2019 SUSTAINABILITY REPORT
A BETTER FUTURE TOGETHER Message to Stakeholders 02 Governance 04 Everyday Products 06 Our Goals 08
RESPONSIBILITY 10
> Raw Materials 12 > Transportation and Logistics 18
ENGAGEMENT 22
> Employees 24 > Safety and Well-being 30 > Communities 36
EFFICIENCY 42
> Energy and Emissions 44 > Water 48 > Byproducts 54
Stakeholder Engagement 58 About This Report 59 Sustainability Performance Indicators 60 RESPONSIBILITY
COMMITTED TO SUPPLY CHAIN TRANSPARENCY SOURCING WOOD RESPONSIBLY, INCLUDING USING THE HIGHEST CERTIFICATION STANDARDS
ENGAGEMENT
SUPPORTING THE DEVELOPMENT OF OUR HAVING A WORKING EMPLOYEES POSITIVE SOCIAL HAND-IN-HAND AND ECONOMIC WITH CUSTOMERS IMPACT AND RECOGNIZED IN OUR ENVIRONMENTAL COMMUNITIES GROUPS EFFICIENCY DOMTAR FUELING OUR MILLS MINIMIZES THE WITH RENEWABLE ENVIRONMENTAL ENERGY IMPACT OF ITS BUSINESS RECYCLING AND BENEFICIALLY OPERATIONS USING BYPRODUCTS FROM THE MANUFACTURING OF FIBER-BASED WATER GHG EMISSIONS PRODUCTS WASTE
SUSTAINABILITY AT DOMTAR 1 MESSAGE TO STAKEHOLDERS
A BETTER FUTURE TOGETHER
More and more companies are publishing We believe this transparency serves both We are wary of the undue influence of sustainability reports, so we thank you for our interests and the public’s interest well. Environmental, Social and Governance taking the time to read ours. As a company Not surprising, since they are inextricably (ESG) ratings organizations with business that has won a number of awards for intertwined. The interests of our investors, models based on secret algorithms and honesty, transparency and creativity in our customers, our employees and our simplistic measures that are divorced reporting, we welcome this trend. We neighbors are more similar than dissimilar. from actual sustainability performance. all benefit as sustainability continues to They understand that disclosure is merely Although Domtar typically holds up well become more mainstream. the means, and that what matters in the in these assessments, we are concerned end is our performance. that they draw attention away from Most of these reports will share statistics truly important trends and factors that and stories about progress achieved Specifically, are we making the lives of our will define our shared economic and at efforts to use water more efficiently, stakeholders and the world around them environmental future. reduce emissions, invest in employees better? Are we helping to solve problems and communities, and make boardrooms that we all face? And are we doing this as We urge ESG ratings organizations to more diverse. You will find all of this in our efficiently as possible to be good stewards begin adhering to the same expectations report, and more. of both financial and natural capital? for transparency that they insist on from the companies that they evaluate. The better reports will go a step further These simple but profound questions are and share the challenges faced in making at the heart of sustainability reporting. We Domtar chooses to report on the issues further progress. We hope this report lives must be careful not to overcomplicate that are truly relevant to the long-term up to our reputation for addressing the what should be an exercise in transparency interests of our shareholders and other difficult bits with candor. and an honest conversation about stakeholders. That is why this report does priorities and trade-offs. more than simply describe what we make, and how and where we make it. We want to share how the everyday products we make are not the end of our story, but the beginning. We want to share why we love what we do.
2 SUSTAINABILITY AT DOMTAR MESSAGE TO STAKEHOLDERS
Yes, we will continue to report on responsible forest management, efficient manufacturing and our engagement with non-governmental organizations. But it is just as important for you, our reader, to understand who we are. WE HARNESS ONE OF THE WORLD’S MOST RENEWABLE RESOURCES – WOOD – We harness one of the world’s most renewable resources – wood – in IN THE SERVICE OF LITERACY, EDUCATION, the service of literacy, education, COMMUNICATION, COMMERCE, PERSONAL communication, commerce, personal dignity, good hygiene, and the DIGNITY, GOOD HYGIENE, AND THE DEVELOPMENT development of sustainable alternatives OF SUSTAINABLE ALTERNATIVES TO PETROLEUM to petroleum hydrocarbons. And that is a HYDROCARBONS. AND THAT IS A STORY story that is material to everyone. THAT IS MATERIAL TO EVERYONE.
John D. Williams President and Chief Executive Officer
SUSTAINABILITY AT DOMTAR 3 GOVERNANCE HOW WE DECIDE: OUR APPROACH TO EFFECTIVE CORPORATE GOVERNANCE
Sustainability at Domtar is more than Effective corporate governance enables We pursue opportunities that achieve what we do and how we do it – it is also us to work efficiently to identify, analyze, our strategic, business and operational about how we decide what we do. We discuss and respond to societal trends, objectives in a manner that involves an believe sound corporate governance is changing consumer expectations, and acceptable level of risk. We acknowledge critical to Domtar’s long-term success other business risks and opportunities. Too that our various business goals can and protection of the interests of our much governance risks being tentative sometimes be divergent, requiring many stakeholders. and slow to respond; too little governance optimization decisions. Making good risks poor, short-sighted decisions without decisions requires quality and timely proper diversity of thought, oversight information, a precautionary approach Our governance is enhanced and controls. to managing complex risks and a by having a Board with diverse willingness to make trade-offs that reflect backgrounds, experiences, and Domtar’s Enterprise Risk Management our values when necessary. Our Internal fresh perspectives. (ERM) process is an important bridge Audit team provides additional oversight All our directors, with the exception between company operational issues and appropriate checks and balances to of our CEO, are independent. and corporate governance. Our Board our work. and Audit Committee work closely with ONE-THIRD OF Management to oversee Domtar’s ERM Domtar also benefits from having DOMTAR’S BOARD process, and to identify, prioritize and empowered interdisciplinary groups of OF DIRECTORS regularly review key risks. Our ERM process managers with a wide range of experiences ARE WOMEN. evaluates factors such as: impact of new and backgrounds to establish and execute regulations, our license to operate, scarcity our strategies for sustainability, diversity We have recommended for election to the Board four new directors of resources, severe weather events, and inclusion. These committees support over the past seven years. changing market demand and public the work of our Management Committee expectations, supply-chain disruptions, and Board to improve their ability to provide asset quality and human capital. the company more informed guidance and decisions.
Please refer to the Investors and Governance section of our website at www.domtar.com, for a more complete picture of our approach to corporate governance.
4 SUSTAINABILITY AT DOMTAR 1. 2. 3.
GOVERNANCE
4. 5. 6.
7. 8. 9.
OUR BOARD COMMITTEE OF DIRECTORS MEMBERSHIPS
1. Robert E. Apple 2. Giannella Alvarez 3. David J. Illingworth Audit Committee Chief Operating Officer Chief Executive Officer Corporate Director David G. Maffucci, Chair David J. Illingworth MasTec, Inc. Beanitos, Inc. Orchid, Florida Mary A. Winston Miami, Florida Austin, Texas Member of our Member of our Board of Member of our Board of Directors Directors since 2012 and Board of Directors since 2013 Environmental, Health, Safety Chairman of the Board since 2012 and Sustainability Committee since 2017 Denis Turcotte, Chair Giannella Alvarez 4. Brian M. Levitt 5. David G. Maffucci 6. Pamela B. Strobel David J. Illingworth Chairman of the Board Corporate Director Corporate Director The Toronto Isle of Palms, South Carolina Chicago, Illinois Dominion Bank Finance Committee Member of our Member of our Kingston, Ontario Board of Directors Board of Directors Brian M. Levitt, Chair Member of our since 2011 since 2007 David G. Maffucci Board of Directors Denis Turcotte since 2007 Mary A. Winston
7. Denis Turcotte 8. John D. Williams 9. Mary A. Winston Human Resources Committee Managing Partner and President and President Pamela B. Strobel, Chair Chief Operating Officer Chief Executive Officer WinsCo Enterprises, Inc. Giannella Alvarez Brookfield Asset Domtar Corporation Charlotte, North Carolina Brian M. Levitt Management Inc. Denis Turcotte Charlotte, North Carolina Member of our Toronto, Ontario President and Board of Directors Member of our Chief Executive Officer since 2015 Nominating and Corporate Board of Directors of Domtar since 2009 Governance Committee since 2007 Robert E. Apple, Chair Brian M. Levitt David G. Maffucci Pamela B. Strobel
SUSTAINABILITY AT DOMTAR 5 EVERYDAY PRODUCTS OUR EVERYDAY PRODUCTS THAT MAKE LIFE BETTER EVERY DAY
Domtar makes products that people around PAPER the world rely on every day. We design, manufacture, market and distribute a wide Paper is integral to communication, literacy, and food and variety of pulp, paper and personal care medical packaging. products from copy paper to baby diapers. Paper has been used to record history for more than 2,000 years. PAPER PACKAGING Wood fiber, a renewable resource, is at the Seventy-eight percent KEEPS PRODUCTS heart of Domtar's products. Our wood fiber of Americans keep SANITARY, SECURE comes from responsibly managed forests HARD COPIES OF AND FRESH. in North America. IMPORTANT DOCUMENTS Our paper is used by at home as they believe this is the manufacturers of innovative Guided by our core values of agility, caring safest and most secure way of food packaging, such as pouches and innovation, Domtar makes products storing information.* and wraps, cookie and chip bags, that contribute to a more sustainable candy wraps and take-out bags. world – socially, environmentally and economically. Here are just a few of the PRINT ON PAPER ways our products are contributing to a PROMOTES LITERACY Our specialty paper is used better world. by manufacturers of drinking AND EDUCATION. straws, cotton swabs, lollipops Americans believe and grocery bags as they understand, ALTERNATIVES TO retain and use Customers value Domtar information better FOSSIL FUEL-BASED for our commitment to when they read on print.* PLASTICS. sustainability. In a Gallup poll taken in September 2018, Domtar’s communications Print on paper is enjoyable, paper customers rated us relaxing and practical. 4.77 out of 5.00 possible points Seventy-three percent of when asked if “Domtar upholds Americans feel that reading a sustainable environmental, social and economic business PRINTED BOOK OR practices.” The poll covered 86 MAGAZINE IS * Twosidesna.org. Between 2015 and 2018, Two Sides percent of our communications North America partnered with global polling firm, MORE ENJOYABLE Toluna, to conduct consumer surveys on how paper customers in North than reading it on an Americans feel about print and paper. America and Europe. electronic device.*
6 SUSTAINABILITY AT DOMTAR EVERYDAY PRODUCTS
PULP BIOMATERIALS PERSONAL CARE
Pulp is an essential fiber building block that Biomaterials are increasingly replacing Personal care products improve sanitation, enhances a variety of everyday consumer fossil fuel-based products with renewable skin health and comfort, and provide dignity. products and innovative industrial products from trees. applications. OUR ADULT INCONTINENCE LIGHTHOUSE® FLUFF PULP For decades, our chemical is used worldwide by manufacturers pulp mills have produced PRODUCTS of absorbent personal hygiene biomaterials for use provide comfort, dignity products, including baby IN A WIDE VARIETY OF and mobility to millions of users. diapers, incontinence CONSUMER PRODUCTS, and feminine hygiene including soap, toothpaste, items. makeup, fragrances OUR COMFEES® and food flavorings. BABY DIAPERS enhance skin health, Lighthouse X fluff pulp is comfort and fit for used to make diaper cores Our biomaterials the infant, and offer more dense and compressible, convenience for parents. thereby improving the are USED IN performance of the core and COMMERCIAL AND enabling the production of INDUSTRIAL PRODUCTS In the U.S. alone, THINNER DIAPER as antimicrobials, antioxidants, OVER 27 BILLION PRODUCTS. This reduces binders, lubricants, and to provide the amount of material used higher strength and lower weight. DISPOSABLE DIAPERS ARE and makes diapers more CONSUMED EVERY YEAR. discreet for the wearer. Unfortunately, 92 percent of Domtar continues to develop new single-use diapers end up in biomaterial technologies and a landfill. We are working on Our Northern and Southern partnerships that position innovations to make our softwood pulp products are key us to lead the shift from products lighter weight and to components for manufacturers of a fossil fuel-based to a low-carbon, REDUCE END-OF-LIFE PREMIUM TISSUE bio-based economy. ENVIRONMENTAL IMPACTS AND TOWEL WITH SOLUTIONS SUCH AS PRODUCTS COMPOSTABLE that contribute to One of our latest products good personal hygiene. being field-tested is a 100% DIAPERS. BIODEGRADABLE,
Pulp specialty products LIGNIN-COATED PAPER have been developed FOR AGRICULTURAL for an array of FILM APPLICATIONS INNOVATIVE that reduces the need for herbicides and irrigation while INDUSTRIAL NEEDS, increasing crop yields. including light switches, circuit boards, fasteners, melamine dinnerware and rayon clothing. When mixed with cement, the pulp fibers provide elasticity, tensile strength and freeze-thaw properties that reduce cracking.
SUSTAINABILITY AT DOMTAR 7 OUR GOALS
OUR PROGRESS TOWARD 2020 GOALS
Reduce our recordable safety incident rate to 0.50 by the end GOAL 0.50 of 2020, while increasing our focus and efforts on preventing more serious injuries. Reduced our recordable incident rate to STATUS 0.74, our best year on record and a 57 percent reduction since 0.74 2008. We continue to increase our emphasis on the behaviors of and barriers to a sustainable culture of safety excellence.
GOAL 100% Establish EarthChoice® Ambassador (ECA) teams in all our STATUS facilities by the end of 2020, engaging our employees in our commitment to sustainability. Expanded our ECA program to 86% 30 locations in four countries, covering 86 percent of our facilities. We are on track to meet our goal.
Increase the level of Forest Stewardship Council® (FSC®) GOAL 20% certified fiber procured for our pulp and paper mills to ACHIEVED 20 percent of total fiber used by the end of 2020. Procured 21 percent of total fiber used from FSC-certified sources, meeting 21% our goal for a second consecutive year.
8 SUSTAINABILITY AT DOMTAR OUR GOALS
Reduce total direct greenhouse gas (GHG) emissions GOAL 15% and indirect emissions from purchased energy at pulp ACHIEVED and paper mills 15 percent by the end of 2020 from 2010 levels. Reduced GHG emissions 15 percent since 2010, 15% meeting our goal for a second consecutive year.
