Mark Buckley still remembers the confusion he felt 17 years ago, when environmentalists started picketing stores affiliated with his employer, office supplies retailer Staples.
“Initially, we were a little taken aback,” he recalls. “We weren’t quite sure what this was all about.”
Danna Smith knew what it was about – because she’s the one who got it started.
“We had over 600 protests outside of Staples stores,” she says, recalling the company’s initial response as: “Why are you targeting us? We don’t really log forests.”
But we all use paper, and we buy it from retailers, who buy it from companies like Domtar, International Paper, and Georgia Pacific (which is part of the science-subverting combine known as Koch Industries). Those paper suppliers buy from pulping plants, which buy from forest owners, who – if they’re located in the Southeastern United States – are probably small in size and under pressure to harvest as much wood as possible in the shortest period of time.
The region is home to just 2 percent of the earth’s forests, but it squeezes out 12 percent of the world’s wood, pulp, and paper – fuel for an economic engine that cranked into overdrive as mining jobs disappeared: a double-edged chainsaw, forged in the embers of the dying coal sector and grinding towards its own destruction by pulverizing forests faster than they can recover, accelerating climate change in the process.
Smith lives in that part of the world, and she founded an environmental NGO called the Dogwood Alliance in 1996 to save the forests by promoting sustainable forestry. At first, she commissioned studies to understand the problem, and she gradually worked her way up the long and intricate supply chains that reach from the forests of the Southeast, through pulping plants, paper makers, and distributors to kindergartens, offices, and newspapers across the country. By the year 2000, she’d concluded that retailers weren’t just links in the chain; they were the muscle pulling it along.
Staples was one of the biggest, and Buckley was the company’s director of procurement.
To her surprise, he listened.
“We met with Danna and others and started to develop a better understanding of the impact of our supply chain,” he says.
Within two years of those first protests, Staples and Dogwood were on the same side. Today, they’re true partners.
“What we saw in Staples was real leadership,” says Smith, appearing with Buckley on a recent episode of the Bionic Planet podcast. “Mark in particular has been a real visionary.”
The organizations have since built what Buckley calls an “uncommon collaborative” of like-minded entities from the corporate, environmental, and academic communities. Earlier this year, they wrapped up a ten-year experiment called Carbon Canopy, which set out to see if small landowners could tap carbon markets to subsidize their transition to sustainable land management. The results were mixed but informative, and the project has spawned several other efforts that build on its success and learn from its lessons.
The story continues below, but you can also hear the full interviews with Buckley and Smith in episode 24 of the Bionic Planet podcast, which is co-produced by Ecosystem Marketplace publisher Forest Trends and available through iTunes, TuneIn, Stitcher, and directly on this device here:
Understanding the Supply Chain
Before joining Staples in 1990, Buckley oversaw the environmental systems for Boston-based supermarket chain Star Market. That experience, he says, inclined him to listen when Dogwood started protesting his operations.
His bosses listened, too, and by 2002 he had a new job title: “Vice President of Environmental Affairs”, and Staples had one of North America’s first sustainable sourcing policies for paper. It’s cornerstone was a pledge to buy more and more paper that was either made of recycled materials or of pulp certified by the Forest Stewardship Council (FSC) as being sustainably harvested. Eventually, the policy said, 100 percent of Staples paper would meet one of those criteria. It was a bold commitment, and it came 12 years before dozens of multinational companies endorsed the New York Declaration on Forests, which is a cluster of 10 pledges that, together, aim to cut global deforestation in half by 2020 and end it by 2030.
But getting there wouldn’t be easy.
Demand Without Supply
The Forest Trends Supply Change initiative currently tracks progress reported by hundreds of companies that have pledged to reduce their impact on forests, but such pledges were rare in 2002, when Staples found its own demand for certified wood products far exceeded the entire country’s supply.
“We started approaching our suppliers, and we were able to get more sustainable fiber from the northern part of the country, but the Southeastern United States remained a bottleneck,” says Buckley.
By 2007, less than 2 percent of Southern US forests were FSC certified, and that number showed no sign of increasing.
“Ninety percent of the land is privately owned, and most of that belongs to very small owners, so it’s a very complex supply chain,” says Smith. “Plus, in order to become certified, there’s a cost involved, and there’s not always an adequate return in terms of the benefit that the landowner would get from harvesting.”
The problem proved more intractable than either Buckley or Smith expected, but they also found they weren’t tackling it alone. One of their suppliers, Domtar, had also embraced FSC certification, and it was also frustrated with the lack of available supply. Then there was Columbia Forest Products, the country’s largest supplier of hardwood plywood, which had begun buying sustainably-harvested timber long before it was fashionable, and was also pushing for expanded certification.
“We invited Danna to meet our suppliers, and she helped us connect with some of the landowners in her area,” says Buckley. “We started to find there were a lot of people out there who had been wrestling with this idea of creating a different value proposition for small forest owners – one that could make it worth their while to leave trees in the ground.”
Among landowners, they found some larger players, like the Forestland Group, embraced certification, but that company was an outlier in the South. It measured its forests in tens of thousands of acres, while family holdings average just 30 acres each, and it was founded by two environmental economists – Chris Zinkhan and Charles Collins – explicitly to manage forests sustainably.
Meanwhile, Staples had joined the World Resources Institute’s Green Power Market Development Group, which aimed to stimulate demand for then-unprofitable renewable energy initiatives – in part by purchasing Renewable Energy Certificates (REC). These are charges tacked onto a company’s energy bill, with the stipulation that the extra money go to wind farms and solar projects feeding into the grid. At the same time, Buckley began researching ecosystem markets, which funnel money from people who benefit from healthy rivers, streams, and forests to those who maintain them – fueling in the process a $25 billion restoration economy that employs more people than logging, coal mining, or steel production.
