
Other current liabilities | 15 | 0 |
Total | 218 | 130 |
Other non-current liabilities | ||
Derivatives | 111 | 70 |
Commodity contracts | 93 | 203 |
Environmental provision | 34 | 169 |
Deferred recognition of government grants | 287 | 205 |
Total | 525 | 647 |
CONSOLIDATED FINANCIAL STATEMENTS
Annual report 2024
Norske Skog
179
I
I
Photo: Carsten Dybevig
Related parties
Investor AS and subsidiaries Drangsland Kapital AS and Byggma ASA are
related parties to Norske Skog through the ownership in Norske Skog ASA
and the CEO Geir Drangsland being the ultimate owner for these companies.
Balances and transactions between the group and subsidiaries listed in Note
20 have been eliminated on consolidation and are not disclosed in this note.
Remuneration for corporate management is presented in Note 10.
Remuneration for leading personnel is presented in the remuneration report
available at www.norskeskog.com.
Any transactions with related parties are conducted on normal commercial
Events after the balance sheet date
There have been no events after the balance sheet date with significant
impact on the financial statements for 2024.
On 31 January 2025 Norske Skog Saugbrugs and its insurance company has
agreed on a final settlement of all remaining insurance claims related to the
rockslide at the Saugbrugs industrial site on 27 April 2023. The settlement of
NOK 540 million will be jointly covered by the insurance company, The
Norwegian Natural Perils Pool and the reinsurers. Payment of the full
settlement amount is expected during the first quarter of 2025 and will thus
be recognised in EBITDA in the first quarter of 2025.
On 7 February 2025 Norske Skog signed an agreement with Boyer Capital Pty
Ltd to sell Norske Skog Industries Australia Ltd with its subsidiaries, mainly
Norske Skog Bruck, wood yard
Photo: Carsten Dybevig
Financial statements
Norske Skog ASA
Financial statements
Income statement
182
Statement of comprehensive income
182
Balance sheet
183
Statement of cash flows
184
Statement of changes in equity
184
Notes to the financial statements
1
General information
185
2
Accounting policies
185
3
Operating revenue by geographical market
185
4
Employee benefits and pensions
185
5
Derivatives and other fair value adjustment
186
6
Associated companies
186
7
Financial items
186
8
Income taxes
186
9
Intangible assets and property, plant and equipment
187
10
Shares in subsidiaries
188
11
Equity
189
12
Maturity of interest-bearing liabilities
190
13
Intercompany receivables and liabilities
190
14
Guarantees
191
15
Related parties
191
16
Events after the balance sheet date
191
Annual report 2024
I
Norske Skog
I
181
Annual report 2023
I
Norske Skog
I
181
FINANCIAL STATEMENTS NORSKE SKOG ASA
INCOME STATEMENT
NOK MILLION
NOTE
2024
2023
Total operating income
3
90
116
Employee benefit expenses
4
-70
-97
Other operating expenses
-62
-62
Restructuring expenses
-4
-28
Depreciation
8
-6
-6
Derivatives and other fair value adjustment
5
-8
0
Total operating expenses
-150
-193
Operating earnings
-60
-77
Share of profit in associated companies
6
-74
-15
Financial income
7
1 003
1 130
Financial expense
7
-982
-288
Gains/(losses) on foreign currency
7
-174
-74
Profit/(loss) before tax
-287
676
Income tax
8
-145
174
Profit/(loss) after tax
-432
851
STATEMENT OF COMPREHENSIVE INCOME
NOK MILLION
2024
2023
Profit/(loss) after tax
-432
851
Items that will not be reclassified subsequently to profit or loss
Remeasurements of post employment benefit obligations
0
-1
Tax effect on remeasurements of post employment benefit obligations
0
0
Other comprehensive income
0
0
Total comprehensive income
-432
850
182
I
Norske Skog
I
Annual report 2024
FINANCIAL STATEMENTS NORSKE SKOG ASA
BALANCE SHEET
NOK MILLION
NOTE
2024
2023
Deferred tax assets
8
49
193
Intangible assets
9
5
6
Property, plant and equipment
9
15
4
Shares in subsidiaries
10
4 657
5 163
Investment in associated companies
6
0
74
Other non-current assets
8
12
Total non-current assets
4 734
5 451
Trade and other receivables
78
69
Intercompany receivables
13
811
820
Other current assets
1
63
Cash and cash equivalents
812
1 642
Total current assets
1 701
2 594
Total assets
6 435
8 045
Paid-in-equity
4 001
4 001
Retained earnings and other reserves
61
493
Total equity
11
4 062
4 494
Employee benefit obligations
4
4
0
Interest-bearing non-current liabilities
12
1 381
1 517
Total non-current liabilities
1 385
1 517
Trade payables
4
7
Intercompany liabilities
13
896
1 964
Other current liabilities
88
63
Total current liabilities
988
2 035
Total liabilities
2 373
3 552
Total equity and liabilities
6 435
8 045
SKØYEN, 18 MARCH
2025
THE BOARD OF DIRECTORS OF NORSKE SKOG ASA
Arvid Grundekjøn
Chair
Trine-Marie Hagen
Board member
Christoffer Bull
Board member
Tone Wille
Board member
Geir Drangsland
CEO
Terje Sagbakken
Board member
Annual report 2024
I
Norske Skog
I
183
FINANCIAL STATEMENTS NORSKE SKOG ASA
STATEMENT OF CASH FLOWS
NOK MILLION
NOTE
2024
2023
Cash generated from operations
81
104
Cash used in operations
-181
-334
Cash flow from currency hedges and financial items
-11
28
Interest payments received
128
152
Interest payments made
-216
-214
Tax paid
8
-1
-1
