appleton coated green tier ii annual report...

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Appleton Coated Green Tier II Annual Report – 2016

Introduction In April 2013, Appleton Coated LLC (Appleton Coated or the Company) was awarded Green Tier II status by the Wisconsin Department of Natural Resources (WDNR) for our commitment to superior environmental performance and continuous improvement. We are very proud to have attained Green Tier II status. Appleton Coated is pleased to present this annual report of our environmental performance during 2016. This report has been prepared in accordance with guidelines established by the WDNR’s Office of Business Support and Sustainability. The report includes information regarding our company, the audit results of our environmental management system (EMS) and air compliance practices, progress on environmental objectives established by the firm for 2016, our environmental practices related to transportation and our supply chain, stakeholder involvement, and our relationship with the WDNR. Company Background Appleton Coated is a manufacturer and distributor of coated, uncoated, specialty and technical papers sold under the Ethos®, Utopia®, Altima® and other brand names. The company’s products are used in high-end commercial printing, textbook publishing, label papers, transactional printing and a variety of specialty, packaging and custom applications. Selling directly and through highly respected paper distributors, the company serves corporations, publishers, printers, converters, and graphic designers in North America. Appleton Coated’s corporate headquarters and manufacturing facility are located in Combined Locks, Wisconsin. Environmental Management System Audit Appleton Coated is ISO 14001 certified (Certificate No. 6L461-EM5, expiration date: September 14, 2018). We have maintained our certification status continuously since our initial certification in 2006. Our EMS is audited on a semi-annual basis by one or more auditors from NSF International Strategic Registrations, Ann Arbor, Michigan. During 2016, two surveillance audits were conducted by NSF. The report from the May 2016 surveillance audit noted the following.

Corrective Actions: There were two minor nonconformance corrective action requests resulting from the audit. 1 - “The organization shall establish, implement and maintain a procedure(s) for dealing with actual and potential nonconformity(ies) and for taking corrective action and preventive action. The procedure(s) shall define requirements for

a) Identifying and correcting nonconformity(ies) and taking action(s) to mitigate their environmental impacts,

b) Investigating nonconformity(ies), determining their cause(s) and taking actions in order to avoid their recurrence,

Appleton Coated Green Tier Annual Report 2016

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c) Evaluating the need for action(s) to prevent nonconformity(ies) and implementing appropriate actions designed to avoid their occurrence

d) Recording the results of corrective action(s) and preventive action(s) taken, and

e) Reviewing the effectiveness of corrective action(s) and preventive action(s) taken.

Actions taken shall be appropriate to the magnitude of the problems and the environmental impacts encountered. The organization shall ensure that any necessary changes are made to environmental management system documentation. The emergency drill critique activity/record is not available as the drill has not been conducted since re-assessment audit.”

In response to this corrective action request, the facility conducted and Emergency Response Team drill to test the skills of the team in an aspect of emergency response. The ERT Superintendent conducted a critique of the drill and completed the new ERT Emergency Drill Critique form. The Safety Supervisor and ERT met to review the completed critique form and the findings and recommendations were used for planning future ERT drills and assessing training needs.

Also, a facility-wide drill was conducted with notifications including security guards at Appleton Coated and the Local Emergency Response Committee (to avoid the potential for miscommunication regarding the nature of drill) and assignments for observing and documenting drill activities. The drill (based on a bomb scare) required a facility-wide evacuation. The Safety and Environmental Management met to complete the Review of Emergency Drill Effectiveness form. The drill plan, drill assessment and training assessment process were implemented.

2 - “The organization shall ensure that any person(s) performing tasks for it or on its behalf that have the potential to cause a significant environmental impact(s) identified by the organization is (are) competent on the basis of appropriate education, training or experience, and shall retain associated records. The organization shall identify training needs associated with its environmental aspects and its environmental management system. It shall provide training or take other action to meet these needs, and shall retain associated records. The organization shall establish, implement and maintain a procedure(s) to make persons working for it or on its behalf aware of

a) The importance of conformity with the environmental policy and procedures and with the requirements of the environmental management system,

b) The significant environmental aspects and related actual or potential impacts associated with their work, and the environmental benefits of improved personal performance,

c) Their roles and responsibilities in achieving conformity with the requirements of the environmental management system, and

d) The potential consequences of departure from specified procedures. No evidence is available for operational control training or other action(s) implemented for trucking personnel entering mill property to make deliveries or pick up loads.


