mou

ntai

n ro

se h

erbs

2015

GREETINGS

Shawn DonnilleVice President/Co-Owner

We are proud to present our fourth annual Mountain Rose Herbs Sustainability Report, which highlights our achievements in assessing the environmental aspects of our business practices. This report also provides our customers the transparency they expect. Mountain Rose Herbs is a mission-based company whose motto is people, plants and planet before profit. With this comes a resolute commitment to ethical business practices and environ-mental integrity. These values are the core of every business decision we make.

Since 1987, we have led our industry in sustainable operations, and we have offered guidance and consultation to numerous companies throughout the country. We take pride in being one of the first businesses to tackle these issues with the develop-ment of a zero waste policy, an alternative commuting program, the creation of our own grassroots group called The Mountain Rose River Project, a paid time for community involvement program, and becoming Eugene’s first Salmon-Safe certified company. In 2015, we installed a 100-panel, 25 kWh solar array and a two-car electric vehicle charging station for employees. We are also proud to be the largest corporate sponsor of several nonprofit organizations including Beyond Toxics, Cascadia Wildlands, McKenzie River Trust, Oregon Wild and more!

With this being our fourth Sustainability Report, we are pleased to have systems established for tracking information. The results in this report show where we excel (such as waste diversion), as well as the areas that need improvement (such as water conser-vation practices). With the help of the Sustainable Food Trade Association, we will continue to innovate and improve. We are excited to share our progress with our customers, employees, and community members.

Sincerely,

0405

1013

1618

1921

2425

2829

HIGHLIGHTS & AWARDS

PRODUCTS

ENERGY USAGE

WATER USAGE

FACILITY DESIGN

CAMPUS DESIGN

WASTE & RECYCLING

EMPLOYEE BENEFITS

EMPLOYEE VOLUNTEERISM

MOUNTAIN ROSE RIVER PROJECT

HERBAL EDUCATION

STRATEGIC PHILANTHROPY

TABLE OF CONTENTS

2015 HIGHLIGHTS

2015 AWARDSCharities@Work Corporate Excellence Award

Vice President/Co-Owner, Shawn Donnille, received the Rachel Carson Award

American Herbal Products Association Industry Leader Award

American Package Design Awards for Herbal Smoking Blend & Organic Hydrosols

Diverted 96.2% of company waste

Offset 295.5 metric tons of greehouse gas emissions Collected 597 lbs of food and 304 lbs of clothing during our annual employee-led Food and Clothing Drive

Installed a 25 kWh solar array at main facility

Hosted two Free Herbalism Project events, helping to educate 1,100 people and raising $1,400 for the United Plant Savers

Sponsored 10 Mountain Rose River Projects, removing 12,956 gallons of trash, clearing 10 cubic yards of invasive plants, and planting/mulching 377 trees and native plants

Decreased greenhouse gas emissions by 5.6 metric tons compared to 2014

Completed a packaging evalua-tion of herb bags and labels to ensure we use the most sustain-able packaging option

Completed Salmon-Safe projects including a tree plant-ing and rain garden installation

HIGHLIGHTS & AWARDS 04

Certified organic processor through USDA accredited Oregon Tilth

Rigorous quality control testing in our lab guarantees product integrity

Banned synthetic fertilizers, pesticides, irradiation, and genetic engineering

Achieved the highest possible performance levels from IMO, a Switzerland-based third-party Fair for Life verifier, for the third year in a row

Increased number of Non-GMO Project Verified products from 4 to 19

PRODUCTS 05

We redesigned our organic vanilla bean packaging to be a lightweight, easily recyclable paper box.

In 2015, we started working with Pennsylvania Certified Organic and the Forest Grown Program to verify sustainable forest cultivation of American Ginseng. Mountain Rose Herbs is the first and only supplier to offer this special organic ginseng root and leaf!

Partnering with the United Plant Savers, we hope to expand this program to include other wild medicinal herbal crops in the future.

We also received the first shipment of certified organic, fair trade Tea Tree essential oil from the foothills of Mount Kenya in Africa.

