How does the global climate change conference (COP21) affect the forest products industry?

03/25/2016

By Christopher Gibbons, President, American Green Consulting

The “21st Conference of the Parties to the United Nations Framework Convention on Climate Change,“ known as COP21, wrapped up three months ago with an agreement between all 195 countries of the world that some consider to be long on promise and short on specifics, and others consider to be ‘historic.’

Here are the key takeaways:

  • The world has agreed to limit the temperature increase of the planet to no more than two degrees Celsius over pre-industrial levels. And, we’ve all agreed to put some money behind that plan as well (at least $100 billion per year through 2025).
  • The agreement leaves each country free to set its own targets toward meeting that goal, with the first set of individual country plans due in 2018.

This means two things. First, companies that are in the business of harvesting forests are going to find opportunities in the space created by promised money and indistinct plans on how to spend it. Secondly, companies that use forest products are going to find themselves under increasing pressure to address these issues through their purchasing practices and throughout their supply chains.

We’re already starting to see this second point come to the forefront. Environmental groups really want to see this agreement succeed, and they are very concerned it will not. ENGOs plan on engaging strongly with business to help springboard COP21 targets. As a single example amongst many, a high ranking staff person at large ENGO recently told me in casual conversation that “the prominence of forests at COP21, and the recognition of the importance of forests in mitigating climate change, means that it is even more important that forest product companies make and keep deforestation-free commitments and that they commit to responsible sourcing.”

Major Environmental Groups are comfortable engaging with business, instead of instigating, and COP21 will be a driver of engagement. Consumers, especially young consumers, are environmentally and socially aware. Sustaining forests, and proving to customers that companies are doing so, will not only be more and more important as part of a comprehensive commitment to reduce everyone’s carbon/climate impact, but will provide companies the opportunity to direct consumer awareness.

In short, the same as each country is going to be determining what constitutes their plan for COP21 compliance over the next couple of years, companies are going to see pressure to come up with their own specific benchmarks in that same timeframe. Some companies will view this opportunity with trepidation, and others with excitement. Because, as we all know, you have to “lead, follow, or get out of the way”.


Source: Image: Two Sides North America