Forest and Paper Products Forestry, Timber, Pulp and … and Paper... · Sustainability Topics for...

Sustainability Topics for Sectors: What do stakeholders want to know?

FOREST AND PAPER PRODUCTS – FORESTRY, TIMBER, PULP AND PAPER, RUBBER

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This table shows a list of topics identified as relevant by different stakeholder groups. They can be considered as stakeholders’ suggestions or requests for topics to be monitored or disclosed by organizations.

Additional information about the project can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx

7 – Forest and Paper Products – Forestry, Timber, Pulp and Paper, Rubber

71 Topics

Owners and Operators of timber tracks, forest tree nurseries and sawmills. Manufacturers of timber and related wood products. Includes lumber

for the building industry. Producers, converters, manufacturers’ merchants of all grades of paper. Manufacturers of paper and cardboard

containers and packaging. Does not include makers of printed forms and paper items. Includes rubber and other forest products.

Sustainability Category

Topic Topic Specification (if available)

Explanation Reference(s)1 Constituency

Economic REDD deals (Reducing Emissions from Deforestation and Forest Degradation (REDD))

A good REDD deal would help conserve forests nationwide, while protecting biodiversity and benefiting indigenous peoples and local communities in a manner that fully respects their rights and needs. A bad deal would allow corporations to continue destroying forests while claiming to protect them, and risks worsening the situation for forest communities

218, 230 Civil Society Organization

GHG sequestration

Total direct and indirect greenhouse gas sequestration by weight Where applicable, indicate the volumes of greenhouse gas sequestration through development of carbon sinks

541 Mediating Institution

https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx




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Many forest organisations have been developed to assist in the sequestration of carbon

Indirect economic impacts

Local community

Support rural communities through salaries and benefits, contracting of local businesses, as well as through donations and sponsorship in support of infrastructure, including schools, roads and hospitals. Given its critical role in the economic viability of thousands of local communities, the sustainability of the global forestry industry is more important than ever. With the increasing pressures of rapid urbanization on infrastructure, housing and public services, the employment opportunities in rural areas help families avoid migration into cities. Report

286, 287 Business

Environmental Materials sourcing

Fresh and recycled wood and/or fiber products

Sustainable fibre procurement refers to the company's responsibility for the provenance of the wood and pulp it buys in. - sourcing of fresh wood/fibre: policy, management systems and reporting on the company's performance. '- sourcing of recycled wood/fibre: disclosure of the proportion of recycled fibre in products and of the company's strategy for raising the proportion of Companies are responsible not only for the management of their own forests and plantations, but also for the provenance of the wood and pulp they buy in. Besides issues surrounding the sustainable cultivation of timber

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(see topic 1 above), traceability systems to track the origins of wood are particularly important here. They are for example used within the framework of certification systems to ensure that the wood in question really has been cultivated sustainably. They are also used with the aim of excluding that illegally logged timber is bought in. In the production of paper, it is far better from the environmental point of view to recycle wood fibres than to extract virgin fibres. Illegal logging is one of the principal causes of global deforestation. The problem is an enormous one, as can be seen from the fact that the European Parliament puts the proportion of global wood production originating from illegal logging at between 20 and 40 per cent. Illegal logging, for example using fake logging permits, is very common, particularly in countries with high rates of corruption. The idea of genetic fingerprinting, which can accurately pinpoint the provenance of wood, is currently growing in importance.

Recycled fiber use

Paper and wood production

Efforts to increase paper recycling rates and invest in technology to increase recycled fibre input into paper and wood products, therefore optimizing the use of wood as raw material and reduce the amount of used paper going to landfills Recovering increasing amounts of paper and integrating it back into the product manufacturing system has an influence on the use of raw wood materials, product

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sustainability and material costs. This complementary fibre source helps to reduce the amount of paper in the waste stream, thus reducing greenhouse gas emissions generated though paper decay. Report

Energy consumption

Type of energy source

Reduction of environmental impacts in further processing of wood/fibre - disclosure of sound and comprehensive measures and programmes for reducing the environmental impacts of wood processing (esp. referring to energy, water and chemicals) '- emissions from biomass-based energy as well as fossil fuel emissions Wood / fibre processing is highly energy- and water-intensive. In addition, it uses numerous chemicals, e.g. for delignifying wood fibres in the production of pulp. Although the use of elemental chlorine has been banned for bleaching pulp in the EU and in many other countries for years, it has still not definitively been ruled out by all companies. The industry traditionally has a high proportion of biomass based energy in its energy mix, as waste products from production (e.g. bark and black liquor) can be converted to energy. Energy produced in this way is viewed by the industry, in line with international initiatives such as the Kyoto Protocol, as being carbon neutral and is not therefore included in reduction targets

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for greenhouse gas emissions. However, since this obscures the actual level of the industry’s emissions, companies should also report transparently on their biomass based CO2 emissions. None of the companies assessed by oekom research in 2011 has implemented a supplementary reduction target that includes emissions from biomass-based energy as well as fossil fuel emissions.

The industry process requires high consumption of electricity and primary energy. What is the company strategy to reduce dependence to fossil fuels, to improve its carbon footprint (CO2 emissions), and reduce its exposure to costs induced by the EU carbon market? The process uses a large amount of Water, what is the disclosure of water usage?

74 Business

Water consumption

Paper production

Water and paper intensity chosen as micro indicator. Water/paper intensity is the ratio between the total amount of water/paper (m3/tonnes) consumed and revenues (EUR mn). Both related costs are direct expenses (operational/administrative), influenced by underlying commodity prices and resource efficiency of operational processes. We multiply water/paper volumes by water/paper prices for costing purposes.

521 Business

Wood and/or fiber processing

Reduction of environmental impacts in further processing of wood/fibre - disclosure of sound and comprehensive measures and programmes for reducing the environmental impacts of wood processing (esp. referring to energy, water and chemicals)




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'- emissions from biomass-based energy as well as fossil fuel emissions Wood / fibre processing is highly energy- and water-intensive. In addition, it uses numerous chemicals, e.g. for delignifying wood fibres in the production of pulp. Although the use of elemental chlorine has been banned for bleaching pulp in the EU and in many other countries for years, it has still not definitively been ruled out by all companies. The industry traditionally has a high proportion of biomass based energy in its energy mix, as waste products from production (e.g. bark and black liquor) can be converted to energy. Energy produced in this way is viewed by the industry, in line with international initiatives such as the Kyoto Protocol, as being carbon neutral and is not therefore included in reduction targets for greenhouse gas emissions. However, since this obscures the actual level of the industry’s emissions, companies should also report transparently on their biomass based CO2 emissions. None of the companies assessed by oekom research in 2011 has implemented a supplementary reduction target that includes emissions from biomass-based energy as well as fossil fuel emissions.

The industry process requires high consumption of electricity and primary energy. What is the company strategy to reduce dependence to fossil fuels, to improve its carbon footprint (CO2 emissions), and reduce its

74 Business



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exposure to costs induced by the EU carbon market? The process uses a large amount of Water, what is the disclosure of water usage?

Water withdrawal

Water abstraction and forest fellings/increment chosen as macro indicator. Water abstraction is expressed as a percentage of the long-term annual average of renewable available water resources, separated into groundwater and surface water. The forest indicator is defined as the ratio of annual fellings of wood over net annual increment.

521 Business

Water conservation practices

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the organization’s discharges of water and runoff (this should include measures to protect water catchments and effects of stream flow e.g. area and percentage of land set aside for catchment protection) Organisations should indicate the area of land set aside for water catchment conservation, this should be expressed as the number of hectares dedicated to water conservation, and may also be expressed as a percentage of the total land area available. Many forest areas play a critical roll in conservation of water resources and actively manage land areas for this purpose.




