Understanding Sustainability Initiatives

2. Introducing the typology framework

The typology framework is composed of four chapters: objective, scope, operations, and governance that are the main foundational elements of a sustainability initiative. Each chapter is broken down into differentiators, which are building blocks based on value neutral characteristics that can provide comprehensive assessments of the broad landscape of sustainability initiatives as well as facilitate differentiation between groupings of initiatives. The typology currently consists of 18 differentiators. For each differentiator, potential attributes are introduced and defined.

Two practical principles concerning the typology framework are important to bear in mind.

• Although the typology is designed as a comprehensive framework, it necessarily comes with simplifications. In particular, there may be various interlinkages and interdependencies across chapters, differentiators, and attributes which the typology does not explicitly account for.

• Potential attributes of a differentiator are not necessarily exclusive. For instance, the facilitation objective of a sustainability initiative could consist in providing at once guidance, tools, and capacity building, even though these are all captured by distinct attributes in the typology.

Figure 2.1 on the following page provides a graphical representation of the typology framework. The remainder of Section 2 lists and defines all chapters, differentiators, and attributes.

2.1. Objective

The “objective” chapter of the framework includes differentiators pertaining to the purpose of a sustainability initiative and to its overall approach to achieving sustainability. The differentiators distinguish between two possible uses for the sustainability initiatives: “facilitation” and “verification”. Table 2.1 lists the differentiators and potential attributes of this chapter.

Table 2.1. Objective chapter of the typology framework

Differentiators	Potential attributes
Facilitation	Not defined Information provision Guidance / framework Tool Training and capacity building
Verification	Not defined Conformity assessment Benchmarking

Figure 2.1. Typology framework

Note: This figure provides a graphic representation of the typology framework through concentric rings. The ring in the middle displays the differentiators, which are organised across the four chapters displayed in the internal ring. First-level potential attributes associated to each differentiator are plotted over the external ring.

Source: Authors' elaboration.

2.1.1. Facilitation

This differentiator captures whether the objective of the sustainability initiative consists in providing information, tools, guidance or support to facilitate the targeted sustainability performance (see differentiator performance under Section 2.2.6) of a subject (see differentiator subject under Section 2.2.5).

Potential attributes

• Not defined. The objective of the sustainability initiative does not consist in providing information, tools, guidance, or support to facilitate the sustainability performance of a subject’s activity.

• Information provision. The sustainability initiative provides information such as geographic information, sector-, product- or site-specific information, such as product or life cycle assessment data, information on joint buyers or suppliers, and chain of custody or other traceability information.

• Guidance, targets, and metrics. The sustainability initiative provides guidance (e.g. on chemical management best practices, establishing grievance mechanisms, improving purchasing practices or supplier assessments), and sets sustainability targets or metrics.

• Tools. The sustainability initiative provides standardised tools such as risk assessment tools, reporting tools, and other templates.

• Training and capacity building. The sustainability initiative carries out training and capacity building of participating enterprises, suppliers, and other stakeholders.

2.1.2. Verification

This differentiator captures whether the sustainability initiative sets written sustainability expectations or requirements for the targeted sustainability performance (see differentiator performance under Section 2.2.6) of a subject (see differentiator subject under Section 2.2.5) and monitors, benchmarks, or otherwise assesses enterprises, sites, products, services, or claims against those standards and requirements. Monitoring and assessment activities vary significantly in quality and frequency, considerations which are intentionally not captured in this differentiator and related attributes.

Potential attributes

• Not defined. The initiative does not have a verification objective.

• Conformity assessment. The sustainability initiative has a defined process for evaluating, measuring, and/or attesting whether materials, products, processes, services, management systems, sites, and enterprises align with expectations or meet requirements which are defined by the sustainability initiative.

• Benchmarking. The sustainability initiative has a structured and systematic way of carrying out evaluations against benchmarks. Benchmarking is any standard or reference by which others can be measured and provides users with comparable information about the benchmarked entities. Examples include global benchmarks that score and rank companies’ sustainability performance or benchmarks that recognise certification programmes that meet specific thresholds or performance criteria.

2.2. Scope

This chapter includes differentiators on the coverage of the sustainability initiative, and who and what it applies to. Table 2.2 reports the differentiators and potential attributes of the “scope” chapter.

