2018
Sustainability
and Social
Responsibility
UpdateLetter to Stakeholders
Graphic Packaging Sustainability and Social Responsibility Program Update
Dear Fellow Stakeholders,
In 2018, we issued Graphic Packaging ’s first GRI-referenced

operational excellence, we remain dedicated to making

we are on a journey and we will encounter challenges andSustainability and Social Responsibility report. Since 2016

a difference for our communities, our stakeholders andopportunities along the way. Future investments may lead to

we have disclosed our Sustainability Vision 2025 goals

our planet.

temporary setbacks in our progress. For example, as discussed

on our website, and, previously, our phase 1 goals witha baseline year of 2008. With the publication of our first
GRI-referenced report, we were able to present our goals
in the greater context of our environmental and social
impacts and in alignment with our long-term growthstrategies. As indicated in our inaugural report, we plan to

Our primary product is made from all or mostly renewablematerial: wood fiber. Virtually all our paperboard packaging
and products are widely or regionally recycled. We continue
to increase the recyclability of our products so that all will be
accepted and made into new products. We also know thatfurther in this report, planned mill downtime for equipment
and process upgrades resulted in an increase in ourgreenhouse gas emissions and non-renewable energy use in
2018. These upgrades were necessary to improve our reliability
and productivity, which ultimately will help us to achieve
our long-term plan and Sustainability Vision 2025 goals.

issue a full report biennially. Furthering our commitment totransparency, however, we are delivering this 2018 interim
report to update key program metrics and to continuecommunicating our progress to our stakeholders.
2018 was a transitional year for Graphic Packaging as wecompleted the combination of two world-class packaging
companies, Graphic Packaging International and the North
America Consumer Packaging division of International
Paper. That integration encompassed some changes to
key leadership, manufacturing processes and our productprofile. In addition, we later assessed our Sustainability 2025
Vision and determined that key changes were appropriate
to stretch ourselves to deliver more. Our score card reflects
these changes with increases to metrics that will further
improve our environmental impact and clarity on our goals
to lead on the recyclability of our packaging products. As
we execute on our growth opportunities and prioritize01

This update complements our financial reporting
and addresses the sustainability topics identified
by Graphic Packaging and our stakeholders as themost material to our company. Customers, investors,
employees and suppliers are the primary audiences
for our reporting. Unless otherwise stated, weare reporting sustainability metrics globally,
covering facilities where Graphic Packaging has
operational control. This includes owned and leased
manufacturing facilities, major administrative
offices, external warehouses and research anddevelopment facilities. Operations that are outside ofthese criteria, such as joint venture locations where
Graphic Packaging does not have full authority tointroduce and implement its operating policies, are
not included in our reporting.
To provide greater perspective on our journey, this report
includes interviews with several inspirational company leaders
who share a passion for achieving our goals.
We know our success requires engagement at all levelsof the organization, and we are fortunate that our Boardof Directors and leadership team are highly engaged. We

consider risks and opportunities related to our economic,
social and environmental impacts on an ongoing basis
as part of our strategic planning, risk management andgovernance discussions. Our Board recently amended
its Nominating and Corporate Governance Committee’s
charter to formally assign principal oversight of oursustainability policy and practices.

TABLE OF CONTENTS

Graphic Packaging is proud of our program, progress andaccomplishments. Two years into our Sustainability Vision
2025, we are inspired by the accomplishments we have made.
We are executing our plan, and we are eager to continue to

03

01
Letter from Our Leadership

Scorecard Progress

fulfill our aspirations of “Making a World of Difference.”05
Michael P. Doss

Operational Update

President andChief Executive Officer

06
Andrew H. Johnson
Vice President,

Our Sustainability Journey:
Conversations with Key Leaders

Government Affairs &Sustainability

Any statements of the Company’s or management’s expectations, beliefs, goals and forecasts in this document, including but not limited to our ability to reach certain sustainability targets
and goals, levels of production and efficiency, new product development and talent acquisition and performance targets, constitute “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results todiffer materially from the Company’s present expectations. These risks and uncertainties include, but are not limited to, inflation of and volatility in raw material and energy costs, cutbacks inconsumer spending that reduce demand for the Company’s products, continuing pressure for lower cost and recyclable products, the Company’s ability to implement its business strategies,
including productivity initiatives, cost reduction plans and integration activities. Undue reliance should not be placed on such forward-looking statements, as such statements speak only asof the date on which they are made, and the Company undertakes no obligation to update such statements except as required by law. Additional information regarding these and other risks
is contained in the Company’s periodic filings with the Securities and Exchange Commission.

