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2010 Sustainability Repo


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About this Report

This report covers International Papers sustainability performance for calendar-

year 2010 and all data are reported as of December 31, 2010, unless otherwise

noted. Additional information on sustainability at International Paper is available

online at www.internationalpaper.com. We compiled this report using the Global

Reporting Initiative (GRI) G3 Indicator Protocols and self-declare that it meets Level

B application requirements under the GRI guidelines when supplemented with

additional information and a GRI index that are available via links in the online version

of this report. Information on the GRI reporting framework can be found at www.

globalreporting.org.

We began publicly sharing our sustainability objectives and performance progress

nearly two decades ago and continue to do so. To keep our customers, investors,

employees and other key stakeholders informed and up to date, we intend to publish

our next Sustainability Report in the spring of 2012 and annually thereafter.

Content Development

In preparing content for this report, International Paper identied relevant topics

and GRI indicators using the GRI reporting principles of materiality, stakeholder

inclusiveness, sustainability context and completeness.

To determine material topics for inclusion, we asked our operations, business

functional departments and other stakeholders to identify:

main sustainability interests and expectations of our stakeholders, especially

those who we expect to review this report: employees, customers, investors,

nongovernmental organizations, government ofcials, suppliers and members of the

communities in which we operate;

major topics and future challenges for the sector reported by peers and competitors;

current and emerging laws, regulations, international agreements and voluntary

agreements with strategic signicance to our Company and our stakeholders;

the Companys sustainability impacts, risks and opportunities;

our key organizational values, policies, strategies, operational management systems,

goals and targets;

core competencies of our Company and how they contribute to sustainable

development.

For questions or more information about this report, contact:

[email protected].

Throughout

this report,

this icon

indicates

there is more

information

available

online.

more

online
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International Paper 2010 Sustainability Report 1

International Paper2010 Sustainability ReportOur vision is to be one of the best and most respected companies

in the world. As we continue our efforts to become a stronger, morecompetitive, more focused company, the key to success will be our

unwavering commitment to people, customers and operational

excellence. This commitment reaches into every corner of our

business and makes International Paper a sustainable company that

is well-positioned for the future.

To achieve our vision, we have to be the best at what we do. This

means attracting and retaining top talent in every area of our

business. By nurturing a culture of inclusion where diverse employees

have opportunities to learn, grow and work safely, we have made

International Paper an employer of choice for entry-level graduates

and experienced professionals alike.

Todays paper, pulp and packaging customers demand more of

their suppliers than high-quality, innovative products. They want a

supply chain partner who can help them achieve their sustainability

objectives. At International Paper, we drive responsible management

through every step in our supply chain to meet our customers

expectations and to enhance our own sustainability.

Our manufacturing operations require substantial resources

wood fiber, water, energy and chemicals. Our goal is to use these

resources efficiently and to leave the smallest footprint behind. We

use continuous performance improvement to measure our progress.

In 2010, we saw improvement in global energy use, greenhouse gas

emissions, and sulfur emissions.

Being a good neighbor means participating in our communities

and lending a helping hand when needed. Throughout 2010,

International Paper and our employees contributed time, talents and

financial aid more than $10 million to support environmental

education and literacy programs, health and human services

organizations and disaster relief efforts around the globe.

Sustainability is integrated throughout our corporate governance,

from the Board of Directors and senior leadership to business

leaders and facility managers. It is the result of a culture of integrity,

in which ethical conduct and open communication are the norm.

Ethics training is routine and required for salaried employees, and all

employees have a variety of pathways for reporting ethics violations.

Sustainability at

International Paper

Page 6

Putting

People First

Page 8

Responsibility Througho

the Paper and Packaging

Life Cycle Page 12

Protecting and Conservi

the Environment

Page 18

Supporting

Our Communities

Page 32

Governance

and Ethics

Page 38


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2 International Paper 2010 Sustainability Report

Letter from theChairman and CEO

Since our last published sustainability report in 2006, the world around us and our Company itself

significantly changed. In that five-year span, we took the first steps toward a major transformation plan,

repositioning International Paper as a global paper and packaging company while making us stronger

and more competitive. We also entered and emerged from the longest, deepest recession in more than

seventy years. Throughout these events, our dedication to sustainable practices never wavered.

Sustainability has been a part of International Papers practices for more than 110 years. Its a

heritage that begins with the wood fiber used during our manufacturing process. In North America,

we purchase most of our wood fiber from private landowners who wisely manage their land, and in

many cases, pass that land down to the next generation. To ensure responsible forest management,

as well as the renewability, transparency and accountability of our resource chain, we partner with

independent certification organizations including the North American Sustainable Forestry Initiative,

the Programme for the Endorsement of Forest Certification, and the Forest Stewardship Council.

In the U.S., our industry plants more trees than it harvests each year planting nearly 1.7 million trees

per day. Its a strong example of a shared commitment to responsible forestry. At International Paper,

we are well-positioned to bring similar leadership to emerging markets worldwide.

In Russia, where sustainable forestry is a growing concept, International Paper is a leading advocate of

safe logging and responsibly managed forest leases. As part of a recent venture into India, we plan to

participate in a nursery program fostering local growth of Casuarina, Leucaena and Eucalyptus trees.

And in Brazil, our harvest of fast growing, renewable hardwood plantations means there is less pressure

on native Brazilian forests.

At all points on the globe, responsibly managed wood and recovered fibers make up the raw materials

used to produce our paper and packaging. As a partner in the Environmental Protection Agencys

Climate Leaders initiative, we strive to produce these materials in a minimally invasive way, relying on

clean fuels and self-sustained energy.


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In our U.S. mill system, nearly 75 percent of generated energy is derived from renewable biomass and

biofuels. Over the past decade, we have reduced our non-renewable fuel usage in the U.S. by 38 percent

and corresponding greenhouse gas emissions from fossil fuels by 40 percent. Outside of North America,

close to 70 percent of our energy needs are generated by renewable sources. Recent investments at our

mills in Svetogorsk, Russia, and Kwidzyn, Poland, increased electrical self-sufficiency at each site to 50

percent and nearly 90 percent, respectively.

A number of the products we make can be reused and recycled many times over. Each year,

International Paper recovers six million tons of fiber about 12 percent of total U.S. fiber collection,

making International Paper the fourth largest processor of recovered fiber and the largest consumer of

recovered fiber in the U.S.

Being good citizens also means protecting employee health. For the 11th year in a row, we improved our

safety performance and achieved our lowest-ever global total incident rate (TIR) of 0.83. Since the year

2000, we have improved our TIR by 68 percent. This past year, we introduced the LIFE program Life-

Changing Injury and Fatality Elimination as a way to connect with people and eliminate accidents

worldwide. Its our commitment to the employees of International Paper and their wellbeing.

We are proud to play a sustainability leadership role, and to date, remain pleased with our progress. But

our work is not yet done. Leadership and constant improvement go hand-in-hand. In the days ahead,

we will find ways to use water and energy more efficiently, further reduce our emissions, and eliminate

life-changing injuries and fatalities from our workplace. Each of these goals encompasses a part of

our larger value system, and its a value system shared by nearly 60,000 employees in 24 countries

worldwide. At International Paper, we stand ready, willing and able to make even greater strides toward

a more sustainable world.

Sincerely,

John Faraci

Chairman and CEO, International Paper


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International Paper is a global leader in the paper and packaging industry. With about 60,000

employees in 24 countries, we manufacture a wide range of coated and uncoated paper, consumer

packaging, pulp and industrial packaging products that deliver quality, reliability and innovative

business solutions to customers worldwide. In 2010, our total production volume was 17 million

metric tons. Through xpedx, our North American distribution business, we also provide a wide

variety of print, packaging and facility supplies and equipment to printers, manufacturers, retailers

and commercial facilities. International Paper Company is incorporated in New York, with our global

headquarters located in Memphis, Tenn. Our stock is traded internationally on the New York Stock

Exchange (ticker symbol IP).

