INTEGRATED REPORT
Working on the sustainable blueprint for forests to flourish
2021
Message from the CEO
About this report
ABOUT WOODBOIS
- Company Overview
- Vision, mission and values
- Origins of Woodbois
- 2021 in brief
- Substantial shareholders
- Organisational structure
- Governance
- The Board as of May 2022
- Our commitment
- Our stakeholders
- Materiality Analysis
OUR BUSINESS MODEL
- Vertically integrated value chain
- Value Creation
- Forestry: the bigger picture
- Forestry in Africa
- Forests and climate change
- Woodbois’ balanced approach
- Risks and opportunities
- Creating value
- Strategic priorities
THE CAPITALS
- Financial capital
- Human capital
- Aligning to international best practices
- Inclusion
- Health and safety
- Grievances
- Whistleblowing procedure
- Our people
- Contributing to the community
- Manufacturing capital
- Assets overview
- Operations in Gabon
- Trading
- Intellectual capital
- Code of Conduct
- Forest management in Gabon
- Management plan: how it works
- Relational and social capital
- Responsible trading & sourcing
- Due diligence process Traceability and transparency
- Engaging with local communities
- Natural capital
- Transparency
- Forest management and climate change
- Waste management
- Use of chemicals
- Firefighting
- Minimising the impact of logging roads
- The forest products value chain as an example of a circular economy
- Enhancing our impact
- FSC Certification
- Reforestation and carbon credit division
- Our reforestation efforts in Mozambique
message from the ceo
We have always aspired to be an active player in finding solutions that promote balance, and invest a great deal of talent, energy and money into developing our own sustainable blueprint for forests to flourish.
In the last few years, Woodbois has found a very particular and unique positioning within the timber industry. We have demonstrated that traditional metrics of business success, such as financial performance and positive numbers, are entirely achievable alongside meaningful action for a more sustainable future for people and planet.
It is no secret that the forestry sector is rife with challenges, and yet, proper and responsible forest management is essential to the future of humanity. We have always aspired to be an active player in finding solutions that promote balance, and invest a great deal of talent, energy and money into developing our own sustainable blueprint for forests to flourish. The establishment of our Carbon Division and its tireless efforts to launch its first reforestation project in Gabon is just one example of this.
I am very proud, then, that this year marked Woodbois’ first positive EBITDA. This achievement is all the more notable given the challenges of COVID-19 and the ongoing constraints imposed by the global shipping situation. It is a testament to our ability to adapt and reorganise.
Much of our success has been driven by our collaborative relationship with the Gabonese government. Open, constructive conversation is the norm here, which has enabled important progress in all areas of forest management. Indeed, Gabon is one of very few countries to have set clear guidelines for carbon project development and carbon rights. The climate ordinance released last year is evidence of the country’s strong will to work with responsible sector partners to protect and restore valuable natural capital. Leveraging this strength, Woodbois intends to replicate its strategy in other West African countries. At COP26 I was able to speak to government representatives from many of these countries, and I’m excited about the potential for additional afforestation projects.
In 2022, we intend to build on our growing success with a continued focus on environmentally-sound practices, active partnerships with governments and industry, and the generation of meaningful benefits for all of our stakeholders, from our investors to the people and communities where we operate.
Indeed, we anticipate 2022 to be another record year with a positive cash flow, further double digit growth, and significant planned headway in our carbon division. We have reviewed our commercial and operational strategy, focusing on increasing sales into European and North American markets, and we have an ambitious plan for additional veneer capacity which will lead to production increases from Q3 onwards. The entry into the carbon credit market will also play a major role in our future growth. With more than 5,200 of the world’s leading companies committed to achieving net-zero by 2050 as part of the Race to Zero campaign, the outlook for Woodbois has never looked more positive. All stakeholders can be proud of the positive impact we have on the communities in which we work.
Paul Dolan
about this report
INTEGRATED REPORTING < IR >
– The time frame considered is the 2021 fiscal year (ending 31 December 2021) for information relating to the reporting aspects, while the prospective framework refers to the upcoming three-year period (2022-2024).
– This report is based on the principles proposed by the International Integrated Reporting Framework () and published by the International Integrated Reporting Council (IIRC). As such, the report contains information that is both financial and non-financial in nature. Some of the information in the report refers to the standards set by the Global Reporting Initiative (GRI) and the Sustainable Developments Goals (SDGs) of the United Nations..
• Explains how an organisation creates, preserves or erodes value over time to all stakeholders.
• Aims to provide insight about the resources and relationships used and affected by an organisation – these are collectively referred to as the capitals (financial, manufactured, intellectual, human, relational and social, and natural capital).
• Reinforces the importance of integrated thinking within an organisation. This consists of analysing the relationships between the operating units and functions of an organisation, as well as the capital it uses or influences.
• Facilitates an integrated decision making process and actions aimed at creating value in the short, medium and long-term.
This report is referring to the UN SDGs and the GRI standards.
All disclosures made in this report are governed by the AIM regulation on reporting. Information on Economic Indicators provided in this report is therefore restricted and we advise investors and other stakeholders to consult the financial statements available on our website:https://www.woodbois.com/investors.
The world’s forests sequestered about twice as much carbon dioxide as they emitted between 2001 and 2019. In other words, forests provide a “carbon sink” that absorbs a net 7.6 billion metric tonnes of CO2 per year, 1.5 times more carbon than the United States emits annually.”
ABOUT WOODBOIS
COMPANY OVERVIEW
Woodbois manufactures and distributes sustainable African hardwoods and hardwood products to customers around the world. Founded in 2004, Woodbois is listed on the AIM section of the London Stock Exchange, one of the world’s leading growth markets for small and mid-cap companies. Woodbois sustainably managesover 156,000 hectares of natural forest concessions in Gabon and over 328,000 hectares in Mozambique.
On 6 August 2021, the Group acquired 100% of the shares and voting interests in La Gabonaise des Forêts et de l’Industrie du Bois (LGFIB). Through the acquisition of LGFIB, the Group acquired 71,000 hectares of forest concessions in Gabon. This additional hectarage, which is located within 100km of our manufacturing base in Mouila, will provide the increased levels of sustainably harvested timber required as additional production capacity comes online at our sawmill and veneer factory. No harvesting has taken place during the 2021 financial year in the newly acquired concession and therefore the acquisition of LGFIB has not materially contributed to the consolidated revenue and profit for the period.
In Gabon, Woodbois operates a 13 hectare sawmill and a fivehectare veneer factory in Mouila, capital of the Ngounié region in the south of the country. Both sites are located within 70km of the forest concessions, which are issued for 20-year terms. In Mozambique, Woodbois’ five hectare bushmill is located in Uape, in the Zambezia Province in the North of the country.
Woodbois has developed a sustainability strategy to define its core priorities and commitments which are used to align company actions with the UN Sustainabl Development Goals (SDGs) and with the London Zoological Society’s Sustainability Policy Transparency Toolkit (SPOTT). SPOTT has ranked the company sixth among more than 100 global timber and pulp producers and traders with a score of 71.6% compared to a 23.6% average.
The company’s established network of African hardwood suppliers and global buyers comprises over 50 different suppliers in Western Africa – 90% of which are concentrated in the Congo Basin – and almost 300 customers across 60+ countries.
In 2021, Woodbois established its carbon division with the aim of developing a project implementation model that can simultaneously deliver environmental, social and economic value.Withina12 month period, the team has made significant progress towards initiating a maiden project, which will entail a large-scale assisted natural regeneration scheme in the south of Gabon, designed to introduce indigenous forest to an area currently occupied by low value grasslands
Employee statistics
PRODUCTS
(Lumber, Veneer, Plywood)
manufactured at our own facilities or sourced from vetted and sustainably compliant third-party suppliers
PREDOMINANT SPECIES
- - Okoume
- - Padouk
- - Okan
INTERNATIONAL PRESENCE
& countries of operations
- UK: Office
- Denmark: Global trading headquarters
-
Gabon: Natural forest concessions on
20-year renewable licences located within
70km of sawmill and veneer factory -
Mozambique: Natural forest concessions
on 25- to 50-year renewable licences -
Mauritius: Operational headquarters for
Treasury, Forestry and Trading - South Africa: Office (finance function)
vision mission
&VALUE
OUR VISION
By taking meaningful action and seeking solutions internally and
externally, we strive to achieve a balanced forest management
system that serves as best practice for the whole forestry
industry. We intend to do this by thoroughly and consistently
implementing the ‘Woodbois Balance Blueprint’.
OUR MISSION
The world is out of balance, forests are out of balance, carbon
emissions are out of balance. Our mission is to become a role
model in forest management by redressing the balance.
OUR Values
PASSION for positive impact
INTEGRITY in our choices
TRANSPARENCY throughout our operations
WHO WE ARE
Our approach to sustainability lies in the constant search for balance. Starting with ourselves, we question
things that are out of balance and propose solutions to help counterbalance the current state of things. This
constant ‘balance-seeking’ mode is part of our culture and our vision of the world.
OUR APPROACH TO FORESTRY : THE BALANCED FOREST BLUEPRINT
We know that real balance is difficult to achieve and maintain, and must be continually searched for. It’s our way of thinking and doing things, looking at all aspects of forest management and wood production. It’s the reason why Woodbois has been so successful in Gabon. It’s our blueprint, and can be applied anywhere in the world.
