2012 Corporate Responsibility Report

2012 Inc 500/5000 Fastest Growing Private Companies in America Award

25% reduction in tonnes of CO2e per unit of production from 2011 to 2012 at PMI Joinease.

91% waste diversion rate at PMI Joinease in 2012

1500employee volunteer

hours in 2012

33% of employees have worked at PMI for 5+ years

2

5+

PMI brands increased the percentage

of recyclable products in their lines

Stanley®

MiG

o®

Aladdin

®

83%79%73%

Every member of the PMI team plays an active role in a greater American, European, Asian and thus world community. Our environmental and social decisions matter, and at PMI, we care about giving back to our global community.

This is why PMI is committed to the principles and values in our Corporate Pillars, including Social Consciousness and Environmental Stewardship. These initiatives are global, corporate and embedded into our brands, and we see them evi-denced in our reduced environmental impact, innovative new products and the strong reciprocal relationships we enjoy with our global customers and manufacturing partners.

We believe it is our responsibility to support and to facilitate the development of energy reduction initiatives in all aspects of our business operations, especially those in China. In 2012, our joint-venture factory improved the energy efficiency of its operations by 25% from the previous year— while also increasing production by 37%. This reduction is significant, and we will strive to emulate it in our contract factories.

PMI cares about our potential impact on climate change. From the availability of raw materials to the transportation of finished goods, each step of our value chain is evaluated for its vulnerability to climate change and proactive action taken to mitigate potential issues.

In 2012, we delivered to consumers the Sustain® cup, a breakthrough product that is affordable, reusable, and recyclable, designed to replace single-use disposable beverage containers. In 2013 we will see the expansion of this new product line. A reclamation system for our Sustain® products that will enable new cups to be made from reclaimed material is also currently in development.

Our Corporate Pillars exist to remind us of the integrity that is woven into the PMI fabric and of our deep commitment to Principal over Profit. This includes our integra-tion of sustainability into our overall business strategy and across our value chain with products that create strong emotional bonds with our consumers.

Our priority is the health and safety of the workers in our factories and our encouragement of community engagement in areas in which we operate. It is in this spirit that we drive to seek out partnerships that provide collaboration regarding social and environmental innovation in all aspects of PMI business.

The following pages share our progress as we continue on this journey. I’m proud of our accomplishments and pleased to share this with you.

Robert M. Harris Founder & CEO

3

Contents

Letter from the CEO ....................................5

PMI People & Offices ....................................6

Social Responsibility .........................................7

Environmental Stewardship..............8

Environmental KPI’s ...........................................9

Product Stewardship .................................11

Community Engagement....................13

Awards/Looking Forward..................15

PMI’s 2012 CSR Report examines the environmental and social impacts associated with the manufacturing of PMI products and PMI global business operations, including the offices and employee travel and commuting. The 2012 scope includes the environmental and social data from 5 of PMI’s 14 manufacturing partners, including Factory C that was added this year. PMI tracks and monitors its impact against 15 Key Performance Indicators, the areas PMI believes are most material to business operations.

In 2012, PMI re-calculated the greenhouse gas emissions generated from electricity use at its Chinese factories, starting from 2009. Updated emission factors from the World Resources Institute* were used in the calculations to increase the footprint accuracy. Global Warming Potentials from the IPCC 4th Assessment were also used in the greenhouse gas analysis. PMI’s contract factories base environmental impact on production levels. The percentage of a contract factory’s production that is PMI product is the percentage of resource use PMI claims. PMI takes 100% responsibility for the environmental impact of its joint-venture factory, PMI Joinease.

PMI’s 2012 CSR follows the Global Report-ing Initiative’s 3.1 reporting tool, adhering to the operational control GHG and resource accounting method, with a reporting period of January 1, 2012 to December 31, 2012.

When evaluating this report against the GRI guidelines, PMI self-declares an Application Level B. For PMI’s 2012 GRI Index and 2012 Corporate Responsibility Report please visit: visit: pmi-worldwide.com.

