KAPSTONEkapstonepaper.com/wp-content/uploads/2013/06/KapStone...• Natural gas supply constraints...
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KAPSTONE ® 2013 SUSTAINABILITY REPORT
Transcript of KAPSTONEkapstonepaper.com/wp-content/uploads/2013/06/KapStone...• Natural gas supply constraints...
KAPSTONE®
2013 SUSTAINABILITY REPORT
ABOUT THIS REPORTThe 2013 KapStone Paper & Packaging Corporation Corporate Social Responsibility (CSR) and Sustainability Report uses the G3 Guidelines developed by
the Global Reporting Initiative (GRI), the internationally recognized standard for responsibility reporting. In addition to the baseline year of 2010, as well
as information covered in our 2012 CSR report, this report covers anecdotal and benchmark data for fiscal year 2013 (January 1–December 31, 2013)
based on all operations owned by KapStone during the reporting period, including Longview Fibre Paper and Packaging, Inc., which was acquired in July
2013. Environmental data included in this report is reflective primarily of paper mill operations. We have updated our 2010 baseline data reported in the
2012 CSR report and restated our reported 2012 data to include all paper mill operations.
The report was prepared under the supervision of our sustainability team covering Environmental, Health & Safety, Operations, Sales & Marketing and
Procurement groups. The G3 Guidelines help us determine material issues not addressed by stakeholder feedback and best practices research. Additional
information on our sustainability efforts can be reviewed at www.kapstonepaper.com/sustainability.
We used the Global Reporting Initiative’s (GRI) G3 indicator protocols to complete this report and self declare that it meets Level C application
requirements under the GRI guidelines. Unless otherwise noted, data used in this report is from our wholly owned U.S. operations and business units. Our
energy, Scope 1 and Scope 2 greenhouse gas emissions, water use and air emissions data are based on procurement and facility environmental records.
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MESSAGE FROM MATT KAPLAN
2020 SUSTAINABILITY GOALS
ABOUT KAPSTONE PAPER & PACKAGING CORPORATION
SUSTAINABILITY AT KAPSTONE
SUPPORTING OUR PEOPLE & COMMUNITY
KAPSTONE PRODUCTS
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03
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15
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GLOBAL REPORTING INITIATIVE G3 CONTENT INDEX
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Thank you for your interest in KapStone Paper and Packaging Corporation. Our Corporate Social Responsibility (CSR) and Sustainability
Report summarizes the impacts of our company on people, society and the environment during 2013.
At KapStone, CSR and sustainability extend beyond the applicable laws and regulations we are mandated to follow. Our customers
and employees place a high value on reducing the full supply chain’s environmental impact. We are committed to using our industry
leadership—and deep passion—to create innovative products, a safe workplace, and show devotion to the communities where we live
and work.
This is our second CSR and sustainability report. In 2013, we grew significantly through acquisition. We have restated our 2010
baseline sustainability goals and updated our progress to include our newly acquired operations. We believe this will provide you with a
more transparent view of the achievements and challenges that defined KapStone during the past year.
2013 was a year of significant growth, both in our operations and in our efforts to create a strong and sustainable business. With
the acquisition of Longview Fibre Paper and Packaging, Inc., we grew our top line and significantly increased our footprint by adding a
pulp and paper mill and seven converting plants. We found synergies in corporate culture, added process improvement expertise, and
created best practices that positively impacted our operations and the environment.
At our legacy mills, we experienced improvements in most environmental and safety metrics in 2013. With the addition of Longview
Mill to our sustainability metrics, KapStone benefited from a further positive shift in all areas of environmental impact and safety metrics
compared to the 2010 baseline and on a year-over-year basis.
During the year, our employees delivered on their dedication to creating sustainable and healthy environments. Our Longview Mill
received a significant AF&PA sustainability award, our Charleston Mill delivered improved safety performance, and our Roanoke Rapids
and Cowpens Mills continued their strong track record for leadership in safety. And, four KapStone employees received industry awards
in safety leadership.
Last year, as we worked to measure and compile our data for this report, it reminded me how fortunate I am to work with such a
dedicated, talented and diverse group of professionals. As we look to the future, we will continue to seek opportunities to grow our
company both organically and through acquisition while maintaining a strong commitment to KapStone’s vision: to be the industry
leader in unbleached paper and packaging by providing the best value proposition to our customers through quality products and
innovation, sound environmental practices, engaged employees, and a strong financial portfolio.
Today, KapStone is the region’s largest producer of Kraft paper and is the fifth largest producer of containerboard in North America.
We have made significant strides throughout the past year and have been recognized for our efforts. While challenges remain, we
will continue to strive to be the best corporate citizen possible. We hope you will join us on our journey by continuing to support our
sustainability efforts and creating a better world for future generations.
Thank you.
Matt Kaplan, President and Chief Operating Officer
M E S S A G E F R O M P R E S I D E N T A N D C H I E F O P E R A T I N G O F F I C E R
MATT KAPLAN
“ 2013 was a year of significant growth, both in our operations and in our efforts to create a strong and sustainable business.”
K A P S T O N E P A P E R M I L L O P E R A T I O N S
2020 SUSTAINABILITY GOALS
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“ KapStone employs sustainability programs and tracks performance objectives as we strive to achieve success in reaching our short- and long-term goals.”
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SUSTAINABILITY GOALS2020
PAGE 05 PAGE 06 PAGE 07
70% 100% 10%REDUCE OSHA RECORDABLE INCIDENT RATE BY 70%
ACHIEVE 100% CHAIN-OF-CUSTODY FIBER CERTIFICATION
REDUCE ENERGY USE MMBTU PER TON BY 10%
PAGE 08 PAGE 09 PAGE 10
15% 25% 10%REDUCE GHG EMISSIONS PER TON BY 15%
REDUCE CRITERIA AIR EMISSIONS PER TON BY 25%
REDUCE WATER USE GALLONS/TON BY 10%
IMPROVE SAFETY
REDUCE GHG
REDUCE CAE
REDUCE WATER USE
ACHIEVE COC
REDUCE ENERGY
OSHA RECORDABLE INCIDENT RATE BY YEAR(injuries per 200,000 man-hours)
2013
1.59
2012
1.58
2011
2.14
2010
2.52
GOAL: 0.76
70%
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Restated 2010–2013 data includes four paper mill operations, Summerville, S.C. lumber mill and KapStone Container Corporation.Restated 2010 baseline: 2010 TRIR totaled 2.52; 2011 TRIR totaled 2.14.
P E R F O R M A N C E I N D I C A T O R :
INJURY-FREE WORKPLACE
2020 GOALREDUCE OSHA RECORDABLE INCIDENT RATE BY 70%
2013 PROGRESSOSHA Total Recordable Incident Rate (TRIR) at 1.59, a 37% reduction since 2010.
2012 PROGRESSOSHA TRIR at 1.58, a 37% reduction from 2010 baseline.
• Charleston Mill experienced third consecutive year of record safety
improvement.
• Safety teams company-wide focus on procedures for Equipment
Lockout/Tagout, Confined Space Entry, Process Safety Management,
and Fall Protection.
• Management team and union officials meet weekly to discuss safety
concerns and offer ideas for safety initiatives.
• Four KapStone employees received safety awards at the 2013
Western Pulp, Paper & Forest Safety & Health Conference.