We ask ourselves every day, what is out of balance? Are our operations efficient? Are we doing enough for nature? Are we making money? Are we taking care of our people? We constantly search for balance
ORIGINS OF WOODBOIS
2021
YEAR IN BRIEF
2021
YEAR IN BRIEF
- Turnover increased by 14% to $17.5m
(2020: $15.3m)
- Gross profit increased by 186% to $3.5m
(2020: $1.2m)
- Significant gross profit margin increase to 20%
(2020: 8%)
- Turnover increased by 14% to $17.5m
(2020: $15.3m)
- Gross profit increased by 186% to $3.5m
(2020: $1.2m)
- Significant gross profit margin increase to 20%
(2020: 8%)
SUBSTANTIAL
SHAREHOLDERS
The Company has been notified that the following have, at the date
of this report, an interest in 3% or more of the issued voting ordinary
share capital of the Company:
ORGANISATIONAL
STRUCTURE
Woodbois Limited’s organisational structure reflects our history and operational footprint. Our production, processing and manufacturing operations are based in Gabon (Woodbois Gabon) and Mozambique (Argento Mozambique). Woodbois International and WoodGroup are the group’s trading companies.
GOVERNANCE
In line with the Company’s commitment to enhance its corporate governance framework, the role of Chair and CEO has been split, with Paul Dolan serving as full time Chief Executive Officer and Graeme Thomson as Non-Executive Chair. In addition, David Rothschild was appointed to the role of Independent Non-Executive Director in November 2021.David serves as a member of the Audit, Remuneration and Nominations Committees.
The Board has adopted the Corporate Governance Code produced by the Quoted Companies Alliance (QCA).
We set out how the Group complies with the QCA Code below.
1. Establish a strategy and business model that promotes
long-term value for shareholders. Capital allocation must be both performance and potential driven, and investment will only be forthcoming for strategies that can demonstrate significant return to shareholders over time.
4. Embed effective risk management, considering both
opportunities and threats, throughout the organisation. The forestry and timber trading business involves a high degree of risk. Our approach to risk management is set out in the Annual Report for the year ending 31 December 2020.
5. Maintain the Board as a well-functioning, balanced
team led by the Chair. The Board is responsible for establishing the strategic direction of the Group, monitoring the Group’s trading performance and appraising, and executing development and acquisition opportunities. The Company holds a minimum of six Board meetings per year at which financial and other reports are considered and, where appropriate, voted on.
6. Ensure that between them, the Directors have
the necessary up-to-date experience, skills and
capabilities. The Nominations Committee oversees the requirements for and recommendations of any new Board appointments to ensure that it has the necessary mix of skills and experience to support the Company’s ongoing development. Any appointments made will be on merit, against objective criteria and with due regard
for the benefits of diversity on the Board, including gender. The Nomination Committee is also responsible for succession planning.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement. The internal evaluation of the Board, the Committees and individual Directors is seen as an important next step in the development of the Board.
8. Promote a corporate culture based on ethical values and a laser sharp focus on behaviours. The Company is committed to complying with all applicable laws and best corporate governance practices, wherever we operate. It is a core aspect of our mission to act with integrity in all of our operations. The Board expects all employees to comply with both the letter and spirit of the law and governance codes.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board. The Company is committed to high standards of corporate governance. Both Management and the Board are dedicated to implementing best practices as the Company grows
10. Communicate how the Company is governed and is performing, by maintaining a dialogue with shareholders and other relevant stakeholders. The The company encourages regular communications with its various stakeholder groups and aims to ensure that all communications concerning the Group’s activities are clear, fair, and accurate.
THE BOARD AS
OF MAY 2022
• Overall Group strategy
• Approval of major capital expenditure projects
• Approval of the annual and interim results
• Annual budgets and revisions thereto
• Approval of extraordinary activities (M&A)
paul dolan
CEO
Paul held senior management positions at Barclays, DE Shaw, and Nomura prior to joining Woodbois in 2016. Paul has consistently built award-winning, world-class teams employing technology to manage substantial pools of human and financial capital across a diversified group of asset classes, ranging from fixed income and equity derivatives to forestry
CARNEL GEDDES
CFO
Carmel is a dual-qualified chartered accountant in the UK and South Africa and is also a certified fraud examiner. During a 15-year career at the global audit, tax, and advisory group BDO, Carnel served as Director of Forensic Services at BDO London and Partner of BDO Cape Town. She has been a Director and Board Member of Pomona, the largest South African pomegranate farm company, since 2008.
HADI GHOSSEIN
Deputy Chair
Based in Gabon, Hadi has 25 years of experience managing forestry operations, including full ownership of a forestry business. He previously served as a diplomat, traveling extensively across Africa, as well as owning various trading and real estate companies. Hadi is fluent in Arabic, French, Portuguese and English and holds Gabonese citizenship
HENRY TURCAN
Non-Executive Director
Henry is a representative of the funds managed by Lombard
Odier. Henry has worked in financial services since 1996,
with a focus on equity capital markets. He has spent the
majority of his career advising growth companies within
investment banking.
GRAEME THOMSON
Senior Independent Non-Executive Chair
Senior Independent Non Executive Chair Graeme is a Fellow of the Institute of Chartered Accountants in England and Wales, and has been a public company director for many decades, as a CEO, CFO/Company Secretary, and as a Non Executive. He has a wide variety of the commercial UK and international experience.
DAVID ROTHSCHILD
Independent Non-Executive Director
As a senior manager and adviser, David has a wide range of experience in growing businesses and improving their performance. He has been active in the African resource and agricultural sectors over the past 20 years, including as co-developer of a Liberian green-field sustainable palm oil operation, and as advisor on environmental and social action planning. He has also been actively involved in governmental and NGO relations and was an early steering committee member of the High Carbon Stock Approach Group, which ensures responsible development. A French speaker with over 40 years’ experience in international business – including six years at consultancy McKinsey & Co – he is a dual national of the USA and South Africa, and holds both B.Com and MBA degrees.
OUR
COMMITMENT
Woodbois strives to bring an increasing range of social and environmental benefits to our communities on both a local and national level. At the heart of our strategic growth objective is a particular focus on regional employment opportunities and skills development.
We are committed to providing a safe environment for all staff and parties for which we have responsibility. Our company believes that protecting whistleblowers is integral to safeguarding public interest, promotes a culture of accountability and integrity in both private and public institutions, and encourages individuals to report corruption, misconduct and fraud. We believe that a person raising concerns should be supported and protected against reprisals, and Woodbois will not tolerate the victimisation or adverse treatment of any employee who has raised a concern.
Woodbois is committed to ethical and fair conduct, as
well as the prohibition of corruption, including bribery and fraud. We work to uphold these commitments by implementing the corporate best practices outlined in SPOTT, and adhering to definitions and guidelines published by leading international organisations.
We ensure that this ethos is integrated throughout the entirety of our operations by conducting due diligence before establishing new business relationships with any suppliers (this process is described in this report’s ‘Responsible production and trading’ section). We systematically inform third parties of our policies so they are aware of our standards and expectations, and we will terminate partnerships or avoid them altogether if third-party companies cannot guarantee acceptable standards for wood procurement, which are verified by our legality audits.
Sustainability sits at the core of everything we do. As well as strictly adhering to responsible forestry guidelines set out by relevant governments, and by actively engaging with local communities, we strive to demonstrate sustainable eadership within our industry with bold targets designed to protect our natural environment. Woodbois is committed to creating net-zero CO2 emissions from its combined activities and aims to achieve a balance between the greenhouse gases it produces and the amount it is able to sequester from the atmosphere by 2035.
Woodbois is committed to transparency and the clear articulation of all of its objectives. Our strong internal accountability mechanisms have been designed to effectively implement commitments as well as ensure that outcomes are measured and communicated efficiently.
OUR
STAKEHOLDERS
Woodbois strives to bring an increasing range of social and environmental benefits to our communities on both a local and national level. At the heart of our strategic growth objective is a particular focus on regional employment opportunities and skills development.
Holistic approaches to achieving more sustainable production and consumption practices are emerging. These approaches incorporate systems-thinking, business model innovation and the circular economy. Tackling sustainability issues will therefore involve taking different stakeholder perspectives into account and collaborating across the value chain. These perspectives include those from investors’ local communities, high-level representatives from international organizations, local governments, industry experts, suppliers, customers, end-consumers and NGOs.
Our ongoing pursuit of sustainable accreditations led to our engagement with PPECF1, the Programme for the Promotion of Certified Exploitation of Forests (Programme de Promotion de l’Exploitation Certifiée des Forêts). The objective of the PPECF is twofold: one, to prevent the loss of certification in companies already certified, and two, to support the third-party certification process. Through this program COMIFAC2 (Commission des forêts d’Afrique Centrales) and German state-owned development bank KfW offer forestry companies support until their initial certification audit. Once this is completed they are better positioned to more easily meet the requirements of the European Timber Regulation3 (EUTR).
