Statement to the T4SD Forum by ITC Executive Director Arancha González
30 September 2016 - Geneva
GENEVA, SWITZERLAND 30 SEPTEMBER 2016
Good morning and welcome to the third annual Trade for Sustainable Development (T4SD) Forum , a unique multi-stakeholders and inter-agency platform.
I am happy to be with you this morning at the WTO to kick-off this day of discussion around voluntary sustainability standards, global value chains, and the need and importance of data.
When I say the word “data”, many people may want to nod off or consult their Phones. Data is not usually an interesting topic to most. It can be dry, boring…. a bit too academic. But, it is in fact quite important – and I would even dare to say – quite interesting and exciting – when it comes to sustainable development.
Data is essential to help business improve the functioning of their value chains. Data is key for investors to make informed decisions and for consumers to trust markets. Data will also help us understand if we are on course to meet the UN Global Goals, in particular Goal 12 on responsible consumption and production.
For us at ITC data is a ‘must’. We collect it – through our ”maps”, including Standards map. We disseminate it. We turn it into intelligence, such as with Export Potential map. We analyse it to understand trends and gaps, as we have recently done with “The State of Sustainable Markets”, where we have documented the rise in the number of certified products and services, producers and land under cultivation.
What does this data tell us? It tells us that trade is evolving and we need to get a better understanding of these dynamics. In many ways, we can say that trade in the 20th century was more focused on protecting domestic industries. And while this is still an imperative in some quarters, today in the second decade of the 21st century we can say that trade is more and more about protecting consumers. We used to say that opening trade would help consumers. Today consumers are telling us what they want. And they are telling us that they want trade, but GOOD trade.
They are telling us that they want trade that is environmentally sustainable and socially responsible. They tell us that they want consumer protection. And as trade practitioners we will have to find ways to respond to these demands.
One of the ways to do this and at the same time maximise the opportunities and benefits that GOOD trade brings, is to collect and disseminate better data so that all actors - whether they be producers, traders, policymakers, buyers, retailers or the end consumer – can make better decisions.
This morning, in the first panel session of the T4SD Forum you will be able to learn more about the exciting research ITC is engaging in with partners such as European University Institute, International Institute for Sustainable Development and the Research Institute of Organic Agriculture and what it means for sustainable value chains. I would love to share some of these findings with you now but I will not “steal the thunder” and let my colleagues do the honours here. So, please be patient as it is coming up just after I finish these remarks!
Beyond research, ITC is also working on innovative initiatives at the demand and supply or downstream and upstream ends of the value chain. We are developing these solutions to open up data sharing and analysis possibilities with the objective or aim to promote GOOD trade.
Let’s first start with the demand or downstream side of the value chain.
ITC, through the T4SD programme, is working with SAI Platform members such as Unilever, Kelloggs, Ahold Delhaize, Coca-Cola, and with PepsiCo to develop customised IT solutions that allow these buying companies to connect with their upstream agricultural producers to provide farm-level environmental and social sustainability data.
This work allows farmers to better understand their sustainability gaps, benchmark themselves against their peers, while incentivising them to improve their performance. In short, the IT solution we are developing provides value to farmers. It offers them a path for continual improvement. Not “name and blame” but rather “name and fame” if you will. It also represents a more scalable and cost effective way to work with large value chains containing thousands of producers worldwide.
These companies can pre-competitively share supplier data to reduce duplication of audits and take a more risk-based approach to verifying their value chain partners. Data can be anonymized and then used by policymakers, governments and other parties to understand sustainability hotspots and where development funds should be invested. This, ladies and gentlemen, is the power of data and how it can contribute to GOOD trade.
These IT solutions can be delivered free of charge to upstream producers everywhere. I am very proud of these initiatives which demonstrate how ITC is working constructively with the private sector in key strategic areas.
The second panel this morning will dive into these IT solutions and provide some glimpses into the initial learnings from this innovative work.
Now let’s talk about the supply side.
One of the imperatives that we identified at the beginning of the T4SD programme was how to make engaging in sustainable value chains worthwhile for the upstream producer. Put simply, what is in it for them? What is the value proposition? Certification is required but often inhibits innovation – it is required when its relevance and desirability to producers is limited. So, how can we create a better business case for the producer to engage? How can we offer more visibility and connectivity potential to farmers? How can we give them a voice, a profile, a means to communicate and connect? A chance to more proactively shape or control their future?
Our response is the Sustainability Network. The Sustainability Network is an online tool where farmers working with ITC and its partners can create their profiles, upload relevant information such as proof of certification, land tenure and their sustainability achievements against a standard or code of conduct. This profile will be bolstered by GPS coordinates and where and when possible a Global Location Number or GLN issued by GS1, thereby offering location based traceability and a further level of data confidence and veracity.
The T4SD team provided a first glimpse of this tool yesterday at the Open House held at ITC and we look forward to the full launch of this portal in early 2017. With the Sustainability Network we are talking about the ability of farmers and upstream operators to leverage data to maximise their business potential and connect with value chain partners. This connectivity and linking ability, benefits we take for granted on sites like LinkedIn and Facebook, should be available and leveraged in the interest and pursuit of GOOD trade. At ITC we are striving to make it happen. We want to work with you to make it happen.
To be sure, there are challenges to be overcome. Connectivity in remote regions of the developing world is often lacking and the costs to bring the internet to these regions can be daunting. Nevertheless, I am optimistic. In my travels, I have visited distant villages in Africa and Asia where, while seemingly “off the grid”, at dusk when the sun has dipped below the horizon, I have seen faces lit up in the bright reflection of a myriad of smart phone screens. Change is happening. Our third panel will debate the issues of connectivity in the developing world and how we can best move forward in “connecting the unconnected”.
So, what is next, where do we go from here?
Zooming out and looking at the landscape from a 35,000 foot level we can see that while voluntary sustainability standards are driven by their mission to address some of the core challenges faced by our society – such as the protection of the environment and respect for human rights and workers’ rights – the real achievements of sustainability standards per their impacts on the ground remain often unassessed or un-assessable due to the lack of applied technology and investments. This presents a data challenge.
To be sure, quantifying sustainability impacts is extremely complex and very few voluntary standards offer sound and robust scientific processes to assess performance of standards and their impacts on the ground. For example, our research with the European University Institute shows that out of close to 200 standards analysed, only 32 have explicit written procedures for monitoring and evaluation of sustainability activities.
This “impact gap” is having an influence on the way private companies are viewing voluntary standards. Coupled with difficulties in delivering solutions at scale, reducing costs, the value proposition for farmers and buyers, lack of harmonisation and consistency of standards and their integration with other tools, new approaches are needed and better, open data is KEY in this regard. In this era of “standards and beyond” we need to think of how data can help to provide new insights and solutions.
The panels we have organised today are aimed at unlocking some initial ideas and proposing some innovative solutions. I hope that the outcome of today’s deliberations will move us forward in the direction of GOOD trade. Thank you for your participation and my best wishes for an engaging and inspiring day.