2004 CSR Report - Timberland Responsibility

The Timberland Company 

2004 Corporate Social Responsibility Report

Table of contents 

Make it better 

Message from the CEO page 3 

Report scope page 4 

Timberland profile page 6 

Key performance indicators page 9 

Corporate governance page 12 

Stakeholder engagement page 15 

Global human rights page 17 

Environmental stewardship page 26 

Community involvement page 36 

Timberland employees page 43 

GRI Index page 48 

Timberland, , Make it better, Timberland PRO, and Path of Service are 

trademarks or registered trademarks of The Timberland Company. Vibram and 

EcoStep are trademarks or registered trademarks of Vibram S.p.A. All other 

trademarks or logos that appear in this copy are the property of their respective 

owners. ©2005 The Timberland Company. All rights reserved. 

The Timberland Company 2004 CSR Report

Headline A Message Text from the CEO 


Accuracy and honesty. That’s what this report is about. 

It’s been several years since Timberland last reported publicly on our activities and efforts to be a good corporate citizen. Which is not to say we haven’t had any 

fits and starts of a Corporate Social Responsibility (CSR) report in that time – we’ve had several. But each time, we ultimately decided that it wasn’t enough – there 

were too many holes, too many questions. And, in this age of too many voices and not enough time to listen, we felt it best not to add one more voice to the 

conversation unnecessarily. 

But now, we have something – several things – that we’d like to say. 

And so begins Timberland’s third report on Corporate Social Responsibility. What you’ll find inside is a lot of what you’d expect – updates on the good work 

we’re doing to strengthen communities, protect our environment and improve global human rights. Information on the important partnerships we’ve forged with 

like-minded agencies, experts and organizations to increase the impact of our positive efforts. Recognition that, although we’re making progress, there’s still a lot 

of work ahead of us. 

I hope you’ll also find a few things you might not expect. For starters, we decided to disclose a list of the factories that currently manufacture Timberland ® products. 

Plain and simple, here for the viewing. The topic of global labor standards has long been taboo – many companies don’t like to talk about where their products are 

made, or by whom, or under what conditions. And yet, improving global labor standards is one of the greatest challenges our industry faces. We can’t improve what 

we don’t understand, and we can’t expect others – partners, consumers, employees – to help us face this challenge if we don’t educate them. And so as a first step 

to promote that understanding and education, here is Timberland’s factory list. 

An accurate, honest report must be built on a sound framework, and so ours is based on the standards of the Global Reporting Initiative (GRI). The GRI is an 

independent, multi-stakeholder institution – comprised of individuals representing such diverse interests as business, the environment, human rights and labor – 

whose mission is to develop and disseminate globally acceptable sustainability reporting guidelines. The GRI guidelines are fast becoming the standard for corporate 

performance reporting, and we feel it’s an important, positive step for us to measure Timberland’s policies and practices against their expectations. 

The balance of this report focuses, I believe, where it should: on the innovation and passion that we put forth, everyday, in an effort to be a socially and 

environmentally responsible corporate citizen – on the accomplishments we’ve achieved and the challenges we’ve faced and continue to face as we work to 

better our global community. Our directive – always – is to Make it better. Making it better guides our actions and is the mandate against which we measure our 

accomplishments. Like much of our world, it’s simple to understand and more difficult to execute, but we remain committed to meeting the challenge of making it 

better in all that we touch and everything we do. 

Even as we publish this report, I look forward to making it better. With future reports, we intend to include greater integration of stakeholder 

feedback, more segmented reporting, and a better determination of issues that are significant to the apparel and footwear industry. 

CSR reporting is constantly evolving, and we intend to evolve along with it. 


2004 CSR Report

Report scope 


This report covers Timberland’s global corporate social responsibility activities 

for fiscal year 2004. Most of the data included is from that year, with the 

exception of our factory list, which catalogs the factories that manufactured 

goods for a majority of the 2005 Timberland ® product line. Those instances in 

which we report only on U.S.-based activities are clearly indicated. 



Report scope 


An Important First Step 

This is Timberland’s first CSR report based 

on the guidelines of the Global Reporting 

Initiative (GRI), a standard now accepted 

across our industry that provides a level of 

credibility, consistency and comparability. A 

previous, non-GRI report was last published in 

2003. In instances where we did not report on 

GRI indicators, we provided an explanation for 

the omission in the GRI Index. 

In some instances, our impact was immaterial 

or we lacked internal data to report 

sufficiently. In the future, our goal is to narrow 

that gap and continue to report on impacts 

that are material and strategically important. 

We are committed to achieving accurate reporting and verification 

This report represents our best attempt to enact two of our core values – integrity and humility – as they 

relate to Corporate Social Responsibility (CSR) reporting. It is our goal to be as transparent as possible, 

and through the process of reporting, create dialogue and build trust. However, we know there is room 

for improvement. 

Two challenges we faced this year were in determining materiality and in externally verifying the data. We 

see materiality as a driving principle of reporting at Timberland. For 2004, our Ceres stakeholder group 

provided a pre-publication assessment, which is a first step. Going forward, we plan to create a broader 

stakeholder engagement process, incorporating the input of shareholders, socially responsible investors 

(SRIs), customers, employees, academics, non-governmental organizations (NGOs) and business partners 

to continually enhance the transparency of our reports. This year we were able to provide internal assurance 

for every data point and its characterization. As we go forward, we will explore the viability of undertaking 

an external verification program. We know such programs enhance the credibility and auditability of CSR 

reports. We look forward to discussing with our stakeholders how best to build and execute a long-term 

sustainable verification program. 

Timberland Welcomes Your Feedback 

Incorporating stakeholder feedback is an 

important step in the reporting process. We see 

this report as an opportunity to engage you in a 

discussion about the issues that concern you the 

most. Please send your suggestions or concerns 

to csrinfo@timberland.com. 

Through stakeholder engagement we aim to evolve our metrics and systems by which we collect and analyze 

data. This will help ensure the relevancy of our reports. Along with several other companies, we are working 

with the GRI to develop a set of indicators specific to the footwear and apparel industry. We intend to use this 

set of indicators in conjunction with our improved metrics in future reports. 

With the publication of this report, we are also disclosing our factory list. As a result, a central focus of this 

report is on our efforts to improve the lives of workers who touch Timberland ® products worldwide. While we 

have closely benchmarked how other companies have reported on labor and human rights impacts, more 

work needs to be done to determine which impacts are most material and how to effectively report 

that data. 

The Timberland Company 2004 CSR Report

Timberland profile 


The Timberland Story began in 1918 when Timberland founder Nathan Swartz began 

his bootmaking career as an apprentice stitcher. He later bought the company he worked for, the 

Abington Shoe Company, welcomed his sons into the company, and launched the Timberland ® brand 

in 1973. In the 1980s Sidney Swartz, his son, took the reigns as Timberland expanded internationally. 

Sidney now serves as the Chairman of our Board with his son Jeff Swartz now serving as President 

and Chief Executive Officer. Under Jeff, Timberland has grown from a premium-quality boot 

and clothing company to a socially responsible global corporation. Timberland’s heritage as a 

family-owned business and status as a public company make it unique. The Swartz family owned 

approximately 20% of Timberland’s shares outstanding and approximately 69% of its voting power 

as of September 30, 2005. 





Brand and Products 

Our goal is to become an authentic outdoor brand of choice globally through our two 

primary brands, Timberland ® and the Timberland PRO ® series. Under the Timberland ® 

brand we offer a broad variety of footwear and apparel products for men, women and 

children. The Timberland PRO ® series serves the needs of a distinct customer group: 

skilled tradespeople and working professionals. 

Timberland set a new standard for craftsmanship, durability and protection when we 

introduced our authentic waterproof leather boot in 1973. Since then, footwear has 

remained the cornerstone of our business, representing 78% of total sales in 2004. 

Through constant innovation and keen attention to the needs of our customers, we 

grew our global footwear business by 13% to nearly $1.2 billion in 2004. 

Timberland’s apparel line, which represented 22% of sales in 2004, is an integral 

part of our business, allowing us to provide an integrated offering of outdoor-inspired 

footwear and apparel to our customers. Our strategy in apparel is to tailor our 

products to better meet the tastes of customers around the world. Our efforts resulted 

in an 8% increase in apparel sales worldwide in 2004. 

Building a global lifestyle brand 

Timberland is a global leader in the design, 

engineering and marketing of premiumquality 

footwear, apparel and accessories for 

consumers who value the outdoors and their 

time in it. Timberland ® products are sold in 

approximately 90 countries worldwide through 

leading department and specialty stores as well 

as more than 200 Timberland ® retail stores. 

Timberland’s commitment to “Make it better” 

reflects our dedication to making quality 

products and transforming the communities in 

which we live and work. 

Timberland stock is traded on the New York 

Stock Exchange under the ticker symbol TBL. It 

is listed on KLD’s Domini 400 Social Index and 

was named one of the world’s top 20 sustainable 

stocks by Sustainablebusiness.com. 

global operations 

Timberland has its world headquarters in Stratham, NH. We operate 227 additional 

facilities globally, including 11 regional offices, 3 distribution centers, 211 stores and 

factories in the Carribbean. These Timberland-owned factories, which produced 9% 

of our footwear in 2004, play a key role in providing world-class production capability 

with greater flexibility and short lead-time support to Timberland’s important U.S. 

market. They also enable us to transfer operational best practices to our sourcing 

partners. Our products are manufactured in 35 countries around the world through 

roughly 261 contract factories (see map in sidebar). In 2004, 91% of our footwear was 

produced in Asia. 

factories that produce timberland ® products worldwide 





RECENT NEWS 

On July 6, 2005, Timberland announced plans to close 

our manufacturing facility in Isabela, Puerto Rico at 

the end of the year – a difficult decision that will end 

Timberland’s 24-year history of shoe making in Puerto 

Rico, and leave 316 hard-working members of Team 

Timberland without jobs. 

We believe that doing well and doing good are inextricably 

linked — that a business can create profit for shareholders 

and create positive impact in communities simultaneously. 

But there are times when the balance of doing well and 

doing good is not so balanced. The strategic decision 

to consolidate operations in our world-class Dominican 

Republic-based facility will enable us to operate more 

efficiently, since the expiration of a tax benefit will make 

our Puerto Rico production costs no longer competitive. 

So the decision to close our facility in Puerto Rico makes 

good business sense. But on a human level, for the 316 

Isabela employees who will lose their jobs, the decision is 

profound, painful and life-changing. 

financial performance 

Timberland delivered record 2004 results, reflecting continued progress in developing the Timberland ® brand portfolio, 

with a significantly enhanced global reach and a diversified presence across a range of product categories spanning 

utility, casual and outdoor end uses. We also continued to benefit from our focus on delivering superior customer 

service, leveraging a strengthened value chain that supported stronger growth and improved operating efficiencies. 

Please see our 2004 annual report for more details on our financial performance. 

sales ($000) 

785,675 

825,846 

879,332 

317,492 

402,252 

478,960 

81,049 

99,178 

121,302 

6,770 

14,847 

20,986 

1,190,896 

1,324,123 

1,500,580 

2002 2003 2004 

2002 2003 2004 

2002 2003 2004 

2002 2003 2004 

2002 2003 2004 

united states 

Europe 

asia 

other 

total 

In an effort to support those members of our Timberland 

family impacted by the facility closure, we’ve prepared a 

best-in-class severance package that includes retirement 

enhancements for those nearing retirement age, access to 

outplacement and career counseling and the guarantee of 

continual health benefits for all 316 employees for up to 

18 months. 

taxes ($000) 

36,240 

48,807 

63,803 

2002 2003 2004 

federal 

7,159 

8,841 

10,981 

2002 2003 2004 

state 

420 

390 

380 

2002 2003 2004 

puerto rico 

5,704 

8,186 

10,701 

2002 2003 2004 

foreign 

49,523 

66,224 

85,865 

2002 2003 2004 

total 

The day after the factory closure announcement was made 

in Isabela, 15 employees utilized their Path of Service TM 

program hours at The Vieques Youth Leadership Initiative, 

an organization dedicated to youth mentorship and 

sustainable eco-tourism – a humbling, inspiring gesture of 

continued commitment to Timberland values. 

net income 

($000) 

95,113 

117,879 

152,693 

2002 2003 2004 

earnings per share before 

cumulative effect of change 

in accounting principle (EPS) 1 

1 

Adjusted for 2-for-1 stock split 

effective May 3, 2005 

1.18 

1.62 

2.14 

2002 2003 2004 

EPS 



Headline Key performance Text indicators 



We have focused our 2004 CSR report on key indicators in four major areas of Corporate Social 

Responsibility: Global Labor Standards, Environmental Stewardship, Community Involvement 

and Timberland Employees. These indicators help us measure over time how well we are doing 

at enacting our values and upholding our commitment to Make it better. 



