Voluntary sustainability standards and economic and ecological outcomes: panel evidence from Rwanda’s coffee sector

Voluntary sustainability standards (VSS) promise consumers that certified products are produced under sustainable conditions. While the literature assessing the effects of VSS has expanded considerably, most studies rely on cross-sectional data, thereby providing only a snapshot in time, and focus on single sustainability dimensions, limiting our understanding of whether improvements in one dimension are accompanied by unintended negative effects in another. Moreover, little is known about the extent to which VSS duration influences outcomes, even though sustainability-related improvements may take time to materialize. Our study addresses these gaps using a three-wave panel dataset from Rwanda’s coffee sector to examine how VSS and their duration are associated with economic and ecological outcomes. We distinguish between state and civil-society VSS , which are developed and monitored by organizations such as governments or NGOs, and industry VSS , which include both company-owned standards and multi-stakeholder initiatives with strong industry involvement. We combine household-, buyer-, and plot-level data and draw on a unique dataset of 844 households, 102 plots and 48 coffee buyers. We find that only state and civil-society certification is positively associated with economic outcomes such as coffee yield, prices, profits and returns to land, while longer certification duration under both VSS types is associated with improvements in most economic outcomes. Ecological results are mixed. While state and civil-society certification and its duration are positively associated with shade tree outcomes, we do not observe similar associations for industry VSS. For both schemes, we find no positive associations with animal diversity outcomes. The findings highlight that VSS should be understood as a long-term process in which sustainability improvements materialize gradually. They also point to current limitations in the ability of VSS to achieve environmental objectives, particularly under industry VSS. More broadly, our findings emphasize the importance of considering time dynamics and multiple sustainability dimensions when assessing VSS effectiveness.