02

Sustainability Vision 2025 – Scorecard ProgressFeatured Goals

Greenhouse
Gas Emissions
GOAL
Reduce greenhousegas emissions by

15%(metric tonnes
C02e/$1,000 sales)
PROGRESSGHG emissions haveincreased by

3.3%

Non-renewable
Energy2018 GHG emissions increased,
which was anticipated. We
have invested capital that will
support our GHG reduction
goals in 2018 and 2019. The
increase was primarily due
to extended mill downtime
at two of our newly acquired
mills. During a mill outage,
paperboard production issuspended and renewable
fuel is not generated. GHG
emissions increased because
certain mill machinery andoperations continue to operate
even though no products forsale are produced.

GOAL
Reduce non-renewableenergy use by

15%(MMBTU/$1,000 sales)
PROGRESS
Non-renewable energy
use has increased by

7.7%

Water
Conservation2018 non-renewable energy
use increased, which was
anticipated. We have invested
capital that will support
our non-renewable energy
reduction goals in 2018and 2019. The increase wasprimarily due to extended
mill downtime at two of our
newly acquired mills. During
a mill outage, paperboard
production is suspended
and renewable fuel is not
generated. Non-renewableenergy use increased because
certain mill machinery andoperations continue to operate
even though no products forsale are produced.

GOAL
Reduce mill water
effluent by

15%

Effluent reduced significantly
and was impacted by theextended downtime thatwas experienced.

(1,000 gal/ saleable ton)
PROGRESS
Water effluent has
decreased by

27.0%

4
Reducing
Plastic

Recyclability
GOAL

100%
of GPI Products
Recyclable

In 2018 Graphic Packaging added more clarity to our packaging productrecycling efforts with two stretch goals to ensure that our productportfolio has positive End-of-Life outcomes. Achieving our packaging
product recyclability and reducing plastic will solidify Graphic Packaging’s
position as a leader in manufacturing environmentally responsible
packaging products. We will report our progress on these goals in 2019.

GOAL
Reduce LDPE use by

40%

03

Sustainability Vision 2025 – Scorecard Progress
Goals Continued
Forest andFiber Certification

SafetyGoal
Continue progress toward aspirational target of zeroincidents, ensuring that safety is a top priority

Goal
All global Graphic Packaging facilities compliant
with a certification standard(1)Goal
All global Graphic Packaging carton manufacturing
facilities in compliance with Social Compliance Sedex
Member Ethical Trade Audit (SMETA) by the endof 2018(1)Progress
Global incident rate reduced from 1.13 to 1.06 from2017 to 2018. The Graphic Packaging Team continues
to prioritize safety.

Progress
89% of facilities globally compliant with Forest /Fiber Certification.

Progress
91% of all global carton manufacturing facilities wereaudited or scheduled for a 2019 SMETA audit.

Waste Diversion

Recovery Rate

Goal
Drive out waste in all our operations – 100% of facilities
engaged in a waste diversion program(1)Goal
Industry paper and paperboard recovery rate of 70% by 2020

Progress
Waste characterization study completed key findings will beincorporated in work plan in 2020. All folding carton and cup
plants globally collect the paperboard in our manufacturing
waste for recycling.

Progress
The recovery rate of paper and paperboard for the U.S.
market increased to 68% and is nearing the industry goal of 70%
by 2020.

Company goals from base year of 2016
(1)
Converting facilities under Graphic Packaging ownership for more than a year
Data Sources: Company records except recovery rate which was developed by the American Forest & Paper Association04

Social Responsibility

Operational Update
Net Sales
Number of Employees

18,000 employees worldwide

Total Number ofOperations$6,023.0 million

80 facilities worldwide

Total Assets

July 31, 2019

December 31, 2018

Total Capitalization

Quantity of Products$7,059.2 million
December 31, 2018

Below is the production at each of the Company’s paperboard mills:
Form of Capital$M% of Total

Total Debt
Market Equity
Total Capital

2,957
4,102
7,059

42%
58%
100%

December 31, 2018

Beneficial Ownership
The largest stockholders of Graphic Packaging Holding
Company are:
The Vanguard Group
Boston Partners
FMR LLC

27,764,279 shares
26,739,242 shares
22,209,385 shares

Location

Product

West Monroe, LA
Macon, GA
Kalamazoo, MI
Battle Creek, MI
Middletown, OH
East Angus, Québec
Texarkana, TX
Augusta, GA
West Monroe, LA

