Forest products highlight the exceptional opportunities for IFC to support a triple bottom line that focuses on people, the planet, and profits. They bring new hope and jobs to poor communities, while reducing pollution, replanting unproductive land, and demonstrating that sustainability is good business.
What is sustainable forestry? At IFC, we define it as a balance between the economic value of forests and a commitment to environmental and social sustainability, including the conservation of biodiversity and ecosystems.
Since the late 1950s, IFC has invested almost $3 billion in sustainable forest products worldwide. In the last four years, our activities have increased significantly, with investments of over $1 billion. We support sustainable businesses along the entire forest product supply chain, from plantations to production of furniture, paper, tissue, and other goods, as well as wastepaper recycling. Our efforts have helped create tens of thousands of jobs while promoting sustainable development and helping reduce emissions, in accordance with the World Bank Group's policy on climate change.
Development and Economic Impact |
In the last five years, IFC's forestry projects have
- Brought nearly 100,000 new jobs to communities where unemployment is high and economic opportunities are few
- Created reliable new income for the poor: an estimated 170,000 small-scale farmers in India; 30,000 in China; and thousands more around the world
- Ensured strong standards for production and manufacturing
- Helped clients adhere to industry codes of conduct and get certification for sustainable sources of wood
- Significantly contributed to sequestration of carbon dioxide and the lowering of greenhouse gas emissions
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What kinds of forestry projects does IFC invest in? IFC investments span the supply chain. We support large and small businesses, with particular attention to building local supply chains that embrace sustainable practices. Many opportunities to create jobs and protect the environment are tied to production of paper and wood fibers, so IFC is targeting projects in forest plantations, sustainable management of natural forests, wastepaper collection, and cleaner technologies.
In product manufacturing, IFC targets engineered wood panels, packaging and tissue, wood furniture, and wastepaper recycling. On a selective basis, we finance large-scale pulp mills with access to sustainable wood resources. In general, IFC seeks to partner with innovators in the industry, particularly on projects that help revitalize forests, reduce pollution, and recycle waste.
Supporting Sustainable Plantations
Stora Enso, the world's largest paper and board producer, is investing in a massive tree planting project in China, helped by $300 million in financing from IFC. The project comes as China's paper market is growing rapidly, with wood shortages causing some manufacturers to rely on illegally logged imports. With IFC's help, the company will expand its sustainable tree plantations in Guangxi Province, one of China's poorest regions.
The project:
- Reduces China's reliance on unsustainable timber imports and fiber
- Creates 28,000 new jobs
- Provides annual worker incomes 80 percent higher than average in the region
- Builds local supply chains through links with nearby distributors
- Sets world-class environmental standards, setting a strong example for local companies to follow
- Sequesters some 2 million tons of carbon dioxide annually
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Creating Opportunity for Poor Communities
India, one of the world's fastest-growing paper markets, is facing major shortages of wood and fiber. IFC's focus here is on planting forests by encouraging small farmers, many of them women, to plant fast-growing trees on fallow land in partnership with the pulp mills they supply. We have provided more than $120 million in financing to four of India's leading pulp and paper companies: AP Paper Mill, BILT, JK Paper Mill, and West Coast Paper Mill.
These firms account for 40 percent of the country's farm forestry programs for the pulp and paper industry—programs that are providing direct employment for thousands and reducing fiber shortages, while enhancing the firms' profits. As leaders in environmental and social responsibility, the firms also help improve the profile of the pulp and paper manufacturing industry.
Key results include:
- Part-time employment for over 170,000 farmers
- Health services, education, and training on sustainable forest management for poor communities
- New forest plantings on barren wasteland, doubling the area covered by 2008
- Tree growth absorbs carbon dioxide, a key contributor to global warming
- Equipment upgrades are lowering energy and water consumption
- Companies report higher profits, lower costs, and better community relations
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A Global Approach
IFC plays a critical global leadership role in the forest products sector by ensuring that our projects set an example of environmental and social sustainability.
In the Middle East, and in other middle-income countries where the recycling industry is in its infancy, IFC works with companies that collect and use wastepaper as raw material for production. This promotes the use of recycled paper and helps grow the industry.
In South America, with its abundance of natural forests, IFC focuses on forest management to monitor tree-cutting and preserve the integrity of ecosystems, as well as on sustainable manufacturing projects based on plantations.
In Africa, with its scarcity of natural wood resources, the emphasis is on reforestation and creating a recycling industry.
IFC promotes wastepaper recycling in all developing regions, and our projects in this area result in an annual reduction in methane emissions equivalent to a million tons of carbon dioxide. In the last five years, we have invested in seven pulp and paper projects that use wastepaper as a supply source. Our clients include Belisce in Croatia, Cartones America in Colombia, Copamex in Mexico, Indevco in Egypt, Intercell in Poland, Modern Karton in Turkey, and Star Paper in Nigeria.
These companies have had a strong development impact, helping develop the recycling industry in their countries and creating some 25,000 new jobs in wastepaper collection. They have collected 1.2 billion metric tons of paper and reduced the volume of virgin pulp used by 130,000 cubic meters.
For more information contact:
Carmen Powell
Communications Officer
IFC Global Manufacturing & Services
Phone: +1(202) 473-4982
E-mail:
cpowell@ifc.org
Published January 14, 2008