Key performance indicators 


Indicators that “Make it Better” 

Our Key Performance Indicators provide us with a dashboard that can quickly tell us how we are doing in each of the four major functional CSR areas: Global Human Rights, 

Environmental Stewardship, Community Involvement and Timberland Employees. Because of the fluctuating nature of CSR reporting, we realize that some metrics may change 

in future reports. We have, however, tried to hit upon the indicators that best record Timberland’s impact on society and our planet. 

Portion of Value 2005 

metric chain Affected 2003 2004 Target More Information 

Global Human Rights 1 

Factory Coverage Percent of Factories Assessed Production * 94% 100% 

See ”Global Human Rights” section, 

pages 17–25 

Environmental Stewardship 

Production, Transportation, * 

Climate Change Reduction of Carbon Emissions from 2002 Baseline 2 Sales, Procurement 

15% 17% 

Recycled Materials 

Percent of Line Items in Footwear Specifications that 

Incorporate Sustainable Material 

Organic Materials Organic Cotton as a Percent of Total Cotton Purchases Procurement, Customers * 2.1% 5% 

See “Environmental Stewardship” 

Procurement, End of Life * * 

Develop section, pages 26–35 

baseline 

Renewable Energy Percent of Energy Purchased from a Renewable Source Production, Sales, Transportation 3.8% 4.3% 6.0% 

Community Involvement 

Charitable Contributions Donations as a Percent of Operating Income Customers 2.3% 2.1% 2.0% 

Benefit Utilization Rate (BUR): Percentage of employees that Customers, Sales, Production, 

* 69.7% 70% 

use at least one hour of service 

Corporate Activity 

See “Community Involvement” 

Path of Service TM section, pages 36–42 

Hours Utilization Rate (HUR): The percentage of hours used Customers, Sales, Production, 

24.8% 28.8% 34.6% 

for service compared to hours available 

Corporate Activity 

Timberland Employees 

Employee Satisfaction Percent of Employees Satisfied with Position at Timberland Sales, Production, Corporate Activity 74% 76% 80% 

Gender Inclusivity Percent of Women in Management Roles Sales, Production, Corporate Activity * 31% 42% 

Development Hours Average Number of Training Hours per Employee Sales, Production, Corporate Activity 30 39 44 

See “Timberland Employees” 

section, pages 43–47 

1 

We intend to include additional key performance indicators in the next report for the Global Human Rights section. Beyond coverage (i.e., audits performed), we will report on our progress and the real impact of our actions. Progress indicators will measure how we performed against the standards that exist in the supply chain. Real impact 

indicators will judge how our actions have affected the worker’s life, needs and aspirations. 2 2002 GHG emissions baseline is 36,000 metric tons of carbon. * Data not available. 


2004 CSR Report 10

Key performance indicators 


K E Y P E R F O R M A N C E I N D I C A T O R S T H R O U G H O U T O U R V A L U E C H A I N 

- Purchase of 

Organic Cotton 

TRANSPORTATION 

PROCUREMENT 

Extracting and 

processing raw 

materials 


PRODUCTION 

Manufacturing and 

packaging of 

Timberland ® products 

- Factory Assessments 

- Reduction of 

Carbon Emissions 


- Footwear that 

Incorporates 

Sustainable Material 

END OF LIFE 

Disposing of product 

after its useful life has 

expired 

CUSTOMERS 

Purchasing and using 

our product—including our 

interaction with the 

community 

SALES 

All activity 

occurring at our 

retail facilities 

- Purchase of Renewable Energy 

- Employee Satisfaction 

- Charitable Contributions 

- Path of Service TM 

(Community Service) 



Corporate governance 


Throughout our history, Timberland has been guided by values that emphasize trust at all 

levels of the organization. Our policies and practices help to ensure that our Company is 

managed with integrity and in our shareholders’ best interests. In March 2004, the Board of 

Directors updated and affirmed the Company’s Governance Principles and Board Committee 

Charters, which, along with the Company’s Code of Ethics, provide the framework for the 

governance of our Company. 





CODE OF ETHICS 

Timberland’s Code of Ethics sets forth the 

guiding principles of business ethics, outlines 

specific laws that must be adhered to and 

reflects two general principles to be used 

in making decisions. The first is to take no 

action which could in any way violate the law, 

or, could negatively reflect on the employee 

or the Company. The second is to not hide 

a problem. The Code of Ethics and related 

policies address the following issues: 

• Insider trading 

• Anti-trust and competition 

• Corruption and bribery 

• Equal opportunity 

• Respectful treatment of others 

• Non-harassment 

• Accuracy of business records 

• Employee conflict of interest 

• Appropriate use of company funds and 

expense accounts 

• Confidentiality of information 

• Political contributions 

• Freedom of expression 

• Consumer privacy 

Our corporate governance standards and our ethics compliance programs are set at the highest level, starting 

with our Board of Directors. Timberland’s Board of Directors currently has eleven members, including Sidney 

Swartz, Timberland’s Chairman, and Jeffrey Swartz, Timberland’s President and Chief Executive Officer. The 

remaining nine members are non-employee Directors. The majority of Timberland’s Directors are independent 

as defined by the New York Stock Exchange. 

Timberland’s Governance Principles address matters such as the composition and size of the Board, 

director qualifications, independence of directors, director responsibilities, frequency of Board meetings 

and the Board’s access to members of management and outside experts. Shareholders may send written 

communications to non-management members of the Board through the Secretary of the Company. 

The Board has the following three standing committees: 

• The Audit Committee, which is comprised solely of independent, non-employee directors and assists the 

Board in its oversight of labor compliance and the Company’s financial reporting process, including the 

Company’s system of internal controls 

• The Governance and Nominating Committee, which reviews the organization, role and structure of the 

Board, advises the Board on corporate governance matters, considers and recommends candidates for 

election to the Board, oversees the evaluation of the Board and its committees and advises the Board on 

director compensation and benefits 

• The Management Development and Compensation Committee, which is comprised solely of outside 

(non-employee) directors and assists the Board in fulfilling its responsibilities to oversee the Company’s 

compensation, stock-based compensation and other benefit plans, and development of its management 

personnel. For specific information about Executive Compensation, see Timberland’s 2005 Proxy Statement. 





Business Ethics 

Because the Code of Ethics is not intended to address every specific situation, we strongly encourage dialogue between employees 

and their supervisors to make everyone aware of situations that may give rise to ethical questions. We also seek to preserve open 

communication at all levels, which include immediate supervisors, Human Resource Managers or any other member of the Timberland 

management. In addition, the 24-hour Integrity Line is a confidential hotline available for employees to report any suspected violations 

of the Code of Ethics or related policies. 

Corporate Social Responsibility 

Ethical governance forms the basis of our commitment to corporate social responsibility. Our CSR efforts are spread across numerous 

departments including Code of Conduct, Environmental Affairs, Social Enterprise, Human Resources, External Affairs, and Investor 

Relations. These department directors work with Business Unit leaders to incorporate CSR strategies and targets into the Company’s 

long range plans. CSR direction and guidance are ultimately provided by our President and Chief Executive Officer. 

As part of our commitment to corporate social responsibility, we have endorsed the following principles: 

• Ceres 

• The Universal Declaration of Human Rights 

• International Labor Organization (ILO) Core Conventions 

We also adhere to a voluntary Code of Conduct (based on the ILO Core Conventions and the Universal Declaration of Human Rights) 

that prohibits child labor, stipulates that all employment must be voluntary and sets standards for freedom of association, labor hours, 

compensation, workplace conditions and health and safety. 



Stakeholder engagement 


We’re bootmakers – and we know that 100 pairs of hands touch every classic 

boot as it moves through production. Strengthening our global community 

also requires the coordination of many hands. Our ability to do well and 

do good on a consistent basis relies on the authentic engagement of our 

stakeholders. It requires the leadership, expertise and alignment of effort to 

create sustainable change. 



Stakeholder engagement 


Stakeholder group 

examples of Engagement 

REPORT Reference section 

Encouraging an open dialogue 

that leads to positive change 

Through stakeholder engagement, our goal 

is to foster candid dialogue that challenges 

assumptions, increases transparency and pushes 

innovation. As we build trust, these partners 

deepen our understanding of our impact on the 

world, advancing our approach to environmental 

stewardship and social justice. 

Our stakeholders include groups or individuals who 

can affect or are affected by the achievement of 

Timberland’s business objectives. The chart on the 

right lists these stakeholders and describes some 

ways in which we work collaboratively on 

CSR efforts. 

Employees 

Customers 

Communities 

Shareholders 

• The Global Employee Survey 

• Civic engagement: Path of Service TM 

program and Service Sabbatical 

• Integrity Line (a 24-hour confidential hotline) 

• Surveys and focus groups 

• Sales meetings 

• Civic engagement: Serv-a-Palooza, 

Community Builders Tour, PRO Skills Tour 

• Civic engagement: Community Builders Tour, 

Earth Day 

• Employee membership on non-profit boards 

• Corporate investment 

• Annual and quarterly reports 

• Annual shareholder meetings 

• Quarterly analyst calls, conferences and 

regular meetings 




Corporate Governance, 

Timberland Profile 

A strategic priority is to bring greater focus and 

cohesion to stakeholder engagement. We intend to 

create a forum for dialogue, analysis and exchange 

of best practices with our stakeholders, including an 

annual address by our President and CEO, Jeffrey 

Swartz, in which he will provide a candid evaluation 

of our CSR performance. We also intend to create a 

partnership strategy across the CSR department. 

This initiative will be launched in early 2006 and will 

be discussed in our 2007 CSR report. 

For this report, Timberland received feedback 

from our Ceres stakeholder group during a prepublication 

review session. Where possible, we 

incorporated its comments. Looking forward, we 

intend to further integrate our Ceres group and 

other key stakeholders into the reporting process. 

Suppliers 

Non-Governmental 

Organizations 

Media 

Government Entities 

Business Colleagues 

• Factory assessments and capacity building 

• Human rights initiatives 

• Annual supplier summit 

• Direct collaboration or joint programs 

on CSR objectives 

• Annual planning and review 

• Focused feedback on CSR activities 

• Meetings and conferences 

• Press releases 

• Meetings and briefings 

• Engagement on regulatory issues 

• Adherence to laws where we operate 

• Industry alliances and associations 

(e.g., Two Ten Foundation) 

• CSR ventures (consumer and community) 

• Conferences and trainings 

Global Human Rights 

Environmental Impact 

Global Human Rights 


The Timberland Company 2004 CSR Report 16

Global human rights 


One of Timberland’s bold goals is to be the reference brand for social 

accountability. This goal is reflected in our objective to ensure basic human 

rights for those who touch Timberland ® products worldwide. 





Promoting fair, safe, non-discriminatory workplaces across the globe 

Through our Code of Conduct, Timberland works with our suppliers to ensure that products are made in 

workplaces that are fair, safe and non-discriminatory. The basis for this Code is the Universal Declaration of 

Human Rights and the International Labor Organization (ILO) Core Conventions. Our goals are to assess all 

of our factories, tanneries and major suppliers annually and through adherence to the Code, work to improve 

the lives of all workers who touch Timberland ® products. The Code of Conduct requires all employment 

to be voluntary, prohibits child labor and discrimination and sets standards for human rights, freedom of 

association, labor hours, compensation, workplace conditions and health and safety. It has been translated 

into over 20 languages and is provided to factories in their local languages. For a full-text version of our 

Code of Conduct, see page 25. 

