The Environment in Tetra Pak’s Value Chain · Tetra Pak’s value chain map 7 Our goals 10 Broader business context 10 2. Product design: for customers and the environment 12 The

The Environment in Tetra Pak’s Value ChainCorporate Environmental Report 1999

TP env. report002.qx4 2000-06-13 09.35 Sida 1

Contents

Contents

CEO Statement 3

1. Tetra Pak and the environment 4The environment in Tetra Pak’s value chain 6Tetra Pak’s value chain map 7Our goals 10Broader business context 10

2. Product design: for customers and the environment 12The life cycle approach 13Which package is the best? 14

3. Raw materials and the supply chain 15Packaging materials 16Machines and equipment 18

4. Tetra Pak operations 19Corporate performance 1999 20Carton packaging performance 1999 24Plastic packaging performance 1999 28Machine and equipment performance 1999 30Support services’ performance 1999 30Market companies’ performance 1999 31

5. Transport 32Environmental impact of transport 34

6. Customers, retailers, consumers and the community 35Plant optimisation 36WinBack 37Recovering full packages 37

7. Waste management 38Integrated waste management 39Recycling 39Recycling technologies for cartons 40Recycling technologies for plastic bottles 42Energy recovery and landfill 42

8. Appendices 43Tetra Pak’s environmental policy 44Tetra Pak’s environmental organisation 45Code of Business Conduct 46Policy on our working environment 46Tetra Pak sites certified to ISO 14001 and/or EMAS 47ERM commentary 48Feedback and order form 49


“ I am pleased to present Tetra Pak's first corporate environmental report. It is

dedicated to those who are closest to our achievements: our employees and

our customers.

This report shows how in our company, throughout our value chain, manage-

ment concerns are linked to the optimal use of resources. In this way, we aim

to bring together business growth and environmental performance, creating

further value for our products. A number of issues still needs to be resolved

and a number of choices remain to be made, while we work with continuous

environmental improvement and commitment.

Tetra Pak's mission is to contribute – together with our customers and

suppliers – to the safe, efficient and environmentally sound production and

distribution of liquid foods to the consumers of the world. This is our contri-

bution to sustainable development and I expect all employees to actively

pursue and support this mission.

Gunnar Brock

President and CEO Tetra Pak Group

3

”


Tetra Pak and the environment

Life cycle thinking lies at the heart of Tetra Pak's approachto the environment, from raw materials to waste

management. In this report we describe how Tetra Pakmanages environmental impacts throughout the life cycle of

its products – in our own operations and in relationshipswith suppliers, customers and the communities we serve.

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Our packages have one simple purpose, to carry food and drink safely andefficiently from where they were made to where they will be consumed. Lastyear the world consumed some 52 billion litres of liquid food and drink,including milk and fruit juice, from 86 billion Tetra Pak packages. Packagingmeans food is less likely to spoil, to be damaged in transit or to be contami-nated. So ultimately, good packaging helps save resources.

Tetra Pak, however, is more than a packaging supplier. We provide com-plete systems for processing, packaging and distributing liquid food, fromcartons and plastic bottles to the machines that fill them on our customers’premises. At Tetra Pak we work with our suppliers and with our customers,the companies that make and pack the food and drink, to try to improve envi-ronmental performance throughout the life cycle of our products.

This life cycle thinking lies at the heart of Tetra Pak's approach to the envi-ronment. In this, our first corporate environmental report, we use the life cycleframework – or value chain – to help describe how Tetra Pak manages envi-ronmental impacts in its own operations and in its relationships with suppli-ers, customers, consumers and the communities we serve.

Tetra Pak makes complete processing and packaging sys-tems including processing equipment (top left), carton pack-aging machines (middle left), plastic packaging machines(middle right), distribution equipment (top right) and a range

of packages (bottom left to right: Tetra Classic, Tetra Wedge,Tetra Rex, Tetra Prisma, Tetra Brik, Tetra Fino, Tetra Top, PETbottles and HDPE bottles).


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Tetra Pak and the environment 1

The environment in Tetra Pak’svalue chain

Life cycle thinking runs throughout Tetra Pak'sapproach to environmental management, from howwe design our products and source raw materials tohow we manufacture packages and work with cus-tomers and the community. Our company’s overallenvironmental performance depends on actionstaken at every stage of the life cycle, and the mapoverleaf shows how this fits together. The key in thebottom left hand corner will help guide you to moredetailed information on how we are tackling eachsection of the value chain.

We also use the relative global warming potential ofthe different steps, shown by the thermometers on themap, to help illustrate our approach to setting prioritieswithin the life cycle.

The map shows, first of all, that food productioncan have a significant impact on climate change. Thismeans that we must be doubly careful to make surethat our packages and the equipment that fills themdo not waste food, and therefore the resources usedto produce it. In Product design: for customers andthe environment (chapter 2) we describe Tetra Pak’sapproach to designing efficient packages andmachinery.

Second to food production, the highest impactcomes from the production of raw material for thepackage. This is why we place strong emphasis ondevelopment of packaging material and encouragingsuppliers to improve their performance. Raw materi-als and the supply chain (chapter 3) explains how wemanage this relationship.

Packaging material production is of course a keyfocus area for Tetra Pak, and where we have thegreatest possibilities to exert influence. In Tetra Pakoperations (chapter 4) we set out performance datafor 1999 and explain how we approach environmen-tal management for our carton and plastic packagingfactories. The impact of machine and equipment pro-duction – at the sites where we make processing andpackaging machinery – and non-production sites isless significant, but still important to us.

Goods coming to and leaving Tetra Pak factoriesdo so in a variety of vehicles, many of which are notunder our direct control, making overall environ-mental impacts difficult to assess. However, theimpact of transport is probably comparable to thosefrom our own converting operations and perhaps

higher. Our management programmes are describedin Transport (chapter 5).

What happens to our products when they haveleft the factory is also important, as Customers,retailers, consumers and the community (chapter 6)explains. Through schemes such as Tetra PlantOptand WinBack, we work closely with our customers tohelp them optimise environmental and economic per-formance.

The final link in the chain is waste management.The global warming contribution from waste man-agement is largely dependent on the amount ofmethane gas released if and when packages degradein landfills. Recycling and energy recovery of pack-aging material can prevent these emissions. Ourapproach is explained in Waste management(chapter 7).

Global warming and climate change

Scientists now largely agree that emissions of greenhousegases from human activity (for example emissions of carbondioxide and methane from energy production, transportationand agriculture) may cause significant changes in tempera-ture, sea levels and weather patterns, and change the climatewhich supports us.

The contribution to climate change throughout our value chainwas assessed by calculating the release of greenhouse gasesat each stage using data from our own operations, life cycleassessments and commonly agreed conversion factors fordifferent fuels and electricity production. The emitted green-house gases were thereafter weighted into an index for ‘glob-al warming potential’ using internationally accepted guide-lines.

The thermometers on the map show the relative globalwarming potential for each stage in our value chain.

Assessments like this are always affected by uncertainties dueto approximations and the difficulty of getting appropriatedata. Nevertheless, we believe that they help us in our pursuittowards a more holistic approach to environmental manage-ment and understanding of the environmental aspects of ourproducts.


Raw material and the supply chain (chapter 3)

Tetra Pak operations (chapter 4)

Transport (chapter 5)

Food production

Customers, retailers, consumers and thecommunity (chapter 6)

Waste management (chapter 7)

Global warming potential




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Tetra Pak and the environment 1

Our goals

Environment is a key concern for Tetra Pak. We areproud of what we have achieved, both in our ownactivities and along the supply chain – but we alsorealise that a lot more is to be done.

This corporate environmental report is a signifi-cant step towards a more structured and consistentglobal approach to improving environmental per-formance throughout the company. Our first prioritywas to establish the baseline, where we are, at thecorporate level and to build a broad consensus with-in the organisation of the way forward.

This report summarises the results of the workdone to establish the baseline environmental per-formance and reflects the outcome of our strategydevelopment work, which involved people from allfunctions and levels within the organisation.

We are integrating environmental considerationsinto the day-to-day management of our businessesand looking to raise performance levels across thecompany. Our Environmental Council, the decisionmaking body for environmental issues in Tetra Pak,has set the following goals for 2000:

Operations

• All manufacturing sites will be certified under ISO14001 (the international standard for environment management systems).

• Carton converting operations will achieve a reduction of 12% in the raw material waste rate relative to 1999.

• Carton converting plants with more than 15% of waste being landfilled will set a reduction target for 2001.

• Manufacturing plants and market companies will set energy reduction targets for 2001.

• We will ensure compliance of all sites withTetra Pak policy on Ozone depleting substances.

• Ten specified solvents will be phased out or replaced with more benign alternatives in carton converting plants. Phaseout plans will be estab-lished for plants where technological constraints exist.

Development

• The Design for Environment approach will be integrated into the project management elements of the innovation process – the process that guides our product development.

• The Design for Environment standard formachines and equipment (The Eco Machine Handbook) will be implemented in five develop-ment projects.

Suppliers

• All Divisions’ major suppliers will be formally encouraged to implement and maintain environ-mental management systems and thereby to continuously reduce the environmental impact of their operations.

Customers

• A list of best practices will be issued to be used asa guide to include environment in customer satisfaction programs, to assist customers in inte-grating environment into their business.

• Market companies will encourage our customers toimplement certified environmental management systems.

Integration of business & environment

• Environment will be integrated into the manage-ment systems and business plans of all marketcompanies and business units, and will be part ofall Business Review meetings.

