- October 2023
Private Sector Engagement Is Key
In a world grappling with declining biodiversity, there is pressing need for sustainable development. Achieving “nature-positive trade” – i.e. trade that delivers beneficial outcomes for nature– has emerged as a crucial goal. It is no longer enough for businesses to focus solely on financial profit; they must actively contribute to the delivering of benefits for both people and nature, and this requires embracing sustainable practices throughout their supply chains. The panellists tackled how to engage private sector actors most effectively through trade related opportunities.
Collaboration and Incentives for Smallholders
One of the fundamental aspects of nature-positive trade lies in fostering collaboration and incentivizing smallholder producers. Reaching this group directly is difficult for companies, and intermediaries such as government and third-party organisations can play a significant role here. High-impact commodities like palm oil, soy, cocoa, and coffee require urgent attention to address their environmental and social impacts. The private sector must prioritise collaboration with smallholders, sharing best practices, conducting research, and implementing pilot projects that promote sustainable agricultural practices. By ensuring a fair price for their products and creating partnerships with local organizations and farmers, businesses can empower smallholders and make them integral to sustainable supply chains.
Examining the Risks of Greenwashing
While the private sector embraces sustainability commitments, it is essential to guard against the risks of greenwashing. Transparency is key to gaining the trust of consumers and ensuring that businesses are moving in the right direction. Companies must adopt a holistic approach and prioritize transparency throughout their supply chains. This includes implementing traceability measures, engaging in ongoing monitoring, auditing, and evaluation, and actively disclosing impacts and dependencies in their business value chains. By doing so, they can foster a genuine shift towards sustainability.
Uplifting Standards, Certifications, and Accountability
Sustainability standards can play a vital role by providing clear guidelines and criteria for sustainable practices. Compliance with these standards can enable farmers to access markets, secure premium prices, and differentiate their products. However, such compliance requires additional capacity and costs, and this must be recognised through the prices paid for smallholder-produced certified commodities, and additional support by other actors along the supply chain offered to smallholders. Certification should also not be viewed as the sole solution. It should be complemented by a broader package of actions, including company policies that emphasise due diligence, risk identification and management, and positive impact opportunities. This multifaceted approach ensures holistic sustainability and reduces negative impacts throughout supply chains.
The Dilemma of Consumer Pressure Point and Shared Responsibility
A significant dilemma in achieving trade that proactively delivers for nature lies in defining consumer pressure points and shared responsibility. While consumer demand for sustainable products is growing, it is crucial to recognize that responsibility extends beyond the consumer alone. Businesses should take steps in the right direction regardless of consumer pressure, and must remain transparent, trustworthy, and avoid greenwashing to educate consumers and build trust. Communication strategies should focus on specific sustainability topics, demonstrating progress in areas such as biodiversity, climate, water, nutrition, and human rights. By working together, businesses, consumers, and governments can create a paradigm shift towards sustainable consumption.
Collaboration and Systematic Approaches
For trade to help deliver for nature collaboration and systematic approaches are required that encompass the entire value chain. Businesses must recognize their common yet differentiated responsibility and proactively work together to meet sustainability commitments. Initiatives such as the FACT Dialogue, which fosters collaboration and government-to-government engagement, provide spaces for sharing lessons and concerns. Collaboration with international processes like the Marrakech Partnership and the Amsterdam Declaration Partnership allows for the exchange of expertise and the alignment of efforts. Systematic approaches, such as the LandScale approach, enable engagement with local stakeholders, sharing responsibility, and addressing environmental and social challenges in a comprehensive manner.
Conclusion
The private sector has a pivotal role to play in achieving a trading system that benefits nature and fosters a sustainable future. By increasing collaboration, incentivizing and supporting smallholders, avoiding greenwashing, and uplifting and mainstreaming standards and certifications, businesses can drive positive change. Transparency, systematic approaches, and a broader perspective are key in creating sustainable supply chains. It is through these collective efforts that businesses can ensure continuity, fair pricing, and the creation of partnerships that place local communities and smallholders at the centre. By embracing nature-positive trade, the private sector can become a driving force in preserving biodiversity and ensuring a sustainable future for generations to come.
The summary has been produced by TRADE Hub. It does not necessarily reflect the views of the organisations participating the webinar.