In 2004, we focused on several goals: increasing the number of factory workers involved in labor rights 

awareness and development activities; increasing the number of factories in compliance with our Code; and 

strengthening relationships with our factories and company partners. While there is significant evidence to 

show that progress was made on each of these fronts, we do not have the data infrastructure currently in 

place to fully report against these goals. We are actively working in 2005 to improve this data infrastructure, 

in order to disclose a more complete picture of our Global Human Rights actions in future reports. 

Although we are reporting on our 2004 performance, we would also like to share changes we are making 

in 2005. We are shifting our program from compliance to enablement; from incremental improvement to 

systemic change; and from anecdotal analysis of performance to data driven analysis. Supporting these 

objectives has required us to redesign our assessment process, putting the worker at the center. This means 

engaging workers, communities and civil society in identifying areas for improvement at factories, and 

involving these stakeholders in generating solutions. Change on this scale does not happen overnight. We 

welcome your input, insights and advice as we move ahead. 


Headline Global human Text rights 


Supply Chain Disclosure 

As a first step in redesigning our Code of Conduct program, we are disclosing our factory list. This list contains factories 

that have produced Timberland ® products for the 2005 product line. Because our supply chain is constantly changing, the list 

represents our best attempt to disclose all of Timberland’s active factories. We believe, along with others in our industry, that 

full factory disclosure and collaboration can create common standards and shared solutions and help advance global human 

rights in all of our factories. 

The factories on this list include footwear and apparel manufacturers, suppliers, tanneries and distributors’ factories, which 

represent over 90% of Timberland ® products sold in 2004. Due to contractual restrictions at this time, we cannot disclose 

the names and locations of factories used by our licensees. The factory list includes the name, address, business unit and 

description of what type of work is performed at each location (either core, seasonal, or incidental 1 ). 

The Audit Process 

Our factory audit process includes interviews with management and production workers, personnel records verification (i.e., 

age documentation, payroll and production hours) and a site inspection. If serious violations of the Code of Conduct are 

identified, we follow a three-step approach to address the problem. First, we make the factory aware of the violation and ask 

it to commit to remediation within 48 hours. If this proves unsuccessful, we move to step two, in which we provide additional 

resources to remediate the problem collaboratively. If this still does not resolve the problem, we move to step three and 

terminate the relationship. Termination of the relationship is a gradual process in which Timberland works to ensure that worker 

livelihoods are not negatively impacted. Through this process we make every effort to build capacity within our factories. 

Rather than immediately terminating relationships when Code infractions are found, we strive to work with factories to improve 

conditions within a specified timeframe. 

1 

A definition of these terms is included on the factory list. 




2004 Performance 

Timberland performed 312 audits on 245 factories in 2004, representing approximately 94% of our 261 product suppliers which 

include apparel and footwear manufacturers, suppliers to those factories, tanneries, distributors and licensees. Of the 312 audits, 198 

were performed by our 7 internal auditors, 87 were performed by external auditors and 27 were undetermined due to a lack of proper 

documentation. These audits were performed on both pre-contract factories and factories that had existing contracts. In addition, some 

factories received more than one audit in 2004, resulting in a higher number of audits than factories. 

In the 2004 audit process, infractions to the Code were documented according to their severity in a Management Action Plan (MAP). 

There were four levels of violations: P1, P2a, P2b and P2c, ranging from the most serious to the least serious. Whenever a P1 finding was 

documented, a factory automatically failed the assessment. P1 findings include the most serious infractions such as mandatory employee 

pregnancy testing and child labor. Whenever a P1 or P2 finding was documented, a score for the supplier was calculated. A score of 95% 

and above was rated good, a score of 60%–95% represented alert, and a score below 60% represented unsatisfactory. While factories 

receiving a “Good” rating had no immediate actions to take, we challenged them to implement a policy of continuous improvement. 

Factories receiving an “Alert” rating were required to take action to improve working conditions. “Unsatisfactory” factories were required to 

take immediate action to resolve an imminent threat to the workers’ quality of life. 

Voice of the stakeholder 

“In June, I traveled to Bangladesh 

to see CARE’s work on a number 

of poverty-related issues. I was 

particularly impressed with the 

project in Chittagong where 

CARE, with financial backing and 

project design collaboration from 

Timberland, is improving the lives 

and the working conditions of 

workers – primarily young women 

from rural areas – who produce 

Timberland ® footwear. I saw factory 

conditions; I attended an off-site 

class on women’s and workers’ 

rights; I visited a neighborhood 

medical clinic; I talked with those 

who administer a savings and credit 

program for the workers – all of 

which is made possible by support 

from Timberland. I talked with the 

workers themselves, and what 

I heard and what I saw made me 

very proud. Timberland deserves to 

feel this same pride.” 

— Monte Allen, Senior Director 

CARE - Boston 





p1 

10.9% 

fair and equal 

treatment 

11.9% 

compensation 

1.8 % 1.0% 

Freedoom of Right of review 

association 

6.5% 

working hours 

66.9% 

health & 

Safety 

0.7% 

Child labor 

0.2% 

voluntary 

employment 

In 2004, the most commonly cited violations were related to health and safety. Examples of these 

violations included: lack of proper fire and emergency safety procedures, poor electrical safety and 

unacceptable medical care and first aid. The next most common violations were related to compensation 

(i.e., minimum wage) and fair and equal treatment (i.e., harassment). 

p2a 

p2b 

p2c 

The chart below shows the average number of violations per factory in each country. For example, on 

average, a factory in Bangladesh had one P1 violation in 2004. These statistics help us understand where 

the most serious offenses occurred and how to prioritize our auditing efforts. 

distribution of infractions 

p2b 

p2c 

Average number of violations per factory 

10 

9 

8 

7 

6 

5 

4 

3 

2 

1 

0 

p1 

0 2 4 6 8 10 

p2a 

p2b 

p2C 

Bangladesh 

Brazil 

Cambodia 

China 

Costa Rica 

Dom. Republic 

Egypt 

El Salvador 

France 

Guatemala 

Honduras 

Hong Kong 

India 

Italy 

Madagascar 

Mexico 

Morocco 

Pakistan 

Peru 

South Korea 

Sri Lanka 

Swaziland 

Taiwan 

Thailand 

Tunisia 

Turkey 

UK 

USA 

Vietnam 




Supply Chain Transparency 

51% 

factories 

audited, not 

complte 

43% 

factories with 

proper audits 

6% 

factories 

not audited 

14% 

Good 

0% 

alert 

29% 

unsatisfactory 

While we performed 312 onsite visits to factories in 2004, fewer than half of the audits were finished to 

completion per the Timberland process. A completed audit process included the following: 

1. An onsite visit by an internal or external auditor 

2. A Management Action Plan (MAP) developed by the auditor and sent to the factory 

3. A factory action plan that responded to the particular violation 

4. Acceptance of the action plan by the Timberland Code of Conduct team 

Although three ratings were designated by the scoring system used in 2004, the results fell into two categories: 

good and unsatisfactory 1 . Of the 144 completed audits, more than 2/3 received unsatisfactory ratings. The results 

clearly present us with a challenge to improve factory performance, understand the root causes of unsatisfactory 

scores, and encourage the greater adoption of best practices. 

Overall Audit scores 

33% 

Good 

67% 


In our supply chain, Timberland has three types of relationships with the factories that produce our product: 

owned, direct and indirect. An “owned” factory is owned and operated by Timberland (i.e., our footwear factory 

in the Dominican Republic). A “direct” relationship is when the Timberland Global Supply Chain organization has 

a direct engagement with factories for footwear, apparel, leather (tanneries) and major non-leather suppliers. An 

“indirect” relationship is when Timberland works with licensees and distributors who manage the production of 

Timberland products through their factory base. 

In terms of our product categories, the highest average score came from our apparel manufacturers while the 

lowest came from factories manufacturing products for our distributors. In addition, the greatest number of 

completed audits occurred within our apparel, licensing and footwear factories (see sidebar for graph). 

50 

40 

30 

20 

10 

0 

Number of completed audits per product category 

21 

50 

40 


good 

24 

23 

30 

30 

14 

6 12 

3 5 

3 3 

APP DIS FW LiC SUP TAN 

20 

1 

No factory received an “Alert” rating in 2004 

Average Audit Score for product category 

Product Category 

Average Audit Score 

Apparel 80% 

Distributor (Footwear and Apparel) 50% 

Footwear 60% 

Licensed Products 73% 

Non-Leather Supplier 72% 

Tannery 64% 

10 




The New Assessment Process 

To improve our current approach, we are revising our entire auditing process. This new process, which we began implementing in June 

2005, is a collaborative approach designed to improve the working conditions and ensure basic human rights. We are combining our threephase 

engagement model with a more robust on-site process. As a result, we are engaging more workers in identifying root causes of 

the violations and measuring the environmental performance of our suppliers. Instead of a list of P1 and P2 findings, the new assessment 

reports contain a root cause analysis focusing on the top three to six major systemic challenges that each factory needs to address. As part 

of this implementation, we are training our Code of Conduct specialists to conduct standard root cause analyses and risk assessments and 

to identify leading practices to share with colleagues worldwide. In addition, we have developed a short list of “immediate actions” that, if 

found, cause us to request a commitment to immediate remediation (within 24 hours). These violations include forced labor, unacceptable 

harassment, and pregnancy testing in the workplace. This short list of serious violations simplifies and streamlines our audit process. 

On the capacity-building side, we are developing a set of competencies and working with suppliers to meet these competencies. The new 

rating system is designed to reward our suppliers who actively drive improvements. It has the following components: immediate actions, 

leading practices, supplier competencies, risk profile, progress profile, systems profile, worker needs assessment and collaboration profile. 

Strategic Partnerships 

We will continue to work with our non-governmental partners to ensure basic human rights. Going forward, our hope is to expand and 

leverage these partnerships to have greater impact. 

Social Accountability International 

Social Accountability International (SAI) is a U.S.-based, non-profit organization dedicated to the development, implementation and 

oversight of voluntary, verifiable social accountability standards. To accomplish this, SAI convenes stakeholders to develop consensusbased 

voluntary standards, accredits qualified organizations to verify compliance, promotes understanding and encourages implementation 

of social accountability standards worldwide. In 2003, Timberland joined SAI’s Corporate Involvement Program. Through this program, 

Timberland set up a detailed plan for working with SAI and SA8000, an international workplace standard. Since then, Timberland suppliers 

have attended several SAI trainings, and the company has actively participated in SAI country programs in China, Vietnam and Guatemala, 

where some factories are beginning to work towards implementing the SA8000 standard. 

Case Study 

Beyond Compliance: 

Micro Finance in Bangladesh 

Mita Gosh is an apparel factory 

worker from the village of 

Boalkhali Upazila in Bangladesh. 

When her husband lost his job, 

Mita, who regularly attended 

health awareness sessions, 

shared this problem with her 

instructor. He advised her to 

join the micro-savings and 

credit program, established by 

Timberland and CARE, which 

enabled her husband to start a 

small fabric store at a nearby 

marketplace. Mita and her 

husband are now repaying those 

loans with profits from the fabric 

store and growing the business. 

This micro-savings and credit 

program enabled Mita and her 

husband to create a better future 

for themselves. Not only were 


they able to reunite their families 

“Timberland’s 

in Chittagong, 

early 

but 

and 

they 

continued 

are also 

able support to fulfill for Verité’s their worker dream education sending 

their programs twin in daughters southern China to school. shows 

that the company values workers as 

stakeholders and takes actions to 

improve their welfare.” 

