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Forest Management

The Future of Commodity Sustainability

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For years, forest policy makers and certification schemes have centered themselves around utilising forest management units (FMUs) in order to simplify claims on sustainability. FMUs represent a specific area of forest subject to a specific management strategy.

When it comes to ensuring ‘forest risk’ commodities such as beef, palm oil and timber are sourced sustainably, governments and companies alike have turned to commodity certification schemes; such as the Forest Stewardship Council (FSC).

Certification is generally classified as a management unit approach, which allows producers to validate the sustainability of a given product against established environmental or social standards.

Following this demonstration, producers can then label their products as sustainable and benefit from green sourcing policies implemented by many companies in the last several years.

However, the legitimacy of both management unit approaches and certification is coming under fire. The main criticisms, lodged by industry experts, against programs, such as FSC and PEFC, revolves around their failure to equate to the sustainability of an entire landscape.

Apart from rare instances, management units, such as Forest Management Units (FMU’s) represent only a specific section of the entire landscape. Consequently the true sustainability outcome for the producing landscape is not captured under certification schemes.

It should be noted that FMU certification can be very beneficial in some circumstances. For example, for massive operations working at a landscape level, with large management areas certified under one scheme and against one standard, as demonstrated in Russia and forest concessions in the tropics.

A New approach

Recently, NGO’s including Greenpeace and the Tropical Forest Alliance, have started to emphasise the importance of a jurisdictional approach. Where the full landscape is taken into account when finding new commodity sources and local governments are more involved.

This methodology attempts to make use of government administrative boundaries to define sustainable development. In short, stakeholders can ensure that ‘forest-risk’ commodities are sourced responsibly from a specific locality, encompassing the entire ecosystem and actors within that production area.

This approach provides far more benefits to each stakeholder involved in the supply chain:

  • Commodity-sourcing companies will have the ability to identify the location of purchased goods and make robust and varied claims on the commodity’s sustainability.
  • Local communities are included in sustainability initiatives due to the dependency on stakeholder forums, and the community’s agreed environmental and social goals are taken into account when deciding production objectives.
The Jurisdictional Approach in Action

One trade initiative, named IDH, is attempting to move the implementation of widespread jurisdictional sourcing forward. In 2017, IDH evolved the approach into ‘Verified Sourcing Areas’ (VSAs), which utilises an online platform to link appropriate buyers to specific jurisdictional coalitions, in agreements dubbed as ‘compacts’.

The online platform from IDH, SourceUp, operates on a two-sided basis where commodity-sourcing companies match their sustainability objectives and sourcing needs with local compact groups that offer corresponding targets.

SourceUp represents one of the very few sourcing systems of its kind in operation. However, an immediate challenge to IDH’s new platform revolves around its verification safeguards and the enforcement of sustainability pledges; both by committed buyers (a company that has committed to support a compact) and compacts.

Prior to a committed buyer and compact going into a sourcing agreement, the involved stakeholders agree a strategy for achieving established targets. During the arrangement compacts update the progress of agreed targets, allowing committed buyers to make varied and accurate claims that demonstrate positive environmental commitment.

If needed, the compacts also have the ability to utilise third-party verification if requested by any involved stakeholder and external investor. As a consequence, the legitimacy of sustainability claims made by committed buyers and compacts can be made in the knowledge that all stakeholders are accountable.

In future, other certification organisations must look to IDH for inspiration on how to ensure their labels remain a genuine demonstration of sustainability and responsible sourcing. Moreover, IDH allows companies to actively engage with the communities they purchase goods from, forging a close and mutually beneficial bound with their sourcing partner.

To read more on sustainable forest management follow this link.

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