PRODUCTS 06

Aloe Vera GelBeet Root PowderBroccoli Sprouting SeedCastille SoapCitric AcidBarley Grass PowderCocoa ButterCocoa Butter WafersCoconut Oil, refinedCoconut Oil, unrefinedFlax SeedHemp Seed OilPapaya LeafSesame OilSunflower OilWheat Germ OilWheatgrass PowderWheatgrass Sprouting SeedHemp Seed, hulled

SUSTAINABLE PRODUCTS

We expanded our selection of Non-GMO Project Verified products:

PRODUCTS 05

100% of our bulk herbs and spices are sustainably sourced:

82.3% certified organic

15.7% ethically wild-harvested

2.0%cultivated without chemicals

98.7% of our tea blends are certified organic

100% of our seaweeds, sprouting seeds, and seasoning blends are certified organic

SUSTAINABLE PACKAGING

RESPONSIBLE SOURCING

We are committed to using recycled materials inthe packaging of our products. Christine, ourProduct Manager, is constantly looking for the most sustainable packaging options with thehighest post-consumer content, recycled, andrecyclable materials available.

In 2015, we conducted a preliminary packagingevaluation of our plastic herb bags and labels.Every year, we analyze a selection of our currentproduct packaging. Through research, our goal is to use the most eco-friendly packaging availablethat delivers products safely to customers who can then reuse or recycle the packaging.

We work closely with the organic farmers and wild-harvesters that grow our herbs and spices. This partnership extends to the suppliers of our glass containers, metal tins, tea pots, lip balm tubes, and other ingredients we offer.

In 2015, members of the Procurement and Purchasing team visited many of our farmers and wild-harvesters both domestically and abroad. We traveled to Egypt, Mexico, Peru, Washington, and Virginia. We offset carbon emissions associated with flights through Carbonfund.org.

PRODUCTS 08

IN 2015, WE PULLED DATA REGARDING METHOD OF CULTIVATION:

Our customer orders are handpicked with care daily. Thanks to our warehouse and shipping crew, we continue to upgrade and innovate our shipping materials and order fulfillment practices to ensure customers receive their eco-friendly goodies safely and in a timely manner.

SHIPPED BY HAND IN THE U.S.

OTHER HIGHLIGHTSWe collect and reuse or donate packing peanuts, block styrofoam, bubble wrap, and filler paper.

Our packing materials and shipping labels are made with recycled plastic and paper content. Our customers have the option of declining brochures and other printed materials in their orders.

We replaced conventional bubble wrap with Geami’s GreenWrap made from 100% recyclable,

biodegradable, and compostable materials.

PRODUCTS 09

ENERGY USAGE 10

SOLAR ARRAY

ENERGY USAGEWe are proud to have converted to 100% renewable energy by investing in solar power and offsetting our remaining electrical usage to renewable energy sources, credits, and development projects through Carbonfund.org and our local utility’s GreenPower program.

We recognize that the majority of our carbon emissions come from operating lights and electronics in our facility. In 2015, we constructed a solar array and electrical vehicle charging station. We installed a 100-panel, 25kWh system that will produce an estimated 32,604 kWh of power in the first year. Over the expected 35-year lifespan of the system, it is anticipated to offset 470 tons of CO2, which is equivalent to the conservation of 10,980 trees or 48,170 gallons of gasoline!

ENERGY SOURCE UNIT AMOUNT CO2 CONVERSION FACTOR MTCO2 EMISSIONS % EMISSIONS

Electricity kWh 640,738 0.00037 239.4 80%

Natural Gas Therms 9,154 0.00950 48.6 16%

Fuel Gallons 1,253 0.00530 11.5 4%(Biodiesel + Gasoline)

TOTAL EMISSIONS 299.5

Since 2013, our Facilities Manager, Mike, has used the EPA Energy Star Portfolio Manager to help us track energy, water, and greenhouse gas (GHG) emissions.

We calculated our energy usage in electricity, natural gas, and fuels such as gasoline and biodiesel for company-owned vehicles and employee vehicles used for business trips. From this, we estimated the GHG emissions associated with operations.

ENERGY USAGE

There was only a nominal change in energy use broken down by source.

80% 80%

17% 16%

3% 4%

2014 2015

ELECTRICITY

NATURAL GAS

FUEL

ENERGY USAGE 11

We offset 295.5 metric tons of carbon emissions with Carbonfund.org in 2015!

We tracked computers and monitors that were left on overnight and held departments accountable.

We used the Cascadian Courier Collective bike service to distribute our posters for the Free Herbalism Project, reducing our carbon footprint.

OTHER HIGHLIGHTS

ENERGY USAGE

TOTAL GHG EMISSIONS (MTCO2E)

2015

299.5305.1

2014

That is the equivalent amount of carbon sequestered by 5.3 acres of US forests in one year!