— Dan Viederman, Executive Director, 

Verité 





Beyond Compliance: 

helping families create 

a better future 

Mita Gosh is an apparel factory worker from 

the village of Boalkhali Upazila in Bangladesh. 

When her husband lost his job, Mita, who 

regularly attended health awareness sessions, 

shared this problem with her instructor. He 

advised her to join the micro-savings and 

credit program established by Timberland and 

CARE, which enabled her husband to start a 

small fabric store at a nearby marketplace. 

Mita and her husband are now repaying those 

loans with profits from the fabric store and 

growing the business. This micro-savings and 

credit program enabled Mita and her husband 

to create a better future for themselves. Not 

only were they able to reunite their families 

in Chittagong, but they are also able to fulfill 

their dream of sending their twin daughters 

to school. 

Verité 

Verité is an independent, non-profit social auditing and research organization that works to ensure that 

workers worldwide work under safe, fair and legal working conditions. In addition to its audit work, the 

organization also develops training, education and remediation programs for workers and management. 

Timberland has worked with Verité to address the needs of factory workers in China, Vietnam and 

Bangladesh. For example, Timberland helped Verité create the Life Skills Training program in China to 

address practical skills, basic education, Chinese labor law, Code of Conduct, wage calculation, health 

(including HIV/AIDS and SARS) and nutrition. Workers have also requested workshops in computer use, 

English and cooking. Over 7,000 workers have benefited from these programs. 

CARE 

Timberland began its partnership with CARE in 2001 to improve the quality of life for production workers 

in Vietnam. The program covered topics such as workplace communication, basic education, healthcare, 

financial management and occupational safety. Eventually, the program’s reach extended beyond workers 

making Timberland ® products and included an HIV/AIDS awareness component. We are now working 

to make this an ongoing, sustainable program in Vietnam and to expand it to additional suppliers. In 

addition, Timberland has partnered with CARE and one of our major vendors in Bangladesh on a project 

whereby workers educate workers on reproductive health, HIV/AIDS, financial management and disaster 

preparation. The project led to the creation of a micro-savings and credit program, where more than 3,000 

workers opened accounts within the first five months. 




Timberland Code of Conduct 

We believe in the power of an individual to make a difference in 

the world where we live and work. One voice can and must make 

a difference. We believe that speaking up for a courageous idea 

or voicing a grievance strengthens Timberland and builds our 

community. 

We respect and promote the Universal Declaration of Human Rights 

and the International Labor Organization (ILO) core conventions that 

establish international human and labor rights. Timberland strives 

to provide the opportunity for all employees to work in fair, safe and 

non-discriminatory environments, and we define “employee” as 

any individual working in an enterprise. We believe that companies 

must provide opportunities for employee development. We seek to 

apply both the letter and the spirit of all applicable local laws and 

to promote continuous improvement in our operations. We hold 

our business partners to these same standards and actively seek 

partners who share our beliefs. The following requirements are 

meant to ensure that these standards are maintained. 

Human Rights 

Voluntary Employment: Each employee’s presence must be 

voluntary. This specifically prohibits all forms of prison labor, 

indentured labor, slave labor or any other forms of compulsory labor. 

Employees must have the option to leave employment. 

Freedom of Association: Employees must be given the right 

to decide how their best interests will be represented in the 

workplace. This includes the right to freely associate and bargain 

collectively. Where the right to freedom of association is restricted 

under law, there must be an equivalent means of independent 

representation for employees. 

Fair and Equal Treatment: Work environments must be free of 

intolerance, harassment, abuse, retribution for grievances and 

corporal punishment. There cannot be discrimination based on race, 

color, sex, religion, political opinion, nationality, social origin, social 

status, indigenous heritage, disability, age, marital status, capacity to 

bear children, pregnancy, sexual orientation, genetic features or other 

status of the individual unrelated to the ability to perform the job. 

Child Labor: The labor of children cannot be used. We define 

“child” as younger than 16 years of age or the compulsory age for 

school attendance, whichever is greater. Laws on restrictions for 

employees of certain ages must be followed. 

Compensation: For regular work hours, employees must receive 

wages and benefits that at a minimum meet all applicable laws 

governing minimum wage and mandated benefits. For overtime 

hours, employees must receive a premium rate, which must be no 

lower than local law. Wages must be paid on a regular schedule 

and employees must receive an understandable pay slip that 

shows how wages are calculated. There cannot be conditional 

employment practices, such as training or apprenticeship wages, 

pre-employment fees, deposits or other practices that effectively 

lower an employee’s pay below the legal minimum wage. 

Working Hours: The regular work schedule (excluding 

appropriately compensated overtime) must not exceed 48 hours 

per six-day period. Total working hours (including overtime) cannot 

exceed 60 hours in a given week or 12 hours in a given day. 

Employees shall receive at least 1 day off of rest after working 6 

consecutive days. All overtime must be voluntary. 

Health and Safety: The workplace must be safe and healthy based 

on the recognized standards of the ILO and national laws. This 

requirement applies to any residential facilities provided. Employees 

must receive training on workplace safety practices. 

Environment 

We expect a strong environmental commitment and aggressive 

efforts to protect and restore the natural environment. We will 

favor partners who: 1) have a management system demonstrating 

environmental commitment; 2) publicly disclose environmental 

impacts and activities through regular reporting; 3) eliminate 

toxic and hazardous substances from products and operations; 4) 

increase efficiency and thereby minimize pollution and waste; 5) 

reduce use of natural resources including raw materials, energy 

and water; 6) take responsibility for proper waste management and 

any environmental problems associated with disposal of wastes. We 

require a continuous effort to improve environmental performance 

along a defined path towards clean production. 

Right of Review 

To measure our compliance and the compliance of our business 

partners, we conduct ongoing audits and reviews of facilities. We 

require full and open access (for our staff and representatives) to 

the facilities and operations involved in our business. Employees 

must have the opportunity to notify us anonymously on any 

violations of standards at a workplace, and they must not receive 

any retribution for this action. We will make information on our 

compliance program available publicly. 



Environmental stewardship 


Because the Timberland ® brand is rooted in the outdoors, we have a particular 

interest in environmental stewardship. Our efforts are focused on energy, chemicals 

and resources – areas that most affect our footprint as an organization. 





Timberland is committed to minimizing our impact on the environment 

At Timberland, we are committed to Make it better by minimizing our environmental impact – whether it’s reducing the energy used 

to light our stores, phasing out harmful chemicals imbedded in our shoes or using recycled packing for our products. Some of 

today’s biggest environmental challenges include global warming caused by fossil fuel emissions; chemical pesticides and fertilizers 

used to grow conventional cotton; and consumption of finite natural resources. Through our environmental stewardship program, 

Timberland is committed to doing our part to address these challenges. 

In 2004 our primary goals were to advance our efforts towards becoming carbon neutral, minimize solvent use, improve the 

environmental performance of the tanneries that supply Timberland and drive sustainable natural resource management by 

enhancing our procurement policies and recycling practices. While most of the data and activities discussed in this section are for 

Timberland-owned global facilities, we know our efforts need to spread to our suppliers, where our environmental impact is greater. 

We are making progress in this area through our Tannery Scorecard, but there is opportunity to improve performance further down 

the supply chain. Specifically, we are working to improve the efficiency of our suppliers’ manufacturing processes and their access 

to renewable energy. We are also working to link the environmental footprint of our suppliers, factories and businesses to specific 

products – building on the work we have done to analyze the environmental impact of our product lifecycle. 

In 2005, our focus is on the development of an ingredient label, which will reveal the energy, chemicals and resources used to make 

our products. This label will help us communicate externally and internally as we continually strive to reduce the environmental 

impact of our business. 

finding better Energy solutions 

Climate change poses an alarming threat given the magnitude and reach of its impact. We are committed to doing our part to 

neutralize that threat. Timberland’s direct contribution of greenhouse gas emissions comes from energy use and waste at our 

corporate offices, retail stores, Caribbean manufacturing facilities and Distribution Centers, and from employee travel. While we 

outsource most of our manufacturing, we are committed to driving reductions in greenhouse gas emissions throughout our value 

chain. Harvesting raw materials, transporting goods and finishing fabrics all produce greenhouse gases that cause global 

climate change. 

Results of our efforts 

• Saved over $275,000 

per year through energy 

efficiency initiatives 

• Met 4.3% of our global 

electric demand with 

renewable energy 

• Saw a 15% reduction in 

carbon emissions from our 

2002 baseline 

• Used water-based adhesives 

in more than 8 million pairs of 

footwear 

• Purchased nearly 167,000 

pounds of organic cotton 

• Received Winslow 

Management’s Green2 

Award 2004 for reducing our 

environmental footprint while 

increasing shareholder value 





Greenhouse Gas Inventory 1 

DIRECT GHG EMISSIONS 

METRIC TONS OF CARBON 

7,000 METRIC TONS OF CARBON 


6,000 7,000 

5,000 

7,000 

6,000 

4,000 5,000 

6,000 

3,000 4,000 

5,000 

2,000 3,000 

4,000 

1,000 2,000 

3,000 

1,000 

2,000 0 

1,000 

0 

0 

inDIRECT GHG EMISSIONS 




5,000 6,000 

6,000 

4,000 5,000 

5,000 

3,000 4,000 

4,000 

2,000 3,000 

3,000 

1,000 2,000 

2,000 

1,000 

1,000 

Headquarters 

Headquarters 

Headquarters 

Dist . Centers 



U.S. Retail 

U.S. Retail 

U.S. Retail 

U.S. Showrooms 



Manu f acturing 



Int’l Retail 


Headquarters 

Headquarters 

Int’l Int’l Retail Showrooms 

Headquarters 

Int’l Showrooms 




Int’l Offices 



U.S. Retail 

U.S. Retail 


U.S. Retail 















2003 

2003 

2004 2003 

2004 


2003 

2003 




Timberland is working to eliminate our emissions of greenhouse gases. To achieve this objective, we enlisted 

the assistance of a regional environmental group that develops innovative solutions to climate change. Through 

our partnership with Clean Air Cool Planet (CA-CP), a Portsmouth, NH based non-profit organization, we have 

implemented a variety of energy-efficiency and renewable energy programs that have cut carbon emissions by 

approximately 15% from our 2002 baseline. 

Using the Greenhouse Gas (GHG) protocol developed by the World Resource Institute (WRI) to calculate 

direct and indirect emissions of greenhouse gases, Timberland identified sources and quantities of emissions 

at our facilities worldwide (see sidebar for more details). Direct GHG emissions come from fuel that we burn 

ourselves for transportation or for heat. Indirect emissions are produced by offsite power generating facilities 

that provide us power. They are characterized as indirect because we do not produce the power; we just create 

the demand for it. 

The majority of our emissions were produced through employee travel, which totals more than 20 million miles 

annually. Improvements in IT infrastructure, such as video conferencing and webcasting, are reducing the need 

for face-to-face visits. We are also looking to offset these travel emissions through the purchase of “green tags.” 

(See the Renewables section for more information.) Remaining emissions come from electricity use and heating 

at our office, retail and distribution facilities. Described in the next section are the steps Timberland has taken to 

minimize our energy demand and carbon footprint from these sources. 

METRIC 

TOTAL 

TONS 

GHG 

OF CARBON 

EMISSIONS 



10,000 8,000 

10,000 

6,000 8,000 

8,000 

4,000 6,000 

6,000 

2,000 4,000 

4,000 

2,0000 

2,000 

0 

0 

Headquarters 

Headquarters 

Headquarters 




U.S. Retail 

U.S. Retail 

U.S. Retail 















2003 

2003 




Efficiency 

To reduce any negative effect on our climate, our goal is to improve energy efficiency at our facilities worldwide 

and then to invest in renewable energy projects. In 2004, lighting retrofits at our two U.S. Distribution Centers 

1 

Timberland’s greenhouse gas inventory is supported by utility billing data and energy usage estimates based on WRI protocol estimation 

procedures. With the exception of one building, all of Timberland’s facilities are leased and less than 10% are able to meter direct energy use 

(energy from onsite heat and power generation as well as from transportation). Due to this and the distribution of facilities across different 

climate regimes, there has been no accurate way to calculate direct energy use and emissions for non-metered facilities. The bulk of direct 

emissions in the inventory consists of travel-related emissions, which can be more accurately tracked. Timberland is working with WRI to 

explore ways to capture this data and have it verified by a third party. 




