This is the second post in the ecolabels series. Check out the first post about the history of ecolabels and sustainability standards.
The Ecolabel Index is tracking 457 ecolabels in the world market in 2020. As a producer, a manufacturer or a consumer, how can you tell if an ecolabel is better than others?
To evaluate the impact of an ecolabel, we must look at the features of its sustainability standard. Remember; an ecolabel is only the image. The real impact of this movement comes from the sustainability standard that an ecolabel represents.
How do sustainability standards work?
A sustainability standard specifies how a product must be created without environmental and social harm. If the sustainability standard is good and effective, it creates significantly better environmental and social impacts.
Why should you care about the effectiveness of a sustainability standard?
Knowing what makes an effective sustainability standard gives you, as a consumer, the ability to evaluate the environmental and social impact of your purchases. You will be able to assess any ecolabel’s standard and choose the products with the most reliable and impactful ecolabels.
Similarly, knowing what makes an effective sustainability standard gives producers and manufacturers the power to choose the best standard for their businesses. Using an ecolabel backed by an effective sustainability standard gives them credibility and the authority to charge high premiums on their products.
The 10 features of an effective sustainability standard
By analyzing the literature on sustainability standards, I’ve distilled 10 specific features for you to keep in mind as you compare ecolabels and their standards.
An effective sustainability standard is:
- Clearly defined with specific requirements
- Constantly improving
- Clearly defined with specific requirements
The intention behind the sustainability standard—whether it be for fair working conditions or for energy efficiency—must be clearly defined. All the requirements of the standard must achieve this intention and must not contain extraneous conditions.
A multi-attribute standard that addresses overall environmental and social improvement can have a wide range of conditions. However, they must still meet the specified goal.
The sustainability standard must be developed with the consensus of all stakeholders. It should be available for everyone to review. The result of verification exercises must be publicly shared.
Castka and Corbett 2014 found that government and media stakeholders perceive transparent standards to be better. Their perceptions are important, because government or media endorsement is an enormous factor in shaping public opinion about anything in today’s world!
For a producer or manufacturer, following a sustainability standard must not be too expensive, too complicated and too time-consuming. So, the standard must require minimal paperwork, straightforward implementation procedures, regular training, reasonable transaction costs and low opportunity costs. It shouldn’t be too difficult to obtain the ecolabel.
It also shouldn’t be too easy to obtain the ecolabel! Ecolabels must only be provided once the producer meets all the mandatory criteria of the sustainability standard. The criteria must also be efficient enough to significantly improve the environment and society.
All the stakeholders, regardless of their location, must be able to apply the sustainability standard in their operations and achieve their sustainability goals.
Local adaptations of the standard may be developed wherever necessary. For example, a sustainable tea production standard may require 40% shade tree cover per hectare of the tea garden. But if the growers in a country use machines for plucking tea leaves, shade trees are a hindrance. So, the standard must permit these growers to have a lower shade tree cover—without compromising the sustainability goal—and award them the ecolabel.
The standards must be easily found, and its intentions and impacts understood by stakeholders. This will allow them to choose ecolabeled products over other alternatives. Would you trust what you don’t understand?
As far as possible, the parameters of the sustainability standard must be quantifiable.
Even qualitative data should have measurement protocols. This generates specific and comparable data, which enhances credibility and helps identify areas of improvement.
For example, it more effective to claim that a product is 20% more energy efficient than its alternatives, rather than to claim that the product is “highly” energy efficient.
Whatever is measured, must be verified. This is becoming increasingly necessary in a world where many ecolabels and its users make exaggerated claims of sustainability.
As a conscious consumer, you want to verify the claims made by the ecolabel. If an ecolabel claims that the product is made of 100% recycled materials, then you should be able to trace the source of the product and check if this is true. Likewise, if an ecolabel claims to sequester 50 tons of CO2e per hectare, you should be able to look at the specifications of the ecolabel’s standard and calculate if this is (theoretically) possible.
Many of us don’t have the time or the energy to track and verify each claim. Therefore, third-parties (who are neither the applicant that gets the ecolabel nor the organization that awards the ecolabel) must test the applicant’s compliance as well as the effectiveness of the sustainability standard. These tests, called audits, verify the sustainability claims. Audits must be undertaken regularly and rigorously, and the results must be made available to the consumers.
Traceability is closely tied to verification.
Consider Adam, a table manufacturer. Adam sells a finished wood product: his table. Who is to know if the timber he used came from a sustainably managed forest or not? Sustainable timber is expensive, so he reduces his costs by mixing some unsustainable timber, claim to be sustainable and earn the premium attached to the ecolabel! Without traceability, he could easily get away with this.
A good sustainability standard certifies the entire supply chain and makes sure that every step of the chain is sustainable. Standards achieve this through Chain of Custody (CoC) certification. If Adam wants to claim that his table is made from sustainable timber and use a relevant ecolabel, he must get a CoC certification for his business from that ecolabel. The standards under the CoC certification would mandate that he source all his timber from a recognized, sustainably managed forest.
Adam’s table would then have a tag—like a batch number—that would show who made the table and where the wood came from. It would allow you to reach Adam’s workshop. You can confirm that Adam is a certified manufacturer. The tag would then direct you to the forest manager who sold Adam the timber. You can then check if the forest manager is practicing sustainable forestry.
- Constantly improving
Improvement has two dimensions. 1) The standard itself is updated regularly and 2) The ecolabel users show improvement in the measured parameters. Stakeholders should encourage improvements at every opportunity.
My analysis matches ISEAL’s 10 credibility principles: sustainability, improvement, relevance, rigor, engagement, impartiality, transparency, accessibility, truthfulness and efficiency.
The next time you are researching ecolabels on your products, check for these 10 features. If they are present, you can safely believe in these ecolabels!
Unfortunately, it’s not enough to have an effective sustainability standard to succeed in the market. In the third post of the ecolabels and sustainability standards series, we discuss the 2 additional ingredients—authentic communication and skillful information design—to convince consumers to buy ecolabeled products.