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Deforestation Inc: How Corporations Mislead on Climate Action through deceptive Greenwashing

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Deforestation Inc., an investigation organised by the International Consortium of Investigative Journalists (ICIJ) and 39 media partners, has uncovered how certification bodies such as the Forest Stewardship Council (FSC) and others are used to validate forest products linked to Indigenous rights abuses, illegal logging, and unsustainable deforestation.
The mission of certification bodies such as the FSC is to promote environmentally sound, socially beneficial, and economically prosperous management of the world’s forests. However, the nine-month investigation revealed that this mission often falls short of the mark. Reporters traced loggers’ footprints across the world, speaking with hundreds of stakeholders and analysing hundreds of documents in multiple languages. They found that at least 160 companies in Indonesia have disregarded environmental regulations over the past decade. Violations range from operating under false permits and illegal logging to the destruction of habitat used by elephants and the critically endangered Sumatran tiger. Yet auditing firms responsible for vetting logging businesses seeking sustainability certification failed to report the violations. As a result, companies have kept their green labels, thereby misleading consumers.
Similar irregularities were uncovered in Brazil. Mil Madeiras Preciosas, which makes timber products and manages more than half a million hectares of Amazon rainforest, claims it was “certified with flying colours” on its website, despite having been fined 36 times for environmental infractions since 1998. The investigation found that 54 FSC-certified companies in Brazil have been fined millions of dollars for committing environmental infractions.

The Role of Sustainability Certification

Although there is no legal requirement for companies to have FSC or other certification, doing so has almost become an industry standard for big companies seeking to show investors, shareholders, and customers that their brand is committed to “environmental, social and governance” (ESG) guidelines. ESG investment funds have grown rapidly in recent years, and companies looking to get into the market show their commitment by paying auditors an annual fee for recognised certification.

The Auditing Process

Jonathan White, a lawyer at ClientEarth with expertise in corporate responsibility and climate risk, says the unregulated space that is environmental auditing creates an accountability problem. “If those kinds of verification bodies are to fulfil a role that is kind of robust… they must apply skepticism and check claims made by companies. They must go behind the information that companies provide.”
Apart from annual administration fees, the FSC also relies on donations. FSC US, for example, has received donations from global companies like Home Depot, Kimberly-Clark, Procter & Gamble, and International Paper, all of which market their products as FSC-certified. The logo can be found stamped on a variety of everyday items, including notebooks, paper cups, furniture, or even washing powders, among thousands of other products.

What is being done to address these issues?

Deforestation Inc. is not the first investigation to highlight the problems with sustainable certification bodies. Previous investigations have also found links between certified products and environmental damage, human rights abuses, and corruption.
In response, some certification bodies have taken steps to improve their processes. For example, the FSC launched a new program in 2021 that aims to improve the traceability of certified products and reduce the risk of fraud and illegal activity.
But critics say that more needs to be done to address the fundamental flaws in the certification system. Some argue that the current model, in which auditors are paid by the companies they are auditing, creates a conflict of interest and makes it difficult for auditors to provide unbiased assessments.
Others say that the standards are too weak and do not go far enough to protect the environment and human rights. For example, the FSC’s standards allow for the use of pesticides and genetically modified trees, which some argue are harmful to biodiversity and local communities.
To address these issues, some activists and NGOs are calling for greater transparency and accountability in the certification process. They argue that certification bodies should be more transparent about their auditing processes and the companies they certify and that they should be held accountable for any failures or violations.
Others are calling for more comprehensive and rigorous standards that take into account the full range of environmental and social impacts of forestry operations. They argue that certification bodies should prioritise the protection of biodiversity, Indigenous rights, and the rights of workers and local communities.

Conclusion

The Deforestation Inc. investigation highlights the urgent need for greater accountability and transparency in the certification of forest products. While sustainable certification bodies such as the FSC and PEFC have made some progress in promoting responsible forest management, they have also been criticised for failing to address environmental damage, human rights abuses, and corruption.
To truly address these issues, certification bodies must take steps to improve their auditing processes and ensure that companies are held accountable for any failures or violations. They must also develop more comprehensive and rigorous standards that prioritise the protection of the environment, Indigenous rights, and the rights of workers and local communities.
Ultimately, the fate of the world’s forests is inextricably linked to the fate of our planet. Deforestation is a major driver of climate change, and it is up to all of us to take action to protect our forests and the communities that depend on them. By holding certification bodies accountable and demanding more responsible practices from companies, we can work towards a more sustainable and just future for all.