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“Over collection” of wild plant populations and species

More and more people demand “natural” products made from wild collected plants. Such products may be used in different ways; mainly they are used in the food industry, in the pharmaceutical industry or in the cosmetics industry. However, the excessive collection of wild plants often leads to a decrease of these plant species, a process called “over collection”. Some species may become endangered or disappear altogether. Consequently, collectors have to walk further and further or cannot collect the requested quantities any more. In order to enable continuous collection and therewith to ensure continuous income for collectors, it is important that plant populations remain vital and productive. Sustainable collection methods ensure that plant populations and species are maintained over the long-term. WWF: It aims to maintain wild plant resources, prevent negative environmental impacts from collecting activities, respect customary rights to plants and ensure benefits to local communities and require fair treatment of collectors, including limiting the use of child labor. http://wwf.panda.org/about_our_earth/all_publications/?194868/New-standard-offers-more-protection-for-wild-medicines-and-collectors


Biodiversity management and protection

Introduction of new species and pests

The challenge for managers is to respond to likely threats from potentially damaging or invasive species in the context of their own particular region, and a risk

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assessment should be made at a country or regional basis before any new potentially invasive species are introduced. Even if judged to be safe, after any introduction, the new species should be carefully monitored to ensure it does not subsequently become invasive, to help determine if any re-medial action needs to be taken, for example to prevent wildings from plantation species invading indigenous forests. In addition, both international and country level legislation is in place to regulate the international movement of organisms posing phytosanitary risks or eco-system threats, and regardless of forest estate certification requirements, these regulations and agreements must be complied with by forest managers. Many organisms interact with trees, but it is only when they affect the forest in a way that is detrimental to a particular objective, for example timber production, or maintaining forest communities within the forest or on neighbouring land, that they become a pest or weed. The introduction of new pests can be catastrophic to natural environments, particularly where similar species do not occur naturally, for example when mammalian species are introduced to areas where they are naturally absent. Climate change can increase the frequency and severity of natural disturbances, alter the range and nature of problem pests, weeds and diseases, and require the reappraisal of existing approaches to management and control. In highly disturbed ecosystems, whether due to natural causes or artificial intervention, further inputs



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may therefore become essential if forests and woodland are to be adequately protected or regenerated, and rapid interventions may need to be taken to prevent damage to neighbouring communities. Damage to trees and woodlands can occur from both indigenous and introduced species. With indigenous species, it is often the impact of humans that has the most influence. However, many of the most serious problems for indigenous trees have resulted from the movement of causal organisms from one part of the world to another. These organisms have not co-evolved with their new hosts, and the hosts may have limited or no effective defensive systems and may lack natural biological controls. Therefore preventing the arrival of a potentially damaging pest, pathogen or invasive plant species, and having detection systems in place to allow a rapid response to any potentially damaging introductions that do occur, will reduce or eliminate the need for more extensive interventions to be made later.

Complying with the principles of responsible forestry The following sections of the GRI reporting guidelines may be used by a reporter to mention the responsible forestry activities related to FSC, those are: - Profile - Commitments to External Initiatives: 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. - Environmental Impact: EN 26: Initiatives to mitigate environmental impacts of products and services, and




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extent of impact mitigation. - Product: PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. PR3 is particularly interesting as companies who choose to report on this indicator should quantify the share of their products which would be FSC certified. In addition to the above criteria, the information collected through the FSC certification process can be directly used to feed in indicators such a Human Rights Performance, Society, Biodiversity, etc. This topic reflects significant impacts, risks and opportunities for a forestry company itself and its stakeholders as well as requires active management or engagement by the organization. FSC works to improve forest management worldwide, and through certification creates an incentive for forest owners and managers to follow best social and environmental practices. The growing demand for FSC certified products tells forest owners that businesses and consumers prefer products from well managed forests. This incentive brings direct benefits to the forest, such as protecting biodiversity, indigenous peoples' rights, worker’s rights, and areas of significant environmental or cultural importance. FSC provides a connection between the forest and the end user, ensuring that products with the FSC label uphold principles and criteria which bring the highest social and environmental benefits.



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In order to help forest managers, stakeholders and certification bodies interpret the FSC Principles and Criteria for a specific region, FSC is developing a set of International Generic Indicators. These are being produced following the most recent revision of the Principles and Criteria in 2012 and are based on the extensive explanatory notes that were developed to support discussion of the revised Principles and Criteria prior to their approval. Moreover, in many countries, FSC working groups have developed FSC National Standards. These are based on the Principles and Criteria, and provide locally appropriate indicators for each criterion to show compliance can be demonstrated in that national situation.

Sustainable management of forests/plantations, consisting of guidelines and management plans (referring to soil and groundwater protection, fire management, the reduction of pesticide use and the protection of biodiversity). - forest/plantation management - certification for sustainable forest management, where appropriate As demand for wood as a raw material is rising (in the paper and the bioenergy market), the pressure on existing forests increases, and it can be assumed that the number of tree plantations will continue to rise. Where




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species-rich primary forests are cleared and replaced by monocultural plantations, severe environmental impacts and damages are caused. The impact of the industry on biodiversity, water balances and soil quality also has significant consequences for the living conditions of the local population. Certification: Particularly noteworthy are the FSC and PEFC labels, the two global labels for sustainably produced wood. oekom research favours FSC certification, which oekom research considers to be of higher quality.

Monoculture forests are less biodiverse and more vulnerable to problems such as weeds and pests, necessitating the use of agrochemicals. Overtime, this can lead to less fertile soils and erosion, impacting long-term production capacity and increasing potential damages from storm and fires. To mitigate biodiversity risks, companies should set aside small areas of protected forests. A good plantation design and the use of biodiversity "corridors" can also improve the levels of biodiversity in and around the plantations. Forests are part of a complex ecosystem and are among the most notable storehouses of biological diversity on the land: they house over 2/3rds of known terrestrial species. Forests serve multifunctional purposes and help to protect the soil, water and other ecosystem functions. Almost 12% of the forest area in Europe is set aside for conserving biological and landscape diversity.




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Sector Report

Emissions to air - GHG emissions

Biomass-based wood and/or fiber processing

Reduction of environmental impacts in further processing of wood/fibre - disclosure of sound and comprehensive measures and programmes for reducing the environmental impacts of wood processing (esp. referring to energy, water and chemicals) '- emissions from biomass-based energy as well as fossil fuel emissions Wood / fibre processing is highly energy- and water-intensive. In addition, it uses numerous chemicals, e.g. for delignifying wood fibres in the production of pulp. Although the use of elemental chlorine has been banned for bleaching pulp in the EU and in many other countries for years, it has still not definitively been ruled out by all companies. The industry traditionally has a high proportion of biomass based energy in its energy mix, as waste products from production (e.g. bark and black liquor) can be converted to energy. Energy produced in this way is viewed by the industry, in line with international initiatives such as the Kyoto Protocol, as being carbon neutral and is not therefore included in reduction targets for greenhouse gas emissions. However, since this obscures the actual level of the industry’s emissions, companies should also report transparently on their




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biomass based CO2 emissions. None of the companies assessed by oekom research in 2011 has implemented a supplementary reduction target that includes emissions from biomass-based energy as well as fossil fuel emissions.

