Leading brands at this week’s SB ‘15 London will reaffirm that doing good is good for business. At ISEAL Alliance, we wanted to find out why companies were choosing certification as a way to meet their sustainable sourcing goals and what the business benefits are for those that do.
In late 2014, ISEAL began to interview all kinds of businesses – retailers, manufacturers, traders and others – on what they saw as the value of working with credible sustainability standards (certification systems) such as those that are members of ISEAL. We wanted to know why certification made good commercial sense. So we began to seek out interviews with company sourcing directors, sustainability heads and other experts who had actively participated in the decision to engage in certification and have watched its evolution in their company over time.
What we learned was that the value of certification was high, but it varied depending on the type of business, the sector, the geography, or other factors. The interviews also showed that certification was not always valued in the way one might expect. While market differentiation and increased sales were mentioned by a few companies, the potential value of visible ecolabels was never the primary reason for the partnership. Instead we heard a great deal about supply chain challenges.
Companies revealed the value of sustainability standards for their business in five key areas:
- Making complex supply chains more understandable. This included providing better traceability, simplifying what is asked of suppliers by using agreed standards and generating better relations with producers.
- Mitigating risk. Rigorous auditing, transparency of origin, and outsourcing assurance of responsible practices to local experts helped companies mitigate risks of sourcing from complex supply chains.
- Ensuring sustainable supply for the whole industry. Several companies noted that by their investment in certification, they were strengthening the reputation and ensuring a sustainable future for the whole sector.
- Meeting consumer expectations. By communicating compliance with sustainability standards, companies said they were increasing consumer awareness of sustainable sourcing and creating market differentiation for their products.
- Reflecting a company’s values and heritage. As well as aligning companies’ goals with their values and maintaining trust, certification also provided a way to engage more deeply with employees.
We also learned that certification is not seen as a silver bullet. Companies continue to work with multiple sustainability tools and multiple certifications. Many still rely heavily on their own codes of conduct or auditing programmes and they see these as complementing their use of third-party certification. While those interviewed agreed that the sustainability landscape is changing dramatically, they also said that their company’s commitment to certification will only deepen over time.
Click here to read interviews with M&S, IKEA, Mars, Woolworths, Wilmar, De Beers, Domtar, Bumble Bee Seafoods and Tetra Pak on what they see as the value of sustainability standards.
This group of interviews is certainly not meant to prove the business case for certification nor to provide detailed research in a case study format; deeper research on the business case for certification is needed. But we at ISEAL hope that these stories will inspire additional companies to engage with credible, robust, and transparent standards. We believe that sustainability standards can provide a roadmap to responsible practices for companies large and small in a wide range of sectors, particularly if those standards systems have been set up with positive sustainability impacts as their highest aim and with credibility at the heart of their systems.