1、VoluntarySustainability Standardsin International TradeGeneva,2023VoluntarySustainability Standardsin International Trade 2023,United NationsAll rights reserved worldwideRequests to reproduce excerpts or to photocopy should be addressed to the Copyright Clearance Center at .All other queries on righ

2、ts and licences,including subsidiary rights,should be addressed to:United Nations Publications405 East 42nd Street,New York,New York 10017United States of AmericaEmail:publicationsun.orgWebsite:https:/shop.un.org/The designations employed and the presentation of material on any map in this work do n

3、ot imply the expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country,territory,city or area or of its authorities,or concerning the delimitation of its frontiers or boundaries.The findings,interpretations and conclusions expressed herein are

4、those of the authors and do not necessarily reflect the views of the United Nations or its officials or Member States.Mention of any firm or licensed process does not imply the endorsement of the United Nations.This publication has been edited externally.United Nations publication issued by the Unit

5、ed Nations Conference on Trade and DevelopmentUNCTAD/DITC/TAB/2022/8ISBN:978-92-1-113081-2eISBN:978-92-1-002275-0Sales No.E.22.II.D.50AcknowledgementsThis report has been prepared by Dr.Axel Marx,Deputy Director,Leuven Centre for Global Governance Studies,University of Leuven,and Ms.Charline Depoort

6、er,also of the Leuven Centre for Global Governance Studies,in collaboration with Santiago Fernandez de Cordoba and Niematallah E.A.Elamin,UNCTAD.The report is based on the University of Leuvens online edX course,“Sustainable Trade”.The authors would like to thank Ralf Peters and Alessandro Nicita(UN

7、CTAD)for their valuable comments and suggestions.The report was formatted by Jenifer Tacardon-Mercado(UNCTAD).iiiAcknowledgementsContentsAcknowledgements.iiiIntroduction:Trade and sustainable development.1Chapter I.Voluntary sustainability standards.5A.Introduction.6B.Emergence and evolution of VSS.

8、6C.Drivers behind the rise of VSS.71.Consumer awareness(demand).82.Motivations of firms to adopt VSS(supply).93.Reaction to failures of multilateral regulatory efforts.104.Reaction to the emergence of other VSS.105.Governments engagement with VSS.11D.Stagnation in the growth of VSS.11Chapter II.How

9、do VSS work?.13A.Setting sustainability standards.14B.Ensuring compliance with standards.161.Conformity assessment:Top-down verification.172.Fostering compliance from the bottom up:Complaint systems.19C.Supply chain tracking.20D.Diversity of VSS institutional design.21Chapter III.Effectiveness of VS

10、S.23A.Pathways for generating impact through VSS adoption.241.VSS sustainability impacts:Empirical evidence.252.Socioeconomic impacts.263.Environmental impacts.27B.Uptake of VSS.281.Barriers to VSS adoption.30Chapter IV.VSS and public policy.33A.Market access regulations.34B.Trade policy:Free trade

11、agreements and the Generalized System of Preferences.35C.Sustainable public procurement.36D.Due diligence regulations.361.Export promotion policies.37Conclusions.38References.39vContentsVoluntary sustainability standards in international tradeList of tables1.Number of positive,neutral and negative i

12、mpacts by category.26List of figures1.Channels of potential VSS impact on trade.32.Evolution in the number of VSS,19422022.73.Factors contributing to the proliferation of VSS between the 1990s and the 2010s.84.Distribution of VSS across sectors.125.VSS standard-setting process.146.Links between VSS

13、requirements and SDG targets.157.Top-down and bottom-up compliance assessments.178.Traceability systems.219.Pathways for VSS impacts.2410.VSS adoption scores by country(proportion of VSS in a country on total number of VSS).2811.Share of certified commodity production in total commodity production,2

14、008 and 2020.3012.Barriers to VSS adoption.3113.Integration of VSS into different public policies.34viIntroductionTrade and sustainabledevelopmentVoluntary sustainability standards in international tradeIntroduction:Trade and sustainable development International trade has expanded significantly ove

15、r the past few decades,powered by the rise of global supply or value chains.In particular,it rose rapidly after 1990,reaching a record level of$28.5 trillion in 2021(UNCTAD,2022).Moreover,trade has truly transnationalized economic activities(Hoekman,2014).In addition,and more fundamentally the natur

16、e of international trade has changed with the emergence of global value chains(GVCs),whereby parts and components are exchanged across countries before being incorporated into final products(Hoekman,2014).Indeed,today around 70 per cent of international trade involves GVCs(OECD,2020),which can enhan

17、ce countries ability to exploit their comparative advantages(UNCTAD,2021a).International trade continues to bring significant benefits to many countries and their people by generating economic growth and increasing incomes,reducing poverty,fostering innovation,creating jobs,broadening consumption ch

18、oices and encouraging peaceful relations(Irwin,2020).Both the 2030 Agenda for Sustainable Development(the 2030 Agenda)and its accompanying Sustainable Development Goals(SDGs),as well as the Addis Ababa Agenda,recognized that,overall,trade can be an engine for inclusive economic growth and poverty re

19、duction,and that it contributes to the promotion of sustainable development(UNCTAD,2021b;WTO,2018;WTO,2022).In addition,it has been argued that the increase in trade might lead to a“race to the top”for better social and environmental protection(Vogel,2005).As highlighted by Bradford(2020),multinatio

20、nal corporations and GVCs can spread stricter social and environmental standards across the globe.However,international trade has also generated significant environmental and socioeconomic concerns.It has contributed to environmental damage,including deforestation,climate change and biodiversity los

21、s(Deere Birkbeck,2021),and has also been linked to an increase in pollution through the creation of“pollution havens”.The socioeconomic concerns associated with increased trade relate,in particular,to labour rights violations,especially those aimed at reducing labour costs,including child labour,ins

22、ufficient wages,slave and forced labour,excessive working hours,or unhealthy and unsafe working conditions.And while international trade has lifted many people out of poverty,it has also contributed to increased inequalities within countries(UNCTAD,2019).Thus,global trade offers huge potential to co

23、ntribute to sustainable development,but it must be governed in a way that mitigates some of its negative impacts on sustainability.Accordingly,many initiatives have been developed that seek to govern global trade in a way that would make it more sustainable.One important initiative is the developmen

24、t and implementation of voluntary sustainability standards(VSS)relating to products and production processes.The United Nations Forum on Sustainability Standards(UNFSS,2013:3)defines VSS as“Standards specifying requirements that producers,traders,manufacturers,retailers or service providers may be a

25、sked to meet,relating to a wide range of sustainability metrics,including respect for basic human rights,worker health and safety,the environmental impacts of production,community relations,land use planning and others.”In other words,VSS prescribe a set of social,economic and/or environmental requi

26、rements that economic actors can voluntarily comply with in order to make their production and processing practices more sustainable.Upon verification of compliance with their rules,VSS issue certificates or labels that serve as proof of such compliance.They reward economic actors for producing more

27、 goods or services sustainably,in theory by facilitating market access and generating price premiums for those goods or services(Auld et al.,2008a;Estrella et al.,2022).Researchers have sought to analyse the effects of VSS on trade(Grassnick and Brmmer,2021;Guan and Ip Ping Sheong,2019).This aspect

28、is especially important for exports from low-and middle-income countries,as trade is viewed as a significant engine for inclusive economic growth and poverty reduction in those countries.In addition,VSS certification is the most widespread in tropical agricultural commodities 2such as coffee,cocoa a

29、nd palm oil,which are mainly produced in developing countries.VSS can have an impact on trade in several ways,as summarized in figure 1.They can have either a trade-enhancing effect as trade catalysts,or a trade-reducing effect as trade barriers.One body of literature argues that VSS enhance trade t

30、hrough several mechanisms,such as securing market access and price premiums,reducing information asymmetries and transaction costs,as well as boosting productivity as a result of improved agricultural practices,training,input use and technology transfer.A second strand of literature suggests that VS

31、S impede trade,especially for low-income countries.Costs related to certification,compliance and monitoring make it difficult for some producers,especially smallholders,to obtain certification.In addition to costs,producers especially in developing countries might not have the technical resources to

32、 comply with VSS requirements.Besides,as argued in the literature,price premiums are not guaranteed,and when they are obtained,they do not necessarily trickle down to the producers,but instead are often captured by powerful actors along GVCs.Thus the producers are not compensated for the certificati

33、on costs they incur what Ponte(2019)refers to as the“sustainability-driven supplier squeeze”.These barriers to VSS adoption can exclude producers especially from developing countries from value chains in which certification increasingly becomes de facto mandatory.Figure 1 Channels of potential VSS i

34、mpact on tradeVoluntary Sustainability StandardsCatalystsIncreased market access and demand through product differentiation and signalingPrice premiumsReduction in information asymmetries and transaction costsProductivity improvementsBarriersHigh certification costsCompliance or implementation costs

35、Monitoring costsTechnical barriers to implementing VSS requirementsPremium captureExclusionary effects Trade value and volumeSource:Authors.3Introduction:Trade and sustainable developmentVoluntary sustainability standards in international tradeLittle empirical research has been conducted on the actu

36、al impact of VSS on trade.A literature review of the empirical evidence of their trade impacts by Elamin and Fernandez de Cordoba(2020)found only nine such studies in this field.While the literature points to a trade-enhancing effect of VSS,overall,some relevant nuances are important to bear in mind

37、.In particular,the reviewed studies yield contradictory results and are highly case-specific,focusing on only a few VSS and products.For example,a study by Grassnick and Brmmer(2021)finds that UTZ certification promotes exports of cocoa beans and paste,but weakens the export performance for further

38、processed cocoa products.Likewise,Guan et al.(2019)find that the trade impact of certification by the Forest Stewardship Council(FSC),a VSS for the sustainable management of forests,depends on the type of wood products exported.More research on the trade effects of VSS is therefore warranted.This re

39、port provides an introduction to VSS as instruments for making international trade more sustainable.Chapter I describes VSS,how they emerged and how they have evolved.It shows that they have grown significantly as a tool for transnational governance in terms of the number of VSS,the number of sector

40、s and commodities in which they are active,and the share of certified production of some key commodities in total global production of those commodities.Chapter II delves into how VSS work to achieve sustainability goals.It describes in detail how VSS operate and the different actors involved in the

