scoping report rev 1

8/8/2019 Scoping Report Rev 1

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Report To: Wood Products Group700 McLeod AvenueFredericton, New BrunswickE3B 1V5

On: On-Product Labeling System Scoping Report

By: Birchwood Environmental Management Inc.33 Lloyd Street

Hanwell, NBE3C 1M4

Date: September 5, 2005Revision 1


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On-Product Labeling System Scoping Report Revision 1Wood Products Group September 5, 2005

Executive Summary

Birchwood Environmental Management Inc. has been contracted by the WoodProducts Group to provide a report on trends and opportunities in forest certificationand on-product labeling systems for member companies involved in the manufacture

and sale of value-added forest products.

There are currently around 105 million hectares of forest land certified across thecountry, representing an annual allowable cut of over 91 million m3. Forestcertification involves an independent, third party certifier with experienced auditorsverifying a companys sustainable forest management (SFM) planning and forestrypractice to ensure they meet the requirements of the certification standard. Thechoices for SFM system certification are currently:

CSA Z809, Canadas national standard for SFM;

SFIS 2005-2009, the American Forest and Paper Associations SFM standard

for member companies and licensees; and FSC, the standard of the international organization, Forest Stewardship

Council.

In the Atlantic Provinces, there have been strong trends towards forest certification,with the result that nearly all major forest products companies now hold some form ofcertification. This, of course, has been facilitated by the requirement in NewBrunswick for all operations on Crown land to be certified. In Nova Scotia andNewfoundland, there have also been significant efforts towards certification, primarilydue to corporate policy of parent companies (e.g., Neenah Paper, StoraEnso,Kruger, J.D. Irving Ltd., and Abitibi-Consolidated Inc.). The result has been

divergence regarding choice of certification standard. In New Brunswick, all Crownlicensees have chosen the SFI standard, with several sub-licensees doing the same.In Nova Scotia, SFI is also the standard of choice (with the exception of Stora, whichalso maintains a CSA certification on their Crown land). In Newfoundland, the CSAstandard has been chosen (primarily because of a simplified land tenure system). Todate, there have been no forest certifications in Prince Edward Island. The FSCstandard has not garnered much interest because of a dispute over the developmentof a regional standard and an outstanding appeal of the standard with theinternational association. There is growing interest in certification of privatewoodlots, however, with organizations representing woodlot owners working on FSCgroup certification.

On-product labeling is available for all three forest certification schemes. Further,CSA has been endorsed by the Programme for the Endorsement of ForestCertification Schemes (PEFC), a pan-European organization that establishes mutualrecognition of national forest certification programs. SFI has filed an application toPEFC and should be endorsed by March 2006. The advantage of endorsement isthe ability to apply the PEFC on-product label, which has recognition in the Europeanmarket.

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In spite of the broad availability of certified forest products, there is little demand foron-product labels. Most retailers do not want competition for their own productbranding and consumers are not well informed about the various certification options.As a result, there is no premium for labeled products, although maintaining aparticular niche market may require labeling.

It is not recommended that the Wood Products Group seek on-product labeling forforest certification. These types of labels are considered Type 1 labels, under ISOprotocol, are expensive to maintain due to the requirement for third-party verificationby certification bodies. There is little demand and the prospect of realizing a returnfor such an investment in resources does not warrant the effort. Chain of custody forsecondary manufacturers of wood products tends to be complex, thereby increasingcosts. An alternative is a Type 3 label, which a self-declaration of goodenvironmental performance, that involves independent verification, but not acertification body. This type of label can be granted and maintained by WPG directly,however, care must be taken in determining what sort of message is to be conveyed

with this label. An information sheet, or profile, can accompany such a label and canbe maintained on WPGs web portal for public access.

This report provides recommendations for further investigating a Type 3 label andoutlines what would be involved in establishing the program.

