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Article

The Evolving Role of FSC Certification in Croatia: From Market Pressures to Sustainable Practices

by
Kristina Klarić
,
Miljenko Klarić
*,
Slađana Josipović
and
Azra Tafro
University of Zagreb Faculty of Forestry and Wood Technology, 10000 Zagreb, Croatia
*
Author to whom correspondence should be addressed.
Forests 2024, 15(10), 1717; https://doi.org/10.3390/f15101717
Submission received: 27 August 2024 / Revised: 18 September 2024 / Accepted: 26 September 2024 / Published: 28 September 2024
(This article belongs to the Special Issue Strategic Forest-Based Sector Planning and Management in the Era of Bioeconomy)
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Abstract

:
Forests are crucial in sustaining life on Earth and are at the core of global sustainability efforts, to which Forest Stewardship Council (FSC) certification makes a significant contribution. Changes in motivations, benefits, and challenges associated with FSC certification among Croatian companies, particularly in light of recent market fluctuations and global sustainability trends, have been examined in this study. The research was conducted in 2015 and 2023 using a survey method among FSC chain of custody (CoC) certificate holders in Croatia. A statistically significant decline in the proportion of companies citing customer demands and company image as the main reasons for FSC certification was observed, while environmental awareness became a more prominent motivation. Additionally, although key benefits such as retaining existing customers and attracting new ones remain important, a significant decline in the proportion of companies reporting increased profits as a benefit was noted. Challenges related to extensive documentation and frequent changes in standards also significantly increased. This study suggests that FSC certification remains crucial for maintaining competitiveness in the Croatian wood industry, especially as environmental concerns gain importance. Given that FSC standards help enforce European sustainability regulations, FSC certification is important for ensuring long-term resilience and success in an unstable market environment.

1. Introduction

1.1. Global Importance of Forests and FSC Certification

Given the critical role forests play in sustaining life on Earth and supporting sustainable development [1,2,3,4], robust mechanisms must be implemented to ensure their protection and sustainable management, as highlighted in SDG Goal 15 on forest management and Goal 6 on water protection [5]. In response to the global need for such mechanisms, the Forest Stewardship Council (FSC) was established in 1993 largely as a response to the shortcomings of the 1992 United Nations Conference on Environment and Development (Earth Summit) in Rio de Janeiro [6]. A comprehensive and binding global forestry regime was not created by the Earth Summit. This failure prompted environmental non-governmental organizations (NGOs), social organizations, some retailers, and several forest industries to develop a voluntary market-based certification system outside the state framework, known as the Forest Stewardship Council (FSC), to promote sustainable management and protection of tropical forests [7]. There are two types of certification, namely certification of forest management (FM), which assesses whether forests are being managed according to a specified set of standards, and certification of the chain of custody (CoC), which ensures the segregation of certified materials from non-certified or non-controlled ones throughout every stage of processing or trade from the forest to the final consumer. By the late 1990s, 10 million hectares of forests were certified under FSC standards [8]. This growth continued until 2013, reaching over 180 million hectares globally. By 2019, the FSC marked 25 years of sustainable forest management, with over 200 million hectares certified and 50,000 CoC certificates issued. In 2020, the suspension of FSC certificates from Russia, Belarus, and parts of Ukraine where combat operations are conducted led to a 31% reduction in the certified area, disrupting supply chains and reducing the availability of certified timber [9]. The FSC currently has 161 million hectares of certified forests, 61,304 issued CoC certificates, and 1554 FM or CoC certificates. It currently has 1183 international members across 89 countries and has been in existence for 30 years [8]. The continued efforts and global influence of the FSC in promoting responsible forest management are evident, despite significant geopolitical and market challenges.

