When Tachi Kiuchi of Mitsubishi Electric signed an agreement with Randy Hayes of Rainforest Action Network (Ran) nearly 18 years ago, it was celebrated as a step forward in forest protection and an example of leveraging of NGO purpose and corporate power to create positive change. Looking back, however, the agreement was just a start.
This agreement helped establish and increase demand for FSC-certified paper, an emerging standard at that time. Demand for responsibly sourced paper and other timber products quickly increased, as more than 400 companies adopted Mitsubishi's approach, prompting suppliers to shift their forest management practices to meet this new demand.
Despite past success, today we continue to face problems of irresponsible forest management and illegal deforestation. Many of the same NGO players – including RAN, Greenpeace, World Wildlife Fund, and Friends of the Earth – continue to battle brands and their suppliers over palm oil and paper sourcing. The corporate "demons" resisting calls to change are many: April, Cargill, and ADM, as well as the myriad brands sourcing from them.
Others, notably Asia Pulp and Paper (APP) and Wilmar, recently responded to NGO pressure, committing to zero natural forest destruction and new industry transparency standards. Still, past agreements have failed to go far enough, raising the question: how can NGO purpose and corporate power be better aligned to forge today's agreements?
Transparency and reporting
Historically, tracking on-the-ground activities thousands of miles away has been challenging. But through co-ordinated efforts of organizations like the Forest Trust and World Resource Institute, greater transparency is being adopted by the pulp and paper industry that could become the model for other commodity industries.
Specifically, APP has begun working with the Forest Trust to build an online monitoring dashboard; APP introduced its Forest Conservation Policy in February 2012. Covering 2.6m hectares of land, the dashboard maps the company's concession areas, responses, and community grievances, as well as identifies High Conservation Value (HCV) lands and other sensitive regions. The data, mostly provided by workers on the ground, is uploaded to the site, providing greater transparency to key stakeholders including local communities, NGO watchdogs, and existing and prospective customers.
The tool is continually being improved with feedback from NGOs and customers so it can work not just for APP, but also for industry peers. Spillover effects are already apparent: Unilever committed to trace all its palm oil to known sources by the end of 2015. Unilever, along with the Forest Trust and Climate Advisers, has been driving Wilmar (the world's largest palm oil supplier) to commit to Zero Deforestation.
To help monitor progress under agreements by companies such as Wilmar, World Resource Institute has convened a coalition to advance Global Forest Watch, a monitoring system that improves transparency through crowdsourcing. It enables stakeholders on the ground to update WRI's map and note fires, poaching and additional threats in real time.
Continual funding to empower local communities
In the past, there was often too little follow-up with companies once agreements were signed. NGOs moved on to the next target, creating a gap between company accountability and backslide. Examples that counter this effect are First Peoples Worldwide's Indigenous Rights Risk Report and Corporate Monitor, which identify potential conflict areas and model corporate-community collaborations to help inform and empower locals in how their resources are exploited.
Creating competitively high standards
Independent third-party certification standards have advanced sustainable use of natural resources. In the forestry sector, there are over 50 standards, many of which are country-specific. It is estimated that only 10% of the world's forests operate under a certification standard. Forest Stewardship Council (FSC) is the gold standard for forest certification, but is imperfect.
Other standards, some of which are industry-led efforts like SFI and PEFC, are regularly accused of greenwashing. Regardless, all standards must be challenged by brands and NGOs to improve and ensure a competitive standards marketplace that hastens increasing demand for certified forest products worldwide.
The message to companies is clear: with great power comes the need for heightened responsibility. To maintain a social license to operate, companies must do more with much less and be highly transparent and accountable about their activities.
By aligning NGO purpose with corporate power, great opportunity for visionary companies to competitively differentiate on sustainability is created. Let's move forward ensuring NGOs and companies improve upon what was achieved 18 years ago with Mitsubishi Electric and Ran – leveraging today's interconnectivity to accelerate the progress we must see for a better world.
Erik Wohlgemuth is COO of Future 500, a global non-profit specializing in stakeholder engagement and building bridges between parties at odds to advance systemic solutions to urgent sustainability challenges
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