October 22-23, 2012 Kimberly-Clark Headquarters Roswell, GA
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1 Global Forest & Trade Network-North America Annual Meeting Driving certified supply and implementing best practices in legal and responsible wood and paper sourcing October 22-23, 2012 Kimberly-Clark Headquarters Roswell, GA Meeting objectives and outcomes: WWF s Global Forest & Trade Network-North America (GFTN-NA) annual meeting brings together companies in its program committed to responsible forestry and trade. GFTN-NA s annual meeting provides an important platform for companies to learn about current forestry issues and share best practices for responsible sourcing of wood and paper products. Topics covered successes and challenges of 2012, and what's on the horizon for 2013; FSC marketing and consumer awareness initiatives; driving FSC certified supply; timber legality; strengthening transparency and communicating progress and results; and WWF s Living Forests Report and other tools. Proceedings Welcome from Kimberly-Clark Corporation: Responsible Fiber Sourcing A Core Value Gail Ciccione, Continuous Improvement and Sustainability, Kimberly-Clark Corporation Kimberly-Clark's main businesses: Personal Care, Consumer Tissue, Health Care, K-C Professional with a Central Sustainability Team and sustainability experts embedded within divisional teams. Approximately 80% of K-C's products contain wood fiber. Total primary wood fiber use in 2011 was approximately 2.5 million ADMT. All K-C virgin wood fiber suppliers are now certified. Next steps for K-C include developing alternative fiber sourcing, criteria for sustainable alternative fibers, and working with WWF on the New Generation Plantations Project. Case Studies in Driving FSC-Certified Supply Panel John Cook, Forester, Domtar Elisabeth Comere, Director, Environment & Government Affairs, Tetra Pak Michael Martin, President & CEO, National Wood Flooring Association Yalmaz Siddiqui, Senior Director of Environment Strategy, Office Depot
2 John Cook, Domtar: Our process towards achieving FSC Forest Management Certification for Private Nonindustrial Forest Landowners in the Four State Region Domtar has 13 pulp and paper mills in North America, 4 in Canada and 9 in the US. The Four States Timberland Owners Association is an independent, non-profit association that landowners can join with locations in AR, TX, OK, LA. Predominant forest types include natural pine, upland pine and hardwood, and planted pine. Landowners are often well-versed in forest management, intensively protective of individual property rights, consider forestland to be an investment, and are willing to prioritize clear environmental benefits over forest productivity. Primary challenges to FSC certification for Association are developing management plans that address HCVF and rare species, enhance diversity, track and monitor proper implementation, and provide continual communication, support, and education. FSC certification challenges for the landowner include costs of management and audits, extensive paperwork, and potential reduction in forest productivity. The good news is that landowners are nevertheless committed. Elisabeth Comere, Tetra Pak Reducing environmental footprint across the value supply chain, developing sustainable products, and increased recycling are among Tetra Pak s primary 2020 strategic environment objectives, to be achieved through: o Capping CO2 at 2010 levels o Sourcing 100% FSC and 100% renewable packaging o Recycling 40% of used carton and 90% of polymer and aluminum Challenges for Tetra Pak include how to best tell the story of renewability as well as the sometimes lack of FSC availability, though Tetra Pak has made progress on FSC certification. Tetra Pak has seen an increase in requests for FSC from retailers. These requests, independent verification of paperboard supply, securing a future supply, and the possibilities for market shares are the main drivers for FSC certification. Tetra Pak engages with their North American suppliers to increase FSC sources in North America and track progress. In 2012, Tetra Pak renewed its global partnership with WWF. Michael Martin, NWFA
3 NWFA s Responsible Procurement Program was created by environmental organizations and industry manufacturers committed to responsible flooring to help companies transition over time to FSC certified sourcing. The supply of FSC is often a big problem. RPP provides options for exercising Lacey due care. An FSC Procurement Group Steering Committee is comprised of diverse stakeholders and works to overcome barriers for family owned land. The FSC Procurement Group has certified more than 80,000 acres to date. In 2012, NWFA moved RPP to its Industry Research Foundation. The program now includes a tax advantage for RPP companies, serves as a vehicle for corporate funding of certified land in a region, currently targeting the SE US, and provides financing for long-term success. Grant funding exists for FSC certification, group certification, and marketing awareness. Yalmaz Siddiqui, Office Depot Eight key lessons: o Start with highest visibility and volume by category o Get a handle on your data o Get third-party verification to drive accuracy o Clarify trends in data before setting realistic targets o Send a risk or opportunity signal to suppliers and ask them to respond o Secure certified fiber at price parity, allowing market access o Support all certifications but have an opinion. Green is not binary. o Simplify communications to B2C/B2B Buyers Question & Answer What are the costs for members of Domtar s Timber Association and NWFA s RPP? o Domtar: The program is not far enough along to quantify all costs, however it does feel significant to all parties. The ultimate goal is to minimize costs. o NWFA: NWFA is looking for low cost alternatives for land owners and it is a significant commitment for manufacturers. RPP s grant funding is meant to offset these costs. To what extent do you communicate relevant concepts to consumers, for example selective harvesting and clear cutting?
