An interview with Suzano

From Promise to Action on Net Zero is a series of research publications, interviews, and events exploring how companies are translating net zero emissions goals into practice. This interview presents one of our discussions with senior executives responsible for delivering their companies’ climate ambitions.

Mark Lee, Director of the SustainAbility Institute by ERM and Stefan Jimenez, Manager of Corporate Sustainability at ERM, spoke with Pablo Gimenez Machado, Executive Director for China and currently responsible for Sustainability at Suzano, about Suzano’s commitment to go beyond net zero and be climate positive.

Mark Lee: First off, we’d like to get to know a bit about you. Please tell us about yourself and how you ended up in your current role.

Pablo Gimenez Machado: I started my career in law and quickly moved to a trading house where I began learning the business of soft commodities within the food industry. It was a really interesting experience – I learned about international trade and global supply chains, and it took me to the US and then to Asia to help start new businesses. Through that experience, I began to understand new ways of doing business attuned to the environmental agenda that was emerging.

After my time in the US, where I supported Asian operations, I moved back to Brazil to manage a newly formed sugar cane and renewable energy company.  Following that company’s IPO, I moved to Suzano in 2015. My initial responsibilities were related to government affairs, legal, and tax, but I then started becoming closer to sustainability. When we merged with Fibria in 2019, I worked closely with the then sustainability director. After she left the business, I was invited by our CEO to lead sustainability for a period while also taking on responsibility for our business in China.

ML: It’s great to hear about your background and how you got to where you are today. We are equally curious about Suzano’s journey. In 2020, the company set its goal to be climate positive and remove 40 million tonnes of carbon from the atmosphere by 2030. Those are big steps! What was the motivation and how did you set the level of ambition?

PGM: In 2019, when we merged Fibria and Suzano, we decided to set up a new company which would respect the legacy of both Suzano Papel e Celulose and Fibria while developing its own culture. The then recently appointed officers for the “new Suzano” got together and decided we needed to communicate to employees and our stakeholders why we are here and what we want to achieve as a company.

We arrived at three questions and three aspirational answers, which became what we call our cultural drivers: (1) Who we are: People who inspire and transform, (2) What we want to deliver: We create and share value, and (3) How we do things: It is only good for us if it’s good for the world.

Building on our cultural drivers, we identified that a core tenet of our strategy is “innovability” or “innovation in the service of sustainability.” 

We are inspired by that notion because it gives us the opportunity to deliver nature-based solutions to society while providing alternatives to non-renewable materials that don’t have the same positive impacts as those we can produce from trees. In addition, how we plant trees is crucial. We use a “mosaic” technique, where we plant productive areas with narrower paths, interspaced with native vegetation and diversified by age, and alternated with conservation areas, forming ecological corridors so that fauna and flora can freely circulate.

Because our business is centered around the tree, sustainability has not been a department at Suzano but rather embedded across our functions, which has in turn facilitated the dialogue and definition of our strategy and who we want to be.

We set our goal to be net positive within this broader context. Our motivation is that we plant trees and follow forests very closely across the world. In doing that, the acceleration of climate change has been evident to us, both through the changes we have been forced to make in our planting, and in the struggles we’ve seen for the forestry sector globally. It was also clear to us that enhancing carbon capture would have positive impact on our business and society. Those three things – our business, climate change, and the view that this would be a great legacy – led us to make our net positive commitment.

ML: That backdrop is helpful to understanding Suzano’s journey. Your comments about your three cultural drivers and mosaic planting lead nicely to the “how.” What has been working? What are some early successes that have allowed Suzano to progress at pace, and where has Suzano met challenges?

PGM: We were positively surprised about our first-year results on carbon capture. In 2020, we emitted 3.8 million tonnes and captured 18.9 million tonnes from our planted forests and the native trees we manage. This was partly a result of planting performance and more productive forests than expected in some regions. Another important factor behind this result was enhancing our mosaic planting methods and expanding that technique to other regions, which proved effective.

Our challenge is now to continually meet, and if possible exceed, our ambition. For us, it’s crucially important that we even further enhance our energy supply, because that’s where much of our emissions reductions come from.

ML: I’m assuming Suzano is not doing this alone. We’ve been asking other companies about partnerships and collaborations, and where you go to find the expertise you need. Who can’t you do this without?

PGM: That is a crucial part of the puzzle. When I was telling you the story about creating the new Suzano following the merger with Fibria, immediately after creating our three cultural drivers we involved our stakeholders. For instance, we set our goal on being net positive after engaging with more than 700 stakeholders ranging from NGOs and customers to suppliers and employees.

