January 2

January 2, 2003 SAVING THE TREES Home Depot Is Expected To Deliver Report on Timber Nation's Largest Wood Retailer Is Reviewing Progress on Using Sustainable Timber Sources By DAN MORSE Staff Reporter of THE WALL STREET JOURNALhttp://online.wsj.com/article/0,,SB1041460403298634313,00.htmlATLANTA -- Home Depot Inc. is expected to deliver a report Thursday to more than 20 environmental and government entities detailing the company's efforts to support responsible timber practices. In recent years, environmental groups have been pressuring retailers that sell wood products to help conserve forests. Home Depot is the nation's largest wood retailer, selling more than $5 billion of lumber, plywood, doors and windows a year. In 1999, Home Depot vowed it would quit selling wood from environmentally sensitive forests by the start of this year. The new report is expected to review the company's changes in wood-purchasing policies, issues it has raised with vendors, and commitments to sell timber products with environmental backing. "Overall, we give them a solid B," said Michael Brune, who has been tracking Home Depot's efforts for the Rainforest Action, the San Francisco-based group that led protests at Home Depot stores three years ago that included -- among other stunts -- taking over intercom systems and announcing: "Attention shoppers, on aisle seven you'll find mahogany ripped from the heart of the Amazon." The debate is a sticky one for big home-improvement retailers, which sell everything from simple two-by-fours to expensive front doors laminated with fine hardwoods. Home Depot first had to ask its vendors where they got their wood, which meant the vendors, in turn, often had to ask their suppliers. Now, Home Depot says, it knows the wood source of 8,900 different products -- down to the blades on ceiling fans. "They get great marks for tracking wood," Mr. Brune said. The next big challenge involved vendors getting wood via "nonsustainable" methods -- that is, without much replanting or in large tracts of clear- cutting. Home Depot said it is reducing its wood purchases harvested from rainforests; less than 0.15% of the company's wood products come from areas around the Brazilian Amazon Basin, for example. But Home Depot acknowledged it revisited exactly what it meant by "sustainable" areas of growth. Thus, it will continue buying certain wood products originating from current nonsustainable areas, as long as authorities and businesses in those areas show a commitment to improve. "We want to go in and keep the lure of that purchase order out there," said Ron Jarvis, merchandising vice president for lumber and building materials. "We've proved that by staying in the game ... that's an incentive to keep the sustainable forest movement growing." Tavia McCuean, director of the Georgia unit of the Nature Conservancy, a preservation group in Arlington, Va., agreed, saying in certain international areas where the native population depends on the forest for livelihood, "you've got to have a balanced approach. It isn't as black and white as you wish it could be. It may mean there's a phased approach that has to happen." At the Rainforest Action Network, however, Mr. Brune wants to see a more aggressive strategy: "The biggest challenge ahead for Home Depot is to push their top suppliers out of the old-growth wood trade." While some environmentalists want Home Depot to go further, they also see the company's moves as significant. Changes at a company such as Home Depot, according to environmentalists, can prompt others to modify their approach to harvesting timber. "You just don't write off Home Depot," said Roger Dower, president of the U.S. office of the Forest Stewardship Council, an accrediting organization that blesses wood harvested in well-managed forests. Two months ago, Staples Inc., Framingham, Mass. -- under pressure from environmental activists -- said it would aim to more than triple the recycled material in paper products sold in its office-supply stores. Home Depot, which has about 1,450 big orange stores, also has been trying to sell more wood certified by the Forest Stewardship Council. Consumers looking for "green" lumber can spot it bearing an "FSC" logo. In 2002, Home Depot sold $250 million of FSC lumber, up from only $15 million in 1999, making it the largest retailer of FSC wood in the U.S., according to Home Depot. Still, at $250 million, the total remains well under 10% of all wood sold in Home Depot stores. The FSC certification process for forests is relatively young and takes time; most of the world's harvested forests aren't certified. "From the evidence we've seen, for their product lines, they're buying everything they can," Mr. Dower said. Home Depot's principal rival -- Lowe's Cos., based in Wilkesboro, N.C., which has about 825 stores nationwide -- released its own wood procurement policy in mid-2000, which sought to "aggressively phase out" the purchase of wood from endangered forests. The company said last week that it isn't certain where 100% of its wood products originate. But it added that it has been trying to bridge gaps between environmentalists and big timber producers. Mr. Brune noted improved forest practices in British Columbia, a source of some of Lowe's wood. "You can see the industry moving," he said. Write to Dan Morse atdan.morse@wsj.comCopyright 2003 Dow Jones & Company, Inc. All Rights Reserved ==^^===============================================================