Inspiring Words from the IP Shareholders Meeting

“Change is painful but the failure to change is the kiss of

As I fly through the air on my way back to North Carolina from the (IP) annual shareholder meeting in White Plains New York, I can’t help but wonder just how long it will take for IP’s CEO, John Faraci, to get it that his company’s production of paper is devastating forests and that continued business as usual is a sure recipe for ecological and financial disaster.

John Faraci, in the midst of major financial turmoil in the global paper industry, has positioned IP as the global leader in paper technology and production efficiency – effectively retooling old paper mills to
produce the same or more paper at less cost to IP.Certainly this is the kind of guy that, if he put his mind to it, could also position IP as a clear leader when it comes to forest practices. Yet IP is throwing up nothing but excuses when its customers approach them about producing products without destroying forests.

Meanwhile, positive change is happening all around IP. IP customers in the office supply market have
set aggressive goals for expanding their purchases of post-consumer and FSC certified paper.Some of these companies are shifting paper purchases to companies other than IP that are able to meet higher environmental standards. IP isn’t even in the race with some of its competitors when it comes to taking real action to improve forestry practices.

White Marsh Clearcut And, as if pressure from customers and competitors weren’t enough, IP is even getting the squeeze from shareholders. Domini Social Investments introduced a
shareholder resolution this year calling on the company to produce a feasibility report on transitioning all of its fiber to FSC certified and recycled sources. Domini filed a similar resolution with MeadWestvaco – one of IP’s major competitors in the packaging sector. While MeadWestvaco agreed to take action on the resolution and will be producing a report over the next year, IP stubbornly stood opposed to it. Why IP would oppose this resolution is very difficult to understand, given that the marketplace is becoming more sophisticated in its understanding of forestry issues and is increasingly endorsing recycled and FSC certified paper as environmentally preferable to business as usual.

Sunrise as Zuni Pine BarrensMy colleague Andrew Goldberg and I flew to New York to attend the IP annual shareholder meeting hoping to get some answers.We asked Mr. Faraci why IP has not been meaningfully engaged with Dogwood Alliance, the leading organization in the Southern US (where IP’s operations are most concentrated) driving change in the marketplace with its customers and competitors, in trying to resolve concerns about IP’s forest destruction. We also asked him to explain why IP is a clear industry laggard when it comes to embracing high standards of forest management, when it such a leader in its industry on issues unrelated to the environment.

Faraci’s answers were less than impressive, reminding me of the teachers in the old Charlie Brown cartoons – whaa whaa whaa whaa whaa….

Come on Mr. Faraci! IP’s customers are getting it; your competitors are getting it.SFI certification is simply inadequate to ensure the long-term viability of the world’s forests.

An IP shareholder unknown to Dogwood Alliance or Domini reminded Mr. Faraci that “Change is painful but the failure to change is the kiss of death.”I was reminded of Darwin’s basic theory of evolution – species adaptability to change is critical to long-term survival.John Faraci is a survivor. IP will adapt when push comes to shove.Dogwood Alliance, through its work with IP customers in the office supply and packaging sectors and through moving IP competitors along, is creating the change that will help the world’s largest paper producer evolve.

We’re trying to help you, Mr. Faraci, because we know you can do better….much better.Oh, and by
the way, the health of the Earth – our home — depends on it.



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