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- A growing mountain of fraud cases threatens to destroy wood sustainability certifier FSC’s reputation once and for all. Action is needed now before it is too late.
- At next week’s FSC General Assembly, members will convene to vote on the scheme’s policies and priorities, including how it will address fraud. A leading FSC auditor has called this GA “the last call to save the FSC”
- FSC’s investigations, triggered by third-party research, are exposing and addressing only the tip of the iceberg of a much wider systemic issue
- New analysis by Earthsight suggests that between $10 and $30 billion of fraudulently certified goods are being sold each year
- Wood companies in FSC’s economic chamber have vetoed all previous attempts to stamp out fraud through mandatory traceability. They can no longer ignore the problem
- FSC Members at FSC General Assembly 2025 must support Motion 30, which requires the development of compulsory traceability. They should also push for it to be strengthened, speeding up the timeline and removing the requirement for a second vote at the GA in 2028
- Environmental and social NGO members of FSC should stage a mass walk-out if the wood company members veto this measure again
- This isn’t FSC’s only serious problem. But if FSC cannot even take the steps necessary to stamp out rampant fraud, it must be abandoned
How widespread is fraud in FSC?
The Forest
Stewardship Council (FSC) is the world’s largest green label. Nearly half of
consumers worldwide recognise its tree-tick logo,[1] which is found
on a vast array of goods from tissue paper to furniture, timber, books and even
clothing made with wood fibres. Eighty per cent of those consumers trust the
logo to ensure their products are not harming forests.[2] But they
are being duped.
The truth
is that there is a good chance the products they are buying do not come from
forests certified ‘sustainable’ by FSC at all. The raw materials used to make
them might even have been illegally harvested.
Fraud is
everywhere in FSC supply chains. It has been found in a vast array of
FSC-certified products, including furniture, toilet paper, paper plates,
charcoal, flooring and pellets. Cases of systemic fraud have been exposed
relating to a wide range of different wood species, tropical and non-tropical,
hardwood and softwood. Though the problem is greatest in China, serious fraud
has been exposed all over the world, including in Europe and the US.
The
epidemic of fraud in FSC is not limited to smaller, less professional firms.
Time and again, some of the largest firms in their respective fields have been
found guilty of deliberate, systemic fraud involving huge quantities of goods.
This includes China’s largest plywood exporter,[3] one of the
largest sawmills in Europe,[4] and the fifth-largest producer of
wood pellets on the planet.[5]Fraudulent FSC-certified goods have
been found on sale at some of the world’s largest retailers, including IKEA, Aldi and Lidl.
How do we
know the problem is more widespread than the examples we know about? Because
the cases we know about have almost all been exposed not by FSC’s own systems,
but as a result of independent research by NGOs and journalists, or by industry
tip-offs (see table). Without this unofficial monitoring, the problem would
still be unknown. There are very few NGOs and journalists conducting these
kinds of investigations, and their research examines a tiny fraction of the
vast trade in FSC-certified products.
In almost
all cases, they were not even specifically looking for FSC fraud, but stumbled
across it while researching other issues.[6] We can therefore be
certain that what they have exposed (and FSC has confirmed) is the tip of a
much, much larger iceberg of fraud within FSC, large enough to bring the whole
organisation crashing down were it fully exposed.
What has been exposed is the tip of a much larger iceberg of fraud, which would sink the whole organisation were it fully exposed
Additional
evidence of the growing fraud within FSC comes from the growing mismatch
between the volumes of FSC-certified wood being produced and the number of
companies licensed to handle that wood. Since Russia and Belarus were kicked
out in March 2022, the area of FSC forests worldwide has declined by 30 per
cent. Yet during the same period, the number of Chain-of-Custody certificate
holders (wood processing companies licensed to handle FSC wood) has
increased by 37 per cent. Twelve new CoC certificates are being churned out
a day in China alone.[7] There simply isn’t enough real FSC
certified wood to go around.
Inadequate responses
Even when fraud in a particular supply chain is exposed and action is taken, FSC has failed to stamp it out. Companies engaged in fraud have been able to swap their certification body and get new certificates just days or months after their old ones were terminated. At most a simple company name change usually does the trick.[27]You might
expect that a major case would have a wider chilling effect, at least for
producers of a particular product for a particular market. But the evidence
proves the opposite.
