By Tammy Gray It’s a good news/bad news scenario in Catalyst Paper’s 2011 sustainability report. The report, issued at the end of June, highlights the company’s efforts to successfully emerge from court-ordered creditor protection, as well as its environmental and safety record. The good news is that Catalyst ranked high in corporate citizenship, environmental practices, accounting transparency and safety. The bad news is that the company is continuing to report losses. Corporate Knights magazine recently listed Catalyst Paper as one of Canada’s 50 Best Corporate Citizens for 2012. The designation focuses on corporate social responsibility, including impacts on the environment, communities and employees. Catalyst CEO Kevin Clarke noted, “While this particular ranking is specific to Canadian-headquartered companies, our placement is based on corporate-wide performance, including the Snowflake recycled newsprint mill.” Holbrook Mayor Jeff Hill recognized Catalyst’s achievement at a recent city council meeting, noting that Catalyst’s purchase of the Snowflake mill kept it in operation when it probably otherwise would have closed. He pointed out that the mill has a major economic impact not only in Snowflake, but in surrounding communi-ties and throughout Navajo County. “We’re hearing a lot of talk about new potential industries in the area, like potash. And that’s great, but we also need to remember to thank and appreciate the industries that have been here supporting our communities for a long time,” he said. Catalyst acquired the Snowflake paper mill in 2008. According to the company, the mill has 297 employees and a payroll of $24 million. A previous report shows that in 2010, Catalyst spent $2.7 million with local ven-dors and paid $600,000 in property taxes. Companywide, Catalyst has 1,877 employees and a total payroll of $178 million. According to the sustainability report, a new service-delivery model is being piloted at the Snowflake mill and has so far proven successful. A customer survey was also conducted at the mill in 2011, which found that the plant’s customers placed a great importance on recycled products. “One of the most interesting findings was the high value Snowflake customers attach to recycled production, contrasted with the relatively modest value they attach to Forest Stewardship Council production,” the report notes. The report points out that not only does Catalyst place a major emphasis on recycling product, but also on renewable energy use, low water use and low emissions. The company participates in a “No Regrets” climate and energy program. “…(P)articipants agreed on eight specific actions that would collectively represent a small but important step toward reducing greenhouse gas emissions while supporting economic development,” the report noted. Corporate Knights gave Catalyst high marks for its environmental practices. The report notes that at the Snowflake mill there were no environmental non-compliances, but there were two incidents “internally classi-fied as being of concern.” Both resulted in new procedures being put in place to reduce emissions. Financially, Catalyst is still in the process of re-structuring. Clarke noted, “It is vitally important to our cor-porate sustainability that we address three immediate requirements: reduce debt, improve liquidity and achieve more competitive operating costs going forward.” The company continued to report losses, with a $12.9 million first quarter loss and a $47.4 million second quarter loss. In the third and fourth quarters, Catalyst reported much higher losses, but they included “impair-ment charges,” which reflect a decrease in the value of an investment, facility or “goodwill” (the company’s reputation). The reported third quarter loss was $205.7 million, which included a $151 million impairment charge on the Snowflake mill. Without the impairment charge, the company would have reported a $54.7 mil-lion loss. In the fourth quarter, the company reported a $708 million loss. That included a “$660.2 million im-pairment charge on Canadian operations and $10.8 million on Snowflake.” Without the impairment charges, fourth quarter losses would have equaled $37 million. Clarke notes that despite the financial difficulties at present, he believes the restructuring process will put Catalyst back into a positive financial position. Regarding the court-ordered creditor protection, he stated, “The board, management and our advisors believe this approach will best facilitate the completion of a recapitaliza-tion transaction that delivers the improvements to our liquidity and capital structure which are necessary to put our company on firm financial and competitive footing in the current business and economic environment.” He also noted that the focus will remain not only on financial responsibility, but on social and environmental responsibility, as well. “As we restructure to address the most immediate financial requirements of our corporate sustainability, so too are we positioning Catalyst to adapt and transform our business future. We look forward to continuing to achieve real, positive change for Catalyst as we move forward together with our stakeholders, be they commu-nities, customers, employees or others.”