Publication: Profitability and Sustainability in Responsible Forestry - Economic Impacts of FSC Certification on Forest Operators
Profitability and Sustainability in Responsible Forestry - Economic Impacts of FSC Certification on Forest Operators
| dc.contributor.author | Breukink, G. | |
| dc.contributor.author | Levin, J. | |
| dc.contributor.author | Mo, K. | |
| dc.date.accessioned | 2022-01-23T18:55:50Z | |
| dc.date.available | 2022-01-23T18:55:50Z | |
| dc.identifier.uri | https://open.fsc.org/handle/resource/663 | |
| dc.title | Profitability and Sustainability in Responsible Forestry - Economic Impacts of FSC Certification on Forest Operators | en |
| dcterms.abstract | This study seeks to advance knowledge about the impact of FSC certification on a company's "bottom line" through primary research on 11 forestry entities operating across four continents. More than 500 original data points are analysed to assess upfront investments, annual costs, annual benefits, and the overall net present value (NPV) of the decision to pursue FSC certification. The research can aid forest operators, as well as their financiers and donors, analyze individual projects, thereby facilitating more efficient allocation of resources. The participating companies represent a range of sizes, geographies, and sub-sectors. This research should help to establish a baseline, a common methodology, and indicative results from a small yet diverse sample. For the forest operations evaluated, the financial benefits of FSC tend to outweigh the costs, albeit with high company-by-company variance, and special consideration required for high conservation value (HCV) set-asides and intangible benefits. On average, the companies earned an extra US$1.80 for every cubic metre of FSC- certified roundwood or equivalent, over and above any new costs, due to price premiums, increased efficiency, and other financial incentives. The business case was strongest for tropical forest operations and small/medium producers (regardless of geography) who experienced significant financial gains, while temperate and large producers experienced small losses. It took the companies, on average, six years to break even on their FSC investment. | en |
| dcterms.accessRights | Public | |
| dcterms.accessRights | Open access | |
| dcterms.bibliographicCitation | Breukink, G., Levin, J. and Mo, K., 2015. Profitability and sustainability in responsible forestry: Economic impacts of FSC certification on forest operators. Jürgen Freund/WWF, p.48. | en |
| dcterms.issued | 2015 | |
| dcterms.language | en | |
| dcterms.license | Copyrighted; all rights reserved | en |
| dcterms.publisher | World Wide Fund for Nature | |
| dcterms.type | Report | |
| dspace.entity.type | Publication | |
| fsc.evidenceCategory | FSC impact-related | |
| fsc.focus.sustainDimension | Social | |
| fsc.focus.sustainDimension | Environmental | |
| fsc.focus.sustainDimension | Economic | |
| fsc.issue.economic | Benefits, motivations, reasons for certification | |
| fsc.issue.economic | Costs, obstacles, barriers to certification | |
| fsc.subject | Evaluation | |
| fsc.subject | Forests | |
| fsc.subject | Ra Technical Suport | |
| fsc.subject | Certification | |
| fsc.subject | Indigenous Community | |
| fsc.subject | Certified Ntfp | |
| fsc.subject | Palm Fruit | |
| fsc.subject | Community Business Development | |
| fsc.subject | Indigenous Management Practices | |
| is.availability.fullText | Full text available | |
| is.contributor.funderType | Private funds (NGOs, companies, VSS self-funded etc) | |
| is.contributor.member | Forest Stewardship Council | |
| is.coverage.country | Colombia | |
| is.coverage.country | Peru | |
| is.coverage.country | Portugal | |
| is.coverage.country | Cameroon | |
| is.coverage.country | Russian Federation | |
| is.coverage.country | Malaysia | |
| is.coverage.country | Indonesia | |
| is.coverage.countryAlpha2 | CO | |
| is.coverage.countryAlpha2 | PE | |
| is.coverage.countryAlpha2 | PT | |
| is.coverage.countryAlpha2 | CM | |
| is.coverage.countryAlpha2 | RU | |
| is.coverage.countryAlpha2 | MY | |
| is.coverage.countryAlpha2 | ID | |
| is.coverage.geographicLevel | Country | |
| is.coverage.latitude | 4.570868 | |
| is.coverage.latitude | -9.189967 | |
| is.coverage.latitude | 39.399872 | |
| is.coverage.latitude | 7.369722 | |
| is.coverage.latitude | 61.52401 | |
| is.coverage.latitude | 4.210484 | |
| is.coverage.latitude | -0.789275 | |
| is.coverage.longitude | -74.297333 | |
| is.coverage.longitude | -75.015152 | |
| is.coverage.longitude | -8.224454 | |
| is.coverage.longitude | 12.354722 | |
| is.coverage.longitude | 105.318756 | |
| is.coverage.longitude | 101.975766 | |
| is.coverage.longitude | 113.921327 | |
| is.evaluation.collection | Company/certified entities /co-op data records | |
| is.evaluation.collection | Interviews/surveys with certified entities and their representatives and workers/producers | |
| is.evaluation.counterfacts | No | |
| is.evaluation.dataSource | Private company data | |
