Critical Issues in Direct Marketing: What Direct Marketers Cant Afford To Ignore About Improving The


1
Critical Issues in Direct MarketingWhat Direct
Marketers Cant Afford To Ignore About Improving
Their Environmental Impact

• Wednesday March 21 2007100 p.m. 230 p.m.
  EDT

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Webinar Panelists

• Speakers
• Meta Brophy Director Publishing Operations
  Consumers Union
• Oliver Clode Vice President Catalog
  Manufacturing Marketing Finance
  Williams-Sonoma Inc.
• Chet Dalzell Director Public Relations
  Harte-Hanks Inc.
• Phil Riebel Environmental Director - North
  America UPM-Kymmene Inc.
• Moderator
• Patricia Kachura Senior Vice President Ethics
  Consumer Affairs DMA

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Webinar Outline

• Instructions to Participants Kristen Cunningham
  (DMA)
• Introduction of Speakers Patricia Kachura (DMA)
• Overview of DMA Environmental Planning Tool Chet
  Dalzell (Harte-Hanks)
• A Walk-Through of the Planning Tool
• Design Production Printing Meta Brophy
  (Consumers Union)
• Paper Procurement Use Suppliers Perspective
  Phil Riebel (UPM)
• Paper Procurement Use Buyers Perspective
  Oliver Clode (Williams-Sonoma)
• Recycling Pollution Reduction Phil Riebel
  (UPM)
• List Hygiene Data Management Chet Dalzell
  (Harte-Hanks)
• A Demo of the Planning Tool Chet Dalzell
  (Harte-Hanks)
• Question Answer Session Patricia Kachura (DMA)

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Overview of DMA Planning Tool Optional Policy
Generator www.the-dma.org/envgen/

• Chet Dalzell
• Director Public Relations
• Harte-Hanks Inc.

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A Vision for Success

• Americas Most Admired Companies What gives GE
  such a glow Fresh ideas and being green
  distinguishes the winners in our 25th annual
  rankings. How to get a great reputation
• These days green means something more. The
  three Most Admired Companies this year General
  Electric Starbucks and Toyota are building
  their growth at least partly on strategies and
  products aimed at helping preserve the planet.
• -- Fortune (March 19 2007 pp. 88 90)

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Direct Marketers Take on Environmental Planning

• DMA Board-Level Task Force on Environmental
  Issues 1989
• DMA Environmental Resource for Direct Marketers
  (First Second Third Editions) 1990 2004
• DMA Robert Rodale Environmental Achievement
  AwardsInitiated 1991
• DMA Committee on the Environment and Social
  Responsibility 2005
• DMA Environmental Planning Tool and Optional
  Policy or Vision Statement Generator 2007

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DMA Committee on the Environment Social
Responsibility

• Established by Board in March 2005
• Identify challenges germane to direct marketers
• Encourage members to make progress on these
  challenges over time
• Manage environmental performance of our
  membership
• Appoint members to facilitate these goals
  subcommittee and working group
• Environment Record
• Designed and executed survey to benchmark DMA
  members business practices
• Selected benchmark project to inform and improve
  environmental performance

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Purposes of the DMA Environmental Planning Tool

• Educate and suggest practices to consider in five
  general areas related to the direct marketing
  process
• -- Design printing
• -- Paper procurement use
• -- Packaging
• -- Recycling pollution reduction
• -- List hygiene data management
• Enable benchmarking in three areas of focus
• -- Improve list hygiene targeting of print
  communications
• -- Increase recovery and recycling of
  post-consumer material used in catalogs and
  direct mail
• -- Support well-managed forests

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Why Does Environmental Performance Matter

• Recognize the formula greater efficiency less
  waste less cost
• Understand heightened global concerns about
  environmental protection and how they influence
  our business
• Bolster and maintain consumer confidence and
  trust in our business and the role environmental
  stewardship plays in this trust
• Recognize Fortune 1000 leadership and corporate
  citizenship these firms are setting business
  trends in green activities
• Take responsibility for business matters that
  affect the planet and find practical and
  innovative ways to manage these areas well

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What Environmental Planning is Not

• A pursuit of environmentalism in our business
  without a recognition of where tradeoffs may
  exist
• A blueprint for being green with higher
  profits as a guarantee
• The pursuit of an agenda set by a third-party
  organization which may or may not understand the
  direct marketing business
• A requirement that direct marketing businesses
  publish their environmental policies and
  practices publicly

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Desired Outcomes in our Use of the Planner