Customers

Our major customers include the banking, commercial printing, printing papers, tissues and absorbent

products, foodservice, consumer products, protein, industrial chemical, office superstore, book

publishing, agriculture, distribution and recycling industry sectors.

FacilitiesOver the last decade, International Paper has evolved with acquisitions and divestitures designed

to help us improve our financial performance, focus on our core strengths and take advantage of

strategic opportunities.

International Papers operations include pulp and paper mills and converting and packaging plants

in the Americas, Europe, Asia, Russia and North Africa. Our U.S. facilities include 20 pulp, paper

and packaging mills, 144 converting and packaging plants, 19 recycling plants and three bag facilities.

Outside the United States, our facilities include eight pulp, paper and packaging mills, 67 converting

and packaging plants and two recycling plants. We distribute printing, packaging, and facility supplies

and equipment through more than 250 locations in the United States, Canada, Mexico and Asia.

Forestlands

International Paper sold most of our previously owned forestland in the United States as part of

our five-year transformation plan that was completed in 2010. At year-end we owned or managed

approximately 260,000 acres in Brazil and had forest harvesting concessions for more than 860,000

acres of government-owned forestland in Russia.

International PaperCompany Profile


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Financial Highlights

International Paper remains committed

to a balanced use of cash, including

incremental debt reduction and returning

cash to shareowners. We will pursue only

investments that make International Paper

a stronger, better company in the years

ahead. We are confident this approach,

together with our current portfolio of

businesses, can generate strong earnings

and free cash f low while generating

better than cost-of-capital returns over the

economic cycle.

In the United States, we will capitalize on our strong position in paper and packaging and focus on

generating solid, sustainable free cash f low from those businesses. We are well-positioned to succeed

and grow profitably while serving customers in high-demand, low-cost markets including Brazil, China,

Eastern Europe and Russia. This balanced global portfolio will pave the way for significant earnings

improvement throughout 2011 and beyond.

Results

(in millions, as of and for the year ending

December 31, 2010)

Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,179

Retained Earnings. . . . . . . . . . . . . . . . . . . . . . $2,416

Industry Segment Operating Prot. . . . . . . . . $1,686

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . $25,368

1-9

10-99

100

Number of offices and

facilities (by country)

International Papers Worldwide Presence


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For more than 110 years, International Paper has championed the sustainable management of natural

resources. Today, we continue to build on this tradition as we look for new and innovative ways to

further improve our environmental footprint, strengthen our strategic partnerships and strike a critical

balance among environmental, social and financial performance.

Because our products are primarily made with wood fiber, our commitment to environmental

excellence naturally begins in the forest. While our global forestland ownership has decreased, our

commitment to stewardship has not. Our products, policies and procurement practices continue to

help keep the worlds forests healthy and productive. Customer needs for our paper and packaging

products drive our demand for wood fiber, most of which we purchase from private landowners.

In turn, our commitment to purchase fiber from responsibly managed sources encourages these

landowners to plant more trees and continue to manage their lands rather than convert them to non-

forest uses such as commercial development. In fact, the U.S. forest products industry plants more

trees than it harvests each year about 1.7 million trees per day. When trees are grown in responsibly

managed forests, they are a renewable resource.

Beyond the forest, our environmental commitment continues through the life of our products.

From design and manufacturing to end use, recycling and disposal, we view product sustainability as

fundamental to running a successful business.

Key Opportunities

We see a number of potential opportunities to enhance our sustainability performance, including:

enhancing our efforts to promote responsible forest management globally;

educating our employees, our customers and the general public about the relationship between the

demand for paper products and the growth of the forests;

using water and energy even more efficiently;

finding new ways to help customers meet their sustainability goals;

leveraging the inherent sustainability of paper and packaging with innovative product designs;

partnering with our stakeholders to advance mutual sustainability objectives;

moving closer to our goal of eliminating life-changing injuries and fatalities in our workplaces; and

strengthening our participation and support in the communities where we operate.

Sustainability atInternational Paper


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Stakeholder Engagement

The process used to identify and select the stakeholders with whom we engage is driven by our business

needs. Our businesses and facilities engage with individuals and organizations in a variety of ways to

better understand and address their expectations and interests. Some ways in which we engage with our

most significant stakeholders are described below.

Employees Intranet sites, newsletters, presentations, sustainability champions

Customers Sales relationships, regular visits, strategic meetings, customer service surveys, special

events, internationalpaper.com and websites for Company initiatives

Investors Internet site, webcasts and presentations, analyst meetings, press releases, financial

reports, interaction with institutional ranking organizations

Government ofcials Legislative advocacy, discussions on trends and positioning, plant tours

Local community members Economic and charitable partnerships, plant tours, Community

Advisory Councils, internet site, media, participation in community organizations

Nongovernmental organizations Internet site, meetings between NGOs and business leaders,

corporate communications

Suppliers Meetings between suppliers and our procurement team, supplier surveys

International Paper Industry Organization Memberships and Participation

American Forest and

Paper Association

American Industrial

Hygiene Association

American Society of

Safety Engineers

Brazilian Pulp and

Paper Association

(Bracelpa)

Brazilian Pulp and

Paper Technical Association

(ABTCP)

Confederation of European Fine

Paper Industries

Corporate

Eco Forum

Council of Industrial

Boiler Owners

Fiber Box

Association

Forest Stewardship

Council

Industrial Energy

Consumers of America

International Emissions

Trading Association

Mercer-ORC Worldwide

(Occupational Health and

Safety and Occupational

Health Forums)

National Association of

Environmental Managers

National Association

of Manufacturers

National Council for

Air and Stream

Improvement

Pulp and Paper

Safety Association

Russian Association

of Pulp and Paper

Organizations &

Enterprises (Bumprom)

Sustainable Forestry

Initiative

TAPPI (worldwide pulp and

paper association)

World

Environment Center

more

online
http://www.internationalpaper.com/US/EN/Company/Sustainability/stakeholderengagemen.htmlhttp://www.internationalpaper.com/US/EN/Company/Sustainability/stakeholderengagemen.htmlhttp://www.internationalpaper.com/US/EN/Company/Sustainability/stakeholderengagemen.html


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International Papers employees are the foundation of our sustainability. They make our products,

support our customers, manage our day-to-day environmental performance and make our communities

better places to work and live. To help us attract and retain the best of the best, we promote a

diverse work environment where our employees can learn, grow and, most importantly, work safely.

Approximately 61 percent of our employees, excluding joint ventures some 36,120 are located in the

United States. Of these U.S. employees, approximately 23,460 are hourly and about 12,660 are salaried;

about 13,920 are represented by labor unions. Outside the United States, approximately 15,350

employees are hourly and 7,790 are salaried.

Health and Safety

International Papers comprehensive health and safety program is designed to effectively manage health

and safety hazards and drive continuous performance improvement. Led by our employees, our safety

initiatives focus on identifying hazards, promoting awareness and defining expectations that help us

eliminate unsafe conditions and behaviors. Our approach to safety includes six key elements.

Leadership. Senior management is an active and visible driver of our safety programs, with frequent

management communications and support of high profile safety initiatives, such as the Life-changing

Injury and Fatality Elimination (LIFE) initiative (see page 9). This safety commitment is shared by

leaders at all levels of the organization and by our employees who are actively engaged in improving

our safety performance.

Corporate Standards. We are establishing a series of standards that define expectations for managing

common health and safety hazards across the Company. Focus areas include moving equipment,

ergonomics, dock safety, hearing conservation, zero energy states and lockout/tag-out procedures,

among many others.

