Many of our early folk stories and legends have the forest as a setting. Perhaps as a result, forests have always been at the heart of national identity.
One hundred years ago this month, the first UK Forestry Act created the Forestry Commission, with a mandate to boost forest cover in a nation that had slipped to around five per cent of its land with tree cover.
Finland has done it differently, perhaps because its own national story is bound up with co-operative enterprise. The country is the most forested in Europe, with 75% of the land area covered by trees. In contrast with the British tradition of large landowners, ownership is dispersed. Over half the forests are owned by families with ownership of over three hectares.
Following a Board meeting of Coops Europe, I had a chance to visit Metsä Co-operative at one of its woodland centres outside of Helsinki.
Metsä was formed in 1934, focused on sawmills and industrial uses for wood. Today, its members are 103,000 forest owners, covering half of the private forest land in the country. The members draw on the services of the co-op to manage and harvest wood in a sustainable way. The co-op has a turnover of €5.7bn and employs 9,300 staff.
The co-op can calculate the benefits for members by comparing what they would have received on the open market. Last year, members gained 7.3 euros extra for every cubic metre of timber sold.
As with any co-op, they have a voice in the running of the business too, electing a representative council of 52 members every four years and a supervisory board of 30 members.
And members can invest as well in the business. The interest on €74m of regular participation shares in 2018 was 7.5%, while for a second class of participation shares, open to wider investors, the interest rate was fixed at 2.5%.
The co-op is enjoying strong growth now, but only because of its response to a crisis earlier in the decade. From 2005 to 2012, there was a depression in the sector, with excess capacity in terms of paper mills. The business was indebted and an incoming CEO, Kari Jordan, was able to see how to turn the crisis into an opportunity. The co-op sold all of its production facilities in wood products that Jordan categorised as ‘sunset’ industries rather than ‘sunrise’ sectors.
Key to the future was to be sustainability. The co-op has always encouraged good forestry management, but now the emphasis was on this as a source of commercial advantage. The purpose of the business was agreed as “advancing a bioeconomy and circular economy by efficiently processing northern wood into first-class products.”
The idea of a bioeconomy as they see it is to replace a fossil fuel economy. So one of the major innovations they are investing in at present, is a €1.2bn pilot factory to produce textiles out of wood pulp. That is a new market opportunity, but it is also a replacement for cotton, which is notoriously water thirsty and fossil fuel hungry.
The circular economy takes a systematic view of the resources that they use, with careful management of carbon through forestry management and locking carbon storage in to high quality wood products, such as engineered wood for construction. 100% of the wood is traceable back to where it came from. 88% of the wood that the co-op uses is now certified by one of the major schemes, PEFC or FSC, compared to 10% of forests worldwide.
This include a focus on the use of every part of a tree, from wood left on the ground to encourage biodiversity through to timber and then the top most branches used for renewable energy. The co-op produces 15% of renewable energy in Finland, but their preference over time is to find new products and uses to store carbon rather than see it released as energy. At present 94% of all wood materials are used. By 2030, the aim is to get this to 100%.
The forest that I visited was mixed, with spruce and birch and pine, rich with life. Where trees has been felled, new seedlings were planted (some of the thirty million planted annually) as the eighty year cycle of forest regeneration started again. Tree cover in Finland is stable and grown for the long term and it is land that remains wild for those who need it, such as the vulnerable white-backed woodpecker, the numbers of whom are on the rise.
This is on a scale and with a focus on sustainability that the UK can’t match, but it is Woodland Social Enterprise Day on October 8th, supported by Plunkett Foundation, itself part of Grown in Britain Week. It is encouraging to see the spread here of community owned woodlands and the same spirit of cooperation and sustainability.
As it is member owned, Metsä co-operative can balance the competing demands that come with a commitment to sustainable forestry. In the process, it is helping to build a path to a low-carbon economy.
This is a story of our forests, a new legend, to which we do well to listen.