Domtar

Published, Spring 2004

This column highlights companies in the business of providing solutions to social and environmental challenges. Featured companies are typically held in the SmallCap Innovations portfolios offered to Walden’s clients.

"Half the world's forests are now gone, and well over 30 million acres more are lost each year. In the United States, more than half our national forests have been logged, mined, or otherwise industrialized." This comment by the Natural Resources Defense Council is typical of the disturbing reports issued regularly by leading environmental advocacy groups. Responses to the plight of the world’s forests have included limits on clear-cutting practices, restrictions on logging in ancient forests, and increased use of recycled content paper products. In addition, environmentalists, consumers, socially responsive investors, and other stakeholders have pushed corporate consumers to adopt more environmentally sensitive purchasing policies. Success stories include new timber sourcing standards at The Home Depot, recycling programs at Staples, and packaging standards at Nike.

As customers alter their purchasing habits, forest products companies have responded. One well-regarded initiative to certify sustainably harvested timber is the Forest Stewardship Council (FSC). Certifiers for the nonprofit FSC¾ a network with affiliates in 40 countries¾ audit forest management activities and track the "chain of custody" of certified forest products

Domtar Inc. is the largest North American forestry company to make paper that meets FSC standards. Based in Montreal, Canada, Domtar manages 22 million acres of forestland and operates 11 mills in the United States and Canada. Among the well-known products using Domtar FSC-certified paper are some of the Harry Potter books. Already 17 percent of Domtar’s timberland is FSC certified, although only a small portion of its revenues come from sales of FSC-certified paper. Domtar has partnered with World Wildlife Fund (WWF) Canada, however, and aims to certify all of its forestland to FSC standards in the coming years. A representative of WWF Canada told Walden that Domtar is a well-run company that has the systems in place to move forward quickly with FSC standards

The U.S. forest products industry has its own Sustainable Forestry Initiative (SFI). According to the Maine Audubon Society, the FSC and SFI standards are similar with regard to protection of soil productivity, water quality, and harvest rates. However, Maine Audubon notes that FSC standards exceed those of SFI with regard to biological diversity, forest chemicals use, plantations, exotic species, support for local communities and workers, indigenous peoples rights, and reporting. Environmental groups also have an appeals process within FSC to address concerns. For example, Rainforest Action Network, which is a member of FSC and an opponent of SFI, is appealing an FSC certification pertaining to Sumatran tiger habitat. —K. Scott and J. Frame (intern)


The information provided in the above article is for historical purposes only.  Such information may no longer be current and therefore should not be relied upon.

The information contained herein has been prepared from sources and data we believe to be reliable, but we make no guarantee as to its adequacy, accuracy or completeness.  We cannot and do not guarantee the suitability or profitability of any particular investment.  No information herein is intended  as an offer or solicitation of an offer to sell or buy, or as a sponsorship of any company, security, or fund.  Opinions expressed herein are subject to change without notice.