Corporate commitments such as science-based targets are a great way to set the ambition and outline a vision for the direction of the company. But organisations need to communicate the green credentials of their products effectively in order for customers to understand these commitments and what they mean for individual products and services.
For this reason, the topic of carbon labelling has recently gained a lot of momentum with Quorn adopting a carbon label on its packaging and Unilever’s ambition to communicate the carbon footprint of all their products. While there is no clear answer to whether labelling is the right way to go, there is certainly a demand for increased communication on what companies are doing to tackle climate change. This blog post explores how to credibly communicate the green credentials of products.
Environmental labelling is where a company indicates better environmental performance across the lifecycle of a certain product compared to a group of similar products. To be a comprehensive environmental label, organisations should take a multi-criteria performance approach and communicate this clearly.
There has been a proliferation of environmental labels, over 450, spanning many different countries, types and criteria, with some well-known examples of ecolabels including the EU Ecolabel, the Nordic Swan and the Hungarian Eco-Label.
These examples are all created by a third party that certifies the product based on set criteria and awards a licence for the use of the label. Organisations can, however, create their own labels.
Carbon labelling is used to label consumer products with the amount of carbon dioxide involved in producing, transporting and, sometimes, use and disposal of a consumer product. An example is the use of carbon dioxide equivalents (CO2e) labels on Oatly products.
These type of claims are “self-declared” by manufacturers or associated businesses and are made without independent third-party certification, however, the claim must still be verifiable. This type of claim should apply terms such as “compostable”, “recyclable”, “recycled content” and avoid the use of vague or ambiguous claims such as ‘environmentally friendly’ or ‘more sustainable’.
Some high profile examples include; Head & Shoulders aiming to use up to 25% recycled plastic in their shampoo bottles, Colgate’s recyclable toothpaste tube, and Nestlé’s biodegradable snack packaging.
Environmental product declarations, or EPDs, provide quantified information on a product or service’s performance. While many associate making green claims with consumer products, this does not necessarily have to be the case. There are many methods and approaches that are relevant for B2B companies. Environmental Product Declarations are a great example of this and are becoming an increasingly popular way of describing the environmental credentials of materials in a supply chain.
EPDs are particularly used for building materials. In France, for example, it is a requirement that an EPD is registered in the national database before the manufacturer can make any environmental claim on the product. This type of communication should consider all relevant environmental aspects of the product throughout its life cycle and should typically go beyond just carbon to cover environmental impacts such as eutrophication, acidification, particulate emissions etc.
Sustainability is becoming an increasingly important part of consumer purchasing decisions. In the period 2013-2018 it has been found that products marketed as sustainable grew 5.6 times faster than other products. It is anticipated that the US market for sustainable products will reach 25% in 2021 representing $150 billion.
Of the options for communicating a product’s green credentials, carbon emissions labels have been heralded by many as a clear way for consumers to quantify the impact of different products. Enabling consumers to know the carbon produced as a result of the product, allows them to make low-emissions choices. For this reason, the topic has also been widely studied with some research finding a strong public demand for carbon labels, whereas others found that labels do not play a major role in consumers’ food choices.
The varying results for carbon emissions labelling can likely be linked to consumers finding it challenging to understand the meaning of grams of carbon dioxide and that emissions of food are frequently underestimated. More easily comprehensible ways of labelling such as a three-tier “traffic-light” scheme have been suggested, also showing better performance compared to alternative types of labels.
The effectiveness of such labels in changing purchasing patterns has been found to be very small unless the product is also competitively priced. Additionally, it may be challenging obtaining enough information to make enough products comparable in order for a traffic-light system to work effectively. This was one of the reasons for Tesco abandoning their target of adopting carbon labels.
With the recent attention that plastics and packaging have received, self-declared claims that focus on this issue can also be an effective way of communicating action. Studies have found that such claims can have equally positive impact on consumer preferences if done right.
However, when making changes to packaging it important to consider the lifecycle impacts to avoid displacing one sustainability issue with another. Unilever’s sustainability report, for example, includes ambitious targets for reducing waste and virgin plastic use. At the same time, Unilever seeks to avoid unintended consequences by deploying lifecycle assessment when making decisions on alternative materials.
Environmental Product Declarations (EPD) are an effective way of supporting B2B customers in reducing supply chain emissions through their ability to communicate objective information. This is important given the challenges of tackling supply chain emissions, which on average are 5.5 times higher than direct operations’. Two great examples of companies already doing this are Iggesund and MetsäBoard, which are both able to provide customers with product-specific environmental declarations in line with The Confederation of European Paper Industries (CEPI)’s carbon footprint framework. With the aim of getting to Net Zero, it will be essential for companies to obtain products and services that are also Net Zero, therefore driving change outside of their own direct boundaries.
We suggest that communication of a product’s green credentials is not done in isolation by either the sustainability team nor the marketing and communications departments. Instead, marketing’s knowledge of the consumer base, sustainability’s understanding of the current actions and R&D’s product data should be integrated to capture the growing opportunity sustainable products and services present. Combining these different knowledge-bases will allow organisations to better market their green credentials and wider sustainability efforts for consumers understanding.
For example, if a consumer base is known to be sensitive on price, it should not be expected that carbon labels or claims will make it possible to charge an additional premium. Instead, the organisation can use its sustainability communication as a differentiator against competition.
Another example would be if the consumer base has a high proportion of Millennials. Millennials generally show higher concern for sustainability and 75% say they are likely to change habits to reduce their environmental impacts. In this case, a label on its own likely presents too little information. Instead combining existing labels with more informative claims may be more effective.
At SE Advisory Services, we’ve been helping companies of all sizes and across most industries with these issues for over 15 years. Get in contact for expert advice on any aspect of the process of positioning your organisation as a sustainability leader.
This article on credibly communicating your product’s green credentials was written by Lau Tambjerg, Sustainability Consultant at SE Advisory Services UK
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