Third-party certification confirms that science-based stakeholder developed forest management practices and continual improvement are occurring on all timberland across the Company. We are committed to responsibly sourcing the raw materials used to make our lumber and plywood while meeting customer demand for quality.
Third-party forest certification plays a vital role in fostering an understanding of the value of properly managed working forests, which helps ensure both tangible forest products and numerous quality-of-life benefits sustainably into the future.
PotlatchDeltic first became third-party certified to standards developed by the SFI in 2002 and by FSC in 2004. As a leader in sustainable forestry, we were also the first publicly traded company in the United States to become FSC certified. Since that time, we have endeavored to continually improve our forest management practices as new scientific discoveries have been made and forest certification systems have evolved. Independent third-party certification provides a credible assurance that our forest management and our wood fiber procurement practices meet clearly defined standards, which have been developed and regularly reviewed by a range of stakeholders interested in the values forests provide.
Our third-party forest certification reflects the rigor of our environmental management system, which is based on an ongoing continual improvement process. As new information is discovered, practices are adjusted and improved, whether that be in threatened and endangered species management, forest productivity, water quality or climate change. Forest certification challenges us to think long term, and to invest with research organizations to study and improve the industry’s technical knowledge. In addition, it encourages us to engage with the communities and stakeholders who are connected to us through our timberlands and all they have to offer.
SUSTAINABLE FORESTRY INITATIVE: SFI is an independent non-profit sustainability organization that collaborates on forest initiatives with the forest sector, conservation groups, academia, local communities, Indigenous peoples, and educators. SFI recognizes that forestland owners have a responsibility for stewardship through reforestation and the management, growing, nurturing, and harvesting of trees. However, SFI also requires a much broader involvement in areas such as research, community outreach, education, and climate change. SFI oversees the standards for certification of approximately 352 million acres of timberland in North America and 67 million acres in the United States. SFI forest certification is based on 17 objectives, 41 performance measures, and 141 indicators that are centered around promoting sustainable forest management practices. These criteria include forest management planning, prompt reforestation, protection of water quality and quantity, wildlife habitat management and biodiversity, recreational opportunities, protection of species at risk, efficient use of fiber resources, Indigenous peoples’ rights, climate-smart forestry, fire resilience, forest research, forest education, and community outreach.
Certification is a broad effort and encompasses much more than just replanting trees that are harvested. For example, the SFI standard includes a multi-faceted approach for education that includes not only ensuring participant staff and logging contractors are appropriately trained as professionals, but also reaching out to students and families to experience the outdoors and to help others understand the importance of sustainable forestry both now and in the future.
Recent SFI forest management standard updates also address the role of forests as a nature-based solution to climate change. SFI’s Climate Smart Forestry Objective requires that climate change risks to forests and forest operations be identified and addressed with appropriate adaptation strategies implemented. In addition, the updates recognize that forest management is an important catastrophic wildfire mitigation tool. SFI certification requires the evaluation of fire risks, management techniques that mitigate fire impacts, and restoration of forests following wildfire damage.
PotlatchDeltic is certified to the SFI Forest Management Standards on 100% of its timberlands. To meet certification standards, our forest management practices are reviewed through an annual third-party surveillance audit, and full recertification audits every five years.
FOREST STEWARDSHIP COUNCIL: PotlatchDeltic is also certified on 70% of our combined timberlands in Arkansas and Louisiana to FSC Forest Management standards. FSC sets standards for responsible forest management on more than 587 million acres in 82 countries worldwide. Over 163 million acres are FSC certified in North America, including over 36 million acres in the United States. FSC’s mission is to promote environmentally sound, socially beneficial, and economically prosperous management of the world’s forests. The FSC U.S. standard is based on 10 principles, 57 criteria, and 200 indicators that include compliance with laws, Indigenous rights, conservation of biological diversity and high conservation value forests, water quality protection, community relations and workers’ rights, and others.
Our decision to dual-certify some of our timberlands through FSC reflects the specifications of some of our customers who produce paper and packaging that are sold to international consumers who prefer FSC product certification. FSC surveillance audits are conducted annually with a full re-certification every five years.
