PMA Board Meeting Corporate Social Responsibility October 7, 2008

What’s Our Agenda? What’s Their Agenda? What’s PMA’s Agenda? AGENDA

What’s Our Agenda?

What’s Their Agenda?

What’s PMA’s Agenda?

WHAT’S OUR AGENDA?

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we want to feel more confident about the economy we are concerned and want accountability for food, health, products, environment we want green products that are real solutions we don’t want to be guilty we don’t want to leave a mess for our kids ‘ Our’ Agenda is….

we want to feel more confident about the economy

we are concerned and want accountability for food, health, products, environment

we want green products that are real solutions

we don’t want to be guilty

we don’t want to leave a mess for our kids

50 million Americans Strongly aware/deeply concerned about issues facing planet Taking action to address them Focus on health, well-being Wiser consumption Who are ‘we’? Source: Cultural Creatives , by Paul Ray/Sherry Anderson, culturalcreatives.org “ Cultural Creatives”

50 million Americans

Strongly aware/deeply concerned about issues facing planet

Taking action to address them

Focus on health, well-being

Wiser consumption

Lifestyles of Health and Sustainability (LOHAS) Who are ‘we’? Source: LOHAS, lohas.com Integrate social, political and economic values with their actions in the marketplace Roughly 1 in every 3 people in U.S. – 58 million adults • Authenticity and transparency key

Lifestyles of Health and Sustainability (LOHAS)

Integrate social, political and economic values with their actions in the marketplace

Roughly 1 in every 3 people in U.S.

– 58 million adults

• Authenticity and transparency key

5 key LOHAS market segments (1) Healthy lifestyles : organic & natural foods (2) Ecological lifestyles : ecotourism, eco-products & natural building/green design (3) Sustainable economy : self-sufficient, eco-friendly Alternative healthcare (5) Personal development : yoga & spas

(1) Healthy lifestyles : organic & natural foods

(2) Ecological lifestyles : ecotourism, eco-products

& natural building/green design

(3) Sustainable economy : self-sufficient, eco-friendly

Alternative healthcare

(5) Personal development : yoga & spas

6 MRI segments 48 Ungreen 10 Green at the market 18 Green in theory 6 Green but only if 16 Green at their best 2 Green advocates % SEGMENT

Roper segments True-Blue Greens: Env ironmental leaders and activists most likely to walk the green talk representing almost one third (30%) of the population. Gree n-Back Greens: Do not have time to be completely green and are not likely to give up comfort and convenience for the environment, but are willing to buy green products. They represent 10% of the population. Sprouts: Environment al “fence sitters” who buy green only if it meets their needs; they account for just over one quarter (26%) of the population. Grousers: Ge nerally uninv olved and uninterested in green issues, this segment believes individual behavior cannot improve the environment. They form 15% of the population. Apathetics: Not concerned enoug h about the environment to take action, this segment believes that environmental indifference is the mainstream. This group represents 18% of the population.

Yankelovich segments ▪ Green-less (29%) Unmoved by environmental issues and alarms ▪ Green-bits (19%) Don’t care but doing a few things ▪ Green-steps (25%) Aware, concerned taking steps ▪ Green-speaks (15%) Talk the talk more than walk the walk ▪ Green-thusiasts (13%) Environment is a passionate concern

but….

Every ecological system is in decline – Habitat destruction & poor land use decisions – Air & water pollution – Over fishing or harvesting Rapid loss of biodiversity – 90% of food supply from 15 food crops & 8 species of livestock Our food system isn’t sustainable – For every calorie of vegetables raised, more than 10 calories of hydrocarbons (oil) are needed – For every calorie of beef, more than 50 calories of energy are needed

Every ecological system is in decline

– Habitat destruction & poor land use decisions

– Air & water pollution

– Over fishing or harvesting

Rapid loss of biodiversity

– 90% of food supply from 15 food crops & 8 species of livestock

Our food system isn’t sustainable

– For every calorie of vegetables raised, more than 10 calories of hydrocarbons (oil) are needed

– For every calorie of beef, more than 50 calories of energy are needed

WHAT’S THEIR AGENDA? (how do you perceive these efforts?)

?

