by Marc Gunther
December 13 2007: 4:56 AM EST
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Does green make a difference?

It's great if companies announce environmentally friendly policies, but the effect on the planet isn't always guaranteed.

By Marc Gunther, senior writer

Xerox's paper certification is laudable, but it won't necessarily do much for the planet.

(Fortune) -- Almost everyone applauds when companies adapt green practices. But will those practices make a meaningful difference to the environment?

Take this week's announcement about paper from Xerox. Xerox, one of the world's largest suppliers of office paper, says it has achieved "chain of custody" certification so that all of its 80 distribution centers in the United States, Canada and Europe can sell paper that meets standards set by the Forest Stewardship Council. The FSC is the gold standard of paper certification; paper with the FSC seal of approval is produced in ways that preserve forests, wildlife and waterways by manufacturers who pledge to uphold decent working conditions.

"Xerox's commitment is wonderful," says Tensie Whalen, executive director of the nonprofit Rainforest Alliance, which worked with the company to achieve FSC approval. "It demonstrates the support of a very large buyer and seller of paper for sustainability."

True enough, but ...

Xerox (Charts, Fortune 500) can't say how much of the environmentally preferable paper it will sell because it won't begin marketing FSC-certified paper until next year. Maybe it will sell a lot. But maybe it will sell very little - because certified paper is more expensive than paper that comes, say, from forests in southeast Asia where environmental standards and protections for workers are weak.

This isn't to question Xerox's good intentions. The Connecticut-based company has a serious commitment to sustainability: It is greening its own operations, recycling its copying machines and helping its customers achieve their environmental goals. In the paper business alone, Xerox has an array of offerings made from recycled stock and a product known as "high yield" paper that is made by a mechanical process that uses only half as many trees as the traditional chemical process for making paper.

Last year, Xerox scientists invented a way to make prints whose images last only a day, so that paper can be used again and again. (It's not yet a commercial product.) And Xerox's corporate foundation is also taking an interest in forest management issues. It has pledged $1 million to The Nature Conservancy to come up with scientific tools to manage forests and enable small landowners to more easily obtain certification for their forest tracts.

Moreover, Xerox executives say they are sure there will be demand for the FSC paper. "Customers are definitely asking about it," says Steve Simpson, who is vice president and general manager of Xerox's paper and supplies unit. Some big commercial and government customers demand certified paper, he says. And small buyers are interested, too. Maggie Ochs, a Xerox paper manager, told me that she spoke this week with the owner of a small printing company in Arkansas who wants to use only FSC paper. "This is his market strategy," she says. "He's doing everything from calendars to yearbooks to Little League programs, using only certified paper."

There's no doubt that demand for certified paper is growing. According to InfoTrends, a market research and consulting firm, forest land certified by the FSC has nearly doubled in the past three years to a total of more than 224 million acres, which increases the supply (and should lower costs) for businesses and consumers.

In recent years, Staples and Office Depot (Charts, Fortune 500) pledged to source more of their paper from FSC-certified forests. Williams-Sonoma (Charts) and Limited Brands, the parent company of Victoria's Secret, use FSC-certified paper in their catalogs. (I wrote about the catalog industry including Victoria's Secret here.)

Simon & Schuster recently pledged to print more books using certified paper, and Scholastic made the biggest buy of FSC-certified paper ever to print 12 million copies of Harry Potter and the Deathly Hallows. Time Inc. (parent company of Fortune) has a substantial and transparent commitment to source certified paper.

But the fact remains that the paper in most magazines, most books, most catalogs and most offices in the United States is not certified. So there's no way to know where it came from and how it was produced. In places like India and China, the idea of producing and consuming paper from environmentally preferable sources has yet to take hold. "We have a long way to go, but most companies are beginning to understand these issues," Whelan told me. "Only two years ago, we didn't."

So, yes, Xerox's announcement is another sign of progress. But does it add up to a meaningful difference to the planet? Hard to know.  To top of page