Net cash flow from operating activities
-200
-264
Purchases equipment and intangible assets
9
-10
-3
Contributions of equity to subsidiary
10
-118
-652
Change in cashpool receivables
-48
548
Net cash flow from investing activities
-175
-107
New loans raised
1 377
0
Repayments of loans
-1 593
-37
Dividend paid
0
-57
Purchase/sale of treasury shares
0
-415
Change in cashpool payable
-264
510
Net cash flow from financing activities
-481
1
Foreign currency effects on cash and cash equivalents
27
0
Total change in cash and cash equivalents
-830
-369
Cash and cash equivalents 1 January
1 642
2 011
Cash and cash equivalents 31 December
1)
812
1 642
1)
Whereof restricted cash
147
452
STATEMENT OF CHANGES IN EQUITY
NOK MILLION
NOTE
SHARE CAPITAL
SHARE PREMIUM
OTHER PAID-IN
CAPITAL
RETAINED
EARNINGS
TOTAL EQUITY
Equity 1 January 2023
377
1 412
2 249
77
4 115
Change in paid-in capital
-38
0
0
-377
-415
Profit after tax
0
0
0
851
851
Other comprehensive income
0
0
0
0
0
Dividends paid
0
0
0
-57
-57
Equity 31 December 2023
339
1 412
2 249
493
4 494
Profit after tax
0
0
0
-432
-432
Other comprehensive income
0
0
0
0
0
Equity 31 December 2024
11
339
1 412
2 249
61
4 062
184
I
Norske Skog
I
Annual report 2024
FINANCIAL STATEMENTS NORSKE SKOG ASA
Notes to the
financial statements
1.
General information
All amounts are presented in NOK million unless otherwise stated. There may
be some small differences in the summation of columns due to rounding.
The financial statements were authorised for issue by the board of directors
on 18 March 2025.
2.
Accounting policies
The financial statements for Norske Skog ASA have been prepared and
presented in accordance with simplified IFRS pursuant to section 3-9 of the
Norwegian Accounting Act.
3.
Operating revenue by geographical market
Accounting policies
Revenue from contracts with customers is recognized when control of the
goods or services are transferred to the customer at an amount that reflects
the consideration to which the company expects to be entitled in exchange
for those goods or services.
The company’s operating revenue consists mainly of the sale of services to
other entities in the group. Operating revenue arising from sales of internal
services to other entities in the group amounted to NOK 89 million in 2024
(NOK 112 million).
OPERATING REVENUE BY GEOGRAPHICAL MARKET
2024
2023
Norway
37
45
Europe excluding Norway
45
60
Australasia
7
12
Total
90
116
4.
Employee benefits and pensions
EMPLOYEE BENEFIT EXPENSES
2024
2023
Salaries including holiday pay
36
75
Social security contributions
11
16
Pension expenses
20
3
Other employee benefit expenses
3
3
Total
70
97
The company is required by law to have a pension scheme for all employees.
The company’s pension plan is compliant with the requirements in the
Norwegian Act relating to mandatory occupational pension. See also Note 27
Pension and other employee obligations in the consolidated financial
statements for further information.
High expense for defined benefit pension in 2024 is due to corrections of prior
periods.
NUMBER OF EMPLOYEES
31.12.2024
31.12.2023
Employees
23
26
NET PERIODIC PENSION EXPENSES
2024
2023
Pension expenses, defined benefit plan
18
0
Pension expenses, defined contribution plan
2
3
Net periodic pension expenses
20
3
Net periodic interest expenses
0
0
PENSION ASSETS IN THE BALANCE SHEET
31.12.2024
31.12.2023
Net pension assets/(liabilities)
in the balance sheet
0
0
PENSION OBLIGATION IN THE BALANCE SHEET
31.12.2024
31.12.2023
Projected benefit obligation
-8
-9
Plan assets at fair value
8
8
Net pension obligations in the balance sheet
0
0
SENSITIVITY ANALYSIS AT 31 DECEMBER 2024
Increase
Decrease
Discount rate -0.5%
0
1
Salary adjustment -0.5%
0
0
Annual report 2024
I
Norske Skog
I
185
FINANCIAL STATEMENTS NORSKE SKOG ASA
5.
Derivatives and other fair value adjustment
Accounting policies
Financial energy derivative contracts are accounted for at fair value using
quoted prices. Realised gains/(losses) and value changes in contracts are
presented in the income statement under derivatives and other fair value
adjustment.
The energy trading is to financial hedge the groups energy costs.
DERIVATIVES AND OTHER FAIR VALUE ADJUSTMENT
2024
2023
Change in value in financial energy contracts
-1
0
Realised gains/(losses) on energy contracts
-7
0
Total
-8
0
6.
Associated companies
Accounting policies
Investment in associated companies are accounted for in accordance with
the equity method. The investment is initially recognized at cost, and the
carrying value is increased or decreased to recognise the company’s share of
the profit or loss of the investee after the date of acquisition.
Norske Skog holds a 26% share of Circa Group AS that has been suspended
from trading on Euronext Growth following its filed petition for bankruptcy on
7 October 2024. An impairment has been made to the shares to the reflect the
market value of nil. Total loss in 2024 amounts to NOK 74 million.
7.
Financial items
Accounting policies
Dividend income is recognised when the right to receive payment is
established, which is generally when the shareholders approve the dividend.
Interest income is recognised using the effective interest method.