| is.evaluation.notes | Very detailed economic analysis of FSC certification at operator-level, incl. cost-benefit analysis, financial returns incl NPV- and Break-even analysis. 11 cases across 4 continents, and companies of different size and with different management type are used as case studies. The results are to be taken as 'indicative not predictive' , i.e. the number of cases and methodology do not allow to generalize. Great graphic overview on page 2 of 'Primary financial impacts of FSC certification on profit and loss'. | |
| is.evaluation.quotes | Tropical forest managers and small/medium producers accrued the largest average net benefits. Additionally, companies reported significant qualitative benefits of FSC such as market access and retention, management effectiveness and quality control, legal compliance, reduction in accidents, stakeholder relations, and improved staff morale. | |
| is.evaluation.quotes | "For the forest operations evaluated, the financial benefits of FSC tend to outweigh the costs, albeit with high company-by-company variance, and special consideration required for high conservation value (HCV) set-asides and intangible benefits. Onaverage, the companies earned an extra US$1.80 for every cubic metre of FSCcertified roundwood or equivalent, over and above any new costs, due to price premiums, increased efficiency, and other financial incentives. The business case was strongest for tropical forest operations and small/medium producers (regardless of geography) who experienced significant financial gains, while temperate and large producers experienced small losses. It took the companies, on average, six years tobreak even on their FSC investment." | |
| is.evaluation.quotes | "WWF considers FSC to be the most credible forest certification standard, because it incorporates the strongest environmental and social safeguards, as well as balanced governance and membership. Compared to other forest certification standards, FSC has the most rigorous requirements for safeguarding HCVs, chemical use, community benefits, indigenous rights, stakeholder engagement and transparency. It also contains the most diverse membership, comprised of leading national and international environmental and social organizations, indigenous peoples' organizations, community forestry enterprises, forest industry professionals and corporations. FSC is an international membership association, governed by its members who are divided into three chambers – environmental, social and economic. Each chamber holds a third of the weight in votes. This guarantees that influence is shared equitably between different interest groups." | |
| is.evaluation.quotes | "Additionally, FSC certification offers incentives to improve operational efficiencies and management practices. FSC requires operators to develop management plans and install modern inventory management, tracking, and accounting systems. It has been reported that these requirements help reduce waste, improve management effectiveness, increase transparency, and eliminate other hidden costs.28 This efficiency gain was well documented in community forestry settings.29, 30 Another study indicated that workers were thoroughly trained in best practices under FSC, including logging techniques, data management, and safety measures31; and therefore are theoretically more productive. Yet there is no information in the existing literature on long-term cost savings resulting from improved management practice and productivity." | |
| is.evaluation.quotes | "Finally, some companies consider the assurance of a more sustainable resource base over the long term as an important benefit of FSC. Certification encourages herbicide and chemical reductions, biological inventory, control over exotic species, and proper waste management.48 An extensive economic analysis of two adjacent forest management units (FMUs) in Sabah, Malaysia – one FSCcertified since 1997, the other practising unsustainable logging – found that the volume of large high-value commercial trees and asset value per hectare in the FSCcertified FMU were twice as high as in the neighbouring non-certified FMU." | |
| is.evaluation.quotes | "FSC certification is a landmark tool in sustainable forestry and a benchmark for global mainstream forestry operations and investment." | |
| is.evidenceSubType | Descriptive information - contextual and operational | |
| is.evidenceType | Descriptive information | |
| is.focus.products | Other forestry and logging | |
| is.focus.sdg | SDG 15 - Life on Land | |
| is.focus.sectors | Agriculture | |
| is.focus.sectors | Forestry | |
| is.focus.sustainDimension | Economic | |
| is.focus.sustainIssue | Participant costs and benefits | |
| is.focus.sustainIssue | Wages and workers' rights | |
| is.focus.sustainLens | Finance | |
| is.focus.sustainOutcome | Price premiums | |
| is.focus.sustainOutcome | Market access | |
| is.focus.sustainOutcome | Cost of inputs | |
| is.focus.sustainOutcome | Product income (gross and net) | |
| is.focus.sustainOutcome | Occupational health and safety | |
| is.focus.systemElement | MandE outcomes and impacts | |
| is.focus.systemElement | MandE performance monitoring | |
| is.identifier.code | Impacts | |
| is.identifier.doi | http://dx.doi.org/10.34800/fsc-international328 | |
| is.identifier.schemeName | Forest Stewardship Council | |
| is.identifier.schemeType | Voluntary Sustainability Standards | |
| is.link.url | http://assets.wwf.org.uk/downloads/profitability_and_sustainability_in_responsible_forestry_main_report_final.pdf |