We’ve also continued our partnership with Congo Basin Forest Partnership (CBFP)4 , and in 2021 we joined forces with the European Forest Institute (EFI)5 an international organization established by European
States, which conducts research and provides policy support on forest-related issues, connecting knowledge to action.
Also in 2021, Woodbois joined ATIBT6 , the trade association representing and defending the interests of those in the private tropical forest sector, and applied to become member of UFIGA (Union of Foresters and Industrialists of Gabon), a professional union created in 2003 with the sole purpose of studying and defending the economic, material and moral interests of its members exercising forestry activities.
Our shareholder commitment translates to direct on-the-ground action. We regularly engage with our suppliers to align policies and commitments towards increased transparency and sustainability. We also regularly engage with our employees to collect their feedback to help us create a positive, safe and healthy work environment that provides development and growth opportunities. The remote communities in which we operate are deeply dependent on forests – understanding their needs, supporting their development and helping local causes is core to our business.
One of Woodbois’ largest shareholders, Lombard Odier, recently announced a new Natural Capital Strategy7, developed in partnership with the Circular Bioeconomy Alliance8 , to invest in companies that utilise the renewable aspect of nature with a core focus on the timber sector. This Natural Capital Strategy is in line with Woodbois’ plans. The company has developed a five-layer approach to making sure our business objectives are aligned with the Circular Bioeconomy Alliance’s proposal:
-
1. Certification for natural forest through Legal
Source (LS) and Forest Stewardship Council (FSC) -
2. Expand production capacity and forest under
management -
3. Reforestation in the form of plantation or natural
forest alongside partners -
4. Reduce timber waste by utilising as much raw
material as possible, by upcycling or recycling our
waste through energy generation or new markets -
5. Capital expenditure to move further down the
timber value chain.
- 1. Certification for natural forest through Legal Source (LS) and Forest Stewardship Council (FSC)
- 2. Expand production capacity and forest under management
- 3. Reforestation in the form of plantation or natural forest alongside partners
- 4. Reduce timber waste by utilising as much raw material as possible, by upcycling or recycling our waste through energy generation or new markets
- 5. Capital expenditure to move further down the timber value chain.
MATERIALITY
ANALYSIS
In Integrated Reporting, a matter is material if it can substantively affect the organisation’s ability to create value in the short, medium and long term. The process of determining materiality is entity-specific and based on industry, multi-stakeholder perspectives and other factors.
A materiality analysis is an exercise that identifies a company’s critical Environmental, Social and Governance (ESG) issues. It engages with internal and external stakeholders to build a full and accurate picture of all organization issues and then use these insights to define core business priorities, guiding both strategy and communication.
Woodbois followed this approach as part of our last annual Sustainability Report, where we worked on defining the organisation’s material matrix. This year, we submitted our materiality survey to a wider range of stakeholders to have them validate our results from the previous year. The relevant issues for Woodbois were identified using the SASB Materiality Map10, which analyses the operational performance of companies in various industries, including the construction material and forestry sectors.
1. Identify and prioritise the relevant issues
2. Identify internal and external stakeholders
3. Design a materiality survey
4. Launch the survey and start collecting insights
5. Identify the critical issues and develop a materiality matrix
6. Define a sustainability strategy based on material priorities
7. Set long- and short-term KPIs and improvement goals
As a result of this process, the most important issues have been identified and are represented in the Woodbois 2021 materiality matrix.
OUR BUSINESS MODEL
VERTICALLY
INTEGRATED
VALUE CHAIN
Value
creation
As investors and end customers become progressively concerned about social impact, climate change, and corporate responsibility, companies are facing increasing scrutiny and are expected to be held accountable for their business practices. It is therefore vital that a business strives to create value – social and environmental, as well as financial – across its operations, both now and in the long-term. As McKinsey notes in its report, The Value of Value Creation,
“Investing for sustainable growth should and often does result in stronger economies, higher living standards, and more opportunities for individuals.”
THIS IS THE VALUE WE WANT TO DELIVER.
According to the Integrated Reporting framework, the value a company creates, preserves or erodes has an impact on two levels: on the company itself, which affects capital return for investors; and on society at large. Given this, investors evaluate companies based on these two value streams (i.e. identifying whether a company can create value for a broader range of societal stakeholders while also creating value for itself). A wide range of activities, interactions and relationships can have an impact on the interrelation between these two value streams. When these interactions, activities, and relationships are material to a company’s ability to create value for itself, they are included in the Integrated Report.
OUR
STAKEHOLDERS
Woodbois strives to bring an increasing range of social and environmental benefits to our communities on both a local and national level. At the heart of our strategic growth objective is a particular focus on regional employment opportunities and skills development.
Deforestation is increasing, with last year seeing a particularly steep rise: at least 42,000km2 of tree cover was lost in key tropical regions. According to data from the University of Maryland and the online monitoring platform Global Forest Watch, this loss was well above the average for the last 20 years. In total, 12.2 million hectares of tree cover were lost in the tropics in 2020, an increase of 12% on 2019.12
Forests are of critical local and global importance. They are home to some 70% of the world’s plant and animal species, including the pollinators essential to the sustainability of our food systems. Forests play a central role in the equilibrium of delicate ecosystems that supply water to communities and plants for medicines, and – crucially – they are the planet’s largest carbon sinks, absorbing and sequestering CO2 from the atmosphere and helping to mitigate the worst effects of climate change.
BUT FORESTS ARE UNDER THREAT
CLIMATE CHANGE
While forests help to mitigate the impact of climate change, they are themselves at risk of its consequences. These include destruction by wildfires and storms, as well as devastation by invasive species encouraged into the area due to temperature and precipitation changes.
ILLEGAL LOGGING
Illegal logging is responsible for the destruction of swathes of forest, leaving behind areas of land so badly affected that natural regeneration is no longer possible. This practice also contributes to biodiversity loss, conflicts with indigenous and local populations, corruption and both human and animal rights abuses
POPULATION GROWTH
It is projected that the world’s population will reach nearly 10 billion by 2050. This will put extreme strain on resources provided by forests, including natural materials for manufacturing and land mass for increasing urbanisation.
FORESTRY IN
AFRICA
The forestry sector in Africa is fragmented. Much of the deforestation caused by logging is the result of unsanctioned forest clearing outside of regulated concession areas. Combined with the formal market, logging in Africa is therefore dominated by thousands of small-scale producers that are largely isolated from global end markets. This isolation means producers often view the forest and its resources as a short-term means to an economic end (often driven by poverty), rather than a long-term asset requiring best practice sustainability and conservation efforts.
Local timber suppliers also face challenges in the form of high costs related to certification and management capacity, creating an obstacle to identifying companies that meet their sustainability requirements. This is only compounded as timber changes hands. This traceability the problem can ultimately result in the manufacturing of end products sourced from forestry operations contributing to deforestation
GABON 1 3 is home to some 23.5 million hectares of forest area, which represents 87% of the country’s total area. All of the Gabonese forest areas are owned by the state, though some are managed by private concessionaires or rural communities exercising their customary rights, while some remain protected as national parks.
Gabon faces a relatively low rate of forest loss at 0.12% per year, with an average degradation rate of 0.09%. Deforestation is a result of small-scale agriculture and urban development, while the main causes of forest degradation are industrial mining and illegal logging in opened-up areas.
GABON BELIEVES IN ITS FORESTS
Despite Africa’s wider challenges, Gabon has emerged as a leader in sustainable forestry. In June 2021, Gabon became the first African country to receive payment for protecting its rainforest by reducing carbon emissions. The UN-backed Central African Forest Initiative (Cafi) is a $150 million program first negotiated in 2019.14 The first payment
of $17 million represents just 0.1% of Gabon’s annual GDP, however the initiative has been widely praised as an important first step in strengthening rainforest protections and maintaining Gabon’s efforts in this area. The rest of the $150 million will follow in the coming decade.
The Gabon Government believes that careful, managed logging is a vital component of these protections. In partnership with The Nature Conservancy, Gabon has tested RIL-C (reduced impact logging for climate), which permits the cutting of just one or two trees per hectare, with 25-year breaks to allow areas to recover. Forecasts suggest this will help reduce logging emissions 50% by 2030 and maintain low deforestation and forest degradation, even as timber production grows.15
This is the balance that Woodbois strives for. As Gabon’s Forests Minister Lee White said in November,
“There has to be a fair deal for Gabon. And we believe the fair deal does involve sustainable forestry. If you do it right, you keep the forest. If you do it wrong, you lose the forest.” 16
WOODBOIS ' BALANCED APPROACH
Achieving the UN Sustainable Development Goals (SDGs)17 by 2030 will require the implementation of a circular economy, better use of renewable resources, and the regeneration and sustainable management of natural systems.
FORESTS &
CLIMATE CHANGE
• Forests help stabilise the climate. They regulate ecosystems, protect biodiversity, play an integral part in the carbon cycle, support livelihoods, and can help drive sustainable growth.
• To maximise the climate benefits of forests, we must keep more forest landscapes intact, manage them more sustainably, and restore more of those landscapes which we have lost.
• Halting the loss and degradation of natural systems and promoting their restoration have the potential to contribute over one-third of the total climate change mitigation scientists say is required by 2030.