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost, using the
effective interest method.
FINANCIAL ITEMS
2024
2023
Financial income
Dividends received
875
978
Interest income
73
94
Interest income from group companies
55
58
Total
1 003
1 130
Financial expenses
Interest expense
-139
-148
Interest expense group companies
-70
-73
Other financial expenses
-149
-27
Impairment of investments in subsidiaries
-624
-39
Total
-982
-288
Gains/(losses) on foreign currency
-174
-74
Total financial items
-154
768
In 2024 dividends of NOK 373 million (NOK 500 million) and NOK 502 million
(NOK 478 million) have been received from Norske Skog Saugbrugs AS and
Norske Skog Skogn AS, respectively.
For 2024 other financial expenses includes provision for bad debt regarding
the subsidiary Norske Skog Industries Australia Ltd.
1)
NOK 86 million and cost
regarding refinancing of the EUR 150 million senior bond NOK 43 million.
In 2023 other financial expenses includes write-down of other shares of
NOK 16 million.
1)
See Note 32 Events after the balance sheet date in the consolidated financial statements.
8.
Income taxes
Accounting policies
Income taxes includes current tax based on taxable profit and changes in
deferred tax. Deferred tax is provided in full, using the liability method, on
temporary differences arising between the carrying amount of assets and
liabilities.
Deferred tax assets are recognised to the extent it is probable that future
taxable profit will be available to utilise it.
TAX EXPENSE
2024
2023
Current tax expense
-1
-1
Change in deferred tax
-143
175
Total
-145
174
INCOME TAX RECONCILIATION
2024
2023
Profit/(loss) before income taxes
-287
676
Computed tax at nominal tax rate 22%
63
-149
Non taxable income/non deductible expenses
-17
14
Dividend
0
198
Impairment of investments in subsidiaries
-138
-12
Adjustment previous years
0
-5
Other items
-16
-3
Deferred tax assets not recognised
-35
132
Withholding tax
-1
-1
Total tax (expense)/income
-145
174
TEMPORARY DIFFERENCES AND TAX LOSSES
- DETAILS
31.12.2024 31.12.2023
Other non-current items
2
8
Pensions
4
0
Translation differences and financial instruments
0
120
Current items
-4
9
Group contribution
225
877
Tax losses to carry forward
590
550
Tax losses and other Deferred Tax Assets not recognised
-1 003
-845
Tax credits
24
15
Interest carry forward (Interest limitation rules)
315
205
Financial instruments
71
-63
Basis for deferred tax
225
877
DEFERRED TAX
31.12.2024 31.12.2023
Net deferred tax asset/(liability)
49
193
1)
The value of tax losses and other tax credits are partly written down, subsequently the tax losses are lower than
total tax benefits not recognised.
186
I
Norske Skog
I
Annual report 2024
FINANCIAL STATEMENTS NORSKE SKOG ASA
9.
Intangible assets and property, plant and equipment
Accounting policies
Intangible assets and property, plant and equipment are shown at historical
cost less subsequent depreciation and impairments. Historical cost includes
expenditure directly attributable to the acquisition of the items.
The right to use an asset is recognised in the balance sheet during the lease
term, together with the liability to make lease payments. At initial recognition
the leased asset is measured at an amount equal to the lease liability.
INTANGIBLE ASSETS
LICENCES AND PATENTS
Acquisition cost 1 January 2023
34
Addition
2
Acquisition cost 31 December 2023
36
Accumulated depreciation and impairments 1 January 2023
27
Depreciation
3
Accumulated depreciation and impairments 31 December 2023
30
Carrying value 31 December 2023
6
Acquisition cost 1 January 2024
36
Addition
2
Acquisition cost 31 December 2024
38
Accumulated depreciation and impairments 1 January 2024
30
Depreciation
3
Accumulated depreciation and impairments 31 December 2024
33
Carrying value 31 December 2024
5
Licenses, patents and other intangible assets are depreciated on a straight-
line basis over a period from three to five years.
Other intangible assets consist mainly of capitalised development costs
relating to customising of software.
PROPERTY, PLANT AND EQUIPMENT
FIXTURES AND
FITTINGS
PLANT UNDER
CONSTRUCTION
RIGHT-OF-USE
ASSETS
TOTAL
Acquisition cost 1 January 2023
1
1
14
17
Addition
0
1
0
1
Acquisition cost 31 December 2023
1
2
14
17
Accumulated depreciation and impairments 1 January 2023
1
0
9
11
Depreciation
0
0
3
3
Accumulated depreciation and impairments 31 December 2023
1
0
12
14
Carrying value 31 December 2023
0
2
2
4
Acquisition cost 1 January 2024
1
2
14
17
Addition
0
7
6
14
Disposals
0
0
-14
-14
Acquisition cost 31 December 2024
1
9
6
17
Accumulated depreciation and impairments 1 January 2024
1
0
12
14
Depreciation
0
0
3
3
Disposals
0
0
-14
-14
Accumulated depreciation and impairments 31 December 2024
1
0
1
3
Carrying value 31 December 2024
0
9
5
15
Fixtures and fittings and right of use assets are depreciated on a linear basis over a period from three to five years.
Annual report 2024
I
Norske Skog
I
187
Photo: Carsten Dybevig
FINANCIAL STATEMENTS NORSKE SKOG ASA
10.
Shares in subsidiaries
Accounting policies
Shares in subsidiaries are recognised at lower of cost and net-realisable value.
Investments in subsidiaries are tested for impairment in accordance with
IAS 36
Impairment of assets.
