PotlatchDeltic is committed to being a responsible corporate citizen. We operate with integrity, protect our timberlands for future generations, cultivate the safety and skills of our people, and support our communities. Corporate responsibility isn’t something we just pay lip service to. It is integrated in the way we do business every day, and has been for over a century.
Integrating Corporate Responsibility With Strategy
Eric J. Cremers
President and Chief Executive Officer
PotlatchDeltic
We are committed to setting corporate responsibility goals, reporting on our progress, and holding ourselves accountable. Our corporate responsibility pillars, which reflect our mission and values, guide us in the development of our strategic goals and initiatives. Our 2023 Corporate Responsibility Report and the accompanying information on the corporate responsibility section of our website highlight some of our accomplishments in 2023 within our four corporate responsibility pillars: Forests, Planet, People, and Performance.
Forests. We managed our forests sustainably and protected water, wildlife, and species-at-risk. We planted nearly 30 million seedlings, implemented best management practices, maintained our third-party forest certification, established biodiversity benefits, and protected the Red-cockaded woodpecker. Several of our rural real estate transactions had conservation outcomes. We also collaborated to strengthen the Wildlife Conservation Initiative, a science-based conservation approach for at-risk species. Our net carbon removals from our forests were 6.4 million tons of CO2e in 2023.
Planet. We minimized our environmental footprint and launched initiatives that make us part of the solution to climate change. Energy usage across our wood products facilities was reduced by 2.5% from 2022 levels and Team Members worked on projects to reduce our greenhouse gas emissions. We created and filled a senior position to develop natural climate solutions opportunities for our business, negotiated land sales and leases for solar projects, made progress in implementing carbon offset initiatives, and worked towards a wide range of other emerging opportunities. In addition, we completed a climate risk scenario analysis across our timberland and procurement regions.
People. We implemented a wide variety of initiatives with an aim to empower Team Members, focus on safety, and strengthen our communities. Our Team Members are our greatest asset, and we dedicated a senior position to diversity and employee development, implemented a variety of training and development opportunities, and launched an employee resource group for Veterans. Safety is a core value, and I’m proud that we maintained our strong safety record, with our incident and severity rates below industry averages. We worked to strengthen our communities through charitable giving, focusing on local impact.
Performance. We continued our commitment to corporate responsibility and governance. We linked 2023 short-term incentive compensation to achievement of key corporate responsibility objectives to provide a more holistic assessment of performance against the Company’s corporate responsibility and operational goals. Our enterprise risk management process incorporated corporate responsibility risks, including climate risks. We held our contractors and suppliers to the same standards we commit ourselves to, and 100% of our wood products facilities remained certified for responsible sourcing. In addition, we made significant progress on several state and federal policy initiatives and industry frameworks and tools that support forests and wood products as part of the solution to climate change.
We continue to see opportunities emerge for forests to participate in the net-zero transformation, including strong demand for solar opportunities. Our southern carbon credit initiative is moving forward, and we have identified potentially promising prospects in carbon capture and storage as well as bioenergy. We are optimistic about growth tied to providing natural climate solutions and we believe these efforts could result in higher returns and higher timberland values. Looking ahead, we see increased supply chain transparency, supportive policies that promote market development, and the advancement of credible climate protocols as critical to our ability to continue to grow these opportunities.
We report our corporate responsibility performance annually informed by and referencing frameworks such as the Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), and Global Reporting Initiative (GRI).
PotlatchDeltic conducts a materiality assessment every two years to identify the corporate responsibility topics deemed important to a broad range of internal and external stakeholders.
We report under the CDP disclosures for forests and climate.
Our environmental commitment, the relationships we have with employees, the independence and oversight of our Board of Directors, the positive impact we have in our communities, and our public advocacy can have a profound impact on our success in maximizing a range of values for our stakeholders. We recognize that these environmental, social, and governance factors are the foundation for our long-term success.
