ANNUAL REPORT 2013 - SCS Global Services€¦ · SCS Global Services 2000 Powell Street, Ste. 600 Emeryville, CA 94608 USA +1.510.452.8000 main ... COMPANY OVERVIEW SCS Global Services

ANNUAL REPORT 2013

SCS Global Services2000 Powell Street, Ste. 600 Emeryville, CA 94608 USA+1.510.452.8000 main | +1.510.452.8001 faxwww.SCSglobalServices.com© April 2014 SCS Global Services

I. About This Report

II. Company Overview and Milestones

III. Providing Services in Support of Our Mission

IV. Reducing our Environmental Footprint

V. Workforce & Community

VI. Client Spotlights

Statement from the SCS Executive Team 5Statement from the Board 5Reporting Framework for this Report 5

Short History 7Kingfisher Certification Mark 7Sustainability Vision and Mission 8Setting the Standard for Sustainability 9Global Presence 10Accountability and Transparency 11Quality 11

SCS Products and Services 13Environmental Certification Services 14Natural Resources 16Food and Agriculture 18Training and Education 20Accreditations 23

Our Environmental Practices 25Transportation 26Facilities, Recycling and Supplies 28

Corporate Culture 31Community Engagement 35Giving Back 36

Unifi Manufacturing Inc. 39Novelis 40Nucraft Furniture Company 41SierraPine 42Fruit of the Loom 43Lonely Planet 44Parties to the Nauru Agreement 45Terra Global Capital – Oddar Meanchey 46Kemin Industries 47Ferrero 48Melissa’s / World Variety Produce 49Tanimura and Antle 50

| ABOUT SCS Global Services | ANNUAL REPORT 2013 | 4

Rori Cowan and Francis Eaton at Clean Harbor’s Environmental Services Hazardous Waste Combustion Facility in El Dorado, Arkansas, verifying refrigerant to be destroyed to create carbon credits.

IAbout This Report

Statement from the SCS exeCutive team SCS Global Services operates for the benefit of people and the environment, and has been working to promote sustainable decision-making and policies in the private and public sectors for nearly 30 years. We are pleased to publish this annual report in fulfillment of our responsibilities as a leading California Benefit Corporation and as a Certified B Corporation.

Statement from the Board Consistent with our incorporation in the State of California as a Benefit Corporation, SCS Global Services has confirmed that: 1) our corporate purpose is to create a materially positive impact on society and the environment; 2) we include consideration of non-financial interests within the scope of our fiduciary duty when making decisions; and 3) we provide an annual report on our overall social and environmental performance using recognized third-party standards.

This is the second Annual Report published in accordance with these provisions since our reincorporation as a California Benefit Corporation in 2012. Pursuant to Sections 14621 and 14630 of the California Corporations Code, the Board of Directors hereby affirms that, during the year 2013, the corporation successfully fulfilled its general purpose, functions and responsibilities as a California Benefit Corporation, as well as its specific purpose of providing third-party certification, auditing, testing and training services that recognize and reinforce client efforts to protect the environment and advance social responsibility.

reportinG framework for thiS reportIn preparing this Annual Report, the Executive Team selected the GIIRS reporting framework. GIIRS (Global Impact Investing Rating System) is an internationally recognized system for evaluating and reporting the social and environmental impacts of companies in a comprehensive and transparent manner. In addition, GIIRS is the framework through which we are independently reviewed and recognized by B Lab as a Certified B Corporation. As such, the selection of this reporting framework ensures consistency between our certification reporting and communication of our accomplishments through this Annual Report.

| ABOUT SCS Global Services | ANNUAL REPORT 2013 | 5

Expanded services through worldwide subsidiaries, partners and affiliates.

Initiated US national life cycle assessment standard to augment international standards and provide rigorous guidance for LCA-based claims.

Initiated US National Sustainable Agriculture Standard under ANSI open, multi-stakeholder consensus standard development process.

Launched flavor and nutrition management services to help growers, seed companies and food retailers optimize these features.

MILESTONES

Participated in the establishment of international Forest Stewardship Council standard, and accredited as one of first certifiers.

1994

Launched first third-party US certification program for environmental claims, and initiated sustainability services for retailers.

1989

Established first pesticide residue and nutrition testing QA program for supermarket fresh produce departments.

1985

Established SCS Mexico subsidiary as first of many international ventures to expand service offerings in countries around the world.

1997

Accredited as one of the first organic certifiers under USDA National Organic Program.

2000

Launched first US HACCP food safety training and audit programs for food producers, processors, handlers and retailers.

1987

Conducted first international independent certification of a wood product made from wood from a responsibly managed forest.

1991

Established world’s first life cycle assessment (LCA) based “Type III” environmental product declaration label: “Environmental Report Card”.

1994

Established world’s first Pesticide Residue Free certification program for fresh produce, with first voluntary full disclosures from growers.

1984

Participated in writing the international ISO 14000 standards for environmental labeling and life cycle assessment (LCA).

1990s

Participated in the establishment of international Marine Stewardship Council standard, and accredited as one of first certifiers.

1997 Worked with Starbucks to establish CAFÉ Practices program for its international coffee supply chain.

2003

2002

2007

2008

2010

Launched sustainable agriculture certification, first for cut flowers and ornamental plants, then for fresh produce.

2004

Launched greenhouse gas (GHG) inventory and carbon offset validation and verification services.

2008

SCS became a certified B Corporation, and became SCS Global Services, represented by the SCS Kingfisher certification logo.

2012

Expanded service offerings in each company division and extends service capabilities throughout worldwide network.

2013

1984 1990 20102000 2013

SCS Global Services | ANNUAL REPORT 2013 | 6| COMPANY OVERVIEW

Short hiStorySCS was founded by Stanley P. Rhodes in September 1984, who was joined by Linda G. Brown the following month to launch company operations. The company was officially incorporated on December 12, 1984 as a California Corporation under the name, Ohlone, Inc., named after the indigenous people who lived sustainably in the San Francisco Bay Area for thousands of years, thriving on its abundant natural resources. Operating in Oakland, California, the company began providing third-party certification services in the food and agricultural sector, under the business trade name, NutriClean.

