Sustainability standards shape who can access global supply chains, at what cost and on what terms. They influence trade, investment and livelihoods, yet remain largely absent from development debates. The World Bank’s World Development Report 2025: Standards for Development brings this into sharper focus, a theme taken up in ISEAL’s first dialogue in a new series exploring issues shaping the future of sustainability.

As Xavier Giné, Director of the World Development Report 2025 at the World Bank, noted in the discussion, standards affect almost every aspect of economic activity. The question is no longer whether standards matter. It’s how they work in practice and what they enable.

The first ISEAL dialogue examined how standards shape sustainability and development outcomes in practice, and what is needed for them to be effective. Vidya Rangan, Policy and Engagement Director at ISEAL, was joined by Xavier Giné, Lead Economist at the World Bank, Sugumar Raman, Chief Programme Officer at Fair Trade USA and Lauren Shields, Sustainability Initiatives Lead at the OECD Centre for Responsible Business Conduct. Across the conversation, one point was clear: standards already play a central role in development outcomes. The challenge is ensuring they work as intended and respond to the different problems they are designed to address.

Navigating a complex landscape

Standards are now deeply embedded in global markets. But the systems around them have become increasingly complex. Sustainability systems have grown rapidly in number and scope, while regulatory activity is accelerating across key markets. The result is a landscape that is harder to navigate, particularly for those with limited capacity.

Shields highlights that the report describes a 'spaghetti bowl' of overlapping requirements, with producers and businesses often required to meet multiple standards, undergo repeated audits and manage competing demands. For some, this creates opportunities; for others, it creates barriers. Standards are widely used but not always aligned. They shape access to markets, but do not always support participation, and are still not well recognised in policy.

From spaghetti bowl to smart mix

If standards are to deliver, the focus must shift from expansion to performance. At the core is a simple point: standards only work when ambition is matched with the capacity to comply, and they are more consistently effective when used as part of a smart mix of regulation and voluntary approaches.

As Giné emphasised, high compliance costs and complex requirements can exclude those with the least capacity. When standards are not grounded in real-world conditions, they risk limiting participation rather than enabling it. Raman described this as a ‘double-edged sword’: standards can enable access to markets, but they can also prevent it, depending on how they are designed and applied.

This tension sits at the heart of the challenge: whether standards are genuinely inclusive in practice. This is particularly evident for SMEs and smallholders in global supply chains, where high compliance costs, complex requirements and overlapping standards can limit participation, even where demand exists.

These challenges are often reinforced by binary ‘pass or fail’ approaches, which create bottlenecks by limiting participation to those already able to meet the highest requirements, excluding others who could improve over time.

Enabling participation, progress and performance

Tiered and progressive approaches offer one way forward. They allow actors to enter at different levels and improve over time. As Giné outlined, this enables gradual alignment with higher standards as capacity grows. Raman also emphasised the importance of tracking progress, not just compliance. Measuring outcomes, rather than simply adherence, is key to understanding whether standards are delivering in practice.

As Shields highlighted, across the wider landscape of standards and regulation, better alignment is needed. Reducing duplication, improving coherence and enabling mutual recognition can lower costs and improve accessibility. Improving outcomes depends less on creating new standards and more on connecting existing ones. This is particularly important for SMEs and smallholders, enabling participation and improvement rather than exclusion.

Standards also need to be understood within a wider policy landscape. As regulation evolves, how mandatory and voluntary approaches work together becomes more important. Giné highlighted that regulation can set minimum requirements, while voluntary standards can raise ambition. Rangan emphasised that voluntary sustainability standards remain critical, particularly for actors aiming to go beyond baseline requirements or drive innovation. Together, these approaches point to the importance of a smart mix, where regulation and voluntary standards are used in complementary ways to support more effective outcomes.

The evolving role of standards

In today’s crowded and complex landscape, credibility determines whether standards translate into real-world outcomes. As Raman put it, standards must do what they say they will do. This requires systems that are realistic, inclusive and grounded in the contexts where they are applied, with manageable costs, clear pathways for improvement and the right supporting infrastructure. It also means focusing on outcomes, not just compliance.

The World Development Report 2025 makes a clear case: standards already play a central role in development. This is not about creating more standards, but ensuring existing systems deliver.

Recognising this central role points to the need for system-level change. As both the discussion and report highlight, the role of standards is evolving. They are no longer only tools for setting and verifying compliance, but also to support participation, enable continuous improvement and help translate policy into practice.

This reflects a shift towards more diverse approaches that better support implementation across different contexts, particularly for those with more limited capacity. Delivered through a smart mix of regulation and voluntary approaches, this more integrated role can help ensure standards contribute effectively to sustainability and development outcomes.

ISEAL works with sustainability systems, businesses and policymakers to support this shift, strengthening credibility and enabling standards to deliver real-world impact.