Sustainability Report - Flakeboard
Transcription
Sustainability Report - Flakeboard
Sustainability Report 2012 Table of Contents A Message From Flakeboard President 3 Who We Are 4 Milestones5 The Environment 24 Resin Reduction and Materials Optimization 27 Energy Reductions 28 Case Study: Sault Ste. Marie, Ontario 29 Reducing GHG Emissions 30 Markets Served 5 Canadian Operations 6 United States Operations 6 Our Commitments 7 Commitment to Local Procurement Assessing Materiality 8 Reducing Transportation through Local Purchasing 34 2010–2012 Awards and Recognition 10 Governance Structure 11 Commitment to Community Engagement and Charitable Contribution 34 Government Assistance 12 Community Investment and Donation 36 Report Boundaries 12 Community Development Programs 36 Stakeholder Engagement and Feedback 12 Flakeboard Community Events and Investments 37 Our Products 13 Eco-Certified Composite (ECC™) 13 California Air Resources Board (CARB) 14 Ultra-Low Emitting Formaldehyde (ULEF) Particleboard and MDF 14 No Added Urea-Formaldehyde (NAUF) 14 Leadership in Energy and Environmental Design (LEED) 15 Our Employees Our Communities 32 32 Faces of Flakeboard 40 Global Reporting Initiative (GRI) 3.1 Index 50 16 Commitment to Teamwork, Communication and Accountability 17 Commitment to Employee Health, Safety and Wellness 18 Health and Safety Committees and Team Representatives 21 Commitment to Rewarding Initiative and Sharing Success 22 2 A Message From Flakeboard President As a company that is now in our 54th Energy use drives our cost of production, from the year of operation, the concept of transport of wood fiber to our mills and finished product sustainability is at the very core of to our customers, to the adhesives binding wood particles every business decision and business together, to the use of natural gas and biomass fuelling our practice. Flakeboard is proud to operations. It is a broad corporate imperative to further continue to voluntarily report on our reduce our energy consumption and carbon footprint, sustainability activities, successes, and more specifically, the types of energy we consume. opportunities to improve and future targets. We see sustainability as the actions our company takes to engage employees, local communities, and other stakeholders to support both business interests and broader societal goals. Since our last report in 2010, we can proudly state the following achievements: rates of safety and fire incidents have improved, environmental performance has improved, and our finances have improved. We have experienced progress toward more efficient use of critical inputs and now use less resin and electricity per unit of production and continue to strive for further reductions. Our successes have much to do with how we achieve our results and they are deeply rooted by involving every employee in our pursuit. We set goals with our employees and recognize those gains in the company’s compensation plan in which each employee participates. As it relates to sustainability, our products are naturally advantaged in that our primary input is wood. This resource is naturally occurring and renewable and we will only Flakeboard has significantly reduced the burning of oil in favor of consuming natural gas and biomass. This goal will be further supported by the addition of another major facility in Moncure, North Carolina into the existing group of Flakeboard mills that came as a result of the recent purchase of Flakeboard by Celulosa Arauco y Constitución. Arauco is based in Santiago, Chile, and operates a group of wood-based companies that are primarily located in Latin America. Arauco is a global leader in the production of sustainable products and exemplifies the use of renewable energy. We are actively working with our parent company to integrate their one North American facility, based in Moncure, North Carolina, into the Flakeboard organization. We see this combination as a tremendous opportunity to strengthen our commitment to the North American composite panel business and intend to include the Moncure facility in our subsequent sustainability reports. All of us at Flakeboard are focused on continuing our quest of sustainability with the resources, support and vision of our new owner. purchase wood that is proven to be sustainably supplied. Furthermore, we offer our customers the option of buying Flakeboard products as FSC® certified*, manufactured with wood from responsibly managed forests, and we have Kelly Shotbolt, President expanded our ability to do so. It is during the conversion [GRI INDEX: 1.1] of wood where we can have the largest impact regarding the use of sustainable and renewable energy. *FSC® C019364, FSC® C110327 3 Who We Are Flakeboard is the largest composite panel manufacturer in North America and operates with approximately 1,000 dedicated, empowered employees in Canada and the United States. With annual sales of approximately $600 million (USD), our products supply the kitchen cabinet, moulding, furniture and fixture markets (both commercially and residentially). Incorporated in 1960 and founded in St. Stephen, New Brunswick, Canada, Flakeboard Company Limited operates two Canadian mills and six mills in the United States. Based in Markham, Ontario, Canada, Flakeboard is a world-scale producer of a variety of Particleboard (PB), Medium-Density Fiberboard (MDF) and High Density Fiberboard (“HDF” or “FIBREX®”). A significant portion of Flakeboard’s products are decoratively surfaced with Thermally Fused Laminates (TFL), paper overlays, paints and direct prints. With the Moncure facility, the North American mills have the current capacity to produce 800MM square feet of particleboard and 874MM square feet of MDF. [GRI INDEX: 2.1, 2.2 and 2.4] Sustainability is paramount at Flakeboard. Our entire product range starts as a wood product or by-product that was once considered a waste stream. Flakeboard is proud to offer environmentally preferable product choices to support our customers in their sustainable building and fabricating initiatives. We pride ourselves on our investments in and commitments to our employees and to the communities in which we are located. Net Sales Dollars: Approximately $600 million (USD) Net Production Volume: 1,018,439¾” standard thickness thousand square feet or 1,802,535 cubic meters [GRI INDEX: 2.8] 4 Who We Are Across North America, Flakeboard continues to set new standards in the sustainable manufacture of composite wood panels. With strategic investments in technology and new product development, Flakeboard provides the widest selection of composite wood panel products in the industry today. St. Stephen, NB Western Regional Support Center Albany, OR Albany, OR Sault Ste. Marie, ON Eugene, OR Canadian Regional Support Center Eastern Regional Support Center Markham, ON Fort Mill, SC ARAUCO-USA Facilities Services Flakeboard FSC Certified Mills Particleboard Regional Support Center MDF ARAUCO-USA TFL – Lamination Milestones Moncure, NC Atlanta, GA Bennettsville, SC Malvern, AR Flakeboard's Market Segment 2012 Flakeboard‘s parent company, Inversiones Arauco Internacional Ltda, (Arauco), purchased Flakeboard in 34.23% September 2012 as a wholly owned subsidiary. Arauco is in turn a wholly owned subsidiary of Celulosa Arauco y 0.06% Constitucion S.A. We are actively working with Arauco to 0.18% integrate the one North American Arauco facility, based in 0.34% Moncure, North Carolina, into the Flakeboard organization. 0.64% [GRI INDEX: 2.6 and 2.9] 1.13% 2.40% Additionally, since our 2010 Sustainability Report, we sold 2.40% Distribution Moulding Flakeboard’s manufacturing plants produce particleboard, MDF and HDF in grades and decorative finishes suitable for multiple applications and standards. Our market segment, including Moncure, is presented to the right. [GRI INDEX: 2.7] 11.22% 2.58% 5% 5.28% 8.24% 5.39% our Simsboro, Louisiana plant in 2011. Markets Served 13.09% Cabinets & Vanities 5.69% 6.84% Laminate Flooring Fabricator Other Office Furniture Counter Tops Retail Store Fixtures Household Furniture Door Components Picture Frames Prefinished Paneling Millwork Shelving Who We Are · 5 Who We Are Canadian Operations United States Operations New Brunswick (St. Stephen) North Carolina (Moncure) Particleboard and FIBREX (thin high density fiberboard) with value add finishing including thermally fused laminates (TFL), paint/print, and décor paper line ® On-site resin facility Ontario (Sault Ste. Marie, Markham) Superior ® MDF and thermally fused laminate manufacturing facilities in Sault Ste. Marie Canadian Regional Support Center in Markham with Sales and Marketing functions, Customer Service, Accounting, Information Technology and Human Resources Premier ® MDF, UltraPine® particleboard and thermally fused laminate manufacturing facility South Carolina (Bennettsville, Fort Mill) UltraPine® particleboard, Premier ® MDF, and thermally fused laminate manufacturing facilities in Bennettsville Trucking operation in Bennettsville Eastern Regional Support Center in Fort Mill with Sales and Marketing functions, Customer Service, Accounting, Engineering, Information Technology, Environmental, Health & Safety, Procurement, Transportation and Human Resources Oregon (Eugene, Albany) Duraflake® particleboard, TERRA™ particleboard and thermally fused laminate manufacturing facilities in Albany Premier ®, eLite™ , TERRA™ MDF and EVO MDF manufacturing in Eugene Western Regional Support Center in Albany with Sales and Marketing functions, Customer Service, Accounting, Information Technology and Human Resources Arkansas (Malvern) Premier ® MDF manufacturing in Malvern [GRI INDEX: 2.2, 2.3 and 2.5] The Carolina Particleboard facility boasts a 10' wide continuous press which produces cost-effective, highly uniform products, available from this site in a wide range of TFL texture and color options. 146 employees work at this facility. Who We Are · 6 Who We Are Our Commitments Flakeboard has established a set of values which we believe in and focus on. We promote and foster the culture of our Business Principles in our goal to be the industry leader, including the commitment to meet our responsibilities. Flakeboard has had no significant monetary fines or non-monetary sanctions associated with non-compliance with laws or regulations in 2012. [GRI INDEX: 4.8 and SO8] Vision: Continual Progress Mission: To be an industry leader through commitment to people, quality, innovation & service while respecting the environment and communities in which we operate Business Principles Meet Our Responsibilities Focus on the Customer Operate a safe, clean and environmentally responsible business “Can do” attitude Strictly adhere to legal and regulatory requirements Quality and Consistency are critical elements for customer satisfaction Responsible stewardship within communities Success through People Attract & retain performance focused people Integrity always Be open and honest & respectful of others Customer focus throughout the entire organization Respond to our customers and align mill capabilities with their needs Customer success ensures our success Maximize Profit Grow people through clear and realistic expectations, training & accountability Each individual is responsible for contributing to the success of the business Empower people to run and improve the business Every decision needs to be a good business decision Encourage initiative and learn from our mistakes Maximize return on investments while meeting Underlying Principles Communicate and communicate some more… Pursue Excellence Share Success Timely execution of priority items Share and utilize the collective knowledge and resources from across the business Be recognized as the quality producer in the industry Acknowledge and celebrate success Continually improve all aspects of the business Employees will contribute to the success of the business and as such, will share in the success Utilize effective business systems and best practices Measure and communicate key factors that influence business success Who We Are · 7 Who We Are Assessing Materiality These principles were considered when evaluating matters to report to our stakeholders. We assembled a cross-functional core team and through a systematic process, determined the significance of associated Global Reporting Initiative (GRI) aspects with selected evaluation criteria supporting each of our Business Principles. Evaluation criteria for assessing the materiality of the GRI aspects were aligned with the Sustainability Accounting Standards Board’s (SASB) materiality assessment criteria as follows: [GRI INDEX: 3.5] Financial Implications Legal/Regulatory/Policy Implications Established Industry Norms Relevance to Stakeholders Opportunity for Innovation We also included a forward looking adjustment in our weightings for those issues where we foresaw an increased future risk or opportunity. The core team scored each of the aspects by each evaluation criterion and ranked the aspects by the average weighted materiality score. We then used this ranking to evaluate appropriate targets for disclosure and performance improvements. The Moncure complex includes particleboard, MDF, and TFL lamination. 