• A presentation of Tetra Pak’s environmental policywill be made to each new employee and we will reinforce this by relaunching the environment siteon our company Intranet (ORBIS).

The Environmental Council will continue to setgoals and targets based on a thorough considerationof the environmental aspects of the organisation andwith the aim of being a leader in our industry.

Broader business context

Sound environmental performance is one part of abroader set of obligations or 'corporate responsibili-ties' which Tetra Pak is addressing throughout itsbusiness. These important issues are describedbriefly below, with more detailed information on ourpolicies and activities available in the appendix tothis report.

Code of Business Conduct

Our first priority is to be a sustainable, profitablebusiness. This means investing for growth, and bal-ancing short and long-term interests by caring aboutour customers, employees, suppliers and the com-munities in which we conduct our operations.

In the course of meeting our business objectives,it is essential that all employees understand, complywith and share the values of Tetra Pak. Our Code ofBusiness Conduct applies to Tetra Pak companies all



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over the world. You can find a copy of this code at theend of this report.

Managers will not be criticised for any loss ofbusiness resulting from adherence to these principles.Equally, no employee will suffer as a consequence ofbringing a breach, or suspected breach, of these prin-ciples to the attention of management.

The Tetra Pak People Idea

The People Idea in Tetra Pak is that the value of peo-ple's commitment and competence shall exceed theircosts, and that the value to the employee of workingfor Tetra Pak shall exceed the investment she/hemakes in the company. It works both ways. ThePeople Idea, together with the Core Values, consti-tutes the code of conduct for the people in Tetra Pak.

Our five Core Values

• Freedom with accountability• Partnership with customers, suppliers and

colleagues• Long-term perspective• Innovation and creativity• Commitment and fun.

Health and safety

Each company within Tetra Pak is responsible forensuring safe working conditions for our employeesand that we comply with local legal requirements. In1999, we introduced accidents as a management keyperformance indicator (KPI) for our carton packagingmaterial plants. We are currently developing a com-pany-wide approach to health and safety. The policyon our working environment can be found on page 46.

Reporting approach

Throughout our business we are focusing on the mainenvironmental issues for Tetra Pak and these arereflected in this report. We have concentrated onreporting our environmental performance in a man-ner that we believe will make most sense and use toour immediate stakeholders.

We have closely followed the development ofmeasures and reporting guidelines within the GlobalReporting Initiative (GRI), the United Nations’backed programme, and those of the World BusinessCouncil for Sustainable Development. Although wehave chosen not to be a pilot company, we believethat this report covers many of the key areas of theguidelines.

Packaging machines in operation: 8,210Packaging machines delivered in 1999: 513Processing units in operation: 13,500Processing units delivered in 1999: 1,250Distribution equipment in operation: 10,461Distribution equipment delivered in 1999: 893Number of markets: more than 165Number of employees: 18,400Number of litres of products delivered in Tetra Pak packages in 1999 (billion): 52*Number of Tetra Pak packages delivered in 1999 (billion): 86Sales in 1999 in billion Euro: 6.8* Including cartons, PET bottles and HDPE bottles.

(Figures as of January 2000)

Market companiesFactories for packages and packaging materialManagement officeRegional head offices


The environment is an important considerationwhen we design new packages and machines. We

aim to optimise our environmental performancewithout compromising our customers’ needs for

safe, functional and cost-effective packages.

Product design: for customers and the environment

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Product design: for the customer and the environment2

When we design a new product, we take on board anumber of issues. Environmental performance isconsidered together with issues such as food safety,technical performance, consumer demands or eco-nomic benefits. The concept of integrated environ-mental assessment in product development is oftencalled ‘Design for the Environment’ (DfE).

In practice, DfE means applying life cycle think-ing so that the environmental aspects throughout thelife cycle can be identified, evaluated and optimised.Beginning this analysis and assessment early in thedesign process allows greater scope for achievingimprovements and reduces the risk of having to makecostly changes at a later stage. In the course of adevelopment project a number of ‘toll gates’ have tobe passed. Safety, functional, economic and environ-mental performance are evaluated against definedcriteria and targets. It is then decided whether or notthe project can move onto the next phase of develop-ment, and which problems need to be solved.

The continual drive to be able to do more with less(and for less!) pushes us to reduce material and ener-gy intensity of goods and services. Different aspectsof, and approaches to, this driver may be given dif-ferent names, such as source reduction and eco-

Ideasgeneration Development Launch

• Identify significant environmental aspects

• Set environmental objectives

Verify

• Environmental information available

• Waste management solutions

• Environmental profile• Environmental requirements

Identify Validate

The environment is carefully considered at every step ofresearch and development to ensure that all environmentalaspects are addressed and all improvement areas identifiedthroughout the life cycle. This includes, in each step, use of

resources, use or emissions of harmful substances, recoveryoptions and recyclability of new packages, as well as con-sumers' environmental perception.

The life cycle approachAt Tetra Pak we try to think in terms of stewardship across thewhole life cycle, and to use the concepts and tools of life cycleassessment. We regard Life Cycle Assessment (LCA) as auseful tool to support our efforts to reduce the potential envi-ronmental impact of our products and processes.

We use LCA as a consistent framework for both operationaland communication purposes, to:

• Identify opportunities to improve environmental performance.

• Design better products and processes.• Develop environmental performance indicators and to

assess suppliers.• Communicate the environmental profile of our products.

We acknowledge that LCAs inevitably involve subjectivejudgements as well as simplifications and that they may yieldresults that are conflicting and not easily comparable. Thereport “Investigating the Life-Cycle Environmental Profile ofLiquid Food Packaging Systems” summarises two Tetra PakLCA case studies (order form at the end of this report).


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Product design: for the customer and the environment 2

efficiency, but the intention and direction remain thesame. We are sensitive also to ever increasing con-cerns related to the use of scarce substances andemissions of hazardous ones, and continually awareof our obligations under various legislative require-ments.

Developments that have helped reduce the envi-ronmental impact of our packages and packagingsystems at various stages in the life cycle include:

• Partnership with aluminium suppliers to produce aseptic packages with the same high food protection capability but with less aluminium.

• Partnership with plastic suppliers to cut air emissions from the packaging material productionprocess at Tetra Pak.

• A new lighter and cheaper packaging format aimed at making aseptic packaging and protection of liquid food (particularly milk) more readily available in less accessible parts of the world.

We have used the ‘design for the environment’ con-cept for many years, with most focus on new devel-opments of packages and packaging materials. Nowwe are making an effort to strengthen this approachfor machines and equipment.

During 1999 we developed an Eco MachineHandbook, which sets out a series of tools for man-aging environmentally conscious development,operation and maintenance of packaging and pro-cessing equipment.

Now equipment designers and technicians – thepeople who help refine customers’ production lines –have a more consistent framework to optimise use ofresources, avoid use of harmful substances and planfor recovery of used equipment.

Our LCAs show that most of the environmentalimpact related to filling machines and processingequipment arises from loss of product, packagingmaterial waste and energy use when liquid food isprocessed and filled into packages at our customers’sites. Reducing wastage of food and packaging is animportant environmental objective – and it savesmoney for our customers too!

For example, our dairy processing lines featureintegrated cleaning systems to regularly flush out thepipes. The cleaning results in the release of milk andwater which must then be treated and disposed of –a waste problem in its own right. So we carefullydesign our cleaning equipment to make sure it pro-duces as little waste as possible, reducing the wasteproblem and saving our customer’s precious product.For more information on our activities to improveperformance at our customer sites, see Customers,retailers, consumers and the community (chapter 6).

Which package is the best?Last year our Life Cycle Assessment (LCA) specialists lookedat 22 studies published between 1990 and 1999 that com-pared different types of packaging. In particular they wantedto compare the environmental impact of a refillable package(such as a glass bottle that can be used several times in itslife) with that of a single-use package (such as a carton whichis recycled, recovered through energy recovery or disposed ofafter a single use).

‘Seventeen of these detailed studies showed no clear envi-ronmental advantage of one packaging system over another,’explains Andreas Barkman, environmental specialist in theCarton Packaging Division. ‘The remaining studies showedresults in favour of either the single-use packages or the refill-able bottles. This supports the conclusion that there is no oneuniversally superior package. That’s one of the reasons TetraPak focuses on improving the performance of each one of itspackaging systems’.


The way our suppliers manage the environmentcan have a significant bearing on the impact of ourown products. That's why Tetra Pak works closely

with suppliers throughout its business.

Raw materials and the supply chain


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Raw materials and the supply chain 3

Like many other companies, Tetra Pak is seriousabout its responsibilities and works to encourageimproved environmental performance from our sup-pliers.

Packaging materials

Raw material supply policy

Environment is an important element of Tetra Pak’sRaw Material Supply Policy, alongside other keybusiness issues such as quality, service, or supplysecurity. We aim to build strong, long-term relationswith our main suppliers who we want to be commit-ted to our business.

We expect our board, plastic, aluminium and inksuppliers to:

• Maintain effective environmental management systems and continuously reduce the environmentalimpact of their operations.

• Work co-operatively with us to continually improvethe environmental impact of our product portfolio over its entire life cycle and to respond to related societal demands and aspirations.

And in addition board suppliers must:• Demonstrate that they are practicing sound forest

management and striving to fulfil the principles of sustainable forest management.

Tetra Pak also puts additional specific requirementson their suppliers, for instance by not allowing inkpigments containing toxic heavy metals, to ensurethat our packages do not present any unacceptablerisks to human health or the environment.

