Traceability & Transparency:
Information Gathering

The approach to transparency and traceability information gathering can be adapted to meet project needs and available resources.

When gathering information on traceability and transparency, project teams can adopt an approach suited to the level of disclosure desired. Regardless of the information-gathering method used, project teams should view themselves as a demand driver in the marketplace to draw out and partner with companies to create greater traceability and transparency in the forest products industry. It can be anticipated that with time and sufficient demand, an increasing number of wood product manufacturers and distributors will implement systems that make it easier to gather and provide desired information when requested.

Traceability Information Gathering

Traceability information gathering starts with asking suppliers about their capacity and willingness to provide information that allows for tracking end products to one or more sources. It is linked to supply chain mapping but focuses on tracing individual products or batches of product either backward or forward through part or all of a supply chain map^[1].

Aids to establishing traceability include:

• Chain of Custody (CoC) Documentation: A basic method for establishing traceability using a paper trail (invoices, bills of lading, etc.) provided by the product vendor that extends as far up the supply chain as possible. This documentation should be collected, reviewed and authenticated.
• Lumber Grade Stamps: These are common for softwood lumber products in North America and identify the sawmill that made them. Having identified the originating mill, one can begin to gather information about the forestry in its ‘supply area.’ NOTE: The ‘supply area’ for a primary mill is the area that it draws logs from. Other terms with the same meaning are ‘wood basket’ and ‘fiber basket.’
• QR Codes or Inventory Tags: For urban wood such as material from street trees and city parks, traceability can be even more direct. Municipal or institutional removals can be recorded at the tree level, including species, location, and date of removal. Logs can be tracked as they enter local log yards, where QR codes or inventory tags can maintain provenance through milling and into final use. These short, segmented supply chains reduce mixing and make it practical to connect individual projects to documented sources.
• Commercial Traceability Tools: There are dozens of “Software as Service” tools available that are designed to track a product’s journey from origin to sale. As of this writing, however, they are not yet widely used by the North American forest products industry^[2]. Digital traceability systems have also been established by some national governments to improve law enforcement and improve revenue collection in the forest sector, but not in the US or Canada.^[3]
• Internal Traceability Systems: Some manufacturers (particularly primary manufacturers) have sophisticated internal traceability systems that can enable accurate tracing up the value chain to the forest source. While some companies might be hesitant to admit having these systems for proprietary reasons, others who can use them to manage and share information about above-business-as-usual forestry may see a competitive advantage.
• Wood ID Testing: There are a number of testing methods that can identify the species or verify the declared origin of most types of wood products. With these technologies, the forest of origin for a final wood product can potentially be identified even without knowing the full supply chain. However, for a variety of reasons including cost and limited reference data^[4], use of these methods is currently limited.

Chain of Custody Documentation vs. Chain of Custody Certification

Of the above, the most straightforward way to establish traceability for wood products today is through Chain of Custody documentation. It should be noted that Chain of Custody documentation is not the same as Chain of Custody (CoC) certification.

As described above, CoC documentation is basically a paper trail from the end product up through the supply chain. CoC certification, on the other hand, is a core component of forest certification systems like Forest Stewardship Council (FSC) and the Sustainable Forestry Initiative (SFI). CoC certification standards lay out a set of requirements that control the handling and processing of certified materials within and transactions of certified products between companies. Companies’ implementation of these requirements is verified through annual audits against the standard in question.

While all forest certification systems’ CoC standards require basic traceability procedures to help ensure that certified materials are accounted for as they move through the supply chain, currently none of them provide continuous or granular traceability through each stage of production and distribution^[5]. Nor do any of them provide access to transparent information on the companies and forests that are upstream from a certified product.

While CoC certification is based on the auditing of documented systems and records, traceability refers to tracking the journey of specific lots of material through each step of the supply chain. In simple terms:

• CoC certification answers the question: Can we prove that this material was handled according to specific requirements?
• CoC documentation seeks to answer the question: Can we follow the actual journey of this material — where it originated, how it moved, and where it ended up — based on real-world events and data?

Transparency Information Gathering

Transparency entails disclosure of information by manufacturers, mills, landowners and others in the supply chain, which is generally necessary to unlock traceability. Gathering the information needed for transparency can happen proactively, by engaging supply chain actors before making a procurement choice, or it can occur retroactively, by looking back up the supply chain after procurement has commenced to at least learn more about where wood has come from. Obviously, proactive transparency is necessary if a project team has intentional wood sourcing goals.

