Europe's pulp and paper sector faces a paradox. Sustainability has become a business imperative, driven by regulations such as the EU Deforestation Regulation (EUDR), the Corporate Sustainability Reporting Directive (CSRD), and the Corporate Sustainability Due Diligence Directive (CSDDD), as well as growing expectations from customers and investors. Yet despite mounting pressure to act, fewer than 40% of the more than 220 companies surveyed across Europe report high levels of sustainability maturity. This raises a critical question: why are some companies successfully navigating the sustainability transition while others continue to lag behind?
To understand how companies across the pulp and paper value chain are responding to these pressures, the findings highlight a broader shift. Sustainability is no longer treated as a purely environmental issue, but as a business concern shaped by four key drivers: Forests & Planet, People, Economy & Markets, and Governance. How companies respond across these areas ultimately determines how effectively they can manage risk, meet market expectations, and remain competitive.
One of the clearest findings is that certification plays an important role in sustainability strategies, but its adoption varies across regions. Many companies recognize certification as a foundational tool to support sustainable practices, with FSC certification supporting companies in demonstrating responsible sourcing and environmental performance. Yet uptake differs significantly depending on the market. For example, reported adoption ranges from 34% in Finland to over 60% in the UK. In some cases, lower uptake is linked to the need for clearer ways to measure impact and stronger stakeholder collaboration.
Market dynamics are another important factor impacting sustainability decisions. More than 60% of companies report that market demand significantly influences their approach to sustainable sourcing. At the same time, inflation and rising costs are creating tension, requiring businesses to balance sustainability ambitions with financial constraints. In fact, cost pressure is identified as the single most important factor likely to shape business decisions in the near term.
While many organizations are making progress on social responsibility, challenges remain in translating commitments into practice across the supply chain. Around 70% of companies report integrating the rights of forest-dependent communities into their sourcing or manufacturing strategies. However, supplier engagement continues to be a key challenge, with companies expressing concern about how consistently these commitments are implemented at supplier level.
Within the governance dimension, trust and transparency emerge as important factors in advancing sustainability. Companies with higher levels of maturity are more likely to adopt certification and express greater confidence in sustainability standards. However, concerns remain around traceability and transparency, particularly among less mature organizations, which can affect confidence in how sustainability claims are verified across the value chain.
The challenge facing the pulp and paper sector is no longer whether sustainability matters. The challenge is how to deliver it in a way that remains commercially viable amid rising costs, growing regulatory demands, and increasingly complex supply chains. Companies that can bridge that gap will be better positioned to meet stakeholder expectations and compete in a rapidly changing market. The report highlights the need for practical solutions that can support businesses in turning ambition into measurable progress.
You can read the full report about the current state and challenges of certification in the pulp and paper industry here https://fsc.org/en/media/2026-fsc-pulppaperlightpaper
Recycled materials in focus
As circularity becomes a growing priority, certification also plays a role in supporting the transition towards more resource-efficient models. Labels such as FSC Recycled enable companies to verify and communicate the use of 100% reclaimed materials, providing greater transparency around recycled content. In a context where demand for circular solutions is increasing, this type of approach helps businesses move beyond commitments and demonstrate how materials are kept in use, supporting more credible and consistent circular economy practices.
You can explore what how FSC is enabling circularity here https://fsc.org/en/circularity