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Introduction
Chain of Custody (CoC) certification is very important for the wood industry of the Republic of Croatia, with more than 350 FSC-certified companies (in 2022). Due to the lack of systematic research in this area, this study aimed to assess the perceived and tangible benefits of the FSC CoC certification in Croatia.
A precondition for the development of FSC CoC certification was a large-scale Forest Management (FM) certification in the Country. Croatian State Forest Enterprise (Hrvatske šume d.o.o.) covers more than 75% of forest area in the Republic of Croatia and has been an FSC FM/CoC certificate holder since 2002. Together with a few private forests that are also managed according to the FSC Principles, they supply the Croatian wood industry companies.
Research questions and results
Klarić et al. used surveys for over 200 FSC CoC certificate holders (23.5% response rate) and published the findings of the study in 2016. The objective of the study is presented through the following four research questions. Have a look at the research questions and the corresponding results below.
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What are the main reasons for the implementation of FSC certification?
The most common answers provided by the CoC certificate holders in Croatia were:
These results show that FSC certificate holders have made the decision regarding FSC certification mostly on request from their customers. Only 50% of respondents uses FSC trademarks for promotional purposes and only 19.2% of respondents indicated that the reason for FSC implementation was company’s promotion.
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What are the benefits of FSC certification?
The most common answers provided by the CoC certificate holders in Croatia were:
Only 11.5 % of respondents stated that they did not achieve any benefit from the implementation of FSC certification, but it may be just a matter of their personal perception.
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What are the main problems in implementing FSC certification?
The most common answers provided by the CoC certificate holders in Croatia were:
Revealing of confidential information, lack of understanding of suppliers, frequent changes of standards and resistance of employees were the least ranked problems in the implementation of FSC certification.
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Does FSC certification bring financial benefits?
Only 6.4% of respondents stated that they have zero income share of certified products. This means that 93.6% of respondents have been selling FSC-certified products. For most of them, the share of certified products in total income was between 80 and 100%.
Approximately one third of respondents (34.6%) stated that profit increased and 21.2% of respondents have raised their prices due to FSC certification. Most respondents (75%) preferred certified suppliers.
The majority of respondents admitted that FSC certification has met their expectations. This is confirmed by the positive answer of maintaining FSC certification among 96% of respondents.
Finally, small positive significant correlations between certification duration and efficiency of total equity and return on assets were established.
Conclusions
According to the results of this study, huge expansion of FSC CoC certification in the last decade was customer driven – certification process was initiated by customers. The majority of certificate holders sell their products on EU market (96%).
Although optional, FSC certification for wood industry companies of the Republic of Croatia is seen as a necessity. Importance of FSC certification can be seen from the fact that 93.6% of respondents were selling FSC-certified products, almost thirty five respondents (34.6%) increased profit due to certification, more than half of respondents have more than 60% share of certified products in total income and 21.2% raised prices due to FSC certification.
Although FSC certificate holders did not substantially profit due to certification, FSC certification has enabled them to be competitive, and they had to maintain FSC certificate in order to survive on the market. Results of this study suggest that FSC certification is a precondition for competitiveness for Croatian wood industry companies.
Overall, the findings of this study encourage the implementation of FSC certification. The FSC certification can serve as a signal to customers that the company implements standards which ensure traceability of materials, applies high environmental principles and that it is not included in the trade of illegally harvested timber.
Credits
This online article presents the published scientific research under the name: "An Exploratory Assessment of FSC Chain of Custody Certification Benefits in Croatian Wood Industry", authored by Kristina Klarić, Krešimir Greger, Miljenko Klarić, Tomislav Andrić, Miloš Hitka, Jože Kropivšek, published in 2016.
The study is a contribution to the research area of benefits of FSC CoC certification, because besides using subjective benefit measures based on respondent’s evaluation, objective measures based on financial reports were also used. The study was not financed by FSC.
Please access the original article on the link below.