2020

LVM Supervisory Board has Approved LVM Sustainability Report

On 1 July, the Supervisory Board of JSC “Latvia's State Forests” (LVM) approved the company's sustainability report for 2019. The report was drafted for the first time in accordance with the internationally recognized Global Reporting Initiative (GRI) guidelines, and it reflects LVM's activities in achieving balanced economic, social and environmental strategic goals of the company.

LVM's strategic economic goals such as increasing long-term profits, increasing the value of assets and stands managed and developing the manufacturing of high value-added products, are complemented by the company's strategic social goals such as promoting public participation and cooperation in forest management and developing a work environment that increases loyalty and promotes self-motivation. In addition to economic and social goals, LVM also sets strategic environmental goals such as developing a gentle public attitude towards the forest environment and increasing the contribution of forests to mitigating global climate change and using renewable resources.

“Sustainability is the most important guiding principle of LVM's management, but the implementation of its principles on a daily basis is possible only through cooperation with all stakeholders: the business owner, cooperation partners, employees, scientific and educational institutions, governmental and non-governmental organizations and the society. LVM is grateful for the involvement of the company's stakeholders, which is implemented at various levels: consultations, negotiations, involvement and even partnership in joint decision-making,” says Mārtiņš Gaigals, Member of LVM Supervisory Board.

LVM's economic contribution to state and local government budgets over twenty years amounts to more than 1.1 billion euros paid in taxes and dividends. Every year, in accordance with the basic principles of donation of the company's shareholder (the Ministry of Agriculture), LVM also directs a part of its profit to support charity, health and social assistance, culture and art, sports, education and science projects important at the national level.

Preservation of environmental values is of key importance for the company: almost 17% of the forests and more than 20% of the total area of all lands are managed by LVM for the purpose of nature protection.

Despite the difficult conditions in the timber market and the lack of winter frost required for forestry work, LVM's profit before corporate income tax in 2019 was more than 118 million euros, exceeding the previous year's profit by 8 million euros. In accordance with the recommendation of LVM Supervisory Board, the company's shareholders' meeting decided to pay out more than 76 million euros in dividends to the state.

The ability to adjust its core business to market demand is LVM's biggest challenge in the situation where economic uncertainty has increased. In 2020, in accordance with the budget approved by LVM Supervisory Board, the company plans to restore forest stands in an area of almost 16 thousand hectares, cultivate young stands in an area of 31 thousand hectares, as well as clean up drainage ditches in an amount of 477 thousand cubic metres. It is also planned to restore almost 23 thousand hectares of forest drainage system and put into operation 348 kilometres of forest roads.