2012 CSR Report - National Office Furniture · ANSI/BIFMA e3 Sustainability Standard Sponsored...

Corporate Social Responsibility

Report2012

It’s a legacy that we build upon every year as we move towards a better tomorrow. It’s also about unbridled respect for nature, people

and communities by putting stewardship into action.

Welcome to the fifth annual report on our progress towards a better tomorrow. Inside you’ll immediately see the importance of

environmental and social responsibility engrained in the National culture. Similar to prior years, our 2012 report is guided by the Global

Reporting Initiative (GRI) Sustainability Reporting Guidelines and the pursuit to make a difference tomorrow by acting responsibly today.

A legacy isn’t merely created by the passing of time; it’s created by putting in the time. A legacy is involvement, caring and making a

difference even when there is no one around to see the resulting impact. At National, we make it personal and promote stewardship at work

and at home. The legacy you leave is driven by a lifestyle embedded with sound behaviors and decision making even when the right thing to

do is often the most challenging to achieve.

We don’t have all the answers; however, that just means we’re going to keep trying to find them in healthy, responsible ways. We’re all on

this journey together and staying on the path, as well as blazing new trails, keeps us headed in the same direction…to a better tomorrow.

At National Office Furniture,we see our legacy as morethan quality office furniture.

2

2012 Corporate Social Responsibility Report

Contents

4Our History

6Our People

14Our Products

20Our Facilities and Operations

25Our Transportation

26About National

27GRI Considerations

www.NationalOfficeFurniture.com 3

A Message from Our General ManagerIn our recent leadership development program, Emerge…Learn, Lead, GrowSM, I asked the group, “What could we accomplish if we were all 10% better leaders?” I didn’t ask this question because I think our people aren’t doing a good job or leading well. As a matter of fact, our people are delivering extraordinaryperformances and providing outstanding leadership, so I posed the question to motivate and challenge them to keep getting better in all aspects of the business,including our social and environmental stewardship. What if everyone picked up one more piece of trash, recycled one more aluminum can, refilled a reusable waterbottle, turned off one more light, and so on.

Everyone can understand the magnitude that “one more” could create; however, one more in the wrong direction could be devastating too. That’s why it’s soimportant for companies to be responsible and do the right thing. Which is what we strive to do at National. All of our manufacturing facilities are voluntarymembers of their respective state’s environmental program, along with being certified to international standards such as ISO 14001. Each facility also has anenergetic Safety Team in place. This combination demonstrates the commitment of our company to pursue excellence in sustainability, safety and overall social responsibility.

In 2012, we achieved several milestones such as being named Manufacturer of the Year in the Casegoods Category by the Office Furniture Dealers Alliance (OFDA),and reducing our overall Greenhouse Gas Emissions by 10.13% per metric ton, year over year. We fell a bit short in a few areas; for example, we were not able toreduce the amount of water used to produce a unit. However, we have put actions in place to improve performance going forward.

One of our signature strategies is to create a lifestyle of responsibility at work and at home. In 2012, we implemented a number of programs which support this,such as the Earth Day campaign that put 600 trees in the ground in at-risk forests due to the “earth-friendly” efforts by our employees, including a beach clean-upon Chicago’s North Shore which my wife, Mandy, and I participated in.

Additionally, we identify Significant Environmental Aspects that guide our teams on annual activities. Our Sustainability Council focuses on long-term goals suchas: reducing the use of chemicals of concern, driving down our GHG emissions, and achieving the U.S. Green Building Council’s LEED® Green Building Rating Systemcertification on construction and renovations. The attainment of LEED Silver for our Santa Claus manufacturing facility was an especially meaningfulaccomplishment.

Volatility has become the norm across the globe whether due to financial, governmental, social or environmental forces. In light of this, it is critical thatcompanies achieve their goals responsibly and transparently. Forbes Magazine named our parent company, Kimball International Inc., as one of America’s MostTrustworthy Companies, which is a critical step in the path towards transparency. Plus, our industry recently had a big win when the LEED System recognized theuse of products certified to the level® program under Pilot Credit 80. Our efforts to achieve level 2 or 3 certification for 100% of company manufactured productsbecause it was the right thing to do (this was us doing 10% better 5 years ago) has now positioned us well to be a key provider of level products in LEED projects.In fact, one of our leaders, Mendy Claridge, Director of Sustainability LEED ID+C, in conjunction with the U.S. Green Building Council and our trade association,BIFMA, are delivering presentations to educate facility managers and A&D professionals about how impactful Pilot Credit 80 can be on green building projects.

So, I ask again, “What if we could do 10% better?” or “What if we just did 1% better?” If the responsible action is there, the percentages, no matter how big orsmall, will add up. And that 1% or 10% collectively will yield an incredible impact. Pick up one more piece of litter, let your personality shine and have some funalong the way. That’s what we strive for at National!

Kevin McCoyVice President, General Manager

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2012 Corporate Social Responsibility Report | Our History

What if everyone picked up one more piece?

2012Santa Claus Facility awarded LEED EBcertification - Silver

Atlanta Showroom registered for LEED CI certification

Washington DC Showroom registered forLEED CI certification

Surpassed 1 million hours without a losttime injury

Approved for U.S. EPA’s ComprehensiveProcurement Guideline (CPG) program due to product recycled content

Named Manufacturer of the Year -Casegoods Category by Office FurnitureDealers Alliance (OFDA)

Reduces Greenhouse Gas emissions by10.13% per metric ton year-over-year

Participates in USGBC’s Green Apple Dayof Service by conducting free EnergyAudit at Jasper High School, Jasper, IN

Matches donations of Incentive Tripguests for a total gift of $15,000 toHurricane Sandy relief efforts

Awards $25,000 Gift of Inspiration forEducation to Wright State University,Dayton, OH

Awards $25,000 Gift of Inspiration forHealthcare to Howard Phillips Center forChildren and Families, Orlando, FL

