At Resolute Forest Products, environmental performance is managed at the local level with oversight by the organization’s top management. Our vice president, Environment, Energy and Innovation, has overall responsibility for risks and opportunities at the mill level, while our vice presidents, Forestry and Wood Products Operations, oversee our woodlands operations. A top-down approach is in place for the analysis of risks and opportunities, which relate primarily to regulatory changes, strategic capital investments, consumer preference changes, reputation and weather-related challenges.
Guided by the company’s Environmental Policy, our environment coordinators and mill managers have on-the-ground responsibility for compliance with local laws and regulations and for facilitating continuous improvement. Corporate environment managers and coordinators work closely with each mill environment coordinator to identify and manage the issues most relevant to specific operations.
On an annual basis, each facility sets reduction targets for water use and fiber losses. In addition, facilities can set additional targets on issues most relevant to their specific local issues. This approach was chosen to reflect the different geographic and technological realities of each operation. Key performance indicators (KPIs) are monitored at both the mill and corporate levels. At the mill level, greenhouse gas (GHG) emissions, water usage, air emissions and waste generation are the most material areas of focus. We monitor our performance closely to maintain continuous improvement across our key performance indicators and conduct regular environmental risk audits as part of our proactive, preventive approach to environmental management. Information on these KPIs is aggregated, analyzed and, in some cases, reported to organizations such as CDP.
ISO 14001:2015 Environmental Management Systems
All of our operations are certified to the ISO 14001:2015 environmental management systems (EMS) standard, with the exception of our Hagerstown (Maryland) tissue converting facility and our three U.S. sawmills, all of which were acquired in 2020.1 We are in the process of implementing EMS at all of these facilities, with the goal of completing ISO 14001:2015 certification at our U.S. sawmills in 2022, and at Hagerstown in 2023. The certification of our Menominee (Michigan) pulp mill as well as our Hialeah and Sanford (Florida) tissue operations was completed in early 2021.
In 2019, Resolute also completed the transition to the new ISO 14001:2015 environmental management system certification at our operations, working to comply with the increasingly stringent and far-reaching requirements of the new standard. The EMS at our Thunder Bay (Ontario) pulp and paper mill was among the first in Canada to be successfully recertified under the standard, which requires better integration with other business activities, the identification of compliance obligations including stakeholder requirements, and emphasizes continuous improvement and performance monitoring.
Proactive Approach to Preventing Environmental Incidents
Our employees have worked collaboratively across all levels of the organization to instill a preventive and proactive approach to environmental management, including developing and implementing environmental risk audits designed to identify potential non-compliances or environmental risks before incidents occur.
In 2021, we trained 165 of our directors, managers and superintendents to reinforce our commitment to environmental management and compliance. Training took place via four virtual sessions led by our Legal team.
Other initiatives include employee outreach and education tools to support a culture change towards environmental incident prevention, rather than reactive management. Such initiatives include a 360-degree risk assessment system, environmental training for supervisors and managers, one-on-one environmental meetings with employees, and a robust near-miss reporting system based on our successful health and safety incident management approach.
In the rare event that an environmental incident does occur, our operations and Environment group review all incident investigations and action plans. Our incident management approach includes a comprehensive tracking system to ensure efficient reporting, as well as specific procedures for the internal communication of environmental incidents with the purpose of sharing key learnings between facilities. A formal investigation is always required so that efficient preventive measures can be put in place.
In late 2012, we changed our reporting procedures following a senior management request for more transparency and consistency in environmental incident communications. Accordingly, the Environment group developed a policy that includes reporting methods and parameters to support information sharing and continuous improvement. In order to compare "apples to apples," we now classify significant (by volume) spills uniformly across operations, using the most stringent local laws and regulations as our baseline. Notices of violation (the documents issued by government entities to inform organizations of their violations as well as the associated administrative penalties, fines or sanctions) are also addressed through this policy framework.
In 2021, we recorded 12 environmental incidents across the company, well below our target of 15, as we continue to work toward our long-term goal of zero incidents. Our 2022 target is 12 incidents or less.
In its financial statements, the company is required to record accidental releases of hazardous substances significant enough to risk damage to human health and environment, or that have potential liability and reputational consequences. Between 2019 and 2021, Resolute recorded no such events. The company is also required to disclose in our published financial statements any fines of material significance for non-compliance with environmental laws and regulations, none of which were served between 2019 and 2021.2
Consistent knowledge transfer and the sharing of best practices following an environmental incident have revolutionized the way that Resolute’s operations investigate root causes and develop preventive practices. Operations where a similar incident might occur must evaluate their risk and implement preventive measures that are tracked at the corporate level. Regular conference calls and individual follow-up meetings have been instrumental in the success of this preventive and proactive approach, which represents a successful cultural shift for the company.
1 Includes 15 ISO 14001-certified pulp, paper and tissue mills, 19 wood products facilities, 1 hydroelectric generation and transmission network, and 7 woodlands operations certified to ISO 14001 out of Resolute’s 15 pulp, paper and tissue mills, 22 wood products facilities, 1 hydroelectric generation and transmission network, and 7 woodlands operations, and 1 tissue converting facility.
2 Material environmental contingencies are disclosed in the footnotes to the company's consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2021. Certain additional proceedings are also disclosed under the heading "Item 3 – Legal Proceedings" in the Form 10-K.