Table 2.2. Scope chapter of the typology framework

Differentiators	Potential attributes
Sector	Not defined Specific
Geography	Not defined Specific
Value chain segment	Non defined Specific
Sustainability	Environmental Social Economic Governance
Subject	Legal persons Commodities, products, services Area / landscape
Performance	Practices Outcomes
Due diligence	Not defined Embed responsible business conduct Identify and assess impacts Cease, prevent and mitigate impacts Track implementation and results Communicate on addressing impacts Provide for / co-operate in remediation

2.2.1. Sectoral scope

This differentiator captures whether the scope of the sustainability initiative applies to all sectors or is specific to one or a combination of sectors.

Potential attributes

• Not defined sectors. The sustainability initiative is not specific to any sector.

• Specific to one or a combination of sectors. The sustainability initiative applies to one or a combination of sectors. As more granular second level potential attributes, sectors from any sectoral classification could be used.

2.2.2. Geography scope

This differentiator captures whether the scope of the sustainability initiative applies to all geographies or is specific to one or a combination of geographies.

Potential attributes

• Not defined geographies. The sustainability initiative is not specific to any geographies.

• Specific to one or a combination of geographies. The sustainability initiative applies to one or a combination of geographies. As more granular second level potential attributes, regions, or countries from any list of regions/countries could be used.

2.2.3. Value chain segment scope

This differentiator captures the segment of the value chain covered by the initiative’s activities and/or requirements.

Potential attributes

• Not defined value chain segment. The sustainability initiative could apply to any segment of the value chain.

• Specific to one or a combination of value chain segments. The sustainability initiative applies to specific segments of the value chain. As more granular second level potential attributes, the following list of value chain segments could be used:

  • Primary production

  • Processing and manufacturing

  • Trading

  • Retailing and consumption

  • Transport and logistics

  • End of life and recycling

2.2.4. Sustainability scope

This differentiator captures whether the sustainability initiative covers environmental, social, and economic aspects or governance-related issues in which the needs of the present are met without compromising the ability of future generations to meet their own needs.

Potential attributes

• Environment. Covers dimensions of sustainability that address environmental impacts or objectives. These include (among others): climate change mitigation and adaptation; the conservation, restoration, and sustainable use of biological diversity; the sustainable, efficient and lawful use of land, resources and energy; sustainable consumption and production, including through promotion of circular economy approaches; and pollution prevention, reduction and control.

• Social. Covers dimensions of sustainability that address the protection and promotion of universal human rights, as grounded in the Universal Declaration for Human Rights and codified in international agreements and treaties,1 and/or labour rights, including rights related to health and safety in the workplace, payment of wages, working hours, child labour, forced labour, migrant workers and their families, and all principles concerning fundamental rights as set out in the International Labour Organisation Declaration on Fundamental Principles and Rights at Work.

• Economic. Refers to practices designed to create long-term economic development while also managing the environmental and social impacts of economic activities. Given that the protection of human rights, or any other sustainability objective, does not automatically follow from economic development, economic sustainability is about balancing economic growth and generating profits that have positive impacts on the environment and people.

• Governance. Covers dimensions of sustainability that address corporate governance, corruption, integrity, and disclosure issues.

2.2.5. Subject

This differentiator captures who or what is the subject that is targeted by the sustainability initiative’s standards or activities.

Potential attributes

• Not defined. The sustainability initiative does not specify the subject.

• Primary commodities, products, or services. The requirements or activities of the sustainability initiative apply to primary commodities, products, or services.

• Legal persons. The requirements or activities of the sustainability initiative apply to companies (entire or site specific, such as a factory), partnerships, sustainability initiatives, institutions, or any other legal person.

• Area/landscape. The requirements or activities of the sustainability initiative apply to physical site or location (e.g. facility, forest area, protected area, landscape, fishery area).

2.2.6. Performance

This differentiator captures the level of the subject’s performance that is targeted by the requirements or activities of the sustainability initiative. The level of performance can vary between sustainability practices, processes, or systems, and the expected outcome.

Potential attributes

• Practices, processes, systems. The focus of the sustainability initiative is on targeting sustainability practices, processes, or systems.

• Outcomes. The focus of the sustainability initiative is on targeting sustainability outcomes of performing an economic activity.

2.2.7. Due diligence

This differentiator captures which aspects of responsible business conduct due diligence the sustainability initiative addresses through its requirements and/or activities.

