According to the United Nations Forum on Sustainability Standards (UNFSS), VSS are standards that set various sustainability metrics for producers, traders, manufactures, retailers or service providers, including: respect for human rights; worker health and safety; environmental conversation; community relations; land use and planning; and others. Like standards, VSS are the result of consensus among industry experts on technical guidelines and best practices for businesses to manage their processes, operations and stakeholder relations. As emphasized by the United Nations Conference on Trade and Development (UNCTAD), VSS are mostly designed by non-governmental organizations or private firms and convey a set of standards for products, processes and production methods to mainstream economic, social and environmental dimensions of sustainability. When discussing VSS, the terms “standards”, “certifications” and “labels” may be used interchangeable. But it is important to approach the right term when designing, marketing and monitoring VSS. For more information, UNFSS’s Voluntary Sustainability Standards provides more analytical aspects of VSS-related terms that may be involved in policy-making processes.
VSS can come in different types according to the sectors, subject matters, production processes and governance mechanisms they focus on. VSS are mostly governed by non-state actors that include companies, industry associations and non-for-profit organizations. These design well-known standards such as GlobalGap, a farm assurance program, or the Fairtrade Standards that certify producers and traders for meeting a range of economic, environmental and social criteria in their business practices. Public agencies such as the United States Department of Agriculture (USDA) also develop standards, such as to certify whether products are organic. Other standards are the result of multi-stakeholder initiatives, including the Forest Stewardship Council (FSC) and the Roundtable on Sustainable Palm Oil (RSPO). The United Nations Conference on Trade and Development (UNCTAD) provides a summary on VSS types on its Framework for the Voluntary Sustainability Standards Assessment Toolkit.
Why do VSS matter for businesses to trade and contribute to sustainable development?
With more than 500 VSS in existence, public and private sector stakeholders are placing increasing attention to sustainability practices that enable businesses and supply chain actors to engage in international trade and foster sustainable development. UNCTAD and UNFSS have analysed a range of channels through which businesses adopting VSS can seize market access opportunities by adopting sustainability practices in their business operations and supply chain relations. For example, businesses that invest in environmental harm reduction technologies and improve living wages for workers obtain sustainability certifications that enable them to charge price premiums in more lucrative markets. Linkages like this demonstrate the potential effect VSS can have for businesses to engage in trade and contribute to sustainable development. Further examples and analyses have been documented in UNCTAD’s Better Trade for Sustainable Development and UNFSS’s Voluntary Sustainability Standards, Trade and Sustainable Development.
How can policymakers support small businesses to adopt VSS?
While adopting VSS and obtaining their relevant certifications offers potential benefits in terms of trade and sustainable development, it often represents challenges for small businesses. Depending on the nature of VSS and related certification schemes, small businesses can face significant compliance challenges, skills shortages and limited resources that make the certification process costly. These challenges are compounded for small businesses from developing countries which lack adequate institutions, technical assistance and policy regulations in support of business sustainability certification. As a starting point for identifying policy areas where small businesses need support, ITC’s SME Competitiveness Outlook 2016 has outlined a five-point action plan aimed to help VSS work for small businesses to participate more in trade. The action plan includes: a) Facilitating access to information; b) Enabling firms to comply with technical standards; c) Supporting technical infrastructure; d) Strengthening domestic governance; and e) Leveraging international mechanisms on trade facilitation.
Where can I access resources on policy frameworks, guidelines and tools?
Where can I access good practices and national examples?