2Sustainability Social Vibrant Equity Economy Healthy Environment Sustainability- What is it?Sustainability is meeting present needs without compromising the ability of future generations to meet their own needs*SocialEquityVibrantEconomySustainabilityHealthy EnvironmentTo International Paper this means . . .Managing Natural ResourcesReducing Environmental FootprintBuilding Strategic Partnerships* Source: Brundtland Commission
3Guiding PrinciplesEvaluate the entire supply chain for sustainability opportunitiesRaw MaterialManufacturingPackaging DesignDistributionProduct UseRecovery / End of LifeBuild partnerships for greater successCollaboration helps uncover additional opportunitiesPartnering enables supply chain improvements beyond one’s own company
4Raw Material Sourcing Managing Natural Resources Renewable Paper-based packaging is made from trees, a renewable resource-- our fiber-based packaging is 100% renewableThird-Party CertifiedOur containerboard and boxes are third party certifiedOur use of a particular standard is dependent upon the location of the facility or forest--sourcing fiber from the closest source is one way that we ensure our environmental responsibilityCurrently 100% of our boxes can be labeled with the SFI Fiber Sourcing logoRegenerate the ForestRegeneration is a critical component of the forest life cycle, and use of our corrugated packaging encourages long term, responsible forest stewardshipDemand for trees helps ensure that tree farmers will continue to keep their land forested rather than sell their land for development or clear it to grow other cropsDemand for wood-based products helps to maintain forests and ensures that trees are managed responsiblyRecycle BalanceWe balance renewable, virgin fiber with recycled fiber for optimal performance for our customer’s supply chain
5Third-Party Certification Certification ensures wood fiber is tracked from the forest to the consumer, with assurance that it comes from responsibly managed forestsOrganizations like the Sustainable Forestry Initiative (SFI) set certification standards, then accredited auditing firms verify a company’s performance against those standards–much like a financial audit verifies a company’s financial performanceCertification is supported by conservation groups, fights illegal logging while recognizing rights of indigenous peoples and protects water, soil, wildlife, and endangered forests90% of paperboard and 93% of containerboard produced in the United States is supplied by SFI ParticipantsThe SFI® mark is a registered mark of the Sustainable Forestry Initiative.
6Certification Statistics How Many Forests Are Certified?Across the world less than 10 percent of forests are certified, and in North America, approximately 30 percent are certified.
7U.S. Forestland Ownership Who owns the American Forests?Government-Owned(146 million acres)Privately-Owned(356 millionacres)Because approximately 70% of U.S. forestland is privately-owned, certifying forests is difficult and very fragmented
8Commitment to 3rd Party Certification International Paper supports 3rd party certification – all credible organizationsOur use of a particular standard will be dependent upon the location of the facility or forestThe idea that one forest certification system is preferable over all others is based on non-empirical, obsolete informationWe believe that the focus should be on reaching the 90% of the forests that are uncertified with improved standards, rather than debating areas that are already sustainably managedOur global certification policy and the certification status of our operations are publicly available at ipsustainability.com
9Balance in Sources of Fiber Which is better virgin (new) or recycled?Recovered FiberVirgin FiberCollection/separationDistance to transportRe-pulp & de-inkFossil fuel energySolid wasteHarvestDistance to transportChip & pulpBiomass energyThere is no one “right” answer -- each choice results in tradeoffs between performance and environmental impactThere is no one “right” answer -- each choice results in tradeoffs between performance and environmental impact
10Virgin vs. Recycled Comparison Over the lifetime of a boxPerformance was similar in the first 2,000 minutes, after which the recycled box failedAnd eventually (after 5,000 mins) so did the virgin boxConsiderations for your supply chain requirements and demands should be assessed to get the optimal performance.Cyclic humidity (50% RH for 6 hours 90% RH for 6 hours .Loaded at 6.4% of BCT(or 11.4% of 85%RH
11It Depends! Summary Virgin vs. Recycled Which is better for the environment?It Depends!Paper fibers can be recycled an average of 4-7 times, so both are essential to making the entire system more sustainableThere cannot be recycled paper without virgin paper to begin and sustain the cycleVirgin fiber that is grown and harvested sustainably helps keep private land forestedRequiring SKU / product specific recycled content percentages sub- optimize the system and can lead to less sustainable practicesIP finds the best suitable outlet for the fiber, leading to a balance between virgin and recovered fiber.
