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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
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7
Optimizing Certification as a Tool

One theme that resonated throughout the discussions was the notion that certification is a tool, and that to make it more effective, or to “optimize” it, one must take a more holistic look at the system within which it is meant to operate. A participant likened this to essayist Wendell Berry’s (1981) concept of “Solving for Pattern” which reads, in part:

A good solution is good because it is in harmony with those larger patterns. … A good solution acts within the larger pattern the way a healthy organ acts within the body … it does not ‘give’ health to the body, is not exploited for the body’s health, but is a part of its health.

Participants identified some potential steps to make certification more effective, and discussed the relative strengths and weaknesses of certification as an approach. They also highlighted roles for various actors in supporting a certification regime. Suggestions covered the evolution of a certification scheme, from conception to its eventual “sunsetting” or handoff to a regulatory agency. In particular, discussions focused on improving our understanding of what certification can and cannot accomplish, introducing systems that could be more inclusive while promoting innovation, and thinking through the interface with complementary programs and institutions.

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

RECOGNIZE CERTIFICATION’S LIMITS

To employ certification effectively, one needs to understand the limits of certification. Chief among these appears to be the fact that certification programs do not have enough authority to eliminate weak performers. While no one suggested that certification programs must somehow become more authoritative (through regulation or otherwise), a number of participants did emphasize that certification does not appear to be the right tool to raise performance at the bottom of a sector. Moreover, compromising compliance standards in order to capture more of the market seems likely to have a negative effect on the standards’ credibility. However, participants did point out that some certification programs are linking to complementary initiatives like a legality verification in the case of the FSC, and to a baseline standard in the case of 4C and the coffee industry.

On a related point, certification programs are relying on markets which are not yet robust enough to provide the authority to “force” producers into compliance. Sustainability as an issue appears to have marketing potential, as evidenced in part by the rise of “green” and “sustainable” claims. However, public education on sustainability needs further attention if it is going to become that point of distinction influencing a consumer to select a certified sustainable product over a conventional alternative. Several participants also remarked that international trade will not be a sufficient lever to impose sustainability. To date, certification schemes have focused on northern export markets, primarily the United States and the European Union. Producing countries, many in the global south, exhibit almost no demand for certified products, making them more vulnerable if overseas demand decreases. Trade between southern countries is also growing (e.g., China trading with African nations), but certified products have not been a focal point for these markets. In any case, government can play a catalyzing role in shaping markets and demand for certified products by requiring certification in its procurement mechanisms.

There is also a yet unanswered question regarding the scalability of certification schemes. Many of them were created in the belief that they could function as an incubator for what might eventually become industry standards. This trend, though, has been hampered both by competition among schemes in a given sector, and by the fact that schemes have focused on the top performers in the market. Most participants agreed that more thought may need to be given to where certification programs provide leverage to start moving the market, and at what point they may need to give way to regulation or other alternatives to mainstream sustainability standards.

Certification might be best viewed as a learning tool. A certified seal is shorthand for consumers, but it is also shorthand for merchants and buyers in business-to-business transactions. Certification could help merchants

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

justify either higher costs or other changes in their purchasing and sourcing practices, because it communicates how merchants are reducing their own risk or enhancing their brand. Many participants emphasized that certification will be crucial to greening supply chains, but that it will require transparency and sound science to bolster its credibility. In the case of organic products, national governments have played an increasingly visible role in supporting organic standards. Governments have not taken over farming, just management of the organic standard—consumers still decide to support organic or not, and this is important to recognize. As one participant summarized, the real goal of many engaged in standards systems is market transformation, and certification is a tool to help achieve this.

CLEARLY DEFINE GOALS

Markets and labels are ultimately means to an end, and so the question for those engaged in certification is: What is that end? If it is an aspiration to change processes that are destructive to the world we live in, then certification can play an important but not singular role in achieving this. Certification as an approach appears to have matured to the point that we can now more clearly identify where and how it will be most effective. It will also be important for schemes to be strategic and focus on what certification is best suited to achieving.

There was wide agreement that, in order to achieve sustainability goals, producer and consumer markets will need to undergo a transformation in which less destructive production practices (in terms of ecological and social well-being) are rewarded in the marketplace. While this transformation is a goal to which any certification program might claim to contribute, certification alone may not be well suited to transforming entire markets. As a result, the positive gains a program makes in raising the bar in the “parallel universe” of top performers will be undermined by slow or negative progress at the bottom. If programs can more sharply define the segment of the market that they are hoping to transform, then they might be more widely incorporated into broader initiatives or complementary schemes.

