Sonoco corporate reSponSibility report
Transcription
Sonoco corporate reSponSibility report
Sonoco Corporate Responsibility Report sonoco 2012-13 corporate responsibility report 1 2 4 6 8 10 12 15 Introduction Letter to Stakeholders Sonoco at a Glance Financial Performance and Strategic Leadership Commitment to Customers Environmental Stewardship Social Responsibility Sustainability Oversight Corporate responsibility statement of intent Become the acknowledged packaging industry leader in creating and enhancing a sustainable future that benefits all of Sonoco’s stakeholders through improvement of economic performance, social responsibility and environmental stewardship. Principles of corporate responsibility and sustainable development L Customer commitment L Governance and integrity L Financial performance L Strategic leadership L Environmental responsibility L Employee health, safety and development L Stakeholder engagement and communication L Community support and philanthropy About this report Sonoco used the Global Reporting Initiative (GRI) G3 Guidelines to define the content of our 2012-13 Corporate Responsibility Report. These guidelines form a voluntary framework of principles and indicators that are used to measure and report economic, environmental and social performance. They also provide a standard of comparison among Sonoco and our peers. Additionally, we carefully considered projects we completed in the second half of 2012 and the first half of 2013, and how those projects relate to our customers, shareholders, employees, suppliers and the communities in which we operate. We hope you will read this report alongside our GRI Content Index on pages 16-31. In 2012, Sonoco was listed in the Dow Jones Sustainability World Index for the fourth consecutive year. Thus, we have used the Corporate Sustainability Assessment developed by RobecoSAM to determine materiality. This year’s report repeats the format and metrics used in previous responsibility reports to provide stakeholders with easy, understandable communication of the Company’s progress of corporate responsibility. In 2012, we successfully integrated the largest acquisition in our Company’s history following the November 2011 purchase of Tegrant Holding Corp. This acquisition added $462 million to Sonoco’s sales. The information contained in the Economic Performance section of this report includes Tegrant, but we have not yet integrated Tegrant’s performance into our Environmental and Social metrics. Environmental metrics in this report have been gathered from all global manufacturing locations, excluding certain warehouses, small office structures and facilities obtained through the Tegrant acquisition. Water usage includes only what is used in global paper operations, which we estimate to be approximately 90% of our total usage. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 1 to sonoco stakeholders On behalf of our nearly 20,000 teammates around the world, I’m pleased to share with you Sonoco’s 2012-13 Corporate Responsibility Report. As only the eighth CEO in Sonoco’s 114-year history, I take seriously our commitment to operate with integrity while creating a sustainable future for all of our stakeholders through improvement of economic performance, social responsibility and environmental stewardship. M. Jack Sanders, President and Chief Executive Officer Stakeholder engagement and communication Communicate openly and engage directly with internal and external stakeholders to achieve a strong, secure and sustainable society, economy and environment l Principles of corporate responsibility and sustainable development To better focus our efforts, we have adopted eight guiding Principles of Corporate Responsibility and Sustainable Development. They include: Customer commitment Focus relentlessly on providing high-quality, innovative, value-creating packaging solutions that Satisfy the Customer l Governance and integrity Maintain strong corporate governance and human rights programs through the highest level of compliance, ethics, integrity and accountability l Financial performance Achieve average annual double-digit total return to shareholders and return on capital and equity in the top quartile of the S&P 500 l Strategic leadership Take advantage of emerging global opportunities, development and challenges to position Sonoco for the future l Environmental responsibility Conduct our business in accordance with all legal requirements and ethical responsibilities using scientific knowledge, technical innovation and sound environmental practices. Achieve continuous environmental performance improvement and energy efficiency in our operations l Employee health, safety and development Provide opportunities that allow employees to develop to their fullest potential in a creative, inclusive, safe and healthy environment l Community support and philanthropy Improve the quality of life in the communities where we operate through partnerships focused on community development, improving education, social welfare, health and culture l These guiding principles are linked directly with Sonoco’s business strategies which we communicate and reinforce with our employees, shareholders, customers, vendors and to our neighbors in the communities where we operate. Our commitments to further improve on these principles are listed on page 3. Focus on environmental stewardship 2012-13 has been an important transitional period for Sonoco in achieving our commitment to reduce the Company’s environmental footprint. Over the past year, we reduced normalized direct (Scope 1) greenhouse gas (GHG) emissions by 9.8% from our facilities as we used more natural gas to fuel our boilers versus highercarbon-content coal. During 2012, we started up a new natural gas boiler to produce steam for our Hartsville, S.C., paperboard mill complex and, in turn, reduced coal usage. We expect to meet our five-year, 15% carbon emission reduction goal by the end of 2014 with the start up of a new $75 million biomass cogeneration system at our Hartsville complex in November 2013. Powered by wood waste from regional logging activity, the new cogeneration system will produce low-cost ‘green’ energy S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 2 t o s o ncommitment oco stakeholders sonoco’s and steam for our paperboard mills, again replacing inefficient coal boilers. In addition, we are improving the performance of a flex-fuel boiler operation in the Hartsville complex, which allows us to use more mill scrap as fuel, thus diverting those wastes from landfills. Supplier Sustainability To encourage development of sustainability efforts outside our scope, Sonoco recently christened a new Supplier Sustainability Awards program to recognize vendors that demonstrate leadership in developing and measuring their environmental and corporate responsibility efforts. First-year recipients were Arcelor Mittal, Buckman International, Staples and W.R. Grace. I want to thank all of our suppliers who are working to improve their sustainability efforts. In conclusion, let me thank you for taking time to read our report. If you would like to extend a dialogue with the Company on issues of sustainability, you may contact us at [email protected]. Sincerely, M. Jack Sanders President and Chief Executive Officer sonoco’s commitment We are committed to reducing the environmental footprint of our global operations. We have reduced normalized GHG emissions by 8.2% since 2009, moving toward our five-year carbon emission reduction goal of 15% by the end of 2014. l Landfill waste from Company facilities was reduced by nearly 12,000 metric tons in 2012 and 31 company plants reached landfill-free status by diverting 95% or more of its wastes from landfills. l Normalized water usage by our global manufacturing operations has been reduced 5.6% since 2009. l We are committed to providing innovative packaging and recycling solutions to meet our customers’ sustainability goals. Sonoco Recycling reduced wastes from our U.S. packaging customers’ operations by nearly 44,000 metric tons in 2012 and helped seven customer plants achieve landfill-free status. l Sonoco’s Flexible Packaging business designed and printed an award-winning, stand-up pouch used by LEGO’s Hero Factory toys that resulted in a 75% weight reduction from its previous packaging. l Sonoco Alcore, our European affiliate, and the Alliance for Beverage Cartons and the Environment (ACE) UK opened a recycling facility at our Stainland, West Yorkshire, paperboard mill that is able to take up to 25,000 metric tons of UK paper l cartons along with an estimated 3,000 metric tons of paper coffee cups from London’s Heathrow Airport to be converted into uncoated recycled paperboard. We are committed to providing a safe and healthy workplace for our employees and supporting the communities where we operate. l Sonoco