As global trade evolves, so does the responsibility it carries. The latest UNCTAD report, “The Future of Sustainable Trade: Due diligence initiatives, voluntary sustainability standards and developing countries”, paints a picture of a world where sustainability is no longer optional—it’s becoming a requirement and ethical imperative.
At the heart of this transformation is the rise of mandatory due diligence regulations. Countries, particularly developed ones, are enacting laws that require companies to ensure their supply chains are free from environmental harm and human rights abuses. The European Union’s Corporate Sustainability Due Diligence Directive and the block’s Deforestation Regulation (EUDR) prime examples, demanding that businesses identify, prevent, and mitigate risks like deforestation and forced labour. Below an example of a due diligence process, with identification and assessment of adverse impacts along the global value chains and a process towards ceasing, preventing, and mitigating adverse impacts, including environmental and social ones.
But this shift, while necessary, is not without its challenges—especially for developing countries. Small producers and local exporters often lack the resources to comply with these complex requirements. Without support, they risk being excluded from global markets, deepening existing inequalities and threatening the livelihoods of millions.
Voluntary Sustainability Standards (VSS), like Fairtrade and Rainforest Alliance among others, have long tried to promote sustainability practices along Global Value Chains (GVCs). These standards already have installed infrastructure in many countries and are relevant for trade, and now they seem to be evolving to align with new legal frameworks. Their tools, such as geolocation tracking and third-party audits, are potentially helping businesses meet due diligence obligations. The report emphasizes that VSS can serve as a bridge between ambitious sustainability goals and the practical realities of trade. By leveraging the existing infrastructure of VSS, policymakers can streamline compliance and reduce the burden on small producers. Below an example of the existing capacity infrastructure already built by VSS: there is higher land-tenure among certified producers, as well as higher membership rates with farmer organizations. Additionally, they arguably had more access to training, access to credit, and technical assistance than non-certified ones.
However, the path forward requires more than alignment. As Santiago Fernandez de Cordoba, Coordinator of UNFSS, highlighted during the 6th UNFSS Flagship press conference, at the Hamburg Sustainability Conference on June 3rd, a holistic approach is required: harmonizing regulations across countries, increasing the participation of producers in standard-setting, and providing financial and technical support to those most at risk of being left behind. The report calls on governments, businesses, and civil society to act, working together to build a trade system that is not only sustainable but also inclusive—one that ensures no one is left behind in the pursuit of a fairer global economy which benefits all.
About the UNFSS Flagship Series
In order to tackle the challenges that VSS posed to developing countries, UNFSS promotes proactive approaches to national policy and information exchanges on VSS, which enables developing countries not only to minimize potential costs associated with adjustment to VSS, but also to maximize related economic, social and environmental benefits.
UNFSS publishes a flagship report on diverse topics biennially, to do with Voluntary Sustainability Standards (VSS), our mission, and activities, for our stakeholders from the public and private sectors. The first volume of the Flagship Report released in 2013 was the interplay of VSS and public governance. The 2016 Flagship Report sought to further dissect the interplay between VSS and public governance processes by striving to answer the question “what are the optimal dynamics between VSS and public policy processes to ensure sustainability objectives are most efficiently met”. The 2018 Flagship Report identified the resemblance between VSS and the Sustainable Development Goals (SDGs). The 2020 report analyzed how VSS are (and can be) integrated into Sustainable Public Procurement (SPP) and trade policy respectively, while the 2022 report delved into the relationship between VSS and trade, particularly on the issue of market access. The 6th edition of this joint UNFSS publication aims to contribute to the ongoing debate on the regulatory shift global governance is experiencing, from voluntary to regulatory approaches, and shed light on the implications of this shift to developing countries.
