PEFC UK

AnnUAl REPoRt

PEFC /16-01-01

ContEntS
01 CHAIRMAnS REPoRt
Peter Lathams final report as Chairman of PEFC UK

05 CASE StUdY 2012 olYMPIC PARK

A world first - London Olympics venue achieves dual PEFC-FSC Project Certification

08 BoARd oF dIRECtoRS
New appointments to the PEFC Board to strengthen representation from key stakeholder groups

02 MARKEt oUtREACH
Snapshot of market outreach activities to promote awareness of and increase demand for PEFC-certified products

06 PEFC IntERnAtIonAl
Report from PEFC International on the challenges facing Forest Certification

10 ACCoUntS
PEFC UK Financial information for 2011-12

04 PUBlIC AFFAIRS
Summary of Public Affairs activities designed to raise awareness of the PEFC programme within the public sector

07 dEMAnd FoR CERtIFICAtIon And CoC

Key forest and Chain of Custody certification facts and figures

13 PRoGRESSIVE PRoCUREMEnt
The growing influence of public and private sector procurement policies in the UK marketplace

PEFC UK lIMItEd
Programme for the Endorsement of Forestry Certification schemes Sheffield Technology Parks Cooper Buildings, Arundel Street Sheffield S1 2NS t +44 (0)114 307 2334 e info@pefc.co.uk w www.pefc.co.uk
Registered in Scotland: Number 209443

BoARd oF dIRECtoRS
Peter Latham Chairman Hugh Miller Incoming Chairman Julia Griffin Ross Bradshaw John Sanderson Rob Shaw Mark Weatherbed Pat Burke David Leslie see page 8 for details

CHAIRMAnS REPoRt
PEtER lAtHAM oBE CHAIRMAn PEFC UK
Welcome to the 2012 Annual Report. Over the past year, the PEFC UK team has continued to work hard to raise the organisations profile and grow market demand for certified timber and paper products, despite the difficult economic climate.
November saw the UK team head off to Switzerland to join the global PEFC family in Montreux. PEFC International was able to report that the certified forest area had grown by almost seven per cent. Newly certified forests in Malaysia, Spain, Sweden, Italy and Poland means that in 2012, the total PEFC-certified area is 243 million hectares two thirds of the global forest area. Additionally, while demand for PEFC Chain of Custody has naturally been affected by challenging global trading conditions, the number of certified companies around the world has risen by 14% to almost 9,000. The previous years General Assembly saw the adoption of social criteria into the PEFC Chain of Custody standard, a first for a certification scheme. These are now being rolled out through the revision of national schemes. another busy year in marketing and commmunications Our marketing team remains dedicated to raising PEFCs profile across key industry sectors to ensure that we add value, both to PEFC-certified products and to companies trading them. PEFC brand recognition continues to grow with leading companies across the UK increasingly using the PEFC logo on product to provide their customers with assurances of responsible sourcing. One of the most exciting pieces of news we received this year was learning that that the Olympic Delivery Authority (ODA), which had previously committed to sourcing 100% certified timber through the Programme for the Endorsement of Forest Certification (PEFC) and Forest Stewardship Council (FSC) schemes, was working towards dual Project Certification for the whole Olympic Park development the first dual project certification in the world. This groundbreaking achievement in sustainable timber procurement has undoubtedly played a prominent role in helping the ODA achieve its commitment of making the London 2012 Olympic Games the greenest games ever. See page5. looking to the future PEFC recognises that one of the most important challenges facing the timber industry next year will be the introduction of a new EU Timber Regulation which will come in to force in March 2013. This Regulation will make it a criminal offence to place illegally