1.2. Wood Industry and FSC Certification in Croatia

Wood is a significant component of the Croatian economy and represents a quite important part of the economy in terms of ensuring sustainable development of society, enabling a circular economy and the transition to a low-carbon society [10]. The availability of sufficient domestic raw materials, combined with quality, experience, and a long-standing tradition in numerous businesses, positions the wood industry as a strategic sector within Croatia’s economy [11]. The industrial strategy of the Republic of Croatia recognizes the wood industry as one of the “drivers” of economic development, particularly due to its strong export orientation, positive earnings before interest tax depreciation and amortization (EBITDA) results, and significant contribution to employment [12]. In 2020, the activities of the wood industry contributed 7.96% to the revenue of the manufacturing industry and 1.88% to the total revenue of the Republic of Croatia, as well as 8.25% to the export of the manufacturing industry and 6.42% to the total trade exchange. The capacity of the sector included 2108 business entities, representing 13.90% of the manufacturing industry and 1.52% of all business entities in the Republic of Croatia, employing 27,925 people, which accounts for 11.25% of the manufacturing industry and 2.78% of the total number of employed persons in Croatia. The wood industry activities generated a supply of goods to the European Union market and exports to third countries worth EUR 957 million, while the value of procurement and import of goods amounted to EUR 672 million, resulting in a trade surplus of EUR 285 million [13]. The Croatian wood industry bases its competitiveness on its significant export potential, a high level of specialization, and strong domestic competitiveness, which stems from the availability of quality raw materials and skilled labor [14]. Vlosky et al. [15] highlighted that certification stands out as a strategy for increasing competitiveness during economically turbulent times. Additionally, this research revealed that nearly all certificate holders surveyed planned to continue selling certified products [15].
In Croatia, nearly three quarters of the total forest area is FSC certified (74%), making it the country with the highest proportion of FSC-certified forests in the world [16]. According to the document “Šumskogospodarska osnova 2016–2025” [17], which represents the forest management plan for managing forests and forest land in the forestry area of the Republic of Croatia, the total forest area in Croatia is 2.8 million hectares, of which 2 million hectares of diverse forest areas are FSC certified. The development of FSC FM and CoC certification in Croatia was crucial for the entire Adria-Balkan region, which includes Bosnia and Herzegovina, Montenegro, Croatia, North Macedonia, Slovenia, and Serbia [18]. In 2000, Hrvatske šume d.o.o. received the first FSC Forest Management (FM) certificate in the region, certifying 72,000 hectares. By 2002, this certification was expanded to cover over 2 million hectares, making Hrvatske šume one of the largest FM certificate holders in Europe. By 2002, Hrvatske šume d.o.o. expanded their certification to cover over 2 million hectares, making them one of the largest FM certificate holders in Europe. Since then, the minimal increase in certified forest area has been due to their consistent maintenance of this certification, which accounts for almost three quarters of all forests in Croatia. Additionally, in 2000, Spačva d.o.o. from Croatia received the first FSC chain of custody (CoC) certificate in the region. After 2008, the growth of CoC certificates accelerated (Figure 1) as other countries in the region began joining the FSC, facilitating the further expansion of FSC standards [18].

