Product Environmental Labels Scoping Study Stage PELS Review The

Product Environmental Labels Scoping Study Stage 1: PELS Review The roles of PELS for sound Life Cycle management of Product Environmental impacts This draft report has been prepared by the Centre for Design at RMIT University, Melbourne by Dr. Ralph Horne, Kendra L. Wasiluk and Helen Lewis In collaboration with Ian Coles, Urban Sustainability Solutions John Gertsakis, Product Ecology Andrew Sweatman, WSP Environmental Prepared for Sustainability Victoria March 30, 2007 Version 2.0 Project Director’s Approval of Final Report This report reaches the quality standard set by the Centre for Design, RMIT University, Melbourne, Australia. Signed QA Review Reviewed by Ralph Horne Helen Lewis Kate Machin Date March 2007 March 2007 October 2007 Release and Revision Record Revision Date 2007 Oct 15 nd Release/Revision Description 2 QA – revisions to grammar/spelling Change Reference KW Authorship Wasiluk, Kendra Horne, Ralph Lewis, Helen CONTENTS 1. 2. INTRODUCTION .............................................................................................. 8 ECOLABELS CLASSIFICATION AND REVIEW............................................. 9 2.1 Background: the need for ecolabels ..........................................................................9 2.2 Overview of product environmental labelling ...........................................................10 2.3 Governance and new environmental policy instruments (NEPIs)............................12 2.4 Trade effects of labelling schemes ..........................................................................14 2.5 Product environmental labelling and consumers .....................................................15 2.6 Competition between labels.....................................................................................18 2.7 Effectiveness of ecolabelling schemes ....................................................................18 2.8 Black product groups and product environmental labels .........................................21 2.9 The Australian consumer .........................................................................................22 2.10 Australian experiences with product environmental labels...................................23 2.10.1 Victorian Green Spot ........................................................................................25 2.10.2 Environmental Choice Australia (ECA).............................................................26 2.10.3 Other labelling programs ..................................................................................27 3. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 SUCCESS FACTORS FOR A RANGE OF ECOLABELS ............................. 28 Blue Angel, Germany...............................................................................................29 EU Flower, European Union ....................................................................................32 Nordic Swan, Nordic countries (including Sweden, Finland and Denmark).............37 Environmental Choice, Canada and New Zealand ..................................................38 Bra Miljoval, Sweden ...............................................................................................39 Forest Stewardship Council .....................................................................................39 International Energy Star .........................................................................................40 Good Environmental Choice Australia (GECA) .......................................................41 Water Efficiency Labelling and Standards (WELS) scheme, Australia ....................42 Energy Rating for Minimum Energy Performance Standards, Australia ..............43 4. PELS ANALYSIS ........................................................................................... 46 4.1 SWOT of PELs.........................................................................................................46 4.1.1 Type I labels...........................................................................................................46 4.1.2 Type II labels..........................................................................................................47 4.1.3 Type III labels.........................................................................................................47 4.2 Mandatory versus voluntary schemes .....................................................................48 5. 6. 6.1 6.2 STAKEHOLDER VIEWS ................................................................................ 49 FINDINGS, CONCLUSIONS AND RECOMMENDATIONS ........................... 50 Conclusions .............................................................................................................51 Recommendations ...................................................................................................51 REFERENCES ......................................................................................................... 54 APPENDIX A. APPENDIX A. APPENDIX B. APPENDIX C. PRODUCT REGISTER — GECA LABEL ..................................... 61 PRODUCT REGISTER — GECA LABEL ..................................... 61 CLASSIFICATION OF PELS......................................................... 64 STAKEHOLDER WORKSHOP ..................................................... 