Annual Report 2014
Contents Foreword by Rik Kutsch Lojenga
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Welcome from Karin Kreider
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Our Governance
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What we do
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ISEAL Credibility Principles
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Activities in 2014 Impacts 16 Effectiveness 18 Adoption 20 Credibility 22 Our Members
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Financials 27 ISEAL Staff 31
Foreword
Rik Kutsch Lojenga, Board Chair
Dear Reader, The ISEAL Alliance is a sustainability organisation unlike any other. It brings together individuals and organisations working in the sustainability standards world who are interested in improving their impacts and learning from each other. Whether an established certification programme, a newer standards initiative, or an organisation that engages with standards through sourcing or advocacy, a group that connects with ISEAL becomes part of a community with a focus on learning and innovation.
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ISEAL members are at the heart of this innovation. We collaborate with each other to become more effective. This year, one of the ISEAL working groups that really began to flourish is our assurance group. “Assurance” encapsulates all the ways we check compliance with a standard, and it can be the most costly and burdensome part of a standards system. In the last few years we’ve all heard about “audit fatigue” or the phrase “beyond certification” calling for lighter or easier ways to bring producers into responsible practices. Introducing such improvements is critical. In 2014, ISEAL members sought to prioritise what new innovations in their assurance systems they will test to seek greater efficiency and reduce barriers. Ultimately this new programme of work at ISEAL has an aim to scale up impacts by reaching many more producers. Imagining what certification could look like in the future is part of our innovation discussion. ISEAL members have visions of both
evolution and revolution in assurance and other systems. In a blue sky future, sustainability standards could ideally have systems in place that let us know in real-time what is going on with an enterprise; where we might know in advance where unsustainable practices might be found. There are a number of paths that will take us in that direction. One could see a future that integrates risk assessments, technology and other information sources to create a more complete picture of certified operations. Some ISEAL members are looking at how to better combine certification with capacity building services. Others are looking at new technologies such as using satellite imagery or mobile technology to have a better idea of where to focus their audits. ISEAL’s members represent a breadth of possibility and action to improve the effectiveness of their systems. Within our Alliance, we are working to understand where the energy, excitement and commitment lie so we can test the highest priorities
and share the learning across all of our members. Together in ISEAL, we have the potential to change the perception and practice of assurance so that it is more credible, efficient and appropriate for scaling up our collective sustainability impacts.
help families, wildlife or our climate? On the whole,
The working groups at ISEAL are just one of our exciting areas of collaboration. In this year’s annual report you can read about a range of ISEAL’s activities, such as the work to build a sustainable food vision for the Rio Olympics, to the blossoming living wage collaboration, to the completion of a global consultation on credible claims and labelling. Read on. We look forward to hearing from you.
Rik Kutsch Lojenga, Board Chair
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Welcome
Karin Kreider, Executive Director their families’ lives through changes in their certified operations. I have seen producers increase yields, improve soil, reduce waste and chemicals, save water, and use the benefits of sustainability to improve their livelihoods. Stories of producers working with ISEAL members are what inspire me today. I am also inspired by the breadth and reach of our members today. Here are some examples: Dear Reader, Working in the sustainability field for 25 years means that I have been able to witness the amazing movement towards more sustainable production globally. During this time, my career has been dedicated to ensuring that sustainability standards improve livelihoods and ecosystems, first in my 20+ years with the Rainforest Alliance, and in these last five years with ISEAL Alliance. I have always been struck by the commitment of producers to improving their communities and
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I n agriculture, there are now several million certified farms and tens of billions of USD in annual sales in coffee, tea, cocoa, sugar, fruit and other commodities that meet Fairtrade, Bonsucro, Rainforest Alliance or UTZ Certified standards. I n seafood, there are more than 20,000 different products with the Marine Stewardship Council seal on them. In early 2014, McDonald’s announced that it would be selling exclusively MSC-certified fish products in its 14,000 U.S. restaurants.
orldwide, more than 180 million W hectares of forest meet Forest Stewardship Council standards for responsible forestry. FSC has secured commitments from no less than 20,000 companies, the biggest of which include Kimberly-Clark and Office Depot, which explicitly favour FSC-certified products in their procurement policies. ith promises from powerful W chocolate companies such as Hershey to certify 100% of its supply chain in the next few years, estimates show that upwards of 30% of global cocoa production could be certified by 2020. While these highlights represent just a few of our members, the 22 ISEAL member standards represent decades of work, with significant impacts, and most importantly: audited and documented changes in production, land use practices, supply chains, and business practices across ten different sectors. Commitment to these sustainability standards represents
rapidly growing awareness by consumers of sustainable products, and strong company demand for sustainable products. All of these efforts inspire me. And at ISEAL, we are working every day to continue to promote more efforts like these. We hope you will join us.
