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Destroying Sumatran rainforest to make way for APP pulpwood plantations. Photo: Jeremy Sutton-Hibbert/Greenpeace

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  • Timber by Peter Dauvergne & Jane Lister

    Timber by Peter Dauvergne & Jane Lister uncovers the dark world of commodity chains linking wood products to global deforestation

7 ways to help stop tropical deforestion & illegal logging

Peter Dauvergne & Jane Lister

11th March, 2011

A store like Walmart can wield more power than a country over a logging company - especially in the global South. But what's good for Walmart is not always good for the planet. Peter Dauvergne & Jane Lister outline 7 key tools for retailers to limit the impacts of timber consumption

Global commodity chains define today's political economy of timber. Chains linking loggers with multinational timber companies and international retailers are moving more and more of the world's timber from the tropical and boreal forests of the Third World to high- consuming states of the First World. The corporate drive into China is particularly notable as Northern multi-national corporations (MNCs) and Chinese domestic firms strive for low-cost production advantages to compete in First World markets as well as capture emerging Asian markets. One result is Russia, Southeast Asia, the South Pacific, Central Africa, and South America are increasingly bearing a disproportionate share of the social and ecological costs of consuming the world's forests.

Imposing rules of conduct for a whole chain that criss- crosses continents is comparatively rare. States do not have jurisdictional authority to do so. NGOs do not have the resources or influence to do so. International law does not have enough power to direct the workings of the corporate world. And, until recently, corporations have not had much incentive to do so.

Over the last decade, however, the world's biggest retailers have been developing policies and programs to attempt to do precisely this - that is, monitor, change, and ultimately control the business and sustainability practices of their thousands of suppliers.

The results, however, are double- edged. Although these efforts are incrementally improving and raising the bar on corporate practices, at a global scale they are falling well short of tackling the forces driving forest degradation and deforestation in the global South. Moreover, these efforts are reinforcing corporate control of what is an invaluable resource for many of the world's poorest and most marginalized people leaving it to large discount retailers to decide how, why, and where we consume timber, and further legitimizing a world of ever- increasing unsustainable consumption. Fundamentally, the attempt by big box retailers to better govern their global commodity chains raises a puzzling dilemma - can the driver of the rising discount economy really be the solution to reversing its growing negative effects?

1. Supply chain tracing

Being able to track products from the final customer back to their origin is a fundamental prerequisite for governing commodity chains effectively. This is not a straightforward exercise for most products. This is particularly the case for composite timber products from mixed- fiber sources (for example, plywood where the high- quality outer veneer wood differs from the lower- quality core material), or for grocery products with soy and palm oil ingredients, with largely hidden connections to tropical deforestation.

The task of achieving supply chain traceability is especially challenging for the big retailers. Not only does a typical retail store sell hundreds of thousands of different products sourced from around the world, but also the store rotates products on and off its shelves as it strives to maintain product selection and offer low prices to bargain- hunting customers.

Nonetheless, many are now taking up the challenge, worrying that a lack of supply chain knowledge presents a growing corporate risk: reputational, legal, and financial. In response to a protest campaign, in 2009 Walmart Brazil stopped sourcing leather and beef from Amazon farmers. In the same year, fearing reputational damage and business losses, Cadbury reversed its decision to use palm oil instead of cocoa butter in its chocolate products. And in 2010, following a highly effective and unprecedented social media campaign that used Facebook, Twitter, and YouTube to send powerful videos, images, and messages of rainforest destruction, Nestlé adopted a new policy to identify and exclude companies from its supply chain that own or manage high- risk plantations or farms linked to tropical deforestation. Retailers that lack an understanding of their wood supply chains are also now facing stiffer potential penalties for violating emerging regulatory measures to curtail the trade of illegal forest products (e.g., the Lacey Act Amendments in the United States and the EU's recently announced rules that will ban illegal timber imports).

2. Forest footprint and product life- cycle analysis

To aid in tracing and revealing how much a company's products and supply chain activities impact upon the world's forests, a number of MNCs, including several major retailers, are analyzing their 'forest footprints.' Some are participating, too, in a UK initiative launched in 2009 called the Forest Footprint Disclosure Project (or the FFD Project). A forest footprint refers here to "the total amount of deforestation caused directly or indirectly by an organization or product."

The FFD Project aims to increase the transparency of corporate practices within the global commodity chains of the biggest "forest risk commodities" (e.g., timber, beef, soy, palm oil, and biofuels). The financial investment community is backing the FFD Project; by 2010 there were 36 institutional investors, with assets of more than US$4 trillion, sponsoring it to help them identify which companies are managing 'environmental risk' effectively.