Supplier evaluation

Tetra Pak has developed a comprehensive evaluationsystem for its main board, plastic and aluminiumsuppliers. Suppliers are evaluated by the respectivefactories and our central quality, environmental andpurchasing departments. Each one of these functionsassigns points to suppliers against key criteria (forexample product quality, service, etc) and the “envi-ronmental profile” criteria account for 5-7% of thetotal marks. The supplier rating aims to encouragecontinuous supplier improvement and is also takeninto consideration in the annual negotiations definingvolume and price.

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20

30

40

50

QUICK FACT

Ten of our 29 main raw material suppliers have now beencertified to ISO 14001, the international standard for environmental management systems.

Aluminium

Plastic

Paperboard

ISO 14001 certification for main raw materialsuppliers

(%)

20

38

45


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Raw materials and the supply chain3

Aluminium foil plant goes for ISO

The Pechiney site at Rugles, which supplies aluminium foil toTetra Pak, recently got its environmental management systemcertified to ISO 14001.

“We are using the Tetra Pak supplier evaluation system as apowerful management tool. The introduction of the environ-ment criteria in 1998 in the supplier evaluation system hasspeeded up the process of ISO 14001 certification” says AnilKarnatak, key account manager at Rugles.

The main steps so far have included defining targets andbudgets, introducing a continuous improvement managementsystem, and various more specific investments. For example,the new production line starting up in the first six months of2000 has addressed environmental concerns from the verystart with modern technology, including the Airpure system torecycle the oil vapour.

The following targets have been adopted for 2000-2002, with1999 as the base year:

• reduction of volatile organic compounds (VOCs) by 20%• no more ‘non-ultimate’ waste to landfill by 2002• fewer than 10 fire starts per year on Rugles rolling mills• reduce energy consumption by 5%• reduce water consumption by 10%• train all employees in at least one action of the contingency

plan.

Pechiney Rugles is working with its customers to reduce envi-ronmental impacts through raw material source reduction (foilthickness reduction) for example. Rugles is also working withTetra Pak on development of post-consumer waste sorting toenhance recycling.

Tetra Pak’s supplier evaluation is speeding up the environ-mental improvement programme at Pechiney’s Rugles site inFrance.

Sustainable forest management

Tetra Pak encourages paperboard suppliers to applyenvironmentally and socially sound forestry practicesin their own forests as well as when they buy woodand pulp from other companies. Suppliers areincreasingly adopting performance standards for sus-tainable forest management, such as those of theForest Stewardship Council (FSC), SustainableForestry Initiative (SFI) and Pan-European ForestCertification scheme (PEFC). We believe that thirdparty certification enhances credibility, and we there-fore give a better score for third party certificationthan for internally-certified systems in our supplierevaluation system.

Bleaching

We also pay attention to potentially harmful chemi-cals that may be released from suppliers’ operationsor contaminate the packaging material. One exampleis the organo-chlorine compounds, which are linkedto the bleaching of pulp for our paperboard.

At present, more than 90% of the paperboard weuse is ECF (Elemental Chlorine Free) or TCF (TotalChlorine Free). Ideally, all our board should be ECF

or TCF, since these bleaching processes give signifi-cantly lower organo-chlorine emissions and minimisethe risk of contamination. Our aim is that all mainglobal suppliers deliver 100% ECF/TCF board by theend of 2000. Smaller local suppliers are required tostate their plans for reducing emissions and becomingfully ECF/TCF.

Paperboard deliveries to Tetra Pak are regularlytested for dioxins – a group of compounds containingtoxic organo-chlorines. The tests show that the diox-in levels are below 1 ng/kg (1 ppt), meeting the rec-ommendations of the German Federal Health Officeand well within the 2 ppt limit set by the U.S. Foodand Drug Administration.

Aluminium

Tetra Pak aseptic cartons use aluminium to enable theproduct in the package to be stored for longer – evenat room temperature. Aseptic packaging has signifi-cantly improved the availability of safer food tomany consumers in areas of the world lacking chilleddistribution networks. The very thin aluminium layer(6-7 micrometers) in the package protects the productfrom light, oxygen and external odours. There are


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Raw materials and the supply chain 3

Sustainable forestry in Brazil More than 90% of the wood which is used in the manufactureof Tetra Pak board in Brazil comes from certified forestsowned and operated by Klabin.

“Long before certification procedures began to be adopted,Klabin had committed itself to sustainable development” saysChief Executive Josmar Verillo. This commitment was demon-strated by the way Klabin planted its forests of pine and euca-lyptus and preserved the native forests.

Economic, environmental and social criteria are used toestablish certification for Klabin’s forest holdings in the Stateof Parana to strict Forest Stewardship Council (FSC) stan-dards. Now the company is conducting a program to certifythe custody chain, including the independent forest owners,who supply the mill.

two layers of polyethylene between the aluminiumand the food product, preventing direct contact withthe aluminium during storage.

Machines and equipment

Packaging machines

At present, environment is part of the supplierassessment for our 12 specialist suppliers (for exam-ple those making moulded metal and plastic compo-nents). We are currently considering to also includeit for the 150 or so suppliers of other packaging linecomponents and machinery.

Environment counts for 10% of our total evalua-tion of machine and equipment suppliers. Fulfillingall minimum requirements gains suppliers a Tetra Pakcertificate. Not fulfilling all minimum requirementsmeans that a company risks not being a supplier inthe long term unless it can improve.

None of our specialist suppliers are currently cer-tified to ISO 14001, but six of them have now madea commitment to implement an appropriate environ-mental management system.

Processing equipment

During 1999 we wrote to 250 suppliers of processingequipment, asking them to complete a questionnaireon their environmental performance. We are nowreviewing their replies and during 2000 we will pro-vide feedback to the suppliers.

Balancing environmental impactsEnvironmental improvements often entail trade-offs. One clearexample of this is the so-called chemi-thermomechanical pulp(CTMP) technology for making paper pulp. This technologyhas been developed by some of our board suppliers with theaim of continuously reducing the amount of material that goesinto our packaging, reducing environmental impacts and sav-ing money.

CTMP manufacturing requires up to 50% less wood com-pared to conventional chemical pulp. The board is muchlighter and when used as one layer in the construction ofpackaging material for our beverage cartons it results in a finalpackage that is up to 7% lighter than alternatives.

However life cycle assessment results of board with and with-out CTMP does not always give a clear winner and loser. Forexample, wood consumption will decrease while electricityuse on site increases, since the CTMP production is an ener-gy-intensive process. Emissions also vary due to local condi-tions and characteristics of the manufacturing process.

And because the CTMP fibres are different the end-use appli-cation of the recycled fibres is also different, see Waste man-agement (chapter 7).

Wood from certified forests owned and operated by Klabinends up as Tetra Pak board at the mill.


Although the environmental impact of our own operations is moderate – when viewed across thewhole value chain – this is our core focus area for

improving environmental performance.

Tetra Pak operations


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Tetra Pak operations 4

1999 was the first year that compatible performance data was collected from all ouroperations. It was collected from more than 120 Tetra Pak sites world-wide – manu-facturing facilities as well as research and development, market company offices andsupport companies.

Although our business is organised in a matrix structure (see page 45), we havegrouped our performance into functional areas. In this section we first present ourperformance at the corporate level, and then give a more detailed breakdown forpackaging material production (cartons and plastic), machine and equipment pro-duction, support services and market companies.

Corporate performance 1999

Below we present our aggregated baseline performance data for selected key param-eters. Alongside the annual total for each parameter the table shows the figures perlitre of liquid food delivered in our packages. This ratio is used to capture the con-cept of eco-efficiency. Eco-efficiency in industry means reducing resource use andpollution while maintaining or increasing the value provided. We believe that it ismeaningful to relate performance to the value we provide, which is to help deliverfood to consumers. The ratios are based on 52.4 billion litres of food delivered in ourpackages.

QUICK FACT

Thirty-nine of Tetra Pak’s 76 manufacturing sites around theworld are now certified to ISO 14001 (at the end of 1999), theinternational standard for environmental management and/orEMAS, the European Union scheme.

tonnes g/litre food

Paperboard 1,326,589 25.3

Plastics 438,149 8.4

Aluminium foil 67,285 1.3

total 1,832,023 35.0

Raw material consumptionRaw materials include all materials used to produce our beveragecartons and plastic bottles but excludes materials used for pro-duction of processing equipment and filling machines.Paperboard is the main material as more than 95% of the fooddelivered in Tetra Pak packages is packaged in cartons.

Paperboard72%

Plastics24%

Aluminium foil4%

0 500,000 1,000,000 1,500,000 2,000,000

Carton packaging material plants

Plastic packaging material plants

(tonnes)


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Tetra Pak operations4

Energy consumptionOur carton converting plants account for 94% of our total energyconsumption. Most of the energy is consumed as electricity fromthe public power grid. To encourage energy efficiency improve-ment we have a goal that manufacturing plants and market com-panies will set energy reduction targets for 2001.

