We need greater collaboration to achieve sustainability goals in global supply chains. This was one of the key messages that speakers emphasized during a hybrid session discussing the role and evolution of voluntary sustainability standards (VSSs) as tools for building a greener and more sustainable global trading system.
The event was organized by the International Trade Centre (ITC) as part of their annual Trade for Sustainable Development Forum, and held during the World Trade Organization (WTO) Public Forum 2021 on 28 September. It outlined some of the ways that VSSs have had a positive social and environmental impact, the challenges they face, and the role of different actors in working together to improve them.
From niche to the new normal
Session moderator Tyler Gillard, Organisation for Economic Co-operation and Development (OECD), started the session by reflecting on how VSSs have progressed over the past 20-30 years in their aim to improve the environmental and social performance of global supply chains.
“I would say sustainability has moved beyond the niche into the new normal,” said Gillard, arguing that we are now in a period of self-reflection with regards to VSSs. Against a backdrop of the COVID-19 pandemic and impending climate crisis, Gillard said “we are in a new paradigm, and that forces us to look at whether sustainability standards are delivering in their promise. Are they having the impact that they set out to achieve?”
Market access and resilience
The first panelist to reflect on this question was Pamela Coke-Hamilton, Executive Director, ITC. “VSSs are one of the key tools that we have in our arsenal to work with [small and medium-sized enterprises (SMEs)] to help them develop and ensure they can access markets for certain products and services,” she said. She also noted that VSSs can improve smallholder farmers’ resilience to external shocks by helping them get higher premiums for their goods, providing them with more options for selling their goods, and building stronger relationships between buyers and sellers.
Coke-Hamilton wrapped up by sharing the main findings from ITC’s new report on sustainability standards. These include the conclusion that there has been a growing consolidation of standards requirements and an increase in VSSs embedded in free trade agreements (FTAs) and policy. The latter point prompted Gillard to note that VSSs may not be “voluntary” for much longer, as actors such as the EU consider mandatory legislation on due diligence in global supply chains.
Transparency and global benchmarking
Jean-Marie Paugam, Deputy Director-General, WTO, emphasized the difference between publicly backed standards, which are recognized by the WTO, and private standards, which are not. He said the WTO recognizes international standard-setting organizations as the “anchor for public policymaking in terms of standards,” noting that they could become the mechanism for recognizing private standards within the WTO.
Paugam also emphasized the importance of standard maps and their role in providing “a concrete response to what is really a blind spot in our governance system on trade.” While at the center of implementation efforts, private standards experience many challenges—from incomparability to a lack of transparency. Gillard agreed that aligning public and private standards with global benchmarks that reflect best practices could help alleviate the duplication and fatigue caused by the multiplicity and misalignment of VSSs in supply chains.
Training, harmonization, and access to finance
Afua Asabea Asare, Ghana Export Promotion Authority (GEPA), outlined the role of VSSs in the development of Ghanaian enterprise. She spoke about GEPA’s collaboration with ITC’s Trade for Sustainable Development (T4SD) programme, which has involved providing training to SMEs on how to attain certification and working with bank officials to help producers access finance.
Asabea Asare emphasized the need for harmonization and collaboration across different VSSs, given the challenges producers face in attaining similar certifications from different agencies. Gillard highlighted the role that governments need to play to coordinate domestic standards so that SMEs can better integrate into global supply chains, which will in turn help with export promotion and domestic market growth.
Developing a platform for convergence
Janet Mensink, Social and Labour Convergence Secretariat, the Netherlands, spoke of how manufacturers in the textile industry are being audited 12-15 times per year for different VSSs, with each audit costing considerable resources but not producing shareable or comparable outcomes. The Social and Labour Convergence initiative emerged as a way to address this problematic landscape of competing standards in the sector, she explained.
Mensink said that this initiative has brought together private and public sector actors to create one uniform framework for measuring labor conditions, thereby freeing up resources that can be redeployed elsewhere. She argued that once the project is scaled up, “we will have an opportunity to drive data insights at an aggregated level and do data analysis that will … [help] drive effective legislation.” Gillard also recognized the need for common metrics at the global level, but cautioned that local adaptation would be critical to get local buy-in.
VSSs are here to stay
In conclusion, Coke-Hamilton acknowledged that VSSs are here to stay, and said that as they get more and more embedded into national policies and international agreements, it becomes even more imperative that technical assistance is provided to producers in developing countries. “Without that, we will leave a lot behind. And we can’t afford to have that happen.”[SDG Knowledge Hub Sources] [WTO Public Forum 2021]