Certification schemes’ theories of change (i.e., their notions of how a scheme will logically lead to preferable outcomes) likely deserve more scrutiny. It is becoming increasingly evident that certification programs are relying on some corollary improvements—namely market demand and capacity building—that fall outside the domain of the typical certifying scheme. As one participant put it, certification schemes need an intention with clear goals and due consideration of potential impacts, trade-offs, and sound (or at least transparent) assumptions. Participants also discussed the end game for certification systems, and specifically the economic advantages that certified products might present. These include price premia, lower insurance

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

rates (due to decreased risk), increased market access, and preferential tax rates or loan terms. All of these provide important leverage in moving the market, but they are not sufficient to bring about a transformation.

By clarifying the scope of the problem being confronted, it may be easier to determine where one draws the line for a hand-off from certification to regulation. For example, several participants pointed out that the social impacts of certification regimes are not being monitored well. Some of the leading standards systems have emphasized environmental protection, but have not attempted to integrate social concerns such as access to markets. Also, from an ecological standpoint, product-based approaches may not be the best tool to address the problem. Consider the example of biofuel production—certifying that a certain feedstock is sustainable may ensure that the product did not contribute to environmental degradation. But this does little to address the other uses for a feedstock (which may not have a market for certified products) or the trade-offs among different land-use types in a given area. Biofuel production has become a contentious international issue in part because it may be encouraging or accelerating unsustainable land-use changes elsewhere. In other words, many sustainability challenges are not product-specific and so not adequately addressed by product-based certification programs.

TIERED APPROACHES

With some exceptions, certification schemes have been pass/fail systems—producers making the grade receive a certified seal, and those who do not meet the requirements are left out. The LEED standard for green buildings is an example of a tiered approach, where there is a performance baseline, but above that there are three ascending levels of compliance (silver, gold, and platinum). Within this system, projects receive points in several categories, and the total score determines their level of achievement. Project developers, corporations, and even governments have started to use this system as a benchmark to encourage or require a certain level of compliance. Tiered approaches within a scheme can provide a pathway to sustainability—there is robust consensus building at the bottom, to bring as many on board as feasible, but still room for improvement at the top.

Individual schemes may have their own mechanisms for reaching out to and incorporating weaker performers, but in general their emphasis has been on defining the top and encouraging producers to comply. As several participants stressed, this approach has not been successful in motivating or providing guidance to weaker performers. It seems that a stepwise approach, including different tiers for compliance, and perhaps phased standards (allowing a limited amount of time to come into compliance) would offer more incentives at the bottom of the market. The most evocative

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

image participants used was that of a ladder being yanked upwards—weak performers could climb on at the bottom rung, and would have the ability to ascend with some prescriptive guidance, but would also be compelled to climb as the standards were periodically raised. This may be a more effective way to raise both the bar and the floor for performance in a sector.

There has been a trend towards multi-attribute labels, which in theory encompass some of the single-attributes (e.g., dolphin-safe) that were pioneers in product labeling. This trend has made certification and compliance more complex, but it also opens up opportunities to craft standards systems that bundle values, rather than highlight individual traits. Bundling values allows, for example, a product to convey its social benefits (living wage for workers) along with health (nontoxic) and environmental benefits (minimal impact). Participants also discussed the possibility of establishing modular approaches, so that a standards system could be more readily transferred across countries or industries. Industry standards and local norms are not static, and stakeholders tend to shift and change. One of the benefits of a certification program is that it can allow for this flexibility. Several participants stressed, though, that at some point a line must be drawn and those who do not merit certification ought to be removed from the marketplace. This may be a role best left to regulation, but it does seem that certification could be more judiciously applied to encourage a higher degree of compliance.

BUILDING CAPACITY THROUGHOUT THE VALUE CHAIN

One criticism of existing certification schemes is that they provide for little if any capacity building to aid producers in becoming compliant. As participants noted, certifiers are often prohibited from offering advice or assistance. The simple response is that producers must be able to adapt to the changing and more competitive marketplace. However, for a variety of reasons, the majority of producers in any given sector have resisted or failed to come into compliance with voluntary sustainability standards. Fundamental requirements for data collection and reporting have stymied some smaller-scale producers. One-time and large up-front costs have continually been an impediment for producers who might otherwise consider participating in a certification program. As an example, the MSC was designed to certify the best-managed fisheries, which happen to be in countries with money, strong science, and adequate data. While the standards systems have evolved and matured over time, the capacity and infrastructure required for them to thrive is lagging.

