Design Your Life, Change the World:
Your Path as a Social Entrepreneur
[ A GUIDE FOR CHANGEMAKERS ]

by Professor Michael Gordon
University of Michigan

book

TABLE of CONTENTS

Introduction

How to Change the World

Interviews With Changemakers: Contemplating, Becoming, and Being

The Nature Of Sustainable Societal Hybrids

Enterprise For A Sustainable World and The Base Of The Pyramid Protocol

In Depth: Enterprise For A Sustainable World

Healthy: The Institute For Oneworld Health

Wealthy: Kickstart

Wise: National Foundation For Teaching Entrepreneurship

Green: Home Depot, Ikea, And The Forest Stewardship Council

Anatomy Of A (R)Evolution

Big Levers + Evolution

Building Blocks For Your Future: The Changemaker's Cube

FAQ: The Practitioner’s Guide To Becoming a Changemaker

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CHAPTER NINE

Green: Home Depot, Ikea,
& The Forest Stewardship Council

Is it possible that the chair you’re sitting on could save the planet? Maybe, maybe not.
As nearly everyone acknowledges, the physical health of the earth is threatened. Industrial processes and other activities associated with our furious lifestyle pour pollutants into the air, fouling our skies and water and dangerously raising the temperature of the planet. If we don’t act quickly to turn things around, we could be cooked (or at least lightly sautéed).

Yet part of what we need to keep the world healthy and green is here already. And it’s already healthy and green—and huge: our forests. As pretty and restful as they appear, our forests are hard at work. The trees, undergrowth, and soil in a forest ecosystem absorb carbon dioxide, the main greenhouse gas contributing to global warming. They contribute to the recycling of nutrients and help maintain our water quality. Rain forests are especially important, growing plants that inspire some of our most potent medicines. These essential services are valued in the trillions (with a t) of dollars. In addition, forests provide homes to indigenous communities living in nature, largely undisturbed by modern society. Ninety percent of the very poorest people in the world depend on forests for their survival.

But forests are under siege. There are fourteen million hectares of forests being cut down every year—the same area as the state of New York, and more than twice the landmass of Greece. In the last half century, there has been more damage to the forest ecosystem than during the rest of human history. As countries develop, they demand more natural resources, including wood. Brazil, China, and Indonesia satisfy their strong appetites for forest products by endangering rare habitats. (The United States, Canada, and Russia are major producers of wood, but they generally log in less environmentally sensitive areas.) Illegal logging and unsustainable forestry practices are responsible for approximately 25 percent of the world’s greenhouse gases. In the next fifty years, the world’s population will increase by 50 percent, yet there will be no new forests.

Now ask yourself: Which organizations want to ensure that our forests are well protected? Certainly pro-environment groups with interests rooted in Mother Earth and the health of the planet, but also large companies banking on healthy forests for their future profitability. In what follows, we’ll look at three organizations that are linked by a network of interactions directed at promoting sustainable forests. Two, Home Depot and IKEA, are for-profit companies attempting to increase the supply and demand of sustainably harvested wood. The third, the nonprofit Forest Stewardship Council, plays an important role in guaranteeing that the word sustainable does not become a vacuous green-marketing buzzword.

Separately, each organization exhibits traits of a societal hybrid. Home Depot and IKEA take measures that you might think were devised by environmentalists. The Forest Stewardship Council works through for-profits to enact its nonprofit agenda of protecting our forests. We can also envision these three organizations as a network organization—one where an overall aim (protecting our forests) is undertaken by a group of organizations with different roles and responsibilities. Even in concert, the three cannot guarantee that our forests are sustainable: forest management is complex in ways environmental, financial, and emotional. But, as a group, the three organizations can be viewed as a kind of interdependent, “networked” social hybrid: a trio, with both overlapping and differing ambitions, whose work together exceeds what any of them could do alone.

FOREST STEWARDSHIP COUNCIL

So how might a chair help save the world?

You’ve probably noticed that today everything seems to carry a label. My shirt says, “Boyne City.” My coffee says, “Fair Trade.” A bumper sticker on my car reads, “No, my daughter can’t stay out past midnight.” (Actually not, and she would disown me if it did. But you get the idea.)

So why not a label on your chair saying that on its journey from tree to furniture it was treated in the most forest-friendly way possible. That is what the Forest Stewardship Council (FSC) has been trying to do since 1993. Formed by advocates for the environment, local communities affected by logging, and the logging industry, FSC has issued principles for sustainable forestry and standards that define and regulate behavior.