International Union for Conservation of Nature (IUCN)]
Woodbois recognises the role it must play in advocating for sustainable forest management if we’re to ensure the longevity of these important natural environments. We are committed to demonstrating positive leadership in this area, and doing so brings about a wealth of social, environmental and business opportunities, both for us as a company, and for the wider population. In engaging with the SDGs, our aim is to drive the sustainable development of Africa while embracing the continent’s move towards higher value-adding activities. This includes creating newand better job opportunities in secure work environments where skills development and equal opportunities are encouraged
Leading the way in aligning our sustainability strategy with the SDGs is Hadi Ghossein, who oversees Woodbois’ sustainability practices on a day-to-day basis, and our Reforestation and Sustainability Manager in Mozambique, Eng. Macedo Uachuacho, who graduated from Eduardo Mondlane University in Forestry Engineering and has 12 years’ experience in the field working with different government entities and NGOs. In 2021, we also welcomed Richard Feteke, who oversees forest management n Gabon and is managing Woodbois’ LegalSource and FSC certification process.
ENVIRONMENTAL PRESERVATION (SDG 13,15)
Managing forests sustainably not only mitigates the directnclimate impact of wood procurement, but can be conducted in such a manner as to facilitate additional carbon sequestration, to the benefit of the global community.
SOCIAL IMPACT (SDG 8, 10)
Sustainable forest management means respecting the rights of local communities, and positively contributing to their development and wellbeing.
ECONOMIC GROWTH (SDG 8, 9,12)
Suppliers, consumers and skakeholders are increasingly demanding sustainable credentials in the companies they do business with. Those that choose to conduct business in a manner that overlooks environmental factors will ultimately be at a significant competitive disadvantage. The more people that advocate for sustainable forestry, the fewer opportunities there will be for those engaged in nunethical practices.
LEADERSHIP AND CULTURE (SDG 8, 10)
Sustainable forestry depends on the ample provision of training and development opportunities. This investment in employees helps to promote loyalty and motivation, while creating a culture of ethical practice that will contribute to a wider respect – and therefore protection – of forests.
GLOBAL PARTNER SHIPS AND KNOWLEDGE SHARING (SDG 17)
Woodbois’ inherent relationship with the environments inextricably linked to the climate crisis (forests) means that through partnerships with government and other institutions we have a significant role to play in bolstering other industries’ sustainability initiatives.
Risk & Opportunities
Forestry and timber trading involves a high degree of technical, political, regulatory, and environmental risks, as well as financial risk. Woodbois takes a prudent approach to manage these risks in line with its corporate objectives
RISKS
- • Rise in forest maintenance and harvesting costs
- • Price pressure and increased demand for low cost products not necessarily sustainable
- • Increased transportation costs
- • Operational disruption due to environmental, political and social events
- • Operational disruption due to technical production issues or health and safety incidents
- • Reputational damage due to unsustainable or unethical practices related to its own activities or those of its suppliers
- • Degraded soil or land due to deforestation, erosion or climate change
- • Financial risks related to market pricing, liquidity, interest rates and credit
OPPORTUNITIES
- • Process optimisation and implementation of circular solutions to reduce cost and dependency on production inputs
- • Making sustainability part of the company's DNA and narrative, creating an opportunity to be recognised as an ethical supplier, partner and employer
- • Satisfy the demand of Africa’s growing population with affordable and sustainable building material solutions
- • Competitive advantage through state of the art equipment and advanced risk management
- • Launch new forest conservation and reforestation projects by leveraging the company’s unique position in forestry to diversify into the carbon offset market
STRATEGIC
PRIORITIES
Fulfilling the potential of sustainable forestry in Africa18 depends on a number of factors, including regulation, management, a focus on local production and the promotion of intra-African trade. As an operator in a very fragile industry, environment and region, Woodbois is committed to running its business in a way that takes these considerations into account. The Forest Sector SDG roadmap19 , as well as the SPOTT framework, have been used as references to define our strategy and commitment to sustainable # forestry.
Our strategic priorities define how Woodbois intends to mitigate and manage risks and maximise opportunities, and demonstrate our commitment to environmental, social and governance (ESG) best practice. Our impact on each capital will be monitored and presented annually through the company’s integrated report.
THE CAPITALS
Financial CAPITALS
We cannot drive a responsible business without healthy economic growth, and this cannot happen withoutmthe personal and professional development of our employees, as well as adequate salaries to support their families and subsequently, drive the growth of their local communities. On a wider scale, our work must also drive the growth of African countries, which represent a large potential market for many businesses operating in different industries.
Woodbois’ operations generate and distribute economic value to the countries in which we operate. The communities we work in are typically quite remote and many are subsistence economies. As such, our continued presence and work in these communities is determining factor in their ability to evolve and grow economically. Our vertically integrated value chain ensures that 100% of Woodbois’ products are processed in Africa, elevating productivity, creating new opportunities for skills development, advancing local processes, and ultimately bringing these countries international exposure through the export of locally-produced products, and not just raw materials.
The Company improved on all measures of financial performance in 2021, increasing turnover by 14% and making significant progress by more than doubling gross profit margins, near trebling gross profit, and a first-ever positive EBITDAS. Volumes shipped during 2021 were constrained by worldwide port congestion and difficulties in accessing empty containers which impacted our cash generation and working capital, particularly in Q4.
HUman CAPITALS
We recognise the value of our people. We are committed to their development, and their health and safety is our top priority. We invest in the continued professional and personal development of all of our staff, we ensure fair compensation, diversity and inclusion throughout the organisation, and we are proud to proactively fight any kind of discrimination.
• Gender inclusion i.e. supporting the inclusion of women across forestry operations<
• Providing essential community services and facilities
• Respecting worker and labour rights for both fulltime and contract employees, including the right to decent work and freedom of association
• Preventing employment and occupation-related discrimination based on gender
• Paying at least the minimum wage
• Ensuring ethical and fair conduct, and fighting corruption
Woodbois’ commitment to human rights and occupational health and safety applies to all suppliers.
Employee wages in gabon and mozambique
Before April 2021, the minimum legal monthly wage in Mozambique was 4,600mt (73.6$) and Woodbois paid its workers 6,700mt (107.2$) a month at this time.
In April 2021, the minimum legal monthly wage in Mozambique increased to 7,450mt (116$) and Woodbois increased its wage to this level. From July 2022, the government in Mozambique will increase its monthly wage to 9,485 mt. Woodbois will then increase its wage to comply with the country law.
In Gabon, the minimum monthly wage (before bonus and premiums) imposed by the government is 87,000fcfa (140$)and Woodbois pays its employees 110,000fcfa (177$) per month.
ALIGNING TO INTERNATIONAL BEST PRACTICES
Woodbois aligns to international best practices such as the Fundamental ILO Core Conventions, ILO Code of Practice Safety and Health in Forestry Work, the UN Declaration on the Rights of Indigenous Peoples, and the United Nations Declaration on Human Rights.
We are committed to extending these international best practices to all of our sourcing and suppliers.
In the second half of 2020, the company began providing educational training around issues such as:
- • human and workers rights
- • ethical conduct
- • eliminating gender inequality within our workforce
In 2021, the company further formalised this process by hiring a dedicated ESG manager (Richard Feteke) in Gabon, who will supervise this initiative.
inclusion
Woodbois pays female employees the equivalent of 100% of a male employee’s salary in Gabon and Mozambique, which is above the national average (source: Gender Gap Africa). Woodbois continues to be committed to reducing the wider industry gender pay gap and to supporting the inclusion of women across all our forestry operations.
Our company is an equal opportunity employer, committed to driving inclusion and diversity in the organisation wherever possible through recruitment, training, career development and promotion.
Eliminating discrimination starts with dismantling barriers and ensuring equality of access to training. We are committed to preventing employment- and occupation-related discrimination based on gender, and believe this is an essential prerequisite for building resilient and socially-minded economies.
We are also committed to keeping employees as fully informed as possible with regard to the Group’s performance and prospects, and seek their views, wherever possible, on matters which affect them as employees.
Woodbois’ commitments apply to all suppliers.
HEALTH & SAFETY
At Woodbois safety comes first. We are committed to ensuring the safety of all of our employees, contractors and the communities within which we operate.
Though coronavirus lockdowns again reduced shifts and the number of employees allowed at Woodbois manufacturing sites during 2021, we took this opportunity to invest in upskilling and training, with a heavy focus on health and safety
We also implemented continuous improvement initiatives and lean manufacturing processes with the idea of building a culture where everyone is encouraged to contribute to enhancing workplace safety and production efficiency.
