Five years ago, ISEAL’s ‘Scaling-Up Strategy’ set out a number of reasons why emerging economies should be a priority for the sustainability standards movement, with Brazil, India and China identified as key markets. Not only are these economic powerhouses the world’s biggest producers and buyers of commodities, but there is also an increasing commitment to tackling major social and environmental issues in these diverse societies.
While several sustainability standards and initiatives have had long-standing relationships in these countries, data collated by ISEAL shows how the use of standards systems in these markets have accelerated in the last three years.
In 2015, ISEAL members covered a total of 9,800 certified entities in Brazil, India and China, up 20% from the year before. Comparing data on certification uptake between 2012 and 2015, ISEAL found that members which in 2012 had no, or very limited reach in emerging markets, were successful in rapidly expanding and consolidating a user-base for their standard. Established standards systems such as FSC or Rainforest Alliance (that already had significant uptake in Brazil, China or India) experienced continued growth across all three countries.
ISEAL members also increased their strategic presence in emerging economies. Looking at aspects such as awareness raising activities, training provision, capacity building, partnership-building and investment in local staff, ISEAL found that the bulk of its members had intensified their strategic engagement in emerging economies. Whereas less than half of ISEAL members could be considered engaged in emerging markets in 2012, by 2015 this had increased to 66%.
Brazil engagement already strong, but alliances have grown
In terms of engagement efforts by ISEAL members, the Brazilian context shows the least change over three years in comparison to the Chinese and Indian landscape. This confirms the relative maturity of the Brazilian market and the fact that many ISEAL members had some form of engagement in Brazil prior to 2012. Over the years a vibrant ISEAL community has emerged, with a notable increase in alliances and partnerships across ISEAL membership. Examples include ISEAL members working together on the Rio Olympics Food Vision Initiative or sharing facilities and back office support. In addition, several ISEAL members have developed structural links to Brazilian standard setting initiatives and certification bodies. Given this context, ISEAL organised its first annual Global Sustainability Standards Symposium in São Paulo on 23rd September 2015, which was widely attended by business leaders and key stakeholders.
China opens up and ISEAL members increase their presence
In China, ISEAL members’ engagement levels have intensified since 2012, with about two thirds of the members now investing in some form of engagement, although these levels have been relatively low compared to the size of the Chinese market. For at least five members, engagement in 2015 is still in an early planning stage. Part of this growth has been made possible by government-led standards sector reform and opening up, along with an open and willing attitude from Chinese regulators to work with ISEAL and ISEAL members along with other leading sustainability tools and standards. Greater numbers of businesses are also using sustainability standards in the Chinese domestic market, often led by global brands, but increasingly by Chinese brands as well. For example, Chinese investors in the palm oil sector have benefited from certification to and guidance from the Roundtable on Sustainable Palm Oil. Palm oil and Chinese foreign investment were the topic at an ISEAL Sustainability Standards Salon in Beijing that coincided with ISEAL’s board meeting held there last April. Chinese businesses were happy to share how standards like RSPO are helping guide them on their sustainability journey to reduce risk and achieve sustainable returns on investment.
India shows most dramatic growth in ISEAL member activity in emerging economies
India emerged as the most dynamic emerging market location for ISEAL members over the past three years, with a strong upsurge and investment in partnerships coupled with a dramatic increase in the number of certified entities and production areas under certification. The number of highly engaged members has doubled, indicating strong investment in local staff offices, strategic partnerships, and increase in the number of certified entities. Through partnering with the Centre for Responsible Business (CRB), an Indian NGO focussed on sustainable supply chains and sustainability standards, ISEAL was able to support a broad range of activities and events to help facilitate members’ expansion in India. Examples include creating a network forum for the local staff of ISEAL members, research on market entry opportunities as well as activities aimed at building the local demand for certified products.
ISEAL is continuing to work in emerging markets to support our members and to build greater awareness of credible standards across Brazil, India and China. Ultimately, we continue to move towards our shared long term aim to see a significant scaling up of the positive sustainability impacts in the sectors and commodities in which ISEAL members operate globally.