74 RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 3 of 75 EXECUTIVE SUMMARY This study of product environmental labels (PELs, also called ecolabels) forms the main delivered outcome of the Stage 1 (scoping study) project for Sustainability Victoria. The key aim is to determine the actual and potential effectiveness of PELs in improving purchasing sustainability through increasing consumer understanding and choices, and encouraging greater responsibility from industry in Australia. The study is designed to inform a potential Stage 2 project, where Sustainability Victoria would seek the means to intervene through policies and/or actions in order to accelerate the uptake of material-efficient and environmentally aware purchasing. The approach taken in this report documents the work undertaken, and in so doing mirrors the proposal made to Sustainability Victoria by the Centre for Design prior to commencement of the project. The key work stages form the objectives for the project. In summary, these objectives are: • • • • • to conduct a review and develop a classification of PELs to undertake an assessment of the success factors in PELs internationally to report on a SWOT analysis of PELs generally to conduct a stakeholder engagement exercise to analyse the above and provide a set of findings and recommendations for Sustainability Victoria. PELs: current state of play The growth of ecolabelling reflects a general trend in many nations from government to governance, and a growing trend to use market-based tools and price signals to achieve environmental outcomes. Most voluntary Type I (simple, third-party accredited) ecolabel schemes are driven by a government or state initiative. A lag time between label creation and market uptake and acceptance is common, although both the time and extent vary, and not all schemes can be regarded as successful. The Blue Angel (1977) and the Nordic Swan (1989) are generally considered to be the two most successful Type I labels on the basis of consumer recognition, scope and reputation. Very little information exists as to the specific environmental savings delivered by ecolabels. The environmental labelling literature indicates that it is difficult to measure and assess these benefits quantitatively and/or qualitatively. Materials efficiency is not generally expressed or accounted for in existing labels, and while product stewardship is generally a technical requirement included in the standards for many voluntary labels, it is not easily regulated or monitored. Indeed, a general limitation of most labelling programs is their potential to affect the use and disposal phases of a product. Low consumer awareness of Australia’s national voluntary Type I scheme exists. However, consumer awareness and educational campaigns have been effective in raising awareness, and operational impacts associated with some products (whitegoods, electronics and water devices) are being addressed in Australia through mandatory programs. The Australian energy labelling program is widely regarded as among the most informative in the world and is recognised by 94% of Australian consumers (Artcraft Research 2005). The impact of product environmental labelling is complicated by the fact that environmental consciousness does not necessarily affect purchasing behaviour directly. There is a complex set of relationships between purchasing behaviour, environmental intent and the prioritisation of other aspects, such as price, quality and habit. Trust, understanding and awareness also play major roles. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 4 of 75 Factors in success or failure Voluntary ecolabels can only succeed where consumers and those on the supply side see the need for them and are willing to use them. The need, efficacy and reputation of the labelling scheme are therefore important. Very few studies have been done on the impacts and successes of privately run and owned labelling schemes. As these schemes are selffunded, they are generally under-resourced and this can be a further impediment to their growth and success. This leaves them open to criticism about their transparency and evidence base. In turn, this can lead to problems with credibility and, ultimately, uptake by product suppliers and manufacturers. More trust is generally placed in schemes where there is significant public-sector involvement. These factors, combined with previous unsuccessful attempts to create a national product environmental label in Australia may be perceived as barriers to be overcome in order to expand multi-criteria product environmental labelling in Australia. The involvement of supply-side stakeholders is critical, and success in product environmental labelling relies on relationship building and multi-stakeholder consultation. The role of consumer groups, environmental NGOs and other advocates is also significant to the success or failure of a label. Successful ecolabels have also involved wider environmental awareness programs. Community social marketing techniques and participatory education programs have the potential to foster the long-term uptake and success of ecolabels. Conclusions The individual PELs analysis, the SWOT analysis of PELs generally, and the stakeholder information collected through the study all provide a consistent picture, which can be summarised in two main themes: • • A range of variables determine the success of any individual PEL. PELs are, at best, only part of the ‘answer’. A successful PEL is able to: • accurately determine the main environmental impacts of the product or service and communicate this to consumers where there is an identified need for the information in the form provided provide credible certification with appropriate costs, fees and verification processes take a long-term view, with regular reviews and long-term resourcing achieve meaningful buy-in through relationship building and multi-stakeholder consultation provide appropriate links with other product policy tools. • • • • Recommendations PELs are only one option for providing consumer and professional purchasers with information regarding the sustainability of a product. The following recommendations are designed to inform Sustainability Victoria when developing Stage 2 of the project. Note that the term PEL implies a Type 1 ecolabel, whereas more general terms, such as labels or ecolabels, imply the initiative may not be related to a formal Type 1 process. Recommendations 1 and 2 are more focused on PELs, while recommendations 3–5 are concerned with broader issues. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 5 of 75 Recommendation 1 An extensive stakeholder assessment exercise should be undertaken to establish the support for existing PELs in Australia and to investigate interest in and the potential for a ‘rebuilding’ of existing schemes. The following strategies would allow Sustainability Victoria to contribute to a strengthening of existing PELs schemes: • Improve the transparency and evidence base of existing programs and contribute to fundamental research on quantitative environmental performance factors Consider developing or sponsoring new ecolabels (evidence suggests competition amongst labels can be positive, provided consumer confusion can be avoided) Identify a particular sector where PELs would be expected to have a significant and immediate impact (where there is need — note this could be for end-consumers or corporate/public procurers in supply chains) Communicate the above to stakeholders, particularly on the supply side Seek involvement and support at a government level, ideally nationally Establish a communication and marketing strategy to build awareness and involvement amongst consumers • • • • • The PELs scheme should then be rolled out to other sectors on an as-needs basis. Recommendation 2 Input and support should be provided for the development of: • • national indicators for measuring progress with ecolabel uptake environmental labelling of the material efficiency of consumer goods (nationally). As with Recommendation 1, this recommendation can be pursued either with existing PELs schemes in mind (e.g. the existing multi-criteria ecolabel in Australia, the Good Environmental Choice label) or for a new PEL strategy. Recommendation 3 Links should be developed with a consumer organisation (such as ECOBuy or CHOICE — Australian Consumers’ Association — who already have established reputations as credible sources for purchasing information) to provide support for the development of product environmental indicators or labelling to complement the purchasing databases/information (note: ECOBuy is able to target two distinct consumer markets — professional purchasers and private consumers — through their operating structure). RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 6 of 75 Recommendation 4 The creation of a new national government policy/regulation to set a minimum level of performance for identified product sectors should be advocated. Sustainability Victoria could narrow the scope of the research to a particular product or service area with known gaps in materials efficiency and product stewardship, and collaborate with relevant industry sectors to understand the product claims they are making in order to explore how companies promote the benefits of their products and whether labelling is the most suitable option. Industry sectors where there is an existing policy context and pressure to provide product environmental information should be chosen, such as packaging, commercial furniture (corporate, professional purchasers), and electronics (consumers, households). Recommendation 5: A public sector purchasing program that focuses on capacity building for procurement rather than on the provision of information should be sponsored. Programs designed to change behaviour by building capacity in sustainable procurement are new overseas and there is potential for their introduction in Australia. Government purchasing programs can play a leadership role in supporting existing PEL schemes in Australia by promoting the organisational procurement of labelled/preferable goods. Organisations have larger purchasing power than private consumers and can therefore have a greater impact on the demand for environmentally preferable goods. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 7 of 75 1. INTRODUCTION This review of product environmental labels (PELs) forms the main delivered outcome of the Stage 1 (scoping study) project for Sustainability Victoria. PELs are also sometimes called ‘ecolabels’, although this is actually a wider term. The project was commissioned in order to provide Sustainability Victoria with a review, analysis and recommendations to inform a potential Stage 2 project, where Sustainability Victoria would seek the means to intervene through policies and/or actions in order to accelerate the uptake of material-efficient and environmentally aware purchasing. Specifically, for Stage 1, Sustainability Victoria is seeking to inform themselves on the following questions: • • • • • • • • • What product environmental labels (PELs) currently exist in Australia? What product environmental labels (PELs) currently exist overseas? How do PELs operate and how are they introduced to the consumer? How do PELs work (e.g. how are materials efficiency, life cycle gains etc. expressed in PELs)? Are producer/retail product stewardship and design for environment strategies included? What drivers led to the creation of schemes? (i.e. government policy, public pressure, etc.)