Karin Kreider, Executive Director
help families, wildlife or our climate? On the whole,
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Our Governance ISEAL Board of Directors as of 31 December 2014 David Agnew Marine Stewardship Council
Kim Carstensen Forest Stewardship Council
Andre de Freitas Rainforest Alliance / Sustainable Agriculture Network
Andreas Kratz Fairtrade International
Guntars Laguns Accreditation Services International
Rik Kutsch Lojenga (Board Chair) Union for Ethical BioTrade
Melanie Rutten-Suelz 4C Association
Fiona Solomon Responsible Jewellery Council
Britta Wyss Bisang UTZ Certified
A special thanks to Rochelle Zaid (Vice-Chair), Social Accountability Accreditation Services, whose Board service ended during 2014.
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Our Governance ISEAL’s Membership Committee as of 31 December, 2014
Sönke Fischer | Accreditation Services International
ISEAL’s new Technical Committee is a permanent body that is responsible primarily for technical oversight of the ISEAL Codes and other credibility tools. It is made up of ISEAL members and external stakeholders with strong overall understanding of sustainability standards.
Khoo Hock Aun | Roundtable on Sustainable Biomaterials
Peter Feilberg | NEPCon
Lisa Bernstein | Social Accountability Accreditation Services Graham Bruford | Marine Stewardship Council
Marieke van der Mijn | Responsible Jewellery Council Nicolas Viart | Bonsucro A special thanks to Rochelle Zaid (Vice-Chair), Social Accountability Accreditation Services, whose Board service ended during 2014.
ISEAL’s Finance Committee Bertjan Bouman | Union for Ethical BioTrade Richard Cook | Social Accountability International Simon Hunt | Independent Ron van Leeuwen | UTZ Certified Thomas Müller-Bardey | 4C Association Britta Wyss Bisang (Board Liaison) | UTZ Certified
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ISEAL’s New Technical Committee
Malcolm Fox | Equitable Origin Cassio Franco Moreira | WWF Michelle Morton | Shell Stefan Salvador | FSC James Sullivan | Independent Matthew Wenban-Smith (Chair) | OneWorldStandards
Re-launch of the ISEAL Stakeholder Council In 2014 we brought together a very notable group of external stakeholders in the standards movement to form our new Stakeholder Council which provides expert advice to support the ISEAL Alliance. The Council helps us to more effectively respond to opportunities and challenges in a rapidly changing landscape. The Council met with ISEAL members at the Annual General Meeting in June. Bimal Arora | Centre for Responsible Business Mike Barry | Marks & Spencer Barbara Bramble | National Wildlife Federation Alastair Child | Mars Global Chocolate Lucy King | Woolworths South Africa John Laidlow | HSBC Jacqueline Macalister | McDonald’s Europe Alexis Morgan | WWF Euan Murray | The Sustainability Consortium Lucian Peppelenbos | IDH Greg Priest | IKEA Philipp Schukat | GIZ
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ISEAL is the global membership association for sustainability standards
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Our mission is to strengthen sustainability standards systems for the benefit of people and the environment
Our Four Goals 1. Demonstrate and improve the impact of sustainability standards systems 2. Improve the effectiveness of sustainability standards systems 3. Increase the adoption of sustainability standards systems 4. Define credible practices for sustainability standards systems
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ISEAL Credibility Principles The Credibility Principles represent ten core values upon which effective sustainability standards are built. They were developed through a year-long multi-stakeholder consultation that engaged more than 400 stakeholders. “ISEAL Membership reflects our commitment to multi-stakeholder processes towards consensus building. This contributed to our organisation being ranked on top of several comparison studies by leading NGOs this year.� ISEAL member
help families, wildlife or our climate? On the whole,
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ISEAL Credibility Principles Sustainability
Impartiality
Improvement
Transparency
Relevance
Accessibility
Rigour
Truthfulness
Engagement
Efficiency
thfulness Tru Rigour
nsparency Tra
provement Im
stainability Su
ISEAL
CREDIBILITY PRINCIPLES
arti ality Imp
agemen t Eng
Relevance
essibility Acc f i ciency Ef
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Activities in 2014 ›› Impacts ›› Effectiveness ›› Adoption ›› Credibility
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Impacts “Data collected thus far reveals that, on balance, farms that are part of a sustainability initiative (typically certification) are experiencing better economic performance compared to conventional and uncertified control farms.� From The COSA Measuring Sustainability Report
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Standards showing impact and market penetration 2014 saw the release of two important reports on standards. The State of Sustainability Initiatives Review pointed to the incredible penetration of certification into mainstream markets, with 41% being the average annual growth of certified production for all commodities studied. The Committee on Sustainability Assessment (COSA) also released its collation of 18,000 impacts surveys in two crops (coffee and cocoa), showing that on average, certified farms outperform uncertified farms in yield, income, training and environmental practices. These third-party studies, along with ISEAL members’ own impacts reports, are vital for illuminating what is working and what needs to be improved.
