Staples Sustainability Overview

Wells College

April 9, 2015

Staples Inc.• Staples founded in Brighton, MA in 1986

• World’s largest reseller of office products and services $23 billion sales

• Operations in 26 countries

• 80,000 Associates worldwide

• Business is comprised of Retail, Contract and International

• Operate 3rd largest e-commerce site in the world behind Amazon.com and Apple

TraditionalBusiness

SustainabilityLeadershipSocial Responsibility

Good for businessGood for the world

Legal Compliance

Led by Legal, EH&S and others

Most Companies

CSR, Environmental Protection, Philanthropy

Led by CSR,PR and othersSeparate from the business

Business Value from Smaller Footprint and Solving World’s

Challenges

Driven from the top Led by line management

Integrated into the business

Don’t get in legal trouble

Be a good corporate

citizen

Tap into new sources of value

Sustainable Business Approach

3

Sustainability leadership strategy

Sell Green Products & Services

Aspirational TargetOffer our customers the most sustainable choices by building

sustainability into all of our products and

services

Own Customer Recycling Solutions

Aspirational TargetRecycle 100% of the

products we offer

Eliminate Operational Waste

Aspirational TargetAchieve zero waste in our operations

and help our customers to

minimize theirs

Maximize Energy Efficiency &

Renewable Energy Use

Aspirational TargetAchieve zero carbon

emissions in our operations and help

our customers pursue the same goal

Drive Positive Change in the World

Community

Aspirational TargetBe recognized

globally as a leader in sustainability

Sustainability LeadershipWe will generate business and

environmental benefit – for ourselves, our customers, andour communities – by leading the way in how sustainable business gets done

1. Metrics, Targets & Business Integration

2. Customer & Associate Engagement & Capability Building

Staples “Sustainability Journey” began within the “4 Walls “of our business

• Energy and carbon management

• Waste reduction and recycling

• Building in operational efficiencies at every level of our business data centers, call centers, distribution centers, fleets and support operations.

Sustainable Operations

93% of the GHG footprint1 is embedded in the products we sell

Note: Product footprint analysis is based an economic input-output (EIO) life-cycle assessment (LCA) model that provides order-of-magnitude comparisons; further analysis using a hybrid LCA model would

likely result in refined and adjusted figures

Source: (1) Product footprint based on Climate Earth’s Comprehensive Environmental Data Archive (CEDA), Climate Earth analysis, and Blu Skye analysis of 2009 US COGS (excludes US Corporate Express

Contract data) by product department; Operations footprint based Blu Skye analysis of 2009 US electricity, natural gas, diesel (based on mileage), business travel (rental car, commercial air,

corporate jet), and HQ employee commuting

Greenhouse Gas (GHG) Environmental Footprint1

(mtCO2e)

1. Printer cartridges2. Paper3. Laptop computers4. Desktop computers

What do Staples customers want?

• Customers look to Staples to provide them the products and services that they need to improve their productivity meeting quality, fit, form, functionand competitively priced above all else

• Contrary to popular belief the reality is that very few Retail customers are willing to pay a premium for a more “sustainable” product.

• Many Contract customers, however, have sophisticated environmental and social criteria built into RFPs and seek comprehensive reporting relative to their spend.

Sustainable Earth by Staples

Many of our products conform to leading eco accreditation standards

Facilities & Breakroom

Business Interiors

Print Solutions

Technology Solutions

Promotional Products

• Cleaning chemicals• Towels & tissue• Janitorial papers• Breakroom supplies• Recycling equipment

Learn more

• LEED-compliant furniture

• Furniture decommissioning and recycling

• Commercial interiors program guidance

Learn more

• Chain-of-Custody Certifications

• Recycled and/or FSC certified paper

• VOC/HAP-free UV Inks Print on Demand

• Digital Print Management

Learn more

• EPEAT & Energy Star Products

• Digital media• Managed Print Services• E-waste Recycling• Ink & Toner Recycling

Learn more

• Paper products with recycled content and/or FSC certification

• Recycled content desk supplies

• Remanufactured ink & toner cartridges

• Refillable pensLearn more

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• Products made from recycled, organic and rapidly renewable materials

• Reusable bottles and cups Reusable tote bags

Learn more

Office Supplies

Sustainability leadership requires examining the entire value chain or “Life Cycle”

Raw MaterialsDistribution/Retail

ConsumerEnd of

Life

Manufacturing

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Lifecycle assessments help companies understand where the major environmental

impacts are

Greenhouse gases and air pollution

Natural resources, waste & recycling

Harmful substances

Biodiversity

Soil and Land Use

Water

Raw Materials Distribution/Retail

Consumer End of LifeManufacturing

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Staples is developing category specific scorecards for all products categories and committed to removing chemicals

of concern and reduce the life cycle impacts for all products

Today

Min. Entry for Sustainability

Bronze

Silver

Gold

More SKUs

Fewer SKUs

Min.

