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Because we are affected by them, directly or indirectly – whether we are a consumer or a producer; a corporation, or a government, or a private person. Standards are all around us and they are constantly operating in our daily lives.
Standards could be mandatory regulatory standards, like TBTs, that are notified as laws of the land, and they could be non-regulatory, voluntary or private.
In case of private standards, they are non-legally binding instruments or documents, approved by a recognized body, that provides rules, guidelines or characteristics for products or production processes, and for which compliance is voluntary. This distinguishes them from laws and regulations that are legally binding. They help in standardizing or ensuring uniformity of a certain outcome, if that standard is followed. This includes voluntary requirements related to terminology, symbols, packaging, marking and labeling.
In September 2015, the UN Member States adopted a new set of development goals to be achieved over the next 15 years, namely the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs). The 2030 Agenda stipulate that the SDGs “are integrated and inseparable and balance the three dimensions of sustainable development: the economic, social and environmental”, and encourage government, businesses, and civil society to promote synergies between their actions. In this regards, standards are expected to play an increasingly important role in complementing governmental engagement towards achieving sustainable development.
Indeed, the exponential growth of standards in recent years reflects the growing consumer demand for “sustainability” and nature-based, healthy products. Standards translates the broad concept of sustainability into specific and concrete measures for companies and their suppliers. With broad uptake, Stadards can move industries towards improved social, environmental and economic performance, which is the core focus of the SDGs.
When we speak of sustainable trade, we speak of the concept of sustainable development. While this concept originally began with a singular focus on development that was environmentally sustainable, today a broader conception of environmental, economic and social sustainability has emerged. This includes the protection and promotion of human rights, maintenance of local and indigenous communities, equity issues, economic productivity and welfare, as well as the traditional focus on environmental protection.
Because it has immense potential of solving the many problems that plague our socio-economic realities. Standards have the potentiality to help to determine market access; the efficiency of the economy; the cost, quality and availability of products; economic growth and innovation; and therefore development. They may be catalytic to achieve positive outcomes for trade-induced economic growth, environmental sustainability and social development. However, there are many trade-related market access issues that are brought to light by the utilization of VSS. Small producers and businesses in developing countries and their governments are not always technically, financially or institutionally capable to reap the developmental benefits arising out of VSS.
We are all consumers. As a consumer, we have the power to express preference for what we would like to consume. Most certainly, we would like our products to be of a good quality, and we would definitely not like to harm some other human being or the environment because of our consumption choice. Be it the vegetables and meat we eat, the oil we use to cook our food, the water we drink, the clothes we wear, the phones we use, the handicrafts we patronize, and so on – we would prefer the one which is of a guaranteed quality and causes the least damage to the people and footprint on the environment.
Our expression of this preference, translates into standards that ensure that our products meet our demand. Standards that define sustainability parameters are formulated and producers are asked to demonstrate their products’ compliance with such standards. This impacts the entire value chain of a product right from the small producer to lead firms to consumer, and the feedback from consumer then travels back through the same route to the producer.
Sustainability Standards are special rules that guarantee that the products you buy don’t hurt the environment and the people that make them. Standards are considered a market-based tool to transform production, global supply chains and consumption patterns into more sustainable ones. The number of these standards has grown recently and they can now help build a new, greener economy. Sustainability Standards focus on economic sectors like forestry, farming, mining or fishing; concentrate on environmental factors like protecting water sources and biodiversity or reducing greenhouse gas emissions; support social protections and workers’ rights; and home in on specific parts of production processes
Sustainability Standards also support groups like small-scale farmers or producers in developing countries; cover a full range of environmental impacts throughout a product’s lifecycle; identify and promote best practice; and support continuous improvement.
Sustainability Standards may be developed by single businesses, business associations, environmental or social non-governmental organizations, or governments. Alternatively, more and more such standards try to balance the interests of a wide range of interested parties.
While many Sustainability Standards are linked with consumer products, others are used within business-to-business relationships. For example, Global G.A.P. (Good Agricultural Practices) is a farm management certification scheme pioneered by supermarkets. Another example is ISO26000 which provides guidance to businesses and other organizations on social responsibility to improve their impact on workers, natural environments and communities.