Building our strategy and targets came as a direct response to engaging our stakeholders. We wanted to understand what they expect. Stakeholders say, “You are big, our expectation is that your ambitions are as big as your business and that you will deliver significant shared value.” We embraced that. Their answers and provocations challenged us, and we have grown from it. We love talking to people who have opposing views or who don’t like what we do, because they make us change and disrupt how we operate in a good way.

Our customers, our employees, and NGOs pushed and challenged us a lot. Two other key stakeholder groups are our suppliers, including the suppliers of funds, and the communities surrounding us.

ML: Regarding customers specifically, can you give us one example of their reactions, maybe what they’ve been excited about? How is what Suzano is doing affecting them?          

PGM: Customers engage us at different levels. Some require certification of our products, while others want to better understand our business model and to witness how we manage our assets and relationships. And there is a third group of customers who develop sustainable products and solutions together with us, such as by helping us replace fossil- based products with renewable ones or collaborating on how we can transport in a more efficient way. Some even ask what they can do with us to increase our ambition and help us capture even more carbon, especially after seeing some of our positive first-year results.

Stefan Jimenez: Thanks for telling us more about your customers and how they support and challenge Suzano – it takes us right into our next question about the impacts of your products and operations. How is Suzano working to extend the life of its products and reduce the emissions associated with the use of your pulp, paper, and biotechnology products?

PGM: This is the heart of sustainability: “What can we do in our operations to perform better and move in the right direction for society?” 

First, we need to further enhance our energy supply – what we call our energy matrix. We are already self-sufficient in terms of energy in our mills. The energy we generate is renewable, and we generate a surplus, which we export to the grid. But we can and must do more. Replacing fossil-fuel-based energy with renewables does a lot for society – and, because of our size and the volume of energy we generate, we can even help improve Brazil’s carbon footprint in doing so.

The second factor is thinking about how we can plant better. If you put the lifecycle of a tree on a graph, the younger it is the more carbon it captures. With that in mind, the more wood we can produce the greater the sustainability impacts. By being more productive, we capture more carbon and use less land, leaving more area free for food and natural restoration. Planting better also means using less chemicals and using the right techniques in the right places to ensure a balanced ecosystem in all the forests and biomes where we operate.

And third, transportation is key for us. Because of our energy matrix and our already-low carbon footprint, it is a challenge to positively disrupt our industrial operations further in energy efficiency and emissions terms, but we do use trucks, rail, and ships to transport 10.5 million tonnes of product to two billion people every year.  It is a very long supply chain, and the next significant contribution to sustainability for Suzano will be changing the fuels in our transportation. While we do not operate vessels, we do operate trucks. We are already increasing the use of electric trucks in our fleet and innovating to improve the efficiency of our trucks so that they use less energy altogether.

In terms of the lifespan of our products, I love discussing the circular economy. As you know, recycling plays a crucial role in all that. Beyond sustainability, recycling is also a great opportunity businesswise. But there is another important feature of our products – they are biodegradable. Recycling is good and should be incentivized, but it consumes chemicals and energy. Sometimes, returning biodegradable products to the environment might be the most sustainable solution.

SJ: I am thinking about some of your earlier overarching comments – you’ll have seen the IPCC’s sixth assessment report, and  Climate Week has just happened, and COP26 getting close. What are you expecting from these events and how will you judge success?

PGM: We have a dream that we express like this: “For us, 2050 is today.” Humanity needs to take immediate action to revert the current situation. The IPCC report is crystal clear, but witnessing the dramatically changing climate just in the forests and biomes where we operate is eye opening. Over the past years, the world has experienced denial in negotiations over how one country can emit more, or get more credits, than another. 

The best-case outcome for COP26 and Climate Week is that climate leaders act on the fact that it’s not time to negotiate or make long-term pledges but realize that it’s time for unified efforts and establishing measurable, short-term, mid-term, and long-term goals with tangible deliverables. Otherwise, the result of our inaction to the next generations will be intolerable. Governmental leaders must embrace ambitious Nationally Determined Contributions (NDCs) and create a truly global carbon market to incentivize countries and businesses to do their best to deliver emissions reductions at pace.

ML: As we close the conversation, what advice do you have for companies who are just starting out on this journey?

PGM:

When the business world and politicians realize that this is what society is demanding, we will face a positive disruption in the way humanity evolves.

I expect that we at Suzano can participate in that and be an important voice in helping usher in that outcome. I am sure that whatever company is starting, regardless of its past, having this type of leadership mindset will let it be successful and contribute to the environment and society.