1.3. Context and Objectives of the Research

The literature on forest certification covers a wide range of topics, primarily focusing on the impact of certification schemes on various aspects of sustainable forest management, market performance, and social and environmental standards. These certification schemes are often highlighted for their role in promoting responsible management of forest resources, which includes improving environmental outcomes, social benefits, and economic efficiency. For instance, studies examining the impact of FSC and Sustainable Forestry Initiative (SFI) certifications in North America point to their significant environmental, social, and economic effects, further supporting the importance of these programs in the sustainable development of the forestry sector [7].
Beyond the impact of forest certification on forestry, many studies investigated the motivations and challenges associated with adopting certification schemes [3,19,20,21,22,23]. Research conducted in Slovakia and Mexico demonstrated that forest owners are motivated by various economic, social, and political factors in the implementation of sustainable forest management standards [3,19]. However, these studies also highlight the challenges faced by forest owners and companies, such as high certification costs, lack of awareness, and the complexity of the certification process. These studies also analyzed the socioeconomic and environmental benefits derived from these certification practices, demonstrating how certification can improve the quality of life in forest-managing communities and contribute to ecosystem conservation [19,24].
A significant area of recent research has focused on investigating the impact of certification on business management practices and market outcomes. For example, studies explored how internal and external motivations for companies to achieve certification influence their business outcomes and market position [20]. Additionally, certification was analyzed from a financial perspective, where researchers used various methodological approaches to quantify the effect of certification on company value [4]. These studies indicate that certification can bring significant economic benefits to companies, but these benefits can vary depending on the sector, company size, and geographical context.
A significant number of studies focused on comparative analysis of different certification programs, exploring their differences in requirements, frameworks, and implementation. These studies contribute to discussions on the future development of certification programs and their role in international trade [25,26]. For instance, studies analyzing forest certification in Spain and Central and Southern Europe highlighted the specific challenges faced by countries in these regions, including differences in perceptions and motivations between different groups of certified companies [25,27]. Additionally, research on chain of custody (CoC) certification in Romania emphasizes the need for government support in the development of these systems, as well as the challenges companies face in maintaining CoC certification [28]. Furthermore, a study examining the attitudes, awareness, and willingness to pay of secondary wood manufacturers in Italy for certified and local wood materials revealed that 30% of respondents were willing to pay more for certified planks and 19% would pay more for panels, mainly due to support for sustainable practices, economic benefits, quality assurance, and customer demand. These findings underscore the importance of understanding local market dynamics and motivations when developing certification strategies [29].
Studies also explored the broader impact of certification on global environmental standards and trade. For example, research on the application of FSC CoC certification in global timber trade uses economic models to analyze the impact of the number of issued certificates on the national net exports of timber products [30]. Furthermore, a study conducted by Cashore et al. [31] investigated the potential of non-state market-driven governance systems in improving global environmental standards, emphasizing the need to assess the role of public policies in facilitating the positive effects of these private initiatives.
In the broader context, forests are essential for maintaining biodiversity, regulating climate, and supporting economic and social well-being. Mechanisms like FSC certification are crucial in ensuring that forests are managed sustainably. Given their critical role in sustaining life on Earth and their importance in global efforts to combat climate change, this research aims to analyze how the motivations for implementing FSC chain of custody (CoC) certification, the perceived benefits, and the challenges faced by Croatian certificate holders have evolved between 2015 and 2023. This research will specifically focus on assessing the impact of recent global events, such as the COVID-19 pandemic and geopolitical tensions like the war in Ukraine, on the business operations and demand among FSC certificate holders in Croatia, which might have consequently influenced their decisions regarding the implementation of FSC certification. The purpose of this research is to provide detailed insight into the changes in the attitudes and experiences of Croatian FSC CoC certificate holders over the past decade. This understanding might help shape FSC certification policies and practices better suited to a dynamic global context and ensure the sustainability of the wood products sector under changing market conditions.

2. Materials and Methods

A survey method was used to collect data on FSC chain of custody (CoC) certification among companies in the Republic of Croatia [32]. The target population consisted of all companies holding FSC certification, with the lists of companies sourced from the FSC Certificate Holder database [33]. The contact information for the survey respondents was obtained from the FSC database, which in 2015 provided a contact person and email address for each company, while in 2023, basic company information was used to retrieve contact information from the Business Register of the Republic of Croatia. The questionnaire with a cover letter was distributed to all FSC certificate holders in the Republic of Croatia via a link embedded within an e-mail. The research was conducted in 2015 and 2023. In 2015, when the first survey was conducted, there were 2617 wood-processing companies in Croatia, with 221 of them being certified. By the time of the most recent survey, 352 companies were certified out of a total of 3262 in the sector. The survey was distributed solely to certified companies, which were the focus of the research. The survey conducted in 2015 [34] was carried out using an online questionnaire created with Google Docs [35]. The questionnaire comprised two sections with a total of 19 questions. The first section gathered general information about the companies, while the second focused on the specifics of FSC certification, including reasons for implementation, benefits gained, challenges faced during the certification process, and other related topics. The first survey was conducted between June and July 2015. The survey conducted in 2023 followed a similar methodology to the 2015 survey. The second survey was created using the 1ka application [36]. The questionnaire included 19 questions from the 2015 survey to maintain consistency, along with 7 additional questions related to the current situation, including the COVID-19 pandemic and the war in Ukraine. The survey period extended from June to August 2023. The analysis employed Pearson’s chi-squared test for comparing the two samples, a Z-test for comparing proportions, and descriptive statistics, which were carried out using the R programming language [37].

