November 15, 2002
Staples Commits to Recycled Paper
by William Baue
Spurred by social investors and environmental groups, Staples announces an environment-friendly
paper procurement policy.
This week the office supplies retailer Staples (ticker: SPLS) announced a
new environmental paper procurement policy that sets a precedent for environmental stewardship in its sector. The policy calls
for Staples to increase the proportion of post-consumer-waste (PCW) and alternative fiber content
in the paper it sells to 30 percent. The policy also calls for phasing out of paper derived from
endangered forests and greater support of well-managed forests.
implementation ends a two-year campaign by environmental and religious groups as well as socially
responsible investment (SRI) organizations to raise Staples' environmental commitment.
"In developing the policy, we took a collaborative approach with shareholder groups, our
suppliers and environmental groups," said Staples Public Relations Manager Owen Davis. Staples
generated $11 billion in revenues last year through its 1,400-plus superstores.
US Bancorp Piper Jaffray's Philanthropic and Social Investment Consulting (PSIC) worked together
with the Calvert Group on filing a
shareowner resolution with Staples. The proposal, which asked Staples to perform a feasibility
study on implementing the kinds of environmental reforms encompassed in the new policy, was
withdrawn after dialogue resulted in Staples' agreement to perform the study. PSIC and Calvert
then worked with Staples to draft the policy. Trillium Asset Management, another SRI firm, also
engaged in dialogue with Staples independently.
This shareowner action complemented
separate activities conducted by environmental organizations operating as a coalition called the
Paper Campaign, which continued to lobby Staples to adopt better environmental practices and
policies. Asheville, North Carolina-based Dogwood Alliance and San Francisco-based ForestEthics, who spearheaded the Paper Campaign, organized more than 600
protests at Staples stores. As well, the Paper Campaign enlisted the rock band REM to support the
use of recycled paper in commercials. As recently as September, ForestEthics published a report
entitled The Credibility Gap at Staples: Destroying Old Growth Forests, Misleading Customers
that documented Staples' continuing sale of paper from endangered forests.
Campaign applauded Staples' new policy that promises to decrease deforestation, particularly in the
southern U.S. According to the U.S. Forest Service, the southern U.S. is home to more endangered
forests than anywhere in the nation. There, the paper industry annually logs about 5 million
acres, an area the size of New Jersey. According to the Dogwood Alliance, a shift of 30 percent
from wood fiber to recycled fiber by all southern paper mills would save about 15 million acres, an
area comparable to all the forests in Tennessee, over the next decade. The policy has positive
ramifications for the protection of forests elsewhere as well, as Staples sources its paper from
throughout the world.
"Staples' new policy is the beginning of the end of the practice of
destroying endangered Southern forests to make paper," said Paper Campaign Director Danna Smith of
the Dogwood Alliance. "If Staples' competitors, such as Office Max, Office Depot, and Corporate
Express, do the right thing and follow Staples' example, our forests can be protected for future
Indeed, when the Home Depot (HD) reacted to a similar
campaign by agreeing to stop selling old-growth lumber, Lowe's (LOW) and a number of smaller
competitors followed suit within weeks. However, Home Depot's deadline for phasing out old-growth
by the end of 2002 is fast approaching, and it is unclear whether the building supplies retailer
will meet its goal.
Unfortunately, Staples' policy does not specify a clear deadline for
reaching its goal of selling 30 percent PCW and alternative fiber paper across its product lines.
"Staples' policy doesn't say whether it is going to hit 30 percent post-consumer content
in the next two years or five years," PSIC Senior Social Researcher Conrad MacKerron told
SocialFunds.com. Mr. MacKerron also pointed out that Staples left its options open as to which
certification protocol it would choose to verify that its paper products originated from
well-managed forests. While the industry's Sustainable Forestry Initiative (SFI) program is
getting better, the Forest Stewardship Council
(FSC) certification program is much preferable, according to Mr. MacKerron.
"There are a
few areas where investors and environmental groups need to watch to make sure that Staples lives up
to the spirit as well as the letter of its policy," observed Mr. MacKerron.