Corporate Recycling Center receivesGovernor’s Award for EnvironmentalExcellence

Fordsville facility accepted into State ofKentucky Excellence in EnvironmentalLeadership (EXCEL)

Planted 600 Arbor Day Foundation treesin damaged forests to recognize over 360hours of Earth Month volunteer workcompleted by our employees

Conducted CEU courses on sustainabilityfor 548 individuals

Maintained or improved level® 2 or 3certification on products for meetingANSI/BIFMA e3 Sustainability Standard

Sponsored LEED® for Healthcareeducation course at GreenbuildConference

Reduced year-over-year cost of electricalconsumption by 16% per casegood unitproduced; Annual average savings $137k

Employees donated over 1,700 items to Food Banks in communities where we operate

2011All veneer casegoods and tables moves to UV (ultraviolet) finish technology“IntegraClear®”

Implements ecoScorecardSM, a free web-based tool for evaluating anddocumenting sustainable attributes of our products for proposals and LEED® documentation

Partnership begins with the take backprogram ANEW (Asset Network forEducation Worldwide)

All seating series, except for one,advance to Indoor Advantage™ Gold certification

Additional casegoods and tables advanceto Indoor Advantage™ Gold certification

100% of National manufactured productsadvance to ANSI/BIFMA level® 2 or 3 certification

Dallas Showroom earns LEED® Goldcertification

Registers Santa Claus, IN, manufacturingfacility for LEED® EB (Existing Buildings)certification

Receives ISO 14001 three-yearrecertification at each facility with no nonconformance

Publicly discloses greenhouse gasemissions and reduction goals withcompletion of the Carbon DisclosureProject’s (CDP) Investor Report

Fordsville facility achieves SHARPS(Safety & Health Achievement Recognition Program) by KentuckyOSHA/Labor Cabinet

Achieves reduction of chemicals used infinish formulation for products andmaintenance operations

3 National employees receive SGE(Special Government Employee)designation with OSHA and assist inVoluntary Protection Program (VPP)evaluations

Conducts CEU courses on sustainabilityfor 492 individuals

Awards $25,000 Gift of Inspiration forHealthcare to Good Samaritan RegionalMedical Center, Corvallis, OR

Awards $25,000 Gift of Inspiration for Education to Brandeis University,Waltham, MA

2010Receives Resource Caretaker Award fromState of KY for Fordsville facility

Earns OSHA Voluntary Protection Program(VPP) STAR Status/11th Avenue

Installs UV (ultraviolet) finish technology“IntegraClear®” at Fordsville facility

Completes Life Cycle Assessment (LCA)for key casegood series

Completes chemical Assessments forproducts and processes; reduction plan developed

Completes LEED® assessment (ExistingBuildings) for Santa Claus facility

Submits LEED® Gold certification(Commercial Interiors) for Dallasshowroom

Introduces Antimicrobial wood finish on casegoods, tables and seating

4 additional casegood series, 1 additionalseating series and all tables earn IndoorAdvantage™ certification

1 additional casegood series and 1 additional seating series earn level® certification

Awards $25,000 Gift of Inspiration forHealthcare to the University of WisconsinHospital and Clinics, Madison, WI

Awards $25,000 Gift of Inspiration forEducation to Hill College, Hillsboro, TX

2009Receives Governor’s Award forEnvironmental Excellence in Pollution Prevention

Majority of products earn level®certification from SCS

Installs UV (ultraviolet) finish technology“IntegraClear®” at Santa Claus facility

Introduces continuing education programfeaturing four sustainability CEUs

Completes Greenhouse Gas Inventory for all facilities

Earns OSHA Voluntary Protection Program(VPP) STAR Status/Santa Claus

Accepted into Indiana Department ofEnvironmental Management’s (IDEM)Environmental Stewardship Program (ESP)

Products meet California Air ResourceBoard (CARB) Air Toxins Control Measure93120 Phase 1

Orange County, CA, showroom earns LEED® certification

Awards $10,000 Gift of Inspiration forEducation to Southwest Middle School,Savannah, GA

2008Receives ISO 14001 registration at all manufacturing facilities

First veneer and laminate casegoods meetBIFMA FES; SCS Indoor Advantage™certification

Partnership in U.S. EPA SmartWaySM

Transport Program

First products meet BIFMA e3-2008Sustainability Standard; SCS SustainableChoice™ certification

Certified to offer Forest StewardshipCouncil (FSC®) certified wood

2007First seating products meet BIFMAFurniture Emissions Standards (FES)

New York showroom earns LEED®Certification

Joins Indiana Department ofEnvironmental Management (IDEM)Vehicle Idling Program

First products meet California 01350 Environmental Requirements

2006Joins Indiana Department ofEnvironmental Management (IDEM)Partners for Pollution Prevention

2005 Jasper, IN, showroom earns LEED® Gold certification

Chicago, IL, showroom earns LEED® Silver certification

2004Awarded SONY “Green Partner”certification for Excellence inEnvironmental Management

2002 Establishes Corporate Recycling Center

Membership in the U.S. Green BuildingCouncil (USGBC)

Earns HONDA ISO 14001 RecognitionAward for Excellence in Recycling

2001 Awarded Recognition as “CorporateConservator” from The NatureConservancy

Earns Indiana Governor’s Award forExcellence in Recycling

Named Mississippi Corporate Recycler of the Year

2000Earns OSHA Voluntary Protection Program(VPP) STAR Status/Springs Valley

Named Mississippi Corporate Recycler of the Year

Earns Indiana Quality Improvement Award

1990 Trees for Tomorrow Program begins

1980 National Office Furniture founded

1977 Membership in Business and InstitutionalFurniture Manufacturer’s Association(BIFMA)

1976 Energy and Environmental Departmentestablished

1970 Message from Kimball InternationalPresident, Tom Habig, on Sustainability

1963 First reforestation efforts on 280 acres


A History of Sustainability and Social Action

2012 Corporate Social Responsibility Report | Our People

6

Our Culture of Caring

We care for our employees and in turn, they care for others. Along with being good

neighbors, our employees are active stewards in their communities serving as

volunteers, mentors, coaches, caregivers, and much more. We often team up to

support a good cause and enjoy each other’s company at work and at play.