The impact has been considerable – we have since set consecutive production records and consider our approach to continuous improvement to be of a world-class standard. We work hard to foster a culture of safety championed by all employees through a dedicated action plan and rigorous monitoring, including:
- • Walk the talk’ leadership
- • Consequence management
- • Engineering controls to eliminate risk
- • Administrative controls to mitigate risk
- • Post-incident root cause analysis and corrective actions
- • High quality, regularly-renewed PPE for all workers, adapted to individual roles
- • First aid training and onsite nurses
- • Regular medical check-ups
- • Comprehensive safety information displayed in all areas, vehicles and on all machinery used
- • The provision of a first aid kit to each work team
- • First aid training and fire safety sessions for all workers
- • Systematic reminders of safety rules before entry to the site
– 800 HOURS OF TRAINING IN 2021
– ZERO WORK-RELATED FATALITIES WERE RECORDED
– 102 TOTAL LOST TIME INJURIES IN THE WORKPLACE
– 2.67% TOTAL RECORDABLE INJURY FREQUENCY RATE (TRIFR)
Reforestation team member in Mozambique wearing PPE
GRIEVANCES
Woodbois has an established company-wide grievance framework that is accessible to both internal and external stakeholders. It is our policy to ensure that all employees have access to procedures to help deal with any workplace grievances fairly and without unreasonable delay. This policy applies to all employees.
WHISTLe blOWING PROCEDURES
- • Employee becomes aware of any malpractice, and immediately reports it to their Line Manager
- • The Line Manager notifies the Group Compliance Office (the Chief Financial Officer will act as Woodbois’ Group Compliance Officer)
- The Line Manager provides formal feedback to the employee and Group Compliance Officer of any investigation conducted and the resulting actions taken
- • If the employee feels the matter has not been resolved to their satisfaction, they can raise their concerns directly with the Group Compliance Officer
- • In instances where the employee does not feel comfortable reporting a potential malpractice to their Line Manager, they are encouraged to raise any concerns directly with the Group Compliance Officer, the Chairperson of the Audit Committee, or the Company Secretary, any of which will investigate the matter promptly, confidentially and sensitively
- • The whistleblower will usually be invited to attend an investigation meeting to discuss their concerns
- • The Group Compliance Officer will provide formal feedback to the employee and Audit Committee of the investigation, and resulting action will be taken
OUR PEOPLE
JACOB HANSEN:
Copenhagen Office Director
Copenhagen-based Jacob has been with Woodbois since the very beginning. “When we first started the company, we applied to many banks for a loan and got a lot of rejection,” he says. “One bank agreed to see us, and offered us a VIP parking space in front of the premises for the meeting, but since we were driving such an old car we decided to walk on foot instead!” But, he adds, “we did get the loan”. His best business advice? “Be patient and avoid ‘panic solutions’. You can’t solve problems in a rush.” Jacob is proud of the success Woodbois has seen since its beginnings in 2005: “Being named the fastest-growing company by the Danish Stock Exchange being all over the papers was a big achievement.”
METTE BIRCHHOLDT :
Payments Controller
Copenhagen-based Mette has been with Woodbois for 14 years, initially joining the company because she wanted to do something that made a difference. This ethos is reflected in her commitment to cycling. Since 2008 she’s been cycling six kilometres to the office and six kilometres back again. “This should be more common,” she says. “Cycling is a great alternative to petrol use.” Her goal for this year? “Try to keep up with the inbox!”
ADRIANO RAFAEL:
Company Administrator
Adriano is from Chokwe in the south of Mozambique, and currently lives in Maputo City. He joined Woodbois in October 2016 as a logistics assistant. Now serving as company administrator at Argento Mozambique, he says he’s proud to have built such a strong 40-person team which performs even more efficiently than previously larger teams. He’s also very happy that Argento Mozambique is among the five best-ranked concessions in terms of operational strategies and compliance. His best advice? “Always listen before replying and spend less to invest more – always keep sustainability in mind.
AlIN BOMA :
Veneer Sheet Sizing Technician
Gabon born-and-bred Alin has been with Woodbois since 2009. “My greatest achievement is staying focused in this role – I was so happy to celebrate 10 years with the company back in 2019,” she says. Her advice? “Always try to work on something you enjoy.” Her goal for this year is to build a house for her bfamily.
ANJU LOCHEE :
Group Finance Manager
Mauritius-based Anju has been with Woodbois since 2018 and is a big believer in teamwork. “We must always work as a team to achieve the best results,” she says, adding that her goal for this year is to work together as a team to bring higher profits to the company. She says that her best achievement so far is consistently meeting tight auditing deadlines with zero audit adjustments.
CONTRIBUTING TO THE COMMUNITY
Woodbois is committed to supporting local businesses in order to make a valuable contribution to the communities of Gabon. One such example is Woodbois’ very own Picasso, real name Guy Christian Mabikais. Originally from Congo, Guy moved to Gabon in 2001, and was made redundant from his job in 2016. Struggling financially, he decided to embrace his passion and talent for art, and in 2017 began offering his services as a road sign maker to local companies. A friend introduced him to Woodbois, and by the end of 2021 Guy – subsequently baptised ‘Picasso’ by the Woodbois team – was working full time for Woodbois as a contractor.
He’s since created
400 SIGNS
maintain a regular income all year long.
MANUFACTURING CAPITAL
We take a proactive approach to investment in energy efficient equipment in order to drive down both costs and emissions, and we make the most of the plentiful renewable resources available to us. We use wood, for example, to create circular solutions that further meet our energy requirements
- • 0 chemicals and pesticides
- • 100% of the logs processed in Woodbois sawmills come from company-owned operations
- • Our productivity in 2021 increased by 88% in terms of sawmill output, 86% in terms of veneer output and 31% in terms of the volume of logs harvested, compared to 2020
- • Acquisition of additional 71,000 hectares of forest concession land in Gabon in the area of Yeno, Mimongo.
The Group continued the roll out of its strategic plan during 2021 with capacity at the sawmill in Mouila, Gabon, almost doubling to 30,000m3 of annual sawn timber output. Value-adding capital projects have continued into 2022 with capacity at our veneer factory in Mouila expected to more than double to an annualised output of 15,000m3 . Significant challenges, most notably the ability to receive machine parts by sea freight, have delayed the completion of this installation: full commissioning is expected to be completed by June 2022. The acquisition of an additional 71,000 hectares (of which 56,000 hectares has an existing approved management plan in place for harvesting) of valuable forest concession land in Gabon during 2021 will more than satisfy the additional raw material input requirements of these expanded production facilities.
OUR FACILITIES
asset overview
OPERATIONS
IN GABON
With more than 156,000 hectares of forest under management, Woodbois has been a significant player in the Gabonese forestry sector for the last two decades. Woodbois has invested significantly into its leading sawmill in Mouila, equipping it with the latest European machinery suitable for African hardwoods, and establishing solid training and development programmes to broaden the skillset of the local workforce. For example, a Primultini bandsaw was added to increase our processing capacity, enabling us to cut long timbers of multiple sizes at the same time. We have also hired industry-leading forestry professionals to advance this site, and to move the company’s offerings further along the timber value chain into products such as blockboard.
Our veneer factory was completed in 2019 as part of our expansion plan and is also located in Mouila, just 50km away from our forest concessions. A second line is planned for 2022 which will enable us to triple our daily production and offer a wider range of products to our customers. This will also bring at least 50 new employment roles to the Mouila’s community. Production from the factory – which employs a significant proportion of women – is exported mainly to the Mediterranean region, with key buyers in Italy, Morocco and Turkey.
Ms. Inssaf Aliazzi is the manager in charge of logistics and shipping in Gabon.
TRADING
Woodbois responsibly sources and trades products from several international – mainly African – countries. The chart below shows the list of countries we source from.
20,200 m3 of timber sourced from third-party supplying mills and traded, representing 59% of the total timber traded (34,427 m3).
INTELLECTUAL CAPITAL
Our material issues – equal rights, conflict resolution and legal harvesting – can be addressed through the consistent application of our three key priorities: leveraging leadership role modelling to live up to the value of integrity and transparency; ensuring ethical conduct and anti-corruption best practices are in place; and ensuring labour rights are met fully.
CODE OF
CONDUCT
1. SAFE AND HEALTHY WORKING CONDITIONS
- We commit to promoting and protecting the safety and occupational health of our entire workforce above all other priorities
- At Woodbois we are focused on providing a safe and healthy workplace by ensuring that tools and equipment are maintained in good order, and by supplying appropriate personal protective equipment in accordance with international standards and national laws.
- All employees receive training to ensure they are competent and fit to carry out allocated duties. This includes information about risks and relevant control measures, procedures for safe evacuations of buildings and workplaces, and correct use of tools and machinery. We recognise that all staff have the authority to halt work if they consider the action unsafe.
2. ENVIRONMENT
- We commit to protecting and respecting the natural environments in which we operate.
- We strive to reduce the environmental impact of our global operations and to help conserve natural resources by planning and managing operations with a sustainability focus.
- We monitor and report our environmental impacts, and ensure that all operations comply with environmental laws. Our production team strives for continuous improvement through waste minimisation, efficient resource use and other measures that reduce our environmental footprint
3. LABOUR AND HUMAN RIGHTS
- We support the United Nations’ Universal Declaration of Human Rights.
- We respect each individual's human rights and follow all employment laws and regulations. We do not tolerate any form of workplace discrimination, harassment or physical assault, or any form of child, forced, or compulsory labour.
- Employees are paid regular and competitive wages, and Woodbois regularly invests in resources and training to assist staff who want to develop their full potential.
4. HOST COMMUNITIES
- We recognise the importance of community engagement and shared prosperity
- We engage with communities at all stages of project planning and development to ensure that local opinions, feedback, and concerns are properly recorded and addressed.
