Businesses experience range of benefits from using sustainability standards

Cotton field, USA © BCI

A new report by Aidenvironment finds that sustainability standards improve market access, profitability and production for certified businesses, as well as enhance the reputation of and reduce risks for manufacturers and retailers.

Following a 2015 ISEAL survey, which found businesses identify a range of benefits from working with sustainability standards, ISEAL commissioned Aidenvironment to conduct a comprehensive review and synthesis of existing literature and evidence to fully understand the business benefits of standards and how they materialise.

The independent research revealed that businesses realise a variety of short-term and long-term benefits from using sustainability standards.

Early benefits of using sustainability standards

Early business benefits include changes in capabilities, practices, processes, relationships, opportunities and other immediate results of using sustainability standards for both upstream and downstream business entities.

Almost all sources (98 per cent) referred to sales and marketing related benefits, 78 per cent of the sources to operations related benefits, 70 per cent to procurement related benefits and 50 per cent to stakeholder engagement related benefits. Benefits related to sector-wide change (28 per cent) were less frequently mentioned.

Final benefits of using sustainability standards

Early business benefits, when realised, can contribute to a range of final benefits. The researchers distinguished between two kinds of final business benefits: the creation of business value, which refers to final benefits that improve the financial return on investment of the business itself; and sustainability impacts, which refers to the social return on investment in terms of social, environmental and economic impacts.

These benefits can be at a company or supply chain level, but also for other stakeholders (e.g. communities living close to a production site), at landscape and sector level.

On business value, sources referred most frequently to improved reputation (60 per cent), improved profitability (53 per cent), cost reduction (30 per cent) and growth in production (30 per cent). Sustainability impacts were referred to in 38 per cent of sources as a business benefit in their own right.

Credible sustainability standards support businesses’ sustainable sourcing strategies

The credibility of a sustainability standard is a key success factor to various business benefits, especially reputation. Credible standards are defined by ISEAL as clear, accurate, relevant, transparent and robust.

The Aidenvironment findings show how standards have the potential not only to bring business benefits but also to contribute towards supply chain and sector transformation when used as part of an integrated sustainable sourcing strategy.

Aidenvironment analysed 40 studies to identify what benefits businesses gain from using sustainability standards and the related influential factors across four sectors: agriculture, fishery, mining and forestry.

The documents reviewed used a variety of research methods including cost-benefit analyses, survey based studies, meta-reviews, literature reviews, key informant interviews and primary data collection. The analysis of the documents focused on evidence of reported benefits by businesses rather than potential benefits.

Read the full report and executive summary.

Read the infographic which illustrates key findings from the report. 

Posted on 24/03/2017