Climate Change Data

Environmental Metrics

ESG Focus Areas

• Animals
• People
• Planet

Environmental Achievements

• Reduced lameness in herd by 31% from 2012 baseline
• 75% of processing plant water recycled
• 65% of plant waste recycled
• 5% reduction in GHG emissions per half gallon of milk vs. 2012 baseline (within GHG Goal Boundary)

Social Achievements

• Added paid parental leave for all employees
• Added a day of paid bereavement leave for all full-time employees
• Farm employees transitioned to a six days on, two days off work week
• Completed construction of employee cafeteria and break room at Coldwater Farm; similar facility in progress at High Plains Dairy Farms
• Donated approximately 54,650 gallons of organic milk and 26,260 pounds of organic butter to local non-profit organizations

Governance Achievements

• Updated Employee Handbook in early 2017, distributed in English and Spanish
• 100% of farm, milk and plant suppliers compliant with sourcing policies in 2015 and 2016
• All Company-owned facilities Validus certified for animal welfare

Climate Goals & Targets

Environmental Challenges

• Remote locations of farms made recycling challenging
• Achieving meaningful GHG emission reductions, particularly enteric emissions from cows
• Meeting 25% farm waste diversion goal by 2017
• Meeting 75% plant recycling target by 2017
• Growing demand for water along Colorado’s Front Range

Mitigation Strategies

• Investing in remote operation technology for irrigation pivots
• Exploring options to replace aging natural gas pumps with more efficient equipment
• Conducting energy audits of farm equipment and processing plant
• Exploring options with utility companies and third-parties around a long-term, comprehensive renewable energy strategy
• Trialling slurry injection techniques to reduce nutrient run-off and nitrogen volatilization
• Exploring new options to reduce the environmental footprint of packaging

Supply Chain Management

Supplier Audits: 100% of farm, milk and plant suppliers compliant with sourcing policies in 2015 and 2016

Responsible Procurement

• Farm Sourcing Policies
• Supplier Policy (reviewed annually)

Climate-Related Risks & Opportunities

Physical Risks

• More frequent and severe droughts

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: USDA Organic, Safe Quality Food (SQF) 2000 Level III, Validus Animal Welfare and Worker Care

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Clean Water and Sanitation (Goal 6)
• Responsible Consumption and Production (Goal 12)
• Climate Action (Goal 13)
• Life Below Water (Goal 14)
• Life On Land (Goal 15)
• Zero Hunger (Goal 2)
• Good Health and Well-being (Goal 3)
• Quality Education (Goal 4)
• Decent Work and Economic Growth (Goal 8)

Material topics discussed throughout this report coincide with 9 of the 17 UN Sustainable Development Goals

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Green Fleet Award (largest outbound carrier)

Environmental Metrics

ESG Focus Areas

• Safety
• Employee Engagement
• Energy Efficiency
• Waste Reduction
• Fiber Certification
• Community Investment
• Product Innovation
• Climate Change Mitigation
• Responsible Sourcing

Environmental Achievements

• Reduced carbon footprint by 66% since 2005
• Achieved 73.6% renewable energy use (net of REC sales)
• Reduced lime mud waste by approximately 1,600 tons per month at Cloquet Mill
• Improved beneficial reuse of solid waste at Cloquet and Westbrook mills

Social Achievements

• Achieved record-low lost time injury frequency rate (LTIFR) of 0.25
• Provided 105 hours of training per employee on average
• Achieved 78% sustainable employee engagement score
• Implemented Employee Ideas that Matter grants program, supporting various community initiatives
• Received a gold rating from EcoVadis

Governance Achievements

• Implemented a new Supplier Code of Conduct
• Completed implementation of ISO 22000 food safety management system at Somerset Mill

Climate Goals & Targets

Environmental Challenges

• Weak graphic paper market demand leading to operational curtailments
• Lower dissolving wood pulp prices due to softening textile demand
• Increased BOD and TSS due to operational changes impacting settling in mill primary clarifiers

Mitigation Strategies

• Strategic expansion into packaging and specialty papers
• Increased flexibility of assets to switch between DWP and kraft pulp production
• Implementation of energy-efficiency projects at all three mills

Supply Chain Management

Responsible Procurement

• New Supplier Code of Conduct

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and processes
• Expansion into biomaterials

Reporting Standards

Frameworks Used: GRI G4, UNGC

Certifications: FSC, SFI, PEFC, ISO 9001, ISO 14001, ISO 22000, OHSAS 18001

UN Sustainable Development Goals

• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 15: Life on Land
• Goal 17: Partnerships for the Goals

The company is developing a strategy to align its goals and advocacy positions around these SDGs.

Sustainable Products & Innovation

• New paperboard grades for luxury packaging
• Recyclable paper-based packaging solutions (Sappi Guard)

Awards & Recognition

• EcoVadis Gold Rating