275 employees work at this site. Who We Are · 8 Who We Are Based on our materiality assessment described on the previous page, we identified our first comprehensive set of targets and objectives. We are proud to share those with our stakeholders and welcome your feedback. Aspects (GRI 3.1) Objectives Targets Materials Provide environmentally-friendly Maintain ECC certification products Maintain FSC certification and grow offering of FSC certified products Emissions, Effluents and Reduce emissions Waste ISO 14001 certification at all mills by end of 2014 Establish data collection process and baseline metrics for water and waste emissions by end of 2013 Establish baseline for Scope 3 greenhouse gas emissions data by end of 2013 Products and Services Provide environmentally-friendly Support LEED v4 readiness (ULEF certification (Environmental – recycled products for VESTA™ products; GRI reporting, lifecycle content) assessments, etc.) Customer Health and Increase product offerings Provide ULEF and/or NAF products in all market Safety with NAF resins and ULEF regions by end of 2013 certification for VESTA™/ TERRA™ products Occupational Health and Maintain safe work environment Safety Energy OHSAS 18001 certification at all mills by end of 2014 Year over year improvement in RIR Reduce energy usage Reduce electricity consumption by 10% by 2015 (per MSF) over 2010 Compliance Strive for 100% compliance with $0 monetary fines and zero Notices of Violations for (Environmental, Social and legal and other requirements compliance with applicable laws and regulations. Enhance coordination of Establish baseline for community service hours by community engagement end of 2013 initiatives Establish community outreach committee at each Products and Services) Local Communities mill by end of 2013 Establish procedure at each mill to track community service hours and/or dollars donated by end of 2013 Establish “Flakeboard Community Initiative” with documented approach in 2013 Training and Education Continual investment in Establish comprehensive training tracking program employees for all mill personnel by end of 2013 Who We Are · 9 Who We Are 2010–2012 Awards and Recognition We are proud of our accomplishments since 2010, and are especially proud when these accomplishments are recognized by the communities in which we serve. [GRI INDEX: 2.10] Flakeboard: FM Global award for “Highly Protected Risk Achievement” (recognizes outstanding commitment to property loss prevention) St Stephen: 2011 Leadership Award from the Natural Resources Canada & the Canadian Industry Program for Energy Efficiency (CIPEC) for outstanding commitment to improving energy efficiency and reducing greenhouse gas emissions—Winner in the Category “Monitoring & Tracking” 2011 Recognition award for Energy Management Information System (EMIS) from the New Brunswick Forest Products Association (NBFPA) Sault Ste. Marie: United Way Chair’s Award of Merit for 100+ employees Malvern: 2012 CPA long-term safety improvement award Duraflake: Nominated for energy award 2011 United Way Business of the Year for Linn County Bennettsville: 2011 South Carolina Chamber of Commerce Award for Safety Who We Are · 10 Who We Are Governance Structure Flakeboard, like Arauco, defines its Corporate Governance as the group of institutional practices and activities that result from the company’s decision-making process. These are practices that contribute to the sustainable generation of value within a corporate framework of transparency and responsibility, in line with incentives and promoting respect for the rights of shareholders and stakeholders whom directly or indirectly participate in the company. Prior to September 2012, Flakeboard was a privately held family-owned business for over 50 years. Now, as a wholly owned subsidiary of Arauco, Flakeboard is a publicly accountable company which will be establishing mechanisms for shareholders and employees to provide Flakeboard’s Executive Team, pictured left to right: Kelly Shotbolt, President, Kevin Shotbolt, Vice President Sales and Marketing, Mike Rosso, Manufacturing Director, Rob Henry, Chief Financial Officer, and Jake Elston, Director of Corporate Operations recommendations and/or direction to the Board of Directors. Under Chile’s Corporation Law, Arauco must hold a Shareholders’ Meeting at least once a year in which shareholders have the right to express their opinions and, on matters submitted for decision, to vote. Flakeboard Sustainability Policy Ensuring that our business is both successful today and sustainable for the long term is an important issue for all Flakeboard employees. We sustain Celulosa Arauco y Constitución is governed by a Board our company through application of our business of Directors comprised of nine members, none of whom principles, continued re-investment in our operations, can simultaneously hold executive positions within the engagement of all our employees, and a deep company. The current Board was appointed in April 2010, commitment to environmental stewardship and in accordance with Chilean laws and the Chilean Securities carbon footprint reductions. and Insurance Supervisor. The Board is the highest level organizational body responsible for setting strategy and At Flakeboard, we are committed to: years. [GRI INDEX: 4.1, 4.2, 4.3 and 4.4] Sustaining our operations through our Business Principles Within Flakeboard, sustainability is a business priority Continually re-investing in our operations, people, and communities organizational oversight. Members hold office for three for all employees as reflected in our Sustainability Policy. Responsibility for overall corporate direction and priorities is seated with the Arauco Board of Directors; these priorities and overall Flakeboard direction lies with Flakeboard’s Executive Management Team and is supported through Plant Management and the Environmental, Health and Safety (EHS)/Sustainability Team. Supporting vertical integration and co-location to reduce freight and greenhouse gases when possible Reducing impacts by cutting energy, resin and fiber use Offering products that conform with environmental stewardship and green building standards Who We Are · 11 Who We Are Government Assistance Stakeholder Engagement and Feedback Flakeboard actively collaborates with the State of South Flakeboard is actively engaged with a variety of stakeholders, Carolina through the South Carolina Job Development including our parent company, employees, customers, Credit Programs (JDC’s) and through Marlboro County suppliers, communities, regulatory agencies, trade for the Fee In Lieu Of Tax (FILOT) South Carolina Property associations, and standards bodies. Our core values reach tax reduction program. In return for the new jobs created beyond our facility walls to all of our business relationships and investment made by Flakeboard, we received and are mirrored in our stakeholders’ appreciation for approximately $243,500 and $350,000 respectively for a business model that successfully conserves natural these programs during the reporting period. In addition, resources while manufacturing high-quality, environmentally our Sault Ste. Marie mill has received financial incentives preferable products. We anchor these relationships in and rebates over a 3-year period through the Ontario trust, as well as mutual respect and success. provincial Northern Industrial Electricity Rate (NIER) [GRI INDEX: 4.14 and 4.15] Program. This funding supports the implementation of an energy management project, an initiative within the Sault Ste. Marie mill’s overall energy management and reduction plan, which the facility was selected to pilot in partnership with the University of Waterloo. [GRI INDEX: EC4] Report Boundaries We are pleased to share with you this Sustainability Report covering the 2012 calendar year and building upon our first report published in 2010. We have no re-statements of information provided in earlier reports, other than aggregate metrics which were adjusted in 2012 for the divestiture of the Louisiana mill in 2011. We appreciate input and feedback on our sustainable business practices, our performance to date, and our reporting content and format. We encourage you to share your thoughts and send us your questions. We look forward to feedback on this report as we seek to strengthen our engagement process and dialogue. Point of Contacts: [GRI INDEX: 3.4] Sustainability Report Richard Weber, Government & Environmental Affairs Manager Email: [email protected] Flakeboard Certification Programs For this report, we have followed the GRI G3.1 framework Kerry Little, Business Sustainability Manager and self-assessed our reporting as Application Level C. Email: [email protected] As our first GRI report, this document contains expanded content from our previous reports. Included in this report Flakeboard Products are all of Flakeboard’s manufacturing facilities, with the Customer Service Point of Contact exception of the Moncure facility (unless otherwise noted), Email: [email protected] which became part of the organization when Flakeboard was purchased by Arauco in September 2012. We expect to fully integrate this facility into subsequent reports, which we plan to publish on an annual basis. Additionally we intend to evaluate over the coming year, the inclusion of our Atlantic Trucking subsidiary in Bennettsville, South Carolina in future reports. [GRI INDEX: 3.1, 3.2, 3.3, 3.6, 3.7, 3.8, 3.10, and 3.11] Who We Are · 12 Our Products Flakeboard is the largest composite panel manufacturer in North America, producing a diverse line of particleboard, MDF, and HDF products. We offer one of the most diverse decorative panel collections in the industry, ranging from thermally fused laminates (TFL) and decorative paper overlays to custom direct prints and paint. We manufacture these high-quality composite panels to supply the kitchen cabinet, moulding, furniture and fixture markets. The value of our products goes beyond the building, furniture, and fixture markets. Our products are uniquely sustainable, and are designed and manufactured for the benefit of our customers and consumers. We utilize recycled, controlled or certified, sustainably-procured fiber and proprietary low-emitting resin technologies to produce composite panels that meet some of the most stringent product standards in the world. The use of these materials also qualifies our products for use in Leadership in Energy and Environmental Design (LEED) projects. Compliance with product standards is critical to our transparent demonstration of our sustainability commitment. In 2012 we had no incidents of noncompliance and no fines related to the provision and use of products and services. [GRI INDEX: PR4 and PR9] Eco-Certified Composite (ECC™) Each of Flakeboard’s mills is certified to the Composite Panel Association’s (CPA) ECC Sustainability Standard and we are committed to maintaining that certification. The ECC standard is a voluntary industry standard for composite wood panel and finished product manufacturers producing particleboard, MDF, hardboard, engineered wood siding and engineered wood trim. The standard uses a life cycle inventory approach and other verifiable environmental practices to evaluate manufacturer performance. Meeting this standard and displaying the green Eco-Certified label demonstrate to consumers the responsible use of wood fiber by manufacturers. The basis of the standard includes the CPA Carbon Calculator, a tool developed by a third party expert to assess the life cycle and carbon footprint of composite panels made at a particular manufacturing plant. Flakeboard actively participates and has leadership roles in the Composite Panel Association. We have also chaired the committee on the Eco-Certified Composite (ECC) standard. [GRI INDEX: 4.13] Arauco is a leader in sustainable forestry. 