In 1989, the corporation’s name was changed to Scientific Certification Systems, Inc. (SCS) to promote more widespread understanding of its mission. During the same year, SCS began issuing certifications in the environmental claims arena for manufactured goods under the business trade name, Green Cross, in conjunction with the Green Cross certification symbol. In 1991, SCS began consolidating certification programs under the SCS corporate name, and revised its certification mark to a Green Cross and Blue Globe, representing the efforts of certified products and companies to help the earth. Also in 1991, SCS began performing third-party certifications in its third major sector of business, the natural resources arena.

In 2001, SCS relocated its headquarters to its current location in Emeryville, California, just across the bay from San Francisco.

II Company Overview and Milestones

Since that time, it has continued to expand its scope of services to address a wide range of food quality, environmental and sustainability performance issues.

In 2012, Scientific Certification Systems, Inc. began doing business as SCS Global Services, communicating its global position as a recognized leader in the provision of third-party certification, auditing, testing and standards development in the burgeoning fields of environmental, sustainability and quality performance claims. SCS Global Services now operates on six continents, with 22 subsidiaries, regional representatives, and sales offices, plus an extensive network of auditors.

kinGfiSher CertifiCation markIn 2012, the company released its new global certification mark, the SCS Kingfisher. Kingfisher birds, ubiquitous and beloved around the world, are known for their keen vision, colorful plumage, and skillful hunting. Widely recognized as indicators of environmental health, some species are now threatened with extinction. The SCS Kingfisher serves as a reminder of the power, beauty, and vulnerability of nature in the face of human activities.

The SCS Kingfisher now appears in conjunction with a broad range of business and consumer products and services certified by SCS, and is reinforcing the efforts of our certified clients to communicate their exemplary achievements.


SuStainaBility viSion and miSSionSCS’ vision, as articulated by founder Stanley P. Rhodes, is to promote sustainable decision-making and policies in every sector of the economy around the world, in order to safeguard our environment, support workers and communities, and raise the standard of living for all.

In support of this vision, SCS’ mission is to: 1) establish and implement programs and services that recognize the outstanding achievements of companies, institutions, and organizations that meet the highest levels of performance in environmental protection, social responsibility, product safety, and quality; and 2) stimulate continuous improvement on the path toward sustainability.

Specifically, we provide auditing, testing, certification, life cycle assessment, and additional strategic services to corporations, government agencies, and stakeholders worldwide to identify and drive practices and policies that advance the goals of sustainable development and give innovators a competitive advantage. These services have enabled policy-makers, procurement officers, company decision-makers and consumers to make informed decisions based on the highest level of environmental, social/ethical and quality accountability. We have been proud to work with leaders across the resource extraction, energy, green building, agriculture, and consumer and business products sectors.

To inform our benefit mission, we employ a life cycle framework, state-of-the-art science, proven analytical methods and performance metrics, and professional expertise. To reinforce this vision and mission over time, SCS became a benefit corporation in the state of California, legally expanding our corporate responsibilities to include consideration of stakeholder interests.

“SCS certification is an important part of how we demonstrate our commitment to progress along the path toward sustainability.”

- Chuck Saylor, Founder and CEO, izzy+

SCS encourages standards that ensure a healthy and equitable work environment.


Christie Pollet-Young, Director of Greenhouse Gas Verification, heads up SCS’ carbon validation and verification services.

SettinG the Standard for SuStainaBility

leadership Standards SCS is committed to leadership standards that drive sustainability practices and continuous improvement in a practical, responsible, and scientifically rigorous manner. To this end, we work in four ways:

1. We initiate the development of standards for industry sectors and claims categories that are underserved, and that offer important advances in one or more aspects of sustainability. These standards are created in accordance with our Standards Development Procedure, which emphasizes thorough process, stakeholder input and transparency.

2. We participate on national, international, and independent, multi-stakeholder standards writing committees to develop new, consensus-based product and management standards in a wide range of industry sectors.

3. We provide guidance to companies who are interested in developing their own in-house standards and specifications for internal operations, quality control, and supply chain management.

4. We supply third-party auditing and certification services to help test standards during the pilot stage to ensure auditability and credibility.

the right to know Since its inception, SCS has been a strong advocate for the right to know. Only when decision makers at all levels have the facts can they make sound judgments and choices. In keeping with this objective, SCS develops and supports ecolabeling systems that promote greater understanding of the strengths and limitations of specific claims.

leading the fight against Greenwashing SCS has been an outspoken critic of greenwashing for three decades. Greenwashing – the assertion of claims or promotion of ecolabels that are misleading or unsubstantiated – confuse the marketplace and diminish the hard-earned accomplishments of legitimate leaders in the private and public sectors.

SCS is actively working to prevent greenwashing in several ways:

1. The SCS Kingfisher certification mark is always accompanied by specific certified claims that accurately communicate the nature of the accomplishment achieved.

2. SCS offers technical guidance to all certification clients to help them communicate their quality, environmental, and sustainability claims in an accurate, measured manner.

3. SCS provides supply chain services to retailers and brands seeking to substantiate the claims of their suppliers.

4. SCS speaks and writes about greenwashing and the importance of making accurate claims.


Mexico

North America

Central America

Brazil

South America

Africa

Netherlands/Benelux

Germany/Poland

Central EuropeJapan

SwedenBulgaria

Latvia

Spain

Egypt

MalaysiaMiddleEast

China

India

Indonesia/South East Asia

Australia/NZ

GloBal preSenCe SCS continues to expand its international service offerings, through subsidiary offices, regional representatives and sales offices located strategically around the globe in: Argentina, Australia/New Zealand, Brazil, Bulgaria, China, Costa Rica, Egypt, Germany, Ghana, India, Indonesia, Japan, Latvia, Malaysia, Mexico, Spain, Sweden, and The Netherlands/Benelux.


aCCountaBility and tranSparenCy

ownershipSince its establishment, SCS ownership has rested in the hands of the founders and key company staff, current and past. This ownership model fits closely with SCS’ commitment to remaining a neutral third-party.