41、 certification process.The chapter also highlights the significant diversity among VSS.Chapter III takes stock of the current literature and evidence on the effectiveness of VSS.Effectiveness is approached from two different dimensions.One dimension focuses on the use or uptake of VSS.The second foc

42、uses on the impacts of VSS on the ground on different sustainability indicators,with a specific focus on their social and environmental impacts.Chapter IV describes the use of VSS by other trade-related policy instruments.It details how VSS are integrated into public policy as complementary instrume

43、nts to achieve public policy goals.4Chapter IVoluntary sustainability standardsVoluntary sustainability standards in international tradeChapter I.Voluntary sustainability standardsA.IntroductionVSS have emerged as important tools for governing global value chains(GVCs)and addressing related sustaina

44、bility concerns(Marx and Depoorter,2022).They are increasingly seen as key transnational governance instruments to pursue sustainable development,as they aim to ensure that products and production processes comply with a set of social,economic and/or environmental requirements in order to make globa

45、l production more sustainable.VSS are actively engaged in a wide range of sectors,from agriculture and forestry to minerals and electronics.However,they are most widely used in tropical agricultural commodity sectors,including bananas,cocoa,coffee,cotton,palm oil,soy,sugarcane and tea,which are most

46、ly produced in and exported from developing countries.Some VSS have gained broad recognition.The FSC,for example,is a global,not-for-profit multistakeholder organization that sets standards to make forest management environmentally responsible,socially beneficial and economically viable in the long

47、term.The Marine Stewardship Council(MSC)is another multistakeholder organization with representatives from the seafood industry,environmental non-governmental organizations(NGOs)and academia,which sets standards on fishery practices in order to protect the oceans and safeguard seafood supplies.The F

48、air Wear Foundation(FWF)is an independent organization that works with the garments industry,workers and industry influencers in order to improve labour conditions in that sector.The Better Cotton Initiative(BCI)aims to make cotton a sustainable mainstream commodity by reducing the environmental imp

49、acts of cotton production,and by improving the livelihoods and economic development of cotton-producing areas.The Rainforest Alliance,founded in 1987 as an NGO,promotes responsible business practices,and provides certifications for sustainable forestry and agriculture,in particular in the coffee,coc

50、oa,tea,hazelnut and banana sectors,but also for sustainable tourism.Fairtrade International is a multistakeholder non-profit organization active in various agricultural sectors that sets standards on labour and cooperative organization to improve farmers and workers income.Although VSS are not a new

51、 phenomenon,their number has proliferated over the past few decades.Depending on the database consulted,their number now ranges from 300(ITC Standards Map,2022)to more than 450(Ecolabel Index,2022).This chapter traces the emergence of VSS and their evolution,and presents the factors driving them.B.E

52、mergence and evolution of VSSThe emergence of VSS can be traced back to 1928 with the creation of the Demeter symbol for the certification of biodynamic farms(Marx and Wouters,2015a).In that sense,VSS are relatively old.However,it took many years before any other VSS were created,starting with Spiel

53、 Gut in 1954,which sought to promote sustainable toys.In the 1970s,some additional biological agricultural labels emerged,such as Bioland in 1971,California Certified Organic Farmers in 1973,and the Soil Associations organic standard in 1973.In 1978,the first government-led voluntary sustainability

54、standard,Blue Angel,emerged in Germany.Thereafter,there was an acceleration in the number of other VSS created.Figure 2 plots the number of VSS from 1942 to 2022 based on two databases the ITC Standards Map,and the Ecolabel Index.It is based on the reported establishment dates of the various VSS sch

55、emes,and only includes those that were still operational in 2022.It shows that while in the early 1980s,only three to four new VSS were created on an annual basis,their number increased rapidly from the mid-1990s onwards.6Figure 2 Evolution in the number of VSS,0300350400450500

56、22200220122022Ecolabel IndexITC Standards MapNumber of VSSSource:Authors,based on ITC Standards Map(2022)and Ecolabel Index(2022).Despite the divergence in numbers between the ITC Standards Map and the Ecolabel Index,resulting from different methodologies and selection criteria

57、,two interesting common trends can be identified.First,although the idea of VSS is relatively old,their proliferation is more recent:VSS truly emerged in the 1990s,and their number grew consistently until the early 2010s.Second,growth in the number of active VSS has been slowing down in recent years

58、,and has stabilized since 2017.The next section explores the factors that drove the proliferation of VSS in the 1990s,before turning to the possible reasons why their growth has been stagnating in recent years.C.Drivers behind the rise of VSSSeveral factors contributed to the proliferation of VSS be

59、tween the 1990s and the 2010s.They relate to consumer demand,firms motivations,governments engagement,a failure of multilateral regulatory efforts and competition from other VSS(figure 3),as discussed further below.7Chapter I.Voluntary sustainability standardsVoluntary sustainability standards in in

60、ternational tradeFigure 3 Factors contributing to the proliferation of VSS between the 1990s and the 2010sProliferationof VSSReaction to the emergence of other VSSReaction to failures of multilateral regulatory effortsGovernments engagement with VSSGrowing consumer awareness of social and environmen

61、tal issuesFirms motivations,such as brand protection,price premium and market access1.Consumer awareness(demand)One factor driving the proliferation of VSS from the 1990s until the 2010s has been consumer demand.In recent decades,consumers have grown more conscious of sustainability issues and,accor

62、dingly,they have adjusted their purchasing behaviour in relation to their perceptions of products sustainability(ORourke,2012).In this respect,VSS respond to consumer concerns by providing information on the sustainability attributes of products through the use of labels.There are several channels t

63、hrough which consumers have contributed to the emergence of VSS.First,in addition to price considerations,ethical considerations,either consciously or unconsciously,play a role in consumers purchasing behaviour.For example,sustainability considerations have prompted some consumers to become vegetari

64、an,while others choose to buy only locally in their own community,and some decide to boycott garment companies that are associated with forced labour or child labour.A number of consumers look for VSS labels on products.Thus,ethical considerations create demand for sustainable products which VSS aim

65、 to supply.In addition to these ethical considerations,producers and retailers have increasingly realized that consumers have a certain influence on how products are produced and distributed.Consumers may decide to boycott certain products,or,on the contrary,purchase sustainable products “buycott”(B

66、artley et al.,2015).These consumption choices have an impact on producers and economic actors in value chains who,as a consequence,may increase their uptake of VSS in order to avoid boycotts or increase their sales.Ethical consumerism has been widely documented in North America and Europe,although t

67、his does not mean that outside these regions consumers do not make ethically driven consumption choices.However,the reality of ethical consumerism and the existence of consumer markets for sustainable products remain contested.Nevertheless,increases in market shares of certified products in some sec

68、tors provide 8evidence of the growing demand for sustainable products.Although systematic data on sales of certified products remain scarce,some examples can be cited.For instance,45 per cent of the coffee sold on the market in the Netherlands in 2010 was certified,compared to only 2.9 per cent in 2

69、001(Ingenbleek and Reinders,2013:467);and global retail sales of Fairtrade certified products increased by 125 per cent,from 4.36 billion in 2010 to 9.8 billion in 2018(Fairtrade,2019;ITC,2019).On the other hand,the actual size of the market for sustainable products is still unclear.Some studies emp

70、hasize that there is demand for VSS-certified goods,and that consumers(mainly in Europe and North America)will consciously choose such goods,but only if they do not cost more(Hainmueller et al.,2015).Other studies show that consumers demand for sustainable products depends on multiple factors,includ

71、ing age,education,budget,nationality,knowledge about sustainability and sustainability labels,or force of habit(Taufique et al.,2017;Thgersen at al.,2017).Thus,demand for sustainable and certified products depends mainly on specific socioeconomic and demographic attributes.In addition,research point

72、s to an“attitude-behaviour gap”,meaning that the expression of peoples awareness of sustainability issues and their intentions to buy sustainable products do not necessarily translate into more sustainable purchasing behaviour(Grabs et al.,2020;Hainmueller et al.,2015).Besides,studies show that the

73、proliferation of sustainability labels,such as VSS,on consumer markets has generated confusion among consumers about the missions of various VSS,the differences between them,and their effectiveness,which has undermined consumers trust in such labels(Marx and Wouters,2015a;Schleifer et al.,2019).Cons

74、umers often find it difficult to determine“the right thing to do”,although civil society is increasingly playing a guiding role by providing information or establishing ethical rankings.Finally,research shows that there is an oversupply of certified products in some markets,as consumer demand has no

75、t kept up with supply,and hence some certified products are sold as non-certified,as is the case in the coffee sector,for example(Tayleur et al.,2017;Garrett and Pfaff,2019),which is also indicative of limited consumer demand for certified coffee.2.Motivations of firms to adopt VSS(supply)A second f

76、actor driving the emergence of VSS lies in the different motives of firms to adopt certification.Here,five main motives are highlighted.First,some firms have sought to adopt VSS in order to protect their brands and mitigate reputational risks(Auld et al.,2008a;Gereffi et al.,2001;Marx,2008).Indeed,b

77、rand protection has become a major concern for many leading companies.Often,NGOs directly target firms through media campaigns and boycotts,pressuring those firms to take civil society concerns into account,and leading them to engage with NGOs to adopt VSS.For instance,Bartley(2003)observed that som

78、e business enterprises were directly targeted for not upholding labour standards throughout their value chain.Initially,those firms reacted by announcing their adoption of codes of conduct to address labour issues throughout their supply chain.However,instead of silencing protests,these actions gene

79、rated more inquiry and allegations that those enterprises were not adhering to their own codes of conduct.Gereffi et al.(2001)noted at the turn of the millennium that protests and direct actions against brand-name retailers were only 10 years old,but as one Greenpeace activist said,“It was like disc

80、overing gunpowder for environmentalists.”As a result,protests became a powerful means of forcing retailers and companies to take environmental,social and safety issues into consideration and develop new tools such as VSS.A second motivation for firms to engage with VSS lies in the price premium thes

81、e can yield for producers or firms,as certified products can potentially be sold at higher prices(Auld et al.,2008b;Marx and Cuypers,2010).However,research has also revealed that price premiums are not guaranteed(Garrett and Pfaff,2019).Moreover,producers and suppliers do not always reap the benefit

