February 20, 2013

Does Asia Pulp & Paper's Promise Signal a New Business Environment?

On Monday, the Landscapes Blog highlighted one market innovation, payment for ecosystem services, that when employed at a landscape scale can yield significant benefits to people, food, and nature, particularly in the case of small-scale farmers. But what about the larger producers of food, fuel, and fiber? There is growing movement among these keys actors in global markets and supply chains toward bringing sustainability into the bigger picture of their corporate practices.

Last week, the World Resources Institute ran an article on Asia Pulp and Paper‘s recent commitment to avoid deforestation in its practices. The policy not only covers sourcing all material from plantation-grown trees, but also leaving carbon-rich peatland intact and involving the local communities in management. Due to the size of its market-share, Asia Pulp and Paper’s decision could set a precedent for the industry as a whole. According to the blog post authors,  Nigel SizerRuth Nogueron and James Anderson, “if APP successfully implements its new Forest Conservation Policy, it will build momentum for other companies and governments to adopt reforms.”

WRI’s blog post outlines three major developments in the business environment of the forest products industry that have influenced this move.

  1. Global supply chains are under scrutiny. Consumers are increasingly demanding higher environmental standards and transparency for forest products, and the companies that sell them are holding suppliers accountable.
  2. “Eyes in the Sky” for forests. Better satellite technology and new remote sensing data is allowing for more robust monitoring, and more effectively track the status of forests and their protection.
  3. Fiber under the microscope. Fiber analysis technologies enable  the watchdogs of forestry practices to test products at the end of the supply chain to determine whether companies are adhering to their commitments.

Asia Pulp and Paper is firmly planted in the forestry sector, so what is the significance of this development for integrated landscape approaches in which food and agriculture are also a major feature? For one, the trends in business practices are not relegated to forest products, but span the spectrum of terrestrial commodities, from timber to palm oil to coffee. Second, commitments in the forestry sector directly impact the quality of management in conjoined land uses. Consumer pressure and supplier commitments to sustainable sourcing are having big effects across land uses and throughout landscapes. Third, the tools that enable better monitoring and more accountability for these commitments are applicable to other land uses, their interactions, and the consequences that decisions in one part of the landscape might have on another. Finally, the blog post notes that corporate commitments alone are not enough, but that supportive policy, local enforcement, strong property rights, and local involvement are crucial to success. This is at the heart of taking a landscape perspective, where there are multiple interests to consider.

Read the original post at the World Resources Institute’s Insights Blog.

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