• Make an understanding and consideration of
  environmentally helpful practices more easily
  accessible in their direct marketing operations
• Enable an internal assessment of present-day
  practices one company at a time currently 115
  listed practices
• Enable a benchmark from which organizations can
  improve their environmental performance with
  respect to direct marketing
• Deliver a Web interface that is easy to
  understand easy to use and easy to reuse over
  time
• ___________________
• OPTIONAL Provide a draft public policy or
  vision statement regarding the environment for
  those organizations which choose to do so

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A Walk-Through of the Planning Tool
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Section Design Production Printing(17
practices)

• Meta Brophy
• Director Publishing Operations
• Consumers Union

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Environmental Responsibility in Production

• Communicate with stakeholders marketing and
  creative the production team outside vendors.
• Everyone has a part to play make assignments
• Agree to what you are collectively trying to
  accomplish
• Research query investigate options and shop
• Dont stop until you understand the options and
  can present them clearly to your colleagues. Are
  you at least as conversant in marketing as your
  marketing colleagues are about production
• File away ancillary information for the next
  project. Pass along information to others

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The Process
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Use the Planning Tool

• Reduce Waste
• Can you change the size
• Can you eliminate a component
• Can you reduce the weight
• Can you cut the quantity
• Can you route electronically
• Reduce Toxicity
• Can you test out of the label
• Can you find another method of creating interest
  and/or involvement
• Recyled/Recylable/Reusable Materials
• Paper poly corn BREs in inventory
• Labels and adhesives

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Suppliers

• Once they are on board they stay engaged
• Vendors are a valuable source for new ideas
• They can gather information and spread the word
  within the industry
• They share in the accomplishment We want our
  vendors to make good choices too

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Recent Successes

• Liftnotes on high-yield groundwood
• Letters on high-yield groundwood
• Postconsumer recycled content in self-mailers
• Biodegradable poly
• Die-cuts instead of labels
• Texture instead of adhesive or ink
• Geographic splits

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Key Challenges (Or Are They Opportunities)

• TIME
• To research
• For the learning curve
• For comparative analysis
• EXPENSE Print Paper Postage Fuel
• Source reduction can mean cost saving
• Is there an upcharge
• The future of flats

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Whats Coming Next

• Stora Enso and Neste Oil to join forces in
  biofuel development
• developing technology for producing
  new-generation biofuels from wood residues to
  replace fossil fuels in transportation and thus
  cut greenhouse gases.
• -- Stora Enso Press Release March 16 2007
• Management thinking Starting to get
  responsibility
• ...a significant number of businesses have got
  past the why of ethics and corporate
  responsibilitya critical breakthroughand are
  now trying to wrap their brains around the
  how.-- Ethical Corporation March 11 2007
• How Print Got Green
• printers are taking the business of being green
  very seriously following many paths to get
  there.
• -- Graphics Arts Monthly March 2007

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Design Production In Summary

• Look at every campaign anew
• Make environmental impact part of the assessment
  along with cost quality and delivery
• Do your research
• Use the DMA Environment Tool and the Resource
  Handbook
• Bring others to the table internal and external
  colleagues
• Make others aware of initiatives communicate
  outside your department
• Ask about what others are doing

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Suppliers Perspective Section Paper
Procurement Use(45 practices)

• Phil Riebel
• Director Environmental Affairs North America
• UPM-Kymmene Inc.

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Suggestions for Purchasing Environmentally-Prefera
ble PaperKey points based on environmental
footprint of paper
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UPM In Brief

• Global leader in printing papers among five
  largest producers in the paper sector
• Listed on DJSI for the fifth year in a row
• 2005 2006 industry group leader
• Top score in sustainable fiber sourcing
  advanced environmental performance
• Ranked No.1 for sustainability by Time Inc.
• Second largest user of recycled fiber in the
  printing paper industry

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Paper Product Life Cycle
Wood raw material to the mills and energy wood
to the power plants. Energy to the mills Chips
and sawdust for energy production By-products for
pulp and paper raw materials Paper for
converting Pulp for paper manufacture Recovered
paper
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Environmental Footprint View of Paper Production
UPM View Companies are responsible for the
environmental impacts caused during the entire
life cycle of their products from raw material
and energy sourcing to production distribution
recovery and disposal Papermaking summary of
activities and environmental impacts

• Activities
• Road construction / harvesting / transport to
  mill
• Other raw material acquisition and transport
  (clay pulp)
• Recovered paper collection / transportation /
  sorting
• Roundwood / chip storage / processing (debarking
  chipping)
• Pulping (Kraft TMP GWD DIP)
• Paper-making
• Shipping
• Printing (energy ink waste)
• Distribution / Use and Disposal
• Paper recycling

• Impacts
• Habitat
• Fossil fuel use / greenhouse gas emissions
• Water / energy use
• Wastewater emissions
• Noise dust
• Runoff solid waste
• Air Emissions
• Solid waste to landfill

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Environmental Guidelines for Purchasers1. Using
a life-cycle approach (footprint of papermaking)

• Evaluate the environmental performance of
  suppliers over the key steps in the life cycle of
  paper - forest to final re-use
• Commit to using a report card to evaluate annual
  environmental performance
• Address the key steps of papermaking
• -- Forest management
• -- Mill operations
• -- Purchased power
• -- Certifications
• -- Paper composition
• Evaluate report cards currently in use
• Paper Profile
• EPAT (Environmental Paper Assessment Tool)
• EPDS (Environmental Profile Data Sheet)
• Integrate into purchasing decision

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Environmental Guidelines for Purchasers2.
Promote sustainable forest management

• We will promote sustainable forest management by
  increasing the level of third-party certified
  fiber in our paper using recognized credible
  forest certification schemes such as PEFC and
  FSC. Forest certification levels are to be
  supported by a verified chain-of-custody.
• There are two international systems (PEFC FSC)
• PEFC includes/recognizes SFI CSA
• Based on several scientific / field assessments
  all systems achieve sustainable forest management
  
• Three-country study done by UPM / DNV / WWF
• Only 7 of the worlds forest are certified
  focus on increasing this
• 72 of the certified fiber is under PEFC
• Verified chain of custody is important to show
  that the origin of wood is known and is
  accurate

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Certified Forests Globally by Scheme
National schemes SFI Sustainable Forest
Initiative (NA) CSA Canadas National Standard
for Sustainable Forest Management FFCS Finnish
Forest Certification System MTCC Malaysian
Timber Certification Council FSC Sweden FSC
Maritime etc (accepted by FSC) UKWAS UK
Woodland Assurance Standard (accepted by PEFC and
FSC)
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Environmental Guidelines for Purchasers3.
Sustainable use of recycled fiber and promote the
recovery of paper

• We will use recycled fiber in appropriate grades
  where its use is economically justified and
  brings environmental benefits
• We will promote the recycling of our paper
  products
• 45-50 of paper products in NA still end up in
  landfills There is a global need to increase
  the recovery rates of paper so that the recovered
  fiber can be used to make other products

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Environmental Guidelines for Purchasers4. Reduce
consumption

• We will make efforts and set targets to reduce
  paper consumption
• This can mean using less paper and raw materials
  lighter-weight papers lower brightness etc.
• Less environmental impacts and raw materials per
  page
• Can save mailing costs as well

• Example
• ENVIRONMENTAL SAVINGS PER PAGE
• (OF CATALOG / MAGAZINE)
• 40 LB TO 28 LB BASIS WEIGHT PAPER
• 20 less water used
• 10 cleaner wastewater
• 15 to 25 lower air emissions (SO2 CO2)
• 15 less solid waste to landfill
• 28 less purchased electricity

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Environmental Guidelines for Purchasers5.
Energy and global warming. Carbon footprint.

• Energy and climate change We value suppliers
  who have switched to less greenhouse gas (GHG)
  intensive energy sources such as carbon-neutral
  biomass and are committed to continual
  energy-efficiency improvements
• We consider the impact of our paper on global
  warming
• Supply chain carbon (CO2) footprint
• Raw materials to mill
• Manufacturing
• Purchased power
• Transportation to printer distribution

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Environmental Guidelines for Purchasers6. Other
items

• Illegal logging
• Biodiversity
• Corporate social responsibility
• Health and safety
• Stakeholder engagement

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What is Environmentally-Preferable Paper

• Sustainable use of wood fiber and recycled fiber
  in appropriate grades/locations
• Third-party certification of mills and forests
• Steadily increasing share of certified fiber
  supported by a certified chain-of-custody
• No illegal wood or wood from designated protected
  or conservation forest areas
• Increasing energy efficiency and biofuel usage
  lower carbon footprint
• Meet best-available-technology levels for
  environmental indicators
• Continuous improvement in minimizing loading per
  ton of paper air water effluent solid waste
• Open transparent and third-party verified
  sustainability / environmental reporting

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Buyers Perspective Section Paper Procurement
Use(45 practices)

• Oliver Clode
• Vice President Catalog Manufacturing Marketing
  Finance
• Williams-Sonoma Inc.

