The International Institute for Sustainable Development (IISD) and the University of Geneva’s Faculty of Law organized a webinar to explore how voluntary sustainability standards (VSS) across a range of commodities could be integrated into trade agreements, market access regulations, export promotion measures, and procurement policy to advance sustainability goals.

Part of a joint series on trade and sustainability, the 10 November webinar focused on the theme, ‘Voluntary Sustainability Standards, Public Procurement, and Trade Policy: Trends, Challenges, and Development Implications.’ Participants also discussed the implications of integrating such standards into trade policy, in particular for developing countries and least developed countries (LDCs).

Cristina Larrea, Lead, Sustainability Standards, IISD, moderated the discussion. She said the webinar built on a report titled, ‘Scaling up VSS through Sustainable Public Procurement and Trade Policy,’ produced by the UN Forum on Sustainability Standards (UNFSS), in collaboration with the University of Leuven (Belgium).

Larrea defined VSS as initiatives that support industry actors in making informed decisions to advance sustainability, and highlighted that while not mandatory, VSS can act as de facto requirements. She noted that according to IISD’s Global Market Report, VSS-compliant production in commodities such as cocoa, cotton, coffee, and palm oil, grew between 2008-2018, reaching an estimated 20-30% of total production volume.

Santiago Fernandez de Cordoba, UNFSS, outlined the role of VSS as a tool to transform the way we are producing, consuming, and trading. He said UNFSS aims to harness VSS’ potential to achieve the SDGs by: facilitating developing countries’ access to global markets, stimulating well-informed dialogue among stakeholders, and elevating capacities for producers, small and medium-sized enterprises (SMEs), and exporters who can be marginalized by VSS in global trade.

De Cordoba highlighted five proposals to integrate VSS into public policy:

• Enhance national capacity;
• Incorporate VSS within the trade regime by using the Standard International Trade Classification;
• Avoid proliferation of VSS systems through mutual recognition mechanisms;
• Curb over-certification; and
• Conduct policy dialogue on the benefits of scaling up VSS.

Axel Marx, University of Leuven, highlighted the role of governments in facilitating the adoption and use of VSS through sustainable public procurement (SPP) to drive sustainable development. He recommended that in their efforts to integrate VSS in SPP, government buyers prioritize credible VSS over non-credible ones. Marx pointed to the emergence of VSS references in free trade agreements (FTAs), and said governments could use VSS as a conditionality in market regulation and export promotion.

Liesbeth Casier, Policy Advisor, IISD, said in order to ensure that VSS deliver on their full potential for SPP, it is important to address implementation, procurement agencies’ ability to determine what is sustainable, and compliance verification, among other issues. She underscored the need to ensure that “sustainability does not become a burden” and that public policy for VSS does not “crowd out” SMEs, which are crucial for job creation. Casier said governments can take complementary actions to ensure that SMEs have access to the SPP market by using e-procurement systems and introducing quotas for contracts to be awarded to SMEs, among other actions.

Nathalie Bernasconi-Osterwalder, Senior Director, Economic Law and Policy, IISD, highlighted that while “trade and environment discussions are picking up again,” including in the World Trade Organization (WTO), and FTAs increasingly incorporate environmental provisions, few contain references to VSS. She highlighted the planned Agreement on Climate Change, Trade and Sustainability (ACCTS), where VSS encourage the promotion and application of ecolabels that are transparent in their criteria and meaningful for consumers. Bernasconi-Osterwalder warned that costly labeling and certification measures may cause developing country producers to lose market access, and recommended that countries undertake ex ante impact assessments of FTAs.

Responding to questions from the audience, participants discussed regulatory versus non-regulatory aspects of VSS, the benefits of mutual recognition between VSS, the need for multiple VSS labels to prevent monopolies, and the role of complementary policies in ensuring that VSS do not marginalize developing countries and SMEs.

In closing, Makane Moïse Mbengue, Professor of International Law, University of Geneva, stressed the importance of cooperation on enhancing developing countries’ capacities to ensure that VSS help them achieve the SDGs.

The UK’s Foreign, Commonwealth and Development Office provided support for the webinar. [Webinar Webpage] [Publication: Scaling up VSS through Sustainable Public Procurement and Trade Policy] [SDG Knowledge Hub Sources]