- We believe it is possible to deliver real socio-economic impact through our regional activities by developing infrastructure, building local skills, and developing people.
- All employees receive training to ensure they are competent and fit to carry out allocated duties. This includes information about risks and relevant control measures, procedures for safe evacuations of buildings and workplaces, and correct use of tools and machinery. We recognise that all staff have the authority to halt work if they consider the action unsafe.
5 .SUPPLIERS ,CUSTOMERS AND OTHER BUSINESS PARTNERS
- We commit to fair and ethical relationships with suppliers, customers and other business partners.
- We endeavour to build long-lasting relationships based on fair selection, clear terms of business, and adherence to shared principles set out in our Code.
- We follow established due-diligence procedures that enable us to select business partners who meet legal requirements and internal expectations in regards to product provenance, supply chain safety and environmental impact.
- Woodbois is committed to purchasing third-party timber only where it is possible to ensure legal compliance of suppliers. The company unreservedly condemns illegal logging and irresponsible trade of endangered species.
6. EQUALITY
- We commit to creating an inclusive environment where every colleague is valued.
- At Woodbois, all employees are expected to treat each other with care and respect. We strive to provide employees with an environment where they can bring their whole self to work regardless of gender, race, sexual orientation, age, religion or disability.
- We seek to reflect the diversity of the regions and communities in which we operate within our own workforce
- and respect the rights of employees including the freedom of association and collective bargaining.
7. BRIBERY
- We stand against bribery and corruption.
- It is not permitted for any Woodbois employee or representative to give, offer or receive a bribe either directly, indirectly, or through a third-party business in any dealings.
8. TRADE CONTROLS AND SANCTIONS
- We comply with all applicable trade controls and sanctions in the regions where we operate and trade.
- The export of timber goods is subject to a range of regulatory requirements in different regions. Woodbois maintains constant dialogue with relevant government and trade bodies to ensure it satisfies registration requirements, export licence needs, and all additional legal obligations.
- Woodbois is conscious that governments and international organisations may impose international trade sanctions on countries where the company operates. We are committed to complying with all trade sanction conditions.
9 . ACCURATE RECORDS , REPORTING AND FINANCIAL RECORDKEEPING
- We commit to publishing accurate and transparent company reports
- We endeavour to release regular operational, financial and integrated reports for the benefit of company stakeholders. Financial statements are produced in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU).
10. TAX
- We commit to paying the right taxes. Woodbois strives to understand and comply with the legal
- and regulatory obligations for taxation arising from its operations.
- We are committed to full compliance with external and company reporting requirements, including those concerning disclosure to tax authorities and reporting on the tax payments that we make
11. PROTECTING AND MAINTAINING ASSETS
- We recognise the importance of looking after our assets.
- Employees are responsible for looking after company assets including business opportunities, funds, property, proprietary information, and personal equipment.
- Employees must take steps to read and understand the rules regarding unacceptable use of company IT resources and comply with the relevant set of rules.
- Woodbois only collects and holds personal information as permitted by law and as is reasonably necessary to meet business requirements.
12. INSIDER DEALING
- We stand against insider dealing
- It is illegal to deal in Woodbois shares on the basis of inside information or to encourage others to do so.
- During the course of their work some employees will have access to information which could influence someone contemplating investing in Woodbois shares.
- Employees are forbidden from using confidential company information for personal gain, or from sharing inside information for the same purpose.
FOREST MANAGEMENT IN GABON
- • Woodbois holds eight forest permits in central Gabon in the province of Ngounié, north-east and south-east of the community of Mouila
- • The management plans, approved by the administration in charge of waters and forests, define the harvesting plan for the areas
- • The inventory plan determines: the stocks of harvestable timber and their location; how to track and mark trees to be harvested or protected; and how to establish the route of potential roads
- • The inventory plan determines: the stocks of harvestable timber and their location; how to track and mark trees to be harvested or protected; and how to establish the route of potential roads
- • The counting operation consists of: identifying the species of trees; measuring diameter; numbering trees via the placing of a plate; geolocating each tree via GPS; and assessing the quality of all applicable trees that have reached the minimum diameter size for harvesting
- • The harvesting plan for 2021 covers a total area of 3,762 hectares. The most common tree species are Ilomba (Pycnanthus angolensis), Ebiara (Berlinia
- bracteosa), Dabema (Piptadeniastrum africanum), Mahogany (Khaya ivorensis), Ovang-Kol (Guibourtia ehie) and Okoumé (Aucoumea klaineana). We are also permitted to harvest from the 2019 management plan
- All of Woodbois’ forest management plans have been approved by local governments following preliminary community consultations and approval processes, and are strictly followed.
This map shows Woodbois’ management plan in Gabon for 2021.
Management plan:
HOW IT WORKS
All of Woodbois’ forest management plans have been approved by local governments following preliminary community consultations and approval processes, and are strictly followed.
HARVESTING PLANS :
Following a 23-year rotation cycle, Woodbois is permitted to harvest a section of its total concession area for three years. After these three years, the same area cannot be touched for 20 years to ensure forest regrowth.
LOGGING ACTIVITIES PLAN :
Vital to minimise the impact of roads.
WATER USAGE
FOREST CONSERVATION :
Areas not in production are protected by Woodbois from illegal logging activities or other uses, such as agriculture.
Forest management plans allow us to track how many cubic metres of timber have been extracted while monitoring the impact our operations have on the environment, ensuring we operate responsibly.
RELATIONAL & SOCIAL CAPITAL
Woodbois’ trading network comprises some 300 customers across more than 60 countries. We place a high value on these connections, and we aim to foster a relationship of trust and security with our customers and suppliers.
RESPONSIBLE TRADING & SOURCING
DUE DILIGENCE PROCESS
- Woodbois only sources forest products from partners who have succeeded in passing a due diligence process for legal and responsible forest product sourcing. To work with any supplier of timber, Woodbois requires information and documentation regarding the source of the timber including tree species, wood origin and compliance with national laws and regulations.
1- SUPPLIERS
- Since 2013, Woodbois has run a due diligence process inspired by EUTR/ FLEGT, which includes a checklist of documents required for screening. This process is done at the beginning of each year for existing suppliers and at the start of any collaboration with new suppliers.
2- SHIPMENT
- Documents required:
- • CITES certificate if necessary (created by Woodbois using supplier export codes)
- Movement certificate (EUR1 for EU trade; Certificate of Origin if shipment is anywhere else in the world)
- Act of Merchandise Transit (Circulation de Merchandise)
- Phytosanitary certificate
3- BUYERS
- Buyers sometimes provide their own supply chain mapping to ensure responsible timber purchases.
TRACEABILITY & TRANSPARENCY
To confirm that none of the wood traded by Woodbois is on the CITES species list, our traceability process allows us to track products across their entire journey, from forest to manufacturing to final export. We trace both our raw material and processed timber back to the country of harvest. Any timber handled by Woodbois in any form requires a certificate of origin – neither ourselves nor our logistics providers or customers will handle timber that does not have a certificate of origin identifying its country of harvest.
In collaboration with South Africa-based WorkPool, we have developed software allowing our trading and operations teams to collect all trading-related data, from inputting a simple sales or supplier enquiry all the way through to issuing invoices. This software allows us to quickly identify any supplier with out-of-date documentation, so we can remove them from our supply chain until their paperwork has been renewed.
We’re also continuing our collaboration with DiginexESG20, a financial services and blockchain technology company, to build a blockchain-based solution to help companies and investors manage ESG company risks, and make sustainability reporting more transparent, secure and immediate. The DiginexESG platform has been used since 2019 by the Woodbois executive team for monitoring and validation of the company’s ESG disclosures in line with the Global Reporting Initiative (GRI) Standards.
ENGAGING WITH LOCAL COMMUNITIES
OUR COMMITMENT
We are committed to:
- • Enabling sustainable use of non-timber forest products (NTFPs) by local communities
- • Free prior and informed consent (FPIC), and the inclusion of indigenous peoples
- • Providing business and work opportunities for local communities
Our commitments apply to all suppliers.
Our teams are actively engaged in community consultations to ensure we respect local customs and our contributions have meaningful value (our FPIC procedure is reported in the report annex). This commitment extends to respecting legal and traditional land rights. For example, our forest concessions are a direct result of community consultations. Local stakeholders help designate and map agricultural land for local use, dedicate areas for specific crops and provide education and information related to the hunting seasons. In some cases, we have established contractual agreements with communities to ensure we respect and align with local needs and customs. Woodbois is also financially contributing to the development of villages Saint-Martin and Mboukou.
In 2021, Woodbois donated 500m3 of lumber to the villages of Mboukou and Saint-Martin. We also provided 5,000 litres of diesel to the villages in our harvesting area.
We count on our neighbouring communities for our dedicated workforce, local business partnerships, and stewardship of the natural resources entrusted to us. Woodbois is committed to conducting business with integrity and in a way that promotes shared prosperity. In accordance with the Gabonese Forestry Code, Woodbois makes regular financial contributions to a fund co-managed by community representatives, local government, and the Ministry of Water and Forests. This fund supports critical community led development initiatives.
