Roundtable Initiatives: What Are They And What's Next?

22/08/2012 (CSR Asia) - In the realm of sustainability initiatives, a plethora of certification systems for different commodities  has developed in the last 20 years. Business leaders and civil society have created “Roundtables” on a range of such commodities including forestry products, fish, palm oil, and coca. A new initiative – the Sustainable Rice PlatformDuPont Crop Protection, the Kellogg Company, Mars Food Europe, Nestlé, and Syngenta. (SRP)– has recently kicked off with the support of the International Rice Research Institute (IRRI) here in Asia, after being initiated by the United Nations Environment Programme (UNEP). Founding corporate members include:

There is a lot of confusion about the effectiveness of many of these certification systems. Are they really good for the environment, people and communities? Can they really deliver sustainable practices? My view is that global roundtables have the potential to deliver strong conservation results and rapid change but they are very challenging to set up and run effectively.

What are they? Roundtable initiatives bring together diverse stakeholders – brands, retailers, processors, producers and traders, not-for-profits and academics to work together to improve the sustainability credentials of a product’s supply chain and assure consumers of sustainability. The initial aim is to build consensus round 6-8 key impacts, assess the range of global performance against those impacts and then develop performance-based standards to reduce the impacts. The goal is transformation of global commodity markets.

At the core of the system is a standard which is a defined set of social, environmental and economic criteria. Each standard determines who has a voice in setting the performance requirements, how it evolves over time, who does the audits and certifies compliance, who accredits the certifiers, and how compliance is signalled.

By tying the work to sustainability performance, not practice, the roundtables remain scale and technology neutral, so the onus is on each producer to find the best way to improve. If done well, these performance standards encourage innovation rather than compliance.

An example of “success”: Given the unique nature of sustainability issues facing each commodity, it would be dangerous to generalise about success. So let’s examine one example: the Roundtable on Sustainable Palm Oil (RSPO). The RSPO is one of the most successful round tables as measured by comprehensiveness: Global production of certified palm oil production reached 10 percent of global palm oil production in August 2011 and multi-nationals and industry players including New Britain Palm Oil and Wilmar have pledged to have 100% of their outputs certified sustainable by 2015.

Conservation NGOs including WWF have evaluated the RSPO and have said that the best performers in the industry have “turned commitment into action and transformed the market”. That being said, they have called for broader commitment amongst members and there is continued criticism as a result of continued deforestation.

Even though RSPO is considered the most successful agricultural sector certification program, in recent years some factions have broken away from the unifying strength of RSPO to set up their own standards. The result? A mind-boggling variety of palm oil certifications because, it is hard to please everyone.

What’s next: Rice presents a unique challenge for any quality control system because it is mostly grown by hundreds of thousands of poor farmers who have only very small farms of less than 1 hectare each. Moreover, 90% of rice is grown in developing countries in Asia, where access to knowledge and support is limited.

The SRP’s underlying philosophy is to “pull sustainable practices from the front”– meaning that farmers can be encouraged to adopt sustainable practices by rewarding them with lower costs and/or higher prices. This is happening on a small scale in northern Malaysia where Nestlé is offering rice farmers a premium for farming using specific standards. It is recognised amongst players in the rice sector that a standard developed by the multi-stakeholder platform has the potential to be much more successful than individual players going it alone.

Over the next 3 years, the SRP aims to develop a set of globally relevant management standards and quantifiable sustainability targets that suit a range of conditions. Key environmental challenges to be addressed include the use of water, fertilizer, herbicide and insecticide.   The Platform will seek to reduce poverty as farmers stand to gain by higher incomes through reduced input costs, higher production, and/or getting a premium on their rice. If successful, consumers and processors purchasing rice grown on the SRP will be assured it is good for the environment and farmer welfare.

It is too early to tell if the SRP will be successful. We know from experience that roundtables (and the resultant certification) are effective if there is sufficient majority of industry players and a highly recognised certification standard among the end consumers. In addition, there must be a strong consensus amongst a range of stakeholders on how to move forward in a unified way.

With many existing roundtable initiatives to learn from, the SRP has the potential to bring about changes in production practices as farmers and others in the supply chain support better practice and performance. Like the RSPO, it will not be a panacea to solve all of the challenges in the sector. At CSR-Asia we will follows its developments with interest and hope to see it accelerate positive change.