Global Sustainability Standards Conference reinforces importance of the business case At the first Global Sustainability Standards Conference, we were treated to a stirring panel debate with leaders from three ISEAL members (Forest Stewardship Council, UTZ Certified and Roundtable on Sustainable Biomaterials) on stage with three users of standards (Shell, Greenpeace and Chiquita) talking about the growing body of evidence on the impacts of standards. Throughout the event, and punctuated by a keynote address from Alastair Child of Mars, the need to scale up the economic triggers and incentives to get buyers and producers on board with certification was made clear.
Launch of a unique business partnership on FSC impacts In September ISEAL saw three of the largest companies in the wood and paper industry come together to better understand Forest Stewardship Council’s impacts – with a view to scaling up certification as a tool to combat deforestation. The group, along with the Dutch Sustainable Trade Initiative (IDH), will be developing a common approach for evaluating the impacts of FSC under a two-year project called Value and Impact Analysis (VIA). ISEAL will be convening their activities and sharing the learning with other ISEAL members.
In 2014 the Global Sustainability Standards Conference saw a 30% growth in participation from the earlier year’s ISEAL Conference, and a record 150+ external stakeholders were in attendance on the main conference day.
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Effectiveness “Workers in the world are in poverty and standardsetting leaders want to take up every opportunity to improve this. Standards can be a powerful tool to move wages up the ladder towards a living wage.� Kristin Komives, Senior M&E Manager, ISEAL Alliance
Living wage lighting the way for collaboration In a 2014 survey 65% of ISEAL members said that they are currently collaborating with other members, and overall we are seeing great momentum for joint projects, collective advocacy, audit recognition and other initiatives to scale up impacts. At ISEAL this is highlighted by our living wage partnership, which brings together six sustainability standards, with international experts Richard and Martha Anker, to pioneer and implement a methodology for calculating living wage in different countries. The partnership will allow these organisations to better empower and protect workers through their respective standards. In 2014 living wage benchmarks for South Africa, Dominican Republic and Malawi were published and more are soon to come in 2015.
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ISEAL members set clear action plans together In 2014 ISEAL once again hosted a week of membersonly workshops, which showed the breadth of topics that ISEAL members are working on together, including assurance, M&E, communications, gender, claims and labelling, and living wage, among others. Member Days reinforced the role that ISEAL plays as a neutral convening platform for standard-setters to share learning and harness new innovations. Highlights in 2014 included development of a work programme to make assurance systems more efficient, and guidance for members on how to strengthen the gender aspects of a standard.
