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The panelists discussed strategies for ensuring the sustainability of global commodity supply chains, in particular through innovative certification and partnership schemes. Jenny McColloch, head of the McDonald’s sustainability initiative, recounted the history of her company’s work in this area, and its “3 Es” approach, which features Environment, Ethics, and Economics. Since McDonalds does not itself produce any of the commodities that it uses as inputs, (e.g. beef, chicken, fish, palm oil, coffee, and packaging fiber), it partners with individuals and entities that are involved in the production process to advance sustainability objectives. Their strategy involves identifying the links in global supply chains that pose the greatest risk from a sustainability perspective and developing initiatives to strengthen these links’ social and environmental performance. McColloch explained that one of the challenges involved with pursuing this strategy is that sustainability criteria remain ill-defined for certain commodities. This is the case of beef, for example. To fill this gap, McDonalds joined the membership of a sustainable beef “Roundtable”: a multi-stakeholder forum that features producers, buyers, NGOs, and certification bodies, among others, in order to develop sustainability criteria for particular commodities. She closed by emphasizing the importance of having a long-term view of sustainability and working with partners that can accompany companies through, but also beyond, the certification process.
Tensie Whelan, President of the Rainforest Alliance, shared the history and mission of her organization, which strives to use markets to achieve sustainability solutions at a global scale. Rather than adopting a punishing approach of boycotting non-sustainable products, the Rainforest Alliance seeks to encourage “buycotting,” where consumers are equipped with information that allows them to make purchasing decisions in line with their values. The Rainforest Alliance has developed standards and certification schemes that it implements and monitors in an effort to redesign production processes for global commodities. If, after certification, a producer/supplier fails to keep up with the applicable requirements, it can be de-certified. To increase accountability, information on certification and de-certification is publicly available. She explained that while sustainability initiatives are effectively pursued at the private level, government involvement is needed to clarify legal thresholds (e.g. define and prosecute illegal logging), and to create an enabling environment through tax incentives for sustainable production processes and consumption, and through sustainability-favoring procurement policies. She highlighted that government involvement can create virtuous circles by sending positive signals to other market actors, like banks, that might respond by engaging with (certified) producers on preferential terms.
Motoko Aizawa, Managing Director of the Institute for Human Rights and Business, spoke to the advantages of focusing sustainability efforts on global supply chains rather than on direct government intervention. Because they cross borders and involve a broad range of actors, sustainable global supply chains can achieve social and environmental goals that are challenging for jurisdiction-bound governments. Experiments with New Governance structures, such as the multi-stakeholder Roundtables, are also promising, in particular when they create markets for sustainable goods. She concluded that while the jury is still out on the question whether the movement from government to governance is effective, important lessons can nevertheless be gleaned from the multi-stakeholder approach that should be incorporated into governance generally, whether new or traditional.
Sarah Dadush is an Assistant Professor at Rutgers School of Law and Co-Chair of the ASIL International Organizations Interest Group.