01

Peter Latham OBE

harvested timber and timber products on the EU market. The legislation will require that due diligence is applied to all timber first placed on the EU market and also that traders, further down the supply chain, keep track of who timber or timber products were bought from, and where applicable, who they were sold to. The Regulation will apply to everyone trading timber and timber products in the EU, including paper, furniture, wood fuel etc., therefore affecting thousands of companies producing timber domestically or importing it from outside the EU. In preparation, PEFC is the process of revising its International Chain of Custody Standard to ensure that all certified companies meet the requirements of the new Regulation. sadly, this is my last report as PEFC UK Chairman Earlier this year, I was appointed to the Board of PEFC International. In this new role, I hope to be able to continue progressing the understanding and use of certified timber and the development of sustainable sourcing and supply. The past five years at PEFC UK have been both challenging and enjoyable and I would like to record my appreciation to the Board for time they have devoted to our affairs during my time in office. I would also like to thank the Finnish Forest Foundation for their longstanding support we simply could not have achieved what we have without them. Thanks are also due to Heritage Envelopes and Williams Lea for supplying us with with envelopes and certified paper. Their valuable in-kind donations have enabled us to devote more of our resources to growing the market for PEFC-certified products to reward those who have invested in responsible forest management and Chain of Custody. Finally, I would like to thank the PEFC UK team of Alun Watkins, Hilary Khawam and Tracy Reeve who continue to work so diligently to take the organisation forward.

MARKEt oUtREACH
In order to grow recognition of the PEFC brand and add value to companies who have invested in PEFC chain of custody, market outreach continues to be a priority for PEFC in the UK. This year has been another busy one for the PEFC team on the communications and marketing front. The report below provides a snapshot of our activities and successes over the past year.
UKWAS Revision

02

Scottish Woodlands

FoREStRY
PEFC and Scottish Woodlands Score UK First In August, PEFC-certified chipwood from a privately-owned Group Scheme from Scottish Woodlands was delivered to a leading manufacturer of timber products for the first time. In keeping with its ambitious sustainable procurement policies and quest for certified raw material, chipwood was delivered to Egger UK, one of the leading manufacturers of wood-based panels in Europe. The growth in homegrown UKsourced timber and wood products has been on the rise since 2010 when over a million hectares of UK forests were dual certified as PEFC and FSC under the United Kingdom Woodland Assurance Standard (UKWAS). This far-reaching development includes all the Forestry Commission forests in England, Scotland and Wales and some 500 privately-owned forest estates, including a number in Northern Ireland, managed through the Scottish Woodlands and UPM Tilhill forest group certification schemes.

Earlier this year the UK Woodland Assurance Standard (UKWAS) completed its latest revision. UKWAS is an independent certification standard for verifying sustainable woodland management. The national certification standard is used by both PEFC and FSC in the UK and was developed on a consensus basis through an inclusive, multi-stakeholder process with a balanced representation of economic, environmental and social interests. The standard is revised every five years. The third edition was agreed by stakeholders and endorsed by PEFC Council in November 2011. The success of the unique UKWAS approach is clear as the standard forms the basis of the forest certification programmes operated in the UK by both PEFC and FSC. Both global schemes enable the UK forestry sector to assure buyers and their customers that their certified wood and wood products come from responsibly-managed woodlands. Currently, 45% of the UKs woodland area and an estimated 85% of harvested timber is certified through one or both of these schemes.

nEW PUBlICAtIonS
Several new titles have been added to the PEFC UK library over the past year which are available for download from the PEFC UK website: www.pefc.co.uk. Hard copies are also available on request (email: info@pefc.co.uk).

THE RESPONSIBLE CHOICE FOR WOOD AND PAPER PRODUCTS

PEFC ProjECt Chain oF Custody CErtiFiCation

an introduCtion

PEFC PROJECT CHAIN OF CUSTODY CERTIFICATION

ONE PROJECT, ONE MESSAGE
Front cover image Foreco Dalfsen BV

A CONSUMER GUIDE TO PEFC

PEFC/01-00-01
PEFC /16-01-01
PEFC_Project_CoC_brochure_A4_LONG_CS5_5sept2011_c.indd 1 05/09/2011 20:49

03
PRInt And PAPER
IPIA Joins PEFC UK In July PEFC UK was delighted to welcome our newest member The Independent Print Industries Association. The IPIA is the only association that brings together print managers, print distributors, trade manufacturers, material suppliers and associated service providers to create partnerships in print. DRUPA 2012 In May, PEFC UK joined colleagues from across Europe to exhibit at Drupa, the largest printing equipment exhibition in the world. The show is held once every four years in Dsseldorf. The 2012 event attracted thousands of visitors from 140 countries and 2,000 exhibitors from 54 countries. Located in the Lean and Green area, the PEFC stand served as a central point of information for the print and graphics sector on sourcing sustainable paper. The international PEFC team was kept busy engaging with visitors from around the world keen to learn more about the benefits of using certified paper to provide assurances of responsible sourcing to their customers.