Potential attributes2

• Not defined. The sustainability initiative does not specify any due diligence process, criteria, policy, or requirement.

• Embed responsible business conduct. The sustainability initiative requires enterprises to embed responsible business conduct due diligence into policies and management systems, and/or supports them in doing so.

• Identify and assess actual and potential impacts. The sustainability initiative requires enterprises to identify and assess actual and potential impacts associated with the enterprise's operations, products or services, including its suppliers and/or other business relationships, and/or supports them in doing so.

• Cease, prevent and mitigate adverse impacts. The sustainability initiative requires enterprises to cease, prevent and mitigate actual and potential adverse impacts, and/or supports them in doing so.

• Track implementation and results. The sustainability initiative requires enterprises to track the implementation and effectiveness of enterprises' due diligence activities, and/or supports them in doing so.

• Communicate how impacts are addressed. The sustainability initiative requires enterprises to publicly communicate externally relevant information on due diligence policies, processes, activities conducted, including the findings and outcomes of those activities, and/or supports them in doing so.

• Provide for or co-operate in remediation when appropriate. The sustainability initiative requires enterprises to provide for or cooperate in remediation when the enterprise identifies that it has caused or contributed to actual adverse impacts, and/or supports them in doing so.

2.3. Operations / implementation

This chapter includes differentiators that look at the system components that support implementation of the sustainability initiative to generate sustainability impacts. Table 2.3 reports the differentiators and potential attributes of the “operations” chapter.

Table 2.3. Operations chapter of the typology framework

Differentiators	Potential attributes
Assurance system	Not defined Assurance system defined
Grievance mechanism	Not defined Public grievance mechanism
Chain of custody	Provided or required Not defined
Sustainability claim	Not defined Non controlled Controlled
Monitoring and evaluation	Not defined Documented methodology
Recognition of other initiatives	Not defined Documented methodology

2.3.1. Assurance system

This differentiator captures whether an assurance system exists. An assurance system is defined as the documented set of procedures and processes to demonstrate evidence that specified requirements relating to a product, process, system, person, or body are fulfilled.3

Potential attributes

• Assurance system not defined. The sustainability initiative does not define any specific assurance system.

• Assurance system defined. The sustainability initiative defines an assurance system. More granular second level potential attributes can be defined to further differentiate amongst different types of assurance systems. Types of assurance systems can be defined in terms of the following.

  • Assurance provider (capturing the level of independence of assurance):

    • First party. Assurance performed by the subject targeted by the verification and based on its own determination. Also called a self-assessment or internal audit.

    • Second party. Assurance performed by a person or body that is related to, or has a user interest in, the subject targeted by the verification. This could be a supplier, customer, or contractor.

    • Third party. Assurance performed by a person or body that is independent of and with no user interest in the subject targeted by the verification.

    • Third party with oversight. Third party assurance activity with oversight through another third-party.

  • Frequency of evaluation/assessment (capturing the frequency of the sustainability initiative's evaluation activities)

    • Not defined. The frequency of the evaluation activities is not specified by the sustainability initiative.

    • Defined. The sustainability initiative specifies rules and policies for the frequency of evaluation activities.

  • Evaluation structure (capturing how the sustainability initiative assesses performance based on degree of conformance against requirements)

    • Continuous improvement. The sustainability initiative applies an evaluation structure, also referred to as progress models, that aims to incentivise progress over time. The evaluation structure can include mandatory or baseline criteria as well as aspirational or improvement criteria and may increase the number of requirements or performance levels over time.

    • Scoring and threshold. The sustainability initiative applies an evaluation structure, also referred to as scoring, where the assessment is based on meeting a subset of criteria, scoring levels, or set of performance levels or thresholds.

    • Pass and fail. The sustainability initiative applies an evaluation that aims to strictly determine compliance to requirements of the sustainability initiative in a binary pass or fail approach, with no granular scoring of compliance nor flexibility in timing of compliance.

2.3.2. Grievance mechanism

This differentiator reflects the extent to which the sustainability initiative claims to have a public grievance mechanism.

Potential attributes

• Not defined. The sustainability initiative does not have a public grievance mechanism.

• Public grievance mechanism. The sustainability initiative provides a public grievance mechanism to address complaints against the initiative, its employees and/or participating enterprises or their suppliers or other business partners.

