Sustainability Report 2015

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Thoro Packaging’s commitment to participate in voluntary climate protection is second to none in the packaging industry in the USA. natureOffice USA is proud and privileged to present the following sustainability report for 2015 to the employees, customers and the management.

natureOffice GmbH natureOffice USA Inc. natureOffice S.A. natureOffice Buchrainstraße 46 1489 W. Warm Springs Mcal. Estigarribia3470 BP:694 Quartier Tsivé 60599 Frankfurt am Main Road, Suite 110 1416Asunción Kpalimé Deutschland Henderson, NV 89014 Paraguay Togo Europe USA South America West Africa

Contact: Tel. 707 500 7017 USA - eh@natureoffice.com Tel. +49 69 173 20 20 0 EU - aw@natureoffice.com Contents

Statement of the president…………4

Company overview…….…………….5

Code of Ethics……………………..…6

Community commitment……….…..7

Corporate sustainability program…..9

Corporate greenhouse gas policy..…9

Energy program……………………..11

Recycling……………………………..12

Social sustainability………………….15

Water sustainability…………………17

Facts…………………………………..18

Summary……………………………..19

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Statement of the president

“Thoro is committed to not only reducing our impact on the environment and natural resources, but also strives to offer as many options as possible to support our customers’ sustainability efforts as well.”

Janet Steiner, president and CEO

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Company overview

Thoro knows that “It’s not just a carton. It’s your brand.” You won’t find any “cookie-cutter” standard packaging here. Placing it’s greatest emphasis on quality, Thoro offers custom, innovative solutions to fit your goals and add value to your brand. Thoro is capable of running any quantity from small to large, with no minimum order requirement. So no matter how big or small, Thoro has a solution for you. Consistently providing unmatched quality and customer service makes Thoro Packaging a partner you can trust. Offering sustainable solutions, Thoro grows with your business.

For over 45 years Thoro has partnered with companies of all sizes, from small business to top Fortune 500 companies, in the medical, pharmaceutical, health & beauty, and other consumer product industries. Macy Dabek - founder of Thoro packaging and father of Janet Steiner. His picture held by Macy Steiner (COO) with Janet Steiner (CEO)

5 Code of Ethics

Thoro is firmly committed to complying with its legal and ethical obligations under all state and federal laws. We expect all employees to promote an environment of trust, respect and equality.

Our philosophy can be implemented only if our employees recognize their responsibility to treat everyone in an honest and fair manner. Accordingly, an employee’s failure to fulfill their responsibilities under this policy may result in disciplinary action, up to and including termination.

The company holds all employees responsible for carrying out and monitoring compliance with this commitment. If an employee becomes aware of a violation of a legal or ethical obligation, or any improper treatment of a fellow employee, customer or supplier, the employee must immediately report this to his or her supervisor, the Human Resources Manager or the President for immediate investigation. It is important to Thoro that we investigate any potential violations of our policy and take appropriate action to correct any violations or incorrect perceptions that are found to exist. By making it the responsibility of all employees to police compliance with our strict ethical standards and commitment to complying with all legal responsibilities, we can continue to maintain our reputation in the community and industry. Employees should feel free to report any information regarding this policy without fear of any kind. Employees can report information to the Human Resources Manager or President, in confidence, if they wish. The company will treat such information as confidential to the extent it can do so without failing to fulfill its legal obligations. In addition, employees who do not wish to identify themselves can

6 report information anonymously. Community commitment

Thoro Packaging’s dedication to making a positive contribution to society extends to our employees and to the community in which we live and work. Our focus is a commitment to a safe workplace and responsible, ethical business practices in everything we do.

Thoro Packaging actively participates in the community, contributes to social programs, and promotes education in the graphic arts.

As a thriving member of the community, Thoro Packaging has a responsibility to help those that are less fortunate and give back to those who have helped support our business.

Thoro facility tours are conducted for packaging and design students from local collages and trade schools. This exposes them to a production environment, allows them to ask any questions they might have, and provides an opportunity for them to take what they have seen and apply it to the classroom and their future.

We offer donations of customized popcorn boxes to schools and universities for their organization and athletic fundraising events.

Various corrugated boxes are donated to schools and libraries.

Donations of paperboard stock are made to local schools and church groups.

7 Community commitment

The Thoro “Care Club” was started in 2010. It gives our employees the opportunity to give back to their own team with the contribution of home cooked meals and donated vacation hours, to aid employees out on medical or family leave.