SCS Executive Team and Senior Management

Our day-to-day operations are managed by the Executive Team, consisting of Stanley P. Rhodes, Ph.D., President and CEO, Robert J. Hrubes, Ph.D., Executive Vice President, and Scott Romito, Chief Financial Officer. Additional senior management includes Linda G. Brown, Senior Vice President and co-founder.

The company operates under three service divisions, each supervised by a Managing Director: Environmental Certification Services, Natural Resources, and Food and Agriculture. Each regional office has a director of services.

SCS Board of Directors and Advisory Board

The SCS Board of Directors consists of five people: Jim Knutzon (chair), Linda G. Brown (secretary), Stanley P. Rhodes, Robert J. Hrubes, and Michele Blazek. The board meets quarterly.

SCS also has an outside Advisory Board. The SCS Advisory Board has been constituted to provide added confidence that SCS’ services are offered and provided with independence and impartiality, in order to meet the general interests of clients, customers and the stakeholder community in the sectors in which SCS conducts its audit, inspection, validation, verification and certification services. Advisory Board members represent a range of industry sectors and viewpoints, providing a balance of interests. In 2013, Advisory Board members represented expertise in forestry, cleantech, energy, sustainability, carbon emission credits markets, standard development, intellectual property and social responsibility.

neutral third partySCS operates as a neutral third-party, providing the independent perspective needed to conduct credible certifications, help clients evaluate their own performance, identify improvement opportunities, and build customer and stakeholder confidence. Our third-party status is corroborated through multiple national and international accreditations, and is built upon the following important foundations:

§§ We are financially independent from our clients, and have no financial backing from any institution with an interest in representing our clients or their products.

§§ We operate on a fee-for-service basis, providing transparency and ensuring that our fees are not attached to the volume of sales of certified products.

§§ Our internal Quality System and company policies ensure insulation from commercial, financial and other pressures that might influence the findings of a certification, verification or validation assessment, and interpretations of test results.

§§ Each SCS Director and Manager is responsible for identifying, analyzing and documenting potential conflicts of interest relative to project-specific evaluation, audit and certification activities, documenting potential conflicts of interest relative to project-specific evaluation, audit and certification activities.

SCS requires all personnel, internal and contracted, to reveal any situation known to them that may present them or SCS with a potential conflict of interest.

QualityThe SCS Quality System is a management-driven mechanism for developing, implementing and maintaining key quality processes and procedures to ensure effective delivery of SCS services. It provides a robust framework for day-to-day operations, enabling SCS to provide value to its clients, improve overall organizational effectiveness and capabilities, and drive organizational and personal learning. The quality management system is, and always will be, a work-in-progress.

Each employee is responsible for learning and helping to maintain the Quality System. In 2013, employees gave the SCS Quality team extremely high marks in our annual internal survey, confirming competent and timely assistance throughout the year.


SCS produCtS and ServiCeSSCS provides third-party certification, verification and validation of business-to-business (B2B) and business-to-consumer (B2C) market claims related to environmental performance, sustainability, and product quality, and is a pioneer and practitioner in the field of life cycle assessment (LCA). Our services are offered through three company divisions: Environmental Certification Services, Natural Resources, and Food and Agriculture. Together, these services support our specific purpose as a California Benefit Corporation.

III Providing Services in Support of Our Mission

“Indoor air quality is an environmental issue that Len-Tex takes very

seriously. We pursued SCS Indoor Advantage™ Gold certification to ensure

that we are meeting the most stringent threshold for indoor emissions.”

- Don Lennon, President, LEN-TEX

SCS Global Services | ANNUAL REPORT 2013 | 13| SERVICES

CERTIFICATIONS INCLUDE A WIDE DIVERSITY OF PRODUCTS MANUFACTURED AROUND THE GLOBE

Example: LCA, EPDs & EPP

Floorscore®

Material Content

Indoor Air QualityIndoor Advantage

Level

LCA, Biofuels, & Other

Cal Compliant CARB ATCM 93120

Example: Biofuels

Spain

Tunisia

China

Canada

United States

Portugal

Columbia

office furniture

steel building materialsbuilding materials

forest products

cookstoves, climate mitigation

wood treatment chemicals

trash bag linerslight bulbs

carpet fiber

ENVIRONMENTAL CERTIFICATION SERVICES1,200 certificates, more than 8,000 product lines

environmental CertifiCation ServiCeS In 2013, this division of SCS offered the following services:

life Cycle assessment (lCa)§§ Environmental Product Declarations

§§ Environmental Product Declarations based on Advanced LCA

§§ Environmentally Preferable Product Certification

§§ LCA Training

§§ LCA Studies

Single Attribute Certifications§§ Indoor Advantage and Indoor Advantage Gold – Indoor Air Quality

§§ FloorScore®

§§ CARB ATCM 93120 – California’s Formaldehyde Standard for Composite Wood Products

§§ Recycled Content

§§ Recycling Program

§§ Biodegradable

Multi-Attribute Certifications§§ Green Squared® for the Tile Industry

§§ BIFMA e3 level® Furniture Sustainability

§§ NSF/ANSI 140 Sustainability Assessment for Carpet

§§ NSF/ANSI 332 Sustainability Assessment for Resilient Floor Coverings

§§ NSF/ANSI 336 Sustainability Assessment for Commercial Furnishings Fabrics

§§ Responsible Source™ for Metals, Gemstones and Jewelry

§§ Responsible Source™ for Synthetic Fiber Materials and Products

§§ Health Product Declarations conforming to HPD Collaborative Standard

XX% PRE-CONSUMERXX% POST-CONSUMER

RSB | [PRODUCT TYPE]