Training and Awareness. We implement a range of training and awareness activities to ensure

employees have the knowledge and skills necessary to manage safety hazards consistent with corporate

standards and to nurture and enhance our safety culture. For example, in 2010 we conducted 10

internal EHS University sessions for paper mill managers, mill environment, health and safety

(EHS) managers and converting plant EHS professionals. Content included a wide range of topics,

from EHS leadership, employee engagement and EHS management tools to current and emerging

regulations, compliance guidelines and incident investigation.

Risk Elimination Process. We use hazard risk assessments and auditing tools to identify and eliminate

potential unsafe conditions. This approach helps to ensure the health and safety of our employees

Putting People First


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by encouraging them to observe specific work activities

or areas of our facilities and to identify and address

potential safety concerns.

Metrics, Goal-setting and Accountability. Guided

by our vision of an accident-free workplace, we drive

continuous safety performance improvement by setting

specific annual safety goals for each of our locations andbusinesses. Success in achieving these targets is formally

considered in performance evaluations. Safety incident

reporting is a formal process consistently implemented

on a global basis. Data are reported to and reviewed

by corporate management and are incorporated in the

goal-setting process.

Annual Plans. Targeted annual plans are developed

for each business to address priority improvement

opportunities based on a holistic review of safety

incident trends.

Health and Safety Performance

One of International Papers key safety metrics is the

Total Incident Rate (TIR), which helps us track our safety

performance by measuring the number of reportable

incidents per 100 person-years worked. We achieved our

best-ever TIR of 0.83 in 2010. This is an incremental

improvement over 2009 and represents a 68 percent

improvement over the last 10 years.

As we move closer to our goal of zero safety incidents, we

are focused on continued reduction in total incidents as

well as in lost workday and severe, life-changing injuries.

Despite these efforts, we are particularly saddened to

report three employee fatalities during 2010, each of

which was thoroughly investigated.

As of January 2011, 116 of our global facilities achieved

an important safety milestone: one year or longer

without a recordable injury. Eleven of these locations

have not had a recordable incident for at least five

years. In addition, approximately 40 of our sites have

been recognized by the U.S. Occupational Safety and

Health Administrations (OSHA) Voluntary Protection

Program (VPP). The VPP recognizes exemplary worksites

that have comprehensive, successful safety and health

management systems and maintain injury rates below

their industry average.

LIFE Preventing the Most Serious Injuries

and Fatalities

While we are proud o our paper and packaging

industry-leading TIR, saety at International Paper is

not about numbers. It is about the health and well-

being o our employees and making sure they return

home sae and healthy every day. In October 2010,

Chairman John Faraci launched the Lie-changing

Injury and Fatality Elimination (LIFE) initiative during

his quarterly broadcast to employees. The program

is helping us sharpen our ocus on the types o

injuries that can potentially end lives or orever

change them. The goal o LIFE is or International

Paper to eliminate atalities and lie-changing

injuries. The program emphasizes fve categories

o LIFE injuries: equipment saeguarding/zero

energy state, motorized equipment incidents, alls,

exposure to harmul substances or environments,

and driver saety. LIFE initiative components include

inormation and data driven initiatives, program and

risk management initiatives, training and education,

communication and employee engagement.

Total Incident Rate, 20002010

0.0

0.5

1.0

1.5

2.0

2.5

3.0

201020082006200420022000

LIFELIFE-CHANGING

INJURY AND

FATALITY

ELIMINATION

Its about...


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Employee Wellness

In October 2010, International Paper introduced HealthyLife, a new wellness benefit for current

U.S. employees with salaried benefits and their spouses or domestic partners. A partnership between

employees and the Company, HealthyLife provides incentives for active participation in our wellness

program. It offers eligible employees and their spouses or domestic partners not only the rewards of

better health, but also up to an annual $600 reduction in their medical insurance premiums. ForInternational Paper, investing in prevention and wellness is the first step toward managing rising health

care costs.

We also provide an Employee Assistance Program (EAP) for all employees worldwide. The EAP

provides employees and their immediate families access to professional counseling resources that can

help address wide-ranging issues, from substance abuse and depression to work/life balance and child

and elder care.

Employee Relief Fund

International Paper established the Employee Relief Fund (ERF) to assist our colleagues and

communities impacted by natural disaster, personal tragedy or other events beyond their control.

In addition, the ERF enables the Company and our employees to pool our resources in response

to disasters around the world. In 2010, donations to the ERF totaled just over $380,000, including

$150,000 from our employees and $230,000 from the Company.

The ERF is managed by a dedicated committee of employee volunteers. The team discusses each

application, determines eligibility and ensures grants are quickly processed to assist employees with

immediate needs.

In 2010, 26 International Paper employees faced signicant losses from house res, ooding,

tornados and earthquakes. We provided ERF grants totaling $45,000 to help these employees meet

food, shelter and clothing needs.

IP employees stepped up early in the year following the January earthquake in Haiti with donations

that helped provide immediate care, emergency shelter and clean water for earthquake survivors.

With the Companys initial donation of $50,000 plus the dollar-for-dollar match on more than

$134,000 in employee gifts, International Papers donations for Haiti relief surpassed $300,000.

Just 60 days later, a magnitude-eight earthquake shook Graneros, Chile, where International Paper

has a container plant and 180 employees. The Company and employees rallied again, raising nearly

$60,000 through the ERF. These funds helped 12 International Paper employees who suffered

signicant property losses.


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Workplace Diversity and Talent Retention

Since 2001, International Papers diversity efforts have been led by our Chairmans

Diversity Council. The Council comprises senior leaders who work with a

representative group of employees to create and maintain a culturally rich and

collaborative work environment. Employees participate on the Council on a

rotating basis to promote inclusiveness. The goals of our overarching diversity andinclusion initiative Many Voices, One Vision: A Blueprint for Success are

to provide a more progressive, flexible and inclusive workplace and to enhance

representation at all levels of the Company so we can compete effectively in the

diverse national and global environment.

The Councils Blueprint for the Workforce outlined strategies for attracting and

retaining women and minorities at International Paper. Today, 32 percent of our

corporate officers are women or minorities, compared to only 17 percent in 2006.

The Council continues to work on a Blueprint for the Workplace, engaging

employees to find ways to more effectively manage the challenges of balancing

careers with family issues, school and other aspects of daily life.

Supplier Diversity

In addition to our internal efforts, we have a supplier diversity initiative designed to provide women

and minority business owners with equal access to purchasing and sourcing opportunities. This effort

extends from our global sourcing teams to local facilities and contributes to the economic well-being

of the communities where we operate. It reflects not only our own core values, but also those of our

customers. Over the last five years, International Papers purchases from women- and minority-owned

suppliers have increased to an annual average of $340 million.

As part of our commitment, we hold training and awareness sessions to educate employees on our

supplier diversity strategy and process. We also provide new minority- and women-owned suppliers

with an orientation on how to effectively conduct business with us and we communicate our diversity

progress to major customers who value diversity, strengthening our relationships with both.

Leadership Institute

International Papers Leadership Institute is an interactive place of learning and growth where our

leaders develop skills that help them engage employees in executing our operational strategies and

exceeding our business objectives. The Institute provides programs, instruction, services and resources

that align with our key business strategies and initiatives, and it promotes leadership development

through observation, assessment, feedback and coaching. These efforts support a consistent leadership

philosophy while introducing new trends and approaches that are essential to our Companys future

success. Since 2005, nearly 1,300 employees have participated in our Leadership Institute programs.