Our people bring our products to life. Furniture with Personality® is driven by a big

grin, solid handshake and an obvious enjoyment for what we do. Genuine people

that care about the success of our customers, the communities we serve and

the environment.

Backpacks of PersonalityEmployees at our Santa Claus facility donated funds and supplies to fill

back to school backpacks for underprivileged children.

National employees are encouraged to live healthy lives with

resources such as gym membership reimbursement, nutrition programs,

wellness events and a 5k walk/run before our annual Sales Meeting.


Our Statement on SustainabilityWe aim to create lasting stakeholder value through responsible

growth and deep commitment to the well-being of future

generations. We cherish the earth’s natural resources and hold

sustainability and environmental protection as our key priorities.

As our company fulfills its responsibilities to our customers,

shareholders, employees and the public, six commitments provide

a framework for focusing our energies toward the greatest good:

• Product Stewardship

• Environmental

Preservation

• Green Building

Development

• Regulatory Compliance

• Social Accountability

• Economic Responsibility

Changing the World One Pair at a Time®

Around the world, over 1.5 billion people have no shoes.

Since its inception in 2006, Soles4Souls® has distributed

nearly 20 million pairs of shoes to people in 128 countries.

Shoes are a basic necessity and the reality of life for many people

in developing nations is that having a pair of shoes is a rarity. It

is not uncommon for children to grow up in these areas without

ever having a pair of shoes. National employees, friends and

partners put their best foot forward for Soles4Souls in 2012 with

over 1,500 pairs of shoes being donated. We had incredible

turnout at our showroom collection gatherings, and the boxes

overflowed at our facilities as well.

8


Taste, Tour, and Renew Trip Culminates with Incredible Generosity from Our Guests…and National!

In October 2012, Hurricane Sandy hit just before our Taste, Tour and Renew incentive trip to Napa Valley for our

Dealer Partners. The unsettled weather caused several attendees to miss their hard-earned vacation. While in Napa

Valley, guests and National employees alike were moved by the devastation of the storm. When it was announced

that National would match any monetary donations to the storm relief effort, our guests donated $7,500 (it was a

small, but mighty generous crowd). With National’s matching gift, a total of $15,000 was sent to the American Red

Cross to support Sandy victims. We can’t think of a better example of great people and a great company doing

extraordinary things for its neighbors and communities.

600 Trees Planted in At-Risk Forestsin Honor of Employee Efforts

With stewardship woven throughout our culture, each Earth Day we

take the opportunity to participate in a focused campaign for our

employees and family. In 2012, we asked our employees to do a

little bit more of what they were already doing – helping improve

the environment, community and people’s lives. They responded

with activities such as planting flowers in public areas, cleaning

up shorelines and parks, and helping elderly neighbors with their

lawn. In recognition, National donated a tree in honor of each

employee who participated. The result? Through the Arbor Day

Foundation, we put 600 trees in the ground in at-risk areas. Three

hundred trees were planted in the Shasta-Trinity National Forest,

the largest National Forest in California. An additional 300 trees

were planted in the Blackwater River State Forest, a woodland

abundant in plant and animal life which lies in the northwestern

Florida Panhandle.


Time and Energy Volunteered forGreen Apple Day of Service

National supported sustainability in education by conducting an

energy audit at an area high school as part of the Green Apple Day

of Service program. Personnel from National and parent company

Kimball International teamed up with Jasper High School in Indiana

to gather performance metrics on the building and conduct an

ASHRAE Level 1 energy audit.

The audit resulted in some key findings that the school will be

addressing as they move forward with their master plan to save

energy and operate a more efficient building. The Green Apple Day

of Service is a nationwide program sponsored by the U.S. Green

Building Council to engage communities and businesses in creating

healthier, more sustainable schools.

367 Volunteer Hours to Improve theEnvironment by Employees in 2012

APRIL 2012

SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAYSATURDAY1 2 3 4 5 6 78 9 10 11 12 13 1415 16 17 18 19 20 2122 23 24 25 26 27 2829 30

Good FridayPassover

Easter Sunday

Earth Day

Arbor Day

Become more aware and educate myself on being more “Green.”

Recycle old motor oil.Recycle all my old magazines. Reuse my water bottles. Turn off the water while I dothe dishes.

Unplug all electronics after use instead of leaving them plugged in.

Turn off the lights when leavingthe roomTurn off the T.V. and do something outside for at least 1 hour.

Drink tap water instead of buying a water bottle.

Open doors and windows instead of using the air conditioner.Turn off all monitors when not in use. Replace my old bulbs with energy efficient bulbs. Install an energy efficientthermostat. Donate gently used clothes tocharitable organizations.

Buy economy sized beverages andrefill smaller containers.Adjust the water level on mywashing machine to the amount being washed.

Use re-chargeable batteries. Bring my lunch in reusablecontainers. Open the curtains to let natural light in instead of turning on a lamp.

Use a re-usable bag when grocery shopping. Recycle aluminum cans, plasticbottles, and cardboard.

Change the air/furnace filters when recommended.

Hang my clothes outside instead of using a dryer.Take my plastic bags to a localgrocery and recycle them.

Use rain water for my plantsand garden. Run the dishwasher only whenit is at max capacity. Use hand towels and fabric napkinsinstead of paper ones.

Take the stairs when possibleinstead of the elevator. Water my lawn only whenneeded.

Use paperless billing for all mybills that allow me this option.