TJ kJ/litre food

Electricity 2,021 38.6

Fuels 1,046 21.2

total 3,067 59.8

0 500 1,000 1,500 2,500 3,000 (TJ)2,000

Water consumptionFresh water is used for example in printing inks, machine test-ing as well as for cooling and sanitary purposes. Our cartonconverting plants account for more than 75% of our totalwater consumption

1000 m3 litre/litre food

water 1,667 0.032

0 300 600 900 1,200 1,500 (1000 m3)



Support services

Machine and equipment plants

Electricity66%

Natural gas16%

LPG* 9%

Fuel oil 3% District heating 2%

Diesel 4%Carton packaging material plants



Support services

Market companies

Market companies

*Liquefied petroleum gases


0 50,000 150,000 250,000 350,000 (tonnes)

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Emissions of ozonedepleting substances

We use ozone depleting substances (ODS) such as CFCs, HCFCsand Halon in chillers, air conditioning systems and fire extinguish-ers. Emissions of these occur mainly through leakage fromchillers, and we have estimated the emissions with the quantitiesused to refill the equipment. Almost all of the emissions of ODStakes place at our converting factories. Our goal is to ensure thatall sites will comply with the Tetra Pak policy on ozone depletingsubstances in 2000 (see page 29).

kg mg/litre foodODS (CFC-11 equivalent) 4,310 0.082

0 1,000 2,000 3,000 4,000 5,000 (kg)

The consumption of energy results in emissions of carbon dioxide(CO2), directly through burning of fuels and indirectly through useof electricity. When calculating CO2 emissions, we have account-ed for the different energy sources used for electricity generationin the countries where our sites are located. District heating wasexcluded because CO2 conversion factors are not generally avail-able. In addition to CO2 we have included the release of CFCs andHCFCs which are also greenhouse gases.

tonnes g/litre foodGreenhouse gases (CO2 equivalent) 368,234 7.02

Emissions of greenhouse gases

CFC56%

Halons23%

HCFC21%Carton packaging material plants



Support services

Market companies




Support services

Market companies

Electricity72%

Fuels18%

CFC/HCFC 10%


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Environmental incidentsReported to local site Reported to the local or

management national authorities

Carton packaging material plants 67 9

Machines and equipment plants 1 1

Support services 5 -

total 73 10

EMS certificationOur manufacturing sites around the world have put in place environmen-tal management systems (EMS) – such as those certified to ISO 14001 –to help them achieve performance improvements on a continuing basis. Inaddition, one market company has been individually certified and three aspart of factory certifications.

Number of plants % of plantswith ISO 14001 and/or EMAS

Carton packaging material plants 34 68%Plastic packaging material plants 2 14%Machine and equipment plants 3 25%total 39

Total numberof plants

Number of plants withISO 14001 and/or EMAS

0 10 20 30 40 50

Carton packaging

material plants

Plastic packaging

material plants

Machine andequipment

plants

50

34

14

2

12

3

Compliance with local legislationOfficial notice of Fines or penalties Sites subjectdeficiency from to legal actionsauthorities9 1* 0(all in carton packaging (in carton packagingmaterial plants) material plant)

* 500 Euro due to incomplete official waste registration


24


Carton packaging performance 1999

To make Tetra Pak cartons requires four basic materials: board, aluminium (for ouraseptic packages), plastics and ink. We call the process of combining these materials“converting”.

Tetra Pak’s converting factories use a special laminating technology to combinetogether layers of board, aluminium and plastic to form the structure of the carton.Each material adds a different property to the carton: board for strength and stiffness,aluminium as a barrier against oxygen, odours and light, plastic as a moisture barri-er and as a “glue”.

We also print our customers’ packaging designs on the cartons, either onto theboard before it is laminated, or onto the plastic outer layer afterwards.

Printing and inks

Tetra Pak’s carton converting factories use several printing technologies, such asflexography, rotogravure and offset. The printing is made either onto the board (mostTetra Brik packaging material) or the plastic (mainly Tetra Rex).

There are several environmental aspects to consider when evaluating the environ-mental performance of printing operations, such as volatile organic compound(VOC) emissions (mainly from solvents in inks), material waste, energy use, noiseand water consumption. Tetra Pak strives to always take these different aspects intoaccount along with functional and cost aspects in the development and use of print-ing technologies.

Many factors affect the requirements on print quality and appearance, for exam-ple, the type of food product packaged and consumer preferences in different coun-tries. We realise that customer preference and demands on print quality will in turnhave an influence on the environmental performance of our own printing operations.

Environmental performance indicators

Three years ago Tetra Pak’s Carton Packaging Division began to gather and reviewprogress against six environmental performance indicators (EPIs) from our cartonconverting factories around the world. These include electricity use, fuel consump-tion, fresh water consumption, VOC emissions, raw material waste and waste tolandfill.

In 1999, the scope of data collection was enlarged to include the use of ozonedepleting substances and specific solvents. The data presented below cover all our 50converting factories.

Electricity, fuels, water and VOCFour of the EPIs are expressed as a ratio of absolute valueand number of standard packages delivered. A standardpackage is a measure of the area of packaging material usedto produce a one (1) litre Tetra Brik package (MSP = millionstandard packages).

total EPIElectricity 1,981 TJ 33,554 MJ/MSPFuels 897 TJ 15,201 MJ/MSPWater 1,278,000 m3 21.7 m3/MSPVOC 1,880 tonnes 31.9 kg/MSP


25


Ink challenge demands trade-offsIn 1993, a new factory was built at Sunne in Sweden, to printTetra Rex packaging material. Tetra Rex cartons are printeddirectly on the outer plastic surface, a process which to datehas required the use of organic solvent based inks (for ourTetra Brik the printing is normally made on the paperboardwith water-based inks). Sunne went for good environmentalperformance by using water-based inks thereby avoidingemissions of volatile organic compounds (VOC).

However, according to Environment Officer Stefan Hallgren,the factory faced problems of inadequate adherence of ink tothe surface. “Ink was rubbed off the packages leading toclaims from customers,” he explains. “Furthermore, produc-tion waste at Sunne increased. It turned out that both from aquality and environmental point of view overall that water-based printing was not a sustainable solution”.

In 1993, Sunne converted to organic solvent based inks, andabatement equipment was installed to minimise VOC emis-sions. The equipment has reached an efficiency of 80-95%,but the targeted continual 95% emission reduction has notyet been met. The aim is to reach this level during 2000.

Thomas Karlsson inspects printed packaging material at Tetra Pak's carton converting factory at Sunne in Sweden.The plant uses organic solvent based inks after trials withwater-based inks, which did not always meet customers'printing quality requirements.

Raw material wasteOur environmental goal is to reduce the raw material wasterate in our converting operations by 12% during 2000. Thismeans that the target for 2000 is to have maximum 8.0% rawmaterial waste.

tonnes EPIRaw material waste 177,097 9.1%

The EPI for waste to landfill from converting factories coversall non-hazardous waste produced, there is both waste of rawmaterials and other types of waste. To increase recovery offactory waste, we have set a goal that factories with morethan 15% of waste being landfilled will set a reduction targetfor 2001. In 1999, ten factories had more than 15% of wastesent to landfill.

tonnes EPIWaste to landfill 14,133 6.2%

Recycled 88%

Incinerated withenergy recovery

6%

Landfilled6%

Waste handling


26


Emissions of ozonedepleting substances

We monitor the consumption of ozone depleting substances(ODS) in order to follow up the implementation of our ozonedepleting substance policy. In year 2000 we will ensure that allsites will comply with Tetra Pak policy on ozone depletingsubstances (see page 29).

kgODS (CFC-11 equivalent) 4,242

Consumption of specific solventsWe use specific solvents, for example halogenated and aro-matic hydrocarbons, mainly in the printing plate productionand for laboratory purposes. These solvents are not used asink solvents. Our goal is to phase out or replace them withmore benign alternatives. Phase out plans will be establishedfor plants where technological constraints exist.

tonnesSpecific solvents 161

Pioneering environmental management

Pakistan

Tetra Pak´s carton converting factory in Lahore achieved certi-fication to ISO 14001 in January, 1999, one of the first com-panies in Pakistan to get the coveted international standard forenvironmental management systems.

The factory has focused on waste, energy and noise, withaction plans and targets to help drive a programme of contin-uous improvement, says Quality and Environmental ManagerAbdul Hakim Chishti.

Total waste has been cut from 10.5% in 1997 to 7.7% in 1999.The waste reduction programme has involved benchmarking,streamlining, motivation and rationalisation of production plan-ning.

Electricity meters have been installed for the major machinerygroups (lamination, slitting, water chilling, factory and businessunit light load, print press, straw section and stereo, air com-pression, air handling units). From January 2000 energy con-sumed by each group will be monitored.

On noise a clear action plan, identifying responsible peopleand setting deadlines, has been developed to help bring downnoise levels to 90 dB. Monitoring and measurement everythree months forms part of a programme which has alreadyhelped identify opportunities for improvement on the slitting,printing and lamination machinery.

Yugoslavia

Tetra Pak’s converting factory in Yugoslavia was certified toISO 14001 during the summer of 1999, a notable example ofefforts to implement our Environmental Policy. “The successfulimplementation of ISO 14001 was achieved in a record shorttime of only eight months compared to an average of 16months,” says Ankica Simovic, Quality and EnvironmentManager at the Gornji Milanovac factory. In addition, the TetraPak factory is the first site in Yugoslavia to be certified to ISO14001.

“It was a great achievement considering a bleak post-war envi-ronment and boosted the morale of our staff,” adds Ankica.

Tetra Pak Gornji Milanovac based its environmental manage-ment system on the successful implementation of a qualitymanagement system (ISO 9002).


27


Trends in absolute performanceFrom 1998 to 1999 our absolute environmental performanceimproved in four areas and got worse in two areas – total electricity consumption and raw material waste.

