Sustainable Forest Finance Toolkit - PwC

Certification briefing note 1 of 7New Application HOMEWhat’s the issue?Forest certification is a system for identifying well-managedforestland, and is widely seen as the most important initiativeof recent decades to promote the sustainable managementof the world’s forests.In this context, sustainability includes maintenance ofecological, economic, and social components. Products fromcertified forestland can, through chain-of-custody certification,move into production streams and in the end receivelabelling that allows customers to know the product camefrom responsible sources.The challengeDespite the merits of the certification approach, take up hasbeen slow. While approximately 300 million ha haveundergone credible third-party certification this is less than10% of the total and much of the world’s forests, particularlyin tropical regions, remain vulnerable to over-exploitation.Understanding the two majorinternational certification systemsThere are two major international forest certification systems:the Forest Stewardship Council (FSC) and the Programmefor the Endorsement of Certification Systems (PEFC). Bothare used by community- and family-owned forests and largelandowners and/or industrial operations. These systemshave similarities, but they also have differences that areconsidered important by their respective constituencies. Thechoice of system varies by geography, and many forestcompanies are certified by both systems, depending on thelocation of their operations.Table 2 provides an overview of the general characteristicsof these two systems. Table 2 is not meant to be anexhaustive comparison.Geographical distribution of certified forestFigure 1: Percentage of forests certified, by region, 2002 and 2007North AmericaEurope + CISLatin AmericaAsiaAfricaSource: InduforGlobal20072002- 5 10 15 20 25 30 35 40%Figure 2: Regional application of the two major international certification systemsEuropePEFC56%AsiaPEFC(M TCC)63%FSC22%FSC44%LEI15%North Am e ricaOceaniaPEFC84%FSC16 %Latin AmericaAfricaPEFC56%Keuhcut33%PEFC88%Source: Based on data from the FSC, the PEFC and notional systems elaborated by InduforFSC12 %FSC44%A proper comparison should include moredetailed aspects such as compliance withinternational standards, system governance,accreditation, certification, criteria used asbasis for the systems, and performance onthe ground (Nussbaum and Simula, 2005).CPET analysisThe differing certification schemes have theirmerits and weaknesses depending on theaims of the certification process andstakeholder point of view. The Central Pointof Expertise on Timber Procurement (CPET)has provided analysis of how the certificationschemes compare, which can be found athttp://www.proforest.net/cpetFSC 67%Page 42pwc