CUK
CUK
CRB
CRB
CRB
CRB
SBS
SBS
Corrugated Medium# of Machines

2018 Net Tons Produced

2
2
2
2
1
1
2
2
1

878,008
686,694
497,901
210,247
173,571
93,849650,964
508,238
120,281

9.4%
9.0%
7.5%

Reported in the 2019 Proxy Statement

05

Our Sustainability Journey:

Conversations with Key Leaders
Our Mills
these mills into our platform, which will add scale, optimize

reduce raw material consumption and address increased

our mill system and enable the SBS mills to benefit fromconsumer demand for product with 100% recycled fiber,

Graphic Packaging’s core competencies. We continually

it will also deliver environmental benefits. The investment

strive to improve our mills with a focus on overall efficiency.

is capacity neutral and will replace production at our

Simply stated, we look to increase productivity rates withother facilities. We estimate that the new paperboard

more powerful assets while using less energy.

machine will allow us to reduce our greenhouse gases
and purchased electricity by 4% annually. We also expect

Mike Farrell
EVP, Mills Division

an approximately 1% reduction in water use. With respectspecifically to our CRB paperboard mill manufacturing
footprint, we anticipate that the addition of this recycled
paperboard machine will decrease greenhouse gases byover 10% and water use by over 25%.
How does mill efficiency contribute toGraphic Packaging’s Sustainability Vision 2025 goals?

Tell us about your current mill portfolio and explain
how recent acquisition and disposition activityaligns with your long-term mill strategy.

The Graphic Packaging mill system represents 96% of ourgreenhouse gas generation and over 80% of our water

Graphic Packaging has nine world-class paperboard mills
as of June 30, 2019. Over the years, we have fine-tuned
our production processes, and our CRB (coated recycled
board) and CNK (coated natural kraft) mills operate on ahighly efficient, reliable platform. In 2018, we expanded ourcapabilities by adding two SBS (solid bleached sulfate) mills
as a result of the Company’s combination with the North
America Consumer Packaging division of International
Paper. Our focus for 2018 and into 2019 is to transition

impact. Paperboard mills are energy-intensive, andwe continually assess our mill footprint to test cost andprojects impact your Sustainability Vision 2025 progress?

environmental effects. Through this assessment process, weconcluded that a rebalancing of our recycled paperboard
mill manufacturing was appropriate. In September 2019,
we announced our intent to invest $600 million into our
integrated CRB platform with the purchase of a newrecycled paperboard machine in Kalamazoo, Michigan.
In addition to producing the highest quality CRB at an
unmatched cost, this purchase is a strategic investment
in sustainable packaging. Not only will the new machine06

How do planned maintenance and improvement

Our strategic decisions are made with a long-term view,
and in 2018 some operational actions had a short-term
adverse impact on our environmental goals. That year
we had an extended shutdown to upgrade the recovery
boiler in our Augusta, Georgia mill. As with any outage,
this shutdown increased our fossil fuel-based energy

consumption. We also encountered market-related down

improvements. We know that running the mills

time and a higher use of wood chips in our Texarkana,efficiently has a positive impact on our environmental

Texas mill, both of which further increased the greenhouseprofile. Our investments in productivity have reduced

gases generated at that mill. These environmental effects

our absolute greenhouse gases and water impacts inwere anticipated, so we are not discouraged by theaddition to significantly reducing the impact per ton of

temporary impact in progress toward our goals. We fullymaterial produced.

expect our capital investments over the next few years will
result in continual improvement, and we will achieve or
exceed our Sustainability Vision 2025 goals.

Our mill footprint has changed drastically since 2008 when

What does the business look like in 2025?

we first established sustainability goals, and we were
proud to achieve our Phase 1 reduction goals. Similarly,
our Sustainability Vision 2025 goals were established in2016 before the addition of our two new SBS mills. Ourcontinued efforts to enhance the efficiency of our millsystem have nearly offset the impact of those mills.

centered around productivity, quality and environmental

In addition to capital expenditures, we also continually
evaluate our processes. In 2018, we established a Center
for Excellence team, chartered to improve reliability. The
team is focused on reliability-centered management
and maintenance. Having a centrally-focused Center for
Excellence team enables the mill division to address reliability
opportunities quickly and efficiently and transfer bestpractices to all mills. This team of experts excels in rapidly
adopting and deploying best-in-class processes. Being
closely linked to Graphic Packaging’s sustainability team, itelements, and several programs also address reliability

helps to facilitate our leading environmental position.

