Certification Brings Positive Impacts and Better Traceability to Business

Eco-labels and other sustainability marks on products are the way that most people experience certification. They are a window into production practices that might have taken place thousands of miles away – the connection between a forester in Brazil and a new piece of furniture; or a fishery in the North Atlantic and a meal of fish and chips; or a tea picker in Kenya and a morning beverage. But it is not only consumers who depend on labels to make informed decisions, it is also retailers and many other participants in the supply chain who are looking to improve their performance.

As the sustainability landscape evolves, so too does the certification movement. Whereas “business-as-usual” activities often do more harm than good for the planet and communities, standards and certification have been identified and proven (so far through many studies and a wealth of anecdotal evidence) to be excellent tools for achieving sustainability impacts and fostering responsible business practices. As one example, in the 2014 report Measuring Sustainability, produced by the Committee on Sustainability Assessment, information from 18,000 surveys in Asia, Latin America, and Africa concluded that, on average, farms participating in a certification program performed better on measures for economic performance and access to training than similar farms that did not participate in such initiatives.

The UN Global Compact and ISEAL share the belief that businesses should be influenced to scale-up their use of certification to increase their positive impacts on people and the planet. Certification is reaching scale in many sectors, such as for certain food crops (tea, coffee, cocoa, bananas), as well as forestry and fishing. Earlier this year, the State of Sustainability Initiatives issued its SSI Review 2014, which showed remarkable growth in the uptake of certified goods across 16 leading certification programs in 10 commodities, now holding an estimated trade value of $31.6 billion (as of 2012), according to the report.

In the seafood industry, more than 20,000 products bear the Marine Stewardship Council label. Worldwide, 180 million hectares of forest meet Forest Stewardship Council (FSC) standards for responsible forestry; FSC has secured commitments from no less than 20,000 companies. The London 2012 Olympics saw all tea, coffee, sugar, and bananas certified as Fairtrade.

Many additional business sectors that are critical for sustainability have just begun to transform their supply chains. The mining sector is seeing growth in new standards in aluminum, steel, gold, and artisanal mining. A similar movement can also be seen in the hospitality sectors, in textiles, in oil and gas, and in livestock, among other sectors with newly emerging sustainability standards and increased interest in responsible business practice. Never before has there been a more crucial time for standard-setters and certification leaders to show the impacts of their programs in order to motivate the adoption of credible sustainability standards and certification by the huge number of companies that are not yet deeply engaged in responsible practices.

Truthfulness above all else

As the global association for sustainability standards and certification, the ISEAL Alliance defines what good practice looks like in certification and labeling, with a core belief that credible processes will lead to positive impacts on the ground. The most credible standards and certification are mission-driven initiatives that monitor their outcomes and continually strive to scale-up their social and environmental impacts. Unfortunately, many sustainability labels and claims are more a product of good marketing than good practice.

To capture knowledge on what makes a certification program credible and effective, we developed the ISEAL Credibility Principles. Comprised of the input from 400 experts on five continents gathered through a one-year public consultation process, these principles represent the first-ever agreement on what distinguishes the certification programs that are most likely to deliver a real impact from those that do not.

Buyers can use the Credibility Principles to avoid certification and labels guilty of “greenwashing,” such as those developed in so-called closed door processes, or that simply require self-declarations by factory or farm owners to become certified, or even just charge a fee for label usage with no inspection at all. Mike Barry, Head of Marks & Spencer’s Plan A, stated during the launch of the principles last year, “The Credibility Principles provide structure, allowing us to take a more systematic approach to considering how we make many dozens of different raw materials more sustainable.”

Take an example in the cocoa sector. A chocolate bar might have a label indicating that the cocoa beans were sustainably grown, but a supermarket’s procurement person can dig deeper. Thanks to the language of the ISEAL Credibility Principles, the procurement person can ask a certification organization if their system embraces relevance, for example, by addressing the main challenges in cocoa production, such as child labor and the livelihoods of producers, or if they embrace the principle of improvement by having a monitoring system in place to measure whether their certification has a positive impact, such as poverty reduction or biodiversity conservation.