Dr Peter Bonfield

tIMBER And ConStRUCtIon

Construction Roundtable In October, PEFC hosted a breakfast Roundtable event which was attended by some of the countrys leading contractors. Delegates heard Dr Peter Bonfield, Head of Construction Products at the Olympic Delivery Authority (ODA) and Chief Executive at BRE; describe how the 2012 London Olympic Park development is destined to be a future model for timber procurement and its legal and sustainable supply. The ODA committed to sourcing 100% certified timber through the Programme for the Endorsement of Forest Certification (PEFC) and Forest Stewardship Council (FSC) schemes and was awarded dual Project Certification for the Olympic Park development in March 2012the first major construction project in the world to achieve this. This groundbreaking achievement in sustainable timber procurement has played a prominent role in helping the ODA achieve its commitment of making the London 2012 Olympic Games the greenest games ever. Timber Expo In September, PEFC UK joined with fellow PEFC family members, the Malaysian Timber Council (MTC) and the North American Sustainable Forestry Initiative (SFI) to exhibit at the UKs first dedicated timber show Timber Expo. This new show sought to promote timber as a key material to help deliver an attractive and sustainable built environment. Over 4,000 visitors including architects, specifiers and major contractors made their way to Coventrys Ricoh Arena for the two-day show and over 100 companies exhibited. Timber Expo provided PEFC UK with an exciting new platform to engage with a broad spectrum of stakeholders from across the timber and construction sectors. This year we plan to take a larger stand to maximise our presence at what will undoubtedly prove to be the UK equivalent of Frances Carrefour International du Bois in years to come.

PEFC UK Joins the Social Network 2012 saw PEFC UK join the social media revolution. Our stakeholders can now keep closer eye on what PEFC UK are doing by following us on Twitter @AlunPEFCUK at www.twitter.com. Alun and the PEFC UK team regularly tweet updates and important snippets of industry activity. For those using LinkedIn, a special Certified & ResponsiblySourced Wood-based Products Group on www.linkedin.com has been developed, where members can discuss, share opinion, experiences and ask advice on issues surrounding certified timber use and supply in the UK.

PEFC

A GUIDE FOR RETAILERS

SuStainable timber PrODuCtS

a GuiDe tO PrOCurement fOr the PubliC SeCtOr

MarCoMMs, Print & Certified PaPer

PEFC /16-01-01
PEFC /16-01-01

PUBlIC AFFAIRS oUtREACH

04
Following the election, PEFC held another engagement session with decision-makers in Scotland to discuss ongoing issues of responsible timber procurement, including the forthcoming EU Timber Regulation and biomass timber resources in Scotland. This was timely as Scotland and the Department for Energy and Climate Change were beginning their consultation on Renewable Obligation Certificates (ROC) Band Reviews and OfGem was developing its sustainability criteria for biomass resources. At local government level, PEFC targeted its engagement to local authority members of ICLEI, an international organisation of local governments for sustainability, meeting procurement officers to encourage the adoption of CPET. Further engagement is planned with Metropolitan Borough Councils.

PEFCs public affairs campaign continues to make progress within National, Devolved and Local Governments. 2011 saw the Devolved Government Elections in May, providing a timely opportunity for PEFC to engage with the relevant decision-makers in Scotland and Wales pre and post election on issues of public sector responsible procurement and biomass.

Looking beyond DEFRA, PEFC briefed Phil Heenan in the Cabinet Offices Efficiency and Reform Group, which will be streamlining the Governments procurement, buying standards and sustainability agenda. PEFC also met with ConstructionSkills, the UK Sector Skills Council for the construction industry.

dEVolVEd And loCAl GoVERnMEntS

Over the course of 2011, PEFC held a series of engagement meetings with decision-makers in the Welsh Assembly, the Scottish Parliament and the Scottish Directorate. In the months leading up to the Devolved Government elections, PEFC met with Elin Jones AM (Plaid Cymru) Minister for Environment, Sustainability and Rural Affairs and Kirsty Williams AM (Lib Dem) Shadow Minister for Environment in Wales. In Scotland, PEFC met with Ministers, Shadow Ministers, Environmental Spokespeople and Committee Convenors across all four parties including Liam McArthur MSP (Lib Dem), Maureen Watt MSP (SNP), Elaine Murray MSP (Lab), John Scott MSP (Con) and Patrick Harvie MSP (Green). In the pre-election stage, PEFC briefed contacts on issues of responsible timber procurement and CPET guidelines and offered a line for inclusion in several parties manifestos.