For more information on the Global Report-ing Initiative Framework and the GRI 3.1 Guidelines, please visit: globalreporting.org.

For questions about PMI’s 2012 CSR, please contact Valerie Bone, Director of Corporate Responsibility, at: pmi.csr@pmi-worldwide.com

GRI Index Key Performance Indicators

Percent of fully recyclable productsPercent of products made from recycled materialPercent of products designed for disassembly

Diversity - North American OfficesCorporate PhilanthropyVolunteer Hours

Code of Conduct (COC) ComplianceWorker Retention - FactoriesInjuries - Factories

Energy UseGreenhouse Gas (GHG) EmissionsWater UseWater RecyclingWasteWaste Recycling

INNOVATION

CULTURE/PEOPLE

SOCIAL RESPONSIBILITY

ENVIRONMENTALSTEWARDSHIP

4

* Ranping Song, Jingjing Zhu, Ping Hou, Hongtao Wang. 2013. “Getting Every Ton of Emissions Right: An Analysis of Emission Factors for Purchased Electricity in China.” Working Paper. World Resources Institute, Beijing.

SCO

PE

5

PMI’sStrategic

Pillars

InnovationAs a brand-focused company, PMI is driven by product innovation that excites its customers and consumers.

Culture/PeopleShared core values and

collaboration among PMI’s team of talented people contribute to the unique

organizational culture and create accelerated

personal and business growth and success.

Social Consciousness

PMI’s ethical behavior and responsible business conduct

ensures employees are treated with dignity and respect.

PMI provides a safe and healthy work environment and gives back to the communities in

which it operates.

Environmental StewardshipAn industry leader in using environmentally responsible manufacturing methods, materials and human interactions, PMI strives to sustain natural resources, eliminate waste, and reduce its carbon footprint.

PMI believes every employee can make a difference and drive profitability by setting, measuring and accomplishing goals according to these Strategic Pillars.

Commitment to ExcellencePMI is committed to world-class supply chain standards and operating excellence in all business aspects including sales, product development and marketing.

Pacific Market International, LLC (PMI) Business Strategy

6

PMI People & Offices

PMI’s continued business success is the result of the company’s global team and the

PMI Strategic Pillars (see page 5 of this report) that influence daily business decisions.

PMI’s ethics are deeply rooted in human values. PMI factories are safe and healthy places

to work, delivering positive impact to the communities in which they operate.

Although PMI tracks KPIs (Key Performance Indicators) for its offices (as shown on this

page), the company focuses on supply chain KPI performance with the primary goal of

carbon footprint reduction and waste reduction (shown later in this report).

CULTURE/PEOPLE

Employees per office

Seat

tle

Shan

ghai

Man

ila

Lond

on

Am

ster

dam

Bent

onvi

lle

Tota

l

2009 88 50 14 12 0 0 164

2010 86 61 18 1 0 3 169

2011 84 54 18 0 3 3 162

2012 90 59 23 0 3 3 178

DIVERSITY IN NORTH AMERICA

% m

inor

ity

repr

esen

tatio

n

% fe

mal

e

% m

ale

% fe

mal

e

man

ager

s

% m

ale

m

anag

ers

2009 17% 52% 48% 50% 50%

2010 15% 54% 46% 58% 42%

2011 15% 51% 49% 56% 44%

2012 14% 45% 55% 54% 46%

2012

Seat

tle

Shan

ghai

Man

ila

Amst

erda

m

Bent

onvi

lle

Electricity consumption (kWh) 519,327 71162 46302 23308 22335

GHG emissions (tonnes of CO2e) 193.94 56.08 22.55 9.14 16.27

Water Use (liters) 2,289,995 34,048 – 51,674 50,915

Waste to Landfill (kg) 4,819 – – 297 –

Waste diverted from landfill11,087 – – 103 –

RETENTION RATES

INJURY RATES

Social Responsibility Business partnerships that champion great factories are why PMI factories have some of the highest employee retention rates in China. Since 1998, PMI has worked with its factory partners on social and environmental improvements that deliver increased worker health and retention benefits. PMI also encourages and supports its factories in creating social programs in both the company facilities and the surrounding communities.