Daily Dose of Green

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Inspiration Totaling $160,000

In 2009, we started our Gift of Inspiration program to provide

opportunities for educators and healthcare providers to enrich lives

and communities. We wanted to do our part in supporting educators,

students, caregivers, and care recipients with a chance to provide

inspirational, meaningful programs, especially as funding for these

important initiatives has been challenged in recent years. The Gift of

Inspiration program allows us to give back to these markets with

financial gifts that may be used for technology needs, scholarships,

enrichment and development programs, facility enhancements or other

worthy endeavors. Through 2012, we have awarded seven Gifts of

Inspiration to education and healthcare organizations totaling

$160,000 in donations since the program’s inception.

4th

10

7.5

5

2.5

0

Employee Survey

Mission, Vision & Guiding Principles*

2006 2008 2010 2012

1,708 Items Donated to Food Banks in our Communities

* 1-10 scale with 10 being the highest

6.997.56 7.65

8.0

1.2

1

0.8

0.6

0.4

0.2

0


Percentage of Employees

Gender Diversity

Total Hourly Salaried Management

100

80

60

40

20

0

Female Male

Average Employee Tenure

13.7 YearsEmployees with 10+ Years

56%Employees with 5+ Years

70%

Percentage of Employee Average Monthly

Voluntary Turnover

2007 2008 2009 2010 2011 2012

Not all data is available for the same time periods, thus charts may vary in duration.

Our Goal: To be an Employer of Choice

National’s culture of caring, bias for action and fun personality make it a

great place to work as is evident through the lengthy average employee

tenure of 13.7 years.

National fosters an environment committed to equal opportunity.

One of the key elements to our diversity management is creating and

maintaining a gender-diverse workforce.

We also pride ourselves on the commitment and dedication of our

employees and set aggressive goals regarding low employee turnover and

consistently exceed these targets as part of our strategy to be their

Employer of Choice.

Every two years we conduct a Mission, Vision and Guiding Principles

survey to ensure our employees feel our actions as an organization align

and deliver what we have committed to as a company. Our values and

guiding principles serve as a road map and direct feedback from our

employees helps us maintain the world class business environment and

performance that exist today.

41%

59%

39%

61%

49%51%

36%

64%

.90 .94

.33

.63

1.05

.49


Way to go!

1 Million Hours12

11th Avenue facility surpassed

Manufacturer of the Year!

In 2012, we were honored to be named the Manufacturer of the Year in the Casegoods

Category by the Office Furniture Dealers Alliance (OFDA). National earned this recognition

by achieving the highest ratings from OFDA’s 2012 Dealer Choice Survey that measures key

performance metrics in the dealer-manufacturer relationship such as training, product lines,

service and support, sales and marketing, management and technology. Over 2,000 dealers

from across the nation completed the survey, where they were asked to rate their top-volume

nonaligned suppliers in each of six product categories.

without a lost time injury

Congratulations to our Fordsville facility for acceptance into the State of Kentucky Excellence in Environmental Leadership (EXCEL) Program


Per 100 Employees

Injury Incident Rate

National Industry Average

5

4

3

2

1

0

71%Less ThanIndustry Average

Ø

Promoting Personal BestSimilar to delivering quality products to our customers, we believe in delivering a quality work experience to

our employees and their families. Safety and overall wellness is immersed in our culture to ensure employees

are comfortable and equipped with all the advantages to be productive and successful.

From flu shots and health screenings, to healthy recipes on the

intranet, creating walking path maps, and on-going feedback,

we are committed to providing the optimal work environment

for our employees. Our approach is holistic to enable our people

to grow professionally and personally.

Examples of Lifelong Learning and Wellness Offerings

• “Fit It In” Fitness Classes

• Seasonal Flu Shots

• Health Screenings

• Fire Extinguisher Training

• Annual Ethics Training (required)

• Workplace Violence Awareness

• Discrimination and Harassment Free Workplace

DETUR Don’t Ever Take Unnecessary Risks

Number of Employee

Recordable Injuries

2004 2005 2006 2007 2008 2009 2010 2011 2012

140

120

100

80

60

40

20

0

87%Reduction

from 2004

Ø

109

71 69

37 26

7 918 14

1.2

4.2

Our Products Reflect Stewardship

Product stewardship is our focus. We actively pursue ways to minimize

the impact of our products on the environment. This means designing

products that save resources, have longer life, use clean manufacturing,

meet indoor air requirements, recycle easily and include many other

sustainable attributes.

Our furniture earns the stringent Indoor

Advantage™ Gold mark from the

independent third party SCS Global Services

for meeting Indoor Air Quality criteria,

which can assist organizations seeking the low-emitting furniture credit

in the LEED® Rating System.

Additionally, our products meet the multi-attribute

criteria set forth in the ANSI/BIFMA e3 Sustainability

Standard and are certified to level®, the sustainability

certification program for furniture from BIFMA (Business

and Institutional Furniture Manufacturers Association). Products can be

awarded level® 1, level 2 or level 3 based on their score, with level 3

being the highest award a product can achieve. We are proud that 100%

of company manufactured products are certified to level 2 or 3. Using

level certified products can contribute to LEED® certification under the

Materials Pilot Credit #80.

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2012 Corporate Social Responsibility Report | Our Products

Casegoods

Arrowood™ Veneer, Laminate 4 4 4 4

Barrington® 4 4 4 4

Captivate® 4 4 4 4

Casbah® 4 4 4 4

Clever® 4 4 4

EnvyWorks® 4 4 4 4

Epic™ 4 4 4

Epic™ with Epicenter® 4 4 4

Escalade® 4 4 4 4

Flourish™ 4 4 4

Franklin™ 4 4

Hiland™ 4 4 4 4

Renegade™ 4 4 4 4

Roosevelt™ 4 4 4

WaveWorks® Veneer, Laminate, Thermofoil 4 4 4 4

WaveWorks® Metal 4 4

For more information, refer to the “What We Believe” page in the Sustainability section of NationalOfficeFurniture.com

By giving customers the option of Forest

Stewardship Council (FSC®) certified wood, we offer

products that are not only economically viable, but are

environmentally responsible and socially beneficial.

Choosing FSC certified furniture can assist with a credit in the LEED®

rating system.