Over 50

years old,

30 percent

3050 years old, 55 percent

Under 30

years old,

15 percent

Female,

24 percent

Male,

76 percent

Total Employees: 60,000

as of December 31, 2010


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From the design of our paper and packaging products and the harvesting of trees, to the ultimate

recycling of paper and packaging, International Paper drives responsible management through

every step in the life cycles of our products. As a forest products company, we understand that

these life cycles extend beyond our operations to include the vendors that supply materials to us

and the customers that buy our products. We recognize that our drive for continuous performance

improvement also means assisting our customers in meeting their own paper- and packaging-related

supply chain sustainability goals.

Responsibility Throughout thePaper and Packaging Life Cycle

Product Design Recovery or Disposal

Raw Material Sourcing Product Use

DistributionProduct Manufacturing

Fiber-Based Product Life Cycle


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Responsible Forestry

For generations, International Paper has led the forest products industry in promoting the planting

and responsible harvesting of trees, in monitoring forest productivity and in conserving and protecting

forest biodiversity in the United States and around the globe.

By participating in research and promoting innovation, we encourage continuous improvement in thesustainable management of global forest resources. We help assure the responsible management of

millions of acres of forestland worldwide through our participation in credible third-party forest and

fiber-procurement certification programs. We also provide a robust wood fiber market to thousands of

responsible landowners and sustainably manage our Company-owned land in Brazil.

Certifying the Supply Chain

How third-party certifications cover the supply chain from forest to consumer.

Forest ManagementCertification

Fiber ProcurementCertification

Chain of CustodyCertification

FOREST PROCUREMENT HARVESTING MANUFACTURING CONVERTING DISTRIBUTION CUSTOMER

Go Paper. Grow Trees.

Go Paper. Grow Trees. is a consumer awareness campaign sponsored by International Paper that

gives consumers the facts about the impact paper products have on U.S. forests. A key element

of this campaign is the interactive website, GoPaperGrowTrees.com, which uses forestry facts,

multimedia tools and engaging videos to tell the true story and dispel myths about paper production.

Go Paper. Grow Trees. connects consumers to the challenges private landowners face in growing

and maintaining healthy forests and demonstrates how paper usage helps create and sustain a

demand for trees. For more information,

log on to GoPaperGrowTrees.com and

share the message by linking to your

favorite social media platforms.

more

online
http://www.gopapergrowtrees.com/http://www.gopapergrowtrees.com/http://www.gopapergrowtrees.com/


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Global Policy on Certications

International Paper recognizes and supports the following third-party certication standards:

Programme for the Endorsement of Forest Certication (PEFC) a

global umbrella organization that endorses national certication standards

and promotes sustainable forest management and chain of custody.

www.pefc.com

Forest Stewardship Council (FSC) a globally recognized

standard that uses regionally developed forest management standards

and includes chain of custody.

www.fsc.org

Sustainable Forestry Initiative (SFI) a North American

certication standard that includes provisions for forest management,

ber procurement and chain of custody, and is endorsed by PEFC.

www.sprogram.org

Other PEFC-endorsed standards such as Ceror and American Tree Farm System (ATFS)

www.inmetro.gov.br/qualidade/ceror.asp

www.treefarmsystem.org

Most of International Papers operations are certied to one or more of these third-party ber

procurement, chain of custody or forest management certication standards. Our ber certication

programs assure that all of the ber we use originates from responsibly managed sources.

It is our policy that in countries or regions of the world that do not have established forest

certication standards, we will establish International Organization for Standardization (ISO) 14001

environmental management systems on our wood procurement systems.

PEFC/29-31-11

Promoting Sustainable

Forest Management

www.pefc.org

SFI-00006

The SFI program includes a bigger picture that supports conservation,

integrity, and community. As a certied SFI program participant,

International Paper embodies this bigger picture through required actions

such as educating landowners on the benets of responsible forestmanagement, sourcing ber from trained loggers, and supporting research

to provide for continuous improvement in forest practices on all lands.

Kathy Abusow,

president and CEO,

Sustainable Forestry Initiative Inc.


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Chain of Custody Certication

Certification of International Papers operations to credible chain of custody (CoC) standards verifies

that we have the policies, systems and procedures in place to track certified fiber as it moves from the

forest through our manufacturing and converting processes to our customers.

As customer demand for certified products has grown, International Paper has not only increased theavailability of certified products, but also has become a global leader in CoC certification. With most of

our pulp and paper mills and converting operations certified to the FSC CoC standard, we have one of

the largest FSC-certified manufacturing platforms in the world today.

In 2007, International Papers distribution business, xpedx, became the first U.S. paper distributor to

receive both SFI and FSC chain of custody certifications. In 2008, xpedx was also certified by PEFC.

In 2010, xpedx maintained the chain of custody for more than 3,500 CoC-certified products produced

by manufacturers worldwide. Today, xpedx actively promotes CoC certification and has implemented

programs to educate printers, designers and corporate end users about its merits.

We are pleased International

Paper sees value in FSC

certication. Indeed, IP has

a tremendous opportunity

to drive the responsible

use and conservation of

forests, especially in the

Southeastern United States.

In the years ahead we look

forward to working with

IP to promote responsible

forest management.

Corey Brinkema,

president, FSC-US


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Endangered Forest Policy

International Paper does not use wood

from endangered forests. Endangered

forests are those forests that are either

naturally rare or have lost much of their

original extent due to human influenceand continue to be threatened with

further habitat loss or degradation. Our

Company works to protect these forests,

including old growth forests, through our

wood fiber procurement systems.

Supporting Biodiversity

International Paper is a long-time

supporter of cooperative research projects

and biological surveys designed to better

understand the ecological role of planted

and natural forests in providing healthy

habitat for a wide variety of wildlife.

On our more than 250,000 acres of

Company-owned land in Brazil, we demonstrate our commitment to the conservation of natural

habitat by integrating forestry planning and management activities with initiatives to preserve

ecosystems and conduct research on local flora and fauna. We have conducted surveys to more fully

understand these natural habitats and their inhabitants and identified approximately 400 individual

species of animals, including birds and mammals, and 350 different native tree species.

In 2010, an International Paper Brazil biodiversity project was recognized by the Food and Agriculture

Organization of the United Nations as an exemplary case of sustainable forest management in Latin

America and the Caribbean region. In cooperation with the So Paulo State Botanical Institute, IP

Brazil created a private conservation area by reforesting 462 acres (187 hectares) with native species,

including more than 100 types of trees. This was the first area to meet new state requirements for high

biodiversity values on reforested lands. Through this continuing partnership, which began in 2002,

we conduct plant and animal research aimed at improving public policy on ecological restoration. To

spread the knowledge gained from this research with the local community, we are working with the

Institute to develop workshops on restoring degraded areas in the municipality of Mogi Guau.

Conservation Easements in the United States

Over the past decade, we have protected about 1.5 million acres of U.S. forestland through donations,

land sales and conservation easements to state and federal agencies and environmental groups. During

this time, in a historic agreement, International Paper, The Conservation Fund and The Nature

Conservancy worked together to protect 218,000 acres of forestlands across 10 states in the largest

Forest Footprint Disclosure Project

In 2010, International Paper was one of 78

companies to participate in the Forest Footprint

Disclosure (FFD) Project. Modeled on the Carbon

Disclosure Project, the two-year-old FFD Project is a

U.K. government-supported initiative created to help

investors identify how an organizations activities and

supply chains contribute to deforestation and to link

this forest footprint to the organizations value. As an

FFD Project participant, International Paper provided

information on how our operations and supply chain

may impact the worlds forests and on what we are

doing to responsibly manage these impacts. We

expect to expand the scope of our reporting in 2011.

To help investors identify the sustainable businesses

of the future as well as possible risks related to

a companys forest footprint, the FFD Project

publishes disclosure information annually. The 2010

report is available at www.forestdisclosure.com.


