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					                    2004 CORPORATE SOCIAL RESPONSIBILITY REPORT

VISION STATEMENT: Staples’ corporate soul is centered on a rock solid belief in social
responsibility and the desire to make a positive impact on our associates, customers, and
the world. We act responsibly and with integrity, conducting our global business as a
great employer, corporate citizen and neighbor. Staples’ soul thrives in the fair treatment
of our diverse and talented associates, in our environmental conscience, in giving back to
our communities and in our sound business ethics.

We are proud of the excellent financial results we achieved in 2004. We are equally proud
of the way we achieved these results and the positive difference we have made in the lives
of our stakeholders. Listening to our associates, customers, suppliers, the communities
where we do business, and environmental advocates, we have made significant strides in
continuing our journey to be a great corporate citizen. As we grow our business, we believe
being socially responsible will differentiate Staples and drive our company performance.
Over the past year, we assembled a team of associates to strengthen our commitment to
sustainable business practices in four key areas, including the environment, business ethics
and corporate governance, diversity, and community affairs. We are pleased with our
accomplishments, many of which are summarized below. Going forward, we will continue
to seek new ways to integrate our commitment to corporate social responsibility with our
core business.

ENVIRONMENT

Environmental stewardship and sustainable business practices continue to be important at
Staples. We offer products and services to help our customers preserve natural resources
and reduce their environmental footprint.

Staples’ company-wide commitment to the environment is founded on four major
cornerstones: the purchase and promotion of products containing post-consumer recycled
materials; recycling initiatives; energy conservation and renewable power procurement; and
environmental education initiatives for customers and associates.

Purchase and Promotion of Products Containing Post-Consumer Recycled Materials
Staples offers for sale nearly 2,800 items containing recycled materials. These products
range from paper to plastic storage to remanufactured ink and toner cartridges. This,
coupled with our industry-first paper procurement policy, continues to promote
responsible sourcing from sustainably managed forests, clean production, and utilization of
more recycled and alternative fiber content material. Staples has increased the average
post-consumer content in all paper offered for sale in the US from 18.7% in 2002 to 26.9%
in 2004, progressing toward our stated goal of 30%. The average post-consumer recycled
content offered for sale in cut sheet paper, which includes copy paper and printer paper,
is 31.6%. We continue to increase recycled content in paper used in internal operations,
such as marketing, shipping, and packaging of Staples brand products.

Staples actively participates with our suppliers, environmental non-government
organizations and scientists to identify and protect endangered forests, including those with
high conservation values.

While paper represents the greatest opportunity to incorporate recycled content into finished
goods, we are looking at creative opportunities to incorporate more post-consumer plastic,
metal and wood composites into the design of Staples brand products while maintaining
high performance standards and competitive pricing.


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Recycling Initiatives
Staples has implemented a variety of programs to make it easy for our customers to
recycle. We offer recycling of ink and toner cartridges in the US and Canada, which also
benefit local schools through Staples Recycle for Education, a program that donates $1 to
public education charities and schools for every eligible used cartridge that is recycled at
more than 1,200 Staples stores. Cellphones, PDAs, pagers, chargers and digital cameras are
recycled with our partner, Collective Good Inc., with a portion of proceeds benefiting the
Sierra Club in the US and Special Olympics in Canada. We recycle rechargeable batteries
at all stores through our partnership with the Rechargeable Battery Recycling Corporation.
Staples also conducted numerous computer recycling events in 2004 as a US Environmental
Protection Agency “Plug into eCycling” partner, to help address the growing global problem
of electronic waste.

We continue to divert more of our own waste stream for recycling, including more than
34,000 tons of cardboard and over 350,000 lamps, and responsibly recover and recycle
obsolete electronic assets.

Energy Conservation and Renewable Power Procurement
Staples is committed to reducing the impact on climate change through two key initiatives,
energy conservation and renewable power procurement. We continue to incorporate green
technology in new building design, retrofit lighting, HVAC and controls in existing
buildings. Additionally, we have worked towards aggressively conserving energy through
energy management systems, reducing the energy used per square foot of real estate by
12.1% since 2001.

We have signed contracts for two 280kw solar systems in 2004, which will be operational in
2005. Additionally Staples purchases 10% (over 50,000,000 kWh) of total US power from
green e-certified sources, including wind, landfill gas, biomass and small certified hydro.
Staples was named US Department of Energy Green Power Partner of the Year in 2004.
Working towards our 2005 goals, we will continue to reduce direct and indirect emissions.

Environmental Education
Staples was a sponsor of America Recycles Day for the fourth consecutive year in 2004, to
help raise awareness of the importance of recycling and buying recycled content products.
We sponsored a Business to Business Resource Page in partnership with Earth 911 and the
Massachusetts Department of Environmental Protection. The site provides businesses with
local resources to help them operate more sustainably.

Staples Foundation for Learning sponsored a grant in 2004 to Earth Force, an organization
which provides teachers an innovative multi-disciplinary curriculum focused on
environmental education for middle school students.

