Sustainability standards create value in local markets

2 October 2014
ITC News

One size does not fit all when it comes to creating the most value for suppliers through the use of sustainability standards, said panellists at the International Trade Centre’s (ITC) Trade for Sustainable Development Forum.

At the session on ‘The supplier perspective – implementing sustainability standards’, held on the second day of the forum in Geneva, Switzerland, speakers encouraged use of voluntary sustainability standards with a stronger focus on making them accessible to all actors in supply chains, from small and medium-sized enterprises (SMEs) to big businesses, as well as consumers.

There are two divergent trends underway: one towards harmonization of the over 400 private voluntary standards that exist today. The other is a drive by emerging economies to have greater ownership by building their own standards to reflect their own consumers’ interests, as well as those of global supply chains.

The Association of Colombian Flower Exporters has its own certification label called Florverde. While 75% of flowers are exported to the United States, where certification is not a requirement, 80% of the association’s SMEs have adopted the local certification for its environmental, social and business benefits.

‘The benchmarking mechanisms that we have in place now allow for local and regional standards,’ said Dave Boselie, Senior Manager, Learning & Innovation, IDH. ‘We must acknowledge that local and domestic standards could very well be more appropriate than a few international standards.’

Mr. Boselie added that if farmers and other suppliers had the opportunity to work with a basket of standards, rather than individual standards, it would give them flexibility in complying with them and further encourage adoption of standards.

With the ‘high growth’ of interest in local ownership of sustainability standards in emerging markets, there must be transparency and engagement with all actors involved, said Karin Kreider, Executive Director of ISEAL Alliance, a non-governmental organization that works to strengthen sustainability standards systems.

‘Standards are not just supply-chain management tools,’ she said. ‘They started with the drive to create better conditions for workers and communities and reduce environmental threats. So that’s what they must focus on.’

‘The way forward is to capture the true value of sustainable products, not just compliance costs,’ Mr. Boselie said. ‘Certified farmers deliver more than just goods. They deliver a range of positive benefits that haven’t been captured properly.’

Moving beyond certification is another important trend. The German government highlighted its work in integrating management-worker dialogues. Mr. Boselie spoke about looking at the broader business case to fine-tune investments. The quality of auditors and related standards – and not just the specific certification being measured – is important.

ColeACP-PIP, an association of businesses that promotes sustainable agriculture, represents millions of smallholders in 50 African, Caribbean and Pacific countries. Director Guy Stinglhamber said standards can be summed up in three P’s: Profit, People and Planet. Profit is the short-term vision, people are a medium-term vision and the planet is the long term – and all are important, he added.