? What market uptake mechanisms exist? Which markets are serviced? What studies have been published that measure the effectiveness of schemes (i.e. market penetration, consumer awareness, changes in consumption patterns, and changes in producer behaviour)? The key aim of this study is to determine if one or a set of PELs is needed and whether this would be effective in terms of increasing consumer understanding and choices, and in encouraging greater responsibility from industry in Australia. The context of the study is the appropriateness in Australia of the use of PELs to convey information on life cycle management to these ends. In order to comprehensively address this and all other key requirements of the tender brief, the project team has adapted the ‘phase model’ approach for the review of existing labelling schemes in Australia and internationally. The approach taken in this report documents the work undertaken, and in so doing mirrors the proposal made to Sustainability Victoria by the Centre for Design prior to commencement of the project. The key work stages form the objectives for the project. In summary, these objectives are: • • • • • to conduct a review and develop a classification of PELs to undertake an assessment of the success factors in PELs internationally to report on a SWOT analysis of PELs generally to conduct a stakeholder engagement exercise to analyse the above and provide a set of findings and recommendations for Sustainability Victoria. Accordingly, Section 2 (and Appendixes A and B) provides a product register, classification and review of PELs, while Section 3 reports on the international assessment of PELs undertaken for the project. Section 4 provides a summary of the SWOT analysis of PELs generally, and Section 5 (with Appendix C) reports on the stakeholder exercise. Finally, Section 6 provides analysis, conclusions and recommendations. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 8 of 75 2. ECOLABELS CLASSIFICATION AND REVIEW A compilation of PELs available in Australia and overseas is attached as Appendix B. The product environmental labels are clearly categorised by type (Type I, II, III and mandatory/voluntary) and there is a separate table for Australian and international labels. The compilation includes the following information: • • • • • label name and country year initiated product range covered number of labels and labelled products the governing body and management structure. This list is primarily populated with Type I ecolabels, as the majority of the literature on product environmental labelling focuses on this type of label. 2.1 Background: the need for ecolabels The United Nations Environment Program (UNEP) states that the current patterns of consumption and production in the world are unsustainable. The key sustainability challenges that the UNEP lists for product design, consumption and disposal are: • • • • • • to increase efficiency in energy and water uses to reduce waste to stimulate the life cycle economy to decrease externalisation of costs to put a ‘polluter pays’ principle into practice to inform and educate the consumers of today and tomorrow (UNEP 2002). Agenda 21 identified ecolabelling as a way to encourage consumers to adopt more sustainable consumption patterns through the purchase of products that are more resource and energy efficient. Consumer distrust and confusion over manufacturers’ environmental claims also heralded a call for third-party labelling schemes (Baker & Miner 1993; Eden 1994; Erskine & Collins 1997; FOE 1993; MacKenzie 1991). Key elements of the World Summit on Sustainable Development’s Plan of Implementation to change unsustainable patterns of consumption and production that relate specifically to product environmental labelling include: • adopting monitoring mechanisms, including, where appropriate, life cycle analysis and national indicators for measuring progress improving products and services provided, while reducing environmental and health impacts using, where appropriate, science-based approaches, such as life cycle assessment developing and adopting on a voluntary basis effective, transparent, verifiable, nonmisleading and non-discriminatory consumer information tools (UNEP 2002, p.7). • • RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 9 of 75 Product environmental labelling, and more specifically, ecolabels, has been proposed as one of the ways to promote more sustainable consumption. Some of the other benefits attributed to ecolabelling include: • • • • improved sales or images of a product encouraging manufacturers to account for the environmental impacts of their products increased consumer awareness of environmental issues protection of the environment (Morris 1997). 2.2 Overview of product environmental labelling Product environmental labels are intended to be a market-based means to internalise externalised costs and to increase public participation in, and raise awareness of, environmental problems (Erskine & Collins 1996). Two of the most general goals provided for product environmental labels are (Piotrowski & Kratz 1999): • • providing consumers with information (information policy instrument) reducing the environmental impact of products and consumption (environmental policy instrument). As an information policy instrument, product environmental labels can aid consumer purchasing decisions by providing: • • • simple environmental information that a consumer might not otherwise seek expert opinion on incommensurables such as water pollution and air emissions during manufacture clarity on environmental superiority, particularly with third-party certified claims (Morris 1997). Product environmental labels can be classified and categorised in a multitude of different ways. However the first level of categorisation should be the differentiation between mandatory and voluntary labels, followed by classification by certification method (i.e. thirdparty or first-party) (Rubik & Frankl 2005). Third-party certification is carried out by an independent source, whereas first-party certification is generally performed by companies on their own behalf. While mandatory labels are always third-party certified, voluntary labels can be either first- or third-party certified. Mandatory environmental labelling is generally prescribed by law and can be split into four main types: declarations of content; usage and disposal information; product labelling; and certification of conformity. Mandatory labelling is well-suited to specific types of product categories, such as water or energy consuming devices (Rubik & Frankl 2005). In the arena of voluntary labelling, the International Standards Organization (ISO) has a set of standards that have been developed as part of the ISO 14000 series for environmental