Tom Bearden looks at pressure on retailers to sell recycled consumer products.
SPOKESMAN: Friends, we are here to mourn, mourn the forests and small businesses killed by Staples.
TOM BEARDEN: Protesters stage a mock funeral on the steps of an office supply store in Boston.
PROTESTERS: Over there. Oh, look, it's Staples!
TOM BEARDEN: High school kids brave the rain to demonstrate at another store in charlotte, all part of a national environmental campaign targeting the world's largest chain of office supply stores, Staples, an $11 billion corporation that sells millions of tons of paper a year.
PROTESTERS: Staples clear-cuts forests for products they can sell...
TOM BEARDEN: Led by a group called Forest Ethics, a coalition of environmental groups is trying to change the way Staples, and ultimately the entire paper supply industry, does business. Todd Paglia says it marks a turning point, a way for environmentalists to accomplish goals more quickly than traditional legal and lobbying tactics.
TODD PAGLIA: Over the last few years, the movement of environmentalists and community activists and grassroots activists have gotten more and more sophisticated on trying to move companies rather than trying to get legislation or file lawsuits. There are hundreds of people all across the country mobilizing to try and get change, and going directly to the marketplace to get it. It's much quicker than legislation, and it's a lot cheaper than a lawsuit.
TOM BEARDEN: Paglia has dubbed this effort the paper campaign.
TODD PAGLIA: Paper campaign is an effort to try and get some of the largest users of paper in the United States to get out of the woods, basically-- to switch to recycled fibers and to preserve the wild lands that we still have left in the United States on a national forest and in the forests all through the Southeast and elsewhere.
TOM BEARDEN: The paper campaign started almost a year ago with a letter to the Staples CEO calling on the company to immediately phase out all wood and paper products made from old-growth trees and from trees grown on U.S. public lands; offer products with at least 50% post-consumer recycled content-- products that would include paper already used by consumers and gathered for recycling-- and to phase out everything made from 100% virgin wood fiber; make 100% post-consumer paper available; educate employees, customers, and suppliers on the benefits of recycled paper and availability of recycled products. Staples management has met with the environmentalists, but has not agreed to any of the demands. They declined our request for an on-camera interview. The paper campaign hopes to have a major impact on companies like International Paper, Staples' largest paper supplier. Here in South Carolina, trees are cut down on company tree farms, shipped to the paper mill at Georgetown, where they're shaved down and chopped up into tiny chips. The fiber is extracted, bleached, and converted into huge rolls of paper that are later cut down into copy paper, legal pads, and stationary. Most of the paper sold in the U.S. is made from this so-called virgin fiber. Environmentalists believe that persuading Staples to buy and offer products that include recycled components will eventually mean paper manufacturers won't cut as much timber.
DANNA SMITH: This kind of management is devastating to wildlife that depends on intact native forest for their survival.
TOM BEARDEN: Dana Smith is the executive director of the Dogwood Alliance, a local Carolina group involved in the paper campaign. She says harvesting fewer trees will mean fewer clear-cut forests here and around the rest of the country.
DANNA SMITH: What's happening right now is our forests are ending up in the landfills, and it's because companies like Staples are not creating a market for recycled paper by demanding recycled products from their suppliers.
TOM BEARDEN: But International Paper says their harvesting practices do not harm the environment.
SPOKESMAN: We're getting a very good chip to the mill. I'm very pleased with it as well.
TOM BEARDEN: Sharon Haines manages millions of acres of forest owned by International Paper. What would you say to an environmentalist who would look at the field behind you and say, "that's a disaster"?
SHARON HAINES, International Paper: I would tell them that that is the beginning of a new forest. I understand that that does not look particularly pretty to some people, but it is the beginning of a new forest, and you can look behind it and see an older stand that's about 25 years old that used to look just like this.
TOM BEARDEN: Environmentalists also hope to spur consumer demand for recycled paper. They say Staples doesn't give people the chance to buy it because they don't carry it.
DANNA SMITH: Well, customers don't want to buy paper that's coming from destroyed forests. They don't want to buy products that are coming from the destruction of the environment. But when they go into a Staples store, they have no choice.