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CoC FIBER CERTIFICATIONS BY YEAR(in percent)
2013201220112010
50% 50% 75% 75%
100%
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P E R F O R M A N C E I N D I C A T O R :
ACHIEVE CHAIN-OF-CUSTODY CERTIFICATION
2020 GOALACHIEVE 100% CHAIN-OF-CUSTODY FIBER CERTIFICATION
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2012–2013 PROGRESS:Achieved 75% of CoC 2020 goal.
• KapStone’s Longview Mill will be audited in June 2014 to become
certified to SFI and PEFC CoC standards.
• KapStone’s East Coast paper mills* are triple-CoC certified to SFI,
PEFC and FSC.
• All KapStone paper mill operations will be 100% CoC certified by the
end of 2014.
• All KapStone full line box plants and sheet feeder plants are certified
to SFI Certified Sourcing standard.
A Chain-of-Custody (CoC) Certificate signifies that the holder has responsibly addressed both the social and environmental aspects during each step of the manufacturing process.
2010–2012 data restated to include Longview Mill operations.*Includes KapStone mills in Charleston, S.C., Cowpens, S.C. and Roanoke Rapids, N.C.
ENERGY USAGE BY YEAR(MMbtu/ton of production)
2013
10.28
2012
10.46
2011
10.15
2010
10.56
GOAL: 9.5
10%
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P E R F O R M A N C E I N D I C A T O R :
REDUCE ENERGY USE
2020 GOALREDUCE ENERGY USE MMBTU PER TON BY 10%
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2013 PROGRESS3% reduction since 2010.
2012 PROGRESS1% reduction since 2010.
• A wetter year than 2012 in the Southeast impacted wood supplies
and required more energy to convert fiber into paper.
• Natural gas supply constraints in Charleston impacted lime kiln
optimization.
• The Longview Mill continued to recognize energy savings from past
improvement projects.
• More than 70% of the energy consumed (in the form of steam) at
KapStone Kraft mills comes from renewable fuel sources. Longview
Mill leads the KapStone mill system operations with 88% of its energy
consumed (in the form of steam) from biomass.
Restated 2010–2012 data includes Charleston, Cowpens, Roanoke Rapids and Longview Mills.
GREENHOUSE GAS EMISSIONS* BY YEAR(tons CO2e per ton of production)
2013
0.77
2012
0.78
2011
0.77
2010
0.82
GOAL: 0.70
15%
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P E R F O R M A N C E I N D I C A T O R :
REDUCE GHG EMISSIONS
2020 GOALREDUCE GHG EMISSION PER TON BY 15%
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2013 PROGRESS7% reduction since 2010.
2012 PROGRESS6% reduction since 2010.
• In 2013, bark screws were upgraded in the Charleston Mill main
power boiler and are now using 100 TPD more bark (bio-mass)
for fuel.
• Charleston Mill’s combined heat and power (CHP) unit project has
avoided CO2 emissions of 2.75 million metric tons compared to
conventional energy sources in 2013 and 2.59 million in 2012.
• At least 70% of steam from the combined Kraft mills came from
carbon-neutral biomass fuel, such as bark, black liquor, wood
waste, etc.
• Longview Mill biomass boiler implemented several projects to reduce
fossil fuel consumption and improve conversion efficiency.
Restated 2010–2012 data includes Charleston, Cowpens, Roanoke Rapids and Longview Mills.*Excludes biogenic CO2 emissions.
25%
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P E R F O R M A N C E I N D I C A T O R :
REDUCE CRITERIA AIR EMISSIONS
2020 GOALREDUCE CRITERIA AIR EMISSIONS PER TON BY 25%
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CRITERIA AIR EMISSIONS BY YEAR(lbs. per ton of production)
2013201220112010
18.98 17.98 15.29 8.68
GOAL: 14.23
2013 PROGRESS54% reduction since 2010.
2012 PROGRESS19% reduction since 2010.
• Third consecutive year of improvement from baseline 2010.
• Charleston reported lower SO2 emissions based on revised emission
factors. The revised emission estimates resulted in a 50% reduction
in SO2 emissions.
• Exceeded 2020 goal by over 29%.
• Air emissions are continually measured and monitored to maintain
and exceed compliance with our regulatory obligations.
• Charleston’s main power boiler was included in the Industrial Boiler
MACT floor determination as one of the top 12% performing boilers
for low mercury and hydrochloric acid emissions.
Restated 2010–2012 data includes Charleston, Cowpens, Roanoke Rapids and Longview Mills.
MILL WATER EFFLUENT FLOW BY YEAR(gallons per ton of production)
2013201220112010
GOAL: 10,113
10,13110,12311,236 9,709
10%
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P E R F O R M A N C E I N D I C A T O R :
REDUCE WATER USE
2020 GOALREDUCE WATER USE GALLONS/TON BY 10%
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2013 PROGRESSReduced gallons/ton by 14%.
2012 PROGRESSReduced gallons/ton by 10%.
• Based on restatement, KapStone met 2020 goal in 2011, reporting a
10% reduction from 2010 baseline, exceeding our 2020 goal by 4%.
• Cowpens Mill 100% closed loop system is the most unique water use
system in the paper industry.
• Water is cleaned and recycled throughout all paper mills, reducing the
need for fresh water; 95% of water used is cleaned in state-of-the-art
clarifiers and returned to the environment.
• Participated with industry coalitions to study the impact our waste-
water has on the local river ecosystems.
Restated 2010–2013 data includes Charleston, Cowpens, Roanoke Rapids and Longview Mills.
A B O U T
KAPSTONE PAPER & PACKAGING CORPORATION
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“ Our commitment to our vision and values makes KapStone Paper and Packaging Corporation an industry leader in unbleached paper and corrugated packaging.”
($ in millions, except per share data) 2013 2012 2011
Net Sales $ 1,748 $ 1,217 $ 906
EBITDA 316 172 157
Adj. EBITDA* 333 183 165
Net Income 127 63 124
Adj. Net Income** 138 71 67
Diluted EPS 1.32 0.65 1.31
Adj. Diluted EPS** 1.42 0.74 0.71
Adj. Free Cash Flow*** 202 91 94
* Adjusted to exclude non-cash stock compensation and acquisition, start up and other costs.** Adjusted to exclude items above, realization of uncertain tax benefit relating to AFTC in 2011 and 2013 and income tax adjustments.
*** Adjusted to exclude alternative fuel mixture credits and dunnage bag business sold in March 2009.
KapStone Paper and Packaging Corporation (KapStone) is the largest Kraft paper producer in the United States and is the fifth largest producer of containerboard and corrugated packaging products in North America. The Company is the parent company of KapStone Kraft Paper Corporation and KapStone Container Corporation. Our products include containerboard, corrugated products, and specialty paper.
In fiscal 2013, we produced 2.1 million tons of product, of which nearly 80 percent was sold to third-party converters or shipped to our corrugated products manufacturing plants based in the United States and 20 percent was sold to foreign based customers. In fiscal 2013, our corrugating plants produced and sold about 590 thousand tons or 9.1 billion square feet (BSF) of corrugated products in the U.S. Our net sales in fiscal 2013 totaled $1.7 billion, which was comprised of $1.1 billion of containerboard and corrugated products and $0.5 billion of specialty paper.
