Is Third-Party Certification Losing Its Luster?

Third-party certification may become a third wheel for consumer product companies and their sustainability partners, according to Ecovia Intelligence, which notes that one of the most difficult issues associated with sustainable sourcing is whether companies should adopt third party standards or develop in-house programs. Recent developments suggest the pendulum is swinging toward in-house sustainable sourcing schemes.


For example, Green & Black's, the well-known ethical chocolate brand, launched Velvet Edition bar this month in the UK. It is its first product that is not certified organic and/or fairtrade. The brand decided to source cocoa beans from the Dominican Republic according to its parent company's Cocoa Life sustainability program. Mondelez Foods has already dropped fairtrade certification for its Cadbury's Dairy Milk chocolate. By 2019, all Cadbury's chocolates in the UK and Ireland will carry the Cocoa Life logo, according to Ecovia. Also in the UK, Sainsbury's recently decided to drop fairtrade certification for its private label teas. The second leading supermarket chain decided to work directly with African tea groups and co-operatives to develop its own Fairly Traded program.


According to Ecovia Intelligence, there are many benefits for large food companies and retailers to develop their in-house sustainable sourcing programs. Apart from providing greater control and less bureaucracy, such programs can easily be integrated into their wider sustainability programs. Similar developments are taking root in the cosmetic and personal care industry. L'Oréal received the Sustainable Beauty Award last year for its ethically sourced quinoa husk extract; the ingredient is a by-product of quinoa that is sustainably farmed by Bolivian farmers. The cosmetics brand Lush sources raw materials according to its own ethical charter. Although many of its ingredients are fairtrade and/or organic, it prefers not to adopt third party standards.


Sustainable sourcing will be one of the topics of conversation at upcoming vents organized by Ecovia Intelligence. They include:
Sustainable Foods Summit Latin America, São Paulo, Sept. 18-20, 2017; Sustainable Cosmetics Summit Europe, Paris, Nov. 6-8, 2017 and Sustainable Foods Summit Asia-Pacific, Nov. 28-30, Singapore. 


As will be shown at the upcoming Sustainable Foods Summit and Sustainable Cosmetics Summit, the number of third party standards or charters continues to grow, especially for single ingredients. The Roundtable for Sustainable Palm Oil (RSPO) is now highly established for palm oil. New sustainability roundtables have now been developed for soya beans, beef, cocoa and cotton. New schemes are also emerging for non-agricultural commodities. For instance, the Responsible Mica Initiative was set up in February to ensure mica mineral is ethically sourced from mines in northern India.


With growing proliferation in sustainability standards, charters and similar schemes, it is perhaps not surprising that companies are opting for in-house schemes. The concern is that companies like Mondelez Foods and Sainsbury's are adopting third party standards as a 'rite of passage' into sustainable sourcing. The knowledge and expertise gained is then used to develop their in-house sourcing programmes which are not subject to the same scrutiny as independent schemes.


Although critics question the commitment of large companies, Ecovia Intelligence notes that more raw materials are now sustainably sourced. Sustainable coffee now has a market share of over 30% of total coffee. Starbucks is the leader with its Coffee And Farmer Equity (CAFE) program. The market share of sustainable tea and cocoa is also above 20% because of similar commitments by large companies. Whether the future is with third party standards or in-house programs, the market share of sustainable ingredients is only going in one direction.