Take
plywood, for example. In 2021, two separate investigations concluded that
China’s largest plywood exporter was guilty of deliberate, large-scale,
systematic FSC labelling fraud.[28] The company was booted out of
the scheme. Yet four years on, FSC fraud in the Chinese plywood sector remains
unchanged. In November 2024, one of China’s other largest plywood companies
offered to Earthsight investigators to put false FSC labels on Russian birch
ply, to be imported into Europe with false Chinese origin documents, in breach
of EU sanctions.[29]
In April
2025, isotopic tests found almost half of the certified birch ply products on
sale in the UK had false country of harvest claims.[30] The study
did not provide separate proportions of false claims found in relation to FSC
products versus those certified by its rival PEFC, but a close examination of
the data shows that a minimum of 36 per cent of the FSC claims were found to be
fraudulent.[31]
Even where
deliberate, massive fraud is proven, the punishments meted out by FSC are
pitifully low, and poorly enforced. FSC’s main tool for disincentivising fraud
is the blacklisting of culprits from the FSC system. But even when companies
don’t get around this by setting up under a slightly different name, the
black-listing is time limited, and rather flexible. When An Viet Phat Energy in
Vietnam, the world’s fifth-largest producer of wood pellets, was found guilty,
it was supposed to have been banned for 3.5 years.[32]But it was
permitted back after just 14 months.[33] Meanwhile that top Chinese
plywood exporter – and twice-confirmed fraudster – has also been allowed to
regain its FSC certificates.[34]
Earthsight's undercover investigators are offered Russian ply by Polish firm Alvi-Bel which had FSC-certification at the time © Earthsight
Putting a figure on fraud
So how much fraud is there, really? When individual cases are exposed, figures for the amounts of fraudulent sales are rarely published. In one case where numbers were calculated – for just one producer and one product – the fraud was estimated to have involved 100,000 tonnes of plywood.[35] A reasonable estimate is that such a volume was worth perhaps $100 million. Just one of the many frauds involving charcoal, exposed by an NGO and confirmed by FSC, involved 18,000 tonnes of falsely labelled goods, which current retail values suggest was worth as much as $50 million.[36]When IKEA
found fraud in its FSC-certified birch products in 2020, it involved 95
different product lines. The company tried to play down the scale, stating that
it related to just 0.28 per cent of its wood use that year.[37]But
it turns out that that amounts to 53,200 cubic metres of round-wood-equivalent
– enough timber to fill an Olympic swimming pool twenty times over.[38]
In the UK, we know the fraud involved 26,767 items of furniture, because that
was the number seized by UK authorities.[39] Based on the proportion
of IKEA’s sales there, this implies nearly 400,000 items affected globally,[40]worth perhaps as much as another $100 million.
Whenever anyone goes looking for FSC fraud, they nearly always find it
Total
global FSC-certified product sales were estimated at $20 billion in 2007.[41]Based on the growth in FSC-certified forest area and adjusting for inflation,
the figure is likely $100 billion today. If even one per cent were fraudulent,
it would mean falsely labelled FSC goods worth at least $1 billion are being
sold every year. Given that whenever anyone goes looking for FSC fraud, they
nearly always find it, the real figure is likely to be at least $10 billion,
quite possibly much more. Phil Guillery, FSC’s former Integrity Director, has
said he believes 20-30 per cent of FSC claims are false.[42]That
would suggest as much as $30 billion of fraudulent sales each year.
Deep-seated denial and false solutions
Though the
FSC Secretariat claim to support volume tracking (as required by Motion 30) as
“a critical step to further strengthen integrity in FSC supply chains,” they
are undermining the chances of its being passed by denying the true extent of
the problem and exaggerating the impact of the inadequate efforts already made
to try to address it.[43]
Their first
defence is to cite cases they have successfully exposed as proof of the problem
being tackled – yet as we have seen, they really prove the opposite. The credit
for first uncovering these cases almost always lies elsewhere, and there is
every reason to believe they are the tip of the iceberg. FSC also tends to
neglect to mention how often their meagre punishments are successfully
circumvented or fail to prevent repeat offences.
The second
FSC defence might be called the ‘blind them with science’ strategy. But the new
technologies FSC likes to flaunt when claiming it is getting a handle on fraud
are hugely overblown in their impact. The first of these is the use of
scientific testing to determine wood origin. In reality, at best such
technology can determine the country of harvest, and even that is only possible
for a limited range of wood species for which sufficient sampling has been
carried out. Very little of the fraud exposed by NGOs and journalists and
confirmed by FSC over the years could have been detected by such methods. Only
cases involving laundering of wood of different species or from different
countries can be exposed – though uncertified wood of the same species from the
same country is the most likely to be passed off as its FSC equivalent.
The second
miracle cure espoused by FSC is blockchain technology. But blockchain can only
help secure information where that information exists, and the traceability
system FSC is planning to use it with (known as FSC Trace)[44] is
voluntary (except for supply chains already proven to be high risk for fraud). When
FSC set up a similar voluntary system before, take-up was so poor it ended up
being cancelled.[45] Until mandatory volume tracking is implemented,
there is likely to be very little information for blockchain to check. FSC
Trace also stops short of the full volume control needed to stamp out fraud.[46]
In 2021, EIA exposed an FSC fraud case involving China’s largest plywood exporter
Last chance saloon
Motion 30 contends that there is a risk that, without action, trust in the system will be lost or diminished, causing “major harm to FSC.”[47] But there is evidence that trust is already being eroded. When FSC surveyed wood product consumers in July 2021, the ‘net trust’ rating for FSC was recorded as 43 per cent.[48] A year and a half later, that number had fallen to 11 per cent.[49]Meanwhile,
FSC’s relevance is vanishing as lawmakers overtake it in their ambition. At the
end of 2025, the EU Deforestation Regulation (EUDR) is set to come into effect
for large companies, banning illegal and deforestation wood from one of the
world’s largest markets. The law requires that firms conduct due diligence
which ensures only a ‘negligible risk’ that their products don’t meet the law’s
demands. It also requires full traceability back to point of harvest. FSC
cannot currently deliver either of those things. FSC has set up a voluntary ‘Regulatory
Module’ which claims to support EUDR compliance, but take-up to-date has been
almost zero.[50]
It is no
wonder that leading FSC auditing firm Preferred by Nature has called this
General Assembly the “last call to save FSC.”[51]
Fraud is
not the only reason why Preferred by Nature and others are saying that. In
2021, prior to the last General Assembly, a group of 34 NGOs from around the
world, including prominent names such as Greenpeace, issued an open letter with
five recommendations.[52]Addressing fraud through compulsory
traceability was one of them, but the others are also important, have yet to be
addressed and are not even on the table at this General Assembly. Even within
the confines of fraud and misrepresentation, there are some crucial things
which Motion 30 will not address (see Box below).