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Table of Contents

1.0 Introduction ...........................................................................................................................1

2.0 Forest Certification Trends in Atlantic Canada ....................................................................1

2.1 Forest Certification Standards ...........................................................................................32.1.1 Sustainable Forestry Initiative ................................................................................... 3

2.1.2 Forest Stewardship Council ....................................................................................... 3

2.1.3 CSA Z809 .................................................................................................................. 42.2 On-Product Labeling .........................................................................................................5

2.2.1 PEFC ......................................................................................................................... 7

3.0 Market Interest in Certified Forest Products ......................................................................... 83.1 Illegal Logging .................................................................................................................. 9

3.2 Procurement Policies .......................................................................................................10

3.3 LEED .............................................................................................................................. 12

4.0 Recommendations ...............................................................................................................14

4.1 Labeling Types ................................................................................................................144.2 An Alternative Approach to On-Product Labeling .........................................................16

5.0 Next Steps ........................................................................................................................... 18

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1.0 IntroductionBirchwood Environmental Management Inc. has been contracted by the WoodProducts Group to provide a report on trends and opportunities in forest certificationand on-product labeling systems for member companies involved in the manufacture

and sale of value-added forest products. This report provides an overview of thecurrent trends in forest certification and on-product labeling, and provides arecommended methodology for proceeding with a labeling pilot project.

2.0 Forest Certification Trends in Atlantic CanadaCertification in Canada's forests is on the rise. According to the April 2005 CanadianSustainable Forestry Certification Coalition certification status report, 104.6 millionhectares of forest land across the country, representing an annual allowable cut ofover 91 million m3 have been certified (Table 1).

Table 1. Canada's Certification Progress from June 2002 to April 2005 - Million HectaresCertified

REPORTEDIN HECTARES

April 112005

Dec 312004

June 062004

Dec 302003

Sept 72003

April 162003

Dec 312002

June12002

CSA 63.7 47.4 32.9 28.4 17.9 17.4 14.4 8.8

FSC 4.9 4.4 4.2 4.2 3.1 3.0 1.0 1.0

SFI 36.8 35.5 21.4 25.8 25.5 22.8 12.7 8.4

Total includingCSA, FSC, SFI*

104.6 86.5 57.7 57.6

ISO 137.9 134.8 127.1 127.8 119.3 116.3 113.8 107.8

Total for ISO,CSA, SFI, FSC* 150.7 150.9 142.6 145.7 129.1 126.2 115.6 109.5

* If a forest area has been certified to more than one standard, the area is only counted once, hencethe grand total of certifications is less than the sum of the individual totals. Source: Data compiled byKathy Abusow on behalf of the Canadian Sustainable Forestry Certification Coalition.

This strong performance among Canadian companies is clear evidence of broadindustry commitment to sustainable forest management (SFM), meeting customerneeds and assuring Canadians that our forests are well managed.

Forest certification involves an independent, third party certifier with experienced

auditors verifying a companys SFM planning and forestry practice to ensure theymeet the requirements of the certification standard. The choices for SFM systemcertification are currently:

CSA Z809, Canadas national standard for SFM;

SFIS 2005-2009, the American Forest and Paper Associations SFM standardfor member companies and licensees; and

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FSC, the standard of the international organization, Forest StewardshipCouncil.

Many customers are interested in certification and want to understand more aboutthe specifics of the three SFM standards in use in Canada. Much effort has been

made to provide interested parties with information, particularly by the ForestProducts Association of Canada, on the SFM standards in use in Canada and topromote the concept of inclusive procurement, which in the end will result inwidespread improvements in sustainable forest management. A March 2002 IBMConsulting report (A Greenward Shift) commissioned by IMPACS (Institute for Media,Policy and Civil Society) report on interviews with 30 key customers of BC andCanadian forest products and their findings conclude that:

While the majority of customers interviewed are attempting to shift theirpurchasing towards certified products, most major buyers see the threecertification schemes as equivalent;

Customers are currently grappling with all the complexities that a greenwardshift implies for them and are developing procedures designed to ensureeffective implementation; and

If other things are equal (price, quality, technical capabilities, delivery, etc.) thegreenest products will be chosen (Source: FPAC).

In the Atlantic Provinces, there have been strong trends towards forest certification,with the result that nearly all major forest products companies now hold some form ofcertification. This, of course, has been facilitated by the requirement in NewBrunswick for all operations on Crown land to be certified. In Nova Scotia andNewfoundland, there have also been significant efforts towards certification, primarily

due to corporate policy of parent companies (e.g., StoraEnso, Kruger, J.D. IrvingLtd., and Abitibi-Consolidated Inc.). The result has been divergence regardingchoice of certification standard. In New Brunswick, all Crown licensees have chosenthe SFI standard1, with several sub-licensees doing the same. In Nova Scotia, SFI isalso the standard of choice (with the exception of Stora, which also maintains a CSAcertification on their Crown land). In Newfoundland, the CSA standard has beenchosen (primarily because of a simplified land tenure system). To date, there havebeen no forest certifications in Prince Edward Island. The FSC standard has notgarnered much interest because of a dispute over the development of a regionalstandard and an outstanding appeal of the standard with the internationalassociation. There is growing interest in certification of private woodlots, however,

with organizations such as the Nova Scotia Forest Fibre Producers and LandownersAssociation working on FSC group certification under the SLIMF (Small and LowIntensity Managed Forests) program. The FSC Maritime Standard is currently underfive year review, and is expected to become more aligned with other regions.

