Essity 2022 Annual and Sustainability Report: Purpose and Vision

Originally published on Essity.com

Our purpose 
Breaking barriers to well-being

Hygiene and health are more important than ever, and Essity’s purpose is to break barriers to well-being. Essity is to be a positive force for change and work to break and overcome barriers that stand in the way of improved well-being across the globe.

Our vision 
Dedicated to improving well-being through leading hygiene and health solutions

Essity strives to enable better hygiene and health standards at home and in public spaces through leading solutions.

Our mission 
To sustainably develop, produce, market and sell value-added products and services within hygiene and health

We develop, produce, market and sell solutions that create value and better hygiene and health experiences at home and in public spaces. Essity achieves this by supporting the efficiency of hygiene and health routines, and by pre- venting, treating and monitoring health conditions.

Business model

Resources 
Essity utilizes resources in the form of financial capital, where equity amounted to approximately SEK 77bn and net debt approximately SEK 63bn in 2022. Furthermore, human capital is used in the form of approximately 48,000 employees and their expertise and experience, as well as intellectual capital such as research and development, patents, licenses, innovation, systems and goodwill. Essity also utilizes capital in the form of raw materials, facilities and infrastructure necessary for production, and relationship capital that includes Essity’s relationship with internal and external stakeholders.

Moreover, Essity uses natural capital in its operations, such as forest, energy and water. Essity strengthens the company’s competitiveness and reduces its environmental footprint by endeavoring to increase efficiency and reduce resource use.

Customer and consumer insights 
The starting point for Essity’s operations is customer and consumer insights. Through knowledge about people’s daily needs and challenges, we create an offering that improves well-being and quality of life for people every day.

Sustainable innovations 
Continuous innovation is crucial to steadily improve people’s hygiene, health and well-being and to contribute to a sustainable and circular society. Essity has a global unit that works with brands, innovation and sustainability with the support of innovation centers in France, China, Mexico, Sweden, Germany and the USA. Research and development (R&D) costs during the year amounted to approximately SEK 1.6bn, corresponding to about 1.0% of net sales.

Responsible sourcing and sustainable manufacturing 
Essity’s main raw materials are pulp, recovered fiber and oil-based materials. The company strives to reduce the use of raw materials.

Essity has around 90 production facilities worldwide. Work to increase efficiency at the facilities is a continuous process that includes digitalization and automation, with the aim to achieve sustainable, efficient world-class production. The cost of goods sold amount- ed to approximately SEK 117bn. Of which raw materials and consumables approximately SEK 65.5bn, distribution costs approximately SEK 15.7bn and energy approximately SEK 9.6bn.

Essity subjects its suppliers to stringent demands and works throughout the supply chain to guarantee responsible sourcing.

Marketing and sales 
Essity actively strives to build awareness of the company’s brand, purpose and product brands, and pursues global and local initiatives to raise awareness and standards for hygiene and health. Essity’s marketing costs in 2022 amounted to approximately SEK 7.6bn, corresponding to 4.8% of net sales. An increasing share of marketing is conducted through digital channels.

Leading hygiene and health solutions 
Essity is the global market leader in incontinence products with the TENA brand and in professional hygiene with the Tork brand. Essity also has strong brands in other product cate- gories. Essity holds the number one or number two position in 90% of the company’s branded sales.

Value creation for our stakeholders 
Customer and consumer value is created through leading solutions that increase well-being and improve quality of life. Value is created for employees, suppliers and society through, for example, employment, remuneration, tax, increased well-being, sustainability initiatives, and community relations.

Essity generates value for shareholders through dividends and a positive share price trend. We work to maximize shareholder value while prioritizing environmental and social issues by taking financial, environmental and social parameters into consideration in our business decisions.

Our objectives:

• Generate increased shareholder value through profitable growth
• Enable more people every day to enjoy a fuller life
• Contribute to a sustainable and circular society
• Winning with people and culture

Read more about Essity’s strategic priorities, earnings and leading sustainability work in the Annual and Sustainability Report 2022, which can be downloaded at www.essity.com.

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