FSC certification yields financial benefits for tropical forest companies, shows WWF report

A new WWF cost-benefit analysis of Forest Stewardship Council (FSC) certification on a cross-section of forest operators finds that tropical producers can benefit significantly from attaining FSC certification.
 
The Profitability and Sustainability in Responsible Forestry: Economic impacts of FSC certification on forest operators report found that on average, the companies examined earned an extra US$1.80 for every cubic metre of FSC-certified roundwood or equivalent, over and above costs associated with certification. The Net Present Value (NPV) of the decision to pursue FSC was, on average, US$6.69 per cubic metre of roundwood or equivalent – a strong positive business case overall for the decision to pursue FSC. 
 
These outcomes were achieved through price premiums, increased efficiency and other financial benefits. On average, it took the companies that were studied six years to break even on their investment in FSC.
 
The research was conducted on 11 companies in seven countries, including one company in Cameroon. Financial data was collected primarily through in-person interviews with company management, as well as a review of financial reports, audit reports and other supporting documentation.
 
“The results of this report show that while the investment costs of entering into an FSC certification process can be considerable, for tropical forest operators  the investment can be good for the bottom line,” said Belmond Tchoumba, WWF’s Regional Forest Coordinator in Central Africa. “This is an important finding given the crucial role sustainable forestry plays in safeguarding forests for the future.”
 
FSC certified concessions cover 942,462 ha in Cameroon, representing 14 forest management units, and total over 5.4 million ha in the entire Congo Basin – the equivalent of about 10% of the area allotted to logging concessions in the region.
 
WWF strongly urges other companies to follow suit and certify their operations under the FSC scheme.
 
“Because of its high environmental, social and economic standards for responsible forestry, FSC remains the only available credible certification system in the Congo Basin, especially for countries with weak governance,” said Tchoumba. 
 
The new report is designed to help forest companies plan financially for forest certification, and provides important insight for forest companies and buyers of wood products, as well as governments, financiers and others with a stake in the impact of FSC certification.
 
This research has also shown that FSC certified companies make significant investments in public goods that benefit society at large.
 
“Governments have a crucial role to play to encourage such investments, and, as such, we recommend them to provide a level playing field to ensure that companies and communities pursuing FSC are not out-competed by their counterparts engaged in unsustainable practices, and so that forestry can compete with other land-uses,” added Tchoumba.
 
This is the second report in a series WWF commissioned in order to look at various aspects of FSC certification. The first report, published in 2014, focused on the social impacts of FSC certification specifically in the Congo Basin. It found that FSC certified companies provide more benefits to communities than uncertified companies.
 
Two other reports will follow, focusing on the FSC impacts on environment and wildlife.
 
The FSC has been operating since 1994, with the first certification in the Congo Basin achieved in 2005. Companies become FSC certified only following third party independent evaluations, which provide both traders and customers with the guarantee that the wood has been sustainably sourced.
 
 
 
 
For further information:
Sinziana Demian, Communications Manager, WWF Central Africa
smdemian@wwfcarpo.org