The Company employs 4,601 people, of which 1,386 employees are salaried and 3,215 are hourly. The Company’s stock is traded on the NYSE Stock Exchange under the symbol KS.
2013 FINANCIAL PERFORMANCE SUMMARY
Net sales for the year ending December 31, 2013, totaled $1,748 million, an increase of 44 percent, compared to 2012 sales
of $1,217 million. The increase was primarily due to the acquisition of Longview Fibre and Packaging, Inc., which contributed $440
million, as well as higher average selling prices.
In July 2013, KapStone completed the acquisition of Longview, a leading manufacturer of high quality containerboard, Kraft papers
and corrugated products. The acquisition included one paper mill located in Longview, WA and seven converting facilities located in the
western U.S.
KapStone’s strategic objective is to profitably grow through acquisitions to a $2 billion company by 2015. With the Longview Mill’s
full year results, KapStone will have achieved this financial objective in 2014.
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PAPER MILL PLANT LOCATIONS AND GENERAL PRODUCT MANUFACTURING OVERVIEW
Headquartered in Northbrook, Illinois, KapStone has operations in 17 U.S. states, including 4 paper mills, 12 full line box plants, 8 sheet
plants, 2 sheet feeder plants, 1 lumber mill, and 2 warehouses. There are no manufacturing facilities located outside the continental U.S.
In fiscal 2013, including the partial year ownership of Longview, we produced 2.1 million tons of containerboard and specialty paper
at our mills in North Charleston, South Carolina; Roanoke Rapids, North Carolina; Cowpens, South Carolina and Longview, Washington.
Our mills operate 24 hours a day, seven days a week.
CUSTOMER OVERVIEW
We sell to customers in the containerboard, corrugated products, and specialty paper markets. The specialty paper market includes Kraft
paper, saturating kraft, and unbleached folding cartonboard. KapStone has over 3,000 U.S.-based and over 200 export customers.
On a consistent and recurring basis, we conduct a Customer Satisfaction Survey to seek feedback on our performance. This
valuable information keeps us aligned with our customers’ priorities and helps us identify opportunities for improvement.
GOVERNANCE & ETHICS
It is because of our commitment to our vision and values that KapStone Paper and Packaging Corporation is an industry leader in
unbleached paper and corrugated packaging. We provide the best value proposition to our customers through quality products and
innovation, solid environmental practices, engaged employees, and a strong financial portfolio. We are committed to providing our paper
and packaging customers with consistent, effective manufacturing solutions coupled with world-class supply chain management.
More information about our facilities is located at www.kapstonepaper.com/locations.
Corporate HeadquartersFull Line Box PlantsWarehousesLumber MillsSheet PlantsSheet Feeder PlantsPaper Mills
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KAPSTONE COMMITMENT
• KapStone is building long-term relationships as a valued partner to our customers.
• We will use continuous improvement in a TEAM environment so that employees reach their full potential.
• KapStone is making investments to enhance shareholder value through strategic growth and improved efficiencies.
• We are using up-to-date technology to be innovative, profitable, safe, and environmentally responsible.
We are also committed to employing the highest ethical and business standards. Our reputation for unquestionable integrity is our
most valuable asset in our relationships with our stakeholders: employees and agents, customers, stockholders and the communities in
which we live and work.
At KapStone, we have dedicated and strongly-focused policies that enforce compliance with all laws, ensure employee fairness,
provide for the safety and health of our employees, ensure fair marketplace competition, and offer a commitment to community service
in the places where we live and work. Our Code of Business Conduct and Ethics covers a wide range of business practices and
procedures that apply to all directors, officers and employees and our subsidiaries. Our policy sets out basic principles to guide all to act
in an ethical and legal manner.
All of our directors, officers and employees engage in compulsory ethics training and must conduct themselves accordingly. Our
legal department oversees policy compliance and is always prepared to provide guidance to employees on any questions that may arise
of an ethical nature. We also maintain a Compliance and Ethics Hotline for employees and third parties who conduct business with
KapStone to anonymously report suspected criminal activity, illegal or unethical conduct and/or suspected safety violations occurring
within the Company.
We aim to apply the highest standards of corporate governance, and our Board of Directors is fully committed to maintaining
KapStone as a sustainability leader in our industry by being a responsible corporate citizen. Our Board of Directors is composed
of 10 members, including our CEO since the inception of the Company in 2005, Roger W. Stone, who also serves as Chairman of the
Board. For additional details about our corporate governance structure, including Board committees and charters, see our website:
http://www.kapstonepaper.com/corporate-overview/governance/.
At KapStone, we believe that keeping a competitive edge means aligning ourselves with suppliers who provide exemplary service to
their customers. It is essential to our business for our suppliers to operate under the highest ethical and legal standards and maintain a
complete reputation for honesty, integrity and lawful conduct.
While KapStone has no formal verification process to evaluate and address the risks of human trafficking and slavery in its supply
chain, we do stipulate that all suppliers must comply with our Code of Business Conduct and Ethics, which requires suppliers to adhere
to relevant laws relating to slavery, human trafficking, and child labor.
AT KAPSTONE, WE WILL USE CONTINUOUS IMPROVEMENT IN A TEAM ENVIRONMENT SO THAT EMPLOYEES REACH THEIR FULL POTENTIAL.
“ We strive for excellence in protecting all natural resources as we manufacture our products derived from sourcing wood and fiber from sustainably managed forests.”
15P R O T E C T I N G T H E
ENVIRONMENT
OUR COMMITMENT TO SUSTAINABILITY
In January 2014, we developed our KapStone Sustainability Commitment letter as we are serious about our dedication to the communities
in which we operate and protection of the environment. Our efforts are in alignment with the American Forest and Paper Association’s
(AF&PA) 2020 goals, which include:
• Ensuring employee safety,
• Protecting the environment,
• Responsibly sourcing raw materials,
• Conserving energy,
• Active recycling, and
• Supporting our communities.
We have dedicated leadership team members at each paper mill and box plant charged with the responsibility of employing
sustainability programs and tracking performance objectives as we strive to achieve success in reaching our short- and long-term
sustainability goals.
KAPSTONE SUSTAINABLE FORESTRY POLICY
We value our natural resources and realize the responsibility we have to create sustainable forests for generations to come. KapStone’s
Sustainable Forestry Policy promotes the Principles of Sustainable Forest Management including: practicing sustainable forestry,
employing responsible practices, promoting forest regeneration and productive capacity, protecting and maintaining long-term forest
and soil productivity, protecting water resources, protecting special sites and biological diversity, complying with legal requirements and
continually improving forest practices. We are committed to complying with applicable federal, state and local laws and regulations,
including social, health and safety laws.
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AT KAPSTONESUSTAINABILITY
WE PROMOTE A LAND STEWARDSHIP ETHIC THAT INTEGRATES REFORESTATION, GROWING AND HARVESTING OF TREES TO MANUFACTURE PRODUCTS IN A WAY THAT WILL ENSURE A SUSTAINABLE LEGACY OF NATURAL RESOURCES FOR FUTURE GENERATIONS.
Our commitment to appropriately sourcing wood and fiber from sustainability managed forests requires us to implement best efforts
to avoid forestry materials that have been harvested illegally, harvested in violation of traditional and civil rights, harvested where
global conservation priorities are threatened, to avoid of areas of the world where significant deforestation is evident, and from use of
genetically modified tree seedlings.