3. Results

3.1. Profile of Respondents

The survey was conducted among companies within the wood-based industries in the Republic of Croatia, focusing on FSC chain of custody (CoC) certification. The response rate was 23.5% in 2015 and 32.9% in 2023. Although the same industry sectors were targeted and similar methodologies were utilized, the consistency in drawing respondents from certified companies in the FSC database is a notable strength of this study. However, variations were observed in the specific respondent companies, the key individuals providing responses, and the overall response rates between the two periods, with response rates of 23.5% in 2015 and 32.9% in 2023. To ensure the comparability of the data, a Pearson’s chi-squared test on the distribution of basic activities was conducted. The result (X2 = 5.4844, df = 6, p-value = 0.4973) indicated a high p value, meaning we could not reject the null hypothesis of samples coming from equal distributions. Thus, we could treat the distribution of basic activities as equivalent across the two survey samples, enabling a reliable comparison of the responses between the 2015 and 2023 surveys. Wood processing remained the most common activity, though a decrease from 59% to 43% among all respondents was observed (Figure 2). A slight increase in furniture manufacturing (from 6% to 9%) was recorded in 2023. The “Other” category was noted to have grown from 12% to 17%, reflecting greater diversification in business activities.

3.2. FSC Certification Perceptions and Impacts

A comparative analysis of the perceptions and impacts of FSC certification between the years 2015 and 2023 across various aspects is presented in Table 1. It was tested whether the proportion of “yes” responses was significantly larger or smaller between 2015 and 2023. The number of responses slightly varied among the survey items in 2023, as some respondents did not answer all of the questions. The table is structured to display survey items related to different aspects of FSC certification, including financial impact, supplier relations, satisfaction and future commitment, and marketing and promotion. Regarding the financial impact, a slight increase was recorded in the proportion of respondents indicating an increase in profit due to FSC certification, changing from 35.3% in 2015 to 38.9% in 2023. Similarly, a small increase was observed in the proportion of respondents indicating higher sale prices due to FSC certification, changing from 19.6% in 2015 to 22.1% in 2023. Regarding satisfaction and future commitment, a slight increase was recorded in the proportion of respondents who felt that FSC certification fulfilled their expectations, rising from 66.7% in 2015 to 68.6% in 2023. Additionally, the intention to retain FSC certification remained extremely high, with an increase from 96.1% in 2015 to 99.0% in 2023. In terms of marketing and promotion, an increase was observed in the proportion of respondents using the FSC logo for promotional purposes, rising from 51.0% in 2015 to 60.8% in 2023. Unfortunately, although a visible increase was observed across all aspects, none of these increases were statistically significant (Table 1), with the possible exception of the intention to retain FSC certification, where the p value was approximately 10%, suggesting a potential trend.
To determine whether differences existed in the respondents’ answers based on their primary activity, a proportion test was conducted (Table 2). The analysis was limited to the activities of “wood processing” and “trade” in 2023. Other comparisons were not made due to the small number of responses, which did not provide sufficient reliability for the results. No statistically significant differences were found in the proportions of “yes” answers between these two types of companies for all questions (Q10 and Q13–Q18), except for Q16, where marginal significance was observed (p = 0.053), suggesting that a similar level of agreement was reached among the respondents for these questions.