Greenhouse Gas Emissions by Region 

Direct emissions 

Indirect emissions 

Total emissions 

dramatically improved the lighting quality while reducing energy use by nearly 40%. This reduction was 

equivalent to preventing 1,000 metric tons of carbon emissions from reaching the atmosphere. Added 

to these savings was a 237,514 kilowatt hour reduction in global electricity use, which resulted from 

the installation of sleep mode software on computer monitors. At our retail locations, we switched out 

T12 lighting for T8 or better technology, improving lighting design with simpler, more efficient lighting 

schemes. We also incorporated the U.S. Green Building Council’s LEED (Leadership in Energy and 

Environmental Design) standards into the construction of all new specialty stores. 

996.72 

1,884 

2,881 

1,228.33 

1,396.5 

2,625 

5,422.07 

14,156.69 

19,579 

7,647.12 

17,437 

25,084 

Asia Europe U.S. Total 


“Timberland demonstrates leadership on climate change through 

its efforts to inventory and eliminate carbon emissions, its 

support and development of new sources of clean power and its 

encouragement of employees to walk softly on the earth through 

efforts like the hybrid incentive program. They continue to identify 

new opportunities and work with customers to understand the 

impact of personal actions on climate change.” 

— Adam Markham, Executive Director 

Clean Air – Cool Planet 

Renewables 

Beyond maximizing energy efficiency, Timberland seeks to buy or generate clean, renewable energy to 

power our operations. Currently, opportunities for purchasing energy from renewable sources are limited 

to our European facilities. Wind power, waste steam and small-scale hydro-power currently provide 100% 

of the power for our European Distribution Center in Enschede, Holland. In areas where grid-supplied 

renewable energy is not available, Timberland is building our own renewable energy facilities. 

In our Dominican manufacturing facility, we are working to reduce greenhouse gas emissions and 

increase the reliability of the power supply. For example, we are exploring wind and solar power with the 

installation of a 10 kilowatt wind turbine and solar-panel water heater. The solar-panel water heater will 

provide 100% of the hot water needed for our handsewn footwear line. Both systems will go live in 2005. 

We are also looking to switch the facility’s diesel supply to lower-emissions biodiesel. 

In California, Timberland is awaiting the installation of what will be one of the state’s largest corporate 

solar panel systems. The 400 kilowatt solar array will provide Timberland’s Ontario, CA Distribution 

Center with 60% of its energy. Thanks to Southern California Edison’s Self Generation Incentive Program, 

Timberland will receive a 50% rebate on the installed cost of the system. The solar array is expected to 

come on-line in early 2006. In addition, we have installed smaller-scale solar power systems for both 

inspiration and education at our corporate headquarters and at a middle school in Stratham, NH. 




To offset the emissions produced by other facilities, Timberland voluntarily began purchasing Tradable Renewable Energy Credits 

(T-RECs). Renewable energy credits are derived from the purchase of “green tags,” which represent dollars paid for the development of 

renewable power sources or the actual generation of power from those sources. Native Energy’s Windbuilder Partners Program 

allowed Timberland to support the creation of new wind farms in exchange for these credits. Since 2002, Timberland has purchased 

the equivalent of over 4,000 metric tons of carbon dioxide credits for offsetting facility emissions. In addition, Timberland also offset the 

emissions associated with special events and conferences in 2004. The Community Builders Tour, Companies for Social Responsibility 

Investors Conference and Serv-a-Palooza are now carbon-neutral events. 

Transportation 

As part of our climate change strategy, Timberland made several investments to boost efficiency in our transportation systems. We joined 

Business for Social Responsibility’s Clean Cargo Program, which promotes sustainable product transportation by land, air and sea. The 

program includes 20% of the top 50 U.S. importers that can influence changes in the transportation industry. Through involvement in this 

effort, Timberland is identifying opportunities to improve the environmental safety and performance of shipping fleets. One recent study 

found that shifting from truck to barge along a Rotterdam to Enschede route resulted in one barge carrying a load previously hauled by 40 

trucks. Modal shifts between 2003 and 2004 are estimated to have saved over 70,000 gallons of diesel fuel – the equivalent of 650 metric 

tons of carbon. 

Transportation efficiency is evaluated at every level of Timberland’s business, including an employee’s commute. As a result of a project 

developed with CA-CP in 2004, the company launched a program offering a $3,000 cash incentive to its employees to purchase a 

low-emissions hybrid vehicle. This incentive helps pay the cost differential between a regular car and a hybrid, which offers higher gas 

mileage and reduced tailpipe emissions. An additional incentive is given in the form of preferred parking for hybrid drivers. Also, 

the company converted its own small diesel truck to run on biodiesel, a plant-based bio-fuel that produces fewer emissions than 

traditional diesel. 

LIFE CYCLE ANALYSIS: 

The Yellow Boot 

A size 9 pair of boots that 

weighs about 2 kilograms has 

“embedded” in it roughly: 

• 147 megajoules of energy 

• 1.5 kilograms of solid waste 

• 1,000 kilograms of water 

Leather and two polymers 

used for soling accounted 

for more than 90% of 

greenhouse gas emissions, 

hazardous waste and water 

use throughout the product’s 

life cycle. 

Our Earthwatch boot, 

which uses a variety of 

environmentally superior 

materials, was developed to 

address these issues. 

Manufacturing this boot 

requires 40% less energy 

in the tanning process and 

contains a 30% recycled 

rubber outsole and a 30% 

recycled thermoplastic 

midsole with no PVC. 





A commitment to using non-hazardous Chemicals 

Millions 

 

 

 

 

 

 

 

Water-based ADHESIVES used in 

Timberland ® footwear production 

 

 

2003 2004 2005 2006 2007 2008 

Assembly 

Stockfit 

Total Production 

A constant challenge for the footwear and apparel industry, one that relies on rapidly changing 

technology, is ensuring that harmful chemicals do not make their way into our products. Timberland is 

committed to phasing out harmful chemicals throughout our value chain – from our design factories, 

where we can control inputs, to our factories’ suppliers, where we have less control. Given this 

complexity, Timberland advocates a collaborative approach to reduce the industry’s dependence on 

harmful chemicals. In partnership with other footwear and apparel companies, we can create demand 

for natural, non-hazardous alternatives that protect workers and the environment. 

Most recently, we have advanced the use of water-based adhesives – a solvent free, environmentand 

worker-friendly alternative. Typically, cements relying on chemical solvents are used to adhere 

soles to shoe uppers. Using a collaborative approach, we have helped our suppliers reduce solvent 

use by 60% without sacrificing performance. In 2004 alone, Timberland used water-based adhesives 

in more than 8 million pairs of footwear, eliminating 140 metric tons of harmful chemicals from the 

manufacturing process. The chart on the sidebar shows our actual and forecasted progress using 

water-based adhesives. 

In 2004, Timberland launched an assessment tool designed to track and improve the environmental 

performance of our footwear suppliers. The tool is based on a model we used to drive progress at 

 

 

 

our leather suppliers beginning in 2003. It uses qualitative assessment techniques to focus attention 

on our primary impacts: energy, chemicals and resources. To improve buy-in and ownership of the 

outcomes, companies assess their own performance. Results are then measured during performance 

review sessions led by Timberland. Progress on this initiative will be discussed in our 2005 report. 

 

 

 

Deeper in our supply chain, we are working to reduce the environmental impact of the tanneries 

that supply Timberland ® products. Timberland is one of the largest buyers of leather in the brown 

shoe industry. With this buying power we are able to work closely with tanneries to address both 

manufacturing and environmental challenges. Using an assessment and monitoring tool, we have 

 

 




helped tanneries improve their overall environmental performance by 30% over their 2003 baseline. In 2004, we launched 

an initiative with other shoe brands to develop this tool into a more comprehensive audit to be launched in 2005. Our 

goal is to have an independent third party administer the audit and report back on tannery performance against specific 

environmental targets and to leverage the buying power of several brands to accelerate greener processes and 

product innovation. 

Polyvinyl Chloride (PVC) 

An ongoing challenge for Timberland is the elimination of PVC, a durable plastic, from its product line. PVC has been a 

material of choice in the footwear industry for its rigidity, wear characteristics and oil resistance – vitally important for boots 

that need to perform under the toughest work conditions. PVC poses unique challenges in its manufacturing and disposal, 

emitting pollutants and chemicals that have harmful environmental and health implications. Concerns over PVC led 

Timberland to start eliminating the material from its products in 2003. Brand logos on our products that were traditionally 

made with PVC are now heat stamped or made from a polyolefin plastic. Near the end of 2004, our Outdoor Performance 

line established a policy to eliminate PVC in its footwear product line. 

Timberland ® boots still contain PVC in their sole. During tests, substitutes for PVC did not bond well with leather, nor did 

they meet the performance and aesthetic requirements of our consumers. Today, tests are underway to create a midsole 

with better environmental attributes. New developments in compounds have led to samples that are identical to boots 

made with PVC in terms of appearance. We are, however, still challenged on some performance characteristics. Research 

and field testing will continue throughout 2005. Timberland hopes to ship its first cases of PVC-free boots in 2006. 

Restricted Substances 

The list of restricted materials and chemicals that cannot go into our products is included in the Workplace Quality 

Standards guide. All factories that enter into a manufacturing agreement with Timberland are given a Workplace Quality 

Standards Guideline that articulates our expectations for working together. For a copy of this list, please email 

csrinfo@timberland.com. 





promoting sustainable Resources 

Make it better to Timberland means creating and growing markets for sustainable resources. From boot 

to box to store, we’re incorporating recycled materials and organic fibers made with less energy and 

water and fewer chemicals. In 2004, by studying the lifecycle of our classic leather boot, a partnership 

between Timberland and the Earthwatch Institute created the Earthwatch Boot. Manufacturing this boot 

requires 40% less water and energy in the tanning process. It also contains a 30% recycled rubber 

outsole and a 30% recycled thermoplastic midsole with no PVC. 

VOICE OF THE STAKEHOLDER 

“Timberland set an internal goal to incorporate 5% organic 

cotton into their cotton products by the end of 2005. They have 

worked very hard to make this happen in a challenging retail 

environment. This goal has inspired other companies to consider 

and adopt the same strategy. As a result, more organic cotton is 

being used around the world. In addition, because the 5% blend 

is being incorporated into products the company makes on a 

continuous basis, the demand for organic cotton is expected to 

be sustained over time. By making their demand predictable, 

Timberland is helping reduce the market risks facing organic 

cotton farmers around the world.” 

—Rebecca Calahan Klein, President 

Organic Exchange 

We are working to institute these changes by increasing the use of renewable materials in our 

footwear design specifications. Styles for 2005 will feature materials such as wool, natural crepe 

rubber and leather dyed with natural dyestuff. Styles for 2006 will use more recycled and sustainable 

materials, including Vibram ® Ecostep ® rubber (a rubber outsole that contains 30% recycled rubber), hemp 

and recycled content upper reinforcements. 

In 2004, Timberland diverted over 250 tons of waste from landfills by purchasing structural shoe 

components and linings that contained recycled materials. Footwear manufacturing in 2005 and 2006 

will incorporate more recycled content into the structural components of the shoes. In addition, we set 

new standards for the inclusion of recycled materials in our products. Each season, starting with our Fall 

2006 product line, we will increase our use of recycled or sustainable materials on footwear by 10%. In 

addition, our Dominican Republic factory has started turning our own waste materials into products. For 

example, leather trimmings are now turned into notepads and baseballs. 

We started blending organic cotton fiber – cotton grown without harmful pesticides or herbicides 

– into our apparel line in 2003. Over the past few years, we converted about 50,000 T-shirts used for 

promotional events to 100% organic cotton, and introduced a line of 100% organic cotton products. 

