1. FSC® F000100 FSC® A.C. All rights reserved Stefan Salvador Director, Quality Assurance Global trends, challenges & strategic plan 2016 FSC Russia Assembly 12 April, 2016

2. 1 GLOBAL FSC CERTIFIED AREA 1 Based on numbers from FSC IT/SD Created: 03/09/2015

3. 2 GLOBAL FSC COC CERTIFICATES 2 Based on numbers from FSC IT/SD Created: 03/09/2015

4. 3 Analysis of audits of all FMU certified areas (2014): = 16,6% of total world industrial roundwood production 3 Over 30.000 companies work with FSC materials – consumers recognize these when FSC labelled Part of production volume not labelled: interrupted chain of custody FSC CERTIFIED PRODUCTION VOLUME

5. 4 FSC 1994-2014

6. 5 FSC certified forest area growth 2011-2015 = 10 million ha 184 171 131 Area 41% GROWTH over 2011-2015 *January 2015 2015 2013 2011

7. 6 Growth in FSC Chain of Custody certification 2011-2015 (number of certificates) = 3,000 certificates 2015 2013 2011 28,604 24,789 19,021 *January 2015 CoC: 50% GROWTH over 2011-2015

8. 7 Status: Certificates 2014 vs. 2015 Milestone: >30,000 certificates! But slower growth in 2014: 5.5% more CoC 2.7% more FM Stagnation or decline in many markets

9. 8 COUNTRIES WITH MOST COC CERTIFICATES RankCountry FSC COC certificates in Dec. 2014 % of total FSC COC certificates % change since Dec. 2009 1 CHINA376113,19%292.59% 2 UNITED STATES305510,71%-13.19% 3 UNITED KINGDOM23478,23%22.05% 4 GERMANY21667,59%97.09% 5 ITALY18756,57%238.45% 6 NETHERLANDS13244,64%60.29% 7 POLAND11784,13%151.17% 8 JAPAN10993,85%14.12% 9 BRAZIL10543,70%229.38% 10 CANADA8833,10%-2.11%

10. 9 Our success creates our challenge Growth in numbers raises expectations: –Quality of certification –Certainty of impact –Provision of services –Global presence –Staff capacity –Marketing –Communications Growth in numbers and expectations raises level of activity

11. 10 The waters are rising Flooded in ongoing processes... Internal: –IGI, Standard transfer Process, Controlled Wood, CoC, IFL, ILO, Motion 12, Policy for Association, Trademark, OCP, etc. External: –EUTR, ISO CoC Standard, etc.  Stakeholder frustration + fatigue

12. 11 Some things we are doing right Stakeholder engagement Democratic Governance, 3-chamber structure NGO support Independent third-party verification Dispute resolution Global reach Strong, credible standards

13. 12 Increased demand, decreasing supply Coping with climate change A global economy in transition Changing demographics The digital explosion Entering an era of ultra-transparency Changing consumer expectations From forests to ecosystem services Link to global trends

14. 13 The new Strategic Plan and Transformation Process must help us solve these problems!

15. 14 2015 Global Strategic Plan

16. STRATEGIC PLAN APPROVED 15 Consensus decision by the International Board in August 2015 Clearly defines high level direction via objectives and success criteria This represents our framework for what we need to achieve Now we take the next steps to enable ourselves to implement the strategy

17. Delivering Forests For All Forever A Bolder, Stronger, More Effective FSC ® Forest Stewardship Council ® Global Strategic Plan 2015 – 2020

18. 2 Empowerment of People Through our actions, FSC will empower smallholders, women, communities,workers, Indigenous Peoples and other under- represented groups. 3 Mission advancement through alliances FSC will advance impact by working more closely with complementary and aligned organizations. 4 User orientation FSC will renew our entrepreneurial spirit and shift processes to emphasize the needs of the users of our system. 2020 Aspiration: Turn the Tide FSC is the leading catalyst and defining force for improved forest management and market transformation, shifting the global forest trend toward sustainable use, conservation, restoration, and respect for all. STRATEGY 1 STRATEGY 2 A new forest paradigm realized The true value of forests is recognized and fully incorporated into society worldwide. 2050 BEACON Objective: 20 BY 2020 The FSC share of global forest-based trade is 20%. STRATEGY 3 Strengthen the FSC framework & governance Streamline standards, increase consistancy, improve governance and develop new forest solutions. Increase market value of FSC Rapidly expand consumer preference, overcome market barriers and create new market opportunities. Transform the way we work Globally align functions, deliver world-class service and promote institutional knowledge. COMMITMENTS 1 Increased focus on outcomes FSC will deliver meaningful impact, report on outcomes, and refine the system accordingly. Forest governance and economic systems in many parts of the world provide greater incentives for deforestation, forest degradation and related social inequities than they do for responsible forest management. Forests For All Forever FSC ® shall promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests. CORE CHALLENGE ! MISSION 4