FUTURE PROJECTS
Since October 2021 Woodbois has been constructing a 126km road in the southwest of Gabon: Route Mouila Mimongo. The new road will give villagers much easier access to the outside world, as the poor condition of the existing abandoned road made visiting family, shopping and business a considerable challenge – a 50km journey would previously take three days to complete. The two-phase project also includes the renovation of bridges, plantation grounds and a local community court.
Other projects planned for 2022 include the restoration of land around the dispensary of Kembele to provide better access for the villagers, as well as restoration of Kembele’s local football pitch, which is used by the football team of Kembele and village school children. We will also be making donations of tools and equipment to villages in our local areas to help communities more efficiently collect and manage wood.
NATURAL CAPITAL
- We commit to promoting and protecting the safety and occupational health of our entire workforce above all other priorities
- At Woodbois we are focused on providing a safe and healthy workplace by ensuring that tools and equipment are maintained in good order, and by supplying appropriate personal protective equipment in accordance with international standards and national laws.
- All employees receive training to ensure they are competent and fit to carry out allocated duties. This includes information about risks and relevant control measures, procedures for safe evacuations of buildings and workplaces, and correct use of tools and machinery. We recognise that all staff have the authority to halt work if they consider the action unsafe.
In 2019, Woodbois began using Global Forest Watch, an online platform that provides data and tools for monitoring forests. By taking data from various satellites, Global Forest Watch can give real-time information on forest fires and other potential deforestation situations.
- We commit to promoting and protecting the safety and occupational health of our entire workforce above all other priorities
- At Woodbois we are focused on providing a safe and healthy workplace by ensuring that tools and equipment are maintained in good order, and by supplying appropriate personal protective equipment in accordance with international standards and national laws.
- All employees receive training to ensure they are competent and fit to carry out allocated duties. This includes information about risks and relevant control measures, procedures for safe evacuations of buildings and workplaces, and correct use of tools and machinery. We recognise that all staff have the authority to halt work if they consider the action unsafe.
We are committed to:
- • Protecting forest areas against deforestation, degradation and conversion for unauthorised or illegal resource use, settlement and other prohibited activities.
- • Restoring non-compliant deforestation and conversion
- • Implementing a landscape-level approach to preserving animal habitats and biodiversity.
- • Permitting no hunting, or permitting sustainable hunting and fishing only
- • Ensuring present and future potential plantation timber suppliers do not plant on peat land.
- • Adopting the High Carbon Stock approach to any future potential plantation timber suppliers.
Our commitments apply to all suppliers.
TRANSPARENCY
In 2021, Woodbois was again recognised for its sustainable activities in the SPOTT ESG policy transparency assessments for the worldwide timber and pulp industries. In the annual assessment, Woodbois was ranked sixth out of more than 100 companies.
FORESTS MANAGEMENT & CLIMATE CHANGE
Woodbois is committed to responsible and ethical forestry.
Our forest management and responsible sourcing practices have a direct impact on SDG 15 and on our ability to preserve the forest environment while supplying wood and wood products in the long term. Inadequate and aggressive management practices could affect the potential of the lands where we operate, reducing the positive impact on localcommunities in terms ofresources and job opportunities. We aim to while recognising the subsistence needs and customary rights of local communities and indigenous peoples.
By pursuing sustainable forest management, Woodbois aims to enhance the benefits healthy forests bring to our ecosystems and help reduce the negative effects of climate change on forests and forestdependent people.
OUR COMMITMENT
We are committed to:
- • We protect our forests to reduce deforestation and degradation
- • We take firm action against deforestation, harvesting fewer trees than management plans permit, and working on a 23-year rotation plan that ensures the regrowth of harvested forest and maximises carbon absorption
- • We work closely with governments and local communities to address illegal activities, helping to ensure that forests are protected and that their productive capacity is optimised in the long term
- • We strictly follow both national and international regulations and standards for flora and fauna protection (CITES, IUCN), and commit to zero conversion of natural forests.
- • To avoid unsustainable and non-compliant use of forest resources, Woodbois donates a significant volume of logs to local communities
- • By sourcing and manufacturing wood and wood products we offer an alternative to less sustainable products.
WOODBOIS’ COMMITMENT TO ZERO DEFORESTATION OR ZERO CONVERSION OF NATURAL ECOSYSTEMS APPLIES TO ALL SUPPLIERS.
OUR FORESTS IN GABON SEQUESTER OVER 160 000t CO2e PER YEAR, ASSUMING 1.69t CO2e SEQUESTERED21 PER HA PER YEAR AND CONSIDERING 8-10 HECTARES OF FORESTS HARVESTED.
OUR FOREST IN MOZAMBIQUE SEQUESTERS 186,000 tCO2e PER YEAR, ASSUMING THAT INTACT NATURAL AFRICAN FORESTS SEQUESTER 0.6t CO2e PER YEAR. 22
In 2021, zero illegal and non-compliant deforestation was
reported. If non-compliant deforestation or conversion
occurs in the future, Woodbois is committed to the
restoration of the areas involved.
The company is working with the Gabonese government and
by 2025 will not accept any form of deforestation.
Woodbois is constantly monitoring climate change and has
identified a list of specific parameters to measure over time,
including:
- • Temperature increases which could impact the dynamics of local flora and fauna
- • Rainfall changes which could lead to flooding and soil saturation
OUR COMMITMENT
We are committed to:
- • Best management practices for soils and peat to minimise the use of chemicals, including pesticides and chemical fertilisers, and no use of World Health Organisation (WHO) Class 1A and 1B pesticides and chemicals listed under the Stockholm Convention and Rotterdam Convention.
- • Reduced-impact logging.
- • Zero burning in the forest.• Zero burning in the forest.
- • Protecting natural waterways with buffer zones.
- • Developing a complete climate change risk assessment. This includes identifying climate-related risks that are relevant to the company, and proposing measures that should be made at the forest management unit in Gabon.
- • Developing a Natural Capital Assessment based on the protocol provided by the Natural Capital Coalition. We are engaging with consultants who can help us perform more detailed High Conservation Value (HCV) and Social and Environmental Impact (SEIAs) assessments.
OUR COMMITMENTS APPLY TO ALL SUPPLIERS.
WATER & WATER WASTE MANAGEMENT
In October 2021, Woodbois commissioned SEEG, the state-run water and electricity utilities company in Gabon, to carry out a study of the well at its sawmill in Gabon.
Woodbois wanted to verify it was not polluting the well with waste, oil or biohazards. The result, provided by an independent third party lab following the WHO guidelines for drinkable water, found the water to be drinkable, with a PH equivalent to Perrier water (ie,5.5)
As Gabon is renowned for its two heavy rain seasons, our facilities are equipped with drainage and gutters adapted to large amounts of water. The water collected is directed as far as possible from the operation and process area using gravity to evacuate it.
In 2022 we intend to add more decanters close to our garage area to capture even more waste and to use part of this water as “grey water” for our commodities.
Woodbois applies strict environmental rules and has written procedures to mitigate the risks of pollution in every area of process, and in the forest, to avoid water and soil contamination.
Details of these procedures are available on demand.
Waste Management
Woodbois does not use chemicals or pesticides to manage waste. Wood waste is shared with all neighbouring villages (1,200m3 in 2021) and the remaining wood waste is used as biofuel for the veneer factory and kilning operations (1,840 tonnes in 2021).
WOOD WASTE RECYCLING:
JEAN DEDIEU’S STORY
Born in Gabon in 1985 and with 12 years’ international professional experience across a range of sectors, Jean Dedieu was inspired to start his wood waste recycling company after watching Marvel movie Black Panther. Living in Belgium at the time, he returned to Africa in 2020.
Jean originally started a training school in wood and forestry, but with the encouragement of industry figures decided to pursue wood waste recycling, supported by Woodbois which provided Jean’s company with wood waste free of charge.
In 2021, Jean launched Exploitation Forestière Agrèage Wakanda (with Wakanda a nod towards Black Panther), building his workshop with wood waste retrieved from Woodbois factories.
EFAW transforms and recycles wood, sawdust and shavings, processing 300m3 of wood waste every month – equivalent to 150m3 of finished product. The company – professionally accredited within the forestry sector – employs four people directly and 15 people indirectly, and has a capital of five million Central African CFA Francs.
As well as building and selling a range of wood-based products, EFAW plays a significant role in the local community, helping to build houses and training young people, preparing them for careers in forestry
Next on the agenda for EFAW is investment in a pellet-making machine to further reduce wood waste, and the launch of internships for apprentices within Woodbois’ factories. “The wood and forest sector represents a great opportunity for our youth and their perspective of employment. Without the support of Woodbois I would not have been able to realise this project,” says Jean. “I consider Woodbois like a godfather to the project!”
WoodBois is closely following the development of EFAW and plans to come back with an exciting update in 2022.
USE OF
CHEMICALS
OUR COMMITMENT
0%
Woodbois does not use chemicals in any forestry, sawmill or veneer operations, including chlorine or chlorine compounds, pesticides and chemical fertilisers (such as World Health Organisation Class 1A and 1B pesticides or chemicals listed under the Stockholm Convention and Rotterdam Convention). To capture and dispose of pests, we use an integrated management approach with nonchemical devices
FIREFIGHTING
At Woodbois, we believe the best approach to reducing the risk of wildfires is preventative firefighting. Our proactiv three-pronged approach –effective weed control, firebreak construction and ring-hoed trees – drastically reduces fuel loads prior to the dry season. By engaging local communities to identify potential hot spots, we ensure fires are kept to a minimum. Our preventative approach is extremely effective; Woodbois has never lost a single tree to fire in any of its project areas.