1 The status of Crown License 8, formerly operated by St. Anne-Nackawic Pulp Company Ltd., regarding

certification is uncertain. It is expected, however, that the Tembec/Birla Joint Venture will be pursuing FSC

certification as Tembec has made a corporate commitment to achieving FSC certification on all their managed

land by the end of 2005.



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2.1 Forest Certification Standards

The following is a summary of the three forest certification options currently in use inAtlantic Canada.

2.1.1 Sustainable Forestry Initiative

Adopted by the American Forest & Paper Association (AF&PA) in October 1994, theSustainable Forestry Initiative (SFI) program is an exacting standard ofenvironmental principles, objectives and performance measures that integrates theperpetual growing and harvesting of trees with the protection of wildlife, plants, soiland water quality and a wide range of other conservation goals. An independentExternal Review Panel, comprised of representatives from the environmental,professional, conservation, academic and public sectors reviews the program andadvises AF&PA on its progress.

Sustainable Forestry BoardThe Sustainable Forestry Board was chartered as an independent body in July of2000 to oversee development and continuous improvement of the SFISM ProgramStandard, associated certification processes and procedures and program qualitycontrol mechanisms.

External Review Panel (ERP)A group of 18 independent experts representing conservation, environmental,professional, academic, and public organizations comprise the Independent ExternalReview Panel. The mission of the External Review Panel is to provide a framework toconduct an independent review of the SFI program and to ensure the Annual Report

fairly states the status of SFI program implementation. The volunteer Panel providesexternal oversight with their independent review of the current SFI program whileseeking steady improvements in sustainable forestry practices. While some membersof the panel do make field visits to member companies and observe their on-the-ground practices, it is not a charge of the panel to verify practices on the ground andthe panel does not review individual company data.

2.1.2 Forest Stewardship Council

The Forest Stewardship Council (FSC) is an international, not-for-profit organizationheadquartered in Bonn, Germany. The goal of the FSC is to foster "environmentallyappropriate, socially beneficial, and economically viable management of the world's

forests." It pursues this goal through independent third-party certification of well-managed forests.

The FSC is governed by a Board elected by its members who are divided into threechambers: "economic" (companies), "environmental" (environmental or conservationgroups) and "social" (indigenous people's organizations, social advocacy groups).The Board's membership includes roughly equal representation from "northern"



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(industrialized) and "southern" (developing) countries. The FSC is represented at thenational level in several countries by FSC national offices or FSC contact persons.

The FSC has developed standards to assess the performance of forestry operations.In the case of processing facilities, the FSC has defined requirements for Chain-of-

Custody (CoC) certification. A CoC certificate indicates that a company has thefacilities and systems needed to track certified material throughout the productionprocess from stump to end-use.

Forest assessments require one or more field visits by a team of specialistsrepresenting a variety of disciplines typically including forestry, ecology/wildlifemanagement/biology, and sociology/anthropology. In addition, the FSC requires thatforest assessment reports be subject to independent peer review. CoC assessmentsalso require site visits. Any FSC assessment may be challenged through a formalcomplaints procedure.

FSC certified products are identified by an on-product label and/or off-productpublicity materials.

The FSC has developed an internationally agreed set of standards, the FSC"Principles and Criteria" (P&C). The P&C address environmental, social andeconomic issues. FSC working groups are developing national and regionalstandards based upon the P&C.

2.1.3 CSA Z809

The Canadian Standards Association (CSA) is a not-for-profit, independentstandards writing organization. Their Sustainable Forest Management (SFM) Project

was initiated in June 1994 through funding and support of the Canadian forestindustry. The purpose of the CSA SFM system is to provide a credible andrecognized process for certifying sustainable forestry in Canada. The CSA SFM ismodeled on the ISO environmental management systems standard (ISO 14001). TheCSA SFM approach to certification involves verifying that a management system is inplace for a defined forest area.