provides its employees with coverage of health assessments, preventive screenings, a 24-hour NurseLine, health coaching and other wellness services, including an on-site clinic for its employees at the Company’s Hartsville, S.C., manufacturing complex. Sonoco teamed with four Hartsville elementary schools to start a Scoutreach afterschool program to teach young boys the precepts to become better citizens by building character, developing strong values and accepting responsibility. l We are committed to strong governance practices and ongoing engagement with our stakeholders. l In 2012, all Sonoco directors, officers, employees and vendors reaffirmed adoption of stringent Corporate Governance Guidelines and Code of Business Conduct and Ethics. Sonoco’s Board intends to regularly seek input from shareholders regarding executive compensation, including annual advisory votes on “Say on Pay” regarding directional input on compensation decisions. l S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 3 sonoco at a glance Founded in 1899, Sonoco is a global provider of a variety of consumer packaging, industrial products, protective packaging and packaging supply chain services. display and packaging Consumer Packaging Products and Services: Round composite cans, shaped rigid paperboard containers, fiber caulk/adhesive tubes; aluminum, steel and peelable membrane easy-open closures for composite and metal cans; plastic bottles, jars, jugs, cups and trays; printed flexible packaging, rotogravure cylinder engraving, global brand management Markets: Snacks, nuts, cookies, crackers, hard-baked goods, desserts, candy, gum, frozen concentrate, powdered and liquid beverages, non-carbonated beverages, ready-to-drink products, powdered infant formula, coffee, refrigerated dough, frozen entrees, processed food, vegetables, fruit, seafood, poultry, soup, pasta, dairy, sauces, dips, fresh-cut produce, pet food, home and personal care, adhesives S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t Products and Services: Point-ofpurchase displays, custom packaging; fulfillment, primary package filling, supply chain management; paperboard specialties Markets: Automotive, beverages, candy, electronics, personal care, baby care, food, cosmetics, fragrances, hosiery, office supplies, toys, home and garden, medical, over-the-counter drugs, sporting goods, hospitality industry, advertising 4 sonoco at a glance With annualized net sales of approximately $4.8 billion, Sonoco has approximately 19,900 employees working in 347 operations in 34 countries, serving many of the world’s best-known brands in some 85 nations. protective solutions paper and industrial converted Products and Services: Recycled paperboard, chipboard, tubeboard, lightweight corestock, boxboard, linerboard, corrugating medium, specialty grades; paperboard tubes and cores, concrete forms, pallets, molded plugs, reels; collection, processing and recycling of old corrugated containers, paper, plastics, metal, glass and other recyclable materials Markets: Converted paperboard products, spiral winders, beverage insulators, construction, film, flowable products, metal, paper mill, shipping and storage, tape and label, textiles, wire and cable, municipal, residential, customers’ manufacturing and distribution facilities S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t Products and Services: Highly engineered, custom-designed protective, temperature-assurance and retail security packaging solutions Markets: Consumer electronics, automotive, appliances, medical devices, temperature-sensitive pharmaceuticals and food, heating and air conditioning, office furnishings, fitness equipment, promotional and palletized distribution 5 11 12 4.79 10 4.12 09 3.60 billions of dollars 4.12 NET SALES 08 4.50 financial performance and strategic leadership overview 2012 was an important year in the continuing $4.8 transformation of Sonoco into a global total solutions 3.6 provider of consumer, industrial and protective 2.4 packaging and services. We successfully integrated 1.2 the largest acquisition in our Company’s history following the November 2011 purchase of Tegrant 12 196.0 11 217.5 10 201.1 09 151.5 millions of dollars 164.6 NET INCOME ATTRIBUTABLE TO SONOCO 08 Holding Corp., which made Sonoco the leading $220 165 110 11 solutions in North America. The acquisition helped us achieve record sales in 2012, along with record gross profits, while base EBIT (earnings before interest and taxes) grew by 2.4%. In addition, free cash flow (cash from operations minus net capital expenditures 12 1.91 10 2.13 09 1.50 dollars 1.63 EARNINGS PER SHARE 08 1.96 55 provider of custom engineered protective packaging and dividends) grew to $101.2 million, compared $2.20 with a negative $31.9 million last year. 1.65 1.10 09 10 11 12 1.11 1.15 1.19 dollars per share 08 1.08 CASH DIVIDENDS PAID TO SHAREHOLDERS 1.07 .55 $1.20 .90 .60 .30 Governance Sonoco follows a philosophy that greater transparency, sensible risk taking and strong governance policies are necessary to protect shareholder value. The Company’s Board of Directors and its management strongly support and adhere to all legislative and regulatory standards adopted by the U.S. Congress, the Securities and Exchange Commission, the State of South Carolina and the New York Stock Exchange. Sonoco’s Board of Directors annually evaluates itself through the use of questionnaires and interviews with members of the Corporate Governance and Nominating Committee to drive participation and effectiveness. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t Sonoco will not permit any type of illegal, unethical or improper behavior on the part of any employee. Employees are expected to comply with all laws and conduct all business in a fair and ethical manner. Furthermore, the Company requires its Board of Directors, management, employees, contractors and vendors to understand and comply with stringent business conduct standards. Sonoco’s Human Rights Policy emphasizes our commitment to ethical business conduct, equal opportunity, protection of workers’ rights, including the rights of children. 6 financial performance and strategic leadership As South Carolina’s largest company, Sonoco annually contributes more than $1 billion to the state’s economy, creating nearly 9,300 jobs and generating more than $473 million in income for residents, according to a study released in March by the Division of Research at the University of South Carolina’s Darla Moore School of Business. In addition, Sonoco’s $1 billion annual economic impact contributes nearly $35 million to state tax revenue each year, and for every 10 jobs created by Sonoco, an additional nine jobs are created elsewhere in the state. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 7 commitment to customers As the world’s largest producer of composite cans, Sonoco helped Melitta USA, which roasts premium European-style coffee, move from traditional metal cans to 90% recycled, 80% post-consumer rigid paperboard composite cans that deliver a reduced environmental footprint. Composite cans such as Melitta’s are not only made from recycled paperboard, but are also gaining acceptance in the recycling stream. In 2012, Sonoco Recycling invested $4 million in its Columbia, S.C., materials recovery facility (MRF), allowing the facility to accept additional types of materials. Because of this, residents can recycle composite cans, as well as glass, magazines and other types of plastics. With this upgrade, Sonoco can now recycle even more of the packaging it produces, further demonstrating the Company’s commitment to sustainable business practices. overview We have made a commitment to satisfy our customers since we were founded in 1899. From continually improving shelf impact, to supply-chain management and protection, to point-of-purchase displays and recycling, providing solutions for our customers’ needs remains central to our sustained success. In 2012, we adopted Net Promoter® Score (NPS), an on-going customer feedback process to optimize the customer product and service experience. Already in use in three of our business units, NPS 360 is being adopted worldwide and expected to be implemented in all businesses over the next two-to-three years. Sonoco Alcore and the Alliance for Beverage Cartons and the Environment (ACE) UK have opened a beverage recycling facility in Stainland, West Yorkshire. When the facility reaches full capacity in July, it will be the first time in seven years that the United Kingdom has had a place to recycle its beverage cartons. The new facility can recycle 25,000 tons of cartons, almost a third of the approximately 60,000 tons of paper-based cartons used in the UK each year. In addition to municipal recycling, Heathrow Airport, which generates around 110,000 tons of waste per year, 2.5% of which is coffee cups, is looking to recycle at the beverage recycling plant as well. Sonoco Alcore will use the paperboard layers from the recycled cartons to produce coreboard, used to make tubes and cores for consumer and industrial applications, such as plastic film, textiles and paper. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 8 commitment to customers awards and ACCOLADEs Sonoco’s Flexible Packaging business designs and manufactures the flexible stand-up pouches used to package LEGO’s Hero Factory toys at our Poland facility. This conversion from plastic and paperboard packaging resulted in a minimum 75% weight reduction of the various package sizes offered. Listed as one of only three global packaging companies in the Dow Jones Sustainability World Index for 2012/13. This was Sonoco’s fourth consecutive listing. Sonoco’s patented, Ranked by Sustainability Asset Management (SAM) as Gold Class winner and Sector Leader in the packaging category in its 2012 and 2013 Sustainability Yearbook. anti-microbial cupstock is made from 100% recycled fiber and up to 35% post-consumer fiber, that is also FSC Named one of the 25 Top Companies for Leaders in North America by Aon Hewitt, The RBL Group and Fortune magazine for a fourth time. chain-of-custody certified. The U.S. Environmental Protection Agency calculates that use of recycled instead of virgin fiber reduces greenhouse gas (GHG) emissions by 2012 0.8 metric tons for each short ton produced. Ranked as the one of the greenest large companies in the U.S. in Newsweek’s 2012 Green Rankings. Ecotect® tan bending chip, primarily sold to manufacturers of folding cartons, is produced from 100% recycled paper with a minimum of 80% post-consumer content. FlatStack® slip sheets can replace corrugated sheets used for separating stacks of product on a pallet. FlatStack sheets are made from 100% recycled fiber, minimum 85% post-consumer and are recyclable. Five FlatStack sheets can be stored and transported in the space used for one corrugated sheet, allowing in-bound trucks to ship twice the amount of slip sheets per truckload, reducing in-bound shipments by 50%. Named the top ranked packaging company in the 2012 Top 100 Corporate Citizens by Corporate Responsibility magazine. Named one of 2013’s Most Admired Companies by Fortune magazine. Named a Platinum Fit-Friendly Company by the American Heart Association. Listed as the top ranked company in South Carolina for Excellence in Sustainability by the Southeastern Corporate Sustainability Rankings developed by Green Business WORKS. Sonoco’s radial crush recycled paper stock eliminates almost 20% of paper from film cores. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 9 environmenta l stewardship environmental policy overview Sonoco takes seriously our responsibility to Climate change, resource scarcity and declining water protect the environment in which we work and live, availability are global challenges that affect us all. and will conduct its business in accordance with all legal requirements and ethical responsibilities, Sonoco is committed to proactively responding using scientific knowledge, technical innovation to them in a way that’s good for our customers, our and sound environmental management practices. employees, our business and the world. l We will be sensitive to environmental issues throughout our business systems, including our To that end, Sonoco is shrinking the environmental selection of materials, processes and products. footprint of our 347 manufacturing plants in 34 We will utilize appropriate monitoring techniques countries by reducing energy consumption, greenhouse to ensure adherence to accepted standards. gasses and other air emissions, water usage and l We will conduct operations in full compliance wastes going to landfills. In 2012 and 2013 we with applicable environmental laws and made great strides toward our sustainability goals. regulations. In those areas of the world where We reduced energy use by 1%, continued construction such requirements are at a minimum, we will operate in a completely responsible manner. l We will utilize natural resources efficiently, continuously seeking ways to reduce our requirements. We will strive to maximize the utilization of recovered materials in the products we of our biomass cogeneration system in Hartsville, and recognized 31 Sonoco facilities that achieved milestones in landfill diversion and waste stream reduction through our Sonoco Sustainability Star Awards program. manufacture and use. l We will minimize the generation of discharges to the environment, including air emissions, wastewater and solid waste. l We will support the development of scientific knowledge relating to environmental matters and implement appropriate new technologies to improve our environmental performance. l We will proactively assist our customers in addressing environmental issues related to their use of our products. l We will communicate openly with our stake- holders concerning our environmental record. l We will cooperate with public and governmental organizations to seek responsible solutions to environmental needs and to develop effective and balanced environmental standards. 2013 was a transition year for Sonoco as we increased use of natural gas and reduced coal usage in our boilers. The Company’s efforts to move from traditional coal fuel to a combination of natural gas and biomass in late 2013 is expected to significantly reduce greenhouse gases (GHGs). Natural gas is used to produce steam, and the new biomass cogeneration system will produce both steam and electricity, all of which will be used in Sonoco’s Hartsville manufacturing complex. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t A truck dumps the first load of biomass fuel onto a chip pile located at Sonoco’s Hartsville, S.C., complex. The Company’s $75 million biomass cogeneration system is expected to be operational November 2013. 10 Sonoco’s approach to climate change environmenta l stewardship Sonoco recognizes our responsibility to address the challenges of global climate change. We are committed to measuring and reporting our greenhouse gas (GHG) emissions, energy and water consumption and waste generation in our operations around the world. We are meeting our responsibility by developing innovative new processes, and by identifying and managing risks and opportunities to our raw materials inputs, operations, employees, suppliers, customers and products. The Company has committed to taking 10% of its global manufacturing operations landfill free (95% or more waste diverted from landfills) by 2015. As of June 2013, Sonoco has a total of 31 plants, or 8.9% of its global operations, diverting 95% or more from landfills. Six of those 31 plants are sending less than 1% to landfills. In April 2012, Sonoco’s Hartsville Campus Sustainability Team ran a one-time, voluntary trash can trade-in program as part of its Earth Day events. More than 130 employees turned in their trash cans, which were then donated to local elementary schools to be used as recycling bins. This spring, the entire Hartsville campus went trashcan free, replacing employees’ individual trash cans with larger recycling bins and a much smaller waste receptacle that is emptied by the employee, reducing maintenance labor and eliminating the cost of individual trash can liners for offices. Establishing 2009 as our baseline year, Sonoco is committed to reducing GHG emissions by 15% from our global manufacturing facilities by the end of 2014. To meet our goal, we are reducing energy usage at our uncoated recycling paperboard mills by maximizing energy efficiency through targeted investments and initiatives. Additionally, we are focusing on further reducing overall energy use, other air emissions, water usage and landfill wastes, and encouraging our vendors, partners and contractors to do the same. key environmental metrics Key Metrics Unit Total Energy Usage MMBtu % Improved 2012 2011 0.98 15,700,414 15,855,000 Energy Usage (normalized)* MMBtu/mtonnes 1.02 3.471 3.507 Total Greenhouse Gas Emissions (GHG) mtonnes CO2e 3.19 1,309,144 1,352,299 Direct Emissions (Scope 1) (normalized) mtonnes CO2/mtonnes 9.79 0.147 0.163 Indirect Emissions (Scope 2) (normalized) mtonnes CO2/mtonnes (3.01) 0.142 0.138 Total GHG Emissions (normalized)* mtonnes CO2e/mtonnes 3.93 0.289 0.301 Total Landfill Disposed mtonnes 6.95 160,006 171,953 Landfill Disposed (normalized)* mtonnes/mtonnes 5.93 0.035 0.038 Total Water Usage m3 (2.65) 29,743,173 28,974,137 Water Usage (normalized)* m3/mtonnes (1.86) 6.575 6.455 Shipped Production mtonnes 0.77 4,523,568 4,488,897 *Historical data referenced in this report has been adjusted to reflect changes in business structure and improvement in data collection and accuracy, and so may differ from previous reports. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 11 social responsibility overview Sonoco believes that we have an inherent responsibility to help improve the quality of life in the communities in which we serve. Sonoco continues our strong support of communities through Sonoco’s greatest asset is our people, so the Company does everything it can to take care of its employees, both short- and long-term. Sonoco provides 100% coverage of preventive screenings, health assessments, a 24-hour NurseLine, paid time off for preventive services, health coaching and numerous health improvement programs. Participation in these activities is incentivized and rewards can be used to reduce medical plan out-of-pocket expenses. The Hartsville location also provides an on-site employee health clinic staffed by a nurse practitioner, RN health coach and medical assistant. partnerships, diversity, education and safety programs. The Sonoco Foundation, Sonoco’s philanthropic arm, donated more than $2.5 million to nonprofit organizations around the world in 2012. The Company’s employees also donated, contributing time, funds and talents to a multitude of worthy causes, including volunteering, serving on boards, raising funds and participating in other civic-oriented projects. Preventive, acute care, full lab services and limited prescriptions are readily available to active employees. A full-time wellness coordinator provides resources to all locations, wellness program development and activity coordination. 02 05 06 07 08 09 10 11 12 .44* .47 1.0 .44 .63 .75 .85 1.5 .55 2 Benchmark median percent spend with diverse suppliers. 04 2.0 4 03 .84 6 recordable injury rate 01 .98 8% 00 1.03 7.9 SAFETY PERFORMANCE 1.19 12 1.49 11 1.99 10 7.7 percentage of total company spending 09 5.5 SUPPLIER DIVERSITY SPENDING 7.5 Arranged by Sonoco, these 12 students from the South Carolina Governor’s School for Science and Mathematics, based in Sonoco’s hometown of Hartsville, S.C., visited and toured the New York Stock Exchange in December 2012 as a part of a three-week interim class called Tech Trek. The students visited with researchers, entrepreneurs, venture capitalists and investment bankers in Boston and New York to learn the process of building technology-based businesses. .5 *Does not include incidents occuring at Tegrant facilities, which will be recorded in 2013. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 12 social responsibility Sonoco is participating in the Community Foundation for a Better Hartsville, a nonprofit public benefit corporation that comprises a cross-section of institutional and community partners working to further local community improvement projects. The Foundation facilitated the generous donation of 24 acres of land from Pacolet Milliken Enterprises for its ongoing community revitalization efforts. The land was donated in a historic mill village, and includes 34 residential lots and 17 acres of undeveloped land, which will be used to further the neighborhood’s renaissance. The properties will be used to develop a community park and garden, provide green space, add security and attract new homeowners to the area. A portion of the land will go to the adjoining South Carolina Governor’s School for Science and Mathematics for future expansion. The Foundation also began a 12-month project to expand and update “Hartsville 2020 Vision” and create a visual framework for the continued development of the city. This master planning project is intended to help synthesize existing research and planning documents with new data, citizen opinions and professional design expertise to offer a coherent vision, strategy and action steps to guide development in Hartsville for the next 20 years. In 2012, Sonoco contributed $60,000 to disaster relief through the Red Cross, $35,000 locally and $25,000 for Hurricane Sandy relief. Sonoco was also quick to respond in 2013 with a $20,000 donation for local fire relief and a $25,000 donation within 24 hours of the devastating sonoco foundation Sonoco views our philanthropic and business endeavors as investments to improve the quality of life in communities where the Company has operations. The Sonoco Foundation, Sonoco’s principal conduit for corporate contributions, is responsive to human needs through its support of quality projects and programs within the areas it supports. The Foundation’s grant program focuses on education, health and wellness, arts and culture, and the environment. The primary focus of these corporate contributions is to support institutions with a local, rather than a national or international, perspective. All requests for specific information should be sent to: Sonoco Foundation – A09 1 North Second Street Hartsville, SC 29550 www.sonocofoundation.com Oklahoma tornados. Unveiled in May 2013, the Sonoco Supplier Sustainability Award program recognizes suppliers who demonstrate clear differentiation from their competitors with measurable, strategic and transparent social and environmental responsibility efforts. First-year recipients Arcelor Mittal, Buckman International, Staples and W.R. Grace showed definitive leadership in various categories such as water, energy, emission and waste disposal reduction goals; environmental policies; social responsibility reports; and codes of conduct. 2012 CASH CONTRIBUTIONS IN SONOCO COMMUNITIES S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 13 social responsibility Memberships and groups l American Forest and Paper Association l AMERIPEN l Composite Can and Tube Institute l Ecodesk l EcoVadis l Environmental Education Association of S.C. l EPS Industry Alliance l Flexible Packaging Association l Forest Stewardship Council® (FSC®) l Institute of Scrap Recycling Industries (ISRI) l Material Handling Institute (MHI) l National Association of Information Destruction l National Council for Air and Stream Improvement l National Minority Supplier Development Council l National Sustainability Coalition l Paper Stock Institute (Chapter of ISRI) l Programme for the Endorsement of Forest Certification (PEFC) l Sedex l Solid Waste Association of North America l Southeastern Recycling Coalition More than 50 students at four Hartsville, S.C., elementary schools are learning life skills through the Scoutreach program, which began in 2012 and is funded by Sonoco. Scoutreach, a division of the Boy Scouts of America, focuses on urban and rural participation. Activities teach boys the integral precepts necessary to become better leaders and citizens: building character, developing values and accepting responsibility. Sonoco’s support covers all expenses, including uniforms, activities and transportation. 12 27.2 26.7 26.4 11 32 10.1 24 9.7 25.4 10 10.0 25.6 09 9.8 percent 08 8.9 EMPLOYEE DIVERSITY 16 8 Women Minorities l Southeastern Recycling Development Council l Sustainable Forestry Initiative® (SFI®) l Sustainable Packaging Coalition l Walmart’s Packaging Sustainable Value Network Sonoco has committed $5 million over five years to fund Partners for Unparalleled Local Scholastic Excellence (PULSE), a first-of-its-kind public-private partnership in South Carolina that is expanding student development and curriculum opportunities through collaborative academic and social development initiatives. The program is focused on schools in Sonoco’s hometown of Hartsville, S.C., and involves Darlington County schools, the South Carolina Governor’s School for Science and Mathematics, Coker College and Yale University’s Child Study Center. Four elementary schools in Hartsville—Southside Early Childhood Center, Thornwell School for the Arts, Washington Street and West Hartsville—are the first schools to use Basecamp, a web-based project management tool used to promote collaboration and communication within and across the four schools. Basecamp helps manage grant writing and communications, and serves as an online archive for professional development materials, articles and other resources. S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 14 sustainability oversight Corporate Sustainability Council Purpose The purpose of the Sonoco Corporate Sustainability Council is to provide oversight, guidance and direction on social, community and environmental issues that have potential impact on the reputation and long-term economic viability of the Company and our stakeholders. Through our actions, we contribute to the economic and social well-being of our stakeholders. Board of Directors Employee and Public Responsibility Committee Purpose The purpose of the Employee and Public Responsibility Committee of the Board of Directors is to provide oversight and guidance on social and public policy issues, including compliance with governmental or other regulatory requirements, which may impact business performance and the investment potential of Sonoco. The council, which meets quarterly, reports to and is sponsored by Sonoco’s president and CEO. The Council reports on Sonoco’s