MINIMISING THE IMPACT
OF LOGGING ROADS
Woodbois minimises the impact of logging roads by basing main tracks, wherever possible, on existing roads and elephant paths, and avoiding secondary roads unless absolutely necessary. Our forest management plan creates new roads efficiently and carefully, with infrastructure dimensions minimized as much as possible while adhering to safety and sunlight rules. Watercourse crossings are constructed without raising the water level, which could potentially lead to flooding upstream and the destruction of forest. Bridges and other structures are planned and constructed according to varying seasonal flows.
Crucially, harvesting only takes place along carefully laid out skid trails. After harvesting, skid trails are rehabilitated to avoid permanent soil compaction and roads are closed to prevent poaching and illegal settlements. In just a few months, skid trails and harvesting gaps are covered by tree regeneration, while roads disappear after a few years due to the natural regeneration of pioneer tree species.
THE FOREST PRODUCTS VALUE CHAIN AS AN EXAMPLE OF A CIRCULAR ECONOMY
- • Substituting conventional building materials for mass timber reduces construction phase emissions by 69%.23
- • Substituting conventional building materials with wood in half of new urban construction could provide 9% of the global emissions reduction needed to meet 2030 targets for keeping global warming below 1.5 °C.23
- • 80% less CO2 e is emitted when manufacturing a wooden table compared to a plastic table.23
- • As an added benefit, wooden furniture also stores carbon at a rate of 1t per 1m3 for its lifetime.
AVOIDEDE MISSION
39.7 k g CO 2 e
ENHANCING OUR IMPACT
FSC CERTIFICATION
Woodbois has FSC chain of custody certification in Denmark and began its journey towards FSC Certification in Gabon in 2020, as well as engaging with the Programme de Promotion de l’Exploitation Certifiée des Forêts24 (PPECF). Our certification is now more than 60% completed.
Within the next ten years Woodbois is committed to:
- • Gaining FSC certification for 100% of our FMUs
- • Sourcing only wood/wood fibre that meets FSC Controlled Wood requirements.
- • Gaining FSC certification for 100% of our FMUs
- • Sourcing only wood/wood fibre that is in legal compliance, as verified by a third party.
Woodbois is committed to FSC certification: Forest Management and Chain of Custody. Woodbois will apply for FSC Chain of Custody in 2022 and Forest Management in 2023. For both types of certification, independent FSC-accredited Certification Bodies verify that all FSC-certified forests conform to the requirements contained within the FSC forest management standard
FSC certification is an international standard focusing on:
- • Wood traceability and sourcing
- • Respect for the environment
- • Social behaviour within the community
- Social behaviour within the company
- • Compliance with labour laws
- Certification is a natural fit for Woodbois, which already abides by these principles.
REFORESTATION & CARBON CREDIT DIVISION
In 2021, for the first time, the Voluntary Carbon Markets (VCM) surpassed $1 billion in notional value traded,25 demonstrating growing confidence in the market’s ability to facilitate near-term climate solutions.
The agenda at COP26 gave significant attention to the role
of nature in climate mitigation and adaptation. In many cases, the private sector responded with updated twin commitments, proposing dual strategies for managing risks associated with both climate change and biodiversity loss. As a result, the VCM saw a surge in preference for credits originating from nature based solutions (NbS), with prices climbing to new highs. Research indicates that NbS have the practical potential to deliver emission reductions of 7GtCO2 e per year, equivalent to one third of the global the target set in Paris. Beyond the climate benefits, NbS can deliver significant environmental and social co benefits, all at a lower cost than ready-to-deploy technological solutions.26 Capitalising on this potential will require a coherent effort between governments, the financial sector, and business actors in order to deliver projects at a new pace and scale
Woodbois established its carbon division in 2021 with the aim of developing a project implementation model that can simultaneously deliver environmental, social and economic value. In a 12 month period, the team has made significant progress towards initiating a proposed maiden project, comprising a large-scale assisted natural regeneration scheme in the south of Gabon, designed to
introduce indigenous forest to an area currently occupied by low-value grasslands. The project involves collaborative fire management and enrichment planting strategies that will create significant local employment, enhance carbon stocks, increase biodiversity, and improve livelihoodsthrough upskilling and alternative income generation. The project is made feasible by the attractive carbon revenue potential. Woodbois expects to register the project with the Verified Carbon Standard for credit issuance as well as Climate, Community and Biodiversity accreditation. Based on conservative estimates, the project could generate 25,000,000 carbon credits over a 45-year period.
Extensive due-diligence carried out as part of the project feasibility process confirmed the attractiveness of Gabon as a project jurisdiction. Woodbois has a long history of operating in the country and continues to strengthen relationships with the local community and Government. Joining the Gabonese delegation at COP26 provided an opportunity to discuss the country’s vision for global carbon markets and the expectations for project developers in Gabon. Well-aligned development objectives, supportive policy and prime environmental conditions all contribute to a unique project development setting. The economic advantages were recognised in a recent OECD paper that compared 166 countries based on the cost efficiency of forest carbon sequestration; Gabon ranked first in the afforestation category.27
In 2021, Woodbois was again recognised for its sustainable activities in the SPOTT ESG policy transparency assessments for the worldwide timber and pulp industries. In the annual assessment, Woodbois was ranked sixth out of more than 100 companies.
REFORESTATION PROJECT PROCESS
- • Identify project sites previously exploited for illegal logging / extractive industries, where lack of investment and expertise has previously prevented reforestation
- • Project developer coordinates with the Government to secure long term concession
- • Native species used to restore efficient ecological system
CO-BENEFIT
- • Positive environmental impact on biodiversity, soil and water quality, and CO2 sequestration
- • Poverty alleviation, skilling and stable employment for local communities
- • Capability building and educating in sustainable practices
- • Reduced social mobility in project geographies
Gabon is ideally located and structured for African reforestation as it is one of the world’s most densely forested countries, with a unique bioclimate suited to rapid tree growth and optimal CO2 sequestration.
The Gabonese government has demonstrated a keen appreciation for the environment, addressing deforestation, investing in green industries, and engaging with international sustainability programmes.
OUR REFORESTATION
EFFORTS IN MOZAMBIQUE
Woodbois manages and operates approximately one million acres of natural forest concessions in Gabon and Mozambique, with the latter our main focus of reforestation activities.
We began reforestation in Mozambique in 2017, with 35 hectares in Madeiras, expanding with a further 30 hectares in 2019. The project is managed by Eng. Macedo Uachuacho, and supported by Woodbois’ head office in Maputo, Mozambique’s capital. There are currently 10 employees working on the project – a number we expect to grow as we expand the area of reforestation. In 2022, we plan on planting 5,000 more trees.
Reforestation and Sustainability Manager in Mozambique
- • Reforestation is the most cost effective solution
- • Photosynthetic carbon capture is the most reliable and costeffective method available today for restricting the rise of atmospheric CO2 concentrations.
- • The Intergovernmental Panel on Climate Change (IPCC) suggests new forest projects could sequester 25% of the CO2 required to maintain the 2°C temperature goal.
We have installed a permanent nursery to support seedling irrigation and only plant species that are native to each concession and their surrounding communities. Since the project began in 2017, more than 10,700 trees of different species have been planted, with the first seedlings now standing between four and five metre stall. At the end of every month, a comprehensive report on our activities and progress is sent to Ministry of Forestry authorities
The project is also an important part of our community collaboration engagement. We aim to make a valued contribution to social progress and the regional economy by creating jobs, providing training and empowering employees to lead initiatives for local action.
NURSERY
PLANTATION
MONTH 1
MONTH 2
MONTH 3
MONTH 4
MONTH 5
MONTH 6
APPENDIX
FPIC PROCEDURE
When Woodbois opens up a new area of forest to be harvested, the company follows an internal FPIC (Free Prior and Informed Consent) procedure to ensure that locals are properly informed and that their concerns and needs are taken into account in the context of the prospective operation.
Identifying concerned locals and their representatives
- • Having been present in Gabon for over 20 years, the company is well known among the local communities in which we operate, allowing us to easily identify local communities that may be present in our area of operation.
Inform the local community of the company’s plans, document any concerns or needs that the indigenous people have
- • The company has strong relationships with local communities, typically meeting local leaders every two months to update them on our activities as well as address concerns or questions surrounding our operations. These are documented and followed up.
Implementation of local community needs within our projects. Regularly monitoring and evaluating agreements that are in place
- • Our Operations Manager actively meets local community leaders and representatives.
- • She also makes sure that any agreements or concerns that may have been highlighted are actively followed up on by specific members of the operations teams on the ground.
FORESTRY TRACEABILITY ASSESSMENT
The Traceability Assessment Guide (TAG) created by Smurfit Business School in collaboration with Woodbois is reported below.
ESG INDICATORS
REFERENCES