The Forest Stewardship Council hopes to rein in unregulated logging that converts forests to pastures, farmland, or urban use, or simply badly degrades it without converting it to other uses at all. Such deforestation decreases biodiversity, disrupts local economies, and hastens climate change. Instead, FSC hopes to promote responsible, sustainable forestry practices based on the basic notion a five-year-old child could understand: if you want cookies for dinner, don’t eat them all at lunch unless you know your mom is bringing home more. In forestry terms: remove trees only at the rate at which the forest can restore them, and no compromising the soil, watershed, or seed sources for future generations or other organisms.
Maybe Dave Mason, one of my favorite musicians, said it best:

Shouldn’t have took more than you gave
Then we wouldn’t be in this mess today
I know we’ve all got different ways
But the dues we’ve got to pay are still the same

The Forest Stewardship Council has developed 10 Principles (spelled out in more detail in 57 Criteria) covering all aspects of well-managed forests around the world. These cover the ecological integrity of a forest and written plans for managing it, as well as the legal use of the forest; the well-being of indigenous people, forest workers, and local communities dependent on the forest; the economic viability of harvesting a forest; and monitoring all aspects of the forest’s use and management.

The Forest Stewardship Council provides three levels of certification. First, forest managers can pass voluntary inspections to demonstrate they are following FSC principles and criteria of forest management. Second, FSC’s “chain of custody” is important for companies that sell lumber or finished wood products to consumers. Chain of custody certification indicates that the item you are looking at has FSC’s highest-level seal of approval, meaning that it originated in an FSC-certified forest and has been tracked and well managed in ways that FSC approves of right up to the moment that you are looking at it. Finally, FSC Controlled Wood certification indicates wood that falls short of full certification but is still acceptable in “mixed source” uses. All certification is conducted by independent certification bodies.

An international non-governmental organization with offices in forty-five countries, FSC is widely accepted as the most credible certification agency. Taking into account the sometimes conflicting views of environmentalists, human rights activists, the timber industry, and the forestry profession, FSC’s principles and standards are viewed by many as the most stringent, too. (They certainly don’t face the same charges of doublespeak as the timber industry’s own certification program, the Sustainable Forestry Initiative.)

The Forest Stewardship Council’s efforts are certainly a step, but a step toward what? All FSC can do is issue its seal, the squiggly outline of a tree whose foliage creates a checkmark. (Disclosure: before I knew what it was, I had looked at FSC documents and web pages for hours and hours, noticing this “logo” everywhere, thinking it was only a funky picture of a tree.) How does its seal save a forest?

The Forest Stewardship Council provides certification in an effort to change the market for forest products. It believes that if people want to buy sustainably harvested wood products, timber companies will take notice and that large enough demand for these products will persuade these companies to follow sustainable forestry practices. It is unlikely we would see the same effects from environmentalists chaining themselves to trees or local, indigenous communities protesting the destruction of their living places.

HOME DEPOT

Home Depot is the largest home-improvement retail chain in the United States and second-largest retailer overall (yes, Wal-Mart), operating more than 2,150 big-box stores. Home Depot enjoys a reputation for being forest-friendly green. But as recently as the late 1990s, environmental groups including Greenpeace and the Rainforest Action Network protested its use of wood from tropical rain forests, even mockingly offering free “rain forest tours” through Home Depot stores.

By 1999, Home Depot had changed its wood-purchasing policy to align with FSC standards. It pledged to “give preference to wood … from forests managed in a responsible way and to eliminate wood purchases from endangered regions of the world by 2002.” It now also promises to promote more efficient and responsible use of wood and wood products, including alternatives when available. And it expects its suppliers and their suppliers—all parties along Home Depot’s chain of custody—to act legally and responsibly, too. Home Depot now sells the most FSC-certified wood in America and has influenced more suppliers to become FSC-compliant than any other retailer.

Home Depot’s stance in favor of sustainable forestry practices is having some impact. In Chile, Home Depot was instrumental in getting the country’s two largest wood producers (and two of the world’s largest) to change their practices to protect Chile’s native forests. In Indonesia, Home Depot discovered that its main supplier was razing huge swaths of rain forests and stopped doing business with that supplier, who had been supplying 90 percent of the wood Home Depot received from that country. It acted similarly in Gabon, Africa, against a supplier whose forestry practices were destroying the habitat of endangered lowland gorillas. (Neither of the latter two suppliers has agreed to alter its behavior to win back contracts with Home Depot—but they still may.)

But Home Depot is waging the war on a potentially bigger front, too: with consumers. Home Depot has created its Eco Options program to showcase energy efficiency and environmental sustainability. As the name suggests, Eco Options gives consumers a choice as they scan the aisles: regular light bulbs or more efficient compact fluorescents; ordinary thermostats or those you can program for energy savings; uncertified wood (products) or those bearing the FSC “Tree Checkmark.”

