Reducing Our Climate Impacts

About Mohawk Mohawk is an independent, family owned business, founded in 1931 that is now run by the 3rd generation of the O’Connor family. We manufacture our papers exclusively in the United States, operating three mills and six paper machines, with over 175,000 tons of capacity.

Products Premium grade printing & writing papers End-use Customers Corporate Educational Non-government Organizations (NGOs) Office Stores

As a resource-intensive, ephemeral product which is consumed in great quantities, paper draws the attention of “wise-use” advocacy groups. However, in recent years their attention has shifted from the mill to the consumer.

Social and environmental issues of interest to a corporation vary by the nature of its business, but increasingly the emphasis has been on the potential impacts of climate change and climate change mitigation strategies. Many companies now also discuss their consumption of paper in the context of sustainable forestry and climate science to address the concerns of organizations such as the National Wildlife Federation. Corporate Social Responsibility Reporting

JPMorgan Chase Community Partnership Report “We have a direct impact on the environment through our daily consumption of energy and paper resources.” “We are committed to advancing the public dialogue on climate change and the need to reduce greenhouse gas emissions”

Paper is a highly disposable item produced in vast quantities in a very resource and energy intensive process. The pulp and paper industry is: Why the focus on paper rather than other consumer goods? the third greatest industrial greenhouse gas emitter in OECD countries, after the chemical and steel industries. 2 the largest consumer of wood fiber – of the global wood harvest for industrial uses (everything but fuel wood) 42% goes into paper production. 1 (Abramovitz, “Paper Cuts” Worldwatch Institute, 1999) Footnotes: 2 OECD Environmental Outlook, Abramovitz, “Paper Cuts” Worldwatch Institute, 1999

Forests are not only great reservoirs of biodiversity but also play a key role in the carbon cycle. They convert CO2 to carbon which is then stored in biomass and soils. Conversely, forests emit GHGs when biomass burns or decays. The indiscriminate destruction of forests contributes to climate change. Why is sustainable forestry such a critical issue?

The climate change impact of deforestation is significant. Changes in land use (deforestation primarily in tropical rainforests) currently constitute about 30 % of CO2 emissions traceable to human activity. At least 37.5 million acres of rainforests are lost annually, an area the size of Georgia. Source: UNEP

Commercial logging is not the only activity that contributes to deforestation, and if done in a sustainable manner, its impacts are greatly mitigated.

At present, the countries emitting the most carbon into the atmosphere from tropical deforestation are, in order of importance: Brazil Indonesia Burma Mexico Thailand

Data source: Energy Information Administration, Basic Petroleum Statistics, 2006 As a domestic paper producer and as stewards of the environment, we have an obligation to use energy as efficiently as possible while using all available means to reduce our GHG emissions. The US has less than 5% of the world’s population, consumes 26% of the world’s oil production, while owning less than 3% of the world’s known oil reserves.

1970s – 1980s... Legal compliance Reactionary By-the-book Emphasis on end-of-pipe treatment Management oversight …1990s … Strategic management Preemptive action Source control Pollution prevention Risk analysis Best management practices Continuous improvement Manufacturing efficiency Integration EHS management Management participation …21st Century Sustainable business Extended stewardship Beyond-the-fence impacts Global impacts Resource conservation Ecosystem protection Product life-cycle considerations Engagement & Communication Regulators Lenders Customers Community Suppliers Media Employees Environmental innovation Renewable energy Carbon offsetting Carbon neutrality Third party certification Management leadership Mohawk: the evolution of environmental stewardship

“Green Seal is an independent non-profit organization dedicated to safeguarding the environment and transforming the marketplace by promoting the manufacture, purchase, and use of environmentally responsible products and services.” The FSC “product label allows consumers worldwide to recognize products that support the growth of responsible forest management worldwide.” “The Rainforest Alliance's SmartWood program offers a diverse set of certification and verification services,...ranging from Forest Stewardship Council certification, to verification of legality, to the management of high conservation value forests.” Climate Leaders is an industry-government partnership that works with companies to develop long-term comprehensive climate change strategies. Partners set a corporate-wide GHG reduction goal and inventory their emissions to measure progress. The Green Power Partnership is a voluntary program that encourages organizations to buy green power as a way to reduce the environmental impacts associated with purchased electricity use. Clean Air-Cool Planet (CA-CP) creates partnerships in the Northeast to implement solutions to climate change and build constituencies for effective climate policies and actions. Affiliations, partnerships, and third party certification programs

Energy Conservation / Demand side management Composite data for all three mills kWh / Ton Production -20% mmBTU / Ton Production - 13% Aging steam plants were voluntarily replaced in the early 1990s with low-emission natural gas fired boilers which: reduced fuel consumption by 14% reduced GHG emissions by 43% took a voluntary emissions cap on NY mills

What is carbon neutrality? “Describes an entity that releases the same amount of CO2 that it absorbs, hence producing a carbon footprint of zero.” Time, April 9, 2007 Calculate GHG emissions within the framework of a credible program. Create goals to reduce emissions by reducing energy consumption. Mohawk’s approach to carbon neutrality Offset the remaining carbon emissions produced for each ton of carbon neutral designated product. Greenhouse gases from business activities Reforestation Renewable energy Energy conservation Verified carbon offsets

In summary, we are focused on the development of products that balance quality, service and price with minimal lifecycle impact. Why? The paper an organization chooses for its communications can in itself convey a positive message to stakeholders who value environmental and social responsibility. Paper is still the main way organizations communicate with their stakeholders. Minimizing environmental impacts creates good will with stakeholders while reducing operating costs and business risk. Mohawk Fine Papers