82、s of certification,as powerful actors in the value chain often capture the premiums(Grabs,2020)what Ponte(2019)refers to as the“sustainability-driven supplier squeeze”.9Chapter I.Voluntary sustainability standardsVoluntary sustainability standards in international tradeThird,producers or firms engag

83、e with VSS in order to gain or increase their access to GVCs and higher value markets.VSS can increase market access via two channels.First,as a differentiation mechanism,they can improve the access of certified products to environmentally and socially sensitive markets.Second,when market access is

84、conditional on compliance with specific sustainability criteria,VSS can provide proof of compliance with such requirements.Indeed,the latter(providing proof of compliance)might become increasingly important with the emergence of new regulatory measures in the area of human rights due diligence(Brigh

85、t et al.,2020;UNFSS,2022).Fourth,adoption of VSS by producers or firms along GVCs can be driven by their commitment to sustainability and ethical values(Faggi et al.,2014;Takahashi,2001).Firms undertake these commitments in response to shareholder/stakeholder demands in order to be able to attract b

86、etter workers,or improve or protect their reputation(Galati et al.,2017).A final motive for firms and producers to engage with VSS is that this enables them to innovate.VSS can facilitate knowledge transfer and learning relating to more sustainable practices,sometimes leading to efficiency gains(Aul

87、d et al.,2015;Rickenbach and Overdevest,2006).For example,Galati et al.(2017)studied the motivations of companies in the Italian forestry industry to adopt FSC certification.While signalling and differentiation motivations,moral aspects,market benefits and greater ability to comply with regulations

88、play a greater role in companies decision to become certified,the authors nonetheless found that companies also engage in certification for learning purposes so as to improve the quality of their products and enhance efficiency in their procedures.3.Reaction to failures of multilateral regulatory ef

89、fortsIn addition to demand(consumer awareness)and supply(firms motivations)factors contributing to the rise of VSS in the 1990s,another factor was the repeated failures of multilateral regulatory efforts to address sustainability issues.For example,the Brundtland report,Our Common Future,as well as

90、the United Nations Conference on Environment and Development in 1992,also known as the Earth Summit,identified deforestation as a key environmental issue.However,the summit failed to deliver a binding commitment to address deforestation.As a result,private forest certification emerged as a tool to a

91、ddress sustainability issues related to forestry.As Bartley(2011)notes,“Private efforts have also been perceived by many NGOs as a way to bypass political roadblocks”.4.Reaction to the emergence of other VSSThe proliferation of VSS can also be explained as a reaction to the emergence and rise of oth

92、er VSS.NGO-driven VSS are sometimes countered by industry-driven VSS,or vice versa,leading to different VSS often competing in the same markets.For example,the Programme for the Endorsement of Forest Certification(PEFC),an industry-driven VSS,was established in reaction to the creation of the FSC,an

93、 NGO-driven VSS,in order to better suit forestry companies realities.These dynamics have resulted in the emergence of several VSS focusing on the same commodities.Some other VSS were established following successes in other sectors,such as the Marine Stewardship Council(MSC)or the Roundtable on Sust

94、ainable Palm Oil(RSPO),under the leadership of the same organizations,such as the World Wide Fund for Nature(WWF).These dynamics contribute to the diffusion of the certification model across sectors.While there has been a degree of consolidation in the form of mergers between some VSS,some important

95、 competitive dynamics persist(Fransen,2011),and new players continue to enter the VSS market.In addition to competition between NGO-driven and industry-driven VSS,an increasing number of public sector VSS are emerging in different parts of the world.And this is becoming a significant 10trend in deve

96、loping countries or regions(UNFSS,2022).These VSS try to accommodate more local or regional sensitivities in their standards.For example,the Indonesian Sustainable Palm Oil and Malaysian Sustainable Palm Oil(public sector)national standards were created as a response to the Roundtable on Sustainable

97、 Palm Oil(RSPO),which is an international multistakeholder VSS for the governance of sustainable palm oil.Although VSS originate more in developed than in developing countries(Schleifer et al.,2019),these dynamics contribute to the rise in the number of VSS,overall,and have gained importance,especia

98、lly in recent years.5.Governments engagement with VSSA last factor that has contributed to the proliferation of VSS is that governments are increasingly engaging with VSS.Government regulations have been,and remain,a major driver of VSS development and adoption.The chapter on VSS and public policy d

99、elves deeper into how different types of public policy instruments integrate VSS or refer to them in some form.This includes regulations that restrict market access if products do not comply with certain(sustainability)requirements in trade policy(including export promotion policy instruments)and pu

100、blic procurement policies,as well as with regulations based on due diligence requirements.D.Stagnation in the growth of VSSWhile the combination of these factors fostered the proliferation of VSS during the period 19902010,in recent years the number of VSS has remained more or less stable(figure 2)f

101、or a number of reasons.First of all,growth in VSS was driven by the diffusion of the certification model across different economic sectors and commodities due to the various factors identified above.However,it appears that such diffusion might have reached its limits.Moreover,it may not be applicabl

102、e to all or other commodities and sectors.The existing VSS are concentrated in a limited number of sectors,such as agricultural and food commodities,textiles and forestry products(figure 4).For some other sectors and commodities,it might take more time or be more difficult to introduce certification

103、.An example is the sustainable management of rubber production,for which it appears to be difficult to develop VSS due to rubber price volatility,complex value chains and a lack of demand for sustainable rubber(Depoorter et al.,2021).Second,for those sectors in which VSS are active,growth has slowed

104、 down due to a certain degree of consolidation in the VSS market,which makes it difficult for new VSS to emerge.This consolidation is driven by two dynamics.In certain sectors such as forestry,some VSS have become dominant,such as the FSC and the PEFC,leaving little market opportunity for other VSS

105、to emerge.Moreover,some leading VSS are merging or collaborating closely,although this remains rare.An example in this respect is the merger of UTZ and the Rainforest Alliance in 2020,which resulted in one of the largest VSS currently operational.Third,the stagnation can be linked to how databases m

106、easure the evolution in the number of VSS.These databases might miss some dynamics,such as the creation of regional or national VSS,especially as the geographical scope and recognition of their standards are limited.Databases might also have become more stringent in deciding which VSS they should in

107、clude.Hence,the observed stagnation might be an effect of data collection rather than a real stagnation.11Chapter I.Voluntary sustainability standardsVoluntary sustainability standards in international tradeFigure 4 Distribution of VSS across sectors34293335383844465656737577152JewelleryElectronicsI

108、ndustrial productsMiningToysEnergyForestryFish(wild capture)ServicesFish(aquaculture)LivestockTextiles/garmentsConsumer productsProcessed foodsAgricultureNumber of VSSSource:Authors calculations based on ITC Standards Map(2022).Despite the current stagnation in their number,VSS have become a major g

109、overnance instrument to make GVCs more sustainable in several sectors,especially the forestry and agricultural sectors.However,the large number of VSS and limited mutual recognition generate confusion on the market for consumers and other actors along GVCs,as it is difficult to distinguish credible

110、from non-credible VSS.Some initiatives,such as the ISEAL Alliance,provide recognition to VSS based on guidelines for credible standards.And in 2020 the European Commission launched an initiative to establish minimum criteria for sustainability labels related to their institutional design(European Co

111、mmission,2022).The next chapter,examines how VSS work and how they differ from one another.12Chapter IIHow do VSS work?Voluntary sustainability standards in international tradeChapter II.How do VSS work?VSS schemes differ in the standards they develop,how they set and enforce those standards,and how

112、 they track the path of certified products along GVCs.But there are also some similarities in how they operate in these respects.A.Setting sustainability standardsBoth substantive and procedural aspects of standard-setting are important for developing relevant and inclusive standards for sustainabil

113、ity.VSS organizations are established based on clear commitments to sustainability,which they operationalize in three distinct steps(figure 5).Figure 5 VSS standard-setting processFormulate general principlesbased on,inter alia,international treaties and conventionsRefine the general principles into

114、 more specific standards and criteriaOperationalize the standards and criteria through one or more specific and measurable indicators123First of all,a VSS organization formulates general principles,which represent its mission or the broad sustainability goals it seeks to achieve.Many VSS aim to cove

115、r all dimensions of sustainability,but some are more oriented towards addressing environmental concerns,while others are more socially oriented.The general principles of VSS are largely based on existing international rules and agreements,often developed in a multilateral context,which relate to sus

116、tainability issues.In this respect,VSS entities integrate those public international rules and standards into their own procedures(Marx,2017).The international agreements include,for example:the Convention on Nature Protection and Wildlife Preservation in the Western Hemisphere,the Convention Concer

117、ning the Protection of World Cultural and Natural Heritage,the Convention on International Trade in Endangered Species of Wild Fauna and Flora(CITES),the Convention on Biological Diversity(CBD),the United Nations Framework Convention on Climate Change(UNFCCC),the United Nations Convention on the Rig

118、hts of the Child and the ILO Declaration on Fundamental Principles and Rights at Work adopted at the International Labour Conference in 1998.Second,VSS refine their general principles into more specific standards,or criteria.Each principle generally comprises several standards,which make conformity

119、assessment possible.For example,many VSS commit to protecting workers rights and improving employment conditions.This commitment is refined into various standards which include,for example,freedom of association,the right to collective bargaining,the abolition of forced labour and child labour,comba

120、ting discrimination,and promoting gender equality,health and safety practices,as well as minimum wages.Third,each of these standards is then operationalized into one or more specific and measurable indicators.The indicators enable additional conformity assessment as well as standardization.For examp

121、le,the commitment to promote gender equality is operationalized into different measurable indicators that can 14be monitored to ensure compliance,including,for example,equal wages for women and men when they do the same work,direct payment to working women to ensure that they receive and retain thei

122、r wages,that maternity leave is no less than a six-week period after childbirth,or that paternity leave is available to men and that they do not incur a penalty for taking it.These three layers principles,standards and indicators enable the operationalization of the general sustainability goals that

123、 VSS aim to achieve,many of which align with the SDGs(box 1 and figure 6).Box 1.VSS and the United Nations Sustainable Development GoalsBox 1.VSS and the United Nations Sustainable Development GoalsThe SDGs provide a shared blueprint to bring peace and prosperity to all people in the world by 2030.V