3.3. Motivations, Benefits, and Challenges of FSC Certification

The research results on the reasons for implementing FSC certification in 2015 and 2023 are shown in Figure 3. The most important reason, customer demand, was noted, though its share decreased from 92% in 2015 to 84% in 2023 (p = 0.070), indicating that it became a less dominant factor. The market need was recorded as the second most important reason, with a slight decline from 65% to 63% (p = 0.413). The company’s image was significantly diminished in importance, dropping from 51% to 38% (p = 0.058), while environmental awareness increased from 43% to 47%, now ranking third (p = 0.305). Other reasons, such as company promotion and obtaining government incentives, did not significantly change. These findings suggest that customer demand and company image have become less important in the recent period, while environmental awareness and company promotion have seen slight increases, though without a significant impact on certification decisions.
Figure 4 presents the research results on the benefits of FSC certification in 2015 and 2023. Customer retention was identified as the most significant benefit, with its share increasing slightly from 80% in 2015 to 84% in 2023 (p = 0.257). A notable increase in gaining new customers was observed, growing from 59% to 66% (p = 0.174), which reflects increased recognition. In contrast, a significant decline in profit increases was noted, dropping sharply from 20% to 9% (p = 0.022), which suggests that this benefit has become less prominent. The importance of a company’s image and market competitiveness reduced, while exports and sales showed minor fluctuations. These findings suggest that customer-related benefits have gained prominence, while financial benefits like profit increases have become less significant.
The analysis in Figure 5 highlights the main challenges encountered during the implementation of FSC certification in 2015 and 2023. High certification costs remained the most significant challenge, with a slight decrease in their share from 71% in 2015 to 69% in 2023 (p = 0.442), indicating that cost continues to be a major concern. An increase in the difficulty associated with extensive documentation was observed, with its share rising from 37% in 2015 to 57% in 2023 (p = 0.009), reflecting a growing administrative burden. Similarly, frequent changes in standards became a more prominent issue, with an increase from 8% to 23% (p = 0.010). The challenge of supplier misunderstandings saw a statistically significant decrease from 14% in 2015 to 6% in 2023 (p = 0.040). Concerns over interference with confidential data showed a slight increase from 16% to 21% (p = 0.202), while employee resistance remained a relatively minor issue, with a small decrease from 6% to 5% (p = 0.368). These findings suggest that while cost-related challenges remain steady, other factors such as documentation, standard changes, and supplier coordination became more significant obstacles in the FSC certification process between 2015 and 2023. The new version (3-1) of the FSC standard [38] (FSC-STD-40-004 V3-1), which took effect on 1 September 2021, and the introduction of Chapter 7 on core labor requirements led to increased documentation requirements (e.g., policy statement or statements which encompass the FSC core labor requirements and FSC core labor requirements self-assessment), which was reflected in the survey responses. The need to review employee documentation during audits, such as contracts and payroll, raised concerns about data confidentiality. These changes resulted in increased administrative burdens and heightened concerns over data confidentiality in the survey responses.

3.4. Impact of Global Disruptions

Given the severity of the COVID-19 pandemic, its impact on businesses was significant. It was found that 69% of companies were negatively affected by the crisis, while 31% indicated that their operations were not impacted. To mitigate these challenges, government support measures [39] were widely utilized in Croatia. The job retention subsidy was the most commonly used form of support, even being accessed by some companies which did not report negative impacts. The “COVID-19 loan” was another measure which saw frequent use, while other specialized types of support, such as the “Microloan for rural development”, income tax exemptions, and VAT payment deferrals, were utilized by fewer companies. These findings highlight the widespread reliance on government interventions to sustain business operations during the pandemic.
Figure 6 presents the challenges companies faced during the COVID-19 crisis in sourcing materials, selling finished products, and adjusting selling prices. For material sourcing, 38% of respondents reported low (2) to extremely low (1) difficulty, while 32% reported moderate (3) difficulty and 30% reported high (4) to extremely high (5) difficulty. Similarly, in selling finished products, 30% faced low (2) to extremely low (1) difficulty, 30% reported moderate (3) difficulty, and 39% reported high (4) to extremely high (5) difficulty. Price change was identified as the most significant challenge, with significant (3) to highly significant (4) impacts reported by 56% of companies and 28% rating it as the greatest impact (5). Overall, moderate-to-high challenges were prevalent across these areas during the pandemic. These challenges, which arose during the pandemic, were further exacerbated by ongoing geopolitical issues and disruptions in energy markets, leading to elevated prices and additional supply shocks, which negatively impacted economic activity [9].
Given the ongoing situation with the war in Ukraine (Figure 7), its impact on businesses was notable. The majority of companies (54%) reported that the conflict had a negative effect on their operations, while 35% indicated no impact and a smaller group (11%) experienced a positive effect. In terms of demand for wood products, the majority of companies reported no change, with a smaller portion noting a decrease in demand. A few companies, however, observed an increase in demand, showing that the effects of the war varied across different businesses. These findings underscore the complex and varied impact of the war on business operations and market demand.
A correlation analysis was conducted between the motivations, benefits, and challenges associated with FSC certification, along with other indicators related to certification, in relation to the final set of questions concerning the COVID-19 crisis and the war in Ukraine. Unfortunately, no significant correlations were identified which would allow firm conclusions to be drawn. Although the survey results and statistical analysis did not indicate that the COVID-19 situation or the war in Ukraine had a direct impact on the market for certified products, it should be noted that the market experienced significant turbulence during this period. Initially, a slowdown was observed, followed by excessive demand and an unreasonable rise in prices. Additionally, the war in Ukraine and the suspension of a large number of certificates in Russia, Belarus, and the occupied parts of Ukraine led to a reduced supply of certain products [40,41]. Furthermore, during crises, less importance tends to be placed on certifications, with business operations shifting to focus on basic needs instead [42]. Given these observations, it is important to highlight the limitations of this study, which should be supplemented with additional questions regarding these connections to potentially validate the results statistically.