As PMI’s factory base continues to increase globally, PMI will continue to expand its Corporate Social Responsibility initiatives in collaboration with industry partners.

PMI’s focus on Environmental Health and Safety (EHS) positively affects the company’s entire supply chain. When PMI employees have safe and healthy work environments, they are able to make high quality products that are safe and enjoyable for consumers to use. This, in turn, helps PMI consumers maintain a healthy lifestyle.

2012PMI JO Factory A Factory B Factory C SUB 1

95.5% 94.8% 92.5% 93.6% 95.0%

2012PMI JO Factory A Factory B Factory C SUB 1

0.01% 1.8% 0.05% 1.5% 0.1%

Summer School for Employees’ ChildrenAt one of PMI’s partner factories, most employees are migrant workers. For much of the year, these employees’ children remain with grandparents, back in their hometown. Summer vacation is time for parents and children to be together, and many employees’ children come to stay at the factory community. PMI’s partner factory is invested in

providing its employees’ children with a safe and meaningful summer vaca-tion, especially during the day while their parents work at the factory.

A summer school was started in 2010 where the factory employees’

children, ages 6 to 12, can attend for free. The summer school takes in about 90 children and benefits over 100 employees, covering 8 departments. Five or more university students, all majoring in education, are invited to take care of and teach the children. The summer school also prepares wonderful stationery, reference books and gifts for all the children. The school program includes a nutritious lunch and various educational courses, thus providing these children with meaningful summer days while their parents work.

With their children attending the summer school, employees can work at ease knowing that their children are well taken care of and close by. This free benefit to employees at PMI’s partner factory has created a stronger sense of community and has increased worker retention.

7

8

Environmental StewardshipPMI’s Corporate Social Responsibility Program, established in 1998, has, since 2009, incorporated a comprehensive KPI based system to track the environmental performance of partner factories producing PMI product. Additionally, increasing stakeholder interest in climate change issues led PMI to complete a life-cycle analysis of one of its products, and to invest in carbon-accounting software to help track and report the company’s corporate greenhouse gas emissions to the Carbon Disclosure Project.

PMI is committed to working with socially responsible and environmentally conscious factories. All of PMI’s factories are ISO 9001 certified for quality system excellence and many are ISO 14001 certified for environ-mental management systems. ISO 14001compliance provides a healthy work environment for factory employees, and it facilitates the measurement and improvement of a factory’s environmental performance.

PMI Joinease Energy Reduction

In 2012, PMI set a 10% emissions intensity reduction goal for its PMI Joinease factory. PMI Joinease greatly exceeded this goal by investing in a number of energy reduc-tion initiatives, including lighting retrofits, thermal blanket wraps for 100 of the fac-tory’s 162 injection mold machines, and a new energy efficient water cooling tower. These initiatives allowed PMI Joinease to reduce its greenhouse gas emissions by 25% per unit from 2011. This efficiency was achieved while the factory increased production by 37% during the same time period.

GHG Emissions 2011 2012% change from 2011 to 2012

Scope 1 & 2 7889 7905 0.20%Scope 3 2622 5724 118.32%

PMI’s 2011 and 2012 Scope 1, 2 and 3 greenhouse gas emissions in tonnes of CO2e. Scope 3 emissions increased during this time period primarily due to the addition of Factory C, a large contract supplier, to the company’s scope of measurement.

0

1.0

2.0

3.0

4.0

5.0

2009 2010 2011 2012

Ton

nes

of C

O2e

PMI Joinease Carbon Intensity

PMI Joinease’s operational greenhouse gas emissions intensity in tonnes of C02e per 10,000 units of production between 2009 and 2012.

Thermal blanket wrap on an injection mold machine.

