FSC+20 Forum:Wednesday 10 September, 11:00 - 12:30
Good money: Increasing the social and environmental returns from forest investments
Elizabeth de Carvalhaes (Executive President Brazilian Tree Industry)

1. Why is FSC General Assembly an important part of the FSC governance system?

We believe that the GA is the most important decision making platform of the system. It gathers delegates from the three chambers to discuss and propose changes to FSC governance, policies and standards.

zoomIt is global, dynamic, democratic, and inclusive and it makes the system credible and renowned worldwide. It’s a relevant event to bring people together to find solutions and promote the sustainable management of forests. It is a unique moment for the FSC members and supporters to meet, articulate, negotiate and seek balance in the actions and motions that guides the system. It is a moment of information exchanging amongst the different chambers that comprise the three pillars of sustainability, expanding the social and environmental benefits and promoting business with certified forest products. It is the opportunity to reflect upon the past to build the future. On the other hand, global market, the economy and the decisions are becoming increasingly dynamic and changing at a faster pace. FSC shall be able to cope with these global trends and pace. Thus, a decision making platform based on a three-year period, may be too extended to move along with a constantly changing world.

2. In your opinion, what have been FSC´s major achievements in the past 20 years?

Firstly, there is almost 200 million hectares of certified forests. This is a major achievement.
FSC was launched to promote environmental appropriate, socially beneficial, and economically viable management of the world’s forests, to basically cope with forest degradation and social exclusion. We think FSC was successful in creating a system credited worldwide that informs consumers the sources of the products in the market, internalizing the positive externalities of well managed forests and therefore making it possible to run the system by paying back the social and the environmental benefits in forest investments, that is complying with FSC principals and criteria. FSC has stablished a multi-stakeholder governance model that works on the ground, it is certainly a model that goes far beyond the forest sector itself and is often used as a reference by other sectors. The quality of this model is globally recognized and the players involved in FSC are active and strongly participate in the consultations and decisions to keep it as a mainstream system.

3. Why are forests so important and what does “certified by FSC” mean to you and your organization?

Forests are one of the most important sources of fuel, fiber and food for a growing population.
Demand for energy is expected to double by 2030, food supply must expand by 100% and the world´s population will grow by nearly 10 billion people by 2050, climate change is expected to reduce crop yields in the future. Additionally to the current use of wood and fibers, a range of the so called “bioproducts” including biotextiles, biocomposites, bioplastics, nanocellulose, pharmaceutical, among others coming from renewable sources and forest-based products are being studied and are yet to be deployed. FSC has a strategic decision to make here to cope with these news developments. Also, as an association that represents the flooring, panels and board industry as well, we can state certification plays a significant role in construction business known as “green building” and it has been blooming even in a period of struggling economy. Civil construction is a great market for FSC development in Brazil and worldwide and it is only feasible if there is a developed cluster of certified suppliers. With a growing population and growing middle class - particularly in emerging markets- these means more demand for wood for construction, flooring, and furniture. Our members are FSC certified, but this segment represents a huge development potential for FSC, considering the future trends. By all these means forests represent the most important resource to cope with this increasingly growing demand. FSC certified forests can play a major role on this global context. “FSC certified” means the assurance of a forest management system that protects the forest assets and adds value to the final product. It protects forests resources as it is used as a risk management tool - assuring legal compliance and mitigation of social and environmental impacts. It adds value as it allows for the assessment of more structured and strict markets and it adds value to the product, the endorsements of practices and regulations of the distinct organizations of the three chambers that influence the system, and yet participate and interact in different business and ventures, broaden the social and environmental values in their community, productive chains and workplace.

4. What else needs to be done to responsibly manage forests?

FSC has important accomplishment along its history, however there are some challenges that need to be addressed to improve the system´s capacity to responsibly manage forests, which include:

  • 1) The constantly development of the system to be able to cope with the dynamics of the market (including new technologies, new products and services) to keep it mainstream rather than a niche system;
  • 2) Balance credibility and general rules and the particularities of each region, the “one size fits all” not always works – will require the empowerment of national initiatives and decentralization of the system;
  • 3) Develop strategies to include smallholders and new kinds of forest ownerships in the value chain;
  • 4) Assure the decision making process based on facts. Certainly a challenge on a cross-chamber governance, but shall be addressed to assure accountability;
  • 5) Improved strategy in advocacy against illegal activities, which bring down the value of forests and create unfair competition in the market flooded with illegal products;
  • 6) Capacity building programs for auditors, as well as ASI´s team, to constantly improve quality of the application of FSC P&C on the ground.