“When it comes to products or commodities where we don’t have a direct relationship with the producers, we depend on standards and certification bodies to provide the assurance that we can’t provide ourselves.” Lucy King, Woolworths South Africa, ISEAL Stakeholder Council Member
ISEAL Member Working Groups in 2014 Assurance
Standard-Setting
Monitoring and Evaluation
Gender
Communications Claims and Traceability
Living Wage Pesticides
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Adoption “I would say that certification is important for more than 80% of our sales. When we talk to people in the food industry, it is becoming obligatory.” Edgard Avezum, Klabin (Brazil)
ISEAL’s work to scale up the adoption of standards in emerging economies is made possible through a partnership with:
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Certification trending upwards in emerging economies Increasing the production of and demand for sustainable products in Brazil, China and India is critical, but it will not happen overnight. Much of ISEAL’s work is focused on building trust, networks and long-term solutions – things that don’t always yield immediate results. But sometimes we are reminded of the real difference in emerging economies, as we were in 2014 when a member meeting in India revealed the strong growth in Forest Stewardship Council, Fairtrade, GoodWeave, Responsible Jewellery Council, and Rainforest Alliance certification since the ISEAL-SECO project began.
ISEAL featured in 2014 UN Global Compact Yearbook We were honoured to be asked to contribute to the yearbook of the world’s leading voluntary corporate sustainability initiative. Our piece was the lead article in the yearbook’s section on traceability and highlighted the added transparency that standards can help bring to supply chains.
and the country’s overall development. Through these workshops we are stimulating dialogue about the whole picture of what makes a sustainability standard credible and effective. Salons in 2014 focused on special topics for Chinese environmental groups, such as how standards can be used for grasslands management or for water conservation.
Sustainability on the menu for Rio 2016 One of the great achievements to date of ISEAL’s work in Brazil has been to help bring organisations together around a common vision for healthy and sustainable food at the Rio 2016 Olympics. An NGO-led initiative that includes ISEAL and six of our members produced the Rio Food Vision in 2014, which provides the framework for the Olympics Organising Committee to source sustainably, but perhaps more importantly, has the potential to leave a lasting legacy on the food industry in Brazil.
Stimulating dialogue in China In China, ISEAL’s popular Sustainability Standards Salons continue to provide a valuable space for local stakeholders to discuss the role of sustainability standards in international trade, Chinese business
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Credibility “The most valuable contribution of ISEAL to our organisation has been their encouragement of our self-evaluation that helped us realize the need to strengthen certain aspects of our system. The guidance provided through the Codes of Good Practice and the support of the ISEAL Secretariat were critical to this, and have also helped us to plan for the future.� ISEAL member
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Setting the bar for good practice ISEAL is the global leader in defining and communicating what good practice looks like for sustainability standards through guidance and credibility tools such as the ISEAL Codes of Good Practice. The goal of all ISEAL Codes is to support standards systems to deliver positive social and environmental impact. The ISEAL Codes of Good Practice work together to achieve this. Individually, each Code is useful in strengthening a component of a standards system. However, only when the Codes are taken together do they provide end users and other interested parties with confidence in the effectiveness of the standards system as a whole.
First members pass Impacts Code evaluation In 2014 the first group of ISEAL full members passed the independent evaluation for the Impacts Code. The evaluation provided impartial verification that these organisations meet the requirements of the Impacts Code - a true test of their commitment to evaluating impacts and continuously improving.
ISEAL’s Codes Standard-Setting Code The ISEAL Code of Good Practice for Setting Social and Environmental Standards (StandardSetting Code) supports the development of standards that are relevant and transparent and that reflect a balance of stakeholder interests. Assurance Code
Revision of two ISEAL Codes in 2014 and additional outreach led to a 170% increase in views and downloads of the Codes of Good Practice during the year.
On the road to better claims and labelling In 2014 we put together a distinguished steering committee to oversee new work to develop guidance for sustainability standards on how to develop and manage credible claims to ensure that truthfulness and transparency are at the forefront of a standards system. The first and second consultation were completed with more than 250 commenters. In 2015 we will launch the “Sustainability Claims Good Practice Guide.”
The ISEAL Code of Good Practice for Assuring Compliance with Social and Environmental Standards (Assurance Code) helps to ensure accurate results from assessments of compliance and encourages the use of assurance to support learning. Impacts Code The ISEAL Code of Good Practice for Assessing the Impacts of Social and Environmental Standards Systems (Impacts Code) supports standards systems to measure and improve the results of their work and to ensure that standards are delivering the desired impact.
