Testing metrics for public equity interests in utilization of natural resources.
Orie L. Loucks, O. Homer Erekson, Allan Springer, Megan Moses Departments of Zoology, Economics, Paper Science and Business
Miami University, Oxford, OH 45056, United States

Presented at EcoSummit 2000: Integrating the Sciences
Halifax, Nova Scotia, Canada
June 18-22, 2000

Timber harvests in the United States and many Western countries are supplied variously from publicly owned forests, from privately-owned company lands, and from small private holdings where standing timber can be simply purchased and removed. Sustainability, or specifically the public's intergenerational equity interest in the outcome of these operations depends on many factors, including the scope of government or industry planning and management, the intensity of removals (clearfelling or selection logging), and the thoroughness and timing of replanting and related land and nutrient conservation measures. Information on the quantity and quality of these industrial forest operations can be discerned, however, from the corporate environmental reports of the major companies involved. We have quantified seven measures of environmental performance (or forest ecosystem stewardship) for the ten forest and paper companies in the Standard and Poores 500. The data allow subtle distinctions to be recognized in field harvest practices and mill operations. The hypothesis being tested here states that practices conducive to sustainability and maintenance of intergenerational equity in productive capacity also reflects good corporate management and works to the self interest and enhancement of a company's long-term shareholder value. While considerable variability exists in performance from one corporation to the next, preliminary results show the hypothesis seems to hold, and total return for high performance companies is abut 60% better than the companies ranked lower in the sustainability metric. These results suggest that the new, enlightened resource industry management practices can both improve aspects of the quality of life and shareholder value at the same time.