Is certification delivering what it promises to feedstock producers? A look at what literature tells us.

As HARMONITOR aims at increasing the effectiveness and robustness of sustainability certification schemes and labels (CSLs), one of the first essential steps is to understand how they currently perform. Many CSLs focusing on feedstock production go beyond their commitment to improving environmental sustainability. They also aim for a positive impact on the economic and social dimensions of sustainability. In essence, these schemes promise to improve the well-being of the individuals involved in the production of feedstocks. Now the question is, are they really able to achieve this ambitious goal?

Scientific knowledge builds on what has been researched before, so we decided to have a look at what other experts had to say on this matter. We turned to the available scientific literature, scanned various databases and selected papers that we found useful for our purpose. We decided to limit the scope to feedstocks that, in spite of being relevant in terms of their sustainability impacts, are currently underrepresented in literature. After some research, we finally selected palm oil, natural rubber, soybean, sugar cane, wood, maize, and raw cotton. We also decided to focus on the economic and social impacts of certification, and more specifically on the economic and social impacts of certification on the farmers producing the feedstocks  mentioned before. Our final selection included 37 peer-reviewed published papers, from which we managed to extract more than 240 observations. Basically, each different combination of feedstock, region, and type of impact of certification was recorded as a separate observation.

As you can see in Figure 1 below, we looked at the impacts of certification on various categories, which are represented on the y axis. On the x axis you can find the regions of the world. On the graph there are bubbles of different colours and dimensions. Each colour represents a specific feedstock, as described in the legend. The size of the bubbles represents the number of observations that were collected for each combination of impact category, region, and feedstock.

Figure 1. Overview of number of observations collected from literature covering different feedstocks, regions, and outcome categories.

Three interesting conclusions can be drawn from the figure. First of all, some areas are particularly coloured and full of bubbles; these areas represent what has been studied the most in literature. For instance, we can immediately notice that the combination of Asia with costs, revenues, productivity, and profits has been investigated more than the rest, especially for palm oil. Another noticeable information is that the economic impacts have way more observations than the social ones, meaning that more research is needed for these ones. The second information we can derive is that, even though some areas of the plot are particularly full, some portions are completely blank. Notably, the rows of market access and price premiums belong to the latter. This finding is quite interesting because it is contradictory with the interests of farmers seeking certification. When looking at what drives the wish to get certified, price premiums and increased market access are almost always mentioned (Morris et al., 2004). We were then surprised to see that it is not something much covered in literature yet. The third point is both a finding and a disclaimer: as said before, some areas are emptier, some fuller. Let’s focus on the full ones once again, and this time on the absolute number of observations. The largest bubble represents a little more than 20 observations. This number is quite low, which means that the impacts of certification in general need more research.

After an overview of what literature has studied and what the main knowledge gaps are, it’s also worth diving deeper into what the findings from these studies tell us. We looked at how many observations reported that certification causes an increase, decrease, or no effect on the impact categories mentioned above. In most cases, certification was found to cause an increase in both costs and benefits (Figure 2). The profits mostly increase, probably due to improved productivity, better market access, and price premiums, which means that the costs tend to be compensated by the economic benefits. This is certainly a positive finding, but there is still a significative number of observations showing negative impacts after certification. This is even more evident if we look at the social benefits.

Figure 2. Number of observation indicating an increase, decrease, or neutral effect on outcome categories after certification.

There are various hypotheses explaining which drivers are behind these mixed results. One idea is that smaller farms may face proportionally higher costs compared to larger ones, which could make it challenging for them to benefit from certification (Aisyah et al., 2021; DeFries et al., 2017; Tey et al., 2021). Similarly, low-income countries may encounter the same difficulties compared to high-income ones (Carlson et al., 2016; Durst et al., 2006; Meemken, 2020). Despite the clear context-dependence of certification's costs and benefits, the precise factors influencing certification outcomes remain somewhat unclear. Understanding this is crucial for improving certification's effectiveness and ensuring it fulfils its intended goal of enhancing sustainability in feedstock production. Moreover, such understanding is fundamental in ensuring that certification is a just and equitable tool, rather than merely a greenwashing tactic used by companies to claim sustainability without genuine implementation.

References

Aisyah, D. D., Irham, & Mulyo, J. H. (2021). How does willingness and ability to pay of palm oil smallholders affect their willingness to participate in Indonesian sustainable palm oil certification? Empirical evidence from North Sumatra. Open Agriculture, 6(1), 369-381.

Carlson, A., & Palmer, C. (2016). A qualitative meta-synthesis of the benefits of eco-labeling in developing countries, Ecological Economics (Vol. 127, pp. 129-145): Elsevier.

DeFries, R. S., Fanzo, J., Mondal, P., Remans, R., & Wood, S. A. (2017). Is voluntary certification of tropical agricultural commodities achieving sustainability goals for small-scale producers? A review of the evidence. Environmental Research Letters, 12(3).

Durst, P. B., McKenzie, P. J., Brown, C. L., & Appanah, S. (2006). Challenges facing certification and eco-labelling of forest products in developing countries. International Forestry Review, 8(2), 193-200.

Meemken, E. M. (2020). Do smallholder farmers benefit from sustainability standards? A systematic review and meta-analysis. Global Food Security, 26, 100373-100373.

Morris, M., & Dunne, N. (2004). Driving environmental certification: its impact on the furniture and timber products value chain in South Africa. Geoforum, 35(2), 251-266.

Tey, Y. S., Brindal, M., Djama, M., Hadi, A. H. I. A., & Darham, S. (2021). A review of the financial costs and benefits of the Roundtable on Sustainable Palm Oil certification: Implications for future research, Sustainable Production and Consumption (Vol. 26, pp. 824-837): Elsevier B.V.