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In response to this corrective action request, the facility installed new signs, described under the facility’s containment plan, on roads, parking areas, and docks used by truckers which will alert drivers to notify the Appleton Coated Emergency Response Team in the event of a spill.

The report from the November 2016 surveillance audit noted the following.

Executive Summary: “Mill is continuing to operate in challenging business environment in year 2016 Core part of the EMS is performing well. Aspect change management through review of capital projects and chemicals change process, Training and Awareness and coal consumption significant aspect ops. Control and related monitoring and management review are considered strength.” Corrective Action: There were no nonconformance corrective action requests resulting from the audit.

Internal audits of our EMS were also conducted twice during 2016 by a group of employees within the company. Environmental Compliance Audit Appleton Coated’s Safety Manager completed an environmental compliance audit focusing on the Asbestos Operations and Maintenance Plan in November 2016. His report noted one potential issue that was immediately addressed and resolved. Progress on Objectives Our environmental objectives are established and monitored by our Environmental Subcommittee, which is comprised of key environmental, operations, purchasing, and marketing personnel. The subcommittee reports to Appleton Coated’s Executive Committee. The objectives are updated every six months and are tracked on a monthly basis. The scorecards for the first half (H1) of 2016 and the second half (H2) of 2016 H2 objectives are included as Attachment A to this report. Our objectives, which are discussed below, cover a broad spectrum of environmental areas. A standard objective for the past few years has been to grow sales of our environmental products. This includes paper with high post/pre-consumer waste (PCW) content, FSC/SFI certified products, and our U2: XG, U1X extra green grades. Although we were not able to achieve all of the 2016 environmental product targets, improvements in a couple of areas were noted. Another on-going objective is Energy Savings measured in therms/ton of paper produced. We were able to meet our energy target in the CFS Complex at our mill; however, we were not able to achieve our goals for energy savings for the remainder of the plant. This was due in part to the volume of paper produced being down, which resulted in additional start-ups and shut-downs with less efficient energy usage. In anticipation of meeting future phosphorus limits in the WPDES permit for our wastewater treatment plant, we initially established an objective in 2014 to reduce the amount of phosphorus discharged to the Lower Fox River. We were successful in meeting the target in 2016. To achieve this objective, we installed a continuous ortho-phosphorus monitoring and dosage control system. Phosphoric acid is added to our activated sludge system to provide required nutrients for the microorganisms used to


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reduce the organic content of our wastewater. The dosage control system helps to optimize the feed rate of phosphoric acid and minimize residual phosphorus in our effluent. Plant operators also implemented operational changes to improve the performance of the treatment system. Appleton Coated has always believed in transparency of our yearly trends in achieving our environmental objectives. This is exemplified in our annual Corporate Sustainability Report (CSR) that has been published since 2007 and posted on our website. Our environmental performance is also presented in the Green Tier Sustainability Matrix which is included as Attachment B to this report. Transportation

Appleton Coated is recognized by the U.S. EPA as a registered SmartWay® Transport partner. We require that all of our outbound shipments are transported by SmartWay® carriers. SmartWay® is a voluntary partnership between various freight industry sectors and the EPA. The program has incentives for freight fuel efficiency and improvements and greenhouse gas reductions. Please see results of these efforts in CSR at page 7. Supply Chain Our environmental responsibility goes both ways with regards to our supply chain. Customers survey us to ensure environmental responsibility and we survey our pulp suppliers similarly. Throughout the year, we are required to document our environmental metrics and show progress to our customers and potential customers. It is now a segment in most requests for quotations that we receive. In 2016, 46.8% of the fiber used in paper making came from certified chain of custody sources and 24.2% was post-consumer recycled fiber. All of our wood fiber was from FSC controlled sources. See CSR at pages 2 and 3. Stakeholder Involvement Stakeholder involvement during 2016 included training, meeting with employees, participating in local environmental organizations, and providing financial support to groups involved with environmental improvement activities. Training on environmental matters included the following. 1. As part of our new employee orientation program, we include a training session that covers the

firm’s environmental policy, environmental management system and various waste management practices including universal waste handling. New employees are encouraged to participate in meeting our environmental policy goals.