The Thoro Packaging Team has adopted the Settlement House for our year-around giving. They are a local non-profit provider of assistance to individuals and families in crisis. Donations include: • Holiday Food Drive • Gently worn clothing for school children • Men’s and women’s clothing for the “Business Closet”

Thoro participates in the PPC’s annual TICCIT program. Adopted by the Paperboard Packaging Council in honor of Earth Day, Arbor Day, TICCIT is part of National Paperboard Packaging Week. This special week was created by Thoro Packaging’s own Dianne Vanover. TICCIT (Trees Into Cartons, Cartons Into Trees) is an outreach and education program for elementary age students, emphasizing the natural renewability and sustainability of paperboard packaging, and the lifecycle of paperboard.

Thoro ofen sponsors local packaging and design students to attend industry events and conferences.

8 Corporate sustainability program

Corporate greenhouse gas reduction program

Green Power Thoro Packaging has improved the environment and reduced the risks associated with climate change by switching to green power (wind farm offset credits.). This commitment reduces the amount of CO2 produced by 2,544,000 pounds per year and builds green infrastructure for future generations to enjoy. EPA Because of this purchase, Thoro has been granted membership to the EPA’s Green Power Leadership Club since 2010. This is a distinction given to organizations that have significantly exceeded the EPA’s minimum green power purchase requirements. Carbon neutral printing Thoro has continued to offer a carbon neutral printing option to our customers via natureOfficeUSA since August 2011. This program offers customers the option to purchase carbon credit certificates to offset the carbon dioxide emissions of each folding carton job. For each job, a customer can choose which climate-protection project best suits their company. The total carbon dioxide emission of the job is calculated, and the appropriate numbers of credits are purchased to offset that output.

Each job receives a very specific natureOffice certificate with a unique tracking number that is printed on each carton with the natureOffice logo. The tracking number can be looked up on the natureOffice website, to see the particular amount and project supported by that job. This offers a way for the end user to validate the claim, and see more information about that project, such as the Native Forest Reforestation Carbon Sequestration Project, in Hawaii, preserving the unique native woods of the Koa tree.

9 Corporate greenhouse gas reduction program

EPA Green Power Partner

As an EPA Green Power Partner since 2009, Thoro Packaging continues to purchase renewable energy credits through Sterling Planet, to offset all energy used by our production facility, office, and warehouse. These credits support diverse renewable energy projects nationwide. Every REC purchased guarantees 1 MWh of renewable power to the electric grid. These RECs are Green-e Certified, meeting stringent environmental and consumer protection standards. Going above and beyond EPA Green Power Partner requirements, Thoro is also a member of the Green Power Leadership Club. Thoro is currently upgrading our RECs from mixed resources, to source only from wind power, the more efficient and cost effective of the Employee vehicle at Thoro’s own charging station renewable energy sources.

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Energy program

Lighting Upgrades Upgrades to lighting in our 54,000 square foot facility Ride Share Program took place over the last few years. Double pane skylights Thoro promotes employee were installed in the manufacturing facility. All lighting rideshare programs and in the warehouse was upgraded from T12 to T8 lighting, and incentives made available motion sensors were added. We are currently researching and through county services. evaluating the option of moving to LEDlighting, the next In 2012, new rides-hare step in more energy efficient lighting. participants received a $25 Target gif card for Cooling System Upgrades signing up for the ride-share A few years ago a white cool roof and hybrid cooling system were installed along with an energy efficient air compressor. These are all projects that are still contributing to the energy efficiency of our facility.

Thin Client Network Thoro’s computer network was upgraded to a thin client system in 2008. This network provides employees/users a graphics user interface, while the operating system and computation are housed on terminal servers. Thin clients have no moving parts and use about one-tenth of the electricity of a desktop PC ( reference: designpt.com)

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Recycling program

Thoro Packing is working towards Zero Waste, and we hope to become certified within the next few years. Our efforts towards this goal have paid off, according to an outside LEAD A.P., Thoro is currently at 96% to the Zero Waste goal. Many recycling and waste reduction programs at Thoro have contributed to this progress. Thoro’s efforts do not stop at the borders of our facility, as we are also providing programs and education to employees to help them reduce their personal waste at home.