sustainability activities, biannually, to the Board of Directors. For more information on the Employee and Public Responsibility Committee, visit http://phx.corporateir.net/phoenix.zhtml?c= 82014&p=irol-govhighlights. Objectives lIdentify and define those issues that are relevant to Sonoco’s long-term sustainability and image as a good corporate citizen lEstablish meaningful long-term and short-term sustainability objectives related to key areas of focus and provide Sonoco’s executive committee with recommendations or guidance on how to meet those objectives lRecommend and establish new Company guidelines, policies and processes to support areas of focus lCreate and communicate a business case for corporate sustainability lProvide recommendations for the Company’s philanthropic efforts in support of overall corporate sustainability objectives Sonoco l 1 North Second Street +843/383-7000 l sonoco.com l Members John E. Linville, Chair John R. Haley Edgar H. Lawton III Philippe R. Rollier Sustainability sponsor M. Jack Sanders, President and Chief Executive Officer Sustainability Council l Roger Schrum, Vice President, Investor Relations and Corporate Affairs – Committee Chair l Gloria Bell, Staff Vice President, Internal Audit l Rodger Fuller, Group Vice President, Paper and Industrial Converted NA l Ray Howard, General Manager, Sonoco Recycling l Jim Lassiter, Staff Vice President, Global Operating Excellence l Allan McLeland, Vice President, Human Resources l Larry Pattengill, Director, Global Environmental Services l Marty Pignone, Vice President, Paper NA l Bob Puechl, Vice President, Global Flexibles l Laura Rowell, Manager, Global Sustainability, Consumer l Jeffrey Schuetz, Staff Vice President, Global Technology, Consumer l Marcy Thompson, Vice President, Marketing and Innovation Hartsville, S.C. 29550-3305 S o n o c o 2 01 2-1 3 c o r p o r at e r e s p o n s i b i l i t y R e p o r t 15 G3 content index Application Level C Standard Disclosures Part 1: Profile Disclosures 1. Strategy and Analysis Profile disclosure Description Reported Cross-reference/Direct answer 1.1Statement from the most senior decision-makerFully 2012-13 Sonoco Corporate Responsibility Report (CRR), of the organizationLetter from the CEO (page 2) 2. Organizational Profile Profile disclosure Description Reported Cross-reference/Direct answer 2.1Name of the organizationFullySonoco 2012 Annual Report (AR), Form 10-K (page 1) 2.2Primary brands, products, and/or services FullyAR, Sonoco at a Glance 2.3Operational structure of the organization, including FullyAR, Sonoco at a Glance main divisions, operating companies, subsidiaries, and joint ventures. 2.4 Location of organization’s headquarters Fully AR, Form 10-K (page 4) 2.5Number of countries where the organization FullyGRI Appendix 1 operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report 2.6Nature of ownership and legal formFullySonoco is a publicly owned C Corporation incorporated under the laws of South Carolina, with stock traded on the New York Stock Exchange under the symbol SON (NYSE:SON). 2.7 Markets served (including geographic breakdown, FullyAR, Sonoco at a Glance sectors served, and types of customers/ beneficiaries) 2.8Scale of the reporting organizationFullyAR, Sonoco at a Glance AR, Financial Highlights (page 1) 2.9 Significant changes during the reporting period Fully AR, Form 10-K, Acquisitions (page F8), Restructuring and asset regarding size, structure, or ownership impairment charges (page F8) 2.10Awards received in the reporting periodFullyCRR, Awards and Accolades (page 9) 3. Report Parameters Profile disclosure Description Reported Cross-reference/Direct answer 3.1 Reporting period (e.g., fiscal/calendar year) for Fully AR, Form 10-K, Notes to the Consolidated Financial information providedStatements, Note 1 (page F6) 3.2Date of most recent previous report (if any)FullyAR: March 2013 CRR: July 2012 16 3. Report Parameters (continued) Profile disclosure Description Reported Cross-reference/Direct answer 3.3 Reporting cycle (annual, biennial, etc.) Fully Both Sonco’s Annual Report and Corporate Responsibility Report are published on an annual basis. 3.4 Contact point for questions regarding the report or Fully Roger P. Schrum, VP, Investor Relations and Corporate Affairs its contents. 3.5 Process for defining report content. Fully CRR, About This Report (page 1) 3.6Boundary of the report (e.g., countries, divisions, FullyCRR, About This Report (page 1) subsidiaries, leased facilities, joint ventures, suppliers). 3.7 State any specific limitations on the scope or Fully CRR, About This Report (page 1) boundary of the report (see completeness principle for explanation of scope)Labor Practices & Decent Work and Human Rights Performance Indicator numbers, rates and percentages have been gathered from all United States and Canadian locations. 3.8Basis for reporting on joint ventures, subsidiaries, FullyCRR, About This Report (page 1) leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations 3.10Explanation of the effect of any re-statements of FullyCRR, About This Report (page 1) information provided in earlier reports, and the reasons for such re-statement (e.g.,mergers/ acquisitions, change of base years/periods, nature of business, measurement methods). 3.11 Significant changes from previous reporting periods Fully CRR, About This Report (page 1) in the scope, boundary, or measurement methods applied in the report 3.12Table identifying the location of the Standard FullyCRR, About This Report (page 1) Disclosures in the report 4. Governance, Commitments and Engagement Profile disclosure Description Reported Cross-reference/Direct answer 4.1Governance structure of the organization, including Fully 2013 Proxy, Leadership Structure (page 13), Board Meetings committees under the highest governance body and Committees of the Board (page 15, 16) responsible for specific tasks, such as setting strategy or organizational oversightAR, Board of Directors (page 20, 21) AR, Form 10-K, Item 10. Directors, executive officers and corporate governance (page 34) CRR, Sustainability Oversight (page 15) 4.2Indicate whether the Chair of the highest Fully 2013 Proxy, Leadership Structure (page 13) governance body is also an executive officer AR, Board of Directors (page 21) 17 4. Governance, Commitments and Engagement (continued) Profile disclosure Description Reported Cross-reference/Direct answer 4.3 For organizations that have a unitary board Partially Sonoco’s Board of Directors has a Tiered Structure. structure, state the number of members of the highest governance body that are independent and/or non-executive members 4.4 Mechanisms for shareholders and employees to Partially 2013 Proxy, Communications with the Board of Directors provide recommendations or direction to the (page 14, 15) highest governance body Employees may make recommendations (anonymously) through the Company’s Sonofone telephonic suggestion box. Recommendations and questions are reviewed and responses developed by the highest-level executive responsible for the issue raised by the employee. Also, the Company employs a third-party service called The Network where employees can provide anonymous information regarding any illegal or unethical activity. These reports are investigated by the Company’s Director of Internal Audit and results are shared with the Board of Director’s Audit Committee for final disposition. 4.14 List of stakeholder groups engaged by the Fully Sonoco has identified our stakeholders to include investors organization. in the Company’s common stock and debt, employees, customers, suppliers, industry organizations, regulatory and other government agencies, the media and the communities in which we operate. 4.15 Basis for identification and selection of Fully As a global packaging company with operations in 34 countries, stakeholders with whom to engage. Sonoco must continually monitor and address our many stake- holders’ most critical issues. Each year, we identify areas in which the Company could have the greatest impact based on issues and opportunities in our operations and communities. This in turn helps us determine our stakeholders of focus. In 2012, our stakeholder engagement practices were focused on employees and our investors following the November 2011 acquisition of Tegrant Corp. In addition, we surveyed employees’ satisfaction, our analysts’ confidence in our 2013 strategy and community matters in the neighborhoods surrounding our Hartsville, S.C., U.S., headquarters. 