Home Depot’s staff helps educate consumers about these options. Yes, a compact fluorescent might be more expensive, but not when you consider the reduced energy it draws and the longer life of the bulb. The appeal of FSC-certified wood products is different, though. The products don’t last longer, and they don’t save you money. There is a whiff of fair trade about them, in which consumers pay a bit more for a more societally responsible product. In contrast to fair trade coffee, though, which tries to shift economic power to small, poor coffee producers, many FSC-certified forests are owned by large private companies and logged by large timber companies.

In fact, customers seem to be willing to pay for FSC products. And builders are eager to use more FSC-certified lumber, especially because wood products usually account for no more than 5 percent of construction costs. Even when there is a premium for FSC wood products, it can be minimal, adding just a percent or two to a product’s price.

But Home Depot cannot obtain all the FSC-certified wood it desires, even though it has a strong preference for FSC products. There just isn’t enough on the market. All told, less than 10 percent of the world’s largest lumber retailer’s wood purchases are FSC certified, despite its hunger for more.

IKEA

IKEA: the Swedish company that makes you say, “This stuff is really cool and affordable, but who writes those @&%+!! instructions for putting things together?”

Still, maybe someday you’ll puff, “This chair I’m sitting on from IKEA . . . it’s helping me save the planet.” (Finally, the world-saving chair!)

One of the world’s largest home furnishings retailers, IKEA, like Home Depot, has some clout in the world of forestry. But it uses its clout in a very different way. Whereas Home Depot makes its FSC appeal to consumers, trying to create stronger demand that will “pull” more certified wood through the supply chain, IKEA seeks change mainly by acting through its suppliers.

IKEA’s agreement with its suppliers is simple: “IWAY or the highway” (“or the highway”: mine).

To become a supplier to IKEA, a company must meet certain minimum standards spelled out in their “IWAY” (IKEA Way) guidelines. These standards become more rigorous the longer a company remains a supplier. Standards focus on well-managed forests and on labor rights. By imposing its standards, IKEA hopes ultimately to obtain all its wood from verifiably well-managed forests.

IKEA uses a staircase model to describe its increasing expectations. The bottom step requires that none of a supplier’s wood come from “Intact Natural Forests” or “High Conservation Value Forests,” which are especially important ecosystems. (There are exceptions made if the source is FSC certified as well managed.) The first step simply gets a supplier into the game, but it won’t keep the supplier there.

The supplier must then produce an action plan with a timetable showing how it can at least climb to Step 2:

  • Reporting the region within a country where the wood it supplies was cut
  • Ensuring that no wood comes from national parks, nature reserves, or other protected areas
  • Obtaining FSC certification for any tropical tree species supplied
  • Complying with applicable regional and national forestry laws and regulations

Step 2 represents the minimum requirements to remain a supplier—at least for a while.
The next two steps represent IKEA’s true aspirations. Step 3 requires that suppliers have procurement routines that meet IKEA’s internal 4Wood forestry standards. Step 4 requires full compliance with FSC’s chain of custody standard.

IKEA’s purchasing team and forestry specialists examine the wood-producing behavior of potential suppliers even before beginning to do business with them. Once suppliers have signed contracts, they are reviewed annually on paper. IKEA also conducts on-site audits of suppliers to ensure none of them has slipped below IKEA’s Step 2 standard and to make sure that each supplier has developed effective sourcing and monitoring routines. The audits are conducted by IKEA’s forestry department or by independent third parties. In a recent year, ninety audits were conducted, covering 2.1 million of the 6.3 million cubic meters of wood used in IKEA products.

IKEA’s goal is to help each of its suppliers reach Step 4. IKEA will continue to do business with suppliers at the lower steps of the staircase, but only if they demonstrate and then act on a plan for making improvements. This creates a strong incentive for suppliers who want to continue doing business with IKEA. IKEA can use its experience dealing with other suppliers to help a struggling supplier climb the staircase. In fact, its Step 3 “4Wood” standard was developed as a means to help suppliers make the difficult journey from Step 2 to Step 4, full chain of custody compliance—not as an excuse for IKEA executives to conduct business on the golf course.

For some suppliers, it really is IWAY or the highway. Repeat offenders and those who don’t create a convincing plan to climb the staircase face losing IKEA’s business. Recently, IKEA severed its relationships with six suppliers because of IWAY violations and reduced its business with twenty-one others. IKEA has also been stepping up its monitoring practices to set a higher standard. Since 2000, the percentage of IKEA’s suppliers in compliance with Step 2 actually declined (while still remaining above 90 percent)—something IKEA points to proudly as an indication of its serious commitment to well-managed forests.

Big Picture Design

No single organization can protect our forests. The Forest Stewardship Council, Home Depot, and IKEA are just three players in a very large international network of for-profit, nonprofit, and governmental institutions attempting to do so. In this network, there are different roles for various organizations, even if none of them has created—or controls—the overall network design.