Bronze

Silver

Gold

Fewer SKUs

More SKUs

Tomorrow

“Unsustainable” SKUs

What are the barriers to scale and market

transformation?

language (lan’gwij) n. [< L lingua, tongue] 1 human speech or the written symbols for speech 2 a) any means of communicating b) a special set of symbols used in a computer 3 the speech of a particular nation, etc. [the French language] 4 the particular style of verbal expression characteristic of a person, group, profession, etc.

Language

“A woman without

her man is nothing!”

“A woman, without her,man is nothing!”

BusinessMature

Cost of Capital

Gross Margin

Sales

P&L

Balance sheet

Depreciation

RONA

IRR

Conservative

Amortization

Cash Flow

Taxes

ROI

How can we communicate in a language of sustainability…to our Associates,

suppliers and to our customers??

Green

Environmentally Friendly

Recycled

Life Cycle Accounting

Compostable

Sustainable

BiodegradableCarbon Footprint

Non Toxic

Low VOC

There is a gap in many businesses today about

how to talk about sustainability. We lack a

common vernacular or language.

Uncommon Collaboration

Uncommon Collaboration

Sustainable Paper Procurement

• Industry first Paper Procurement Policy 2002• Founding member of the Paper Working Group and EPAT

2003 www.metafore.org• Commitment to FSC (Forest Stewardship Certification) • Founding member of the Carbon Canopy

www.carboncanopy.com• Rainforest Alliance Smart Source Partner

www.rainforestalliance.org• Member of the WRI/ USAID Forest Legality Alliance

www.forestlegality.org• Member Boreal Business Forum overseeing historic

Canadian Boreal Forest Agreement www.canadianborealforestagreement.com

The Paper Working Group

The Paper Working Group

Environmental Performance Assessment Tool

Life Cycle Reporting Tool for Paper Purchasing

UNCOMMON COLLABORATION

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Need map here, with pictures of pulp/paper products – from

Andrea/Ruth/Anne’s Federal Register analysis

Pulp from Indonesia Chinese factories Books in US

Russia Europe US

Source: The Nature Conservancy. 2007. Advancing Responsible Forest Management and Trade.

Online at: http://www.nature.org/initiatives/forests/files/forest_trade_brochure.pdf

Global Flow of Wood and Paper Products of Illegal and/or Controversial Origin

SmartSource Implementation Process: Help Companies Make Gradual Progress

Known and legal

FSC/Recycled

Progressingtoward certification

Unknown or unwanted

FSC certified sources and/or post-consumer recycled / sustainable alternative fibers

Progressing toward FSC certification with 3rd

party verification

Minimum standard: Origin and legality is confirmed

Protects rights of local communities and high conservation values

Non-controversial

Goals: Eliminate unknown or unwanted fiber and move all products to FSC certification and/or recycled and sustainable content

Recycled and Alternative Fibers in the Production of Paper Products

• Increased competition for resource from non-traditional industries such as energy for biomass fuel

• Agricultural waste and rapidly renewable fibers such as sugar cane (bagasse), wheat straw, flax straw , bamboo

• Post consumer recycled paper and textile wastes

Packaging moves

• Eliminate clamshell packaging and improve cube efficiency in master and break packs

• Packaging eliminates PVC and where required replace with recycled PET paperboard containing minimum 65% pcw and recyclable.

Packaging Concepts

“Smart Size Packaging”

End of Life Solutions“The Circular Economy”

Recycling and responsible end of life solutions

• EPA Plug into e-Cycling founding member 2003 and e-Steward certified collector

• First national retailer to offer everyday e waste program in 2007

• e Steward and R2 certified no export

Environmental Challenges • Mercury, Cadmium, Phosphors, Lead and other metals common in electronics,

as well as plastics and flame retardants, can contaminate the air, water and soil if sent to a landfill, or otherwise irresponsibly disposed of.

• Many of these materials are also known to cause birth defects, neurological impairments, respiratory illness, cancer, or other serious ailments in humans or animals exposed to these substances.

• The explosive growth in technology consumption has created a monumental challenge: the proper management of used electronics in both the developed and the developing world.

.

