Global Standards

Developing a methodology for mapping and harmonising standards supporting integrity-related issues in GVCs

As consumers and investors have become more socially conscious, ensuring integrity (sustainability, ethical behaviour, security and inclusion) in global value chains (GVCs) operations has become imperative.

In a more environmentally and socially conscious world, integrity risks for multinational corporations (MNCs) and for small and medium enterprises (SMEs) are likely to increase in the coming decades. In order to reduce those risks, a myriad of standards and certifications run by industries, private sector, international organisations and NGOs have emerged in the past decades. While these standards may pursue similar goals, they may also differ in terms of the incentives for their adoption, their type of enforcement, their funding, and their approach to substantial social issues, amongst others. As a result, the universe of standards available have expanded, increasing fragmentation and therefore diminishing the overall impact of standards in facilitating global trade. At the same time, current standards are often very focused on specific issues at play in a GVC, fragmenting the compliance operations of MNCs and SMEs, and making it more onerous and complex.

In this context, the Global Trade Professionals Alliance (GTPA) in partnership with RMIT University and with the support of Bloomberg’s New Economy Solutions initiative, will work with a coalition of other partners and stakeholders in 2020 to develop a methodology for mapping and harmonising existing standards supporting integrity related issues in GVCs, with the long-term goal to develop an overarching standard to build integrity in GVCs. That overarching global standard would link, in a harmonised framework, a series of relevant elements resulting from the mapping and its analysis, as well as from other quantitative and qualitative projects that the GTPA is running to develop its overall solution to unlock inclusive trade between MNCs and SMEs.

An overarching standard to build integrity in GVCs would not only reduce risks in the operation of MNCs and promote the participation of SMEs in those GVCs but would also make the undertakings of ensuring compliance and mitigating risks simpler, faster and less onerous.

Why is this the case?

Because standards are frameworks in nature. As such, they have an overarching nature that facilitates, on one hand, their universal use, and the other, to tailor them to the specific nature, procedures, and systems of GVCs. This versatility of standards is what would permit the project to be implemented at the global scale covering multiple MNCs and SMEs across a myriad of regions and of industry sectors. Developing an overarching global standard to build integrity in GVCs would effectively capture the full versatility of standards.

Standards contribute to:

• Reducing costs and risks
• Delivering consistency where multiplicity is the norm
• Providing certainty where uncertainty is the rule
• Offering credibility and enhancing trust
• Facilitating diverse engagements and access to innovation and technology
• Ensuring quality of procedures, products, and services
• Complying with domestic and international regulations at a lower cost