GHG Emissions decreased by 5.6 MTCO2

ENERGY USAGE 12

2014 2015

150,000

300,000

450,000

600,000

WATER USAGE COMPARISON (GALLONS)

To determine water usage in production and operations, we gathered all of our water bills for 2015 and calculated usage for our main facility.

WATER USAGE

While water consumption increased over the past few years, we will institute water conservation practices including low-flow toilets, flushless urinals, and a thorough landscaping irrigation assessment in 2016.

WATER USAGE 13

POTABLE WATER

DRINKING WATER

TOTAL

376,000

5,460

381,460

98.6%

1.4%

547,000

5,920

552,920

98.9%

1.1%

2014 2014 2015 2015

Climate change presents an undeniable challenge for food security and access to fresh water as the human population grows. Mountain Rose Herbs recognizes the power businesses have to impact water quality and availability for people, plants, and the planet. We are committed to organic farming practices that keep toxins off our land and out of our waterways. We also support organizations and government agencies working to protect our groundwater supply and riparian corridors. Through our fierce dedication to sustainable practices, we promise to conserve water in our production facility and landscaping in partnership with Salmon-Safe.

WATER USAGE 14

Repurposed redwood slabs into shelving,

counters, and signs

Bamboo plywood for countertop and sign

frames

Stools made from repurposed cedar logs

Utilized L.E.D. low voltage lighting fixtures

Purchased fabric from Sunbrella, a zero waste

company

Burlap backdrop, redwood fencing, and

corrugated panels made from recycled materials

Printed graphics on natural cotton material

Structure and storage crates constructed

with FSC Certified cedar and plywood,

low-emitting materials (no added urea-formaldehyde),

and low VOC stains and finishes

In 2015, working with a local builder, we designed and constructed a new marketing booth using locally sourced sustainable building materials. These include:

NEW SUSTAINABLE BOOTH

We use recycled or reclaimed materials whenever possible for construction and repair projects, in-line with our Zero Waste Policy.

We use 22 motion sensors for lights, and spent light bulbs are recycled.

We use Energy Star rated appliances in the office and production.

We use Mountain Rose Herbs lemon essential oil and grapefruit seed extract to make an environ-mentally-friendly surface cleaner.

OTHER HIGHLIGHTS:

Mountain Rose Herbs operates in three build-ings with a total of 117,938 sq. ft. in Eugene, Oregon. Our main facility was built to LEED (Leadership in Energy & Environmental Design) standards before the certification existed.

In 2015, we upgraded to touchless paper towel dispensers and donated the gently used dispensers to Eugene’s Habitat for Humanity ReStore.

FACILITY DESIGN

FACILITY DESIGN 16

“Mountain Rose Herbs is the yardstick for how success should be measured.‘People and planet before profit.’ Your practices are an inspiration to all businesses.”Angie R. Marzano, Director of Business Development & RE:think, BRING

CAMPUS DESIGNSince receiving our Salmon-Safe certification in 2013, we created a five-year action plan to conserve water, restore riparian habitat, limit fertilizer use, and improve our stormwater treatment system.

Throughout 2015, we hosted numerous tours of our sustainable campus and trout-friendly and salmon-safe landscaping for business owners, community members, educators, advocates, and professional landscapers.

CAMPUS DESIGN 18

FEBRUARY

JULY

As part of the Mountain Rose River Project, with the assistance of our land-scaper and Friends of Trees staff, we planted 19 native trees around the retention pond and employee lunch area.

Employees removed 10 cubic yards of invasive blackberry and teasel.

AUGUSTWe installed 10 educational landscaping signs including: one sign describing the function and value of rain gardens, two signs promoting Oregon Tilth’s Accredited Organic Land Care program, and seven tree identification signs with common and botanical names.

SEPTEMBERWe completed our first rain garden. Native species planted in the garden include white alder, mock orange, red flowering currant, shiny leafed spirea, and creeping Oregon grape.

WASTE & RECYCLING

WASTE & RECYCLING 19

Our first priority is to make sure we only use what we need, and that’s why we adopted our Zero Waste Policy in 2007! What’s left is reused, reclaimed, recycled, or composted. Consistent employee education helps us achieve our zero waste goals. We have staff trainings, instructional signage, and we are always looking for creative new ways to divert waste from the landfill. New in 2015, we began collecting nitrile gloves and hair/beard nets to recycle through TerraCycle’s Zero Waste Boxes.

On November 27, 2015, we promoted Buy Nothing Day! Instead of playing into commercialism on Black Friday, we encouraged our staff and customers to spend time with family, volunteer, and enjoy nature.