The purpose of PotlatchDeltic’s corporate responsibility reporting is to provide our stakeholders with an understanding of our priority corporate responsibility topics. It reflects our commitment to provide transparency and accountability of our corporate responsibility practices, performance, and goals. Our Report outlines our approaches, policies, practices, and results, and highlights some of our “material” corporate responsibility topics through case studies. We report annually and update you on our progress, on corporate responsibility related changes in our business and operating environment, and on our initiatives.
Our corporate responsibility approach reflects our commitment to continue to focus on areas where we can enhance our disclosures, procedures, and key performance metrics. Our analysis and benchmarking also help us to identify issues where we could improve and position us to develop harmonized action plans that are linked to our strategic objectives. These measures can range from initiatives related to diversity, training, suppliers, and employee engagement or can involve plans to further reduce our environmental impacts. The approach is embedded within a strong governance framework with Board oversight, broad management involvement, and cross-functional working groups.
We report our corporate responsibility performance informed by and referencing frameworks such as the Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), and Global Reporting Initiative (GRI). We have incorporated our support of the United Nations Sustainable Development Goals (UN SDGs) into our report, highlighting some key areas of alignment. In addition, we report under the CDP disclosures for forests and climate.
Our corporate responsibility reporting includes all activities of PotlatchDeltic Corporation and subsidiaries consolidated for financial reporting purposes, as set forth in our 2023 Annual Report on Form 10-K.
PotlatchDeltic’s mission is to Grow and Produce the Resources that Build a Foundation for Our Lives and Improve the Communities Where We Live, Work, and Play.
We execute our mission through the lens of our corporate responsibility strategy. This guides how we view sustainability in our business and across our value chain.
We deliver a range of sustainable economic, social, and environmental values for our stakeholders and strive to do our part to help the planet for future generations. We are proud of the resources that we produce, the values we exemplify, and the contributions that our team members make every day.
PotlatchDeltic supports all the UN SDGs, however, we focus on the six core UN SDGs where we have the greatest impact. We also include an additional five goals that closely align with our policies and initiatives.
PotlatchDeltic is committed to the sustainable management of our timberlands. We have a long legacy of excellence in sustainable timberland management and in protecting water, soil, and wildlife. This approach is reinforced through our Forest Stewardship Policy.
Our approach includes managing timberlands using advanced long-term strategic harvest scheduling models and replanting harvested areas. Foresters manage timberlands using best management practices that protect water quality and biodiversity and comply with environmental laws and regulations. We are a leader in forest stewardship and sustainability with rigorous third-party auditing and certification of our practices. We use a comprehensive timberland environmental management system that focuses on continual improvement. We also recognize that some areas need to be conserved and species at risk need to be protected on the lands we manage.
In real estate, conservation outcomes are at the heart of our rural land sales objectives. We also seek to incorporate environmental practices into any communities we develop.
The forest management cycle combines decades of biological knowledge with technical advances in forest management. Our Forest Stewardship Policy reflects our commitment to sustainable forest management.
Our forest management practices adhere to a combination of legislation, regulation, best management practices, and certification standards. These combined with our expertise, ensure the health of forest soil, water, vegetation, wildlife, and aquatic habitat.
Sustainably managed private working forests are healthy and resilient and provide forest habitat that supports a significant amount of the forest species. Our forest stewardship commitments include the responsibility to conserve wildlife species and their habitats.
Third-party certification confirms that science-based stakeholder developed forest management practices and continual improvement are occurring on our timberlands.
Our real estate developments incorporate environmental practices. In rural real estate, conservation outcomes are at the heart of our objectives, and we seek to partner with organizations to benefit recreation, water quality, and wildlife.
We have a long legacy of excellence in timberland management and wood products manufacturing and we are committed to being a responsible corporate citizen.
PotlatchDeltic is committed to the sustainable management of our lands and responsible environmental operations in our wood products facilities. This commitment includes practicing sustainable forest management, ensuring our compliance with environmental laws,
effectively utilizing resources, and minimizing our environmental impact. This approach is reinforced through our Environmental, Health, and Safety Policy and Forest Stewardship Policy. We are a leader in forest stewardship and sustainability with rigorous third-party auditing and certification of our practices.