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Environmental Responsibility as a Paper Buyer

• Environmental stewardship is not just a fad it
  has become main-stream and is now a business
  reality
• Everyone can make an impact regardless of how
  much paper you buy
• One size does NOT fit all every organizations
  circumstances and approach will be different
• Educate yourself understand the facts
• Be proactive strategic and proactive solutions
  are always far better than reactive solutions
• Incorporate environmental thought leadership into
  your everyday language and practices

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Steps All Paper Buyers Should Take
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How The Planning Tool Can Help

• Strategic Road Map
• Menu of specific principles and initiatives that
  all Direct Marketers can choose to adopt and
  implement
• Checklist for developing a baseline assessment
• Provides insights on key impact areas for
  continuous improvement
• Educational Tool to assist Direct Marketers in
  better understanding environmental issues and
  options
• Policy Guide and Generator easily helps
  establish a strong foundation right out of the
  gate
• Ongoing Evaluation Tool provides a benchmark
  against which to gauge your progress and with
  which you can reset your baseline

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Motivators for Williams-Sonoma Inc.

• Corporate Responsibility
• Its part of our culture
• Cost Savings
• Reducing waste and inefficiencies
• Increasing efficiencies
• Customer Awareness and Loyalty
• Increasingly important to our customer base
• Changing Values of the Workforce
• Attract candidates
• Retain employees
• Risk Mitigation
• Business interruptions from negative
  publicity/activist campaigns
• Legal actions/forced regulation

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WSIs Environmental Journey 2003-2006

• Educated ourselves on the key issues and
  established a Vision
• Audited catalog paper supply chain and set
  priorities/targets/goals
• Developed a Responsible Catalog Paper Procurement
  Policy
• Reached out and partnered with key external
  stakeholders
• Paper suppliers ForestEthics Peer Companies
• Printers FSC Other NGOs
• Reduced waste/increased efficiencies saved
  significant
• Continued to streamline and improve our List
  Hygiene and Modeling techniques
• Tested and rolled out lower basis weight paper in
  all catalogs
• Re-evaluated and reduced trim-size on virtually
  all catalogs
• Renegotiated and significantly reduced printers
  spoilage allowances
• Expanded use of versioning
• Increased the use of the internet as a customer
  contact vehicle and ordering channel
• Tested and incorporated PCW recycled content into
  Flagship catalog
• Shifted virtually all (95) catalog paper to
  FSC-certified paper

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Words of Wisdom

• Dont ignore environmental stewardship take
  responsible purchasing seriously and be proactive
  about it
• Educate yourself and your organization and
  develop a point of view
• Dont be afraid to reach out to NGOs Many are
  well-intentioned have subject expertise and
  understand the need for finding market-based
  solutions
• Establish a responsible purchasing policy and
  communicate it to your stakeholders move
  towards compliance
• Continually challenge yourself and your supply
  chain partners and collaborate with them to find
  and develop new solutions including addressing
  cost concerns it doesnt need to cost more
• Regularly review your progress report on it and
  reset the bar

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Section Recycling Pollution Reduction(32
practices)

• Phil Riebel
• Director Environmental Affairs North America
• UPM-Kymmene Inc.

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Sustainable Use of Recycled Fiber
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Top 10 Printing Paper Producers Using Recycled
Paper
Enough to fill the Empire State Building 6 times
Source Jaakko Pöyry 23.11.05
1000 tonnes
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Benefits of Wood and Recycled Fiber

• Sustainable managed forests and recycled fiber
  complement each other as important raw materials
  for papermaking
• Benefits of using wood
• Renewable natural resource
• Recyclable and re-usable material
• Climate protection (forests are a carbon sink)
• Carbon-neutral fuel (biomass)
• Benefits of using recovered paper
• Efficient use of raw material
• Decrease landfill waste
• Save energy
• Creating responsibility and awareness for
  recycling

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Net Annual Change in Forest Area 1990-2000
Deforestation continues in tropical/subtropical
forests in Latin America Africa and Southeast
Asia
Annual change /a
Total average annual change - 9.4 million ha
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Key Factors for Sustainable Use of Recovered Paper

• Economic and environmental benefits must be
  considered
• Paper is a valuable resource and should not go to
  landfills
• Key conditions
• Minimal transportation
• Modern mills using B-A-T / reduced environmental
  load
• De-inked sludge used for energy generation or
  re-used
• Paper mills integrated to DIP
• Paper grades adapted to pulp quality
• Lower end up to newsprint can be 100 RCF
• Recycled paper needs to be affordable and
  available
• Input of virgin fiber is essential to make the
  paper cycle work