4 o Tetra Pak: Too technical can be confusing. Tetra Pak is testing definitions with focus groups. o Office Depot: The goal is to explain a complex concept with a simple idea, even if it oversimplifies. How much do landowners know about FSC? o Misconceptions about FSC are common. There is a need for awareness and stronger, simpler communication about the certification process. Clearly, one of the biggest opportunities to increase FSC certified supply is to engage family forests. Timber Legislation Update: Lacey Act, EU timber regulation and Australia s Illegal Logging Bill Vanessa Dick, Senior Program Officer, WWF-US Julia Young, Manager, GFTN-UK Amy Smith, Senior Program Officer, GFTN-NA Vanessa Dick, WWF-US As we know, Lacey Act is the U.S.'s oldest wildlife protection statute, amended in 2008 to extend protection to a broader range of plants and plant products, including timber. The introduced Relief Act is not a solution to the implementation issues within Lacey. What have we learned this last year? o Illegal logging is still happening. o The Administration needs to be more active and prioritize more effective implementation of Lacey. o The Gibson Compliance Program focuses on legality rather than sustainability but is a useful reference. o GFTN-NA participants can help by connecting Vanessa with their own Government Relations shops and continually providing feedback on their Lacey compliance process. Visit USDA APHIS website for more information on the Lacey Act: Julia Young, GFTN-UK The EU timber regulation (EUTR) aims to improve traceability and minimize risk.
5 The penalties within the EU timber regulation have largely not been set and it is unclear what exactly they will be. The regulation does not totally prescribe due care and there is still debate as to what is actually covered within the legislation. Failure to market accurately has led to a regulatory measure to disclose sources, formerly voluntary. Disclosing percentages of exact species is sometimes a challenge for paper companies in the US because current databases do not have this capacity. EUTR is pushing standards to improve tracking and due diligence. Timber and timber products covered by FLEGT and CITES licenses are considered compliant with the requirements of the regulation. Amy Smith, GFTN-NA The Illegal Logging Prohibition Act passed the Australian Parliament s House of Representatives in August of Like Lacey and EUTR, the bill prohibits importers from importing illegal wood and processors from processing illegal timber. Due diligence is required for both importers and processers. Which products exactly will be covered under the bill is yet to be determined. International organizations are looking at the Australian Illegal Logging Bill to provide technical assistance to countries without the same capacity. The bill has pushed forest producing countries to further examine their own forest governance, for example the FLEGT mandatory legality system in Indonesia (SVLK). There is issue in regulating the bill within Australia s bilateral agreements. o The current Trans-Pacific Partnership negotiations are discussing incorporation of the new regulation. WWF s Living Forests Report: An analysis of 2050 scenarios for achieving zero net deforestation and forest degradation and meeting global fiber, food, and fuel needs Kerry Cesareo, Managing Director, WWF-US Forest Program Emmanuelle Neyroumande, WWF-International Pulp & Paper Coordinator Kerry Cesareo, WWF-US The rate of forest loss globally has slowed but is still too high. Agricultural productivity is essential to reaching Zero Net Deforestation and Degradation (ZNDD). Degradation is the silent D. Existing trade-offs need to be considered. For example, is it better to log more forests or expand plantations? The key issues involved are the marketplace, governance,
6 consumption, and biodiversity. Significant changes and incentives are needed to meet increasing global demand. Emmanuelle Neyroumande, WWF-International Paper production and demand is increasing however if managed well, this can be an opportunity. The challenge is to better share limited resources and to better manage our forests. There is greatest need for focus on better forestry, new and efficient technologies, stronger governance and enforcement, policies, information, and smarter consumption. GFTN Updates: Discussion of proposed revisions to GFTN participation rules, communications rules, and step-wise definitions; GFTN-NA Year in Review; preview of new WWF risk management guidance and tools Linda Walker, Manager, GFTN-NA Amy Smith, Senior Program Officer, GFTN-NA Key Points: GFTN-NA will produce its first year-in-review for GFTN-NA considers this an important step towards strengthening the transparency and credibility of its program and that of its participants, as well as an important opportunity to more publicly communicate the progress and achievements of our joint collaborations to advance responsible forestry and trade to our key stakeholders and other companies interested in engaging with GFTN. The GFTN-UK 2011 annual report