labelling. ISO classifies environmental labels into three categories, namely Type I, II and III. Type I labels are third-party certification environmental labelling schemes, which award a ‘seal of approval’ logo that can be displayed on products and services that meet or exceed a set of criteria established by the certifying body. Type I labels provide qualitative information and indicate the overall environmental preferability of products within a product category, based on life cycle considerations (ISO 1999a). This type of label is most commonly referred to in the literature as an ‘ecolabel’. Type II labels are environmental labelling programs based on the self-declarations of manufacturers, importers, distributors or retailers (ISO 1999b). They are not third-party certified. Type III labels, also referred to as environmental product declarations, are intended to provide quantitative life cycle environmental data of a product based on pre-set categories of parameters, such as natural resource use, energy RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 10 of 75 use, air emissions and solid waste generation (ISO 2000). They do not indicate the overall environmental preferability of a product within a product category. The ISO standards however do not encompass the entire voluntary labelling landscape, which also includes test reports, trademarks and cause-related marketing (i.e. labels indicating support for environmental or social causes). There is also a growing number of Type I-like labels, such as Forest Stewardship Certification (FSC), which do not label a variety of product categories, but rather focus on a single product category (i.e. timber) (refer to Figure 1 and Figure 2). Product environmental label by type VOLUNTARY Product endorsement Multi-product groups • MBDC • Landcare • ACF • WWF MANDATORY Danger symbols ISO Type I Multi-product groups/criteria • GECA (AUS) • Blue Angel (GER) • EU Flower (EU) • Nordic Swan • Environmental Choice (CAN) • Green Seal Type I-like (not ISO) Single product groups or criteria • GreenPower (AUS) • FSC (forest stewardship council) • MSC (marine stewardship council) • GreenSTAR • LEED (USA+CA) • EnergySTAR (Int’l) • Green Globe (Int’l) • Greenpower (AU) • Greenhouse Friendly (AU) Conformity with standards Purchasing databases Multi-product groups • Eco-Buy • Eco-Specifier Declaration of contents National ISO Type II Self-declarations • CFC-free • Recycled content • Dolphin friendly Social labelling Multi-product groups • Fairtrade • WELS • Energy Rating Label ISO Type III Report card format • EPD (Envt’l. Prod. declaration • Nutrition Panel on Food Research & testing institutions • NATA • AFRDI Figure 1: Classification of product environmental labels by type (Adapted from Rubik & Frankl 2005) RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 11 of 75 Figure 2: Classification of product environmental labels (US EPA 1994) 2.3 Governance and new environmental policy instruments (NEPIs) Since the 1980s, self-regulation has been increasingly adopted as an alternative to governmental command and control regimes, particularly in Western economies (van Amstel, Driessen & Glasbergen 2006). The trend away from command and control measures imposed by governments towards a model of governance and self-regulation is seeing an increase in new environmental policy instruments (NEPIs), such as ecolabelling (Jordan et al. 2003; Taplin 2003). Australia’s regulatory style is most similar to that of Canada, New Zealand and most other economically advanced democracies. The notable exception is that of the United States, which tends to employ a more prescriptive, deterrence-orientated style of regulation (Kagan, Thornton & Gunningham 2003, p.62). A number of detailed case studies that reviewed the various regimes of social regulation for coal mine safety, workplace safety, nursing home quality of care and environmental regulation for countries including Australia, Sweden, France, Germany, Japan, the Netherlands, Great Britain and the United States, concluded that American regulatory rules are far more detailed, are more often enforced through the legal system, and have more frequent and larger regulatory sanctions imposed (Aoki & Cioffi 2000; Aoki, Kagan & Axelrad 2000; Axelrad 2000; Braithwaite 1985; Dwyer, Brooks & Marco 2000; Kelman 1981; Wilson 1985; Wokutch 1992). It is suggested that Australian studies (Gabrosky & Braithwaite 1986; Gunningham & Grabosky 1998) illustrate that regulators primarily rely on cooperation and persuasion with an almost complete absence of the kind of coercive enforcement that often occurs in the United States when it comes to corporate environmental regulation (Kagan, Thornton & Gunningham 2003). Regulatory policy in Australia over the past two decades also has a reputation of being accommodative towards industry (Taplin 2003), as Australia’s economic base relies on the export of primary and minimally processed products, the dominance of foreign capital in manufacturing investment and a large service sector (Walker 1994). However in the past decade, the influence of environmentally sustainable design (ESD) in the regulatory and policy undertakings of all levels of government has become apparent. In Australia, programs, policies and recommendations are all directed towards the goal of international best practice: ‘This aspiration for international best practice policies to be adopted and especially NEPIs would appear to conflict with the developmentalist goals of enhancing an economy largely dependent on resource extractive and energy intensive industries’ (Taplin 2003, p.493). However, in Australia, NEPIs may not be seen as a RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 12 of 75 constraint on development (Papadakis & Grant 2003). In comparison to other countries, such as the Netherlands, Germany and Finland, Australia is not viewed as an international leader in the adoption of NEPIs. Advantages