Private Standards Importance

Why are private standards growing in importance?

 

Consumer Awareness

Consumers in developed economies, as well as civil society organizations in those parts of the world, are showing growing concerns about the social and environmental conditions prevailing in countries participating in the supply chains of products that are sold into their markets. Cases of severe breaches of:

  • workers rights
  • human rights violations
  • environmental degradation

by corporate activity are decreasing consumers confidence.

Differentiation Tool

Many multinationals use private standards as an instrument of:

  • supply chain management
  • as a mechanism to gain market advantage over rivals

The large brands are setting stricter standards within their supply chain with the aim of improving the social and ecological performance of the developing country producers along the whole length of those value chains.

Governance Gap

Cases of misconduct indicate that national governments in developing countries often fail to enforce national and international norms and regulations. Consequently, globally operating companies find themselves faced with the challenge of responding to this governance gap.