INDOOR ADVANTAGE GOLD [PRODUCT]

CalCompliant

environmental Claims validations§§ No Added Formaldehyde

§§ No Added Urea Formaldehyde

§§ Reduced VOC Content

Sustainable Sourcing and Supply Chain Services§§ Conflict Free Minerals

§§ Green Supply Chain

Biofuels and Biomaterials§§ Roundtable on Sustainable Biomaterials (RSB)

§§ International Sustainability & Carbon Certification (ISCC)

§§ Bonsucro®

Sampling of certification marks


TIMBERLEGALITY

GHG AIRLINES A large number of the 2013 carbon footprints focussed on airline industry emissions

Verified carbon offsetprojects reduced or avoided

emissions of over

27.6 MILLIONTONS CO2e

588,000 hectares of forest verified under the SCS Legal Harvest™timber legality verification program in Indonesia, China, Suriname, and Brazil.

27% Crustacean

64% Fish

9% School Fish

CHAINOFCUSTODY

FORESTMANAGEMENT

8.9% GROWTH in certified hectares

Trader

Wholesaler

Other

Primary Manufacturer

Printer

SECONDARYMANUFACTURER

37%

14.5%

12%

18% 4%

14.5%

Tilapia and Pangasius in the US, Canada, and Australia.

SUSTAINABLE SEAFOOD

338new certificatesin 2013

natural reSourCeSIn 2013, the Natural Resources division of SCS offered the following services:

Forests and Wood Product Certifications§§ FSC® Certified Responsible Forestry

§§ FSC® Chain of Custody

§§ PEFC Chain of Custody

§§ Timber Legality (SVLK, EUTR, SCS Legal Harvest™)

Climate Verifications and Validations§§ Carbon Offset Verification (VCS, CAR, ACR, CCB, FCOP)

§§ Carbon Footprint (TCP, WRI, CDP, PAS 2050)

§§ Carbon Neutral

Fisheries and Seafood Certifications§§ MSC Fisheries Certification

§§ ASC Aquaculture Production Certification

§§ MSC Seafood Chain of Custody Certification

§§ ASC Seafood Chain of Custody Certification

§§ Seafood Safety

§§ Fisheries Improvement Projects (FIPS)

Sabine Daume, Manager of SCS’ Sustainable Seafood program, in the field.


SustainablyGrown

Sustainable Supply Chain Verification

GAP, GMP, Other Food Safety

Other Testing Services

Pesticide Residue Free

Organic

GlobalG.A.P.

SQF and BRC

Fair Trade

GMP

GAP

Mushroom GAPFood andAgriculture

food and aGriCultureIn 2013, the Food and Agriculture division of SCS offered the following services:

Food Safety Auditing and Certification§§ GFSI (Safe Quality Food, BRC, GlobalG.A.P.)

§§ Harmonized GAP

§§ Mushroom GAP (MGAP)

§§ Tomato Metrics

§§ Good Manufacturing Practices (GMP)

§§ Hazard Analysis Critical Control Point (HACCP)

§§ Tesco Nurture

§§ Food Security

organic and Sustainability§§ USDA Organic

§§ Fair Trade Certified®

§§ Retailer Ethical Sourcing

§§ Certified Sustainable Grown – Fresh Produce

§§ Sustainable Biofuels, Biomaterials and Sugarcane (RSB, ISCC, ISCC+, Bonsucro)

§§ Veriflora® Certified Sustainably Grown – Cut Flowers and Plants

Quality Testing and Certification§§ Antioxidant Superfoods

§§ Flavor and Sensory Analysis

§§ Pesticide Residue Free

§§ Residue Management (MRL)

§§ FDA Detention

other§§ Food Safety Training

§§ Analytical Testing

§§ Retailer Services

BASED ON GOVERNMENTLIMIT-OF-DETECTION PROTOCOLSRSB | [PRODUCT TYPE]

XX% HIGHER ANTIOXIDANT DENSITY THAN USDA REPORTED AVERAGE

Sampling of certification marks


traininG and eduCationIn 2013, SCS provided diverse educational training opportunities for industry representatives, government agency personnel, practitioners and other interested stakeholders in a growing number of areas.

food SafetyOur most popular training category remains Food Safety. More than 800 people attended and completed professional trainings over the course of the year at SCS headquarters, online, and at client facilities. Training courses included:

§§ Implementing SQF (SQF Training Center)

§§ How to Interpret the BRC Food Safety Standard

§§ GlobalG.A.P. - IFA Standard for Fruits & Vegetables

§§ Internal and Supplier Auditor Training

§§ HACCP (Hazard Analysis Critical Control Points)

§§ HACCP/HARPC for Agricultural Operations

§§ GAPs Harmonized Standard training

SA

FE QUALITY FOOD INSTITUTE

BEST SQF TRAINING CENTER

TOP FINALIST 2013

“I’ve taken a number of HACCP courses over the past 15 years, and this is the best one yet! ”

- Jesus oseguera, Taylor Farms, Inc.


Forestry Certification Professional TrainingsAnother important area of training services pertains to Forest Stewardship Council (FSC) certification. In 2013, over 1,100 people participated in one or more of following in-person professional trainings and webinars:

In Person

§§ FSC Chain of Custody Lead Auditor 101

§§ FSC Forest Management Lead Auditor 101

Webinars

§§ FSC Trademark Requirements

§§ FSC CoC lead auditor 101

§§ FSC Controlled Wood

§§ FSC Credit and Percentage Systems

§§ FSC Reclaimed Materials

§§ Conducting Witness Audits

§§ FSC Updates Training

Ongoing

§§ ENews

§§ Auditor Manual

life Cycle assessmentThe Life Cycle Assessment (LCA) unit hosted a 10-part, in-depth monthly web-based training series during which government agency and industry participants reviewed basic Life Cycle Assessment principles and learned about more advanced LCA practices. The latter practices are codified in the LEO-SCS-002 draft standard, being finalized under the American National Standards Institute (ANSI) process.