Recycling Services

• Toner & Ink Recycling • Free ink & toner recycling as well as customer pickup• As one of the world’s largest ink recyclers, we recycled

more than 450 million ink and toner cartridges since 2005.

• E-Waste (Printers, PCs, Electronics)• Recycling services of all electronics • Collected more than 28 million pounds of e-waste for

recycling in 2014• Batteries• Lamps, Ballast, & Light bulbs

• Cell Phone• Customers can responsibly recycle cell phones

peripherals and batteries by requesting a collection box

• Furniture • Decommissioning and recycling of office furniture• Collection of bulk ‘surplus’ items for donation and

reuse in disaster recovery and developing countries.

Commodities producedCopper Copper

Aluminum TV and Monitor Boards

High Grade Precious Metals Plastic

Low Grade Precious Metals

Steel

Brass Memory Wiring Processors

Ink and Toner Recovery

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stainable Earth by

Remanufacture, Recycle and “Downcycle”

40

tEarth by Staples R

• Sort empty cartridges• Disassemble non-usable• Grind plastic

Step 1: Step 2:

• Ship recycled plastic pellets to manufacturer

Step 3:Step 4:

• Recycled plastic pellets used to injection mold new parts

• New product is assembled and ultimately sold at Staples

“Radical Transparency” and Reporting

Environmental Purchases Summary Report

Launching to 2015

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• Tool covers these credits:

o Materials and Resources (MR) Credit 1 – Ongoing Consumables

o MR Credit 2.1 – Electric-powered Equipment

o MR Credit 2.2 –Furniture

o MR Credit 5 – Food

o Indoor Environmental Quality Credit 3.3 –Sustainable Cleaning Products & Materials

LEED Eligibility Report

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Staples Sustainable Innovation Lab

• Established in April 2012 with a gift from Staples

• The 1500 sq-ft lab in the Golisano Institute for Sustainability at RIT opened April 2013. GIS is a LEED Platinum building.

• Working research lab and test bed for sustainable business solutions. Business Interiors by Staples

Longer Term Vision

• Aspire to become our business customer’s “trusted sustainable business solutions provider”

• Accelerate market transformation for more sustainable products and services which align with our customers goals and objectives

• Provide meaningful and transparent data for customers to help them benchmark base performance and set improvement targets.

• Create opportunities for meaningful dialogue, introduce tools and resources to help businesses at every stage accelerate their understanding of emerging sustainability trends and opportunities which will effect their business.

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Final Thoughts

• Taking a life cycle approach reduces waste, improves efficiencies and reduce costs and builds resilience into supply chains

• The approach identifies supply chain risks and uncovers hidden opportunities.

• Uncovering “ Uncommon Collaboratives” leads to long term strategic partnerships with non traditional stakeholders

• Accelerates the development of transformational business models and markets

• Responsibly lead, compete and win in a 21st Century economy while transforming markets!

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Thank you!Q&A

Apendix

Can readily summarize and measure overall progress graphically

Purchases Summary for7/1/2011 – 6/30/2012

All Products Paper Products

Total product purchases: $1,064,303 $418,472

No environmental features $652,168 $142,551

Basic eco features 1 $91,880 $51,432

Advanced eco features 2 $320,245 $224,490

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2. Advanced: 30%+ post-consumer recycled content; remanufactured;

certified to following (BPI compostable, Cradle to Cradle, Energy Star,

EcoLogo, EcoSense (EPEAT), Fair Trade, Forest Stewardship Council,

GreenSeal, level, Rainforest Alliance, USDA Organic); or contain >= 30%

bio-based plastics, rapidly renewable content, or agricultural residues.

1. Basic: recycled content less than 30%, “industry standard” eco

certifications or feature s (SFI, AP nontoxic, solar powered, Indoor Advantage,

rechargeable batteries, etc.)

Environmental Purchases Report –Purchases overview

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Environmental Purchases Report –Paper product purchase summary

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Environmental Purchases Report –Summary by product categories

52

Environmental Purchases Report –Purchases details, including environmental

attributes

53

Small Order Reduction Environmental Savings Calculator

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Recycled Content Paper Calculator –Resources saved based on percentage PCW

paper purchased

55

Staples GHG emissions associated with customer deliveries

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Customer: EXAMPLE 2010 2011

GHG emissions per package (kg CO2e) 1.526 1.341

Number of packages delivered for customer 250 250

Staples GHG emissions associated with customer deliveries (mt CO2-e) 0.38 0.34

Staples GHG emissions associated with customer deliveries (lbs CO2-e) 840.91 739.09

