There is a growing consensus among governments, NGOs and private corporations on the need to adopt zero deforestation policies to preserve and protect forests around the world. Yet, incentivizing the private sector to enact zero deforestation initiatives is commonly met with skepticism due to perceived threats to a company’s business and financial performance.
Until now, there has been a lack of a harmonized approach on how to address issues of deforestation and other related matters. While regional regulatory frameworks within the forestry sector, such as the Indonesian Legality Assurance System (SVLK); European Union Timber Regulation (EUTR); and the U.S. Lacey Act have helped address the issue of the illegal timber trade, more needs to be done to stop deforestation. The regional nature of these regulatory frameworks lacks the global enforcement mechanisms needed to achieve what is necessary such as ensuring high conservation value forest (HCVF) were not used in the sourcing of the paper or that the material meets non-controversial standards.
To allay these concerns and promote environmental stewardship on a global scale, a group of like-minded organizations formed The Sustainability Consortium, an organization of diverse global participants that work collaboratively to build a scientific foundation that drives innovation to improve consumer product sustainability. The consortium develops transparent methodologies, tools, and strategies to drive a new generation of products and supply networks that address environmental, social, and economic imperatives. One of the organization’s primary goals is to encourage other companies to adopt rigorous sustainability standards that, in tandem with global regulatory measures, will help protect and preserve the environment by driving innovation and improving consumer product sustainability.
The Need for Private Sector Cooperation
The private and public sector often have competing interests that might, upon first glance, seem incompatible. Yet, by setting aside differences and looking for ways to partner to address common challenges and interests, a great deal of progress can be achieved, as evidenced by the below examples.
Asia Pulp & Paper (APP), a private multi-national corporation, faced tremendous pressure from activists, NGOs and customers relative to its (poor) environmental practices in parts of Indonesia. Recognizing the need to reform its approach to sourcing materials used to manufacture pulp and paper products, APP implemented its Forest Conservation Policy in 2013, stipulating a “zero-deforestation” commitment and a permanent end to HCVF clearance across its entire supply chain.
Of course, simply announcing this type of policy is meaningless unless there is a clear level of transparency and accountability connected to the implementation of the initiative. Therefore, to help formulate and guide the enactment of this commitment, APP joined with several NGOs including The Forest Trust (TFT) and other organizations to assist with this massive business transformation. Then, in June 2013, APP joined The Sustainability Consortium to engage in ongoing collaboration for mutually enhanced learning – to help develop the standards that would define sustainable paper products.
Exceeding International Standards through Collaboration
For the private sector to be taken seriously in its commitment to environmental stewardship, it must demonstrate that it means business. Companies like Asia Pulp & Paper, Wilmar International, Unilever (IW 1000/59), and Johnson & Johnson (IW 1000/60) have recently put forth policies that exceed industry standards and go beyond industry certification standards, such as the Sustainable Forestry Initiative (SFI) or Roundtable on Sustainable Palm Oil (RSPO). This, in turn, raises the bar across industries and compels other suppliers to adhere to these standards, as their customers more and more demand sustainable products as the norm.
There are a number of key performance indicators that APP uses to not only monitor and comply with its sustainability goals, but also to exceed local and international standards. A few examples include:
- Eliminate all HCVF clearance across the entire supply chain and employ tools to monitor progress to ensure transparency and accountability (e.g., an online monitoring ‘dashboard’ established by The Forest Trust).
- Ensure that the sourcing of wood-based products (e.g., cardboard, paper, tissue paper) are in accordance with multiple chain-of-custody or certification programs set forth by groups like the Programme for the Endorsement of Forest Certification (PEFC), the world’s largest forest certification organization.
- Documenting the percentage of recycled products and actively increasing the recyclability of products. In 2012, approximately 37% of APP’s fiber source came from recycled material. As technologies advance, we may see even further increases in the use and applications of recycled paper products.
Similar to APP, a number of other well-known brands are working with The Sustainability Consortium and other third parties to raise environmental and sustainability standards. Examples include Starbucks working with Coffee and Farmer Equity (C.A.F.E.) to “ensure Starbucks is sourcing sustainably grown and processed coffee by evaluating the economic, social and environmental aspects of coffee production;” and Walmart working with The Sustainability Consortium on its sustainability index – a tool used to measure and drive product and supply chain sustainability.
The Business Benefits of Embracing Sustainability Initiatives
Ultimately, in order to foster the enforcement of global environmental policies, it is advantageous for private companies to collaborate with third party entities, like TFT, to address regulatory inadequacies. The benefits are not only limited to the environment, but to business as well. Such benefits include:
- Enhancing relationships with multiple stakeholders, including: customers; suppliers; government entities; NGOs; employees; and shareholders, among others.
- Improving brand perception and overall customer value.
- Averting costly fines due to environmental infractions.
- Positioning the company to strengthen customer retention and acquisitions.
There is positive momentum emanating from these partnerships and collaborative efforts. The prevailing assumption commonly holds that private companies have no interest in environmental preservation. Let’s prove the naysayers wrong and continue to demonstrate the real progress that can be achieved through multi-faceted collaboration among NGOs, the private sector and all levels of government. The Sustainability Consortium is just one example of how these types of partnerships can advance mutual business and environmental interests.
