Stewart Van Horn

Director – Global Sustainability

Achieving a Superior Sustainability Footprint

In Tissue Manufacturing

It begins with our mission…

58,000 employees worldwide

$21 Billion+ in Net Sales

#1 or #2 position in more than 80 countries

Nearly one-quarter of the world’s population use our products daily

Leading the world in essentials for a better life. 2

Kimberly-Clark Brands deliver on that mission

Personal Care Consumer Tissue

Health Care K-C Professional

3 Leading the world in essentials for a better life. 3

Sustainably manufactured within the goals of three foundational pillars

4 Leading the world in essentials for a better life. 4

79% 78% 100% mfg. waste diverted from landfill

A responsible planet footprint requires that natural resources are …

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• Minimize long term effect

• Replace, recycle, replenish

Sourced Responsibly

• Efficiency in use

• Retain, recover, repurpose, reuse

Used Responsibly

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• Certified Sources

• Recycled Content

• Process retention

• Maximize recovery

• Minimize sludge

• Preferred Mix

• Sustainable Alternative Fiber

• Repurposed sludge

• Biofuel

• Secondary Mkt.

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K-C’s Fiber Sourcing Commitments

• Wood fiber suppliers are 100% certified

• 90% Environmentally Preferred Fiber (EPF) in global tissue by 2025

• Rio +20 Commitment

– 50% reduction in fiber sourced

from natural forests by 2025

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• Balanced (remove/replace)

• Short-Loop Recycle • White water utilization

• Improved quality of returned water

• Water stressed regions

• Long-Loop Recycle • Advanced WWT

Filtration

• Toxicity free effluent

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• Low GHG* sources

• Mix optimization

• Clarify emissions

• Efficient equipment

• Waste minimization

• Heat recovery

• Co-Generation • Waste Heat

Integration

• Renewable sources

• Efficient asset utilization

• Real-time energy management

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1 2 3

1. Conservation: Real-Time Energy Management

• LEAN Energy

– LEAN manufacturing management integration

– 5%+ reduction in energy/unit typical

• Energy Conservation Mindset created

• Focus on efficiently using assets (versus using efficient assets)

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LEAN Energy: The opportunity

• Real-time tools don’t exist to understand that there is a problem

• Standards don’t exist to trigger action

• Experiences don’t exist which create the belief in energy’s value

Why is it such a challenge:

The solve:

LEAN manufacturing deployment of a complete solution: Visual management at the asset level (problem consciousness) • Dashboards with real time energy intensity (energy/unit) Operating system changes (accountability) • Make overconsumption a ‘red’ condition trigger for action • Design rewards to stroke the ‘right’ conservation behavior

Mindset & Capability Training (create the shared need) • Compelling value of energy/ton; make conservation personal

Standard design for quicker and more standardized implementation

Standard Dashboard Defined KC Asset Type

Visual Management: A Global Design Standard

Seven types of Kimberly-Clark machines defined with metering and data requirements

Tissue Machine Envelope

Electricity Low Voltage MBTU

Wet end gas MBTU

Electricity Med Voltage MBTU

Dry end gas MBTU

Steam to YankeeMBTU

Steam to ShowerMBTU

Steam to PulperMBTU

Steam to white water MBTU

13.14

12.78 2011

12.07 2012

11.85 2013

$1.12 MM

$0.74 MM

$1.86 MM

2010

(MBTU/BDMT)

(MBTU/BDMT)

(MBTU/BDMT)

(MBTU/BDMT)

Energy Consumption (MBTU/MT) Sitio del Niño, El Salvador

The Result: 5-8% Energy Reduction

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- Integrated into cost savings - Make gaps to adoption visible - Make aggregate value visible - ‘Grow’ confidence w/ pre-design & analysis

1. Conservation: Energy Efficiency Projects

2. Alternate Energy

Optimize Supply Value (current mix)

Price CI, Reliability, Predictability • Influence market regs/legislation • Competitively bid contracts • Change term length & other T&Cs • Incorporate risk for value