But if FSC cannot take the simple steps needed to address fraud, there is little hope of other important changes being made. So this vote must be seen as a make-or-break moment.
A WWF analysis of the EU charcoal market revelaed widespread fraud
A red line for civil soceity?
FSC’s members must not just support Motion 30, but should also seek to strengthen it before approving it.
A key weakness of the Motion is that it only empowers the FSC Secretariat to build a system for mandatory traceability, requiring a second vote at the General Assembly in 2028 before it can be rolled out. This means that even if the Motion is passed, the wood company members of FSC will still be able to kill it in two years’ time. Why should we suspect they might do that? Because they have done it before.
In 2013, FSC launched a new ‘Online Claims Platform’, where companies could report volumes of production, purchases and sales of FSC-certified wood, allowing these to be reconciled against one another to ensure no more FSC wood is sold than is harvested. But at a vote at a later General Assembly, a Motion to make the system compulsory was vetoed by companies in FSC’s economic chamber.
Another problem with Motion 30 is that it demands only that the system, if approved in 2028, is rolled out with a ‘target date’ of 2030. FSC cannot afford to wait another five years before addressing the rampant fraud which is occurring. This is a pitifully unambitious timeline, which members must also seek to amend.
To avoid the measure failing, it is also vital that timber companies understand how seriously the NGO community takes this issue, and what the consequences will be if they reject it. Environmental and social NGO members must make clear that if action on fraud is vetoed again, they will stage a mass walk-out.
It is vital that timber companies understand how seriously the NGO community takes this issue, and what the consequences will be if they reject it
The fraud and misrepresentation that
Motion 30 will not fix
Mandatory volume reconciliation, as proposed in
Motion 30, will be a big step to rescuing FSC’s dwindling reputation and
relevance. But it is not the only big problem with how the certification
scheme’s requirements are being abused. Two other major issues must also be
addressed.
The first is fraud at source. New
systems to ensure FSC products sold are matched against FSC timber harvested
will not address fraud at the point of harvest. Over the last five years,
Earthsight has published multiple damning reports exposing how illegal wood
gained the FSC imprimatur. None of these cases involved timber processors and
manufacturers mislabelling uncertified wood – the issue Motion 30 promises to
address. The problems were happening inside the FSC concessions themselves, or
at the point they sold their wood to the first processor.
One key type of fraud we found in Russia
involved a company inflating logging volumes inside its FSC concession, then
passing off wood from elsewhere as originating there. We were able to detect
this by using satellite imagery to estimate actual harvest areas and volumes,
then comparing those with what had been declared to FSC auditors. Our analysis
suggested that 535,000 cubic metres of uncertified wood had been laundered into
FSC supply chains by just one company over a five-year period.[53]FSC auditors are not required to carry out the sorts of checks which would
expose such fraud. This needs to change.
Secondly, there is the problem of misrepresentation
of FSC chain-of-custody certification. It has been well known for some time
that most FSC CoC certificate holders do not buy any certified wood at all.[54]
Some of those firms are committing fraud, falsely labelling goods they sell as
being made from FSC wood. But in most cases, the reason they are paying for CoC
certification is in order to be able to falsely claim that it alone confers
some green credentials on their products, regardless of whether those products
are actually FSC labelled. While certification professionals are well aware
that a CoC certificate is meaningless on its own, that is not true of the vast
majority of wood product retailers and customers. This is why, as we said back
in 2021, “The internet is festooned with wood product manufacturers and
retailers advertising these certificates and misleadingly claiming them as
proof of their sustainable credentials.” [55]
Little has changed since then. Just this month,
we published further examples of this pattern at work.[56]It is
deeply counterintuitive to the public that a company can have a green
‘certificate’ without handling ‘green’ wood. Education is not the solution.
Instead, as experts have been advocating for over a decade, FSC could stamp
this out overnight by simply refusing to allow companies which buy no certified
wood to hold and promote a CoC certificate. FSC has just announced that it will
now require CoC holders not using any FSC wood to be listed as such on the FSC
database. This is a welcome step for other reasons, but will do nothing to
prevent them continuing to misrepresent their certifications.