2. Spill, Prevention, Control, and Countermeasure (SPCC) training was conducted for individuals involved in handling oil at Appleton Coated. As part of this training, we discussed means for preventing and responding to oil spills. Members of our Emergency Response Team also participated.

3. Contractors performing work at Appleton Coated are required to undergo environmental, health, and safety training. As part of this training, our environmental manager reviews our environmental policy, environmental management system, and procedures for complying with our waste management, spill control, and hazardous chemical handling procedures.


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Appleton Coated’s Environmental Manager served on the 2016 Board of Directors for Trees for Tomorrow, an environmental education organization. He is also a member of the Outagamie County Local Emergency Planning Committee (LEPC). As part of monthly business update meetings for employees of Appleton Coated, our President / CEO reviews the status of our environmental performance and opportunities for continued improvement. Employees are encouraged to participate on our Environmental Improvement Team. During 2016, our Environmental Improvement Team, which is comprised of Appleton Coated volunteers, organized a highway cleanup as part of Outagamie County’s Adopt-a-Highway Program. In addition the Environmental Improvement Team organized aluminum can recycling throughout the facility and used the proceeds to provide financial support for local environmental education. DNR Relationship Our involvement with the Green Tier program has enhanced the very good relationship we have had with the WDNR. During 2016, we drew on the WDNR’s expertise to review our plans for meeting the phosphorus discharge limits in the mill’s WPDES permit and beneficial reuse opportunities for our waste treatment sludge and boiler ash. WDNR staff provided valuable insights in both of these endeavors. Laurel Sukup, our single point of contact with the WDNR Green Tier Program, continued to provide valuable support during 2016. She understands our facility’s challenges and provided excellent guidance on various environmental issues facing Appleton Coated and expectations of the Green Tier program. Conclusion Sustainability has been and remains a shared value of our company. It embraces our commitment to the environment, support of our customers and local communities, and our long-term economic viability to our family of employees. We are proud of our involvement in the Green Tier program and will continue to strive toward continual improvement in our sustainable practices and environmental performance.


Attachment A 2016 Environmental Objectives


2016 ENVIRONMENTAL OBJECTIVES H1

JULY 31, 2016

1

Min 2

Fair 3

Target

4 Very Good

5 Excellent

Comments/ Status

1. Product offering: grow sales of environmental products Jenni / Ann

a) U2:XG --- Rolls (tons shipped per week) 83 100 116 122 128 74.5

b) U2:XG --- Sheets (tons shipped per week)

c) Reincarnation 100% (tons shipped per week) d) Ethos Offset 100% (tons shipped per week)

154

41

103

178

50

108

201

59

114

211

62

120

221

65

125

135.5 59.5 26.4

e) Growth of products ≥ 30% PCRF (tons shipped per week)

1206 1273 1340 1407 1474

1089.46

2. Recycling / Reuse Object - % of waste recycled excluding ash & sludge

Dan

84%

87%

90%

93%

96%

97

3. Form and hold meeting w/ Interested Persons Group for Green Tier

Jenni Dan Ann

Nov.

Oct.

Sept.

Will meet with suppliers

4. Achieve participation by contracted carriers in EPA SmartWay (participation based on carrier miles)

Angie

98.2 98.6 99.0 99.4 99.8 99.9

5. Achieve energy savings (unadjusted) David

a) Paper mill (therms/T) 107 106 105 104 103

b) CFS complex (therms/T) 21 20 19

18 17

6. Phosphorus effluent loading – lbs./day of phosphorus – 6 month average (5/16 – 10/16)

David 26 23 20 17 14 18.5

7. Implement Energy Savings Projects

David 0 1 2

8. Form ISO 14001-2015 Planning Committee Dan Nov Oct Sept Aug July

9. Implement Beneficial Reuse for Sludge David / Dan

Nov Oct Sept Aug July See Note 1

10. Implement Beneficial Reuse for Ash David / Dan

Nov Oct Sept Aug July See Note 1


2016 ENVIRONMENTAL OBJECTIVES H2 DECEMBER 31, 2016

1

Min 2

Fair 3

Target

4 Very Good

5 Excellent

Comments/ Status

1. Product offering: grow sales of environmental products Jenni /

Ann

a. U2:XG --- Rolls (tons shipped per week) 83 100 116 122 128 41.5

b. U2:XG --- Sheets (tons shipped per week) 154 178 201 211 221 139.4

c. Reincarnation 100% (tons shipped per week) 41 50 59 62 65 39.5

d. Ethos Offset 100% (tons shipped per week) 103 108 114 120 125 71.9

e. Growth of products ≥ 30% PCRF (tons shipped per week) 1206 1273 1340 1407 1474 1051.6