13 Our Products From the Composite Panel Association’s website (www.decorativesurfaces.org/cpa-green/go-ecc-green.html): California Air Resources Board (CARB) All Flakeboard mills, in both the United States and Canada, ECC Certification is available to individual manufacturing are certified by the Composite Panel Association to plants and requires an on-site qualification audit and produce CARB Phase 2 emission limits. These regulations subsequent annual audits. Unfinished composite panel establish the most stringent production standards in the products must first comply with the stringent CARB world for formaldehyde emissions from composite wood formaldehyde emissions regulation before being considered products. All Flakeboard products meet CARB Phase 2 for other ECC criteria. Qualified plants must then meet at emissions levels, or lower. least three of the following requirements: Carbon Footprint: The plant shall demonstrate that the panel’s carbon store offsets its cradle-to-gate carbon footprint as determined in kg-CO2 equivalents of greenhouse gas (GHG) emissions. Each plant shall use the CPA Carbon Calculator to determine if a panel performs as a carbon sink resulting in overall net carbon storage. Ultra-Low Emitting Formaldehyde (ULEF) Particleboard and MDF Local and Renewable Resource: At least 85% of total annual wood fiber used shall be sourced within 250 miles (402 km) of the manufacturing plant. an ECC sustainably certified product. These products Recycled/Recovered: Use a minimum of 75% recycled or recovered fiber; OR at least 50% recycled or recovered fiber AND a minimum of 5% postconsumer fiber. Percentages shall be calculated on a weight basis as measured in bone dry tonnes (BDT). and qualify to contribute to LEED points or for use in Sustainability: The plant shall document that greater than 97% fiber furnish brought on-site to manufacture panels is either converted into panels or other non-waste products. Wood Sourcing: The plant shall hold a valid assessment and certificate from a certifying agency recognized by CPA such as the Forest Stewardship Council® (FSC – Controlled Wood Standard or Chain of Custody Standard) or the Sustainable Forestry Initiative (SFI – Fiber Sourcing Standard). Flakeboard uses a proprietary ULEF resin system to manufacture the VESTA™ brand MDF and particleboard panel products. VESTA™ is made with 100% recycled and/or recovered wood fiber, and is meet CARB Airborne Toxic Control Measures (ATCM) requirements for ultra-low emitting formaldehyde resins projects where products manufactured with ultra-low emitting (ULEF) resins are specified. No Added Urea-Formaldehyde (NAUF) Flakeboard has developed an innovative new product line of sustainable panels called TERRA™ that uses no added urea-formaldehyde resin technology in production. These high quality ECC Certified Panels qualify to contribute to LEED points or for use in projects where products manufactured with no added urea-formaldehyde (NAUF) resins are specified. Flakeboard is committed to supplying both ULEF and NAUF products in all of our market regions by the end of 2013. Our Products · 14 Our Products Leadership in Energy and Environmental Design (LEED) The U.S. Green Building Council (USGBC) is a 501(C)(3) non-profit organization composed of leaders from every sector of the building industry working to promote buildings and communities that are environmentally responsible, profitable and healthy places to live and work. The USGBC’s LEED system is a third-party certification program that promotes sustainable green planning, building and development. Flakeboard products may qualify for use in LEED projects. For each relevant credit, a description of the LEED requirement is listed below with the associated Flakeboard product(s) that may qualify. LEED Category Intent Requirement Flakeboard Products MR 4 Materials & Increase the use of Sum of post-consumer recycled content All Flakeboard products Resources: building products plus ½ of the pre consumer recycled are manufactured with Recycled Content that contain recycled content constitutes at least 10% (1 point) recycled materials that content material or 20% (2 points) of materials in the meet this criterion project, based on cost MR 5 Materials & Increase the use of Use of building materials that have been Flakeboard Resources: building products extracted, harvested or recovered, and composite panels are Regional Materials that are extracted and manufactured within 500 miles of the manufactured with manufactured within project site; a minimum of 10% (1 point) regional materials and the project region or 20% (2 points), based on cost, of the may meet this criterion total materials value MR 7 Materials & Encourage A minimum of 50% (based on cost) FSC certified products Resources: environmentally of wood-based materials and products can be ordered from Certified Wood responsible forest that are certified in accordance with any Flakeboard facility management the Forest Stewardship Council's principles and criteria, for wood building components (1 Point) IEQ 4.4 Indoor Improve indoor air Composite wood products must contain Flakeboard’s low Environmental quality no added urea-formaldehyde resins or emitting VESTA™ and Quality: meet requirements of CARB ATCM for TERRA™ Panels Low Emitting ULEF or NAF resins (1 Point) Materials The USGBC is expected to release Version 4 of its criteria in 2013. Flakeboard is committed to providing our customers options that meet these new criteria once they are implemented. Our Products · 15 Our Employees At its core, the Flakeboard story is about our employees. “Business sustainability extends beyond the environment. A successful and sustainable business never loses sight of the value of solid customer relationships which are developed through efficient and extraordinary service. Flakeboard continues to support the ongoing training and education of our Sales & Service teams, thereby solidifying those relationships through accountability and our commitment to our customers to consistently exceed their expectations. We have a vested interest in the success of our customers as we move towards our goal of being the industry leader in sustainable operations.” We are only as strong as our people, and our success can be attributed to an empowered and nurtured workforce. Our Vision, Mission, and Business Principles provide this clarity and continually guide our commitment to our employees and their families. The focus on our people helps us achieve our business goals and establish systems that foster superior quality and customer satisfaction. We promote teamwork, communication, and accountability through a variety of programs, including our Team Concept and Best Practice Exchange programs. We invest in our people through our strong commitment to Health and Safety, as well as our professional development programs. We reward initiative and share success through our Annual Charlotte Giddens, Manager Inside Sales Team, Eastern Regional Support Center Performance Reviews, Career Advancement programs and Service Awards. Total full-time Employees (Month Ending December 2012) 202 Hourly Equivalence 166 Salary Equivalence 146.5 125.5 116 106 117 112.5 97 86 105.5 78.5 87 62 25 22 11 Sa N CD at or rp M ill (C o les e) e) at rp rt Fo kh ar M i te d am St (C o at ge es or Sa les DF ne M ar Eu M e. St ult Sa 22.5 16.5 ie DF 18.5 Un Be nn et tsv er ill e M nM DF ke fla ra alv ti c ar aP lin Du oa leb ph te .S St ro Ca 26.5 20 19.5 rd en 30.5 M 36 Our Vision of Continual Improvement applies not only to our products but to our people, and we devote substantial energy to the human element of the workplace. 16 Our Employees Commitment to Teamwork, Communication and Accountability Cross Functional Training through our Team Concept Flakeboard developed its Team Concept in 1995. The Team Professional Development and Craft Enhancement Training Concept has been implemented flexibly with variations In addition to the cross-functional training for our employees at each mill. It empowers employees to supervise their through the Team Concept, we also provide job training to work and productivity, to own their achievements, and to ensure our engineers, mechanics, and electricians maintain advance their skills and expertise in a number of unique certification and advance in their trades. Where formal trade roles and responsibilities. Through cross-functional training certification programs do not exist, we implement craft and experience, employees are granted flexibility and enhancement programs. In these programs, we define our autonomy in their career development and progression. own craft skill levels and the associated technical expertise The concept emphasizes cross-training so that over time, each member learns to perform a variety of operations carried out by the team. Typically, teams meet before or after each shift to discuss the day’s work, applying their collective ingenuity to improve quality, process and productivity. Management keeps employees informed on corporate financial performance, ensuring and trade skills required for each level. Then we work with our employees to create Individual Action/Development Plans to grow their technical expertise so they are able to advance to higher craft levels. Group training is often provided at the mills, and individual training is provided through online, on-site and off-site programs. Apprenticeship programs with paid leave are offered at some mills. that teams connect their efforts to the overall company We intend to establish a comprehensive training tracking goals. From this collective effort comes cost-effective program for all mill personnel by the end of 2013. innovation, top quality products, satisfied customers, and committed employees. Best Practice Sharing through our “Best Practice Exchange” Concept Flakeboard implements the Best Practice Exchange concept to promote extensive mill-to-mill communication and learning. On monthly conference calls and regular on-site “When we talk about Team Concept, it’s about how we work together to empower our employees to give them the most ownership and flexibility to achieve superior results” meetings, several functional groups with representatives from each mill discuss key business priorities and best production, maintenance, safety and management practices. Through this mill-to-mill sharing, our employees further explore and advance ideas beyond the mill boundaries, contributing to the health, safety, and professional development of the wider Flakeboard community. Mike Rosso, Manufacturing Director Our Employees · 17 Our Employees Commitment to Employee Health, Safety and Wellness Safety Is Our #1 Priority [GRI INDEX: LA7] Our 2012 lost day rate (LDR) was 4.50, which is inclusive Flakeboard tracks rates of injury and occupational of all lost work days due to work-related injury or disease. disease in accordance with applicable