12Manufacturing Reducing Our Environmental Footprint Energy Our mills use >70% renewable energy which is self-generated and carbon neutralSince 2003, IP has invested over $250 million in energy efficiency improvements.Green House Gas (GHS) EmissionsWe are founding members of the voluntary Chicago Climate Exchange (CCX) and the EPA Climate Leaders Program in the U.S.Under the Climate Leaders program, we committed to reducing emissions 15% from , and exceeded that goal by doubleFuelWe have increased the amount of renewable fuel usage by over 5%since 2004, and decreased fuel oil and natural gas use by 49% per ton of product since 2001 in the U.S.WaterWe are focused on water conservation, recycling water within our mills and protecting water quality in waterways that receive our water after useFrom , our effluent decreased by 4%When accounting for evaporation and precipitation, over 99.5% of total water inputs are returned to the environment
13GHG Emissions 30% Decrease in GHG Emissions Under the Climate Leaders program, we committed to reducing emissions 15% from , and exceeded that goal by doubleClimate Leaders Data, includes all US Operations
14Packaging Design Remove Reduce Renewable Recycle / Recyclable Through innovative paper and packaging design, we have made extensive progress in removing unnecessary packaging and less desirable materials while delivering value to suppliers, retailers and end-usersReduceUsing performance-based and lighter weight papers and liners, our design experts optimize the amount of material in the packaging, so it’s not over engineered but serves its purpose across the supply chain“Right-size” and optimize packaging design for performance, product-to-packaging ratio and cube utilization for efficiency across the supply chainRenewableOur structural design experts help customers determine the right balance of fibers and the right packaging design to minimize material requirements without compromising strength and performanceRecycle / RecyclableOur corrugated packaging is 100 % recyclable and contains an average of 34% recycled contentWe offer many innovative solutions that replace packaging materials that are not recyclableWe collectively improve packaging sustainability and the environmental impact when we share the latest innovations, collaborate together and incorporate new ideas into products and activities
15Remove Packaging CORRDrum™ with Triplewall Corrugated Technology™ A revolutionary all corrugated drum which replaces fiber, steel, plastic, and composite drumsMade from recyclable linerboard and mediumComplies with SFI sourcing standardsCan be reused after providing product protection and end-user or consumer storageUsed in a variety of food products such as cereal, pasta, vegetables, and industrial chemical productsThe package is recyclable with OCC eliminating the cost of landfill disposal and can provide revenue to retailers and end-users
16Box Compression Test Pro Reduce PackagingBox Compression Test ProBox Compression Test Pro (BCTPro), International Paper’s corrugated packaging solution helps suppliers of Wal-Mart improve their sustainability commitments.Proprietary technology built in to BCTPro helps deliver packaging solutions that perform throughout the supply chainBCTPro tests result in better utilization of materials, transportation and energyOptimizes corrugated packaging solutions by removing unnecessary packaging and reducing suppliers’ total costs through the supply chain
17Reduce Packaging Square or near square RSCs waste material Resizing for same cube or reorienting the opening can reduce blank size20 x 20 x 1017.4 Sq ft20 x 10 x 2013.2 Sq ft24% reduction
18Display-Ready Packaging for Fresh Produce Reusable PackagingDisplay-Ready Packaging for Fresh ProduceUsing performance-based papers, optimized basis weights and removing excess materials “right-sizes” the packagingImprove efficiency and retail appeal whilereducing material use, “less desirable materials,” handling and wasteCommon footprint, modularity, and shelf ready packaging minimize waste and improve cube utilization
19Distribution Global footprint Transportation Warehouse Our vast geographic footprint enables quick delivery and speed to market, which equals quicker sales and realized profitsStrategic locations close to major retailers to better serve them and our CPG customersTransportationMultiple locations reduces travel distanceTurnkey solutions under one roof enable manufacturing, pack out, etc. to all occur in one location vs. travel from facility to facilityThrough optimized design, we reduce materials used, maximize cube utilization and product-to- packaging ratio, freight costs and reduce truckloads and lower green house gas emissions with less fuelWarehouseEfficiency gains in labor and warehousing with fewer pallets, modular designs, and shelf-ready packaging
20Power Wing Display / Self-Shipper Reduce PackagingPower Wing Display / Self-ShipperReduces the environmental footprint of the standardpower wing display by minimizing the number of components andeliminating the master shipperSelf-shipping display uses an “overwrap” with aperforated die-cut that can be removed for easier retail setup40% less corrugated material used – reduction of display components and no master shipperOverall cost savings – 4 fewer pallets needed for same quantity of displays shippedThe gravity feed design provides large billboardspace to communicate brand message andproduct benefits