Shares are reviewed for impairment if changes in
circumstances indicate that the carrying amount is higher than the fair value of
the investment. Impairment loss is reversed if the impairment situation no
longer exists. For impairment testing purposes, investments in subsidiaries are
grouped in the same manner as the cash-generating units for the group. The
carrying amount of investments in subsidiaries within each cash-generating
unit is measured against the recoverable amount of investments in subsidiaries
within this cash-generating unit.
SHARE IN SUBSIDIARIES
CURRENCY
SHARE CAPITAL
(IN 1
000)
OWNERSHIP%
CARRYING VALUE
(IN NOK MILLION)
Norske Skog Bruck GmbH, Bruck, Austria
EUR
67 000
99.9%
1 000
Norske Skog Golbey SAS, Golbey, France
EUR
62 365
100.0%
1 715
Norske Skog Skogn AS, Levanger, Norway
NOK
115 230
100.0%
615
Norske Skog Saugbrugs AS, Halden, Norway
NOK
115 230
100.0%
1 301
Norske Skog Industries Australia Ltd., Sydney, Australia
AUD
340 000
100.0%
0
Nornews AS, Oslo, Norway
NOK
300
100.0%
26
Cebina AS, Oslo, Norway
NOK
30
100.0%
0
Cebico AS, Oslo, Norway
NOK
30
100.0%
0
Total
4 657
The investment in subsidiaries have decreased from NOK 5
163 million to
NOK 4
657 million during 2024. The decrease is due to new paid in capital of
EUR 10 million and impairment of NOK 387 in Norske Skog Bruck GmbH and
impairment of NOK 237 million in Norske Skog Industries Australia Ltd.
See Note 7. For further information with respect to impairment testing see
Note 18 Property, plant and equipment in the consolidated financial
statements.
188
I
Norske Skog
I
Annual report 2024
FINANCIAL STATEMENTS NORSKE SKOG ASA
11.
Equity
Accounting policies
Ordinary shares are classified as equity. Incremental costs directly attributable
to the issue of new shares are shown in equity as a deduction, net of tax, from
the proceeds.
1 January 2024 Norske Skog ASA held 9
426 470
own shares, representing
10% of the share capital. The shares were cancelled by capital reduction in
2024.
The share capital of Norske Skog ASA on 31 December 2024 was
NOK 339 million (NOK 377 million) and consisted of 84
838 235
shares each
with a nominal value of NOK 4.00
. All shares have been created under the
Norwegian Public Limited Companies Act and are validly issued and fully paid.
Byggma ASA/Drangsland Kapital AS/Investor AS is the largest shareholder
with a combined ownership of 26.84% on 31 December 2024
.
The 20 largest shareholders at 31 December 2024 are as follows:
20 LARGEST SHAREHOLDERS AT 31.12.2024
NUMBER OF
SHARES
OWNERSHIP%
Byggma ASA
17 430 431
20.55
UBS Europe SE
7 595 017
8.95
Drangsland Kapital AS
5 316 148
6.27
Intertrade Shipping AS
3 000 000
3.54
J.P. Morgan SE
2 819 755
3.32
Verdipapirfondet Fondsfinans Norge
2 802 177
3.30
Voldstad Eiendom AS
2 200 984
2.59
State Street Bank And Trust Comp
1 075 296
1.27
Nordnet Bank AB
867 034
1.02
VPF Sparebank 1 Norge Verdi
750 000
0.88
Inak 3 AS
700 000
0.83
Pershing Securities Limited
688 585
0.81
Saxo Bank A/S
585 469
0.69
J.P. Morgan SE
566 669
0.67
SES AS
500 000
0.59
Gåsø Næringsutvikling AS
425 000
0.50
Goldman Sachs & Co. LLC
400 000
0.47
Sparebank 1 Markets AS
389 976
0.46
Verdipapirfondet Dnb SMB
377 154
0.44
Ronja Capital Investment AS
375 000
0.44
Other shareholders
35 973 540
42.40
Total
84 838 235
100.00
The shareholder list is extracted from VPS. Whilst every reasonable effort is made to verify all data VPS cannot guarantee the accuracy of the analysis.
SHARES OWNED BY MEMBERS OF THE BOARD OF DIRECTORS AT 31 DECEMBER 2024
NUMBER OF SHARES
Arvid Grundekjøn
101 617
Trine-Marie Hagen
0
Terje Sagbakken
0
Christoffer Bull
0
Tone Wille
0
SHARES OWNED BY MEMBERS OF CORPORATE MANAGEMENT AT 31 DECEMBER 2024
NUMBER OF SHARES
Geir Drangsland
1)
22 774 079
Tord Steinset Torvund
11 000
Robert Wood
5 263
Even Lund
0
Einar Blaauw
0
1)
Geir Drangsland is the controlling shareholder of Investor AS. The company’s largest shareholders, Byggma
ASA and Drangsland Kapital AS are under common control of Investor AS and the three companies holds 22
774 079
shares combined. See also Note 31 Related parties in the consolidated financial statements.
Annual report 2024
I
Norske Skog
I
189
FINANCIAL STATEMENTS NORSKE SKOG ASA
12.
Maturity of interest-bearing liabilities
MATURITY OF THE COMPANY’S DEBT AT 31.12.2024
INTEREST
BOND
TOTAL
2025
130
0
130
2026
130
0
130
2027
130
0
130
2028
131
0
131
2029
65
1 400
1 465
Total
587
1 400
1 987
MATURITY OF THE COMPANY’S DEBT AT 31.12.2023
INTEREST
BOND
TOTAL
2024
147
0
147
2025
147
0
147
2026
36
1 530
1 566
Total
330
1 530
1 860
The table above shows contractual scheduled repayments.