In addition, the majority of the T-shirts we sell in the United States are made with 6% organic cotton. 

Through these efforts, we tripled our consumption of organic cotton to nearly 167,000 pounds in 2004, 




which represented 2.1% of our overall purchase of cotton. 

Wood is fundamental to our operations – from packaging and office paper, to building construction and store design elements. By 

gluing together our boxes instead of folding them, Timberland uses 15% less material. The resulting box is also stronger, so it’s easier 

to reuse. To close the loop, we purchase only 98% post-consumer recycled (PCR) content cardboard to make our footwear boxes. 

In 2004, our purchase of PCR fiber reduced pressure on forest resources and saved over 30 million pounds of paper from entering 

landfills. Timberland offices purchase a minimum of 30% PCR copy paper, which in 2004 saved 250 trees, 151,000 gallons of water 

and 33,000 pounds of carbon emissions! 

In our stores, the use of renewable and recycled materials translates into floors and counters made from recycled pine boards, store 

fixtures made with recycled fiber and paints and floor finishes that have low volatile organic compound content. 

Supporting sustainable material use means reusing and recycling waste. At our World Headquarters, we recycle mixed containers 

and paper as well as cell phones, batteries, cardboard, toner cartridges and tyvec envelopes. In 2004, Timberland became a member 

of the U.S. Environmental Protection Agency’s Waste Wise Program – a voluntary program that allows businesses to track the solid 

waste they generate and set goals for waste reduction. As part of our Waste Wise targets for 2004, Timberland doubled the signage 

and containers in our building so that every employee is within the same walking distance to a recycling bin as to a fire extinguisher. 

One area for improvement is recycling at our retail locations. A survey of several retail stores located in malls found that recycling 

stations for paper and mixed containers were extremely limited. We are reaching out to other brands located in the same malls to 

jointly promote recycling. 


We’re not in this alone. We often partner with other organizations that share our values to help multiply the impact of our efforts. 

We’re excited about the opportunity these relationships provide, and we’re committed to making additional progress. 

Clean Air Cool Planet 

In 2001 Timberland partnered with Clean Air Cool Planet (CA-CP), a non-profit organization that implements solutions to climate 





change, to undertake an inventory of our greenhouse gas emissions, establish a reduction target and help educate our suppliers, 

vendors, employees and customers on the economic benefits of taking action to address climate change. Partnering with CA-CP 

has provided Timberland with access to the organization’s extensive network of contacts in the fields of energy and environmental 

management. The partnership has also generated results, helping us work to reduce our environmental footprint. 

Organic Exchange 

Organic Exchange brings together companies in all parts of the organic cotton value chain to identify and address barriers to 

industry growth. It convenes farmers, companies, government and regulatory bodies and NGOs to foster greater demand and supply 

of organic cotton and develop the networks, new business models, processes and metrics needed to facilitate growth in the organic 

cotton industry. Within 10 years, its goal is to have organic cotton comprise 10% of the overall supply and demand in the industry. 

As a founding member of the Organic Exchange, Timberland has used this network to develop our organic cotton program. 

Timberland employees have visited organic cotton farms in Texas and India and have shared lessons learned at Organic Exchange 

meetings in the United States, Thailand and India. Timberland also hosted an Introduction to Organic Cotton session at its 

headquarters in September 2003, attended by more than 60 individuals from all parts of the organic value chain. In addition, 

Timberland is an annual sponsor of the Organic Exchange conference, and we feature our organic clothing in an eco-fashion show 

sponsored by the Clean Air Coalition every year. 



Headline Community Text involvement 


At Timberland, we enable people to make a difference in the world with our 

products and through civic engagement with our stakeholders. We believe that 

living our values, by engaging consumers and employees in service, creates 

sustainable change in the communities where we live and work. Through this 

commitment to commerce and justice, we’re emphasizing that Timberland ® 

products stand for much more than just quality craftsmanship. 





serving the communities where we work and live. 

An important way in which we demonstrate Timberland’s commitment to community is through our 

Path of Service program, which enables full-time employees to contribute up to 40 paid volunteer 

hours per year. Through this program, our employees served more than 55,000 hours globally and 

engaged 8,375 consumers and partners in 27 countries around the world in 2004. Achieving this scale 

of impact required us to focus on three key goals: building awareness of Timberland’s community 

involvement programs, optimizing the Path of Service TM program and increasing impact through strategic 

allocation of corporate investment. 

In 2004, we experienced 34% growth in the percentage of hours used for the Path of Service TM program. 

Our next goal is to achieve consistent engagement across the Company, which will require greater 

collaboration with our operating units. This will require dedicated resources for community involvement 

in each operating unit, clearly defined goals and leadership. In terms of corporate giving, contributions 

as a percent of Operating Income were 2.1% 1 , which was well above the corporate average for 2004. To 

increase this percentage, our goal is to work with the business units and target more investments to our 

international communities. 

34,200 

30,600 

38,700 

2000 2001 2002 2003 2004 

Timberland Employee 

Service Hours 

41,000 

55,008 

19% 

europe 

8% 

asia 

21% 

caribbean 

and canada 

52% 

U.S. 

2004 regional distribution 

of service hours 

We are proud of these accomplishments and continue to strengthen the impact of our efforts. While 

employee engagement continues to rise, we estimate that fewer than one third of all available Path of 

Service TM hours were used in 2004. We believe this could be due to employees who underreport service 

hours or temporary or seasonal employees who don’t report at all. Therefore, our 2005 goals are to 

increase the number of employees who report their hours and to determine a more accurate baseline of all 

available hours. 

To increase hours served, we launched a pilot Service Committee in the United States and Europe to spur 

departmental accountability and leadership of volunteer planning and reporting. Europe, in particular, has 

made significant progress towards this goal, increasing hours served through NGO partnerships. 

1 

This number was calculated by dividing the 2004 Charitable Donations ($3.9M) by the 2003 Operating Income ( $184.3M) 




We have also begun to drive a cross-functional program designed to improve how we implement the Path of Service TM program 

across our global operations. This Global Stewards program will leverage our internal capabilities in environmental stewardship 

and advance global human rights to foster a deeper, more sustainable impact in communities where we operate. 

In addition, we are continuing to address one of our greatest challenges – measuring impact, not just activity. While we currently 

measure service hours, we also aim to identify the economic, social or environmental benefits of service in our communities. In 

2005, we will establish a process to collect more detailed information about our service activities. We will gather information (to be 

aggregated over time) to help paint a clearer picture of the positive impact we are having in our communities. We will also ask our 

community partners for more detailed information to measure the long term impact of service. 

Civic Engagement 

Employees 

Employees use the Path of Service program in several different ways. They can choose to volunteer at Timberland service days, 

serve independently with a nonprofit organization of their choice or engage in a combination of both. Employees interested in 

investing in a longer-term project with greater impact can do so through Timberland’s Service Sabbatical program. Employees 

who have been with Timberland for at least three years are eligible to apply for up to a six-month sabbatical at a nonprofit 

organization of their choice. These sabbaticals are paid time off for the employee with continued benefits. Timberland grants up to 

four Service Sabbaticals per year. Participants serve in ways that reflect their individual passions. 

• One employee developed a long-term sustainability plan and launched a dentistry program at a Peruvian orphanage. 

• Another employee created a food drive and distribution management system for a local anti-hunger organization. 

Timberland also offers a program for its retail employees through a partnership with Earthwatch Institute, a non-profit organization 

that engages people worldwide in scientific field research and education to promote the understanding and action necessary to 

create a sustainable environment. Employees who have worked for Timberland for at least two years in a retail capacity and have 

fully participated in the Path of Service TM program are eligible to participate in a paid 9–10 day environmental service sabbatical 

with the Earthwatch Institute. 

FINDING A CURE 

New Hampshire and 

Massachusetts 

At Timberland, several 

employees have rallied 

together to find a cure 

for cancer–a disease that 

affects all of us. Through 

cycling events, such as 

the Pan Mass Challenge 

and the Granite State 

Quest, to marathons and 

walkathons, Timberland 

employees have organized 

themselves, neighbors, 

family members and other 

companies to raise money 

in support of a cure. 

The result? Our employees 

have raised more than 

$500,000 over the past 

four years to support 

research at facilities, 

such as the Dana 

Farber Institute and 

Massachusetts General 

Hospital, two of the leading 

cancer research centers in 

the United States. 





SERVICE SABBATICAL: 

Tracking Wolves in Emas National Park, Brazil 

Janice Kaniola joined an Earthwatch team on 

a “Carnivore Ecology and Conservation in the 

Brazilian Grasslands” project, the purpose of 

which was to increase knowledge of the carnivore 

community and assess the status of habitat 

conservation in the national park. Over the two 

weeks, she set and checked baited traps in order 

to radio collar and monitor wolves. 

Reflecting on the experience, Kaniola claimed, 

“The biggest thing I learned was that we need 

so little. [As humans], we have too much and 

waste too much. My biggest thrill was to see the 

variety of birds, especially when a flock flew from 

a tree. Seeing these animals free in the wild had 

a tremendous impact on me. It fortified in me 

the importance of volunteer work and the need 

for people to see and learn about animals from 

around the world.” 


“Children all over the country look up to City Year corps 

members — in their trademark Timberland ® boots and 

jackets — as civic superheroes. Just put on a red jacket and 

walk onto a City Year service site and you’ll see for yourself 

that children will joyously call out to you. Timberland helped 

evolve the image of young people to young leaders and 

positive role models.” 

— Michael Brown, President and Co-Founder 

City Year 

The Path of Service TM program has spawned several other employee initiatives at Timberland, such as 

the efforts to find a cure for cancer described in a previous side bar. The 2004 Global Employee survey 

showed that 68% of employees believed that the Path of Service TM program encouraged them to engage in 

community service beyond the 40 hours of paid leave. 

Community 

The Community Builders Tour is a multi-city community service tour that engages thousands of Timberland 

employees, consumers and community members for a day of service. Through this event, we communicate 

our values and beliefs to our stakeholders, helping to build our brand and reputation. In 2004, we served 

in 5 cities across the United States, bringing together 2,146 volunteers who contributed a total of 6,392 

service hours. 

Our Company’s passion for environmental stewardship and commitment to service annually merge on 

Earth Day. In 2004, 4,712 volunteers, including consumers, students, business partners and employees in 

16 countries performed 23,204 hours of service. Sponsored by the global retail team, volunteers served 

in a variety of locations, including a 180-acre wildlife sanctuary in New Hampshire, the shores of the River 

Thames in London and in the Degla Valley in Egypt. 

To meet our bold goal of being a reference brand for social responsibility, Timberland has acted as a 

convener to enhance the power of citizen service. We have organized several multi-sector, roundtable 

discussions to share the ethic of service and help organizations bring their civic engagement activities to 

scale. For example, in 2004 we launched a leadership gathering and training for a network of local and 

national level civic and corporate partners as part of our Stratham Serv-a-Palooza week (see p. 40). We 

engaged over 25 colleagues from the following non-profit and corporate partners: City Year, Future Farmers 

of America, Skills USA, United Way, Volunteer NH!, Aveda and Cirtronics. The goal of the meeting was to 

begin a dialogue about ways we could leverage our network to better focus our Serv-a-Palooza strategy 

towards a more scaleable model of impact, in New Hampshire and across the United States. Each delegate 

spent a day in conference with us and then served alongside Timberland employees and guests at Serva-Palooza 

projects on the Seacoast. We have continued the discussions into 2005 and are positioned to 

operationalize plans with some of the attending partners in the near future. 


Community involvement 


Customers 

Serv-a-Palooza, Timberland’s premiere showcase of civic engagement, marked its 7th year in 2004. It is a day of woldwide community service that engages not only 

employees, but also our business partners (who in the United States represented close to 30% of all volunteers). In 28 countries around the world, 3,669 volunteers 

donated a total of 27,161 hours at 108 service sites. 