One then-nascent market was the one for forest carbon, which would make it possible for industrial companies to offset their greenhouse gas emissions by paying to conserve or restore forests, with the payments being based on the amount of carbon stored in trees either saved or planted. NGOs had been experimenting with forest carbon programs since the late 1980s, and in 2005 the United Nations Framework Convention on Climate Change (UNFCCC) began considering them as part of a global climate agreement. At the same time, the state of California was developing its own cap-and-trade program that would include forest-carbon offsets from across the United States.
By 2006, Buckley and Smith say their thinking had converged dramatically, and that’s when Smith invited Buckley down to Dogwood headquarters in Asheville, North Carolina.
“We went for a hike, and it was my first direct exposure to the southern forests,” he says. “Then Danna and I and Andrew [Goldberg, Dogwood’s director of corporate engagement] went for beers at a place called Jack of the Wood, and all of these elements started to create the germ of an idea around land-based carbon offsets.”
Specifically, they wondered if carbon finance was lucrative enough to make it worthwhile for small, shoestring operations to not only leave more trees in the ground, but also get through the expensive FSC certification process. They decided to test it in Southern Appalachia, which had been especially hard-hit by the decline of coal, as part of a broader effort to get 20 percent of US southern forests – or about 40 million acres of land – certified under FSC.
Building the Partnership
From then on, the pieces fell together quickly: the Forestland Group agreed to pilot the program on one of its properties, while Columbia and the National Woodland Owners Association helped identify other properties (the entire process is detailed here). The lots ranged in size from 1,400 acres to nearly 10,000, and the Pacific Forest Trust signed on to handle the carbon accounting in accordance with the standards developed under California’s cap-and-trade program. Environmental NGOs like the Rainforest Alliance, the World Resources Institute, and the Environmental Defense Fund then got behind the effort, as did FSC itself.
As for buyers, Staples and carpet-maker Interface committed to buying offsets up-front – and both did so for reasons that have proven to be quite common, according to an Ecosystem Market analysis of carbon market buyers.
Both, for example, have worked hard to bolster their role as climate leaders, a motive that accounts for 44 percent of total tracked value. At the same time, both incorporated offsetting into larger emission-reductions strategies. Interface, for example, used carbon markets to offset emissions from all stages of its carpets’ life-cycle – “from production to end use (including estimated emissions from vacuuming)”, while Staples used them to kill two birds with one stone.
Specifically, by purchasing offsets, Staples reduced its carbon footprint and increased the supplies of FSC-certified fiber.
“The intent was to see if there was an opportunity to create a model that would encourage certification for landowners in the South,” says Buckley. “We thought that improving land-management practices under FSC would improve carbon stocks in forests and, as a result, that net carbon benefit would be good for offsetting impacts associated with climate change, but also improve the availability of FSC-certified fiber in an area that we source a lot of our paper and wood products from.”
What Works – And What Doesn’t?
Ten years after that hike in the woods, 30 percent of Staples’ paper products meet the company’s sustainability criteria, according to the Forest Trends Supply Change initiative, and the Carbon Canopy project shows that carbon finance can, in fact, cover the cost of certification – but only for landowners whose forests are at least 2,600 acres in size and at a carbon price of $11.50 or higher.
That’s roughly twice the average price identified in Ecosystem Marketplace’s most recent State of Voluntary Carbon Markets report, published in May, but Forestland Group has nonetheless embarked on a plan to expand its carbon finance area from 9,700 acres to 240,000 acres in the Southern Appalachians.
To bring smaller forest owners into the fold, Staples and Domtar have launched an initiative called the Appalachian Woodlands Alliance (AWA), together with Rainforest Alliance, Avery Dennison, Columbia, Evergreen Packaging, Kimberly-Clark, and the US Forest Service. Headed by Andrew Goldberg, the initiative works in part by exploring more cost-effective ways of certifying small landowners.
“We try to identify the types of things that truly need to be proven on the ground at a particular harvest site, and which can be proven through regional analysis, to feel confident that there is no risk to sustainable forest management values,” says Goldberg.
Certification programs identify more than 100 indicators, he says, but some – like rates of re-planting – aren’t relevant in southern Appalachia, because the forests are naturally-regenerating hardwoods. Others – like annual harvesting rates – aren’t applicable to small forests, which tend to be harvested once in a generation.
“You can’t take 3 percent of 40 acres and make a viable practice,” he says. “But you can look to see if the overall rate of harvesting across a region is sustainable, and whether individual owners are practicing good silviculture that doesn’t contaminate water, or whether they’re treating their workers right.”
Another issue is wetland forests, which store massive amounts of carbon and also filter water, but which are being ground into cheap pulp at devastating rates.
“Economically and environmentally, this makes no sense,” says Smith. “But it also makes no sense to address this on a property-by-property basis.”
So Dogwood has joined with more than two dozen other organizations in the Wetland Forest Initiative, which aims to protect 35 million acres of wetland forests through a combination of financing, education, and lobbying. Launched on World Wetlands Day in February of this year, the initiative aims to make wetland conservation a regional priority while lining up finance from downstream beneficiaries such as cities, towns, and the tourism sector.
None of these efforts will work in isolation, but land-use is emerging as an unappreciated front in the battle to end and even reverse climate change. A study by the Nature Conservancy identified 20 low-cost land-management strategies that can be scaled up to provide 30 percent of the emission reductions needed to meet the Paris Agreement targets, but it also found such efforts account for just 2.5 percent of climate finance (we’ll explore this in-depth in an upcoming piece).
Other analyses show that governments and investors are funneling more than 40-times more money into forest destruction than into conservation – a tragic imbalance that will ultimately destroy more economic value than it creates unless more executives follow Buckley’s lead, and listen.