• Enhancing the functioning of value chains, including standards A number of efforts revolve around enhancing the performance of value chains. This can span any link in the chain, ranging from design to production, assembly, packaging, marketing, distribution and consumption. Assistance in meeting quality and safety standards is particularly important to help incorporate local producers into global value chains (see Figure 26). Promoting the sustainable inclusion of small producers into global value chains is fundamental to fighting poverty: 75% of the world’s poor live in rural areas, and of these, 86% depend on agriculture (World Bank databank). If small-scale producers are able to link to the chain while at the same time obtaining assistance to help with needed certification for value-added goods (e.g., organic production), they will be able to take much better advantage of market access opportunities.

# • Facilitating trade

Trade facilitation is a major concern for the private sector as red tape and inefficiencies in border management and corridor performance can raise transport costs substantially, resulting in major delays. Initiatives and projects led by firms and industry groups range from road safety initiatives to more efficient customs processes through customized software development. Trade facilitation is typical of a public good: when roads are safer and custom’s clearance faster, it benefits the company at the origin of the capacity building efforts as much as its competitors.

# **_Minimizing the risks of participation in GVCs_**

In some instances, GVCs are severely criticized due to the predatory behavior of some global buyers or producers that tap into local human and natural resources in an irresponsible or unsustainable way or without sharing enough of the profits. For example, Oxfam observed the functioning of GVCs led by major food and beverage companies, and asked whether these lead firms were:

- improving conditions for women, small-scale farmers and farm workers;

- promoting equitable and sustainable access to and use of land and water;

- reducing emissions and helping farmers adapt to climate change; and

- being transparent about their supply chains and broader corporate activities.

Scorecards established by Oxfam reveal very different behaviors of lead firms vis-à-vis suppliers in the GVCs (http://www.behindthebrands.org/en-us).

# _(1) Responsible investment_

Stakeholders in host countries should carefully review supplier codes and guidelines and help with their implementation as appropriate. They should also create incentives for lead firms to comply with major principles for responsible investment and business. These include references such as:

- The UN Principles for responsible investment<sup>2</sup> :

- Principle 1: We will incorporate environmental, social and corporate governance (ESG) issues into investment analysis and decision-making processes.

- Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.

- Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.

- 2 Available at www.unpri.org . In early 2005, the then UN Secretary-General, Kofi Annan, invited a group of the world’s largest institutional investors to join a process to develop the Principles for Responsible Investment. A 20-person Investor Group drawn from institutions in 12 countries was supported by a 70-person group of experts from the investment industry, intergovernmental organisations and civil society. The Principles were launched in April 2006 at the New York Stock Exchange (Source: http://www.unpri.org/about-pri/about-pri/history/).

38