Year

FY 2014 Paper Environmental Impacts

560

565

570

575

580

585

590

595

Q1 2014 Q2 2014 Q3 2014

594

573

588

Trees Saved

69000695007000070500710007150072000725007300073500

Q1 2014 Q2 2014 Q3 2014

73082

70482

72297

Greenhouse gas emissions reduced (CO2 equivalents)

FY 2014 Copy and Printer Paper Purchased-Weight

56.00%

58.00%

60.00%

62.00%

64.00%

66.00%

68.00%

70.00%

72.00%

Q1 2014 Q2 2014 Q3 2014

67.07%

70.03%

61.95%

Paper Products with 1 or more environmental features

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Q1 2014 Q2 2014 Q3 2014

55.1%47.0%

42.5%

Contain >= 30% post-consumer recycled content

FY 2014 Paper Environmental Impacts

330000

335000

340000

345000

350000

355000

Q1 2014 Q2 2014 Q3 2014

351743

339231

347964

Water Saved (Gallons)

Water Saved (Gallons)

FY 2015 Strategy by CertificationEnvironmental Category FY 2014 Achieved FY 2015 Goal FY 2015 YTD Progress

>=30% Recycled Content 138719 154132 11%

Projects to Grow Recycled Content

Project Implemented

Environmental Category FY 2014 Achieved FY 2015 Goal FY 2015 YTD Progress

FSC 121311 109180 -10%

Projects to Grow FSC Content

Project Implemented

Vertical Benchmark

Customer ADVANCED ECO SALES% BASIC ECO SALES %

HEALTHCARE 7.6% 15.3%

ACME HOSPITAL 20.3% 25.3%

STAPLES 7.3% 16.0%

DUNS_VERTICAL_MARKET_DESC CATEGORY ADVANCED ECO SALES % BASIC ECO SALES %

HEALTHCARE BREAKROOM 0.31% 7.1%

ACME 0.00% 0.0%

HEALTHCARE FACILITIES 8.05% 18.1%

ACME 0.00% 0.0%

HEALTHCARE FURNITURE 6.68% 4.1%

ACME 0.00% 0.0%

HEALTHCARE OFFICE PRODUCTS 22.02% 14.5%

ACME 0.00% 0.0%

HEALTHCARE PAPER 2.34% 30.6%

ACME 0.00% 0.0%

HEALTHCARE TONER 0.12% 13.9%

ACME 0.00% 0.0%

HEALTHCARE TECH 1.50% 11.9%

ACME 0.00% 0.0%

HEALTHCARE TECH 1.50% 11.9%

ACME 0.00% 0.0%

HEALTHCARE PROMOTIONAL 0.00% 7.2%

ACME 0.00% 0.0%

HEALTHCARE PRINT 0.00% 1.1%

ACME 0.00% 0.0%

Staples Advantage FY 2013

Landowners manage forests under FSC standards, creating and maintaining large carbon sinks

Landowners produce FSC forest products sold into the marketplace

Forest product manufacturers are guaranteed a stable supply of FSC certified wood

Corporate consumers and retailers are able to offer customers FSC certified products as an indication of commitment to sustainability

Landowners produce CAR carbon credits sold into the marketplace

Companies purchase carbon offsets from the landowners to help counter their own carbon emissions

Profits from credit sales support landowner

Print Facilities Technology Business Interiors Promotional

Eco-Conscious Products: Broad Selection

Digital Copy Print

Services

Recycled/FSC paper

Customizable Print

Capabilities

FSC Certified Print Ctrs

Recycled Business Cards

Recycled Greeting Cards

Product Solutions

Sustainable Earth Brand

Chemicals

Rolled Towel vs.

Folded Towel

Recycled Content

Janitorial Papers

Eco Products

Break-room supplies

Entry Mats

Professional Services

On-Site Needs

Assessment

Product Solutions

Complete line of LEED

compliant furniture made

from recycled and rapidly

renewable materials

Furniture decommissioning

and recycling

Professional Services

On-Site Needs Assessment

Experts in Greenguard and

LEED Certification

Technology Products

EnergyStar compliant

items such as printers,

fax, PCs, monitors, etc.

Digital Media –

paper reduction

Technology Solutions

Data Tape recycling/

remanufacturing

High Speed Printer

toner recovery

Green Data Ctr program

Product Solutions

Complete line of apparel

and promotional items

made from recycled,

organic and rapidly

renewable materials

Water bottles and

coffee cups to reduce

disposable cups

Reusable tote bags to

replace plastic bags