124、SS are discussed as a possible implementation mechanism for the 2030 Agenda(UNFSS,2016).Beyond their direct relevance to SDG 12(Responsible Consumption and Production),VSS align with a wide range of policy targets included in some of the other SDGs,such as food security,gender equality and climate a

125、ction among others(Marx and Depoorter,2021).However,empirical research in this area is still at a very early stage.On the one hand,there are those who see great potential for“credible”voluntary standard systems to play an important role in this area(WWF,2017).Others are less optimistic,pointing to s

126、hortcomings and limitations of VSS as a mode of sustainability governance(Bartley,2010;Bennett,2018).Bissinger et al.(2020)find significant concordance between VSS and the SDGs.They observe that a large number of relevant VSS are available for policymakers aiming to create synergies in SDG-related a

127、reas.Using data from the ITC Sustainability Map,they conducted a systematic analysis of the interlinkages between 232 VSS and the 17 SDGs and their targets.The result(see figure 6)indicates that the three SDGs most widely covered by VSS are SDG 8(Decent Work and Economic Growth),SDG 12(Responsible C

128、onsumption and Production)and SDG 2(Zero Hunger).Moreover,they found that more than 200 VSS are linked with each of these goals.The standards are also relevant to other SDGs,including SDG 16(Peace,Justice and Strong Institutions),SDG 15(Life on Land),SDG 5(Gender Equality),SDG 9(Industry,Innovation

129、and Infrastructure),SDG 7(Affordable and Clean Energy)and SDG 10(Reduced Inequalities).There is potential to further increase the relevance of VSS.In summary,VSS could contribute to the achievement of the SDGs by complementing the roles of governments and international organizations.This is of great

130、 value,especially for developing countries in their attempts to move towards a sustainable future,better understand the SDGs and how VSS can foster their efforts towards achieving these goals.Figure 6 Figure 6 Links between VSS requirements and SDG targets22419611581

131、6500500617Number of VSSSDGSource:Bissinger et al.(2020).15Chapter II.How do VSS work?Voluntary sustainability standards in international tradeThe way that VSS develop their principles,standards and indicators should follow a set of procedural guidelines.They should s

132、et standards through an open,transparent and consensus-based process which takes into account various stakeholders concerns and interests.Key stakeholder groups should include directly affected stakeholders(those who will be impacted by the implementation of the standards),and may also include indir

133、ectly affected stakeholders(those who have an interest in the application of the standards),such as representatives from NGOs,businesses,producers,consumers and several other groups.An open consultation process should guarantee that all stakeholders have access to the standard-setting activities.In

134、order to overcome the difficulty of ensuring that all relevant stakeholders are included,standard-setting organizations should make efforts to identify them through a stakeholder identification(or mapping)process.The challenge of including all stakeholders was made clear by Bennett(2017),who sought

135、to find out who was involved in the standard-setting process.Bennett observed that VSS organizations are often assumed to have multistakeholder governance structures,which include the producers of certified products(e.g.farmers,artisans and workers).However,her research of 33 VSS organizations showe

136、d that producers are not always included in standard-setting processes.Only in a quarter of the cases did producers have votes or seats,and only in 20 per cent of the cases did producers have veto power,which is key to influencing decision-making.B.Ensuring compliance with standardsOnce a VSS organi

137、zation has developed standards,producers or other actors along GVCs can apply to the VSS organization,which involves a commitment to conform their production practices to its sustainability standards.In order to ensure that those standards are correctly applied by certified entities,the VSS develops

138、 systems to assess conformity and monitor continuous compliance.Those who are found to comply with the standards receive a certificate and are allowed to use a label on their products to signify that they were produced in conformity with the sustainability requirements.VSS certificates therefore pro

139、vide proof of compliance with sustainability standards.This make it possible to differentiate products on the market,transfer information to buyers and consumers,and increase transparency in complex GVCs.Figure 7 Top-down and bottom-up compliance assessments VSS organizationSpecification of sustaina

140、bility standardsAccreditation bodyQuality controlCertification bodyConformity assessment(audit)VSS adopterImplements sustainability standardsExternal stakeholdersAffected by VSS systemTop-down(ex ante)compliance assessment Bottom-up(ex post)compliance assessment IdentifiesChecks competenceSets requi

141、rementsChecks complianceCan file complainttoCan file complainttoCan file complainttoCan file complainttoSource:Authors.16VSS organizations ensure compliance with their standards in two ways:by means of conformity assessments through audits(top-down or ex-ante conformity assessment),and through compl

142、aint or grievance mechanisms(bottom-up or ex-post conformity assessment).Figure 7 shows the different actors involved in the VSS system,and how they relate to each other in the context of conformity assessment.The blue arrows indicate the relationships between actors in a top-down conformity assessm

143、ent system through audits,whereas the orange arrows represent their relationships in a bottom-up system based on complaint and grievance mechanisms.The following sections describe these two assessment systems in more detail.It discusses what a conformity assessment or audit(top-down)entails,why it i

144、s sometimes criticized,and how VSS have carried out conformity assessments during the Covid pandemic.This is followed by a description of complaint and grievance mechanisms(bottom-up).1.Conformity assessment:Top-down verificationVSS organizations issue certificates after determining whether the prac

145、tices of potential adherents are in conformity with their standards.Conformity assessment can therefore be called an ex-ante verification system,since compliance with standards is verified prior to granting a certificate.Such assessments use a top-down verification mechanism and are carried out by i

146、ndependent third-party auditors.The auditors form part of a certification body.And it is this body that awards the certificate to the standards adopter if the latter is seen to comply with the standards.Different types of audits can be carried out in the VSS system to ensure conformity:certification

147、,verification,surprise and shadow audits.Audits involve an analysis of documents,as well as the collection of data on the practices of the VSS applicants during field visits,using surveys,checklists and sometimes interviews.Therefore several actors are involved in the assessment and auditing process

148、.Figure 7 summarizes how VSS certification works.The work done by certification bodies is checked in an accreditation process by an accreditation office which is appointed by the VSS.The accreditation office,such as Assurance Services International(ASI),verifies whether the certification bodies are

149、competent to perform the conformity assessment.Certification audits include audits that are conducted both in the certification and re-certification processes.They are carried out in three steps.First,the applicant to the VSS invites an auditor,who conducts a pre-audit or feasibility study on whethe

150、r the entity under consideration has the potential to be certified.Second,a genuine certification audit is conducted through an on-site field visit to assess the current management practices of the applicant against the standards and criteria of the VSS organization.Following this audit,the auditor

151、can issue corrective actions requests(CARs),which refer to identified non-conformities that need to be addressed by the applicant in order to gain certification.They usually specify a time frame within which the applicant needs to address the non-conformities.Third,when the applicant has implemented

152、 the required corrective actions and has assessed the audit,a new audit is carried out by the certification body to verify that non-conformities have been addressed,and it may issue additional CARs.Based on that,the certification body decides whether or not a certificate can be awarded.The validity

153、period of certificates varies depending on the VSS(e.g.1,3 or 5 years),but they can be renewed based on re-certification audits.Verification audits are usually carried out on an annual basis to monitor continued compliance.Depending on the VSS,surveillance audits can be desk-based rather than on-sit

154、e,meaning that the auditor reviews updated documentation on the certified entity from their office,rather than through a field visit.Based on those audits,corrective actions may be requested,or the certificate may be suspended or even withdrawn in case of severe and repeated non-compliance.17Chapter

155、 II.How do VSS work?Voluntary sustainability standards in international tradeIn addition to certification and verification audits,other types of audits may be carried out by the independent auditor,by the VSS organization itself,or by the accreditation body to further ensure compliance.For example,a

156、uditors may conduct surprise audits,which are unannounced or announced only with short notice to the certified entity to ensure its continued compliance.Another example is shadow audits,which are conducted by the VSS itself or by the accreditation body,which witnesses an audit conducted by the certi

157、fication body in order to verify the quality of the audit.Surprise and shadow audits therefore provide an additional layer of checks on compliance with standards.However,not all VSS organizations require or even allow shadow or surprise audits.Box 2 describes how auditing works in the field.While VS

158、S rely on audits to ensure compliance with their standards,such audits have been criticized for several reasons(LeBaron et al.,2017;Power,1997;Strathern,2000).First,it is alleged that they are selective about the issues they assess,often focusing on outcome standards that are more easily measurable,

159、such as working hours or wages,while paying less attention to process standards that are more difficult to measure,such as freedom of association or non-discrimination in the case of labour standards.Second,audits have been criticized for the quality of information they gather.Audits are typically b

160、ased on checklists and questionnaires,which enable quantification and standardization,and thus allow comparison between certified entities.Typically,audits lack a more qualitative assessment of standards implementation,and fail to include the voices of local stakeholders,marginalized groups,or worke

161、rs themselves(although some VSS require auditors to interview workers and,sometimes,external stakeholders as well)(Marx and Wouters,2018).Third,audit-based conformity assessment systems have been criticized for not taking sufficient account of the complexity of value chains in some sectors.In some G

162、VCs,there is considerable outsourcing or subcontracting,and it can therefore be difficult to monitor operations in a systematic and sufficiently frequent manner in different steps of the value chain.Lastly,since the certification bodies that carry out the audits are chosen and paid by the standards

163、adopter,conflicts of interest can arise and lead auditors to underreport bad practices in order to retain clients(Marx and Wouters,2018).Under most certification schemes,it is the certificate holders responsibility to select and sign a contract with a certification body from a list of accredited bod

164、ies.Both parties sign a contract in which the estimated audit costs are predefined and agreed upon.Those audit costs are paid by the certificate holder to the certification body.However,this can generate conflicts of interest,as certification bodies have an incentive to underreport non-compliance,le

165、st certificate holders contract with another certification body.The reliance of VSS on audits to ensure compliance with their standards has also faced challenges as a result of the Covid-19 pandemic,since lockdowns and travel restrictions prevented auditors from conducting field visits.In response,s

166、ome VSS decided to suspend all auditing activities and extend the validity period of certificates for the time being.Other VSS opted for remote auditing to continue monitoring compliance,which involves collecting data,for example through telephone interviews or teleconferencing,or by reviewing docum