4. Discussion

Significant fluctuations have been observed in the Croatian wood-based industry sectors over the past decade. These industries initially exhibited consistent growth, peaking around 2018, before a decline occurred in 2020, likely due to the COVID-19 pandemic. The wood products sector peaked at EUR 1027.0 million in 2018 and then dropped to EUR 926.6 million in 2020. Similarly, the furniture sector grew to EUR 558.2 million in 2019 before falling to EUR 491.7 million in 2020, and the paper products sector decreased from EUR 520.1 million in 2018 to EUR 459.3 million in 2020 [43]. These trends highlight the significant impact of the pandemic on these sectors, with fluctuations affecting FSC certification, which was reflected in the research results.
A series of challenges and changes were faced by the global wood industry from 2020 to 2023. Production disruptions, supply chain issues, and a drop in demand, particularly in the construction and furniture sectors, were caused by the COVID-19 pandemic in 2020. After the initial decline, higher prices and increased production were observed in 2021 and early 2022 due to recovery and increased demand. However, the market was further disrupted in 2022 by the war in Ukraine, especially in Europe, as energy costs rose and the availability of raw materials decreased. Declines in production in the European wood industry were accompanied by intensified competition from non-solid wood and substitute materials. Although a favourable long-term outlook for the European industry remains due to political support for sustainable projects, the recovery is still impacted by economic uncertainties and geopolitical risks [40].
The current state of the Croatian wood processing industry is challenging, according to data presented by the Croatian Chamber of Commerce (HGK). It was reported that in 2023, the largest wood processing companies experienced a decline in turnover and revenue ranging from 5% to 55%, with an average decrease of 30%. According to the data for 2023, Croatia exported wood, wood products, and furniture worth EUR 1.4 billion. Compared with 2022, exports decreased by 15%, or EUR 253 million.
The importance of enhancing competitiveness has been emphasized in light of the fluctuations and challenges in the Croatian wood-based industry. A decline in exports and production requires strategic adaptation, and FSC certification could be crucial for maintaining market shares and customer trust. In such a volatile market, having competitive advantages, such as certification, may prove essential for resilience and long-term success.
Although customer demand remains a primary motivation for certification, its decline in surveys indicates less emphasis on FSC certification. Supply chain disruptions from the pandemic and the war in Ukraine likely redirected company resources toward stabilizing operations, reducing the focus on certification. Financial pressures during the crisis may also have lowered the priority of certification, particularly due to its high costs [42]. Despite these challenges, the benefits of FSC certification, such as retaining existing customers and attracting new ones, have remained significant. The increased share of companies reporting these benefits in 2023 compared with 2015 further supports this observation. This is consistent with the studies, which emphasized market and reputational benefits, such as access to new markets and improved corporate image, as key external motivations for CoC certification [20,27,28]. However, a shift was observed in our results towards the increased importance of environmental awareness, which may reflect changes in global trends and specific local contexts in Croatia. Additionally, the intention to retain FSC certification was consistently high, with an increase from 96.1% in 2015 to 99.0% in 2023. The increase in environmental awareness as a motive for certification can be attributed to the growing global focus on environmental issues [44], particularly within the wood industry, which is increasingly required to align with environmental policies. As environmental awareness increases, the integration of FSC certification with EU sustainability policies is becoming crucial for maintaining and improving market position. In the context of the Croatian wood industry, European sustainability regulations, such as EUDR [45], are becoming increasingly significant, and FSC can assist in adaptation. This strategic alignment can help companies navigate the changing market environment and capitalize on the growing importance of sustainability.
The certification costs were identified as the main problem by respondents in this study, which is in contrast to the research conducted in Romania, where certification costs were considered the least important factor [28], and there was a minimal price increase due to certification [27,46]. However, in both studies, administrative difficulties are recognized as one of the major problems in the certification process. Although high certification costs were highlighted as the biggest problem in this research, financial benefits, such as price increases and sales growth, were perceived the least. Despite this, certification was primarily chosen to meet market and customer demands. Interestingly, despite the challenges related to costs and limited financial benefits, nearly all respondents (99%) planned to retain their certification, underscoring the importance of certification for business strategy and maintaining market position. A connection can also be made with the research conducted in the countries of Central and South Europe [26], where the key problems associated with certified supply chains are related to the overpricing of certified material inputs, while respondents reported no or minimal price premiums for their certified products compared with non-certified alternatives. The increased documentation demands and concerns about data confidentiality due to recent updates to the FSC standard, including core labor requirements, were reflected in survey responses related to challenges. The importance of social responsibility in business practices was highlighted by these changes, aligning with broader corporate social responsibility objectives to ensure sustainable operations and competitiveness. The results of this research highlight the critical role of FSC certification in the Croatian wood industry, especially in the context of significant challenges and fluctuations observed in recent years.