The management system must consist of six components:

A commitment to SFM in terms of the organization's vision, principles, andhuman and financial resources.

A structured public participation process to identify SFM indicators, set goalsand objectives for the forest, and provide ongoing evaluation of actions.

A long-term (minimum 50 yr.) SFM plan that specifies how goals andobjectives are to be achieved. Objective statements must be quantified with apre-determined acceptable level of deviation, a schedule for implementation,and interim milestones that can be audited.

A schedule for implementation including work plans, inspection protocols, andauditing programs.



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Systematic, periodic assessment of the status of each indicator to identifydeficiencies and corrective actions.

Mechanisms to provide for continual improvement in SFM through regularcomparison of the trends in indicators against projections.

After developing its own Sustainable Forest Management (SFM) standards, CSAworked with the Canadian government to create a national standard for sustainableforestry. CSA published Canadas National Standard for Sustainable ForestManagement (CAN/CSA Z809) in 1996. A subsequent review and update wascompleted in 2002. The Z809 standard was developed through the collaboration ofthe government, environmental groups, forest industry and academic interests. Inresponse to public demand for sustainable forest products, CSA International createdthe Forest Products Marking Program, a chain of custody system that tracks forestproducts from the tree to the retailers shelf. After a third party audit according to CSAstandards, companies may apply to the CSA SFM Mark, an eco-labeling system.

2.2 On-Product LabelingBecause the SFI standard is currently the dominant standard being adopted onCrown and industrial freehold land in New Brunswick and Nova Scotia, companiesinterested in on-product labeling are considering the SFI label. Table 2 provides alist of certifications in Atlantic Canada, including certification type, and AAC. Accessto certified wood is essential, particularly for secondary producers of wood productswho do not directly manage forest land. There are examples of several companiesholding a FSC chain-of-custody certification, but there is little FSC certified woodavailable, and therefore, they cannot use the FSC label without procuring wood fromoutside the region. To further entrench the use of the SFI label, the CanadianFederation of Woodlot Owners is currently developing a Canadian alternative to the

American Tree Farm system, a certification system for private woodlots in the USA.American Tree Farm is recognized by SFI as the equivalent standard for private land,and the new Pan-Canadian Private Woodlot Certification Scheme, when available,will seek to be mutually recognized by SFI for use in Canada as well. This will furtherexpand the availability of SFI certified wood, and offers to be a viable option for thesmaller woodlots (or particular significance in provinces with a large proportion offorested land in private ownership, such as PEI and Nova Scotia.

A recent development with the Pan-Canadian Standard is that the SFB has rejectedthe endorsement of the standard stating they because they are seeking PEFCendorsement, they will no longer endorse other standards outside of this process.

Also, the CSA is developing a small woodlot version of Z809 using the Pan-CanadianStandard as the model.



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Table 2. Certifications by Company and Certification Type in Atlantic Canada.

New Brunswick

Company

Bowater Canadian Operations Ba

Mir

Dal

Fraser Papers Fre

J.D. Irving Ltd. Bla

Chi

De

Sus

UPM Miramichi Inc. Cro



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All three SFM standards currently offer on-product labels (Figure 1). Each standardhas established minimum content requirements for the use of the label. Further,there are strict controls over what products may use the label and how they are to bepromoted and displayed.

2.2.1 PEFC

The PEFC Council (Programme for the Endorsement of Forest Certification

schemes) is an independent, non-profit, non-governmental organization, founded in1999 which promotes sustainably managed forests through independent third partycertification. The PEFC provides an assurance mechanism to purchasers of woodand paper products that they are promoting the sustainable management of forests.

PEFC is a global umbrella organization for the assessment of and mutual recognitionof national forest certification schemes developed in a multi-stakeholder process.These national schemes build upon the inter-governmental processes for thepromotion of sustainable forest management, a series of on-going mechanismssupported by 149 governments in the world covering 85% of the world's forest area.

PEFC has in its membership 31 independent national forest certification systems ofwhich 18 to date have been through a rigorous assessment process involving publicconsultation and the use of independent consultants to provide the assessments onwhich mutual recognition decisions are taken by the membership. These 18 schemesaccount for over 100 million hectares of certified forests producing millions of tonnesof certified timber to the market place making PEFC the world's largest certificationscheme. The other national members schemes are at various stages of developmentand are working towards mutual recognition under the PEFC processes.


