Can Market Transformation Impact Biodiversity Conservation?

Current unsustainable development and consumption levels are rapidly depleting global biodiversity (Living Planet Index). To address these threats, new and larger-scale approaches to conservation are urgently needed. Market-based approaches are especially important as they directly affect commodity supply chains, industry practices, and ultimately consumer demand and consumption behavior.

The World Wide Fund for Nature (WWF) has been a leading advocate for market-based approaches to conservation for more than a quarter century, working closely with industry to pioneer global certification schemes that transform global markets, particularly timber and seafood.

Nautilus Impact Investing was recently invited to assist WWF China and its global network partners to review their market transformation initiative (MTI) and assess how it could make an even greater contribution to conservation globally. The WWF MTI program worked closely with industry, government and community partners to certify forest, fisheries and food commodities in China and globally over the past decade.

In the forests sector, 17 Chinese processors meet Forest Stewardship Council (FSC) standards and there are currently some 2.9 million hectares of FSC certified forest in China. WWF staff have trained some 600 Chinese companies in forest certification approaches. Those efforts enabled 12 Chinese forestry companies operating in Gabon (~40% of the country’s concessions) to also commit to sustainable forestry management. Because of industry partnerships such as the China Sustainable Paper Alliance (CSPA), producers representing an estimated 80% of solid wood flooring and 50% other wood products in China are now committed to responsible and transparent sourcing of timber products.

In the seafood sector, 278 Chinese companies meet Marine Stewardship Council (MSC) Chain of Custody (CoC) standards and 21 (including Hong Kong companies) meet Aquaculture Stewardship Council (ASC) CoC standards. Equally important, the number of approved certifying bodies in China has grown from zero to three for MSC in 2013 and three for ASC in 2015.

In the food sector, there are now nearly 20,000 ha of soy Roundtable for Responsible Soy (RTRS) certified in China. More than 20 soy producers and >50 palm oil processors are trained in sustainable sourcing and production methods. Globally, there are now three Chinese members of  RTRS and 53 Chinese members of the Roundtable on Sustainable Palm Oil (RSPO).

Underpinning these programs have been a series of high level strategic partnerships with industrial/trade associations such as the China Aquatic Products Processing and Marketing Alliance, China Soy Industrial Association, China Chain Store and Franchise Association, China National Forest Products Industry Association, China Interior Decoration Association and China Chamber of Foodstuffs and Native Produce which have helped promote sustainable production and consumption of priority commodities in China.

At the policy level MTI has supported the State Forestry Administration to develop “Guidelines for Sustainable Trade of Forest Products and Investment for Oversea Chinese Enterprises”. This guideline will help the Chinese government to develop the Chinese version of legality regulation like EU Timber Regulation and the US Lacy Act.

Especially notable on a global scale has been the remarkable success of the China MTI program in engaging Chinese consumers. Working with the China Sustainable Retail Roundtable and more than 900 Chinese retail stores and hotels, WWF China has delivered four Sustainable Consumption Week campaigns that focus on consumer education about sustainable foods and products. Those programs have engaged millions of Chinese consumers.

In sum, WWF has demonstrated the feasibility of market-based approaches to conservation in China. While these types of programs can take time to deliver because of the need to build systems and capacity concurrent with policy and market signals, they have demonstrated it is possible to change commodity production and supply chain practices at scale domestically and globally.