In 2015, we underwent an assessment and main-tained our RE:think Business Certification from BRING.

Our goal is to become zero waste certified by 2016 and achieve 100% waste diversion by 2020!

2015 POUNDS PERCENTAGERECYCLING 234,251 69.8 %

COMPOST 88,492 26.4%

WASTE 12,837 3.8%

TOTAL 335,580 100%

Paper & Special Materials 104,004 31.0%Community Partnerships 110,993 33.1%Comingled Recycling 16,200 4.8%Repurposed Materials 3,054 0.9%

Wood and Scrap Herbs

Landfill 12,279 3.7%Hazardous Waste 558 0.1%

DIVERSION RATE

89.2% 92.8% 93.6% 96.2% 100%2012 2013 2014 2015 2020

GOAL

Recycling

Compost

Waste

WASTE & RECYCLING

WASTE & RECYCLING 20

Medical, Dental, and Vision Coverage

Term Life Coverage

Supplemental Insurance by AFLAC

Paid public holidays

401K plan with matching funds from Mountain Rose

Herbs

On-site herbal education courses

Tuition Reimbursement Program

Up to 40% off employee purchases

Personal finance education

Former employees who worked with us for at least

six months and left in good standing receive a

LIFETIME 10% discount

Mountain Rose Herbs takes every measure to ensure a welcoming, safe, and enjoyable work environment for employees by providing competitive benefits.

EMPLOYEE BENEFITSMountain Rose Herbs is an EarthShare Oregon business partner offering employees an easy way to contribute to 70+ environmental nonprofits. Through workplace giving, employees make tax-deductable contributions directly from their paychecks. In 2015, 35 employees participated in EarthShare Oregon and pledged $4,328!

In 2015, we were honored in New York City with the Charities@Work Corporate Excellence Award. This is the top award given annually to one company for overall excellence in employee engagement and corporate social responsibility. Companies are selected based on excellence in workplace giving campaigns, employee engagement, and overall leadership involvement in all facets of social and corporate citizenship.

EARTHSHARE

CHARITIES@WORK

EMPLOYEE BENEFITS 21

EMPLOYEE BENEFITS 22

Mountain Rose Herbs’ Green Team is an employee-led committee that promotes environmentally sound and socially conscious operating practices such as reducing waste, conserving energy and water, encouraging use of alternative transportation, and informing and motivat-ing co-workers about workplace giving and volunteer opportunities.

In 2015, Mountain Rose Herbs employees founded a hiking club, book club, fantasy football league, and belly dancing class.

Employee safety and satisfaction is paramount at Mountain Rose Herbs. This includes ergo-nomic work stations and machines. In 2015, we acquired an emulsifier, adjustable work tables, a hot knife, and a cream dispenser to reduce repetitive motion injuries and unneces-sary muscle strain.

Our Safety Manager, Rick, began sharing information every Wednesday about different wellness related topics with staff. Rick also achieved ergonomic assessor certification from SAIF and began installation of sit/stand adjustable workstations for employees.

SAFETY & ERGONOMICS

In an effort to reduce CO2 emissions and elevate healthy living through movement, Mountain Rose Herbs employees participated in the local 2015 Business Commute Challenge and came in 4th place in our metro area! We had 47 employees carpool, walk, bus, or cycle to work during a rainy week in May. We logged 133 trips in just seven days! In total, all participating businesses saved 92,548 miles of single occupancy cars on the road and 96,254 lbs of CO2 emissions. As a group, we burned 131,441 kcals.

Mountain Rose Herbs offers one of the nation's most comprehensive commuting programs, paying substantial cash incentives to all employees who carpool with fellow employees, ride the bus, bicycle, or walk to work.

We pay staff members who carpool and ride the bus $0.15 per mile and $0.25 per mile for biking and walking. Every year, we award the employee who logs the most miles in each category an additional $250. Employees have access to a covered and locked bike garage, indoor lockers, showers, and a bicycle repair kit. In 2015, Mountain Rose Herbs incentivized alternative modes of transportation and paid our employees over $9,500!

CARPOOL POLICY & INCENTIVE BUSINESS COMMUTE CHALLENGE

EMPLOYEE BENEFITS 23

We encourage employees to give back to our community. Through the Paid Time for Community Involvement Program, employees are paid 24 hours every year to volunteer with a nonprofit or local organization of their choice.

EMPLOYEE VOLUNTEERISM

In 2015, Mountain Rose employees volunteered 660 hours!

