Letter from our Chairman and CEO

Letter from our Chairman and CEO

As the world’s largest packaging and paper company, International Paper’s wise use of natural resources — renewable wood fiber from sustainable and responsibly managed working forests, as well as water and energy — is critical to the sustainability of our business and our environment. For more than 116 years, our company has been a sustainability leader, with continuous performance improvement as the driving force and common denominator among our economic, environmental and social priorities. Our people are the key to our success, making vital connections that matter between our company and the world we share with our many stakeholders.

In 2013, International Paper achieved another financial milestone as we generated record operating earnings and continued our strong cash flow generation, driven by our great team of highly engaged people and first-rate execution. We delivered on our ongoing commitments to return cash to shareholders, strategically reinvest in our business and maintain a strong balance sheet. As a result, we believe that no other company in our industry is as well-positioned to meet the needs of global markets and create value for shareowners on a global scale.

International Paper’s sustainability begins in the responsibly managed working forests where we source the wood fiber to make our products. Around the globe, we are engaged in a broad range of efforts to protect and conserve forest resources, promote sustainable forest management practices and encourage third-party forest certification, especially in the regions where we operate. In 2013, these efforts included:

  • Contributing $7.5 million (over the next five years) to the National Fish and Wildlife Foundation to create the Forestland Stewards Initiative, a pioneering partnership to promote the value of working forests and to conserve and restore more than 200,000 acres of forestland across eight southern U.S. states;
  • Establishing a Private Natural Heritage Reserve to protect and conserve biodiversity and conduct biodiversity research on 2,000 acres of high-conservation-value forest owned by International Paper in Brazil; and
  • Joining the Global Forest & Trade Network, a World Wildlife Fund initiative focused on eliminating illegal logging and promoting environmentally and socially responsible forest management worldwide.

While working forests are the lifeblood of our business, International Paper’s sustainability commitment doesn’t end at the forest’s edge. It touches the entire life cycle of our products, from our manufacturing operations through end-use and recycling. Our products are made from renewable resources, on average 70 percent of the energy used in our mill manufacturing processes is self-generated using renewable wood-based biomass, and most of the products we make are reusable and recyclable. Our sustainability commitment also reaches into the communities where we operate. In addition to supporting our local communities with good jobs, tax dollars and purchases from local and regional suppliers, International Paper contributed nearly $12 million in 2013 to charitable causes, disaster relief, social development programs and support for employee volunteer efforts.

Our commitment to continuous performance improvement in everything we do carries with it a responsibility to be both transparent and accountable to our many stakeholders. To help us gauge and report our progress, we’ve set 12 voluntary sustainability goals with a 2010 baseline and an initial target date of 2020. At year-end 2013, we had already surpassed several of these targets and continue to challenge ourselves to raise the bar even higher.

Ultimately, our sustainability success — like our business success — comes down to the commitment of our 70,000 employees around the globe to do the right things, the right way for the right reasons. Nowhere is this more evident than in our quest to be an injury-free workplace. Safety is a core value at International Paper, and through our Life-changing Injury and Fatality Elimination (LIFE) initiative we reduced year-over-year LIFE incidents by 20 percent in 2013. While we are extremely proud of our industry-leading safety performance, we will never be satisfied until International Paper is injury-free.

On the pages that follow, you’ll find 2013 highlights that illustrate the many ways our people are helping International Paper achieve our mission: To improve the world today and for generations to come by using renewable resources to make products people depend on every day. I invite you to read on and encourage you to share your feedback at sustainability@ipaper.com.

Sincerely,

John V. Faraci

John V. Faraci

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About Our Company
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Diversity Awards

REACH manager Terri Creech and zone general manager Derrick Pratt personify International Paper's drive for diversity and inclusion. Terri's work to recruit diverse new engineers earned her a Chairman's Diversity Council (CDC) Impact Award; Derrick was recognized as a diversity thought leader as a result of strong work in creating a more productive and inclusive workplace.

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About Our Company
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"Partnerships That Work": International Paper Joins the White House Labor Management Summit

International Paper was selected to participate in the White House Labor Management Summit. Together with union, business and government leaders such as U.S. Secretary of Labor Thomas E. Perez and U.S. Secretary of Commerce Penny S. Pritzker, the summit focused on major labor management agreements, showing the potential for unions and employers to work together to improve competitiveness, productivity and quality. The summit highlighted recent collective bargaining successes that demonstrate the value of labor-management cooperation.