What is Graphic Packaging’s strategy for millproductivity and reliability?

Increasing mill productivity is a primary focus area at
Graphic Packaging. Our capital expenditure strategy isI envision that we will have an even more efficient millsystem in 2025, producing SBS, CRB and CNK paperboard
grades. Our entire mill system will operate at world-classlevels for safety and productivity. We will be among theleaders in our industry offering high quality and low-cost
paperboard solutions manufactured in a mill systemthat is sensitive to its environmental impact. We will be amodel for efficient use of resources including water, energy
and tree fiber and be known as advocates of responsible
fiber management.

07

Our Products and Innovation
more environmentally sound solution. We are continually
innovating to provide solutions for broad-based market
needs, utilizing our Design for Environment (DfE)
philosophy. We are committed to making a difference forour customers and also to our planet.
How is Graphic Packaging responding to thisBill Sedlacek
VP, Innovation & New Business Development

heightened focus on more sustainable packaging?

Graphic Packaging is driving innovative paperboard
What themes have emerged in recent years withsolutions and practices. We are developing new products

respect to evolving customer and consumer needs?

that incorporate the latest materials and processes tomeet or exceed our customers’ performance criteriawith the right economics. Increased investment in new

How does Graphic Packaging’s vision: “Inspired
Packaging. A World of Difference.” motivate you?

Awareness of sustainability challenges and theirenvironmental effects has been evolving in recent years
and seems to have reached an inflection point over the

At Graphic Packaging, we are focused on solutions.
We work directly with our customers to address their
specific challenges and partner with them to improvethe environmental profile and impact of their packaging,while meeting performance and cost expectations.
The innovation team is energized when our customers
engage with us to transform a current package to a

resulting in increased adoption of new solutions replacing
plastic materials.

past year. Where environmental responsibility previously

It should be no surprise that our focus on innovating

may have been a consideration for our customers, it issustainable solutions is a critical component of our long-

now a requirement. Consumers are more often making

term strategic plan. Accordingly, we are able to leverage

conscious decisions to change their consumption patterns

our worldwide operations, and we prioritize global

with increased focus on product and material choices.

collaboration over regional development. Our Board of

Demographic shifts, including the purchasing power andDirectors is engaged with our leadership team in our new

influence of millennials, are amplifying the message andproduct development initiatives and tracks our pipeline

expediting the demand. Front and center is the heightened

and acceptance rates on an ongoing basis.

urgency to eliminate plastic, including styrofoam, whichfurther opens the door for paperboard alternatives.

08

paperboard solutions, through R&D and design, is3.

P aperboard trays: We have developed a rangeof paperboard trays replacing plastic trays forfrozen foods cooked in the microwave. Thesepaperboard trays are generally recyclable andprovide outstanding performance in the microwave
providing a superior consumer experience for foodTell us more about your Design for Environment
philosophy.

We continue to seek “the ultimate package” – packaging
made from renewable materials, with renewable energy,
that is also recyclable or compostable. As we move towardthat aspirational goal, we focus on a suitability continuum,
where we strive for progress on this journey to develop
the ultimate package. A cornerstone of our innovation is a
DfE, philosophy and how we can improve the profile andefficiency of the product lifecycle.
We consider the circular economy concept, including ourability to accept and process recovered materials for use in
our products and to manufacture recyclable products. Asof today, virtually all our packaging solutions are widely or
regionally recyclable. Although we are intensely focusedon replacing plastic that is added to our packaging forfunctional purposes, the wood-fiber portion of the package
can be recovered in a mill process. Thus, 95% of the package
is recoverable, and recycling the package is encouraged.
Further along the continuum, we are doing our part tosupport the American Forest and Paper Association (AF&PA)
sponsored industry recovery goal of 70%. According to the
AF&PA, the 2018 recovery rate was 68%.

Tell us about some new products and how they arecooking and convenience.

responsive to market demand for more sustainable
alternatives.

We have several products that have been recently
introduced. I’ll highlight three of them.
1.

ecotainer™: We are continuing to extend the offeringof foodservice articles that have plant-based,

What does the business look like in 2025?

compostable or easily recyclable barrier coatings
which eliminate plastic film barrier linings. We
consider our ecotainer™ line of products to be the next
generation of hot and cold foodservice packaging.
2.