state, provincial, and The lost day count begins the day after an accident. national laws in our operating areas. Our 2012 Recordable Contractor hours and general employee absentee rates Injury Rate (RIR) of 2.00 is lower than the Composite Panel will be included in future reports. Association-reported RIR of 2.27* for member companies. Beginning in 2011 and extending into 2012, we stepped up behavioral based safety programs at each mill, which targets one-on-one positive safety coaching interactions to Lost Day Rate (LDR) 2010–2012 encourage safe behavior. We believe in the long-term that employees will work more safely and take fewer risks when 76.30 given the right tools and training while performing tasks in a positive working environment. We are progressing but we 50.60 are not content with our RIR results and have committed to reducing our year-over-year RIR. 4.50 Our RIR is inclusive of work-related injuries and occupational diseases. Rates of occupational disease are not tracked 2010 2011 2012 separately from the RIR. Flakeboard has made significant progress in reducing lost work days due to employee injuries or illnesses. One of the Recordable Injury Rate (RIR) 2010–2012 tools we use is our Return-to-Work Policy (RTW), intended to benefit both employee and company by supporting 3.82 ∆ ∆ 3.37∆ CPA-reported RIR for member companies compensation costs. The goal of our RTW program is to return employees to meaningful and productive work at 2.89 2.27∆ 2.18 the workers' healing process and helping control workers’ 2.00 the earliest possible date—following attending physician’s release—after an injury or illness. Transitional work provided to the worker will be based on the availability of relevant and productive tasks that meet company 2010 2011 2012 needs and match worker skills sets. There were no fatalities for the reported period. *2.27 is a year-end CPA estimate, pending finalization of member data Our Employees · 18 Our Employees We have committed to certifying all of our mills to Occupational Health and Safety Assessment Series (OHSAS) 18001 by the end of 2014. The OHSAS 18001 standard is an international health and safety management system that will guide our focus on controlling occupational health and safety risks and implementing continual improvement programs. Safety is our number one priority at the mills, and we are committing significant resources to this end. In 2012 we received no significant or non-monetary sanctions for noncompliance with health and safety laws and regulations. [GRI INDEX: LA7] Contractor Safety Our commitment to safety goes beyond our employees and extends to our contractor network. Currently, all of our contractors are required to have annual contractor safety training before they can perform work at our sites. A 2013 initiative is to model our Sault Ste. Marie mill best practice at our other mills and require an active contractor work permit program for all significant work performed. This system encourages a daily interaction and communication of safe work practices to our contractors— from supplier representatives, to mechanical contractors, to raw material and finished board carriers. We are currently building an extensive database that will track the safety training components of all suppliers and contractors who come onto our sites. We envision that this database will allow us to step up to the next level in terms of ensuring that everyone who comes onto our sites has been given the necessary and appropriate training for the tasks they will be asked to perform and activities they will be engaged in. Flakeboard ISO/OHSAS Working Group, pictured left to right: Todd Phillips, Kerry Little, Blair Axley, Anthony DiGasparro, David Lyon, Jason Banks, Richard Weber. Our Employees Fire Safety One of the key internal safety metrics that we track is the annual incidence of fires that occur in our mills. Within our company, the prevention, detection, and quick response to potential fires is paramount to the safety of our employees and the protection of our livelihood. We take all fire situations seriously and thoroughly investigate and track incidents that involve emergency response crews and/or the use of fire suppression equipment. Fire reports are generated in the following circumstances: Fire brigade members or employees respond to an emergency call that is not a false alarm Anytime there is discharge of fire suppression equipment (exemption: the discharge of automatic sprays through a spark detection system during normal operation or the extinguishment of sparks and or small flames resulting from permitted hot work). Over the past several years, we have made significant progress to reduce our risk related to fires. Fire safety and emergency response training, communication, preventive maintenance programs, and engineered solutions are important aspects to protect life and property. Through proactive safety management, training, and mill team efforts, we have reduced our incidents of fire by over 45% in the past two years. Fire Incidents 2010–2012 78 56 42 2010 2011 2012 Flakeboard maintains strong lines of communication with local Emergency Response and Fire Departments to ensure they are familiar with Flakeboard's facilities and emergency response plans. Our Employees Health and Safety Committees and Team Representatives [GRI INDEX: LA6] In 2012, 25% of the mill workforce company-wide, including both hourly and salaried employees, participated in joint management- The Health and Safety committees worker Health and Safety committees. The committees, which typically help guide wellness and safety meet on a monthly basis, have a two-pronged advantage: employees program development, best are empowered to develop their own safety and wellness priorities and practices, and performance, and programs and managers gain the knowledge and understanding of support wellness program initiatives employees’ needs so they may better contribute to employee safety for employees and their families. and wellness in consideration of specific concerns. Many of our voluntary wellness programs and community events, Also, as part of our Team Concept, some mills have wellness and safety such as weight-loss challenges and representatives, sometimes called “Starpoints,” who act as health walking and running events, are and safety experts for the team. These representatives meet with coordinated and promoted by mill applicable human resources and safety managers on a regular basis Health and Safety Committees. to discuss team successes and challenges, and they are responsible for communicating new policies and programs to their respective teams. Modeled after Occupational Seafty & Health Admistration's (OSHA) Voluntary Protection Program (VPP), our Carolina Particleboard mill instituted a safety committee structure that is rewarded with significant employee participation. We are looking to expand this structure to other mills with the goal of getting more employees involved in safety activities and working safely. Workforce Participation Graph Overall Employees Involved 77% 25% 30% 7% nM ph M alv er te .S Shannon Wulk, Regional HR Manager, Western Regional Support Center ra fla St “We need happy and healthy employees to function as a high performing company.” DF en rd oa ti c ke P ar tsv et nn Be leb M ill e e. St ult 9% 16% DF ie ar M M ne Sa ge Eu 18% Du Ca ro lin aP ar ti c leb oa DF rd 21% Our Employees · 21 Our Employees Wellness Programs [GRI INDEX: LA8] Flakeboard currently provides wellness education, Commitment to Rewarding Initiative and Sharing Success training, counseling, prevention and risk-control programs for its employees. All employees are given information on services for Blue Cross Blue Shield (United States) or Great West Life (Canada) regarding case management services, preventative care, disease specific mailers, flyers and pamphlets. Preventative health care benefits, such as regular physical exams, disease screenings, and immunizations, covered-in-full for employees and dependents through participation in employee health plans. All employees have access to an Employee Assistance Program (EAP) provided by Ceridian for Canadian employees and Unum for American employees, which provide confidential counseling 24 hours a day, 365 days a year. Various on-site wellness programs including annual health fairs, cardiac risk screening, smoking cessation, and on-site preventative care, such as flu shots, are provided at some mill locations. Wellness committees meet frequently at many of the mills to communicate information on wellness benefits, promote healthy lifestyles, and organize and host wellness events, such as weight-loss challenges and races. Annual Performance Reviews and Career Advancement By the end of each calendar year, all salaried employees develop performance goals for the upcoming year. Because we believe that employees should own their goals, the employee drafts their personal goals based on company-wide initiatives, plant-specific initiatives and goals for the employee’s personal growth and development. Managers then discuss the goals with each employee and ensure they are Specific, Measurable, Attainable, Realistic and Timely (SMART). Employees and managers are expected to review goals and progress on a quarterly basis, with formal mid- and end-year reviews conducted between salaried employees and managers. Accomplishment of goals is the key consideration for wage adjustment recommendations during annual wage reviews for all salaried employees. All employees participate in our profit and gain-sharing program resulting from the positive impact of teamwork on our business. Flakeboard conducts formal annual performance reviews with 100% of salaried employees. Inclusive of all hourly and salaried employees, annual reviews are conducted with 19% of the workforce. [GRI INDEX: LA12] Fourteen gentlemen from the St. Stephen mill grew moustaches in November and raised $4,200 for Prostate Cancer Awareness month Our Employees · 22 Our Employees Service Awards We are proud of our employee retention, and we are pleased to honor our staff with Service Awards for their tenures. At 10, 20, 25, 30 and 40 years of service, we acknowledge our employees’ contribution with a Service Award, which includes a gift and public appreciation, often including a story and photograph in our mill newsletters. Employee Years of Service (% of Workforce) 63% 45% >10 years >15 years >20 years 30% Donnie Greenier, Fire and Safety Support, St. Stephen, receiving 25 Year Service Award, presented by Rodney Walsh, Maintenance/ Project Manager, St. Stephen. Flakeboard employees enjoy one of the many barbecues hosted at the mills. Our Employees · 23 The Environment At Flakeboard, preserving and protecting our environment is more than just a commitment—it’s an integral part of how we do business. Our stated mission is “continual improvement” and this is certainly true as it relates to environmental performance and to the conservation of natural resources through the establishment and meeting of environmental targets and objectives. All employees are expected to: Conserve Comply Communicate As demonstration of our commitment to environmental compliance and continual improvement, we are in the process of implementing environmental management systems at all of our mills and have a commitment to have all mills certified to ISO 14001 by end of 2014. Each mill has a dedicated EHS or Environmental Manager and our compliance record is strong, with no violations resulting in significant monetary fines in 2012. [GRI INDEX: E28] Our commitment to the environment does not stop with our operational footprint but extends to our entire business. We focus on reducing our impacts through responsible stewardship of our natural resources, efficient manufacturing, and the development and distribution of products to environmentally responsible customers and green building markets. This commitment begins with our raw material: wood. Wood fiber is the