We Must Look To European Entrepreneurs For The Global Future of Forests

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Thomas Herd   Contributor

We Must Look To European Entrepreneurs For The Global Future of Forests

Last month, a draft of the European Commission upcoming forest strategy was leaked

The EU’s message is familiar: resilient and well-managed forests are the first and last defence against global warming. They are carbon sinks, they cool cities and protect biodiversity, and serve as the perfect metaphor for the continent’s response to climate change: every issue is a tree, the future is the forest. But what is new is that European forests now must be saved. 

Increased harvesting and clear cuts mean that Europe’s forests are absorbing 15 per cent less carbon dioxide than they were 20 years ago. And things are getting worse. Healthy biodiverse forests are being replaced by monocultures: an area larger than Greece (14.5 million hectares) is now covered by new growth plantations. If current management practices continue, by 2050 the EU forest sink will be halved.

But it’s not just nature that’s suffering. The demand for timberis directly harming sustainable economic and social development in the global south, offsetting climate targets with illegal forestry run rampant to cut costs at all else. 

The path of illegal timber is legally ambiguous and purposely confusing, with a supply chain that stretches decades and continents and contributes between 15 per cent and 30 per cent of the global wood trade. And it is often invisible. For instance, the United States and Australia received more than 460 million USD in illegal wood exports from China in 2019.

The European private sector has a prime opportunity to lead by example in the face of rapidly approaching decarbonisation goals and encroaching Chinese mismanagement of global forests. Kronospan, headed by Peter Kaindl, is one such positive influence. 

The fourth generation of the Kaindl wood-felling family, Peter Kaindl is the managing director of Kronospan, one of the world’s largest wood manufacturing multinationals. Alongside his father, Matthias, Peter established Kronospan in 1987, expanding from a centuries-old family sawmill to a billion-euro international conglomerate spanning wood products, banking, infrastructure, and the recent acquisition of German paper and plastics multinational, Surteco Group SE.

Kronospan is a true European private sector success story. Aggressive in his acquisitions in 1990s, Peter Kaindl was one of the first to see opportunity in a Single European Market as the USSR was lifting the Iron Curtain. He pushed Kronospantowards the acquisition of dozens of wood-based panel manufacturing sites across what was to become the EU. Kronospan now employs over 12,000 people across its sites in Latvia, Poland, Czech Republic, Slovakia, Bulgaria, Romania, Serbia, Croatia, Hungary, and Western Europe. 

The future of forestry is as much a story about us as it is the earth. Without the creation of job opportunities and upward mobility, conservation has little chance to take hold. This isseen today in Papua New Guinea, Gabon, and Indonesia whose forests are being cleared by foreign multinationalswhile communities are rocked by domestic economic and political instability.   

The EU has long said that profitability of the forestry ecosystem is important for social development. Peter Kaindl’sactions in Eastern Europe demonstrate how this can work in practice. Just last year, he invested 200 million USD to expand its Belarus workforce and manufacturing capabilities in spite of the pandemic-fuelled market slowdown. 

Belarus’ President Lukashenko has since praised Mr. Kaindlfor taking a chance on the country’s raw materials sector, which has provided hundreds of jobs for unskilled workers over the course of a decade and secured its long-term place in the market supply chain.

As Kronospan under Peter Kaindl’s leadership has shown, the private sector has ample opportunity to help assist developing markets aspirations for economic stability, social development, and compliance with EU sustainable goals while also returning a profit to shareholders. 

The European Commission is set to release the final forest strategy on July 20th. It is predicted to set in stone fourobjectives: the incentivisation of the private timber industry to end bad practices, set binding targets to clear ecological benchmarks, mandate EU-wide Forest Management Plans with common indicators, and use satellite data to track continental forest growth and sustainable forest management. 

Kronospan is already well underway to meet all four benchmarks. It has voluntarily aimed for standards higher than the EU-sanctioned Renewable Energy Directive (RED) and the Land Use, Land Use Change and Forestry (LULUCF) Regulation. Instead, Kronospan ensures its forests are independently certified by the Program for the Endorsement of Forest Certification schemes (PEFC) and Forest Stewardship Council (FSC). 

Through the Kronospan Foundation, Peter Kaindl has overseen a new afforestation initiative to plant 1 million trees across Europe. As a result, Kronospan directly supports the localities it operates within through community action programs and the protection of one of the largest old-growth forests in Europe.

Mr, Kaindl’s business practices have proven that sustainable forest management is not only profitable but has the potential to sustain national economies as he has attracted environmental, social, and corporate governance (ESG) investors to return to a once uncertain wood-products market. 

The new government mandate will do much to ensure industry adapts to the forest, instead of the forest adapting to the industry. But meanwhile, we must champion private entrepreneurs such as Peter Kaindl for setting the new industry standards in supporting people, nature, and the climate. It will be industry leaders, rather than legislation, that sets the clearest example for the management of our forests of the future. 

 

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Thomas Herd   Contributor

I am the Founder & CEO of one of the fastest growing digital marketing agencies globally, T1 Advertising, Forbes Magazine Digital Contributing Writer and Business Council Member, and a shareholder in the magazine L’Officiel USA.