During 2024 the EUR 150 million bond was refinanced with a NIBOR+450
bps NOK 1 600 million senior unsecured bond. On 31 December 2024 the
outstanding amount under the NOK 1 600 million senior unsecured bond, was
NOK 1 400 million.
For more information, see Note 29 Interest-bearing liabilities in the
consolidated financial statements.
13.
Intercompany receivables and liabilities
31.12.2024
31.12.2023
Current intercompany receivables
Nornews AS
2
2
Norske Skog Bruck GmbH
608
393
Norske Skog Golbey SAS
0
6
Norske Skog Skogn AS
0
194
Saugbrugs Bioenergi AS
32
6
Norske Skog (Australasia) Pty Ltd
168
221
Total
811
820
Current intercompany liabilities
GV Bois SAS
1
3
Norske Skog (Österreich) GmbH
23
19
Norske Skog (Schweiz) AG
1
3
Norske Skog Deutschland GmbH
71
67
Norske Skog France SARL
54
45
Norske Skog Golbey SAS
186
1 467
Norske Skog Saugbrugs AS
160
323
Norske Skog Skogn AS
371
14
Norske Skog (UK) Ltd.
30
23
Total
896
1 964
All non-current intercompany debt falls due for repayment at least 12 months
after the balance sheet date. The majority of this debt has a considerably
longer term to maturity.
190
I
Norske Skog
I
Annual report 2024
FINANCIAL STATEMENTS NORSKE SKOG ASA
14.
Guarantees
The company has issued bank guarantees in an amount of NOK 4 million at
31 December 2024 (NOK 4 million). In addition, the company has issued
corporate guarantees with an outstanding amount of NOK 3
129 million at
31 December 2024 (NOK 2
988 million) on behalf of Norske Skog Saugbrugs
AS, Saugbrugs Bioenergi AS, Norske Skog Skogn AS, Norske Skog Bruck
GmbH, Norske Skog Golbey SAS and Norske Skog Paper Mills (Australia) Ltd.
15.
Related parties
A description of transactions with related parties is given in Note 31 Related
parties in the consolidated financial statements.
16.
Events after the balance sheet date
There have been no events after the balance sheet date with significant
impact on the financial statements for 2024.
See Note 32 Events after the balance sheet date in the consolidated financial
statements for other post balance sheet events.
Statement from the
board of directors and the
CEO
IN COMPLIANCE WITH SECTION 5-5 IN THE SECURITIES TRADING ACT
We declare that to the best of our knowledge, the financial statements for the
period 1 January to 31 December 2024 have been prepared in accordance
with applicable accounting standards, and that the information in the financial
statements give a true and fair view of the company’s and the group’s assets,
liabilities, financial position and result as a whole.
We confirm that the board of directors’ report provides a true and fair view of
the development and performance of the business and the position of the
company and the group, as well as a description of the key risks and
uncertainty factors which the company and the group is facing.
We further confirm that the board of directors’ report has been prepared in
accordance with and meet the requirements of the European sustainability
reporting standards (ESRS), the Norwegian accounting act and article 8 of
the taxonomy regulation.
SKØYEN, 18 MARCH 2025
THE BOARD OF DIRECTORS OF NORSKE SKOG ASA
Arvid Grundekjøn
Chair
Trine-Marie Hagen
Board member
Christoffer Bull
Board member
Tone Wille
Board member
Geir Drangsland
CEO
Terje Sagbakken
Board member
Annual report 2024
I
Norske Skog
I
191
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Norske Skog ASA
Independent Sustainability Auditor’s Limited Assurance Report
Limited Assurance Conclusion
We have conducted a limited assurance engagement on the consolidated sustainability statement
of Norske Skog ASA (the «Company») included in the Sustainability statement
of the Board of Directors’
report (the «Sustainability Statement»), as at 31 December 2024 and for the year then ended.
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our
attention that causes us to believe that the Sustainability Statement is not prepared, in all material respects,
in accordance with the Norwegian Accounting Act section 2-3, including:
●
compliance with the European Sustainability Reporting Standards (ESRS), including that the
process carried out by the Company to identify the information reported in the Sustainability
Statement (the «Process») is in accordance with the description set out in the section
s “3. Strategy,
stakeholders, material impacts, risks and opportunities (IRO)” and “4. Impacts, risks and
opportunity management” within the General Disclosures chapter
; and
●
compliance of the disclosures in the subsection "EU taxonomy" in the Climate change section of
the Sustainability Statement with Article 8 of EU Regulation 2020/852 (the «Taxonomy
Regulation»).
Basis for Conclusion
We conducted our limited assurance engagement in accordance with International Standard on Assurance
Engagements (ISAE) 3000 (Revised), Assurance engagements other than audits or reviews of historical
financial information («ISAE 3000 (Revised)»), issued by the International Auditing and Assurance
Standards Board.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion. Our responsibilities under this standard are further described in the
Sustainability Auditor’s
Responsibilities
section of our report.
Our Independence and Quality Management
We have complied with the independence and other ethical requirements as required by relevant laws and
regulations in Norway and the International Code of Ethics for Professional Accountants (including
International Independence Standards) issued by the International Ethics Standards Board for Accountants
(IESBA Code), which is founded on fundamental principles of integrity, objectivity, professional competence
and due care, confidentiality and professional behaviour.
The firm applies International Standard on Quality Management 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.