(int.power, demand response) • Sell excess power generated (CHP) • Use grants/incentives • Incorporate reliability &

predictability levers

Transform to Optimal Mix/Form

Cost & Sustainability Transformation • Switch fuels for cost/sustainability • Supply “densification” for savings • Deploy alternate energy (biomass,

solar, wind) • Generate electricity from alternate

lower cost / Green house gas fuels for utility independence (Co-Generation)

Leverage scale across mills/country/region

Price/Cost & Risk Reduction • Aggregate /consolidate supply

points • Aggregate/consolidate suppliers • Lift common strategy elements

from country ‘sub’-strategies and seek common solution (engineering, design)

3. Energy Supply

2. Alternate Energy: Co-Generation of Electricity

• Four Units deployed in last decade (15 – 35 megawatts each)

– 4,000,000 MT CO2e cumulative GHG reduction

– $30 million+ annual savings

• Power generation – Co-Generation w/ heat recovery can approach 80% efficiency

– Waste heat integration into TM

• Waste & Energy Combo Solutions

– Creating secondary material streams

– Flexible alternatives to landfill waste

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• 20% of mill sludge used as fuel (guarantee)

• Remaining sludge and ash repurposed into secondary materials / landfill

• Provides 100% of current mill steam needs

Biomass

Boiler

• Generates ~ 100% of mill electricity needs

• Provides another 50% of current mill steam needs supports future expansion needs

Co-Gen

System

2. Waste & Energy: Combination Value Example

Optimize Supply Value (current mix)

Price CI, Reliability, Predictability • Influence market regs/legislation • Competitively bid contracts • Change term length & other T&Cs • Incorporate risk for value (int.power,

demand response) • Sell excess power generated (CHP) • Use grants/incentives • Incorporate reliability & predictability

levers

Leverage scale across mills/country/region

Price/Cost & Risk Reduction • Aggregate /consolidate supply points • Aggregate/consolidate suppliers • Lift common strategy elements from

country ‘sub’-strategies and seek common solution (engineering, design)

3. Energy Supply

- Must be integrated approach (Sustainability & Procurement) - Market Study w/ trends known required for pipeline of value - Takes time to develop game changing options – (ex. High Voltage Power) - ‘Grow’ confidence in business leaders w/ small wins to sell larger initiatives

Thank You

Appendix

Kimberly-Clark Recognition • 2013 Ethisphere Institute’s

World’s Most Ethical Companies for 2nd year in a row

• 10th consecutive year on FTSE4GOOD Index

• 2013 Top 20 of World’s Best Corporate Citizens for 5 consecutive years by Corporate Responsibility Magazine

• 2012 Circle of Excellence award from DBMA

• EPA’s Fortune 500 Green Power List for 2012

• #1 Consumer goods company in Newsweek’s “2012 Green Rankings”

• #4 among 2012’s “World’s Best Multinational Workplaces”

• #12 on 2012 list of Fortune 500 companies using green power

• Signatory to the United Nations Global Compact

• 2013-2014 USGBC Platinum Member

• Named to the first Natural Capital Leaders Index

• 2013 Dow Jones Sustainability Index

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K-C Fiber Sourcing Milestones

Introduced use of Recycled Fiber 1970s

1st to require 3rd party certification

• Sustainable Forest Mosaics Initiative with Conservation

International; later a featured case study in State of the World's

Forests 2011 report

• New Fiber Procurement Policy

• Europe introduces FSC Andrex tissue

• KCP 1st with FSC tissue products

2007

2003

2009

• Joined WWF’s GFTN

• Alliance with

Greenpeace

2011

2012 and

beyond

• Global GFTN agreement

• KCP gains FSC labeling for 95%+

of NA tissue & towel

• Kleenex and Scott Naturals: 1st U.S.

Branded Consumer Tissue Maker to

adopt FSC

• FSC NA consumer Scott, Cottonelle, Viva

• Set goal to reduce its Forest Fiber Footprint by

50%

• Alternative Fiber

• Bamboo

• Wheat Straw

• Set goal of 100%

certified suppliers

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