Should Eco-Labels Come from Government or Third Party Private Organizations?

ulenv-logo-headerAccording to Ecolabelling.org, there are more than 300 eco-labels commonly applied to products and services as diverse as building products and cleaning supplies.  The website defines an eco-label as, “any consumer facing logo that claims an added environmental or social benefit.”  Off the top of my head, I could only come up with about 20, and I work as a sustainability consultant and green business writer.  As a fairly savvy eco-consumer, I would expect to know more about these labels, and to know more of them.

Some of these I know are good, such as the USDA Organic symbol, Energy Star for appliances, LEED for green building, Forest Stewardship Council (FSC) for sustainable forest products like wood and paper, and the Marine Stewardship Council (MSC) for sustainable fish.  Some I know are bad, such as the Sustainable Forestry Initiative (SFI), an industry-backed, greenwashing “eco-label” for wood products that is significantly less rigorous as FSC.  But many, like the Green Seal…I simply don’t know enough about them, nor do I, as an industry professional, let alone a green consumer, have the time to learn about them all.

This leads to the inevitable conclusion that there are simply too many eco-labels, which leads to a lot of consumer confusion.

A recent webinar on the green marketing landscape and eco-labels by GreenBiz.com was sponsored by Underwriters Laboratory (UL), a certifying third party entity that has historically focused on providing dependable standards for safety-related products.  UL is launching a new eco-label called UL Environment.

UL brings a 115 year history as a third-party certifying body and a solid reputation to the green product landscape, which, comparably, is in its infancy despite many years of solid growth.

According to Suzanne Shelton, president of Shelton Group, a marketing research firm, the most common green products consumers seek are cleaning products, food, and personal care.  However, clearly consumers are not “getting it,” when it comes to what is green and what is not.  “Half don’t know that a product can be organic but not sustainable,” said Shelton.  “They also think the label ‘natural’ is preferable to the label ‘organic’.”  Consumers don’t know who to trust, according to Shelton:  Only 18 percent trust third party evaluators like UL or Consumer Reports.  But they are poised and ready to punish manufacturers who lie to them about green claims.  Thirty-six percent would not just stop buying the product, but also tell others to do the same.  Forty percent would simply stop buying the product.  Bottom line, and her conclusion, is that there’s a lot of education needed about standards and labels.  She points to the Energy Star rating as the most effective eco-label that people understand and trust.

This begs the ultimate question:  Should these labels be coming from the government?  The U.S. EPA has two of the most trusted eco-labels (Energy Star and WaterSense), and the U.S. Department of Agriculture perhaps the best, most well-known, and trusted, in the USDA Organic label, along with the 5 digit code starting with a ‘9’ on all produce that is organic.

Surely the Federal Government, and eventually the UN, will play a role in determining labeling standards, at the very least, if not the labels themselves.  The Federal Trade Commission (FTC), which regulates false advertising, recently reevaluated its green guide about how companies can make green claims.  Their key concerns were updating definitions such as renewable, sustainable, and recyclable; seals and labels; and how terms such as “environmentally-friendly” can be applied.

Political influence is inevitable, of course, which is a strike against private third party certifications with government regulation (as opposed to federal standards like the USDA Organic label).  For example, from 1990 to 2000, the FTC made 37 cases against so-called greenwashing claims.  During the Bush years?  Zero.  Not a single one.  And of course, the sustainable marketplace has grown substantially during that time period, as have the occurrence of greenwashing.  Jon Leibowitz, the new FTC chair under the Obama Administration has taken a different tack, not surprisingly, and has already filed a number of complaints against claims by obvious violators (one being a company that was using rayon in its fabrics and labeling the fibers bamboo).

The Bush Administration turned a blind eye to such flagrant violators, with no real repercussions besides losing the green vote, which, well….Bush wasn’t really worried about losing.

Underwriters’ Laboratory enters the arena with the argument that private, 3rd party certifying bodies can handle the greenwashing epidemic.  True, UL brings 115 years and a solid reputation as a third party certifying body, and presents a good case for creating clear evaluation methods (like LEED, another non-governmental organization providing a terrific eco-label).  Stephen Wenc, of UL, argues that a lack of commonly accepted definition of green helps create problems, and leaves room for creative definitions.

At the end of the webinar, a telling question came in from an audience member:  How do we find out which eco-labels are best, most trusted?

Shelton responded that a lot of labels are great, but consumers have little recognition of them.  Consumer recognition is based on years of brand building.  She suggested that we need a label or two to rise to the top.  But the way that might happen, according to Shelton, is, in my mind, a further strike against 3rd party certifiers:  “The labels that [can build enough brand recognition to become an effective eco-label] will have the best consumer advertising,” she said.

However, the recommendations Shelton and UL had for a unifying eco-label for consumer products was a good one.  It needs to have a set of tangible, easily-measured criteria, much like a nutrition label, which tells you exactly how much fat is in something, and what percentage of your recommended daily allowance that is, rather than making a blind claim of being healthy, low-fat, or the like.  Something similar for an eco-label would be quite helpful.

Scott Cooney is the author of Build a Green Small Business:  Profitable Ways to Become An Ecopreneur (McGraw-Hill).

Scott Cooney, Principal of GreenBusinessOwner.com and author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill, November 2008), is also a serial ecopreneur who has started and grown several green businesses and consulted several other green startups. He co-founded the ReDirect Guide, a green business directory, in Salt Lake City, UT. He greened his home in Salt Lake City, including xeriscaping, an organic orchard, extra natural fiber insulation, a 1.8kW solar PV array, on-demand hot water, energy star appliances, and natural paints. He is a vegetarian, an avid cyclist, ultimate frisbee player, and surfer, and currently lives in the sunny Mission district of San Francisco. Scott is working on his second book, a look at microeconomics in the green sector.In June 2010, Scott launched GreenBusinessOwner.com, a sustainability consulting firm dedicated to providing solutions to common business problems by leveraging the power of the triple bottom line. Focused exclusively on small business, GBO's mission is to facilitate the creation and success of small, green businesses.