Overall, our energy consumption (electricity and fuels) waslargely stable – despite increased production – and we will belooking to all plants to set energy reduction targets for 2001.The largest improvements was the significant decrease ofwaste sent to landfill, which was mainly due to improvementat the plant in Denton, USA.

1998 1999

Electricity (TJ) 1,920 1,981

Fuels (TJ) 1,018 897

Water (1,000 m3) 1,316 1,278

VOC (tonnes) 1,977 1,880

Raw material waste (tonnes) 171,305 177,097

Waste to landfill (tonnes) 18,307 14,133

Trends in relative performanceFrom 1998 to 1999 our relative environmental performanceper million standard packages improved or remained constantexcept for electricity consumption. However, the total amountof energy (electricity and fuels) consumed to make each pack-age was stable. The relative performance is consistent withthe absolute performance except for waste of raw material,which remains constant in relative terms.

1998 1999

Electricity (MJ/MSP) 32,746 33,554

Fuels (MJ/MSP) 17,356 15,201

Water (m3/MSP) 22.3 21.7

VOC (kg/MSP) 33.7 31.9

Raw material waste (%) 9.1 9.1

Waste to landfill (%) 9.4 6.2

EMS implementation trendIn 1995 our converting factory in Arganda, Spain, was certi-fied to ISO 14001, the first in Tetra Pak. Since then there hasbeen a steady increase in environmental management sys-tems certification.

0

10

20

30

40

-35 -30 -25 -20 -15 -10 -5 0 5

-35 -30 -25 -20 -15 -10 -5 0 5

Electricity

Fuels

Water

VOC

Raw material waste

Waste to landfill

Electricity

Fuels

Water

VOC

Raw material waste

Waste to landfill

Sites certified to ISO14001 and/or EMAS

1995 1996 1997 1998 1999

Change 1999 vs 1998 (%)

Change 1999 vs 1998 (%)

(Number of sites)


28


Waste split saves moneyWhen Tetra Pak’s Belgian plastic packaging factory began tolook at how waste was being handled in 1998, as part of itsprogramme to implement ISO 14001, the site’s waste dispos-al bill was 1.6 million Belgian Francs. By November the costhad been cut to 900,000 Francs simply by putting the rubbishwaste in different bins.

Waste contractors charge more per tonne for dealing withsome types of waste than others. When different sorts ofwaste are mixed, they charge the same price for all the waste.

“Now we split the waste stream into different components toensure that we pay the right price to get rid of each sort ofwaste,” explains Environmental Co-ordinator KatleenLagaisse. These include: dangerous liquid waste (solventsand oils), dangerous waste (for example paint, oil filters, oilycleaning paper) and other waste (for example domestic,paper and cartons, waste resin). “So while we still have to paya high fee per tonne for mixed waste, the bulk of the waste(which is non-hazardous) can be charged at lower rates.”

Plastic packaging performance 1999

Tetra Pak’s plastic bottles are made from one of two materials: Polyethylene tereph-talate (PET) commonly used for carbonated soft drinks, water and beer and HighDensity Polyethylene (HDPE) used for milk. They are designed in different ways,according to the needs of our customers.

Tetra Pak produces PET preforms by injection moulding. The PET bottles are thenusually manufactured in stretchblow moulding machines at the customer site beforefilling and sealing. HDPE bottles are in most cases moulded at customers’ sites in so-called “hole-through-the-wall” plants before entering the filling line. Furthermore,we manufacture plastic straws and strips for sealing and closures.

In 1999 Tetra Pak bought Novembal, a French manufacturer of plastic closures.We conducted thorough, third-party due diligence audits of Novembal’s sites. Theinvestigation highlighted some environmental management issues which we will fol-low up, and we plan to commission similar due diligence audits for all future acqui-sitions.

The performance data presented here cover 13 sites including HDPE bottle, PETpreform, strips and straw production plants (closure sites not covered). In addition tothe aggregated performance measures, our Plastic Packaging Division pilotedmonthly reporting of five environmental performance indicators (EPIs) during 1999,at plants in Spain, Italy and Belgium and at our Trafford Park site in the U.K.


29


Ozone depleting substancesChlorofluorocarbons (CFC and HCFC), often called freons, areused as refrigerants in chillers and air-conditioning systems.These substances contribute to the reduction of ozone in theupper atmosphere. The ozone layer absorbs ultraviolet (UV)radiation, which in excessive quantities can be harmful toplants, animals and humans.

In Tetra Pak, CFCs and HCFCs are mainly used in coolingsystems in packaging material production plants and in air-conditioning systems in buildings. We have drawn up aninventory covering all Tetra Pak sites to establish baseline per-formance. The inventory also covered Halons, gases that areused in fire extinguishers, and also contribute to ozone deple-tion. We have an action plan, which among other require-ments, does not allow new installations of CFC or HCFCchillers.

Our policy

• Each site is responsible for ensuring compliance with the Tetra Pak action plan and with national legislation. Where following the action plan would imply non-compliance with national regulations, the national regulations must be followed.

• Decisions relating to the substitution of refrigerant and/or cooling equipment must take into account financial, functional, and environmental and safety aspects.

• When old systems are scrapped, sites must ensure that theold refrigerant is collected and recycled or destroyed, and that losses are minimised.

Electricity, fuels, water and wasteThe performance is expressed both as the total amount aswell as per tonne of used raw material.

Electricity 23 TJ 311 MJ/tonnes materialFuels 117 TJ 1,613 MJ/tonnes materialWater 26,000 m3 0.35 m3/tonnes materialProcess waste 3,514 tonnes 48.5 kg/tonnes material

Ozone depleting substances We monitor the consumption of ozone depleting substances(ODS) in order to follow up the implementation of our ozonedepleting substance policy. In year 2000 we will ensure thatall sites will comply with Tetra Pak policy on ozone depletingsubstances.

kgODS (CFC-11 equivalent) 61

Process waste handlingAll process waste from our plastic manufacturing sites isbeing recovered through material recycling or energy recovery.

tonnesRecycled 2,878Incinerated with energy recovery 636Landfilled -total 3,514

Recycled 82%

Incinerated withenergy recovery

18%


30


Machine and equipment performance 1999

An important part of our relationship with our customers lies in the machines andequipment which helps them to process the liquid food and fill and seal packageswith their products, as well as move the filled packages around their sites. Theseinclude separators, homogenisers and aseptic processing equipment, as well as fill-ing machines, conveyors and film wrappers.

Tetra Pak has 12 factories around the world where we assemble or manufactureprocessing and packaging machines and equipment. These plants have a relativelylow direct impact, whereas the operation of the machines at the customer’s site ismore important. We strive to improve the operational performance both through newproduct design (see chapter 2) and by increasing the efficiency of installed equip-ment (see chapter 6).

We have chosen to divide data into two blocks: processing equipment and pack-aging machines. Below we present data both as absolute annual values and as theratio of absolute value and number of delivered processing units and packagingmachines respectively.

Support services’ performance 1999

Tetra Pak’s business also includes a number of services that are essential to functionas a company and to keep customers satisfied. These include research and develop-ment centres which work on new packaging and equipment designs, and various sup-port companies. Performance data for support services’ sites, which have a low directimpact, are presented below.

Processing equipmenttotal per delivered unit

Electricity 1 TJ 945 MJ/unitFuels 15 TJ 11,677 MJ/unitWater 60,000 m3 48 m3/unitODS (CFC-11 equivalent) - kg - kg/unit

Packaging machinestotal per delivered machine

Electricity 2 TJ 4,290 MJ/machineFuels 9 TJ 18,078 MJ/machineWater 82,000 m3 161 m3/machineODS (CFC-11 equivalent) 5.6 kg 0.01 kg/machine

Electricity 12 TJFuels 8 TJWater 161,000 m3

ODS (CFC-11 equivalent) 1.4 kg


31


Market companies’ performance 1999

Tetra Pak’s market companies are a critical link in our business, connecting us withour customers. Largely office-based, these operations are quite different in environ-mental terms from our manufacturing sites. However, we believe that we must care-fully manage all aspects of our activities and that includes offices. The data here rep-resent 39 of our market companies.

The market companies have a central role to play in helping to explain to our col-leagues and customers what Tetra Pak is doing to contribute to sustainability and toensure that our customers’ suggestions to improve environmental performance aretranslated into action.

Electricity 2 TJWater 60,000 m3

Best practice in JapanNihon Tetra Pak is the first of Tetra Pak’s market companiesto gain an ISO 14001 certificate independent of a productionfacility.

Its 1999 objectives were to achieve an overall 15% reductionin copy paper consumption compared to 1997 and reduceelectricity consumption by 15% compared to 1997.

According to environmental specialist Bob Kawaratani: “Thetarget for copy paper consumption was met and exceeded in1999 with a 21% reduction. A new Technical Facility wasopened in Gotemba, helping achieve a 24% reduction in elec-tricity consumption for Nihon Tetra Pak.”


Transport of materials to our factories and products to our customers has an impact on the

environment, both locally and globally. Tetra Pak isstarting to address this complex field in order to

reduce impact throughout the value chain.

Transport


33

Transport5

Within Tetra Pak, transport and travel services aremainly purchased and managed on a local level, thatis by individual factories and offices. At the corpo-rate level, Tetra Laval Group Transport & Travel –our in-house experts on transport and travel – isresponsible for rationalising transportation and thepurchase of transport related services. Their mainaim is to develop transport solutions which have less

impact on the environment and which are compatiblewith prevailing economic conditions. From May2000 they have been mandated to co-ordinate andmanage the flow of goods, including raw materials,as well as travel related purchases for the whole ofTetra Pak.