Capacity building is a tool to complement certification systems—the key is in determining who is responsible for it, and then linking it to the implementation of a program. Some certification programs do not even allow for

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

BOX 6

Organic Foods in the United States

In 1990, Congress passed the Organic Foods Production Act (OFPA) as part of the Farm Bill. This Act established the creation of the National Organic Program and cited the U.S. Department of Agriculture (USDA) as the responsible authority, specifically the Agricultural Marketing Service (AMS). The Act also gave the Secretary of Agriculture the authority to appoint a fifteen member Board to assist the agency in developing organic production standards. The National Organic Standards Board (NOSB) is structured according to specific subcommittees and task forces, such as the task on organic pet food and the committee on organic handling procedures. NOSB members include farmers/growers, handlers/processors, retailers, scientists, consumer/public interest advocates, environmentalists, and USDA accredited certifying agents. As an advisory arm to the National Organic Program at the USDA, the NOSB makes recommendations on a regular basis, with its most recent recommendations issued in November 2008.

The USDA accredits private and state certification agents who monitor producers, processors, and handlers of goods to ensure that they are meeting the standards set forth by the National Organic Program. In order for a product to be labeled “USDA Organic,” 95 percent or more of its content must meet organic production standards (Wellson ed., 2007). The purpose of the organic labeling program is to increase consumer confidence in organic products, facilitate international trade of organic products, and increase the market supply of organically produced products (Johnson, 2008).


Stakeholders

Stakeholders within the organic certification process include, but are not limited to, farmers/producers, processors, handlers, state and private certifying agents, retailers and consumers. As with other certification/labeling schemes, controversy often arises among stakeholders. Often, more senior stakeholders—those who have been involved in the organic market for a number of years—are interested in tightening/increasing regulations within the industry, while newer players in the organic-product supply chain are more in favor of a free market approach to organic agricultural production (Johnson, 2008).

According to a 2002 USDA report, organic products were, at that time, “available in nearly 20,000 natural foods stores, and are sold in 73 percent of all conventional grocery stores” (USDA/ERS, 2002). As such, supermarkets and other retail megastores also play an important stakeholder role in the organic-product supply chain. Because supermarkets see an increasing demand for organic

capacity building, and so the burden falls back to governments (many of which were deemed ineffective to begin with) to provide support. Several participants suggested that NGOs could take a more innovative, long-term strategic approach to how they support certification schemes. The challenge is that NGOs, and the philanthropic community in particular, have exhibited a preference for innovative solutions—some participants questioned their

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

products on their shelves, more pressure is placed on the organic production industry (Johnson, 2008).


Competitors and Parallel Certification Efforts

Within the United States, the USDA National Organic Program label is the primary standard for sustainable organic agriculture production. Many European Union (EU) countries have recognized the importance of the ecological sustainability associated with organic farming practices and have thus adopted policies to encourage organic farming/product labeling. For example, some EU countries offer financial support for farmers who use organic farming practices, as well as financial support for research and educational programs (Thilmany, 2006). While the USDA National Organic Program standards attempt to certify sustainable organic products, correct and effective application of these standards depends heavily on stakeholders, such as private and state certifying agencies.


Market Share and Impact

United States famers increasingly use organic farming methods to attempt to lower input costs, decrease reliance on nonrenewable resources, capture high-value markets and premium prices, and boost farm income. To increase U.S. organic production, the 2008 Farm Bill provides subsides to organic producers and handlers through the “Organic Certification Cost-share Program.” This program grants producers and handlers up to $750 in federal assistance with a maximum coverage limit for certification costs of up to 75 percent (Johnson, 2008).

Organic labeling reduces transaction costs by signaling, to consumers, that a product was produced in a sustainable manner. Organic agriculture is also one of the fastest growing sectors in U. S. agricultural production. Since the adoption of the USDA National Organic labeling scheme, U.S. exports of organic products into international markets had been increasing. However, in 2002, organic imported products exceeded U.S. exports, reflecting in increase in U.S. consumer demand for organically produced agricultural products (Thilmany, 2006). European Union (EU) countries and the United States are both large-scale consumers of organic products. According to a 2005 report by the USDA, consumer purchases from EU countries and the United States made up “95 percent ($25 million) of world retail sales in 2003” (Dimitri and Oberholtzer, 2005). Additionally, a 2007 survey by the Organic Trade Association, noted that the U.S. organic industry expanded 21 percent with a total of $17.7 billion in consumer sales in 2006 (OTA, 2007).

staying power if the capacity building component turned into a decades-long endeavor.

Some participants wondered if new institutions are necessary to support certification efforts. The International Social and Environmental Accreditation and Labeling Alliance (ISEAL) is one such institution that has emerged to fill this void. ISEAL works with a range of voluntary standards systems,

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

providing services, advocating in trade and policy circles, and developing tools on some of the more mundane issues (e.g., auditing requirements) common among certification programs. In the coffee sector, the Common Code for the Coffee Community (4C) has emerged as an alliance of public and private stakeholders, to reconcile the various competing sustainability standards and move the industry forward. Part of 4C’s mission is to provide support mechanisms to farmers and put them on a path of continual improvement, bolstered by an extensive outreach network and training modules.