GOAL 40% Reduce total waste to landfill from pulp and paper mills 40 percent by the end of 2020 from 2013 levels. Reduced amount of waste STATUS sent to landfills 19 percent since 2013 through source reduction and 19% beneficial-use programs. After four years of good progress, the amount of materials landfilled increased in 2018. This increase was largely due to operational, reliability and weather-related issues at a few mills. Domtar remains committed to meeting our landfill reduction goal.
Develop a model for our pulp and paper mills to measure ACHIEVED and more strategically manage the full cost of using water. Completed development of our full-cost-of-water model and 100% began using it in project approvals in 2018 to further support water and energy conservation efforts.
SUSTAINABILITY AT DOMTAR 9 DOMTAR OPERATES RESPONSIBLY ACROSS ITS BUSINESS
10 SUSTAINABILITY AT DOMTAR RESPONSIBILITY RAW MATERIALS Domtar purchases materials and services 38% of our fiber needs FROM LOCAL were met with certified SUPPLIERS wood in 2018, including when possible. 21% FROM FSC- CERTIFIED SOURCES.
As the 22nd largest U.S. exporter by container volume, TRANSPORTATION Domtar supports improving TRANSPORTATION AND EFFICIENCY through the expansion of ports LOGISTICS and intermodal terminals.
SUSTAINABILITY AT DOMTAR 11 12 managed forests. sourcing wood from responsibly natural forests andbiodiversity by indigenous peoples, andconserving respecting the culture and rights of endangered forests andwildlife, We are committed to safeguarding strengthening thelocaleconomy. we need,and services inadditionto they produce responsibly thematerials allows themandensure usto know close to Being our suppliers alsorisk. oursupplychainandreducesshortens from suppliersnearourfacilities. This Whenever possible, we buy materials SOURCING RESPONSIBLY our products. needed to make on materials andservices we spendabout Each year, OF OUR REVENUE TWO-THIRDS RAW MATERIALS RESPONSIBILITY SUSTAINABILITY AT DOMTAR
lower cost. produce at a products better quality efficiencies, usefewer materials and help usimprove ourmanufacturing of keyraw materials. suppliers Our withrecognizedpartnerships suppliers Beyondfiber, we have strategic responsible forest management. an additionallevel ofassurance of which provides certification, third-party of sustainable forest management and to promote thebenefitsother partners We collaborate withlandowners and asforests.America to keepforests inNorth landowners demandforOur wood enables › › › › › › ›
certification standards.certification increasingly complex andcostly given frequently changingand limit sourcing flexibility. that and policies objectives can more sustainableraw materials. affordability and availability of certification. landowners andfacilitating their forest management to small partnerships. risk profiles, andbuildstrategic volumes, improve and service major inputscentrally to leverage make ourproducts. materials we andservices needto whenpurchasingas possible the management. safety andsustainability responsible intheirenvironmental, Securing sufficientwoodSecuring certified differingBalancing customer Ensuring theperformance, Promoting thevalue ofsustainable theprocurementManaging of Favoring suppliersasmuch local Ensuring oursuppliersare RAWCHALLENGES PRIORITIES
MATERIALS RAW MATERIALS TOP-TO-BOTTOM EFFICIENCY for fossil fuels. renewable fuelthatdisplaces theneed for landscaping, oritmay beusedasa tree may beusedsustainably harvested But thatisnotall. fromThe bark thesame pulp, paperandpersonalcare products. products above) may beused to produce with theleftover the wood from making Finally, the same tree’s branches (along such asshippingcrates andpallets. products lendsitselfto making quality upthetree, thewood farther Moving hardwood floors, stairsandfurniture. the tree’s wood may beusedfor cabinets, doors and tables. up thetrunk, Moving may beusedto produce fine veneers for The large diameter baseofatree’s trunk from the bottom up. To understandthis, itishelpfulto think useful products–andmore. cases, asingletree may provide allofthese what many donotrealize isthat,inmany furniture, cabinets, lumber and paper. But used different to make types and grades of people understand thatMost a tree can be BOTTOM-TO-TOP. OR MORE ACCURATELY,
“bottoms up!” “bottoms resources issomethingto cheer. So, We think efficient useof renewable wood it even leaves theforest. wood precisely for itsoptimalvaluebefore “cut-to-length” processing systems to cut forest health. They are alsoemploying new residuals are behindto promote left good that appropriate amountsofharvesting monitor tree growth, andto ensure geographical information systems to Foresters are now using drones and with newtechnologies. isbeingenhancedproducts today to create useful, renewable used to produce maplesyrupeachspring! maple trees has in Quebec are that Domtar And ifthatisnotsweet enough,thesugar of thechemicalsderivedfrom fossil fuels. components inautomobiles, replacing some plastic researched high-quality to make andisnow being natural polymeronEarth, chemicals, lignin, isthemostwidelyavailable fragrances andeven food. Oneofthese flavors,chemicals thatare usedinmaking fromare the same tree extracted often – ofnaturalchemicals addition,avariety In OF THE TREE USING EVERY PART IN OUR EFFICIENCY
HARVESTED TREE BREAKDOWN OF A TYPICAL Pulp andPaper QUALITY PULPWOOD Very Quality High Quality High Average Quality High Pulpwood Quality 7% 15% SUSTAINABILITY AT DOMTAR 3% RESPONSIBILITY RAW MATERIALS 75% Veneer Lumber Hardwood Pallet, Flooring HIGH QUALITY VERY HIGH QUALITY HIGH QUALITY AVERAGE
13 RESPONSIBILITY RAW MATERIALS
A LOOK AT OUR CERTIFIED WOOD USAGE PROMOTING DOMTAR CERTIFIED WOOD DELIVERIES Pulp and Paper Mills SUSTAINABLE FOREST (% of Total Wood Delivered) PEFC* MANAGEMENT FOR FSC 38% U.S. Industry Average = 29%** 28% 17% SMALL LANDOWNERS 12% Locally-sourced wood is the lifeblood of our pulp and paper mills. We 21% have an economic interest in keeping the forests near our mills as forests 16% and promoting sustainable forestry practices – everywhere we operate.
2010 2018 Our mills purchased 15.2 million green metric tons of wood chips in *Includes fiber inputs from the American Tree Farm System 2018, the majority from small landowners and local suppliers, especially (ATFS), Canadian Standards Association (CSA) and Sustainable Forestry Initiative® (SFI®) sources. Program for the Endorsement for our mills in the southern of Forest CertifcationTM (PEFCTM) endorses these and other national forest certification standards. U.S. For example, at our mill in **2018 American Forest & Paper Association Kingsport, Tennessee, which has Our mills purchased Sustainability Report. been in continuous operation for over a century, about 50 percent 15.2 MILLION of the fiber comes from family green metric tons of forest ownerships of fewer than wood chips in 2018, the 38% 100 acres. majority from small of our fiber needs were met with landowners and certified wood in 2018, including While it is widely recognized local suppliers. 21% FROM that our wood suppliers are responsible forest stewards, FSC-CERTIFIED some customers seek documentation of sustainable practices. In some SOURCES. cases, this may include certification from recognized organizations such as the Forest Stewardship Council® (FSC®).
ADVANTAGES Our challenge is getting small landowners to see the value in certifying OF FOREST CERTIFICATION their forest lands when they feel they are already managing their land well. As certification requires technical and financial resources, landowners FOR SMALL LANDOWNERS need to be convinced these additional resources are worth the investment. For example, of the small private landowners supplying our mill in › Formalizes existing best practices, opens up more markets and derives Kingsport, Tennessee, less than 1 percent are FSC-certified. higher value at harvest. That is why Domtar has supported more forest landowners in certifying › Creates potential to increase their operations. Domtar is a founder and supporter of the Appalachian yield by adopting scientific forest Woodlands Alliance (AWA), a multi-party effort led by the Rainforest management practices. Alliance in a 67,000-square-mile area of Georgia, Kentucky, North Carolina, South Carolina, Tennessee, Virginia and West Virginia. We are also the Promotes healthy forests to maintain › driving force behind the Four States Timberland Owners Association habitats for flora and fauna. (FSTOA), in Ashdown, Arkansas, which provides small landowners with simple, useful tools for achieving FSC certification.
14 SUSTAINABILITY AT DOMTAR RESPONSIBILITY RAW MATERIALS
APPALACHIAN FOUR STATES WOODLANDS ALLIANCE TIMBERLAND OWNERS
The AWA is piloting a Smallholder Access Program ASSOCIATION designed to develop new and more efficient tools Created in 2012 under the leadership of our Ashdown, that provide the benefits of FSC certification to small Arkansas, mill, FSTOA has grown steadily to reach over landowners through existing procurement efforts. 220 members with a total of 628,000 acres of woodland under FSC certification. Working with industry partners, This first-of-its-kind pilot program in the global FSC Domtar has helped fund the certification process and system will engage hundreds of small landowners make it more manageable for small landowners. in responsible harvesting and management of their woodlands, including addressing their stewardship and sustainability goals. The program focuses on regionally important conservation values and water quality, as well 628,000 ACRES as improving poorly managed stands through scientific of woodland under forest management practices. FSC certification
“Domtar’s commitment to growing responsible forest management with the small private woodland owners The group hosts events for existing and prospective of the Southern and Central Appalachian region is members, including an annual meeting and mill tours. impressive,’’ said Andrew Goldberg, a project manager Domtar forestry leaders also speak to groups such as the for Southeast Family Forest Projects of the Rainforest Arkansas Farm Bureau, Arkansas Forestry Association Alliance. ‘‘Together we reach hundreds of landowners and Women Owning Woodlands, where they explain every year and look forward to advancing new tools the benefits of FSTOA membership and FSC certification. to help bring FSC certification to this critical part of Domtar’s supply chain.” “Admittedly, at first there was fear of the unknowns about the FSC standard and fear of losing control and having someone from the outside telling us how to manage our forest land,” said Lance Childress, who manages the lands Ward Timber has in the FSTOA. “Membership in FSTOA has afforded me and my clients the opportunity to further understand and appreciate The AWA will also introduce woodland owners the FSC initiative.” to new opportunities for planning and harvesting, using information from satellite imagery and other technological tools, educational materials and events.
SUSTAINABILITY AT DOMTAR 15 RESPONSIBILITY RAW MATERIALS
HELPING SOLVE THE PLASTIC PROBLEM According to National Geographic, more But at Domtar, our challenge – and than 8 million tons of plastic reach our opportunity – goes well beyond oceans every year – and it doesn’t just furthering efforts to substitute paper disappear. The “Great Pacific Garbage for plastic. We are, at the same time, Patch” covers more than 600,000 square working to make plastic materials miles and is 9 feet deep. It is the largest more sustainable. accumulation of marine debris in the world – and it is mostly plastic. We recognize that plastic, in some applications, can offer enormous There are five additional large floating environmental advantages given its islands of plastic in oceans around the durability and light weight – such as world, with countless smaller ones making vehicles far more fuel efficient. forming. And because of the ocean’s This environmental advantage becomes wave activity, plastic trash breaks down even greater when those plastics are into “microplastics” that are ingested made from naturally occurring chemicals by marine life, eventually entering the that we extract from renewably world’s food chain. harvested trees, partially replacing fossil fuel-based chemicals. This is exactly What makes this even more disturbing is what Prisma Renewable Composites, a the fact that much of this plastic pollution biomaterials company of which Domtar is made up of products that were only is the majority owner, is researching used once. with the world’s largest maker of plastic 23 MILLION vehicle components. MORE ACRES OF FOREST It is not surprising that more and more in the United States today than responsible companies are moving from It is worth noting that while supplies there were 40 years ago. plastic to paper for single-use products, of hydrocarbons used to make plastics such as cups, plates and straws. Plastic decrease over time, the amount of forest lasts for a very long time – so why use land on which we depend has actually it for short-lived products when paper increased. There are 23 million more acres can do the job? of forest in the United States today than 68% In the United States, most of the there were 40 years ago, according to paper that can be recycled is We are pleased that influential the U.S. Department of Agriculture’s recycled – reaching an all-time environmental organizations, such as Forest Service. This positive trend is high of 68 percent. the United States Public Interest Research driven, in part, by growing demand for Group, are reinforcing this point. forest products.
16 SUSTAINABILITY AT DOMTAR RESPONSIBILITY RAW MATERIALS
BACK TO THE FUTURE Finally, at Domtar, we have learned a It has been a long, long time since automobile dashboards were thing or two about successful recycling made from wood. You can still find them in antique car collections. and composting. For example, in the United States, most of the paper that can Today, the interior components of the car you drive are most likely be recycled is recycled – reaching an all- made from Acrylonitrile Butadiene Styrene – or, ABS plastic – which time high of 68 percent according to the is derived from petroleum. latest data from the American Forest & Paper Association. Paper is one of the best However, your next car may very well have a dashboard made, in examples of a material that proves the part, from wood. concept of what leading environmental thinkers call “the circular economy.” The world’s leading maker of car interiors, Yanfeng Automotive Interiors (YFAI), was searching for new materials. In particular, YFAI Plastic recycling, by comparison, has lagged was interested in making components with higher resistance to far behind paper, with recovery rates below damage caused by sunlight, greater tensile strength, lower overall 10 percent in the United States. greenhouse gas emissions – and all at an affordable cost.
We were delighted that they found much promise in the highly renewable, 100% organic polymers that Domtar extracts We are now field-testing a from sustainably harvested wood. 100 percent biodegradable, lignin-coated paper for These polymers, known as lignin, are essentially the “glue” that agricultural film applications. surrounds the cell walls of plants like trees. These renewable polymers contain a vast amount of the world’s carbon and have This product, which reduces the need the potential, when modified correctly, to replace many of the for herbicides and irrigation, is made petrochemical-based products we use in everyday life. from the abundant, organic polymers that are naturally found in trees. And It is just another example of Domtar making every day better with better yet, at the end of the season, it everyday products. And it could be coming soon to a showroom can be tilled into the soil, eliminating near you. plastic waste.