5. Where do you see FSC 20 years from now?

As the forest industry unfolds FSC also needs to follow the market trends. Payments for environmental services need to be internalized by the system. FSC also needs to position itself in regards of development of new technologies, intensification of forest management, new products and services which indeed will be required to meet the megatrends of world´s consumers’ needs. Additionally there is an important trend of increasing the role of smallholders as suppliers of the forest industry. In 20 years, FSC shall be a more inclusive system, focusing on certifying smallholders, and with more participative social and environmental chambers. It would be relevant to have a stronger FSC advocacy towards end end-users and be closely aligned with public policies. Also we should see a drive towards strengthening regional offices as key centers of business and governance development of the system. Decentralization shall be a key decision for the growing capacity of FSC. Global security and credibility will come from the certification guidelines and traceability of products, but national offices shall have the authority and be empowered to discuss and consider the particularities of each region and forest type.

6. Why is so important to invest in forests, and how do you think we can maximize social and environmental returns?

FSC certification has played a significant role on shifting the paradigm regarding the social and environmental returns associated with forest management. There is also a link with increased consumer awareness towards more environmentally friendly and socially fair products, which started to require products that are managed “sustainably”. FSC come as a tool to show the value of forests for its consumers but also to assure investors that their assets are well managed, low risk, traceable and managed in a way that no rights of workers or local communities were damaged. When it comes to social programs, for instance, there has been a significant paradigm shift to maximize its return. Projects that used to focus on philanthropic actions have moved towards shared value initiatives that benefit both companies and communities. Investing in smallholders is also keen to increase social return. Subsidies to conservation and restoration in these small properties are also important to maximize environmental return. We believe that social and environmental returns shall be maximized also when society interacts with the industry, business and consumers of certified forest products. Investments in certification alone may not maximize these returns, consumers must be aware that their choices empowers the social and environmental benefits of certification, and only by laying pressure and choosing companies, industry, and certified products, they can leverage and extend the generated values. This cultural change in consumer’s behavior might take a few generations to happen, and will depend highly upon the mainstream media and a shift in consumer´s awareness.

7. How can we orient market towards more ethical and long term paybacks?

Advocating the concepts of the new economy, where the broader spectrum of the forest assets shall be considered. Considering products and services that are currently not valued in the market investors will have higher and safer return over their investments in the long run – there would be products and services to be commercialized other than timber. Thus, it is required to create value to goods and services that currently have no market value. This will grant to investors long term payback and will enhance the current value attributed to forests.

8. Deforestation in the SDGs – what is your opinion of a zero-net SDG deforestation goal by 2030?

We believe action is needed both within the UN system and at national levels. Actions will only be deployed if there is greater convergence between industry and NGOs to stimulate political cohesion and achieve impact on the ground. We also need closer cooperation between the forest sector and other land users such as crops and livestock. This will provide both top-down governance and bottom up action. When we discuss zero net deforestation, we should include degradation since degradation of forests by subsistence farming can be a far greater driver of forest loss than industrial scale deforestation in many parts of the world. Attempts to reduce deforestation and degradation need to be integrated into the increasing demand for fiber and cannot therefore be dissociated from private sector action. What is needed is responsible forest production and trade. FSC has an important role in this context. The WWF Living Forest Report projects that wood harvesting could triple by 2050, and studies underline the need to halve deforestation emissions by 2020 and make the forest sector carbon neutral by 2030 – with emissions from forest loss balanced by new forest growth. To achieve zero net deforestation and degradation, we need to reduce logging pressure on natural forests. Plantations cover only 7% of total global forests but produce over 50% of demand. If the zero net deforestation and degradation goals are considered within the management unit of the certification holders the Brazilian model has shown that this can be done. However caution is needed when considering the landscape management, to avoid leakage. This depends upon a well-structured policy and governance frameworks for land-use and management. These policies can drive the investments that support a globally competitive industry, such as plantations and modern agro-industries that in turn can restore degraded lands, conserve biodiversity and support rural livelihoods.