MoVInG FoRWARd
With Rio+20, the United Nations Conference on Sustainable Development taking place this year twenty years after the 1992 Earth Summit, the international community will be focused on sustainability. In addition, DECC will be publishing its bioenergy strategy this spring, OfGem will finalise sustainability criteria for biomass to be implemented in April 2013 and next year the EU Timber Regulation will be come into effect. 2012 will therefore provide one of the best opportunities for highlighting and maintaining the case for sustainable initiatives both nationally and internationally. Therefore, PEFC will continue its campaign across the public and private sectors to ensure certification and responsible timber procurement are understood, implemented and enforced.

WEStMInStER And WHItEHAll

PEFCs public affairs campaign within UK Parliament and Government Departments focused on several key initiatives including the introduction of the EU Timber Regulation, the future of CPET, public sector buying standards, the newly established Efficiency and Reform Group and the Government Construction Board. In early 2011, PEFC met with Andrew George MP, Chair of the Liberal Democrat Policy Committee on Environment, Food and Rural Affairs to brief him on responsible timber procurement. This meeting followed previous engagement with James Paice MP, Minister for Agriculture and Food, and Willie Bain MP, then Shadow Minister for Environment, Food and Rural Affairs. In addition, PEFC also held several strategic meetings with key DEFRA civil servants throughout the year.

PE FC CE RtIF IE d tI M BE R: CA SE

StUdY

05
2012 PR oj ECt CE RtIF IC AtIo n
site comprises of seven major venues across the 246-hectare Olympic Park and needed to be managed on a daily basis for the thousands of timber products entering the site. The ambitious and innovative development approach was driven forward by the establishment of the Timber Supplier Panel that embedded str ict policy and procurement procedure s, created controls and implemented a delive ry management system. It was also forthr ight in policing and educating stakehold ers about their supply chains, sustainabl e timber and the importance of an unb roken chain of custody.

o lYM PI C G o ld Fo R lo n d o n
As the countdown to this summers iconic spor ting event continues, the entire London 2012 Olympic Park de velopment has achieved dual Pr oject Certification from PE FC and the Forest Stewards hip Council (FSC) schemes for its timber usage the first dual Project Certification in the wo rld.
This groundbreaking ach ievement in sustainable timber procur ement has played a prominent role in helpin g the Olympic Delivery Authority (ODA) achieve its commitment of making the London 2012 Olympic Games the gre enest games ever with 100% of wood pro ducts supplied certified as legal and sus tainable. Sites range from the Velodrom e with its Siberian Pine track, the Red Louro -faced roof cladding panels for the Aquatics Centre, to all the bridges, fences and benches. The project involved ove r 12,500 cubic metres European softwo ods and tropical hardwoods The project certification ceremony took place on 28 March at the Olympic Park Site with certificates pre sented to Dr. Peter Bonfield, Head of Construction Products at the ODA and Noah Bold, Park Operations Environment & Sustainability Manager, by the Soil As sociation. The development was aud ited by the Soil Associations Woodmark and is being hailed as a major achiev ement that is potentially destined to be a future model for timber procurement globally. The scheme also saw a unique and important partnership role played by both PEFC and FSC to make sure that the levels of legal and sustainable timber procured by the ODA achieved the highes t possible target. Woodmark said the pro ject was a world first for certification of such a huge and complex site.