21Product Use Reuse Performance Our corrugated containers are often used multiple times to transport, protect and store products. Our engineers develop packaging systems with the entire supply chain in mind and use materials that are reusable and returnableOur corrugated packaging is 100 percent recyclable, so after its initial useful life it can be recycled and reused to make another productPerformanceProducts are designed and engineered for top performance with minimal environmental impact—from protection and retail sales to reusability and recoverabilityDesign incorporates in-store activities to minimize the number of components and complexity of getting the display to the retail floor and shopped by the customer
22Reusable Packaging Bulk Bin Packaging International Paper engineers develop multiple-trip and closed-loop bulk packaging systems for the supply chain with corrugated materials that are reusable and returnable.Many paper-based packaging solutions produced by the company can be reused after providing product protection and end-user or consumer storageFreight, labor, warehousing, and waste are reduced with International Paper reusable bulk packaging systemsUsed in a variety of food products such as pumpkins and watermelons
23Recovery / End of Life International Paper Recycling Results One of the largest recyclers in the world, with extensive experience in recycling servicesA leader in buying and selling recovered paper to mills globally, recovering more than six million tons of recyclable products each yearWell positioned geographically with 20 facilities in the U.S. and Mexico to serve customers in North America and close to major ports for export accessResultsOur consulting expertise identifies areas to reduce costs or improve profits,We help maximize warehouse space for product inventory, maximize the life of recovered fiber by using it in the most optimal application, reduce landfill waste and improve customers recycling revenue streamRecycling Services
24Recycle(able) Packaging Use materials made of the highest recycled content withoutcompromising qualityIn 2008, recovery of Old Corrugated Containers was 81%But paper production can not rely on recovered fiber alone - Paper fibers can only be recycled 4-7 timesRecovered fiber growth rate is slower than the projected global fiber demand needsInternational Paper is one of the world’s largest paper recyclers – 6 million tons collectedInternational Paper’s corrugated packaging contains an average of 34% total recycled content
25Recycle(able) Packaging ClimaSeriesTM - the latest technology in cold chain packaging that replaces waxed boxesRecyclable - Unlike wax products, ClimaSeries® boxes are salable though the regular OCC recovery system.Performance - Boxes that meet or exceed the performance of the entire spectrum of current waxed packaging.Cost-Effective - ClimaSeries® products help you get product to market fresh, protected, and in a recyclable package. ClimaSeries® products are cost-effective from a product and supply chain perspective.
26“Duracool” Recycle(able) Packaging Display-ready, fully recyclable alternative to Expandable PolyStyrene (EPS) packagingRecycles with other OCC and also reduces packaging, freight, and retailer labor costs throughout the supply chain. Certified under the Fibre Box Association protocol as fully recyclable and fully repulpableSpecially treated package assures ambient moisture and fungicide treatment stay on grapes instead of being absorbed by the package
27Partnerships for Greater Success Partnering with International Paper’s packaging team gives you experts at every stage in the lifecycle of your corrugated packagingWe can help optimize fiber use and reduce environmental impact throughout the supply chainWe build sustainability into your business with products and practices that are not only the right environmental choice, but also the smart economic choice
28Wal-Mart’s Sustainability Improvement Goals Be supplied 100% by renewable energyExisting stores 20% more efficient in 7 yearsNew stores 30% more efficient in 4 yearsTrucks 25% more efficient in 3 years; 50% in 10 yearsCreate zero waste25% reduction in solid waste in 3 yearsAll private brand packaging improved in 2 yearsSell products that sustain resources and environment20% supply base aligned in 3 yearsPreference given to aligned suppliers in 2 years
29Wal-Mart’s Packaging Scoreboard Metrics Used to Evaluate PackagingMETRICDESCRIPTIONWEIGHTGreenhouse Gas EmissionsAuto-populated by material withindustry average CO2/ton15%Sustainable Material (Material H&S)Material Health & Safety based onindustry average OSHA scoreProduct-Package RatioAmount of packaging relative to product driven by # units, weight (SKU spec.)Cube UtilizationMeasure of fit – product to package ratio (SKU specific)Transport DistanceDistance converted packaging travels to ‘pack-in’ facility10%Recycled Contentindustry average recycled contentRecovery Valueindustry average recovery rateRenewable Energy3rd party evaluated usage5%Extra Credit / Innovation3rd party evaluated energy efficiency, etc.
30Summary Paper based packaging is inherently sustainable International Paper has a strong sustainability platformRenewable and recycled fiber sourcesBiomass utilization and greenhouse gas reductionsPerformance and design optimizationWal-Mart’s scorecard reflects an understanding of the integrated nature of the global corrugated packaging industry Scorecard using industry averages for many attributes for corrugated, not an individual company’s recycled vs. virgin.Packaging design (product to packaging ratio and cube utilization) is critical as you can directly impact the score at the SKU levelInternational Paper has the tools, resources, and track record to help you with your sustainability goals and improve your scorecard results
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