Bank of America: Green Bank or Greenwash? posted by Nell in Global Finance on April 3rd, 2008 Or at least that was the question on the mind of Fortune Magazine’s Marc Gunther, in his “Black, White or Green?” blog post yesterday. On the same day as we awarded Bank of America CEO Ken Lewis the Fossil Fool of the Year award for being a lead financier of new coal-fired powerplants and mountaintop removal, he was in NY to accept an award from NRDC for the Bank’s new “green” skyscraper and their $20 billion commitment to renewable energy. The coincidence compelled Gunther to ask: “So is the Bank of America an environmental hero? A villain? Both? Or neither?” As corporations and financial institutions begin to respond to the demand for action on climate change, it seems we are always in a state of wondering where a company stands on the green line. How can we tell with Bank of America? Well, just as Bank of America measures their bottom-line with ones and zeros, we’re measuring their environmental impact by where their money is. As of 2006, every $1 Bank of America invested in renewable energy was matched by another $100 spent on dirty energy. To use an appropriate cliché, perhaps its time they put their money where their mouth is. Rainforest Action Network blog:

BMW brought its not-for-sale-in-America 118d five-door to New York City to claim the 2008 World Green Car award... and that's probably the only time we'll ever see the thing on US soil. Immediately following the event, BMW packed up the car and put it on the boat back to Deutschland.

Clorox Green Works brought together a reverse graffiti artist and a critically acclaimed documentary filmmaker, to create an environmentally friendly work of art and a film about a philosophy of clean. http://reversegraffitiproject.com

Table of Contents From the CEO 4 The Timberland Footprint 6 Summary of CSR Indicators 8 The Organization 9 Global Human Rights 16 Environmental Stewardship 34 Community Involvement 52 Stakeholder Engagement 70 Report Scope 72 Standard Disclosures 78 At Timberland, we live by a simple challenge and a common commitment—“Make it better.” Every day, we apply skill and passion to finding new ways to improve our products. Strengthening our relationships with stakeholders. And enhancing the communities where we live and work. “ Make it better” is straightforward, practical and common sense. It is a journey and not a destination. It can be found in small measures of goodness and in revolutionary breakthroughs in product technology. It’s the shoes we craft and the green spaces we restore. And at the end of the day, our hope is that, through the people and places we touch, we do our share to create a better world THE TIMBERLAND COMPANY 2006 CORPORATE SOCIAL RESPONSIBILITY REPORT

Vodka with a “Green” State of Mind

Barbie® Introduces '‘ Barbie™ BCause'' a Limited Edition Collection of Eco-Friendly Accessories for Girls Barbie™ BCause Collection, Available Exclusively at Toys“R”Us Stores Nationwide, Reuses and Repurposes Excess Barbie™ Fabrics and Trimmings to Create Fashionable and Playful Handbags, Pillows, Diaries, Totes and Other Accessories Environment & Earth Day EL SEGUNDO, Calif .--( BUSINESS WIRE )-- Just in time to celebrate Earth Day in style, Barbie® introduces a collection of eco-friendly accessories for girls with the debut of Barbie™ BCau se . The playful and on-trend Barbie™ BCause collection repurposes excess fabric and trimmings from other Barbie® doll fashions and products which would otherwise be discarded, offering eco-conscious girls a way to make an environmentally-friendly fashion statement with cool, patchwork-style accessories. Sold exclusively at Toys“R”Us stores in the Barbie® toy aisle, the Barbie™ BCause collection includes handbags, coin purses, hats, tote bags, pillows, diaries and more, each featuring its own unique variations and kitschy patchwork detail

“ Food with integrity” Foods, design of restaurants, treatment of employees Vegetarian and vegan options Return on Investment & Return on Environment

“ Food with integrity”

Foods, design of restaurants, treatment of employees

Vegetarian and vegan options

Return on Investment & Return on Environment

People crave transparency… U.K. McDonalds have built a campaign around “quality scouts” Unpaid volunteers take video of their findings, people can ask questions posted online– measures to counter documentaries such as “Fast Food Nation” Documented on website & in videos, communicated through ads & in blogs www.makeupyourownmind.co.ok

People crave transparency…

U.K. McDonalds have built a campaign around “quality scouts”