primary raw material for our products, comprising approximately 85% of our finished products. Forests, if managed properly, provide a sustainable, renewable resource. Due to the commitment of foresters and responsible fiber users such as Flakeboard, timber stocks across North America are increasing, and forests are healthy and strong. “Our commitment to the environment is grounded in our relentless drive toward efficient operations, compliance to regulatory requirements, and transparency to stakeholders in material matters, including greenhouse gas emissions. We have the employees and company leadership that can and will make a difference.” Richard Weber, Government & Environmental Affairs Manager 24 The Environment Flakeboard FSC Certification Policy Flakeboard is committed to responsible procurement of woodbased products. Flakeboard will engage in best practices to process wood from certified or controlled suppliers in the manufacture of its Medium-Density Fiberboard (MDF) and Particleboard (PB) products. Our suppliers will provide raw material that has been: Legally harvested; Harvested from areas where traditional and civil rights are not violated; Harvested from forests where high conservation values are embraced; Harvested from areas that have not been converted from natural forests or habitats to plantations or non-forest uses; Not harvested from genetically modified trees Flakeboard views its FSC Chain of Custody certification as a tangible example of the company’s commitment to important environmental initiatives. At Flakeboard, we encourage and support the sustainable management of forest resources by using Forest Stewardship Council (FSC) certified fiber sources for our raw materials. In 2012, 100% of our products were produced with recycled, responsibly sourced, or certified fiber. The FSC certification requires the responsible management of the forests covered by the certification, and through the FSC Chain of Custody system, we work with our suppliers and customers to track those responsibly produced materials and ensure a link between responsible forest management, responsible production and responsible consumption. Our Employees · 25 The Environment We pride ourselves on working with forest products This philosophy of “highest and best” use governs companies to utilize recycled and secondary sources of many of the decisions that we make in our operations. fiber—including sawdust, shavings and other pre- and As an example, the staff of the Albany mill has focused post-consumer materials to produce high-quality, value- on utilizing the residual wood fiber in products and added wood products for the building and furniture has identified practices to shift away from burning this industries. In 2012, we used 1.37 million bone dry tonnes biomass for heat and steam generation. Similarly, the of wood fiber and 100% of our wood fiber came from St. Stephen, Bennettsville and Carolina Particleboard recycled or recovered sources. [GRI INDEX: EN1 and EN2] employees have been able to recover increased amounts of sander dust to be utilized as fuel and in the case of Recycled Fiber Content 2012 St. Stephen displaced the combustion of fuel oil, which also reduces Greenhouse Gas (GHG) emissions. In fact, working with the Bennettsville MDF plant, the employees 2% 9% 89% Pre-consumer Recycled Fiber Recovered Wood Fiber of the Carolina Particleboard plant are now utilizing 100% of the recovered sander dust either as raw material for production or as biomass fuel to displace fossil fuels. Post-consumer Recycled Fiber In addition to utilizing sustainable wood fiber as a raw material, we also believe that wood should be used for its “highest and best” application. Generally, that means that we favor using wood to produce high-value products over using it to produce energy, and we favor producing energy over using it for compost or animal bedding material, and we favor composting or bedding material over landfilling. In all applications, we believe that wood should be used as efficiently as possible, minimizing waste and finding secondary or even tertiary applications for that material before considering it a waste for disposal. This practice is reflected in CPA’s 2011 Benchmarking Survey conducted of 18 Medium-Density Fiberboard (MDF) manufacturing facilities that evaluated total wood usage rates per unit of production, i.e., wood incorporated into the product plus wood waste. The survey identified the Eugene, Sault St. Marie, and Malvern facilities as three of the top four facilities with the lowest wood usage rates per unit of production. The Environment · 26 The Environment Resin Reduction and Materials Optimization [GRI INDEX: EN26] Our commitment to reducing our environmental impacts goes beyond just our wood management. One of the largest impacts is material input reduction, and resin dosing reductions is one of the most significant. As emissions standards—such as CARB Phase 2—become more and more stringent and resin costs continue to rise, Flakeboard has focused on optimizing production formulations as well as developing of some of the most progressive resin technology in the industry. Since 2010, we have reduced our resin usage across the company, in terms of pounds per thousand square feet of ¾” product (lb/MSF), by more than 5%. We strive for ongoing resin reduction and optimization so that we can continue to provide a cost competitive product for our customers while maintaining the high standards of quality that they rely on. For example: In several of our plants, we have recently converted to a new, proprietary resin application technology that has saved approximately 5–15% on resin usage and anticipate more reductions as the technology is optimized at those sites. We installed a second EVOJet™ system at the St. Stephen plant in 2010, on the FIBREX® line. Since then, we have reduced resin use by approximately 30% and have also significantly reduced formaldehyde emissions. In Eugene, we installed the EVOJet™ technology in 2009. This technology, which was originally developed by Flakeboard in St. Stephen, has allowed us to manufacture a high-quality MDF with post-dryer resin application. The Eugene MDF plant achieved 100% post-dryer resin application, shortly after startup, and achieved a 33% reduction in resin usage from 2008 to 2011, with continuing improvements as the operations have been optimized. We believe it is not always necessary to secure new technologies in order to see significant gains. Through full asset utilization, significant input reductions can be achieved. A company-wide project led by Flakeboard’s Engineering Team to refurbish our multi-opening presses across the business resulted in sand-off reduction by approximately 25%, reducing both wood and additive usage. Our company vision of continual progress is evident in the day to day operations that also support the materials reduction trends, in areas such as density reduction, trim reduction, reject reduction and improved grade. Over time, these daily “wins” equate a significant impact to the environment, cost, and sustainable operational efficiencies. In tandem with our efforts to optimize resin, focus has also been on engineering products that meet specific customer criteria. Over-engineered products build waste throughout the supply chain—be it raw materials consumption, embodied energy or transportation cost. Many of our facilities have worked closely with key customers to Total Resin Use Intensity as a Percentage of Baseline reduce raw material usages up to 8% without sacrificing product performance for those applications. Resin Intensity as a Percentage of 2010 Baseline 110% 100% 2010 99.11% Baseline 94.45% 90% 2011 2012 All Plants “Flakeboard embraces the voice of the customer—that most often steers the direction we take toward process and product improvement; this practice has long been a mainstay to our business.” Mike Luepkes, Business Technical Manager The Environment Energy Reductions In 2012, Flakeboard consumed 5.48 million MMBTUs of fuel Our greatest focus on energy reductions has been on in stationary combustion units. Of that total, 4.27 million improving our electrical energy efficiency. For example, MMBTUs, or 77.9%, were generated from fossil fuels, since 2010, we have installed energy efficient lighting primarily natural gas, and 1.21 million MMBTUs, or 22.1%, at our mills in Albany, St. Stephen, Sault Ste. Marie and were generated from biomass, primarily sander dust and Bennettsville. We have implemented Real-Time Energy hog fuel (bark and other low-grade wood materials). Management Information Systems (RT EMIS) at St. [GRI INDEX: EN3 and EN4] Stephen and Sault Ste. Marie. Four of our facilities have In 2012, Flakeboard also used approximately 539,000 megawatt-hours (MWh) of electricity, supplied by American and Canadian utility companies. We participated in the Pacific Power Blue Sky Renewable Energy Program again in 2012, purchasing 1,622,400 kWh of renewable energy, and avoiding the release of 2,025,631 lbs of carbon dioxide. It is imperative for our business to continue to find ways of reducing our energy usage. Over the past few years, we have focused on two areas of energy performance: converting from fuel oil to lower GHGemitting fuels (i.e., natural gas) and carbon-neutral biomass, and increasing energy efficiency, particularly completed, or are in the process of completing projects to improve and optimize refiner and screening operations. In Bennettsville, this is a savings of approximately 500 kW/hr and in Sault Ste. Marie it represents 30 kW/Oven Dried Metric Tonne (ODMT) of fiber. Similar results are expected at Malvern and Albany, as they complete similar projects in the coming year. We plan to implement formal energy management best practices auditing to help give mills direction on how to reduce energy and elevate the awareness of energy opportunities through more focused training. Company-wide, we have been successful in reducing our electrical energy intensity (in kWH/MSF) by more than 7% since 2010 and we are committed to a 10% electrical energy efficiency in our plants. We have reduction over 2010's intensity by 2015. participated in numerous cooperative agreements [GRI INDEX: EN5, EN7 and EN18] with local government agencies and public utilities, contributing to capital improvements, energy efficiency commitments and agreements to shut down, upon Electrical Energy Intensity request, during peak electrical grid use periods. Tagging onto the success at our Eugene MDF mill with use of the biofilter for emissions control, we are evaluating the possibility of replacing thermal oxidizers with this technology in several other mills to control emissions from our presses and further reduce the use of fossil fuels. In our Carolina Particleboard plant, this will save approximately 87,000 MMBTU/yr. We are also improving process performance using heat recovery at the Albany and Percentage of 2010 Baseline Electrical Energy Intensity (kWh/MSF) 110% 100% 2010 96.70% Baseline 92.80% 90% 2011 2012 All Plants Bennettsville plants. This has reduced natural gas use in the thermal oxidizers by approximately 6% at Bennettsville. The Environment · 28 The Environment Case Study: Sault Ste. Marie, Ontario The Sault Ste. Marie facility has historically been one of our highest electrical energy consuming facilities. As such, this plant has taken the lead in developing strategies and programs to increase electrical energy efficiency. In 2010, a team of Sault Ste. Marie staff developed a comprehensive Energy Management Plan (EMP) and an application for the Ontario Northern Industrial Electricity Rate (NIER) Program. This led to a partnership with the University of Waterloo and the Ontario NIER Program. Through this program, the plant has received financial incentives and rebates over a 3-year period to assist in funding energy efficiency projects. Some of the projects undertaken at Sault Ste. Marie include: Real-Time Energy Management Information System (RT EMIS) The RT EMIS is a proprietary energy management system designed on a Pi OSI based platform. The system allows for real time management and control of processes, to measure energy reduction gains and losses. The components of this system have been installed and energy targets are being established for areas of the mill. The RT EMIS system is 90% complete and will be fully operational in 2013. Plant-wide Energy Metering Network To support the RT EMIS, since 2010, the mill has installed more than 30 revenue grade power meters, four natural gas meters, and three compressed air flow meters, connected to a dedicated energy subnet and dedicated energy OPC Server. This has allowed a connection to Ontario real time market power pricing for cost control. Voltage Optimization and Reduction As part of our Energy Management Plan, we have been working with an American company, Utilidata, over the last two years to study voltages in the Sault Ste. Marie mill and develop an implementation plan for a Voltage Reduction Control system. The University of Waterloo is also doing a study on the project and is working closely with both Flakeboard and Utilidata. Implementation of the project will be completed by the end of 2013 and is anticipated to result in a 1.5% to 2% annual energy reduction, with a return on investment of two years. Variable Frequency Drive (VFD) Installation The Sault Ste. Marie plant plans to install a VFD on one of the largest fans in the plant, a project which is estimated to result in an energy savings of approximately 1,800 MWh/yr, or 1.8% of the plant total electrical energy demand. Installation is planned for later in 2013. [GRI INDEX: EN7 and EN18] “The RT EMIS system uses a plant-wide metering system and complex data analysis to create an easy to use graphic display. With it, we are putting a display port in front of the operators, who will be able to use their skills and experience to identify additional opportunities for energy savings.” Jason Kustura, Power Distribution/Conservation & Instrumentation All metering and servers have been installed, and networked, and the system will be fully operational this year. The Environment · 29 The Environment Reducing GHG Emissions* Total Scope 1 and Scope 2 mass emissions have continued to moderately increase over the last 3 years. This is expected as production has increased with the improving economy. However, the total Scope 1 and Scope 2 GHG emissions intensity reached a peak in 2011, and started to reduce in 2012. As market conditions continue to improve, we will be able to operate our plants at more optimized rates and schedules, allowing us to further improve GHG emissions intensity. Our efforts to reduce electrical energy consumption have resulted in a Scope 2 GHG intensity reduction of almost 8%, over our baseline year of 2010. We have also committed to establishing a baseline for Scope 3 GHG emissions data by the end of 2013. Scope 1 & 2 GHG Mass Emissions Scope 2 500,000 250,000 193,595 183,469 200,616 208,640 207,382 229,004 2011 2012 0 2010 All Plants GHG Emissions Intensity (CO2e metric tonnes/MSF) as a Percentage of 2010 Baseline Mass Emissions (metric tonnes) Scope 1 Scope 1 & 2 GHG Emissions Intensity as a Percentage of Baseline 110% 100% 101.98% 100.14% 2010 Baseline 90% 2011 2012 All Plants Excludes Scope 1 mobile sources. [GRI INDEX: EN16] Excludes Scope 1 mobile sources. [GRI INDEX: EN16] *Scope 1, 2 and 3 GHG Emissions, per the Greenhouse Gas Protocol: GHG Emissions Intensity (CO2e metric tonnes/MSF) as a Percentage of 2010 Baseline Scope 2 Emissions Intensity as a Percentage of Baseline Scope 1 accounts for direct GHG emissions from sources that are owned or controlled by the reporting company. Scope 2 accounts for indirect emissions associated with the generation of imported/purchased electricity, heat, or steam. 110% Scope 3 allows for the treatment of other indirect emissions that are a consequence of the activities of the reporting company, but occur from sources owned or controlled by another company. 100% 2010 96.68% Baseline 92.14% 90% 2011 2012 The Environment · 30 The Environment In addition to our efforts to reduce GHG emissions through the reduced utilization of fossil fuels, we have the unique benefit of producing products out of wood. Wood is a naturally renewable material that removes carbon dioxide (CO2 ) from the atmosphere and incorporates the carbon into the fibers of the wood. When the wood is incorporated into a product, the carbon is sequestered for the life of that product. Carbon Equivalent (CO2e) Balance 20.000 10.000 Short tonnes / ft² 0.000 -10.000 -20.000 -30.000 -40.000 -50.000 Fossil Carbon Emissions Biogenic Carbon Emissions Carbon Stored in Panels Net CO2e Emissions Typical Flakeboard Carbon Equivalent Balance using the Composite Panel Association’s Carbon Model, in this case for St. Stephen While many of our plants have implemented eco-efficiency initiatives, these have traditionally occurred on an ad hoc basis and we have not consistently tracked these initiatives to date. We therefore have set a new target to establish a data collection process and baseline metrics for water and waste emissions by end of 2013. Based on the Composite Panel Association’s Carbon Model, the panels that we produce sequester more than three times the CO2e emitted from our production process and supply chain. The Environment · 31 Our Communities Since its founding in 1960, Flakeboard has been an integral member of the local communities in which it operates. We understand that the health of the communities in which we operate is critical to the sustainability of our business and our financial success. Our commitment to our communities is demonstrated in our local procurement programs, community engagement efforts, and charitable contributions. We do not take these commitments lightly. Commitment to Local Procurement [GRI Index: EC6] In order for a region to grow and prosper it is vital that all of the spokes in the wheel are in alignment. In todays’ world, in order for sawmills to operate and prosper it is critical that they find a “home” for their co-products. As consumers of what was traditionally considered a sawmill waste product that typically went The direct employment by Flakeboard of individuals in our communities to landfill, Flakeboard provides an has a significant impact on our local economies, with current annual outlet for these residuals that are employee salaries and benefits at $73,052,546 (USD). This income no longer accepted at landfills, and provides economic stimulus to all types of local business. This impact is sawmills have essentially turned these compounded by our extensive local procurement policies and practices. co products into important revenue At Flakeboard, we believe the best procurement policy is to buy locally whenever possible. This commitment contributes to community prosperity, builds strong and lasting relationships with our suppliers, and reduces transportation and the associated fossil fuel consumption and GHG emissions. streams. Flakeboard recognizes and accepts the responsibility to contribute to the greater community health and prosperity by providing a beneficial application for these co-products. Community Prosperity Buying from local suppliers keeps the dollars spent within the community, which supports local employment opportunities and promotes growth. Strong and Lasting Supplier Relationships Getting to know our local suppliers on a first name basis and gaining an understanding of their operations, challenges, opportunities and capabilities is a critical component of our procurement practice. Knowing our suppliers allows us to work together to achieve efficiencies and to In 2012, 97.2% of our fiber supply and 100% of our resin supply was procured from within 250 miles of our production facilities. build mutually beneficial best practices. 32 Our Communities Our procurement policy includes a supplier pre-qualification We firmly believe that having an independent third process which evaluates insurance coverage, worker party certification body is a best practice that allows us safety training, product specifications, and quality. Our to demonstrate to our customers and communities that procurement process also involves periodic supplier sustainability is indeed very important to us and is a key reviews and quality assurance checks. The procurement component of our operations. In addition, our company policy covers not only parts and consumable goods but wood procurement personnel spend considerable time also mechanical contractors, resin, wood, and transportation working with community groups and task forces on suppliers. Working with local businesses affords us the ability initiatives such as: to gain the knowledge and insight required to help our suppliers reach “preferred supplier” status. The benefits of a strong supplier relationship are clearly evident in items such as refiner plates, where we combine our technology and experience with the technology and experience of our suppliers to build tooling that matches the best available materials and techniques to improve material flows, extend life and reduce energy requirements. Working together to trial and collect data in the field has allowed us to continually improve our refiner Collecting data that allows for an understanding of local biomass inventories, Understanding, testing and trialing alternative renewable biomass supplies for both our regular production processes and for biomass heating requirements/co-generation initiatives, Building best practices to collect, store, convert and use construction and demolition debris as a way to divert this material from landfills and use it in value added products such as ours. plate performance while building efficiencies into our energy requirements. In fact, the collaboration with our refiner plate suppliers at our Sault Ste. Marie MDF facility has allowed us to reduce our energy requirements in the refining process by over 30% over the last several years. Similarly, working with our resin suppliers has allowed us to create a ‘best fit’ resin recipe for our facilities in order to reduce costs on both sides, while still allowing us to produce the quality products that our customers have come to know us for. In terms of raw material supply, knowing our suppliers and working closely with them to understand their operations and forestry practices allows us the comfort and knowledge that our suppliers are as interested in working towards “We believe in building relationships with each of our suppliers in order to gain a mutual understanding of the other’s operations, capabilities, challenges and opportunities. This investment of time pays significant dividends in terms of quality, efficiency, optimization and the exploration of other potential synergies. Over the years we have mutually enjoyed the benefits of building these critical relationships and time and time again we are reminded of how important it is to go beyond a simple customer/supplier relationship.” Jeff Ferguson, Regional Wood Procurement Manager, Sault Ste. Marie sustainable forest practices as we are. As such, Flakeboard has spent resources and effort to meet the stringent requirements of FSC certification. Our Communities · 33 Our Communities Reducing Transportation through Local Purchasing [GRI Index: EN29] Flakeboard is committed to reducing the negative effects that arise from transporting goods over great distances by buying locally whenever possible. Our wood fiber material procurement policy aligns itself with the ‘local’ dimension of the ECC Certification Program: where quality and product meet requirements, we will seek to procure our material from within a 250 mile radius of our production facilities. In 2012, we purchased 97.2% of our fiber from within this 250 mile radius. Similar to wood fiber material transportation, the distance of our resin suppliers to our production facilities is also a major consideration. 