The industry process requires high consumption of electricity and primary energy. What is the company strategy to reduce dependence to fossil fuels, to improve its carbon footprint (CO2 emissions), and reduce its exposure to costs induced by the EU carbon market? The process uses a large amount of Water, what is the disclosure of water usage?

74 Business

Chemicals use and discharges

Pulping and bleaching process in paper production

By switching to less toxic bleaching processes, the risk of paper mills to lose their license to operate is reduced. Building a closed-loop system with purifying water for re-use and recovering used chemicals can help companies reduce their environmental footprint. Cellulose (the fibre) and lignin are the two main ingredients of trees. Pulping is either done mechanically (grinding the wood) or chemically. As the lignin darkens when exposed to light, pulp is still sometimes bleached with chlorine-based chemicals. The process also requires a long cooking time and extensive washing. Pollution from production is affecting water (by adding nutrients and removing oxygen) and air quality. It also contaminates marine habitats, wildlife and the food chain. Pollution represents a risk for companies in terms of reputation, legal controversies and fines.




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Sector Report

Wood and/or fiber processing

Reduction of environmental impacts in further processing of wood/fibre Chemical effluents (e.g. chlorine)


Waste management

Residual products from forest and paper industries

Residual products which cannot be used on the site can be used in other ways: recycling to soil conditioner, building material, road building material or for the sealing layer on landfills. The industry therefore sends less and less of its waste to landfill. Many of the forest and paper industries’ residual products are valuable – their recovery rate is impressive: spent liquors, sludges, bark, chips and sawdust are almost fully utilised in energy generation and pulp manufacturing, while sawdust and chips also serve as raw material for pulp mills.

164, 288 Business

Water pollution Plantations The vast extent of agricultural activities around the world contributes significantly to both economic productivity and water-pollutant loads. Since the 1970s, there has been growing concern over the increases in nitrogen, phosphorus, and pesticide runoff into surface and groundwater. Intensive cultivation and growing concentrations of “factory” livestock or aquaculture operations have also long been known to produce large non-point source contributions of pollutants to surface and groundwater pollution. Beyond nitrate contamination, agricultural activities are also linked to the salinization of surface water, eutrophication (excess




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nutrients), pesticides in runoff, and altered erosion and sedimentation patterns. The quality of water is central to all of the roles that water plays in life. Safe water plays an essential role in drinking water and health – good water quality is fundamental to the network of life and livelihood that water supports. Water is the source of life on earth, and human civilizations blossomed where there was reliable and clean freshwater. Use of water by humans – for drinking, washing, and recreation – requires water free from biological, chemical, and physical sources of contamination. Plants, animals, and the habitats that support biological diversity also need clean water. Water of a certain quality is needed to grow food, to power cities, and to run industries.

Pulping and papermaking process

Efforts to produce paper bleached without elemental chlorine, reductions in the discharge of BOD (biological oxygen demand, representing the concentration of organic substances in effluents) per tonne of product, etc. Water is used in nearly every stage of the pulping and papermaking process, in varying quantities according to the type of paper produced. The large majority of pulp and paper mills apply a primary and secondary water treatment and in some cases, a tertiary treatment. Concerns have often been raised about the impact of chlorine bleaching on the environment.

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Water discharge and run-off

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the organization’s discharges of water and runoff (this should include measures to protect water catchments and effects of stream flow e.g. area and percentage of land set aside for catchment protection) Organisations should indicate the area of land set aside for water catchment conservation, this should be expressed as the number of hectares dedicated to water conservation, and may also be expressed as a percentage of the total land area available. Many forest areas play a critical roll in conservation of water resources and actively manage land areas for this purpose.


Emissions to water Components of emissions to water by environmental importance (according to TRI; PRTR; and EPER)


Environmental impacts mitigation

Complying with the principles of responsible forestry The following sections of the GRI reporting guidelines may be used by a reporter to mention the responsible forestry activities related to FSC, those are: - Profile - Commitments to External Initiatives: 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. - Environmental Impact: EN 26: Initiatives to mitigate




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environmental impacts of products and services, and extent of impact mitigation. - Product: PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. PR3 is particularly interesting as companies who choose to report on this indicator should quantify the share of their products which would be FSC certified. In addition to the above criteria, the information collected through the FSC certification process can be directly used to feed in indicators such a Human Rights Performance, Society, Biodiversity, etc. This topic reflects significant impacts, risks and opportunities for a forestry company itself and its stakeholders as well as requires active management or engagement by the organization. FSC works to improve forest management worldwide, and through certification creates an incentive for forest owners and managers to follow best social and environmental practices. The growing demand for FSC certified products tells forest owners that businesses and consumers prefer products from well managed forests. This incentive brings direct benefits to the forest, such as protecting biodiversity, indigenous peoples' rights, worker’s rights, and areas of significant environmental or cultural importance. FSC provides a connection between the forest and the end user, ensuring that products with the FSC label uphold principles and criteria which bring



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the highest social and environmental benefits. In order to help forest managers, stakeholders and certification bodies interpret the FSC Principles and Criteria for a specific region, FSC is developing a set of International Generic Indicators. These are being produced following the most recent revision of the Principles and Criteria in 2012 and are based on the extensive explanatory notes that were developed to support discussion of the revised Principles and Criteria prior to their approval. Moreover, in many countries, FSC working groups have developed FSC National Standards. These are based on the Principles and Criteria, and provide locally appropriate indicators for each criterion to show compliance can be demonstrated in that national situation.

Forestry practices

Deforestation A number of FSC Criteria state that conversion of forests into other land uses is not acceptable for FSC certified forest management. For example FSC P&C 6.10 states forest conversion to plantations or non-forest land uses shall not occur, except in circumstances where conversion: 1. entails a very limited portion of the forest management unit; and 2. does not occur on high conservation value forest areas; and 3. will enable clear, substantial, additional, secure, long term conservation benefits across the forest management unit.


Deforestation of tropical forests

Sustainable forestry under pressure. Growing demand for timber and agricultural commodities is costing 13mn hectares of tropical deforestation each year causing 18%

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of global GHG emissions37. Price increases for beef (10Y CAGR +3.2%), soy (+10.0%), palm oil (+14.8%) biofuels (+7.8%) and timber (+2.7%) are pushing global deforestation further with the EU27 having experienced a 13.2% increase in its forest land leverage from 1998 to 2005.

Fire management

Sustainable management of forests/plantations, consisting of guidelines and management plans (referring to soil and groundwater protection, fire management, the reduction of pesticide use and the protection of biodiversity). - forest/plantation management - certification for sustainable forest management, where appropriate As demand for wood as a raw material is rising (in the paper and the bioenergy market), the pressure on existing forests increases, and it can be assumed that the number of tree plantations will continue to rise. Where species-rich primary forests are cleared and replaced by monocultural plantations, severe environmental impacts and damages are caused. The impact of the industry on biodiversity, water balances and soil quality also has significant consequences for the living conditions of the local population. Certification: Particularly noteworthy are the FSC and PEFC labels, the two global labels for sustainably produced wood. oekom research favours FSC




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certification, which oekom research considers to be of higher quality.

Harvesting Volume of forest product harvested Total volume of forest product harvested by species, and where applicable by product, for example this may include logs expressed in meters cubed, bark expressed in tonnes, mushrooms and ferns expressed in kgs. This may also be expressed in volume per land area, so for example the meters cubed of logs per species harvested per hectare of land. This is an indicator of the sustainability of logging operations and the off take for commercial purposes.