National’s manufacturing facilities are registered to the ISO 14001

standard. This management tool enables us to identify and control

the environmental impact of our operations, continually improve our

company’s environmental performance and systematically set

environmental objectives and demonstrate their achievement.

We realize that the environmental impact of a product

throughout its entire life is important. Thus, we have

conducted a Life Cycle Assessment (LCA) that is

compliant to ISO 14040/14044 on a number of our

products. LCA is a method of addressing the environmental aspects

throughout a product's life cycle from raw material acquisition through

production, use, end-of-life treatment and disposal.


Seating

Acquaint® 4 4 4* 4

Admire® 4 4 4* 4

Arlington™ 4 4 4

Aurora® 4 4 4

Confide® 4 4 4

Cinch® 4 4

Davari™ 4 4 4

Eloquence® Executive, Lounge 4 4 4

Eloquence® Guest/Tandem/Bariatric 4 4 4* 4

Fuel® 4 4 4

Gotcha® 4 4

Jiminy® 4 4

Journey® 4 4 4

Justice® 4 4 4

Medalist™ 4 4 4

Mix-it® 4 4

Monterrey™ 4 4 4

Pennant™ 4 4 4

Remedy® 4 4 4

Reno® 4 4 4

Respect® 4 4 4

Swift™ 4 4 4

Tag® 4 4 4

Timberlane™ 4 4

Triumph™ 4 4

Dividers

Chameleon® 4 4

Conference, Training, Occasional Tables

Varies - refer to online list 4 4 4 4

Wall Rail Solution

Exhibit™ 4 4

National Manufactured Products

Certified to level® 2 or 3100%* Requires FSC-certified wood option

LEEDing The Way

We realize it is important to our customers to build and maintain buildings that are easy on the environment. Many strive to meet the guidelines of the LEED®

(Leadership in Energy and Environmental Design) Green Building Rating System™. In addition to following the LEED guidelines in our own buildings, we also feel

it is critical to offer furniture solutions to our customers that can help contribute LEED points towards certification.

Furniture is included in the scope of a limited amount of LEED categories; however, rest assured that we have those categories covered. The table below outlines

how National’s solutions can help achieve points in a number of areas, from task lights to packaging to the furniture itself.

16


Contributions to LEED®New Construction and Commercial Interiors v2009

MR Credit 2.1 Construction Waste Management: Divert 50% from LandfillMR Credit 2.2 Construction Waste Management: Divert 75% from LandfillMR Credit 3.1 Materials Reuse, 5%MR Credit 3.2 Materials Reuse, 10%MR Credit 3.3 Resource Reuse, 30% Furniture and FurnishingsMR Credit 4.1 Recycled Content: 10% (Post-consumer + ½ Pre-consumer)MR Credit 4.2 Recycled Content: 20% (Post-consumer + ½ Pre-consumer)MR Credit 5.1 Regional MaterialsMR Credit 7 Certified WoodMR Pilot Credit 80 Environmentally Preferable Interior Furnishings

EA Credit 1.1 Optimize Energy Performance

Materials & Resources

Energy & Atmosphere

EQ Credit 4.5 Low-emitting MaterialsEQ Credit 6.1 Controllability of Systems, Lighting EQ Credit 8.1 Daylighting and Views

Indoor Environmental Quality

ID Credit 1.1-1.4 Innovation in Design Innovation in Design

RP Credit 1 Regional PriorityRegional Priority


ecoScorecardSM

Green Product Information Made Simple

ecoScorecard is an easy-to-use tool to

search and evaluate sustainable products

from National. It’s also a simple way to

produce some of the documents required

to apply for certification for LEED® and

other green building rating systems.

This free, web-based tool is available

24/7 to anyone who would like more

details on the sustainability attributes

and certification conformance of National’s

furniture. No one will know if you utilize

the application (unless you click a

“Contact Me” button) and information

can be saved to come back to later.

ecoScorecard is a quick and easy

method to consolidate product

sustainability information without

spending hours making phone calls,

sending emails or tracking down details.

level® ProductsContribute toLEED under Pilot Credit 80

NationalOfficeFurniture.ecoScorecard.com

For specific information on LEED® credit

contribution for National products, visit

our free web-based tool.

National offers

722Textiles with

Reduced Environmental Impact

Sustainable Textiles

Sustainability extends beyond a product to its coverings. That’s why the textiles offered on National

products include fabrics with a reduced environmental impact. There are 235 for seating, 39 for tack

boards, and 448 “carded” alliance for seating. Choices include fabrics which have significant recycled

content or are PVC or chrome-free. Some bear the Terratex® name, which signifies they are made of

100% recycled fiber and use a fabric production process that reduces waste and emissions. Others

are made of Repreve® yarn, a recycled polyester yarn that uses the U Trust™ verification program

which ensures that Repreve recycled fibers are traceable, transparent and certifiably sustainable. In

addition, some fabrics are Green-e® certified, signifying that 100% of the electricity used to make

the fabric is matched by Green-e® certified renewable energy certificates that support clean energy.

Our alliance partners, Arc-Com, Stinson, Maharam, Momentum and Ultrafabrics, offer a wide variety

of upholstery choices that feature sustainable characteristics. For additional details, please refer to

their websites.


18

National Casegoods Include on Average

82%Recycled Material

Average PercentagePost-ConsumerRecycled Content

Average PercentagePre-ConsumerRecycled Content

Total Average PercentageRecycled Content

Executive Seating 11.7% 11.5% 23.2%

Task Seating 11.7% 0% 11.7%

Lounge Seating .3% .8% 1.1%

Guest Seating 1.5% 0% 1.5%

Stacking Seating 13.7% 17% 30.7%

Veneer & Laminate Casegoods 1.7% 80.6% 82.3%

Veneer & Laminate Table Tops .1% 97.5% 97.6%

Occasional Tables 0% 67 - 91% 67 - 91%

Training Table Tops .1% 97.5% 97.6%

Wall Rail Solution 1.1% 62.4% 63.5%

Assessing and Reducing Chemical Use

As part of the ongoing work to improve our furniture, we address health and safety impacts across the life cycle of products. All product series are tested

against industry safety/durability test standards during development. To date, roughly half of the series in our product portfolio have undergone life cycle

analysis as outlined in the ISO 14040 and 14044 standards. What’s more, we analyze the materials and processes in place to detect the presence of any

“chemicals of concern” as defined in the ANSI/BIFMA e3 Sustainability Standard, which is the criteria for level® certification. Since 2010, we have been

assessing our end products, manufacturing processes and maintenance operations and taking steps to reduce or eliminate chemicals wherever possible.

