Signed, Sealed… Delivered? Behind Certifications and Beyond Labels

Drawing on over 85 expert interviews, Signed, Sealed… Delivered? explores the value and challenges that businesses find in using certification and labeling as tools to improve economic, environmental and social outcomes across global value chains.

Certification, labeling and the standards-setting organizations behind them have been pioneers in building a more sustainable economy. For businesses, they provide a credible, consensus-set reference point for collective action, access to expertise and networks, and can spur demand for certified or labeled goods. But the very traits — governance and inclusiveness — that make consensus-based standards so useful as credible mechanisms for collective action also pose challenges for businesses seeking to move quickly and to differentiate themselves in the marketplace. And like any tool, certification and labeling have limits — including limits to scale.

Watch the summary video (put together by the brilliant Geoff Kendall) or download the full report from SustainAbility here.

Questioning and evolving the eco-label

[This blog originally appeared on Guardian Sustainable Business.]

In the last fifty years, the value of internationally traded goods has increased from less than a fifth to more than half of world GDP. A couple of years ago, a shipping container followed by the BBC went twice round the world in a year, stopping at Scotland, Shanghai, Brazil and Los Angeles along the way. Whereas a century ago we might have known where, how and who produced the things we eat, wear and use, in so many instances today all we know is what we’re told. And how can we be sure that what we’re told can be trusted?

Cliff Burrows, president of Starbucks, acknowledges that trust is critical as we seek to move to more sustainable business models: “Customers have demonstrated that they are more likely to buy products and services from companies they trust.”

Enter the eco-label: an independently verified, on-pack label that tells the consumer a product was produced (think Fairtrade or organic) or can be consumed (think nutritional labels or Energy Star) in a more sustainable way. It’s a powerful idea that combines sustainability standards-setting and branding, underpinned by the credibility of an independent body.

But 33 years after Germany’s Blue Angel, the world’s first eco-label appeared, the time is ripe for asking: How well has the eco-label lived up to its ambitions? And how does the model need to evolve to accelerate more sustainable modes of consumption as 7 billion of us, and counting, bump up against the limits of the planet’s natural resources?

Certainly, many eco-labels have done a great deal to raise awareness and to create trust, to change what we expect from certain product categories, and to build capacity and create a common framework around sustainability. Consider the success of the Fairtrade movement in the UK, where sales of products topped £1bn in 2010 and the 15th annual Fairtrade Fortnight is now drawing to a close.

But as Burrows notes, the eco-label model may have become too successful: “A wide array of certification programs has been developed, creating confusion among customers and undue burden on farmers. The industry needs to better understand what is meaningful to customers and works best for producers.”

And it’s not just the food and beverage industry that is affected. As of today, the Ecolabel Index lists 377 schemes in 211 countries and 25 industry sectors, from Italy’s 100% Green Electricity to New Zealand’s Zque natural wool label. In January alone, we saw announcements on a new label for wind energy, another front-of-pack nutritional label, and a certification process for conflict minerals.

More worryingly, it’s unclear how much impact eco-labels have really had. WWF’s 2010 review noted “insufficient comparable and meaningful data available” on the impacts of certifications and roundtables. Not only that, impact isn’t always the top priority for businesses: last week’s ISEAL 100 thought leaders survey found that only 56% of those surveyed from the corporate sector saw “improved sustainability performance” as the main benefit of using voluntary standards, while 78% cited “increased operational effectiveness”.

The need to question and to evolve the eco-label model is becoming more acute as global companies begin committing to audacious, long-term sustainability goals and need to find effective ways of delivering, as well as credible ways of communicating what they’ve done. Consider Unilever, which has committed to sourcing 100% of its agricultural raw materials sustainably by 2020. How will the company deliver – and show that they’ve delivered – on this goal when, as of 2009, only 8% of global tea production was certified sustainable according to one of 10 independent standards?

As Jan Kees Vis, Unilever’s global director of sustainable sourcing, says: “Companies and brands are struggling with the question how to mobilise consumers to give preference to products and brands that have the potential to deliver positive social and environmental outcomes. The tools available seem to be labels and brands, and I think there is room in the market for both.”

Eco-labels have started to evolve to meet the challenge: ISEAL and WWF have recently completed major strategic reviews of their voluntary standards and multi-stakeholder initiatives. But we need to step back and consider what eco-labels were designed to achieve in the first place, consider objectively the limitations of the eco-label as a tool, and ask how it can be complemented by other ways of creating trust and influencing behaviour change across global supply chains.

Ultimately, eco-labels strive to accelerate sustainable behaviour. Neither consumers nor producers can be expected to do the right thing unless they know what that is, and eco-labels are to be commended for focusing on this need – as are the global companies who are pushing to make effective use of them.

Patrin Watanatada is leading a project at SustainAbility to explore these issues. Signed, Sealed… Delivered? This can be downloaded here

Links for 18.3.10 [FC heavy]

  • Facebook co-founder and creator Chris Hughes soft-launches – a social networking site that “matches people based on their skills and interests with organizations around the world that need their input”
  • “Infographics and data visualization have reached some kind of tipping point in our world, agreed four of the discipline’s smartest designers at the Interactive Infographics panel at SXSW Tuesday afternoon… Infographics are so mainstream that there are even jokes about infographics.”
  • The World Bank’s excellent Information for Development website
  • The Worldwatch Institute’s intriguing Transforming Cultures and Nourishing the Planet’s blogs on moving from consumerism to sustainability, and sustainable agriculture
  • Twitter launches @anywhere, enabling someone reading a website to mouseover, say, a company’s name and view a pop-up of the latest tweets about that company. Implications for corporate transparency?
  • John (Elkington)’s first Fast Company blog, on the cleantech scene in SF
  • Reading Seth Godin’s Linchpin and can’t get this out of my mind

Hard to swallow, indeed

I don’t think I could have guessed a year ago, when I first applied to work at SustainAbility and decided to go for the position focusing on Food rather than Healthcare — partly because I love food, but mostly because I wanted to work on the other focus of that position, Social Enterprise — how much more than ever I’d be thinking about food in the months to come, and how much I’d start losing my appetite. So many are looking at our food system with a critical eye. Went to see Our Daily Bread at the ICA with Summer last month. Staggering out of the theater an hour and a half later, what struck us both was speed and steel. Later that same week, I came across a piece in the Atlantic Monthly, “Hard to Swallow“, subtitled “The gourmet’s ongoing failure to think in moral terms.”

Organic Thai eats

P’Book and I had a delicious lunch the other day in Bangkok at Anothai Restaurant, an organic, mostly vegetarian café and bakery that’s been around for a few years (second entry on this page). I haven’t had food this good, original and fresh in a while. We had:

  • two tofu appetizers
  • organic salad greens with miso dressing
  • spaghetti with salted fish
  • green curry fried (brown) rice
  • lemonade with mint
  • peach and mint sorbet
  • pumpkin & orange cake with cream cheese topping
  • lemongrass and rose petal tea

I didn’t know that in 2002, Thailand had implemented a five-year masterplan to become a global production center for organic food. Here’s the situation now – growing, but still a long way to go.