2. Recycling / Reuse Object - % of waste recycled excluding ash & sludge

Dan 84% 87% 90% 93% 96% 99

3. Form and hold meeting w/ Interested Persons Group for Green Tier

Jenni Dan Ann

Nov.

Oct.

Sept. 10/19/2016 with

vendors

4. Achieve participation by contracted carriers in EPA SmartWay (participation based on carrier miles)

Angie 98.2 98.6 99.0 99.4 99.8 100% as of

October 2016

5. Achieve energy savings (unadjusted) David

a. Paper mill (therms/T) 107 106 105 104 103 106

b. CFS complex (therms/T) 21 20 19

18 17 18.6

6. Phosphorus effluent loading – lbs./day of phosphorus – 6 month average (7/16 – 12/16)

David 26 23 20 17 14 2016 H2: 15.9

(future limit: 12.9)

7. Implement Energy Savings Projects David 0 1 2

8. Form ISO 14001-2015 Planning Committee Dan Nov Oct Sept Aug July Prelim. group

formed

9. Implement Beneficial Reuse for Sludge David /

Dan

Nov Oct Sept Aug July In progress

10. Implement Beneficial Reuse for Ash David /

Dan Nov Oct Sept Aug July

In progress


Attachment B 2016 Corporate Sustainability Report (CSR)

GREENERAppleton Coated 2016 Sustainability Report - A profile of growing sustainability

Published July 2017All photographs taken at Appleton Coated’s facility in Combined Locks, WI

Greener is our goal.Greener is our commitment.

More and more,greener is our result.

1

Sales of ‘green’ paperPercentage of total sales that are chain of custody products

2

FSC® certified

SFI® certified

GREENER :: Appleton Coated 2016 Sustainability Report

Responsible forest management continues to be important, especially as more corporations continue to monitor their supply chains for deforestation claims. Appleton Coated makes choosing chain of custody papers easy.

PEFCTM certified

’10

29.2%

1.2%

30.4%35.4%

3.2%

32.2%

’11

35.5%

29.3%

6.2%

’12

25.2%

8.1%

’13

33.3%

’14

25.3%

10.1%

35.6%

.2%

’15

.2%

40.5%

31.1%

9.2%

46.8%

10.2%

36.2%

.4%

’16

The balance of wood fiber used is all FSC Controlled Wood.

’10

10.1% 10.0%

’11

12.3%

’12 ’13

15.8%

17.6%

’14 ’15

24.7%

3

Use of post-consumer recovered fiberPercentage of total fiber comprised of PCRF


Demand for papers with higher (≥ 30%) post-consumer recovered fiber (PCRF) remains strong and drives our PCRF usage. Changes in product mix account for the movement in total percentage of PCRF fiber from 2015 to 2016.

24.2%

’16

’10

10.38

’11

10.84

’12

11.76

’13

12.33

’14

12.51 12.06

’15

4

Energy used to produce paperTotal energy expended per ton of product, in gigajoules

9 gigajoules

14 gigajoules


Changes in volume and grade mix contributed to an increase in energy use per ton.

12.57

’16

’10

19.1%

’11

29.2%

34.2%

’12 ’13

42.9%

’14

33.0%

28.4%

’15

5

Alternative energy used to produce paperNon-fossil fuel sources as percentage of total energy used


Two actions substantially reduced the amount of alter-native energy used in 2016. We idled our solid fuel boiler for 6 months, replacing its pro-duction with our natural gas boiler. Operational issues with using biofuels (wood waste and paper pellets) in the solid fuel boiler were also a factor.

