Green Timber Supply Chain Initiative launched by China real estate industry

Posted on June, 05 2016

48 real estate companies in China have committed to green procurement.
BEIJING, June 5 – Coinciding with the 45th "World Environment Day" at the Fourth Chinese Enterprise Green Compact Forum, a consortium of organizations and companies jointly launched the Real Estate Industry Green Supply Chain Initiative.

As part of the initiative, 48 real estate and related enterprises have promised to stick to green procurement, marking the opening of a green economy transition practice. 

Based on the environmental impact and feasibility, the Initiative  launched by Alxa SEE Ecological Association, China Urban Realty Association (CURA), China Real Estate Chamber of Commerce (CRECC), Vanke, and Landsea – has identified the first batch of key product categories, including flooring, plywood and relevent products, steel, cement, and aluminum extrusions, and has developed and improved the green procurement action plan for each category. 

Among those 48 enterprises which have committed to green procurement, 21 chose to join the Green Timber Supply Chain Action Plan in flooring, plywood and relevant products, which will align with WWF's Global Forest & Trade Network (GFTN) supply chain and due diligence system, and will establish green procurement policies of timber, the raw material source tracking system as well as risk prevention mechanism. Alxa SEE and CURA will work closely with WWF, and encourage the companies to implement their commitment to transform the sector.

By 2020, China's demand for timber in building construction will rise from the current 6 million cubic meters per year to 45 million cubic meters per year. More than 5,000 real estate developers, planning and design companies and financial institutions are involved in the Initiative, with their development projects spreading throughout more than 100 major cities in the country and achieving market sales of 800 billion yuan, which accounts for 10% of real estate sales in China. If the Green Timber Supply Chain Action Plan can be implemented as planned, it could drive 50% or more Chinese flooring enterprises to use timber with legitimate sources and certified by FSC.
Providing technical support to the green timber supply chain system, WWF is committed to mobilizing flooring manufacturers, timber manufacturers and real estate developers and to assist them in capacitybuilding and action plan development, and to introduce a third party review. 

“GFTN started in China in 2005, and has a total of 28 participants. However, due to lack of support from the upstream industry, flooring manufacturers and woodland businesses rarely have an incentive to take proactive steps to meet the requirements that the origin of wood can be traced back, and thereby to look for FSC certified timber. Chinese real estate developers have issued a clear signal to improve the supply chain of real estate and flooring industry, so that legal and FSC certified timber will become mainstream in the market," said Jin Zhonghao, Director, WWF China Market Transition Project.

In 2011, Vanke became the first Chinese real estate companies to join GFTN. In March 2016, Landsea Group also started the process of joining GFTN, and plans to push its upstream suppliers to join as well.

“Under the influence of the industry leaders, there are 21 large-scale real estate developers committed to green timber supply chain. The meaning of their promise has gone beyond energy conservation, and has been extended to global biodiversity, ecological security and social friendliness. It will drive approximately more than 80% of the Chinese flooring companies and other timber products businesses to join to the action," Jin said. 

Forests are home to of 80% known terrestrial species, and to 300 million people.They not only provide a large number of renewable products, but also important ecological functions including preventing soil erosion, regulating climate and maintaining water sources. However, forests are disappearing at a rate of nearly 13 million hectares per year and if deforestation continues at current trends, by 2030, 170 million hectares of forest will be gone in these areas. 

In recent years, the area of overseas forests owned by Chinese forestry enterprises has been increasing. China is a key actor in the chain of global timber and paper products trade, therefore whether Chinese companies can realize sustainable forest management, is vital to curb the trend of global forest loss, and to maintain the sustainable development of human society. 
For more information, please contact: 
Sun He, Program Communication Manager    13501376574 
Aerial view of forest cover
© Zig Koch/WWF