KeelClip™: Our KeelClip is designed to be a
replacement for the ubiquitous plastic rings andshrink wrap film used widely in beverage packaging.
KeelClip is a proprietary paperboard solutionthat can replace both options with a superior
sustainability profile. This solution provides excellent
performance through the distribution channels andis recyclable.

I believe that Graphic Packaging will be the leader insustainable paperboard-based solutions. We will be the“go to” partner developing new products, processes andsolutions in the foodservice and folding carton industries,
which improve the sustainability profile of packaged
goods and foodservice items. We will continually innovatea broad range of products based on the advantages of
paperboard. Our products will deliver outstanding value
and performance through our channels to customers
and consumers, and they will have positive end-of-life
outcomes, ideally being 100% recyclable.

09

Our Workforce
Remembering my first communications with
Graphic Packaging, I was struck by the commitment toorganizational effectiveness. Now, six months in, I havefound there is a shared enthusiasm around wiring aperformance culture. Leadership is in more of a “pull”
rather than a “push” mode in terms of moving our priorities

Stacey Panayiotou
EVP, Human Resources

forward, and my early interactions with our Board oftalent, with a focus on cultivating both role-specific andcareer-advancing skill capabilities that differentiate us
from our competition. Fourth, we continue to streamline
processes across segments and geographies to leverage
our best practices throughout our global operations. And
last, but certainly not least, we gain recognition as an
employer of choice for top talent.

Directors have impressed me with their level of engagement.

What does it mean to be an employer of choice?
What has been your top priority since joining
Graphic Packaging?

How do you intend to prioritize and dedicate
resources to drive a growth culture?
Awareness that a workplace values time, rewards andMy early days at Graphic Packaging were dedicatedprimarily to what I call “my listening tour” and consistedof meetings with employees up, down, and across theorganization. It’s clear to me that Graphic Packaging is in
an exciting, transformative period where driving results is
top of mind. There is consensus at all levels that we want
to be an execution powerhouse with a growth mindset.
Our talent and structure must be considered in the context
of driving this organizational behavior.

10

At this point, I am concentrating on scalable processes.
I am not just referring to processes in the usual “HR policy
and practices” sense. Rather, I am focused on establishingan environment and set of principles that drives highperformance and is adaptable for relevance across all
bands of our 18,000 employees. Let me explain in terms of
our five strategic priorities.
First, we emphasize strength, quality and diversity of
talent. Second, we drive high performance with positive
leadership practices, such as coaching and real-time
feedback. Third, we invest in sustainable development ofwork practices – essentially, employee sentiment that
“Graphic Packaging is a place I want to work and build
a career.” From an external perspective, status as an
employer of choice is critical to how we market to theworkforce and recruit the right talent. Internally, ourperception as a select employer is determined by what
we are asking of our employees and what we return inexchange. Compensation and advancement is a key pieceof the analysis, of course. Corporate culture also plays apart, as does employee engagement. Employees want
to feel as though their work matters and, perhaps more

importantly, to understand why it matters. This ties backat all levels understanding that the more diverse theto another of our strategic priorities. When we invest in

workforce, the more positive the outcomes. We will forecast

people leadership as a capability, we develop managers

diversity as part of our succession planning and leadership

who can provide context and explain purpose to theirdevelopment. We are just starting our benchmarking andteam, thus contributing to overall employee satisfaction.

expect to report our data in future reports.

Next year we plan to launch an enterprise-wide
engagement survey. I am interested in understanding
our employees’ perception of Graphic Packaging’s
current strengths and weaknesses, but I am also eager
to establish a baseline to measure our key engagement
drivers moving forward.
What does the business look like in 2025?

We anticipate that Graphic Packaging will have top
quartile results and be the industry benchmark for highTell us about your diversity & inclusion vision.

performance. We will attract and retain the right talent
with a diverse pipeline of future leaders. We will havea culture that values learning, with engaged talentseeking to develop new capabilities and expand their

For the most part, D&I boils down to the “D” – which isdifferences - and the “I” which is how a company values
those differences. If we successfully implement processes
that support our five strategic priorities, we prioritize
quality of talent. Our talent pool should reflect the diversity

responsibilities. We will promote from within at optimallevels, while still maintaining a healthy stream of new
external candidates to add fresh perspective. Our teamwill be conditioned to win and satisfied that compensationand other rewards reflect their many achievements.

of the communities in which we operate. As we emphasize
performance management, we will assess representation

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