19/44


private land conservation sale in the history of the U.S. south. These were some of International

Papers most ecologically important lands, home to species such as bald eagles, black bear and the

endangered red-cockaded woodpecker. Much of these lands remain as working forests, allowing the

sustainable harvest of timber while continuing the protection of sensitive areas. Our Company also

donated the International Paper John Dillon Park, a 15,800-acre conservation easement, to the state of

New York. The park blends accessible recreation, conservation and education within working forests

and is the first wilderness area with facilities specially designed to accommodate people with disabilities.

Landowner Outreach

More than 90 percent of International Papers ber supply in the United States comes

from privately owned forests, most of which are small and family-owned. One of the

ways we encourage family tree farmers to protect the environment and nurture the

natural resources we use to make our paper and packaging products is our participation

in the Sustainable Forestry Initiatives State Implementation Committees (SICs).

In 2010, we provided nearly $170,000 in nancial assistance to SICs in 15 states

where we source ber, and IP employees actively participate on each of the

committees. These highly effective committees reach out to landowners and

logging professionals at the state and local level to provide training, promote best

practices, expand certication and maintain the integrity of the SFI program.

Our outreach efforts also include the distribution of Sustainable Forestry for Landowners,

our award-winning landowner outreach booklet. Distributed by our foresters and suppliers to

landowners and customers in both printed copy and electronic format, the booklet provides valuable

information on sustainable forest management. It includes basic information and guidance to

additional resources on topics ranging from developing responsible forestry management plans and

using best management practices to conserving wildlife habitat and protecting endangered species.

A copy of the booklet is available on our website at www.internationalpaper.com/documents/EN/

sustainability/LandOwnersBrochure.pdf.

more

online

Working forests are part of the basic infrastructure the green infrastructure of America,

providing clean air, clean water, and supporting more than a million jobs. For as long as I

have been in the conservation movement, International Paper has been a leader in support

of working forests transitioning from great stewardship of company-owned lands tohelping small forestland owners be great stewards of their lands. IPs legacy in conservation

extends far beyond the nearly 400,000 acres of magnicent working forest that we at The

Conservation Fund have helped to protect, to also include forest certication of privately

owned land and endangered species protection.

Larry Selzer, president and CEO, The Conservation Fund
http://www.internationalpaper.com/US/EN/Company/Sustainability/LandownerOutreach.htmlhttp://www.internationalpaper.com/US/EN/Company/Sustainability/LandownerOutreach.htmlhttp://www.internationalpaper.com/US/EN/Company/Sustainability/LandownerOutreach.html


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Protecting and Conservingthe Environment

Policy on Environment, Health, Safety and Sustainability

International Paper is committed to excellence in environmental, health, safety and sustainability

practices and performance, and continually works to wisely manage natural resources. Health and

safety are fundamental values, and we strive to design, operate and maintain accident and injury-

free workplaces for our employees, contractors and visitors around the globe.

Sustainable practices represent the foundation of our business, and we endeavor to minimize

environment, health and safety impacts during the design, manufacture, distribution, use and at

the end-of-life of our many products. This includes a commitment to the communities where we

operate, work and live to responsibly manage our forests, facilities and related businesses.

International Paper seeks to do business with customers, suppliers, vendors, contractors, joint-

venture partners and other business associates who share our high standards of ethical business

behavior. International Paper champions the innovative and ethical management of natural

resources. We partner with suppliers of responsibly grown ber and routinely certify our ber

supply chain to widely recognized standards. Our commitment extends past the forests to include

manufacturing and supply chain excellence.

To fulll these commitments globally, we hold our leaders responsible for the engagement of all

employees to ensure:

compliance with all applicable laws and regulations;

implementation of this Policy, IPs global EHS&S management systems and performance

standards; and

transparent reporting of our EHS&S metrics and progress against our commitments.

Continuously improving our environmental, health, safety and sustainability performance is a

cornerstone of our future business success and fundamental to The IP Way.


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About Our Data

Quantitative data regarding air

emissions, water use and solid

waste cover only the even-

numbered years because our

environmental data collection aligns

with the North American trade

associations data collection process,

which is conducted every other

year. Water use data for 2006 is not

judged to be sufciently accurate

to include in this report. Energy and

GHG emissions data are compiled

annually, based on purchasing

data, and used for our Carbon

Disclosure Project and EPA Climate

Leaders reporting commitments.

We have plans in place to move

toward annual reporting for all our

environmental metrics.

International Paper is passionate about delivering the innovative, high-quality products our customers

want and about protecting the environment while we do it. We focus on the efficient use of natural

resources, pollution prevention and continuous performance improvement through technology and

employee engagement.

We are implementing an environmental, health, safety and sustainability (EHS&S) management

system across our sites globally. The system builds upon a foundation of our EHS&S Policy, technicalstandards, metrics and reporting, training, auditing, subject matter experts, clearly defined roles and

responsibilities, and accountability at the corporate, business unit and site levels.

Energy Use and Greenhouse Gas Emissions

Our operations use a significant amount of energy and emit greenhouse gases (GHG). Years before

legislation and regulation to reduce GHGs were initiated, International Paper began measuring and

tracking our GHG emissions and committed to reducing them voluntarily. In part, we do this through

increasing the energy efficiency of our operations.

Increasing onsite electricity generation has long been a component of our strategy to reduce energy

consumption. Our manufacturing operations use high-efficiency combined heat and power (CHP)

systems to generate both thermal energy and electricity used in our production processes. The energy

conversion efficiency of our CHP systems ranges between 60 percent and 80 percent, much higher than

the 25 percent to 45 percent for traditional electricity-only utilities.

Onsite generation accounted for 63 percent of the electricity consumed

by our global pulp and paper manufacturing facilities in 2010, and

improving self-sufficiency continues to be a priority. In 2010, a $36

million investment at our Kwidzyn Mill in Poland increased that sites

electrical self-sufficiency from 40 percent to nearly 90 percent. We

recently announced investments in a CHP facility at our Svetogorsk Mill

in Russia that will increase efficiency from 33 percent to 50 percent.

In 2010, we met nearly 70 percent of our global energy requirements

with renewable biomass such as bark and wood residuals. Biomass is

internationally recognized as carbon neutral by entities such as the Inter-

governmental Panel on Climate Change, the World Business Council for

Sustainable Development and the European Union Emissions Trading

Systems (EU ETS). Greenhouse gas emissions resulting from their use

are excluded from most environmental reporting requirements.

We invested $45 million in capital projects during 2010 to improve

overall energy efficiency and further reduce our fossil fuel use and

associated GHG emissions in the United States. We expect these

projects to result in a 3.5 trillion Btu annual reduction in fossil fuel use

and a GHG reduction of 200,000 metric tons annually an emission

reduction equivalent to removing nearly 40,000 passenger vehicles from

the road.


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0

200

400

600

800

1000

2010200920082007

Greenhouse Gases

metric tons per 1000 metric tons of production

Scope 2(indirect)

Scope 1(direct)0

5

10

15

20

25

30

2010200920082007

Non-Renewables

Renewables

Energy Usemillion BTUs per metric ton of production

Using Carbon Neutral

Biomass Energy

The carbon neutrality of biomass

is a longstanding and widely

established principle. Organizations

recognizing the carbon neutrality

of biomass emissions include the

European Union, U.S. EPA, and the

United Nations Intergovernmental

Panel on Climate Change (IPCC).

When biomass, such as wood, is

combusted for energy, it releases

back into the atmosphere carbon

dioxide that it has absorbed from the

atmosphere during growth. When

harvested biomass is replanted,

the cycle repeats. Through

sustainable forestry policies, including

re-growth and management, the

biomass stock is renewed. There

is more forestland in the U.S. today

than just 20 years ago.