Inventories Forest Inventory Volumes (per species) and / or areas available for harvesting. This would normally be expressed in the form of a long term plan (minimum 5 years) showing resources available commercial exploitation. Organisations should report on the totally of resources available, current reporting period availability and use for the reporting period. This would normally be expressed as a comparision of actual use compared to budgeted / plan use. The organisation should also report on the frequency of inventories and the date of the current inventory being used. This topic is an indicator of the resources available and the sustainable use thereof.




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Land use Land Use Optimisation Area of land utilised for forest activities in the period under review, this may be expressed by operation (i.e. development / planting / establishment, or logging / harvesting). This should be expressed as the total number of hectares developed as well as a factor against the total area available for forest activities per forest land area and per country. This is an indication of the sustainability of the forest operations, and an indication of optimising land use.


Pesticide use Sustainable management of forests/plantations, consisting of guidelines and management plans (referring to soil and groundwater protection, fire management, the reduction of pesticide use and the protection of biodiversity). - forest/plantation management - certification for sustainable forest management, where appropriate As demand for wood as a raw material is rising (in the paper and the bioenergy market), the pressure on existing forests increases, and it can be assumed that the number of tree plantations will continue to rise. Where species-rich primary forests are cleared and replaced by monocultural plantations, severe environmental impacts and damages are caused. The impact of the industry on biodiversity, water balances and soil quality also has




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significant consequences for the living conditions of the local population. Certification: Particularly noteworthy are the FSC and PEFC labels, the two global labels for sustainably produced wood. oekom research favours FSC certification, which oekom research considers to be of higher quality.

Agricultural pesticides contribute to raising agricultural productivity but also pose potential risks to human health and the environment. Data refer to active ingredients of insecticides, fungicides, herbicides and other pesticides including plant growth regulators and rodenticides. The risks vary greatly depending on pesticide’s inherent toxicity (or hazard) and exposure. Exposure depends on a number of variables, such as the application method, the weather after application, its environmental mobility and persistence, and proximity to water courses.


Water balance and soil quality

Sustainable management of forests/plantations, consisting of guidelines and management plans (referring to soil and groundwater protection, fire management, the reduction of pesticide use and the protection of biodiversity). - forest/plantation management - certification for sustainable forest management, where appropriate




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As demand for wood as a raw material is rising (in the paper and the bioenergy market), the pressure on existing forests increases, and it can be assumed that the number of tree plantations will continue to rise. Where species-rich primary forests are cleared and replaced by monocultural plantations, severe environmental impacts and damages are caused. The impact of the industry on biodiversity, water balances and soil quality also has significant consequences for the living conditions of the local population. Certification: Particularly noteworthy are the FSC and PEFC labels, the two global labels for sustainably produced wood. oekom research favours FSC certification, which oekom research considers to be of higher quality.

Soil management

Soil erosion Risks of erosion are largely attributed to the: continued cultivation of fragile and marginal soils; overgrazing of pasture, especially in hilly areas; and poor uptake of soil conservation practices. In some regions erosion is aggravated by the increasing incidence and severity of droughts and/or heavy rainfall events, and in some countries land clearing. The reduction in agricultural land susceptible to moderate to severe risk of erosion is mainly linked to the growing uptake of soil conservation practices, such as the adoption of reduced or no tillage, and the conversion of agricultural land to forestry. Estimates show that the costs of soil erosion damage can be considerable. On-farm costs correspond essentially to




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the agricultural production foregone as a result of soil degradation lowering crop productivity. Off-farm costs, resulting from off-farm sediment flows, include: extra expense to treat drinking water; costs of dredging rivers, lakes and reservoirs; damage to roads and buildings; and harmful effects on aquatic ecosystems, including recreational and commercial fishing

Soil nutrient balance

Inputs of nutrients, such as nitrogen and phosphorus, are important in farming systems as they are critical in raising crop and forage productivity, and a nutrient deficiency can impair soil fertility and crop yields. A buildup of surplus nutrients in excess of immediate crop and forage needs, however, can lead to nutrient losses representing not only a possible cause of economic inefficiency in nutrient use by farmers, but especially a source of potential harm to the environment. This can occur in terms of water pollution (e.g. eutrophication of surface water caused by nutrient runoff and groundwater pollution by leaching), and air pollution, notably ammonia, as well as greenhouse gas emissions. An additional environmental issue concerns the sustainability of phosphorus resources, as world reserves are diminishing (Johnston and Steén, 1997).

415, 534 Mediating Institution

Sustainable forest management

Forest management planning

The management plan, which is the output of forest management planning (and may be a single document or a series of separate documents) is the place where the whole range of requirements and plans for sustainable forest management are brought together and turned into a cohesive whole. The management plan should,

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primarily, be a document for the forest manager, which is used as the basis for all the activities undertaken in the forest. It also needs to meet any legal requirements for management planning documentation

Adherence to Principles of responsible forestry (FSC)

Complying with the principles of responsible forestry The following sections of the GRI reporting guidelines may be used by a reporter to mention the responsible forestry activities related to FSC, those are: - Profile - Commitments to External Initiatives: 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. - Environmental Impact: EN 26: Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. - Product: PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. PR3 is particularly interesting as companies who choose to report on this indicator should quantify the share of their products which would be FSC certified. In addition to the above criteria, the information collected through the FSC certification process can be directly used to feed in indicators such a Human Rights Performance, Society, Biodiversity, etc. This topic reflects significant impacts, risks and opportunities for a forestry company itself and its




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stakeholders as well as requires active management or engagement by the organization. FSC works to improve forest management worldwide, and through certification creates an incentive for forest owners and managers to follow best social and environmental practices. The growing demand for FSC certified products tells forest owners that businesses and consumers prefer products from well managed forests. This incentive brings direct benefits to the forest, such as protecting biodiversity, indigenous peoples' rights, worker’s rights, and areas of significant environmental or cultural importance. FSC provides a connection between the forest and the end user, ensuring that products with the FSC label uphold principles and criteria which bring the highest social and environmental benefits. In order to help forest managers, stakeholders and certification bodies interpret the FSC Principles and Criteria for a specific region, FSC is developing a set of International Generic Indicators. These are being produced following the most recent revision of the Principles and Criteria in 2012 and are based on the extensive explanatory notes that were developed to support discussion of the revised Principles and Criteria prior to their approval. Moreover, in many countries, FSC working groups have developed FSC National Standards. These are based on the Principles and Criteria, and provide locally appropriate indicators for each criterion to show



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compliance can be demonstrated in that national situation.

Forest and forest plantations

The forestry & paper sector comprises owners and operators of timber tracts, forest tree nurseries and sawmills as well as producers, converters, merchants and distributors of all grades of paper. The main challenge consists of ensuring responsible management of forests and plantations and responsible sourcing of wood fibers


Forest plantations

Addressing climate change through the promotion and implementation of sustainable forest management, sustainable forest plantation, while optimizing the use of raw materials, increasing efficiency in the mill processes and developing new, climate friendly bio-energy and forest-based products. Sustainable forest management can contribute to tackling climate change which continues to be a key issue for all industries globally. The forest products industry is uniquely positioned to produce products for the marketplace from renewable sources that capture and store carbon, and can sustainably replace other less climate-friendly materials. Additionally, forest plantations are an effective complement to natural forests to meet the growing demand for large volumes of timber. Forest plantations are established on relatively small areas of land and contribute to the conservation of vast areas of natural forests satisfying the needs for soil conservation, biodiversity, recreation etc. They are a key element in the overall multifunctionality and sustainability of forests. They provide essential

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environmental services, such as erosion control, soil recovery, carbon dioxide sequestration, regulation of watersheds, improvement of landscapes, and alternative habitats for wildlife. Report

Forestry on sustainable trend. Despite increasing industrial pressure on forests (EU27 roundwood production +32.4% 2005-2008), strategic preservation initiatives such as the EU Forest Action Plan have seen a 1.6% increase in EU27 forest/other wooded land area from 2000 to 2005. With decreasing fellings to net annual increments (-2.4% 2000-05), we expect a further positive downward trend in this indicator (52.6% in 2020).