Noah Bold, ODA Park Op erations Environment & Sustaina bility Manager, said: A huge thanks to Soil Association Woodmark for guiding us through the certification process. Rig ht from the start we knew we wanted our construction work to have the smallest pos sible environmental footprint and supporting sustainable forest management around the world was a big part of that. Alun Watkins who heads up PEFC in the UK commented: PEFC is delighted to have worked together wit h FSC to help make dual certification of this highly prestigious project possib le. This is the first dual certified projec t in the world and we are proud that the UK has provided an example for others to foll ow in the future. We congratulate the Oly mpic Delivery Authority on their decisio n to source only certified timber. This dem onstrates a strong commitment to res ponsible timber procurement which will help to make London 2012 one of the most successful and greenest games eve r. The partnership role pla yed by both PEFC and FSC will see the lev els of legal and sustainable timber achiev e the highest possible targets. The Ga mes East London

Praising PEFC, FSC, the auditors, the timber industry, contracto rs and CLM (Olympic delivery partne r) team managers for their efforts in achiev ing the 100% target, Dr Peter Bonfield, Head of Construction Products at the ODA added: It is an outstanding out come that really shows what can be ach ieved and its a strong platform for the industry to build on. Now the question is wh at are the industry and certification bodies going to do to take that across the rest of the country.

PEFC IntERnAtIonAl
Ben Gunneberg Secretary General, PEFC Council

06

BEn GUnnEBERG SECREtARY GEnERAl, PEFC CoUnCIl

In the past few years, new challenges to sustainable forest management have been appearing; challenges that did not exist when forest certification was originally established twenty years ago. Issues such as carbon accounting, payment for ecosystem services and management strategies for biomass and biofuels were unheard of in the 1990s.

PEFC General Assembly 2011, Montreux Switzerland

Regulation (EUTR), one of the central elements of EU FLEGT, is fast approaching. The Regulation requires companies first placing timber on the EU market to have appropriate due diligence systems in place. With due diligence being an integral part of Chain of Custody (CoC) certification, this creates challenges and opportunities for PEFC. We are committed to aligning our Chain of Custody certification requirements with EUTR requirements, but without placing an undue burden on certified companies not operating within the EU. If stakeholders manage to find the right approach to this, a significant opportunity exists for a rapid increase in Chain of Custody certificates. This should enable companies along the supply chain to take advantage of an increasing number of PEFC-certified suppliers and customers. Commitments from governments around the world to an energy mix with a higher percentage of biofuels and biomass means that demand for certification is likely to grow. Energy companies and regulators are in the process of developing criteria to provide proof of sustainable sourcing for biomass products, and we must ensure that PEFC certification can provide this evidence.

Certification, as a tried and tested voluntary method of providing evidence of sustainable forest management, can also play an important part in the climate debate. Although it can contribute to REDD+ (Reducing Emissions from Deforestation and Forest Degradation) initiatives, this will require PEFC to further strengthen its activities aimed at developing certification in the tropics. Yet sustainable forest management is about more than carbon as a proxy for climate change, or a sustainable source of green energy. It is about the overall contribution forests make to society. Forest management maintains and enhances forest ecosystems, contributing to sustainable livelihoods for people living in and around forests. They also provide sustainable timber as an important material for a green economy. This holistic view of sustainable forest management was captured in the Rio Forest Certification Declaration, which we recently submitted as a contribution to the outcome document to Rio+20, the United Nations follow-up conference to the 1992 Rio conference. So the landscape in which PEFC is operating is expanding. We are therefore looking forward to further strengthening our contribution to the growing number of initiatives and stakeholders around the world.

Forest certification was originally established for a traditional forest-based sector. However, with the appearance of new forest uses and new forest users, we are now witnessing a growing trend in non-traditional uses. These are increasingly important in sustainable forest management and certification, and this is reflected in changes to legality in national and regional legislation, such as the US Lacey Act and the European Forest Law Enforcement Governance and Trade (FLEGT) Action Plan, as well as other legislation emerging from countries around the globe. The 2013 deadline for the implementation of the EU Timber

GRoWtH In CERtIFIEd FoRESt AREA And CHAIn oF CUStodY

GloBAl GRoWtH In PEFC-CERtIFIEd FoRESt AREA
2011 saw newly certified forests in Poland bringing the global PEFC-certified forest area to 230 million hectares.

07

GloBAl GRoWtH In CHAIn oF CUStodY nUMBERS

While the global economic climate remains challenging, demand for PEFC Chain of Custody increased by 14% in 2011.