Tobias Schultz, Life Cycle Assessment Practioner presenting climate research at American Geophysical Union meeting in San Francisco


floorScore® and Green Squared® Ceus

In 2013, SCS developed two Continuing Education Unit presentations: “An Introduction to FloorScore Certification,” which provides an overview of the FloorScore program developed by the Resilient Floor Covering Institute (RFCI), and “Thinking GROUTside The Box - Green Squared Certification,” which offers an introduction to the Tile Council of North America’s Green Squared® certification program for sustainable tile and installation products.

Sustainability practices

During the year, the Food and Agriculture Sustainability team hosted:

§§ Trainings on Fair Trade USA for subcontractors and auditors based in Côte d’Ivoire, El Salvador, Indonesia, Rwanda, and Sri Lanka.

§§ Training courses and webinars on Starbucks CAFÉ practices, the international company’s groundbreaking supply chain specifications, with growers from Indonesia, Brazil, Guatemala, Ethiopia, Columbia, and India in attendance.

§§ Ferrero Farming Values (FFV) auditor training in Turkey related to hazelnut production and handling assessment.

“FloorScore® certification by SCS validates our efforts to assure customers that our flooring products and adhesives meet the strictest standards for indoor air quality.”

- Diane Martel, Vice President of Environmental Planning and Strategy, Tarkett


aCCreditationSThe following independent accreditations were effective, renewed, or issued in 2013 for SCS services. The initial year of accreditation for the respective programs is also shown. Accreditations are determined by independent accreditation bodies, who conduct in-depth, on-site assessments of SCS processes and practices, as well as witness audits in the field.

1. SCS Accreditations by Accreditation Services International (ASI):

§§ The SCS Forest Conservation Program was accredited as a Certification Body for the Forest Stewardship Council’s (FSC) Forest Management, Chain of Custody, and FSC Controlled Wood Certifications. Initial accreditation: February 1996.

§§ SCS was accredited as a Certification Body for fisheries that meet the Marine Stewardship Council’s (MSC) Principles and Criteria for Sustainable Fishing, and for Chain of Custody certification of operations that handle MSC-certified fish. Initial accreditation: January 2001.

§§ SCS was accredited as a Certification Body to conduct Chain of Custody certifications of operations that handle farmed fish under the Aquaculture Stewardship Council (ASC) Chain of Custody standard. Initial accreditation: April 2012.

§§ SCS was in the process of obtaining accreditation to certify aquaculture operations under the Aquaculture Stewardship Council (ASC) Farm certification. Initial acceptance as applicant in 2012; accreditation anticipated in 2014.

2. SCS Accreditation by the U.S. Department of Agriculture (USDA):

§§ SCS was accredited as a Certification Body for the National Organic Program (NOP) to certify organic crops, wild crops and handling operations. Initial accreditation: April 2002.

3. SCS Accreditations by the American National Standards Institute (ANSI):

§§ SCS was accredited as a Certification Body under ISO/IEC Guide 65, an international performance standard for third-party certification bodies, covering the following services:

§§ Food safety auditing conducted on behalf of the Safe Quality Foods standards (SQF Code Edition 7). Initial accreditation: March 2009.

§§ Food safety auditing conducted on behalf of the British Retail Consortium (BRC Issue 6). Initial accreditation: March 2011.

§§ Food safety auditing conducted on behalf of GlobalG.A.P. (Version 4.0), Produce Safety Standard 4.0 (PSS) and Mexico GAP V4.0, June 2012. Initial accreditation: August 2011, December 2012, and November 2012, respectively.

§§ Wood and paper products chain-of-custody for the Programme for the Endorsement of Forest Certification (PEFC ST 2002:20010 Chain of Custody of Forest Based Products). Initial accreditation: March 2009.

§§ Indoor Air Quality for SCS’ proprietary Indoor Advantage™ and Indoor Advantage™ Gold and FloorScore®. Initial accreditation: March 2009.

§§ level™, a multi-attribute furniture Certification Program for BIFMA e3-2008 Sustainable Furniture Standard. Initial accreditation: October 2010.

§§ Auditing against the Fair Trade USA Farm Workers Standard and Fair Trade USA Independent Smallholders Standard. Initial accreditation: July 2013.

§§ SCS was accredited as a Verification Body under ISO 14065 and 14064-3 for Greenhouse Gas Validation and Verification, including the following programs. Initial accreditation: May 2009.

§§ The Climate Registry (TCR), General Verification Protocol.

§§ Voluntary Carbon Standard (VCS).

§§ Climate Action Reserve (CAR), Forest Verification Protocol.

4. SCS Accreditations by The California Air Resources Board (ARB).

§§ SCS was accredited to verify carbon offset projects under the California Cap-and-Trade Program. Initial accreditation: February 2013.

“Our company has 90 employees who rely on their jobs. It’s good to know that SCS can support us with quality training so we can move forward. I am confident that we can meet our buyer’s requirements.”

- Brett Besser, A&B Produce, Inc. of San Francisco


Larry Wilson, a forester for the SCS Greenhouse Gas Verification program.

IV our environmental praCtiCeS Our commitment as a Benefit Corporation is not only driven from top down, but from the bottom up. We learned long ago that some of the most creative and effective ideas for minimizing our own environmental footprint as a company come from our capable and committed employees. They make a difference every single day.

As a service business, our environmental footprint is largely a function of five areas of activity:

§§ Work commute

§§ Business travel

§§ Electric power consumption

§§ Office supplies consumption

§§ Waste management

Reducing Our Environmental Footprint

bicycled to work more than half

of the time

took publictransportation more than half

of the time

took publictransportation at least some

of the time

bicycled to work at least some

of the time

SCS headquarters work commute survey results.

