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March 20, 2001

Top Ten Wood Product Companies Could Help Make Global Sustainable Forestry a Reality

A new World Wildlife Fund report states that the largest wood processors and buyers could tip the balance toward sustainable management of the world's forests.

SocialFunds.com -- In a World Wildlife Fund (WWF) study entitled "The Forest Industry in the 21st Century," researchers found that a small number of leading companies account for a large percentage of global wood processing and consumption. If these companies choose to support sustainable forestry practices, the report states, their market power could have a domino effect on how the world's forests are managed.

Visit the
Prospectus Ordering Center"We recognized that ten or so large companies can have a far more significant impact on global forest conservation than we previously thought," said Dr. Nicholas Brown, Manager for U.S. Forest Conservation at WWF. "They potentially can play a major role in environmental preservation by committing to better forest management," he added.

The researchers were surprised to find that as little as 1.5 billion acres of forest, if managed correctly, could provide the industrial wood and wood fiber needed to meet the world's projected future demand on a sustainable basis. This would be about one-fifth of the world's forest, an area equivalent to about twice the size of India.

The path to correct forest management, the report states, is independent certification that forests are being managed sustainably. WWF believes the Forest Stewardship Council (FSC) has established itself as the program all stakeholders should support.

Established in 1993, the FSC is a non-profit organization that certifies forests as being managed on sound ecological principles. It uses 56 criteria for evaluating forestry practices such as clear cutting and herbicide use. The FSC mission also includes social goals such as creating sustainable employment and recognizing the rights of indigenous peoples.

According to the report, the five largest wood processing companies are International Paper (ticker: IP), Georgia Pacific (GP), Weyerhaeuser (WY), Finland-based Stora-Enso (SEO) and Smurfit Stone Container (SSCC). These five companies collectively process around 20 percent of the world's industrial wood.

Of the five firms, only Stora-Enso has any amount of forests that are FSC certified. WWF was not able to obtain Smurfit Stone Container's perspective on sustainable forestry or environmental policy, although Smurfit is one of the world's largest recyclers of paper fiber. International Paper, Georgia-Pacific and Weyerhaeuser all claim a commitment to sustainable forestry by supporting the Sustainable Forestry Initiative (SFI).

SFI is a certification program created by the American Forest and Paper Association as an answer to FSC. Being funded by the industry it monitors, SFI is considered to be weaker than FSC. Most environmental groups, including the WWF, believe SFI standards do not meet the requirements of sustainable forestry.

On the consumption side, the report names Home Depot (HD), Lowes (LOW), Sweden-based IKEA, Kimberly-Clark (KMB), and Procter & Gamble (PG) as the five largest wood buyers in the world. Home Depot and Lowes are both members of the Certified Forest Products Council, a U.S.-based certification organization that works in partnership with FSC. IKEA also actively support FSC principles.

According to WWF, Kimberly-Clark has a policy not to use wood from tropical rain forests and has implemented forestry management programs, but it has not yet made a move toward FSC certification. Procter & Gamble releases little information about its procurement of wood fiber and has so far indicated no intention of supporting FSC.

FSC has certified over 50 million acres in 35 countries, but that only represents 2-3 percent of the world's timber-producing forests. If forest destruction is to be curbed, sustainable management practices must be more widely adopted.

"FSC remains the platinum standard for forestry certification programs, the standard that other systems should aspire to," said Dr. Brown. "We need processors and buyers to adopt the standard as a whole, or adjust their own programs to meet the standard's criteria."

Half of the world's original forest cover has already been destroyed. This report offers hope that further loss from human consumption need not occur, if we only choose to do so. That choice can be kick started by the large wood processors and buyers.

© SRI World Group, Inc. All Rights Reserved.

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