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© 2007

LEED, FSC, Lacey & SMaRT Sustainable Products

Increasing NWFA Member Sales, Profits & Market Share

SMaRT Solutions for Sustainable Business

© 2007

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Why Have Leading Sustainability Standards Received Market Acceptance?

•  Certified Organic Products •  LEED green buildings •  FSC certified wood

•  Clean vehicles •  SMaRT

They Meet Leadership Standards Criteria 1. Substantial pollution reductions 2. Transparent & consensus standards 3. Credible global independent third party certification 4. Subsequent government support

© 2007










Certified Organic Products •  Yankelovich / P&G know that conventional consumer products’ market share is continually being eroded by products marketed with organic products especially at Whole Foods.

•  The reason is the power of organic products including halo effect, substantial pollution reductions, and resulting health & environmental benefits.

•  USDA’s organic product rule received overwhelming support.

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LEED Green Buildings & FSC Wood

•  LEED commercial is 40% of US New Construction & Renovation Market & the leading Global Standard (McGraw-Hill)

•  Over 90% of new homes are green & 100% by major US builders

•  Success was dictated by consensus nature of LEED, substantial pollution reductions, & government adoption

•  LEED, FSC & SMaRT documented as more profitable, less risky, & preferred by investors in peer-reviewed Wall St. due diligence released at NYSE

•  Consensus underwriting standards measure added value



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SMaRT© Products Also Meet the Market Acceptance Criteria

SMaRT© 4.0 Consensus Sustainable Product Standard


EATON Universal

Power Saver

EATON POW-R-WAY III BUSWAY



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© 2007


The SMaRT REVOLUTION Shaping the Products

of the Future

Global SMaRT Marketing Campaign •  Launched Sept. 12 at NYSE with 100 Fortune 500 companies

•  Sustainability 50 dinner program co-hosted by OgilvyEarth / SMaRT, Nov. 15 at Greenbuild

•  LEED ND Cheaper Cost of Capital / SMaRT Pilots Announced at Greenbuild

•  Sustainable Brands London Nov. 27

•  Marketing 50 / Sustainability 50 dinner program co-hosted by OgivyEarth / SMaRT, Dec. 2012

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What is SMaRT©?

•  SMaRT is to products what LEED® is to buildings

•  Sustainable Product Standard covering the world's products

•  SMaRT is based on the LEED model—a consensus rating system with prerequisites and optional credits

•  Acronym stands for Sustainable Materials Rating Technology

•  SMaRT© Global Brand launched in 2002, adopted by LEED in 2007

•  Fast Company identifies SMaRT as an important product label

•  SMaRT is approved for credit by the US, Canada, Australia and New Zealand Green Building Councils, and in Europe and globally through the SMaRT Environmental Product Declaration (EPD).

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Who oversees SMaRT©?

The Institute for Market Transformation to Sustainability (MTS)

•  A non-profit public charity based in Washington, D.C.

•  An American National Standards Institute (ANSI) Accredited Standards Developer

•  MTS unites leading environmental groups, manufacturers, purchasers and state and local governments

•  Its goal is to increase the share of sustainable products to 90% of the market by 2020

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Why did Leading Manufacturers, Purchasers & Governments Choose

SMaRT©?

SMaRT is the consensus sustainable product standard & label:

•  Accessible

•  Comprehensive

•  Transparent

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Why did Leading Manufacturers, Purchasers & Governments choose SMaRT©?

•  Greenwash and market confusion – are the leading barriers to further environmental progress.

•  MTS & State of California Attorney General Greenwash Survey Submitted to FTC – over 80% of product ads in green building publications violate truth in advertising law.

•  Credibility – Due to rampant greenwash, the public does not believe corporate self-promotion on the environment.

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Why did Leading Manufacturers, Purchasers

& Governments choose SMaRT©?

•  SMaRT is a Leadership Standard – recognized by the Leadership Standard’s Campaign Public Framework as the sustainable product standard.

•  The Campaign is led by National Wildlife Federation, Sierra Club, Corporate Responsibility Association, Perkins+Will & Eaton.

•  The Campaign educates the market about attributes and benefits of leadership standards – Marketplace / NPR is the Campaign’s advertising Partner.

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Increased Profitability Sustainable Product Case Study – Forbo Linoleum

A Culture of Long Term Commitment to Optimized Environmental Performance. Forbo Linoleum manufacturers and sells linoleum floorcovering, wallcovering and finishing for office furniture. The company attributes the following superior economic performance to its sustainable practices (Forbo internal data 2001-2011):

•  EBIT (operating result) performance as a percentage of sales averages 14% better than any of its top competitors

•  Internal profitability shows its sustainable products’ EBIT level performance more than double, as a percent of sales, those of traditional products

•  Five year share price performance is 100% greater than its three largest competitors

Forbo Linoleum is a SMaRT Platinum Certified Sustainable Product eligible for credit for LEED & Green Star certified green buildings.