167、ents.Remote audits therefore significantly rely on the use of information and communication technology.Even before the Coved-19 pandemic,some VSS were already increasingly using technological tools to enhance audits.For example,some VSS had started using satellite images to assess environmental para

168、meters such as changes in forest cover.While,arguably,audits should not fully rely on technology,technology can nevertheless support and enhance audits to better ensure compliance with sustainability standards and inform evidence on the sustainability impacts of VSS.18Box 2.Getting certified and aud

169、ited:Example from the field in IndonesiaBox 2.Getting certified and audited:Example from the field in IndonesiaIn 2004,company A,a coffee plantation in Indonesia,wished to increase its exports to European markets by becoming UTZ-certified.It applied for UTZ certification and contracted a certificati

170、on body,Control Union,to carry out the initial audit.After fulfilling all pre-certification requirements and drawing up a management plan,company A obtained UTZ certification.The company hired a new staff member dedicated to managing all administrative aspects of UTZ certification.Every year,the com

171、pany would undergo a surveillance audit to make sure that it continued to comply with UTZ requirements.In 2007,the company decided to seek certification also by the Rainforest Alliance,since its main buyer on the export market,a Japanese company,started to require Rainforest Alliance certification f

172、rom its suppliers.The Mass Balance system allowed under the Rainforest Alliance enables the Japanese company to mix certified coffee beans supplied from company A with coffee beans supplied from other sources,and market them accordingly.Company A contracted Nepcon,the only certification body accredi

173、ted by the Rainforest Alliance in Indonesia at that time,to carry out the annual audits.With its double UTZ/Rainforest Alliance certification,company A had to accommodate and pay for two different audits per year.As the UTZ certificate did not help increase the companys access to European markets,co

174、mpany A decided not to renew its UTZ certification in 2019,but to continue with Rainforest Alliance certification.Later on,the two certification schemes merged.Some years later,incidences of non-compliance were uncovered during the surveillance audit carried out on company As plantation.For example,

175、in 2019,the audit revealed that wages of workers on the plantation were not paid according to the time frame required by Rainforest Alliance standards.Company A explained this non-compliance by differences between the requirements of the Rainforest Alliance and the traditional way of working in the

176、coffee sector in Indonesia.According to the latter,wages are paid upon achieving the result of the work for which workers are hired,whereas the Rainforest Alliance requires that wages be paid on a daily basis.A time frame to resolve this non-compliance issue was agreed upon between the certification

177、 body and company A.Eventually,the company paid the wages as required by the Rainforest Alliance and an additional audit,for which the company had to pay half the price of the annual audit,was carried out,whereupon it was concluded that the non-compliance issue had been resolved.In 2020,other certif

178、ication bodies became accredited by the Rainforest Alliance to conduct audits in the coffee sector in Indonesia.Company A decided to contract another certification body,SDS,as it was more competitive.This example from the field illustrates how certification is adopted by a producer,how audits are ca

179、rried out,and non-compliance resolved.It also shows that competition between certification bodies is important for VSS adopters.Moreover,it illustrates that sometimes local practices can differ from the requirements of transnational VSS organizations.2.Fostering compliance from the bottom up:Complai

180、nt systemsIn addition to top-down verification through audits,several VSS have also established mechanisms to ensure compliance with their standards using a bottom-up approach,namely through complaint or grievance mechanisms.While audits are a form of ex-ante verification,complaint systems involve e

181、x-post verification,as compliance with standards is constantly monitored after the certificate has been granted.Complaint systems form a complementary mechanism for standards enforcement.Although complaint mechanisms may differ in detail among various VSS entities,in general,they allow stakeholders,

182、such as VSS member organizations,certificate holders,workers in certified operations,but also external actors from the wider community,such as NGOs,governments,consumers and local communities,to lodge complaints relating to the VSS entitys operations and to challenge its decisions.Typically,complain

183、ts can be raised on three types of issues:19Chapter II.How do VSS work?Voluntary sustainability standards in international tradeFirst,how a VSS organization operates internally,including issues relating to its principles,its procedures,how standards are set,and who is involved in standard-setting or

184、 other decisions;Second,how a certification body operates and conducts the audits;andThird,about a certification decision if there are clear indications of non-compliance with standards.However,there are several shortcomings on the use of complaint systems in the VSS realm.First,not all VSS organiza

185、tions have complaint systems in place.Marx and Wouters(2018)found that only a few of them had ex-post verification systems in place based on data from 2011.The authors pointed to the lack of incentives for them to establish such systems,which would require them to mobilize resources and establish pr

186、ocedures to deal with complaints.Moreover,the very existence of such systems could deter potential clients from seeking certification as those systems would likely subject their operations to increased scrutiny.The design of complaint systems can vary in a number of ways,which determine their streng

187、th and credibility as a verification mechanism.First of all,they vary in what they accept as a complaint.Some VSS organizations allows complaints to be raised on a wide range of issues,while others restrict complaints to the interpretation of standards and to conformity assessments.Second,they vary

188、in who they allow to file a complaint.Some VSS organizations restrict the possibility of complaint to members only,while others allow anyone to raise a complaint.There has been some criticism concerning the accessibility of these systems as well as their outcomes,with only a minority of VSS organiza

189、tions making their complaint procedures and outcomes publicly available and accessible language-wise and procedure-wise(Fiorini et al.,2019;Marx and Wouters,2015b).One literature review and empirical analysis of 18 VSS concluded that complaint systems typically fail to meet internationally recognize

190、d criteria for effective access to remedy(MSI Integrity,2020);their resolution of complaints can be slow and may not address issues in a satisfactory manner from the perspective of the complainants.C.Supply chain trackingA third important aspect of how VSS organizations operate lies in how they trac

191、k the path of certified products along GVCs through traceability systems.Before a product reaches the end consumer,it is often handled by various intermediaries,who add value to the product and link producers to consumers.Hence,it is important to ensure the integrity of the trade in certified produc

192、ts along the entire value chain,ensuring that products sold as certified have indeed been produced in accordance with the sustainability standards of a certification scheme.For this reason,many VSS have developed what is called“chain of custody”(CoC)certification(or“supply chain certification”)in ad

193、dition to product certification.CoC certification makes it possible to keep track of the traded volumes of certified products,and hence prevents false claims about the sustainability attributes of end products.It also helps trace the path of products emanating from certified operations(e.g.farms)thr

194、oughout their value chain,which is done via so-called“traceability systems”.A traceability system is often operated online,and consists of the collection of documents specifying the ownership and/or transfer of ownership of a product from one economic actor to another,together with its sustainabilit

195、y criteria in the form of VSS certificates.Such a system makes it possible to record the paths of products,parts and materials from their suppliers,their processing and ultimately their distribution as end products(ISEAL Alliance,2016).Different traceability systems exist,which vary according to the

196、 use and handling of the certified products they allow along the value chain(ISEAL Alliance,2016).The three most important traceability systems are:identity preservation,product segregation and mass balance(see figure 8).An identity preservation system not only ensures that certified products are ke

197、pt separated from non-certified products at each stage of the value chain,but also that the origin of the product can be traced back to its single certified producer.Under this system,the mixing of certified products from different origins is prohibited.The 20identity preservation system is therefor

198、e only applicable to certain commodities that can be kept separate at each stage of the value chain,such as fish or wood.A product segregation system is comparable to an identity preservation system in that it forbids the mixing of certified with non-certified products,but product segregation allows

199、 the mixing of certified products from different origins.As with the identity preservation system,this system can only be used for certain commodities,such as fish or wood.A mass balance system does not necessarily aim to keep certified products separate from non-certified products;they can be mixed

200、,and this results in the end product containing various percentages of certified and non-certified inputs.For the end product to be sold as certified,the seller must indicate the percentage of certified products it contains.The mass balance system is often applied to commodities such as tea,coffee o

201、r palm oil,which are typically difficult to keep separate from non-certified products along the whole value chain.In recent years,increasing attention has also been paid to the possibilities and limitations of applying new technologies,such as blockchain technology,for traceability purposes.Figure 8

202、 Traceability systemsEnsures the origin of the product can be traced back to its single certified producerEnsures that certified products are kept separate from non-certified products at each stage of the value chain Product segregationThe end product contains a certain percentage of certified produ

203、cts and a certain percentage of non-certified products Mass balancePreservation systemD.Diversity of VSS institutional designAs the previous sections have highlighted,VSS organizations can differ greatly in their standard-setting procedures,in their conformity assessment mechanisms and in their trac

204、eability systems.Overall,this shows high diversity in how their standards are designed.This has important implications,since the institutional design of VSS organizations influences their credibility as well as their effectiveness,as analysed by several studies summarized below.A first and early str

205、eam of research focused on the legitimacy of VSS as transnational governance instruments.To conceptualize and analyse legitimacy in relation to VSS,many researchers build on the work by Scharpf(1999),who introduced the notions of input and output legitimacy.Input legitimacy focuses on the rule-makin

206、g or standard-setting process,and can be assessed by examining whether standards are developed according to a set of procedural requirements,such as representation of relevant stakeholders,inclusiveness,transparency and deliberativeness(Auld and Gulbrandsen,2010).This line of research has focused pa

207、rticularly on which actors are involved in the standard-setting process.21Chapter II.How do VSS work?Voluntary sustainability standards in international tradeSome authors argue that VSS organizations are remarkably democratic and inclusive in standard-setting(Dingwerth,2007),while others are more sc

208、eptical and critical,and highlight that key actors,such as producers,are scarcely represented in the standard-setting process(Bennett,2017).Output legitimacy relates to the degree to which decision makers can be held to account after decisions are made.It echoes the notion of“accountability as respo

209、nsiveness”(Gulbrandsen,2004;2008),which focuses on the relationship between the VSS organization and its various stakeholders(Gulbrandsen,2008).To analyse output legitimacy,some researchers have focused on complaint systems as accountability mechanisms(Marx,2014).Other researchers have criticized th

210、ese approaches to legitimacy,as they tend to ignore questions related to the broader societal acceptance of an organizations policies,structures and operations(Bernstein and Cashore,2007).This has been addressed by scholars using a more sociological approach to legitimacy,and has led to assessing th

211、e attitudes and perceptions of the communities in which the institution in question operates(Bernstein and Cashore,2007;Beisheim and Dingwerth,2008;Cashore,2002).A second stream of research focuses on the substance of standards,and analyses which social,economic and environmental aspects are address