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Wood charcoal production

Rainforest destruction

In Brazil- the world’s largest consumer of wood charcoal, almost all of the wood charcoal is used to process pig iron ( a key ingredient for steel). Turning iron ore dirt into steel requires massive amounts of energy, and for the rainforest in the northeastern Amazon, this energy has come at a heavy price Wood charcoal made from the charred remnants of the rainforest is used to heat pig iron blast furnaces that provide raw material for the steel mills and cast iron foundries


Social Employment practices

Contractors and contract workers

A large part of forestry work is carried out by contractors (contractor enterprises), the size of which may vary from one to two people to hundreds of workers. In these enterprises, there are direct workers and also contract

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workers whose employment status may not always be clear.

Diversity and equal opportunity

There are many women in temporary or casual work involving irregular or unusual hours or hired on a contract or piece-rate basis. They are paid less than men and normally are not covered by labour and social security regulations nor by the collective agreements. In the construction industry, women work very hard and long hours carrying bricks and mortar, breaking stones, pouring concrete and doing earth work. They generally continue to be regarded as unskilled even after they have worked in the industry many years. When they are young, they are exploited and harassed and when they are old they are told to leave. Statement on website

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Employee turnover

As a result of difficult working conditions, turnover in the workforce tends to be high, even in many industrialised countries. Adequate training is one of the key elements in breaking the cycle of low productivity, low wages, high accident rates and high turnover in the forestry workforce. Forestry is often a very important element of rural economies, providing complementary employment to the agriculture sector and offering jobs in regions where few other employment opportunities exist.




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Sector Report

Remuneration and wage systems

In many countries forestry is a low-paid industry (although there is less discrepancy between forestry and other industries in developed countries). As forestry work tends to be seasonal, annual income may be low even though daily rates are relatively high. In many countries it is up to the employer and worker or their organizations to agree on remuneration. Minimum levels of pay may be set in statutory instruments. Remuneration can be based on piece rates, time wage or combinations of these. In the forestry sector, group wage systems may be in use. The group members divide the sum they have received for a certain task. Helpers are often used in felling, and the wage can be paid by the chain-saw operator or by the main employer.

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Labor conditions Living conditions in work camps

Forestry workers are sometimes required to stay at temporary work camps in remote areas to remain near their place of work. Camps are usually owned and managed by employers. Geographic isolation can make enforcement of labour standards more difficult. This can affect Standards of living, affecting the health and safety of workers (facilities for eating, sleeping, washing, cooking and communication and also access to drinking water and food and hygienic conditions). Working environment in forestry has particular features that distinguish forestry from many other industries. Worksites are usually temporary and scattered; facilities

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are more difficult to arrange than at permanent work premises; climatic, topographical and biological conditions, and the large share of contractual and seasonal workers, have significant impacts on labour issues and on the welfare of labour.

Labor management relations

Closures and structural changes affecting workforce

Capacity closures and structural changes can cause tense labour relations or even strikes if they are not properly planned in cooperation with key stakeholders. Responsible practices include outplacement and career transition services, retirement plans or retraining. Cyclical prices, restructuring and rationalisation of paper companies lead to redundancies and reduction in workforce. Sector Report


Occupational health and safety management

Forestry workforce, contractors, self-employed and forest farmers

Accident prevention and health preservation measures Forestry is one of the three most dangerous occupations in most countries. All segments of the forestry workforce – but in particular contractors, self-employed and forest farmers – are exposed to high accident risks including many fatalities and serious health problems. Sector Report


Pulp and paper industry

Good practices: Horizontal Safety Checks, Contractors Management, Lockout Tagout Tryout, Anti-fall Cord, Machine Guarding, Safe Access to Confined Space, Rescue From Drying Cylinder, Roll Lifting Jack to Free Trapped Workers, Custom-made Paper Reel Trolley,

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Colour Coding System Improves Traffic Flow, Audiovisual Catalogue of Critical Situations, Manual for the Observation of Safe Behaviour in the Paper Industry, Safety Without Words, Five Minutes Daily for Occupational Safety, Occupational Safety Observation, Safety Alerts Inherently, the pulp and paper making process may present risks to the health and safety of the workers. These risks can be related to the use of certain substances/products, to the running of the machines, to the exposure to high temperatures, to the transport and handling of loads of different kinds, to the maintenance of the production equipment, etc.

Risk of accidents Forest workers are faced with serious occupational safety and health (OSH) risks. In most countries, the rates of accidents and occupational diseases are still high in the forestry sector. Within the forestry sector, accident rates are highest in logging work. Felling of trees, lifting and extraction of logs, and repair and maintenance work carry high accident risks. Many accidents take place in the transportation of timber and in travel to worksites. In silvicultural activities, accidents are less frequent and less serious, but are still relatively common. Slipping, falling and cuts by sharp tools or hand-held machines are the most common causes. Groups of workers who may be more prone to accidents and injuries include the young, the old and, in some cases, women. Regardless of the work, accidents are normally caused by

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poor organization and supervision, inadequate tools and equipment, poor planning, and lack of skills and competence among workers, supervisors and managers. Terrain and weather conditions increase accident risk but are often excuses for, rather than the principal causes of, accidents. In small-scale forestry, the risk of accidents tends to be high because of poor work equipment and safety gear, unskilled and inexperienced workers, and lack of awareness of safety hazards.

Wood dust a. evaluating the risks which cannot be avoided; b. combating the risks at source; c. adapting to technical progress; d. developing a coherent overall prevention policy which covers technology, organisation of work, working conditions, social relationships and the influence of factors related to the working environment; e. giving collective protective measures priority over individual protective measures; f. giving appropriate instructions to the workers. Europe-wide several million people are regularly exposed to wood dust in the course of their work. Wood dust remains the principal health hazard in the woodworking sector and to some extent also in the building industry, in almost all types of activity in which wood is worked by machine or manually.

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Wood workers’ exposure to formaldehyde

Measurement, assessment of exposure, actions for reduction Wood workers are often exposed to formaldehyde which has a carcinogen effect. (Formaldehyde comes primarily

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from the resin used in the adhesive when it is heated. Several factors affect formaldehyde emission, such as the type of resin, the pressing time, the thickness of the panel, etc. The most exposed workers are those assigned to the press operating tasks (usually in the control rooms) and maintenance tasks (press operator, mechanic, electrician, cleaner, foreman, etc.) when action must be taken during a breakdown or a production shutdown. Sample collection can also expose workers to high concentrations for short periods. In the furniture industry, formaldehyde comes primarily from the type of coating used and from the use of formaldehyde-based resins to glue elements and components together. This is also the case for the parquet industry and for the production of laminated wood.)

Work-related impacts on workers' physical and mental health

Most forest work is physically demanding. Hand-held tools and machines are heavy and moving and lifting timber is strenuous. Mechanization does not necessarily reduce the physical load. In work with machines, it is more common to suffer from one-sided repetitive work, pain in the neck, shoulders and back and other ergonomic problems. Vibrations from machines can be problematic, as can noise levels. Health problems can be caused by continuous machine operation to meet demanding production objectives. Chemical agents used in silvicultural work, timber protection and maintenance work may cause health risks if not used correctly. Chemicals should be stored, mixed, used and discharged correctly. They can have short-term acute effects and

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longer term chronic effects. Adequate protective equipment is necessary. Correct use of personal protective equipment (PPE) and its maintenance is essential for safe work.