New energy efficient water-cooling tower

9

PMI engages its suppliers on environmental performance through strategic Key Performance Indicators (KPIs) covering issues including ener-gy and water consumption, greenhouse gas emissions and waste diversion. PMI bases its impact on the company’s production levels at its contract

factories. The percentage of a contract supplier’s production that is PMI product is the percentage of resource use PMI claims. PMI takes 100% responsibility for the environmental impact at its joint-venture factory, PMI Joinease. Factories are compared against themselves on a per 10,000 units of production basis, which allows performance to be tracked independent of growth. PMI pilots environmental initiatives at PMI Joinease and then replicates successful efforts at contract factories to achieve similar environmental performance improvements.

Environmental Factory Key Performance Indicators

*Calculations are based off of the US EPA’s Greenhouse Gas Equivalencies Calculator. http://www.epa.gov/cleanenergy/energy-resources/calculator.html

Hazardous Waste Intensity: KG per 10,000 units

PMI JOFactory

AFactory

BFactory

CSUB 1

2011 1.56 5.22 9.77 - 3.43

2012 1.41 51.00 4.57 77.11 3.17

% change 2011-2012 -9.6% 877.2% -53.2% - -7.6%

Non-Hazardous Waste Intensity: KG per 10,000 units

PMI JOFactory

AFactory

BFactory

CSUB 1

2011 28.22 544.59 1,956.24 - 591.32

2012 18.01 1,153.17 915.51 16.98 771.98

% change 2011-2012 -36.2% 111.7% -53.2% - 30.6%

Waste Recycling: KG per 10,000 units PMI JO

Factory A

Factory B

Factory C

SUB 1

2011 282.83 2,152.56 1,013.22 - 591.32

2012 201.76 1,191.16 475.23 353.31 771.98

% change 2011-2012 -28.7% -44.7% -53.1% - 30.6%

Energy Intensity: MMBTU / 10,000 units

PMI JOFactory

AFactory

BFactory

CSUB 1

2011 6,417.27 9,563.65 8,731.63 - 349.74

2012 4,766.57 17,690.69 5,061.31 12,533.61 473.77

% change 2011-2012 -25.7% 85.0% -42.0% - 35.5%

GHG Intensity: Tonnes of CO2e per 10,000 units

PMI JOFactory

AFactory

BFactory

CSUB 1

2011 4.21 7.34 6.74 - 0.24

2012 3.13 11.59 3.00 8.49 0.30

% change 2011-2012 -25.5% 57.9% -55.5% - 26.0%

Water Intensity: Liters per 10,000 units

PMI JOFactory

AFactory

BFactory

CSUB 1

2011 28,723.35 139,587.86 109,607.45 - 6,749.11

2012 22,871.35 180,581.55 70,729.58 229,334.84 5,883.45

% change 2011-2012 -20.4% 29.4% -35.5% - -12.8%

Water Recycling Intensity: Liters per 10,000 unit

PMI JOFactory

AFactory

BFactory

CSUB 1

2011 3,803.59 63,337.83 12,039.58 - -

2012 4,432.53 - 5,543.97 - -

% change 2011-2012 16.5% -100.0% -54.0% - -

PMI Joinese Waste Reduction

PMI Joinease, PMI’s joint venture factory in southern China, has worked to reduce waste generation in all aspects of its operations. Several years ago, PMI Joinease started looking at its waste stream as an opportunity for improvement. The first step was to increase the material efficiency of production, thereby reducing the amount of raw materials needed and scrap material produced.

As a second step, PMI Joinease invested in an on-site waste sorting facility where employees sort scrap materials to be recycled, sold and landfilled to increase the diversion rate. In 2012, PMI Joinease achieved a 91% waste diversion rate at its facility. The factory’s focus on material efficiency and waste minimization has decreased raw material and disposal costs and created a new revenue stream from

the sale of recyclable waste. Waste diversion, which provides both top and bottom-line results, continues to be a priority for PMI Joinease.

Learn more about the environmental initiatives at

PMI Joinease, and see the video on our corporate

social responsibility page: www.pmi-worldwide.

com/who-we-are/social-responsibility/default.aspx

10

91%wastediversion

Above: The recycling and material sorting area at PMI Joinese.