In 2012, a new wood coating technology was implemented on our seating to transition from a low emitting formaldehyde finish to one that is non-detectable

for formaldehyde with current testing technology. As more is understood about the impact of chemicals on human and ecosystem health, we continue to take

action to reduce and eliminate these types of elements.

Doing What’s Right With What’s Left®

Since 2011, National has been in partnership with ANEW (Asset Network for

Education Worldwide), a non-profit organization dedicated to extending the

life cycle of surplus furniture, fixtures and equipment (FF&E). A Take Back

program, ANEW works with organizations to collect, organize and repurpose

FF&E for donation to the underserved, resulting in cost savings and increased

social responsibility. An alternative to sending used furnishings to a landfill,

working with ANEW can also result in tax advantages for organizations which

is a win-win for all.

To learn more, visit ANEW’s website www.anewfound.org

IntegraClear®Tough, Beautiful, Earth-Friendly

All of our veneer casegoods and tables are finished with IntegraClear®,

our proprietary, water-based ultraviolet (UV) finish. This finish is friendly

to the environment, easy on the eyes and even handles daily events such

as coffee spills like a champ. IntegraClear provides the ultimate balance in

beauty, durability and sustainability enabling our products to earn indoor

air quality certification for low-emitting furniture that can contribute to

LEED® points.


100%of Finished Wood Products Include

Silver Ion Antimicrobial Protection

A Bright Idea

We recognize that energy consumption can be a contributor to climate change due to the generation of carbon dioxide (a greenhouse

gas) associated with the burning of fossil fuel energy sources. While most solutions within our product portfolio do not rely on a power

source, we have recently introduced desk lighting products which are energy efficient. Our LED lighting products meet the

requirements of the Energy Independence and Security Act of 2007 and also meet six of the seven Energy Star requirements for

LED lights. Use of the lights can assist customers in their efforts to reduce energy consumption, and also help keep reduce their

energy costs.

a n ew

20

2012 Corporate Social Responsibility Report | Our Facilities and Operations

Growing with Green Buildings

National facilities testify to our belief in sustainable building

practices. Pursuing guidelines set by the U.S. Green Building

Council (USGBC), we prioritize building

practices that support the LEED® (Leadership

in Energy and Environmental Design) Green

Building Rating System™. Our latest LEED

project is the application for LEED

Commercial Interiors (CI) certification for our

Washington, DC and Atlanta, GA facilities.

Our LEED® Certified Projects

Research and Development Annex/Jasper, IN - LEED Certified

Corporate Showroom/Jasper, IN - LEED Gold

Showroom/Atlanta, GA - LEED Pending

Showroom/Chicago, IL - LEED Silver

Showroom/Dallas, TX - LEED Gold

Showroom/New York, NY - LEED Certified

Showroom/Orange County, CA - LEED Certified

Showroom/Washington, DC - LEED Silver

Manufacturing Facility/Santa Claus, IN - LEED Silver

We’ve reduced our year over year greenhouse gas emissions by 10.13%

Measuring Today For a Better Tomorrow

Further strengthening our commitment to environmental and social

stewardship, National completed the CDP (formerly the Carbon Disclosure

Project) Investor Report in 2011 and we continue to voluntarily disclose

our measurements and management of greenhouse gas emissions (GHG)

and climate change initiatives today.

As our industry embraces more transparency with the growing use of tools

such as EPDs (Environmental Product Declarations) and HPDs (Health

Product Declarations) based on certifications and life cycle assessments,

carbon disclosure and climate change impacts will be key data that

manufacturers and suppliers must make readily accessible to consumers.

Overall, National reduced GHG emissions per unit produced by 9.76% per

metric ton from 2011 to 2012. Total GHG emissions have decreased by

10.13% per metric ton during this same time frame. Other key 2012

GHG statistics:

• Total GHG emissions (metric tons) was 39,967.

• Total was comprised of 9,194 metric tons of GHG emissions from

direct sources which include sources controlled by our company and

parent company such as emissions from combustion in our boilers,

furnaces, and from corporate truck fleet and aircraft.

• Total also includes 30,773 metric tons from indirect sources, which

include emissions from the generation of purchased electricity, and

from contracted carriers and commercial aircraft.

• An offset of 1,014 metric tons was achieved from recycling activities

and utilization of a landfill which converts resultant greenhouse

gases (methane) into an alternative energy source.

• GHG emissions from National facilities (not including allocation of

parent company facilities) were driven by the consumption of

22,088,008 total kilowatt hours of electricity, 42,451,419 cubic feet

of natural gas and 27,003 gallons of propane.

• Our efforts to reduce GHGs included (among others) the use of wood

waste to eliminate coal in a facility, energy reduction efforts put in

place by Power Management Teams at each facility, reduced impact of

transporting recycled materials due to use of a new bailer, improved

fuel efficiency and reduced idling of our fleet and external carriers.


Percentage of Wood Based Casegoods and Tables Available in

FSC® Certified Wood

100%

FSC® Certified WoodThe Mark of Responsible Forestry

National’s manufacturing facilities have been approved to offer the

option of Forest Stewardship Council (FSC®) certified wood since

2008. Our commitment to offering FSC wood continues as we were

recently recertified for another five year period.