Total number of fatalities in relation to FTEs Total number of injuries in relation to FTEs


Migrant workers Human trafficking risks

Trafficking in persons, or human trafficking, involves the recruitment, transportation, transfer, harbouring or receipt of a person (a woman, man or a child), often over international borders but also frequently within the boundaries of a single country, for the purpose of exploitation. It is a widespread abuse, affecting developing countries, countries in transition and industrialized market economies alike. The majority of victims of human trafficking are between the ages of 18 and 24, with most having received a job offer prior to their departure


Management of migrant and foreign workers

Migrant workers and workers with language skills different from the dominant culture are exceptionally vulnerable. Many countries have benefited from immigration and immigrant workers in the forestry sector. The integration of immigrants to the life of work is a key issue in promoting mutual benefits. Migrant workers are often in a weaker position than local people when it comes to defending their rights or meeting their responsibilities. There may be language problems leading to difficulties in the communication of

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work instructions. Cultural differences and preferences may bring tension to the workplace and act as a barrier to social integration. Migration can also lead to problems of illegal work, in which case the areas of safety and health, remuneration and social security, and all other aspects of decent work may be poorly regulated.

Recruitment, labor and working conditions

Recruitment and employment of migrant workers Number of migrant workers employed Countries of origin Gender of workers Positions within company Length of contracts Recruitment channels Any fees for recruitment Passport retention Migrant workers both internal and external are a significant and growing feature of all company activities. There are over 200 million migrants in the world. They are found within nearly all business sectors and across all regions. Many migrant workers, particularly those working in unskilled jobs are subject to discrimination and are vulnerable to exploitation and abuse. For many migrants exploitation begins during recruitment. Exorbitant fees and other charges, often at usurious rates of interest can leave many migrant workers effectively bonded labour whatever the subsequent conditions of employment.




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Company due diligence and reporting should therefore extend into the supply chain for labour.

Wild plant collectors

Working conditions and product pricing

More and more people demand “natural” products made from wild collected plants. Such products may be used in different ways; mainly they are used in the food industry, in the pharmaceutical industry or in the cosmetics industry. Products collected from the wild (e.g. medicinal and aromatic plants, berries, wild fruits, nuts and seeds, mushrooms) and raw materials for finished products (e.g. essential and fatty oils). The collection operation has to maintain fair and transparent relations with the collectors and actively involve them in key decisions that directly affect them, including the product pricing.


Forest users' rights and needs

Local communities and indigenous peoples

Forest areas fundamental to meeting basic needs of local communities (e.g. subsistence, health). Forest areas critical to local communities’ traditional cultural identity (areas of cultural, ecological, economic or religious significance identified in cooperation with such local communities). Forest operations can directly impact upon the livelihoods of people who use the forest which might include indigenous people, forest-dependent people and other communities and individuals living in or near the forest. By law or tradition, these groups often have rights to the forest area and resources, which must be maintained and protected.




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Corruption Logging licenses and concessions

Corruption in logging is fuelled by a range of factors,1 such as the lack of institutional capacity to monitor and enforce existing legal and policy frameworks, low transparency and accountability, and overall weak governance Corruption is one of the main drivers of illegal logging. It runs through the whole timber production and marketing chain


Timber trafficking and laundering

Timber laundering means converting illegally-cut logs to legally-certified timber by exploiting legal loopholes — such as those relating to transport of timber, or certification of origin — and relying on smuggling channels to bring the goods to market. As a result, companies buy raw timber for further processing and consumers purchase the end products without knowing the origin of the timber they have bought. The high profits involved in the illegal timber trade provide incentives for smugglers to launder illegal timber for sale on international markets


Child labor Wild plant collection

More and more people demand “natural” products made from wild collected plants. Such products may be used in different ways; mainly they are used in the food industry, in the pharmaceutical industry or in the cosmetics industry. Products collected from the wild (e.g. medicinal and aromatic plants, berries, wild fruits, nuts and seeds, mushrooms) and raw materials for finished products (e.g. essential and fatty oils)




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Common practices in collection with regard to involvement of children or young people (15 to 18 years)

Indigenous peoples rights

Adherence to international agreements (e.g. Equator Principles and Free Prior and Informed Consent (FPIC) of Indigenous Peoples)

The Rights of Indigenous People requires active management & engagement due to societal, legal & financial impacts of companies operating in extractive industries. The GRI should solicit companies’ policies and practices on the question of Free Prior and Informed Consent (FPIC) by asking if company explicitly recognizes or references the UN Declaration on the Rights of Indigenous Peoples or the ILO Conventions 107 and 169. Reporting should go beyond compliance violations to explicitly address reporters’ proactive strategies to address their impact on Indigenous communities (particularly with respect to cultural heritage) and how well companies are equipped to anticipate, forestall and mitigate negative impacts. Report on operations where indigenous communities are affected by activities (where FPIC applies), where specific engagement strategies are in place, number of projects that have failed FPIC review processes, and any projects that were preempted or discontinued due to that failure. Report on measurement and tracking of indicators of Indigenous Peoples’ community well-being, (e.g. life expectancy, substance abuse, domestic violence, native language literacy, and intensity of cultural practices) before during and after project. Disclose what materials and training the company provides to its employees pertaining to the rights of Indigenous Peoples.




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Land grabs of traditional lands and territories is one a major problems faced by Indigenous Peoples globally. With the increased value of commodity crops land grabs by forestry and agriculture companies is on the rise. Commercial fishing competes with Indigenous populations for a resource that is increasingly scarce due to overfishing and mismanagement. LEGAL: The UN Declaration on the Rights of Indigenous Peoples (IP) and with the expectation that these rights will be adopted both nationally and internationally as legal standards, corporations should be thinking from the highest levels about how they are incorporating these specific human rights into their management structure. FINANCIAL: While there are some examples of successful FPIC, there are many more where a company's operations have been shut down, projects delayed or in some cases forcibly abandoned due to blockades, legal actions or permit appeals. REPUTATIONAL: Companies that ignore the rights of local communities and/or respond to protests through the employment of private security forces are highly exposed to human rights violations, and face reputational risks that can lead to lost revenue or destruction of shareholder value. Any company involved in forestry, agriculture or fishing on the lands of Indigenous People will have an impact. It is the company's responsibility to ensure that the impact is positive. Potential negative impacts include but are no limited to forced displacement, competition for



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resources, contamination of resources, division of local tribes, and loss of cultural heritage sites. Risks include not only operational (financial) but reputational. FPIC provides the opportunity for companies to operate on Indigenous Peoples' land in a manner that respects their right to self-determination, provides equitable economic benefits, and serves to preempt multiple financial, legal, regulatory and reputational risks. Opportunities exist for economic partnerships that not only provide communities with an equitable stake in company success, but can serve to increase efficiency and profitability of operations through application of Indigenous Peoples' unique expertise of their territories.

