Trust Marks 2.0

24 Jun 2011 – Patrin Watanatada

I write this on the plane back to London from a wonderful (if logistically bumpy – thank you State Department and friends for getting me home!) trip to the States, where we kicked off our Signed, Sealed… Delivered? research by running sessions at Sustainable Brands 2011 in Monterey, California (hosted by KoAnn Skyrzniarz and team at Sustainable Life Media), Starbucks (hosted by Ben Packard and Colleen Chapman of the Starbucks global responsibility team) and Method (hosted by director of sustainability Drummond Lawson – see my colleague Mark Lee’s blog for a recap).

With the wonderfully diverse set of B2B and B2C (food & beverage, retail, paper, household & personal care, biotech, industrial materials and carpet) and functional perspectives represented (from procurement to brand & marketing), our goal was to explore the following questions:

• What are the benefits and limitations of the traditional certification or eco-label model? Our research participants agreed: labels and certifications have done a lot to set common goals and standards, to foster partnerships and collaboration, and to create trust and raise awareness. But they’re not perfect, and things are different now. Is it time to evolve the model?
• What should the next generation of “trust marks” look like? What’s the full toolkit for communicating product-level sustainability performance and influencing behavior change in a credible and compelling way?
• What must we address in our research? What issue or answer would most help you in your work?

The challenge lies in a familiar tension: the pre-competitive vs competitive

My biggest takeaway? The challenge for the traditional 3rd-party eco-label or certification is an inevitable tension between the need for:

1. A common set of standards to guide and drive performance on the one hand; and,
2. Differentiating, brand-specific attributes to create consumer pull – and value for the business.

There are very real costs associated with 3rd-party eco-labels and certifications, for both suppliers and producers: fees associated with auditing, certification and licensing, the time it takes to report data. To succeed, trust marks need be able to generate both a social & environmental and a commercial return on those investments. But our research participants perceived a number of challenges in generating that return:

• Sheer number is inefficient: With trust marks proliferating, too many are chasing the same goals, while regionally specific standards pose harmonization challenges.

• Can discourage innovation: Standards requiring specific technologies don’t allow for new ones. And it’s no fun to design to some of these standards, especially if consumers aren’t even interested in them.

• Difficult to distinguish stellar performers: Pass-fail labels don’t allow superior performers to differentiate themselves, since everyone who meets the minimum requirements is marked in the same way. (Excuse to tell an amusing anecdote: This assumes that the people looking at the eco-label know what it means. Said one participant from a paper company, “My neighbors think that the FSC label has to do with direct marketing.”)

• Tough to prove that it’s a purchasing driver: It’s perennially difficult to link eco-labels directly to purchasing behavior.

• Difficult to create distinctive assets for the brand: From a brand perspective, 3rd-party eco-labels have a built-in shelf life: the more successful they are at raising supply and production performance standards across a category, the less of a differentiator they become. They also tend to lead on functional attributes, shortcutting the emotional communication of sustainability.

Traditional labeling & certification: let’s amplify what works

As Forum for the Future’s Sally Uren remarked at our Sustainable Brands session, “We need to take what works and amplify it.” Our participants suggested that traditional eco-labels and certifications have worked best when they:

• Set a level playing field for safety and technical performance: Standards such as the ASTM International materials or UL product safety standards have become requirements for global market entry, but do not attempt to serve as differentiators (although UL started that way in 1894, and UL’s path is one we will be looking at more closely).

• Are based on efforts to collaborate across a value chain to define a new industry: LEED came up a couple of times as an example of one standard that has worked very well by building a constituency of designers, developers, manufacturers and construction firms to define a greener building industry. (My thought when I heard this: there’s something interesting about industry power structure, much more equal for building than for the food & beverage industry where individual farmers and consumers have much less power than the businesses in the middle.)

• Lead to new ways of thinking: As controversial as carbon labels have been, they’ve encouraged the businesses using them to start thinking in terms of life-cycle impacts and carbon hotspots along the value chain.

• Use criteria structured in such a way that brands can differentiate themselves based on performance: For example, the European Union home appliance energy efficiency labels has A to G tiers. Retailers have used these to differentiate themselves by advertising that they carry only the more efficient tiers, for example.

• Lead on “in me, on me, around me” performance attributes: The most successful B2C labels are the ones that speak to “what’s in it for me,” such as Energy Star, organic, or the UL safety marks. “At our company we think of this as ‘my environment’ versus ‘the environment,’” said one participant.

What’s next for our research?

In a sentence, the biggest research ‘ask’ from our participants was: “Look more closely at transparency, trust, and what really gets consumers to change and people to act.”

From QR codes to Bhopal-style crises, from social media to the future of the shopping experience, we’ll be taking a look at the drivers of consumer awareness and behavior change. And we’ve got lots of other fascinating questions to dive into, covering the full gamut of improved performance standards, trust and transparency, and consumption behavior.

Stay tuned for future blogs, join our research team (@patrin, @markpeterlee, @heatherkmak and @moshawaf) on Twitter at #beyondlabels, and do get in touch with Patrin Watanatada or Mark Lee if you’d like to contribute to sponsorship or have ideas.