Voluntary Sustainability Standards Sustainability Agenda and Developing Countries: Opportunities and Challenges

Summary

To achieve sustainable and inclusive growth, it is vital that sustainable business practices are adopted throughout entire global value chains (GVCs). Companies are increasingly placing voluntary sustainability standards (VSS) at the centre of the sustainability approaches governing their GVCs. So much so that VSS have been proliferating over the past few decades. They have emerged as important tools to address sustainability challenges such as biodiversity loss, climate change, pollution and human rights violations. By establishing standards for sustainable consumption and production practices, VSS can help achieve environmental, social and economic sustainability. It is expected that the implementation of VSS will contribute to mitigating environmental crises, and to improving social and economic sustainability, fostering food security and improving livelihoods, as well as helping to improve the goals of job creation and poverty alleviation, among others. Compliance with VSS requirements could also increase market access and generate trade opportunities for producers in developing countries. However, VSS also generate challenges for developing countries, particularly for small producers in those countries. In some cases, they can increase production costs and restrict the integration of smallholders and producers from developing countries into GVCs through exclusionary effects. Barriers linked to governance gaps, lack of access to finance, lack of incentives and sociopolitical resistance to VSS, among others, can prevent their adoption and hence producers’ access to higher value markets. Recent policy developments make these exclusionary effects even more significant, necessitating an improved understanding of the effects of VSS, especially for developing countries and least developed countries (LDCs). Against this background, this report discusses the role of VSS in advancing the sustainability agenda in developing countries, and assesses the opportunities and challenges associated with VSS uptake in those countries.