News & Events / Making Sense of Eco-labels: A Primer on “Green” Seals of Approval
Making Sense of Eco-labels: A Primer on “Green” Seals of Approval
Beveridge & Diamond, P.C., February 23, 2010
The demand for environmentally responsible products and corporate practices remains strong despite the current economic climate. According to a survey by Green Seal, an environmental certification organization, 82% of consumers buy “green” products and services.1 As a result, companies continue to flood the marketplace with such products and actively assert environmental marketing claims. In an effort to gain increased credibility for their green claims, companies are increasingly turning to third-party environmental certification programs (or seals of approval) to distinguish their products in a crowded green marketplace and gain competitive advantages. While such certification programs have proved beneficial in helping consumers identify environmentally preferable products or features, the overabundance of such programs has led to confusion and skepticism.2 Businesses using third-party environmental certification programs should be mindful of the standards behind these various programs and the legal risks associated with deceptive environmental labeling.
Environmental Labeling Basics
Environmental labeling is the practice of identifying products based on a wide range of environmental considerations.3 The term “environmental label” can encompass a broad array of classifications, ranging from mandatory labels, e.g., those required by EPA, to individual corporate-based programs, e.g., Home Depot’s Eco Options, to voluntary, third-party verified certification programs, e.g., the United States’ Green Seal or Norway’s Nordic Swan. Labeling programs most relevant to corporate green marketing initiatives are comprised of the latter – commonly referred to as seals of approval or eco-labels.4
The International Organization for Standardization ("ISO") standard 14024:1999 classifies a third-party environmental certification as a “Type I claim”, defining it as “a voluntary, multiple-criteria based, third party program that awards a license which authorizes the use of environmental labels on products indicating overall environmental preferability of a product within a particular product category based on life cycle considerations.”5 The Global Ecolabelling Network ("GEN"), a non-profit association of third-party, environmental performance recognition, certification, and labeling organizations, has adopted the principles set forth in ISO standard 14024 as a “code of good practice to guide ecolabelling program designers, developers, managers, and operators.”6 Companies seeking credible environmental labeling programs for purposes of green marketing may want to focus on voluntary, third-party certification programs, but also be aware of their various characteristics and costs.
Determining the best or most appropriate eco-label for a particular product or business may be difficult, as specific product categories and evaluation criteria vary between programs. Common standards, such as energy efficiency, recycled content, and compliance with industry standards, are present among most or all of them. But the specifics of those common standards and the environmental attributes considered for each product may differ. The following chart compares the standards considered in certifying, for example, printing and writing paper under the U.S. Green Seal certification and the Canada-based EcoLogo certification.
Similar criteria apply to products across the board – including office supplies, construction materials, and cleaning products. As a result, companies should center their attention on which certification programs might be most suitable to their needs rather than attempting to harmonize the various programs.
In doing so, businesses should also be mindful of the varying fees associated with each program. Using the above example, Green Seal’s certification fee ranges from $3,000 to $9,500 depending on the applicant’s revenue and the number of products under consideration.9 EcoLogo’s initial certification fee ranges from $1,500 to $5,000 depending on the type and number of products.10
Legal Implications of Environmental Labeling
The Federal Trade Commission (“FTC”) Guides for the Use of Environmental Marketing Claims (“the Green Guides”), 16 C.F.R. Part 260, provide interpretive guidance on the use of environmental marketing claims, including claims made in labeling.11 In Complying with Environmental Marketing Guides, the FTC staff specifically address eco-labels:
Broad, vague, unqualified, and/or unsubstantiated claims may run afoul of the Green Guides, subjecting companies to complaints from the FTC or various self-regulatory organizations, such as the National Advertising Division of the Better Business Bureau. Companies should also be cautious in communicating green labeling claims in light of the FTC’s recent activity in bringing environmental marketing enforcement actions.13
Environmental labels that give a false impression of a credible third-party verified certification may also face scrutiny. In April 2009, TerraChoice Environmental Marketing, a prominent U.S. environmental marketing agency, published The Seven Sins of Greenwashing as an update to its 2007 publication, The Six Sins of Greenwashing.14 The new addition: The Sin of Worshipping False Labels. This seventh sin is committed by a product that “gives the impression of third-party endorsement where no such endorsement actually exists.”15 First-party labeling claims run the most risk of this type of greenwashing. As a result, company-based environmental labels should be used with qualifying language and substantiated by sound scientific evidence. In addition, general environmental benefit claims should not be used in conjunction with certification-like images or graphics. Legitimate third-party eco-labels and adequately qualified and substantiated first-party environmental labels offer a reduced risk of greenwashing.
A Sampling of Eco-labels
When considering environmentally preferable products, “eco-labels can increase trust and confidence in ‘green’ products. In fact, 88% of purchasers use and/or recognize at least one eco-label.”16 However, the amount of third-party environmental labels in the marketplace is high and continues to increase, making it difficult for companies to decipher their differences. Consequently, businesses serious about green marketing should become aware of what is considered a good, independently verified eco-label and what is not.
The following chart provides a sampling of well-developed third party verified eco-labels from around the world. Also included are the ten most recognized eco-labels in the United States.
The listings below are those identified in a 2009 TerraChoice Environmental Marketing Eco Markets Summary Report.17
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1 Green Seal, 2009 National Green Buying Research, http://www.greenseal.org/resources/green_buying_research.cfm.
2 See Committee on Certification of Sustainable Products and Services, Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop (2010), http://www.nap.edu/catalog/12805.html.
3 For a dated but extensive review of the issues involved in environmental labeling, see EPA, Environmental Labeling Issues, Policies, and Practices Worldwide (1998), http://epa.gov/epp/pubs/wwlabel3.pdf. For a discussion of third-party certification of sustainability claims, see National Research Council, Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop (2010), www.nap/edu/catalog/12805.html
4 For an extensive discussion on eco-labels, see UNOPS, A Guide to Environmental Labels – for Procurement Practitioners of the United Nations System (2009), http://www.ungm.org/Publications/sp/Env_Labels_Guide.pdf.
5 See GEN (citing ISO standard 14024:1999, http://www.iso.org/iso/catalogue_detail.htm?csnumber=23145).
7 Green Seal Environmental Standard for Printing and Writing Paper (1999), http://www.greenseal.org/certification/standards/gs-7.pdf.
8 EcoLogo, Certification Criteria Document (1998), http://www.terrachoice-certified.com/common/assets/criterias/CCD-077.pdf
9 Green Seal, Green Seal Product Certification Fee Schedule (2007, last updated 2009) http://www.greenseal.org/certification/gs_certification_fees.pdf.
12 FTC, Complying with the Environmental Marketing Guides, http://www.ftc.gov/bcp/edu/pubs/business/energy/bus42.pdf.
14 TerraChoice Environmental Marketing, The Seven Sins of Greenwashing (2009), http://sinsofgreenwashing.org/?dl_id=2; TerraChoice Environmental Marketing, The Six Sins of Greenwashing (2007), http://sinsofgreenwashing.org/?dl_id=3.
16 TerraChoice Environmental Marketing, Eco Markets Summary Report (2009), http://www.terrachoice.com/files/2009%20EcoMarkets%20Summary%20Report%20-%20September%2018,%202009.pdf.