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Sustainability Oversight: Guiding International Paper's ESG Commitments
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MEMPHIS, Tenn. (News release) -- International Paper has an integrated board and executive-level governance structure to oversee and set the tone on Environment, Social and Governance (ESG) topics across our businesses. The full board periodically reviews components of our sustainability strategy and performance including material ESG developments and issues.

Within our Board of Directors, the Public Policy and Environment Committee (PPE) has oversight over environmental topics as well as public policy, legal, and health and safety issues or risks that could affect the Company. The Audit and Finance Committee (A&F) reviews processes and controls for external reporting, and the Management Development and Compensation Committee (MDCC) approves CEO stewardship-focused objectives and evaluates performance related to compensation.

At the management level, our CEO and Senior Leadership Team are responsible for corporate sustainability strategy and leadership, with functionspecific councils reporting to them.

Our Stewardship Council is made up of representatives from areas across our businesses and functional teams. In addition, the Manufacturing Council, Environment, Health and Safety Council and the Global Diversity and Inclusion Council guide implementation of the related Vision 2030 goals and assess progress against them.

In support of the Stewardship Council, the Renewable Solutions Steering Team, Global Certification and Sustainability Task Team and the Energy and GHG Steering Team develop the tactics needed to further advance implementation of our Vision 2030 goals and targets.

Our Chief Sustainability Officer leads our Sustainability Team and is ultimately responsible for the development and execution of our sustainability strategy. In turn, the Sustainability Team coordinates activities across IP businesses and functional areas to deliver on our Vision 2030 targets.

Rewarding our ESG performance

The purpose of our incentive plans is to drive improved financial performance and results for the short- and long-term success of the company. We work to achieve our Vision 2030 goals because we believe it's the right thing to do.

Our Annual Incentive Plan (AIP), considers performance against our sustainability targets when applying the individual performance modifier for members of the Senior Leadership Team, corporate officers and their direct reports. We believe performance in this area enables the achievement of our Vision 2030 goals. We currently consider metrics in the following areas when determining their individual payout under AIP:

  • Health & Safety

  • Environment & Sustainability

  • Human Capital & Culture

  • Governance

  • Diversity & Inclusion

International Paper's stewardship value is also a driver of long-term shareowner value. This is measured in our Long-Term Incentive Plan through the Total Shareholder Return metric, which determines 50% of the award. Every year, we evaluate the short- and long-term incentive plan metrics and make a recommendation to our MDCC for approval.

ESG governance

Full board

  • Periodic review of components of sustainability strategy and performance

  • Review material ESG-related developments and issues

A&F

  • Review processes and controls for external reporting of sustainability and social impact data and metrics

  • Review related disclosures in Sustainability Report and Form 10-K

Governance

  • Review and reassess adequacy of, and oversee compliance with Corporate Governance Guidelines

  • Seek Board candidates with diverse backgrounds

PPE

  • Review sustainability and social impact policies, plans and performance to continuously improve and comply with commitment to stewardship

  • Review environmental policies, plans, performance and social impact

MDCC

  • Approve CEO ESG-focused objectives, evaluate performance

  • Consider ESG factors in Senior Vice President (SVP) compensation and overall compensation plan

  • Review related disclosures in CD&A

Stakeholder engagement

Our operations impact a wide range of stakeholders, from employees and local communities, to customers and shareholders. Engaging with these diverse groups allows us to gain valuable insights, understand their expectations and address their concerns. By fostering open and constructive dialogue, we can identify material issues, prioritize emerging global issues and industry trends, and gain vital information to guide our sustainability efforts and strategies (see page 99).

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