250
217,4 223,5

226,8

231,0

8000 7000
6166

7688

7814

200
Certified forest area (m. ha)

187,7

193,8

194,4

6000
Number of CoC Certificates

150 100 50 0

5000 4000 3000 2000 1000 0

2005 2006 2007
2901 2362 3545

4420

2005

2006

2007

2008

2009

2010

2011

2008

2009

2010

2011

Y E A R

Y E A R

UK CHAIn oF CUStodY And PEFC loGo lICEnSES

With the economic climate remaining challenging in 2011, Chain of Custody numbers remained fairly static with new companies coming into the programme to replace those leaving it as a result of companies going out of business. However, demand for the PEFC logo grew steadily. An increasing number of household brands are now using the PEFC logo on product to demonstrate responsible sourcing to their customers.
1500 1200

logo licenses chain of custody numbers

Number of Holders/Contracts

900 600 300 0

2005

2006

2007

2008

2009

2010

2011

Y E A R

BREAKdoWn oF CERtIFIEd FoRESt AREA BY ContInEnt

Just over 9% of the global forest area is currently certified, with two thirds certified to PEFC-endorsed schemes.

Asia 0.1%

Central & S. America 1.5%

Oceania 4.4%

total 231m ha

Europe 27%

North America 67%

BoARd oF dIRECtoRS

08

PEFC is keen to ensure that key stakeholder groups are represented on its Governing Board. After five years loyal service, Peter Latham of James Latham PLC has left PEFC UK to take up a position on PEFC Councils Board of Directors. Peter is succeeded as Chairman by long standing Board member and forestry academic, Hugh Miller. In addition, two new Directors were appointed in January 2012; Pat Burke from Arnold Laver Timber World and David Leslie of James Jones. We are confident that these new appointments will help support the PEFC team in its activities to grow demand for certified timber in the UK market.

PEtER lAtHAM oBE CHAIRMAn

Peter Latham OBE is Chairman of James Latham plc, one of Britains oldest timber companies. Since the first James Latham began importing hardwoods into Liverpool in 1757, the company has developed into a leading importer and distributor of panel products, joinery quality softwood and hardwood and hardwood flooring. The company is publicly quoted. It operates from nine sites in England and recently opened its first distribution centre in Scotland. Peter, is a former Chairman of the Forests Forever Committee of the Timber Trades Federation, and is a Trustee of the Commonwealth Forestry Association.

HUGH MIllER oBE

InCoMInG CHAIRMAn
Hugh Miller OBE graduated in forestry from the University of Aberdeen in 1964. For the next two decades he led research into forest biogeochemistry at the Macaulay Institute for Soil Research, during which time he published extensively and in 1981 was awarded the Scientific Achievement Award of the International Union of Forest Research Organizations. In 1984 he was appointed Professor and Head of the Department of Forestry in the University of Aberdeen, retiring in 2004. He is a Fellow of the Institute of Chartered Foresters and was President from 1994 to 1996. In 2007, the Institute awarded him its Medal. He was made a Fellow of the Royal Society of Edinburgh in 1985.

jUlIA GRIFFIn
Julia Griffin is a member of B&Qs Social Responsibility team and her area of expertise is timber. B&Q is a UK home improvement retailer, owned by Kingfisher PLC. Julia works with the Commercial, Quality Assurance teams and suppliers to monitor timber and forest products sourced by the business to ensure they meet the requirements of B&Qs Timber Policy. She is also responsible for reporting performance to the B&Q Board and the Kingfisher Board Network. Julia has been the timber expert in B&Qs Social Responsibility team for six years and has first-hand experience of the practicalities and challenges associated with implementing and adhering to a responsible timber sourcing policy.

09

RoB SHAW
Rob Shaw, FICFor, CMIOSH, graduated from Aberdeen University in 1988 and joined Scottish Woodlands Ltd. In 1998 he helped achieved FSC Resource and Group Scheme Management status for the Company, a first within the UK. Between 1999 and 2002 he carried out international certification consultancy work in Latvia and Slovakia. In 2007 he was appointed SEQ & Contracts Director and now oversees the Utility and Landscaping Division in addition to Certification and Safety issues. Scottish Woodlands runs one of the largest Group Certification schemes in the UK, and is dualcertified, with the ability to supply both FSC and PEFC labelled timber into the major markets.