Foresters manage timberlands with best management practices that protect water quality and biodiversity. We use a comprehensive timberland environmental management system that focuses on continual improvement. We also recognize that some areas need to be conserved and species at risk need to be protected on the lands we manage.
Our wood products manufacturing facilities focus on responsible manufacturing and on resource efficiency. Facilities minimize air emissions, monitor water discharge and protect streams and rivers. An experienced professional team actively manages our environmental compliance at our manufacturing facilities,
and we have implemented compliance programs that include environmental education and training for our employees.
PotlatchDeltic recognizes the role forests play in combating climate change and the powerful positive impact our timberlands provide through carbon sequestration. By leveraging decades of management experience and working closely with scientific research organizations,
we manage our assets while considering how climate change could create potential risks and opportunities.
Sustainably managed forests combat climate change through carbon removal, storage, and cycling. Trees absorb atmospheric carbon dioxide through photosynthesis and store it in the branches, trunk, needles, and roots. Using wood products for building stores tree carbon and using biomass for energy retains carbon within a natural loop.
The carbon that working forests remove from the atmosphere is stored in multiple ways. It can be stored in tree branches, stems, and roots, as well as in the soil. Once a tree is harvested, the wood products manufactured from it holds that carbon until it is replaced or decays. The trees we plant then grow, renewing the cycle and growing net carbon storage.
The growing and harvesting of timber, the production of primary wood products such as lumber, and the use of sawmill residuals to manufacture secondary products create complex fiber flows into multiple end products.
Climate change presents both risks and opportunities for PotlatchDeltic. The Board of Directors and the management team continue to expand their consideration of these risks and opportunities on Company strategy, operational decisions, risk management oversight, and performance.
Our forests can support climate solution initiatives and advance the UN Sustainable Development Goals. Opportunities are considered in our strategic and operating plans and in our advocacy and policy initiatives. These factors can impact our business, strategy, and financial planning.
Understanding the depth and breadth of all applicable requirements of environmental laws and our operating permits, and establishing reliable methods to meet those requirements, are critical in establishing a reliable compliance assurance program.
Reducing energy consumption and conserving resources are integral to our success. Energy consumption has accompanying financial and environmental costs that vary depending on the type of energy used. We continually evaluate our operations and planned projects to minimize these costs by emphasizing conservation and the use of renewable energy.
We are committed to protecting air quality, reducing water consumption, and reducing our waste in order to protect our environment.
We strive to make PotlatchDeltic a workplace of excellence through our Company culture, fair compensation, and comprehensive benefit options. We value an environment of ethical, diverse, and inclusive teamwork and look to attract talent with diverse backgrounds and experience. Our wide range of employee benefits helps our employees and their families to stay healthy and considers employees’ need for flexibility. We promote equal opportunities for employee development and professional growth and maximize employee engagement through a strategy of continuous performance improvement. We act with strong principles, honoring our commitments and building and maintaining trust with our stakeholders. Our commitment to our employees starts with a strong culture that prioritizes health and safety at the core of every decision we make. We seek to provide and constantly maintain a safe work environment with comprehensive health and safety programs that identify and mitigate risks, train employees properly, and focus on continuous improvement.
We view the relationships we have with our contractors and suppliers as essential to our success and expect them to follow best practices, focus on health and safety, be ethical, and respect and promote human rights. PotlatchDeltic understands that we are an integral part of the communities where we live, work, and play. Our employees and their families are members of rural communities where our facilities operate, and our actions can often have a substantial impact on those communities. Active community engagement in these
areas and in our larger communities through community involvement, charitable giving, and volunteering is a core part of our Company culture.
In addition, as stewards of our working forests, we are proud of the work we do and the positive impact we have on our planet. We believe people can best learn about forests by experiencing them and make most of our timberlands available to the public for a wide range of recreational uses.
We recognize that employing a highly skilled and diverse workforce is a competitive advantage and leads to better employee engagement. We are committed to the development of all employees in support of their career aspirations.