Figure 2. On-Product Labeling for Secondary Wood Producers


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In March 2005, PEFC endorsed CSA Z809, which enables CSA certified companiesto carry the PEFC label on products. The Sustainable Forestry Initiative has recently(June 2005) applies for PEFC endorsement as well. The application is undergoingassessment and it is expected the SFI will be endorsed by March 2006.

With PEFC endorsement is the right to display the PEFC on-product label onproducts that meet their label use requirements. This requires a chain of custodycertificate issued by an independent certification body meeting the requirements ofAnnex 6 (Certification and Accreditation Procedures) of the PEFC TechnicalDocument, and shall state compliance with Annex 4 (Chain of Custody of ForestBased Products - Requirements) or with national, regional or sectorial applicationsapproved by the PEFC Council (e.g., CSA Plus 1163 for CSA Z809 certified forests).

Figure 2. PEFC Label for Products with Recycled Wood Content

3.0 Market Interest in Certified Forest ProductsA recent study by the United Nations Economic Commission for Europe (UNECE),

where they conducted a review of the global forest products market, concluded thefollowing points regarding the demand for certified forest products:

Public procurement policies continue to be a driving force for certification andan important source of demand for certified forest products (CFPs).

Demand for CFPs by private end-consumers remains minor, which is a majorobstacle to market growth; however, general consumer sentiment aboutdeforestation and forest degradation keeps the sector under pressure to act.

Chain-of-custody (CoC) certificates increased by about 50%, reaching almost4,500 certificates worldwide, driven mainly by a doubling of the PEFCcertificates, which now constitute 30% of total certificates.

Germany and France are leading in CoC certificates within the UNECE region,while Japan and Brazil have more certificates outside the UNECE region.

Policies have been developed by which forest certification could potentiallyplay a role as a verification mechanism for small-scale afforestation andreforestation projects under the clean development mechanism in the firstcommitment period of the Kyoto Protocol.



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Mutual recognition between the Forest Stewardship Council (FSC) and thePEFC is not expected; however, the other major schemes have establishedmutual recognition agreements between themselves and the PEFC.

This report, although focusing on European trends, tends to mirror sentiments in

North America. There are very few report of premiums being paid for certified forestproducts. It seems that being certified has more effect on market access than marketpreference.

3.1 Illegal Logging

Illegal logging of forests around the world continues to be a major concern. Illegallogging and illegal trade in forest products is actually a complex set of interrelatedlegal, political, social and economic issues. It is important to note that there is nointernational definition of illegal logging. Logging without a government-approvedmanagement plan may be perfectly legal in the U.S. South, but would be illegal in theBrazilian Amazon. Some nations with poor forest practices may in fact have a low

level of illegal logging simply because their standards are so lax. As a generalizeddefinition, illegal logging is most often referred to in the literature as when timber isharvested, transported, bought or sold in violation of national laws. Harvesting innational parks or reserves would be an obvious example of illegal logging, but often,poor forest practices (whether in violation of a specific set of rules or not) are alsoclaimed to be associated with illegal activities. Within the context of illegal logging,they can be summarized as:

harvesting without authority in designated national parks or forest reserves;

harvesting without authorization or in excess of concession permit limits;

failing to report harvesting activity to avoid royalty payments or taxes; and

violating international trading rules or agreements, such as export bans orCITES.

Figure 2 provides a graphical representation of the significance of this problem. Arecent trend with respect to certification is to obtain independent verification ofsources of forest products with respect to controversial sources. FSC and PEFCboth acknowledge non-controversial sources as valid for on-product labelingpurposes. Such sources are typically characterized as not coming from illegalharvests, but FSC also includes forests of high conservation value, and geneticallymodified organisms.

A number of organizations are now providing certificates of origin for companiesthat procure forest products but may not be directly responsible for forestmanagement activities. For example, SGS has a Timber Tracking Programme, andPriceWaterhouseCoopers has an Independent Chain of Custody Standard. In thecase of SGS, they are working with the International Tropical Timber Organization todevelop a graduated certification system that would encourage producers to improvebut recognize their efforts although they may not yet qualify for full certification.



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Figure 2. Estimation of Percentage of Illegally Harvest Wood Entering EUCountries

3.2 Procurement Policies

Metafore, a consulting firm specializing in facilitating market development for forestproducts and conducting associated analyses, completed a study in 2003 thatresearched procurement policies of Fortune 100 companies. They concluded that:

More than half of Fortune 100 companies choose office paper containingrecycled content.