5. Conclusions

In this research, the changes in motivations, benefits, and challenges in implementing FSC certification by Croatian companies were examined, particularly in the context of significant market fluctuations and global sustainability trends observed in recent years.
The research revealed a statistically significant decrease in the proportion of companies citing customer demand and company image as the primary reasons for FSC certification. On the other hand, increased environmental awareness has become a more important motivation for certification, reflecting the global focus on sustainability. Moreover, the research identified key benefits of FSC certification, such as retaining existing customers and attracting new ones, although there was a significant decrease in the proportion of companies reporting increased profits as a benefit. The main difficulties in implementing FSC certification include extensive documentation and frequent changes in standards, both of which have also shown statistically significant increases.
Although the pandemic and geopolitical crises required a shift in focus toward business stabilization, the enduring value of FSC certification in retaining and attracting customers remains evident. As environmental awareness continues to grow, FSC certification which evolves in line with European sustainability policies will be crucial for enhancing competitiveness and ensuring the long-term resilience and success of the industry in an increasingly unstable market. This strategic alignment not only addresses current challenges but also positions the industry for success amidst future uncertainties.
The main strengths of this study are demonstrated through a comprehensive longitudinal analysis of FSC certification in Croatia over several years, allowing for the observation of evolving trends and motivations in response to global events. Certain limitations of this study should be acknowledged, as these may have influenced the findings. While an adequate response rate was achieved, and the distribution of responses was considered generally representative, challenges may have arisen from variations in responses by sector, limiting the comparability across different industries. Additionally, the absence of questions linking FSC indicators with the current geopolitical context may have restricted a deeper understanding of the certification’s impact on companies. Furthermore, the research being conducted during changes in FSC standards may have influenced the results and their interpretation. These factors should be taken into account in future studies to ensure a more comprehensive analysis and deeper insights into the complexities of FSC certification in various contexts.

Author Contributions

Conceptualization, K.K., M.K. and S.J.; methodology, K.K., S.J. and A.T.; software, K.K., S.J. and A.T.; validation, K.K., M.K. and A.T.; formal analysis, A.T.; investigation, K.K. and S.J.; resources, K.K. and M.K.; data curation, K.K., S.J. and A.T.; writing—original draft preparation, K.K. and M.K.; writing—review and editing, K.K., M.K. and A.T.; visualization, K.K., M.K. and A.T.; supervision, K.K. and M.K.; project administration, K.K. and M.K.; funding acquisition, K.K. and M.K. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by the University of Zagreb’s Faculty of Forestry and Wood Technology Fund for scientific and professional work.

Data Availability Statement

The original contributions presented in this study are included in the article, and further inquiries can be directed to the corresponding author.

Conflicts of Interest

The authors declare no conflicts of interest. The funders had no role in the design of the study; in the collection, analyses, or interpretation of data; in the writing of the manuscript; or in the decision to publish the results.