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National Sustainable Manufacturing Underwriting Standard •  25-100 CMP Corporate Green Value Score •  Measures increased cash flow •  Three product lines must be certified & higher Score for more lines •  Higher value for Green-e Power & Conventional Energy Reductions •  Higher value for higher reduction of pollutants •  Higher value for reuse – avoids disposal risks •  Covers all manufacturers & retailers

Underwrites Increased Interest Rates for Business Banking & Green Convertible Securities

Launched at MTS / CMP New York Stock Exchange Meeting & Unanimously Approved

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Increasing Sustainable Products Markets / NWFA Sales

National Green Building Financing Launched Sept. 28 by Citi, States & MTS / Capital Markets Partnership:

•  Green Building Bonds •  Cheaper Cost of Capital & SMaRT for LEED ND

Wall Street Due Diligence released at NYSE documented that LEED, FSC & SMaRT are:

•  More profitable •  Less risky •  Preferred by investors

Cheaper Cost of Capital Pilots for New Green Homes are Underway with Homebuilders, Appraisal Institute, Federal Housing Finance

Agency, UBS, Wells Fargo, Fireman’s Fund & Allstate

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Why did Leading Manufacturers, Purchasers & Governments choose SMaRT©?

SMaRT is comprehensive. •  Leading standards – requires stringent product

sustainability standards, including: –  ISO 14001 LCA & EPD –  Carcinogen Policy & Prohibits Stockholm Treaty Toxic Chemicals

–  GREENGUARD / California 01350 VOC –  FSC Certified Wood

•  Life Cycle Assessment (LCA) – measures environmental impacts throughout product life cycle – raw materials extraction, manufacturing, shipping, use or reuse

•  Global – Covers world’s products requiring supplier data for 12 environmental impacts, & credit for reducing over 1300 pollutants up to 100%

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LCA Impact Example: Steel Environmental Performance SMaRT Requires ISO Compliant LCA Covering Global Suppliers / SMaRT

Environmental Product Declarations (EPDs)

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SMaRT ISO Compliant Environmental Product Declaration (EPD) is the Global Leader

•  SMaRT’s unique universal Product Criteria Rule (PCR) obviates need to create NWFA PCR. ISO requires PCRs costing from $60,000-$100,000.

•  EPDs required for all consumer products sold in France & EU EPD requirements are being amended.

•  LEED provides EPD Credit & points awarded are being increased.

•  EPDS are heavily marketed by industry & becoming a cost of doing business.

Knoll ReGeneration SMaRT EPD

© 2007








SMaRT Solutions for Sustainable Business Knoll

ReGeneration SMaRT EPD

SMaRT ReGeneration EPD CO2 Footprint by Life Cycle Stage

© 2007









Benefits

Legally Binding Certificate of Compliance Prevents

Strict Liability Seizure, Forfeiture, Criminal & Civil Liability, Brand Destruction & Uncertainty, &

Increases Business Value Including with Customers & Other Partners

www.LaceyDueCare.com

Lacey Due Care Consensus Standard Unanimously Approved April 2012

© 2007









Benefits

Through SMaRT’s FSC Prerequisite, Lacey Provides Traceability Requirements for NWFA’s RPP for US

Hardwoods Thus Achieving Multiple LEED Credits: FSC, SMaRT, LCA & EPD

Lacey Requires Protection of the Forest Environment / Forest Certification



© 2007









SMaRT RPP Interpretation

US Hardwoods with an American Hardwood Export Council Permit, Equivalent Certification, or FSC

Certification in Compliance With Lacey Standard, Achieve SMaRT’s FSC Prerequisite.

Lacey Requires Protection of the Forest Environment / Forest Certification



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Who else is involved?

SMaRT Committee Officers

•  Ken Baker, Principal, Gensler •  Doug Pierce, AIA, LEED AP BD+C, Perkins+Will •  Ginny Dyson, IIDA, LEED AP BD+C, AECOM •  Keith Winn, IIDA, LEED AP, ASID, Catalyst Partners •  Ralph Bicknese, AIA, LEED APBD+C, Hellmuth+Bicknese •  Eric Corey Freed, Licensed Architect, Principal, Organic Architects •  Sigi Koko, Principal, Down to Earth Design •  Lou Newett, Environmental Director, Knoll Inc. •  Tim Cole, Environmental Director, Forbo Flooring •  Tim Nolan, State of Minnesota

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•  U.S. Green Building Council (USGBC) and its LEED® Rating System –  LEED provides credits for SMaRT & SMaRT LCA & EPD

–  SMaRT & LCA Education are USGBC Education Provider Programs

–  Use of SMaRT certified products for 2.5% of total the value of a project contributes one Innovation and Design credit

•  American Institute of Architects (AIA) –  SMaRT is part of AIA's imperative to reduce 70% of carbon

energy use in new or renovated buildings by 2015

•  Sustainable Furnishings Council –  SFC approved SMaRT as the standard

to which its members must certify to

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•  Capital Markets Partnership –  Led by JPMorgan Chase, Citi, Bank of America and California

Lieutenant Governor Gavin Newsom

–  Supported by US Conference of Mayors: • Consensus Green Building & Sustainable Manufacturing Underwriting

Standards recognize SMaRT • Green Building Securities recognize SMaRT

•  Fireman's Fund – Adopted SMaRT in its underwriting criteria for discounted insurance to manufacturers of certified products

•  City of Santa Monica – Includes SMaRT certified products in its purchasing directive, which is being sent to U.S. cities for their adoption too

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•  Los Angeles Community College District –  $5B of LEED Platinum construction

–  More than 3000 manufacturers are transitioning to SMaRT

–  SMaRT Certified manufacturer data accessible through a searchable online data base.

