The global market for forest and wood products is worth over $300 billion (USD) per year. However, as an industrial sector it is highly sensitive to environmental pressures. In recent years, groups like Greenpeace have been successfully pushing leading brand name, consumer-driven companies such as Home Depot and Walmart to only buy from certified suppliers who can prove good environmental performance. An example of how significant the impact of such pressure can be is Asia Pulp and Paper, Asia’s leading paper supplier. This company lost over $100 million-worth of business with European customers who were urged by NGOs to stop buying from it. In addition, global legislative efforts are underway to ban the trade in illegally logged timber and timber products. In the US, the Initiative Against Illegal Logging (IALL) now allows for companies to be prosecuted for trade in illegal timber products – and there are strong trends to adopt similar laws in the EU. Therefore buyers in the US and the EU will increasingly require assurance, in the form of supply chain transparency, that they will not be liable for prosecution.

There are over 50 standards and schemes which companies can sign up to relating to sustainable forestry. The PEFC (Program for the Endorsement of Certification) scheme is an umbrella group which recognizes national forest certification schemes, such as CERTFOR in Chile, and SFI in the US. It has 25 national member schemes under its umbrella and to whom it allows use of its certification brand and labels. However, the details and rigor of the individual standards under its umbrella vary. The Forest Stewardship Council (FSC), on the other hand is a single global standard administered by its non-profit secretariat headquartered in Germany, but with significant international operations. An example of a sustainable forestry initiative not yet reaching the level of audited standard is the WWF’s Global Forest and Trade Network (GFTN) which encourages suppliers not yet in a position to gain certification to join its grouping and pursue a step-wise approach to sustainable forestry.

So which standards are the most recognized and valuable for a company in the forestry business to have? Of course this is open to debate and depends on what you are selling to whom. The needs of global trade differ from domestic commerce. We have analyzed the forestry standards in terms of numbers – who is certified to what, and in which country, data as of the end of 2008.

Certified Forests

FSC Forestry Management:

118 million hectares, 997 certificate in 82 countries

PEFC Systems for Forests:

223 million hectares, 514 certificates, in 22 countries

FSC Forestry Management (ex N America):

75 million in 80 countries

SFI FM (US PEFC scheme, included in PEFC total):

72 million hectares, 73 certificates, in North America

CSA (Canadian PEFC scheme, included in PEFC total):

73 million hectares, all in Canada

Australian Forest Certification Scheme:

10 million hectares, 9 certificates, in Australia

The geographic focus of the two systems, PEFC and FSC can be clearly seen from the above data. In terms of forests covered by the certificates 66% of PEFC forest area are in North America, while the figure for FSC is less than 35%, indicating the more global scale of FSC’s coverage. This can also clearly be seen in the distribution of Chain of Custody certificates, where the vast majority of PEFC’s suppliers are based in Europe. Clearly, FSC leads in providing sustainable forestry assurance when it comes to global trade in wood and pulp products and is the fastest growing in emerging markets like Asia, Africa and South America. Buyers also are aware of the more structured format of the FSC certificate – the same details and rules apply wherever one sources from. The PEFC standard holders may play to differing rules depending on which member country the certificate was obtained from. Global companies in general prefer the simplicity of a single, harmonized standard they can apply globally.

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