100% of our resin supply comes from within a 250 mile radius of our production facilities. Commitment to Community Engagement and Charitable Contribution We recognize our employees and their families as vital stakeholders of our community engagement efforts. They are at the forefront of identifying and engaging our mills in new philanthropic programs, community events, and volunteer opportunities—truly leading Flakeboard’s community involvement efforts. Whether it’s one of the many employee-organized fundraiser barbecues, a Relay for Life, a student mentoring session, or the awarding of an annual college scholarship, Flakeboard and its employees treat the community like family. We know a vibrant community is dependent on its youth and we ensure that investment in these future leaders of society is met through the sponsorship of athletic groups, recreational facilities, educational scholarships, and the mentoring and tutoring of children in our local schools. In 2012, our mills contributed more than $26,900 to local colleges, and elementary, middle, and high schools; in addition, many of our employees volunteered as tutors and mentors in their communities. We know members of our community that are disadvantaged and we have We know that being a good member of the community attempted to lessen their needs with food bank donations, means being a contributing member of the community. clothing drives, and financial contributions. In 2012, our For over 50 years, our contributions have gone beyond mills donated $7,500 to Meals on Wheels, a program that financial to include the investment of time, expertise provides home-delivered hot meals to elderly people in and materials on many issues that impact our the community who are unable to prepare their own. communities and neighbors. Flakeboard employees in St. Stephen spend one hour of their work week (on company paid time) mentoring students at Milltown Elementary School in the Partners Assisting Local Schools (PALS) program. Our Communities · 34 Our Communities We also feel it is important to participate in charitable campaigns for community health and wellness, including heart and stroke, and cancer research through fundraising and individual participation. As an example of this commitment, our Sault Ste. Marie mill has contributed nearly $150,000 to the Sault Area Hospital Foundation over the past seven years, with its most recent donation of $21,000 in 2012. These actions help ensure the fabric of our local communities remains strong and resilient. We know this directly contributes to the strength and resilience of our business. In the coming years, we seek to enhance the coordination and positive impact of our community engagement initiatives by establishing “Flakeboard is committed to ‘giving back’ to the community which is evident in the many volunteer hours and donations, both company and personal. We believe this is an important part of respecting the local communities in which we operate.” Lorraine Matthews, Human Relations Manager, St. Stephen a baseline for our community service hours, community outreach committees at each mill by 2013, and a procedure at each mill to track community service hours and dollars donated. In addition we are committed to establishing a formalized Flakeboard Community Initiative with a documented approach and goals for community engagement by the end of 2013. Flakeboard employees in St. Stephen generously donate and present a $9,000 check to the Izaak Walton Killam (IWK) Health Care Foundation, whose mission is to inspire and celebrate giving to support excellence in specialized health care for families in the Maritime region of Canada. Our Communities · 35 Our Communities Community Investment and Donation [GRI INDEX: EC1, partial] In 2012, Flakeboard mills and corporate and sales offices contributed more Flakeboard Charitable Contributions in 2012 than $169,000 to charitable organizations. This included donations to the March of Dimes, the United Way, the American Cancer Society, the Boys $180,000 and Girls Club, local grade schools, colleges, hospitals, community centers, $169,414 sports teams and clubs, and many more organizations that contribute to the vitality of our communities. $160,000 On top of that, Flakeboard employees donated hundreds of volunteer hours and thousands of dollars to charitable organizations in 2012 through company and self-organized events and programs. Specific data on $140,000 employee contributions are not tracked. In 2013, we plan to establish a baseline for employee community service hours and procedures to track service hours and dollars donated. $120,000 Team Flakeboard participated in the Second Annual Crime Stoppers Fire Truck Pull, a fundraiser for Crime Stoppers of Sault Ste. Marie and $100,000 the District of Algoma. Community Development Programs [GRI INDEX: SO1] $80,000 In 2012, all United States-based Flakeboard mills voluntarily implemented Affirmative Action Plans to ensure that Flakeboard mill workforces generally $60,000 reflect the gender, racial, and ethnic demographics of their respective community labor pools. $40,000 The Affirmative Action Plans include an assessment element to determine the composition of the workforce and new hires as compared to community characteristics; recruiting, community outreach and training elements to $20,000 address underutilization of women or minorities; and a monitoring element to evaluate the impact of its employment and compensation decisions on women and minorities. As part of the Affirmative Action Plans, Flakeboard $0 attended or hosted recruiting events and career fairs for and conducted outreach to women, minority and veteran groups throughout its operating Bennettsville MDF areas in the United States. The Affirmative Action Plans help ensure that Eugene MDF Flakeboard is as diverse as the communities in which it operates and that Carolina Particleboard economic benefits are fairly distributed. Corporate & Sales Duraflake Malvern St. Stephen Sault Ste. Marie Our Communities · 36 Our Communities Flakeboard Community Events and Investments Malvern: Duraflake: Participated in American Cancer Society “Relay for Life” Participated in the Soroptimist International “Walk for a Cause” cancer fundraiser Brickfest Community Festival, Annual BBQ Contest Sponsor Partnered with the Department of Human Services to sponsor foster children during the Holiday Season, providing basic necessities. Sponsored purchase of new score board for the Glen Rose High School football field Pop Tab Pandemonium—collected pop tabs for Ronald McDonald House Charities Collected canned goods for the local food pantry Participated in an annual United Way campaign for local community efforts Participated in community Clean Up Day Donated to: Sponsored annual “Log a Load” function which benefits Arkansas Children’s Hospital −− Albany Aquatic Center Tabled Sponsorship at American Heart Association “Heart Ball” −− Leukemia and Lymphoma Society Supported Glen Rose School Archery team in their first trip to the National tournament −− South and West Albany Robotics −− West Albany High School Baseball Team Hosted annual family day picnic −− Boys & Girls Club of Linn County Supported Hot Spring County Medical Center through the purchase of a table at their annual dinner/fundraiser −− Lyons Charity Golf Tournament Donated to College of the Ouachitas, Literacy Council of Heart Springs, Hot Springs County Library, Lee Sports Foundation, and Magnet Cove High School −− Christmas Storybook Land −− River Rhythms −− Jefferson High School −− Rebel Sports Foundation (sports camps for both West and South Albany) Eugene: Participated in and sponsored American Cancer Society “Relay for Life” Member of the Eugene Chamber of Commerce Donated to: −− Children’s Miracle Network −− N. Eugene High School −− Springfield High School −− Fern Rich Middle School −− Madison Middle School −− Big Brother/ Big Sister Duraflake employees volunteer along with other community members to 'spruce up' a local home, during United Way Day of Caring. Our Communities · 37 Our Communities Carolina Particleboard (Bennettsville): Sault Ste. Marie: Participated in and sponsored American Cancer Society “Relay for Life” Seven years of contributions to Sault Area Hospital Foundation totaling $150,000 Employee involvement and contributions to March of Dimes' Annual March for Babies Contributed to Algoma University and Sault College large capital campaigns to increase infrastructure. Donated to: Sponsored and judged Algoma University Business Case Competition −− Carolina Pride Softball −− Richmond Rockies Baseball −− Carolina Hotstix Softball −− Wallace Dixie Youth Baseball Team −− Bennettsville Fire Department −− Wallace Area Recreation Department −− McColl Recreation Department −− Cheraw Recreation & Leisure Services −− Marlboro County Branch NAACP −− March of Dimes Annual March for Babies Bennettsville MDF: Participated in and sponsored American Cancer Society “Relay for Life” Employee involvement in March of Dimes' Annual March for Babies and American Heart Walk Donated to Greater Cheraw Chamber of Commerce and Marlboro Country Branch NAACP Sponsored DC Ballers Baseball Club Collaborate with local economic development and like businesses to improve vocational skills of students in local high school and technical schools to improve long-range applicant pool Job Fairs North East Tech, Florence Darlington Tech, Orangeburg SC Class on Interview skills for Bennettsville Employment Security Commission Contributed to the creation of two “Continuous Improvement” Bursary’s at Sault College to award 2nd or 3rd year maintenance students that show the greatest academic improvements Provided mill tours to local high school and college classes Provided some kind of service or interaction with over 75 local groups/agencies Support of Operation Christmas Child that provides gifts and supplies for Kids in Third World Countries Donated $7,500 to local Meals on Wheels Program Donated $7,500 to Big Sisters / Brothers Foundation Flakeboard and its employees donated $16,000 to the United Way in 2012 Distributed over $2,500 to Sault Ste. Marie Safe Communities Partnership, Bon Soo Winter Carnival Rotaryfest Easter Seals Telethon and Community Day Celebration Weekly barbecues raised over $3,500 for local sports teams, schools and non-profit organizations Participated in the Algoma Workforce Investment Committee’s (AWIC) and the Algoma Training Consortium Participated on Sault Ste. Marie Safe Communities Partnership Board Donated board and individual time for Habitat for Humanity Provided Domestic Violence Awareness Training to the general plant through Neighbours, Friends and Families, a public education campaign to raise awareness of the signs of abuse of women Flakeboard employees participate in the First Annual Crime Stoppers Fire Truck Pull, a fundraiser for Crime Stoppers of Sault Ste. Marie and the District of Algoma. Our Communities · 38 Our Communities St. Stephen: Donated to Curling, Wrestling, Soccer, Baseball, Hockey, and Basketball sports teams Weekly barbecues in the spring raised $1,200 for the Relay for Life (Cancer Society) Community donations include contributions to: St. Stephen Volunteer Fire Department, Civic Centre, Legions, Lions Club, Border Arena, Disaster flood relief, International Festival, Milltown Elementary School, Scholarships and Movember, NB Heart and Stroke Foundation Donated $1,000 to the Milltown Elementary School for their summer program Five volunteers in the PALS program mentored children at the Milltown Elementary School for one hour/week on company-paid time Employees contributed $9,000 to the IWK Foundation Eight volunteers worked at the breakfast program at the Milltown Elementary School Fourteen gentlemen from the management group grew moustaches in November and raised $4,200 for Prostate Cancer Awareness month Other volunteering: John Howard Society Board, Lincourt Manor Board, Coalition for a Drug Free Community, Enterprise Charlotte Board [GRI INDEX: EC1, partial] Kelly Shotbolt, Flakeboard President, joins a parade of New Brunswick Business Council members along with their respective HR Managers. This group meets routinely to discuss initiatives and issues, one of which has been the implementation of the Partners Assisting Local Schools (PALS) program. Our Communities · 39 Eastern Regional Support Center (left to right) Charlotte Giddens, Manager – Inside Sales Melanie Pittman, Inside Sales Cynthia Pettyjohn, Inside Sales Nedra Jurewicz, Inside Sales Faces of Flakeboard Flakeboard recognizes and invests in our most important asset, our people. The next few pages introduce some of our employees at various locations throughout our organization (left to right) Phil Pierot, Eastern Region Sales Manager John Verzino, Regional Sales Manager Kim Duit, Regional Sales Manager Al Murray, Mill Sales and Export Manager Clark Lary, Mill Sales Manager Kevin Sutton, Regional Sales Manager Bennettsville South carolina Bennettsville MDF (top circle, top-down) (bottom circle, top-down) Zach Hoiland Technical Director Andrew Eddy Regional Engineering Manager, Bennettsville Complex Pete Manning Finishing & Logistics Manager Mike Henry Production Manager Jason Banks Site Environmental Manager, Bennettsville Complex David Gunnells Production Manager Jackie Roberts Lab Supervisor Faces of Flakeboard · 41 Bennettsville South carolina Carolina Particleboard (top circle, top-down) Patricia Russell Shipping Clerk Sharon Linton Maintenance Clerk Matt Swinnie Operations Manager Chris Norton Finishing & Shipping Manager (bottom circle, top-down) Helen Woods Production James Bridges Shipping Mike Reardon Manufacturing Manager, Bennettsville Complex Jimmy Amerson (left) and Tim Peterkin (right) Saw Operators Faces of Flakeboard · 42 Albany, Oregon Eugene, Oregon (top circle, top-down) (bottom circle, top-down) Nathan Eshelman Lamination, Shipping and Specialty Coordinator Dave Kruse Technical Director Glade Campbell Maintenance Coordinator Gwenda Carr Lamination Team Jon Jensen Production Manager Roxanne Elliott HR/Office Manager Steve Smith Maintenance Planner Albany OREGON Eugene Faces of Flakeboard · 43 Malvern ARKANSAS (top circle, top-down) Rick Culpepper Plant Manager Madison ”Corky“ Pankey Line Operator Daren True Plant Scheduler/Finishing Manager Devin Dismuke Milling and Drying Utility (bottom circle, top-down) Brent Leopard Control Systems Technician Jackie Butler Bander Operator Gary Parrish Shipper Mike Rhodes Environmental Health and Safety Manager Faces of Flakeboard · 44 Moncure NORTH CAROLINA (top circle, top-down) (bottom circle, top-down) Adrain Cameron Mill Sales Manager Rey Morales Outfeed/Infeed/Coldroom Driver John Bird Site Environmental Health and Safety Manager Henry Scheller MDF Plant Manager Ricardo Hillman Site Manager Amanda Hair Chemical Technician Hector Correa Electric Control Specialist James Isley Control Room Operator Jeff MacMillian (left) Particleboard Production Manager and Mark Wicker (right) Particleboard Supervisor Mike Ellington MDF Production Manager Faces of Flakeboard · 45 (top circle, top-down) (bottom circle, top-down) Scott Gregor Plant Manager Frank Babcock Reliability Manager, originating from St. Stephen Steve Organ Industrial Instrument Mechanic Mark Hansen Production Coordinator, FIBREX®/ Selco/Pegboard/Packaging Darin Cleaves Quality Manager Mike Caswell Resin Production Coordinator David Moffat Production Manager Blaine Tapley Electrical Maintenance Coordinator St. Stephen New Brunswick Faces of Flakeboard · 46 Sault Ste. Marie ONTARIO (top circle, top-down) Anthony DiGasparro Customer Service and Human Resource Manager Bryan Primeau Industrial Electrician Mostafa Doroodian Industrial Electrician Rebecca McCaig Lamination Technician (bottom circle, top down) Marcello Stefano Lamination Technician Kim Sacchetta Financial Manager Jeff Manson Inside Sales Robert Gauthier Production Technician Lloyd Hotchkiss Plant Manager Faces of Flakeboard · 47 Fort Mill South carolina Eastern Regional Support Center (top circle, top-down) Tex Giddens Project Manager Christina Helms AP Specialist Gina Burns AP Specialist Susan Mersch AP Lead West Coast Regional Support Center (bottom circle, top-down) Tom Quesenberry West Coast Manufacturing Manager Wade Gregory Western Sales Manager Cathy Hummer Design and Specification Manager Bill Andersen Marketing Manager, Special Products Albany oregon Markham ONTARIO Canadian Regional Support (top-down) Chris Fowlis Melamine Procurement Coordinator Gillian Matthew Marketing Coordinator Jeff Shotbolt Canadian National Sales Manager Patoucha Giguere-Sutherland Special Projects Vince Chiarelli IT Coordinator Faces of Flakeboard · 49 Global Reporting Initiative (GRI) 3.1 Index [GRI Index: 3.12] GRI Indicator Description Page(s) 1.Strategy and Analysis 1.1 Statement from the most senior decision-maker of the organization. 3 2.Organizational Profile 2.1 Name of the organization. 4 2.2 Primary brands, products, and/or services. 4, 6 2.3 Operational structure of the organization, including main divisions, operating 6 companies, subsidiaries, and joint ventures. 2.4 Location of organization's headquarters. 4 2.5 Number of countries where the organization operates, and names of countries with 6 either major operations or that are specifically relevant to the sustainability issues covered in the report. 2.6 Nature of ownership and legal form. 5 2.7 Markets served (including geographic breakdown, sectors served, and types of 5 customers/ beneficiaries). 2.8 Scale of the reporting organization. 4 2.9 Significant changes during the reporting period regarding size, structure or ownership. 5 2.10 Awards received in the reporting period. 10 3.Report Parameters 3.1 Reporting period (e.g., fiscal/calendar year) for information provided. 12 3.2 Date of most recent previous report (if any). 12 3.3 Reporting cycle (annual, biennial, etc.) 12 3.4 Contact point for questions regarding the report or its contents. 12 3.5 Process for defining report content. 8 3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint 12 ventures, suppliers). 3.7 State any specific limitations on the scope or boundary of the report. 12 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced 12 operations, and other entities that can significantly affect comparability from period to period and/or between organizations. 50 Global Reporting Initiative (GRI) 3.1 Index GRI Indicator Description Page(s) 3.10 Explanation of the effect of any re-statements of information provided in earlier reports, 12 and the reasons for such re-statement. 3.11 Significant changes from previous reporting periods in the scope, boundary, or 12 measurement methods applied in the report. 3.12 Table identifying the location of the Standard Disclosures in the report. 50 4.Governance, Commitments, And Engagement 4.1 Governance structure of the organization, including committees under the highest 11 governance body responsible for specific tasks, such as setting strategy or organizational oversight. 4.2 Indicate whether the Chair of the highest governance body is also an executive officer. 11 4.3 For organizations that have a unitary board structure, state the number of members of 11 the highest governance body that are independent and/or non-executive members. 4.4 Mechanisms for shareholders and employees to provide recommendations or direction 11 to the highest governance body. 4.8 Internally developed statements of mission or values, codes of conduct, and principles 7 relevant to economic, environmental, and social performance and the status of their implementation. 4.13 Members in associations (such as industry associations)and/or national /international 13 advocacy organizations 4.14 List of stakeholder groups engaged by the organization. 12 4.15 Basis for identification and selection of stakeholders with whom to engage. 12 5.Economic Performance Indicators Economic Performance EC1 Direct economic value generated and distributed, including revenues, operating 36, 39 costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. (core*) EC4 Significant financial performance received from government. (core) 12 Market Presence EC6 Policy, Practice and Proportion of spending on locally-based suppliers at significant 32 locations of operation. (core) *Core indicators are those indicators identified in the GRI Guidelines to be of interest to most stakeholders and assumed to be material unless deemed otherwise on the basis of the GRI Reporting Principles. Global Reporting Initiative (GRI) 3.1 Index · 51 Global Reporting Initiative (GRI) 3.1 Index GRI Indicator Description Page(s) 6.Environmental Performance Indicators Materials EN1 Materials used by weight or volume. (core) 26 EN2 Percentage of materials used that are recycled input materials. (core) 26 EN3 Direct energy consumption by primary energy source. (core) 28 EN4 Indirect energy consumption by primary source. (core) 28 EN5 Energy saved due to conservation and efficiency improvements. (additional**) 28 EN7 Initiatives to reduce indirect energy consumption and reductions achieved. (additional) 28, 29 Energy Emissions, Effluents, and Waste EN16 Total direct and indirect greenhouse gas emissions by weight. (core) 30 EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. (additional) 28, 29 Products and Services EN26 Initiatives to mitigate environmental impacts of products and services, and extent of 27 impact mitigation. (core) Compliance EN28 Monetary value of significant fines and total number of non-monetary sanctions for 24 noncompliance with environmental laws and regulations. (core) EN29 Significant environmental impacts of transporting products and other goods and 34 materials used for the organization’s operations, and transporting members of the workforce. (additional) 7.Labor Performance Indicators Occupational Health and Safety LA6 Percentage of workforce represented in a formal joint management-worker health and 21 safety committees that help monitor and advise on occupational health and safety programs. (additional) LA7 Rates of injury, occupational diseases, lost days, absenteeism and total number of work- 18, 19 related fatalities, by region and by gender. (core) LA8 Educational, training, counselling, prevention, and risk-control programs in place to 22 assist workforce members, their families, or community members regarding serious diseases. (core) **Additional indicators are those indicators identified in the GRI Guidelines that represent emerging practice or address topics that may be material to some organizations but not generally for a majority. Global Reporting Initiative (GRI) 3.1 Index · 52 Global Reporting Initiative (GRI) 3.1 Index GRI Indicator Description Page(s) Training and Education LA12 Percentage of employees receiving regular performance and career development 22 reviews, by gender. (additional) 8.Society Performance Indicators Local Communities SO1 Percentage of operations with implemented local community engagement, impact 36 assessments, and development programs. (core) S08 Monetary value of significant fines and total number of non-monetary sanctions for 7 noncompliance with laws and regulations. (core) 9.Product Responsibility Indicators Customer Health and Safety PR4 Total number of incidents of non-compliance with regulations and voluntary codes 13 concerning product and service information and labeling, by type of outcomes. (additional) Product and Service Labelling PR9 Monetary value of significant fines for noncompliance with laws and regulations 13 concerning the provision and use of products and services. (core) TRC Environmental Corporation (TRC) was retained to assist Flakeboard with the development of this sustainability report. TRC served as a consultant to the Sustainability Leadership Team, facilitating the development of sustainability strategy, assessment of materiality, analysis of sustainability metrics and development of targets and objectives. Global Reporting Initiative (GRI) 3.1 Index · 53