Unpaid volunteers take video of their findings, people can ask questions posted online– measures to counter documentaries such as “Fast Food Nation”

Documented on website & in videos, communicated through ads & in blogs

Deborah Doane , the chair of the Britain-based organization CORE Coalition (for "COrporate REsponsibility"), wrote an article for the Fall 2005 issue of the Stanford Social Innovation Review where she listed and debunked what she called "the four key myths of CSR." Those myths are: " The market can deliver both short-term financial returns and long-term social benefits." A ccording to Doane, not only are the interests of profit-seeking corporations and broader society often at odds, but socially responsible investments by corporations "are particularly unlikely to pay off in the two- to four-year time horizon that public companies, through demands of the stock market, often seem to require." "The ethical consumer will drive change." Doane writes, "Most surveys show that consumers are more concerned about things like price, taste, or sell-by date than ethics." "There will be a competitive 'race to the top' over ethics amongst businesses." While CSR efforts often "offer good PR," which companies of course like, "in some cases businesses may be able to capitalize on well-intentioned efforts, say by signing the U.N. Global Compact, without n ecessarily having to actually change their behavior." "In the global economy, countries will compete to have the best ethical practices." Although companies often claim that their presence in "developing" countries will improve health, environmental and labor conditions, Doane counters, "companies often fail to uphold voluntary standards of behavior in developing countries, arguing instead that they operate within the law of the countries in which they are working.” BUT….

Deborah Doane , the chair of the Britain-based organization CORE Coalition (for "COrporate REsponsibility"), wrote an article for the Fall 2005 issue of the Stanford Social Innovation Review where she listed and debunked what she called "the four key myths of CSR." Those myths are:

" The market can deliver both short-term financial returns and long-term social benefits." A ccording to Doane, not only are the interests of profit-seeking corporations and broader society often at odds, but socially responsible investments by corporations "are particularly unlikely to pay off in the two- to four-year time horizon that public companies, through demands of the stock market, often seem to require."

"The ethical consumer will drive change." Doane writes, "Most surveys show that consumers are more concerned about things like price, taste, or sell-by date than ethics."

"There will be a competitive 'race to the top' over ethics amongst businesses." While CSR efforts often "offer good PR," which companies of course like, "in some cases businesses may be able to capitalize on well-intentioned efforts, say by signing the U.N. Global Compact, without n ecessarily having to actually change their behavior."

"In the global economy, countries will compete to have the best ethical practices." Although companies often claim that their presence in "developing" countries will improve health, environmental and labor conditions, Doane counters, "companies often fail to uphold voluntary standards of behavior in developing countries, arguing instead that they operate within the law of the countries in which they are working.”

How about these #’s?

… and these #’s? 63% are concerned about the environment in general 67% about their car’s gas consumption 46% global warming 65% recycle 49% look for energy-efficient labels on products 21% say the green movement is just a fad

63% are concerned about the environment in general

67% about their car’s gas consumption

46% global warming

65% recycle

49% look for energy-efficient labels on products

21% say the green movement is just a fad

… and these #s? 70% of people are skeptical about marketer’s claims that they help the environment and society Over one-third of CMOs are not aware of their company’s CSR initiatives

70% of people are skeptical about marketer’s claims that they help the environment and society

Over one-third of CMOs are not aware of their company’s CSR initiatives

A Few Questions? Who’s doing it right? Who’s doing it right in the mainstream? Is it ‘marketing’ or something else?

Who’s doing it right?

Who’s doing it right in the mainstream?

Is it ‘marketing’ or something else?

WHAT’S PMA’s AGENDA?

Some Competition The Sustainable Advantage Wharton Nov 13-15 Philadelphia www.netimpact.org/conference

AGENDA OPTION #1: IGNORE

AGENDA OPTION #2: CAPITALIZE

Planet (environmental) – Enhancing, restoring and conserving nature People (social) – Customers, workers, vendors, investors Profit (financial) – Reinvesting for the future The “Triple Bottom Line” AGENDA OPTION #3: ENLIGHTEN

Planet (environmental)

– Enhancing, restoring and conserving nature

People (social)

– Customers, workers, vendors, investors

Profit (financial)

– Reinvesting for the future

consumption pre-consumption post-consumption AGENDA OPTION #4: VALUE CHAIN

consumption

Energy Efficiency,Conservation & Renewable Water Efficiency & Conservation Recycling & Composting Sustainable Food Pollution Prevention Green Building & Construction Stakeholders Sustainability Agenda AGENDA OPTION #5: DO IT ALL!