212、ed by standards,as well as the stringency of those standards(Holvoet and Muys,2005).This line of research also includes a focus on which international norms,conventions and agreements these standards are based.Some authors argue that VSS are firmly rooted in existing international law,and thus they

213、do not create new rules or commitments;instead,they operationalize existing international commitments,as mentioned earlier(Marx,2017).However,in so doing,the question arises as to whether this results in the dilution or weakening of standards or their strengthening,with a specific focus on corporate

214、 co-option leading to greenwashing(Auld,2014;Bennett,2018;Grabs,2020).A third stream of research focuses on how standards are enforced.A significant body of literature discusses the use of independent third-party auditing,and the many deficiencies in the audit approach(Locke,2013;Marx and Wouters,20

215、15b;Sabel et al.,2000).It also focuses on complaint and grievance mechanisms(Marx and Wouters,2015b;Marx,2014).A fourth stream of research seeks to bring these elements together,and looks at how different components of institutional design combine in the context of specific VSS organizations,or prov

216、ides a comparative analysis of several VSS organizations institutional design(Collins et al.,2017;Fiorini et al.,2019;Marx,2013).This line of research shows that there is significant variation in how VSS institutions are designed in terms of how standards are set,how ex-ante conformity is assessed t

217、hrough audits,whether or not they use complaint systems and the extent of their transparency.This diversity in their design has important implications for their effectiveness.Accordingly,researchers have also tried to understand what influences the design of VSS.Van der Ven(2019)argues that large co

218、nsumer-oriented retailers that use VSS influence the design and credibility of those standards,since VSS organizations targeting those firms specifically seek to insulate them from critical scrutiny.Therefore,they develop stringent systems to provide more reassurance to firms that they are complying

219、 with sustainability commitments throughout their value chains.Although the mechanisms by means of which VSS institutional design affects VSS impacts are unclear,many impact studies recognize the relevance of design.The next chapter provides an overview of the effectiveness of VSS.22Chapter IIIEffec

220、tiveness of VSSVoluntary sustainability standards in international tradeChapter III.Effectiveness of VSSGiven that VSS have become important governance instruments to foster sustainability along GVCs,it is important to understand whether these systems are effective in achieving positive sustainabili

221、ty impacts.Many factors determine the effectiveness of VSS,including their institutional design,the content of their standards,and the socioeconomic and political context in which the standards are implemented.In general,the effectiveness of VSS can be analysed along two dimensions:their impacts on

222、the ground based on various sustainability parameters,and their adoption.This chapter first examines the pathways through which VSS aim to exert positive impacts,and provides an overview of the current evidence of their impacts on various sustainability dimensions.The chapter then explores the secon

223、d dimension of VSS effectiveness adoption by examining the different ways in which VSS adoption can be analysed and identifying the barriers to adoption.A.Pathways for generating impact through VSS adoptionThere are four main pathways,or interventions,by means of which VSS aim to achieve impacts on

224、the ground:regulatory interventions,market interventions,capacity-building and awareness-raising(figure 9).These pathways are described in more detail below,along with concrete examples.Figure 9 Pathways for VSS impactsSub-optimal sustainability outcomesMarket interventionsCapacity-building interven

225、tionsAwareness-raising interventionsImproved sustainability outcomesRegulatory interventionsVSSChild labourLow price and restricted market accessLow productivityWomens exclusionNo child labour,improved school attendanceImproved economic conditionsImproved productivityWomens empowermentVSS requiremen

226、t:no child labourVSS requiring and providing trainings on good agricultural practices VSS granting preferable economic conditions(price,premium,market access,)Awareness-raising activities on gender equalitye.g.e.g.e.g.24First,VSS rely on regulatory interventions to generate sustainability impacts.Up

227、on applying for VSS adoption,participants may need to invest in modifying their production practices to comply with sustainability standards,such as implementing wastewater management systems or ensuring they do not employ child labour.VSS thereby embody regulatory intervention in the sense that,upo

228、n compliance with the standards,the environmental and social practices of producers are improved.For example,they ensure that wastewater is treated and avoid the use of toxic chemical inputs,or refrain from employing child labour.This in turn is expected to improve environmental and social sustainab

229、ility outcomes,causing,for example,a reduction of effluent runoff in critical watersheds,or better educational outcomes for children and youth.Second,VSS aim to improve sustainability through market interventions.Upon adoption of a standard,upstream value chain actors,such as buyers,may grant prefer

230、able economic conditions to VSS-compliant producers,for example through increased market access or price premiums.Market access is sometimes conditional on producers obtaining VSS certification for their products,as upstream buyers,such as retailers,often require them to provide such certification i

231、n order to purchase their goods.Consequently,economic conditions for the producers improve,as they often receive higher prices for their products or gain access to certain markets which they could not enter before.Better economic conditions for producers in turn are expected to increase household in

232、comes and well-being.Moreover,market interventions are assumed to provide the incentives necessary for producers to adopt and comply with VSS.Third,VSS rely on capacity-building interventions to improve sustainability.Upon VSS adoption,managing entities need to conduct capacity-building events,such

233、as offering training to producers in good agricultural practices,or in professional management skills.Some VSS entities themselves often organize such training.As a result,productivity rises.For example,technical training in good agricultural practices can lead to increased productivity,which in tur

234、n can generate higher incomes.Thus,capacity-building can also ultimately be associated with improved economic and social sustainability.Lastly,VSS organizations improve sustainability through awareness-raising interventions.Upon VSS adoption,organizations adopting VSS may be induced to conduct aware

235、ness-raising events,for example on gender-related issues.As a consequence,awareness about critical social issues(such as womens disempowerment)increases.This in turn is expected to lead to improved social behaviour and sustainability outcomes,as womens social and economic conditions can improve.In a

236、ddition,the VSS organizations themselves may raise awareness about some sustainability issues which might not have been considered before.An increasing body of literature has been dedicated to assessing the impacts of VSS on the ground.The following sections present the current evidence on the impac

237、ts of VSS in general,and more specifically on their impacts on the socioeconomic and environmental dimensions of sustainable development.1.VSS sustainability impacts:Empirical evidenceOverall,the evidence on the impacts of VSS on different sustainability dimensions is mixed.Some studies point to pos

238、itive impacts of certification,others find no impact,and still others albeit only a few find negative impacts.Generally speaking,the nature of the findings depends on the VSS,the local context in which VSS are implemented,as well as the indicators measured and the methodology used to assess VSS impa

239、cts.Nonetheless,one way to gain an overview of the current evidence on the sustainability impacts of VSS is provided by the Evidensia database,a knowledge platform that summarizes credible evidence about VSS impacts.To provide comparable and credible results,the studies included in the Evidensia dat

240、abase are selected against strict quality criteria with regard to their research design.The studies need to be based upon a statistical analysis,which permits isolating the effects of VSS,and comparing a treatment group 25Chapter III.Effectiveness of VSSVoluntary sustainability standards in internat

241、ional trade(i.e.a certified group)with a control group(i.e.a non-certified group).The studies also need to be recent no older than 10 years old(Evidensia,2019).The database lists almost 450 impacts of VSS from morethan 70 different studies.For each impact,the database reports whether VSS have a posi

242、tive impact if thecertified group performs better than the control group;a neutral impact if there is statistically no differencebetween the certified and the control group;and a negative impact if the control group performs betterthan the certified group.Table 1 shows that,of the 447 impacts listed

243、 in the Visual Summaries,205 are positive and 211 are neutral.Only 31 of the impacts appear to be negative.These negative impacts include,for example that VSS increase the costs of production.A similar distribution of positive,neutral and negative impacts can be observed in the types of impacts,that

244、 is,socioeconomic and environmental impacts.The table lists 94 positive impacts,93 neutral impacts,and only 9 negative impacts on environmental issues.For the socioeconomic impact of the studied VSS,Evidensia shows 111 positive impacts,118 neutral impacts and 22 negative impacts(Marx et al.,2021).Ta

245、ble 1 Number of positive,neutral and negative impacts by categoryIssue categoryPositiveNeutralNegativeEnvironment94939Socioeconomic11111822Total20521131Source:Authors based on Evidensia database.Importantly,the literature highlights that VSS impacts are highly context specific.More research is warra

246、nted to understand the conditions under which the standards generate positive impacts,particularly in relation to the institutional design of VSS(Marx et al.,2021).In addition,trade-offs between sustainability dimensions can occur when evaluating VSS impacts.The following sections provide some insig

247、hts into the current evidence of VSS impacts on socioeconomic indicators,and on environmental indicators more specifically.2.Socioeconomic impactsMost VSS define a set of socioeconomic requirements for the production of and/or trade in certified products.The requirements are specified mainly for the

248、 production stage,which applies to primary producers and hired workers(ITC,2021).In contrast,only a limited number of VSS focus on upstream actors in the value chain,such as traders and processing companies.To assess the socioeconomic impacts of VSS at the production stage,most studies focus on indi

249、cators that can be grouped into six different thematic areas identified by Evidensia(2022).These areas include costs and benefits for participants(incl.costs of inputs,net income,price,yield,access to certified markets,knowledge and training),child rights and well-being(incl.child labour and educati

250、on);health and well-being(incl.food security,access to health care,nutrition,water,sanitation and hygiene,and waste disposal);livelihoods(incl.access to credit,access to land,assets,poverty and gender equality);wages and workers rights(incl.wage levels,working hours,occupational health and safety me

251、asures,health insurance,permanence of working contracts,local employment opportunities,forced labour,freedom of association,grievance redressal,job satisfaction and worker empowerment);and rights of indigenous and local communities(incl.their participation in decision-making,infrastructure developme

252、nt for the community such as the development of roads,social protection,such as conflict resolution practices,and recognition of land rights).In contrast,the main indicators used to assess VSS socioeconomic impacts along value chains are traceability,and revenue and costs(Evidensia,2022).26A large n

253、umber of studies have been carried out to assess the socioeconomic impacts of VSS,though they differ in scope.Most of them focus on the economic impact,and tend to neglect the social(and environmental)impacts,although all three pillars of sustainability are equally important to investigate,and event