SUSTAINABILITY AT DOMTAR 17 EFFICIENT DISTRIBUTION 18 terminals. andintermodal of ports through theexpansion Domtar supports reduce environmental emissions. customers,to serve managecosts and providers. aretransport priorities Our rail,truck, intermodal andocean vessel personal care usingthird-party products tonetwork move pulp, paperand We operate an efficient distribution EFFICIENCY TRANSPORTATION IMPROVING TRANSPORTATION AND LOGISTICS RESPONSIBILITY SUSTAINABILITY AT DOMTAR
on atruck. loading patterns to getmore products developing innovative and packaging For theseproducts, we are focused on volume before capacity weight capacity. care products, we tend to reach truck For bulkier, lighter-weight personal and emissions. empty. This will reduce truck traffic that theyare currently required to leave utilize existing space intheirtrailers axle, truckoperators would beableto comes from installinganadditional andweightcapacity that distribution equipping trucks with improved braking safer truckswithgreater payloads. By will improve byutilizing truckefficiency We publicpoliciesthat alsosupport
› › › › › ›
standard isimplemented. Organization low-sulfur fuel 2020 International Maritime ocean freight asthe carriers fromcost and supplyimpacts intermodal opportunities. developing andfundingmore public entities to collaborate on companiescarriers, trucking and infrastructure. no detriment to safety and where studiesdemonstrate by increasing truck weight limits reduce truck traffic andemissions solutions.adaptable delivery efficiently customers serve with and distributioncenters to strategically located manufacturing arrangements. andstacking packaging volumes by optimizingproduct efficiently. tomodes move ourproducts Mitigating the uncertainties ofMitigating theuncertainties railroads,Getting ocean freight Convincing to policymakers Leveraging our network of truckMaximizing andcontainer availableOptimizing transportation TRANSCHALLENGES PRIORITIES PORTATION LOGISTICS TRANS PORTATION IS A GOOD THING WHEN ON PUTTING WEIGHT working together withcustomers,working teams inAneby and Toledo, Spain, logisticsmanufacturing, andsales design, andpackaging product ourClose cooperationbetween onthepallet.stacked for anotherrow ofproduct to be pallet from eachstack and allows eliminates aSpain andPortugal. It in Aneby, Sweden, to customers in linesfrom product two ourplant for arrangement shippingstacking Our latest innovation truck- isanew deliver environmental benefits. cost-effective solutions tend to also And, thecase, asisoften themost way to stack more products on a truck. come upwithyet anothercreative each load. OurEuropean plantshave thatshipsin the amountofproduct allowable weight limit and maximize The challenge is how to reach the to fillatrailerandmeet weight limits. of paper. The upside is that it is easy butbulky,lightweight theopposite Personal care products tend to be space issue. weight constrained, theotherhasa in atrailer. While onebusinessis with gettingthemostproducts is a companywide objective, along efficiency Optimizing transportation opposite, struggle to they putiton. a weight problem. Quite the in Personal Care donothave and Paper, ourlogistics colleagues in Pulp their counterparts Unlike
LOGIS TICS on eachtruck more product 17-20% Before gas emissions less greenhouse metric tons 176 consumed diesel fuel fewer liters of 63,000 around theEarth) (or 5trips miles fewer truck 119,000 benefits, and fewer trucksonthe road. lower costs, greater environmental proved to beawin-win, resulting in made itallpossible. The solution BENEFITS ENVIRONMENTAL ANNUAL
traveled
0 After 0 0 0 0 TRANSPORTATION AND LOGISTICS Based ontons shipped. ofproduct Based ontons shipped. ofproduct PULP AND PAPER - 2018 PERSONAL CARE - 2018 TRANSPORTATION A LOOK AT OUR MODES OF freight transport. environmental from impacts and reducefuel efficiency the program isdesigned to improve programPartner since 2015. The Agency’sSmartWay® Transport the U.S. Environmental Protection Domtar hasbeenamemberof Ocean Vessel Intermodal Rail Truck Ocean Vessel Intermodal Truck SUSTAINABILITY AT DOMTAR 14% 12% RESPONSIBILITY 9% 12% 6%
85% 62% 19 RESPONSIBILITY TRANSPORTATION AND LOGISTICS
The efforts of the fiber procurement team have resulted in a significantly REDUCED LOCALLY GROWN, haulage distance and fuel consumption, leading to savings on transportation costs and GLOBALLY SERVED lower emissions.
Our mill in Windsor, Quebec, serves greenhouse gas emissions, and labor And the Windsor Mill is not stopping there. a global export market. Customers availability are some of the issues we A woodyard modernization currently appreciate the sustainability of the manage every day along with controlling underway will improve productivity and Windsor operation and the local forests freight costs. chip quality, while reducing fiber loss that support it. and processing costs. As fiber yield from This is why our mill management each unit of wood brought to the mill is While we have always used locally grown has been engaging with 14 regional increased, the number of wood deliveries wood to make paper, there are some forestry partners to promote sustainable required for each product will continue important benefits from shortening forest management practices to small to decline. the distance we haul from the forest to landowners, and to train loggers on the mill. harvesting methods that increase Through innovation, best practices and productivity and quality. Three years into collaboration with regional partners, the With 50,000 trucks hauling wood annually, this initiative, the fiber supply from forests Windsor Mill is building a better future by and an average haul distance to the mill located close to the mill has increased by optimizing its fiber supply and reducing of 120 miles, road safety, truck noise, 30 percent. its environmental footprint.
B-TRAIN 30% ANNUAL These specialized rigs In 2018, close to 30 percent carry 15 percent more than of Windsor’s fiber was hauled ENVIRONMENTAL conventional trucks and have by B-train, optimizing loads, BENEFITS* the additional advantage of reducing the number of rigs being allowed on highways on the road, and providing during the spring thaw. all-season supply for the 950,000 0 fewer truck miles 0 0 0 0 woodyard. traveled (or 38 trips around the Earth)
994,000 fewer liters of diesel fuel consumed 2,770 metric tons less greenhouse gas emissions
*Relative to 2015 baseline.
20 SUSTAINABILITY AT DOMTAR RESPONSIBILITY TRANSPORTATION AND LOGISTICS
Even better, what began as an exceptional circumstance turned into a sustainable WHEN CRISIS BRINGS partnership. The new facility also provides more flexibility and additional options in moving products to customers.
OPPORTUNITY By using the Dillon intermodal facility, we can load our products into a container and Our Marlboro Mill in Bennettsville, We faced the prospect of having to truck them fewer than 40 miles before they South Carolina, and our neighboring suspend one of our converting operations are lifted onto a train and brought directly paper converting plant in Tatum, have due to the plant’s warehouse being to the port in Charleston. This reduces the historically moved most products bound full. But then things took a turn for the number of truck miles our products travel for export to Europe by truck to the better. A new intermodal terminal built by more than 75 percent, resulting in fewer ports of Wilmington, North Carolina, and by the South Carolina Ports Authority in emissions, less congestion, and less wear Charleston, South Carolina. the nearby town of Dillon had available on the roads. capacity, and we also persuaded an ocean But then, along came Hurricane Florence carrier partner to use the new terminal. in late 2018, pummeling the Carolinas, 75% and wreaking havoc on people, industry, 0 homes, roads and more. As the 22nd largest U.S. exporter REDUCTION 0 0 0 0 by container volume,* we are in truck miles our products travel always looking for ways to Although the hurricane caused minimal disruption to our production facilities, IMPROVE damage and disruptions to roads and TRANSPORTATION Having seen the benefits of the Dillon infrastructure were more severe. The facility, we continue to advocate for , EFFICIENCY building an intermodal facility near our trucking industry, which Domtar relied especially by increasing on to move product to port for customers our intermodal opportunities. mill in Ashdown, Arkansas, which could in Europe, was nearly paralyzed. offer similar efficiency benefits as we move pulp to our customers around the globe. The rail line to Charleston withstood the *Journal of Commerce, www.joc.com, U.S. foreign trade hurricane much better than the roads via ocean container transport, 2018. – but Domtar had not historically had access to this rail service to the ports.
Photo: courtesy of the South Carolina Ports Authority. SUSTAINABILITY AT DOMTAR 21 DOMTAR IS A TRUSTED COLLABORATOR WITH ITS STAKEHOLDERS
22 SUSTAINABILITY AT DOMTAR ENGAGEMENT
DOMTAR’S VOLUNTARY EMPLOYEES EMPLOYEE TURNOVER RATE WAS 4.2% IN 2018 compared to a 13.5 percent voluntary turnover rate for the U.S. Manufacturing & Distribution Industry.* *2018 Turnover Report, Compdata Surveys & Consulting. 57% REDUCTION SAFETY AND in recordable safety incidents since 2008 from continuing operations. WELL-BEING COMMUNITIES 13,800+ HOURS $2.5 MILLION Value of community CONTRIBUTED BY investments made companywide OUR EMPLOYEES in 2018. at Domtar-sponsored events in our communities in 2018.
SUSTAINABILITY AT DOMTAR 23 24 *2018 Turnover Compdata &Consulting. Surveys Report, Industry.* U.S. &Distribution Manufacturing turnovervoluntary rate for the compared to a13.5percent one ofDomtar’s strengths. revealed that, in their opinion, this is ities. ofemployees latest Our survey and management capabil knowledge to expand andenhance theirskills, professional growth, andoffer resources We provide our employees pathways for needs ofourevolving industry. workforcenext-generation to meet the we are recruiting anddeveloping our our colleagues approach retirement, workforce. of As asignificant portion is to critical maintaining an agile, skilled andintentionalEarly succession planning RATE WAS EMPLOYEE TURNOVER DOMTAR’S VOLUNTARY GENERATION GROOMINGNEXT THE EMPLOYEES ENGAGEMENT SUSTAINABILITY AT DOMTAR
4.2% IN 2018 IN 4.2%
-
backgrounds. and industries other manufacturing experiencepeople whobring from of our workforce by talented hiring We are alsoexpanding thediversity employees to enhance theirown skills. forprovide ourcurrent opportunities for graduates. alsoThese partnerships asanattractive career pathfacturing facilities. This helps to promote manu processes we useat ourmanufacturing technologyvanced and manufacturing schools to introduce students to ad colleges, universities andtechnical trade We withcommunity have partnerships - - › › › › › ›
manufacturing locations. manufacturing relocate to someofourmore rural development plans. performance, behaviors and with employees regarding time to have regular conversations in ourworkforce. managing thegenerational transition and remain in aheadofthecurve to facilitate transfer knowledge professional development goals. to achieve businessand both builds trust andempowers employees workplace that fosters teamwork, to generation. thenext fromknowledge seasonedemployees transferring manufacturing practical to succeed,the skills including agility, andinnovation. caring employees whoshare ourvalues of Finding candidates willingto Ensuring that ourmanagerstake the Implementing succession plans Creating acollaborative, inclusive Equipping ouremployees with Recruiting andretaining thebest CHALLENGES PRIORITIES EMPLOYEES EMPLOYEES 9,784 IN 2018* IN EMPLOYEES BY REGION EMPLOYEES 44% UNIONIZED 56% NON-UNION 90% NON-MANAGEMENT 10% MANAGEMENT 73% MALE 27% FEMALE 78% MALE 22% FEMALE BY EMPLOYMENTBY TYPE EMPLOYEES MANAGEMENT BY GENDER EMPLOYEES BY GENDER AGE BY EMPLOYEES *As ofDecember 31,2018. North America North 30 -39 ≤ 29 33% 12% 12%
<1%
<1% 50 -59 40 -49
12% Europe 88% 25% 18% ≥ 70 60 -69 Asia 1,394 HIREDIN 2018 NEW EMPLOYEES BY REGION NEW EMPLOYEES 41% UNIONIZED 59% NON-UNION 97% NON-MANAGEMENT 3% MANAGEMENT 78% MALE 22% FEMALE 29% FEMALE 71% MALE BY EMPLOYMENTBY TYPE NEW EMPLOYEES NEW MANAGEMENT BY GENDER NEW EMPLOYEES BY GENDER AGE BY EMPLOYEES NEW 30 -39 ≤ 29 North America North
15% 10% 22% 13%
5%
<1%
50 -59 40 -49
Europe 87% 48% ≥ 70 60 -69 ENGAGEMENT EMPLOYEES SUSTAINABILITY AT DOMTAR 25 ENGAGEMENT EMPLOYEES
WOMEN IN MANUFACTURING OPTIMIZING THE OPERATIONAL Marie’s leadership skills were recognized LINES AT WINDSOR once again in 2019, when she was With dreams of a career in Science, named manager of our Dryden, Ontario, Technology, Engineering and pulp mill. Domtar was pleased to have Production (STEP) since high school, been able to fill this important role with Marie Cyr graduated as a mechanical a proven, internal leader. engineer from L’Ecole Polytechnique in Montreal, joined Domtar in 1995 as a When asked what changes she has seen project engineer and soon transitioned in the workplace at Domtar over the past to maintenance engineer. “I was the 20+ years, Cyr commented, “I’ve held first female engineer at Windsor and many jobs during that span of time, the stakes were high,” Cyr recalled. and have seen first-hand how women “I realized very quickly I wanted to lead in leadership have transformed and a team, and no challenge was too improved the mill’s daily operations. great for me to tackle in order to reach We enrich ideas, resulting in better that goal.” operational performance.” MARIE A few years later, she was named Cyr's advice to younger women in assistant director of pulp and energy manufacturing is to follow her lead. “If a CYR operations, and a year thereafter, position opens with more responsibility, was promoted to director. “I knew have confidence in yourself and apply for I had the technical skills, but gaining it. Don’t wait for someone to recognize credibility with my supervisor and you before making the move, or it may male colleagues was the key to never happen. If you need support, get earning a leadership position,” said Cyr. a mentor through Domtar’s mentoring “It took months to earn the trust of program. Your ambition will give you my co-workers on the floor, but as my more credibility in the workplace,” she reputation for problem-solving and concluded, “Just remember, it always team mentoring grew, the hard work starts with one.” paid off.”
26 SUSTAINABILITY AT DOMTAR ENGAGEMENT EMPLOYEES
FROM NASA TO DOMTAR: After leaving NASA and moving into BRINGING DATA ANALYTICS the private sector, she worked on TO PERSONAL CARE solution architecture, predicting results Alisha Thompson, recently promoted from production processes, analytics to senior director of the global digital and quality assurance in such diverse center of excellence and business industries as insurance, print media, intelligence in Domtar’s Personal Care pharmaceuticals and finance. Recruited division, has been passionate about by Domtar in 2013, Thompson now technology since she was a child. At works closely with internal stakeholders 8 years old, she wrote her first computer in Personal Care to understand their program, a game for the Commodore 64. business needs, and applies business While pursuing an undergraduate intelligence tools, enterprise data degree in computer science at Western analysis and customized dashboards Kentucky University, she was a shy, from around the globe to translate data self-described “nerd” and one of only into targeted business solutions. three women in a program with close to 300 male students. Thompson appreciates Domtar’s ALISHA culture of inclusion and has some Fresh out of school, Thompson was advice for young women advancing in THOMPSON recruited by the National Aeronautics their manufacturing careers, “Wisdom and Space Administration (NASA) where is based on making mistakes, so she worked in mission control at the know they will happen. Be open to TAPPING OUR FUTURE LEADERS Johnson Space Center in Houston, innovation. It will result in a home run The path to developing and advancing Texas, on space shuttle launches and or a setback, but you’ll learn from both.” talented women starts with attracting reported to supervisors who had worked She then added, ”Highly-driven people a diverse candidate pool, followed by on Apollo missions. She learned that are often very hard on themselves and challenging opportunities for growth and problem solving is best done through that can sometimes hurt their ability advancement. It is also helpful to have collaboration, and that her experience to move forward. Be kind to yourself. role models, such as Marie Cyr and Alisha was applicable to many industries, Be a good friend to yourself, not your Thompson to inspire and attract more especially manufacturing. own worst critic. And give yourself a women professionals to manufacturing. mental hug now and then!”