Using scientific, environmental, social and economic forestry practices, KapStone meets the needs of our current customers as we
leave a sustainable legacy of natural resources for future generations. This is accomplished by promoting a land stewardship ethic
that integrates reforestation, growing and harvesting of trees for useful products with the conservation of soil, air and water quality,
biological diversity, wildlife and aquatic habitat, recreation and aesthetics.
KAPSTONE TREE FARM PROGRAM SUPPORTS LOCAL FORESTS
KapStone Kraft Paper Corporation’s Tree Farm Program has achieved continued certification with the American Family Forest (AFF)
2010–2015 Standards of Sustainability for Forest Certification, according to the NSF-ISR ATFS Certification Audit Process. The
KapStone Forest Management (KFM®) program, which is at the heart of the KapStone Tree Farm Group, promotes forest stewardship
and environmental responsibility. As a result, the biological, economic and social impacts extend far beyond our processing facilities.
The KFM program, which began shortly after WWII, was formalized in 1956 at the KapStone Charleston, S.C. paper mill. Today, this
forest management program includes six foresters serving 350 landowners, owning more than 150,000 acres of South Carolina forest
land. These KFM lands provide the KapStone Charleston Paper Mill and Summerville Lumber Mill with over 200,000 tons of wood per
year. The AFF Certification process recognized the KFM program as a superb example of high-quality, long-term management of private
forest lands. The KapStone Foresters’ depth of knowledge, dedication, and long-term service to the many tree farm owners were
deemed extraordinary.
Through KFM, landowners receive detailed, long range forest management plans that include tract information, individual stand
data, maps, silvicultural recommendations, and advice on encouraging wildlife or enhancing scenic or recreational land uses. KFM
landowners construct ponds, restore wetland, create and enhance wildlife habitats, preserve water quality and conserve sites of histori-
cal, biological or aesthetic value. They plant and work with longleaf restoration. Each South Carolina management plan has a 10-year
planning horizon and is updated at the end of each period to reflect changes in forest conditions, landowner objectives, and updated
technology.
The program and its foresters have received state, regional and national awards including 44 individuals, who have received the
American Tree Farm System® Tree Farmer of the Year Award.
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PINE SEEDLINGS REGENERATE SOUTH CAROLINA’S FORESTS
For the past two decades, the number of pine seedlings planted in South Carolina has experienced a steady decline from a peak of
over 160 million seedlings per year to less than 40 million. The supply of wood as a renewable resource is dependent upon tree
seedlings being planted as existing tree resources are harvested. To help mitigate this decline in S.C. forest regeneration, the KapStone
Charleston Kraft LLC’s Wood Procurement Department launched the Pine Seeding Program in 2012, which offers landowners free
second generation, bare root, loblolly pine seedlings to plant at the end of harvest.
This program, in conjunction with the KFM program, puts KapStone Foresters in close contact with private landowners. In addition
to receiving the seedlings, KapStone will align the landowner with needed resources to prep and plant this valuable natural resource.
In 2012, KapStone provided and assisted in planting over 500,000 seedlings for forest regeneration. In 2013, this program grew to
1.32 million seedlings and we anticipate over 1.6 million seedlings to be planted in 2014 and over 2.7 million by 2015.
KAPSTONE LONGVIEW PAPER MILL WINS AF&PA SUSTAINABILITY AWARD
In November 2013, KapStone’s Longview Mill was recognized by the American Forest & Paper Association (AF&PA) as a leader in
sustainability by winning an AF&PA 2013 Better Practices, Better Planet 2020 Sustainability Award. Specifically, the paper mill was
awarded the 2013 Leadership in Sustainability—Greenhouse Gas Reduction/Energy Efficiency Award for its “One-Year Snapshot of
Longview’s Multi-Year Journey” project.
In a letter to the mill, AF&PA president and CEO, Donna Harman praised the company, saying, “KapStone’s Longview Mill project is
a great example of stringent business discipline and out-of-the-box thinking. The integrated solutions used by the KapStone Longview
Mill demonstrate that doing what’s right for business is also right for the environment.”
The Longview Mill embarked on a multi-million dollar improvement project that spanned three years, contributing to the following
overall results: reduction of greenhouse gas emissions by 72 percent over the last decade; reduction of overall energy use by 37
percent since 2007; reduction of overall energy used per ton of paper produced by 17.6 percent since 2007; an increase of total tons
of paper produced by 50 percent since 2006.
“We’re extremely pleased that our commitment to environmental protection is being recognized,” said Randy Nebel, president,
KapStone Kraft Paper Corporation. “Our achievements so far have resulted from teamwork on the part of many skilled and dedicated
people. They’re also the result of our common vision, revolving around both business success and environmental protection. We believe
that the two go hand-in-hand.”
FOLLOWING STANDARDS OF SUSTAINABILITY
At KapStone, we strive for excellence in protecting all natural resources as we manufacture and sell products using raw materials
derived from sourcing wood and fiber from sustainably managed forests. To ensure our operations are in compliance with all applicable
laws and industry best practices, we stay actively engaged with the recurring updates of the various Forest Certification Standards.
We strive to maintain certifications with the following internationally accepted Sustainability Standards:
• Sustainable Forestry Initiative® (SFI®),
• Forest Stewardship Council (FSC®),
• Program for the Endorsement of Forest Certification (PEFC™), and
• AFF’s American Tree Farm System®.
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“ Our products are developed and manufactured in a way that is consistent with sustainability and responsible forest management.”
19K A P S T O N E
PRODUCTS
2013 2012
PRODUCT LINE: Tons % of Total Tons % of Total
Containerboard/Corrugated Products 1,449,694 65.8% 1,073,918 63.9%
Specialty Paper 753,363 34.2% 606,547 36.1%
Total Tons of Product Sold 2,203,057 100.0% 1,680,465 100.0%
2013 2012
PRODUCT LINE: Tons % of Total Tons % of Total
Containerboard 859,171 39.0% 690,503 41.1%
Corrugated Products 590,523 26.8% 383,415 22.8%
Kraft Paper 380,519 17.3% 250,280 14.9%
DuraSorb® 261,718 11.9% 253,239 15.1%
KRAFTPAK® 111,126 5.0% 103,028 6.1%
Total Tons of Product Sold 2,203,057 100% 1,680,465 100%
KapStone’s paper and pulp mills produce a wide spectrum of Kraft and recycled products ranging from containerboard, including liner and medium, to kraft papers, saturating kraft and folding cartonboard. The mill’s product portfolio contains several branded products including KRAFTPAK®, DuraSorb®, TEAKraft®, FibreLok® and FibreShield® as well as extensible Kraft paper grades and highperformance, lightweight linerboard. KapStone’s corrugated packaging business offers an array of fully equipped converting facilities that provide industrial, retail and agricultural corrugated packaging solutions for any customer, regardless of size or demands.
TONS OF PRODUCT SOLD
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PRODUCT PORTFOLIOKRAFT & RECYCLE
CONTAINERBOARD
Containerboard, which includes linerboard and corrugated medium, is primarily used to manufacture corrugated containers for packaging
products. KapStone’s primary containerboard markets include internal converting facilities and independent corrugators who focus on
specialty niche packaging. Branded product lines: FibreLok® and Ultra Performance Liner (UPL).
