“The deadly impacts of climate change are here and now. Loss and damage can no longer be swept under the rug. It is a moral imperative. It is a fundamental question of international solidarity – and climate justice.” – Antonio Guterres, UN secretary general at the COP27 in Sharm-el- Sheikh.
In his statement, UN secretary-general, Antonio Guterres said that the growing number of catastrophic events causing enormous suffering around the world had no warning or means of preparation; and calls for nations to come together, and international solidarity across the board, all actors in society for a universal early warning or means of preparation.
The United Nations Forum on Sustainability Standards (UNFSS) extends this notion through sustainability. There is a growing consensus among many segments of society about the increasing importance of both sustainability and crisis management. This consensus is borne out by a body of academic and professional literature, the efforts of the international community at the global level, and the promulgation of laws and regulations at national and local levels.
As leaders in knowledge creation, and research, academics are in a unique position for their expertise to make significant advancements not only in the fight against climate change but also in furthering the goals of sustainable development at large.
The UNFSS established the Academic Advisory Council (AAC) to ensure inclusion of the component of research in understanding the effectiveness on Voluntary Sustainability Standards (VSS) and the determinants of its effectiveness. Currently, different disciplines approach questions related to the effectiveness of VSS from different theoretical perspectives and focus on different dimensions of effectiveness. The AAC´s objective is to being these different perspectives into one overarching network that critically examines the issues related to VSS.
In October 2022, the UNFSS co-organized its second AAC meeting together with the Leuven Centre for Global Governance Studies, the German Institute of Development and Sustainability (IDOS), and the European University Institute (EUI), hosted at the Irish College in Leuven. The meeting was conducted in a hybrid format and some participants joined in-person and some joined virtually.
The meeting brought together an international mix of academic (members of the AAC), practitioners (members from the UNFSS National Platforms) and policy experts from various disciplines and backgrounds to consolidate the knowledge on VSS, and discuss the contributions of VSS to sustainable development, centered around the theme for discussion: “Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of VSS”, structured around the internal and external dimensions of VSS, with a development related lens. This provided an avenue for cross fertilization of thoughts on the issue at hand.
“There is an increasing focus of policymakers on sustainability. For example, in the recent Trade Policy Review done in Europe, there have been efforts to push values like sustainability, through the instrument of trade. There has been an increasing push to make trade and sustainability objectives more enforceable in trade agreements. However, the objective in the EU is to work collaboratively with partners and the work of VSS is thus more amenable to the EU approach as VSS generally work together with producers and smallholders.
Dr. Bernard Hoekman, Professor and Director, Global Economics at the Robert Schuman Centre for Advanced Studies, European University Institute.
This year’s AAC meeting discussed the SWOT framework of VSS. On the internal dimension, the AAC meeting explored the strengths and weaknesses of VSS in advancing the sustainability agenda, especially in developing countries, with a specific focus on VSS institutional design, how they work, how they have evolved over time, and how they try to adopt to new challenges and circumstances.
Further, on the external dimension, the AAC meeting explored the opportunities and threats that VSS face as a private governance tool that interacts with other regulatory initiatives. This is also imperative to be understood as there is an increasing interest in making value chains more sustainable, and from a regulatory perspective, there is an emergence of new regulatory tools, like the EU due diligence legislatives, which can have interactions with the VSS systems.
The idea of doing a SWOT analysis would benefit all key stakeholders present. For the researchers, it provides insights into what can be included in future research agendas; and for the policymakers and practitioners, it can inform them about the possibilities and limitations of including more private regulatory initiatives into public regulatory mechanisms
Dr. Axel Marx, Deputy Director at the Leuven Centre for Global Governance Studies, KU Leuven
In a nutshell, the SWOT gathered includes:
Internal Dimension
Strengths:
- There are multiple mechanisms through which VSS can foster compliance and this is allowed by varied design among VSS
- Regular revisions of standards and public consultation mechanisms can maintain
low barriers to entry allowing for broader adoption - VSS, in rhetoric, do support the broader sustainable development goals or the SDGs
- Complementary to public policy by filling in gaps in current regulatory regimes (substitution effect) and/or spillover effects of effectiveness
Weakness:
- There is less focus on strategies in VSS systems that support equitable value distribution
- Large variation in VSS design creates multiplicity and the lack of clarity on terminologies related to VSS hinders their adoption and in general creates confusion.