Staples continues to improve content of environmental information on our website and
in-store signage, and promotes environmental stewardship through company sponsored
events. Additional environmental information and a complete 2004 Sustainability Report
can be found at www.staples.com/recycle.

BUSINESS ETHICS AND CORPORATE GOVERNANCE

Business Ethics
Our commitment to business ethics starts with our Code of Ethics. This is a set of guiding
principles that applies to all of our associates around the world, as well as members of


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our Board of Directors. We implemented a Code of Ethics more than a decade ago, but in
2004 we made a renewed effort to build awareness of our standards and make it easier for
associates to do the right thing. We created a new role of Vice President, Business Ethics
to focus our efforts in this important area and make sure that business ethics is part of our
everyday culture.

Over the past year, we also created a new Supplier Code of Conduct. The Supplier Code
of Conduct formalizes our factory certification program, which has been in place for several
years. Under this program, we use a third party to audit new and existing factories
manufacturing Staples brand products to ensure they can meet our quality, social
responsibility, and security standards. We are committed to working with factories that can
provide and sustain fair and safe labor practices.

Corporate Governance
Since our founding, we have sought to follow best practices in corporate governance in a
manner that is in the best interests of our business and shareholders. In 2004, we further
aligned management’s interests with the interests of Staples’ shareholders through two
important corporate governance initiatives. First, we do not have a shareholder rights plan in
effect and are not considering adopting one. Further, in response to our shareholders’ request,
our board of directors adopted a shareholder rights plan policy, under which we will only
adopt a shareholder rights plan if the plan has been approved by shareholders either in
advance or within 12 months of its adoption by our board. Second, our board adopted new
stock ownership guidelines. These guidelines require that non-management members of the
board own a minimum level of equity in the company worth at least $200,000. The new
guidelines also call for minimum equity ownership levels for all senior executives, including
the CEO, who must own equity worth at least five times his salary. Going forward, Staples
will continue its commitment to best practices in corporate governance.

A GREAT PLACE TO WORK

Staples strives to be a truly great company — one that people are proud to work for,
offering an inclusive environment where each member of our diverse and talented team can
develop and make a difference.

Fostering such an environment helps us build a more productive, vibrant and loyal workforce.
Our associates’ diverse set of viewpoints helps us understand and build rapport with our
customers, resulting in better customer service and a more rewarding shopping experience.
Reflecting the face of our customers helps us sustain a competitive advantage that is
crucial to our success. Visitors to our stores who are greeted by associates with similar
backgrounds — even languages, in some cases — feel more at home and are more likely
to become loyal customers. We’re reaching out directly to attract diverse customers, as well.
In southern California, we launched our first advertising campaign targeted to the Latino
population. Our excellent track record in diversity is an important factor that many of our
Contract customers look to when making their supplier decision.

To attract and retain people from diverse populations, we market Staples in a variety
of venues. We recruit at historically black and high-minority colleges, attend job fairs,
and advertise on diverse Web sites. In 2004, our college recruiting initiatives resulted in
67% diverse new hires and 45% female new hires. We work with various professional
organizations that represent women and minorities, such as Women for Hire, the
Association of Latino Professionals in Finance and Accounting, and the national Association
of Black Accountants.




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Staples provides many opportunities for associates to learn and grow in their careers. Staples
University offers world-class training to all associates including classroom, computer-based,
and satellite instruction. In 2004, our continued efforts to build a strong and talented team
helped us fill nearly 60% of all management openings with internal candidates.

Because we want every associate to think like an owner, we provide a wide range of equity
incentive programs and profit sharing opportunities. Staples’ Employee Stock Purchase Plan
gives all associates a chance to share in Staples’ long-term success. We also offer a
performance based bonus program to our store associates for team performance that drives
high customer service and sales results.

Our diversity strategy was developed with input from our associates. The Staples eDiversity
Marketplace, an initiative created internally, supports minority- and women-owned
businesses that supply goods and services to Staples.

We’ve expanded our national partnerships and initiatives that support diversity. Partnerships
with organizations like the Initiative for a Competitive Inner City, as well as the creation of the
Staples Minority-Owned Business of the Year Award, support our commitment to small
businesses in America’s inner cities and focus on entrepreneurs and 28% of minority-owned
businesses in communities nationwide. In 2004, Staples was recognized by
DiversityBusiness.com as a multicultural business.

Staples emphasizes an inclusive, results-oriented environment that values each of the
65,000 members of our team. We recognize our associates for their many ideas, impact,
talent, and leadership style that truly make a difference — to our associates, to our
customers in the local communities we serve, and in the success of our business. Promoting
and publishing our TeamCARE values ensures that every associate knows diversity is key
to our company’s success.

STAPLES IN THE COMMUNITY

Staples Foundation for Learning, Inc.
Staples supports communities nationwide by providing resources to non-profit organizations
that provide educational opportunities for all people, with a special emphasis on
disadvantaged youth. Staples Foundation for Learning was launched in August of 2002, and
has since contributed over $4 million to 205 organizations in 129 communities throughout
the country. The Foundation supports causes that teach, train and inspire young people from
diverse backgrounds to help them achieve their highest potential and grow into capable and
productive members of society.