PotlatchDeltic recognizes that employing a highly skilled and diverse workforce is a competitive advantage. Diversity and inclusion are a fundamental part of our values and are actively incorporated daily into our culture across our businesses.
PotlatchDeltic offers a comprehensive benefits program to help protect and sustain the diverse health and financial needs of our employees and their families.
We recognize that employing a highly skilled and diverse workforce is a competitive advantage and leads to better employee engagement. We are committed to the development of all employees in support of their career aspirations.
Safety is a core value at PotlatchDeltic. Our team members are our greatest asset, and we focus on their health and safety without compromise. Keeping team members and on-site contractors safe is a critical underpinning to our success.
We are an integral part of the communities where we work, live, and play. We provide jobs, volunteer, and invest in the well-being and vitality of our communities.
Responsible corporate governance aligned with our mission, a culture that incorporates our values, and rigorous systems for the identification and mitigation of risks increase our competitiveness, build resiliency, and create long-term value for our stakeholders.
PotlatchDeltic maintains high standards of integrity and ethics and requires compliance with the law and our Corporate Conduct and Ethics Code. Our corporate governance policies and procedures, strong and effective Board of Directors, combined with our culture, guide us to ethical management that promotes respect for the community, a commitment to corporate responsibility, and sound financial management.
Effective governance enhances long-term shareholder value by executing our strategy through sustainable forest management practices, a commitment to environmental responsibility, a culture supporting a diverse, equitable, inclusive, and engaged workforce, strong health and safety programs, and a positive impact to our communities. Robust governance practices, including a culture of ethics and integrity, respect for human rights, and a commitment to transparency, are the foundation of all we do. They influence the decisions we make across the Company every day. We expect everyone we work with, from our employees to our suppliers, to adhere to our ethical principles and to abide by these practices.
Our Board of Directors oversees our corporate responsibility governance system that supports the development of a cohesive corporate responsibility strategy and the evaluation of climate risks and opportunities. Our corporate responsibility practices are continuing to be integrated across our businesses. An enterprise-wide risk management and control framework identifies, assesses, and tracks mitigation strategies for material risks facing the Company, including climate-related risks and cybersecurity.
Our engagement with stakeholders helps us to understand, prioritize, and manage our impacts.
We have a responsibility to advocate for laws and regulations that help support a policy environment that aligns with the interests of our business and stakeholders. This can include public advocacy on a wide range of topics such as trade, H-2B visas, and natural climate solutions. We also work with several associations and coalitions and recognize that the best policy outcomes require collaboration and education.
PotlatchDeltic’s Board of Directors sets high standards for the Company’s employees, officers, and Directors. Implicit in this philosophy is the importance of sound corporate governance for shareholders, the Board of Directors, management, employees, and public trust.
We comply with laws and regulations wherever we operate, and we exceed those legal structures by practicing a high standard of business and personal ethics.
We strive to respect and promote human rights in our relationships with our employees, suppliers, the communities where we operate, and other stakeholders.
Strong corporate responsibility governance, including effective Board oversight, sets the framework for embedding corporate responsibility considerations throughout the organization and implementing targets and initiatives.
A comprehensive enterprise risk management (ERM) framework is utilized to identify, access, and mitigate a broad spectrum of risks facing the Company, including climate risks.
We expect our suppliers and contractors to have the same commitment to environmental responsibility and sustainable forest management, social responsibility, and responsible corporate governance, including human rights, as we do.
We are committed to responsibly sourcing the raw materials used to make our lumber and plywood, while meeting customer demand for quality.
Our comprehensive cybersecurity program maintains a strong focus on protecting the Company, our customers, partners, and vendors.
PotlatchDeltic believes it is our responsibility as a corporate citizen to pay our fair share of taxes. Our commitment to integrity and our Corporate Conduct and Ethics Code guide our activities related to taxation.
We recognize the diverse interests of our stakeholders and believe that our relationships both within and outside of PotlatchDeltic are an important part of our value-creation and success.
Building relationships with federal, state, and local government representatives and their staff enables us to engage on issues that are important to our business and to influence policy through education and advocacy.