2.3.3. Chain of custody (CoC) model

This differentiator captures whether the sustainability initiative requires or provides for the custodial sequence occurring as ownership or control of the material supply is transferred from one custodian to another in the value chain. Documenting chain of custody describes the list of all organisations (value chain) that take ownership or control of a product during production, processing, shipping, and retail (physically and/or administratively).4

Potential attributes

• Not defined. The sustainability initiative does not provide or require CoC.

• CoC provided or required: The sustainability initiative defines CoC mechanisms, models and/or rules, or requires such mechanisms. As more granular second level potential attributes, the following list could be used:

  • Identity preservation (IP). An IP model ensures that certified or assured product from a certified or assessed site or enterprise is kept separate from other sources. If used along the whole supply chain, it allows certified products to be uniquely traced through the production process, from the production site to the last point of transformation, or, where relevant, the labelling of a product.

  • Segregation. This model ensures that a certified product is kept separate from non-certified sources at each stage of the supply chain, allowing assurance that the ingredients of a particular product originate from certified sources, although it may not be possible to identify which molecule came from which certified source.

  • Mass balance. Mass balance is an overarching term for different types of chain of custody which involve balancing volume reconciliation.

  • Certificate trading. This is also known as “book and claim” and “credit trading”. In this model, certified material is completely decoupled from sustainability data. Certified and non-certified products flow freely through the supply chain. Sustainability certificates or credits are issued at the beginning of the supply chain by an independent issuing body and can be bought by market participants, usually via a certificate or credit-trading platform. A CoC model in which the administrative record flow is not necessarily connected to the physical flow of materials or products throughout the supply chain.

2.3.4. Sustainability claims

This differentiator captures whether the sustainability initiative allows enterprises (or other legal persons that are the subject of the initiative) to make claims on the sustainability and/or responsibility of their operations, products or services. A sustainability claim is a message used to set apart and promote a product, process, business, or service with reference to one or more dimensions of sustainability.

Potential attributes

• Not defined. The sustainability initiative has no specific rules or documented methodology for claims and/or does not allow them.

• Not controlled. The sustainability initiative has a documented methodology for participating enterprises to make a claim that is used to promote an aspect of or relationship with the sustainability initiative, but which does not require approval for use of claims.

• Controlled. The sustainability initiative has a documented methodology for participating enterprises to make a claim that results from an assurance process against the requirements of the sustainability initiative and there is an approval system for use of claims. This attribute refers to claims on a product, process, business or service that has been certified in compliance with the requirements. For example, use of logos and labels on products.

2.3.5. Monitoring and evaluation

This differentiator captures whether a sustainability initiative has a monitoring and evaluation system, i.e. an ongoing process through which a sustainability initiative draws conclusions about its contribution to intended outcomes and impacts. A monitoring and evaluation system consists of a set of interconnected functions, processes, and activities, including systematic collection of monitoring data on specified indicators, and the implementation of outcome and impact evaluation. The system could also incorporate a learning dimension (monitoring, evaluation, and learning), including processes to take appropriate measures in relationship to the results of the evaluation.

Potential attributes

• Not defined. The sustainability initiative has no formal monitoring and evaluation system.

• Documented methodology. The sustainability initiative has a formal process of collecting and analysing sources of data and information relevant to implementation of its requirements by its operators to monitor and evaluate whether the initiative is meeting its intended outcomes and impacts.

2.3.6. Recognition of other initiatives

This differentiator captures whether a sustainability initiative recognises other sustainability initiatives as a means for enterprises or other subjects of the initiative to meet its criteria or requirements. Recognition can include acceptance of third party trainings, supplier assessments, or other activities as a means to align with expectations or meet criteria or requirements. Recognition can be full or partial.

Potential attributes

• Not defined. No reliance on or recognition of other sustainability initiatives

• Recognition through a documented methodology. The sustainability initiative recognises all or part of another sustainability initiative as equivalent to its own requirements or activities through a documented methodology. As more granular second level potential attributes, the following list could be used:

  • Horizontal recognition. Recognition between peer initiatives for parts or all of the requirements (e.g. recognition of a peer initiative considered to meet relevant criteria, but covers a different supply chain, geographical, risk or other scope).

  • Vertical recognition. Recognition of initiatives for parts that the initiative does not cover itself through its requirements (e.g. another tier of the value chain or another commodity).