During 1998 and 1999 Tetra Laval GroupTransport & Travel performed a comprehensive

Swedish convertingfactories

Air

Rail

Truck

Sea

-

< 1

1,392

54

12,867

< 1

6,541

15,112

Air

Rail

Truck

Sea

Tetra Laval Group Transport & Travel has calculated CO2

emissions (total tonnes in 1999) and the distance transported(total tonne-kilometres) for freight to and from the four Swedish

carton converting factories. This helps us monitor efficiencyimprovements and identify lower impact options.

-

70

28

4

2

103

131

1,001

Transport (tonne-kilometres)

CO2 emissions (tonnes)


Transport 5

evaluation of their contracted transport and travelsuppliers – including shipping, trucking, air trans-port, car hire and hotels. In total 80 suppliers wereincluded in the evaluation. The result of this supplierevaluation will be used as qualifiers for agreementswith Tetra Pak, encouraging our suppliers to contin-uously focus on the environment.

Environmental impact of transport

In addition, Tetra Laval Group Transport & Travelassessed the environmental impacts associated withthe transportation of all incoming and outgoinggoods at the four Swedish carton converting factories

during 1998 and 1999. This resulted in detailed dataon the amount of transport work produced as well asthe corresponding carbon dioxide emissions (see fig-ure on the previous page).

To get a better understanding of how transport ismanaged locally, we included specific transportquestions to both factories and offices in our 1999survey. The information gained through the survey,as well as key learnings from the Swedish case stud-ies, will be made available and used within Tetra Pakto encourage enhanced environmental managementof all transport and travel operations.

Video conferencing saves travelTetra Pak’s use of videoconferencing in Sweden hasincreased steadily since we first experimented with the tech-nology in 1995. From 106 conferences in 1995, by 1999 wewere holding 450 a year – boosted by active marketing of ourfacilities around the company.

Margereta Olsson, manager of the videoconference suite inLund, says: “We reckon that we saved 1,445,000 km ofinternational travel to and from Sweden in 1999 that wouldotherwise have led to greater pollution”.

Tetra Pak’s Elisabeth Antonsson, Andreas Barkman and LarsLundahl are joined by Matt Haddon from consultancy ERM inLondon during preparation of this report.

34

100

200

300

400

500

1995 1996 1997 1998 1999

Number of video conferences in Sweden


Meeting our customers’ needs is as vital to thecommercial success of Tetra Pak as it is to any

business. We work closely with our customers tohelp them in their pursuit of environmental and

economic efficiency.

Customers, retailers, consumersand the community


36

Customers, retailers, consumers and the community 6

Tetra Pak has developed a number of services to helpour customers improve their operational efficiency,reducing costs as well as environmental impact. Webelieve that the expertise Tetra Pak has developedwithin its own operations can be valuable to our cus-tomers, including:

• Customer’s plant performance • Environmental impact monitoring and

improvement• Waste management and recovery techniques• Life Cycle Assessments • Regulatory processes and compliance• Communication material and skills• Distribution equipment.

Below we outline three areas where we are usingthis expertise to help our customers improve theiroperating and environmental efficiency.

Plant optimisation

Tetra PlantOpt is a new service which helps cus-tomers to achieve environmental and economic effi-ciencies by optimising their entire plant operations.Our engineers work on customers’ sites to help iden-tify opportunities for improvement and develop pro-grammes to deliver them.

We provide project management support to helpcustomers achieve environmental benefits in a num-ber of areas:

• Less packaging material waste• Less food product to drains and waste water

treatment• Minimising the use of hazardous detergents• Minimising the use of fresh water• Optimal use of energy• Reduce space requirement.

For example we have helped a major customer inAsia to greatly improve packaging line efficiencythrough reducing waste on three lines (see figure onthe next page).

Tackling litter in TrinidadSeveral of the market companies in the Americas have aproactive environmental program. For example, Tetra PakCentral America and Caribbean and our customer, Nestle,were the driving forces behind the formation of an industrycoalition to help Trinidad address its litter problem.

“We are working very closely with the Government on a litterprogram and by piloting recycling” says Jose MariaHernandez of Tetra Pak Central America and Caribbean.

In Brazil, Tetra Pak’s education kit helps schoolchildrenlearn about the environment.

Environmental educationMany Tetra Pak market companies are undertaking or sup-porting education programmes for schools, including Mexico,Brazil, Argentina, Chile, France, Sweden and Spain. Tetra PakUK has granted for the third consecutive year The Tetra PakAward for Environmental Teaching in Primary Schools.

Throughout the world Tetra Pak collaborates in packagingwaste management programs organised by local authorities,by encouraging consumers to participate and finding end-uses to the post-consumer packages. In the Philippines, acraft room sponsored by Tetra Pak at Museo Pambata inManila continues to attract thousands of school children eachyear. This has proved to be a unique way of educating chil-dren on the issues of recycling and reuse through creativecraft ideas.


WinBack

Customer satisfaction surveys suggested that cus-tomers were unhappy with the operational efficiencyof our packaging lines, also in terms of too muchwaste. Our response was the WinBack project which,among other things, aims to ensure that:

• Rebuilding kits specified by the product companiesfor filling machines and distribution equipment areinstalled in all cases.

• Performance Line Monitoring Systems (PLMS) will be installed at customer plants to enable customer machine performance to be monitored remotely, and to compare performance across a range of customers.

• Technical training will be carried out at Tetra Pak market companies and at customer operations to overcome any problems that do occur.

Recovering full packages

Tetra Pak can also give advice on solutions to recov-er both packaging and products from full packagesnot suitable for distribution (for example due to afault during filling or which are returned by retailersand distribution because the ‘best before ’period hasexpired).

We have been working to identify equipment tomeet the growing need to empty beverage cartons ofany shape and size. Benefits include saving employ-ee time through faster emptying of cartons.

With very little product in the recovered packag-ing material it is easier to handle and recycle, allow-ing for lower transport or disposal cost. The emptypackaging can be baled and sent to a recycler.

37

Customers, retailers, consumers and the community6

Can you imagine cooking food in an oven made of Tetra Pakcartons? In the semi-arid north of Kenya this is a daily realityfor the nomadic Samburu people.

Tetra Pak’s Peter Rosberg, the factory manager in Nairobi,says: “Alison Curtis, an American working in the WambaHospital, hit on the idea of using board that had been lami-nated, but which we could not use because of misprinting.”

Aluminium coated board is carefully folded to form a bowlshape that reflects the sun’s rays towards its middle – what isknown as a ‘solar oven’. Pots full of uncooked food areplaced in the middle and because they are painted black theyabsorb the solar energy that has been concentrated by thereflective bowl. After a few hours the temperature inside thepots can reach 150 degrees Centigrade, boiling two litres ofwater in 45 minutes and cooking rice in two hours – all with-out burning any fuel.

0

1

2

3

4

5

6

7

8

Line 1

Before

(%)

TargetAfter

Line 2 Line 3

Packaging line waste reduction / customer case study

Packing them inTetra Pak’s Tetra Brik business unit has developed a newtransport and display pallet that helps retailers and whole-salers save time and space. Once the Floor Based Sales Unithas been loaded with Tetra Brik Aseptic packages in the fac-tory it can be transported right to the shop floor, with con-sumers able to pick their products directly off it.

The new unit uses less than half the material of Tetra Pak’sconventional cardboard tray, with a plastic base and layers ofcardboard to separate the layers of stacked packages. Theyare designed to fit neatly onto a standard Euro pallet, four ata time.

Cooking with cartons


Waste management

Where our packages end up is one of the most visible parts of Tetra Pak’s impact on the environment.Source reduction in making new packages, recycling

and energy recovery of used packaging all have important parts to play in completing the value chain.


39

Waste management7

Put simply, waste is what is left when you have fin-ished making something, or that “something” afterits useful life is over. Either way, “waste” is a majorconcern for modern society as we consume more andmore natural resources.

Across the world, local and national governmentsare increasingly concerned that used packaging, andother types of waste, is managed effectively, withconsumers playing their part alongside manufactur-ers, distributers and public authorities.

In Europe, used packaging of all types accountsfor 25-35% of household waste, which in turn repre-sents a significant part of municipal solid waste(MSW). However MSW is a small part, about 5%, ofthe total waste.

We believe good packaging helps to saveresources by delivering products safely and efficient-ly to consumers. Tetra Pak has adopted the conceptof “source reduction” which means using less naturalresources to make the package in the first place.

Although making sure resources are used effi-ciently in the first place is an important issue, a lotcan be done to optimise what happens to our pack-ages after used by consumers. Tetra Pak worksalongside other players in the value chain to dealeffectively with packaging waste.

Integrated waste management

The ability to combine waste management technolo-gies to handle different materials from differentsources is called integrated waste management. Theultimate aim of an integrated waste management sys-tem is to handle waste in a cost-effective way while

minimising the environmental impact. Therefore,local conditions have to be accounted for to find theoptimal combination of different waste managementtechnologies. After use, Tetra Pak packaging can gothrough all recovery options.

The used packaging can be recycled to recover thematerial. The packaging contains energy that can berecovered in municipal incinerators or in industrialplants. In a number of countries, trials have shownthat cartons can also fit into composting pro-grammes. In the compost, paperboard will degradewhile the plastic and aluminium residues have to beremoved. Finally, if appropriate recovery options arenot available, packages go to landfill. In an integrat-ed waste management system each of these alterna-tives has its role to play.