The strength of FSC absolutely depends on the involvement of companies such as Home Depot and IKEA. It works the other way, too. Both companies’ attempts to protect forests (their most critical resource) depend on the critical verification and certification work of FSC. Part of the wisdom of FSC at the outset was its understanding that, to protect forests, it needed to represent the views of the logging industry, consumers of forest products, and local people affected by forestry practices—not just environmentalists.

The ways that Home Depot and IKEA use the standards and network that FSC has set up create a nice complement: Home Depot’s consumer education tries to create more demand for well-managed forests. IKEA’s work with suppliers tries to create more supply. Strengthening both ends of the supply-demand push-pull continuum is vital to forests’ wellbeing. The Forest Stewardship Council (as a certification agency) and Home Depot and IKEA (as retailers dependent on wood) understand, too, that a chain is only as strong as its weakest link. These organizations create leverage to change other organizations’ behavior by harnessing the power of markets via chain of custody certification (FSC), tracking wood back to its origin (both companies), and holding suppliers’ suppliers responsible for sustainable forestry (IKEA).

Making It Appropriate

Both producing wood and selling wood products to consumers are very scattered activities. For example, Home Depot, as the world’s largest lumber retailer, still purchases only 1 percent of the lumber in the world. Ninety-five percent of its wood comes from North America. In contrast, IKEA obtains most of its wood from Russia, Poland, China, Romania, and Sweden. Noticeably absent from both companies’ large-country providers are countries in the tropics, where the need to protect and manage forests may be the greatest.

There are enormous differences from country to country in the age, condition, and content of forests, the stage of development of logging companies, and governmental regulations among other factors. To account for these differences, FSC’s standards differ from region to region. Though not as perfect as insisting that all regions obey identical, absolutely rigorous standards, such an approach embodies the principle that the perfect can be the enemy of the good.

Making It Stick

The essence of Making It Stick is being able to determine that things are working as well on the ground (or in the forest and then throughout the supply chain) as they were when they were in drawn up near the clouds in a seventy-ninth-floor boardroom. The Forest Stewardship Council has not been perfect in this regard. The giant Indonesian paper company Asia Pulp and Paper, for example, received a chain of custody certification, which FSC subsequently had to revoke because of the company’s destruction of forests.
Yet, FSC’s authority comes from its ability to accurately assess whether forests are well managed and whether companies are behaving in a forest-friendly manner. Despite some embarrassing and damaging mistakes, FSC is still regarded as the gold standard in these matters—even by most environmentalists. Other certification organizations would love to have its clout.

Making It Bigger

By themselves, and even in combination, the efforts of FSC, Home Depot, and IKEA are small and only a beginning. Their effects are growing, but some question by what means.
Although FSC is the premier certification agency, it is not without competitors. Ninety other organizations provide forest-related certification, many to companies that fail to meet FSC standards. The more the others issue such certificates—even “easy” certificates—the less FSC is able to say that it is the only certification body that matters. This makes it more difficult to promote its “brand” to create a bigger market for products coming from truly sustainable sources.

In fact, FSC has almost been “forced” to water down its standards. In 1993, companies could gain FSC certification only if 100 percent of the wood in their products was from well-managed, sustainable forests. Now, only 50 percent must be from well-managed, sustainable forests; the rest just has to be harvested legally. Why? Because under the initial policy, only three companies met the standard. Today, some 230 million acres of forests in seventy-six countries have been certified by FSC. The market for FSC-certified products is approximately $5 billion a year. FSC has now issued more than six thousand certificates.

Some environmental groups fret that FSC’s rush to provide certification has been damaging to forests. There are now even watchdog agencies, such as FSC-Watch, which monitor FSC’s behavior to assure that it acts as an effective steward of the environment.

If the annual harvest from the world’s forest could be represented as a checkerboard, Home Depot and IKEA combined would control about half of one square. And almost all of that would be non-FSC certified wood, largely because of their inability to obtain more. But these businesses are having an impact. Educating customers about the need for sustainable forestry is the first step toward increasing demand for products from sustainable forests, even if efforts like Home Depot’s Eco Options take a while to stimulate more production. Other retailers are taking notice, too. Eager to ride the “green wave,” Lowe’s, the number two home improvement chain, has begun its own program, with an ultimate goal of selling only wood products that originate in well-managed, non-endangered forests.

Many countries newly intent on economic growth such as Brazil, China, and Indonesia harvest their forests recklessly. And in most Asian countries the market for sustainably harvested wood products is close to nil. Environmental groups are working in these regions to curtail illegal logging, institute tracking systems from forest to sales floor, and establish FSC compliance. We must hope that these efforts are enough, and take place soon enough to ensure that the planet retains one of its most life-giving resources—its forests.

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(c) 2011 Michael Gordon. All Rights Reserved
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