Public policy and private standards – bridging the gap to mainstream sustainability

Private standards emerged to address pressing sustainability issues in the absence of effective regulation. With policy-makers increasingly looking at sustainable value chains as the economic drivers behind the global sustainability agenda, new partnerships and ‘co-regulatory’ initiatives are being developed which connect public policy and private standards. ISEAL is mapping such partnerships with the aim to foster a new dialogue on how governments can and should use sustainability standards.

In recent years, governments around the world have stepped up their commitment to sustainability. They have introduced numerous regulations and policies which aim to improve production practices in order to reduce negative environmental impacts and achieve better socio-economic outcomes. Most significantly, in 2015 almost every national government signed up to a set of ambitious targets by 2030 through the UN Sustainable Development Goals (SDGs).

The private sector has made similar sustainability commitments to address sustainability in their supply chains, both on specific issues (stopping deforestation) and in light of broader agenda’s such as the SDGs.

This has gone hand in hand with the growing use of voluntary sustainability standards. These are market-based tools to achieve positive environmental, social and economic outcomes by introducing better management and production practices, while providing market incentives.

Shifting perceptions

For a number of reasons, public policies and private standards have often work besides each other. On one hand, governmental officials have often dismissed private standards as illegitimate, irrelevant or obstructive, despite the fact that in many countries responsible business practices are not regulated or enforced.

These perceptions are changing. Politicians in developing or emerging economies recognize the potential of standards with a credible system behind them, as they can enable sustainable trade and investment flows. Credible multi-stakeholders standards from their side are more open to adaptation and collaboration with local and national stakeholders to increase their reach and enhance sustainability outcomes.

With their universal scope, the SDGs provide a common language and a framework for public and private sectors to work together. Because of their alignment to the SDGs, sustainability standards are not only business tools which enable companies and whole sectors to make progress on the 2030 agenda, they are also tools for policy-makers to support and enable this.

Mapping new partnerships; examples from fish to biofuels and beyond

ISEAL is developing a series of short case-studies to identify how such partnerships are already achieving sustainability outcomes in different countries and industries. Three of these case studies, available here, have now been published.

The first example takes us to Brazil, where a partnership between the government of the world’s largest coffee producing state – Minas Gerais – and the world’s largest voluntary standard for coffee, UTZ Certified was established. A mutual recognition agreement enables producers certified under the government’s own sustainability scheme to sell their coffee with the UTZ label. This gives them access to high-value markets, while opening up UTZ certification to many more small producers.

In a second case study, the Marine Stewardship Council (MSC) and a coalition stakeholders enabled Suriname’s seabob fishery to become the first MSC certified shrimp fishery in the tropics. While certification helped secure access to important export markets, the process also led to wider improvements in fisheries management. In order to meet the MSC standard, the Suriname government invested in scientific stock assessments, formal management plans and monitoring of illegal, unregulated and unreported fishing.  

In Mozambique, a third example looks at an innovative partnership which is re-shaping the country’s cotton industry. The Better Cotton Initiative (BCI) has assisted the country’s policy-makers in re-shaping its rules for cotton concessions to achieve higher yields while improving on sustainability aspects. In addition to improved extension services, BCI also allows Mozambican producers to meet the rapidly growing market demand for more responsibly cotton. 

Another case study looks at the EU’s Renewable Energy Directive (EU RED), which aims to promote the use of sustainably produced biofuels. The Directive relies on private standards and certification programmes to guarantee that sustainability criteria are met in the production of biofuels, ensuring that clean energy production is not causing negative effects such as deforestation. It has driven wider uptake of existing standards and created new certification programmes. However, the policy – which is currently under revision - needs to do more to distinguish between low-bar standards and more comprehensive, credible standards which provide better safeguards. Without a more selective approach, EU RED is unlikely to foster a ‘race to the top’ in more sustainable biofuel production.    

Mutual Benefits and the importance of credibility

These examples provide first insights and lessons on the opportunities and challenge of developing partnerships and co-regulation between governments and private standards. They all suggest that cooperation and mutual recognition between private standards and public policies is better than competition.

They also evidence how partnering with a standard system can offer various advantages to policy-makers. They can provide expertise, guidelines and a suite of practices. Moreover, when implemented, they enable various benefits to businesses, can unlock capacity building support, and access to global markets and finance. The case-studies also illustrate how sustainability standards developed at the international level have the greatest impact when they are implemented in a supportive environment. Government regulations and policies can make private standards more accessible, and help drive sustainability performance across whole landscapes and sectors.

In all of this, the concept of ‘credibility’ is key. To be credible and transformative, standards need a high degree of transparency, impartiality, and rigour, and are based on multi-stakeholder processes which neutralize conflicts of interest. In using state resources to support or use a private standard, governments need to be aware of these important differences in governance, processes and effectiveness between different standards.

The ISEAL’s case-study series will illuminate the achievements, key lessons and challenges for policy-makers. Working with a variety of partners, ISEAL aims to foster a dialogue on how public and private actors can achieve transformational outcomes through sustainable supply chains.   

To learn more about the relation between public policies and private standards, please contact Ms Norma Tregurtha, Director Policy and Outreach at ISEAL, on norma@isealalliance.org.