2.4. Governance

This chapter covers differentiators that help to understand key aspects of the governance of a sustainability initiative. Governance characterises here the nature of the initiative’s owner(s), as well as the approaches taken to engage with stakeholders and disclose information around the initiative’s activities. Table 2.4 reports the differentiators and potential attributes of the “governance” chapter.

Table 2.4. Governance chapter of the typology framework

Differentiators	Potential attributes
Ownership	Public Private
Stakeholder engagement	Not defined Stakeholder engagement
Information disclosure	Not defined Information disclosure

2.4.1. Ownership

This differentiator captures the type of organisation(s) that legally own, manage, and implement the sustainability initiative.

Potential attributes

• Public. The sustainability initiative is owned by a public entity. As more granular second level potential attributes, the following list could be used:

  • Public national. The sustainability initiative is owned by a government entity operating at national, regional, or local level providing services to the public or another public entity.

  • Public international. The sustainability initiative is owned by a multi-lateral organisation formed and funded by more than one government.

• Private. The sustainability initiative is owned by a private entity. As more granular second level potential attributes, the following list could be used:

  • Private for profit. The sustainability initiative is owned by a private enterprise(s) and legally registered as a for-profit enterprise which distributes profits to owners, investors, and shareholders. It may be publicly traded.

  • Private not for profit. The sustainability initiative is owned by a private enterprise(s) and legally registered as a not-for-profit enterprise which operates for a public good and “profits” are reinvested in the enterprise.

2.4.2. Stakeholder engagement

This differentiator captures the extent to which the sustainability initiative claims to engage relevant stakeholders in key processes and activities. Stakeholders are defined as individuals or groups interested in or who will be affected by the decisions or activities of the scheme.

Potential attributes

• Not defined. No stakeholder engagement defined in governance of the sustainability initiative.

• Stakeholder engagement defined. The sustainability initiative engages stakeholders at varying capacity or responsibility across its activities. As more granular second level potential attributes, the following list could be used:

  • Stakeholder engagement in boards and committees. The sustainability initiative has a process to ensure that a balanced and diverse group of relevant stakeholders can participate in governance bodies, boards, and committees.

  • Stakeholder engagement in monitoring and evaluation. The sustainability initiative has a process to ensure that relevant stakeholders are involved in defining the monitoring and evaluation strategies.

  • Stakeholder engagement in development of and revisions of initiative. The sustainability initiative has a process to ensure that relevant stakeholders are involved in the development and revisions of tools, standards, etc.

  • Stakeholder engagement in assurance systems. The sustainability initiative has a process to ensure that relevant stakeholders are involved in the development and revision of assurance and oversight systems.

2.4.3. Information disclosure

This differentiator reflects the extent to which the sustainability initiative claims to publish information on key topics.

Potential attributes

• Not defined. The sustainability initiative does not publish any information.

• Information disclosed. The initiative publishes some information. As more granular second level potential attributes, the following list could be used:

  • Ownership and governance. The sustainability initiative publishes information about its ownership and governance.

  • Sustainability standard, guidance and policies. The sustainability initiative publishes information about its standards, guidance, and policies. These can take the form of documents that provides, for common and repeated use, rules, guidelines or characteristics for products or services, or related processes and production methods, with which compliance is not mandatory. The term standard is inclusive of similar tools that define sustainability performance levels or improvement pathways (also referred to as code, principles and criteria (ISEAL, 2023[11])).

  • Assessment results/reports. The sustainability initiative publishes reports and findings of any assessments.

  • Assessment methodology. The sustainability initiative publishes its assessment methodology.

  • Standard setting procedures. The sustainability initiative publishes information on how standards are developed, how they are revised and who is responsible for decision making on standard setting.

  • Outcomes and impacts. The sustainability initiative publishes information on its outcomes and impacts.

Notes

← 1.  International instruments on the rights of Indigenous Peoples (UN Declaration on the Rights of Indigenous Peoples); persons belonging to national, ethnic, religious, or linguistic minorities; women; children; and persons with disabilities have been elaborated under the framework of the United Nations.

← 2.  The attributes of the differentiator “due diligence” reflect the due diligence process as defined in the OECD Due Diligence Guidance for Responsible Business Conduct.

← 3.  The definition of assurance scheme follows ISEAL (2023[11]).

← 4.  Related, but not the same, is traceability which is the ability to trace a product or object through the supply or value chain and demonstrate CoC. This is done through the verification of the history, location, characteristics, or application of an item by means of documented recorded identification.