joHn SAndERSon
John Sanderson is Director, Global Environmental Market Support for UPM Kymmene, a global forest products group with core businesses in printing papers, speciality papers, label materials and wood products. John has worked exclusively for UPM since graduating from the University of Wales over twenty years ago with a degree in wood science and forestry. Increasing environmental focus and concern from UPMs customers has led to an unprecedented increase in demand for environmental education, commitment and performance from suppliers. Johns current role is designed to address this market interest head on by educating customers and end users about the industrys sustainability credentials.

dAVId lESlIE
David Leslie is General Manager, Harvesting & Operations for James Jones and Sons Ltd, Scotlands largest independent sawmiller and one of the leading suppliers of British timber in the UK. He is responsible for the Groups roundwood procurement, sawmill co-products and haulage. In addition to his PEFC role, David chairs the Private Sector Timber Forecast Group, is a member of the Grampian Forestry Forum, a board member of SIRT and member of the Institute of Chartered Foresters. David was appointed to the PEFC UK Board in January 2012.

PAt BURKE
Pat Burke is Group Purchasing Director, Arnold Laver Timber World. He previously worked for Jewson, Meyer International and The Graham Group, before joining Arnold Laver in 1999 as Group Softwood Director. He was appointed Group Purchasing Director in 2002. Pat is a former Chair of the North East Timber Trade Association and has held positions within Forests Forever and various TTF commodity committees as well as serving on the Boards of the British Woodworking Federation, Proskills and the Wood Industry Training Board.

RoSS BRAdSHAW
Ross Bradshaw has worked in the paper manufacturing industry for over twenty years. He chairs the Paper Agents Association Environmental Committee and is a Liveryman of Stationers Hall. Ross joined the PEFC UK Board in July 2006.

MARK WEAtHERBEd
Mark Weatherbed was a founder member of the Global Association of Corporate Sustainability Officers. His areas of expertise are raw material and sustainable paper-based commodity and primary packaging sourcing. Mark has been a PEFC UK Director since 2007.

AUdItEd ACCoUntS
Audited Accounts for year ending 31st July 2011

10
StAtEMEnt AS to dISCloSURE oF InFoRMAtIon to AUdItoRS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the companys auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the companys auditors are aware of that information. Auditors The auditors, Miller McIntyre & Gellatly CA, will be proposed for re-appointment at the forthcoming Annual General Meeting. PEFC UK Limited. Report of the Directors for the Year Ended 31st July 2011. This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies. ON BEHALF OF THE BOARD: H G Miller - Director.

dIRECtoRS
The directors shown below held office during the whole of the period from 1 August 2010 to the 31st July 2011.

StAtEMEnt oF dIRECtoRS RESPonSIBIlItIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
l

H G Miller P D L Latham R N Bradshaw M R Weatherbed Mrs J Griffin R Shaw J A Sanderson

select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the companys transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

11
REPoRt oF tHE IndEPEndEnt AUdItoRS to tHE MEMBERS oF PEFC UK lIMItEd
We have audited the financial statements of PEFC UK Limited for the year ended 31 July 2011. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective April 2008) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities). This report is made solely to the companys members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the companys members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the companys members as a body, for our audit work, for this report, or for the opinions we have formed.

SCoPE oF tHE AUdIt oF tHE FInAnCIAl StAtEMEntS

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the companys circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the Directors to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

oPInIon on otHER MAttER PRESCRIBEd BY tHE CoMPAnIES ACt 2006

In our opinion the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements.

MAttERS on WHICH WE ARE REqUIREd to REPoRt BY ExCEPtIon

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
l

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit; or the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption in preparing the Report of the Directors.

oPInIon on FInAnCIAl StAtEMEntS

In our opinion the financial statements:
l l

RESPECtIVE RESPonSIBIlItIES oF dIRECtoRS And AUdItoRS

As explained more fully in the Statement of Directors Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Boards (APBs) Ethical Standards for Auditors, including APB Ethical Standard - Provisions Available for Small Entities (Revised), in the circumstances set out in note nine to the financial statements.

give a true and fair view of the state of the companys affairs as at 31 July 2011 and of its loss for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and have been prepared in accordance with the requirements of the Companies Act 2006.