18 G3 content index Application Level C Standard Disclosures Part 3: Performance Indicators Economic Performance Description indicator Reported Cross-reference/Direct answer Economic performance EC1Direct economic value generated and distributed, FullyCRR, Financial Performance and Strategic Leadership including revenues, operating costs, employee (page 7) compensation, donations and other community investments, retained earnings, and payments to AR, Form 10-K capital providers and governmentsConsolidated Statements of Income (page F3) Consolidated Balance Sheets (page F2) Item 6. Selected financial data (page 15) EC2 Financial implications and other risks and opportunities Partially CRR, Sonoco’s Approach to Climate Change (page 11) for the organization’s activities due to climate change. EC3 Coverage of the organization’s defined benefit plan Fully 2013 Proxy obligations Sonoco Pension Plan (page 47) EC4 Significant financial assistance received from Fully No significant financial assistance was received in 2012 government Market presence EC6Policy, practices, and proportion of spending on locally-NotInformation is not available based suppliers at significant locations of operation EC7 Procedures for local hiring and proportion of senior Partially Sonoco’s Employee Referral Program (ERP) encourages management hired from the local community at Sonoco employees to help find talented applicants. significant locations of operation Sonoco’s ERP provides a quick, easy and financially rewarding process for employees to refer qualified candidates for vacant positions. 19 Economic (continued) Performance Description indicator Reported Cross-reference/Direct answer Indirect economic impacts EC8Development and impact of infrastructure investments FullySonoco targets philanthropic contributions at approximately and services provided primarily for public benefit 1 percent of the Company’s annual domestic pretax profits. through commercial, in-kind, or pro bono engagement In 2012, cash contributions equaled over $2.5 million. Charitable grants are made only to organizations with tax- exempt status. The Company’s priority is to give to and support those communities in which we operate, with special consideration given to those institutions which are supported by employees through their personal contributions of time and/or money. Sonoco does not make grants to individuals or organizations for religious or political purposes, either for lobbying efforts or campaigns. Sonoco does not make grants for capital fundraising programs, endowments or for trips or tours. In 2010, Sonoco worked with the Darlington County School District, the South Carolina Governor’s School for Science and Mathematics (GSSM) and Coker College to conduct a detailed needs assessment to address ways of significantly improving educational achievement for students attending school in the Company’s hometown of Hartsville. The needs assessment group was headed by Sonoco Chairman Harris DeLoach and included the presidents of Coker and GSSM along with the superintendent of schools for Darlington County. Two items were identified by the assessment—improving academic and personal development skills for four underperforming Tier 1 elementary schools and providing accelerated learning programs for top achieving high school students. The group solicited support from Yale University’s Child Study Center to develop a Comer School Development at the four elementary schools patterned after Yale’s nationally recognized development initiative. In addition, college equivalent classes were developed for Hartsville High School and Governor School students in organic chemistry, Mandarin Chinese, calculus, physics and fine art programs. The program, called PULSE (Partners for Unparalleled Local Scholastic Excellence) was funded by a $5 million grant (over five years) by the Sonoco Foundation and was launched in 2011, reaching 1,400 elementary students and 100 high school students. 20 Economic (continued) Performance Description indicator Reported Cross-reference/Direct answer Indirect economic impacts (continued) In 2012, PULSE provided the following results: • Comer School Development Program impacted 1,296 Kindergarten-5th grade students at four elementary schools. • Coker College provided 18 professional development workshops for Darlington County teachers • Comer’s four elementary schools’ test scores improved in Palmetto Assessment of State Standards (PASS) testing. • Overall scores improved 12-24 percent in Measures of Academic Progress(MAP) testing at the four Comer elementary schools: • Comer’s mentor program included 77 volunteer community mentors and 88 student mentees • AP Calculus scores improved for students in the PULSE Accelerated Learning Opportunities (ALO) program. 50 percent of ALO students scored 3 or higher compared to 13 percent of non-ALO students • ALO Enrollment increased for the 2012-2013 school year to the following enrollment: –Fifty-two students enrolled in Mandarin Chinese I, II –Six students in Advanced Chemistry –Eight students in Voice class –Four students in Applied Voice class –Two students in Piano –Two students in Applied Piano –Four students in Applications of Calculus AB –Six students in Pedal to the Metal pre-Calculus Environmental Performance Description indicator Reported Cross-reference/Direct answer Materials EN1 Materials used by weight or volume NotInformation is not available EN2Percentage of materials used that are recycled input NotInformation is not available materials Energy EN3Direct energy consumption by primary energy sourceFully 15,700,000 MMBtu (Does not include biomass or by-product fuels for Hartsville, S.C., U.S.) EN4Indirect energy consumption by primary sourceFully 1,121,158 MWh EN6 Initiatives to provide energy-efficient or renewable Fully CRR (page 10) energy based products and services, and reductions in energy requirements as a result of these initiatives Sonoco’s new biomass cogeneration system is expected to be operational in November 2013 and will produce 16 megawatts of low-cost, green electricity and steam that will be used at the Hartsville, S.C., U.S., complex. The boiler system is expected to provide approximately $14 million in savings. 21 Environmental (continued) Performance Description indicator Reported Cross-reference/Direct answer Water EN8Total water withdrawal by source FullyCRR, Key Environmental Metrics (page 11) Biodiversity EN11Location and size of land owned, leased, managed in, FullySonoco owns and manages multiple tracts of timberland or adjacent to, protected areas and areas of high totaling 55,080 acres, all of which are located in South biodiversity value outside protected areasCarolina. These Company-owned forests are primarily hardwoods and provide a fiber source used to produce corrugated paper at Sonoco’s Hartsville-based paper mill, in addition to being managed under a multiple use system for recreation and wildlife. All of Sonoco’s timberland is managed according to the Sustainable Forestry Initiative (SFI). Through SFI, Sonoco achieved certification for respon- sible and sustainable forestry management practices. Sonoco also is certified by the Forest Stewardship Council and the Program for the Endorsement of Forest Certification (PERC) for responsible fiber-sourcing practices. To our knowledge, we do not own any land adjacent to protected areas or areas deemed to be of high biodiversity value. EN12 Description of significant impacts of activities, products Fully To our knowledge, we do not own any land adjacent to and services on biodiversity in protected areas and protected areas or areas deemed to be of high biodiversity areas of high biodiversity value outside protected areas. value. Emissions, effluents and waste EN16Total direct and indirect greenhouse gas emissions by Fully 1,309,144 mtonnes CO2e weight EN17Other relevant indirect greenhouse gas emissions by FullyInformation is not available weight EN19Emissions of ozone-depleting substances by weight NotInformation is not available EN20 NOx, SOx, and other significant air emissions by type Not Information is not available and weight EN21 Total water discharge by quality and destination Fully 12,026,085 m3 (recycled paperboard mills only, which represent 90 percent of water usage) EN22 Total weight of waste by type and disposal method Fully 159,995 mtonnes landfilled EN23 Total number and volume of significant spills Fully No significant spills occurred at Company operations in 2012 Products and services EN26Initiatives to mitigate environmental impacts of products FullyCRR, Commitment to Customers (page 8-9) and services, and extent of impact mitigation EN27 Percentage of products sold and their packaging Partially Sonoco’s strategy is to work with customers to ensure materials that are reclaimed by category return shipments and reuse of the tubes and cores, pallets, reels, carts and racks, bins, slip sheets and cartons that are utilized to move our products 22 Environmental (continued) Performance Description indicator Reported Cross-reference/Direct answer Compliance EN28 Monetary value of significant fines and total number of Fully AR, Form 10-K, Item 3, Legal proceedings (pages 10-13) non-monetary sanctions for non-compliance