- Sustainability impacts of VSS are mostly context-specific, and sometimes inconclusive
- There is a lack of transparency and accountability in the stakeholders consultation mechanisms of VSS
External Dimension
Opportunity:
- Non-trade objectives such as sustainable development are increasingly included in trade agreements
- VSS can reduce the governance gaps between trading partners and hence increase the trade opportunities between developed and developing countries
- International VSS complements national VSS by segmenting by sectors i.e SMEs
- National VSS allows the country to target better on issues within the country
- Regional VSS allows market implementation to foster sustainability practices among countries that are cooperating in the region.
- VSS helps global supply chains implement sustainability requirements
- VSS can provide data for risk assessments required in due diligence
Threats:
- VSS’ voluntary and private nature and some lack of transparency, raise concerns about the impacts of these standards.
- Lack of data and evidence on the trade impact of VSS will continue to hinder their opportunities to be considered a policy tool.
- The cost of the certification, along with the technical barriers that limit developing countries access to VSS compliant markets, among other barriers, make VSS less attractive to developing countries’ small business owners
- There is a general lack of demand for some certified products such as palm oil, both in the domestic and foreign markets- thus lack of incentives to comply with VSS.
- There is a perception of VSS interference in domestic politics and that they lead to marginalisation of vulnerable actors in GVCs
Trade policy is only one of the many instrument to solve the multiple crisis that the world is facing. In that respect, design is a very important aspect. How we design VSS, or for instance, the new compliance regulations, is an important step and it must be steered towards what we want to ultimately achieve. This will make these instruments more inclusive. And for that we also must have data and ensure transparency. So design, data and transparency stand out while doing a type of SWOT analysis of instruments like VSS.
Dr. Mercedes Aràoz Fernàndez, Universidad del Pacifico and former Prime Minister of Peru.
What’s next?
Follow us as we discuss the VSS SWOT in-depth through our upcoming publication and continue to foster the dialogue on strengths, weaknesses, opportunities, and threats of VSS. These discussions are a steppingstone for researchers and policy makers to consider systemic pathways to better adopt VSS in order to foster sustainable trade.
Presentations provided can be accessed here, and they include: https://drive.google.com/drive/folders/1PagRgQLjgYf2WYAN1w3vADtUNFPDWhE0
- Voluntary Sustainability Standards and Value Distribution: Worker Cooperatives, Employee Ownership, and Profit Sharing, Elizabeth Bennett, Lewis & Clark College
- VSS institutional design for compliance, Axel Marx and Charline Depoorter, University of Leuven
- Sustainability standards and regulatory requirements for agriculture: international trade consideration, Shemina Amarsy, International Trade Center
- Strengths and weaknesses of VSS: Perspectives from developing countries, Manish Pande, Quality Council of India
- Sustainable Standards: voluntary or regulatory? Implications for trade policy, Kristin Komives, & Joshua Wickerham ISEAL
- Public and private sustainability standards in the palm oil sector, Etsuyo Michida, JETRO Japan
- Voluntary Sustainability Standards (VSS) and “greening” of “dirty” industry sectors in Brazil, Rogerio de Oliveira Corrêa, InMetro
- Regional sustainability standards: the case of ECOMARK Africa, Hermogene Nsengimana, ARSO
- The regulatory turn towards due diligence: an overview of recent developments, Axel Marx, University of Leuven
- Dilemma & Future – VSS and Due Diligence in Global Value Chains, Li Li, University of International Business and Economics
- Human Rights Due Diligence Measures and their Impact on Developing Countries, Archna Negi, Jawarhalal Nehru University
- Voluntary Sustainability Standards and Due Diligence along the Value Chain, Bernardo Calzadilla-Sarmiento, UNIDO
- Zero deforestation commitments by the private sector: Strengths and weaknesses. Eric Lambin, Stanford Woods Institute
- Goal-based private environmental governance and its tensions in the Indonesian palm oil sector, Janina Grabs (ESADE Business School) and Rachael Garrett, ETH Zürich
- A Comparison of Stakeholder Engagement Practices in Voluntary Sustainability Standards, Hamish van der Ven, University of British Columbia
- Overview of RSPO’s impacts on deforestation and incomes, Robert Heilmayr, University of California
- Governing AI through ethical standards: learning from the experiences of other private governance initiatives, Graeme Auld, Carleton University
- The economic impact of VSS: A review of empirical evidence, Niematallah Elamin, UNCTAD