The FSC is an international organization which promotes the

long-term stewardship of the world’s forests through the

development of worldwide standards for responsible forest

management. To ensure that these standards are adhered to, the

organization accredits independent third party organizations who

can certify forest managers and forest product producers that meet

the FSC standards. By giving customers the option of FSC certified

wood, we offer the assurance of products that are not only

economically viable but are also environmentally responsible and

socially beneficial. Purchasing FSC certified wood products from

National can also help businesses earn points toward achieving

a LEED® building rating.

National’s FSC Chain of Custody Number: SCS-COC-001573

Valid from June 4, 2013, to June 3, 2018

Independently certified by SCS Global Services

Many casegoods, tables and seating products are available with an FSC

certified wood option

ZERO Fines or sanctions for noncompliance of environmental regulations

Significant spills of hazardous substances

Investing in the Future

As we invest in the future of our employees, communities and

shareholders, our organization received the following assistance

from the government in 2012:

• $40,000 local tax abatement for UV (ultra-violet) wood finish

work cell in the Santa Claus facility

• $25,000 federal tax credit for Research and Development

• $15,890 in training costs were reimbursed for employees hired

through the State of Kentucky Bluegrass Area Development

District’s On-The-Job training program

• $12,390 federal tax credit for Targeted Jobs program

• $5,654 Kentucky Economic Development Finance Authority

payroll tax benefit

• $27,290 in rebates to Fordsville/11th Avenue facilities for

switching to more efficient light fixtures

Waste Wise

With our parent company, Kimball International, we recycle 65 different kinds of materials;

from steel, aluminum, glass and cardboard to oil, printer cartridges and computer hardware.

Discarded materials find new life as fencing, automotive insulation, animal bedding, tack

boards and other goods to enhance people’s lives. Our corporate recycling center alone diverts

3.6 million pounds of waste each year from landfills. Sawdust and wood scraps become

clean-burning fuel for National manufacturing plants. Computer-guided trimming prevents

fabric waste, and the minimal scrap is repurposed in trunk liners, headliners and acoustic insulation.

Aluminum180,924 lbs.

Cardboard3,339,752 lbs.

Plastics1,092,958 lbs.

Sawdust/ Wood Waste20,611,841 lbs.

Steel3,307,298 lbs.

Upholstery175,334 lbs.

Electronics63,252 lbs.

Office Paper/Magazines161,384 lbs.

Data is for Kimball International

22


of Solid Waste generated by National was Recycled or Reused in 2012

59.7%Reduction

From 2002

Ø

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

20,000

15,000

10,000

5,000

0

Total Weight of

Generated Solid Waste*

94.5%

We Recycle

65Differ

ent Kinds o

f

Materials

*In tons

Regardless of Volume Growth

16,158

10,289 10,3148,189

6,7295,239 5,199 4,800

6,257 7,424 6,515


Waste Not, Want Not

At National, we continue to tackle waste

from all angles to mitigate its effect on the

environment and operations. Waste can be

costly in more ways than one, so we

measure it by total weight, and also by

units produced to ensure progress is being

made even when we are producing more

product year over year. Our Design for the

Environment (DfE), continuous

improvement efforts, and education

programs help reduce waste, energy use,

and water during the manufacturing of our

products and our general operations.


Pounds Per Unit Produced

Solid Waste

2009 2010 2011 2012

2.5

2.0

1.5

1.0

.5

0

44%Reduction

From 2011

¨

772Tons of Wood Reclaimed for Boiler Fuel

Providing Energy for Production Facilities

Gallons Per Unit Produced

Water Used

2009 2010 2011 2012

12

10

8

6

4

2

1.812.09 1.69

0.94

7.91

9.89

7.868.29

Reducing Our Environmental Impact

A critical element of the ISO 14001-certified Environmental Management System (EMS) in place at each of

our manufacturing locations is the identification of Significant Environmental Aspects. These Aspects are

key continuous improvement projects or metrics that are identified, tracked and monitored through our

EMS system. Each location determines their Significant Environmental Aspects annually based on the

potential impact to the environment while considering the larger strategies and goals of the company.

Our EMS system is certified to ISO 14001 by the third-party registrar SAI Global, who conducts annual

audits and a recertification every three years. Our system enables us to identify and control the

environmental impact of our operations, continually improve our company's environmental

performance, and systematically set environmental objectives and demonstrate their achievement.

24


Goals 2012 Performance 2012

Reduce GHG emissions per unit produced by 2% Achieved a total reduction of 9.76% per unit produced

Increase Break Room Recycling by 75% in select facilities

Achieved a 35.5% increase

Improve landfill diversion rate for vinyl in selectfacilities by 2%

Improved from a diversion rate of 0% for this material to 16.6%

Reduce by 50% the amount of cardboard containerspurchased for recycling use in select facilities

Achieved a 68.9% reduction in purchases of cardboard containers;now utilizing a bailer for plastic materials (resulted in a reduction of9.49 metric tons of CO2 due to decreased transportation footprint)


VOC Emissions

2009 2010 2011 2012

0.9

0.8

0.6

0.4

0.2

0


Hazardous Waste

2009 2010 2011 2012

.09

.08

.06

.04

.02

0

Goals 2013 (may vary by facility)

Reduce GHG emissions per unit producedby additional 2-4%

Reduce total hazardous waste by 34% in select facilities

Increase recycle rate by 2% in selectfacilities

Reduce use of aerosols by 15% in select facilities

Percentage of National ManufacturedProducts from

ISO 14001 Facilities

100%

.08 .084 .081 .080.71 .75

.65 .57

Percentage of Tractor

Idling Time*


Reducing Our Tire Tracks

At National we recognize the environmental impact produced by

commercial freight. We continuously work to reduce our carbon footprint

as materials ship into our facilities and products ship to our customers.

Our corporate fleet participates in the Indiana Department of

Environmental Management (IDEM) Vehicle Idling

Program for Cleaner Air and was accepted by the

U.S. EPA into their SmartWaySM Transport Partnership

in 2008.

