WTO Public Forum - Voluntary Sustainability Standards and Inclusive Trade: The role of Government
29 September 2016
Ladies and Gentlemen,
Good morning.
It is my pleasure to be here today to launch the second Flagship report of the United Nations Forum on Sustainability Standards: "Meeting Sustainability Goals: Voluntary Sustainability Standards and the role of government".
Agenda 2030 gives us a roadmap to ensure a future of prosperity for all, dignity for all and a better planet for all. The challenges ahead to achieve the Sustainable Development Goals are enormous and require a concerted effort: the mobilization of all communities and all tools at our disposal.
To achieve the SDGs, we need to change the way we do things. And the private sector is fundamental in this process in two ways. First, the private sector can contribute to change "unsustainable consumption and production patterns". And second, it can improve "resource efficiency in consumption and production".
And this is where standards play an important role for sustainable and inclusive development.
Standards can push the frontier of best practices of sustainable production methods. And they can also help to build trust in consumers and other stakeholders to regards to these methods.
Voluntary Sustainability Standards (VSS) in particular have become a new market reality. They provide a new level of engagement with the private sector on consumer and business to business products.
The number of VSS has been growing fast. There are almost 500 eco-labels in 199 countries and 25 industrial sectors. Exports of VSS certified products were already worth $36 billion in 2012.
VSS today are a tool for supply-chain management, a marketing instrument for businesses, and a tool to competitiveness. The average annual growth rate of standard compliant production, across the commodity sectors in 2012, was a stunning 41%, with sugar growing at 74%, cocoa at 69% and cotton at 55%.
VSS are also a benchmark for consumers. They help them to select "sustainable" goods and services. A recent survey by Nielsen shows consumers' willingness to pay for "sustainability" products is increasing. In 2014, 50% of consumers surveyed in 60 countries, express their willingness to pay for more sustainable brands and products. Today this figure stands at 66%. And in fact, demand for sustainable products in developing countries has grown even faster than in developed-country markets.
Yet, there are risks inherent in this development.
In UNCTAD we are paying particular attention to the risks of fragmentation, which disproportionally hurt SMEs and companies from developing countries. The number and complexity of VSS overwhelms some developing country exporters, de facto acting as an entry barrier. The cocoa, coffee, tea, cotton, forestry, sugar and soybean sectors are especially affected.
Ladies and Gentlemen,
This report highlights that although the sustainability impact of VSS seem to be positive, it is also very much case specific. Moreover, whereas there is not a globally accepted benchmark for assessing the overall impact of VSS on sustainable development, there are a number of risks and challenges we must address:
First of all we need to ensure that VSS benefit those that need it the most - rather than the traders and retailers at the end of the value chain. VSS should benefit producers, especially in developing countries.
Secondly, we need to address the lack of interoperability among the more of 400 existing standards. This enormously affects their credibility and spurs confusion among producers, buyers and consumers.
Thirdly, VSS need to be applicable at local level and operate in local contexts.
Fourthly, VSS need to be more affordable. Their cost of implementation and certification can be prohibitive.
Fifthly, VSS need to be credible, legitimate and accountable.
And finally they need to have a real transformational impact. They need to bring about a major systemic change that protects natural resources and communities at local and national level.
Considering the challenges above, this Forum has a key role to play in providing an inter-governmental process that ensures multi-stakeholder participation. This should help to deepen the understanding of the contribution of VSS to sustainable development.
We all agree that governments and business must work together to leverage VSS and make them an effective tool for sustainable development.
Now, the critical question is:
"What is the role of governments in effectively supporting VSS"? "How can governments use VSS as a lever to support sustainable development?"
Governments have an awful lot to play. Their role is critical both to amplify the benefits of VSS and to address their deficiencies.
We have enough experience to see how powerful these schemes can be, but governments will have to do more so that more schemes are more powerful.
This report is a valuable contribution that answers some of those questions, and provides some recommendations on the role of governments.
Governments should:
Set the conditions for an effective implementation of VSS, by having the adequate national policy and regulatory environment. And they should also align public policy goals with the goals of VSS so to amplify their benefits.
Ensure VSS are relevant to local contexts and use VSS as a market enhancer for inclusive trade. For example, by eliminating the core causes of high certification costs, reducing information asymmetry and enhancing interoperability among standards.
Facilitate multi-stakeholders partnerships for VSS, rather than take individual actions, and Public-Private Partnerships have a great potential in this.
Use an open inter-governmental process for ensuring VSS effectiveness and accountability.
The conclusions of the report offer a starting point for understanding how governments can use VSS as an effective tool towards sustainable development.
I am looking forward to the discussion today, to explore in depth the conclusions of the report.
However, we must consider this as a starting point.
Whereas governments have a key role to play, there are also risks arising from governments' involvement with VSS. For example, let's consider the need to minimize possible business rent seeking behavior, or the potential impact of VSS on the welfare of domestic consumers if prices increase, and finally the adoption of national standards versus international standards.
More questions arise, which I hope can stimulate the discussion in this forum.
Thank you very much
