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Extracting the Voluntary Sustainability Standards Opportunity for Biodiversity Protection: The need for a dedicated policy response

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By Jason Potts, May 19, 2017

Voluntary sustainability standards have a strong potential for supporting efforts to protect biological diversity. But policy makers will have to expand their role beyond mere supporters and users of such initiatives to that of watchdogs and regulators if this potential is to be realized.

As the world marks the International Day for Biological Diversity on May 22, it is well worth considering the potential contribution of voluntary sustainability standards (VSS).

Agriculture is responsible for 70 per cent of projected losses in terrestrial biodiversity due to widespread land conversion, pollution and soil degradation. Thankfully, the market for certified agricultural products is booming as major retailers and manufacturers adopt voluntary sustainability standards.

Agricultural production compliant with these standards has grown at an average of 35 per cent per annum between 2008 and 2014, with standard compliance across four of the eight key commodities boasting standard compliance across at least 10 per cent of global production.

In its forthcoming review, Standards and Biodiversity—which covers 15 major VSS operating in the agriculture sector—IISD confirms the substantive relevance of sustainability standards to biodiversity protection. Virtually all of the major agriculture standards place strong emphasis on habitat protection, with many prohibiting production on recently converted land.

The Convention on Biological Diversity has recognized this potential. In its most recent Conference of the Parties, delegates to agreed to place an emphasis on the mainstreaming of biodiversity protection. Within Decision XIII/3, paragraph 17 (h) in particular calls on the Parties to, “make use of voluntary sustainability standards and/or of voluntary certification schemes, and promote their further development.” 

But the potential of voluntary standards to promote biodiversity friendly practices needs to be weighed against their corresponding potential to rubber stamp unsustainable practices through either weak standards or weak conformity assessment processes. In its 2014 Review, the State of Sustainability Initiatives documented a downward trend in the rigor associated with voluntary standards over the past several decades as such initiatives became increasingly tailored to serve mainstream markets. On the other hand, the effectiveness of standards can be severely limited by leakage when sufficient market demand for unsustainably produced products exists to continue the use of such practices at current or even growing rates.

One of the major risks associated with voluntary standards is the ability of the “imperfect” market to dictate “imperfect” outcomes—even across markets for voluntary standards initiatives. The externalization of social and environmental costs in conventional markets is all too easily translated into the externalization of such costs across so called “sustainable markets” as well—often forcing standards initiatives and their proponents to decide between market share and system rigor. 

Economists have long recognized the central importance of policy intervention in overcoming market imperfections.  Ensuring that voluntary standards do not become subject to such forces themselves will almost certainly require closer engagement, management and strategic investment in the voluntary sector by policy makers—not as blind supporters, but as the arbiters of meaningful market claims and appropriate fiscal incentives for producers or supply chains that can guarantee desired performance outcomes. 

The uncertainties associated with voluntary standards provide plenty of room for skepticism regarding the appropriateness of supporting such initiatives with public policy. But they also provide one of the greatest arguments for increased attention and investment by policy makers. 

For more information, please read our policy brief Voluntary Sustainability Standards and Biodiversity: Understanding the potential of agricultural standards for biodiversity protection

Jason Potts manages the Sustainable Markets and Responsible Trade (SMART) Program at the International Institute for Sustainable Development.