11

2011 2012 2011 2012 2011 2012

Percent of our in-line product collection that is fully recyclable products

21% 83% 15% 73% n/a 79%

Percent of our in-line product collection that is made from recycled material

15% 13% 16% 20% n/a n/a

Percent of our in-line product collection that is designed for dissasembly

9% 4% 0% 4% n/a 0%

Built for Life

Product Stewardship

Environmental Stewardship lives at the heart of PMI’s corporate strategy. As PMI continues to minimize its environmental impact (including its contribution to climate change), new steps will be taken in how PMI collaborates with employees, suppliers, and customers. In order to manage PMI’s commitment to environmental issues with the same rigor given to PMI social programs, continued focus will remain on innovation to bring scalable product solutions to market while ensuring PMI pursues environmental improvement in its factories.

In 2012, the percentage of recyclable PMI brand products greatly increased. PMI also began using Life Cycle Assessment (LCA) software in 2012 to evaluate the environmental impact across its products’ lifecycles. Going forward, PMI will conduct LCAs of additional products and utilize the results in its product design process. These in-depth analyses will allow each of the PMI brands to further incorporate sustainability into its brand strategies.

The table on this page shows each brand’s performance across three product KPIs.

SUSTAINABLE PRODUCTSDelightfully Different

Assured Quality, Reassured Choice

12

The Sustain® StoryJourney of a Breakthrough Product

Guided by the Environmental Stewardship embedded in PMI’s corporate strategy, an internal PMI task force was formed to create a breakthrough product that would enable consumers to reduce their environmental footprint. Starting as a system concept, the cup that we know today as Sustain® was delivered in 2012.

PMI performed an internal Life Cycle Assessment (LCA) of the Sustain® 16 oz. cup with the support of Quantis software. The LCA found that, after 30 uses, the Sustain® cup has a 50% less environmental impact than 30 equivalent single-use paper cups.

The graph below shows the environmental impact of a Sustain® 16 oz. cup relative to a single use 16 oz. paper cup. Carbon footprint, human health, ecosystem quality, resources and water use are all measured across each product’s lifecycle, from cradle-to-grave. Results show that the more times a Sustain® cup is used, the impact, relative to a paper cup, decreases. The environmental break-even point occurs at around 10 uses of the Sustain® 16 oz. cup, enabling consumers to easily and significantly reduce their impact.

500%

450%

400%

350%

300%

250%

200%

150%

100%

50%

0%

Impa

ct o

f a S

usta

in® 1

6 oz

. cup

rel

ativ

eto

a s

ingl

e us

e 16

oz.

pap

er c

up

Carbon FootprintHuman HealthEcosystem QualityResourcesWater Use

Number of times a Sustain® cup is used

0 5 10 15 20 25 30

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Break even point

13

Community Engagement

PMI’s impact goes beyond its offices and suppliers and into the communities in which the company operates. PMI gives back to these communities where its employees work and play by donating 1% of pre-tax profits to organizations that support causes relating to children, education and the environment. In addition to company-led donations, PMI sponsors programs that empower employees by involving them with those cause-supporting organizations about which they are passion-ate. Employees are given one paid volunteer day per year, and PMI donates quarterly to an organization that is nominated and voted on by PMI employees through the company’s Grassroots Giving Program.

Seattle = 36Bentonville = 3Shanghai = 10 Manila = 4Amsterdam = 1

Total = 54ORGANIZATIONS

NUMBER OF ORGANIZATIONS PMI

MADE FINANCIAL DONATIONS TO:

Total =

1500 HOURS NUMBER OF UNITS OF PRODUCTS DONATED:

Total =4,463 PRODUCTS

VOLUNTEER HOURS:

Seattle = 3,800 Shanghai = 663

Seattle = 771Bentonville = 32Shanghai = 485 Manila = 164Amsterdam = 48

Conservation International

International Red Cross Disaster Relief Fund

World Affairs Council

Conservation Alliance

Big City Mountaineers

Make a Wish Foundation

Walton Foundation

WA Green Schools

Seattle University - Albers School of Business & Economics: China Study Program

ACRS (Asian Counseling Referral Service)