Complying with the principles of responsible forestry The following sections of the GRI reporting guidelines may be used by a reporter to mention the responsible forestry activities related to FSC, those are: - Profile - Commitments to External Initiatives: 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. - Environmental Impact: EN 26: Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. - Product: PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. PR3 is particularly interesting as companies who choose




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to report on this indicator should quantify the share of their products which would be FSC certified. In addition to the above criteria, the information collected through the FSC certification process can be directly used to feed in indicators such a Human Rights Performance, Society, Biodiversity, etc. This topic reflects significant impacts, risks and opportunities for a forestry company itself and its stakeholders as well as requires active management or engagement by the organization. FSC works to improve forest management worldwide, and through certification creates an incentive for forest owners and managers to follow best social and environmental practices. The growing demand for FSC certified products tells forest owners that businesses and consumers prefer products from well managed forests. This incentive brings direct benefits to the forest, such as protecting biodiversity, indigenous peoples' rights, worker’s rights, and areas of significant environmental or cultural importance. FSC provides a connection between the forest and the end user, ensuring that products with the FSC label uphold principles and criteria which bring the highest social and environmental benefits. In order to help forest managers, stakeholders and certification bodies interpret the FSC Principles and Criteria for a specific region, FSC is developing a set of International Generic Indicators. These are being produced following the most recent revision of the



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Principles and Criteria in 2012 and are based on the extensive explanatory notes that were developed to support discussion of the revised Principles and Criteria prior to their approval. Moreover, in many countries, FSC working groups have developed FSC National Standards. These are based on the Principles and Criteria, and provide locally appropriate indicators for each criterion to show compliance can be demonstrated in that national situation.

Human rights and people’s livelihoods protection

Local communities and indigenous peoples

Protection of human rights and livelihoods * procedures and adopted measures to ensure that the human rights of the local population concerned are not violated - procedures and adopted measures to safeguard the rights of indigenous peoples and create lasting and independent income opportunities - opportunities for local communities and indigenous peoples from forestry operations The protection of human rights and people’s livelihoods is a key issue facing the industry, as the forest areas and plantations owned and/or leased by companies generally occupy very large areas of land. This often leads, particularly in emerging and developing countries, to conflicts between companies and the local population over land use, especially where the latter is displaced by the national government in order to make way for the industry to establish itself.




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Good practice: Some companies, for example, offer local farmers the opportunity to establish their own small plantations by supplying free seedlings, provide practical support for implementing such projects and guarantee to take their wood.

Land use rights The right to access the land is not restricted by a narrow interpretation of property rights. The rights‐holders have human rights, which may not include land‐ownership rights, partly because some countries do not recognize individual property rights, and partly because some people may not have legal title to the land on which they live or work, but may have customarily done so for years, if not generations. That aspect has huge significance for the landless and other rights are also involved. It affects those with land rights, and those who work on the land, such as sharecroppers, and those who use land seasonally, such as pastoralists or informal businesses common in many parts of Africa. These groups often correlate with those that are already the most vulnerable groups in society (e.g. due to gender, caste or age discrimination). Their not owning property rights does not mean they do not have rights – The impact on human rights is felt much before business operations begin – even when a company expresses its intention to develop a project in a particular area, there are human rights implications, because of raised expectations within a community. The power asymmetry between State and communities, between private




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economic interests and individuals or groups, often becomes the determining factor in shaping the land ownership dilemma. Business, civil society, and governments have a common interest in developing a framework that prevents human rights abuses at all stages of business’ relationship with land – before acquisition, during acquisition, and after operations have commenced and, if necessary, concerning appropriate relocation, rehabilitation and compensation. The extraction of natural resources – oil, gas, and mining – has commanded considerable attention in the area of business and human rights, but other businesses – tourism, manufacturing, infrastructure projects, power plants, public highways, irrigation projects, and even urban office complexes and supermarkets require land.

Forest management certification schemes

Forest product certification

Complying with the principles of responsible forestry The following sections of the GRI reporting guidelines may be used by a reporter to mention the responsible forestry activities related to FSC, those are: - Profile - Commitments to External Initiatives: 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. - Environmental Impact: EN 26: Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. - Product: PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information




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requirements. PR3 is particularly interesting as companies who choose to report on this indicator should quantify the share of their products which would be FSC certified. In addition to the above criteria, the information collected through the FSC certification process can be directly used to feed in indicators such a Human Rights Performance, Society, Biodiversity, etc. This topic reflects significant impacts, risks and opportunities for a forestry company itself and its stakeholders as well as requires active management or engagement by the organization. FSC works to improve forest management worldwide, and through certification creates an incentive for forest owners and managers to follow best social and environmental practices. The growing demand for FSC certified products tells forest owners that businesses and consumers prefer products from well managed forests. This incentive brings direct benefits to the forest, such as protecting biodiversity, indigenous peoples' rights, worker’s rights, and areas of significant environmental or cultural importance. FSC provides a connection between the forest and the end user, ensuring that products with the FSC label uphold principles and criteria which bring the highest social and environmental benefits. In order to help forest managers, stakeholders and certification bodies interpret the FSC Principles and Criteria for a specific region, FSC is developing a set of International Generic Indicators. These are being



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produced following the most recent revision of the Principles and Criteria in 2012 and are based on the extensive explanatory notes that were developed to support discussion of the revised Principles and Criteria prior to their approval. Moreover, in many countries, FSC working groups have developed FSC National Standards. These are based on the Principles and Criteria, and provide locally appropriate indicators for each criterion to show compliance can be demonstrated in that national situation.

Certifications are voluntary, market-based tools that ensure the application of SFM (Sustainable Forest Management) principles, improve on-the-ground sustainable management, and allow consumers to purchase forest products with confidence. There are numerous global SFM certification systems used throughout the industry, a variety of which are used by ICFPA members. The most common certifications include the Program for the Endorsement of Forest Certification (PEFC - www.pefc.org) and the Forest Stewardship Council (FSC - www.fsc.org). These certification systems also recognize a number of national or region-specific systems. Forests that are sustainably managed support the conservation of biodiversity and ecosystem functions involve local stakeholders, provide employment in rural areas, and are a sustainable source of wood fibre. Sustainably managed forests also contribute to the

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absorption of CO2, allow for the manufacturing of products that store carbon, provide an alternative to carbon intensive materials and fuels, and create renewable products made from recyclable raw materials. Members see credible forestry certification as a significant, voluntary, market-based tool which improves forest management practices, increases community well-being and meets the requirements of the industry’s customers. Report

forestry product output with recognised forest certification schemes


The main challenge consists of ensuring responsible management of forests and plantations and responsible sourcing of wood fibers. Certification and chain of custody systems play an important role in gaining customers’ trust and loyalty.


SCA [Svenska Cellulosa Aktiebolaget] recognizes it is crucial for group competitiveness to be able to deliver (FSC/PEFC) certified products given the sharp rise in the demand for such products in recent years.

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Percentage of total forestry product output in revenues €, $ with products from recognised forest certification schemes (FSC, Programme for the Endorsement of Forest Certification Schemes PEFC, Canadian Standard Association CSA, Sustainable Forestry Initiative SFI, Malaysian Timber Certification Council)




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Other Corporate governance

Gender participation on governance bodies

GOVERNANCE / EUROPE: boardroom lady boom: is it possible without quotas? On 22 June, the CapitalCom agency published its 2011 survey into the boardroom gender mix of CAC 40 companies, with fairly encouraging results: the proportion of women on the board has doubled in recent years, from 10.5% in 2009 to 20.8% in 2011. In January, the French parliament adopted legislation imposing quotas for the proportion of women on the board of major companies. Under the measures, the development of female board membership is mandatory and gradual: 20% for listed groups, public companies of an administrative, industrial and commercial nature by January 2014, rising to 40% by January 2017. The law also stipulates that companies with no women present on their board must appoint at least one within six months of it being on the statute books (voted on 13 January 2011). In France, some 2,000 companies are affected (the 650 largest listed firms and companies with more than 500 employees and those generating sales in excess of €50bn). In terms of sanctions for noncompliance, appointments that run counter to the parity principles are to be declared null and void and attendance fees are to be temporarily suspended. At the European level and at the instigation of the Vice-president of the European Commission, Viviane Reding, the European parliament will decide in March 2012 on whether to adopt common legislation on this matter (a




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mandatory proportion of women in decision-making positions of 30% in 2015 and 40% in 2020). This will depend on the level of improvement seen based on the selfregulation of European companies, in accordance with the equality initiative adopted by the European Commission in December 2010 and the European parliament resolution of 17 January 2008 calling for the Commission and member states to promote a balance between women and men on company boards, particularly where member states are shareholders. Europe as a whole illustrates the degree of hesitation between a soft-law approach and conventional legislation (quotas in this instance), but it is clear from the experience at national level that the second method tends to get much better results.