Recycling

Our first aim is to comply with legislation: so as akey objective we will meet recycling targets whererequired. To meet our objective we work closely withsome of our suppliers, recycling companies and localentrepreneurs to find stable, low cost, recyclingcapacity with minimum environmental impact. Inother words, finding ways of further using theresources in our used packages in a way that trulyreplaces the use of new resources.

Furthermore, we support the development of newtechnologies for recycling of used packages andrecovering the different materials contained in them.For Tetra Pak, contributing to the recycling capabili-ties of the packages we produce is part of a responsi-ble approach to the environment. The recyclability of

QUICK FACT

During 1999, 21% of all beverage cartons in Western Europewere recycled, 18% were reused for energy production and61% were landfilled. Germany alone achieved 66% recycling.Higher rates of recycling are expected as organised packag-ing waste collection systems increase throughout Europe.


40

Waste management 7

our products is part of the development process ofnew products and improvement of existing ones.

But recycling is a commercial operation. Its suc-cess depends on the end market. Both paper andplastic are commodities, so the economics and extentof recycling depends on the prevailing market condi-tions. Tetra Pak continues to examine the cost-effi-ciency of packaging recycling, through new sortingequipment, recycling technologies and throughfocusing on the flow of material for recycling.

Recycling technologies for cartons

At the moment, waste from Tetra Pak products –both direct from our packaging material factories,from customer sites, and “post-consumer” – is recy-cled in two ways: repulping and press moulding intopanel boards. Our technical group in Sweden worksclosely with R&D, business units and market com-panies around the world to discuss existing andfuture needs for recycling capacities and recyclingtechnologies. In many cases the challenge is to finda viable end market for the recycled material.

Repulping

The most common way to recycle used beverage car-tons is by recovery of the fibre at paper mills. Thepackaging material is put in water and de-laminatedunder high friction by hydraulic forces. This process,

Self-assessment system satisfiesnew European waste law

The European Packaging and Packaging Waste Directive,which came into force in 1994 and is currently under revision,aims to both reduce the environmental impact of packagingand packaging waste and ensure the free movement ofgoods in Europe.

Specifically, it requires that:

• By 2001 50-65% of packaging waste is recovered and 25-45% recycled in each member state.

• By 2001 15% of each type of material is recycled in each member state.

• Some essential requirements are met: minimum use of material by volume and weight, waste management suitability in terms of recycling, energy recovery, compost-ing and landfilling, and minimum established levels of harmful substances.

• Packaging complying with the directive can circulate freely within the EU.

Teresa Presas, Director Corporate Environmental Affairs whohas been following-up the implementation and revision of thedirective explains: “Tetra Pak has devised a transparent sys-tem of self-assessment in complying with the directive’sessential requirements which can be examined by customersand regulators alike. Through this system, Tetra Pak alsoensures that suppliers upstream are meeting the requiredstandards”.

Once used packages have been collectedthey are sorted and baled before beingrepulped to make recycled paper products.For more information order “What happensto used beverage cartons?”, from Tetra Pakusing the form at the end of this report.


41

Waste management7

known as hydrapulping yields a pulp slurry. Thestrong virgin fibres used in beverage cartons give ahigh fibre quality which becomes increasinglyimportant as higher recycling rates of paper andboard tend to deteriorate the overall fibre quality inrecycled paper and board grades.

Plastic closures do not interfere with the repulpingprocess, and end up as reject together with the poly-ethylene and aluminium layers. A major challenge iswhat to do with the reject. During 1999 a Finnishcompany completed a study verifying materialrecovery of the aluminium and energy recovery ofthe polymer materials (see next page) and Tetra Pakis now working closely with them. In Germany thereject is used as fuel in cement kilns and in BrazilTetra Pak has patented equipment to clean the rejectso that it could be used to make new plastic products.

Panel boards

What started as a research project in Sweden in themid-1980s has grown into a number of successfulbusinesses around the world. Market demand fromthe construction industry is growing for panel boardsmade by shredding and then heat-moulding cartonwaste. Manufacturers of office furniture are alsoshowing interest.

Since the first plant was opened in Kenya in 1987,third-party manufacturers in nine further countrieshave invested in equipment to turn carton waste intoa competitor to chipboard, plaster board and MediumDensity Fibreboard (MDF). The technology has par-ticular appeal in developing countries, with threeplants in China alone.

A key challenge for Tetra Pak is to help thesepanel board manufacturers to handle more post-con-sumer waste, with its impurities, higher moisturecontent and residual odour from the food productwhich the cartons used to contain.

QUICK FACT

After extensive trials involving Tetra Pak, Australia’s twolargest cardboard recyclers, Amcor and Visy, last year agreedto allow aseptic cartons to be recycled through the mixedpaper stream, simplifying collection from householders andavoiding sorting costs.

Recycling grows in ChinaThe third Chiptec panel board plant was opened in Shanghaiin 1999. During 2000 a major new facility will be built bySheng De Industry, in Shenzhen with an annual capacity of6,000 tones, the largest in Asia. Transfer stations in majorPearl River Delta cities in southern China will be set up to helpcollection of Tetra Brik Aseptic packages.

In early 1997 Chiptec was one of the first batch of 27 tech-nologies recommended by the Chinese environmental author-ities for spreading nationwide. The following year the recyclingtechnology also passed an official State technical appraisal.

The next step is to establish production facilities in Fujianprovince and Beijing where market conditions are mature. Tomake Chiptec economically viable, greater efforts will bespent on developing higher-value added downstream enduses.

In 2000 the Asian Development Bank accepted ChineseChiptec as a case study in its Sustainable DevelopmentReport.

Used beverage cartons are being turned into new products– from building panels to table tennis bats.


42

Waste management 7

Finnish foil recovery saves energyThe layer of aluminium foil in Tetra Pak’s aseptic cartons is thethinnest layer in any industrial process and is used to preventthe food inside from oxidising. The aluminium foil constitutesapproximately 4% of the total weight of an aseptic carton.

Because producing virgin aluminium from bauxite ore is veryenergy intensive, Tetra Pak has been working with Finnishcompany Corenso United Oy to recover the foil in used car-tons. In June 1999 Corenso unveiled plans for a EUR 17 mil-lion plant that will recover 2 million kilograms of aluminium ayear to be used in making new aluminium products with 95%less energy.

“Our gasification plant uses the plastic film in the cartons togenerate energy, providing enough power to fuel the alumini-um recovery process – as well as turn the fibres into pulp forrecycling,” says Lauri Makipaja of Corenso. The plant, whichwill come on stream in autumn 2000, is expected to generate165 GWh of energy, enough to heat a town of 25,000 peoplefor a year and saving 16,500 tonnes of oil.

Correnso’s Lauri Makipaja inspects used cartons beforethe aluminium foil, paperboard fibre and plastic are recovered.

QUICK FACT

The Plastic Packaging Division has developed two new typesof oxygen barriers for PET bottles – Glaskin and Sealica.When adding barrier material to packages it is important toensure complete recyclability. During 1999, recycling trialswhere carried out in conjunction with the recycling associationPETCORE and a supplier.

Recycling technologies for plasticbottles

Used plastic bottles, which have been collected andsorted, are cut into small pieces, called flakes, in agrinder. The flakes are then washed by water in largetanks with mixers so that the “slurry” will be movingand the friction enhance the cleaning process. Thisprocess will not only clean the flakes, but alsoremove any paper labels. Sometimes detergents areadded to the water.

Recycled products derived from post-consumerHDPE milk bottles include motor oil bottles, mer-chandise bags, drainage pipes, blow-moulded con-tainers, pallets and garbage sacks.

Recycled PET is used mainly in fibre applica-tions. There are different types of fibre applicationsand the industry comprises four major fields ofapplication: staple, filament, non-woven and fibre-fill. The PET fibres can be used for production ofclothes and sportswear.

Other applications include carpets, strapping,sheets, films and containers.

PET can also be chemically recycled whichmeans that used PET is broken down into smallchemical constituents. Chemically recycled PET hasthe same properties as virgin PET and can thereforebe used in food contact applications.

Energy recovery and landfill

Life cycle studies have shown that from an environ-mental point of view, energy recovery can be as gooda way of dealing with used packaging as recycling.For example, the materials in each tonne of used car-tons contain about as much energy as half a tonne ofoil.

Many local authorities burn municipal solid waste(including organic waste, glass and metals, as well asother packaging) to recover energy. Taking out thenon-combustible elements creates Refuse DerivedFuel, which improves the fuel quality and energyvalue.

In the European Union, 18% of all used beveragecartons are valorised by energy recovery.

Sometimes landfill is the most environmentallyfeasible management option, for example in remoteareas where the impact of transporting waste overlong distances to an incinerator or recycling plantwould offset the benefit of recovery. Tetra Pak issponsoring studies to help us better understand howpackaging degrades in landfills.


Appendices

MI

ORANGEJUICE

JUICE


Tetra Pak’s vision is to become and remain theworld’s leading liquid food processing and packag-ing company. In order to achieve our vision, we mustalso be an industry leader in environmental matters.

Our environmental leadership position is based onboth facts and perceptions. Our processes and prod-ucts have environmental impacts which we mustrecognise since both consumers and governmentofficials place a heavy emphasis on environmentalconcerns when they think about packaging. It is onlynormal that we respond to societal demands and aspi-rations in all areas.