U.S. CONTAINERBOARD MARKET (in millions) 2013 2012 2011
Total U.S. Sales 30.8 tons 30.7 tons 30.6 tons
U.S. Production 34.8 tons 34.4 tons 34.0 tons
Imports 0.8 tons 0.6 tons 0.8 tons
Exports 4.2 tons 4.3 tons 4.2 tons
U.S. Operating Rates 96% 95% 96%
Source: AF&PA.
CORRUGATED PRODUCTS END-USER MARKET
Food, Beverages and Agriculture Products 40%
Paper Products 20%
General Retail and Wholesale Trade 18%
Miscellaneous Manufacturing 14%
Petroleum, Plastic, Synthetic and Rubber Products 6%
Appliances, Vehicles and Metal Products 2%
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CORRUGATED PRODUCTS
The Fibre Box Association reported the value of 2013 industry shipments of corrugated products was $26.4 billion. Corrugated products
are used to package everything from fresh agricultural products to automotive parts. With KapStone’s coast-to-coast geographic
footprint and extensive manufacturing capabilities, we offer our customers a portfolio of corrugated products.
Source: Fibre Box Association annual report dated April 2013.
CORRUGATED PRODUCTSEND-USER MARKET
Food, beverages and agriculture productsPaper productsGeneral retail and wholesale tradeMiscellaneous manufacturingPetroleum, plastic, synthetic, and rubber productsAppliances, vehicles, and metal products
●
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●
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$26.4Billion40%20%18%14%6%2%
OUR PULP AND PAPER MILLS PRODUCE A WIDE SPECTRUM OF KRAFT AND RECYCLED PRODUCTS RANGING FROM CONTAINERBOARD, INCLUDING LINER AND MEDIUM, TO KRAFT PAPERS, SATURATING KRAFT AND FOLDING CARTONBOARD.
KRAFT PAPER
KapStone produces three general categories of Kraft paper including multiwall, specialty and lightweight paper grades:
• Multiwall paper is used to produce bags for agricultural products, pet food, baking products, cement and chemicals. We are the
only U.S. manufacturer and one of three primary manufacturers in the world of extensible, high performance multiwall Kraft paper.
Branded product lines: FibreShield® and TEA-Kraft®.
• Specialty paper has a large variety of uses within coating and laminating applications that require a smooth surface. Our specialty
paper products are sold to a variety of converters, which laminate, coat and print. End use products include insulation, agricultural
and food packaging, shingle wrap, end caps, roll wraps and dunnage.
• Lightweight paper is used in a variety of flexible packaging applications that range from quick-service restaurants carry out bags
to direct contact food packaging. These unbleached Kraft papers are converted into a wide variety of bag, pouch and specialty
applications. Branded product line: FibreGreen®, which meets the U.S. Food and Drug Administration’s requirements for direct
food contact and is certified by the Sustainable Forestry Initiative®.
SATURATING KRAFT PAPER
Saturating kraft is used in multiple industries around the world, including construction, electronics and furniture manufacturing. The
major end-use is thin high pressure laminates (HPL), used to create decorative surfaces such as kitchen and bath countertops. Other
uses include compact laminates used for exterior cladding, interior partitions, CPL (thinner) laminates for home and office furniture and
flooring. Branded product line: DuraSorb® and DuRecycle®. The global saturating kraft market where we participate is estimated to be
a 765,000 ton/year market.
FOLDING CARTONBOARD
Kraftpak® is a virgin unbleached folding cartonboard which is an alternative packaging substrate to traditional paperboards. End-user
applications include the general folding carton segment of the paperboard packaging market such as beverage, retail carry-out, bakery
and dairy packaging. The U.S. folding cartonboard market is estimated to be 6.8 million tons of production.
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KRAFT PAPER MARKET (in millions) 2013 2012 2011
Total U.S. Sales 1.34 tons 1.34 tons 1.39 tons
U.S. Production 1.27 tons 1.28 tons 1.32 tons
Imports 0.18 tons 0.16 tons 0.16 tons
Exports 0.21 tons 0.22 tons 0.25 tons
U.S. Operating Rates 77% 76% 78%
Source: AF&PA.
DEDICATED TO RESPONSIBLE FOREST MANAGEMENT
As consumers want assurance that their purchased products were harvested and manufactured in a way that is consistent with sustainable
and responsible forest management, KapStone has set a goal to receive 100 percent Chain-of-Custody (CoC) Certification of all our pulp
and paper mill operations. A CoC certificate signifies that the certificate holder has responsibly addressed both the social and environmental
aspects during each step of the manufacturing process. Therefore, acquiring a CoC certificate reflects positively on the producer.
In addition to the CoC Certification, our KapStone Kraft mills in Charleston and Roanoke Rapids are certified to the SFI Certified
Sourcing standard, which ensures that all of our fibers come from legal, responsibly harvested, and sustainable sources. Our Cowpens
Mill is CoC certified to the FSC Recycled standard for its 100 percent recycled mill. KapStone’s East Coast paper mills are triple-CoC
certified to SFI, PEFC and FSC. In June 2014, KapStone’s Longview Mill, which is certified to SFI Certified Sourcing standard, will
be audited to become certified to SFI and PEFC CoC standards. Certifications can be found online at www.kapstonepaper.com/
sustainability/mills.
KapStone has a centralized Product Stewardship Program where concerns about the environmental, health, and safety protection
around the product itself is adequately addressed to meet customer and consumer protection regulations. Generally, everyone involved in
the supply chain process of the product is called upon to take up responsibility to reduce its environmental, health, and safety impacts.
Declaration documents are available for the following regulations:
• Food Safety Declaration (per FDA or EU requirements)
• CONEG
• U.S. Lacey Act
• European Union Timber Regulation (EUTR)
• EU REACH
• Toy Safety Standards
• RoHS
• ISEGA Biodegradability & Compostability
• Conflict Mineral Declaration
• MSDS
• California Proposition 65
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U.S. TOTAL FOLDING CARTON AND CARTONBOARD MARKET (in thousand tons) 2013e 2012 2011
Folding Carton Shipments 5,361 5,266 5,203
Converting Loss at Plants 622 618 610
Board Consumption at Carton Plants 5,984 5,884 5,813
Board Consumption, All Other Uses 656 630 585
Domestic Cartonboard Demand 6,640 6,514 6,398
Cartonboard Net Exports 198 455 681
Cartonboard Production 6,838 6,969 7,079
Source: PPC 2013 Trends Report.
KAPSTONE IS THE ONLY U.S. MANUFACTURER AND ONE OF THREE PRIMARY MANUFACTURERS IN THE WORLD OF EXTENSIBLE, HIGH PERFORMANCE MULTIWALL KRAFT PAPER.
WE UTILIZE UP-TO-DATE TECHNOLOGY TO BE INNOVATIVE, PROFITABLE, SAFE AND ENVIRONMENTALLY RESPONSIBLE.
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REDUCING CARBON FOOTPRINT WITH KAPSTONE PRODUCTS
KapStone’s folding cartonboard and corrugated products are produced with the environment in mind. We recognized in the North
American folding carton and corrugated box industry that many packages are over-packaged from a product-to-package ratio and basis
weight standpoint. To address this issue, we developed a paperboard substrate for folding carton and corrugated packaging that
provides the greatest amount of strength while using the least amount of fiber, which contributes to a lower carbon footprint for folding
carton and corrugated packaging products.