SCS Global Services | ANNUAL REPORT 2013 | 25| ENVIRONMENT

tranSportationwork Commute – While over a third of our employees are almost exclusively single car drivers, SCS actively encouraged employees to find alternative means of traveling to and from work to reduce transportation impacts. As a financial incentive to avoid driving, the company made commute stipends available to employees who decline a parking garage pass.

In 2013, 15% of employees estimated that their commute footprint increased (half of these due to moving residences) and 35% estimated that their footprint decreased, through increased bicycling, public transportation, telecommuting, and other factors.

§§ Bicycling – In response to increased demand, six new bicycle racks were installed on the corporate campus in 2013. Every spring, the company participates in the region-wide “Bike to Work” month. In 2013, 22% of employees participated, logging a total of 2,857 miles during this month alone. (The same number of miles driven in an automobile would have added 1.43 tons of carbon dioxide to the atmosphere.)

§§ public transportation – The Emeryville office is centrally located in the San Francisco Bay Area, accessible by free shuttle bus from a major transit hub of Bay Area Rapid Transit (BART). This service, as well as traditional bus service, was utilized by over a third of the employees in 2013.

§§ telecommuting – More than 25% of employees telecommuted in 2013, ranging from a few days a year to regular weekly telecommute schedules. Flex-time was granted on a case-by-case basis to allow employees to avoid heavy commute traffic hours.

SCS employees participated in the annual “Bike to Work” month.


Business travel – Approximately one-third of SCS employees made five or more business trips in 2013. Auditors conducted onsite inspections as part of their assessment responsibilities, and our professional staff travelled to conferences, meetings, and speaking engagements. A variety of tactics were employed to minimize travel and travel-related impacts:

§§ Internet technologies such as Skype, Webex, and GoToMeeting are used regularly to conduct face-to-face meetings, provide presentations, participate in professional meetings, and otherwise conduct business with auditors, managers and clients internationally. Over 12% of local staff reported having utilized at least one of these technologies to replace airline trips on one or more occasions during 2013.

§§ The company continued to employ an international network of auditors to reduce overall vehicle miles traveled.

Employees arriving by BART, the Bay Area Regional Transportation network. Photo Credit: Beatrice Murch

“Environmental Certification Services took several steps to minimize our business transportation footprint in 2013. We reorganized geographically, locating managers and auditors in or near major industry hubs in Michigan, Illinois, and Georgia. We worked to train auditors in India and China to localize auditing capability. Finally, we met with remote teams predominantly through web conference or teleconference.”

- Stowe Beam, Managing Director, Environmental Certification Services


faCilitieS, reCyClinG and SupplieSEnergy Efficiency – SCS occupies the 6th floor of the Towers Building at 2000 Powell Street in Emeryville, California. LBA, the realty management firm, earned the Energy Star designation in 2013, surpassing the minimum standards for energy efficiency for commercial buildings. Among the efforts undertaken, two electric car-charging stations were added to reinforce regional efforts to increase the use of high energy-efficiency vehicles.

Energy-saving features and initiatives within the SCS headquarters office included:

§§ Interior floor-to-ceiling glass walls to allow natural light to pass through facade offices

§§ Timers and motion sensors for interior lights

§§ Energy Star appliances

§§ Compact fluorescents

§§ Computer monitors set to enter automatic sleep mode after 15 minutes

recycling and Composting – SCS continued to actively support recycling and composting:

§§ SCS employees actively engaged in recycling of a wide range of materials, including paper, glass, plastic, organic wastes, metal, and other materials, as well as reuse of paper

§§ E-waste was professionally collected

§§ Only rechargeable batteries were purchased

§§ Out of-date computers were refurbished and donated to employees

§§ A majority of cardboard boxes and packing materials were stored for reuse or returned to mailing centers

The Towers at 2000 Powell Street, Emeryville, CAPhoto Credit: Google Maps


Environmentally Preferable Purchasing and Office Policies – SCS continued its EPP purchasing policies, including purchases from SCS certified sources whenever available:

§§ The majority of office supplies were purchased locally from B Corporation Give Something Back and The Green Office.

§§ All paper stock for SCS office paper, certificates, and holiday cards were Forest Stewardship Council (FSC) certified to be made from 100% recycled material. Double-sided printing was used whenever possible.

§§ Gently used office furniture purchased from a local client that relocated in 2012 was used to accommodate employee expansion in 2013.

§§ Employee raffle gifts included Veriflora® certified orchids, local B Corporation chocolate, local sustainably grown wine, and other similar products.

§§ Reusable kitchen utensils and dinnerware were supplied for use by employees, supplemented with dinnerware made from 100% recycled content for trainings and some events.

§§ Caterers were asked to refrain from providing plastic utensils.

§§ Kitchen cleaning products were obtained from SCS certified companies or B Corporations.

§§ Laundered kitchen towels were used to reduce the need for disposable paper towels.

Bonnie Holman, Sustainability Associate, enjoys the fall equinox picnic by the San Francisco Bay.


Having fun at the company holiday party.Photo Credit: Michael Van Auken

V Corporate Culture

professionalismThe SCS corporate culture can be summed up in three words: Competency, Creativity, and Commitment.

§§ Competency – We have assembled a world-class professional team capable of providing our customers worldwide with timely, insightful, and effective service.

§§ Creativity – We are proud to have assembled a team of highly energetic, innovative problem solvers. In this intellectually demanding environment, individual employees at all levels of the company are encouraged to contribute ideas and solutions. To reward such initiative, the company maintains a robust practice of promoting from within its ranks.

§§ Commitment – The people who are attracted to work at SCS care deeply about protecting the environment, promoting safe and healthy work conditions for workers, and rising above politics to find the right solutions grounded in scientific rigor.

Workforce& Community

Areas of expertise represented by SCS staff.