’16

21.3%

’1010,075 3,324

450

’1112,504 3,832

339

’127,790 5,090

259

10,960 15,600

323’13

’1411,026 22,052

319

’1510,020 23,980

274

6

Waste sent to landfillAsh, Sludge and conventional Garbage, in tons

Ash Sludge Garbage


Our volume of ash to landfill decreased because the solid fuel boiler was shut down for 6 months and replaced with a nat-ural gas boiler. We continue to investigate options for beneficial re-use channels for our ash and sludge. Our conventional garbage sent to landfill was reduced by over 10% as our internal recycling efforts continue to grow.

’165,374 25,115

245

’10

97% 99%

’11

98.9%

’12

99.4%

’13

99.4%

’14

99.8%

’15

99.8%

’16

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Paper shipped the ‘smart way’Percentage of outbound freight through EPA® SmartWay® partner carriers


Appleton Coated is a United States Environmental Protection Agency (EPA) SmartWay® Transport part-ner. We require our regular outbound carriers to be SmartWay certified. Smart-Way partners work together to advance supply chain sustainability by measuring, benchmarking, and improv-ing freight transportation efficiency and to reduce the environmental impacts of the freight industry.

’100.30 0.18 0.04

0.02

0.62 0.25

0.02’110.04

0.03’120.80 0.34 0.03

0.03

0.70’13

0.35 0.04

0.64 0.30 0.10

0.03’14

Nitrogen Phosphorous

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Pounds of discharge per ton of production

Discharge into water

Suspended Solids Biochemical Oxygen Demand


The increase in discharges per ton in 2016 are related to fluctuations in volume and product mix.

0.43 0.28 0.15

0.02’15

0.56 0.35 0.07

0.03’16

’10

5,2436,168

’11

6,967

’12 ’13

6,280 6,278

’14

6,119

’15

9

Water into waste treatmentGallons per ton of production


The change in gallons per ton reflects a change in volume and product mix for 2016.

6,310

’16

’102.14 2.23 0.46 0.32

0.65

0.65’111.70 2.09 0.37 0.32

0.53’121.10 2.25 0.72 0.30

’131.25 1.90 0.50 0.68

0.63

2.12 2.10 0.44 0.62

0.70’14

’152.02 1.91 0.47 0.65

0.61

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Emissions into air (excluding CO2)Pounds of emission per ton of production

Sulfur Dioxide Nitrogen Oxides Carbon Monoxide Volatile Organic Compounds Particulate Matter


We were able to reduce our emissions into the air due to our increased use of the natural gas boiler.

’160.09 1.55 0.58 0.19

0.26

’11

2,842

’12

2,282

’13

2,315

’14

2,171 2,079

’15’10

N/A

11

CO2 emissions into airPounds of CO2 emissions from fossil fuel sources per ton of production (direct & indirect)


We saw significant reduction in our CO2 emissions because natural gas replaced solid fuels (coal, wood waste, and paper pellets) for approxi-mately 6 months of 2016.

1,886

’16

12

And now,8 additional points about sustainabilityat Appleton Coated.


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:: The Environmental Subcommittee (of our Executive Committee) sets the strategy and keeps a scorecard.

:: Two energy teams of employees work to identify ways to reduce energy usage.

:: An Environmental Improvement Team of both bargaining unit and non-bargaining employees drives deeper and broader involvement across the company. This team leads the Environmental portion of our Sustainability initiative with activities such as Adopt-a-Highway, recycling of cans, batteries, plastic bottles and toner cartridges, holds an annual e-waste recycling & paper document destruction event on Earth Day, and donates money towards landscaping for our local Habitat for Humanity chapter. Energy meters are available for employee checkout to monitor their energy usage at home.

We continually strive to find new ways to help make it a greener world both at work and in our homes.

1 Employee involvement is key to a sustainable future at Appleton Coated.


’11 ’12 ’13 ’14

1.9 2.0

2.7

3.8

’15

2.4

’11

4.5

’12

4.5

’13

5.5 5.8

’14 ’15

3.4

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Workplace health and safety are vital components of a company’s overall sustainability. Appleton Coated continues our efforts to enhance safety and promote good health among employees.

Employee safety is one of Appleton Coated’s Shared Values as well as a Key Objective.

Our annual OSHA incident rate is up slightly over the 2015 rate, but still significantly lower than our previous annual average. Our DART (Days Away Restrictions and Transfers) rate climbed slightly, but remains steady against historical rates.

The efforts of Appleton Coated to improve our employees’ overall wellness have expanded. We finished 2016 with an engagement rate of over 40% achieving silver status in our wellness program.