SUSTAINABILITY AT DOMTAR 27 ENGAGEMENT EMPLOYEES
GETTING THE BEST FROM A DIVERSE BACKGROUND
What do General Motors, Harley Davidson, Michelin It was that kind of passion and practical leadership Tires and Alcoa have in common? that led to Spence’s promotion in September 2018, to general manager at our mill in Plymouth, North They all provided Everick Spence with a diverse Carolina. “It was an unexpected surprise, but my set of manufacturing experiences, which later broad manufacturing background really helped me helped advance Domtar’s success at Continuous to quickly grasp Plymouth’s systems, resolve issues Improvement (CI). and apply a great number of CI principles directly to mill floor operations,” said Spence. In 2016, Spence joined Domtar as director of Continuous Improvement, our disciplined, inten- Spence believes his tional approach to improving our manufacturing two years at Domtar’s efficiency, reliability and quality. headquarters in Fort Mill, South Carolina, Spence found that the diversity of his previous offered him invaluable experiences in a number of different industries opportunities to learn equipped him well to see opportunities in pulp Domtar’s proud culture and paper manufacturing. This background and build relationships allowed him to help accelerate positive results from that were pivotal for EVERICK Domtar’s CI program. SPENCE successful communication with Plymouth personnel. “A large part of Domtar’s CI success is due to bringing daily management systems and decision-making to “Success as a mill manager requires a unique set of the mill floor, empowering operators to come up skills,” he explained, “not the least of which is gaining with work improvement ideas and ways to reduce the trust of staff. You also need to demonstrate your costs,” commented Spence. “Trust by mill leadership depth of knowledge and experience through sound in its workforce drives progress toward bottom-line decision-making, while at the same time patiently objectives and a highly engaged culture across our coaching individuals and teams to run operations 13 pulp and paper mills.” and solve problems.”
As the generational transition in our workforce continues, Domtar embraces those who can bring their diverse background, experiences and skills to the table.
28 SUSTAINABILITY AT DOMTAR ENGAGEMENT EMPLOYEES
AN INCLUSIVE WORKFORCE DOMTAR USES A BLENDED LEARNING APPROACH MAKES DOMTAR A BETTER TO DELIVER SKILLS AND BUSINESS KNOWLEDGE TO EMPLOYEES MOST EFFECTIVELY. “As we face the challenges of our changing industry, we are We strive to offer training that is strengthening our organization by bringing in new talent, approximately 70 percent on the job, 20 percent classroom and by developing and leveraging the skills of our existing and 10 percent online. employees. Our company’s values of agility, caring and innovation have never been more important to our success, and people with different backgrounds, perspectives and ON-THE-JOB TRAINING experiences enhance each of those values.” Transferring institutional knowledge through - Mike Garcia apprenticeships, observations, President, Pulp and Paper coaching and mentoring.
Domtar’s Inclusion and Diversity Committee is composed of leaders from across the organization. The Committee's CLASSROOM TRAINING objective is to promote a culture of inclusivity, and to help Leading and interacting 20% with subject experts increase the representation of women and minorities within and peers outside of the company’s talent pipeline. their normal work environment.
AT DOMTAR, WE BELIEVE THAT: ONLINE TRAINING Offering specific skills and OUR OUR OUR knowledge through Domtar’s flexible and customizable AGILITY CARING INNOVATION online university, improves deepens quickens allowing employees when we have when we have when different to find what they a wider set a broader ideas and need quickly. of skills. understanding imaginations 10% of the world. meet. 20 HOURS * OF CLASSROOM AND ONLINE LEARNING PER EMPLOYEE IN 2018
*While a significant part of Domtar’s approach to learning, the company currently does not have a consistent approach for tracking on-the-job training hours, and therefore, this type of training is excluded from our reported training hours.
SUSTAINABILITY AT DOMTAR 29 30 leadership teams. methods andtools, andour well-being industry-leading experts, by dedicatedsupported safety and are inplace across ourlocations, managementour performance systems. behaviors. isalsowhy we It linksafety to accountability that helpmaintain theright culture that reinforces thevigilance and And itis why we promote asafety hazards andminimize ofinjury. risk relentlessly to physically eliminate aninjury.is worth That iswhy we work gain or business benefit No production PROGRAMS AND PREVENTION ACTIVE AWARENESS SAFE ANDSAFE WELL KEEPING OUR EMPLOYEES SAFETY AND WELL-BEING SAFETY ENGAGEMENT SUSTAINABILITY AT DOMTAR
Right and Responsibility to policy. Act andResponsibility Right work. This obligation iscodified inour when theywitnessunsafe behavior at employees and contractors to intervene We alsoempower our and expect before occur. injuries identify and eliminate potential hazards using leadingindicators, we canbetter reveal what has already happened. By as recordable rates that only injury beyond traditional safety metrics, such We encourage new ideas. We look injuries atinjuries work andat home. and canhelpprevent accidents and ofdeaththe risk from chronic diseases, canreduceand mental healthsupport regular nutrition, Good physical activity, establish and maintain healthy lifestyles. being programs to help our colleagues This iswhy we alsoinvest inwell- amounted to 6percent ofdeaths. and injuries, includingthoseat work, 22 percent oftotal deaths. Accidents disease at 23percent andcancer at two leadingcausesofdeath are heart the injuries. U.S.,workplace In the top suffer from poor health than from Prevention far more (CDC), individuals the Centers for DiseaseControl and According to 2016statistics from SAFETY › › › › › › › ›
healthy lifestyles. at work andat home. safety top ofmind–every day – workplaces. to improve thesafety ofour of injuries. and reducing theseverity including asafer workplace. ofhealthythe benefits lifestyles, the right things. are addressingsafety activities of workplace injuriesto ensure our potential incidents. them anticipate andprevent to helpleading safety activities of recognized hazards. Convincing allemployees to adopt allemployeesGetting to keep Regularly usingleadingindicators injuries Eliminating life-altering Engaging ouremployees inrealizing Identifying theunderlying causes Engaging ouremployees in Providing asafe workplace free CHALLENGES PRIORITIES
SAFETY *Based on73recordable incidents. BY BUSINESS AREA - 2018 INCIDENTSSAFETY AREAS OF BODY INJURED - 2018 2018-INJURY TYPES Area Business Domtar All Divison Personal Care Division Pulp &Paper Shoulder Head/Face/Eye Back/Chest Leg/Knee Foot/Ankle Arm/Elbow Hand/Wrist/Finger Other Burn Bruise/Contusion Break/Fracture Cut/Laceration Sprain/Strain
Frequency Total Rate
* 0.74 0.64 0.79 WELLNESS Frequency Lost Time Rate SAFETY AND WELL-BEING SAFETY * 0.35 0.36 0.35
12%
18% 7% 14% 11% SUSTAINABILITY AT DOMTAR Severity Lost Time Rate 7% 7% 8% ENGAGEMENT 18.63 17.10 19.84
15% 26% Fatalities 25% 16% 34% 31 0 0 0 ENGAGEMENT SAFETY AND WELL-BEING
A HOLISTIC APPROACH TO KEEPING OUR This real-time visualization has led to changes in procedures, equipment and behavior, as well as EMPLOYEES discussions about the safest way to complete the task. Expectations are set, and safety procedures are put in place. Larry Warren, senior director of health and safety for Pulp and Paper and Corporate, draws on childhood SAFE memories at his family’s farm to illustrate how it works.
As humans, we all make mistakes. Recognizing and dealing with this truth is at the core of Human “Although my father had never heard of HPI, he was very familiar with Performance Improvement (HPI), an approach Domtar the difference between work as imagined and work as performed. is using to stimulate new thinking and best-in-class On more than one occasion, I recall hoeing in the fields and having performance in safety management. my father point out that my ‘work as performed’ did not meet his vision of HPI rests on a philosophy of open communication ‘work as imagined’ because I had missed and positive reinforcement, a rigorous method some weeds,” Warren recalled. for identifying the causes of incidents, and implementation of effective corrective actions. It “And I have to admit that he had given me comes with a rich array of proactive tools – known as a ‘tune up’ more than once because of that leading safety activities – that help prevent injuries gap. Now I realize he was just resetting by identifying risks in procedures, equipment or the expectation for work as performed to behavior so that adjustments can be made before be sure there was an expectation in place LARRY they lead to incidents. WARREN that was well understood and that was enforced.” Among the most powerful leading safety activities are “show-me” audits, in which our employees perform tasks in the presence of safety personnel and colleagues. The Thanks to HPI and engaged colleagues, Domtar purpose of this exercise is to identify any gaps between is making great strides in safety performance. We established procedures and processes, and the way work have seen a 57 percent decrease in recordable safety is actually performed. incidents since 2008, severity is trending lower, and fewer days are lost due to injuries.
32 SUSTAINABILITY AT DOMTAR ENGAGEMENT SAFETY AND WELL-BEING
HUMAN PERFORMANCE IMPROVEMENT
PHILOSOPHY METHOD PROACTIVE TOOLS › Don’t blame the employee › Understand why individual › Pre-task risk assessment made decision they did › People make mistakes › Near-miss reporting and Identify error precursors investigations › Errors are predictable, › preventable and manageable › Determine causal factors › Show-me audits to ensure there is no gap between work as imagined Individual behavior is Take effective corrective › › and work as performed influenced by organizational actions processes and values › Verification audits to verify the correct and documented procedure High performance comes › is in place, understood and followed from reinforcements from peers, leaders, subordinates › Participation in HandSMART and MoveSMART programs that Appropriate response to › focus on ergonomics and the proper errors, learning, consistency use of hand and body mechanics
1.73 7TH CONSECUTIVE 57% YEAR OUR RECORDABLE REDUCTION 0.74 INCIDENT RATE HAS BEEN IN RECORDABLE SAFETY 2008 2018 BELOW INCIDENTS SINCE 2008* *From continuing operations. 1.00 TFR = number of recordable incidents per 200,000 hours worked and based on the U.S. Occupational Safety and Health Administration guidelines.
SUSTAINABILITY AT DOMTAR 33 ENGAGEMENT SAFETY AND WELL-BEING
CONTRACTOR SCREENING PROMOTES SAFETY
Contractors support our operations with valuable expertise and specialized services, working in our facilities and alongside our employees. That is why we expect them to meet our safety standards. 34% Screening the more than 1,200 external service OF OUR RECORDABLE providers who work in our pulp and paper mills is made INJURIES IN 2018 easier by ISNetworld, an online contractor management database we began using in 2017. The information WERE SPRAINS in the database enables us to verify qualifications, AND STRAINS. compliance with relevant regulations and safety These types performance, giving us greater visibility to those who of injuries can be reduced are coming into our mills. through well-being initiatives that lead to healthier employees.
One year after expanding our Well-Being Program to include mental and financial health, 43 percent of Domtar employees have joined and 62 percent of the participants are engaged in well-being activities Domtar also participates in the Pulp and Paper Safety at least monthly. Association, which offers contractors information on how to improve their overall safety.
34 SUSTAINABILITY AT DOMTAR ENGAGEMENT SAFETY AND WELL-BEING
WELL EMPLOYEES ARE SAFER EMPLOYEES
The connection between well-being We recognize that lifestyle behaviors and safety is a straight line. That is are a significant factor in overall health. why Domtar’s well-being and safety Because of this, the mission of our well- initiatives go hand-in-hand in keeping being team is to promote healthy living. our colleagues healthy and safe. Domtar’s well-being program is designed Our data and experience show that to encourage employees across the colleagues who are too tired to carry out company to adopt healthy lifestyles – their tasks properly or not feeling well lose weight, manage stress and be more because of stress and/or chronic health active. Incentive points are awarded for conditions, are more injury and accident- participation in well-being activities and prone. They may also unintentionally place can be redeemed for attractive rewards. co-workers at risk. Having employees come to work physically, mentally and All employees have free access to an emotionally prepared can minimize online platform and mobile application these situations. with tools and easy-to-use resources to help them set and obtain well-being That is why our safety and well-being goals. Employees can track health and teams have made a conscious effort to fitness activities, get stress management better integrate their programs through support and obtain daily health tips shared objectives and incorporating well- customized to their interests. being into safety training and discussions throughout the organization. These efforts We also have volunteer well-being include a focus on physical and emotional champions in our offices and facilities well-being as they are equally important who organize local activities and raise to driving a safer work environment. awareness of Domtar’s well-being program. This includes employee wellness challenges that offer friendly competition and encouragement.
We believe that promoting healthy lifestyles supports our long-term safety performance, and we continue to refine and expand our well-being program to get more employees to join and actively participate.
SUSTAINABILITY AT DOMTAR 35 ENGAGEMENT COMMUNITIES
AT HOME WITH DOMTAR DOMTAR CALLS In some of these places, we have been PRIORITIES doing business for more than a century. › Encouraging our employees MORE THAN In others, we are newer to the scene. But and supporting their efforts at 30 COMMUNITIES in all of them, we recognize that we are volunteering in our communities. more than an employer and a taxpayer. › Helping our communities prepare for natural disasters, and getting Our communities depend on us, and . infrastructure systems back on-line HOME we depend on them. We share roads, They are the places we live, safely and quickly when work and play. They help define dams, water services and volunteer disruptions occur.
who we are – as individuals, fire departments. We aim to be good neighbors – in the everyday encounters › Aligning our community investments and as a company. with Domtar’s products and business of business, as well as in extraordinary priorities – literacy, health and times of need. wellness and sustainability.
Most importantly, we strive to remain globally competitive, so that we can CHALLENGES continue to contribute to livelihoods and everyday life in these communities. › Improving performance measures Working together begins in the places of our community investments to ensure we are delivering lasting we call home. benefits.
