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Are Voluntary Standards Relevant to the SDGs? Three Factors that Matter

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By Jason Potts, September 16, 2015

At face value, it would seem, there could be little doubt as to the relevance of sustainability standards in achieving the UN’s freshly minted Sustainable Development Goals (SDGs).

Goal 12 explicitly calls on governments to ensure that consumption and production practices are sustainable. Standards have long sold themselves as promoting sustainable consumption and production by facilitating the identification and application of sustainable practices along global supply chains. Voluntary sustainability standards would, at minimum, appear to have an obvious role to play in fulfilling SD Goal 12. 

Moreover, as voluntary “eco” standards have gradually migrated from single-issue initiatives (for example, ozone friendly or dolphin friendly labels) toward increasingly comprehensive multi-issue “sustainability” standards their potential relevance extends to the other SDGs. Add to this the growing adoption of voluntary standards by mainstream companies such as Walmart, Unilever, Nestle, Home Depot and Mars to name but  a few, and it would appear that standards are poised to play a pivotal role in the achievement of the new SDGs.

While such an observation might be conceptually accurate, the real meaningfulness of voluntary standards to the SDGs will depend not on their purported thematic relevance to the SDGs, but rather on whether they actually offer anything new to the international trading system. This, in turn has far less to do with their thematic coverage and much more to do with how they are operated and the systems they employ. More specifically, the relevance of voluntary standards to fulfillment of the SDGs will turn on their ability to overcome three hurdles facing all market-based approaches to sustainable development:

  1. Economic Inclusiveness: Voluntary standards have long been understood as vehicles for offering economic benefits in return for the adoption of sustainable practices. Presented in such a light, voluntary standards offer no shortage of “opportunities” for improved economic well-being among the poor. However, as instruments of the market, voluntary standards are persistently forced to seek the lowest-cost solutions for compliance, which, to date, has tended towards a consolidation of production among those producers that already have the means to demonstrate compliance or make the necessary investments to do so.[1]  Those most in need, the long-understood priority of sustainability development, thus have the potential to become the losers in a free-market world governed by voluntary sustainability standards.  This presents a major challenge for voluntary standards and points towards a systemic need for targeted investment in capacity building and technical assistance to facilitate the transition of poorer producers to a position where they can access compliance-based markets.
  2. Participatory governance:  Voluntary standards offer private systems of governance which operate in parallel to public regimes but themselves are subject to very little regulatory oversight. In principle, voluntary “sustainability” standards run by single individuals or companies on a for-profit basis and with little meaningful sustainability impact could easily dominate trade. However, over the years, voluntary standards, largely in an effort to ensure their own credibility, have relied heavily on multi-stakeholder, not-for-profit governance models.  This has, in turn, given rise to a variety of innovative systems for enabling stakeholders across multiple jurisdictions to participate in their rule making processes. In many cases, voluntary standards have offered new opportunities for otherwise marginalized stakeholders to participate in global supply chains. Sustainability standards are, however, conflicted by a deep need to pay special attention to the needs of big market players as a basis of maintaining or expanding market share—leading to a situation where more marginalized producers may remain under-represented in their so-called participatory governance processes. While sustainability standards appear to have improved the participation of more marginalized decision makers in many cases, even the most participatory initiatives tend to be driven by actors in developed countries.[2] The ability of voluntary standards to exert meaningful change in global economic relations will depend on their ability to transform the status quo distribution of decision-making among global supply chain actors through more participatory forms of governance.
  3. Measurability: In terms of content, the SDGS offer very little that is actually new. The SDGs are primarily a parceling and prioritization of concepts and objectives already captured by the Earth Summit and Agenda 21 processes. The value-added of the SDGs rests in their ability to provide focused and measurable targets for decision-makers that can improve tracking and accountability related to their achievement. One of the major attributes that standards bring to conventional supply chains is also an improved ability to define goals and measure results towards their achievement through their standards development and enforcement processes.  To a large degree, the very project of sustainability standards can be seen as a micro-application of the SDG effort itself. And while standards have made significant advances in improving the measurability of supply chain actions, to date, many, if not most, sustainability standards have focused on stipulating management requirements rather than actual performance requirements.[3] This, in turn, has left issues related to the measurable impacts of standards largely in question. If standards are to become effective tools in the realization of SDGs, standards will need to place a greater emphasis on performance requirements and related outcomes/impacts. 

While it has been common to focus attention on the content of standards systems when evaluating their potential contribution to sustainable development, the real value of standards to the SDG process are likely to lie elsewhere. In particular, the ability of the voluntary standards infrastructure to promote economic inclusiveness, participatory governance and enhanced measurability across global supply chains will represent the most important asset of such systems in the context of the SDGs. The actual requirements of sustainability standards will be meaningless if they are not supported by processes that explicitly and significantly advance equity and accountability within global supply chains.

 

[1] Potts J. et al, The State of Sustainability Initiatives, IISD, 2014.

[2] Ibid.

[3] Ibid.