Appleton Coated remains vigilant and dedicated to improving the safety and health of our employees.

2 Workplace health and safety.

OSHA INCIDENT RATES

DART RATES


4.1

’16

’16

2.6

15

In 2016, we maintained our previous certifications and continue to be recognized by others.

Appleton Coated is Green-e® certified. Proof that we are committed to increasing Green Power usage and maintaining at least 20% renewable electricity.

For the sixth consecutive year, the Green Masters Program of the Wisconsin Sustainability Business Council recognized Appleton Coated as one of their Green Masters Award companies. This confirms that we have performed actions in nine areas of sustainability and scored in the top twenty percent.

Appleton Coated is one of six companies in the state to achieve Green Tier II status – Wisconsin’s environmental leadership program for businesses and local governments established by the Wisconsin Department of Natural Resources. Tier II recipients represent the truly exceptional companies that are not only committed to going above and beyond in their environmental performance, but are also committed to bringing about change in their industry, region, or within their supply chain.

Being ISO 14001 certified ensures that we continue to manage and improve our environmental impact based on our Environmental Management System.

Just as important is the renewed chain of custody certification of our company under three forest management systems – Forest Stewardship Council® (FSC®), Sustainable Forestry Initiative® (SFI®), and Programme for the Endorsement of Forest Certification (PEFC™).

Independent verification is essential in our drive to become greener. Appleton Coated is proud to meet the requirements of those who set the standards of our industry.

3 Third Parties continue to certify our products and practices.

-1


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Appleton Coated supports the sustainability initiatives of our customers and we insist on sustainability in our supply chain as well.

All of our pulp suppliers are certified to the standard of the Forest Stewardship Council® (FSC®). Appleton Coated requires that all of our pulp suppliers are at a minimum FSC Controlled Wood Certified. Many are FSC-COC (Chain of Custody), SFI-COC or PEFC-COC as well.

Significantly, over 97% of the fiber used to manufacture Appleton Coated products at our Combined Locks Mill comes from North America. Our major post-consumer recovered fiber suppliers are located within 80 miles of our mill. By limiting the distance our pulp has to travel, we are able to reduce the carbon footprint of our products.

Appleton Coated makes it easy for our customers to choose paper with higher percentages of post-consumer recovered fiber. This is important because recycled fiber uses less water and total energy in manufacturing and reduces the amount of waste sent to the landfill – which ultimately means less methane (a greenhouse gas with 25 times more heat-trapping power than carbon dioxide) is released into the environment.

4 Responsible fiber sourcing and promoting the use of post-consumer recovered fiber.


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We feel it is important to give back to the community and to support our employees in their volunteer efforts. Some of the organizations and programs that Appleton Coated supported in 2016 include the following:

:: Harbor House – helping women and children who are victims of domestic abuse:: Junior Achievement – teaching our youth in the classroom:: Emergency Shelter of the Fox Valley – providing temporary shelter and guidance to homeless

individuals and families:: Fox Valley Literacy Coalition – providing client-focused adult literacy education in the Fox Valley

An 8-person Community Involvement Team drives the “Community” portion of our sustainability efforts. In 2016, this team sponsored activities such as personal product donations to the “Help for the Homeless” drive and “Stuff the Bus” with school supplies for our local school district.

In 2016, Appleton Coated employees made nearly 350 donations through the Community Blood Center (CBC). Each donation has the potential of saving three lives, enabling over 1,000 lives to be saved thanks to our employees.

5 Expanding beyond the environment - making the world a better place.


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Appleton Coated maintains a database of environmental incidents and all actions involved. There were fifteen environmental incidents during 2016, as described below:

:: The following three Incidents resulted in a release to either the Fox River or Gardners Creek. :: On April 20, 2016, during a routine cleaning of a pipeline in the mill, about 10 gallons of calcium carbonate were released through a floor drain into the Fox River. The Wisconsin DNR was notified and the drain has been permanently sealed to prevent reoccurrence. No additional action was needed.:: On August 2, 2016, a pipe carrying used process water to the mill’s wastewater treatment plant developed a leak which released approximately 3,000 to 4,000 gallons of untreated wastewater to the Fox River. Appleton Coated notified the Wisconsin DNR and the National Response Center about the spill at the time of the incident. Based on subsequent analyses, no hazardous substances were released at levels exceeding the threshold reporting quantity. No further action was required.:: During cleanup of a spill of fiber inside the mill from a pulping operation, approximately 50 gallons of a solution consisting of fiber and water was released to an outside storm drain where it was conveyed to Garners Creek, a tributary to the Fox River. Some fiber was observed on the shoreline. But there was no water quality impact to the creek.

