Over the past few decades, voluntary sustainability standards (VSS) have emerged as important tools  to address key sustainability challenges such as biodiversity loss, climate change and human rights  violations. Indeed, an increasing number of firms are putting those standards front and centre of their  sustainability approach. As a result, VSS are proliferating, often as part of corporate social responsibility  (CSR) or risk management initiatives. And there is growing recognition that to achieve sustainable and  inclusive development, responsible business practices need to be implemented throughout the entire  global value chain (GVC). Moreover, those standards are likely to become even more prominent in the  coming years as several new regulatory initiatives impose due diligence requirements on firms. 

In theory, compliance with VSS requirements eventually contributes to mitigating environmental crises  and improving social and economic sustainability in terms of improved livelihoods and poverty alleviation,  among others. In addition, VSS can work as a trade-enhancing tool that can contribute to the integration  of producers from developing countries into GVCs. They can push the frontier of best practices for  sustainable production and help build trust in those practices among consumers and other stakeholders. 

However, they can also present challenges for developing countries, particularly for their smallholders  and producers, who cannot afford the information and production costs of VSS certification. This can  result in their exclusion from global trade. In addition, the governance gaps between developed countries,  where standards are usually designed, and developing countries, which face difficulties implementing  them, make it harder for developing countries to employ such standards. Moreover, the proliferation of  standards adds further challenges. Thus, VSS can be viewed as powerful market-based tools to scale up  sustainable development only if the challenges facing developing countries’ smallholder producers as well  as their concerns relating to these standards are adequately addressed.