The future of green labels

When environmental labels such as Energy Star, Green Seal and EcoLogo were first introduced in the late 1980s and early 1990s, government purchasers were the first to embrace them. Government purchasers saw them as a useful way to identify more environmentally preferable products and began including preferences or requirements for products meeting the standards in purchasing specifications.

Once government purchasers proved there was interest in buying more environmentally preferable products, manufacturers increased production to meet the demand. As a result, it became easier for the average consumer to buy “greener” products. Well-known consumer companies are now promoting “green” cleaning products, recycled-content, process chlorine-free paper and energy-efficient televisions and computers, among other “greener” offerings.

As interest in greener products expanded, there was also a corresponding increase in the number of environmental labels. In 1992, there were fewer than a dozen environmental labels in the entire world. There are now more than 300.

Too many environmental labels is actually making it more challenging for both government purchasers and the average consumer. Not all labels are created equal. In fact, some of the labels are essentially meaningless. A few creative entrepreneurs have even set up Websites to sell environmental certifications online without establishing an environmental standard, requiring any product testing or even reviewing the product.

Comparing eco-labels

There are three critical components of any labeling program — the validity of the standard on which the label is based, the process used to set the standard and the verification processes used to determine if a product meets the standard.

Based on recommendations by the U.S. Environmental Protection Agency (EPA), Consumer’s Union (publisher of Consumer Reports) and members of the Global Ecolabeling Network (GEN), purchasers can use the following guidelines to identify the most credible labels.

1. Validity of the Standard

• Standards should have a clear and consistent meaning. The meaning of the label should not change based on who is certifying a product or which manufacturer’s product is being certified.

• Standards should be clear about what aspects of a product’s environmental performance it covers. They should include explicit information defining what ingredients and practices are acceptable or prohibited and which testing protocols are used to make such determinations.

• Multi-attribute standards should be based on human health and environmental considerations throughout the life cycle of the product from raw material extraction, manufacture, use and ultimate disposal of the product. The life cycle stages considered and covered by the standard should be explicitly stated.

2. Standard-Setting Process

• Standards should be developed in an open, public, transparent process that includes broad stakeholder participation including government purchasers, academic experts, environmental non-profits, government officials, manufacturers, suppliers and end users.

• There should be no conflict of interest for the standard-setting organization.

• Standards should be reviewed and updated on a regular basis.

3. Verification Process

There are a variety of verification procedures to determine whether a product meets a standard. Some are more rigorous (and more expensive) but provide a greater degree of assurance.

• Self-verification. Individual companies determine whether their products meet the standard.

• Self-verification with random audits. Individual companies verify their products, but an organization conducts random audits to ensure compliance.

• Independent third-party certification. An independent organization certifies that the products meet the standard based on information provided by the manufacturer.

• Independent third-party certification with on-site audits. An independent organization certifies the products meet the standards based on information provided by the manufacturer after an onsite visit to verify the accuracy of the information provided by the manufacturer.

It is important to note that a stringent verification process is meaningless if the standard being used is not meaningful.

Future of environmental labeling

With more than 300 environmental labels in use, it is challenging for professional purchasers and individual consumers to properly evaluate the various environmental claims being made. While the U.S. Federal Trade Commission (FTC) has begun fining manufacturers and retailers for making false or misleading environmental claims, the FTC approach does not address the larger issue of label proliferation.

There are, however, a variety of efforts under way to create a national or global environmental labeling approach. Members of Congress are beginning to explore possible legislative remedies. Groups of retailers are working together to try to define a common approach. In addition, some of the existing environmental labeling programs are working together with government purchasers and others to define a solution.

Many of the solutions combine the strengths of various approaches currently available in the market. As illustrated in the diagram on page 22, one possible approach is to create a single labeling program that includes an easily recognized mark, a rating system to compare products (one, two, three, or four stars), an environmental nutrition label to provide additional information for experienced environmental purchasing professionals and an online database of additional environmental factors for experts.

Role of government purchasers

National Institute of Governmental Purchasing (NIGP) members, including members of the NIGP Green Knowledge Community (www.nigp.org), are actively involved with efforts to bring additional clarity to the green market. They are sharing information and expertise to ensure the systems that emerge meet the needs of government purchasers.

About the author

Scot Case has been researching and promoting responsible purchasing issues for 16 years. He is vice president of TerraChoice Environmental Marketing, which manages the EcoLogo program. Contact him via e-mail at [email protected] or in Reading, Pa., at 610-779-3770.

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