May 27th, 2009

Will We See a Federal Eco-Label Program Soon?

As green marketing has proliferated the last few years, so has the number of “eco-labels” competing to be the environmental or socially-responsible equivalent of a Good Housekeeping seal of approval. There are literally hundreds of labels with only a handful known by more than tiny percentage of consumers. And more are coming all the time.

This proliferation has lead to significant amounts of confusion, not only by consumers, but even those in the industries being certified.

We found one humorous example of this confusion. A label calling themselves “Tested Green Certification” states that they are, “endorsed by the National Green Business Association and the National Association of Government Contractors to provide green certification to federal and state contractors as well as other green small businesses.” This claim was then apparently taken out of context and was reclaimed by a supply chain services company who is one of their clients. On its website, the client asserted that it “has been certified by the TESTED GREEN Federal Government certification program” [italics added for emphasis].

While the federal government has organic standards, it has no others related to environmental claims of products or services. There isn’t even any specific regulation on green product claims generally, let alone eco labels other than “organic.”

Instead, there are just unenforceable Federal Trade Commission guidelines (more than 10 years old and in the process of being updated) and false advertising laws that cover broad areas and often put the burden on those they’re meant to protect to prove claims are misleading.

The confusion the numerous eco-labels bring makes it difficult for consumers to intelligently compare the differences in businesses’ numerous environmental or social claims. As a result there is some skepticism and distrust of such green claims and eco-labels.

Green businesses and their marketers, now realizing the problems of greenwashing, are looking for the most credible eco-labels. As Kevin Owsley, owner of Cleanpro USA LLC, of Scottsdale, Ariz., joked with the Wall Street Journal, “If you want green certification bad enough, you can get it… I could buy some of these companies a case of beer, and they’d give us a certification.”

In response to the confusion and misleading claims, Diane Feinstein, chairwoman of the Senate Rules and Administration Committee, had circulated late last year a draft bill that could eventually become a de facto federal mandate for eco-labeling. While she has distributed draft language to other Senate offices, only a leaked copy has provided any clues to the details. They include:

• An Environmental Protection Agency (EPA) voluntary program to award environmental impact approvals to consumer products.
• Accurate, science-based criteria for green labels.
• A 13-member decision-making board, chaired by an EPA official and with members from manufacturing, environmental, consumer, scientific and labor groups.
• “Product certification centers” that would establish eco-label criteria for specific product categories and award green label status to products on the basis of their “potential to reduce negative environmental impacts.
• Eligible products would be those that present “a significant potential to effect environmental improvements through consumer choice.”

Feinstein’s program is intended to recognize consumer products that are environmentally preferable over others throughout their life cycle. While the senate has been publicly quiet on their efforts, some believe the bill may be introduced this year.

Thanks to my intern, Tiffany Fox, for her research efforts on this piece. We’ll soon be putting out a white paper on eco labels to help guide businesses. Stay tuned!