We believe that environmental considerations willcontribute to the success of our business. Our con-stant aim is to align our business goals with environ-mental considerations in a way that balances costsand benefits, helps us to sustain our competitiveadvantages, and makes a contribution to sustainabledevelopment.

The environment, thus is an integral part of ourbusiness operations and it is only common sense toaddress the environmental dimensions of our activi-ties.

Our policy is to achieve environmental excellencein the three major areas of our activities: productdesign and manufacturing; management processes,and communication.

Product design and manufacturing

Our primary environmental objective is to minimisethe environmental impacts of our products throughthe entire life cycle by making efficient use ofresources in our product development and design, inour manufacturing processes, and in our operations.This is translated into a number of practices:

• We will incorporate environmental consideration from the very beginning in our development activities.

• We will use life cycle analysis to understand the environmental aspects of our products and optimisethe balance between environmental impacts and product performance.

• We will continuously improve the efficiency of ourprocessing equipment.

• We will seek to reduce consumption of materials inall operations, reuse rather than dispose whenever practicable, and promote recycling and the use of recycled materials where environmental, technicaland economical criteria so justify it.

• We will design energy efficiency into products, new services and buildings and manage energy wisely in all operations.

• We will market products that are safe to use, makeefficient use of resources, and are able to be recovered or disposed of safely.

• We will strongly encourage our suppliers to continuously reduce the impact of their operationson the environment through a yearly activity plan containing concrete goals.

• We will maintain a working environment for all ouremployees which is safe and protects their health.

• We will meet and, where appropriate, exceed the requirements of all relevant environmental legislation, regulations and guidelines. Local legalrequirements will be considered as a minimum standard.

Management processes

Environmental leadership is driven by Tetra Pak’sEnvironmental Council composed of managementrepresentatives of the different areas and structureswithin the Company. The Environmental Councilsets annual environmental goals, monitors improve-ments and establishes systems to fully integrate envi-ronmental considerations into our business strategyand operation.

All manufacturing facilities will implement envi-ronmental management systems to improve environ-mental performance on a continual basis. We willencourage our suppliers and customers to do like-wise.

Responsibility and accountability are key criteriafor environmental performance. They are shared inour Company in accordance with responsibility andaccountability of the various Product Divisions,Market Companies and Regional Headquarters. Eachentity will define a yearly environmental plan inte-grated into its business plan, including measurableobjectives which will be part of annual evaluations.

Communication

Environmental excellence is achieved by motivatedindividuals. We will endeavour that all Tetra Pakemployees understand the Company’s environmentalgoals and strategies so that they can fully collaboratein their implementation and achievement.

We will actively monitor and review progress andpublish an environmental performance report,including updated facts and figures on our pro-grammes of improvements.

44

Appendices

Tetra Pak’s environmental policy


Group Management

Tetra Laval GroupTransport & Travel

Tetra LavalOccupational

Health Service

EnvironmentalCouncil

CorporateEnvironmental

Affairs

Europe & Africa Americas Asia

MarketCompany

MarketCompany

MarketCompany

MarketCompany

MarketCompany

MarketCompany

BusinessUnits

BusinessUnits

BusinessUnits

Carton Packaging

Plastic Packaging

Processing

Divisions

Regions

45

Appendices

Tetra Pak’s environmental organisationEvery Tetra Pak site has a person dedicated to environmental issues, whether it is amanufacturing plant or an office. They are responsible for driving forward environ-mental initiatives at a local level.

Tetra Pak’s Environmental Council, composed of management representatives ofthe different areas and structures within the company, sets annual goals, monitorsimprovements and establishes systems to integrate environmental considerations intoour business strategy and operation.

Responsibility and accountability are key criteria for environmental performanceand are shared between the various Product Divisions, Market Companies andRegional Headquarters. Measurable environmental objectives now form part of sen-ior managers’ evaluations as part of their ‘Balanced Scorecards’.

We will provide verifiable statements integratedinto their right context for all claims related to envi-ronmental performance.

We will communicate externally to opinion lead-ers, government officials, and to the public aboutcommon sense approaches to the issues of packagingand the environment, ensuring that public policiesmake sense and that the public gains a fuller, morerational view of these issues, including an apprecia-tion of the benefits of packaging.

We will actively participate in policy discussionsconcerning environmental aspects of our activities,and we will play an active role in shaping policies onconsumer solid waste management by supportingflexible, cost-effective integrated waste managementapproaches.


46

Appendices

Code of Business ConductOur first priority is to be a sustainable, profitable business. This means investing forgrowth, and balancing short and long-term interests by caring about our customers,employees, suppliers and the communities in which we conduct our operations.

In the course of meeting our business objectives, it is essential that all employeesunderstand, comply with and share the values of Tetra Pak.

Examples:

• Standard of conduct. Tetra Pak conducts its business with honesty, integrity and respectfor the interests of others.

• Obeying the law. Tetra Pak companies comply with the laws and regulations of the countries in which they operate and behave as good corporate citizens.

• Employees. Tetra Pak companies are expected to recruit, employ and promote employees on the solid basis of their qualifications and ability. There shall be no discrimination on the grounds of religion, social standing, ethnic origin, gender, sexual orientation or political belief.

The code applies to Tetra Pak companies all over the world.

Managers will not be criticised for any loss of business resulting from adherence to theseprinciples. Equally, no employee will suffer as a consequence of bringing a breach orsuspected breach of these principles to the attention of the management.

Policy on our working environment• Tetra Pak is committed to provide safe and healthy

working conditions for its employees in all parts ofthe world.

• We will maintain a working environment for all employees which promotes safety and the protection of employee health.

In order to fulfil this:

• We take a holistic approach encompassing physicaland mental health.

• We promote the involvement of employees in the design of their working environment.

• We take a preventive approach to minimise the occurrence of incidents, accidents, diseases and injuries.

• We make regular assessment of the workingenvironment, publication of the results and the plans for corrective actions.

• We educate our employees in the working environment practices which are applicable to themand their responsibilities to comply with these.

• We establish an overall philosophy for the differenttypes of working environments within the company(there is manufacturing, office, etc.) and apply within appropriate local standards.

• We comply with, but not limited to the fulfilment ofall local legislative requirements in the pursuit of this policy.

This is so that our working environment supports ouremployees in their pursuit of Tetra Pak’s strategicobjectives.


47

Appendices


La Rioja ArgentinaFairfield AustraliaMonte Mor BrazilBeijing ChinaFoshan ChinaKunshan ChinaEspoo FinlandDijon FranceLimburg GermanyBudaors HungaryLatina ItalyRubiera ItalyGotemba JapanSeishin JapanQueretaro MexicoNaucalpan MexicoMoerdijk NetherlandsLahore PakistanJurong SingaporeSkalica SlovakiaSeoul South KoreaArganda SpainLund SwedenSkoghall SwedenSunne SwedenForshaga SwedenRomont SwitzerlandTaipei Taiwan

Rayong ThailandIzmir TurkeyWrexham UKKiev UkraineSikeston USAGornji Milanovac Yugoslavia


Tetra Pak PET Belgium BelgiumTetra Pak MPS (Trafford Park) UK


Tetra Pak VTV SwedenTetra Pak Dairy & Beverage Systems SwedenTetra Pak Processing Components Sweden

Market companies

(certified in their own right)Nihon Tetra Pak Japan

(certified together with factory)Tetra Pak Australia AustraliaTetra Pak Korea South KoreaTetra Pak Taiwan Taiwan

as at end of 1999

Tetra Pak sites certified to ISO 14001 and/or EMAS


48

Appendices

ERM commentaryInternational consultant Environmental Resources Management (ERM) assistedTetra Pak in the production of this Corporate Environmental Report and the devel-opment of overall environmental strategy. We worked very closely with theEnvironment Team from an early stage on the structure, scope and content of thisreport, and how it fits with the strategy. We started by looking at management ofenvironmental issues across the company, and helped identify strengths and weak-nesses.

We can comment on the process used to draw this report together – although weare inevitably too close to this process to give wholly independent views – and onwhere we see opportunities for improvements in the future.

There is genuine progress to report as Tetra Pak tackles a whole range of envi-ronmental issues across the breadth of the organisation. We support and welcome thecomprehensive approach to the complex issues addressed.

We note that Tetra Pak has set out a clear policy and vision, and that both strate-gic and practical issues are being addressed. While Tetra Pak has produced muchinformation on its environmental performance already, this report marks the firstattempt to collate global environmental performance data across all operations. It setsup a sound baseline against which future progress can be monitored.

Looking to the future, we would expect to see:

• Trends in performance reported against the baseline, with increased levels of detail.• Consistent reporting of environmental performance.• Increased setting of measurable targets to improve environmental performance.• Increased reporting on engagement of key stakeholders outside Tetra Pak.• More information on health and safety policy and performance.• Increased detail on the transport implications of Tetra Pak’s businesses.

Sustainable development reporting in general is only at an early stage, but more com-panies are reporting every year, and on an increasingly broad set of issues. Globalstandards for reporting such as the Global Reporting Initiative are starting to emerge.Tetra Pak’s first Corporate Environmental Report is a very useful starting point forthe company from which to drive improved performance on environment and sus-tainable development, and to improve reporting in the future in line with global stan-dards.

Dr Tom WoollardDirector Corporate Advisory ServicesEnvironmental Resources Management


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Documents

The Environment in Tetra Pak’s Value Chain · Tetra Pak’s value chain map 7 Our goals 10 Broader business context 10 2. Product design: for customers and the environment 12 The