› Enhancing community amenities to attract employees and their families to our more rural communities.
36 SUSTAINABILITY AT DOMTAR GIVING GIVING in making ourcommunitiesbetter.in making employeesDomtar's invest theirtime donations, andproduct monetary and sustainability. additionto our In promote literacy, healthandwellness, We give preference to programs that social benefits of the products we make. givingour charitable andthebroader when there between isaconnection investments are more meaningful believes thatourcommunityDomtar Economic Policy Institute, August 2003. *Updated Employment for Multipliers theU.S. Economy, and localcommunities. in supplierindustries 325 JOBS an our facilitiessupport Every 100jobsin in 2018. companywide investments made Value ofcommunity $2.5 MILLION ADDITIONAL APPROXIMATELY 2.2% INVESTMENTS WERE the pastfive years, compared by IUPUILillyFamily ofPhilanthropy, School of our pre-tax earningsoverof ourpre-tax a public service of a publicservice The Givinginstitute. 13,800+ HOURS sponsored events inour to anaverage of0.8%* year 2017.Researched andwritten * employees at Domtar- over thesameperiod.
communities in2018.
for U.S. corporations *Giving USA2018– The Annual
Report onPhilanthropy forReport the COMMUNITY COMMUNITY
contributed by our
x 3
in TaxesPaid to Debtholders in Interest Paid to Shareholders in DividendsReturned and Benefits Paid Salaries, Wagesin Development in Research and in ourFacilities Investments in Capital Purchased and Services in Materials stakeholders. shareholders andother to suppliers, employees, in economic value $5.5 AND DISTRIBUTED DOMTAR CREATED 2018, IN $978 MILLION $150 MILLION $195 MILLION $3.6 $71 MILLION $57 MILLION $108 MILLION $ 5.2 BILLION
BILLION BILLION
SUSTAINABILITY AT DOMTAR COMMUNITIES ENGAGEMENT 37 ENGAGEMENT COMMUNITIES
Despite the storm’s ferocity, historic flood levels and extensive power outages, no WEATHERING breaches occurred into or out of our lagoons, and our mills did not experience a single environmental incident. Although production was lost at both mills, customer THE STORM orders were met thanks to Domtar’s geographically diverse distribution We cannot control the weather, but we Both mills executed orderly production network. Advance planning, which has can prepare for it. shutdowns in advance of the storm to been an integral part of our preparedness minimize damage to plant, property and over the decades, minimized disruptions We work to keep our employees and equipment. Special precautions were to our raw material supply, and both mills communities safe, protect our physical taken to prepare effluent treatment were up and running within days after assets, and ensure our customers have lagoons for an inundation of rain, the storm. the products they need. In the calm including the installation of back-up after the storm, we strive to restore generators and pumps. normal operations as safely and quickly as possible, while working with local authorities and organizations to help our DEPLOYING COMFORT AND CARE communities recover. As flood waters receded, many areas of North and South Carolina faced extraordinary challenges, and Domtar was there to help. With an eye toward Our resilience has been tested on several responding to events such as this more quickly, in 2016 we formed a partnership occasions, most recently during Hurricane with Good360, a nonprofit organization that delivers critical products to families Florence, which swept through the affected by disasters. This allowed us to quickly deliver more than 840,000 southeastern U.S. in September 2018. diapers for adults and infants to agencies in affected areas through our Comfort With high winds and heavy rain on the and Care program. Donated diapers were radar, our Plymouth, North Carolina, and distributed by partners such as the North 840,000 Marlboro, South Carolina, mills activated Carolina Diaper Bank and agencies in Myrtle diapers for adults their hurricane preparedness and flood Beach and Dillon County, South Carolina. and infants plans, and we deployed our Comfort and “Domtar continues to be an excellent partner for Good360, particularly in the Care program. area of disaster recovery,” said Howard Sherman, Good360 CEO. “We know we can count on Domtar to help us meet both short- and long-term needs of communities impacted by disasters.”
We also donated to the Checkered Flag Foundation, which supported first responders in communities affected by the hurricane by arranging for fuel deliveries and providing them with food and other supplies. And we donated to the Food Bank of Central and Eastern North Carolina for meal distribution to residents in counties hit hardest by the storm.
38 SUSTAINABILITY AT DOMTAR ENGAGEMENT COMMUNITIES
Despite personal hardships, and in some cases Domtar EarthChoice® property losses of their own, the spirit of our people Ambassador showed through with many Domtar employees programs are now active giving time and supplies to help their neighbors IN 30 DOMTAR and colleagues. Savannah McBride, a Personal Care FACILITIES employee, worked with colleagues in Raleigh and across North America Greenville to collect donations of food, water and and Europe. other essentials for delivery to communities hardest hit by the hurricane.
“I grew up in Morehead City and its people are near PROMOTING LITERACY and dear to me,” McBride said. “When roads closed by providing books to children and communication lines shut down, I knew how who may not otherwise have access to them. serious the situation was and how urgently people on the coastine needed our help.” 353,000 BOOKS have been donated “Roads were so washed out, staff had to drive between since 2012 through our 10 and 30 extra miles each way to get to the mill,” said collaboration with First Book. Chris Gore, pulp and utilities manager at the Marlboro Mill. “It was quite a sight to see whole communities and shopping centers under water while searching for a way to work.” COMFORT AND CARE launched in 2016 to help Dennis Askew, Marlboro Mill manager, commented, alleviate financial and emotional “Property turned from farmland to swampland, stress on families and individuals making it impossible for some employees to get to by providing diaper donations work. Fortunately, folks who could make it in were to diaper banks and care facilities. willing to work flexible hours and keep the mill going We established strategic partnerships to until the water receded and everyone could get back provide in-kind donations of our products through distribution networks before the need arises. on the job.” 2.3 MILLION 4,750 diapers distributed Comfort and Care through our Comfort personal care and Care program kits distributed since launch. since 2016.
NEARLY $4 MILLION donated to Word Wildlife Fund since 2008 to support conservation programs around the world.
®WWF Register ed Trademark. Panda Symbol © 1986 WW F. © 1986 Panda symbol WWF- World Wide Fund for Nature (also known as World Wildlife Fund ). ®"WWF" is a WWF Re gistered Trademark.
SUSTAINABILITY AT DOMTAR 39 ENGAGEMENT COMMUNITIES
MAKING OUR COMMUNITIES STRONGER
PROMOTING THE PRINTED PAGE BRING COMFORT AND CARE THROUGH POWERFUL PAGES TO OUR COMMUNITIES
In today’s technology-driven world, we leisure reading. Students created a plan to We proudly support Camp Blue Skies; remain committed to the printed page renovate space within the school’s library an overnight camp for adults with dis- and to promoting literacy among children. to create a reading room and volunteers abilities. In 2018, Domtar volunteers Johnsonburg, Pennsylvania, community transformed the space. worked with the camp to set up acti- leaders, students and the EarthChoice vities for campers, including zip lines, Ambassadors, worked together to Domtar funded a First Book Market- ropes courses, Frisbee games and post- develop, fund and dedicate the Domtar place Grant, enabling the school to lunch singalongs in the cafeteria. Learning Lounge at the Johnsonburg Area buy more than 450 books at a reduced Junior Senior High School. rate. And, books printed on paper made at Camp Blue Skies provides individuals the Johnsonburg facility, as well as books with special needs a safe, friendly In 2012, Domtar sponsored the first of that highlight Johnsonburg and the mill environment that can accommodate 12 Ben Carson Reading Rooms at the history, where also donated to the lounge. their physical and developmental Johnsonburg Elementary School. It was challenges. The camp, which holds such a success that, as students moved Now, high school students can continue sessions in Georgia and North Carolina, to junior and senior high school, they to enjoy a good book, in a reading space works tirelessly to help serve a population missed having a place dedicated to of their own. that is largely underserved.
Domtar partnered with First Book to In 2018, Domtar collaborated with First transform the lives of children in need Book to deliver a truck-full of books by making books and resources available to Classroom Central, a Charlotte, to the educators and kids who need North Carolina, non-profit which equips them most. students in need by collecting and distributing free school supplies to their teachers. “It is always a privilege to be a part For the third year, volunteers of the camp’s activities for a day,” said from Domtar’s corporate Kate Shupe, office supply team lead, offices in Fort Mill, South who volunteers year after year. “I think Carolina, unpacked, sorted I get more out of my visit with the and shelved the books, campers than they do. It’s always such creating a bookstore and an inspiring day!” inviting teachers from Mecklenburg and York counties to “shop” for brand-new, free books for their schools and students.
40 SUSTAINABILITY AT DOMTAR ENGAGEMENT COMMUNITIES
AND BETTER PLACES TO LIVE AND WORK
DOMTAR EARTHCHOICE AMBASSADORS IN ACTION
Our Aneby EarthChoice Ambassador Employees in Jesup, Georgia, partnered in ways that nurture the environment team partners with Sweden-based, with first-grade teacher Kristyn May and promote great health,” said Jesup's Human Bridge, a non-profit organization and James E. Bacon Elementary (JEB) to Kim Sumner, director of operations that collects and distributes medical develop an outdoor classroom for the and development. supplies for development, relief and school’s garden project. social projects. The space is part of JEB’s Georgia Shape Grant One hundred thirty-two metric tons initiatives promoting of adult incontinence products, in- good nutrition and cluding protective underwear, briefs, physical activity. bladder control pads and bed pads were donated in 2018. “The opportunity to work with a local school to build an outdoor classroom was a great fit to support Domtar’s sustainability and EarthChoice® programs. We love when we can support the kids “Human Bridge lets us know that our gifts make a difference for people in this world. Thank-you letters include photos and details on where our donations went,” In May 2018, the Student Conservation next to the local high school, once a said Fredrik Gustavsson, environmental Association (SCA) and more than neighborhood gathering place, had specialist, who is the ECA captain and 100 Domtar Home Delivery Incontinence seen better days prior to local budget oversees the diaper donation program Supplies’ employees and family members cuts. By the end of the day, all areas of the at the facility. “It’s rewarding to see the contributed more than 300 hours of park were visible through the tree line. impact we can have.” service revitalizing Kirkwood Park in Local residents were pleased to see the Olivette, Missouri, by weeding, mulching improvements. and clearing out invasive, overgrown honeysuckle. Domtar has partnered with the SCA in the United States and Canada since In June 2018, with the help of SCA, 2012, serving as a national supporter 60 Domtar employees, families and with financial contributions and as friends, from the Dryden, Ontario, a local contributor through a series community, pitched in to make a local of community projects like the com- park a safe and welcoming community munity service projects in Olivette space. The relatively small park, nestled and Dryden.
SUSTAINABILITY AT DOMTAR 41 DOMTAR MINIMIZES THE ENVIRONMENTAL IMPACT OF ITS BUSINESS OPERATIONS
42 SUSTAINABILITY AT DOMTAR EFFICIENCY
of the energy 72% we use in our ENERGY AND pulp and paper mills comes from EMISSIONS RENEWABLE BIOMASS FUELS.
90% OF THE WATER we use in our pulp and paper mills is returned to the watershed from which it came. WATER
WATER REDUCTION + BYPRODUCTS GHG EMISSIONS REDUCTION BENEFICIALLY USED + OF MANUFACTURING WASTE 69% BYPRODUCTS REDUCTION generated by our pulp and paper mills in 2018, up from 59 percent in 2013.
SUSTAINABILITY AT DOMTAR 43 EFFICIENCY ENERGY AND EMISSIONS GY
PRIORITIES TOWARD A LOWER-CARBON › Continuing to improve the reliability of our assets and operations through ECONOMY targeted investments in our facilities and Continuous Improvement Thanks to a long history of effectively We continue to invest in targeted projects programs. managing energy, including efforts to optimize and enhance the reliability of › Maximizing the economic value and to optimize our use of carbon-neutral our manufacturing assets, and improve environmental benefits from our biomass fuels, Domtar is well positioned the efficiency of our raw material and energy generation assets, including through partnerships with local to meet expectations for a lower-carbon energy use. These ongoing investments utilities and businesses. economy. have incrementally improved our cost, climate and environmental profile, › Preparing for a low-carbon economy and we expect further progress in the by advocating for sustainable policies, reducing our carbon footprint and years ahead. building resiliency into our operations 72% and supply chains. As a result, Domtar enjoys an environ- Today, 72 percent* mental edge relative to other major of the energy we use in our pulp and paper producing regions of pulp and paper mills comes CHALLENGES the world, with direct greenhouse gas from renewable biomass fuels, › Getting more non-governmental emissions about two-thirds lower than mostly self-generated from organizations to understand the average pulp and paper producer the benefits of using renewable, our wood processing and in Asia. Our emissions to air of nitrogen carbon-neutral biomass fuels from pulping byproducts. sustainably managed forests in our oxides, sulfur dioxide and particulate Industry average = 67%** processes. matter have also significantly improved *Net of renewable energy and attribute sales. through these initiatives. › Finding lower-carbon fuel alternatives **2018 American Forest & Paper Association to natural gas for use in our mills Sustainability Report. that meet process supply and safety Longer term, Domtar’s pulp mills may serve requirements as well as product as biorefineries to produce affordable, quality requirements. sustainable biomaterials and fuels that › Getting policymakers to recognize can potentially replace some fossil-based and address the unintended products, furthering the development of consequences of policies that shift a lower-carbon economy. manufacturing to regions with higher carbon footprints than ours.
