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

Scott Cooney | Friday October 23rd, 2009 | 11 Comments

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).


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  • Kirsten@Nexyoo

    This is an interesting problem. I’ve actually heard that there are more than 400 labels. It’s confusing for consumers, and ultimately weakens the value of each label. I think particular labels may rise to the top through competition. There may be a place for a general EPA label as well, that attempts to reflect a broad picture of sustainability.

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  • Brian

    Important topic for discussion. I appreciate your article and respond on my blog. http://janineplusbrianequals.wordpress.com/
    I point to the conclusion that less government involvment in labelling will be better in the long run.

  • Benjamin

    Above all it is important that these labels do not lose their credibility because it can undermine the whole movement. I just wish that corporations take more responsibility in order to prevent these types of situations: http://tinyurl.com/ygrnh9r

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  • Bob

    A label that behaves more like a nutrition label is perhaps the most important challenge to eco-labelers inside and outside of the government. The current rubber-stamp variety eco-labels are helpful, but only because there is no more informative alternative. Certifications can (but don’t always) promote a minimum standard instead of furthering competition. I’d love to see the nutrition facts style eco-label take hold in the market.

  • http://www.sfiprogram.org Sue McMillan

    You are right – there certainly are a lot of eco-labels out there, and many truly are examples of greenwashing. However, your statement that SFI is a greenwashing industry-backed label and is less rigorous than FSC is inaccurate.

    • SFI is a fully independent charitable non-profit organization and is backed by a board with equal representation from the environmental, social, and economic sectors.
    • The SFI forest certification Standard was developed by professional foresters, conservationists, scientists, and others. Its requirements include reforesting harvested areas promptly, obeying all laws, maintaining biological diversity and wildlife habitat, and avoiding fibre from illegal or other controversial sources.
    • The SFI program is recognized by many influential organizations around the world such as the conservation groups, large corporations, non-profits and governments, including governments of Japan, USA, Canada, the UK and others.

    You should also check out the “Seven Sins of Greenwashing” report put out recently by Terrachoice Environmental Marketing. They included SFI, along with FSC, as a credible label saying that SFI meets three key criteria – third party certified, publicly available standard and transparent standard development process received. SFI is one of just 14, including Green Seal and Energy Star labels that the group recognizes as “legitimate.”

    For more information, I encourage you to
    • visit our site: http://www.sfiprogram.org and
    • Read more about the “Seven Sins” report on our blog here: http://www.goodforforests.com/archives/tag/terrachoice
    • Read a recent blog post by Conservation Fund President and CEO, Larry Selzer, about Forest Certification here: http://www.cnbc.com/id/33417397

    Sue McMillan
    Sustainable Forestry Initiative

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  • http://www.facebook.com/jimschweitzer Jim Schweitzer

    This is one of the major questions we’re trying to address right now in the Executive MBA Program at Wake Forest University. This is real business and impacts real strategy. Every company needs to be aware, and those who can predict which ones will “stick” will have the edge

    I’ve recorded some of my thoughts on my blog here: http://jimschweitzer.wordpress.com/2009/10/24/bringing-environmentalism-and-sustainability-to-the-mba/

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  • http://blog.greenearthbamboo.com Corey

    This is in regards to the FTC Claims on the bamboo textile industry:

    I highly suggest reviewing the true facts and scientific evidence that discounts the FTC’s allegations. there are several posts on this at Green Earth News blog site. The most recent post, FTC’s Bamboo Smear Campaign Riddled with Deception explains a lot and has links to scientific results as well! There is powerful evidence here as well as prior FTC cases that totally discredit the FTC.

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  • Frank

    Eco-labels are mostly a scam in my opinion. First, because we have no real idea of the environmental savings they provide, if any. All we have is a set of arbitrary rules and marketing spin. Second, eco-labels mean we all get to pay a voluntary tax; a new green tax. Well, not everyone; marketing firms that sell the logo make money. In the end, the “green” movement is all about money. The big boys have found another way to take money from of our pockets. We’ve been fooled to believe that we need to pay money to “save the planet”. We don’t even care whether or not it’s really being saved or not, we pay out of guilt. Finally, because eco-labels cost lots of money, only the big corporations have a foot in the green door and can secure the market. Very soon, if your product doesn’t have a cute pretty green logo we will not be able to sell. Say bye-bye to the small mom and pop shops. There are many other reasons why eco-labels are flawed. The more we dig the more we’ll find how corrupt the green movement has become. “Third-party” means nothing! Heck, “third-parties” take money for their verification services. Most “third parties” are not being audited themselves, or not accredited, or have created a bogus process so they can claim they have integrity. Should we trust such a system just because it’s called “third party”. I choose not, because the bottom line of a business is to make money, and money tends to corrupt even the best of us, greenie or not.

    • James

      Sadly, I would agree with you Frank – third-party means virtually nothing. I have been investigating the so called “Gold Standard” eco-labels (E.G. Marine Stewardship Council) and can testify to the fact that they do not deliver on their promise of buying “guilt free” products.