Institutional design of voluntary sustainability standards systems: Evidence from a new database

Abstract

Voluntary sustainability standards (VSS) have become a significant element of the governance of international trade and production. Even though VSS are not mandatory (required by law), in practice they are often necessary for producers to participate in global value chains. Finally, VSS are often considered costly for producers. This article provides an overview of the global VSS landscape, and addresses the following questions: how producer-friendly are VSS, and how do their practices towards producers vary with relevant features of VSS institutional design? The analysis is empirical, and it is based on a data collection project called Standards Map (SM), launched in 2011 by the International Trade Centre (ITC). The analysis covers a population of up to 180 VSS. This large-n approach allows for a macro-perspective which complements the existing literature characterized by micro-level studies. Our analysis documents a significant heterogeneity in producer-friendly practices across VSS. We find that participation in meta-governance organizations (such as ISEAL full membership) is strongly associated with producer-friendly practices. Moreover, the location of headquarters in Organisation for Economic Cooperation and Development (OECD) member countries, the engagement of buyers in the board or management of the O194 | FIORINI et al.

Towards Greening Trade? Environmental Provisions in Emerging Markets’ Preferential Trade Agreements

“…Our findings show that environmental considerations play an increasingly important role in trade-both the spread of voluntary sustainability standards (e.g. Brandi, 2016;Fiorini et al, 2018;Marx et al, 2015) and public regulation that seeks to address sustainability concerns for a specific sector or product, as discussed in other chapters in this book, are an expression of this. More research is needed in order to provide a more detailed picture of the interlinkages between international trade and the environment, both in emerging economies and beyond.…”

Multiplicity of sustainability standards and potential trade costs in the palm oil industry

“…We consider the main SS Institutional Design—ID features divided into six dimensions derived from several variables (Table 2). The dimensions of cost‐sharing arrangement, support mechanisms, monitoring systems, and transparency regime are widely acknowledged for sustainability standards and addressed by several studies (Fiorini et al, 2019; Schleifer et al, 2019; UNFSS, 2018). Furthermore, was added the dimension regarding standard‐setter and involvement of producers in the decision‐making process, are relevant to North–South multiplicity in the palm oil standard market (Fransen et al, 2019; Standard Map 2020).…”

“…Then, each certification requires added efforts and expenses at the farm and the organizational level (Dietz et al, 2019). Second, if there is no harmonized system between these standards and procedures, transaction and information costs may also increase, making the SS a de facto requirement for market access (Fiorini et al, 2019; Henson, 2008).…”

Governing spillovers of agricultural land use through voluntary sustainability standards: A coverage analysis of sustainability requirements

“…In response to research question 2, we linked the VSCS with data on VSS characteristics through means of an exploratory descriptive analysis. We thereby focus on the two characteristics of VSS that are most commonly used to distinguish VSS systems (Fiorini et al, 2019;: 1) the type of standard-setting organization (i.e., company-based, public and other private standards); and 2) the verification mechanism used (i.e., third party and non-third party verification). We used data from the ITC Standards Map regarding the…”

“…It is the inherent nature of spillovers that the producers themselves are less likely to benefit directly from the additional efforts needed to mitigate negative or foster positive spillovers. If not compensated sufficiently, the resulting opportunity costs could thus further increase the risk of smallholder exclusion from participation in certification schemes (Fiorini et al, 2019;Grabs, 2020;Starobin, 2020;UNCTAD, 2021). Second, expanding the coverage of standards could further enhance the already frequently high costs for auditing and monitoring, potentially placing additional financial burdens on farmers and nurturing incentives to cheat (Meemken et al, 2021;Schilling-Vacaflor et al, 2020).…”