Energy Efficiency,Conservation & Renewable

Water Efficiency & Conservation

Recycling & Composting

Sustainable Food

Pollution Prevention

Green Building & Construction

Stakeholders

AGENDA OPTION #6: COMMUNICATE BETTER

PMA’s AGENDA? 7. ??? 6. communicate better 5. do it all 4. value chain 3. enlighten 2. capitalize 1. ignore Option

PMA’s AGENDA? Help members craft their company’s CSR agenda Help members manage/execute their company’s CSR agenda Help members fire up (align) their fellow employees around their company’s CSR agenda Help members measure their CSR efforts Help members develop the appropriate communications/marketing to their customers

Help members craft their company’s CSR agenda

Help members manage/execute their company’s CSR agenda

Help members fire up (align) their fellow employees around their company’s CSR agenda

Help members measure their CSR efforts

Help members develop the appropriate communications/marketing to their customers

Our Reco The PMA can help member companies… ... define, design and implement their sustainability agenda… as a key function of their integrated marketing efforts

The PMA can help member companies…

... define, design and implement their sustainability agenda… as a key function of their integrated marketing efforts

Our Reco: Webinar Schedule January 13, 2009: Contributing positively as a competitive advantage- Setting Your Agenda - Ben Packard, Environmental Affairs Manager at Starbucks March 03, 2009: Sustainability equals corporate social responsibility- Being Realistically Bold - Sarah Severn, Global Director, Corporate Responsibility Horizons at Nike May 05, 2009: Changing the game: Movement marketing- How Consumers Are Thinking/Acting - Alex Petrov, SVP, General Manager at Lucerne Foods July 07, 2009: Brands and their impact: Practical approaches to changing the way we think and operate - William McDonough, Activist, visionary, author, consultant September 01, 2009: The concept of Sustainable Value Networks- Inside-out Agenda - Susan Chambers, Executive Vice President - People Division at Wal-Mart November 03, 2009: Open communication culture inside-out - a case study of the Patagonia Footprint Chronicles - Rick Ridgeway, VP Environmental Programs & Communications at Patagonia

January 13, 2009: Contributing positively as a competitive advantage- Setting Your Agenda - Ben Packard, Environmental Affairs Manager at Starbucks

March 03, 2009: Sustainability equals corporate social responsibility- Being Realistically Bold - Sarah Severn, Global Director, Corporate Responsibility Horizons at Nike

May 05, 2009: Changing the game: Movement marketing- How Consumers Are Thinking/Acting - Alex Petrov, SVP, General Manager at Lucerne Foods

July 07, 2009: Brands and their impact: Practical approaches to changing the way we think and operate - William McDonough, Activist, visionary, author, consultant

September 01, 2009: The concept of Sustainable Value Networks- Inside-out Agenda - Susan Chambers, Executive Vice President - People Division at Wal-Mart

November 03, 2009: Open communication culture inside-out - a case study of the Patagonia Footprint Chronicles - Rick Ridgeway, VP Environmental Programs & Communications at Patagonia

Our Reco: Specifics Turnkey chapter meeting materials from the webinars A way to assemble a virtual resource center (?) Trend research specific to CSR/marketing Of consumers and their reactions to company/brand efforts Of marketers and what they’re doing/seeing and how it’s working

Turnkey chapter meeting materials from the webinars

A way to assemble a virtual resource center (?)

Trend research specific to CSR/marketing

Of consumers and their reactions to company/brand efforts

Of marketers and what they’re doing/seeing and how it’s working

Next Steps Board Approval to a ‘hybrid’ CSR CoE Build out the webinar series speakers Ensure the materials, recordings etc are available to the chapters Determine the feasibility of an online resource center for CSR Determine how best to do trend research

Board Approval to a ‘hybrid’ CSR CoE

Build out the webinar series speakers

Ensure the materials, recordings etc are available to the chapters

Determine the feasibility of an online resource center for CSR

Determine how best to do trend research

Thank You [email_address]