Annual Administration Fee Update for Chain of Custody Certification

The annual administration fee (AAF) is a fee charged by FSC to accredited certification bodies. The AAF for chain of custody certification is calculated according to the AAF policy using the value of certificate holders’ forest products turnover in the certification body’s portfolio. 

The majority of FSC’s income comes from the AAF and is used to fund FSC’s activities. As such, the AAF is a vital contribution to achieving FSC’s mission of Forests for All Forever.

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A Revised AAF

FSC has revised the AAF structure for chain of custody certification to make it more equitable and provide FSC with additional funding to invest in increasing the value delivered by FSC; thereby creating more value for certificate holders.

Additional Investment Brings Market Value

Investment

Additional investment will drive implementation of FSC's ambitious 2021-2026 Global Strategy. It is estimated that the new AAF policy will enable FSC to invest more than US$10 million over the next three to five years. The additional investment will help to accelerate value chain development, implement critical upgrades in technology, strengthen system integrity and enhance stakeholder engagement.

The value of FSC's brand presence is growing

Value

The value of FSC's market presence is growing and generating more and more opportunities to engage positively with consumers, brands and retailers for the benefit of the world's forests. Strengthening FSC will enable the organization to respond to market needs and leverage these opportunities. Increasing awareness of and demand for FSC-certified products will create market opportunities for chain of custody certificate holders, and thus incentivize the adoption of sustainable forest management across an increasing area of the world's forests.

Coming Soon: A More Equitable AAF

Equity

Currently, the AAF for chain of custody certification is calculated according to a series of wide bands of forest products turnover, with a fixed fee charged depending on the turnover category that a certificate holder falls into. This is set to change from July 2022, to make the AAF more equitable.

The current AAF calculation can lead to inequalities because companies at the lower end of a turnover band pay the same fee as those at the top of the band. For example, a company with forest products turnover of US$101 million will pay the same fee as a company with a forest products turnover of US$499 million, using the turnover band method. To address this, a new structure will be introduced that calculates AAF based on the actual forest products turnover, rather than using broad ranges. In addition, the single site discount will be removed.

Estimate Your New AAF

The new AAF will be calculated based on a certificate holder's actual forest-products turnover using a sliding scale. This results in a more equitable AAF structure.

For certificate holders to estimate their new fee from 1 July 2022, please consult the AAF Policy. For a precise figure, please contact your certification body.

The New AAF Applies From 1 July 2022

July 2022

 

Investing in Value Chains Brings New Benefits

In the past years, FSC has successfully grown the FSC brand and promoted the uptake of FSC certification in key value chains. Most notably, FSC has:

  • Increased the adoption of FSC certification in key value chains such as textiles, packaging, natural rubber and furniture, providing market growth opportunities for many chain of custody certificate holders. For example, FSC collaborated with Pirelli and BMW to launch the first FSC-certified car tyre, which is a significant step forward in the sustainable development of the natural rubber sector.
  • Increased engagement with ecommerce. For example, FSC collaborated with Amazon to highlight FSC-certified products as part of the Amazon Climate Pledge Friendly platform to encourage consumers to choose more sustainable products.
  • Reached millions of consumers with stories of FSC impact, most recently on EuroNews and in National Geographic.
  • Continued development and expansion of FSC climate and ecosystem services solutions.
  • Invested in technology to make the FSC system more transparent and allow auditors to prepare for audits virtually, so making the audit process faster, more effective and data driven.
  • Developed and piloted new certification protocols for smallholders, ensuring forests are protected, while opening market opportunities for many small forest owners.

Potential extra funding from the revised AAF will enable FSC to build on this progress and continue to grow the value of the FSC brand and uptake of FSC certification. In turn, this will create larger markets for FSC-certified products. In addition, further investment will accelerate development of climate and ecosystem services solutions and strengthen the integrity of FSC's system through investment in blockchain technology, helping us to address problematic supply chains.

Read more about our plans in our 2021-2026 Global Strategy.