Of those specifying recycled paper:o 23% choose paper with at least some recycled fiber;

o 18% choose 30% post-consumer fiber, the minimum standard accepted

by the federal government; and



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o 18% choose virgin fiber derived from well-managed forests in addition

to post-consumer recycled content.

Companies policies regarding the use of paper products are generally limitedto reducing, reusing, and recycling office paper.

10% of companies have solid wood purchasing policies.

58% of companies acknowledge using solid wood but have no specific policyguiding wood purchasing.

33% believe their solid wood use is insignificant and therefore have no woodpurchasing guidelines.

While many companies substitute traditional wood products with those madefrom alternative materials, the use of informed environmental performancecriteria to guide these decisions is not common.

Examples of company procurement policies with respect to wood purchasing areprovided in Table 3.

Table 3. Excerpts from Corporate Procurement Policies

Company Procurement PolicyOffice Depot Office Depot values the suppliers of forest and paper products

composed of wood fiber derived from well-managed forest operations,such as those certified and verified by an independent third party.

L.L Bean L.L.Bean will source all paper from responsibly managed forests. Toverify that best practices are employed, we seek third party certification.We recognize that there are multiple certification systems in place andnot all certifications are right for all situations. We give preference to fibercertified under Forest Stewardship Council (FSC) standards whenfeasible, based on market conditions. More broadly, we look for forestmanagement standards that are based on continuous improvement,including Sustainable Forestry Initiative (SFI), Canadian StandardsAssociation (CSA), American Tree Farm System (ATFS), and MaineMaster Logger Program (MMLP).

Home Depot The Home Depot will give preference to the purchase of wood and woodproducts originating from certified well managed forests whereverfeasible.

IKEA IKEA does not accept timber, veneer, plywood or layer-glued wood fromintact natural forests or from forests with a clearly defined highconservation value. Our long-term goal is to source all wood in the IKEArange from verified, well-managed forests that have been certified

according to a forest management standard recognized by IKEA.

Kodak Our suppliers already have or are actively seeking certifications frombodies accredited by the internationally recognized Forest StewardshipCouncil (FSC), or are working closely with environmental, indigenous,and social interests to develop FSC standards or comparable standardswhere none exist.

Credible certification programs include the Canadian Standards



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Company Procurement PolicyAssociation Sustainable Forest Management (SFM) Standard, theInternational Organization for Standardization 14001 EMS program, theSustainable Forestry Initiative by the American Forest and PaperAssociation and their chain of custody processes.

UK Government Departments can accept certification schemes as providing somedegree of assurance from suppliers that they have taken steps toendeavour to comply with the terms of their contracts. The better knowncertification schemes currently operating are: Forest Stewardship Council (FSC) Pan European Forest Certification (PEFC) Canadian Standards Association (CSA) Sustainable Forestry Initiative (SFI) Malaysian Timber Certification Council (MTCC) Indonesian Ecolabelling Institute (LEI) Brazilian Forest Certification System) (CERFLOR) Finish Forest Certification System (FFCS)

Because relatively little of wood certified in North America is traceable under CoC,labeling of products is typically not required. One development of interest is theefforts of the Paper Working Group, headed by Time Inc., to mandate a highpercentage of certified fibre in their publications, thereby forcing companies such asUPM and StoraEnso to scramble to source certified fibre. This is largely the reasonfor the development of programs such as the Pan-Canadian Standard and theAtlantic Master Logger Certification Program. The Paper Working Group hasendorsed the Maine Master Logger Program for use on woodlots less than 500 acresthat are harvested by Master Loggers and have written management plans. TheCanadian Woodlands Forum who sponsors the Atlantic Master Logger Program, isseeking similar endorsement. Further, they are seeking FSC endorsement as

controlled wood under their CoC standard. Regardless, the Paper Working Grouponly requires verification of source and not labeling.

3.3 LEED

The LEED (Leadership in Energy and Environmental Design) Green Building RatingSystem is a voluntary, consensus-based national standard for developing high-performance, sustainable buildings. Members of the U.S. Green Building Councilrepresenting all segments of the building industry developed LEED and continue tocontribute to its evolution. The Canadian Green Building Council has beenestablished to administer projects registered in Canada.