19. 2 Empowerment of People Through our actions, FSC will empower smallholders, women, communities,workers, Indigenous Peoples and other under- represented groups. 3 Mission advancement through alliances FSC will advance impact by working more closely with complementary and aligned organizations. 4 User orientation FSC will renew our entrepreneurial spirit and shift processes to emphasize the needs of the users of our system. 2020 Aspiration: Turn the Tide FSC is the leading catalyst and defining force for improved forest management and market transformation, shifting the global forest trend toward sustainable use, conservation, restoration, and respect for all. STRATEGY 1 STRATEGY 2 A new forest paradigm realized The true value of forests is recognized and fully incorporated into society worldwide. 2050 BEACON Objective: 20 BY 2020 The FSC share of global forest-based trade is 20%. STRATEGY 3 Strengthen the FSC framework & governance Streamline standards, increase consistancy, improve governance and develop new forest solutions. Increase market value of FSC Rapidly expand consumer preference, overcome market barriers and create new market opportunities. Transform the way we work Globally align functions, deliver world-class service and promote institutional knowledge. COMMITMENTS 1 Increased focus on outcomes FSC will deliver meaningful impact, report on outcomes, and refine the system accordingly. Forest governance and economic systems in many parts of the world provide greater incentives for deforestation, forest degradation and related social inequities than they do for responsible forest management. Forests For All Forever FSC ® shall promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests. CORE CHALLENGE ! MISSION 4 Overarching strategic goal: Reach 20% of global forest trade by 2020 The objective recognizes that FSC, as a market- based system, requires continuing market success as a critically important prerequisite for achieving these goals, while maintaining the highest levels of integrity and credibility.

20. 2 Empowerment of People Through our actions, FSC will empower smallholders, women, communities,workers, Indigenous Peoples and other under- represented groups. 3 Mission advancement through alliances FSC will advance impact by working more closely with complementary and aligned organizations. 4 User orientation FSC will renew our entrepreneurial spirit and shift processes to emphasize the needs of the users of our system. 2020 Aspiration: Turn the Tide FSC is the leading catalyst and defining force for improved forest management and market transformation, shifting the global forest trend toward sustainable use, conservation, restoration, and respect for all. STRATEGY 1 STRATEGY 2 A new forest paradigm realized The true value of forests is recognized and fully incorporated into society worldwide. 2050 BEACON Objective: 20 BY 2020 The FSC share of global forest-based trade is 20%. STRATEGY 3 Strengthen the FSC framework & governance Streamline standards, increase consistancy, improve governance and develop new forest solutions. Increase market value of FSC Rapidly expand consumer preference, overcome market barriers and create new market opportunities. Transform the way we work Globally align functions, deliver world-class service and promote institutional knowledge. COMMITMENTS 1 Increased focus on outcomes FSC will deliver meaningful impact, report on outcomes, and refine the system accordingly. Forest governance and economic systems in many parts of the world provide greater incentives for deforestation, forest degradation and related social inequities than they do for responsible forest management. Forests For All Forever FSC ® shall promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests. CORE CHALLENGE ! MISSION 4 Utilizing the two roles of FSC We recognize two very distinctive, but interactive roles as being necessary within the FSC system: 1.FSC as assurance tools to the forest industry, such as the Principles and Criteria for forest management, policies, and standards. This role ensures that FSC empowers and benefits workers, Indigenous Peoples, smallholders, communities, biodiversity, water, cultural places, etc. 2.FSC as a service provider for a voluntary, market-based system designed to allow people throughout society to make responsible purchasing decisions. It prioritizes customer needs and satisfaction and extends beyond consumer marketing into supply growth, market development, public awareness building and advocacy on behalf of responsible practices. The unique value of FSC is realized when these two roles are harmonized and performed on a high level of quality – nationally, regionally and globally.

21. 20 Very clear cannot achieve strategy on: Current budget Current resources Current level of investment in our people – training and skills Current IT systems Current level of organization-wide project management Without operating collectively as ‘One FSC’

22. 21 What is the Transformation Project The process by which we are moving FSC from where it is today to the FSC we need to be, in order to achieve 20 by 2020. It includes: Getting a strategy agreed by consensus Reviewing our current operations Changes in the financing and accountability of all FSC organizations Streamlining and becoming efficient in all that we do A review of the governance of FSC 21

23. 22 Implementation planning Ongoing now, until July 2016 Create implementation plan for each CRAThru early-May Impact analysis & integrationMid May/early June Implementation plan to GNMJune Implementation plan to BoardJuly meeting Includes New global coordination structure Training of staff and network partners Analysis and strategic project development Revenue development (Ian Hanna and Altruist Partners)

24. FSC International Charles de Gaulle Straße 5 53113 Bonn Germany T +49 (0) 228 367 660 F +49 (0) 228 367 66 30 Mail: fsc@fsc.org www.fsc.org Copyright © 2015 FSC G.D. All rights reserved FSC ® F000100 Environmentally appropriate forest management ensures that the harvest of timber and non- timber products maintains the forest’s biodiversity, productivity, and ecological processes. Economically viable forest management means that forest operations are structured and managed so as to be sufficiently profitable, without generating financial profit at the expense of the forest resource, the ecosystem, or affected communities. Socially beneficial forest management helps both local people and society at large to enjoy long term benefits and also provides strong incentives to local people to sustain the forest resources and adhere to long- term management plans. FSC is...