• KapStone’s low-density Kraftpak grades offer uniquely lightweight yet competitive performance in the folding carton markets.
• KapStone’s Ultra-Performance Linerboard (UPL) grades allow customers to substitute lighter grade combinations while maintaining
excellent box performance standards.
These innovative grades allow customers to create both corrugated and solid fiber packages that use less fiber, generate less waste,
and at the same time utilize a raw material that is renewable and a highly valued recyclable source.
LIFE CYCLE ASSESSMENT
Last year we reported that in 2011, KapStone completed a Cradle-to-Gate Life Cycle Assessment (LCA), examining the environmental
impact of our KRAFTPAK and DuraSorb product lines. The LCA project analysis was conducted by PE International, a sustainability
software and consulting company, and independently audited by a third-party Critical Review Panel. The report examined environmental
impacts from the forest to the manufactured products exiting the mill “gate.” The report documented positive environmental impacts
and also identified areas for further improvement.
Contributors to positive results for energy and greenhouse gas emissions include:
• High yield pulping and low-density papermaking process and
• Highly efficient COGEN operation, with more than 70 percent of mill fuel energy from renewable sources or biomass
Identified opportunities for future improvement:
• Abiotic Depletion Potential (ADP) of fossil fuels (oil, coal, natural gas)
Finding: Energy Supply Chain through grid is major contributor.
Recommendation: Work to close this loop and maximize non-fossil energy sources.
Work to improve mill production efficiency in terms of energy per ton.
• Greenhouse Gases (GHG)
Finding: Focus on further improvement.
Recommendation: Work to optimize energy supply chain and mill production efficiency; optimize fuel mix
As a result of this assessment, we have upgraded the bark screws in the Charleston Mill main power boiler and are now using 100
TPD more bark (more bio-mass) for fuel.
“ We value our employees and their commitment to supporting the communities in which we live and work.”
25S U P P O R T I N G O U R
PEOPLE& COMMUNITY
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COMMUNITYPEOPLE/At KapStone, we have a commitment to all our stakeholders by employing programs that ensure employee fairness, provide a safe and healthy workplace, ensure fair marketplace competition, and offer a commitment to community service in the places where we live and work.
PROMOTING SAFETY IS OUR #1 VALUE
Providing a safe and healthy work environment for our employees is a core value at KapStone. Our Health & Safety Commitment
ensures employees that we have the systems in place and resources available to mitigate hazards.
Our employees have many opportunities to be involved in promoting a safe work environment. An employee-driven, behavior-based
safety program encourages employees to observe each other while performing their own work in an effort to help all employees do their
jobs safely. Employees serve on individual department safety committees as well as safety committees for the overall business units.
Safety committees focusing on procedures for Equipment Lockout/Tagout, Confined Space Entry, Process Safety Management, and Fall
Protection are but a few of the many safety initiatives at KapStone. Members of our management team and union officials meet weekly
to discuss safety concerns and offer ideas for safety initiatives.
In 2013, our Charleston Mill improved its safety performance for the third year in a row. This was accomplished by a collaborative
effort by all employees as the facility focused on several areas:
• Improved incident investigation process and safety related communications.
• Increased expectations in safety leadership at all levels of the organization.
• Reenergized hourly lead departmental safety committees and behavior-based safety program.
The mill also implemented the use of bright yellow work clothing which creates a heightened awareness of safety.
KapStone Employees Awarded for Safety Leadership
KapStone Paper and Packaging Corp. has a strong commitment to maintaining a safe work environment at all our operations. At the 2013 Western Pulp, Paper & Forest Safety & Health Conference, four KapStone employees received awards for showing leadership in safety, both at work and in their communities.
• Tommy Baker—Seattle, WA container plant—Association of Western Pulp and Paper Workers (AWPPW) Washington-Alaska
Safety Representative of the Year
• Shayne Bird—Twin Falls, ID container plant—Safety Professional of the Year
• Creighton Shaul—Yakima, WA container plant—Jack Kirkpatrick Award for achievement and dedication to the field of safety
• Bruce Stoner—Longview, WA pulp and paper mill—Safety Advocate of the Year
HEALTH & WELLNESS AT KAPSTONE
KapStone provides a variety of benefits and programs which reward employees, encourage employee involvement, and promote health
and safety.
The Wellness Committee, comprised of employee volunteers, organizes events throughout the year to motivate employees to live
healthy lifestyles. An on-site, state-of-the-art fitness center at the Roanoke Rapids and Charleston Mills, which offers fitness classes
and personal training, is available 24/7 for employees and spouses to utilize at no cost. KapStone provides annual Wellness Screening
programs at no cost to employees, which include confidential lab testing that could detect disease or illness at the earliest state.
Employees receive an individualized health risk profile that focuses on heart health, weight control and biometric screening. Many
employees participate in the Virgin Health Miles program, which provides financial rewards for staying active. Employees who partici-
pate in this program also have the opportunity to receive reduced medical insurance premiums. KapStone employees also participate in
the Metabolic Syndrome Program that provides them and their spouses with tools to lose weight, reduce stress, increase exercise and
improve their overall health.
Employees Awarded for Creating Long-Term Success
At KapStone, we believe in a performance culture where our employees differentiate us in the markets we serve and are instrumental in creating our long-term success. To celebrate their performance and achievements, we annually distribute the President’s Award to individuals and teams who have made a significant, positive impact on the business. This year, 272 individual and team awards were distributed.
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272AwardsTHIS YEAR, 272 INDIVIDUAL AND TEAM AWARDS WERE DISTRIBUTED.
EDUCATION AND WORK FORCE DEVELOPMENT
We partner with Trident Technical College, located in North Charleston, S.C., to provide apprenticeship training for our mechanics. This
program has provided advancement and developmental opportunities for employees who are interested in expanding their careers in a
craft trade. Our Cowpens Mill partners with Spartanburg Community College to develop a customized training package for our first-line
supervisors. We also provide on-site Learning Center facilities that offer a wide range of educational experiences for employees and
their families, including annual safety compliance training, literacy training and coaching. A formal Co-Op program is in place that
provides engineering students with hands-on experience while providing KapStone with the opportunity to train students for potential
employment opportunities upon graduation.
KapStone provides strong internal training programs to ensure our workforce stays current with ever-changing technology, as
well as positioning employees for advancement within the organization. We provide financial support to those employees interested in
broadening their formal education with the KapStone Tuition Reimbursement Program. We have established a scholarship program to
assist employees’ children who plan to continue their education in college. Up to ten renewable $5,000 scholarships are offered each
year for full-time study at an accredited institution of the student’s choice.
Our management team members receive leadership and other “soft skills” training to achieve results through effective leadership.
As an Equal Employment Opportunity employer, we select, develop, and promote employees based on the individual’s ability and job
performance. It is the policy of KapStone to provide Equal Employment Opportunity to all people in all aspects of employment practices
without discrimination because of race, color, religious creed, national origin, ancestry, sex, marital status, age, disability, sexual
orientation or status as an Armed Services Veteran.