Other Matter
The comparative information included in the Sustainability Statement was not subject to an assurance
engagement. Our conclusion is not modified in respect of this matter.
192
I
Norske Skog
I
Annual report 2024
SUSTAINABILITY REPORT
/
INDEPENDENT AUDITOR’S ASSURANCE REPORT
2 / 4
Responsibilities for the Sustainability Statement
The Board of Directors and the Managing Director (Management) are responsible for designing and
implementing a process to identify the information reported in the Sustainability Statement in accordance
with the ESRS and for disclosing this Process in the section
s “3. Strategy, stakeholders, material impacts,
risks and opportunities (IRO)” and “4. Impacts, risks and opportunity management” within the General
Disclosures chapter of the Sustainability Statement. This responsibility includes:
●
understanding the context in which the Group's activities and business relationships take place and
developing an understanding of its affected stakeholders;
●
the identification of the actual and potential impacts (both negative and positive) related to
sustainability matters, as well as risks and opportunities that affect, or could reasonably be
expected to affect, the Group’s financial position, financial perf
ormance, cash flows, access to
finance or cost of capital over the short-, medium-, or long-term;
●
the assessment of the materiality of the identified impacts, risks and opportunities related to
sustainability matters by selecting and applying appropriate thresholds; and
●
making assumptions that are reasonable in the circumstances.
Management is further responsible for the preparation of the Sustainability Statement, in accordance with
the Norwegian Accounting Act section 2-3, including:
●
compliance with the ESRS;
●
preparing the disclosures in the subsection "EU taxonomy" in the Climate change section of the
Sustainability Statement, in compliance with the Taxonomy Regulation;
●
designing, implementing and maintaining such internal control that Management determines is
necessary to enable the preparation of the Sustainability Statement that is free from material
misstatement, whether due to fraud or error; and
●
the selection and application of appropriate sustainability reporting methods and making
assumptions and estimates that are reasonable in the circumstances.
Inherent limitations in preparing the Sustainability Statement
In reporting forward-looking information in accordance with ESRS, Management is required to prepare the
forward-looking information on the basis of disclosed assumptions about events that may occur in the future
and possible future actions by the Group. Actual outcomes are likely to be different since anticipated events
frequently do not occur as expected.
Sustainability
Auditor’s Responsibilities
Our responsibility is to plan and perform the assurance engagement to obtain limited assurance about
whether the Sustainability Statement is free from material misstatement, whether due to fraud or error, and
to issue a limited assurance report that includes our conclusion. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence decisions of users taken on the basis of the Sustainability Statement as a whole.
As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise
professional judgement and maintain professional scepticism throughout the engagement.
4
Annual report 2024
I
Norske Skog
I
193
INDEPENDENT AUDITOR’S ASSURANCE REPORT
/
SUSTAINABILITY REPORT
3 / 4
Our responsibilities in respect of the Sustainability Statement, in relation to the Process, include:
●
Obtaining an understanding of the Process, but not for the purpose of providing a conclusion on the
effectiveness of the Process, including the outcome of the Process;
●
Considering whether the information identified addresses the applicable disclosure requirements of
the ESRS; and
●
Designing and performing procedures to evaluate whether the Process is consistent with the
Company’s description of its Process set out in the section
s
“3. Strategy, stakeholders, material
impacts, risks and opportunities (IRO)” and “4. Impacts, risks and opportunity management” within
the General Disclosures chapter
.
Our other responsibilities in respect of the Sustainability Statement include:
●
Identifying where material misstatements are likely to arise, whether due to fraud or error; and
●
Designing and performing procedures responsive to where material misstatements are likely to
arise in the Sustainability Statement. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Summary of the Work Performed
A limited assurance engagement involves performing procedures to obtain evidence about the
Sustainability Statement. The procedures in a limited assurance engagement vary in nature and timing
from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of
assurance obtained in a limited assurance engagement is substantially lower than the assurance that would
have been obtained had a reasonable assurance engagement been performed.
The nature, timing and extent of procedures selected depend on professional judgement, including the
identification of disclosures where material misstatements are likely to arise in the Sustainability Statement,
whether due to fraud or error.
In conducting our limited assurance engagement, with respect to the Process, we:
●
Obtained an understanding of the Process by:
o
performing inquiries to understand the sources of the information used by management
(e.g., stakeholder engagement, business plans and strategy documents); and
o
reviewing the Company’s internal documentation of its Process; and
●
Evaluated whether the evidence obtained from our procedures with respect to the Process
implemented by the Company was consistent with the description of the Process set out in the
sections
“3. Strategy, stakeholders, material impacts, risks and opportunities (IRO)” and “4.
Impacts, risks and opportunity management” within the General Disclosures chapter
.
194
I
Norske Skog
I
Annual report 2024
INDEPENDENT AUDITOR’S REPORT
4 / 4
In conducting our limited assurance engagement, with respect to the Sustainability Statement, we:
●
Obtained an understanding of the Group’s reporting processes relevant to the preparation of its
Sustainability Statement by:
o
Obtaining an understanding of the Group’s control environment, processes, control
activities and information system relevant to the preparation of the Sustainability
Statement, but not for the purpose of providing a conclusion on the effectiveness of the
G
roup’s internal control; and
o
Obtaining an understanding of the Group’s risk assessment process;
●
Evaluated whether the information identified by the Process is included in the Sustainability
Statement;
●
Evaluated whether the structure and the presentation of the Sustainability Statement is in
accordance with the ESRS;
●
Performed inquiries of relevant personnel on selected information in the Sustainability Statement;
●
Performed substantive assurance procedures on selected information in the Sustainability
Statement;
●
Where applicable, compared disclosures in the Sustainability Statement with the corresponding
disclosures in the financial statements and other sections of the Board of Directors’ report;
●
Evaluated the methods, assumptions and data for developing estimates and forward-looking
information;
●
Obtained an understanding of the Company’s process to identify taxonomy
-eligible and taxonomy-
aligned economic activities and the corresponding disclosures in the Sustainability Statement;
●
Evaluated whether information about the identified taxonomy-eligible and taxonomy-aligned
economic activities is included in the Sustainability Statement; and
●
Performed inquiries of relevant personnel and substantive procedures on selected taxonomy
disclosures included in the Sustainability Statement.
