Canopy, a nonprofit organization that collaborates with over 1,000 brands to promote sustainable practices and protect forests, has recently released new research on vulnerabilities in global wood supply chains. The research, developed in partnership with Finance Earth, highlights the pressures impacting wood supply chains worldwide, including climate impacts, regulatory changes, and increased competition for forest resources.
The report identifies key risks for businesses that rely on forest products, such as the rising demand for wood fiber exceeding what forests can sustainably provide. Other challenges highlighted include limited wood availability due to land competition and ecosystem degradation, as well as stricter compliance requirements related to regulations like the EU Deforestation Regulation and human rights due diligence obligations.
To address these challenges, the research recommends three approaches for companies:
1. Lessen dependence on raw wood by expanding the use of circular and next-generation materials created from sources like agricultural by-products, discarded textiles, and recycled materials. This helps separate growth from the use of primary forests and reduces vulnerability to fluctuations in price and regulatory requirements.
2. Strengthen the security of the remaining wood supply by ensuring that any ongoing use of new wood is properly certified, fully traceable, and evaluated for environmental and community impacts. This includes assessing risks to ancient forests, endangered ecosystems, Indigenous Peoples, and local populations.
3. Prepare for potential disruptions by incorporating wood-related risks into scenario planning and stress testing processes, and investing in more robust sourcing methods and strategies.
Canopy’s founder and executive director, Nicole Rycroft, emphasized the importance of sustainable wood sourcing, stating that current practices are pushing forests to their breaking point. She urged companies and investors to shift towards alternative sources and Next Gen materials to mitigate risks and ensure long-term sustainability.
In addition to the research findings, Canopy also announced the launch of a $2 billion blended finance platform aimed at expanding sustainable textile production. The platform will bring together government representatives, private sector participants, investors, and philanthropic organizations to support the adoption of sustainable textile materials. By funding the full value chain, from feedstock systems to mill upgrades, the program aims to scale Next Gen production across paper, packaging, and MMCF textiles, starting with an initial launch in India.
Overall, Canopy’s efforts to address vulnerabilities in global wood supply chains and promote sustainable practices in the textile industry are crucial steps towards protecting forests and combating climate change. By implementing the recommended approaches and supporting innovative solutions, businesses can reduce their environmental impact and contribute to a more sustainable future.