Unfortunately, many companies that are direct suppliers of wood products to building projects don’t know where the material originates, and even if they do they may resist disclosing what they consider sensitive information. The ask for information is often best made by a vendor’s direct customer whom they may know well and trust instead of by a project team member they are less familiar with (or in tandem). Information can be gathered with pre-procurement questionnaires, architectural specifications and/or reporting forms. Each of these methods typically rely on early engagement on the part of the project team with supplying manufacturers and mills. See the Project Phases section to learn more about how early engagement can enable proactive and intentional procurement.

Source Forest Disclosure

In figure 2 below, suppliers can be asked to disclose information that can allow project teams to identify source forests that best match project goals and avoid sources that don’t. CSWG proposes three different levels and methods of disclosure:

• Level 1 disclosure starts with project teams working with their immediate (Tier 1) suppliers to identify primary mill(s) at the beginning of the supply chain for the product(s) they are procuring. Once the location of a primary mill is known, it’s possible to make an assumption about the supply area (also referred to as a wood basket or a fiber basket) for the timber. This is because most primary mills don’t source logs from farther away than a few hundred miles due to hauling costs. Thus, one can draw a circle around the mill to estimate where material is most likely coming from and conduct research on the working forests within that area. If one or more CSF operations are identified, then the mill can be asked to disclose if they are already buying timber from them or be encouraged to do so. Level 1 disclosure is necessary for achieving levels 2 and 3.
• Level 2 disclosure relies not on assumptions but rather on primary mills willingly providing more specific information on the working forests from which they buy logs. At minimum this should include landowner type (e.g., federal land, state land, family forest owners, tribes, etc,) by volume or percentage and general location (e.g., county or zip code). This type of generalized information maintains the anonymity of landowners and may be more palatable to mills that are reluctant to disclose information they consider sensitive. Level 2 disclosure provides a basis for level 3 disclosure.
• Level 3 disclosure relies on a primary mill and/or landowners within the supply area providing still more specific information on procurement, source forests and management practices. Achieving this level of disclosure can be challenging since some landowners may be reluctant to share information about their forests and how they are managed. In such cases, sensitive information could be protected through non-disclosure agreements. On the other hand, landowners who are practicing CSF may be eager to share information about their operations. In any case, it is at this level of disclosure that a much clearer understanding of how “climate smart” a wood source is can be achieved. See Procurement Option #3 (Intentional Sourcing from Climate Smart Forestry Operations)) for more information.

Sourcing material directly from specific landowners almost always requires segregation of logs at the primary mill, since that material would otherwise get mixed in production with logs from other sources. It is possible, however, to reward specific landowners indirectly through a mass balance system approach. For more detail, see the relevant section under Procurement Option #3.

Supply Chain Mapping

Disclosure of supply chain and source forest information can result in a supply chain map: a schematic depiction of all of the supply chain links (manufacturing and distribution steps) from forest(s) of origin down to the final product. It is not necessarily obligatory, however, to identify all the intermediary companies between a Tier 1 supplier and a primary mill in order to achieve transparency around forest sources.

Urban, salvaged and reclaimed wood supply chains are often simpler: removals can be documented at the point of origin by cities, schools, or landowners, creating a transparent record before logs enter log yards or mills.

Moving toward more transparent and intentional procurement can take different trajectories.

Before launching into a transparency effort, broad buy-in is necessary, from the project client to the design team to the contractor, since the level of effort and commitment can vary based on the sourcing pathway chosen. See the Project Phases section to learn more about advocating for and collectively choosing sourcing pathways and levels of transparency that are necessary to make credible claims around the wood being sourced.

[1] While often discussed in similar contexts, supply chain mapping and traceability serve distinct functions in sourcing CSW and supporting CSF. Recognizing their differences is important, particularly in complex supply chains where the two must be strategically combined. Supply chain mapping is the process of documenting and visualizing the network of suppliers, facilities, and processes potentially involved in the production of goods across different tiers of the supply chain. It typically involves mapping suppliers tier by tier, providing project teams with a network-level view that answers “who” and “where” and helping them understand the potential actors in their supply chains. While this is critical for transparency, in and of itself it does not deliver traceability which enables end users to connect a wood product to or from the forest(s) of origin to the final product. Mapping identifies the universe of potential actors, while traceability validates what actually happened to a specific product or material within that universe.

[2] For more information, see Preferred by Nature’s Due Diligence Toolkit, DD 16 https://www.woodrisk.org/digital-supply-chain-management-tools

[3] https://www.worldwildlife.org/pages/tnrc-topic-brief-traceability-systems-potential-tools-to-deter-illegality-and-corruption-in-the-timber-and-fish-sectors

[4] However, there is a large and growing library of reference data for US hardwoods.

[5] This said, supply chains that have CoC certification may be better able to provide granular traceability since some level of tracking is intrinsic to the system.