44 SUSTAINABILITY AT DOMTAR ENER EFFICIENCY ENERGY AND EMISSIONS
MANUFACTURING ENERGY SOURCES - 2018 0.7% 0.8% 1.1% 3.6%
Biomass Natural Gas Purchased Electricty (Net) 19.1% Coal 72% Purchased Steam 74.7% SELF-GENERATED AN and Heat (Net) Other EQUIVALENT OF 72 PERCENT OF ELECTRICITY TOTAL ENERGY USE = used in our pulp and paper mills. 165.83 MILLION GIGAJOULES GY Industry average = 55%* › Pulp and Paper Mills = 99.5% › Paper Converting Facilities = 0.1% *2018 American Forest & Paper Association Sustainability Report. › Personal Care Facilities = 0.4%
AVERAGE GREENHOUSE GAS EMISSIONS REDUCED TOTAL FROM FOSSIL FUEL COMBUSTION DIRECT GREENHOUSE Pulp and Paper Mills by Region* GAS EMISSIONS (Metric Tons CO2e/Finished Metric Ton Product) AND INDIRECT 64% LOWER than Asia Pacific 29% LOWER than Europe EMISSIONS from purchased energy 38% HIGHER than Latin America at our pulp and paper mills 9% LOWER than North America 15 percent since 2010 due to 15% 1.026 fuel switching, shutting down less efficient equipment and energy conservation. 0.516 0.368 0.405 0.267
Domtar Asia Pacific Europe Latin North GREENHOUSE GAS EMISSIONS America America
Pulp and Paper Mills Paper Converting and Source: Fisher International, FisherSolveTM, April 24, 2019. (Million Metric Tons CO2e) Personal Care Facilities *Includes mills that produce Uncoated Freesheet, Specialty Paper and Hardwood (Thousand Metric Tons CO2e) and Softwood Market Pulp. EMIS15% 15% 0.51 REDUCTION IN EMISSIONS 0.63 0.62 0.51 FROM OUR PULP AND PAPER MILLS 86.02 72.82 SINCE 2014 2.46 1.94 Sulfur Dioxide Nitrogen Oxide Total Filterable Particulate 3.54 3.08 SO2 NOx as NO2 Matter 2010 2018 2014 2018
Indirect Emissions from Renewable Energy and Attribute Sales Indirect Emissions from Purchased Electricity, Steam and Heat 51% 18% 11% Direct Emissions Domtar 2020 Absolute Goal (-15% from 2010) SIONSSUSTAINABILITY AT DOMTAR 45 ENER EFFICIENCY ENERGY AND EMISSIONS
As years went by, it became evident that the Plymouth Mill needed to further optimize its manufacturing processes and assets to PLYMOUTH remain viable in a competitive market. The smaller of its two fluff pulp machines was permanently shut down in 2018, and the mill embarked on a multi-year investment program, beginning CONTINUES ITS with several energy and environmental sustainability initiatives.
The overall objective is to reduce the mill’s total energy SUSTAINABILITY footprint and thereby lower its costs, resource use, and environmental footprint. Capital projects at Plymouth in 2018 and 2019 included: JOURNEY › Reducing steam use through several energy efficiency projects in the pulp manufacturing process. DOMTAR’S MILL IN PLYMOUTH, NORTH CAROLINA, PROVES THE ADAGE THAT SUSTAINABILITY IS A › Reducing fuel use by improving the efficiency of one of the JOURNEY, NOT A DESTINATION. mill’s power boilers. › Reducing fuel use to make steam by installing a condensing The Plymouth Mill, which got its start making pulp and paper in 1937, cooling tower and heat exchanger that will eliminate the use faced a bleak future as paper consumption declined precipitously of about 11 million gallons per day of single-pass non-contact in the aftermath of the Great Recession. But Domtar’s entry into the cooling water and recover heat from the process. growing personal care market, combined with Plymouth’s access to Installing a thermal oxidizer to provide a back-up air emission the right fiber resources, gave the mill a new lease on life. › control device when the power boiler is not available to incinerate gases produced in the chemical pulp manufacturing process. After an investment of $87 million to repurpose the assets, in 2010 Plymouth became the first mill in Domtar’s manufacturing › Reducing particulate matter emissions from one of the mill’s network to produce fluff pulp. Through the dedication and skill of its power boilers by installing a new electrostatic precipitator. employees, Plymouth forged a reputation for quality and reliability in global markets, paving the way for an even larger conversion to fluff pulp at Domtar’s mill in Ashdown, Arkansas, in 2016. The sum of these projects will produce enough energy savings and operational flexibility to ALLOW THE MILL TO SHUT DOWN ONE OF ITS TWO POWER BOILERS IN 2019.
The Roanoke River ecosystem was also a major beneficiary of the project. Eliminating our need to intake “once-through” cooling water for the mill has removed the possibility of unintentionally entrapping and entraining aquatic life, including juvenile fish and larvae via that intake.
Domtar’s major investments in Plymouth are testimony to its commitment to the mill’s future and ongoing support for its sustainability journey.
46 SUSTAINABILITY AT DOMTAR EFFICIENCY ENERGY AND EMISSIONS
DOING WELL TRANSFORMING OUR WORLD for a low-carbon BY DOING GOOD future will require more ingenuity and collaboration as we seek to It is heartening to realize that being a good neighbor can also be good use the Earth’s resources more for business and be good for our planet’s sustainability. efficiently.
In communities where we have operated for decades – in some cases more than a century – we have developed relationships that benefit our bottom line, as well as the local economy and environment.
Using our assets, energy and water resources more efficiently helps us build a better future together. Here are a few examples of how Domtar is doing this:
Bennettsville (Marlboro), Making products from greenhouse South Carolina: Our mill provides gases: At five of our mills, carbon dioxide wastewater treatment services from our fuel combustion is sent to third- for an adjacent manufacturing party, co-located facilities to manufacture plant located far from precipitated calcium carbonate, a primary the city’s sewer system. filler used in our paper to make it brighter and smoother.
Ontario: Our Dryden and Espanola mills manage their operations to limit Plymouth, North Carolina: their power draw during the grid’s five Our mill sells steam to an adjacent peak hours. This contractual arrangement manufacturing facility and also treats their helps reduce the provincial peak, avoiding wastewater and storm water. the need for extra generation, which benefits Domtar, the utility, other power users and the environment. Cogeneration of electricity and steam: All of our mills have on-site Rothschild, Wisconsin: Our mill cogeneration. This process supplies water and renewable biomass is more efficient than conventional fuel to a co-located electric utility, and electricity generation from the grid, in return it purchases steam from the as our mills and co-located businesses utility to make pulp and paper. Our mill can subsequently use the steam in their also provides energy and water utilities manufacturing processes after it is used to and wastewater treatment services generate electricity. Some of the electricity to another co-located business that is sold to outside utilities. Another benefit makes biomaterials from the mill’s from our use of renewable, biomass fuels pulping liquors. in our cogeneration processes is our ability to create Renewable Energy Certificates (RECs) to help others meet their energy Windsor, Quebec: Our mill and greenhouse gas reduction goals. leases land to another party that operates 24 wind turbines, a source of renewable electricity to the Quebec grid.
SUSTAINABILITY AT DOMTAR 47 EFFICIENCY WATER ER
PRIORITIES STEWARDS OF › Managing our water use in a way that helps maintain the quantity, OUR WATER RESOURCES quality , timing and availability of local water resources. Water quality plays a significant role in All of our mills are located in watersheds › Understanding the full cost of our water management plans. It impacts with ample water supplies. But, while using water to empower local facility how we treat the water coming into our we have access to abundant and managers to use it more efficiently. mills and is also a major consideration inexpensive water supplies, we do not › Sharing best practices for improving in establishing the water quality levels take this resource for granted. To this the efficiency and effectiveness of our mills must meet before returning end, we deployed a model in 2018 that our wastewater treatment systems. the water to the watershed. helps our mills better understand the full cost of using water. CHALLENGES We believe that because water is a Getting some environmental local resource, it is best managed at › agencies to regulate agricultural and 90% the facility level using site-specific stormwater runoff, which negatively Approximately 90 percent strategies. Understanding the unique affects industrial, municipal and of the water we use in our pulp environmental and socio-economic recreational water users. and paper mills is returned characteristics of the watersheds where › Maintaining performance given to the watershed from which we operate enables us to be better the legacy infrastructure and it came. A small amount stewards of water resources. capacity constraints in several of our wastewater treatment remains in our products and systems. byproducts, and the rest returns to the atmosphere through › Advancements in scientific testing and analysis to detect pollutants at evaporation. very low levels are progressing much faster than new technologies to treat and remove the pollutants from our effluent.
48 SUSTAINABILITY AT DOMTAR WAT WATER Aqueduct Aqueduct Water Atlas. Risk Source: Fisher International, Fisher way for ourstakeholders. in ourlocalwatersheds andto disclosetheminamore standard used WRI’s tool to validate what we about already water risks know inwatershedsof potential where risks operate. they has Domtar better by understandwater providing risk ahigh-level screening online resource, Aqueduct Water Atlas, Risk to help companies has developed a global,The World (WRI) Resources Institute competition for shared resources, water we for donottake granted. water goingforward. With growing populationsandadditional we recognize we cannot rely alone to manage on past practices ofwater,with minimaldisruptionsdueto andquality theavailability While we have operated someofourmillsfor more than150years timing ofwater available operations. for useinourmanufacturing thatinfluencethequantity,economic characteristics and quality geographies, landuses, regulatory, environmental andsocio- Each of our facilities operates in a watershed with particular need to beconsidered. component. Water quality, andreputational also risks regulatory to mind is water or availability, quantity but this is just one thefirstthingthatcomes when peoplethinkaboutwater risk, and efforts resourcesOften where willdothemostgood. they to our Understanding waterrisks supplies helps us better focus PULP AND PAPER MILLS BY WATER VOLUME – 2018 REGIONAL WATER SUPPLY RISKS FOR DOMTAR'S WATER OVERSIMPLIFYING THE RISK OF Mean Volume-Weighted Domtar Water (4-5) Risk High Extremely (3-4) Risk High (2-3) to Risk Medium High Low (1-2) to Risk Medium Low (0-1) Risk Water Category Risk
Solve Next TM , April 24, 2019,basedon , April World Resources Institute Medium Risk Risk Medium Availability Low to (1.65) 30% 43% 27% 0% 0%
Medium toMedium High Risk Risk High Quality (2.50) 31% 35% 26% 0% 8%
Reputational Risk Regulatory and Regulatory › › › › › › › Availability of water risk to a single metric (e.g., toof water asinglemetric risk Baseline Water Stress), and GovernanceSocial (ESG) rating agencies limit their evaluation that some is concerning Environmental, It for evaluatingwater risk. issues are inherently complex. That iswhy itincludes12indicators the Although not perfect, WRI tool does recognize thatwater a screening-level tool canmaskreal atindividualfacilities, risks upandaveraginghighly localized Rolling concern. from water risks greenhousetheir algorithms, water –unlike risk gas emissions –is a companies, between water andintegrating risk into theserisks While we can appreciate ESG rating agencies wanting to compare valuesHigher indicate more competition amongusers. accounting for upstream consumptive use. total available annualrenewable supply, ratio oftotal annualwater withdrawals to “Baseline water stress” isameasure ofthe according to WRI’s Aqueduct Water Atlas. Risk while 13percent comes from areas categorized asHigh, 87 PERCENT OF WATER USED BY DOMTAR’S ofacompany’spotentially missingalarge profile. part risk USING 12INDICATORS THE WRI TOOLCATEGORIZES WATERRISK LOW TO MEDIUM BASELINE WATER STRESS, MILLS COMES FROM REGIONS WITH LOW OR Groundwater Stress Upstream Storage Drought Severity Flood Occurrence VariabilitySeasonal Inter-annual Variability Baseline WaterStress Low Risk 100% (0.72) 0% 0% 0% 0%
risk disclosure.risk help companiesprovide more water meaningful appreciatesDomtar initiatives and dialogues that Given is still emerging, that water reporting risk level.facility adequately capture what ishappeningatthe alonedonot butthey offer auseful framework, Screening toolslevel assessmentsofwater risk. to alsoconsidermill- which iswhy itisimportant › › Quality Land Protected Upstream Ratio Return Flow SUSTAINABILITY AT DOMTAR
› › › Reputational Risk and Regulatory
Amphibians Threatened toAccess Water CoverageMedia EFFICIENCY
WATER
49 EFFICIENCY WATER
All of these factors affect the quantity, quality and availability of water. Our WATER MAY BE CHEAP; mills must be prepared to treat water in changing conditions, including:
USING IT ISN’T Varying water temperatures and flows from season to season Watching water move down a river can sustainability performance optimization. lull us into thinking it’s as free as it is “We understand water is a shared resource free-flowing. But this resource, which we that we borrow from nature.” Weather-related events, such as flooding, share with our communities, isn’t free. In storm surges and recent years, Domtar has taken a closer The cost to Domtar to pump, filter, drought look at the costs of using water in making demineralize, treat, heat, reuse and clean pulp and paper. And thanks to a variety the water before returning it to the of process improvements, we are seeing environment is anything but free. Water Turbidity resulting greater water efficiency and lower costs. costs are complex, comprising long-term, from runoff from the landscape short-term, fixed and variable costs. And We are intentional about our water they matter, both to the bottom line and efficiency, and we return nearly 90 percent to the communities where we operate. Algal blooms from of it to its source. In some cases, the water upstream activities that we return is cleaner and clearer than it Our 13 pulp and paper mills are located enrich surface water was originally. in watersheds with unique geographies with nutrients and climates, from the southeastern “While Domtar’s mills operate in areas United States to Canada. The land that “Developing our full-cost-of-water model with ample water supplies – and in most surrounds our facilities may be forested, has been a broad effort supported by locations, we pay little to no fees to agricultural or urban, with a range of colleagues in sustainability, energy and withdraw water – we don’t want to fall into upstream and downstream water users, finance, in close partnership with our local the trap of taking this resource for granted,” from manufacturers and farmers to cities manufacturing leaders,” said Kozlowski. said Brian Kozlowski, senior manager for and residential areas. Domtar completed its model to quantify the full cost of water use for our pulp and paper mills and began adopting it in our mill system in 2018.
50 SUSTAINABILITY AT DOMTAR EFFICIENCY WATER
WATER EFFICIENCY REDUCES COSTS A LOOK AT WATER USAGE IN OUR AND INFORMS OUR INVESTMENTS Evaluating water efficiency and costs requires several PULP AND PAPER MILLS years of data. For example, some water costs, such as obtaining a wastewater discharge permit, occur WATER SOURCES - 2018 once every few years, rather than annually. Water 6% licenses and permits, as well as water testing and labor Surface Water associated with water access, use and treatment, are Groundwater generally fixed costs that don’t change with water use. 94%
Other costs are variable or semi-variable, areas in which water conservation efforts can offer opportunities for savings. Energy and chemical use are two of the most significant variable costs and are directly linked to the amount of water used. TOTAL WATER USE* Understanding the full cost of water is also (Million Cubic Meters) 2% becoming an increasingly important tool for our Process Water 54.2 45.7 mills when planning – and justifying – capital Non-contact Cooling Water investments. As an example, the Plymouth Mill’s cooling tower heat/exchanger project was the first 361.8 application of Domtar's cost-of-water model, which 361.1 ultimately influenced the nature and components of the project. 2014 2018 As we improve our water efficiency, we can lower *Measured as final effluent plus non-contact cooling water volume. our costs in several areas. And as we expand the use of our cost-of-water model, our understanding of water costs help us make more sustainable REDUCTION IN DISCHARGES TO WATER investment decisions. FROM OUR PULP AND PAPER MILLS SINCE 2014
Adsorbable Biochemical Total Organic Oxygen Suspended Halides Demand Solids HAOX 2BOD OTSS 16% 5% 3%
SUSTAINABILITY AT DOMTAR 51 EFFICIENCY WATER
Several years ago, Domtar embarked on a major CI initiative to reduce bleaching chemical usage in the pulp-making process. THE RIGHT Our CI Team and mill operations worked with suppliers to improve our bleaching chemical efficiency and pulp-making processes across our mill system. After much work and fine-tuning, we are CHEMISTRY TO now producing the same amount of pulp with less chemicals – an environmental and economic win-win.