Pike Place Market Foundation

Big Brothers Big Sisters

Northwest Harvest

Treehouse – Back to School

Childcare Resources

AMCHAM Shanghai

Hands on Hands Shanghai

Wanhangdu Road Primary School - Shanghai

Chongming Forest Park - China

Philippine Red Cross

GMA Kapuso Foundation - Philippines

Haribon Foundation for Conservation of Natural Resources - Philippines

RSCC – Reception & Study Center for Children – Philippines

PMI Global Philanthropy focuses on children, education and the environment.

Organizations PMI supported in 2012:

14

Community EngagementSeattle Shanghai PMI Joinese Manila Bentonville Amsterdam

PMI Manila Team supports the Haribon Foundation

PMI Seattle team volunteers at Conservation Alliance Backyard Collective event

PMI Shanghai Team donates MiGo brand products and volunteer time to educate local school children regarding the environment.

PMI’s Amsterdam office donated 2 clean-water wells that were built in the Ugandan communities of Kahanami and Kitonezi. This was a result of PMI’s partnership with the “Trinkwasser” NGO.

PMI Joinease contributed to the rebuilding of an essential bridge in their town and the expansion of a local school.

PMI Bentonville collects food for the Northwest

Arkansas Food Bank.

15

2012 Awards

2012 Seattle Met Magazine “Best Places to Work” Award

2012 Communitas Award for Social Responsibility and Supply Chain Partnership

2012 Inc 500/5000 Fastest Growing Private Companies in America Award

“ What you get by achieving your

goals is not as important as

what you become by

achieving your goals.”

—Henry David Thoreau

PMI believes its products transform the way people experience food and beverage. PMI also believes it can drive global change based on how PMI products are created. As both a brand (Aladdin®, Stanley,® MiGo®) and a supplier, PMI faces some tough challenges in championing both Environmental Steward-ship and Social Responsibility in each area of its business practices. However, PMI will face these challenges undaunted, as it has for the past fif-teen years, in the company’s ongoing journey to seek innovative improvement in all aspects of business.

Collaboration with other brands and customers is essential to successfully increase PMI’s ability to improve its factory sustainability and product

footprint. Customer partners provide leverage and incentive while peer brand collaboration provides leverage and scope increase. The voice of PMI’s customers and consumers is essential to the growth of the company’s environmental and social initiatives.

PMI is proud to be a member of both the IHA (International Housewares Association) and the OIA (Outdoor Industry Association), and is proud to collaborate within these industry organizations on social and environmental improvement.

In 2013, PMI will continue to reduce its environmental footprint while championing social compliance.

Looking Forward

PMI Seattle - Headquarters 2401 Elliott Ave., 4th Floor

Seattle, WA 98121

Tel: 206.441.1400

Fax: 206.441.2823

E-mail: info@pmi-worldwide.com

PMI Bentonville 206 SW 8th St., Suite 116

Bentonville, AR 72712

Tel: 479.715.0311

PMI Shanghai Shanghai Int’l Shipping Building, Rm. 11B

720 Pu Dong Ave.

Pu Dong New District,

Shanghai, China 518111

Tel: 86.21.50366.350

PMI Amsterdam Herengracht 124-128

1015 BT Amsterdam

The Netherlands

Tel: +31.20794.4840

PMI Manila 7F Pearlbank Centre Building

146 Valero St., Salcedo Village

Makati City 1227 Philippines

Tel: 800.251.4535

Fax: 615.370.0546

www.pmi-worldwide.com

www.stanley-pmi.com

www.aladdin-pmi.com

www.migo.com

For questions regarding this report,

please contact Valerie Bone at:

pmi.csr@pmi-worldwide.com

To read our Code of Conduct, visit our website at: www.pmi-worldwide.com

The best way to predict the future is to create it. —Peter Drucker

Built for Life

Delightfully Different