Paper Thin Comfort – Wood Fibre Risk in a Finite Forest World

January 15, 2026, Global – Solutions-driven environmental non-profit Canopy has released a new issue brief, Paper Thin Comfort - Wood Fibre Risk in a Finite Forest World. The brief highlights the growing risks facing global wood-dependent supply chains, particularly in paper, packaging, and textiles, and the urgent strategic shifts businesses must make to strengthen resilience, reduce exposure, and align with emerging climate and nature regulations. Insights include the projected near and mid-term impacts of increased competition for an increasingly constrained supply of wood fibre due to regulations and climate change.

The brief was jointly developed by Canopy and Finance Earth, a social enterprise which specialises in investment analysis and design to deliver positive outcomes for nature, climate and communities. The brief finds that escalating demand, climate-driven shocks, and tightening regulations are converging to create a riskier and more volatile outlook for companies dependent on conventional wood-based inputs in paper, packaging and textiles. The brief underscores that competition is increasing for a finite pool of wood,  as other sectors such as energy and construction increase wood consumption. These pressures, alongside new regulations on deforestation and degradation are expected to drive sustained cost increases, supply volatility, and higher compliance expenditure for companies that rely heavily on virgin wood. 

In addition, the brief warns that current volumes of credibly certified wood are already limited and heavily competed for, meaning that most “sustainable” wood supply is effectively spoken for and will not be sufficient to absorb future demand growth.

Nicole Rycroft, Founder and Executive Director of Canopy, said: “Forests are one of our greatest climate allies and central to meeting global climate and nature targets, yet current sourcing models and supply chains are pushing them to breaking point. This brief makes it clear: if companies and investors stay locked into business-as-usual wood sourcing, they are signing up for higher costs, greater supply vulnerability, and growing regulatory and reputational risk. This exposes businesses unnecessarily, given there is a clear exit ramp with Next Gen and alternative sources.”

The brief identifies three core risk areas for brands and investors with wood fibre-dependent supply chains:

• Rising demand for wood fibre across energy, construction, packaging, and textiles are outpacing what forests can sustainably supply;
• Supply constraints as land competition, climate impacts, and ecosystem degradation limit wood availability and quality;
• Escalating compliance costs as regulations such as the EU Deforestation Regulation (EUDR) and human-rights due diligence rules tighten market access. 

In response, the issue brief sets out a three-part strategic framework for companies to reduce exposure and build resilient, climate-aligned supply chains:

1. Reduce reliance on virgin wood by scaling circular and Next Gen alternatives made from agricultural residues, waste textiles, and recycled inputs, to delink growth from primary and other high-value forests and lower exposure to price and compliance shocks.
2. De-risk remaining wood supply by ensuring any continued use of virgin wood is credibly certified, fully traceable, and screened for ecological and social risks, including impacts on Ancient and Endangered Forests or Indigenous Peoples and local communities.
3. Plan for future shocks by integrating wood-related risks into scenario analysis and stress testing, and steering capital towards more resilient sourcing and investment strategies.

'The good news is that many corporates engaged in wood fibre sourcing are already starting to consider the financial implication of these risks to their bottom line. By quantifying the risks associated with business as usual wood fibre sourcing, businesses are able to see the clear rationale for investing in resilience and doubling down on sourcing of lower risk supply', says Elizabeth Beall, Managing Director of Finance Earth. 

Building on the findings of the Finance Earth brief, Canopy will continue to work with its global network of brand partners, investors, producers, and innovators to scale circular and Next Gen Solutions, strengthen sustainable, resilient sourcing, and ensure that supply chains help protect, rather than deplete, the world’s most climate-critical forests.

Read the full report here.

For more information, contact:
Mike Hudema, Communications Director, Canopy
Email: mike.hudema@canopyplanet.org
Phone: 778-989-6153

About Canopy
Canopy is a solutions-driven environmental non-profit dedicated to protecting the world’s forests, species, and climate. Working with more than 1,000 global brands, producers, and innovators, Canopy drives supply chain transformation and scales Next Gen Solutions to reduce reliance on Ancient and Endangeredl Forests. Learn more at www.canopyplanet.org 

About Finance Earth
Finance Earth is a leading environmental impact investment advisor, active in over 35 countries worldwide. Established in 2016, Finance Earth’s mission is to facilitate more finance and funding into nature, climate and communities, and it specialises in the design and implementation of financing strategies that can achieve this goal.  Finance Earth is a mission-locked, employee-owned B Corp, with 51% of profits reinvested into its mission. https://finance.earth/