HOW DID WE DO IT? SUCCEED By expanding our data collection capabilities and using real-time data visualization tools, we have gained better insight into our WHAT DO YOU GET WHEN YOU DO WELL consumption of pulping chemicals. This allows us to track, control, FINANCIALLY AND GOOD ENVIRONMENTALLY? and ultimately reduce variability of the pulp digester and bleach HAPPY SHAREHOLDERS AND A HEALTHIER PLANET. plant processes, and final pulp brightness.
There’s no shame in admitting that the primary motivation for most of our Continuous Improvement (CI) initiatives is improving our bottom line. In a competitive environment, maximizing our efficiencies and reducing our costs are part of the job. But oftentimes, lowering costs and improving environmental performance go hand in hand – that’s called sustainability.
Through these efforts, our mills were able to reduce overall bleaching chemical usage (sodium chlorate, hydrogen peroxide, sodium hydroxide and sulfuric acid) per unit of pulp by over 7 percent since 2015. “The mills did a great job of identifying and capturing opportunities. Each mill team leveraged information from other Domtar mills, suppliers and our Continuous Improvement specialists to achieve these results,” said John O’Donnell, director of fiberline optimization.
WE ARE NOW PRODUCING To sustain these improvements, Domtar’s fiberline functional team THE SAME AMOUNT works with the mills to monitor key performance indicators and OF PULP WITH LESS report the data as part of each mill’s monthly business review. This ensures chemical usage stays front and center with our CHEMICALS – managers. Within the mill, chemical usage is discussed daily with an environmental and economic win-win. the operators, who have their hands on the chemical dials. This keeps them actively engaged and questioning how we can further reduce chemical use and process variability.
52 SUSTAINABILITY AT DOMTAR EFFICIENCY WATER
AND WE GOT MORE THAN WE BARGAINED FOR… “With greater visibility and control of our processes, we saw another beneficial trend that the chemical cost reduction team had not originally focused on,” said Kathy Collins, director of environment. “Where there were reductions in sodium chlorate usage, we also saw similar reductions in Adsorbable Organic Halide (AOX) discharges in our final wastewater effluent.” Sodium chlorate is used to generate chlorine dioxide at our mills to bleach pulp and make it white. Chemical residuals from the bleaching process are the primary contributor to AOX in a mill’s final effluent.
Since 2015, Domtar has reduced sodium chlorate use 9 percent per ton of pulp, which resulted in cost savings and reducing AOX discharges in our mills’ final effluent by 17 percent over the same period.
Now that’s a win for the wallet and the environment. WHAT IS SODIUM CHLORATE USE AND AOX DISCHARGES PER AIR-DRIED METRIC TON BLEACHED PULP AOX 44 0.23 ? AOX IS A TEST-DEFINED PARAMETER, 43 0.22 RATHER THAN AN ACTUAL CHEMICAL, 42 0.21 THAT MEASURES THE TOTAL AMOUNT 41 0.20 OF HALOGEN ATOMS BOUND TO 40 0.19 AOX (Kg/ADMT) AOX ORGANIC MATTER IN WATER. 39 0.18 For mills manufacturing bleached pulps, AOX is Sodium Chlorate Use (Kg/ADMT) Use Sodium Chlorate used as a surrogate measure of chlorinated organics 38 0.17 in wastewater or treated effluent. Some chlorinated 2015 2016 2017 2018 organics may be a concern for some aquatic organisms. Therefore, reducing AOX discharges provides an Sodium Chlorate Use additional margin of safety for aquatic organisms. AOX
SUSTAINABILITY AT DOMTAR 53 EFFICIENCY BYPRODUCTS
A CIRCULAR ECONOMY
Our business has long relied on These efforts are enhanced through PRIORITIES renewable and recyclable resources to our continuous improvement initiatives › Improving resource efficiency make our products. We are building on and engineering innovations focused on in our manufacturing processes that experience to broaden the circle – increasing our manufacturing efficiencies to minimize waste. from the raw materials we use, to how and turning more of the materials we › Minimizing the amount of waste we make our products, to how they are handle into saleable products. we send to landfills. managed at the end of their useful life. Our industrial processes benefit from Our progress in finding recycling and › Finding beneficial, higher value uses for our manufacturing mimicking the closed-loop flow of beneficial-use options for our byproducts byproducts. materials of natural ecosystems. has accelerated over the past few years, driven by a more consistent, disciplined, companywide approach to defining, CHALLENGES measuring and reporting byproduct We are increasingly designing streams. We are also sharing best › Increasing the amount of reused our production and materials or recycled materials in our practices across our manufacturing management systems to manufacturing processes while still facilities to build on our success. Together meeting customer specifications. ALIGN WITH with external experts and partners, we Finding economically viable continue to evaluate opportunities › CIRCULAR markets for our byproducts near to redirect additional byproducts to our facilities so that transportation ECONOMY beneficial, higher value products. costs are lower than the cost to landfill them. PRINCIPLES. This includes minimizing › Minimizing byproducts generated due to equipment failures and the amount of resources operational challenges. we use, keeping them in use for as long as possible and extracting maximum value from them.
54 SUSTAINABILITY AT DOMTAR BYPRODUCTS EFFICIENCY BYPRODUCTS
This began with source reduction and Non-woven materials, super absorbent keeping the recycling stream clean. polymer, paper, plastic and metal are sep- WHAT Repurposing, recycling and waste-to- arated at the facility and sent to specialized energy took care of the rest. recycling facilities in the state.
WASTE? A key step was the reduction of scrap being When Mark Clack joined Domtar in 2016 generated by switching to larger-diameter as the manager of the Delaware, Ohio, rolls of raw material. The larger rolls run personal care facility, he noted that an longer on the machine, resulting in fewer impressive 80 percent of the manufacturing roll cores for disposal, saving time and 86% Beneficially used or byproducts was being beneficially used or improving efficiency of the line. recycled 86 percent of recycled. “Given Domtar’s commitment to the 19,812 metric tons sustainability, and my experience helping “Another important step was making it of manufacturing a microbrewery I previously worked at in easier for colleagues to separate materials byproducts generated at our personal care California achieve zero waste to the landfill, for recycling,” said administrative assistant, facilities in 2018. I saw the opportunity to do the same in Vickie Bowles. Recovery stations were Delaware.” positioned closer to work areas so that sorting and recycling require less physical In 2018, Clack’s goal for the Delaware effort. Better signage and education also The remaining residuals, including organic facility became a reality. Delaware became helped encourage participation. materials, are sent to a facility that generates the second Domtar manufacturing facility clean energy for Indianapolis, Indiana. to reach the enviable milestone of sending Spent cores with remaining zero waste to the landfill. Our facility in Now all byproducts have found a second unusable raw material are calling, keeping valuable resources cycling Aneby, Sweden, was the first. now collected and shipped to InRETURN, an Ohio non-profit through the economy. Working together, that employs people with traumatic our colleagues in Delaware have reduced From 2016 to 2018, the Delaware the facility’s environmental footprint, doing plant made the journey brain injuries. Employees there reuse the material to make their part to ensure a better future. FROM 80 TO absorbent products 100 PERCENT such as dog beds, beneficial reuse of its packaging materials, manufacturing byproducts. and more.
SUSTAINABILITY AT DOMTAR 55 BYPRODUCTS EFFICIENCY BYPRODUCTS
While the mill converted both its power boilers from coal to cleaner burning ”TEEMING” FOR WILDLIFE natural gas in late 2016, it is important we continue helping restore the land from IN PENNSYLVANIA which we once sourced fuel. It’s just one example of how Domtar For decades, Elk County, Pennsylvania, The benefits are wide-reaching: regional has enhanced the land, making it more supplied coal to power the region and water quality has been improved by more attractive to wildlife, more valuable to beyond, including to Domtar’s local mill effectively treating acid mine drainage; the community and more enjoyable for in Johnsonburg. But strip mining has left lush vegetation has returned, providing hunters and nature lovers. Don’t take it behind a legacy of scarred land, marked valuable food and cover for wildlife; and the from us. Here’s what Richard S. Bodenhorn, by acidic soils devoid of organic matter mill has found a long-term, cost-effective president of North Central Pennsylvania and nutrients – conditions not suitable for solution to divert more than 95 percent Pheasants Forever, had to say in a letter to growing vegetation. of its byproducts from the landfill to more Domtar in March 2019: beneficial uses. Driven by the need to find a new home for “With the 2018 pheasant season fully its manufacturing byproducts, a passion behind us, I would like to thank the Domtar for wildlife, and a desire to leave a different Today the – Johnsonburg Mill for once again providing kind of legacy, the Johnsonburg Mill RESTORATION the habitat that made state game lands found the perfect solution. 44 the prime place in Pennsylvania for EFFORT pheasant hunting. is blossoming, literally, For more than 20 years, the mill has been with sunflowers and more. using organic and nutrient-rich wastewater I heard nothing but praise for the habitat treatment residuals and acid-balancing hunters found again this year… absolutely lime residuals to rejuvenate old mine sites. beautiful fields of corn, soybean, sorghum The success of these efforts would not and sunflower. What is even better, if you are have been possible without teaming a pheasant hunter, is the fields not only look up with equally determined public and like good habitat, but they are also harboring private non-profit wildlife groups, such pheasants and better hunting opportunities as the Pennsylvania Game Commission, for a wide range of wildlife species. The deer, Rocky Mountain Elk Foundation and bears, raccoon and other wildlife greatly Pheasants Forever. enjoyed the corn, but still left the fields valuable to the pheasants and other smaller species well into the fall and winter.
56 SUSTAINABILITY AT DOMTAR EFFICIENCY BYPRODUCTS
Once the hunting seasons have ended, and hunters settled in for the winter, the crops still have what might be their greatest value. A LOOK AT BYPRODUCTS They are then of great importance in both food and cover to the various wildlife species MANAGEMENT IN OUR through the winter PULP AND PAPER MILLS months when natural food can often be hard DISPOSITION OF MANUFACTURING to find. BYPRODUCTS - 2018
2% <1% Without their donation, Landfill Agricultural and Silvicultural work in land applying 9% Soil Improvement the residuals (working it Energy Generation 12% 31% into the existing ground), then planting the Mine and Land Reclamation crops, neither the hunters or the wildlife would Landfill Cover and Construction be benefiting from what is without a doubt Manufactured Soil/Compost 18% the best habitat they have seen in that area Other Beneficial Use in their lifetime. 28% Total manufacturing byproducts generated = 473,888 dry metric tons We all owe Domtar both a round of applause and heart felt thank you for being such a benefit to our community, hunters and wildlife.” WASTE TO LANDFILL (Dry Metric Tons) 19%
Domtar Goal (40% reduction from 2013 by the end of 2020)
177,967 144,850
2013 2018
BENEFICIALLY USED 69 PERCENT OF MANUFACTURING 69% BYPRODUCTS generated by our pulp and paper mills in 2018, up from 59 percent in 2013. This compares to an U.S. industry average of 43 percent beneficial use.*
*2018 American Forest & Paper Association Sustainability Report, Additional Environmental Indicators.
SUSTAINABILITY AT DOMTAR 57 STAKEHOLDER ENGAGEMENT
SHAPING OUR SUSTAINABILITY AGENDA
Domtar’s sustainability agenda benefits from regular interaction Engaging with NGOs to understand their expectations with our key stakeholders. Gathering diverse perspectives from our from businesses on sustainability. This engagement has customers, employees, shareholders, communities and advocacy revealed that a company’s environmental performance is of organizations provides us with insight and opportunities to primary importance as it shapes the public’s perception of recognize emerging trends and identify market expectations in the corporation. a timely manner. Surveying our sales teams in our pulp, paper and Since our last Sustainability Report was published in 2017, we personal care businesses regarding their customers’ interests have broadened our stakeholder engagement. These efforts in sustainability and our sustainability included: reporting materials. Results indicate changes we recently made to our sustainability reporting help them better engage customers Conducting a survey of more than 100 stakeholders on sustainability. to rate the importance of various sustainability topics for coverage in our reporting. This exercise Discussing sustainability issues with our shareholders. revealed the similarities and differences These conversations have reinforced that Domtar’s approach among our key stakeholder groups when to sustainability and sustainability reporting are aligned with prioritizing topics of greatest importance their long-term investment goals. to them. The priority topics included economic performance, sustainable Researching investor interest in Environmental, Social forestry, safety and security of facilities and property, responsible and Governance (ESG) issues. Domtar evaluated seven ESG sourcing of raw materials, air quality, health and safety, climate rating and ranking firms to better understand opportunities to change, equality, and inclusion and diversity. meet the evolving disclosure and reporting expectations for ESG issues. This work revealed ESG analysis is too Gathering information from our business partners often opaque, and that there are misleading to better understand consumer perceptions and inconsistencies between how rating and behaviors related to the sustainability of our pulp, paper ranking firms judge a company’s sustainability and personal care products. Results show that 71percent of performance. As a result of this consultation, American consumers feel a responsibility to make their daily Domtar is disclosing more information related product purchase decisions in a way that positively impacts to climate change, water management, inclusion and diversity, the environment and ensures a safe, healthy quality of life in employee training and development, and raw material sourcing. their homes.* Household paper items and copy/printer paper are among the products consumers consider priorities when selecting We believe the diversity of perspectives provided goods that meet those goals. These drivers by our stakeholder engagement helps to shape our have fine-tuned the way we communicate sustainability agenda and enables us to prepare a more to our B2B customers and consumers about relevant and useful report. the work we do to promote responsible forest management and manufacture our products as efficiently as possible.
*Shelton Group Eco Pulse Study released April 19, 2019.
