Sustainable forestry and the reduction of ‘forest footprint’

01-06-2010 | With 4 billion hectares worldwide, forests cover some 30 percent of the world’s land area. Forests are crucial to maintaining biodiversity and keeping climate change under control. However, to satisfy the needs of modern society, deforestation continues at the alarming rate of about 13 million hectares per year, which is 0,3% of total forest area. Sustainable forestry standards have been developed to fight deforestation, such as FSC and PEFC*. Thanks to these initiatives, wood and pulp is available which is produced on legal plantations that meet environmental and basic labour rights standards, and that respect the rights of indigenous people. Although the area of certified forests grows rapidly, only some 8% of productive forests are certified. Moreover, certified forests are largely located in Europe and North-America, leaving a tremendous challenge in the more sensitive regions, such as Africa, Latin-America and Asia, where illegal forestry is booming.

Sustainable forestry standards

Triodos Sustainability Research applies strict standards on sustainable forestry practices. These standards are developed to identify the sustainability leaders in every sector and are regularly updated to reflect the latest developments. Companies in ‘high-risk’ sectors for deforestation, including paper and forestry companies, metals and mining companies and food producers are required to have a policy against deforestation activities in protected and sensitive areas. In addition, companies that own forests and forestry plantations are required to have all their own forests and plantations certified with a sustainable forestry certificate, or have certification scheduled for within 5 years. Companies in the paper and forestry sector, as well as publishing, advertising and printing companies, are required to purchase at least 50% of their wood and pulp from forests with sustainable forestry certification.
In the development of its standards to prevent involvement in deforestation, Triodos Sustainability Research takes into account the leading sector- and multi-stakeholder initiatives such as FSC and PEFC. In 2009, Triodos Sustainability Research also contributed to the set up and launch of the Forest Footprint Disclosure Project, an initiative that aims to raise awareness about deforestation across sectors, similar to the Carbon Disclosure Project. By raising awareness and measuring impact, the initiative can help companies to reduce their involvement in deforestation.

Growing awareness

Our research shows that companies in different sectors are becoming increasingly aware of deforestation. In the food retail sector, Sainsbury’s from the UK has 75% of its wood based products FSC certified and its tissue, toilet roll and kitchen towel is either FSC certified or 100% recycled. Sainsbury’s is also a member of the WWF Forest and Trade Network group, which commits to sourcing wood-based products from sustainably managed forests. Other good examples are Adidas and Timberland; in 2009 they told their suppliers that they expected zero deforestation or they would stop buying from them. All three are considered eligible for investment.

Companies excluded

In our 2009 sustainability study of the commercial printing industry, two Japanese printing companies did not meet the requirements for sustainable forestry. The companies, Dai Nippon Printing and Toppan Printing, could not show evidence of sufficient use of material from certified forests and are therefore no longer selected for the investment universe. Sustainable forestry was also an issue at some AGM’s we visited this year - in the article about the AGM season, you will find examples of printing companies that do meet Triodos requirements.

*Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC)

Note: The issues explored in this article are specifically relevant to sustainable investments on the stock market. Triodos Bank believes that our Socially Responsible Investment funds are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to clients that choose to invest on the stock market.