Since 2007, we have reduced our total global energy use by 3 percent and our use of non-renewable

energy by 9.5 percent per metric ton of product. From 2007 to 2010, we reduced fossil fuel direct and

indirect GHG emissions from stationary combustion sources by 29 and 1 percent, respectively. In

absolute terms, we reduced our total energy use by nearly 7 percent over the same time period. Thats

about the same amount of energy needed to power 420,000 homes, or the reduction equivalent of

removing one million passenger vehicles from the road

Climate Change Approach

International Paper uses a four-pronged approach in addressing the

challenges posed by global climate change.

Understanding our footprint. We track our global GHG emissions

and report them annually through our participation in the Carbon

Disclosure Project, the U.S. Environmental Protection Agencys Climate

Leaders program, the EU ETS, the Chicago Climate Exchange (CCX)

and various state, regional and national reporting programs.

Encouraging balanced climate policy. International Paper participates

in climate discussions at the regional, national and international levels

to encourage balanced public policies that recognize the importance of

forest sustainability, the carbon neutrality of biomass, pulp and paper

manufacturing jobs and international competitiveness. In this manner,

we will continue to engage in comprehensive dialogue on climate and

energy issues toward a goal of well-constructed policies that are beneficial

to the environment and International Paper.

Investing in the future. We continue to invest in efforts to conserve

energy, reduce our fossil fuel use and increase our use of bioenergy.

Learning by doing. We participate in GHG trading programs that are

helping us better understand how to reduce GHG emissions in a cost

effective manner. We participate in the European Unions carbon trading

system through our European mills, and we helped develop a well-func-

tioning market for carbon trading as a founding member of the CCX.


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Reducing Carbon Footprint

Associated with Our

Bulk Box Products

As part of a sustainability initiative at our Bulk

Box Plant in Lafayette, La., we eliminated

corrugated spacers between bulk boxes

when loading our freight vehicles. While the

spacers provide easy access for forklifts to

unload bulk boxes from the trucks, they are

not necessary for safe unloading. Eliminating

the spacers reduced material inputs, energy

use and CO2

emissions associated with

their production and improved the packing

efciency of our trucks. In total, we reduced

the number of truck deliveries by 8 percent

and reduced CO2

emissions associated with

spacer production and transportation by more

than 25,000 pounds per year.

IT Team Reduces Energy Consumption for Computing

International Papers information technology (IT) team has made great progress on greening our data

center in Memphis, Tenn., resulting in a signicant decrease in overall energy consumption. Thanks

to their efforts, we have achieved the following successes.

IT power consumption has dropped each year over the past four years while data center

infrastructure continues to grow.

At our main data center, power consumption is 7 percent lower today than in 2006 while server

workload has increased 25 percent and storage capacity has increased 275 percent.

We are actively replacing traditional stand-alone servers with virtual servers. Replacing traditional

servers with new virtual servers wherever possible decreases our need for power and cooling

while allowing for the same or greater computing capacity. Our server environment is about 40

percent virtual today and that percentage is increasing every year.

For several years, we have been using newer-generation personal computers that require less

power than older models. We are also rolling out new power management capabilities to our PCs,

which is expected to reduce our carbon dioxide emissions by 6,000 to 7,000 tons per year.

To create an even greener data center, we continue to improve efciency of existing assets and

revamp our IT infrastructure.


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Air Emissions

In addition to GHGs, we track and report other air emissions from our manufacturing facilities,

including sulfur dioxide (SO2) and nitrogen oxides (NO

X). Were committed to reducing these

emissions and strive to move beyond levels of regulatory compliance wherever possible, focusing on

innovative processes, advances in technology and best management practices. International Paper

has a long-standing ozone-depleting substances policy and were on track to phase out refrigerants,

eliminating the use of R22 by 2020 as required by U.S. regulations.

Since 2006, International Paper has reduced overall air emissions from our mills worldwide. Emissions

of SO2

and total reduced sulfides (TRS) per ton of production decreased 34 percent and 49 percent,

respectively, while emissions of particulate matter (PM) and NOX

remained relatively f lat when

normalized for production. The decrease in TRS is a direct result of process changes and additional

infrastructure control to reduce and reclaim sulfur-containing compounds. Asset consolidation and

investment in a new precipitator contributed to our 2010 PM and SO2

emissions reductions.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

201020082006

Air Emissions


SulfurDioxide

NitrogenOxides

ParticulateMatter

TotalReducedSulfides

Rey Econature Paper Known for Improved Environmental Footprint

Our mill in Saillat, France, produces Rey Econature multipurpose ofce paper using wood from

nearby forestland and energy from renewable biomass. Rey Econature is not made with optical

brightening agents, meaning that fewer chemicals are used in the manufacturing process. The paper

therefore has a natural ivory shade, setting it apart from other white papers on the market.


25/44


Water Use

Sustainable water management is critical to our

business. At our pulp and paper facilities, we use

water to manufacture our products and to cool

equipment. Our water conservation and management

practices focus on recycling water within our mills andprotecting the water quality in waterways that receive

our treated process water. Several of our operations

treat wastewater for other nearby manufacturers and

the local community.

When compared against production, our water

withdrawal and discharge volumes did not change

significantly from 2008 to 2010. 0

10

20

30

40

50

20102008

Water Use

cubic meters per metric ton of production

Influent

Effluent

We intend to apply best practices learned from our operations and our energy conservation projects

and programs to identify opportunities to enhance water efficiency, to reduce overall water use and to

maintain the quality of the water that we discharge.


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Solid Waste Management

International Papers waste management hierarchy emphasizes reducing the amount of waste generated,

followed by reusing or recycling waste that could not be eliminated. We use the residuals of the

papermaking process as fuel to generate energy and, where possible, employ it for other beneficial

uses such as fertilizer or other soil amendment. As a last resort, this waste is safely landfilled. Since

2006, our solid waste landfilled has increased by 2 percent per metric ton of production. This increaseresulted from fewer outlets for the beneficial reuse of ash in cement due to the global downturn in the

construction industry and the purchase of Weyerhaeusers recycling infrastructure, which generated

an increased amount of recycling-related reject materials. During the same period, we increased the

proportion of solid waste burned for energy or beneficially used up from 43 percent in 2006 to

48 percent in 2010.

In 2010, our Cedar Rapids, Iowa, containerboard mill partnered with a

local company, Fiberight, LLC, to convert short ber waste into cellulosic

ethanol, resulting in up to 6 million gallons of renewable fuel annually.

Solid Waste

by disposition

Other Beneficial Use,

15 percent

Beneficially Appliedto Land, 18 percent

Burned On Site

for Energy,

15 percent

Landfilled, 52 percent

0

10

20

30

40

50

60

70

80

201020082006

Solid Waste Landfilled


Environmental Expenditures

International Paper expects our facilities to comply with all applicable environmental laws and

regulations. In 2010, we spent $62 million on capital projects to comply with our environmental

permits, more effectively control releases into the air and water, and assure environmentally sound

management and disposal of waste.


27/44


In many instances, International Paper assumes responsibility for environmental liabilities originated

by production sites gained through acquisitions and mergers; in many cases, International Paper never

operated these sites. Our remediation team manages these and other IP environmental liabilities

that arise under various regulations related to past release, disposal or management of waste and

hazardous substances.

Product Stewardship

From product design and acquisition of raw materials through the

manufacturing processes to the end user and recycling or disposal, we

take considerable care to ensure our products meet high standards for

environmental responsibility and human health and safety.

In addition to sourcing our wood fiber from responsibly managed

forests, we manage our supply chain to assure all product inputs are

safe and environmentally acceptable. We design products with our

customers carbon footprint, recycled-content and other sustainability

objectives in mind and then manufacture them to our own standards for

environmental excellence, safety and quality. We monitor raw materials,

chemicals and manufacturing processes. We also conduct regular,

comprehensive testing to demonstrate that our products are safe, free of

substances of concern and suitable for their intended purposes. When

our customers need help to comply with requirements for various voluntary standards, we provide the

information needed to support product labels, claims and third-party certifications.