254、ually improve sustainability(Traldi,2021).Moreover,most existing studies concentrate on the agricultural sector,with currently more than 100 studies published in high-quality peer-reviewed journals,followed(in descending order)by forestry,fisheries,energy and others(Evidensia,2022;Traldi,2021;Meemke

255、n,2020;Oya et al.,2018).Studies of the agricultural sector focus on coffee,while cotton,sugar,cocoa,soy and palm oil are underrepresented.There is also a geographical imbalance.Most studies conducted are for Africa,followed by Latin America and Asia.No studies have yet been conducted for North Ameri

256、ca or Australia,although certification does take place in these regions.Moreover,most studies focus on Fairtrade,Rainforest Alliance or UTZ certification,while studies focusing on organic certification are underrepresented.In terms of findings,recent reviews focusing on studies that measured impacts

257、 quantitatively show that VSS have mixed impacts,meaning that the studies mainly find positive impacts,while others find no or even negative impacts(Oya et al.,2018;Traldi,2021;Meemken,2020;DeFries et al.,2017;UNFSS,2022).The possible negative impacts are most often related to the economic dimension

258、s of sustainability,and refer to increased costs for producers.Results also depend on the indicators investigated and the research context under review.Overall,in terms of economic impacts,about half of the studies find positive impacts of VSS.A third of these find no significant economic impacts,an

259、d about a tenth find negative impacts.In terms of social impacts,most studies(about two thirds)find no significant impacts of VSS,while a third of these studies find positive impacts,and a few of them find negative impacts(Traldi,2021).Moreover,impacts on economic indicators seem to be more positive

260、 than those on social indicators.And the impacts seems to be greater for large-scale agro-industrial farms than for smallholders(UNFSSS,2022;Meemken,2020).However,as the current studies focus heavily on only a few crops,on some VSS or on some countries,these findings should be interpreted with cauti

261、on,as they cannot be generalized,particularly as the impacts tend to be context-dependent.3.Environmental impactsVSS vary in terms of how they aim to mitigate the adverse environmental impacts of production and the stringency of their environmental standards.Many studies have been conducted to asses

262、s their environmental impacts.Most of them focus on indicators that can be grouped into five thematic areas(Evidensia,2022):climate change(incl.adaptation of farming techniques to increase resilience of crops to droughts,reduction of greenhouse gas emissions,switching to renewable energy sources);fo

263、rests and other ecosystems(incl.protection of primary forests and protected areas,a minimum required canopy cover for commodity products which are grown under shady trees,efforts to restore land area to its natural state);freshwater and oceans(incl.creation of buffer zones around rivers,monitoring w

264、ater use,reducing water consumption and treating waste water);pesticides,fertilizers and soil(incl.use of organic fertilizers,reduced use of chemical pesticides and herbicides,prevention of soil erosion,improving health),plant and wildlife conservation(incl.protecting threatened and endangered speci

265、es and protecting habitats for plants and wildlife).Most of the studies assessing the environmental impacts of VSS are based on case studies(largely relating to coffee certification),and focus mainly on Latin America and Africa.For example,Takahashi and Todo(2013;2014)analysed coffee certification i

266、n Ethiopia,and showed that certification reduces the probability of deforestation.In a study comparing organic and non-organic farms in Nicaragua,Costa Rica and Guatemala,Haggar et al.(2015)found greater tree diversity in certified farms.Carlson et al.(2018)found that RSPO-certified palm oil plantat

267、ions in Indonesia had less deforestation than non-certified plantations.27Chapter III.Effectiveness of VSSVoluntary sustainability standards in international tradeTraldi(2021)summarized the findings of 45 studies on the environmental impacts of VSS certification:47 per cent reported positive impacts

268、,another 47 per cent reported no difference between certified and non-certified groups,and 6 per cent reported negative environmental impacts.In a review of the evidence from 24 studies on the impacts of certification of tropical agricultural commodities for achieving sustainability goals among smal

269、l-scale producers,DeFries et al.(2017)reported 36 per cent positive outcomes and 64 per cent indifferent outcomes.Hence,the evidence on VSS sustainability impacts,so far,remains mixed,although,overall,it is positive or neutral.B.Uptake of VSSThe second dimension for gauging the effectiveness of VSS

270、is their adoption,or uptake.Adoption is a relevant dimension of effectiveness because the more widely VSS are adopted,the more likely they will be to improve sustainability.If they are only marginally adopted,their potential to transform production processes in GVCs towards more sustainable ones is

271、limited.VSS adoption can be measured by different indicators,such as the number of VSS active in different countries,the distribution of VSS across sectors,the number of producers or firms that are certified,the proportion of certified production volume in total production volume,and the share of ce

272、rtified production land in total production land.Chapter I showed that the number of VSS organizations active globally has greatly increased over time.However,they are not evenly distributed across countries,sectors and commodities.First,at the country level,the adoption of VSS varies.Based on data

273、from the ITC Standards Map,the UNFSS 4th Flagship report(2020)calculated VSS adoption scores,which are obtained by dividing the number of VSS organizations active in a country by the total number that exist worldwide.This gives an indication of where VSS organizations are the most active.Figure 10 p

274、resents a ranking of VSS adoption scores by country.Several observations can be made from this figure.Figure 10 VSS adoption scores by country(proportion of VSS in a country on total number of VSS)2829292929293030303323232333434343535353536373737383839394NicaraguaEthiopiaGuatem

275、alaSwedenJapanUnited Republic of TanzaniaHondurasSri LankaPolandAustraliaAustriaDenmarkMalaysiaKenyaPortugalChileEcuadorSwitzerlandCosta RicaArgentinaBelgiumCanadaSouth AfricaFranceItalyTrkiyeSpainUnited KingdomNetherlandsThailandColombiaViet NamGermanyPeruMexicoIndonesiaChinaIndiaUnited States of A

276、mericaBrazil2525252526262626262627272727272727272828282822323232323232323232424EstoniaPanamaSerbiaLatviaZimbabweCte dIvoireSingaporeZambiaBangladeshEl SalvadorMauritiusRepublic of KoreaSloveniaLithuaniaSlovakiaUruguayNew ZealandRussian FederationParaguayCambodiaCroatiaBolivia(Plurinationa

277、l State of)FinlandMadagascarNorwayTunisiaUgandaGhanaPakistanRomaniaCzechiaDominican RepublicHungaryMoroccoBulgariaPhilippinesEgyptGreeceIreland67880202020202020202021AlgeriaEswatiniGuyanaKazakhstanRepublic of MoldovaAlbaniaJamaicaSaudi ArabiaNam

278、ibiaOmanCongoHaitiTogoBurundiLebanonMaltaNorth MacedoniaJordanMaliMyanmarNigeriaSurinameBelizeVenezuela(Bolivarian Republic of)Lao Peoples Democratic RepublicMozambiqueDemocratic Republic of the CongoLuxembourgNepalCyprusRwandaSenegalUnited Arab EmiratesBurkina FasoCameroonPapua New GuineaBosnia and

279、 HerzegovinaMalawiIsrael333455151515QatarSolomon IslandsTimor-LesteArmeniaCabo VerdeKuwaitKyrgyzstanMauritaniaDemocratic Peoples Republic of KoreaGrenadaIran(Islamic Republic of)LesothoSudanTajikistanBarbadosBelarusSaint LuciaSyrian A

280、rab RepublicAngolaCubaGabonGuineaLiberiaSeychellesTurkmenistanAzerbaijanGambiaBahamasBahrainMaldivesNigerSierra LeoneUzbekistanBeninBotswanaFijiGeorgiaIcelandMongolia8999922NauruMicronesia(Federated States of)PalauTongaTuvaluMarshall IslandsAndorraKiribati

281、SamoaVanuatuBhutanBrunei DarussalamDjiboutiEquatorial GuineaIraqLibyaSaint Kitts and NevisSao Tome and PrincipeSomaliaChadComorosEritreaSaint Vincent and the GrenadinesYemenAfghanistanAntigua and BarbudaCentral African RepublicDominica21Ukraine15Trinidad and Tobago12Guinea-BissauSource:Authors based

282、 on data in the 4th Flagship report of UNFSS(2020).28First,it appears that VSS organizations operate in all countries,but there is considerable variation among countries,which can be broadly expected due to variations in the size of their economies.Second,variation in adoption scores appears to be m

283、ore or less in line with income levels.Low-income countries and to some extent,lower middle-income countries tend to count fewer VSS than high-or upper middle-income countries.However,there are exceptions.For example,some lower middle-income countries score high,such as India,Indonesia and Viet Nam.

284、Income levels therefore do not necessarily predict VSS adoption rates.Rather,the well-scoring lower middle-income countries are typically those that pursue an export-oriented economic development policy and export a wide variety of products.Lastly,even some low-income countries score fairly high,suc

285、h as Ethiopia and the United Republic of Tanzania.It is worth noting that these countries score relatively high because their export commodities,such as coffee,tend to be certified by multiple VSS schemes.In addition to an uneven distribution of VSS across countries,there is also an uneven distribut

286、ion of VSS across sectors.Figure 4 above showed that VSS are primarily active in the agricultural sector,and in consumer products,processed foods and the garments sector.In contrast,only a few VSS are active in sectors like electronics or jewellery.However,merely looking at the number of VSS active

287、in a given sector does not give an indication of the level of their adoption by economic actors in that sector.Hence,other indicators need to be analysed to better understand the adoption rates of VSS.Investigating the number of certificate holders would help assess the extent of adoption.However,th

288、is number is difficult to assess because not all VSS disclose information about the number of certificates they issue.Besides,the number of certificate holders does not provide information about the size of their certified operations.Hence,other indicators are needed,such as the share of the certifi

289、ed commodity(by volume)in total commodity production(by volume),and the share of certified production area in total production area.In this respect,the State of Sustainable Markets annual reports of the International Trade Centre(ITC),in collaboration with the Research Institute of Organic Agricultu

290、re(FiBL)and the International Institute for Sustainable Development(IISD),have been providing the most comprehensive mapping and evolution-tracking of certified commodities globally since 2008.Those reports compile data from the 14 major VSS organizations globally,covering eight agricultural commodi

291、ties:bananas,cocoa,coffee,cotton,palm oil,soybeans,sugarcane and tea,plus forestry.The main findings of the 2020 report show that certification has intensified over the past decade,both in terms of the share of certified commodities in their respective markets,and the share of certified production a