COMMUNITY, PROFESSIONAL INVOLVEMENT AND ECONOMIC DEVELOPMENT
KapStone has a strong tradition of ongoing commitment to the community. As one of the Lowcountry’s premier supporters of the Trident
United Way, we generously support their Community Plan for Bold Change program with goals of improving the education, financial
stability, and health of our citizens. In addition, KapStone has made a five-year financial commitment to the Metro Chamber of
Commerce’s Accelerate Greater Charleston initiative. This program seeks to strengthen economic development and community
advancement opportunities. We are focusing our efforts on building and strengthening a talented workforce through education. The
Cowpens Mill is a financial supporter of the Meals on Wheels program and Chapman Cultural Center in Spartanburg.
To ensure we are following the best practices in our industry and to maintain the highest level of compliance required for certification,
KapStone employees are actively engaged with key professional organizations:
• Paperboard Packaging Council (PPC)
• Corrugated Packaging Alliance (CPA)
• American Forest & Paperboard Association (AF&PA)
• Fiber Box Association (FBA)
• Association of Independent Corrugated Converters (AICC)
• Technical Association of Pulp and Paper Industry (TAPPI)
• International Committee of the Decorative Laminates
Industry (ICDLI)
• Decorative Surfaces Council (DSC)
• Composite Panel Association (CPA)
• Paper Shipping Sack Manufacturers Association (PSSMA)
• Renewable Bag Council (RBC)
• Paper Recycling Coalition (PRC)
• Paper Recovery Alliance (PRA)
• European Federation of Multiwall Paper Sack Manufacturers
(Eurosac)
Additionally, KapStone employees serve on the U.S. Chamber of Commerce Policy Committees for Labor Relations and Environment.
Our employees also serve on a host of boards and, as volunteers, on numerous community involvement organizations. KapStone’s
charitable donations program selects community activities and involvement that are directly related to employee affiliations..
As an associate member of the Paperboard Packaging Council (PPC), KapStone attends PPC’s bi-annual Sustainability Committee meeting. The Committee’s mission is to provide information on the latest sustainability trends impacting the paperboard packaging industry, educate members on topics related to sustainability, provide input and guidance in support of sustainable paperboard packaging promotions, and represent the interests of the paperboard packaging industry in all sustainability initiatives.
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KAPSTONE HAS A PROUD TRADITION OF SPONSORING EMPLOYEE VOLUNTEERS TO THE ANNUAL CHARLESTON DAY OF CARING EVENT. WE ARE RECOGNIZED THROUGHOUT THE COMMUNITY AS ONE OF THE TOP DONORS TO LOCAL CHARITIES WITH CORPORATE AND EMPLOYEE DONATIONS.
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COMMUNITY PARTNERSHIPS
KapStone is an active member of the S.C. Chamber of Commerce, the U.S. Chamber of Commerce, as well as five local chambers:
Metro Charleston, Berkeley County, Summerville/Dorchester County, Spartanburg, and Cherokee County. Our employees are visible
throughout the state, serving as youth sports coaches, Boy Scout/Girl Scout leaders, Homeowners Association officers, church
leadership and program participants, as well as volunteering for a host of charitable organizations.
We have a proud tradition of sponsoring employee volunteers to the annual Charleston Day of Caring event, as well as having teams
in events such as the MS Walk, March for Babies, Heart Walk, and other similar fundraisers. Our Vice President for the Eastern Mill
Systems Operations served as Campaign Chairman for the Trident United Way’s annual fundraising program, successfully meeting the
goal of raising in excess of $11,000,000. He currently serves on the Board of Directors for Roper Hospital. KapStone employees serve
in positions such as Chairman of the Goodwill Board of Directors as well as leadership roles for the Education Foundation. KapStone is
recognized throughout the community as one of the top donors to local charities with corporate and employee donations.
Employees at our Roanoke Rapids operations sponsor an annual Earth Day Environmental Education Program that has reached
more than 2,000 students since its inception four years ago. At this annual event, a team of volunteers provides information on forestry,
papermaking and sustainability to schools and local community organizations. In October 2013, over 3,000 Roanoke Rapids students
learned about fire safety from a company-sponsored Fire Prevention Program.
In 2013, employees at the Longview Mill donated $10,000 to Community Home Health and Hospice, an organization which services
five counties in Washington and Oregon. Employees raised the funds by participating in a mill-wide safety challenge issued by Longview
senior leaders. Also during the year, Longview Mill employees partnered with other local companies in a community-wide “food fight”
KapStone Employees Participate in Annual “Day of Caring”
On September 13, 2013, KapStone North Charleston-based employees participated in the 14th annual Trident United Way Day of Caring. KapStone’s project for the day, Make the Butterfly Garden Bloom with Beauty!, was a success as many employee volunteers spruced up the Park Circle Butterfly Garden and the surrounding area as they planted new flowers, spread compost, mulch, pine straw, and coated picnic tables with a protective layer of polyurethane.
KAPSTONE HAS A STRONG TRADITION OF ONGOING COMMITMENT TO THE COMMUNITIES WHERE OUR EMPLOYEES WORK AND PLAY.
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Longview Mill Supports Annual Boat Regatta
Since 2009, the KapStone Longview Mill and box plant has been a key sponsor and volunteer at the community July 4th Cardboard Boat Regatta held on the shores of Lake Sacajawea in Longview, WA.
KapStone donates approximately 6,000 sheets of corrugated board for team members, representing a wide range of community
organizations, to construct their vessels for the race. Upward to 40 vessels are entered each year competing to steer their boats for
three heats around a 200-yard water course. Additionally, employees spend many volunteer hours helping to organize the event and to
create an array of winning trophies also crafted from the mill’s corrugated board.
40 2006,000VESSELS ENTERED
EACH YEAR200-YARD
WATER COURSESHEETS OF
CORRUGATED BOARD
to see which organization could collect the most food and raise the most money to support Help Warehouse, a food collection and
distribution center for the eight Cowlitz-Wahkiakum food banks and 14 USDA commodities distribution sites. The KapStone team collected
over 7,000 pounds of food and raised funds to buy food. Employees also adopted families during the holidays, collected supplies for
local schools, and sponsored local community arts programs and sports organizations.
The Employees Charitable Contribution Program (ECCP), a payroll deduction donation program, has been in existence since 1953
and continues to maintain, if not increase, annual contributions by employees and retirees.
In 2013, KapStone Paper Mill Operations and its employees contributed over $710,000 to non-profit and charitable organizations.