An example of this commitment to address customer needs responsibly is our ecotainer compostable

foodservice packaging. During the development of each specific product, material options are evaluated

against many criteria such as environmental impact, FDA compliance and functionality. Once a final

design is approved, we validate our understanding with third-party certifications for claims such as

compostability. From raw-material through end-of-life, we are committed to ensuring our products

deliver results responsibly.

Communicating with Stakeholders About Paper and the Environment

International Paper launched its Down to Earthseries in 2008 and has been continuously updating

the series with new topics ever since. The series of educational pieces, available in print or on the

web, is designed to provide easy-to-understand information on a variety of complex environmental

topics related to paper and packaging. Currently, there are eight topics addressing questions such

as: Are pixels greener than paper? How does using paper lead to more trees? What are the benets

of certication labels and logos? The series is available online at www.down2earthonline.com.more

online
http://www.down2earthonline.com/http://www.down2earthonline.com/http://www.down2earthonline.com/


28/44


Product Certication and Documentation

To help our customers meet their information needs related to the products they buy from us, we

provide product certifications or documentation on:

regulatory status

suitability for intended use

chemicals of concern

certification standards

recycled content

recyclability and compostability

To provide customers with certification information as efficiently and consistently as possible, we

developed a software system that allows access to this information by our Sales team and other IP

employees. Our Product Stewardship staff handles nonstandard and complex requests. We also provide

supporting documentation, such as product test results and information obtained from suppliers. All

information is updated periodically to make sure it represents current product offerings.

Paper Prole Initiative

International Paper is a member of the Paper Profile

initiative (www.paperprofile.com), a voluntary

environmental product declaration scheme

developed to help pulp and paper manufacturers

uniformly report on key environmental aspects

of their products and help their customers make

informed product choices. The Paper Profile

sets specific rules for collecting, calculating

and presenting information. Profiles are

currently available for a dozen International

Paper products manufactured in Brazil,

Poland, France and Russia with plans to

expand to other mills in the future. More

information is available on our website at

www.internationalpaper.com/EMEA/EN/

Company/Sustainability/pp.html.

Avoluntary,internationally-harmonised

environmentalproductdeclarationtoguidethepaperbuyer.

Paperplaysavitalroleinhumancommunicationsandpeopleareusing

morepaperthanever.Papermakingisessentiallybasedonrenewableand

biodegradablerawmaterialsandtheproductsarerecyclableafteruse.

more

online
http://www.internationalpaper.com/EMEA/EN/Company/Sustainability/pp.htmlhttp://www.internationalpaper.com/EMEA/EN/Company/Sustainability/pp.htmlhttp://www.internationalpaper.com/EMEA/EN/Company/Sustainability/pp.html


29/44


Sustainable Green Printing Partnership

The Sustainable Green Printing (SGPSM) Partnership welcomed xpedx as a Gold Patron in 2010. The

SGP Partnership is a non-profit organization devoted to increasing the social responsibility of the print

and graphic communication industry through sustainable printing practices. xpedxs Gold Patron

sponsorship helps the SGP Partnership keep program participation fees low for printers.

Facility Solutions

xpedx provides customers with expertise in green cleaning procedures and infection control strategies,

supporting their needs to create healthy, clean and sustainable environments. Nationally certified

ISSA (the Worldwide Cleaning Industry Association) certified experts are on staff, helping customers

implement ISSAs Cleaning Industry Management Standard Green Building. xpedx is also a member

of the U.S. Green Building Council and provides resources that support achieving and maintaining

Leadership in Energy and Environmental Design (LEED) certification.

Life Cycle Assessment

Science-based life cycle assessment (LCA) is the leading method for measuring the environmental

impacts associated with every stage of the life of a product. For paper and packaging products, an LCA

includes everything from the harvesting of trees through the manufacturing processes to recycling or

disposal. International Paper conducts LCAs to help us measure the environmental footprint of our

products and identify areas for improvement that benefit our customers and contribute to internal

process innovation. All of our assessments comply with applicable ISO standards.

Examples of International Papers LCA efforts include:

completing an LCA on our new fiber and recycled content solid bleached sulfate products in 2007;

assisting customers with data needs for their own life cycle studies;

participating in industry-wide LCAs for various paper and packaging products, from which data were

shared with the U.S. Life Cycle Inventory database for public use in LCA studies;

calculating the product carbon footprints for all our pulp and paper mills in Europe, the Middle East

and Africa (calculations follow the guidelines developed by the Confederation of European Paper

Industries);

participating in the development of the University of Pennsylvanias 2009 conference on LCA

organized through the Wharton Schools Initiative for Global Environmental Leadership, which we

helped found; and

participating in the National Council for Air and Stream Improvements GHG LCA of black liquor, a

residual of the pulping process.


30/44


Commitment to Customer Satisfaction

Customer satisfaction is a priority in everything we do at International Paper, and sustainability

continues to gain importance in customer evaluations of our products and performance. We assess our

customers views on our performance by using surveys, meetings and other tools with varying frequency,

depending on the customer and the business. We use this feedback to help us build strategic supplier

and customer partnerships, develop innovative new products and improve performance that helps both

International Paper and our customers meet and exceed our business and sustainability objectives.

IP Container France

Receives Gold Award

IP Container France recently received

a Gold Award from ONDEF,

the French Corrugated Packaging

Manufacturers Association, for

its unique packaging design. This

design signicantly improves product

accessibility and visibility when placed

in a supermarket. The packaging is

simpler than other designs available,

creates less production waste and

provides easier storage.


31/44


ClimaProof cartons give us the opportunity to offer our trade customers

an environmentally friendly packaging option for our hydro-cooled and

iced products. Weve been able to give our trade customers quantiable

improvements to their own carbon footprints simply with their purchase

of Ocean Mist Farms commodities that are packed in a ClimaProof carton

versus the traditional, industry standard of a waxed carton.

Kori Tuggle, marketing manager,

Ocean Mist Farms

A Recyclable Alternative

We developed our ClimaSeries packaging

technologies to provide customers with a

recyclable alternative to petroleum-based wax

barriers for use in meat, poultry and agriculture

packaging applications.

Recycling and Recycled-content Products

Helping to increase the recovery and recycling of our products is a vital part of our commitment

to environmental stewardship. With 19 facilities in the United States and one in Mexico, our

International Paper Recycling business is one of the largest recyclers of recovered office paper and

corrugated boxes in North America.

We annually recover some 6 million tons of fiber about 12 percent of total U.S. fiber collection as

well as 2 million tons of additional recyclable material. Our recycling services include secure document

destruction; collecting, sorting and processing recovered material; designing recycling plans for

businesses; and supplying high-quality recovered paper for use in new products to mills worldwide.

In 2010, nearly 90 percent of Americans had access to curbside or drop-off recycling systems that

contributed to an all-time-high recovery rate of 63.4 percent of all paper and paperboard used in

the United States. While the exact amount varies by region, local recycling infrastructure and local

regulations, most of International Papers products can be recovered for recycling.


32/44


International Paper is the largest user of recycled fiber in the United States, with 90 percent of our

mills using some level of recovered fiber in the products they manufacture and three mills making

products with 100 percent recovered fiber. Where it has been determined that recovered fiber meets the

food contact guidelines established by the U.S. FDA, we also produce recycled-content paper for food

contact and packaging applications.

