Focus on Sustainability CHEP is committed to sustainability in the supply chains it serves. The goal is to improve overall supply chain efficiency and sustainability through CHEP’s product and service offerings. To accomplish this goal of contributing to integrated business performance and environmental stewardship, sustainable development criteria will always be a core component in the design, sourcing and execution of all products, services and processes. CHEP recognises its responsibility as a consumer of forest products to endeavour to have a neutral or positive effect on the world’s forests. Sustainably managed forests are subject to high standards of silviculture. Features of sustainable forest management are responsible harvesting, reforestation and biodiversity preservation, while protecting natural forests and the supply of resources into the future. More specifically, internationally recognised forestry certification schemes consider controversial sources of lumber as those where forest management activities are: Not complying with local, national or international legislation, in particular related to the following areas: Forestry operations & harvesting, including conversion of forest to other use Management of areas with designated high environmental and cultural values Protected and endangered species Health and labor issues relating to forest workers Indigenous peoples property, tenure and use rights Payment of taxes and royalties Utilising genetically modified organisms Converting forest to other vegetation type, including conversion of primary forest to forest plantations. CHEP’s objective in sourcing pooled pallet lumber is for the lumber to be chain of custody certified (COC certified) or, in the absence of COC certification, for the lumber to be from certified forest resources. Due to lumber availability and commercial acceptability reasons, this may not always be practical, thereby necessitating sourcing of lumber from uncertified forest resources. Where uncertified forest resource lumber is used, CHEP undertakes due diligence to ensure its sustainability position is not compromised. The leading certification schemes providing the benchmark for CHEP acceptability are: PEFC – Program for the Endorsement of Forest Certification. Examples of national certification schemes endorsed by PEFC are: SFI – Sustainable Forest Initiative CERTFOR – Chilean System for Sustainable Forest Management Certification AFS – Australian Forestry Standard MTCC – Malaysian Timber Certification Council FSC – Forest Stewardship Council For clarity, the CHEP position is: Where COC certified lumber is not readily available or if available, is currently commercially unacceptable, CHEP endeavors to source lumber that comes from certified forest resources and will continue to advocate and encourage the development of the COC certified market. If certified forest resources are not available or are commercially unacceptable, CHEP undertakes due-diligence to establish confidence the forest resources are legally harvested and do not pose ethical concerns for CHEP. CHEP’s procurement function actively pursues transitioning from uncertified forest resources to certified forest resources and COC certified lumber. CHEP has established standard operating procedures to assist it’s Businesses with their due diligence programs. The approach focuses on knowledge of forestry sources, the certification status of forests, legality of logging, transparency of the lumber supply chain, knowledge of species, avoidance of controversial or endangered species and any ethically questionable forestry industry arrangements and practices. The International Union for Conservation of Nature (IUCN) rating of the endangerment status of species is used by CHEP as a primary guide to sustainability risk associated with tree species.