In addition to third-party certification, we also conduct annual internal audits at every forest district to ensure that our environmental management system is effectively implemented. Internal audits focus on adherence to our environmental management system policies and procedures by foresters and professional staff, application of site-level BMPs on the ground, contract logger understanding and application of policies and practices, employee and contractor safety performance, and understanding of fire risk policies and equipment, among many other areas.
The raw materials for lumber and plywood include logs from our own company lands, logs from other private industrial and family-owned landowners, and from public agency landowners. No matter where these logs originate, we commit that they are sourced in a manner that protects the values these forests provide.
Some of the logs we use come from land that is certified to either SFI or FSC standards including our own ownership, other industrial landowners that have chosen to be certified, and some state and county agency lands. Given approximately 90% of the world’s forests are not certified, however, both SFI and FSC have systems in place to ensure responsible procurement occurs when purchasing fiber from non-certified lands. We use both SFI Fiber Sourcing and FSC Chain of Custody programs to assure our customers and stakeholders that the wood we purchase to make our products originates from responsible sources.
All seven of our facilities are certified to the SFI Fiber Sourcing standard, which provides structure to how we, as an SFI Program Participant purchase fiber from both certified and non-certified forestland. This standard is designed to extend the positive reach of sustainable forestry information and practices to landowners on such topics as forest regeneration, forestry best management practices for water quality, wildlife and biodiversity, use of professional logging contractors, and avoiding controversial sources such as illegal logging.
The 2022 SFI Fiber Sourcing Standard has 13 Principles, 11 Objectives, 29 Performance Measures and 59 Indicators, all designed to promote responsible procurement. In addition to sharing sustainable forestry information with landowners, we also must demonstrate adherence to all federal, state, and local forestry laws, invest in forestry research, science, and technology, and develop verifiable monitoring systems to evaluate the use of best management practices across the geographic area where we procure wood.
In 2022, 100% of the timber consumption at all our wood products facilities was SFI Fiber Sourcing certified. Our Gwinn, Michigan, and Warren and Waldo, Arkansas facilities are also FSC Chain of Custody certified. We track the path of our products from the forest through the supply chain, ensuring that FSC-certified material is identified from non-certified material throughout that chain. In addition, FSC certification requires that wood that is procured from land not FSC certified falls under the FSC Controlled Wood standard. The Controlled Wood standard requires that the non-certified wood we purchase does not come from undesirable sources. FSC considers all the following undesirable sources: illegally harvested forests; forests that were harvested in violation of traditional and civil rights; forests where high conservation values are threatened by management activities; natural forests that were converted to non-forest uses; and forests with genetically modified trees.
In 2022, 59% of timber consumption at all our wood products facilities was FSC Chain of Custody certified, and 100% of the timber consumption at our Gwinn, Warren, and Waldo facilities was FSC Chain of Custody certified. In 2022, 35% of timber consumption at all our wood products facilities was FSC Controlled Wood certified.
We have traceability systems at all wood products facilities based on our SFI Fiber Sourcing procedures. Our SFI procedures are designed to ensure that our sourcing is from legal and responsible sources with emphasis on uncertified sources. We track all log purchases to section, township, and range, with the only exception being two remote concentration yards where we know state and county of origin only. In every case, we have a system to assess the risk that logs could be acquired from illegal logging sources that includes communications with suppliers, contract documentation, and maintenance of records. We identify and address any significant risks.
Our risk assessment procedures, plan implementation and results are evaluated in internal and third-party audits. We have not identified any issues with illegal sourcing. In addition, we have policies and procedures designed to promote compliance with all applicable chain of custody laws and to extend legal compliance throughout our supply chain. Our procedures for ensuring chain of custody legal compliance are internally and externally audited and we have also not identified any material issues with legal compliance. All our sourcing is verified to be from legal, responsible sources and produced by trained logging contractors.
PotlatchDeltic understands the importance of good forest stewardship not only on our own land but also with the many other landowners we work with. This stewardship plays a key role in our commitment to sustainability for our shareholders, customers, communities in which we operate, and numerous other stakeholders.