Serv-a-Palooza 2004 Regional Highlights 

Stratham, NH 

900 volunteers 

At the corporate headquarters, 

one in six employees managed 

event execution. In addition, 

Timberland hosted 53 business 

partners and over 20 civic 

partners. 

Antwerp, Belgium 199 volunteers 

199 volunteers in Antwerp 

partnered with YEPP (an NGO 

working with disadvantaged 

youth) to transform a polluted 

and abandoned lot into a clean 

playground for the students of the 

CDO-NOORD vocational school. 

Caribbean 


Employees, in conjunction 

with local service committees, 

developed and led 23 projects 

for 692 participants in the 

Dominican Republic and 

Puerto Rico. 

Sao Paulo, Brazil 


Our Brazilian Distributor, Sao Paulo 

Alpargatas S.A., constructed and 

painted a playroom at a local youth 

center. Additionally, they built book 

racks and donated toys and books 

for the children from the Casa de 

Amparo neighborhood. 

Zuhai, China 


Volunteers from our supply 

chain headquarters in Zuhai 

served at the Fei-sha School. 

Over 50% of volunteers were 

recruited from the community. 






Corporate Giving 

At Timberland, we demonstrate our commitment to justice in both the time that we give and the dollars that we invest. Innovative 

community service programs and financial investment work in concert to assist our community partners as they strive to 

strengthen our communities. A majority of our investment is through our two leading strategic partnerships in the United States, 

City Year and Share our Strength. We also make a number of smaller grants to organizations working to foster the ethic of 

citizen volunteer service and environmental responsibility. When and where it is the most effective way to support the work of 

an organization, Timberland will also make in-kind donations of our product. The Company adheres to a publicized set of giving 

guidelines when deciding how to allocate cash and in-kind donations. For more information, go to the “Inform” section of 

www.timberlandserve.com. 

2004 Charitable Donations 

Product and In-Kind Cash Total 

Social Enterprise $1,288,624 $969,925 $2,258,549 

U.S. Wholesale 525,675 123,520 649,195 

Corporate (includes Marketing) 15,038 613,509 628,547 

“Timberland exemplifies dedication to 

sustainable change at the community 

level. Whether it’s encouraging all 

sectors of the company to patronize 

the restaurants that support Share 

Our Strength year-round, volunteering 

on Taste of the Nation or Operation 

Frontline steering committees, 

mobilizing people through service 

activities that bring divergent 

community segments together or 

simply selling quality products that 

generate critical revenue for antihunger 

efforts, Timberland is thoughtful, 

comprehensive and highly engaged 

in every aspect of its partnership with 

Share Our Strength and our 65 local 

volunteer committees.” 

— Ashley Graham, Leadership Director 

Share Our Strength 

Consumer Direct 22,467 95,745 118,212 

International 104,259 173,038 277,297 

Total $1,956,063 $1,975,737 $3,931,800 





List of Corporate Social 

Responsibility awards in 2004 

• Recognized as one of the “World’s Top 

Sustainable Stocks” by SustainableBusiness.com 

• 7th consecutive year on Fortune magazine’s 

“100 Best Companies to Work For” list 

• Named to list of “100 Best Companies for 

Working Mothers” by Working Mother Magazine 

• Number one in the Household and Personal 

Products category on Forbes magazine’s 

“Platinum 400 - The Best Managed Companies 

in America” list 

• Listed in Business New Hampshire magazine’s 

Hall of Fame for Best Companies to Work for in 

New Hampshire after 6 years on the “10 Best 

Companies to Work For” list 

• Ranked 17th on Business Ethics magazine’s list 

of “100 Best Corporate Citizens” 

• Received Partner in Progress Award from Sears 


Timberland’s belief in service gains momentum, inspiration and direction from our strategic partners. 

By collaborating with community organizations, we are able to multiply the effect of our efforts and 

focus on projects with long-term impact. We work with several organizations, including City Year and 

Share Our Strength – our key partners in the United States with whom we have the longest history and 

closest relationships. 

City Year 

City Year is a national service organization that annually unites over 1,000 17- to 24-year old volunteers 

for a challenging year of full-time service, leadership and civic engagement in 15 sites across the United 

States and in South Africa. Each year, City Year’s young leaders help develop and lead Timberland’s service 

agenda. Our 15-year partnership has many facets – the most essential is Timberland’s support of the 1,000 

member corps and our status as their official uniform sponsor. We also sponsor three sites, one of which 

is housed in our corporate headquarters. In 2003, Timberland and City Year worked together to launch the 

first international City Year program in South Africa. In 2004, Timberland donated approximately $1.3 million 

to City Year. 

Share Our Strength 

Timberland’s commitment to justice and children is realized through our partnership with Share Our 

Strength, a leading national anti-hunger, anti-poverty organization. Through creative partnerships with 

chefs, restaurateurs, writers, community leaders and corporations, Share Our Strength brings together a 

diverse network in an effort to create community wealth and end childhood hunger in America by 2024. 

Timberland and Share Our Strength have been partners since 1996. Through creative cause marketing, we 

have developed programs such as the Timberland ® Crib Bootie line whereby we donated a portion of the 

proceeds from sales to support the organization’s anti-hunger efforts. In 2004, Timberland donated a total 

of more than $570,000 in cash and product to Share Our Strength. 


Timberland employees 


Timberland is honored to be among Fortune’s “100 Best Companies to Work 

For” in the United States and is pleased to be included on the list of “100 Best 

Companies for Working Mothers” by Working Mothers Magazine. We are proud 

of these laurels, but we don’t rest on them. We strive to continually respond to 

the needs of our employees – by informing, inspiring and engaging – in order to 

achieve our bold goal of being an Employer of Choice. 



Timberland employees 


At Timberland, being an Employer of Choice means creating a place where employees feel empowered to make decisions, feel connected to Timberland’s 

strategies, understand the importance of their work and consistently demonstrate our values. We work to attract, excite and retain individuals who share our 

core values of humanity, humility, integrity and excellence. We also work to foster employee commitment through challenging work assignments, competitive 

compensation, community service and quarterly employee rallies where we share our financial performance in a town meeting format. Our goal is to engage and 

motivate our employees by inspiring their passions, respecting the individual, and creating an inclusive community. 

In order to meet this goal, we focused on three key areas: talent management, employee engagement and gender diversity. 

Key Workforce Statistics 

Global Employment: 5,600 

Number of Global 

Senior Managers: 180 


Workforce Growth: 100 

Talent Management 

Talent Management helps us ensure that we have a ready “pool of talent” for business-critical roles and provide career paths for our employees. It includes 

assessing organizational capabilities and requirements and creating individual development plans to help our employees meet current and future business 

challenges. In 2004 we: 

• Implemented two new manager skill-building programs, resulting in a favorable perception of management as seen on the Employee Survey 

• Provided corporate-level manager-skill building training to 124 front-line managers in our Caribbean manufacturing operations 

• Expanded our global Leadership and Talent Review program by 150%, increasing the number of employees reviewed from 140 to 350 

Average Age 

Men: 

Women: 

Average Length 

of Service: 

31% 

Female 

32 years 

33 years 

4.2 years 

U.S. employees received, on average, 39 hours of training in 2004, up from 30 hours in 2003. Of those 39 hours, more than half were spent on development – skillbuilding 

activities that are transferable across business units and industries. Examples of development trainings include: Manager Skill Building, Presentation Skills 

Training and Retail Store Leadership Training. The remaining hours were spent on educational or occupational training that teach employees about issues specific to 

Timberland’s business or equip them to operate successfully within their working environments. 

In 2004, we focused on developing and growing our leaders from within. This focus on internal promotion resulted in an internal hire rate for Grade 7 (Senior 

Manager Level) and above of 47%. Of the leadership positions filled in 2004, six moves were lateral to encourage breadth of development. Of these “crosspollinating” 

moves, two-thirds involved moving women into new leadership roles. 

Global Composition of 

Senior Management 

7% 

occupational 

69% male 

Through our talent management efforts, gender diversity in leadership positions globally rose to 31% in 2004 from 23% at the beginning of the year. However, we 

know there is more work to do. In 2005, we will broaden our workforce diversity programs to focus on race and ethnicity. Progress on these efforts will be discussed 

in our 2005 CSR report. 

42% 

educational 51% 

DEVELOPMENT 

training received by u.s. employees 


Headline Timberland Text employees 


Employee Engagement and Satisfaction 

We pride ourselves on having a hard-working, casual and caring work environment. The way we build this community is through employee 

engagement. When employees are engaged, they are committed to our values and mission and willing to expend extra effort to get the job 

done. Engagement drives satisfaction, retention and productivity. The annual Employee Survey is one tool we use to measure engagement 

and identify the drivers of engagement, such as our brand or benefits. Increased participation in the Employee Survey, from 58% in 2003 to 

70% in 2004, is one indicator of a more fully engaged workforce. 

Based on the aggregate data of two bellwether questions, 1 we were able to determine that 76% of employees were satisfied working here in 

2004, up 2% from the prior year. While this is a positive trend, we are actively working to increase satisfaction internationally – regions we are 

targeting for business growth. Voluntary turnover was up 3% in Asia to 25%, 5% in the Caribbean to 12% and 3% in Europe to 14% in 2004. 

Focus groups led by local management representatives are being conducted to understand reasons behind the change. 

1 

“Overall I am satisfied with Timberland as a place to work” and “I would choose to work here again if I were looking for work.” 





Hiking the Path 

Danville, Kentucky 

In 2003, our Danville, KY Distribution Center (DC) saw an 

opportunity. The DC employs over 110 full-time employees and 

an average of 100 temporary employees. The employee survey 

results from the prior year indicated some challenges with 

reward and recognition. As a result, Human Resources worked 

with the plant director to bring together employees to brainstorm 

solutions. Through this dialogue “Hike the Path” was born. 

Hike the Path celebrates accomplishments in the areas of 

safety, accuracy, community service, attendance and employee 

participation. Employees earn “miles hiked” each time they 

meet a goal of the program. For example, employees earn one 

mile for perfect attendance in a calendar month, active service 

on a committee or use of all 40 hours of community service. 

To celebrate the “hikers,” there is an annual luncheon and 

prominent visual display of their progress. 

The Danville DC has seen some dramatic results. In 2004, 

since the launch of the program: 

• Employees reporting feeling recognized for their good work 

increased by 26% 

• No lost time accidents have occurred 

• Service hours doubled from 1,700 to 3,500 annually, 

averaging 30 hours per person 

There have been benefits beyond the intended results. The 

response rate for the employee survey doubled from 37% to 

75%, indicating greater employee engagement. Timberland’s 

community involvement activities became more visible, 

generating more requests for service within Danville, thus 

enhancing engagement on the part of employees. Danville’s 

accomplishments with this program serve as a model for other 

parts of the Timberland organization such as the Ontario, 

California Distribution Center, which is looking to duplicate 

Danville’s success in civic engagement, employee 

participation and safety. 

Workforce Diversity and Benefits 

At Timberland, we strive to support workforce diversity though the following policies and programs: 

• Equal Opportunity and Non-Discrimination 

• Open Door Policy and Integrity Line, a 24-hour confidential third-party hotline, providing employees opportunities to 

submit ideas, questions or concerns 

• The Women’s Network, an affinity and networking group offering women quarterly networking events and career 

development forums 

• Work/life Benefits 

- Lifestyle leave – 8 paid days of leave beyond vacation days 

- On-site Day Care (Worldwide headquarters location only) 

- Family Care leave – 6–8 weeks for paternity, maternity, adoption, elder care or dependent care leave 

- Adoption assistance of up to $12,000 per year 

- Alternative Work Arrangements – adjusting a regular 40 hour work week to meet family or other needs 

• Domestic Partner Benefits including insurance and other coverage for same-sex and opposite sex domestic partners. 