of NEPIs and self-regulation include flexibility and sensitivity to the market; responsiveness; producer’s willingness to comply; standards anticipating the most recent technology; and efficiency. Disadvantages to self-regulation include the capability to be deceptive; the potential to serve corporate interests rather than the public good; inadequate means to tackle complex environmental problems; standards that are not binding or transparent; and ineffective enforcement and punishment (van Amstel, Driessen & Glasbergen 2006). Companies’ voluntary over-compliance can motivated by a number of factors, including increased public environmental concern, consumers’ increasing willingness to pay for environmental quality (which will vary by income level), and the perceived benefits of the improved reputation effects and credence for organisations (Kirchhoff 2000). Overcompliance, through the voluntary use of third-party environmental labelling, is also more likely the more competitive the circumstances. Studies on the phenomenon of overcompliance find that to focus on a single variable (e.g. legal, economic or attitudinal) provides an picture that is incomplete, inadequate and over-simplified (Kagan, Thornton & Gunningham 2003). The ability and willingness of companies to voluntarily adopt environmental policies is a subject of debate in the literature. One side of the debate touts the potential benefits and rewards to companies who adopt environmental management systems and policies, which include cost savings, new market opportunities, protection from regulatory authorities, the ‘first mover’ advantage, and differentiation opportunities (Porter & van der Linde 1995). From a rational economic perspective, companies are also said to be motivated to comply with voluntary standards as a way to protect or enhance their reputation, provide credible information to consumers, gain competitive market advantage, and deal with internal or external peer pressure (Gunningham & Rees 1997; Klein 1997). When specifically looking at ecolabelling, companies are said to be primarily motivated by the desire to extract a price premium for labelled products or to gain greater access to markets (Gulbrandsen 2006). The other side of the debate focuses on the barriers to voluntary environmental policies, which include limited investment resources, high costs of implementation, lack of information and know-how, difficulty quantifying the paybacks, and organisational inertia (Hussain 1999; Walley & Whitehead 1994). Experience in Germany has shown that it is generally smaller companies whose sales figures improve because of their ecolabel, whereas medium and larger firms are driven more by concerns of losing market share to competitors carrying the label (Jordan et al. 2003). Although product environmental labelling is seen as a voluntary environmental mechanism that replaces or challenges traditional state authority, it is argued that through public procurement policies and financial support, governments have contributed to the creation of markets for labelled products (Gulbrandsen 2006). In the UK, the government has directly invested over five million pounds (approximately $12.4 million AUD) in running and promoting the EU Flower scheme (DEFRA 2006). Furthermore, the process of criteria development and selection of product groups is influenced by not only individual and private stakeholders, but also government bodies. This is more prevalent in countries where the ecolabelling organisation and standards bodies are set up by the state, such as in the EU (Morris 1997). Governments who have found themselves in the situation of not being able to create environmental regulations for fear of contravening international agreements, or because they wish to avoid domestic political conflict, have also used their procurement policies to support non-state environmental governance schemes, including ecolabelling. Using the forestry Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 13 of 75 RMIT University sector as an example, Austria provided funds to support the FSC after repealing a law requiring mandatory labelling of tropical timber products, for fear of being in breach of the General Agreement on Tariffs and Trade (GATT) rules (Gulbrandsen 2006). Other European countries, including the UK, the Netherlands, Denmark, Germany and France, have either required or articulated in their public procurement policies a preference for FSC or similar labelled timber. This is despite the fact that the FSC forbids the participation of state agencies in the organisation. In the case of forestry and fisheries ecolabelling, it is argued that the increase of programs should not be attributed to the traditional market-driven theories of ecolabelling, but rather to the pressure placed on industry by transnational environmental groups (Gulbrandsen 2006). 2.4 Trade effects of labelling schemes The potential trade effects of labelling schemes are mentioned often in the ecolabelling literature. Because many ecolabelling programs are created and funded by governmental bodies, they are criticised as being protectionist policies for domestic producers (Greaker 2002). However, because they are voluntary standards, to date Type I ecolabels have not been charged in the World Trade Organization (WTO) or GATT framework for not complying with the Technical Barriers to Trade Agreement (Piotrowski & Kratz 1999). It is also argued that many voluntary ecolabels (particularly the EU Flower) do not have the ‘critical mass to act in this negative way’ (DEFRA 2006). In relation to trade effects placed on foreign companies attempting to comply with a voluntary Type I ecolabel, the common issues raised, particularly by developing countries, include: • • • • • the potential that domestic products may dictate the product selection process, hence, producers may be required to meet criteria that are not relevant in the producing country a lack