LEED was created to:

define "green building" by establishing a common standard of measurement

promote integrated, whole-building design practices

recognize environmental leadership in the building industry

stimulate green competition



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raise consumer awareness of green building benefits

transform the building market

LEED provides a complete framework for assessing building performance andmeeting sustainability goals. Based on well-founded scientific standards, LEED

emphasizes state of the art strategies for sustainable site development, watersavings, energy efficiency, materials selection and indoor environmental quality.LEED recognizes achievements and promotes expertise in green building through acomprehensive system offering project certification, professional accreditation,training and practical resources.

For new construction projects, LEED includes within their rating system, provisionsfor recognizing certified building materials. Presently they are only recognizing FSCcertified products, however, a new version of the rating system (version 2.2) iscurrently out for public comment and includes an amendment to also recognize CSAand SFI certified products. Regardless, this does provide a growing market for

certified products. Table 4 provides a list of LEED projects currently registered inAtlantic Canada. Various levels of government are committed to LEED ratings ontheir project. Public Works and Government Services Canada, for example has acommitment to LEED as part of their Sustainable Development Strategy.

Table 4. LEED Projects in Atlantic Canada

Project Building Type City Province

QEH/St. Pat's HighSchool

School Halifax NS

Western HRM School Tantallon NS

Nova ScotiaCommunity College- New MetroCampus

College Dartmouth NS

Chiefs and PettyOfficers' andOfficers' Facilities,CFB Halifax

Assembly/high riseresidential

Halifax NS

Iona P-12 School School Iona NS

Upper River ValleyHospital

Hospital Waterville, CarletonCo.

NB

DNR District Office Office building Bathurst NBNew ScienceBuilding, BiologicalStation

Laboratory St. Andrews NB

GOCB Building Office building Charlottetown PE



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4.0 RecommendationsThe demand for certified forest products remains relatively small, and within thissmall market, the requirements for on-product labeling is even smaller. For acompany to seek such a label, the key to a successful on-product labeling programwill be flexibility. They must be able to respond to whatever their market requires. It

is unlikely, however, that a company going to the effort and expense of establishingan on-product label will realize any real benefit, unless it is in direct response to aspecific market requirement.

A further complicating factor is chain of custody. This must be established in order todetermine the percentage of certified wood in a product. Secondary manufacturers,by virtue of the type of forest product they use, tend to have very complexprocurement systems. They may have numerous sources of product and often areprocuring wood third-hand and do not know the origin. Some companies procurewood outside of NB and therefore do not have the advantage of transportationcertificates to determine origin. This all adds to the complexity of the system and

therefore increases cost. The alternative is to sole-source to suppliers of certifiedwood products, but this may be cost-prohibitive.

4.1 Labeling Types

It should be noted that on-product labels denoting the percentage of the product thatoriginates from certified sustainably managed forests represent a specific type ofenvironmental label. Environmental labels that are independently verified are calledType 1 labels. Table 5 provides a brief summary of the main types of environmentallabels currently in use.

Environmental labels have often been voluntarily adopted for marketing purposes.However, it has become increasingly important to develop clear guidelines forproducts to help consumers make informed purchases because the wide variety ofenvironmental statements currently in the marketplace can be misleading and lackcredibility. An environmental labels value depends directly on consumers trust in thelabel. Table 6 examines the three types of labels and provides a comparison ofbenefits and limitations.

Table 5. Summary of Environmental Label Types

ISO* Type 1 Label

Indicates environmental preferability within a sector.

Based on life-cycle performance of pre-defined and weighted set of coreenvironmental attributes.

Independently verified.

E.g., Environmental Choice EcoLogo provides logo to top performers.



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ISO Type 2 Label

Environmental declaration made by manufacturers/importers/distributors.

Not independently verified (no certifying body means there are no regulatory costs)

Declaration may be defined by a regulatory body.

E.g., green power, recycled content, or biodegradable.

ISO Type 3 Label

Similar to food labels in that they list data of interest to the consumer withinestablished categories in this case, categories of environmental attributes.

Based on life-cycle performance of pre-defined and weighted set of coreenvironmental attributes.

Independently verified but not required to be by a certification body

E.g., Environmental Profile Data Sheet used by the pulp and paper industry in

Canada.

Performance Standard

Indicates environmental preferability within a sector.

Based on a single performance standard.

Independently verified.