• Educational Assistance Policy, helping employees reach their education goals by providing financial assistance for 

undergraduate and graduate-level courses 

• The Path of Service TM and the Service Sabbatical programs 

• Casual dress every day 

• Employee Assistance Program, a 24-hour hotline to help employees resolve day-to-day issues 

• On-site fitness center and massage therapist (Worldwide headquarters only) 

Timberland knows that, just as each of our employees’ personalities, lives and circumstances are different, so are their 

benefit needs. Our benefits are designed to be flexible and comprehensive in order to accommodate this diversity. 




Insurances 

Timberland provides a range of health related plans, such as medical, dental and vision insurance, in addition to other forms of 

insurance such as auto, home and pet insurance. 

Paid time off 

Each year Timberland employees receive 11 holidays, 10–25 vacation days (depending upon seniority), 8 days of lifestyle time and 

5 days of community service. 

Investment programs 

Timberland offers a range of employee investment programs, including a 401(k) plan, an education savings plan, an employee 

stock purchase plan and pre-tax flexible spending accounts for out-of-pocket health care expenses. 

For more information, please see the working benefits page on the Timberland Web site. 

Health and Safety 

Timberland is committed to providing a safe and healthy workplace for all of its employees by taking proactive measures to 

prevent incident occurrence. Our Corporate Health and Safety team works directly with employees both individually and in groups 

to identify workplace health and safety issues and to develop solutions. Timberland does not limit administrative, engineering or 

protective prevention measures that can impact workplace safety. We report all incidents promptly, assess their root causes and 

take corrective action to prevent their recurrence. Examples of corrective actions include improving employee and supervisor 

training, buying new equipment, hiring professional safety consultants and implementing ergonomic work station design. 

The lost work day injury and illness rate (LWDII) in the United States for 2004 was 1.9, meaning there were 1.9 incidents involving 

lost or restricted workdays per 100 employees (see chart in sidebar for trend data). This statistic includes all U.S. Operations, 

including retail, corporate headquarters and the Ontario and Danville distribution centers. 

1.9 

3.7 

2.4 

2.5 

2.3 

1.9 

2000 2001 2002 2003 2004 

LWDII - All US Operations 



GRI index 


corresponding 

GRI 

Indicator Indicator Description section page notes 

global Compact 

principle 

1. Vision and Strategy 

1.1 Vision and Strategy CEO Letter 3 8 

1.2 CEO Statement CEO Letter 3 

2. Profile 

2.1 Name of reporting organization Timberland Profile 7 

2.2 Major products, services, brands Timberland Profile 7 

2.3 Operational structure Timberland Profile 7 

2.4 Description of major divisions Timberland Profile 7 

2.5 Global operations Timberland Profile 7 

2.6 Nature of ownership Timberland Profile 6 

2.7 Nature of markets served Timberland Profile 7 

2.8 Scale of organization Timberland Profile 7 

2.9 List of stakeholders Stakeholder Engagment 16 

2.10 Contact person for report GRI Index 52 

2.11 Reporting period Report Scope 4 

2.12 Date of previous report CEO Letter 4 

2.13 Boundaries of the report Report Scope 4 

2.14 Significant business changes 10-k 10-k 

2.15 Basis for reporting on joint ventures Not Reported Not applicable 

2.16 Restatements 10-k 10-k 

2.17 Decisions not to apply GRI principles Report Scope 5 

2.18 Criteria/definitions used for non-financial accounting Not material 

2.19 Changes in measurement methods Global Human Rights 23 

2.20 Internal assurance policies and practices Report Scope 5 

2.21 Policy for independent assurance Not Reported Not applicable 

2.22 Obtaining additional information GRI Index 52 

3. Governance Structure and Management Systems 

3.1 Governance structure Corporate Governance 13 

3.2 Percent of independent Directors Corporate Governance 13 

3.3 Process of determining strategic expertise of Board Corporate Governance 13 

3.4 Governance Process Corporate Governance 13 



GRI Index 


corresponding 

GRI 



principle 

3.5 Executive Compensation Corporate Governance 13 

3.6 Organizational structure for CSR, key individuals Corporate Governance 14 

3.7 Mission, values, codes related to CSR Corporate Governance 14 

3.8 Mechanism for shareholder dialogue Corporate Governance 13 

3.9 Identification and selection of major stakeholders Stakeholder Engagment 16 

3.10 Stakeholder consultation methods Stakeholder Engagment 16 

3.11 Information generated by stakeholders Stakeholder Engagment 16 

3.12 Use of stakeholder information Stakeholder Engagment 16 

3.13 Precautionary principle Not Reported Not applicable 7 

3.14 Endorsed principles, voluntary charters Corporate Governance 14 

3.15 Industry and business association memberships Not Reported Lack of access to data 

3.16 Systems for managing upstream/downstream impacts Environmental Stewardship 31–32 

3.17 Systems for managing indirect impacts Corporate Governance 14 

3.18 Major decisions on operational changes Timberland Profile 8 

3.19 Performance programs and procedures Corporate Governance 14 

3.20 Certification pertaining to management systems Not material 

4. GRI Content Index 

4.1 GRI Content Index GRI Index 48–52 

5. Economic Perfomance Indicators 

EC1 Net Sales (in millions) Timberland Profile 8 

EC2 Geographic market breakdown Timberland Profile 8 

EC3 Costs of goods, materials, services 10-k 10-k 

EC4 Percent of contracts paid by agreed terms Not material 

EC5 Total payroll and benefits by region 10-k 10-k 

EC6 Distribution to providers of capital 10-k 10-k 

EC7 Change in retained earnings 10-k 10-k 

EC8 Taxes paid by country (in millions) Timberland Profile 8 

EC9 Subsidies by country Not material 

EC10 Donations, in-kind and cash (in millions) Community Impact 41 

EC11 Supplier breakdown, by organization and country Global Human Rights 19 

EC12 Spending on non-core infrastructure development Not material 



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EC13 Indirect economic impacts Not material 

6. Environmental Performance Indicators 

EN1 Total material use (except water) Environmental Stewardship 26–35 8 

EN2 Percent of materials used that are wastes Environmental Stewardship 33 8 

EN3 Energy use by primary source Not Reported Lack of data infrastructure 8 

EN4 Indirect energy use Not Reported Lack of data infrastructure 8 

EN5 Total water use Not Reported Lack of data infrastructure 8 

EN6 Land owned, leased or managed (in biodiversity-rich habitats” Not Material 8 

EN7 Major impacts on biodiversity Not Material 8 

EN8 Greenhouse gas emissions Environmental Stewardship 28–29 8 

EN9 Ozone-depleting substances Not Material 8 

EN10 NOX, SOX and other air emissions Not Reported Lack of data infrastructure 8 

EN11 Total amount of waste Not Reported Lack of data infrastructure 8 

EN12 Significant discharges to water Not Material 8 

EN13 Significant spills Not Material 8 

EN14 Environmental impacts of products and services Environmental Stewardship 27–35 8 

EN15 Reclaimable products after useful life Not Reported Lack of data infrastructure 8 

EN16 Incidents and fines Not Material 8 

EN17 Renewable energy/efficiency initiatives Environmental Stewardship 27–30 9 

EN18 Energy consumption footprint Environmental Stewardship 30 

EN19 Other indirect energy use Not Reported Lack of data infrastructure 

EN20 Water sources significantly affected Not Material 

EN21 Annual ground, surface water withdrawals Not Material 

EN22 Recycling/reuse of water Not Reported Lack of data infrastructure 

EN23 Land owned, leased or managed (Production/extractive use) Not Material 

EN24 Impermeable surfaces as a percent of land purchased Not Material 

EN25 Impact on protected or sensitive areas Not Material 

EN26 Changes to natural habitats Not Material 

EN27 Objectives for restoring native ecosystems, species Not Material 

EN28 Number of IUCN Red List species affected Not Material 

EN29 Business units in sensitive areas Not Material 



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EN30 Other relevant indirect greenhouse gas emissions Environmental Stewardship 28–29 

EN31 Hazardous waste use (Basel Convention rated) Not Material 

EN32 Water discharge, runoff effects Not Material 

EN33 Environmental performance of suppliers Environmental Stewardship 31–32 

EN34 Environmental impacts of transportation Environmental Stewardship 30 

EN35 Environmental expenditures by type Not Material 

7. Social Performance Indicators: Labor Practices and Decent Work 

LA1 Workforce breakdown Employees 44 

LA2 Net employment creation Employees 44–45 

LA3 Employees represented by trade unions Not Reported No Timberland unions 3 

LA4 Policies, procedures related to consultation with employees Corporate Governance 14 3 

LA5 Notification of occupational accidents, diseases Employees 47 

LA6 Joint health and safety committees Employees 47 

LA7 Injury, lost day and absentee rates Employees 47 

LA8 Policies, programs on HIV/AIDS Not Reported Not applicable 

LA9 Average hours of training per year Employees 44 

LA10 Equal opportunity policies and programs Employees 46 6 

LA11 Composition of senior management Employees 44 6 

LA12 Employee benefits beyond legal mandates Employees 46 

LA13 Formal worker representation in decision-making Not Reported No Timberland unions 

LA14 Evidence of compliance with ILO guidelines Global Human Rights 18 

LA15 Formal agreements on health and safety Not Reported No Timberland unions 

LA16 Continued employability programs Employees 44 

LA17 Lifelong learning programs Employees 46 

8. Social Performance Indicators: Human Rights 

HR1 Human rights policies and procedures Global Human Rights 25 1 

HR2 Consideration of human rights as part of decision-making Global Human Rights 25 1,2 

HR3 Policies to evaluate, address human rights in supply chain Global Human Rights 25 1,2 

HR4 Policies, programs to prevent discrimination Global Human Rights 25 1,6 

HR5 Freedom of association policies Global Human Rights 25 3 

HR6 Policy excluding child labor (ILO Convention 138) Global Human Rights 25 5 



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HR7 Policy to prevent forced and compulsory labor Global Human Rights 25 4 

HR8 Employee training on human rights Not Reported Lack of data infrastructure 

HR9 Appeal practices related to human rights Not Reported Lack of data infrastructure 

HR10 Non-retaliation, employee grievance policies Global Human Rights 25 

HR11 Human rights training for security personnel Not material 

HR12 Indigenous peoples policy Not material 

HR13 Community grievance mechanisms Not material 

HR14 Share of operating revenues redistributed to local communities Community Impact 37 

9. Social Performance Indicators: Society 

SO1 Policies to manage impacts on communities Community Impact 37–42 

SO2 Policies to address bribery and corruption Corporate Governance 13 10 

SO3 Policies to address political lobbying and contributions Timberland Web Site “Code of Ethics” on IR site 

SO4 Awards received relevant to CSR performance Community Impact 42 

SO5 Contributions made to political parties and candidates Timberland Web Site “Code of Ethics” on IR site 

SO6 Court decisions - Antitrust Not Reported None to report 

SO7 Policies to prevent anti-competitive behavior Corporate Governance 13 

10. Social Performance Indicators: Product Responsibility 

PR1 Policies for preserving customer health and safety Not Reported Lack of access to data 

PR2 Policies relating to product information and labeling Not Reported Lack of access to data 

PR3 Policies relating to consumer privacy Corporate Governance 13 

PR4 Number of non-compliance issues Not material 

PR5 Health and safety complaints upheld by regulatory body Not material 

PR6 Voluntary code compliance Corporate Governance 14 

PR7 Instances of non-compliance–product information and labeling Not material 

PR8 Customer satisfaction Not material 

PR9 Advertising–adherence to standards Not material 

PR10 Advertising and marketing regulation breaches Not material 

PR11 Consumer privacy–breaches complaints Not material 

For more information on the GRI and its reporting principles, please visit www.globalreporting.org. For information about this report, please contact Alex Hausman in Code of Conduct at: 

The Timberland Company | 200 Domain Drive | Stratham, NH 03885 | 603-772-9500 | csrinfo@timberland.com 

Want to learn more about Timberland’s activities in the area of corporate social responsibility? Please log on to www.timberlandserve.com.

2004 CSR Report - Timberland Responsibility

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