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Special Report

Leadership in Paper and the Environment

by Derek Smith

February-March, 2008
The links between converting and finishing in the printing industry and global warming may appear to be particularly obscure. A second look, however, might suggest some new business opportunities which have both the potential for increasing profitability and the downside of being excluded from a powerful new market through inaction or lack of recognition of the links between business and global warming. These are becoming increasingly evident and important.

The explosion of the environmental market can be attributed to many things but perhaps there are three drivers that are particularly relevant in the laminating, foil stamping, and finishing industries.

The first major driver is the huge growth in public awareness that climate change is a real problem. Action will have to be taken to deal with some of these problems and incidentally, to take advantage of some of the opportunities that always come with the emergence of danger.

The second driver is Corporate America itself. The financial scandals of the nineties gave rise to a corporate view of social responsibility that, while not entirely new, was very different from the exclusively bottom line-driven approach that had perhaps led to some of those financial problems. Generally speaking, Corporate America is run by highly intelligent men and women, and these men and women fully understand the potential impact of global warming on commerce and industry throughout the world and their social responsibility with it. In almost every one of the Fortune 500 Top Companies, environmental performance is now rated as one of the most important areas of concern when reporting to the stakeholders.

The banking and finance sectors are particularly aware of the need to meet key environmental criteria. This is beginning to affect lending policies throughout the world and consequently, the environmental performance of would-be borrowers.

The third driver is the growing power of the environmental groups who are extremely involved in many commercial and governmental areas in working with companies, cities, and states to determine environmental policies which will reduce the carbon footprint of their clients. Some environmental groups also are willing to attack commercial organizations that do not appear to understand the environmental consequences of their corporate behavior. Staples, Victoria’s Secret, and now Sears have faced this kind of confrontation, frequently at significant cost.

All of these indicators, together with the fact that more than 25 states of the union, 350 cities in the United States, and more than 400 universities and colleges have signed on to environmental programs for the reduction of carbon emissions, are clear signs of the way this huge new market is developing.

In the paper and printing industries in the United States, there is no longer a paper mill that is not actively marketing its environmental profile, practices, and products to the printing industry and in particular, to end users. The impact on paper merchants and printers is apparent in the growth of merchants and printers who have applied for SFI or FSC certification in the last year alone.

Both these programs relate to forest protection. The forests of the world are the second great defensive system we have for the protection of the planet against carbon dioxide (after the oceans) because of their ability to extract CO2 from the atmosphere and sequester it until the tree dies. In addition, more than a billion people live in and off the forests. The natural ecosystem that protects vast numbers and types of biodiversity relies on the trees for governance and the industries that rely on wood for survival are apparent to all home owners and users of paper!

It would be a fair assumption then to think that we protect the forests of the world, an assumption that is sadly quite wrong. Illegal logging in South America, South East Asia, and Eastern Europe has reached endemic proportions. The growth of the Chinese economy and the consequent demand for timber has heightened the problem. Unless forests are managed like nature, with regard for the consequences to the people who live in them, to the biodiversity that exists because of them and the industries that rely on them, and most of all for the protection they offer against global warming, it is hard to see how the damage so far caused by man can be reversed.

In the developed countries of the world, forestry management is commonplace and here in the U.S., FSC and SFI certifications are the two programs that guarantee for the end user that the paper produced from forests managed with these programs is environmentally responsible. To use the logos of either system, all the links in the supply chain between mill and end user have to be certified - the paper mill, the merchant, and the printer. This carries a cost and takes a few weeks to implement but as all mills in the USA are now certified by one or both these programs and all merchants carry at least one certification with some holding both, the issue is becoming more entrenched as common practice.

For full details of these programs and what they entail, please visit the web sites www.fscus.org and www.sfiprogram.org.

I have cited only paper and print here, but the logic is quite clear. Corporate America and the general public are driving up the demands for environmental responsibility in the companies that make the products they buy and in those products themselves. For the world of finishing, foil, and laminating, the issues remain the same, as do the opportunities and the responsibilities. The environmental market is here for good and is far from reaching the power it will eventually have in determining how our businesses are run. The opportunities to become part of that development are exciting and challenging… and potentially very profitable, as well as being morally and socially right!

Derek Smith has spent a lifetime in paper and print. He formed Derek Smith & Associates LLC as a consultancy company in 2003 and has consulted for FSC, SFI, Metafore, and several major printing companies, paper mills and merchants, and graphic designers on environmental issues. For more information about the writer, please see www.paperleadership.com. To contact Smith, e-mail dereksmith@paperleadership.com or call (202) 465-4351.