At the moment, almost 500 sustainability standards operate in 199 countries and 25 industrial sectors, and the sustainable standards ecosystem involves testing, inspection and certification procedures across all market sectors which apply to samples, products, services, management systems or personnel. The sustainability standards system has become the new market reality as a tool for sustainable supply-chain management, marketing and competitiveness.
Access to certain markets, particularly in OECD countries, increasingly depends on demonstrating to customers – be they corporate clients or individual consumers – that products have been produced according to the principles of sustainable development. Compliance with relevant standards – be they on fisheries or forest management, energy efficiency, human health and safety, hazardous waste management or labour standards – has become a symbol in the marketplace for compliance with the principles of sustainable development. The core value here is the promotion of more than private welfare or private profit, more than technical engineering compatibilities, and so on.
In emerging economies, sustainability standards are seen to compete with the national regulatory institutions in defining the mandate for safety and quality. Therefore, in addition to mandatory regulations, voluntary measures affecting market access of local products require close consideration.
As compared to developed economies, emerging countries are more vulnerable to the adverse effects of these standards on market access and competitiveness. Various reasons have been identified for this.
Firstly, lack of infrastructural and monitoring facilities, limited technology choices, inadequate access to (and relatively more expensive) environmentally friendly raw materials and information are one set of reasons identified. Secondly, small and medium enterprises (SMEs) face more formidable compliance costs and there is an increasing emergence and duplication of PSS. Thirdly, emerging economies enterprises more often than not lack the skill and technology required for exploiting the positive trading opportunities generated by environmental measures. Fourthly, emerging economy exports are more vulnerable to market access barriers on account of their scale and sectoral composition. A connected problem is the diseconomies of scale due to small domestic markets. Finally, while developed markets are more amenable to harmonization efforts, emerging economy markets have widely differing environmental standards in accordance with their national priorities, rendering harmonization both difficult and inadvisable as compared to mutual recognition and equivalence.
Global brand producers and retailers increasingly require their suppliers from developing countries to comply with certain social, environmental and safety norms for fulfilling their consumer expectations. However, private standards (which are not part of regulation) imposed by producers of global brands and retailers may also go beyond national and local laws, and/or contain further conditions related, for example, to health and safety issues – sometimes imposed to show product differentiation either in terms of adhering to a specific environmental process or towards achieving a certain aspect of social welfare. A proactive strategy on the part of local manufacturers will make it easier for them to cope with such standards and will also lead to significant benefits, including competitive advantages, improved efficiency and, ultimately, more exporting opportunities.
In many positive contexts, sustainability standards take steps towards ensuring long term sustainability of value chains and prepares the national market for rising consumer awareness and demand for product & environmental safety, livelihood improvement of workers, together with improving competitiveness of industries, production practices of the fast-growing smallholder segment, and mainstreaming smallholders into the sustainability fold.
In the case of India, besides existing international standards such as SA-8000, GOTS, Forest Management & Chain of Custody (FSC), Better Cotton, etc., India itself has responded to the development of standards in the form of voluntary standards such as Trustea, INDGAP, ZED, Voluntary Certification Scheme for AYUSH Products, Lead Safe Paints, and Medicinal Plant Produce. These have shown a promising way in India for development of private and voluntary standards, thereby achieving quality production along with introducing sustainability in process both in food and non-food sector.
Keeping this emerging and dominant ecosystem in mind, emerging economies could unlock the full potential of attracting international investment and business if they prepare adequately and are able to prove their commitment and alignment to sustainability, with special emphasis on corporate sustainability and responsibility.
Through dialogue, deliberation and knowledge sharing.
The sustainable trade and standards ecosystem functions on the core principle of cooperation. Stakeholders cooperate with each other through communication of expectations, sharing knowledge for greater awareness, and mutual capacity development for making the system work in their favor. The way forward is to have a platform which defines the vision for sustainability standards for the world where stakeholders from developed and emerging economies, including intergovernmental and international multi-stakeholder initiatives, work in collaboration with each other to maximize the benefits of such a system and enable creation of projects that will empower more producers and connect them to global value chains.
One such international platform is going to be the International Convention on Sustainable Trade and Standards, New Delhi, India.