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Fiber Resource Demographics

• Finland and NA
• low population density
• large forest resource
• large paper industry
• Virgin fiber resource predominates

net Virgin Fiber / Paper Exports

• UK
• high population density
• small forest resource
• small paper industry
• Recovered fiber resource predominates

• Germany and France
• high population density
• medium forest resource
• medium paper industry
• Both virgin and recovered fiber

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Source RISI
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Consumption of Recovered Paper by Region
World consumption of recycled paper is expected
to grow from 153 million tons in 2000 to 243
million tons in 2015 (average growth 3.1 per
year). In volume terms the growth will be
fastest in Asia.
Rest of the World
Forecast
Latin America
Rest of Asia
China
Japan
Eastern Europe
Western Europe
North America
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Recycling in North America General Points

• China / Asias fiber deficit will be the main
  driving force for recycled paper trade worldwide
• EU and NA are very different due to population
  density mill locations transportation
  distances mill investments
• North America
• Larger distances
• Older mill facilities / higher environmental load
• RCP shortage
• High cost compared to mechanical wood fiber
  high demand / low supply
• Landfill cost also drive recycling (NA are lower
  than in EU)
• In NA the use of RCF fiber in catalog and
  magazine grades has no clear measurable economic
  or environmental benefit
• Although the initial intention may be to help
  the environment the end result of using RCP in
  high end printing grades is currently driven by
  eco-marketing
• This is causing the environmental footprint
  (load impacts) of paper to increase instead of
  decreasing
• It does not make much economic or environmental
  sense to take recovered paper away from one
  supply chain (i.e. board mills) and move it to
  another (i.e. catalogs and magazines) without
  ensuring growth of RCP availability

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LWC grade mech. fiber no RCF vs Competing Grade
with 10 RCF
Advantage of wood-fiber based paper
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If done sustainably and using best-available-techn
ology use of recycled paper can result in a
lower environmental footprint of the paper
(primarily less energy used compared to
mechanical fiber)
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Environmental Guidelines for PurchasersSustainabl
e Use of Recycled Fiber and Promote the Recovery
of Paper

• We will use recycled fiber in appropriate grades
  where its use is economically justified and
  brings environmental benefits
• We will promote the recycling of our paper
  products
• Due to global paper demand there is a need to
  recover more paper.and grow more trees
• An approach that looks at the environmental
  footprint of our paper will ensure that we are
  doing the right thing for the environment
• There are other effective ways to reduce the
  environmental footprint of paper
• Lighter basis weights
• Lower carbon footprint

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Section List Hygiene Data Management(17
Practices)

• Chet Dalzell
• Director Public Relations
• Harte-Hanks Inc.

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List Data Management We Own This Opportunity

• All direct marketing is data- based
• The list is more important than the offer
  and the creative
• Every aspect of a list can be tested
• The supply chain management for lists and
  data is completely in our control

• Our ethics guidelines for notice choice
  span 35 years
• The U.S. Postal Service is our ally in
  educating mailers
• Enterprise-wide data quality has gained
  c-level attention
• Responsibility rests with us

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Steps All List Managers Should Take
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The Tool Serves to Help Increase Mail Efficiency

• We Maintain Suppression Lists
• We Offer Notice Choice
• We Clean Our Lists Prior to Mailing
• We Merge/Purge Our Data
• We Test Market Offers Prior to Rollout

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Key Observations in List Data

• No rocket science here
• Test track and document
• Verify suppression applications
• The database as a Center for Customer Truth

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(No Transcript)
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Demo of the Tool on the DMA Web
sitewww.the-dma.org/envgen
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• Weve Downloaded the Tool Whats Next

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Internal Or External

• Use this as an internal planning tool revisit
  as necessary
• -- Tackle all at once simultaneously
• -- Section by section
• -- Practice by practice
• Consider adoption of language to share with
  external audiences
• -- Suppliers
• -- Customers
• -- Corporate Policy
• -- Vision Statements
• Give DMA suggestions on possible practices to add
  to the planner
• -- environment_at_the-dma.org

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Questions

• Next year will you represent a Most Admired
  Company

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Thank You!

• To receive DMAs free e-newsletter about
  corporate responsibility and environmental
  issues please e-mail your contact information to
  environment_at_the-dma.org.