More and more MNCs are also conducting broader life- cycle assessments of products and processes. Two main life- cycle assessments and global carbon accounting supply chain initiatives are the sustainability consortium and the World Resources Institute and the World Business Council for Sustainable Development greenhouse gas protocol reporting standards. This means considering the full range of impacts on the environment over the lifetime of the product at all stages, including extraction of raw materials, manufacturing, packaging, transportation, energy consumption, maintenance, and disposal.

3. Supplier requirements and green procurement

Global retailers are increasingly using their purchasing power to implement green procurement policies, product specifications, and supplier sustainability requirements. Often, these go beyond legal requirements, particularly in developing countries. Aided by sustainable procurement guides developed by groups such as the WWF, the World Resources Institute, and the World Business Council for Sustainable Development, the biggest global do- it- yourself home improvement, office supply, and hypermarket retailers all have global wood procurement policies.

Staples, the world's largest office products company, became in 2002 the first in the paper industry to announce a comprehensive environmental paper procurement policy. 'The Paper Campaign,' an intensive two- year US market campaign led by ForestEthics and the Dogwood Alliance, was influential in pushing Staples to develop this policy. The policy commits Staples to only purchase 'sustainable paper products' defined as paper products 'that are designed, harvested and manufactured to minimize environmental impacts across the entire life- cycle, promote responsible forest management, and protect the rights and needs of local communities.'

IKEA now has a wood procurement policy, too. Its code of conduct for its suppliers is at the forefront of such policies. Called 'IWAY,' it sets uniform sustainability requirements for IKEA's timber product suppliers worldwide. All of IKEA's catalogue suppliers, for example, must meet the same requirements for recycled and certified fiber.

4. Eco-certification and eco-labeling

Retailers are incorporating eco-certification and eco-labeled products into their commodity chain greening efforts and sales strategies as a means to define and assess supplier responsibility, ensure the sustainability of their product offerings, and capture new market demand for eco-friendly products.

On the production side, eco- certification works by setting sustainability criteria that producers adopt to protect forests, water quality, wildlife habitats, local communities, and so on. On the consumption side, retailers stock their shelves with eco- certified products that are marked with an eco- label symbol to enable shoppers to pick out and purchase green products.

Over the past two decades, around 13 percent of the world's forests have been certified. To this point, however, approximately 80-90 percent has occurred in well- managed forests of Europe and North America rather than in the boreal and tropical forests of the global South. Less than 1 percent of forests in Asia and Africa, just 1.6 percent of forests in Latin America, and less than 3 percent of boreal forests in Russia are certified. The sustainable procurement policies of retailers are driving the growth in certified product demand; yet, so far, eco- certified forest products have had limited impact on mitigating tropical or boreal deforestation in the developing world.

5. Supplier audits

Many retailers are also starting to audit suppliers to verify that they are meeting certification standards, corporate codes of conduct, and commodity chain sustainability requirements. IKEA now has a Compliance & Monitoring Group, for example, that follows up on its IWAY code with regular audits (in addition to its third- party audits conducted by the Rainforest Alliance SmartWood Program). In China, in particular, IKEA audits every supplier at least once a year - with most audit visits now unannounced.

6. Stakeholder partnerships

Retailers are increasingly participating in strategic partnerships among multiple stakeholders to design, implement, and legitimize policies and programs for governing the sustainability of global commodity chains. These partnerships involve conservation groups (e.g., WWF, Conservation International, and the Nature Conservancy), buyer groups (e.g., the WWF Global Forest & Trade Network), green building associations (e.g., US Green Building Council), and business councils (e.g., World Business Council for Sustainable Development).

Environmental groups have also proactively supported and rewarded positive corporate sustainability initiatives. The Natural Resources Defense Council (NRDC), for example, strongly backed the decision by Staples to source paper certified by the Forest Stewardship Council as containing post- consumer recycled content.

7. Sustainability reporting

Finally, recognizing the increasing demand from governments and consumers for greater multinational transparency and accountability, the global retailers are communicating their sustainability commitments and global commodity chain greening programs through sustainability reports that document their progress toward sustainability goals. Some are using the Global Reporting Initiative (GRI) guidelines to facilitate benchmarking of their performance against the progress of other companies. Some are also hiring professional auditing firms like PricewaterhouseCoopers to conduct independent assurance assessments of the sustainability reports, so as to verify the legitimacy of the reported information and avoid accusations of corporate greenwash.

Others are participating in retail industry voluntary codes of conduct, such as Europe's Retail Environmental Sustainability Code, in which signatory companies agree to adopt better environmental management practices and to track and report regularly on their sustainability progress.

This an extract from Timber by Peter Dauvergne & Jane Lister (Polity Press, 2011, £14.999 paperback).

To order a copy of Timber with a 25 per cent discount, visit the Polity website and use the order reference code PY204 at checkout or simply phone John Wiley Customer Services on 0800 243 407, and order using the same reference.

 

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