•  Big Green Purse –  Leading consumer web site & book on sustainable products

–  Adopted SMaRT

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•  Leading Global Manufacturers

Implementing Global SMaRT Marketing Agreement

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A financial and professional services firm specializing in real estate services & investment management, with more than 30,000 people in 700 cities and 60 countries.

J

•  Jones Lang LaSalle

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The Leading Green Home Standard for new and existing homes, equivalent to LEED, and part of the Green Building Underwriting Standards© .

J

•  Build it Green GreenPoint RATED Homes

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CB Richard Ellis is the global leader in real estate services.

•  CB Richard Ellis

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SMaRT is approved by LEED Canada as the Certified Sustainable Product Innovation Credit.

•  Canada Green Building Council

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SMaRT is approved by Green Star for Green Building Credit.

•  Australia & New Zealand Green Building Councils

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Three companies led the charge and SMaRT certified their products:

•  Forbo flooring

•  Milliken carpet & textiles

•  Knoll furniture

Due to the SMaRT LEED Credit, all three Companies

went Climate Neutral at their Manufacturing

Facilities.

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Platinum

Produced With 100% Wind Energy

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SMaRT Certified Sustainable Carpet

PVC Free Carbon Neutral Production

Platinum

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How do you achieve a SMaRT© rating? •  Submit a completed application

•  Pass an internal MTS data audit

•  Execute a legally binding certification pursuant to FTC Environmental Marketing Guides that:

–  Data are accurate and not misleading

–  Qualified professionals were used

•  Publish certification summary on a web site

•  Pass an external audit by Ernst & Young's Global Sustainable Auditing Group or Redstone Global Auditing (depending on level)

•  Renew certification every three years

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How do you achieve a SMaRT© rating?

Product must achieve 14 prerequisite points and score a minimum of 28 out of 162 points in the following areas covering all product stages across the global supply chain:

•  Safe for public health & environment

•  Renewable energy & energy efficiency

•  Biobased or recycled materials

•  Facility or company requirements

•  Reclamation, sustainable reuse & end of life management

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How do you achieve a SMaRT© rating? Based on overall points achieved, there are four levels of SMaRT certification

SMaRT Rating

Sustainable Sustainable Silver

Sustainable Gold

Sustainable Platinum

Point Range

28-40 41-60 61-89 90-162

External Audit

Random Random Mandatory Mandatory

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Case Study: How did the Knoll Life chair rate? Sustainable Gold with 71 points The first chair in the industry to be SMaRT certified

•  18 points: Safe for public health & environment –  GREENGUARD Children & SchoolsSM certified

•  23 points: Renewable energy & energy efficiency –  Lubin electricity offset by wind energy

•  16 points: Biobased or recycled materials –  60%+ recycled content

•  10 points: Facility or company requirements –  Life Cycle Assessment

•  4 points: Reclamation, Reuse & End of Life

© 2007









What does it mean to Knoll customers? •  They are purchasing an independently

certified product that is good for the environment, economy and social equity

•  They can have confidence in the environmental claims because of the accessible, comprehensive, and transparent nature of the certification process

•  They can achieve an additional LEED credit for many Knoll products depending on percent of total project value

© 2007









What are the next steps for Knoll?

•  Include SMaRT Certified Chadwick, Generation & Moment chairs & Calibre Furniture & Template Bookcase Series in customer education

•  SMaRT & SMaRT EPD Certify remainder of Knoll products.

•  Knoll has built SMaRT certification into product development initiatives going forward

•  Knoll has trained A&D managers to lead CEU accredited courses on Sustainable Product Certification

© 2007









Remember, SMaRT© is

•  To products what LEED® is to buildings

•  Accessible – Open, consensus, and affordable

•  Comprehensive – Is a Leadership Standard incorporating leading standards, LCA, global supply chain & requiring global independent third party certification

•  Transparent – Quantified, documented, audited, and accredited

© 2007









SMaRT Resources

EMERGENCY SMaRT© Standard 4.0

•  for more information on SMaRT see:

mts.sustainableproducts.com/index.html

SMaRT Scorecard

MTS & SMaRT

© 2007









SMaRT© Policies

•  SF6 Climate Change Pollutant Policy

•  Carcinogen Policy

•  Legal Operations Policy

•  Environmental Product Declaration (EPD) Policy & Product Criteria Rule



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© 2007

Get SMaRT©! Thank you


Market Transformation to Sustainability (MTS)

1511 Wisconsin Ave., NW Wash., DC 20007

202-338-3131 mts.sustainableproducts.com

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