ISO Week in China - 39th ISO General Assembly
13 September 2016
Excellencies,
Ladies and Gentlemen,
On behalf of UNCTAD, it is a great honour and privilege for me to participate in this 39th ISO General Assembly.
This is all more so the case in light of the critically important topic for this GA discussion, namely the sustainable development goals.
Ladies and Gentlemen,
Last year, the international community dared to charge a new course for our common future. Agenda 2030 is a new, universal, comprehensive and coherent blueprint for the development of all of our societies. It sets out 17 goals, and 169 targets, to be achieved by the year 2030. The Sustainable Development Goals will ensure a future of prosperity for all, dignity for all and a better planet for all.
To make these collective aspirations a reality, it will require profound transformation. Nothing less.
It is an agenda that, I would argue, is far broader and more ambitious than anything previously attempted: it goes to the heart of how we organize our societies and our economies.
As such, Agenda 2030 also poses major challenges. If we are to meet the SDGs, we will have to, among other things: kick-start our engines of growth and prosperity in a different manner than before; decarbonize the global economy; decouple growth from environmental degradation; revamp our energy mix, while ensuring all have reliable access to energy; reverse acidification of our oceans and loss of biodiversity; offer a new sustainable path for consumption and production; ensure that economic improvements are benefitting all - not least the poorest and most vulnerable amongst us.
At UNCTAD, we have done some estimates of the magnitude of the challenge ahead:
We will need, collectively, to mobilise no less than 2.5 trillion USD annually in new investments to SDG-related sectors in developing countries;
We will need, collectively, to ensure that the poorest nations outperform China's best 15 years of growth performance, while the overall global carbon emissions are brought under control.
States cannot do this alone.
In order to deliver Agenda 2030, we need to mobilise all communities and all tools at our disposal. Global partnership is the key.
In fact, and rightly so, the 2030 Agenda considers the private sector as one of the major drivers of transformational change needed to achieve the SDGs.
In the end, private sector drives capital formation, investment, innovation and technology diffusion, productivity and trade - all of which is key for economic, social and environmental betterment. For this reason, the 2030 Agenda strongly encourages the business sector to contribute to change "unsustainable consumption and production patterns", and to improve "resource efficiency in consumption and production".
A major task ahead, therefore, is getting the incentives right for proper and genuine transformation. Private operators react to markets and markets are all about incentives. Doing the right thing must become a bottom-line issue for corporations.
It must pay-off to invest in, and innovate for, the future we want.
This is why, in UNCTAD's view, standards and certification, just as transparency and reporting, are critically important.
For example, at UNCTAD, we are working with stock-markets to ensure that publically listed companies are induced to provide environmental, social and governance reporting. We are advising governments on attracting and promoting investments for SDGs. And we are developing accounting tools for how corporate reporting should take into account the company's performance in relation to the SDGs.
Similar to reporting, standards can play a pivotal role to change the base-line calculation of companies' performance. As highlighted in the background document for this panel, standards are "an indispensable element of the infrastructure of modern industrial societies." They can push the frontier of best practices of sustainable production methods, while ensuring essential trust in these methods in relation to consumers and other stakeholders.
A recent survey by Nielsen shows consumers' willingness to pay for "sustainability" products is increasing: 66% of consumers surveyed in 60 countries said they were ready to pay more for sustainable brands and products (up from 55% in 2014 and 50% in 2013). Demand for sustainable products in developing countries has actually grown even at a faster rate than that in developed-country markets.
But there also are risks inherent in this development. At UNCTAD, being in charge of trade issues within UN family, we are paying particular attention to the risks of fragmentation, which disproportionally hurt SMEs and companies from developing countries.
One of such risks for fragmentations is the rise in non-tariff measures imposed by governments. Of course governments must regulate their markets and only naturally want to use its relevant instruments for promoting highest possible welfare of their citizens. But divergent and different national regulatory requirements pose serious obstacles to the connectivity of markets. At UNCTAD, we are closely monitoring this development and operate a database of NTMs covering 80% of world trade. What we have seen, is that NTMs are on the rise. And that these NTMs, whenever national requirements deviate from international standards, pose a far more significant hurdle to market access of poorer nations than traditional trade barriers, such as tariffs.
Another one of these risks for fragmentation stem from the the growing use of private sustainability standards by individual companies. Ideally, PSS schemes can contribute to achieving sustainable development in all its dimensions: in the economic dimension (for example obtaining price premium or ensuring a supply channel), in the social dimension (through better labour standards), and in the environmental dimension (through greener production).
However, private corporate standards can also increase information and production costs and impose a negative impact on international trade. This is particularly the case when there are a plethora of different PSS, requiring separate certification. The number of PSS schemes has increased rapidly particularly in the past two decades: Ecolabel Index currently follows 465 eco-labels in 199 countries and 25 industrial sectors. The presence of PSS is particularly high in the commodity sectors of coffee, tea and soybeans. We have also seen that such corporate sustainability standards may, in some instances, be arbitrary and not based on scientific evidence. This is not surprising considering that a few PSS primarily serve as a marketing tool. In addition, we have seen that PSS have increased their commercial influence in many developing countries without necessarily reflecting the producers' local needs and concerns, let alone the national sustainable development strategies.
This is why international standards grow in importance by the day and why they are the most cost effective way for producers and governments to boost development. International standards should be the basis for national regulations, just as for the development of PSS, and national certifying bodies can take a lead in this.
The 2030 agenda also explicitly acknowledged international standards as one of the means for implementing the SDGs. It recognizes the importance of achieving a balance between fostering dynamic business sectors and protecting social and environmental well-being in accordance with relevant international standards.
In conclusion: International standards can be instrumental to ensure sustainable patterns of production and consumption and, thereby, to the fulfilment of Agenda2030. They are also the most powerful way to counter tendencies for divergence in approaches to sustainability. For these, and other reasons, UNCTAD is keenly interested in closely collaborating with ISO and other international standard-setting bodies in the years to come. We look forward to exploring the possibility to work with ISO on reporting and accounting standards, on non-tariff measures and regulatory convergence, on private corporate sustainability standards and on our science, technology and innovation policy frameworks.
Many thanks!
