Emergence of Business Biodiversity models: the case of forest certification

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In the context of economic downturn and pressing environmental issues, the emerging Biodiversity Business sector seems to offer outstanding opportunities. However, while Biodiversity Business presents an enormous capacity to drive change, suspicions have hampered its development. On one hand, as is the case for all sectors, risks to adopt new business models are important and in the case of Biodiversity Business models, even greater. In fact, biodiversity is mainly viewed by business as a risk or liability, rather than a potential profit centre. On the other hand, not exploring what this market can deliver is no longer an option. Besides, at a fundamental level, all economies and all businesses depend, directly or indirectly  on biodiversity and its component resources.

In this regard, this article seeks to provide a successful Biodiversity Business case study based on the certification scheme in the forest sector.

Experts agree that one major hurdle facing all biodiversity businesses is developing practical indicators for measuring negative impacts and positive contributions to biodiversity. That is the reason why certification schemes have emerged in recent years to become an innovative and significant element for measurement. Particularly, schemes in the forest are  of interest as they are among the most advanced of the sustainability labelling initiatives.

In 1993 one the most famous institutions in this sector, Forest Stewardship Council, was founded by the WWF and other environmental NGOs, timber traders, indigenous peoples’ groups, etc. The Forest Stewardship Council (FSC) is an independent, non-governmental, not for profit organization established to “promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests.  “Environmentally appropriate” meant practices that ensured the maintenance of “the forest’s biodiversity, productivity, and ecological processes.” “Socially beneficial” meant that local people and society as a whole would commit to long-term management of forests.  “Economically viable” meant that profits would be generated without jeopardizing the forest resources, the ecosystem, or affected communities. Nowadays, the FSC is an international association of members and s represented in more than  countries in the world.

Nonetheless, from the beginning the FSC has been challenged by a number of critics,  particularly regarding the key role of the WWF in its creation, and the potential of environmental and social interests to understate economic interests.

As a matter of fact, several interest groups or industries responded by forming new schemes. In 1999 European forest owners joined together the Pan European Forest Certification (PEFC) to facilitate the mutual recognition of national schemes and provide them with a mutual ecolabel. In 2003, the PEFC went global and has firmly established itself as a competitor of the FSC. To date, with about 30 endorsed national certification systems and more than 220 million hectares of certified forests, the PEFC is the world’s largest forest certification system. Not surprisingly, competition between PEFC and FSC is fierce as their survival both depends upon two concomitant elements; firstly gaining acceptance from market players, in particular larger wood- and paper-product buyers and finance; on the other side of the spectrum attracting funding from charitable foundations, government donors and business contributions. As a result, pressures have been directed to assessing the differences across these schemes, but hitherto the distinctions are still elusive.

 The review above turns to the broader implications of certification. The act of competition suggests de facto the existence of an expected profit or prize, and accordingly, a certain performance in the sector. As a matter of fact, the certification scheme in the forest sector is a successful Biodiversity Business case study. Therefore, the core problem is not necessarily related to the biodiversity business sector performance but mostly to perceptions attached to it. 

Besides, while the schemes generate profit, this is not a panacea. The resources expended to certify operations and to support the various schemes’ managerial structures are resources that could be used for other ends. In this regard, the forest certification is an opportunity for many companies, but to be effective they have to manage forest resources in ways that optimise a range of benefits. Eg: ecotourism and other ‘green’ products and services.

The private sector has the power to stimulate biodiversity conservation. Nonetheless, to enable more widespread adoption of sustainable forestry, there is a need to address other policy issues, such as use rights and the decentralisation of forest management.  To do so, indicators and measurement tools to assess business biodiversity performance are required but are still in the early stages of development. In the future, in regard to major environmental threats faced worldwide these initiatives need to be fostered.

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  1. Report on Biodiversity, Resilience and REDD
  2. Models versus Common Sense
  3. New Climate Business Game
  4. REDD & Financing
  5. Hunter Lovins Call-in On Business and CC

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