SCS Global Services | ANNUAL REPORT 2013 | 31| WORKFORCE & COMMUNITY

Cross-fertilizationIn addition to the formal interaction that occurs every day, we are committed to providing ample opportunities for informal interactions between SCS’ three divisions and all levels of staff to promote improved communication and cross-fertilization of ideas and best practices. For example:

§§ In March 2013, the first Spring Equinox Salad Bar of local and seasonal fruits and vegetables was held, inspiring a monthly single-ingredient pot luck luncheon that has become a regular opportunity for staff to share a healthy meal and lively discussion with senior executives.

§§ In August, Director of Sustainability Nathan Smith made a clean sweep of the Second Annual Home-Grown Tomato Taste Test.

§§ The 2013 Wellness program featured a meditation class, a lunch presentation of ergonomic work habits, and our second annual Qi Gong session.

Director of Sustainability Nathan Smith wins the Second Annual Home-Grown Tomato Taste Test.

“We rely on the credibility of SCS for multiple certifications relavant to our overall sustainability mission.”

- mogens Smed, CEO, DIRTT


Food and Agriculture Division managers Heidi Wright and Jane Atkins Franch judging the Second Annual Home-Grown Tomato Taste Test.

Community enGaGementConsistent with our general purpose as a California Benefit Corporation, SCS is committed to having a positive impact on the communities in which we operate. This section describes some of the steps taken in the SCS headquarters office in Emeryville in 2013.

Community hiring and purchasing preferencefSC Supplies – SCS is one of the largest certification bodies for forestry operations, wood and paper products, and product handlers under the Forest Stewardship Council (FSC) program. Likewise, we preferentially seek out FSC-certified products for our own business supply needs. Since 2003, we’ve consistently ordered the vast majority of our office supplies from Give Something Back, a local B Corporation, and San Francisco-based TheGreenOffice.com. Supplies are selected according to recycled content and certification. Printers for business cards and marketing collateral are local and FSC certified.

tea – We stock Oakland-based B Corporation Numi tea for daily enjoyment by employees and guests alike.

local hiring and Contracting – SCS supports the local economy by giving preference to local job candidates, provided that other qualifications are equivalent. In 2013, over 90% of the employees hired were locally based. Our primary laboratories and IT support team are located near our headquarters for optimal service.

Kim Vincent, Digital Communications Specialist, and Elise Hunter, Marketing Specialist, at regional networking event.


GivinG BaCk

For several years, SCS has provided opportunities for our employees to be directly involved in efforts to give back to the community. In 2013, we returned to our traditional model of a centrally coordinated Day of Service, during which 66% of our employees volunteered with the following local non-profits:

SCS regularly contributes to a variety of organizations, including sponsorship of the Golden Gate Audubon Society’s annual Birdathon, and regional and national forestry and agricultural organizations such as The Forest Guild, Central Sierra Environmental Resource Center, The Pacific Forest Trust, and The Climate Institute. 2013 was also a significant year for SCS’ sponsorship of independent, national standards setting initiatives for sustainable agriculture and advanced life cycle assessment with Leonardo Academy, a non-profit ANSI-accredited standards developer.

SCS provided meeting space to a local Toastmasters chapter, supporting self-improvement goals of SCS employees and colleagues from neighboring offices.

SCS employees volunteering during annual day of service.



VI Client Spotlights

Unifi Manufacturing, Inc.

SeCtor: Textiles

aCCompliShment: Responsible Source Certification for REPREVE® fiber, Certified Recycled Content for REPREVE® fiber

aBout: REPREVE® fiber is made from 95% recycled polyethylene terephthalate (rPET) and is used by well-known brands in a variety of applications such as sporting apparel, office furnishings, automotive interiors, and reusable shopping bags. REPREVE® was the first manufactured textile fiber to earn SCS Responsible Source™ certification, which looks beyond recycled content to evaluate environmental and social responsibility. Unifi Manufacturing, Inc. is a leading producer of multi-filament polyester, nylon textured yarns, and resins that supply manufacturers around the globe at every level of the supply chain.

“This certification is important to Unifi, as it further shows our commitment to providing our customers with quality, transparent and responsibly manufactured REPREVE-based products,”

– Jay Hertwig, Vice President of Global Branding for Unifi

SCS Global Services | ANNUAL REPORT 2013 | 39| CLIENT SPOTLIGHT

novelis

SeCtor: Aluminum Beverage Containers

aCCompliShment: Novelis evercan™ body sheet: Minimum 90% Recycled Aluminum Content with at least 60% Post-Consumer Recycled Content*

aBout: Novelis, the world leader in aluminum rolling and recycling, launched evercan™ as the world’s first certified high recycled content material for aluminum beverage cans. The company’s efforts to increase the recycling of beverage cans is a key component of its plan to increase the recycled content of its products across its global operations to 80 percent by 2020, dramatically reducing energy use, lowering greenhouse gas emissions, and reducing pressure on raw material mining. Novelis’ evercan™ aluminum beverage can body sheet is commercially available to beverage manufacturers in North America, South America, Europe and Asia.

“We are excited to be able to deliver yet another tangible result of our commitment to sustainable aluminum product innovation. Our Novelis evercan™ high recycled content beverage can body sheet, backed by the industry’s first independent certification program, represents tremendous progress in sustainable consumer products packaging.”

- Phil Martens, Novelis President and Chief Executive Officer.* The balance (30%) Pre-Consumer Recycled Content.


Storage Module

Retrofittable Power and Data Blocks

Dialogue Configuration

Flow provides powerful scalability concealed beneath the Power Island

6 7

nucraft furniture Company

SeCtor: Furniture

aCCompliShment: Environmental Product Declaration for Flow XT Conference Table; FSC Chain of Custody Certification

aBout: Nucraft Furniture Company, known for its meticulously crafted office furniture, produced the first Environmental Product Declaration (EPD) in the North American furniture industry, prepared by SCS and independently verified. An EPD is a transparent disclosure of environmental performance based on life cycle assessment in conformance with international standards (e.g., ISO 14044 and ISO 14025). EPDs are increasingly popular in the green building and commercial interior design sectors as a new method for informing customers about the environmental performance of products.