Not surprisingly, the principle that stakeholders ranked as being the most important one that credible certification embraces was truthfulness. For ISEAL and our members, this reinforced that honesty and transparency are what people expect most from certification and labels. This is why ISEAL is taking the next year to develop a Good Practice Guide on claims and labeling that will improve consistency in how certification programs make sustainability claims, ensuring they embrace the concept of truthfulness, among other important steps and practices. It will mean that companies can ensure that their claims and labels are accurate, easily understood, and do not overstate their benefits. ISEAL’s members will follow the steps in the Good Practice Guide, which can be used by businesses, along with other ISEAL credibility tools, to filter what practices in claims and labels are credible and which are not.

Better traceability

Certification has evolved since its origins a few decades ago with the organic movement. Companies are no longer interested in simply hanging their hats on a sustainability label for positive publicity or increased sales. There is a larger set of reasons to use certification, including better traceability of the product through the supply chain.

Companies increasingly need to understand where their supply comes from and what potential risks they might be exposed to, such as child labor, illegal logging, or food contamination. Knowing your suppliers and your supply chain is one of the first steps in a company’s sustainability journey. Standards organizations that are members of ISEAL – including the 4C Association (coffee), Bonsucro (sugarcane), Responsible Jewellery Council (mining and minerals), and UTZ Certified (coffee, tea, and cocoa) – are helping companies reduce risk and increase transparency in their supply chains. The Union for Ethical BioTrade, for instance, is designed to help food and cosmetics companies better manage the hundreds of biodiversity-derived products in their supply chains. One might even begin to call certification programs “traceability programs.” Well-functioning traceability systems are one of the major benefits to a business that engages with certification. Certification and its focus on sound traceability and chain-of-custody standards have become a crucial component of the sustainability movement, and their impacts and credibility are increasing. As part of ISEAL’s work on credible claims, we are also examining the link between claims and traceability systems.

Using certification for transparency

One example of a “front of the pack” company when it comes to sustainability is IKEA. Most of us know this huge retailer. At the Global Sustainability Standards Conference, an IKEA representative asked the audience if anyone had not been to an IKEA store. Only one hand was raised in the large room. In 2013 IKEA achieved some significant sustainability results, including sourcing more than 70 percent of its cotton from sustainable sources, and more than 30 percent of its wood from what it calls “more sustainable” sources, meaning it comes from FSC certified or recycled timber. In addition IKEA has developed a set of minimum standards for its leather suppliers. It is serving MSC-certified fish in its cafés, and even IKEA candles are produced with certified sustainable palm oil.

Palm oil is one of the most interesting and challenging examples in traceability and transparency. Using the IKEA example again, the vast majority of IKEA’s palm oil purchases are for its candles. As most of us know, palm oil is associated with deforestation and biodiversity loss in the tropics, and the product has a complex supply chain, with most of the sustainable oil ending up mixed in with conventional oil before sale. To improve traceability, IKEA works with ISEAL associate member Roundtable on Sustainable Palm Oil to source segregated certified palm oil, with a commitment to reach 100 percent of IKEA’s supplies by the end of 2015 (rather than 2020, as previously committed by the company). Using a specialized traceability system, IKEA and other buyers purchase palm oil through tradable GreenPalm certificates. While not offering segregation yet, this is a responsible step as IKEA moves toward a supply of wholly segregated certified palm oil.

In cocoa, companies such as Mars and Nestlé have made commitments to the UTZ Certified program to help them track the origin and flow of cocoa sourced for their Kit Kat, Mars Bars, and other brands. Traceability is one of the foundations of the UTZ program, providing a fully automated, accurate, and flexible system called their “Good Inside Portal.” As well as tracing UTZ Certified coffee, tea, and cocoa for its market partners, UTZ also provides the traceability service to other certification programs in agriculture, including the Roundtable on Sustainable Palm Oil and the Better Cotton Initiative.

Choosing and supporting credible standards

Credibility is an important driver for any company thinking of engaging in a sustainable sourcing program and looking for certification partners to engage with. An additional method of determining credibility is to look for a certification program’s membership in the ISEAL Alliance, whose members strive to scale-up their collective and individual sustainability impacts to benefit people and the environment. ISEAL membership requires that certification programs demonstrate their effectiveness through their compliance with ISEAL’s Codes of Good Practice. The Codes include a standard-setting code, an assurance code, and an impacts monitoring code. For more information on the members of ISEAL, see www.iseal.org.

Most sustainability standards and certification have been set up and implemented to ensure that products are made sustainably. For many companies, these certification programs have become the most viable approaches to managing their supply chain’s impacts on ecosystems and livelihoods. By choosing raw materials – certified or verified as sustainable by credible certification programs – businesses might better achieve their own sustainability objectives.