Paperboard is 100% Recyclable An added benefit of the folding cartons produced by Thoro Packaging is that paperboard is 100% recyclable. The recyclability of paperboard helps or customers, their customers and the end users reduce waste by being able recycle all folding carton packaging and preventing additional landfill waste.

FSC & SFI Certified Thoro Packaging is FSC (Forest Stewardship Council) and SFI (Sustainable Forestry Initiative) certified, and we offer both FSC and SFI certified boards to our customers. In March 2012, Thoro Packaging was the first to offer Neutrogena environmentally sustainable FSC paperboard, at no additional charge. FSC certifies the movement of materials from the forest to the end-user. As a paperboard product manufacturer, it is important for us to acknowledge the natural renewability of our primary raw material resource.

12 Recycling program

Dual Stream Recycling Program Thoro maintains a dual stream recycling system, with bins located at desks, in lunch rooms, and in meeting areas.

Employee Recycling Program Thoro offers recycling collection for employees at our facility. Recyclable materials accepted include paper, plastic, glass, and electronics. Employees are encouraged to bring in their recycling from home, “The Kelpies” Winner of the 2014 employee recycling including e-waste items for which it is ofen harder contest. Made from recycled aluminum printing plates to find recycling collections in the community. Money raised from employee recycling programs goes to help fund FUN Committee activities for employees such as our annual Thoro Day family outing and Holiday Party.

For more difficult to recycle materials, Thoro offers additional on-site recycling options for staff. A convenient battery drop of site is located in the office year-round, and collections are taking to local recycling center. Once a year, afer the holiday season, Thoro offers Styrofoam recycling collections, Ottomans made from recycled paper roll cores which are taken to a local recycling facility.

13 Recycling program

Reduced Ink Usage and Solvent Waste A couple of years ago, Thoro invested in two Sun Chemical Mx12 GFI ink mixing and dispensing systems, automating the ink mixing process. The Maratek Solvent Recycling System was adopted to address solvent waste.

Green Committee Our Green Committee presents at our monthly plant meetings which are attended by all Thoro employees. We provide education on recycling, waste reduction, and encourage employees to be better environmental stewards beyond Thoro. Our goal is for our employees to take what they have learned here at Thoro back to their homes and to their children.

Repurposing Thoro tries to find new purposes for materials that would usually be recycled or sent to landfills. The cardboard cores from our paper rolls are turned in to cat condos by a local company. An artist out of LA found inspiration in our die boards, and turns them into beautiful works of art. The Thoro Green Committee recently hosted an employee contest in which participants were asked to make something out of recycled materials. The winning art piece was made of 90% recycled materials sourced here at Thoro. Bistro table made from pallets & scraps

14 Workforce Injury/Illness Reduction Social sustainability Thoro’s Injury and Illness Prevention Program make the safety and health of employees a top priority in the operation of our business. New hire orientations include health and safety topics. A safe environment, low in risk of illness, means fewer time-off incidents due to illness or injury, resulting in a more reliable workforce. Our staff is dedicated to making sure we are available to support your needs. Monthly Safety Training & Incentive Employee safety awareness training is included in Thoro’s monthly plant meetings, and is attended by all employees. Thoro also offers an incentive to employees for extended time periods without a recordable injury in the workplace. Monthly Safety Inspections at 100% of facilities Each month safety inspections are conducted of our entire facility. These inspections allow for immediate correction of any unsafe conditions. Daily Stretching Exercise Plan A couple of years ago, a Kaiser recommended daily stretching plan was implemented in our Finishing department. This routine occurs at the same time each day, with 8 minutes of stretching exercises designed to prevent workplace injuries. Sanitation Hand sanitizing stations are located throughout the facility in common areas. Seasonal Flu Vaccinations – Thoro offers seasonal flu vaccinations on site at a discounted rate. Floor Cleaning Machine- Thoro has invested in new floor cleaning machine to be used on our production and Cheri Liles - Pre-Press Supervisor warehouse floors. 15

Social sustainability Wellness Committee A Wellness Committee was established at Thoro Packaging in 2008, to create a healthy environment and encourage healthy behaviors. The committee meets periodically to plan health and wellness programs and events. Also offered, is an on-site wellness library, with exercise DVDs and healthy cookbooks for employees to check out. Sonic Boom Program In 2013 Thoro’s Wellness Committee has implemented the Sonic Boom Program to encourage healthy eating and an active lifestyle. This program started with a biometric screening. Each participating employee received the results of this screening as reference for their starting point. Participants each received a pebble/pedometer that tracks and uploads step/mileage/speed activity statistics to a health tracking website. Employees can track their daily stats and set goals. Daily challenge activities are presented as a way to earn bonus points in the program, and encourage additional physical activity. A food and water consumption tracker is available on the website to encourage healthy eating, and earn additional points. Employees can reward coworkers for good habits by awarding them bonus points. Points earn different levels of prizes. Occasional competitions encourage further participation. At the end of the year, participants will receive another biometric screening to see the results of their efforts in 2013.

