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  • Investing in Environmentally Friendly Wood

    2010 - 05.27

    At the start of this year PriceWaterhouseCoopers published its annual review of the Forest, Paper and Packaging industry, entitled ‘Forest, paper and packaging: CEO perspectives’.

    A couple of interesting statements are as follows:

    “We heard a strong consensus from CEOs that the FPP industry needs to do a much better job at raising public awareness and understanding of the fundamentals of the business. The industry must improve its ability not only to publicize its successes in increasing efficiency and reducing carbon emissions, but also to convey the realities of modern sustainable forestry and pulp and paper-making processes.”

    “Virgin fibre based carton board is the most sustainable, most environmentally sound packaging application and we are very confident that the total demand and consumption of those packaging materials will very strongly increase also in the future.”

    On the whole these statements are correct. However, the industry will have a hard time proving that their products are environmentally sound as long as there are companies out there who are supplying their demand from old growth rainforests. Despite this a large number of paper companies have invested a lot in making sure that their production and wood supply is environmentally friendly and comes from sustainable sources.

    Unfortunately these efforts are not very news worthy and all it takes is one irresponsible company that conduct their business at the expense of the environment and the whole sector suffers.

    An added problem is that the industry has to think very carefully on how it shows itself to be environmentally friendly. The public is ready to condemn any project when development of genetic material is mentioned by the industry. As long as genetic engineering is part of these operations the public will not accept operations as environmentally friendly. Even the use of clonal material for timber plantations creates problems with environmentalists who cite the loss of biodiversity when using clonal material.

    “Increasing the fibre yield from existing forests will also play a role in helping the industry maintain competitiveness, such as… other executives point towards Brazil as leading the way, particularly in terms of developing genetic materials to increase yield”

    The forest products industry has a lot of potential for coping with challenges of in the future. Such as the new business model that the economic downturn and climate change are demanding. Called the ‘bio-based economy’, the forest product industry could be one of the key pillars of this new economy model. The main raw material for this industry is, was and will always be wood, however the challenge for the future is to make more out of wood.

    And forests are the first step. Timber must be grown in well managed forests, preferably by forest management specialists such as The Phaunos Timber Fund, Greenwood Management or Cambium. In this way sustainable forest management provides the proof that the wood has been grow in an environmentally friendly way.

    The Timber Investment Blog is sponsored by Greenwood Management. For more information on investing in Forestry please click here

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    2 Responses to “Investing in Environmentally Friendly Wood”

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