Derek Grant MA (Hons) CA (Senior Statutory Auditor) Miller McIntyre & Gellatly CA Chapelshade House 78 84 Bell Street Dundee DD1 1RQ 3 April 2012

AUdItEd ACCoUntS
PEFC UK lIMItEd PRoFIt And loSS ACCoUnt
for the Year Ended 31 July 2011 2011 TURNOvER Administrative expenses OPERATING LOSS Interest receivable and similar income 440,307 471,129 (30,822) 218 2010 423,759 444,321 (20,562) 420

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PROFIT/(LOSS) ON ORDINARy ACTIvITIES BEFORE TAxATION Tax on profit/(loss) on ordinary activities

(30,604) (121)

(20,142) 459

PROFIT/(LOSS) FOR ThE FINANCIAL yEAR AFTER TAxATION

(30,483)

(20,601)

BREAKdoWn oF PEFC UK ltd ExPEndItURE

for the Year Ended 31 July 2011
subscriptions, sponsorship, audits and bank fees

office, rent, salaries, administration

travel, subsistence and sundry expenses

6% 8%

22% 3%

meetings, including Board and AGM

PEFC Council fees

471,129 30% 31%

advertising, communications and consultants

AdoPtInG A GREEn lEAdERSHIP StRAtEGY

PRoGRESSIVE PRoCUREMEnt
The new statement should prove to be a real boost to the supply and profile of PEFC-certified materials on many of the UKs major construction schemes. The UKCG is the primary association for building contractors operating in the UK, representing over thirty leading companies including Balfour Beatty, Keepmoat, Galliford Try, Skanska UK and Willmott Dixon. Between them, UKCG members account for 33 billion of construction turnover a third of the UKs construction total output. The new guidance on timber procurement is therefore likely to prove enormously influential on the UK building sector and its suppliers. assured compliance

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Sustainable Homes followed CPETs lead in recognising the importance of responsible timber sourcing. Using certified timber directly helps achieve Levels 3 to 6 of the Code for Sustainable Homes and also helps to achieve Excellent BREEAM ratings in addition to demonstrating a strong commitment to environmental best practice. The move by UKCG is a proactive one, in step with a worldwide push increasingly being embraced by planners, designers, architects, builders and their customers. Leading green building rating programmes from around the world recognise the importance of sourcing timber certified by credible certification programmes such as PEFCs. These include CASBEE in Japan, the Australian Green Star Program, Built Green in Canada and the US Green Building Initiative. 2013 regulations The UKCG announcement comes twelve months ahead of the introduction of new EU regulations. The Illegal Timber Regulation (ITR) now commonly called the EUTR will apply to all Member States from the 3 March 2013 and will make it illegal to place timber and timber products which have been illegally-harvested at the point of origin on the EU market. In response to the forthcoming introduction of the EUTR, more and more companies in the private sector are also developing inclusive corporate procurement policies which seek to ensure that the paper and wood products they buy come from responsibly-managed forests. These inclusive policies should also recognise both recycled and certified materials to help companies ensure flexibility of sourcing and supply. As the worlds largest forest certification system, PEFC and its certified suppliers offer a wide and diverse choice of certified wood, paper and packaging products to the increasingly enviro-conscious global marketplace.

In April, the UK Contractors Group (UKCG) published a new statement on timber procurement, demonstrating industry leadership on sustainable timber sourcing and supply for the UK construction industry.

The UKCG policy commits members to: support and give preference to procuring products which are able to demonstrate compliance with a recognised responsible sourcing scheme, certified by a third party. By stating this, UKCG are ensuring that all timber products purchased for either temporary or permanent use on UKCG member sites are certified as legally and sustainably sourced, as defined by the UK Governments Central Point of Expertise on Timber (CPET) - http://www. cpet.org.uk. CPET currently approves two global certification schemes as providing evidence of legal and sustainable sourcing FSC (Forest Stewardship Council) and PEFC (Programme for the Endorsement of Forest Certification). government commitment The development of a mandatory timber procurement policy by the UK Government back in 2005 sent a strong signal to both the public and private sectors concerning the importance of responsible sourcing of forest products. Both BREEAM (Building Research Establishment Environmental Assessment Method) and the Code for

PEFC UK
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PEFC CoUnCIl
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