of transparency of the whole process possible discriminatory effects entailed in the use of standard process and production methods (PPM) the potential to lose competitive advantage as a result of higher costs of production and operation potential extra costs for certification and compliance (especially if site visits are involved) (Piotrowski & Kratz 1999; Zarrilli, Jha & Vossenaar 1997). The award criteria for ecolabels are often based on the environmental concerns and priorities of the host country and, as such, ecolabels are sometimes criticised for imposing the environmental concerns of the importing countries on the processes and production methods of their trading partners. For example, reducing SO2 emissions is a high priority in Europe because of concerns about acid rain, whereas in Brazil the issue is less relevant. This became an issue of contention in the criteria set for labelled tissue paper products in the EU. The inclusion of strict limits on sulphur dioxide emissions was argued to be unfair against the Brazilian pulp and paper industry and advantageous to European producers who already had to comply with strict SO2 emissions regulations (Morris 1997; Piotrowski & Kratz 1999). A Statistics Norway study analysed the trade and welfare effects of ecolabelling in the Norwegian context, using both a domestic and a foreign firm as their case studies. The research concluded that ‘the critique that ecolabels are hidden protectionist measures may be overstated’ (Greaker 2002, p.18). Because many negative environmental effects are global in nature (such as climate change, decreasing biodiversity and air pollution), consumers may have a willingness to pay for environmental protection in other countries. Foreign producers are not disadvantaged, it was argued, as consumers will be paying for the abatement costs. The Statistics Norway paper however does not support the notion that ecolabelling criteria should be set so that only a limited number of firms will obtain the label. This was argued to be a disutility to consumers, who may not be able to purchase their preferred product, based on their purchasing criteria (price, quality and brand), because they RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 14 of 75 place priority on product with ecolabels. The environmental benefits of widespread adoption of beyond compliance environmental measures will produce a larger environmental benefit (Greaker 2002). Proposed approaches to address the potential issues of trade barriers and discrimination against developing countries due to ecolabelling include: • • • • • • • transparency and consultation standards on standard setting (which is now addressed in the ISO standards) international cooperation (as is evidenced with GEN) equivalence mutual recognition (which is occurring with many national ecolabelling programs) international labels technical and financial assistance for developing countries (Piotrowski & Kratz 1999). 2.5 Product environmental labelling and consumers The general discussion in the literature on consumer purchasing habits suggests that the impact of product environmental labelling is complicated by the fact that environmental consciousness does not necessarily affect purchasing behaviour directly. Consumers prioritise other aspects, such as price and quality, and their purchases are often guided by habit (Gallastegui 2002). Other key factors on which consumers base their purchasing decisions include consumer satisfaction, values, identification, availability and social pressure/consumer boycotts (Hemmelskamp & Brockman 1997). Furthermore, different factors may affect purchasing decisions at different times: ‘Because it is difficult to identify a stable group of consistently green consumers, the market impact of environmentally labelled products and services becomes less predictable’ (Pedersen & Neergaard 2006, p.25). Thus, product environmental labelling has been shown to only be moderately successful in relation to the individual consumer (OECD 2005). A review of the extensive literature on Nordic consumers and product-related environmental information labelling made the following conclusions: • Consumers express their preferences for environmentally benign products, revealing they have an awareness of the issues. The main ecolabels are highly recognised and perceived to be trustworthy. Consumers tend to over-emphasise their purchases of ecolabelled products, which implies a limited amount of consumer behaviour change. Consumer knowledge of the environmental attribute of labelled products and labelling criteria is weak. Consumer motivation may be enhanced if product-related environmental information schemes more adequately documented that they result in environmental improvements (Leire & Thidell 2005). • • • • Moreover, it cannot be assumed that consumers always correctly interpret product environmental labels. Consumers may not have an understanding of the connection between a specific environmental problem and the purchasing behaviour that can address that problem (Szarka 1991). Another confounding factor is the notion that labelled goods may give the consumer a misperception of non-labelled goods and lead to the assumption that all labelled goods are environmentally superior. For example, ecolabelled cleaning products are found on supermarket shelves, although not beside alternative environmentally preferable (unlabelled) cleaning products, such as baking soda and water. Given the variety RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 15 of 75 of reasons why companies choose to have their products labelled or not, there may in fact be non-labelled goods available to consumers that have a lower impact on the environment than labelled ones (Gallastegui 2002). In the Nordic context, there is a plethora of research highlighting consumer perceptions, understanding and use of product-related environmental information. The research highlights