(Originally published in the Crane and Matten blog)
Over 30 years ago, the Blue Angel label came out in Germany. It was significant – a label for consumers to recognize what was the more environmentally sound choice, backed by a standard and certification. Years later, many others followed – including many well-known ones such as Fairtrade, Marine Stewardship Council, Energy Star, Organic – and as of several days ago on the Ecolabel Index, the tally was at 424 labels. But what we needed in the past is not what we need any more. It’s time for a change.
In a recent research piece from SustainAbility called Signed, Sealed…Delivered? that I co-authored with my colleague Patrin Watanatada – we looked at the value and challenges that businesses find in using certification and labelling as tools to improve economic, environmental and social outcomes across global value chains.
What we have found is this – certification, labelling and the standards-setting organizations behind them have been pioneers in building a more sustainable economy. For businesses, they provide a credible, consensus-set reference point for collective action, access to expertise and networks, and can spur demand for certified or labelled goods. This is particularly the case in the B2B space, where labels and sustainable attributes are built into institutional purchasing agreements, such as within large companies or municipalities.
However, there are also a number of challenges. The traits that are the strengths of consensus-based standards – governance and inclusiveness — also pose challenges. For one, some businesses are seeking to advance sustainability as quickly as possible – but sometimes the agreement required in a consensus based model can slow things down. In addition, what is best for all stakeholders is not always perfect for sustainability – for example with many of the forestry standards it is a compromise between best available science and what the industry can handle. Also – the issues that are covered by specific standards may not be entirely appropriate for the business, so there are many cases where companies such as Innocent Drinks have developed their own standards for sustainable sourcing. As labels become more known in specific product categories, they also become a mere condition of entry, which has been the case with Energy Star in electronics. This does not suit most marketing departments who seek to differentiate, first and foremost.
Another challenge to labelling is that it has limits – in particular, limits to scale. Labels are mostly recognized and understood by a niche group of consumers – a typical consumer will not buy an ecolabelled product unless it has a clear “what’s in it for me?” for them. For example, organic products have done well because many believe it to offer them a significant health benefit. This is also why we see an increasing number of B2B standards and certifications that have no consumer facing element, including the Better Cotton Initiative and UTZ Certified for coffee and cocoa, which allows companies to focus solely on making the commodity more sustainable.
What then needs to happen? We think that the model of standards + certifications + on-pack ecolabels needs to evolve, where they are separated and each are used and recognized as part of a larger sustainability toolkit. Standards would provide an increasing, pre-competitive baseline, and brands could compete around this, such as what apparel manufacturers are planning with the Sustainable Apparel Coalition’s index. In concert, partnerships and collaboration with civil society would help to transform supply chains and consumer norms and behaviour, for example with Procter & Gamble’s Turn to 30 cold water washing campaign. Certification could take the form of civil society and government evolving to be more effective and efficient in developing ways to hold business accountable. And lastly, brands – which intentionally started off as trustmarks themselves – would be the main focal point with labels becoming a complementary “back of pack” instrument, such as the case with Method using Cradle to Cradle certification as a design tool to reinforce the brand’s design focus, and using the label for the 1% of its customers who are interested in it.
It’s a tall order to be sure, and a lot needs to happen before this vision can be realized. But in a quickly changing space as sustainability – it’s time that ecolabels had their change too.