As we celebrate Staples' 25^th anniversary in 2011, the world and the company are transforming.

We're growing globally and expanding our presence in international markets. We're also redefining our business beyond sales of office products. Our aim is to provide a fuller suite of services and solutions for all our customers.

We're investing in growth despite a continuing soft economy worldwide. Our challenge is to balance our commitment to innovation and growth with a disciplined approach to expense management and a sharp focus on results.

We've known for years that a focus on results includes a focus on Staples Soul. Soul is our desire to be a leader in environmental sustainability, business ethics, diversity and community engagement.

Staples Soul encompasses beliefs and objectives that are core to our culture. In fact, we've found that our stakeholders — customers and associates, investors, communities and others — look to us not only for strong performance on price, quality and value, but also for leadership in corporate responsibility.

In developing this report, we evaluated the impact of environmental, social and governance issues facing our company. As part of that analysis, we asked our stakeholders to tell us their priorities for Staples.

We learned a lot. Our stakeholders want us to do more than meet our numbers. They want us to sell safe products that help make the world more sustainable. They worry about climate change and want us to use less energy. They hold us accountable for ethical operations and the labor practices of our suppliers and partners. They believe, rightly, that we have a responsibility to foster the well-being of our customers and associates and of the communities where we all live and work.

Stakeholder input has helped shape our Staples Soul efforts and goals. As highlighted here and throughout the report, we're making progress in each of the Soul pillars:

Ethics. In 2010, we donated more than $25 million to educational non-profit organizations around the world. Through sponsored programs and educational programs and activities, Staples associates helped donate $1.5 million to organizations they care about. We also held a Community Service Day during which associates in nine countries participated in volunteer activities in their local communities. In 2011, one of our goals is to encourage additional employees more associate engagement, further refine our philanthropic investments globally and continue focusing on the educational needs of communities around the world. to volunteer more. We also plan to set up a system to accurately track volunteer hours.

Also in 2010, we completed 290 Social Accountability factory certification audits. The audits, conducted at Staples® brand supplier facilities, monitored compliance with Staples' Supplier Code of Conduct.

Community. In 2010, we donated more than $25 million to non-profit organizations around the world. Through sponsored programs and activities, Staples associates helped donate $1.5 million to organizations they care about. We also held a Community Service Day during which associates in nine countries participated in volunteer activities in their local communities. In 2011, one of our goals is to encourage additional employees to volunteer more. We also plan to set up a system to accurately track volunteer hours.

Environment. In 2010, we completed the development of Staples' environmental sustainability strategy. The strategy outlines five pillars where we aim to excel:

• Selling green products and services
• Offering recycling solutions to customers
• Reducing operational waste
• Maximizing energy efficiency and the use of renewable energy
• Becoming a global sustainability leader

In October 2010, we launched a new supplier initiative in support of this strategy — the "Race to the Top." The program will drive innovation in sustainable product manufacturing, packaging and distribution. Suppliers are challenged to compete not only on superior quality and value but also on delivering product and packaging solutions that significantly reduce environmental impacts.

Diversity. During 2010, Staples was recognized for its continuing diversity efforts. DiversityInc named Staples one of "25 Noteworthy Companies in Diversity," and Diversity MBA Magazine ranked us #16 among the 50 Out Front Companies for Diversity Leadership, up from #29 in 2009. Despite these achievements, we need to continue building diversity within our leadership ranks, focusing on greater representation by women and minorities.

We also expanded our Associate Resource Group (ARG) program in 2010. These affinity groups facilitate networking and professional development among our diverse associate populations. They also help to build communities and increase associate engagement and retention. We plan to expand the number and reach of ARGs to additional associate groups and geographic areas.

While we have achieved a great deal, we know that our journey to become a more responsible and successful company continues. I'd like to thank our associates for setting tough goals, honestly assessing where we're succeeding and where we're falling short, and taking the steps necessary to make Soul a part of our everyday operations.

I'm proud of all that we've accomplished over the past 25 years, and I'm confident that the next 25 years will bring even greater success.

Ron Sargent
Chairman & CEO

Ethics

We strive to model integrity in all that we do, and strictly adhere to our Code of Ethics and corporate governance practices. We seek to work with suppliers who share our values and expect them to follow our Supplier Code of Conduct.

Community

We reach out to and support the communities in which our customers and associates live and work. We do this by creating jobs (both through direct employment and indirectly through our supply chain), and also by providing support for educational important community initiatives through financial contributions, employee associate engagement in local causes and in-kind donations.

Environment

We generate business and environmental benefits — for ourselves, our customers and our communities — by leading the way in sustainable business practices. We focus on offering more sustainable products and services, providing easy customer recycling solutions, and operating our business in an environmentally efficient way.

Diversity

We seek to develop a workforce that reflects the diversity of the communities and customers we serve all over the world by embracing diversity in all its forms — race, gender, thought and experience. We promote a culture of inclusion within our workforce, and source products and services from diverse minority- and women-owned businesses.