Reporters’ Memo October 11, 2012 Disney’s Rainforest Commitment: Paper Sourcing and Use Policy Comprehensive paper buying policy will have global impacts; highlights urgency of addressing deforestation in rainforests, especially in Indonesia; Part of trend to eliminate forest destruction from supply chains. What does this policy apply to? Disney’s paper policy covers ALL of the company’s extensive global holdings as well as its thousands of licensees. This may be one of the widest reaching responsible paper policies to date. The policy will change the paper purchasing of Disney’s 3 media networks, 11 theme parks, 43 resorts, 4 cruise ships, and all its product packaging, copy paper and book publishing. Disney is the largest publisher of children’s books and magazines, the largest licensor of toys and the largest operator of theme parks in the world. Disney owns ESPN, ABC and the Disney Channel, Pixar Animation Studio, Marvel Comics, Walt Disney Studios, Touchstone Studios, Hollywood Records and much more. Disney is the #1 brand licensee in the world and this policy applies to all 3700 licensees and 4800 vendors that use Disney characters and products. This policy covers any Disney products produced in any of nearly 25,000 factories in more than 100 countries, including 10,000 in China. What does this policy do? As stated in Disney’s Policy: “The Paper Sourcing and Use Policy sets forth our commitment to increase the use of paper products designed and manufactured to minimize environmental impact across their entire lifecycle, work towards effective solutions to eliminate unwanted sources from our paper supply chain, promote forest conservation and responsible forest management, respect the people whose livelihoods depend on the forest and protect the plants and animals of the forests.” Maximize the good and eliminate the bad: Specifically, Disney’s paper policy sets out to ensure its operations and those of its licensees reduce the consumption of paper and maximize their use of recycled content, Forest Stewardship Council (FSC) certified content and paper made without chlorine. In addition, the policy seeks to eliminate paper from “unwanted sources” (including illegally-harvested wood, high conservation value areas, areas where there are violations of human rights and social conflict, and non-FSC certified fiber from high risk regions including Indonesia). What other companies are addressing deforestation in their supply chains? Tropical deforestation is occurring at a rate of about one acre every second, according to the FAO, and commodities linked to tropical deforestation are entering, largely unknown, into the supply chains of hundreds of major consumer brand companies in the world. Disney joins several household brands, including Staples, Mattel, Scholastic, Tiffany and Krogers that have moved to source paper and forest products responsibly, protect critical habitats and respect the rights of forest communities, in particular focusing on eliminating controversial sources from high-risk regions such as Indonesia. The Consumer Goods Forum, whose 400 corporate consumer-brand companies have a combined sales of $3.1 trillion and employ nearly 10 million people, has recently committed to help achieve zero net deforestation in their supply chains by 2020. Why does Disney specifically name Indonesia’s rainforests? As stated in Disney’s Targets document: “Due to the urgency of the deforestation issue in Indonesia, Disney has taken and will take action to eliminate paper fiber from unwanted sources in this region. During 2011 and 2012, Disney (a) sent communications to its suppliers, vendors, and licensees urging caution while sourcing from this region, (b) conducted a pilot study on paper used in Disney’s day-to-day-business operations, and (c) conducted an additional pilot with licensees across the globe, including in Indonesia, to assess paper sources.” Indonesia is the primary place where rainforests are still being cut down for paper. Indonesia is losing an average of 2.5 million acres a year, one of the highest rates of deforestation in the world, due, in part, to the pulp and paper industry. The pulp and paper industry is a primary driver of deforestation pushing iconic species like the Sumatran tiger and elephant to the brink of extinction. Scientists estimate only about 400 Sumatran tigers remain in the wild. Indonesia has the third largest rate of greenhouse gas emissions in the world, just behind China and the U.S. However, unlike those countries whose emissions are dominated by fossil fuels, in Indonesia 80% of emissions come from deforestation and peat land draining. Nearly one million hectares of peatland have already been converted to pulp plantations in Indonesia. Who are Asia Pulp and Paper (APP) and Asia Pacific Resources International Holdings (APRIL), and why are so many companies cutting ties to them? Disney’s new policy establishes its leadership amongst a growing number of consumer companies sourcing paper and forest products responsibly, and specifically moving away from controversial Indonesian paper companies Asia Pulp and Paper (APP) and Asia Pacific Resources International Holdings (APRIL). APP is the largest pulp and paper company in Indonesia and one of the three largest paper companies in the world. APP alone is responsible for pulping an area of rainforest the size of the state of Massachusetts. APP paper is the most carbon intensive paper known to be on the market place. This policy sends a strong signal that APP, APRIL and other bad actors in the pulp and paper industry must institute major reforms that protect against the destruction of natural forests and associated social conflict if they wish to succeed and expand in a modern global market. What sets this policy apart? The policy addresses the relationship between deforestation and climate change by explicitly prohibiting sourcing paper from anywhere that degrades High Conservation Value Forests, including High Carbon Value forests and landscapes (e.g. old growth and peat). Crucially, this policy supports and respects the rights of Indigenous peoples and forest dependent communities to give free, prior and informed consent (FPIC). This is a values based policy that utilizes but does not depend on outside entities like the Forest Stewardship Council for its integrity. Disney is proactively announcing its values and using that as a compass to determine what kind of world it wants to make and what kind of products it wants to buy. This policy includes groundbreaking tools for supply chain transparency by requiring manufacturers and suppliers to track and trace paper supplies back to the forest, supported with Disney verification and fiber testing procedures. If companies like Disney are not getting paper from rainforests in Indonesia or elsewhere, than where will they get it from? Will this lead to leakage/logging in other countries? Major printers have a wide suite of ready sellers and sources to choose from. Alternative sources include New Zealand, Australia, Canada, U.S., Scandanavia, South Africa and many other countries. Recycled papers are becoming more common and a higher portion of paper used. This helps to reduce "leakage" by promoting more efficient use (and reuse) of forest fiber. Certified papers from the Forest Stewardship Council is widely available and competitively priced. Is buying rainforest-free paper more expensive? It can sometimes be marginally more expensive to source good paper, but paper is a very small part of the total cost of most Disney products to consumers. Changing to more responsible paper sources will add no costs to perhaps a few pennies. In many cases, it is a question of requesting more responsible sources from suppliers, many of whom are already doing so for other customers and have no problems making the switch. What was Rainforest Action Network’s role in Disney’s policy? Rainforest Action Network began working with Disney in 2010 when lab results found that Disney children’s books were printed with rainforest fiber. Disney, which is the largest children’s book publisher in the world, was among the top publishers urged by RAN to eliminate paper tied to Indonesian rainforest destruction from its books. To date, nine top U.S. publishers have announced rainforest commitments, including Scholastic, Hachette, Pearson/Penguin, Candlewick Press, Houghton Mifflin Harcourt, Macmillan, Random House, Simon & Schuster, and now Disney. In May of 2011, RAN organized a high profile protest at Disney headquarters in Burbank to draw attention to Disney’s failure to address serious problems in its supply chains. Disney responded immediately and engaged RAN in productive negotiations that lasted over a year and resulted in this policy.