can be found online at: GFTN is currently making a few revisions to the participation rules. GFTN-NA will send a description of these changes and be available for any questions. GFTN has developed two new and updated tools to help GFTN participants assess risk. o Country Profiles: Country profiles summarize key risks companies should consider when sourcing from a particular country. These profiles are only available for our GFTN participants and will eventually be accessible through a participant-only site. Until then, participants can contact Amy for copies. o GFTN Risk Assessor: Created five years ago, this access database helps companies assess sourcing risk in a particular country or of a particular species. This tool will be updated with current risk information and ready for use by GFTN is adapting the Risk Assessor to a web-based system rather than its previous CD format. New Generation Plantations Project (NGPP): Living Forests Model
7 Luis Silva, WWF-International Key Points: The NGPP is a platform of WWF & Leaders of the plantations sector, working together to identify and develop solutions toward sustainability and better plantations. NGPP is an information-sharing framework rather than the stepwise approach GFTN implements, and promotes the implementation of sustainable forest management tools such as FSC, HCV, REDD, FPIC, and others. NGPP acknowledges progress on plantation management while also recognizing that not all aspects of the New Generation Plantations concept can effectively apply everywhere. Plantations need to demonstrate their benefits both to society and to investors. Sound land use decision-making is crucial to this process. Question & Answer Does the NGPP provide guidelines on GMOs? o Not officially. As an information-sharing platform, NGPP does not have GMO requirements though NGPP does contribute its expertise and supports FSC certification, through which GMOs are addressed. o The consequences of GMOs need to be balanced with the growing need for efficiency. NGPP is very aware of the issue and participates with an eye on the big picture. Updates from the Field: Indonesia Aditya ( Dito ) Bayunanda, Manager, GFTN-Indonesia The total amount FSC certified forest and community forests in Indonesia is increasing. There are recognized economic incentives to grow trees. GFTN focuses mostly in Borneo because there is not as much natural production forest remaining in Sumatra. Outside of Java most forests are state-owned, removing the economic incentives to grow and manage forests. GFTN-Indonesia has recently started working with community forests in Papua. Indonesia Legal Wood (SVLK) is the Indonesian government s mandatory system for tracking timber legality. A V-Legal Document is now required for export of timber products. Importing companies can always request this document. SVLK addressing legality, not sustainability. The V-Legal Document demonstrates proper permits but does not detail any management practices.
8 The Lacey Act has decreased obvious illegal logging in Indonesia however more discreet forms are ongoing and loopholes exploited for conversion. SVLK is useful in keeping illegal timber out of the system from the start. Experts like GFTN must identify these loopholes and identify the risk factors companies should know when sourcing from Indonesia. FSC-US: An update on FSC-US s consumer awareness campaign Harnessing FSC to Drive U.S. Mainstream Consumer Purchase-Preference Etienne McManus-White, Chief Marketing Officer, FSC-US FSC has engaged mainstream consumers at major retail stores in the U.S. in 1.5 years of research to better understand current consumer interests, challenges, beliefs, purchasing preferences, perceptions of key forestry issues such as deforestation, etc. Latest data indicates consumers are willing to pay more for FSC products, but are more likely to buy FSC when seeing the logo. The goal is to change purchasing behavior. FSC is currently working with a creative agency for a 2013 campaign. FSC encourages GFTN-NA participants to get the credit you deserve for the efforts you are already making: o Make the FSC logo prominent on your product packaging, at retail and in your promotions. o Explain who FSC is and why what FSC does is important engage consumers. FSC is looking for partners to help tell their story at a regional and national level. Looking Ahead: Discussion of FSC marketing issues, responsible sourcing, goals on the horizon for 2013, and key takeaways from the day. Linda Walker, Manager, GFTN-NA Due diligence remains crucial to combating illegal logging. We all share an appreciation for a holistic view and approach, evident in the fuel and fiber discussion and throughout the day. Long-term relationships with suppliers are often more effective than price premiums or new suppliers.
9 Smallholders have strong stewardship values and are an opportunity to increase FSC certified supply. Credible yet accessible communication is important despite continual challenges in conveying sometimes complex concepts.
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