Who takes responsibility for knowledge extension in this emerging field remains an open question, and in all likelihood it will differ across sectors. The important point is that these programs will need that extension agent, if they are going to be able to scale up and enter new regions and constituencies. On a related point, the tent will need to be bigger for these schemes to succeed. As participants noted, schemes are generally not engaging enough of the right stakeholders, further complicating efforts to scale up.

MULTIPLIER EFFECTS AND COMPLEMENTARY APPROACHES

Certification programs have met with some success, in terms of identifying and establishing markets for more sustainable products, but there appears to be much greater potential if they could be incorporated into other regulatory and voluntary approaches. Regulatory agencies do not like ambiguity—certification processes may be a means to navigate complex issues, explore and experiment with new standards, and then hand them off to regulators to scale up or make mandatory. Given the increasing interest in reducing greenhouse gas (GHG) emissions, it seems certain that certification will play an important role in managing offsets and establishing national and international markets for energy and carbon trading. At a broader level, certification networks have emerged as a bridge connecting different sectors, and this in itself can be valuable to sustainability efforts.

The demonstrated viability of green or sustainable products begs a normative question: Should communities continue to allow unsustainable products in the marketplace when sustainable alternatives exist? As stakeholders on all sides grapple with this, certification schemes have been able to move ahead and demonstrate how markets could be transformed, without waiting for a regulatory mandate. For regulators who are engaged in these sorts of voluntary programs, though, the exercise can be an important testing ground. In California, for example, certain programs have eventually rolled into mandates. Governments are able to play several supporting roles, in fact, as large-scale procurers of certified products, as managers of standards, and possibly as regulators if voluntary standards

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

begin to represent the norm. Firms may also invest in certification schemes as part of a risk management strategy, to guard against imminent regulation on certain issues like GHG emissions. There may also be lessons from experience with integrated product policies (e.g., procurement, substance restrictions, product takebacks), whereby firms are attempting to green their value chains and have cooperated with regulators like EPA to manage some aspects.

Many participants emphasized that there ultimately must be a business case for certification schemes. Compliance costs are expected, and not insurmountable, but should be put alongside considerations of product quality improvements and potential as a “customer-facing” innovation designed to help move products. Others pointed out that buyers (in firms and retail stores) like not having to evaluate or approve several sets of criteria. Certified labels can be helpful here, and can also provide additional data for CSR reports. Information disclosure can also be a powerful tool, as evidenced by earlier experience with EPA’s Toxics Release Inventory (TRI). No corrective actions were mandated as part of the TRI, but the information disclosure alone forced many industries to react.

Finally, certification’s stakeholder engagement mechanism provides an opportunity to bring in elements and considerations that might not be included in regulatory or industry-led approaches. This can actually provide the leverage to move larger parts, e.g., setting standards which governments take over; bringing industries on board; coordinating stakeholders across a value chain. Certification schemes can function as a boundary organization (see NRC, 2006) in a knowledge system—they create opportunities to improve management, resolve conflict, and share promising practices. Whether this evolves into a collaborative, multistakeholder partnership or remains a loosely coordinated alliance depends on the players. However, to be effective, a certification system must be able to engage the right group of stakeholders (including adverse parties) and work to ensure its own financial sustainability. It is not clear yet that any certification scheme has identified a sustainable financing structure, but over the long term this will be fundamentally important.

Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 63
Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 64
Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 65
Suggested Citation:"7 Optimizing Certification as a Tool." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Consumption of goods and services represents a growing share of global economic activity. In the United States, consumption accounts for more than two-thirds of gross domestic product. This trend of increasing consumption has brought with it negative consequences for the environment and human well-being. Global demand for energy, food, and all manner of goods is on the rise, putting strains on the natural and human capital required to produce them. Extractive industries and production processes are prominent causes of species endangerment. Modern economies are underpinned by substantial energy consumption, a primary contributor to the current climate crisis. Expanding international trade has led to many economic opportunities, but has also contributed to unfair labor practices and wealth disparities.

While certain processes have improved or become more efficient, and certain practices have been outlawed or amended, the sheer scale of global consumption and its attendant impacts continue to be major challenges we face in the transition to sustainability. Third-party certification systems have emerged over the last 15 years as a tool with some promise. There has been anecdotal evidence of success, but to date the overall impact of certified goods and services has been small. Moreover, definitions of sustainable vary across sectors and markets, and rigorous assessments of these programs have been few and far between.

In order to take a step in learning from this field of practice, the National Academies' Science and Technology for Sustainability Program held a workshop to illuminate the decision making process of those who purchase and produce certified goods and services. It was also intended to help clarify the scope and limitations of the scientific knowledge that might contribute to the economic success of certified products. The workshop, summarized in this volume, involved presentations and discussions with approximately 40 invited experts from academia, business, government, and nongovernmental organizations.

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