31G L O B A L R E P O R T I N G I N I T I A T I V E
G3 CONTENTINDEX
G3 General Standard Disclosure Page/Link
STRATEGY AND ANALYSIS
1.1 Statement from the most senior decision-maker of the organization 2
ORGANIZATIONAL PROFILE
2.1 Name of the organization 12
2.2 Primary brands, products, and/or services 21–23
2.3 Operational structure of the organization, including main divisions, operating compa-nies, subsidiaries, and joint ventures
12
2.4 Location of organization’s headquarters Northbrook, Illinois
2.5 Number of countries where the organization operates; and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report
13
2.6 Nature of ownership and legal form 12
2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries)
21–23
2.8 Scale of reporting organization, including number of employees, number of operations, net sales or net revenues, total capitalization broken down in terms of debt and equity; and quantity of products or services provided
12
2.9 Significant changes during the reporting period regarding size, structure, or ownership including the location of, or changes in, operations, including facility openings, closings, and expansions; and changes in the share capital structure and other capital formation, maintenance, and alternative operations
2
2.10 Awards received in the reporting period 18, 27
REPORT PARAMETERReport Profile
3.1 Reporting period (e.g., fiscal/calendar year) for information provided 1
3.2 Date of most recent previous report (if any) 1
3.3 Reporting cycle (annual, biennial, etc.) 1
3.4 Contact point for questions regarding the report or its contents John BensonDirector of [email protected]
Report Scope and Boundary
3.5 Process for defining report content, including determining materiality, prioritizing topics within the report, and identifying stakeholders the organization expects to use the report
1
3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers)
1
3.7 State any specific limitations of scope or boundary of the report No limitations existed during the reporting period.
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations
Company reported on its wholly-owned paper mill and lumber mill operations in the U.S.
3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reason for such re-statements
1, 2; Company restated baseline 2010 Sustainability Goals and subsequent years to include operations acquired during fiscal 2013.
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GRI INDEX
G3 General Standard Disclosure Page/Link
3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report
1, 2; Company restated baseline 2010 Sustainability Goals and subsequent years to include operations acquired during fiscal 2013.
GRI Content Index
3.12 Table identifying the location of the Standard Disclosures in this report 32–35
GOVERNANCE, COMMITTEES, AND ENGAGEMENTGovernance
4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy and organi-zational oversight
14; see Governance section at www.kapstonepaper.com
4.2 Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organization’s management and the reason for this arrangement)
14; see Governance section at www.kapstonepaper.com
4.3 For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members
In 2013, the Company’s board included 7 independent directors; see Governance section at www.kapstonepaper.com
4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governing body; identify topics related to economic, environmental, and social performance raised through these mechanisms during the reporting period
14; see Governance section at www.kapstonepaper.com
Stakeholder Engagement
4.14 List of stakeholder groups engaged by the organization 13, 16, 26, 28; Table 1 below
4.15 Basis for identification and selection of stakeholders with whom to engage 1; see Form 10-K at investor relations section at www.kapstonepaper.com
Table 1: List of Professional Organizations and Association Memberships with Key Leadership Roles
American Forest & Paper Association (AF&PA) Roberto Artiga, Air Quality and Water Quality Subcommittee memberJan Cleiland, Recycling Sector Board MemberMatt Kaplan, Board of DirectorsDuane Mummert, Environmental Committee MemberEric Smith, Wood Fiber Resource Committee Member, International Trade
Resource Committee Member
American Tree Farm System Eric Smith, S.C. Tree Farm Committee, State Chair, District Chair
Corrugated Packaging Alliance (CPA) Tim Keneally, Board of DirectorsJohn D. Benson, Advisory Committee Member
Forest Resources Association James Erickson, Vice Chair, Fiber Quality/Production Committee, Western Region
Jeff Marthaller, Policy Committee for Western RegionBernard Rose, Policy Committee for Southeast RegionEric Smith, National Board member, Policy Committee, Timber Security
GroupDavid West, Executive Committee, Board of Directors and Chair of the
Supplier/Consumer Relations Committee
North Carolina Forestry Association Bernard Rose, Executive Committee, Board of Directors, Biomass Task Force, Forest Development Task Force
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GRI INDEX
Table 1: List of Professional Organizations and Association Memberships with Key Leadership Roles
North Carolina Manufacturers Association Bill Kessinger, Board of DirectorsBen White, Board of Directors
Northwest Pulp and Paper Association Roberto Artiga, Washington Technical CommitteePat Ortiz, Washington Board of Trustee
South Carolina Board of Registration for Foresters Eric Smith, Board member
South Carolina Foresters Council Eric Smith, TOP Committee
S.C., N.C., V.A. & G.A. Forestry Association Eric Smith, S.C. Board member
Sustainable Forestry Initiative State Implementation Committees(South Carolina, North Carolina, Virginia,Georgia, Washington and Oregon)
Eric Goodman, V.A. SFI State Implementation TeamBernard Rose, Vice Chair, N.C. SFI State Implementation TeamEric Smith, S.C. Logger Education Subcommittee ChairKathy Troupe, W.A. State Implementation Team; O.R. Implementation
Committee Chair
Upper Savannah Land Trust Eric Smith, Board member
Other membership organizations: County Landowner AssociationsSociety of American ForestersSouth Carolina Manufacturer’s AllianceSouth Carolina Timber Producers AssociationNational Council for Air & Stream ImprovementWashington Contract Loggers AssociationWood Supply Research Institute
MANAGEMENT APPROACH AND PERFORMANCE INDICATORS
GRI Performance
Indicator Description Page/Links
ECONOMIC PERFORMANCE INDICATORSAspect: Economic Performance
EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments
12; see investor relations section at www.kapstonepaper.com
EC4 Significant financial assistance received from government Company received no assistance during reporting period.
Aspect: Market Presence
EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation
17, 18
ENVIRONMENTAL PERFORMANCE INDICATORSAspect: Materials
EN2 Percentage of materials used that are recycled input materials Pre-consumer fiber 12% Post-consumer fiber 19%
Aspect: Energy
EN3 Direct energy consumption by primary energy source 4, 7
Aspect: Water
EN8 Total water withdrawal by source 4, 10
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MANAGEMENT APPROACH AND PERFORMANCE INDICATORS
GRI Performance
Indicator Description Page/Links
Aspect: Biodiversity
EN11 Location and size of land owned, leased, managed in, or in adjacent to protected areas and areas of high biodiversity value outside protected areas
KapStone is not a forest landowner.
EN14 Strategies, current actions, and future plans for managing impacts on biodiversity
4, 6, 17, 18
Aspect: Emissions, Effluents, and Waste
EN16 Total direct and indirect greenhouse gas emissions by weight 4, 8
EN20 NO, SO, and other significant air emissions by type and weight 4, 9
EN23 Total number and volume of significant spills The Company had no spills during the reporting period.
Aspect: Products and Services
EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation
16–18, 23
Aspect: Compliance
EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations
There were no such fines or sanctions during the reporting period.
SOCIAL PERFORMANCE INDICATORSLABOR PRACTICES AND DECENTAspect: Employment
LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation
27, 28
Aspect: Labor/Management Relations
LA4 Percentage of employees covered by collective bargaining agreements Approximately 85% of KapStone employees are covered by collective bargaining.
Aspect: Occupational Health and Safety
LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender
4, 5
HUMAN RIGHTS PERFORMANCE INDICATORSAspect: Forced and Compulsory Labor
HR7 Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor
14; see California Transparency Supply Chain Act Disclosures at www.kapstonepaper.com
SOCIETY PERFORMANCE INDICATORSAspect: Corruption
SO3 Percentage of employees trained in organization’s anti-corruption policies and procedures
14
PRODUCT RESPONSIBILITY PERFORMANCE INDICATORSAspect: Customer Health and Safety
PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures
24
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SFI-00095
1101 Skokie Blvd., Suite 300Northbrook, Illinois 60062-4124 T (847) 239-8800 F (847) 205-7551www.kapstonepaper.com
KAPSTONE PAPER AND PACKAGING CORPORATION
