How do consumers and institutional
buyers know if something is ‘green’ or ‘ecofriendly’?
As environmental qualities are often
imperceptible in the final product, producers
need to make them visible to consumers.
Many ecolabels and eco-certification
schemes have been launched to validate
green claims, guide green purchasing,
and improve environmental performance
standards. Done well, ecolabels and
eco-certifications can provide an effective
baseline within industry sectors by
encouraging best practice and providing
guidelines that companies must meet in
order to meet a certified standard.
Demand for products with ecolabels is
growing, though confusion about which
companies are truly environmentally
responsible persists. For example, the
numbers of ecolabeled organic food
products and forestry practices have
grown at 20-30% per year since the late
1990s and early 2000s (USDA, 2007). A
2009 Mintel study showed that the green
market outperformed the US economy
as a whole in 2009 and grew by over 40%
from 2004 to 2009.
More than a third of US consumers now
say they are willing to pay a premium
for eco-friendly products (according to a
March 2010 Mintel study). In some cases
this is even higher, for example 53% of
US consumers would be willing to pay a
premium for a greener television, according
to the Consumer Electronics Association.
In the UK, according to a 2009 Carbon Trust
study, 44% of UK consumers want more
information on what companies are doing
to be green, but 70% do not feel confident
about identifying which companies are
Several large companies and government
agencies have recently announced or
improved their green- or eco-purchasing
policies, notably Wal-Mart5, Office Depot,
Mars, Dow, Dell and the US Federal
Government. In order to meet their policies,
these large-scale institutional purchasers
need standards, detailed information, and
proof that a product is green.
The ecolabel and eco-certification
landscape is currently fragmented and
often confusing to institutional buyers as
well as individual consumers. Marketplace
confusion has grown and continues to grow
due to competing claims on what makes a
product ‘green’, especially when there are
two or more competing schemes for the
same sector or product.
Some ecolabels are regionally specific,
while others are global; and some
have stricter criteria than others.
Compounding the problem is a lack of
good quality standardized and comparable
information worldwide. According to
a European market research study
(OECD, 2006), marketing, consumer
confusion and competition between
similar schemes has caused low market
penetration for some ecolabels.
In late 2007, Big Room Inc., a Vancouver
based company, surveyed around 270
ecolabels and published the results to a
website, [www.ecolabelling.org] (now www.ecolabelindex.com). Two years later, the
World Resources Institute, a Washington
DC-based environmental think tank, and
Big Room Inc. began discussing how to
expand and update the data on ecolabelling.
org into a more comprehensive ‘global
ecolabel monitor’. In October 2009, with
support from companies involved with WRI’s
Green Supply Chain Project, the effort was
launched and was sponsored by Wal-Mart,
UPS and UTC with additional support from
Dell, Nike, PepsiCo, Dow and Johnson &
Johnson. This report summarises our findings.