with Environmental matters (pages F25-26) environmental laws and regulations Sonoco operates 347 facilities in 34 countries and all have various forms of environmental requirements. In those facilities we occasionally exceed the permit limit, for which we take immediate corrective action, thus any fines that may have been paid were minimal. Currently, the Company doesn’t have any environmental violations involving our facilities. On a global basis, ongoing capita investment allows a few Company facilities to continue meeting current and future environmental limits. Social: Labor Practices and Decent Work Performance Description indicator Reported Cross-reference/Direct answer Employment LA1Total workforce by employment type, employment FullyAppendix 2 contract, and region LA2Total number and rate of employee turnover by age FullyAppendix 2 group, gender, and region Labor/management relations LA4Percentage of employees covered by collective FullyThirteen (13) percent of Sonoco employees are covered by bargaining agreements collective bargaining agreements. LA5 Minimum notice period(s) regarding significant Partially Depending on the business circumstances, a minimum operational changes, including whether it is specified in of 60 days and up to one year’s notice is required collective agreements Occupational health and safety LA7Rates of injury, occupational diseases, lost days, and FullyCRR, Social Responsibility (page 12) absenteeism, and number of work-related fatalities by regionThe Company follows OSHA 1904 regulations for recording and reporting occupational injuries and illness throughout our global operations. In 2012, Sonoco’s global injury rate (IR), the total injuries per 100 employees, including independent contractors, excluding Tegrant employees, was 0.44. Including Tegrant, the IR was .53. Sonoco did have 182 Standard Threshold shifts under the hearing conservation standard and would yield a Total Incident Rate of (TIR) of 1.25 Our 2012 lost workday incident rate, the lost workday incidents per 100 employees, excluding Tegrant, was .27. Including Tegrant, the rate was .28. Our lost workday rate, the lost scheduled workdays per 100 employees, excluding Tegrant, was 8.79. Including Tegrant, the rate was 8.33. Sonoco does not have any recorded occupational diseases and in 2012 we experi- enced one (1) workplace fatality. 23 Social: Labor Practices and Decent Work (continued) Performance Description indicator Reported Cross-reference/Direct answer Occupational health and safety (continued) LA8Education, training, counseling, prevention, and FullySonoco provides training and development programs for risk-control programs in place to assist workforce employees and groups of employees at every level. For members, their families, or community members help with work life balance issues, we provide assistance regarding serious diseases through Guidance Resources. Guidance Resources offers free and confidential counciling for issues ranging from family finances and healthcare to daycare for children or aging parents. We offer health improvement programs and health coaches for employees and in many cases, for family members. Sonoco employees do not have a high incidence or high risk of any specific diseases. Training and education LA10Average hours of training per year per employee byNotInformation is not available employee category Diversity and equal opportunity LA13Composition of governance bodies and breakdown of FullyAppendix 2 employees per category according to gender, age group, minority group membership, and other indicators of diversity LA14 Ratio of basic salary of men to women by employee Partially It is the policy of Sonoco to provide equal employment category opportunities without regard to race, color, religion, sex, age, national origin, disability and veteran status. The Company will also take affirmative action to employ and advance disabled individuals who are qualified. This policy relates to all phases of employment, including, but not limited to, recruiting, employment, placement, upgrading, demotion or transfer; layoff, recall and termination; rates of pay or other forms of compensation and selection for training; and the use of all facilities. This policy is periodically brought to the attention of all managers and supervisors who are responsible for its implementation. Social: Human Rights Performance Description indicator Reported Cross-reference/Direct answer Investment and Procurement Practices HR1 Percentage and total number of significant investment Fully One hundred (100) percent of agreements with of Sonoco’s agreements that include human rights clauses or that 1150 direct suppliers outline human rights and Sonoco’s have undergone human rights screening requirements of our suppliers regarding human rights. HR2 Percentage of significant suppliers and contractors that Fully One hundred (100) percent of Sonoco’s 1150 direct have undergone screening on human rights and actions suppliers took part in our human rights screening in 2012. taken HR3 Total hours of employee training on policies and Fully One hundred (100) percent of Sonoco’s global exempt level procedures concerning aspects of human rights that are professionals are required to participate in business code relevant to operations, including the percentage of of conduct and human rights training biennially. The last employees trained training was conducted in Summer 2012. 24 Social: Human Rights (continued) Performance Description indicator Reported Cross-reference/Direct answer Non-discrimination HR4Total number of incidents of discrimination and FullySonoco had nine charges of discrimination in 2012. Five actions taken were dismissed by the EEOC and/or state agency, three were settled out of court and one remains open in 2013. Freedom of association and collective bargaining HR5 Operations identified in which the right to exercise Fully freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights No Sonoco operations or suppliers have been identified as being at significant risk. Child labor HR6 Operations identified as having significant risk for Fully No Sonoco operations or suppliers have been identified as incidents of child labor, and measures taken to being at significant risk. The minimum working age at contribute to the elimination of child labor Sonoco is 18. Forced and compulsory labor HR7 Operations identified as having significant risk for Fully incidents of forced or compulsory labor, and measures to contribute to the elimination of forced or compulsory labor No Sonoco operations or suppliers have been identified as being at significant risk. Security practices HR8Percentage of security personnel trained in the Fully One hundred (100) percent of Sonoco’s global exempt-level organization’s policies or procedures concerning professionals are required to participate in business code aspects of human rights that are relevant to operations of conduct and human rights training biennially. The last training was in Summer 2012. Indigenous rights HR9 Total number of incidents of violations involving rights Fully No incidents or violations have ever been filed related to of indigenous people and actions taken human rights 25 Social: Society Performance Description indicator Reported Cross-reference/Direct answer Community SO1 Nature, scope, and effectiveness of any programs and Fully CRR, Sonoco’s Approach to Climate Change (page 11) practices that assess and manage the impacts of CRR, Environmental Policy (page 10) operations on communities, including entering, operating http://www.sonocofoundation.com/philosophy.aspx and exiting http://www.sonoco.com/contact.aspx Most of Sonoco’s global manufacturing locations are relatively small, with less than 100 employees. However, at the Company’s largest manufacturing and headquarters complex in Hartsville, S.C., we have approximately 2,000 employees and contractors and 1000 retirees. As a result, most of the Company’s stakeholder engagement programs are employed inside and outside the Sonoco operations in this community. This includes approximately 75 percent of all philanthropic contributions; annual philanthropic needs assessments (including community engagement, environmental, development programs) and ongoing stakeholder engagement programs. Corruption SO2Percentage and total number of business units analyzed NotRegulatory compliance -- business conduct for risks related to corruption SO3 Percentage of employees trained in organization’s anti- Fully One hundred (100) percent of Sonoco’s employees are corruption policies and procedures trained in anti-corruption biennially. The last training was conducted in 2012, and training will occur again in Summer 2014. SO4Actions taken in response to incidents of corruptionFullySonoco is not aware of any material weakness or significant deficiency in our internal controls. The