SMEs need gov’t support to implement sustainability standards

MANILA, Philippines - Policymakers in developing countries must help small and medium-size enterprises (SMEs) understand and embrace sustainability standards to sharpen their overseas competitiveness and expand their business potentials, according to the International Trade Centre (ITC), a subsidiary organization of the World Trade Organization (WTO).

Sustainability initiatives “can provide new trade opportunities, improve product quality, mitigate environmental degradation, improve compliance to social and labor standards, and boost the overall competitiveness of SME exporters,” said ITC executive director Arancha Gonzalez.

“For that, we need serious investment of financial and technical resources to meet those standards,” she added.

Gonzales said many SMEs in the developing world face difficulties in understanding and implementing sustainable practices, primarily due to the proliferation of various standards, codes of conduct, and other sustainability initiatives around the world.

To help exporters fully realize the benefits of sustainable business, policymakers must invest in financial and technical resources to provide SMEs with information as well as the means to comply.

Gonzales added that adopting sustainability standards is now no longer just an option for small producers but “a critical part of the business plan of any SME.”

Ronald Saborio Soto, ambassador and permanent representative of Costa Rica to the WTO, said more exporters will be willing to invest in certification if they realize that their efforts will be rewarded with greater competitiveness, production efficiency, a stronger image, and higher prices that markets are willing to pay.

Dominik Ziller, deputy director-general for global cooperation at Germany’s Ministry for Economic Cooperation and Development, said many developed economies won’t buy anything that is not sustainably produced.

“If you want to have sustainable supply chains, if you expect consumers to buy sustainable products, you have to set a good standard,” he said.

Ziller added that policymakers must set the example for businesses and consumers by addressing transparency issues such as lack of enforcement and corruption. “They can support capacity building and auditing to combat corruption,’ he said. ‘Otherwise, standards will be worth nothing.”

At the same time governments must ensure inclusiveness by working with nongovernmental organizations and businesses to promote widespread compliance to sustainability standards, from producing to sourcing sustainable goods.