EMPLOYEE VOLUNTEERISM 24

MOUNTAIN ROSE RIVER PROJECT

The Mountain Rose River Project is a grassroots action campaign coordinated and funded entirely by our company. Each year, employees manage restoration projects through our Paid Time for Community Involvement Program.

We also partner with numerous state, federal, and nonprofit agencies focusing on protecting riparian ecosystems, stream health, and fish habitat.

RIVER PROJECT 25

For the second year, we adopted two native seed plots in Friends of Buford Park’s Native Plant Nursery in Eugene, including a plot of Yarrow and one of Trillium.

In 2015, we participated in The Great Willamette River Clean-up alongside almost 400 community volunteers!

2015 MOUNTAIN ROSE RIVER PROJECT STATS:

10

556

1,585

12,956

10

377

restoration projects led or sposored

community volunteers engaged

hours logged

gallons of trashremoved

cubic yards of invasive plants removed

trees and native plants planted/ mulched

OTHER HIGHLIGHTS:

RIVER PROJECT 26

HERBAL EDUCATION 28

Mountain Rose Herbs hosts the Free Herbalism Project each year. This series of free lectures for the community features renowned herbalists from around the county. Not only are the lectures free to the public, we also serve free organic tea and feature live music. All funds raised from merchandise sales at the event are donated to a free clinic or nonprofit.

In 2015, the Free Herbalism Project helped to educate 1,100 people and raise $1,400 for the United Plant Savers.

We created free recipe books to distribute at herbal conferences, tradeshows, local events, and workshops.We have an ongoing partnership with the Herb Fairies online children’s course.We celebrated Organically Grown in Oregon Week in September.

OTHER HIGHLIGHTS:

HERBAL EDUCATION

STRATEGIC PHILANTHROPY 29

We donated 597 lbs of food (more than doubling last year’s record) to Food for Lane County and 304 lbs of clothes (including an entire 55 gallon drum of socks) to Occupy Medical during the annual employee-led Food and Clothing Drive.

We contributed $5,000 in matching funds to Cascadia Wildlands, McKenzie River Trust, Oregon Wild, and Western Environmental Law Center.

We supported the American Herbal Products Association’s Osha Sustainability Study with a $2,000 matching gift.

We adopted Trillium (an at-risk healing herb) through United Plant Savers’ program.

We joined the Organic Seed Alliance as a supporting business member.

Supporting our community through financial contributions, in-kind donations, and volunteer hours is a core part of our company culture. We work directly with local and national nonprofit organizations through charitable giving, event sponsorships, matching gifts, conservation work, and plant-related projects.

STRATEGIC PHILANTHROPYCHARITABLE GIVING

OTHER HIGHLIGHTS

In 2015, we donated over $109,000 in cash sponsorships andnearly $17,000 of in-kind support to nonprofits and freeclinics across the U.S.

NONPROFIT SPOTLIGHT

Beyond Toxics is an organization that works to guarantee environmental protections and health for all communi-ties and residents. They expose root causes of toxic pollution and help Oregon communities find effective, lasting solutions.

In 2015, we formulated the organic Pollinator Tea as a tribute to our native Pacific Northwest pollinators. Mountain Rose Herbs donated 5% of the annual sales from this special blend to Beyond Toxics and their Save Oregon’s Bees Project.

BEYOND TOXICS

“Mountain Rose Herbs is our biggest business supporter, and they look out for us and follow our campaigns every year. Those contributions have really helped us increase our capacity to take unconventional approaches to challenging bad environmental policies. We’ve gained ever-increasing confidence with the support of Mountain Rose Herbs. Beyond Toxics is now a major player in changing environmental protec-tion policy in Oregon!” – Lisa Arkin, Executive Director, Beyond Toxics

Mountain Rose Herbs is committed to sustainable business practices, organic agriculture, social equality, and inspiring other businesses to put

people and planet before profit. We have staff currently sitting on the Board of Directors or serving on committees for these organizations: American Herbal Products Association, Cascadia Wildlands, GreenLane Sustainable

Business Network, Provender Alliance, and the Willamette Valley Sustainable Foods Alliance. We encourage anyone with an interest in herbal products or

the natural food industry to check them out!

Thank you to the extraordinary staff at Mountain Rose Herbs, our vendors, and our customers who have helped make us an herbs, health,

and harmony company since 1987.

For more information about Mountain Rose Herbs’ sustainability programsvisit www.mountainroseherbs.com or contact Alyssa Lawless,

Director of Sustainability, sustainability@mountainroseherbs.com.

Thank you