Company did report an incident of theft in 2012 involving recyclable materials. One employee was arrested and prosecuted. Public policy SO5Public policy positions and participation in public policy FullyCRR, Memberships (page 14) development and lobbying Sonoco is a member of American Forest and Paper Association, Composite Can and Tube Institute, Can Manufacturers Institute, AMERIPEN, and many other organizations, all of whom support our interests in public policy development and lobbying. Anti-competitive behavior SO7Total number of legal actions for anti-competitive FullyNo legal actions for anti-competitive behavior, anti-trust behavior, anti-trust, and monopoly practices and their and monopoly practices and their outcomes outcomes Compliance SO8 Monetary value of significant fines and total number of Fully AR, Form 10-K, Item 3, Legal proceedings (pages 10-13) non-monetary sanctions for non-compliance with laws Environmental matters (pages F25-26) and regulations 26 Social: Product Responsibility Performance Description indicator Reported Cross-reference/Direct answer Customer health and safety PR1 Life cycle stages in which health and safety impacts of Fully For all packaging, Sonoco evaluates suppliers’ materials products and services are assessed for improvement for compliance with laws and regulations required by and percentage of significant products and services product safety. A large percentage of Sonoco’s consumer categories subject to such procedures packaging is developed for the food packaging industry as well as for the health and beauty market. Our Product Safety organization is responsible for ensuring compliance of our packaging products with all health, safety, and environmental laws and applicable to packaging materials in the countries and regions in which they are manufactured and marketed. Suppliers of components for these packaging applications are scrutinized for compliance with U.S. Food and Drug Administration and other national laws and regulations for food-contact packaging. Sonoco is currently pursuing GFSI (Global Food Safety Initiative) certification for several dozen Sonoco manu facturing sites. The certification of these Sonoco facilities is schedule to be completed by the end of 2014. Sonoco operates commercial recycling and materials processing centers. This allows Sonoco to collaborate with customers on available end-of-life options for their packaging. For new product development and some significant design changes, Sonoco may use an internally-created Design for Sustainability tool to evaluate raw material choices. In 2012, Sonoco also used the Sustainable Packaging Coalition’s COMPASS life cycle indicator tool to assess and communicate packaging changes. COMPASS has a material health and safety component based on industry- average raw material sourcing, manufacturing, and packaging converting practices. When appropriate, these COMPASS assessments were performed by a third-party consultant. Product and service labelling PR3 Type of product and service information required by Fully procedures, and percentage of significant products and services subject to such information requirements Sonoco manufactures packaging for consumer brands companies and others. These customers dictate and are responsible for package graphics, including labeling. The component materials in Sonoco packages are sourced from various vendors/suppliers. This may include other facilities that manufacture and supply component materials within or across divisions. These component materials are assessed for material health and safety based on vendor/supplier documents. As with labeling, safe use of the product packaging is ultimately determined by the customer. Much of Sonoco’s sales are assessed to ensure product and food safety. We have assessed and can communicate the end of life options for many of our product offerings and have closed loop return systems in place for our packaging. 27 Social: Product Responsibility Performance Description indicator Reported Cross-reference/Direct answer Marketing communications PR6Programs for adherence to laws, standards, and FullySonoco manufactures packaging for consumer brands voluntary codes related to marketing communications, companies and others. These customers dictate and are including advertising, promotion, and sponsorship responsible for package graphics, including labeling. However, Sonoco does provide data that are used to validate a claim. Additionally, environmental marketing claims made about Sonoco packaging to these customers or the public are reviewed for compliance with ISO 14021 and the Federal Trade Commission’s Guides for the use of Environmental Marketing Claims. Compliance PR9 Monetary value of significant fines for non-compliance Fully with laws and regulations concerning the provision and use of products and services Sonoco is not aware of any significant fines for noncompliance with laws and regulations concerning provision and use of products and services. 28 G3 content index Application Level C appendix 1: Countries Where the Organization Operates Australia Belgium Brazil Canada Chile China Colombia Estonia Finland France Germany Greece Indonesia Ireland Italy Luxembourg Malaysia Mexico Netherlands New Zealand Norway Poland Puerto Rico Russia Singapore Spain Sweden Switzerland Taiwan Thailand Turkey United Kingdom United States Venezuela 29 G3 content index Application Level C appendix 2: Labor Practices and Decent Work Performance Indicators LA1: Total workforce by employment type, employment contract and region broken down by gender (US and Canada) The total workforce broken down by employees, supervised workers Female: 2783 and gender Male: 8380Hourly: 8409Salary: 2754 The total number of employees broken down by type of employment Regular Female: TemporaryRegular Male: Temp Male: contract and gender 2747Female: 36 8281 99 The total number of permanent employees broken down byHourly Female: Salaried Female: Hourly Male: Salaried Male: employment type and gender 1873 910 6536 1844 The total workforce broken down by region and gender based on theCanadianCanadian Male: United States United States scale of the organization’s operations Female: 362 676 Female: 2421 Male: 7704 LA2: Total number and rate of new employee hires and employee turnover by age group, gender, and region Total number of new employee hires entering employment during the Female: 342 Male: 1082 reporting period broken down by gender Rate of new employee hires entering employment during the reporting Females: 24% Males: 76% period broken down by gender Total number of new employee hires entering employment during the Under 30: 600 30-50: 631Over 50: 193 reporting period broken down by age group Rate of new employee hires entering employment during the reporting Under 30: 42% 30-50: 44%Over 50: 14% period broken down by age group Total number of new employee hires entering employment during the Canada: 73United States: reporting period broken down by region 1351 Rate of new employee hires entering employment during the reporting Canada: 5%United States: period broken down by region 95% Total number of employees leaving employment during the reporting Female: 429 Male: 1015 period broken down by gender Rate of employees leaving employment during the reporting period Female: 30% Male: 70% broken down by gender Total number of employees leaving employment during the reporting Under 30: 314 30-50: 692Over 50: 438 period broken down by age group Rate of employees leaving employment during the reporting period Under 30: 22% 30-50: 48%Over 50: 30% broken down by age group Total number of employees leaving employment during the reporting Canada: 262United States: period broken down by region 1182 Rate of employees leaving employment during the reporting period Canada: 18%United States: broken down by region 82% 30 LA13: Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity The percentage of employees in the gender category (female/male)Female: 24.93% The percentage of employees in minority groupsTotal: 26.6% The percentage of employees by age group (under 30; 30-50; over 50)Under 30: 13.57% For the identified minority and age groups, report the percentage of employees by gender Male: 75.07% 30-50: 52.96%Over 50: 33.46% Minority Females: Under 30 8%Females: 10% Minority Males: Under 30 Males: 20% 15% 30-50 Females: Over 50 53%Females: 37% 30-50 Males: Over 50 Males: 53% 32% The percentage of individuals within the organization’s governance Female: 8.3% Male: 91.7% bodies in the gender category (female/male) The percentage of individuals within the organization’s governance Total: 4.0% bodies in minority groups The percentage of individuals within the organization’s governance Under 30: 0% 30-50: 17.4% Over 50: 82.6% bodies by age group (under 30; 30-50; over 50) 31
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