Sustainability Profile: Neenah Paper

Neenah Paper is the leading producer of technical and fine paper products used for filtration, labeling, printing, and premium packaging. Neenah has the #1 market share in the filtration market in Europe and a dominant market share in the North American premium printing paper market of about 60%. Their strategy for market differentiation is based upon superior technical processes that design unique products, strong customer relationships and excellent service levels. The foundation of the company’s success is built on its long-standing commitment to environmental, social and governance issues that are material to the business and its stakeholders.

Neenah’s sustainability strategy is to improve its environmental footprint by exceeding all regulatory standards with a focus on responsible fiber sourcing, conservation and offering a wide selection of recyclable and environmentally preferred products. The company has long established strict sourcing standards, requiring all suppliers to place a priority on promoting safety, protecting the environment, and valuing human rights. Neenah was awarded the 2019 Forest Stewardship Council Leadership award for their long-standing commitment to responsible sourcing and designing innovative products. It was first FSC Certified in 2003, and 100% of their wood fiber purchases are FSC certified or controlled.

Water and energy conservation are also important aspects of Neenah’s sustainability strategy because of the environmental and economic benefits of these actions. The company has successfully reduced its energy consumed per unit of production by 19% over the last five years through investment in operational efficiencies and through being the largest purchaser of certified renewable electricity in the state of Wisconsin. Neenah also works to reduce the amount of fresh water used at its facilities and has invested in state-of-the-art water treatment systems that allow the company to recycle, reuse and return the water used in its manufacturing without negatively impacting the environment. The company has reduced its water drawn per unit of production by over 18% over the last five years. These conservation efforts helped maintain Neenah’s cost advantage relative to the competition and preserve margins during the COVID-19 crisis in 2020.

Sustainability is also a major focus of Neenah’s R&D and innovation pipeline as its customers are also looking to bring even more environmentally friendly products to market. Neenah’s Imagemax line, which is 100% paper-based and 100% recyclable sign material, offers a cost-effective replacement to styrene plastic and generates less waste. Green Seal certified products from Neenah guarantee that at least 30% of post-consumer waste is used and that the mill process and packaging are environmentally preferable. The TexCol product line uses a proprietary technology to transfer images onto natural fibers like cotton through a waterless process. The company is also working to develop new commercial products from sustainable fibers like cotton and hemp.

The financial results they have been able to deliver validate that making sustainability a priority has paid off for Neenah. This impact is most evident in the company’s balance sheet. Management has historically maintained leverage around 2.0x and has used excess free cash flow to repay debt and provide dividends to shareholders. The company views its responsibility to improve the environment and create value for all stakeholders as a duty because doing the right thing in these areas makes good economic sense.


By Marcus Moore

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Zeo Capital Advisors is a fundamental investment manager with a short-duration credit mutual fund, a sustainable high yield mutual fund and separately managed accounts. Marcus Moore authored this piece and is the Assistant Portfolio Manager and Senior Credit Analyst at Zeo Capital Advisors. For more information contact Zeo directly at 415-875-5604 or visit

Past performance is not indicative of future performance. This Company was not selected for performance-based reasons, and was instead selected to emphasize the types of issuers that Zeo Capital Advisors, LLC (“Zeo”) seeks to invest in based on its sustainability mandate.

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