2004 National Grants:

Boys & Girls Clubs of America
Since 2002, Staples Foundation for Learning has been a national supporter of Boys & Girls
Clubs of America (BGCA), an organization that provides a safe and structured environment
for children after school. In 2004, the Foundation continued to fund its three-year, $2.5
million grant to the Boys & Girls Clubs of America’s Torch Clubs program. In addition to
helping build character and leadership skills in pre-teens, Torch Clubs promote positive
self-esteem and personal growth, reinforce academic achievement and encourage children
to develop into conscientious citizens. During 2004, Staples Foundation for Learning helped
BGCA accomplish the following:
• Established 248 new Torch Clubs, serving 3,761 youth
• Improved training for Torch Club advisors by providing over 3,200 new professional


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development opportunities
• Increased the community service commitment of Torch Club members by
establishing the Staples Torch Club Awards to annually recognize outstanding
programs in the areas of Service to the Club and Community, Education, Health and
Fitness and Social Recreation

Initiative for a Competitive Inner City
Staples Foundation for Learning awarded a grant to the Initiative for a Competitive Inner
City (ICIC) to support the Inner City 100 program. Developed in partnership with Inc.
Magazine, the Inner City 100 list recognizes entrepreneurs in some of America’s most
disadvantaged inner city communities. In 2004, ICIC accomplished the following with the
support of Staples Foundation for Learning:
• Increased nominations to Inner City 100 list by more than 20%
• Created best business practices report for inner city businesses, mayors and staff
involved in economic development
• Began an advisory board of minority CEOs to help fuel ideas for ICIC programs

Earth Force
Staples Foundation for Learning awarded a grant to Earth Force to support its National
GREEN Initiative, a program that helps teachers infuse classroom teaching with
environmental problem solving. Staples Foundation for Learning helped Earth Force
accomplish the following:
• Provided 32 teachers with specialized environmental training and teaching resources
• Impacted over 950 students through environmental education and community projects
• Increased teacher and student community involvement, awareness of environmental
issues and development of critical thinking skills

LINC TELACU Education Foundation
The LINC TELACU Education Foundation received a grant from Staples Foundation for
Learning for their College Advisement & Leadership Program. LINC TELACU provides
financial assistance, advisement, counseling, and internship opportunities to qualified Latino
students seeking college degrees. The College Advisement & Leadership Program is for
all incoming freshman LINC TELACU scholars, and provides college survival skills,
leadership training, and job-preparedness skills.

Institute for Entrepreneurship
Staples Foundation for Learning provided the Institute for Entrepreneurship support towards
its national Youth Venture Grant Program. The mission of the Institute for Entrepreneurship
is to provide young people throughout the United States with assistance to start businesses.

Product Donations
In 2004, Staples donated office products worth $4 million to help outfit non-profit
organizations in communities throughout the United States. In Staples stores, managers
develop relationships with local charities and donate product to help fulfill their needs. In
addition, Staples Distribution and Fulfillment Centers provide organizations such as SHOPA
Kids in Need Resource Centers and Crayons to Computers with much-needed supplies.

Cause-Related Programs

Supplies for School Kids
Each year during the back to school season, Staples joins forces with its customers to help
prepare children from low-income families for the school year. Staples’ customers are
encouraged to make a donation that provides school supplies for a local Boys & Girls Club


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member. Now in its third year, this program builds upon the partnership between Staples
and Boys & Girls Clubs of America by providing additional tools and resources for children
to be successful in school and beyond. Through the efforts of Staples’ associates and
customers, Staples contributed approximately $1 million in school supplies to Boys & Girls
Clubs members nationwide in 2004, a 150% increase from 2003.

Staples Business Depot in the Community
Staples Business Depot is committed to building a stronger, more caring community
through various programs throughout Canada. Staples Business Depot has been a proud
national sponsor of Special Olympics Canada since 1996 through financial and in-kind
support to help fund training programs in every province and territory across Canada.
In addition, each year customers are invited to help support Canada’s Special Olympics
athletes through the Give a Dollar Share a Dream program. By giving a donation,
customers can help send athletes to the Special Olympics National and World Games.
Over the last three years, over $1 million has been raised through this program.

Each year, Staples Business Depot organizes the National Writing Challenge to promote
children’s literacy and raise money for Canadian schools. Winners’ stories are published in
the annual Staples Business Depot short story book, which is sold in stores for a limited
time each year. Staples Business Depot donates all of the net proceeds from the sale of the
book to Canadian schools.

In addition, Staples Business Depot helps meet the needs of hundreds of community,
regional and national projects and organizations every year throughout Canada through store
community involvement funds. From sports tournaments to educational programs, Staples
Business Depot stores devote resources to organizations within their local communities.

LOOKING AHEAD

We are excited about the progress that we have made over the past few years as we have
sharpened our focus on sustainability. While we are pleased with our accomplishments,
we recognize this is the beginning of a journey. We look forward to continuing the dialogue
with our stakeholders and implementing new initiatives to further our progress to drive
social responsibility.




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