:: A fire occurred inside a solid fuel bunker at the mill’s boiler house on August 26, 2016. The fire was extinguished and the fuel was ultimately combusted in the boiler.

:: There were three incidents during 2016 involving the release of small amounts of oil or coolant from vehicles. These spills were contained and removed without any release to the Fox River.:: The remaining eight incidents consisted of chemical or oil spills inside buildings at the mill. The spilled material

was either contained and removed or was discharged to an internal drain where the spill was directed to our wastewater treatment facility.

6 Corrective actions were taken on the environmental incidents experienced in 2016.


493, 76%

133, 21%

Our people define our sustainability.

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The Appleton Coated workforce is union and non-union, male and female, under 30 and over 50 (and ages in between). 644 experienced people driving improvement, quality, and service. They define our sustainability and our brand. “People” is one of our Shared Values – “Create the environment and opportunities for employees to maximize talents and contribute to our success.”

Continuous improvement is part of who we are. Ongoing training and development is one of the ways we invest in our valued employees. Monthly e-learning topics are required to be successfully completed with a passing score. 100% of our non-bargaining unit employees receive regular performance and career development reviews.

We continue to flourish because of our dedicated workforce and our ability to innovate processes and develop new products.

7THE APPLETON COATED WORKFORCE PROFILE

644 TOTAL EMPLOYEES

452

3

101

83

Bargaining Unit Full-Time

Non-Bargaining Unit Mill Full-Time

Non-Bargaining Unit HQ Full-Time

Non-Bargaining Unit Part-Time

5, 1%

Male

Female

Minority - Male

Over 50

30-50

Under 30

79, 12%

346, 54%219, 34%

Minority - Female

13, 2%


Fixed Term Temporary

5

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Diversification and growth through new product development is critical to Appleton Coated’s sustainability.

Building on our strengths:

:: Broad papermaking and coating capabilities

:: Strong product development and collaboration capabilities

:: Environmental leadership

:: Long-term partnerships

:: Service, reliability, and flexibility

We have diversified our product offering and grown our revenue. 31% of revenue in 2016 was generated from new products introduced in the past 5 years.

8New product development is a primary focus.


25%

20%

15%

10%

5%

0%2012 2013 2014

% of Revenue from New Products

11.9%

16.6%

21.6%

31.0%

2015

30%

35%31.0%

2016

2016 had Appleton Coated continuing to build on its strengths: innovation, environmental leadership and superior service. As we see some decline in traditional printing & writing markets, we also see growth in new markets through partnerships and in new, innovative specialty products.

Sustainability has been and remains a Shared Value of our company. It embraces our commitment to the environment, support of our communities, and our long-term economic viability for our family of employees.

Areas for focus in 2017 are:

Environment:

:: Reducing our impact on the environment by finding beneficial reuses for our largest waste products: ash and sludge

:: Continuous education of our customers on the benefits of environmentally-responsible papers, especially the use of recycled fiber

Employees:

:: Working toward an improved safety performance by building daily awareness

:: Responding to the dual challenges of an aging workforce and an influx of new hires with robust training, coaching, and safety procedures, as well as hiring a full-time training coordinator.

:: Our wellness goal for 2017 is 60% engagement at silver status by September 1st. At mid-year, we have achieved 50% engagement, surpassing 2016’s 40% rate.

Growth:

:: Improving all aspects of our new product development process to continue to meet our goal of over 25% of revenue from new products

:: Maintaining or exceeding customer quality and service targets in existing and new business

Doug Osterberg Chief Executive Officer

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Continued commitment to sustainability.


All photographs taken at Appleton Coated in Combined Locks, Wisconsin © 2017 by Glen Hartjes of Image Studios

Our sustainability story doesn’t end hereIf you’d like more details on anything you see in this report, please e-mail Jenni Birkholz at Appleton Coated: [email protected].

And please share this report with others who may find it of interest.

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