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Figure 1. Historical trend of CoC and FM certificates in Croatia.
Figure 1. Historical trend of CoC and FM certificates in Croatia.
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Figure 2. Basic activity of respondents (percent of respondents) (2015: n = 51; 2023: n = 120).
Figure 2. Basic activity of respondents (percent of respondents) (2015: n = 51; 2023: n = 120).
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Figure 3. Motivations for implementing FSC certification (percent of respondents) (2015: n = 51; 2023: n = 116) (multiple responses possible).
Figure 3. Motivations for implementing FSC certification (percent of respondents) (2015: n = 51; 2023: n = 116) (multiple responses possible).
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Figure 4. Benefits of FSC certification (percent of respondents) (2015: n = 51; 2023: n = 116) (multiple responses possible).
Figure 4. Benefits of FSC certification (percent of respondents) (2015: n = 51; 2023: n = 116) (multiple responses possible).
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Figure 5. Main challenges in implementing FSC certification (percent of respondents) (2015: n = 51; 2023: n = 108) (multiple responses possible).
Figure 5. Main challenges in implementing FSC certification (percent of respondents) (2015: n = 51; 2023: n = 108) (multiple responses possible).
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Figure 6. Business challenges during the COVID-19 crisis (percent of respondents; 1 = least impact, 5 = greatest impact).
Figure 6. Business challenges during the COVID-19 crisis (percent of respondents; 1 = least impact, 5 = greatest impact).
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Figure 7. Impact of the war in Ukraine on business operations and demand for wood products.
Figure 7. Impact of the war in Ukraine on business operations and demand for wood products.
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Table 1. Comparison of FSC certification perceptions and impacts between 2015 and 2023 (yes and no responses).
Table 1. Comparison of FSC certification perceptions and impacts between 2015 and 2023 (yes and no responses).
Aspect of FSC CertificationSurvey ItemYearNumber of Respondents (n)Proportion of “Yes” Responses (p)Z-Statisticp Value
Financial ImpactIncrease in profit due to FSC certification (Q10)2015510.353−0.4450.328
20231130.389
Increase in sales prices due to FSC certification (Q13)2015510.196−0.3580.360
20231040.221
Supplier RelationsDifficulty in finding certified suppliers (Q14)2015510.216−0.1380.445
20231020.225
Preference for certified suppliers when selecting suppliers (Q15)2015510.745−0.2670.395
20231020.765
Satisfaction and Future CommitmentFulfillment of expectations by FSC certification (Q16)2015510.667−0.2450.403
20231020.686
Intention to retain FSC certification (Q17)2015510.961−1.2370.108
20231020.990
Marketing and PromotionUse of FSC logo for promotional purposes (Q18)2015510.510−1.1560.124
20231020.608
Table 2. Comparison of proportions of “yes” responses for wood processing and trade activities.
Table 2. Comparison of proportions of “yes” responses for wood processing and trade activities.
Survey Item *Q10Q13Q14Q15Q16Q17Q18
Proportion of “yes” responses for wood processing 0.4600.1880.2550.7660.5960.9790.553
Proportion of “yes” responses for trade 0.3640.1500.2000.7500.8001.0000.400
Z-statistic 0.7610.3690.4860.140−1.611−0.6571.148
p value 0.2230.3560.3130.44430.0530.2550.125
* A description of the survey questions is provided in Table 1.
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Klarić, K.; Klarić, M.; Josipović, S.; Tafro, A. The Evolving Role of FSC Certification in Croatia: From Market Pressures to Sustainable Practices. Forests 2024, 15, 1717. https://doi.org/10.3390/f15101717

AMA Style

Klarić K, Klarić M, Josipović S, Tafro A. The Evolving Role of FSC Certification in Croatia: From Market Pressures to Sustainable Practices. Forests. 2024; 15(10):1717. https://doi.org/10.3390/f15101717

Chicago/Turabian Style

Klarić, Kristina, Miljenko Klarić, Slađana Josipović, and Azra Tafro. 2024. "The Evolving Role of FSC Certification in Croatia: From Market Pressures to Sustainable Practices" Forests 15, no. 10: 1717. https://doi.org/10.3390/f15101717

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