Pictured: Flow XT Table with Four Post Base


Sierrapine

SeCtor: Composite Wood Products

aCCompliShment: Health Product Declaration (HPD) for particleboard and MDF specialty product; FSC Chain of Custody Certification

aBout: Working with SCS, SierraPine became the first manufacturer of particleboard and MDF in North America to complete a Health Product Declaration, accurately disclosing and publicly declaring the chemical contents of its products. The HPD, produced in alignment with the format and guidance of the HPD Collaborative, enables downstream users of SierraPine products to make informed decisions about the products they choose.

Pictured: Mandarin Oriental Hotel, Las Vegas, NV. Ballroom pre-function space features alternating grain quarter figured paldao veneer over Medite II core


fruit of the loom

SeCtor: Apparel

aCCompliShment: Verified Carbon Footprint

aBout: Fruit of the Loom’s verified carbon footprint provides a comprehensive profile of its greenhouse gas (GHG) emissions from stationary sources, transportation, purchased electricity and more. Its verified carbon footprint serves as a baseline by which the company can measure success compared to its 2015 goal of reducing emissions from purchased electricity by 40%. Fruit of the Loom’s carbon footprint provides important transparency to its customers and stakeholders, meeting the international requirements of ISO 14064-3 and ISO 14065 standards as well as the World Resource Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol.


lonely planet

SeCtor: Travel Guides

aCCompliShment: FSC Chain of Custody Certification for all printed materials since 2008

aBout: Customers who purchase Lonely Planet’s travel guides are assured that the company prints on paper sourced from forests that conform to Forest Stewardship Council (FSC) requirements. FSC is the world’s most robust standard in responsible forestry, integrating environmental stewardship and social sustainability elements with responsible harvesting practices. Lonely Planet prints millions of books every year across more than 500 titles, and remains one of the most prominent names in the travel and tourism sector.


parties to the nauru agreement (pna)

SeCtor: Marine Fisheries, Processors, and Distributors

aCCompliShment: MSC Chain of Custody Certification

aBout: PNA, an intergovernmental organization with representatives from eight countries in Micronesia, manages the largest purse seine tuna fishery in the world, representing up to 50% of the world’s skipjack catch. The MSC CoC certification ensures that designated shipments of sustainably-harvested freeschool skipjack tuna are tracked and segregated from non-certified seafood at every stage in PNA’s supply chain, from net to processor.


terra Global Capital - oddar meanchey

SeCtor: Forest Management

aCCompliShment: Verified as world’s first ‘Triple Gold’ REDD+ Project under the Climate, Community and Biodiversity (CCB) standard, registered to the Verified Carbon Standard (VCS)

aBout: Oddar Meanchey, a Reducing Emissions from Deforestation and Forest Degradation (REDD+) project in Cambodia, benefits the climate by maintaining a forest that serves as an important greenhouse gas (GHG) sink. The “Triple Gold” CCB distinction means Oddar Meanchey’s approach to forest stewardship minimizes deforestation drivers – e.g., urbanization, agriculture, forest fires and illegal logging – while upholding an exemplary level of community engagement and environmental protection.


kemin industries

SeCtor: Food and Product Ingredients

aCCompliShment: Certified Sustainably Grown

Benefit: In 2013, Kemin Industries became the first company to certify rosemary, an agricultural ingredient used in a wide range food and consumer products, under the SCS Certified Sustainably Grown standard. Five farms and more than 450 acres of rosemary were certified to this rigorous standard, which assures customers that products are grown in a way that meets exceptional environmental protection, social responsibility, economic viability, and quality benchmarks.


ferrero

SeCtor: Hazelnut Products

aCCompliShment: Verified Sustainable Sourcing Strategies in accordance with Ferrero Farming Values

aBout: When Ferrero was looking for a partner to support development of its responsible sourcing program for hazelnuts in Turkey, it turned to SCS Global Services. SCS works with Ferrero on an ongoing basis to implement the Ferrero Farming Values (FFV) program, verifying grower practices and traceability in the hazelnut supply chain. The FFV program comprises four focus areas encompassing social responsibility, best practices in agricultural production, product quality, and traceability. The goal of the FFV program is to foster continuous improvement in the Turkish hazelnut sector and achieve a 100% traceable supply of hazelnuts by 2020.


melissa’s/world variety produce

SeCtor: Fresh and Packaged Produce Distribution

aCCompliShment: Safe Quality Food (SQF) Level II Recertification

Benefit: Melissa’s/World Variety Produce has a long-standing commitment to quality operations and food safety. For 14 years, SCS has served as its certifier of choice. In 2013, Melissa’s was re-certified SQF Level II, affirming its facility as one of the safest in the nation. Melissa’s markets more than 1,000 fresh produce items out of its 280,000 sq. ft. facility in Los Angeles. Its complementary food service operation supplies culinary professionals with staples, exotics, and Melissa’s full line of organic produce.


tanimura & antle

SeCtor: Agriculture – Fresh Produce

aCCompliShment: Pesticide Residue Free – Butter Lettuce

aBout: Consumers who enjoy Tanimura & Antle’s butter lettuce had an extra reason to feel good in 2013 as the company received Pesticide Residue Free certification, the most stringent standard in the world. SCS certified that T&A’s fresh butter lettuce contained no pesticide residues down to 0.01 ppm or the analytical limits of detection, ensuring that customers are getting clean, delicious produce. Tanimura & Antle proudly displayed the SCS Kingfisher mark on its butter lettuce packaging, alerting customers to its Pesticide Residue Free certification status.


SCS Global Services2000 Powell Street, Ste. 600 Emeryville, CA 94608 USA+1.510.452.8000 main | +1.510.452.8001 faxwww.SCSglobalServices.com© April 2014 SCS Global Services

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