E.g., Energy Star provides logo to top products based on energy efficiency

*ISO =International Organization for Standardization

Different combinations of these label types are also used. For example, EnerGuide

labels address a single attribute similar to a performance standard, but provideexplicit data on the attribute, similar to a Type 3 label, which the consumer can use inmaking a value judgment.

Table 6. Comparison of Environmental Labeling Types*

Type I Type II Type III

Informationon Label

Indicatesenvironmentalpreferability withinits sector.

Environmentaldeclaration madebymanufacturers/im

porters/distributors.

Comprehensive data lists thatgive environmental informationon a product throughout its lifecycle.

ValueJudgment

Certifyingorganizationevaluates product.Customer choosesproduct because it

Consumerevaluates productbased ondeclaration. Labelis nonselective.

Consumer evaluates productbased on data provided. Labelis nonselective.



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Type I Type II Type III

has the label.Label is selectiveto products that

meet criteria.

Verification Third-party verifiedthrough a testing orauditing process

Notindependentlyverified.

May be verified through a third-party audit.

Criteria Based on LCAcriteria.

Singleissue/criterion.

May use an LCA approach.

Benefits Clarity and ease ofchoice to theconsumer.

Easy and free formanufacturers toadopt.

Label provides unbiasedinformation.

Limitations Label has inherentcultural, social, andenvironmentalbiases.

Credibility andconsumerconfusion overterm definitionsmay result.

Higher level of consumerawareness needed for label tobe meaningful.

Examples TerraChoiceEcoLogo

Green LeafHotel RatingProgram

CSA Mark

Green Seal(U.S.)

Blue Angel(Germany)

Nordic Swan(Scandinavia)

Green Power

RecycledContent

Phosphate-free

Biodegradable

Environmental PerformanceData Sheets (EPDSs)

Environmentally PreferableElectricity Program(Scientific CertificationSystems, U.S.)

*From a report prepared by the Pembina Institute for the Canadian Transportation Fuel Cell Alliance

4.2 An Alternative Approach to On-Product Labeling

Since Type 1 labels are not in demand within the secondary manufactured woodproducts sector, a variation of a Type 3 label may have some merit. The WoodProducts Group, in an effort to raise awareness of the quality of their members is ina good position to establish their own seal-of-approval label. Such a label would a



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combination of on-product logo, which directs the consumer to more detailedinformation. In WPGs case, this could be their web portal.

The scope of the label should focus on the environmental performance of themanufacturers. A performance standard could be developed that incorporates the

following considerations:

Compliance with environmental laws and regulations:o Fuel and chemical handling

o Waste disposal

o Air and wastewater emissions

o WHMIS

o Etc.

Non-toxic / low impact chemicals used in manufacturing (finishes, preservatives,etc.)

Sustainable source of raw material (where verifiable):o From third-party certified forestso Recycled wood

o Non-controversial sources (not from high conservation value forests,

illegal logging, etc.)

No net increase in greenhouse gas emissions (considers the long-term carbonstorage of solid-wood products)

Product utilization and value-added processes

Employee training and competency programs

Inspection and corrective action processes

Review and improvement processes

In order for a member company to display the label, a verification site visit wouldneed to be organized by WPG to confirm that all requirements of the performancestandard are being maintained. Once verified, an information sheet would bedeveloped that described what the member company does (or does not do) towarrant the label.

In order for this type of program to be functional, the following are examples ofdocumentation that would need to be developed:

Program manual describes program roles and responsibilities, performance

standards, etc. Verification procedure and checklists

Logo use document

Member profile templates



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5.0 Next StepsFurther research is required before proceeding with a Type 3 label. A fundamentalquestion to be answered is, what is the message to be conveyed to the consumerwith this label? The program standard does not have to be limited to environmentalinformation, for example. A sustainability message could be conveyed incorporating

socio-economic criteria in the standard. Alternatively, business practices could behighlighted with quality assurance and product security criteria.

Once the message is determined, it is advisable to establish a committee frommember companies to participate in the development of the label and standard. Thelabel needs to convey information that will be useful to member companies, therebycreating interest on their part. Surveys or focus groups could also be used to solicitinput.

It would be useful to establish several pilot programs among member companies sothat the various documentation can be trialed during development. These companies

should represent a cross-section of the membership.

The content of the program standard can be derived from various existingenvironmental labeling programs, again, once the content has been determined.There are numerous product labeling programs around the world that have beenquite successful. How these programs are administered should also be examined.

scoping report rev 1

Documents