Ground-breaking new study reports double-digit growth in market performance of “eco-labels”
Geneva, Switzerland, (31 January 2014)
The average annual growth rate of products certified under “eco-labels” or voluntary sustainability standards (VSS) across all commodity sectors except biofuels in 2012 was a stunning 41%, reveals one of two comprehensive reports to be presented to the United Nations Forum on Sustainability Standards (UNFSS) on January 31 at 10.00 am in Conference Room XXVI, Palais des Nations, Geneva, Switzerland.
The State of Sustainability Initiatives (SSI) Review 2014 found that growth in VSS-compliant production was strongest in palm oil, which experienced 90% growth in 2012; sugar (74%), cocoa (69%) and cotton (55%).
The report is being launched alongside the first Measuring Sustainability Report of the Committee on Sustainability Assessment (COSA). Together these major reports provide the most comprehensive review to date of market trends, system performance and impact research on popular sustainability standards, and ask how sustainability initiatives actually affect farmers, communities and the environment in low and middle-income countries.
“Multi-billion dollar market segments now accommodate no fewer than 435 sustainability standards or ‘eco-labels’ claiming some aspect of sustainability,” COSA President, Daniele Giovannucci said. “Some of these are a response to the failure of public policies to deliver results in the most critical aspects of our food supplies. So, it is becoming increasingly important to know how effective they are and, indeed, how sustainable any initiative really is.”
The reports will be a critical resource for supply-chain decision-makers such as business executives, policymakers, investment advisers, standard setters and non-governmental organizations.
UNFSS, which was launched in March 2013 to respond to growing interest in sustainability standards that can reduce poverty in developing countries, is cosponsored by UNCTAD and four other United Nations agencies: the Food and Agriculture Organization (FAO), the International Trade Centre (ITC), the United Nations Environment Programme (UNEP), and the United Nations Industrial Development Organization (UNIDO).
The SSI Review 2014 provides a bird’s eye view of market and performance trends of the 16 most prevalent standards initiatives – such as the Forest Stewardship Council, Organic, and Rainforest Alliance – across ten leading commodity sectors. Certified goods with an estimated trade value of US$31.6 billion in 2012 were studied.
The COSA Measuring Sustainability Report, Mr. Giovannucci said, “illuminates the salient findings from nearly 18,000 surveys conducted between 2009 to 2013 in Africa, Asia and Latin America for coffee and cocoa — two important commodities that are bellwethers for sustainability trends in other crops.”
Key findings of the SSI Review include:
• VSS-compliant products attained significant market penetration in several major commodity markets. VSS-compliant coffee reached 38% in 2012 (up from 9% in 2008); cocoa 22%; palm oil 15% and tea 12%.
• Despite growth, there is persistent oversupply of VSS-compliant products on the market. On average, only 42% of VSS-compliant production is actually sold as such on the market.
• Uptake in standard-compliant production is led by the more developed of the export-oriented producers, raising questions about the effect on poverty reduction.
• VSS have been successful in establishing: (i) more inclusive governance across global supply chains; (ii) third-party monitoring as the minimum norm for conformity assessment: (iii) compliance with labour standards as minimum requirements for market entry.
• However, as VSS have moved into the mainstream, the average breadth and depth of sustainability requirements covered by such standards has declined, pointing toward the importance of understanding the impacts of mainstream adoption.
Key findings of the COSA Measuring Sustainability Report include:
• VSS results are very context specific, great in some areas and flawed in others.
• Higher yields sometimes can correlate with better environmental practices.
• Efficiency measures leading to better incomes suggest new ways to work with farmers to reduce costs and improve yields.
• Multiple certifications correlate to more, not less, income, but only up to a point.
• More training is a benefit of VSS, but differences in other key social indicators such as food security are inconsistent and even many of the better-earning small farmers still lack adequate food.
Overall, the COSA and SSI reports show that the opportunities for voluntary standards to enable positive and transformational changes across major mainstream markets are now well established and continue to grow, but that taking full advantage of them requires a better understanding of field level impacts as well as a host of strategic policy measures to support technical assistance and cost-internalization at the market level.
For more information, please check the UNFSS website at www.unfss.org or contact Mr. Ulrich Hoffmann, coordinator of UNFSS, at the UNCTAD secretariat (firstname.lastname@example.org, phone +41 22 9175780).
The SSI Review 2014 is a collaborative effort by the International Institute for Sustainable Development (IISD), the International Institute for Environment and Development (IIED), the Finance Alliance for Sustainable Trade (FAST), Environment and Trade in a World of Interdependence (ENTWINED), the Sustainable Trade Initiative (IDH) and the World Wildlife Fund (WWF).
COSA is a neutral and non-profit global consortium of organizations. Its mission is to accelerate sustainability in agriculture via mutual partnerships and assessment tools that advance our understanding and management of social, economic, and environmental impacts (thecosa.org).