Ralph Martinez - Head of Design

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Water Use and Reduction Water sustainability Reductions in water usage also provide a small financial savings and help to conserve natural resources. This savings also helps to offset the rising costs of our primary raw material, paperboard, and prevent this cost increases from being passed on to our customers such as Johnson & Johnson.

Water conservation landscaping Thoro was proud to announce the completion of our water conservative landscaping in compliance with the Xeriscape philosophy According to Ryan McFadgen, Landscape Manager at Environmental Landscape Inc., “Watering costs alone can be cut by one-half to two-thirds by installing Xeriscaping." Thoro Packaging has implemented water conservative landscaping techniques in compliance with the Xeriscaping philosophy and the Seven Principles of Water Conservation.

Low flow toilets The new low flow toilets are using 2-4 times less water than the old toilets. This improvement has added to water conservation while also providing some cost savings.

17 Facts

Sustainability programs: Ongoing improvement programs: I. FSC & SFI Certification I. Green Power - continuous CO2 reduction II. natureOffice Carbon Neutral II. Energy use improvement certification III. TICCIT program 2012 (tree planting) III. 100% recycled paper board Carbon neutral printing IV. Vegetable oil based printing inks IV. Scrap recycling V. Sustainable energy program V. Paper recycling VI. PPC Recycable Logo VI. Ink recycling VII. Recycable foil board

year 2011 2012 2013 2014 Consumption versus productivity electricity/MW/h 2751 2923 3058 3210 water/utility units 2673 3463 4109 4681 sales/finacial units 3000 3400 3600 4000 The graph on the right shows the increase in sales/productivity and the consumption of resources. The 14000" graph indicates that consumption 12000" does not go parallel to productivity. 10000" 8000" This finding suggests improvements sales/finacial"units" 6000" water/u6lity"units" in sustainability efforts and the use electricity/MW/h" of less resources in the reproduction 4000" process. 2000" 0" 2011" 2012" 2013" 2014"

18 Summary report

This report is about the last 4 years of sustainability efforts of Thoro packaging, based in Corona, California. We have examined the social, economic and ecological sustainability efforts of the company. The force that drives any program in a corporation are the people. Thoro has implemented an impressive array of programs that support the development of the sustainability program. Thoro has also understood that suitability programs within an organization do not add to the expense but rather to the profitability of the same. Sustainability in itself suggests to save, reuse and recycle (e.g.sell waste for further use) and therefore costs are reduced in the long run. At Thoro the implementation of energy saving devices and the drive to reduce consumption has shown that economic growth does not have to go hand-in-hand with an increased use of resources. With the use of “green energy” Thoro has committed to go deep into the carbon neutral system by purchasing only certified “green” power to supply the operation. Since 2011 Thoro is also certified as a Carbon Neutral Print supplier which is an elite industry group in the USA. The continued growth of Thoro and the high rate of customer satisfaction are proof that Thoro is on the right track toward a cleaner, more profitable and sustainable future. Thus ecological impact has been dramatically reduced by the use of better energy, and the opportunity for employees to recharge their car batteries at the shop. Thoro is a leader in reusing, recycling and extending life periods of products which minimizes the impact on the environment. The water savings program implemented has helped save money, but more important the company has reduced the consumption of one of the most needed resources we have. We have compared Thoro to other companies similar in size and revenues, mostly with companies in Europe since there are no similar companies in the packaging industry in the United States. We have found that Thoro is in the top with other European companies of its kind but the single and most advanced company in California and the United States based on A) effort, B) implementation, C) results and D) continued improvements. This report and summary were prepared by natureOffice USA, an independent consultancy with offices in Europe, USA , South America and West Africa. natureOffice works with governments and private industries and is proud to work with leaders like Thoro to create a smarter and cleaner way to operate a business.

Erwin Hudelist, president December 2014

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