Commentary: Is FSC the Apple of My Eye?

Lead Author: Dr. Jeff Howe

Publish date: 10.01.2008


A number of people have voiced concerns about my last commentary and my suggestion that wood should get better treatment by green building programs in general and by the US Green Building Council's LEED program in particular. Their primary issues seem to be with my statement that FSC wood was “statistically inaccessible” and with the potential for broader recognition to significantly reduce the impetus in the growth in demand for FSC wood. Since I view this as a very important topic and highly germane to the skill sets of Dovetail, I am addressing those concerns briefly this month.


First, I want to point out that I am a current member and long-time supporter of the Forest Stewardship Council. My former company, Colonial Craft, was certified with Chain-of-Custody number 009. The FSC database shows that Colonial Craft has the oldest active CoC certificate in the U.S, maintained since its issue date of November 1, 1994. In rock concert terminology, we were the ones that camped out on the sidewalks to get our tickets to be certified back then, and the only reason our number was that high is that a few people managed to sneak in line ahead of us. And I have been there through thick and thin ever since, and believe to my toes that FSC sets the standard by which all other programs are measured.


All that being said, let me first address the terminology of “statistically inaccessible.” The term more commonly used and probably more familiar to most people is economically accessible, which basically means that the product is affordable to a segment of the marketplace of sufficient size to make production worthwhile. There are some who argue that FSC wood is not economically accessible to enough people to make certification worthwhile due to the high costs of management and chain-of-custody certification process. Others argue that the marketplace does not value sustainable forestry sufficiently enough to make certification viable. I would argue that in both cases the term statistically unavailable is more important. Let me explain.


In my use of the term statistically unavailable I am suggesting that the product is not readily available in sufficient volume and variety to reflect the needs of the marketplace. Some authors have suggested that market sustainability is achieved when a product category has achieved 13 percent of the available market. Whether or not that is the accurate proportion is less important than the fact that some reasonable and recognizable share of the market must be served for the material to be considered sustainable. In addition, one of the great failures of business occurs when an enterprise generates a demand for a product that it cannot provide. That demand is generally very quickly filled by a ready substitute.


Today in North America there are as many as 50,000 wood products companies listed in various categories from primary manufacturing to retail. In addition, the number of “unlisted” small garage and/or similar based wood products businesses likely numbers 3 to 4 times that amount. These include all the one and two person portable sawmills, custom millwork, and cabinet shops around the country. In difficult economic times, such as now, these numbers INCREASE rather than decrease, as the closure of a few larger mills fosters the entrepreneurial start-up of many smaller ones. Given all this it is reasonable to assume that there could be as many as 100,000-200,000 wood products companies or more in North America. At this point about 3,000 (2,400 in the US and 530 in Canada), or less than 2-3%, of these are FSC CoC certified. These organizations are dispersed both geographically and by product type (everything from logs to guitars). For an individual FSC transaction to occur, not only does the right final forest product need to exist geographically, but also the right sequence of CoC relationships needs to be in place, in the right order, for the right species and product for the customer to gain access. From a statistical perspective, the probability of the linkage of a chain of events involving an extremely small proportion of the population is, in itself, quite remote. This is what I mean by statistically unavailable. Thus of the literally millions of wood products transactions occurring every year, only a few, possibly only in the hundreds, are purposely occurring as FSC transactions. So, for the average Joe (plumber or not) FSC wood is statistically unavailable.


Now you could argue that someone trying to design and construct a green building is not your average Joe. However, it is quite intriguing that there happen to be over 60 thousand LEED AP's (Accredited Professionals) in the US alone, and AT LEAST 3-4 times that number who have garnered significant knowledge about green building without actually getting accredited. So we now have at least hundreds of thousands of disparate “points of light” seeking green materials. Effectively these might be considered the average Joes of the Green world. Each of these is potentially stimulating multiple transactions, meaning it is simple statistics that we have created a vastly underserved market (in terms of certified wood products) that is turning to alternative materials as substitutes. This latter conclusion is borne out in data that suggest people are readily and regularly substituting other materials for wood in Green building.


So, that is what I mean by statistically inaccessible and why that is important.


As to the suggestion that the growth in usage of FSC materials will be reduced if green building programs no longer give sole preference to FSC certification, that is possibly true. However, my view is that until FSC recognizes the size of the market it is trying to serve and the infrastructure needed to serve that market, this issue is FSC's problem and not that of green building.


Recent information indicates that there is currently a high level of CoC certification activity. For example, about half of the current certificates in the U.S. were issued in 2008. Of the nearly 2,400 FSC CoCs in the U.S, about 1,200 were issued in the first 10 months of 2008, about 700 were issued in 2007, 200 in 2006, and 300 active certificates were first issued before 2006 (going back to the Colonial Craft certificate from 1994). By some measures, these are large numbers and impressive growth. However, to effectively address demand, and to be statistically relevant, FSC needs to accomplish a much greater rate than that - perhaps 10 to 15 times that amount. A marked increase in market penetration would begin to generate economies of scale that could also provide economic accessibility to new and different segments of the marketplace. The goal in green building is that people are making the best green choice available, and it is not reasonable to suggest that they hold out for a product that from their perspective doesn't effectively exist.


To me FSC is a bit like Apple Computer in the early years - meaning at its core it is probably the best system and it has some strong and really loyal followers, including me. However, in the early years Apple's insistence on exclusivity in their linkage between their software and hardware may have been good for them ultimately, but it didn't address the greater needs and demands of the marketplace at that time. Hence, the more flexible IBM platform dominated then and to this day. FSC may, in its purest form be the best certification system, but the green building market needs an IBM.


Dr. Jeff Howe

October 2008