Oslo, 18 March 2025
PricewaterhouseCoopers AS
Herman Skibrek
State Authorised Public Accountant
–
Sustainability Auditor
Annual report 2024
I
Norske Skog
I
195
INDEPENDENT AUDITOR’S REPORT
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Norske Skog ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Norske Skog ASA, which comprise:
•
the financial statements of the parent company Norske Skog ASA (the Company), which comprise
the balance sheet as at 31 December 2024, the income statement, statement of comprehensive
income, statement of changes in equity and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies, and
•
the consolidated financial statements of Norske Skog ASA and its subsidiaries (the Group), which
comprise the balance sheet as at 31 December 2024, the income statement, statement of
comprehensive income, statement of changes in group equity and statement of cash flows for the
year then ended, and notes to the financial statements, including material accounting policy
information.
In our opinion
•
the financial statements comply with applicable statutory requirements,
•
the financial statements give a true and fair view of the financial position of the Company as at 31
December 2024, and its financial performance and its cash flows for the year then ended in
accordance with simplified application of international accounting standards according to section 3-
9 of the Norwegian Accounting Act, and
•
the consolidated financial statements give a true and fair view of the financial position of the Group
as at 31 December 2024, and its financial performance and its cash flows for the year then ended
in accordance with IFRS Accounting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements
section of our report. We are independent of the Company and the Group as required by
relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International Independence Standards)
(IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation
(537/2014) Article 5.1 have been provided.
We have been the auditor of Norske Skog ASA for 3 years from the election by the general meeting of the
shareholders on 21 April 2022 for the accounting year 2022.
196
I
Norske Skog
I
Annual report 2024
INDEPENDENT AUDITOR’S REPORT
2 / 5
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Last year’s key audit matter concerning the Accounting for the Insurance Settlement Related to the
Rockslide Incident at Norske Skog Saugbrugs was no longer an area of focus, as the accounting treatment
of the insurance claim was settled by management in 2023.
Key Audit Matters
How our audit addressed the Key Audit Matter
Valuation of Commodity Contracts to Fair Value
Being a paper producer with significant
electricity
consumption, the Group is exposed to
uncertainty
related to changes in electricity market
prices.
Thus, the price of electricity has a significant
impact
on the Group's results. The Group price-
protects
part of its future electric power
consumption using
physical energy commodity
contracts. Policies are
established to manage the
risks arising from these
contracts.
Commodity contracts classified as
financial
instruments within the scope of IFRS 9 are
related
to energy contracts in Norway. To calculate
the fair
value of the commodity contracts,
management
uses a complex model with several
input factors.
Fair value of commodity contracts
recognised in the
balance sheet is calculated by
using quotes from
actively traded markets when
available. Otherwise,
price forecasts from
acknowledged external
sources are used.
The fair value of commodity contracts is
especially
sensitive to future changes in energy
prices.
Accounting for financial instruments used to
hedge
electricity expenses is a key matter in our
audit due
to the complexity of management's
calculations,
and the significant impact on the
Group's results
from changes in fair value.
Management explains the
accounting of
electricity
contracts in notes 5, 12, 21, 22, 23 and
30
to the consolidated financial statements.
During our audit, we mapped and assessed
the
design of the Group's internal controls related
to
trading, monitoring, and accounting of
electricity
commodity contracts. We also assessed
the
Group's accounting principles for
financial
instruments against requirements in the
IFRS
Accounting Standards, particularly IFRS 9.
We interviewed management to understand
how
they calculated the fair value of the
commodity
contracts, including how judgment was
applied.
Further, we evaluated the appropriateness
of the
model used by comparing to models
generally used
for valuation of co
mmodity contracts
and
performed a technical recalculation of the
valuation.
We tested the completeness, existence, and
valuation of the commodity contracts by
obtaining
and understanding the underlying
agreements.
Further, we tested the accuracy of the
input factors
including future electricity prices,
Electricity Price
Area Differentials, discount rates,
paper prices,
pulpwood prices, and currency
assumptions by
comparing to forecasts from
external sources such
as Nasdaq, Reuters,
Fastmarkets Risi, Nord Pool,
Statistics Norway,
and the International Monetary
Fund.
We discussed and challenged management’s
assumptions and use of judgment by evaluating
whether these were used neutrally and consistently
in the valuation and in comparison
, to valuations
performed in prior periods.
We also assessed and found that the information in
the notes was sufficient and comprehensive.
Annual report 2024
I
Norske Skog
I
197
INDEPENDENT AUDITOR’S REPORT
3 / 5
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information in the
Board of Directors’ report and the other information accompanying the financial statements. The other
information comprises information in the annual report, but does not include the financial statements and
our auditor’s report thereon.
