ESG in the paper industry is evolving from a concept associated primarily with sustainable development into an increasingly important factor in business strategy, risk management and access to international markets. As customers, investors and supply-chain partners pay greater attention to raw material sourcing, emissions, resource efficiency and transparency, paper companies need to demonstrate their ESG performance through concrete policies, processes and data.
ESG in the Paper Industry: From Sustainability Trend to Strategic Requirement
ESG comprises three main pillars: Environmental, Social and Governance.
For the pulp and paper industry, ESG is directly connected to many aspects of production, from raw materials, energy and water to emissions, waste, working conditions, corporate governance and supply-chain management.
In the past, the competitiveness of paper companies was generally assessed based on production costs, production capacity, productivity, product quality and the ability to fulfill orders. However, sustainability factors are increasingly being incorporated into supplier selection and partner evaluation processes.
In particular, international sustainability reporting standards are increasingly emphasizing the need for companies to identify, manage and disclose sustainability-related risks and opportunities. IFRS S1, developed by the ISSB, for example, focuses on governance, strategy, risk management, metrics and targets related to sustainability risks and opportunities that could affect a company’s prospects.
This demonstrates that ESG is no longer simply a corporate social responsibility or communications initiative, but is increasingly connected to corporate governance and long-term value creation.
How Does ESG Impact the Paper Industry Value Chain?
1. Environmental – Reducing Environmental Impact
Environmental performance is one of the key areas of ESG in the paper industry.
Paper production is directly associated with the use of pulp, fiber, water, energy, chemicals and other resources. As a result, companies are increasingly focusing on improving the efficiency of raw material, energy and water use, as well as strengthening waste management.
Solutions such as improving energy efficiency, using lower-emission energy sources, increasing recycling rates, optimizing production processes and improving wastewater treatment systems can become important components of a company’s sustainability strategy.
Developments in the European paper industry demonstrate that emissions reduction is increasingly linked to investment in non-fossil energy, energy efficiency and the modernization of production assets. According to the Confederation of European Paper Industries (Cepi), the European pulp and paper industry had reduced its direct CO₂ emissions by approximately 30% by 2025, while continuing to pursue long-term decarbonization pathways.
2. Traceability – Raw Material Traceability
For the paper industry, the sustainability of raw materials is becoming increasingly important within international supply chains.
Companies need to look beyond raw material quality and cost to also manage origin and traceability, particularly as export markets introduce new requirements related to forests and deforestation.
The European Union has developed the EU Deforestation Regulation (EUDR), together with implementation tools and information systems to support supply-chain due diligence. Recent updates from the European Commission continue to emphasize the importance of traceability, data systems and due diligence responsibilities within relevant commodity supply chains.
For paper companies participating in international supply chains, this is one of the reasons why developing reliable raw material data systems is becoming increasingly important.
Social – People as Part of the ESG Strategy
The Social pillar focuses on people and social relationships within business operations.
For companies in the paper industry, this can include:
- Occupational health and safety;
- Working conditions;
- Employee training and development;
- Employee rights and benefits;
- Community relations;
- Management of social issues within the supply chain.
Effective management of social factors not only helps companies meet partner requirements but also contributes to building a stable workforce and reducing operational risks.
Governance – Transparency and Data Management Are Becoming Increasingly Important
While the Environmental pillar focuses on a company’s impact on the environment and the Social pillar focuses on people, Governance provides the foundation for managing these areas systematically.
ESG governance can involve governance structures, internal controls, risk management, information transparency, accountability and mechanisms for monitoring sustainability objectives.
Under IFRS S1, companies are required to provide information about governance processes, strategy, risk management processes, as well as metrics and targets related to sustainability risks and opportunities that could reasonably be expected to affect the company’s prospects.
This makes ESG data an increasingly important component of corporate governance.
ESG Data – From Reporting Requirement to Competitive Asset
One of the most significant changes brought by ESG is that companies are increasingly required to move from “commitment” to “measurement and evidence.”
Rather than simply stating commitments to reduce emissions or use sustainable materials, companies need to be able to monitor relevant indicators and demonstrate progress through data.
IFRS S1 emphasizes the disclosure of metrics and targets — the indicators and objectives companies use to measure, monitor and manage sustainability-related risks and opportunities.
For the paper industry, relevant data may include:
Energy → Water → Emissions → Raw Materials → Recycling → Waste → Occupational Safety → ESG Targets
Building a reliable ESG data system helps companies better understand operational performance, identify areas for improvement and respond more effectively to information requirements from customers, partners and investors.
How Can ESG Create a Competitive Advantage?
As sustainability requirements become increasingly integrated into supply chains, companies that proactively implement ESG can gain advantages in several areas.
Optimize Costs
More efficient use of energy, water and raw materials can support environmental objectives while also helping optimize production costs.
Expand into New Markets
The ability to meet requirements related to raw material sourcing, data and sustainability standards can help companies work more effectively with international customers.
Increase Transparency
ESG data systems provide companies with a clearer basis for communication with customers, investors and other stakeholders.
Strengthen Risk Management
ESG can help companies identify environmental, supply-chain, regulatory and market-related risks at an earlier stage.
More importantly, ESG is gradually becoming part of long-term competitiveness, rather than simply a corporate social responsibility initiative.
Paper Vietnam 2027 – Connecting Technology and Solutions for the Paper Industry
As the paper industry faces new requirements related to production efficiency, technological innovation, the circular economy and sustainable development, access to appropriate technologies and solutions is becoming increasingly important for businesses.
Paper Vietnam 2027 will take place from 23–25 June 2027 at the Saigon Exhibition and Convention Center (SECC), Ho Chi Minh City, Vietnam, bringing together companies across the pulp, paper, packaging, tissue, chemicals, raw materials, machinery, equipment and production technology sectors.
The exhibition aims to connect manufacturers, suppliers, buyers and industry professionals, while providing opportunities to discover new technologies and solutions across the paper industry value chain.
With an expected scale of 120+ exhibitors from 15 countries and regions, 5,000+ trade visitors and 2,000 B2B meetings, Paper Vietnam 2027 is positioned as a business and technology platform for the paper industry in Vietnam.