We know that a sustainable paper industry is an integrated one that uses both new and recovered

fiber for the greatest environmental and economic benefit. Depending on the product manufactured,

using recycled content can sometimes require more fossil fuel, water, fiber and chemicals, making new

fiber the right environmental choice. Also, paper can be recycled only six or seven times before fibers

degrade during reprocessing. By producing paper made with fiber harvested from responsibly managed

forests, we create a supply of high-quality recyclable fiber that can continually replace recycled fiber that

is lost after multiple uses.


33/44


Pilot Effort Turns Recovered Used Cups into New Cups

International Paper is committed to expanding current, and developing new, end-of-life options for

our products. In the fall of 2010, we partnered with Starbucks Coffee Company and Mississippi

River Pulp, LLC to prove, for the rst time, the feasibility of turning used paper cups back into new,

FDA-compliant, paper cups.

During the pilot effort, hot cups that had been used by consumers were collected from coffee

houses and other retail locations. The material was sorted and baled at a nearby material recovery

facility, then it was sent to Mississippi River Pulp. At its location in Natchez, Miss., the recovered

cups were combined with other raw materials and processed in the same manner currently used

to produce FDA-compliant materials for Starbucks hot paper cups. Internal and third-party tests

conrmed the resulting de-inked pulp met the appropriate standards and did not indicate an increase

in contamination. The pulp was then made into cupstock at International Papers coated paperboard

mill in Texarkana, Texas, which was converted into new cups at our Kenton, Ohio, cup plant.

Although we did not identify any adverse effects of processing the material in any of the

manufacturing operations, several challenges related to the collection and sorting of the cups

still exist and must be addressed before we are able to make the Cup-to-Cup concept a

widespread reality.

As part of our commitment to advancing end-of-life options, International Paper will continue to work

with our valued partners during 2011 to address the recovery and processing challenges of used

paper cups.

This innovation represents an important milestone in

our journey. We still have a lot of work to do to reach

our 2015 goal of ensuring 100 percent of Starbucks

cups are reusable or recyclable, but were now in a

much stronger position to build momentum across

the recycling industry.

Jim Hanna,

director of environmental impact, Starbucks


34/44


Supporting Our Communities

International Papers products and services touch more markets, communities and individuals

than ever before. As we strive to meet the needs of our employees, customers, and shareholders in a

responsible manner, we believe it is vital to maintain high standards as a good neighbor and that our

efforts contribute to a sense of community with benefits that extend far beyond our bottom line.

International Paper Foundation

We conduct our global philanthropic activities through International Paper Foundations in the United

States, Poland and Brazil, through business contributions in the communities where we operate and

through the IP Employee Relief Fund. Our giving is concentrated in three areas:

environmental and literacy programs

health and human service programs

disaster assistance for employees and global communities

In 2010, our giving exceeded $10 million and was distributed to hundreds of non-profit organizations

in communities around the globe. The examples below represent the types of programs we support.

Coins 4 Kids. International Paper and the World Food Programme formed this first-of-its-kind school

feeding program to assure that more than 72,000 children in Nairobi, Kenya, get the daily nourishment

they need to learn in school. Since the programs inception in 2004, school attendance has skyrocketed

from 62 percent to 97 percent. Coins 4 Kids is funded by donations from our Company and its

employees. International Paper was named National Eagle Leadership Institute (NELI) Award winner

based on the creation and support of Coins 4 Kids.

United Way. For more than 30 years, International Paper and its employees have come together to raise

funds and awareness for the United Way and its partner agencies. United Way is a key component of

International Papers giving as it balances our focus on environmental education and literacy with the

need to support health and human service needs in the communities where our employees live and

work. Each year, employee gifts to United Way along with the Companys 60 percent match raise more

than $3 million.


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National Civil Rights Museum Freedom Awards. We

are a leading sponsor of the museums largest annual

fund-raising event, which honors individuals who have

made significant contributions to civil rights and equality.

Since 1991, the Freedom Awards have served as a symbol

of the continuing fight for human rights in America and

around the world.

Childrens Museum of Memphis Exhibit. We

sponsor this exhibit, which promotes natural resource

conservation through everyday living. It engages visitors

in the life cycle of a tree, demonstrates the important role

of trees in our environment, and touches on topics like

ecosystems, sustainability and tree products.

Life of the Forest Poster Series. This poster series has

been praised in classrooms across America as an effective

tool for teaching children of all ages about the forest. In

2011, the International Paper Foundation renewed the

series and will continue to offer it for distribution to

our employees, educators and other interested parties.

Some of the topics in the series include learning how a

tree eats, drinks and breathes; understanding leaves and

needles; and reading the rings of a tree.

Biosphere Guardians. Sponsored by International Paper

and designed for children in the 1st to 4th grade, Biosphere Guardians is a series of digitally animated

films about Brazilian ecosystems and how to preserve them. The films are distributed to about 36,000

public and private schools all over Brazil, and are accompanied by educational material and games. In

addition, they are broadcast to over 50,000 educational institutions in partnership with the Brazilian

Ministry of Education. It has been estimated that Biosphere Guardians has been seen by 9 million

children all over Brazil.

Community Involvement

Community involvement is an essential element in our sustainability commitment and we actively

support the communities where we operate. Our financial and in-kind donations to local nonprofit

organizations are aligned with our employees volunteer activity and with our three targeted areas

of support.

Our participation in the community surrounding our Memphis headquarters is representative of the

types of organizations we support. In 2010, we contributed financial and volunteer assistance to the

United Way of the Mid-South, the Susan G. Komen Race for the Cure (for breast cancer), St. Judes

Childrens Research Hospital, and Memphis chapters of the American Heart Association and Juvenile

Diabetes Research Foundation. This type of employee-driven community involvement happens at IP

locations around the globe.

Volunteers of International Paper

One of International Papers core principles is to

make a difference in the communities in which we

live and work. The International Paper Foundation

provides funding for employee-led grant review

committees to encourage community involvement.

At our corporate headquarters in Memphis, Tenn.,

we encourage and nurture volunteerism as soon

as employees join the Company. Our employee

orientation includes a section on philanthropy and

volunteerism. Our executive leadership supports

giving back to the community by providing paid time

off to volunteer, and many teams tie at least one

teambuilding activity to a volunteer event annually.

A 2010 survey indicated that 86 percent of Memphis

employees had volunteered during work hours for

a local non-prot organization, and 95 percent said

they were familiar with volunteer opportunities

provided by the Company and our key charitable

partners in the community.


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Nurturing StrategicPartnerships

International Paper has a long tradition of

partnering with customers, environmental

and academic organizations, government

and other key stakeholders. Strategic

partnerships help us to identify areas

where the greatest strides in sustainability

can be achieved, to develop innovative

new solutions for our customers, and

to make a positive difference in the

communities where we operate.

Conservation Partnerships

As an award-winning advocate for the

responsible management of forests,

International Paper supports many

conservation efforts. We believe that forests can be managed to balance economic, environmental,

recreational and other socially beneficial uses. Our groundbreaking and precedent-setting partnerships

and agreements prove that conservation and working forests are not mutually exclusive.

We are proud to have played an important role in protection programs for many endangered species,

like the red-cockaded woodpecker. We have also assisted in reintroducing species, such as the boulder

darter (an endangered fish), into areas from which they had previously vanished.

Building Strong Community Ties in

Kwidzyn, Poland

Since we purchased it in 1992, our mill in Kwidzyn,

Poland, has been a positive resource for the

community. Our on-site wastewater treatment plant

handles all of the towns municipal wastewater,

and the excess steam generated from our boilers

provides 65 percent of the towns residential heating.

We funded the expansion and modernization of the

Kwidzyn Hospital as well as the construction of a

sports facility. And since taking ownership of the

mill, we have signicantly reduced air emissions,

odors and water consumption and increased the

use of renewable carbon-neutral biofuels. We

provide similar community support f

ip sustainabilityreport

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