TOM BEARDEN: And if they're given the choice, you think they'll pay more?
DANNA SMITH: Absolutely.
SPOKESMAN: So you're saying that there are actually red woodpeckers over there, huh?
TOM BEARDEN: Carl Gagliardi is International Paper's director of environmental business services. He has been involved in negotiations between Staples and environmentalists. He says Staples is feeling a bit under siege.
CARL GAGLIARDI: Oh, they certainly feel as though they've been subject to a certain amount of intimidation, and they certainly feel as though some of that is unfair. They have pointed out a number of times, for example, that they sell hundreds of recycled content lines. They can't understand why the activist community is out saying that they don't sell any, or very few, recycled lines.
TOM BEARDEN: Staples says they average between 10% and 30% post- consumer material in their recycled product line. But environmentalists want them to boost that to more than 50%, and eventually introduce 100% post-consumer recycled products. Gagliardi says making higher- content recycled paper is more expensive and could possibly increase prices threefold, especially for 100% recycled products. It's a price he says customers won't pay.
CARL GAGLIARDI: Why, when you go to a higher recycled content, it gets more expensive, is because you have to go out and get more what used to be called waste paper, what we now call recycled content or recovered fiber. When you go out to get more recovered fiber, that means you are drawing in a greater supply, and you need much more high quality at a cheap price-- in other words, plentiful supply, and that's driving the price up, which again makes it more difficult for the consumer to buy because it's more expensive.
TODD PAGLIA: If Staples decided it's going to market better paper, greener paper, I have absolute confidence that they will be able to do that. This is a company that started the office supply store industry. They're geniuses in marketing. They've been able to market their name into one of the biggest brands on the planet, and the idea that they can't sell recycled paper just is a little ridiculous to me.
TOM BEARDEN: Paglia points to an earlier campaign as proof that environmentally friendly marketing can be successful. For two and a half years, environmental groups protested the fact that the giant Home Depot hardware chain sold old- growth lumber. Last year, Home Depot agreed to stop doing so, and a few months later, their biggest competitor, Lowe's, jumped on the bandwagon. Lowe's also agreed to offer more tree-free products like plastic trim. Mark Kauffman is senior vice president of merchandising at Lowe's. He says the company accepted the demands because they wanted to be an environmental leader.
MARK KAUFFMAN: We didn't want it to turn it into a confrontation because we wanted to really hear what they had to say. And they spend a lot more time than we do in the forests, and they are passionate about their cause, so we really felt we could learn something from them.
TOM BEARDEN: Adam Davis is a San Francisco consultant who helps companies develop environmentally friendly business plans. He says more and more companies are finding it profitable to do so.
ADAM DAVIS: The corporate community, from my experience, is full of people who would prefer to do the right thing. If they can make a profit by providing, you know, really ethical and, you know, services which impact the environment in a lesser degree, and are making progress in a way that they can be proud of, that's something they'd like to achieve. So I don't think there's a lot of resistance to it if they can see that the relationship between environmental performance and competitive advantage.
FRED SMITH: Hello. What did they find out?
TOM BEARDEN: Fred Smith is a former economist with the EPA, and now president of the Competitive Enterprise Institute. He says programs like the paper campaign are thinly disguised blackmail.
FRED SMITH: Generally there is an element of extortion in almost all of these green cooperative initiatives. "Sign on with our program, agree to our standards, and you'll be vindicated; you'll be certified; you'll get a green label, a green seal of approval. And if you don't, well, you know, we can be pretty nasty. We can boycott; we can lobby; we can demonize your product." Consumer companies in the modern world are terrified of those tactics.
CARL GAGLIARDI: And what they're doing is not so much intimidation in the sense of blackmail, but intimidation in the sense that they believe they can shift market forces toward or away from a retailer or other business based on whether or not that retailer does what they want them to do, which in this case has put pressure on us to force products company to change our practices in one way or another.
TOM BEARDEN: Environmentalists hope to reach some kind of deal with Staples soon, so they can move on to other paper products companies like Office Depot, Copymax, and Kinko's.