Forest Stewardship Council – United States FSC Western Hardwood Markets An Update on Supply, COC Options, & Drivers June 20, 2009 FSC-certified forest in Lakeview, Oregon Courtesy of Collins Pine Company Ian Hanna x2

Forest Stewardship Council – United States Major themes The FSC market has changed Fundamental business forces are driving FSC growth FSC is supply limited in the West

Forest Stewardship Council – United States FSC Certification Market-based, non-regulatory forest conservation tool World’s most comprehensive forest management standards Buyers create positive change through their purchasing Third-party verification of forest management practices, chain-of-custody, and product labeling Forest Management Chain of Custody certificationProduct Labeling

Forest Stewardship Council – United States Global foundation, global impact 3 chamber membership Environmental, Social, Economic Global North & South million acres certified 13,469 chain-of-custody certificates in 82 countries

Forest Stewardship Council – United States What sets FSC apart: open, diverse membership and balanced, consensus-based standards and governance

Forest Stewardship Council – United States Supply Chain Growth * 2,721 total FSC chain-of-custody certificates in U.S. which is currently 6 times the # of certificates of the nearest system (SFI) Chain of Custody Certificates – US Building & Furniture vs. Paper & printing CA – 450; OR – 150; WA - 111

Forest Stewardship Council – United States Certified Forest Growth * 2,721 total FSC chain-of-custody certificates in U.S. which is nearly 6 times the # of certificates of the nearest system (SFI) Chain of Custody Certificates - US

Forest Stewardship Council – United States Total of 30.6 million acres as of June 2009 AR: 478,819 CA: 984,035 MA: 623,652 CT: 7,840 ID: 669,370 IN: 150,000 LA: 582,530 MD: 81,511 ME: 3,365,701 MI: 4,570,027 MN: 6,096,827 MO: 159,583 MS: 345,854 NH: 186,297 NJ: 241,523 NY: 1,056,501 OR: 987,501 PA: 2,280,967 SC: 6,425 TN 193,423 VT: 197,651 WA: 332,841 WI: 4,977,304 HI: 34,600 NC: 1,896,140 FSC-certified forestland in the US

Forest Stewardship Council – United States How FSC works Set standards (IC) Forest management Chain-of-custody Accredit certifying bodies (ASI) Authorize product labelling (GD)

Forest Stewardship Council – United States FSC-certified product origins FSC-certified wood and pulp can originate from: FSC certified forests (FM) Post consumer recycled content Combination of FSC-certified wood fiber, recycled content and other ‘controlled’ sources (5 key screens).

Forest Stewardship Council – United States The Label The FSC check tree logo identifies FSC-certified products These FSC Product groups contains a mixture of FSC certified material and other controlled sources This FSC product group contains 100% FSC certified materials This FSC product group contains 100% post- consumer reclaimed material

Forest Stewardship Council – United States Certification Roles FSC Certifiers Group Manager (group rules changing) Forest or Supplier (FM or COC)

Forest Stewardship Council – United States COC Certifiers SCS SmartWood SGS Bureau Veritas GFA/American Green Business Sustainable Northwest (group only)

Forest Stewardship Council – United States Claim Options Transfer system Easiest administratively Percentage system 70% minimum on solid products 50% on chip and fiber through 2009 Credit system No minimum threshold Based on conversion factors

Forest Stewardship Council – United States US marketplace trends Fortune 500 via brand value (McD)/risk reduction (IKEA) Critical mass of FSC-labeled products (5%?) Virgin and recycled paper ENGO engagement in consumer marketing National branding and tools Group certification a la NNRG Stepwise approaches a la NWFA Lacey Act amendment USGBC/LEED MRc7 benchmark FSC Northwest – Supply analysis/market development

Forest Stewardship Council – United States BUILDING LEED, BuiltGreen, Earth Advantage, Build It Green Home Depot, Lowe’s, regional suppliers NWFA RPP Columbia, Collins, Potlatch, US States PAPER Williams Sonoma, REI, Limited Brands Staples, Kinkos, Scholastic, HSBC Domtar, Mohawk, Grays Harbor, NewLeaf PACKAGING Tetra Pak, Curtis, others FURNITURE Crate & Barrel, Walmart, Pier One OTHER Guitars: Gibson, Martin, Taylor, Fender US Market Leaders

Forest Stewardship Council – United States FSC is a business strategy  Invest in strategy and at least one staff person  Get them involved in networks*  Think in terms of differentiation – you are marketing a new product  Offer regular product lines  Position for new product flows (OESF/PC, NCF/Pref Pros, ODF?)  Incentives have to flow to forest managers

Forest Stewardship Council – United States Resources x 2

Forest Stewardship Council – United States WOOD IS GREEN