292、rea.First,regarding the share of certified production(by volume)in total production(by volume),the report found that an increasing proportion of the eight commodities studied had been certified over time(except for soybeans),though the increase varied by commodity(figure 11).Depending on estimates,c

293、ertified global coffee production increased from 9 per cent in 2008 to 2040 per cent in 2020,that of cocoa from 3 per cent in 2008 to 2644 in 2020,palm oil from 2 per cent in 2008 to about 15 per cent in 2020,tea from 6 per cent in 2008 to 1622 in 2020,cotton from 1 per cent in 2008 to 1820 per cent

294、 in 2020,bananas from 2 per cent in 2008 to 610 per cent in 2020,and sugarcane from 1 per cent in 2008 to 78 per cent in 2020.Only soybeans showed a possible decline,from 2 per cent in 2008 to 12 per cent in 2020(Meier et al.,2020).In addition,in 2020,about 10 per cent of global forests had been cer

295、tified by the FSC and/or the PEFC compared to 7 per cent in 2008.However,this general trend hides significant differences on the country level where in some cases adoption increases strongly,while in other cases it declines(Depoorter and Marx,2022).In sum,in several sectors,VSS have become mainstrea

296、m.29Chapter III.Effectiveness of VSSVoluntary sustainability standards in international tradeFigure 11 Share of certified commodity production in total commodity production,2008 and 202072121623910.41.67.46.018.216.115.326.820.7ForestSoybeanSugercaneBananasCottonTeaPalm oilCocoaCoffee20202008However

297、,the report also shows that there is still considerable potential for VSS to expand further.In terms of the share of certified production area in total production area,the report estimates that the area of production land certified by 12 leading agricultural VSS accounts for only 1.94 per cent of to

298、tal agricultural land area globally.However,this percentage is increasing,as confirmed by Tayleur et al.(2017),who mapped the coverage of 12 major agricultural VSS,and found that certified cropland is growing by approximately 11 per cent a year.They observed that the proportion of certified cropland

299、 is higher in countries that are large producers of agricultural commodities.More strikingly,they found that even when looking only at the areas or countries where agricultural commodities are mostly produced,certification is not uniformly distributed.For example,while bananas,cocoa,coffee,palm oil,

300、soybeans and sugarcane are produced in many tropical countries,their certification is concentrated in specific countries,or regions of countries.For bananas,certification is the most intensive in some parts of Colombia,Costa Rica,the Dominican Republic,Ecuador and Honduras.Certified cocoa is mostly

301、concentrated in Cte dIvoire,certified coffee in Brazil,Central America and Colombia,certified palm oil in Indonesia and Malaysia,certified soybeans in Argentina and Brazil,and certified sugarcane in Brazil.These findings suggest that being a large producer of commodities for which many VSS exist pot

302、entially plays a role,but is not sufficient in and of itself to explain VSS adoption.1.Barriers to VSS adoptionThe previous section has shown that VSS adoption is uneven across countries,and suggests that there remain barriers to the uptake of VSS.Four major barriers to adoption can be identified in

303、 the relevant academic literature:the costs involved in obtaining certification,the lack of incentives to adopt VSS,governance gaps and sociopolitical resistance to VSS(figure 12).Typically,it is mainly the smallholder producers in developing countries who face these barriers.30Figure 12Barriers to

304、VSS adoptionCost of certificationLack of incentives to engage in certificationGovernance gapSociopolitical resistanceCosts of certificationThe costs involved in obtaining certification are of two kinds:certification costs and compliance costs(Schleifer et al.,2019).Certification costs are the costs

305、involved in the different steps of the certification process.These include the costs of audits,which must be paid for by the standards adopter,as well as the costs linked to the certification decision,as some VSS organizations charge a fee for their certificate.The VSS applicants also need to elabor

306、ate management plans in order to get certified,and audits are intensive in terms of the time invested and the data required to be provided.The applicant needs to collect and provide relevant data linked to all the requirements.However,these data are often not readily available,especially in developi

307、ng countries.In addition to certification costs,producers incur compliance costs to make their production practices compliant with VSS requirements.This can require significant investment and acquisition of expertise,especially for producers(typically in developing countries)that lack prior capacity

308、 to comply.Lack of incentives to engage in certificationEconomic benefits provide an important incentive for producers to become certified,but when it is uncertain whether such benefits will accrue,there is little incentive for VSS adoption.To some extent,the costs incurred to obtain certification n

309、eed to be compensated by additional revenue.The economic benefits linked to certification can take two forms:price premiums and increased market access.However,these incentives are not guaranteed,which can discourage the adoption of VSS.With regard to price premiums,some VSS organizations,such as Fa

310、irtrade,guarantee a price(or income)premium for producers of their certified commodities.This form of direct additional income for producers can incentivize them to adopt VSS.However,generally,price premiums are not guaranteed,and their existence depends on market dynamics.Consumers may or may not b

311、e willing to pay a premium for certified products.Besides,even when they are willing to pay a premium,producers and suppliers do not necessarily receive it,as they need to negotiate the premium with their buyers.Typically,small-scale producers,especially in developing countries,have less negotiating

312、 ability,which results in powerful actors in the value chain often capturing the premium(Grabs,2020;Ponte,2019).31Chapter III.Effectiveness of VSSVoluntary sustainability standards in international tradeVSS can act as trade facilitators since they can augment demand by providing information on how g

313、oods are produced and distributed.However,this incentive can only be effective if countries have sufficient potentially VSS certifiable products for export(in terms of value and volume),and if the markets exist for VSS-certified products.If exports remain limited,or if there is no market for the cer

314、tified products,the incentives to certify will remain low.Governance gapSeveral studies highlight the importance of the political and institutional context in which VSS are being used,and point to a governance gap as a possibly significant additional barrier to VSS adoption.A literature review of mo

315、re than 100 studies argued that a necessary,although insufficient,condition for the use of VSS is the presence of national institutions which provide a supporting environment for compliance with standards(Loconto and Dankers,2014).This implies that countries with effective and well-functioning gover

316、nance structures offer a better institutional context for the adoption of VSS.This is probably because producers in these countries are more accustomed to complying with rules than those in countries with weaker governance structures,and therefore find it less difficult to comply with VSS requiremen

317、ts.In contrast,in countries with weaker governance structures,as in many developing countries,the political and institutional context can constitute a barrier to the adoption of VSS because of a governance gap(Auld et al.,2015).In such a context,there can be a discrepancy between public regulations

318、and VSS requirements in terms of the stringency of the rules they prescribe,but also in terms of their enforcement.In a country with less stringent or poorly enforced public regulations,economic actors are less accustomed to complying with rules.As a consequence,complying with VSS requires more effo

319、rts for them.This governance gap can therefore be a barrier to the adoption of VSS.Sociopolitical resistanceSome authors report that VSS are sometimes viewed as mechanisms that enforce existing power relations,especially by lead firms in GVCs,many of which are located in developed countries.These fi

320、rms define sustainability according to their perspectives and interests,and require this approach from all their suppliers.This can generate resistance to the adoption of VSS by some producers in developing countries if they believe that developed countries standards are being imposed on them(Auld a

321、nd Renckens,2021;Levy et al.,2016).Such resistance to VSS can come from individual producers,but also from governments in developing countries.This developed-developing country tension or divide might represent a disincentive to the adoption of VSS.Moreover,it could also foster the adoption of alter

322、native,more localized institutional arrangements.The persistence of these kinds of barriers to VSS adoption can create significant exclusionary effects,particularly for small-scale producers in developing countries.32Chapter IVVSS and public policyVoluntary sustainability standards in international

323、tradeChapter IV.VSS and public policyAs explored in chapter II,one factor that has led to the proliferation of VSS is their increased recognition by governments,and their integration into public policy.This chapter explores the different types of public policies into which VSS have been(or could be)

324、integrated.These include market access regulations,trade policy,public procurement policy,due diligence and export promotion measures.Figure 13 Integration of VSS into different public policiesMarket access requirementsGovernments are using/promoting the use of VSS throughTrade policyFTAs and PTAsPu

325、blic procurementSustainabilitydue diligenceExport promotionA.Market access regulationsVSS are increasingly used in market access regulations or are incorporated by reference to them in the regulations that determine which products can access a market or not.The VSS then become a mandatory market acc

326、ess requirement.No data are available on how many regulations are based on or refer to VSS,but some recent examples are presented below to illustrate how VSS have been integrated into market access regulations.The Republic of Koreas Act on the Sustainable Use of Timbers(2017)explicitly recognizes VS

327、S as proof of compliance with legality requirements(Korea Forest Service,2017).This regulation aims to tackle illegal deforestation and prevent illegally harvested timber from being sold on that countrys market.Complying with the Act is mandatory for all timber operators or traders aiming to conduct

328、 their activities in the Republic of Korea.Timber importers are expected to prepare all legality assurance documents prior to importing timber into the country.The Korea Forest Service supervises the legality of the timber imports through pre-import controls with the assistance of the Korea Forestry

329、 Promotion Institute,an inspection agency.This institute checks the legality assurance documents and decides whether the timber in question can enter the country.Implementation of the Act is supported by the Detailed Standards for Determining Legality of Imported Timber and Timber Products,which spe

330、cify the requirements that imported and domestically produced timber and timber products need to meet.It contains an exhaustive list of documents and certifications that are recognized by the Republic of Korea as assuring the legality of the timber harvest.In particular,these documents include expli

331、cit references to VSS,and certificates from the FSC and the PEFC as proof of legality(Korea Forest Service,2018;UNFSS,2020).Another interesting example where VSS play a role in market access regulations is the European Unions Renewable Energy Directive(RED).The directive aims to achieve a number of

332、mandatory targets to promote the use of renewable energy sources,including the use of biofuels as a renewable energy source.In order to ensure that the European Union imports sustainable biofuels,RED has established a set of sustainability criteria for biofuels,and VSS certification can provide proo

333、f of compliance with those criteria.While VSS organizations certify most of the sustainable biofuels available in the European Union 34market,not all of them provide the proof of compliance necessary to enter that market,since not all VSS oganizations are equal in how they set standards and which standards they set.In this respect,a key component of RED is a recognition system based on substantive