Lawful logging and rights to exploit

Adherence to forest legislation, regulation and policy

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations (specific reference to forest legislation and policy) Forest legislation, regulation and policy should be specifically included in this topic, it may be possible to express legal compliances in terms of the number of non-compliances and well as the monetary value of the non-compliance. Forest legislation compliance is critical in the forest industry




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The forest and paper industry acknowledges that forest law enforcement is the responsibility of domestic authorities, but concedes that such practices are not always easy to control. In order to ensure a predictable wood supply, the establishment of laws and regulations that promote and advance sustainable forest management, as well as the correct enforcement of these laws is welcomed by the forest and paper industry. In addition, practices such as certification of sustainable forest management, as well as the use by the industry of new technologies (GIS, GPS, electronic marking, etc.) to trace harvested wood, all contribute to the fight against illegal logging. The forest and paper industry worldwide is strongly opposed to illegal logging. It not only contributes to deforestation but also undermines the viability of legally harvested and traded forest products and is a serious detriment to forest sustainability.

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A basic requirement of sustainable forest management is that the forest resource is only exploited by the people who have a right to do so. Widespread illegal exploitation of forest resources in many parts of the world is a major threat to sustainability and as a result has become the focus of international concern. This has led to many timber buyers making a commitment only to buy timber from legal sources.


Political accountability

There are various measures of political accountability that can be measured (contributions, disclosure, board oversight).

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Note that this topic is applicable to more than the three industries noted. Essentially the political accountability practices of any company that is owned by public stockholders. Political contributions, the amount of disclosure and board oversight are among the data items that would be helpful in a sustainability report. In making investment decisions (especially for investors interested in socially responsible investing) is would be helpful to understand how a given company is exposed to political risk (i.e. are they backing the winning candidate, are they subject to potential retribution, why do they find it necessary to make political contributions, etc.). I have found the information I reference to be helpful in constructing investment portfolios that take into account this attribute of sustainability. Since it is not currently an established parameter in the socially responsible investment industry (www.ussif.org), adoption by the Global Reporting Initiative would go a long way in moving the topic of political accountability forward.

Information Users

Sourcing strategy and policies

Environmental and social standards in the supply chain of wood and/or fiber products

Sustainable procurement covers measures taken by companies to integrate environmental and social criteria in the selection and management of suppliers. Supply chain (social and environmental): ¦ Formal sourcing policy covering environmental and social issues




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¦ mechanisms in place to ensure effective implementation of sustainable/responsible procurement policy of wood and wood products ¦ Percentage of suppliers for which sustainable procurement measures (assessment, control or audit) were implemented ¦ Percentage of recycled fibers in paper pulp produced or purchased ¦ Share of wood/ paper pulp coming from the certified sustainable forestry sources as a percentage of total wood/ paper pulp used weight. ¦ Check of subcontractors compliance with basic labor requirements through CSR assessments or audits (e.g. number of audits) ¦Sourcing wood fibres not sourced from illegal forests is the main way the industry can minimize environmental impacts from sourcing ¦Chain of Custody Certification is a very straightforward way of ensuring traceability and responsible purchasing of forestry products ¦In the sector, social risks in the supply chain occur when the company has subcontracting operations in risk countries.

1 All references can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx




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References

All references can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx

22 Tikina, A.V., Innes, J.L., Trosper, R.L., Larson, B.C., 2010. Aboriginal Peoples and Forest Certification: a Review of the Canadian Situation. Ecology & Society, 15(3).

60 Building and Wood Worker's International (BWI), 2010. Violence Against Women is a Health and Safety Issue. [Online] Available at: http://www.bwint.org/default.asp?index=2642&Language=EN [Accessed 28 March 2013].

61 Building and Wood Worker's International, 2013. Gender Equity. [Online] Available at: http://www.bwint.org/default.asp?Issue=Gender%20Equity%20and%20Youth&Language=EN [Accessed 27 February 2013].

74 Chevreux Crédit Agricole, 2011. Nordic ESG Issues, Paris: Chevreux Crédit Agricole.

80 Collaborative Partnership on Forests (CPF), 2012. Sustainable Forest Management (SFM) and Indigenous Peoples, New York: Collaborative Partnership on Forests (CPF).

85 Confederation of European Paper Industries (CEPI), 2005. Legal Logging: Code of Conduct for the Paper Industry. [Online] Available at: http://www.illegal-logging.info/item_single.php?it_id=347&it=document [Accessed 5 March 2013].

151 European Federation of Building and Woodworkers (EFBWW), European Confederation of Woodworking Industries (CEI-Bois) & Azienda USL 7 Siena, n.d.. Less Dust. Brussels: European Federation of Building and Woodworkers (EFBWW), Cei-Bois (CEIB) & Azienda USL 7 Siena.

153 European Federation of Financial Analysts Societies (EFFAS) and Society of Investment Professionals in Germany (DVFA), 2010. KPIs for ESG - A Guideline for the Integration of ESG into Financial Analysis and Corporate Valuation, Frankfurt am Main: EFFAS.

154 European Mine, Chemical and Energy Workers' Federation (EMCEF) & Confederation of European Paper Industries (CEPI), 2012. No Paper Without Skilled, Healthy and Safe People Report of Good Health and Safety Practices in the European Pulp and Paper Industry, Brussels: European Mine, Chemical and Energy Workers' Federation (EMCEF) & Confederation of European Paper Industries (CEPI).




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159 European Panel Federation (EPF), European Confederation of Woodworking Industries (CEI-Bois) & European Federation of Building and Woodworkers (EFBWW), 2010. Reduction of Formaldehyde Exposure in the Woodworking Industries, Brussels: European Panel Federation (EPF), European Confederation of Woodworking Industries (CEI-Bois) & European Federation of Building and Woodworkers (EFBWW).

164 European Social Investment Forum (Eurosif) & Ethix SRI Advisors, 2007. Forestry & Paper: Sector Report - 6th in a series. [Online] Available at: http://www.eurosif.org/images/stories/pdf/eurosif_sr_forestry_paper.pdf [Accessed 25 February 2013].

176 FairWild Foundation, 'Fairwild Standard', version 2.0, 2010.

179 Food and Agriculture Organization of the United Nations (FAO), 2010. Global Forest Resources Assessment 2010, Rome: Food and Agriculture Organization (FAO).

181 Food and Agriculture Organization of the United Nations (FAO), Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security, 2012.

186 Forest Governance Integrity Programme, Transparency International, 2010. Analysing Corruption in the Forestry Sector: A Manual, Berlin: Transparency International.

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° Resource available on request and/or for a fee.

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