NEW YORK, Aug. 22, 2011 (RISI) -Companies in every market are looking at their paper use with increasing scrutiny. Those organizations that were early adopters of paper procurement policies used to be considered the market leaders for corporate social responsibility. Now it's the detailed commitments that set apart those policies and the actions companies are taking. And companies are taking action. The latest Green Grades Report Card from ForestEthics could be proof that many companies are taking direct actions around paper to improve their environmental performance.
An annual assessment for the last five years, the 2011 version of the Green Grades Report Card focused on companies in the credit card, insurance and telecom sectors, markets that typically consume high amounts of paper for use in direct mail campaigns and as part of their office use and in communicating with customers. As with the previous reports, companies were measured on their survey responses to responsible paper fiber sourcing, use of recycled content and overall paper reduction. But in this year's report, several companies went a step further and made specific commitments to improve their paper practices or adopted new policies for their paper use in addition to returning the survey.
Sprint, which received the only "A" grade on the Green Grades Report Card, had already adopted a paper policy in October 2010 before the survey went out. Bank of America and Capital One also had policies in place, although not as comprehensive when compared to Sprint in the report. AT&T, USAA, State Farm, and Verizon, on the other hand, were initiating the process of developing new or updated policies. Discover adopted its first ever paper policy in March 2011. All of these companies received at least a "C-" grade, in part due to their willingness to set stronger goals for their paper use.
"It was encouraging to us that some of the companies that may have had other sustainability initiatives, but hadn't necessarily considered the issue of their paper use, took on that initiative as part of their overall goals," says Mark Schofield, paper campaigner for ForestEthics.
The Green Grades Report Card serves as an independent resource to inform customers and other businesses about the environmental paper performance for some of the major US companies. As part of talking with companies about their responses to the survey, ForestEthics has always hoped Green Grades would serve as a larger platform to engage companies in conversations about their paper use.
Sprint received the only "A" grade on this year's Green Grades Report Card, already having a comprehensive paper policy in place.
"Green Grades provided the opportunity to both assess companies' current environmental performance and engage them on improving their paper practices," says Schofield. "It was rewarding to see some companies take a closer look at responsible paper sourcing and use as a way to advance their environmental values."
As part of the Green Grades reporting, some of the companies made a significant market shift with commitments to sourcing products and paper certified by the Forest Stewardship Council (FSC). Sprint, in this case, was the biggest example. Increasing the goals in their existing policy, Sprint made an additional commitment to source 90% of their paper from FSC sources by next year and 100% by 2017. These increased commitments helped secure them the highest grade.
"We want to engage with them as they go through this process because our organization has quite a bit of experience working with companies to develop policies and overcome obstacles when implementing them," says Schofield.
A few other companies were able to improve their initial rankings as well. One example was AT&T. Even though they didn't have an existing paper procurement policy, AT&T committed to finalizing one by Fall 2011. AT&T also made pre-policy commitments around giving purchasing preferences to FSC-certified products and avoiding the use of the Sustainable Forestry Initiative (SFI) logo.
The choice to focus this year's Green Grades on large companies with heavy direct mail campaigns was not accidental. Spending in direct mail is forecast to increase 3.6% annually between 2011 and 2014, according to the National Mail Order Association. Direct mail represents 52% of the total mail volume in the US and businesses spent $45.2 billion on direct mail advertising in 2010, a 3.1% increase from the previous year, as reported by Deliver Magazine, a publication of the US Postal Service.
Responsible fiber sourcing
Each company who participated in the survey was initially assigned letter grades in four major categories: use of FSC-certification, avoiding utilization of the SFI, use of recycled content, and overall reduction of paper use. The companies were then given their provisional grade and where they might rank if the report were published without any changes. Companies who wanted to take steps to improve their rankings could take steps in any of the areas where they were deficient, such as fiber sourcing or increasing the recycled fiber.
In the survey and the report card, ForestEthics worked hard to make clear their position on the use of FSC certification.
In many cases, the issue of fiber sourcing was a major topic of conversation. Since two of the four main categories revolve around the use of responsible fiber sourcing, ForestEthics tried to make their position clear on the use of FSC certification.
"We encourage companies to adopt a clear preference for FSC, and a few companies did that," says Schofield. "We are also encouraging companies who utilize or promote the Sustainable Forestry Initiative to cease doing that. We let them know the use of SFI is greenwashing that represents a risk to their brand."
ForestEthics's paper campaigns largely exist to help companies avoid sourcing from endangered forests or other controversial sources. By encouraging them to use only FSC-certified sources, says ForestEthics, certification becomes another tool that companies can reply on for their own due diligence around their paper sourcing. When accepting a certification system that cannot be used as an effective tool, that can lead companies to enact bad policies.
"The reason FSC is in Green Grades, not just from our view, but from the view of many major environmental and conservation groups in North America, is that it's currently the only credible certification," says Schofield. "When companies choose to rely only or partly on a certification that makes claims about forest sustainability which are not accurate or doesn't live up to those claims, it actually harms credible certification as a tool."
Talking about responsible fiber sourcing with companies whose core business depends on paper is an important first step in the process to developing larger paper policies, according to Schofield. Just as the final rankings for the Green Grades Report Card can be seen as another step. With some of the companies in this year's report, the willingness to take a public stand in their environmental efforts shows market leadership. For others, there is still work to be done.
"In this year's Green Grades report there were some disappointments, such as GEICO and Travelers," says Schofield. "But we are not giving up on them yet."