Additionally, our logistics group has identified a number of strategies to

improve fuel efficiency and reduce emissions through methods such as

testing the use of nitrogen in tires as a way to increase fuel efficiency,

using auxillary power units to decrease idle

times, and utilizing battery management

systems to increase battery life. In 2011 our

fleet was comprised of 26% CARB (California

Air Resource Board) compliant engines; in 2012 we increased the

number to 74%.

2012 Corporate Social Responsibility Report | Our Transportation

2005 2006 2007 2008 2009 2010 2011 2012

50%

40%

30%

20%

10%

0

*Engine is running but truck is not moving

2005 2006 2007 2008 2009 2010 2011 2012

7

6.8

6.6

6.4

6.2

6

5.8

Over-the-Road Fleet

Average Miles per Gallon

Industry average is 6% for heavy duty trucks


Percentage of Kimball Fleet usingCARB compliant engines

74%

98%of National’s outbound loads a

re delivered by our

corporate fleet or other SmartWaySM certified carriers

43.1

32.3

24.120.4 19.6 19.9 23.9 19.5

6.0

6.2

6.35

6.54 6.47 6.5

6.9

6.7

2012 Corporate Social Responsibility Report | About National

About National Office FurnitureOver thirty years ago, National Office Furniture was created to deliver on two fundamental objectives: provide customers with office furniture at a better value and offer

shorter lead times. These two fundamentals thrive in our business today and have grown into so much more. That “better value” is now “exceptional value,” which starts

with a great price and becomes even more attractive with the quality, reliability, style and sustainability that are a part of everything we do.

National crafts casegoods, seating, filing and storage, tables, dividers and a wall rail solution to work across all commercial markets and applications. We also integrate

innovative design features and functionality into our extensive product portfolio to excel in focused industries such as healthcare, education and finance as well as state,

local and federal government. In 2012 we expanded our reach by opening a showroom in Atlanta.

Due to the early and continued efforts of our parent company, Kimball International, we’re fortunate to have a rich heritage in wood manufacturing, environmental

responsibility and financial stability to build upon while stretching our curiosity in identifying new opportunities that are meaningful to end customers, dealer partners,

design professionals, employees, neighbors and the environment. Kimball International operates in two segments: furniture and electronics. In addition to National,

Kimball International is parent to Kimball Office, Kimball Hospitality and Kimball Electronics. For more information on Kimball International operations, the Board of

Directors governing body, and communication with the Board, visit www.Kimball.com/Investor_Relations.

For more information regarding National’s environmental and social responsibility, contact Lisa Schmidt at 800.482.1717 or [email protected].

26

Atlanta, GALEED Pending

Chicago, ILLEED Silver

Dallas, TXLEED Gold

Jasper, INCorporate ShowroomLEED Gold

New York, NYLEED Certified

Orange County, CALEED Certified

Toronto, ON

Washington, D.C.LEED Silver

Showroom & Facility Locations

Showrooms 11th Avenue, Jasper, IN282,634 sq. ft.

Santa Claus, IN324,320 sq. ft.LEED Silver

Fordsville, KY194,566 sq. ft.

Danville, KY158,307 sq. ft

ManufacturingFacilities

Corporate HeadquartersProduct Developmentand Research AnnexJasper, IN

We developed this report with consideration given to the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines version G3.1. The GRI framework

suggests principles and indicators that organizations can use to measure and report their economic, environmental and social performance. To learn more about

GRI, go to www.globalreporting.org.

GRI Reference PageStrategy and Analysis

1.1 General Manager Statement 4

Organizational Profile2.1, 2.2 Name of organization, primary brands, products or services 262.4, 2.5 Location of headquarters, countries located 262.7 Markets served 262.10 Awards received during reporting period 4, 5, 12

Report Parameters3.1 Reporting period 13.2 Date of most recent previous report 23.3 Reporting cycle 23.4 Contact point for questions on report 26

Governance, Commitments and Engagement4.1 Organization’s governance structure 264.2 Chair of highest governance body 264.3 Independent members of highest governance body 264.4 Shareholder and employee recommendations to highest governance body 264.8 Internally developed mission relevant to economic, environmental and social performance 74.12 Externally developed, voluntary initiatives organization subscribes to or endorses 5, 8, 9, 10, 194.13 Significant association memberships 284.14 List of stakeholder groups engaged by organization 26

Economic PerformanceEC4 Financial assistance from Government 21

Environmental PerformanceEN2 Recycled input materials used 18EN3 Direct energy consumption by energy source 20EN5 Energy saved due to conservation and efficency improvements 20 EN6 Initiatives to provide energy-efficient products 19EN7 Initiatives to reduce indirect energy consumption 20, 25EN8 Water withdrawal by source 23EN16 Direct and indirect greenhouse gas emissions 20EN18 Initiatives to reduce greenhouse gas emissions 19, 20, 22, 23, 24, 25EN22 Waste by type and disposal method 22, 23EN23 Number of significant spills 21EN26 Initiatives to mitigate environmental impacts of products 14, 18, 19, 21, 22, 23, 24, 25EN28 Value of fines, number of sanctions for environmental noncompliance 21

Social PerformanceLA2 Employee turnover 11LA6 Management – worker health and safety committees 4LA7 Rates of injury 13LA8 Education, training, counseling and prevention programs regarding serious diseases 13LA11 Skills management and lifelong learning programs 13LA13 Breakdown of employees by gender 11SO3 Anticorruption policies and procedures training for employees 13PR1 Lifecycle stages where health and safety impacts of products are assssed 18

2012 Corporate Social Responsibility Report | GRI Considerations


We see our legacy as more than quality furniture.It is also a reverence for nature, which inspires our resolve to protect, nurture and preserve nature’s gifts.

www.NationalOfficeFurniture.com800.482.1717

1205 Kimball Boulevard, Jasper, IN 47549 Form No. NBRCSR2012

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