Our opinion on the financial statements does not cover the information in the
Board of Directors’
report nor the other information accompanying the financial statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’
report and the other information accompanying the financial statements. The purpose is to consider if there
is material inconsistency between th
e Board of Directors’ report and the other information accompanying
the financial statements and the financial statements or our knowledge obtained in the audit, or whether the
Board of Directors’ report and the other information accompanying the financial
statements otherwise
appears to be materially misstated. We are required to report if there is a material misstatement in the
Board of Directors’ report or the other information accompanying the financial statements. We have nothing
to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
•
is consistent with the financial statements and
•
contains the information required by applicable statutory requirements.
Our opinion on the Board of Directors' report applies correspondingly to the statement on Corporate
Governance.
Our opinion on whether the Board of Directors’ report contains the information required by
applicable
statutory requirements, does not cover the Sustainability Statement, on which a separate assurance report
is issued.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements of the Company that give a true and
fair view in accordance with simplified application of international accounting standards according to the
Norwegian Accounting Act section 3-9, and for the preparation of the consolidated financial statements of
the Group that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the
EU. Management is responsible for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the Group
or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
198
I
Norske Skog
I
Annual report 2024
INDEPENDENT AUDITOR’S REPORT
4 / 5
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
•
obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's and the Group's internal control.
•
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
•
conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company's and the Group's ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause the Company and the Group to cease to continue as a going concern.
•
evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves a true and fair view.
•
obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with the Board of Directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our au
ditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Annual report 2024
I
Norske Skog
I
199
5 / 5
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Norske Skog ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the annual
report, with the file name Norske_Skog_Annual_Report_2024_ESEF.zip, have been prepared, in all
material respects, in compliance with the requirements of the Commission Delegated Regulation (EU)
2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section
5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the
annual report in XHTML format, and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all material
respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF regulation.
This responsibility comprises an adequate process and such internal control as management determines is
necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF
reporting, see:
https://revisorforeningen.no/revisjonsberetninger
Oslo, 18 March 2025
PricewaterhouseCoopers AS
Herman Skibrek
State Authorised Public Accountant
200
I
Norske Skog
I
Annual report 2024
INDEPENDENT AUDITOR’S REPORT
Alternative performance measures
Alternative performance measures (APM) is defined as a financial measure of
historical or future financial performance, financial position, or cash flows,
other than a financial measure defined or specific in the applicable financial
reporting framework (IFRS). The company uses EBITDA, EBITDA margin and
return on capital employed (annualised) to measure operating performance on
group level. It is the company’s view that the APMs provides the investors
relevant and specific operating figures that may enhance their understanding
of the performance. EBITDA, EBITDA margin, variable costs, fixed costs, return
on capital employed and net interest-bearing debt are defined by the company
below.
EBITDA:
Operating earnings for the period, before restructuring expenses,
depreciation and amortisation and impairment charges, derivatives and other
fair value adjustments, determined on an entity, combined or consolidated
basis. EBITDA is used for providing consisting information of operating
performance and cash generating which is relative to other companies and
frequently used by other stakeholders.
RESTATED
NOK MILLION
2024
2023
Operating earnings
-60
934
Restructuring expenses
16
32
Depreciation
481
464
Impairments
121
27
Derivatives and other fair value adjustments
178
605
EBITDA
736
2 062
EBITDA margin:
EBITDA/total operating income. EBITDA margin assist in providing a more comprehensive analysis of operating performance relative to other companies.
RESTATED
NOK MILLION
2024
2023
EBITDA
736
2 062
Total operating income
10 173
11 557
EBITDA margin
7.2%
17.8%
Variable costs:
Distribution costs + cost of materials.
RESTATED
NOK MILLION
2024
2023
Distribution costs
1 005
845
Cost of materials
5 927
5 863
Variable costs
6 932
6 708
Fixed costs:
Employee benefit expenses + other operating expenses.
RESTATED
NOK MILLION
2024
2023
Employee benefit expenses
1 702
1 768
Other operating expenses
803
1 019
Fixed costs
2 505
2 787
Annual report 2024
I
Norske Skog
I
201
ALTERNATIVE PERFORMANCE MEASURES
Return on capital employed (annualised):
(Annualised EBITDA – annualised capital expenditure)/capital employed (average).
RESTATED
NOK MILLION
2024
2023
EBITDA
736
2 062
Capital expenditure
1 558
3 084
Average capital employed
10 103
8 172
Return on capital employed (annualised)
-8.1%
-12.5%
NOK MILLION
2024
2023
Intangible assets
11
12
Tangible assets
9 723
8 567
Inventory
1 390
1 360
Trade and other receivables
1 253
1 635
Trade and other payables
-2 118
-2 256
Assets held for sale
631
0
Capital employed
10 890
9 317
Net interest-bearing debt:
Net interest-bearing debt consist of bond issued and other interest-bearing liabilities (current and non-current) reduced by cash and cash equivalent.
2024
2023
Interest-bearing non-current liabilities
4 475
4 536
Interest-bearing current liabilities
771
517
Cash and cash equivalents
-1 127
-2 463
Net interest-bearing debt
4 119
2 590
Capital expenditure (capex):
Purchases of property, plant and equipment and intangible assets.
Maintenance capex:
Capex required to maintain the group’s current business.
202
I
Norske Skog
I
Annual report 2024
ALTERNATIVE PERFORMANCE MEASURES
Norske Skog Golbey, pipes to the air condenser
Photo: Carsten Dybevig
NORSKE SKOG ASA
Sjølyst plass 2, 0278 Oslo
/
www.norskeskog.com
Film about Norske
Skog Golbey
Film about
Norske Skog
Follow us