PEFC ConferenceLondon – July 5th, 2016

THE CONSUMER GOODS FORUMSustainability Pillar

THE CONSUMER GOODS FORUM – WORKING TOGETHER FOR EFFICIENCY AND POSITIVE CHANGE

A Focus on Implementation

Sustainability

Ethical & Sustainable

Supply Chains

Product

Safety

(Global Food Safety Initiative)

End-to-End

Value Chain

Transparency, Data &

Consumer Trust

Health &

Wellness

Healthier ConsumersWorldwide

Knowledge and Best Practice Sharing

Global Coverage:

400 Retailers & Manufacturers;

SUSTAINABLE VALUE CHAINS & BUSINESS PRACTICES GLOBALLY

The CGF Sustainability Pillar

SOLID WASTE

Deforestation Resolution

SOY PALM OIL PAPER & PULP BEEF

"As the Board of The Consumer Goods Forum, we pledge to mobilise resources within our respective businesses to help achieve zero net deforestation by 2020. We will achieve this both by individual company initiatives and by working collectively in partnership with governments and NGOs”.

• A Public Private Partnership founded by the US government and CGF. Announced at the Rio+20 conference in June 2012 by former US Secretary of State Hillary Clinton.

• Priority geographies: South America, Indonesia and Africa

• Secretariat now hosted by the World Economic Forum.

• Objective: “to collectively stimulate the direction of capital towards sustainable, low carbon growth and away from activities that undermine it”.

• Developed the ‘Soft Commodities Compact’, setting out commitments made by adopting banking institutions.

CGF Paper & Pulp Sourcing Guidelines

Scope - applies to pulp, paper, & packaging used in a company’s operations AND its products. For retailers, the scope for products applies to private label brands.

Approach - a three-pronged approach is recommended:

• Develop sourcing policies that avoid controversial sources of pulp, paper and packaging contributing to deforestation. • Verify supply from high priority countries has low risk of controversial sources contributing to deforestation. • Disclose company policies, goals and progress to avoid controversial sources of pulp, paper and packaging contributing to

deforestation in their individual supply chains.

Verification: Legality of a source , low risk of controversial sources (high priority country list) contributing to deforestation & sustainable forest management

a) FSC certified productb) Product certified by a national forest standard endorsed by PEFCc) Other credible, independent mechanisms that verify there is low risk of controversial sources,

NOTE: CGF does not endorse any one certification system - member companies are free to do so in their individual responsible fiber sourcing

guidelines CGF does not independently review any country forest certification standards that have been endorsed by PEFC or approved by FSC

State of Play

o Legality

Main importers of timber and pulp and paper are China, Japan, USA, and the EU. Both the EU Timber Reg (FLEGT) and the USA Lacey Act are in place to prevent

illegally-produced wood-based products, including pulp & paper The Japanese government’s approach remains focused on voluntary measures rather

than establishing legally binding requirements.

o Key building blocks towards zero net deforestation in companies’ operations.

Traceability. Complex and obscure supply chains need more collaborative efforts ) challenges include political instability, market failures and price volatility.

Scale Certification in parallel to Landscape Approaches and land use planning

Social inclusion and Forced Labour issues

Preventing leakages: stronger forest governance, including strengthening current moratoria to minimize displacement of deforestation across commodities, jurisdictions and ecosystems

Conclusions

o Forest certification is widely seen as a very important initiative to promote better forest management.

o Certification has brought different stakeholder groups around the table to discuss what constitutes sustainable forest management, and it is clear that it has had its benefits.

o Now, almost 15 years after the concept was first developed, it is time to examine more concrete impacts. It is time to focus energy on enhancing the certification tool to improve and enlarge its impact.

o Need to work with leading and lagging members

o It is critical that certification schemes include social aspects

o Developing standards that are both achievable and stretching will be an ongoing challenge.

Thank you

Q & AThe Consumer Goods Forumi.gavilan@theconsumergoodsforum.com

CGF Sustainability website: http://www.theconsumergoodsforum.com/sustainability-strategic-focus/