Stora Enso faces investor pressure and potential divestments amid conservation crime investigation

03 Sep 2024 --- Stora Enso has announced a range of remedial measures after being found to have committed a serious nature conservation violation, which is under investigation by Finnish police. The forestry corporation’s wood harvesters were crossing protected conservation areas, damaging habitats of the endangered freshwater pearl mussel. CEO Hans Sohlström says the company’s “credibility has taken a serious blow.”

The offense was discovered at a Stora Enso harvesting site on August 15, in Kainuu, Finland. Logging machinery was found to have been crossing the Hukkajoki river, crushing the mussels and polluting the river with tons of wood chip sediment, mud and other residues.

Several Finnish pension funds are reportedly considering divesting from the company as a result. Other investors are engaging with the company’s leadership to acquire answers before making any decisions.

Pirkko-Liisa Luhta, a project leader and advisor for fisheries planning at Metsähallitus, a state-owned Finnish nature conservation organization, tells Packaging Insights that Stora Enso’s harvesting machines crossed the river between 300-400 times, and that dirt dragged into the river has traveled up to 700 meters downstream.

“There are dead mussels that have been crushed, and there are mussels that cannot breathe anymore because of the sediment. It’s very difficult to know how many will survive over winter, especially downstream,” she says.

Stora Enso offered help after the discovery, but Metsähallitus could not find any other way to dredge the river of the pollution, so it has been removing the sediment by hand, in thousands of buckets.

“The water levels are rising, and it’s a difficult time to deal with this issue. The river is roughly 15 meters wide,” says Luhta.

Stora Enso investigation

According to Stora Enso’s internal investigation, the events are a consequence of several factors, related to information flow, IT systems functions and individual and company miscalculations. The company states it will bear its responsibility both environmentally and financially.

“It is too early to comment on the actual damage impact, why it is also premature to provide estimates on the costs,” Carl Norell, a Stora Enso spokesperson, tells us. “Focus is still on the restoration work managed by the Finnish forest authority, which we are funding and also supporting onsite with help from Stora Enso employees.”

“The police investigation is ongoing, and any legal repercussions will become clear once that investigation is completed. Since the violation came to our attention, we suspended wood harvesting in protected sites in Finland to assess any risks related to these sites. This assessment is a high priority and we hope to conclude it quickly.”

The company has announced a number of corrective measures to ensure an “uninterrupted flow of information and compliance with guidelines” in the future:

• Increased resources for the planning and monitoring of harvesting operations.
• Self-monitoring and information flow will pay special attention to harvesting operations carried out in sensitive nature areas.
• Further development of forest industry IT systems will be conducted to provide automatic monitoring and alerts for all actors in the supply chain.
• Further clarification of the roles of actors within its harvesting operations will be made.
• The planning and implementation of the above measures started immediately. In addition, Stora Enso will start to develop a forestry water program in Finland.

“We have established a reputation as a leader in sustainability, and now our credibility is being severely tested. For Stora Enso, being a responsible and reliable operator is of paramount importance,” says Sohlström.

By Louis Gore-Langton

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