58 SUSTAINABILITY AT DOMTAR ABOUT THIS REPORT
OUR SUSTAINABILITY REPORTING
As a publicly traded U.S. company, Domtar discloses issues Domtar routinely shares information about our sustainability deemed material in our reports to the U.S. Securities and efforts and performance at:www.domtar.com/en/how-we-work/ Exchange Commission. Issues deemed important in the context sustainability-domtar. We also publish printed reports on a of sustainability reporting should not be inadvertently confused biennial basis to effectively with materiality in the context of a regulatory reporting standard. expand our audience and Voluntary sustainability reporting is an opportunity to go beyond share more details about our the materiality tests of a regulatory report and present a more work. Domtar’s last report was holistic perspective of our priorities, challenges and opportunities. published in 2017.
The data contained in this report This report was prepared in accordance with the cover all of our operations and “core option” of the Global Reporting Initiative’s (GRI) include the most current annual Sustainability Reporting Standards. This framework data available. Baseline years encourages companies to thoughtfully focus their for presenting historical data sustainability reports on relevant issues that matter and trends have been selected most to their customers, employees, shareholders, to account for changing regulatory definitions and reporting communities, advocacy groups and other stakeholders. methods to provide the truest perspective on our performance. For Domtar, these include: Some of the data contained in this report may be slightly different than what has been previously reported. This is due to adjustments AIR AND resulting from additional data verification, ongoing efforts to GREENHOUSE standardize and improve performance indicators across the GAS EMISSIONS ECONOMIC EMPLOYEE PERFORMANCE TRAINING AND company, and changes to reporting methods (e.g., adjustments AND IMPACTS DEVELOPMENT for the sale of renewable energy credits to other electricity users).
The data contained in this report have gone through a rigorous internal verification process. Given the nature and purpose of this ENERGY FIBER FOREST voluntary report, we do not engage an external auditor. PROCUREMENT MANAGEMENT
For additional facility-specific environmental, social and economic information about our pulp and paper mills, please visit Domtar’s INCLUSION LOCAL OCCUPATIONAL web-based, interactive transparency tool, The Paper Trail®, at: AND DIVERSITY COMMUNITIES HEALTH AND www.domtarpapertrail.com. SAFETY TRANSPORTATION The GRI content index can be found on our website at: www.domtar.com/en/how-we-work/sustainability-domtar. For more information about this report or to share your comments, please contact Paige Goff, vice president of sustainability, at: WASTE WATER AND AND [email protected], or call us at: 803-802-8001. BYPRODUCTS EFFLUENTS MANAGEMENT
SUSTAINABILITY AT DOMTAR 59 SUSTAINABILITY PERFORMANCE INDICATORS
WOOD AND FIBER PURCHASES (Thousand Metric Tons) Pulp and Paper Mills 2014 2015 2016 2017 2018 Wood Purchases (As Received in Chip Equivalents) 1) 15,453 15,856 15,463 15,586 15,178 Virgin Pulp Purchases (Air Dry) 35 33 22 41 58 Recycled Pulp Purchases (Air Dry) 67 74 66 68 75
CERTIFIED WOOD (% of Total Wood Deliveries) Pulp and Paper Mills 2014 2015 2016 2017 2018 TOTAL CERTIFIED WOOD 33% 30% 34% 41% 38% Forest Stewardship Council (FSC) 19% 18% 19% 22% 21% Programme for the Endorsement of Forest Certification (PEFC)2) 14% 12% 15% 19% 17%
DIRECT ECONOMIC VALUE CREATED BY OPERATIONS (Million U.S. Dollars) 3) All Domtar Operations 2014 2015 2016 2017 2018 ECONOMIC VALUE GENERATED Sales Revenue 5,555 5,257 5,090 5,148 5,455 ECONOMIC VALUE DISTRIBUTED Materials and Services Purchased 3,691 3,471 3,407 3,445 3,612 Capital Investments in our Facilities 236 289 347 182 195 Research and Development 127 139 129 141 150 Salaries, Wages and Benefits Paid 985 938 954 993 978 Returns to Shareholders 122 150 112 104 108 Interest Paid to Debtholders 92 133 64 58 57 Taxes Paid 18 34 40 33 71
OUR WORKFORCE (% Unless Otherwise Noted) All Domtar Operations 2014 2015 2016 4) 2017 2018 Number of Employees as of December 31st Each Year 9,759 9,792 9,983 9,899 9,784 BY REGION Asia <0.1% <0.1% <0.1% <0.1% <0.1% Europe 11% 11% 11% 12% 12% North America 89% 89% 89% 88% 88% BY GENDER Female 21% 21% 22% 22% 22% Male 79% 79% 78% 78% 78% BY AGE ≤ 29 8% 9% 10% 9% 12% 30-39 16% 17% 18% 17% 18% 40-49 27% 26% 26% 25% 25% 50-59 36% 35% 34% 33% 33% 60-69 13% 13% 12% 15% 12% ≥ 70 <1% <1% <1% 1% <1% BY EMPLOYMENT TYPE 5) Union 47% 47% 48% 48% 44% Non-Union 53% 53% 52% 52% 56% TURNOVER Voluntary Turnover Rate 3.2% 3.4% 3.9% 3.6% 4.2%
SAFETY INCIDENTS All Domtar Operations 2014 2015 2016 2017 2018 Total Frequency Rate (# Recordable Incidents/200,000 Hours Worked) 0.97 0.99 0.82 0.78 0.74 Lost Time Frequency Rate 0.38 0.43 0.33 0.38 0.35 (# Lost Time Recordable Incidents/200,000 Hours Worked) Lost Time Severity Rate (# Lost Days * 200,000)/# Hours Worked) 26.03 25.18 32.44 16.87 18.63 Fatalities (Number) 6) 0 1 0 1 0
1) Includes roundwood and chips. 2) Includes fiber inputs from the American Tree Farm System (ATFS), Canadian Standards Association (CSA) and Sustainable Forestry Initiative (SFI). PEFC endorses these and other national forest certification standards. 3) Sales Revenue and Materials and Services Purchased, years 2014-2017, were adjusted to reflect the retrospective application of ASU 2014-09 "Revenue from contracts with customers," adopted on January 1, 2018. 4) Includes acquisition of Home Delivery Incontinent Supplies Co. (HDIS). 5) The employment type for some of our employees at our European operations were categorized differently beginning in 2018. 6) Ashdown, Arkansas, September 2015 and Kamloops, British Columbia, June 2017.
60 SUSTAINABILITY AT DOMTAR SUSTAINABILITY PERFORMANCE INDICATORS
ENERGY USE (Million Gigajoules Unless Otherwise Noted) All Manufacturing Facilities 2014 2015 2016 2017 2018 TOTAL ENERGY USE FOR MANUFACTURING 169.65 170.98 164.51 169.06 165.83 Biomass (Black Liquor, Bark, Wood Residuals and Biofuels) 76.6% 76.8% 76.9% 77.0% 74.7% Natural Gas 12.7% 14.7% 15.6% 16.9% 19.1% Purchased Electricity (net) 3.3% 3.5% 3.6% 3.7% 3.6% Coal 5.7% 3.6% 2.5% 1.0% 1.1% Purchased Steam and Heat (net) 0.7% 0.7% 0.6% 0.7% 0.7% Other (Hydropower, Oil, Pet Coke, Propane, Tire-derived Fuel) 1.0% 0.7% 0.8% 0.7% 0.8% TOTAL ENERGY USE FOR ON-SITE MOBILE EQUIPMENT 0.35 0.35 0.34 0.32 0.33 Diesel 62.5% 64.3% 66.5% 66.7% 66.4% Propane 27.5% 25.6% 24.0% 23.8% 23.4% Gasoline 10.0% 10.1% 9.5% 9.5% 10.2%
AIR EMISSIONS (Metric Tons) Pulp and Paper Mills 2014 2015 2016 2017 2018
Nitrogen Oxides (NOx) 13,652 12,776 12,038 11,706 11,260 Sulfur Dioxide (SO2) 5,883 3,617 3,150 3,203 2,896 Total Particulate Matter (PM) 3,228 3,415 3,158 3,140 2,877 Volatile Organic Compounds (VOC) 5,708 5,596 4,435 4,612 4,741
GREENHOUSE GAS EMISSIONS (Million Metric Tons CO2e) All Manufacturing Facilities 2014 2015 2016 2017 2018 TOTAL GREENHOUSE GAS EMISSIONS 3.53 3.28 3.17 3.03 3.15 Direct Emissions (Scope 1) 2.19 2.03 1.85 1.77 1.94 Indirect Emissions from Purchased Electricity and Steam (Scope 2) 0.70 0.67 0.67 0.60 0.59 Indirect Emissions from Sale of Renewable Electricity Attributes (Scope 2) 0.64 0.58 0.65 0.66 0.62
WATER USE AND DISCHARGES Pulp and Paper Mills 2014 2015 2016 2017 2018 TOTAL WATER USE (Million Cubic Meters) 7) 416.0 405.9 405.5 410.4 406.8 Process Water Use 365.6 367.9 363.3 365.9 361.1 Non-contact Cooling Water Use 50.4 38.0 42.2 44.5 45.7 WATER SOURCES (%) Surface Water 93% 93% 94% 94% 94% Groundwater 7% 7% 6% 6% 6% DISCHARGES TO WATER (Metric Tons) Adsorbable Organic Halides (AOX) 798 830 766 749 670 Biochemical Oxygen Demand (BOD) 9,933 10,045 8,570 8,990 9,435 Total Suspended Solids (TSS) 13,068 11,823 11,981 11,483 12,729
MANAGEMENT OF MANUFACTURING BYPRODUCTS (Dry Metric Tons Unless Otherwise Noted) Pulp and Paper Mills and Personal Care Facilities 2014 2015 2016 2017 2018 TOTAL BYPRODUCTS GENERATED 473,013 493,690 470,872 475,527 493,701 To Landfill 139,202 137,337 119,998 113,874 147,548 To Beneficial Use or Recycling 333,811 356,353 350,874 361,653 346,153 Beneficial Use and Recycling Rate 71% 72% 75% 76% 70%
HAZARDOUS WASTE (Metric Tons) Pulp and Paper Mills and Personal Care Facilities 2014 2015 2016 2017 2018 Total Hazardous Waste Manifested 8) 751 385 457 501 370
7) Measured as water volume discharged. 8) Reported according to national jurisdictional regulations and requirements. In Canada, facilities are required to manifest used oil as hazardous waste even when recycled. Of the total hazardous waste manifested, used oil represented a low of 40% in 2016 to a high of 80% in 2014.
Some of the data contained in these tables may be slightly different than what has been previously reported. This is due to adjustments resulting from additional data verification, ongoing efforts to standardize and improve performance indicators across the company, and changes to reporting methods.
SUSTAINABILITY AT DOMTAR 61 PRODUCTION NOTES
Pictures Paper Front Cover Page 30 Cover printed on 80 lb. Cougar® Cover, Super Smooth Finish. Terri Tischler and nephews Gabriel and Colleagues at Domtar’s corporate offices Insert printed on 80 lb. Cougar® Text, Super Smooth Finish. Solomon Wong participate in an EarthChoice in Fort Mill, South Carolina, stroll around Ambassadors’ event at Kamloops Wildlife Park the campus lake in celebration of National near our mill in British Columbia. Walking Day. Inside Cover Page 33 The next generation observes nature’s mysteries Colleagues at our Dryden Mill in Ontario discuss Printing near our Marlboro Mill in Bennettsville, which pulp bales need priority loading. South Carolina (left to right): Layson Mitchell, Cover and insert printed using a 4-color process with low son of Robert Mitchell; Emmie Rogers, Page 35 VOC, HUV inks on a Komori GL 640 press with in-line coating granddaughter of Bob Whiteman; Coby Collins, Jonathan Laliberte enjoys a bike ride and an extended delivery, HUV drying system. grandson of Tammy Gathings; Kayti Adams, to our Windsor Mill in Quebec on a daughter of Will Adams; Abel Rowe, son of community-forest trail. Joni Rowe; and Kameron Virgous, stepson Page 36 of Kenneth Augustus. As part of the Adopt-A-Highway program, Page 10 Nekoosa Mill’s EarthChoice Ambassadors Eric Lapointe scans the forest canopy near our pick up litter along a stretch of road bordering Windsor Mill in Quebec. the Wisconsin River. Page 18 Page 37 Loading bales of pulp at our Dryden Mill in Domtar Personal Care staff and local residents Ontario into rail cars for shipping to customers. participate in a community run in Frankfurt, Germany. Page 22 ®WWF Register ed Trademark. Panda Symbol © 1986 WW F. © 1986 Panda symbol WWF- World Wide Fund for Nature (also known as World Wildlife Fund ). ®"WWF" is a WWF Re gistered Trademark. A student discovers new worlds through the Page 37 pages of a book at a Ben Carson reading room Children from Washington Elementary School dedication sponsored by Domtar at Foust visit our Nekoosa Mill in Wisconsin to get a Elementary School in Owensboro, Kentucky. hands-on lesson in papermaking. Page 24 Page 37 Andre West and Sonica Speight oversee Angela Madussi from our Dryden Mill in Ontario, operations at our personal care facility in helps revitalize a local park near the mill with Greenville, North Carolina. our partners at the Student Conservation Association. Page 25 Lonnie Seamster supervises paper machine Page 40 operations via multiple screens in the wet-end Rachel Hui-Hubbard, program coordinator of Cougar® paper contains the Early Learning Partnership of York County, 10% post-consumer control room at our Ashdown Mill in Arkansas. fiber South Carolina, shops for books at a recent Page 25 Truck of Books event. Randa Bangart inspects our premium Cougar® paper before it ships from our Rothschild Mill Page 42 in Wisconsin to customers. Brandon Ayers inspects a water sample at our Ashdown Mill in Arkansas. Page 25 Learn the environmental, social and Randy Meverden keeps our Rothschild Mill Page 52 economic impacts of Domtar products at in Wisconsin well maintained. Brady Conroy runs an Atomic Absorption domtarpapertrail.com. Spectrophotometer at our Kamloops Mill in Page 25 British Columbia to maintain quality control. Yannick Melancon verifies the quality and sheeting precision of paper produced at our Page 55 Windsor Mill in Quebec. Angie Smith takes sorting and recycling seriously at our personal care facility in Delaware, Ohio. Page 25 Ann Walker and Tammy Waters (left to right) Back Cover conversing at our Ashdown Mill in Arkansas. Children and grandchildren of colleagues at our Marlboro Mill in Bennettsville, South Carolina, look for wildlife in a nearby forested area.
62 SUSTAINABILITY AT DOMTAR
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