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Our Members Achieving ISEAL membership is a considerable accomplishment for a standards system and consists of a learning pathway and checks against ISEAL’s Codes of Good Practice. By committing to the process, organisations dedicate themselves to continuous improvement and to developing well-functioning systems that embrace credibility. Some ISEAL members promote high-performance standards that push the leading edge of sustainable practices. Other ISEAL members opt to focus on incremental changes that can more quickly be adopted by a large proportion of a given sector. ISEAL believes that both “raising the ceiling” and “lifting the floor” can be credible approaches as long as there is a focus on continuous improvement. Full members
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SOC
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Associate members
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Financials As of 31 December 2014 - unaudited with comparative audited totals for financial year 2013
Income (in Euros) Membership and Community
2013
2014
278,000
469,000
Government
762,000
966,000
Foundation
901,000
646,000
1,941,000
2,081,000
Effectiveness Programme
424,000
732,000
Impacts Programme
517,000
247,000
Adoption Programme
433,000
522,000
›› Communications
39,000
49,000
›› Development and Fundraising
63,000
60,000
128,000
140,000
Expenses
Organisation
›› Finance, Operations and Governance ›› Strategic Planning
Indirect Costs
Surplus or deficit Reserves at Start of Year Reserves at End of Year
85,000 1,689,000
1,750.00
209,000
249,000
1,898,000
1,999.00
43,000
82,000
264,000
307,000
307,000
389,000
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Financials 6%
42%
31%
8%
23%
30%
Expenses
46%
Income
• Effectiveness Programme
• Membership and Community
• Impacts Programme
• Government
• Adoption Programme
• Foundation
• Finance, Operations and Governance
•
• Communications and Fundraising •
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14%
•
Funding Partners In addition to our members’ financial and in-kind contributions, ISEAL also received generous support in 2014 from the following institutions: ›› ›› ›› ›› ›› ›› ›› ›› ››
Germany Federal Ministry for Economic Development and Cooperation (BMZ) Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Ford Foundation International Finance Corporation (IFC) Humanist Institute for Development Cooperation (Hivos) The David and Lucile Packard Foundation State Secretariat for Economic Affairs, Switzerland (SECO) UK Department for International Development (DFID) The Walton Family Foundation
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ISEAL Staff As of 31 December 2014 Julia Birchall Finance Coordinator
Jason LaChappelle Senior Communications Coordinator
Rosie Forsyth Senior Community and Learning Coordinator
Marta Maireles González Senior Monitoring & Evaluation Coordinator
Natalie Gawor Community and Learning Coordinator
Patrick Mallet Credibility Director
Amy Jackson Senior Credibility Manager
Marcus Nyman Senior Policy & Outreach Coordinator
Kristin Komives Senior Monitoring & Evaluation Manager
Norma Tregurtha Senior Policy Manager
Lara Koritzke Director of Development & Communications
Philip Wilson Finance & Operations Director
Karin Kreider Executive Director
Photography We would like to thank all members that provided photography for this report. Inside cover and page 11 © Bonsucro. Page 3 and 29 © UTZ Certified. Page 5 © J.P. Lawrence | Rainforest Alliance. Page 7, 8, 12, 14, 16, 18, 21, 22, 26, 31 and 32 © Rainforest Alliance. Page 9, 19 and 20 © Marine Stewardship Council. Page 17 © Aquaculture Stewardship Council. Page 25 © Suzanne Lee | Fairtrade International. Page 32 (top center) © Brigitte Ermel Joaillier | Responsible Jewellery Council.
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Our Cover ISEAL member Equitable Origin certified Pacific Rubiales Energy (PRE) in August 2014. Located in the interior of Colombia, in a vast inter-tropical savannah intersected by high biodiversity forests, PRE’s oil production fields cover 214 hectares and have more than 2,500 employees. The company prepared for eighteen months to achieve bronze level certification by meeting the first set of performance targets in the EO100 standard that is comprised of six principles ranging from human rights to biodiversity to working conditions. To reach EO100 silver in the future, PRE will need to demonstrate progress against additional performance targets that exceed industry good practice. Editor | Lara Koritzke Graphic Designer | Kelly Gregory, mail@kellygregory. co.uk
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ISEAL Alliance The Wenlock Centre 50-52 Wharf Road London N1 7EU United Kingdom +44 (0)20 3246 0066 info@isealalliance.org twitter.com/isealalliance www.iseal.org