IISD’s State of Sustainability Initiatives Review

The report analyzes the intersection of voluntary sustainability standards (VSSs) and sustainable finance in eight agricultural commodity sectors. It argues that while VSSs effectively address environmental and social risks—such as deforestation and labor rights—they often lack the rigorous economic and business management criteria that financial service providers (FSPs) require for due diligence. By benchmarking 12 VSSs against sustainable finance frameworks, the document identifies gaps in areas like corruption prevention, economic viability, and climate adaptation. It recommends that VSSs align their criteria with FSP needs, that FSPs develop preferential loan programs for certified farmers, and that governments support land tenure and infrastructure to improve investment readiness.

• There is a significant investment gap in sustainable agriculture, with an estimated USD 260 billion annual deficit to meet Sustainable Development Goal 2 (zero hunger) targets in developing countries, a gap that widened following the COVID-19 pandemic.
• Financial service providers (FSPs) perceive agricultural investments as high-risk due to factors such as weather effects, volatile prices, and poor business management; however, VSSs can act as risk mitigators by requiring sustainable practices and providing monitoring and assurance.
• VSS-compliant production is generally growing faster than conventional production across eight key commodities (bananas, cocoa, coffee, cotton, palm oil, soybeans, sugarcane, and tea), with all eight sectors seeing a CAGR of more than 10% from 2008 to 2018.
• Benchmarking of 12 VSSs reveals a disparity between VSS coverage and FSP priorities: VSSs have relatively low coverage of economic and business dimensions (34%) compared to environmental (45%) and social (47%) dimensions.
• There is a notable gap in VSS requirements regarding corruption and bribery prevention; only 10% of the examined VSSs include such criteria, despite 78% of consulted FSPs viewing this as highly important for lowering financial risk.
• VSSs are generally strong in upholding basic labor rights and workplace health and safety, with coverage rates of 93% and 84% respectively across the examined standards.
• While VSSs effectively cover biodiversity and forest conservation, they are less oriented toward specific climate change adaptation and mitigation requirements, with adaptation coverage at only 23%.
• Blended finance models, which combine public and private capital, are identified as a critical tool for sharing risks and mobilizing resources for higher-risk farmers in least-developed countries.
• The report recommends that VSSs develop criteria that directly support FSP due diligence, such as requiring records of production costs, revenues, and projected cash flows to improve farmer bankability.
• Governments are urged to secure land tenure systems, particularly for women, as clear property rights are fundamental to accessing financing and attracting sustainable investments.

APA

Voora, V., Larrea, C., Huppé, G., & Nugnes, F. (2022). IISD’s State of Sustainability Initiatives Review. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-04/ssi-initiatives-review-standards-investments-agriculture.pdf

Chicago

Voora, Vivek, Cristina Larrea, Gabriel Huppé, and Francesca Nugnes. IISD’s State of Sustainability Initiatives Review. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-04/ssi-initiatives-review-standards-investments-agriculture.pdf.

Wikipedia

{{cite report |last1=Voora |first1=Vivek |last2=Larrea |first2=Cristina |last3=Huppé |first3=Gabriel |last4=Nugnes |first4=Francesca |title=IISD’s State of Sustainability Initiatives Review |publisher=International Institute for Sustainable Development |date=April 2022 |url=https://www.iisd.org/system/files/2022-04/ssi-initiatives-review-standards-investments-agriculture.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{voora2022iisds, author = {Voora, Vivek and Larrea, Cristina and Huppé, Gabriel and Nugnes, Francesca}, title = {{IISD’s State of Sustainability Initiatives Review}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = apr, url = {https://www.iisd.org/system/files/2022-04/ssi-initiatives-review-standards-investments-agriculture.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }