Eco labelling: An overview of Eco-

standards, Certification and Labels

P
Pre-work for today’s
class
Mandatory:
1. Case: Poppy Barley: weighing the costs and benefits of sustainability
certification, Ivey,W18441 – Read carefully and discuss in groups

Recommended:

1. Bini, Laura & Belluci, Marco 2020 – Chapter 2

2. Galarraga Gallastegui, Ibon. "The use of eco‐labels: a review of
the literature." European Environment 12, no. 6 (2002): 316-
331.

2
What is EcoLabel? Why is it
needed?
An ecolabel is a label which identifies overall
environmental preference of a product (i.e. good
or service) within a product category based on life
cycle considerations – Global Ecolabelling Network
(2004)

 Communicates verifiable and accurate information (that’s not

misleading) on environmental aspects of products & services

 Differentiates products/services from competition in same

category

 Generates awareness on environmental and social issues

 Encourage demand and supply for such products

 Stimulate potential for market-driven continuous

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Standards, Accreditation, and
Ecolabels

Standard-Setting Accreditation Certification /

Ecolabel

Standards are like the training regime you

follow.
Ecolabel is the medal you get for completing
the regime so you can show the world!
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 ISO Eco-Labelling
Standards
Type 1: voluntary, multiple-criteria based, third party program that
awards a license which authorises use of environmental labels on
products
– ISO 14024:2018
– whole product life cycle are taken into consideration
– awarding body may be either a governmental organisation or a private non-
commercial entity
– E.g. EU Eco-label, German Blue Angel, Nordic Swan, Indian Ecomark

• Type II: “self-declared” environment claims, usually single attribute

– ISO 14021:2016 – Environmental labels and declarations – Self-declared
environmental claims
– responsibility to ensure a claim is accurate resides with the claimant
– describes a general evaluation and verification methodology for self-declared
environmental claims, as well as specific methods
– E.g. recycled content, recyclability or bio degradability of the product

• Type III: quantified environmental information (report

– ISO
cards 14025:2006
/ information labels) under predefined criteria
– impact on bio diversity, instructions & limits for efficient use, or hazard, etc. is
also
given, where relevant 5
ISO Eco-Labelling
Standards

6
Types of
Standards

7
Today’s
A genda
• Weighing the pros & cons of certification:
Case: Poppy Barley

• Select Popular Regional Eco-

Labels
– Blue Angel, Germany
– EU Ecolabel
– Ecomark, India

• Key Issues in adoption of eco-

labels

8
Case: Poppy Barley – Weighing Costs and Benefits
of Sustainability Certification
About Poppy Barley
• Founded by Justin & Kendall Barber (sisters) in 2012 in
Edmonton, Alberta, Canada
• Custom ‘made-to-measure’ footwear retailer (niche
mkt)
• E-commerce operations initially but later expanded
brick-
and-mortar stores across Canada
• BY 2017, repositioned to mainstream market
– majority of footwear revenue from in-stock standard sized
– 25% of revenues from accessories & small leather goods
e.g. handbags
• Aimed to become next national Canadian footwear 9
Case: Poppy Barley – Weighing Costs and Benefits
of Sustainability Certification
Sustainable Business Practices
• Sisters felt passionately about corporate social responsibility – core
of
Poppy Barley’s identity
• Since beginning, sourced only from factories that provided
employees with “living wage, reasonable working hours, and safe
working conditions” (difficult to find)
• After Rana Plaza incident, high pressure on brands and retailers on
ethical practices
– Poppy Barley published a Factory Transparency Report disclosing info
on wages, vacation, work hours, etc
– Hired full-time staff in Mexico to communicate with factories to
ensure
quality and good employment practices
– Full-time
Gettingemployees encouraged tocertification
a sustainability donate time withwould,
paid leave
however, require a more careful analysis and
organizational commitment (incl many changes to 10
Case Facts: Poppy Barley 2017 Sustainability
Goals

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Case Facts: B Corporation
certification

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B Corporation
certification

https://www.youtube.com/watch?v=GP69PNzO Q1U

13
Case Facts: Fairtrade
certification

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Fairtrade
certification

https://www.youtube
.com/watch?v=VFR_KlEbp4Q&t=3s
15
Case Facts: Leather Working Group
membership

16
Case Questions for Reflection and
Analysis
• What are the major considerations / factors that
Poppy Barley should keep in mind to evaluate “whether
to pursue certification”?

• Should Poppy Barley pursue a sustainability certification

right now? If so, which one (and why)?

• How can Poppy Barley expect sustainability certification

to affect its triple bottom line?

17
Some Key
Considerations
• Affect on consumer demand and perceptions
• Management bandwidth including founder’s time – to
get
certification and keep it updated
• Changes to company’s practices including source
factory
• Costs of certification
• Timing and stage of business - Resource and focus
diversion from other initiatives e.g. company growth
and expansion
• Motivations of the founders and company
vision/mission
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Comparative
assessment
Certification Merits Issues / Challenges
B Corporation • Sustainable brand for • Application cannot be
entire company (not just delegated
footwear) • Requires changes in
• Well-recognized label practices to meet
• Flexible – 80/200 pts minimum points needed
needed for certification
• Clear framework for • Some required practices
continuous ma not be meaningful to
improvement Poppy Barley’s context
• Access to global network
of like-minded
companies
• Affordable, sliding scale
Fairtrade • Sustainable brand for • Factory, not Poppy Barley,
factories to
• Well-recognized be certified
• Would attract new • Certification largely out of
customers Poppy Barley’s control
• Ensures factory workers are • Costly – 4% of annual cost of
paid fair wages & have goods per factory
good working conditions
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• Sustainable brand for • Not as well recognized
 What happened at Poppy
•Barley
Owners decided to pursue B Corporation certification immediately
& LW G Gold status after the min 5 year period
• Fairtrade was costly and too out of control of company
• B C orp was a comprehensive assessment – governance,
people, community, environment, customers
– Scores need not be minimum requirements but can be pushed
to score
highest possible in each category
– Required new approaches, screening tools, and relationships
with factories
• Whether it affects sales, remains to be seen (as of case
writing)
• By 2022
– B Corp is prominently highlighted/marketed
– LW G Gold certified leather tanneries
– Focus on new plant-based leather materials
– Factories certified every years on labour practices
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Today’s
A genda
• Weighing the pros & cons of certification:
Case:
Poppy Barley
• Select Popular Regional Eco-Labels
– Blue Angel, Germany
– EU Ecolabel
– Ecomark, India

• Key Issues in adoption of eco-

labels

21
 Blue Angel, Germany:
Overview
• World’s first ecolabel – introduced in 1978
• Started in aftermath of 1972 ‘Club of
Rome’ where discussion on ‘limits of
growth’ was introduced; advocacy from
consumer groups
• German Environmental Agency -1974
founded after environment program of
German govt unveiled in 1971
• Stern resistance and opposition from
major industrial groups in Germany
• Over 12,000 products and services from
over 1,600 companies have been awarded
with the Blue Angel.

Source: https://www.blauer-en 22
 Blue Angel, Germany:
Process

Owner:
Environment
Ministry

Professional
expertise: German
Environment Agency

Independent Auditor Independent Decision

inspects adherence Makers:
and manages Environmental Label
contracts Jury
Source: https://www.blauer-en 23
 Blue Angel, Germany: Process &
C osts

 Online
application
based on
product/
service
category

 A one-off fee
of 400 EUR
(plus VAT) for
processing the
application

Source: https://www.blauer-en 24
 Blue Angel, Germany:Value
Proposition

 ‘Good for me. Good for the environment’

 ‘If you use products or services holding the Blue Angel ecolabel, you
can be sure that you are doing something good for yourself, the
environment and the future’
https://www.youtube.com/watch?v=aHlOXQLmmL0
Source: https://www.blauer-en 25
 Blue Angel, Germany:
C overage

Source: https://www.blauer-en 26
Blue Angel, Germany: Company
Demand

27
Blue Angel, Germany: Consumer
Adoption

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 E U Ecolabel
 It was started in 1992 as a regional
eco labelling program for Europe
 Regulated by European Parliament
and EU
Council
 Voluntary, multi criteria, third party
verified
 Considers life-cycle assessment -
Raw material extraction, to
production, distribution and
disposal
 Impact Claims
o Minimises the use of hazardous
substances
o Where cardboard boxes are used, Eco-
labelled light bulbs use at least 80%
recycled packaging
o W all paints use ten times fewer
Source: volatile organic compounds than
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http://ec.europa.eu/environment/ecolabel
 E U Ecolabel

Source:
30
http://ec.europa.eu/environment/ecolabel
 E U Ecolabel
 Based on turnover, annual fee ranges between 500
to 25000 euros per product based across
countries

 Application Fee is additional ranges between 200

to 2000 euros

 Not as strong as some of the country

specific programs like Blue Angel or
Nordic Swan

 Bureaucratic, complexity and rigidity some

of the
lacunae

 Only 48% people recognise it across

Source:
31
http://ec.europa.eu/environment/ecolabel
 Ecomark,
India
 Government of India launched this scheme in 1991
for Labelling of Environment Friendly Products
 Managed by BIS
 Eco Mark logo has to be used with ISI mark
 The criteria are based on the cradle-to-grave approach,
i.e. from raw material extraction to manufacturing and
to disposal
 Range of products -Soaps and Detergents,
Paints,Paper, Packing/Packaging Materials
 Exemption of 50% fee in the consent/renewal of
consent under Water Act / Air Act for Eco Mark
label industries
 BIS standards a preliminary standard to apply for
ECO Mark
 Non participatory approach for development of 32
Source: https://
Today’s
A genda
• Weighing the pros & cons of certification:
Case:
Poppy Barley

• Select Popular Regional Eco-Labels

– Blue Angel, Germany
– EU Ecolabel
– Ecomark, India
• Key Issues in adoption of eco-labels

33
Key Issues and
Questions
• Are the criteria of eco-labels contributing to
sustainability?
– Most are related to “practical performance aspirations’ rather
than
any systematic consideration of environmental carrying capacity?
– No eco-labels for products with significant env. impacts e.g.
cars, pesticides, etc – may be misleading (or no performance
incentives)

• Do they include stakeholder needs?

– trust issues, especially if the standard-setting
influenced by corporations
– Government or independent initiatives fare better;
diversity of
stakeholder consultations critical

• Do they enable consumer choice?

– Is there a credible differentiation among competitive 34
 Key Issues and
•Questions
Are the outcomes really significant?
– Most impact studies ignore that technology and product
improvements are happening in parallel & would have happened
anyways (even without) the ecolabel?

• Should the criteria be simple?

– Consumers are attracted to simple eco-labels because they provide
for clear decision making, but simplicity can undermine efficacy of
environmental claims
– Criteria consistency and difficulty of making direct functional
comparisons between products can operate against simplicity
aims

• Can the eco-labels be welfare reducing?

– Build entry barriers especially in international trade
– Shifts burden to consumers
• Remember, most ‘sustainable’ product choice is often,
not 35
Pre-work for next
class
Mandatory:
1. Explore https://fsc.org/en
2. Case: Sustainable Tea at Unilever, HBR, 9-712-438 – Read carefully
and discuss in groups (remember appendices)

Recommended:

1. FSC Principles and Criteria for Forest Stewardship Standard

(STD):
https://connect.fsc.org/document-centre/documents/resource/392
2. https://connect.fsc.org/document-centre/documents/resource/277

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THANKS!!

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