The issue:

Sustainability-driven regulations have become a new trend among industrialized countries. Focusing on the implementation of environmental and social standards, they are labelled as sustainability standards, environmental, social and governance (ESG) or simply, due diligence requirements. These regulations are a cause of concern among producer countries as they may lead to an increase in administrative and compliance requirements and, therefore, costs for small- and medium-sized enterprises (SMEs) in the agri-food sector, who are supplying larger buyers. As supply chains become more regulated, and costs of production increase, food prices may go up further, contributing to food and nutrition insecurity issues globally.  

On the other hand, such sustainability-driven regulations can offer producers opportunities in the form of long-term productivity gains and higher prices thanks to more sustainable production processes and products.   

To help manage the burden of increased regulatory compliance, it is essential to provide tailored technical support to industrializing countries in improving their regulatory frameworks and enforcement mechanisms in ESG and quality assurance standards. This will also help measures are unavoidable to comply with global standards set by the International Labour Organization and the Paris Agreement (among others) and those that are becoming increasingly necessary to access the markets of industrialized countries.  

Local industries will also need to improve their competitiveness and productivity to address complex issues, such as fair wages and child labour. Robust vocational education systems and skills development in agri-food processing and related sectors and industries would also need to be established to foster sustainable industrialization and eradicate hunger through equitable socioeconomic access to food.  

Addressing the complexity of sustainability-driven regulations and their implications on low- and middle-income countries is still possible as regulators have recognized the need for an adequate transition period.  

Objectives:

This moderated discussion will: 

• Explore the impact of increased regulatory measures promoting environmental and social standards in the food systems of industrializing countries. Many have already expressed concerns about the new sustainability-driven supply chain regulations, which have disproportionately increased costs for agri-businesses in the producing countries.  

• Examining both challenges and opportunities, the session will also discuss what is required to scale positive examples across different supply chains and entrench them at a systemic level. 

Key guiding questions:

• What are the possible implications of sustainability-driven regulations for food security? 

• How could we mitigate the unintended consequences of sustainability-driven regulations for food security, from a socioeconomic access perspective, impacting the most vulnerable, particularly smallholder farmers, SMEs and consumers? 

• What is the role of the international development community and industrialized countries in addressing these development challenges in food supply chains?  

Expected outcomes:

• Creating awareness of the opportunities and potential unintended consequences of sustainability-driven regulations by highlighting recent findings on the potential impacts for smallholders and SMEs.  

• Identifying solutions towards a more fair distribution of the cost of compliance between the producer and consumer countries.  

Session format and structure:

The moderator will introduce the topic followed by a short keynote "setting the scene” with some current data on the impact of sustainability requirements on production costs and food prices. The panellists will then provide perspectives from their respective fields of work on the challenges, opportunities and costs of sustainability-driven regulations for smallholders, SMEs, agri-food trade and the environment. 

Moderator

Panelists