that consumers recognise, know and possess significant confidence in the main Nordic ecolabels, but that this does not result in consumers using the product-related environmental information. The authors who reviewed all of the Nordic literature suggest that the gap lies in focusing on the purchasing decision and taking into account the dynamic context of diverse purchasing situations (Manzini et al. 2006). Others have also noted that just as environmental consciousness does not always lead to environmentally friendly behaviour, environmental awareness does not always lead to changes in purchasing behaviour (Gallaroti 1995; Pedersen & Neergaard 2006). The key findings of an American market research study (Teisl, Roe & Levy 2002) to measure the impacts and effects of various voluntary ecolabelling strategies (marketing materials, eco-seals and labelling) on consumer perceptions and purchase intentions for deregulated electricity supply and forest products were as follows: • Products marketed for their low price are seen as more damaging to the environment than those marketed with environmental marketing. Uncertainty about products’ eco-attributes is reduced after viewing environmental marketing and while the addition of an eco-seal further reduces the uncertainty, its impact is less than that of the marketing. Ecolabels provide no significant effect when viewed after environmental marketing. Ecolabelling has no effect on intent to buy. Generally, consumers are more likely to be satisfied with full, compulsory disclosure than nearly any other disclosure policy. Adding a single summary score to the label decreases the label’s credibility and increases consumer scepticism about the overall information. This was attributed to a lack of transparency in the quantitative data. Adding a table of environmental scores increases the label’s credibility and adding contact information increases the eco-seal’s credibility. Credibility varies across certification organisations. While one ENGO label was viewed as the most credible, another was seen as the least credible. This was attributed to stakeholder familiarity with the organisations. The US Environmental Protection Agency (US EPA) certified products were viewed as the worst environmentally, even though the US EPA was rated as a highly credible organisation. The issue was not that consumers did not trust the EPA, but rather that they believed they were not the right government organisation to be certifying forest products. When faced with two similar labelled products, consumers assume the higher priced item has superior environmental characteristics. Simple voluntary eco-seals are not the most effective method of communicating the environmental attributes of products to consumers. Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 16 of 75 • • • • • • • • • • RMIT University • Labels that display more detailed information about environmental attributes are more beneficial for consumers. Simple eco-seals are viewed as the least credible, provide the lowest level of consumer satisfaction, and do not provide consumers with an adequate basis for product differentiation. Consumers are not familiar with labels, and informational campaigns are required to educate consumers as to the goals and means of the certification programs (Teisl, Roe & Levy 2002). • • Green consumers’ concern for the environment and willingness to pay more for products and services with reduced environmental impact is often listed as one of the advantages and motivations for the creation of product environmental labelling schemes. In a critique of the simplified notion of what constitutes a ‘green’ consumer, the following inconsistencies were highlighted: • Different kinds of green consumers exist (i.e. private consumers and professional purchasers). Different green consumers do not necessarily share the same values, attitudes and behaviour patterns. Impacts of labelling schemes are different on private consumers than on professional purchasers, who may be motivated by company policy. Consumers are selective in their purchasing habits and may only be green consumers of certain products. Willingness to pay for green products can vary, based on consumer budget constraints. Consumers are green until other issues attract their attention. Consumers may be unintentionally green or unconsciously green. Consumers can be manipulated to purchase products that are not green because of their lack of comprehension about the various types of environmental labelling (Pedersen & Neergaard 2006). • • • • • • • Studies of labelled forestry and seafood products concluded that consumers, even those in environmentally concerned markets such as the United States and Norway, are seldom willing to pay more than a few percent premiums for third-party certified environmentally preferable products (Forsyth, Haley & Kozak 1999; Gulbrandsen 2006; Viesten 2002; Wessells 2000). Survey results indicated that consumers in the UK and Norway were willing to pay approximately 1.6% and 1% more, respectively, for an ecolabelled wood furniture product. The same study also concluded that about 39% of the UK population and 32% of the Norwegian population are predicted to choose ecolabelled alternatives when the price difference is less than 5% (Viesten 2002). The argument that ecolabels only have a role as long as consumers are willing to pay more for greener products is common (Greaker 2002). However, this also assumes that ecolabelled products will cost the consumer more. This view does not consider the range of drivers for companies to seek ecolabels. Companies may also be able to pass along cost savings from more resource efficient manufacturing processes to neutralise any potential Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 17 of 75 RMIT University costs incurred in complying with voluntary labelling standards (Porter & van der Linde 1995). Also, as previously noted, while price premiums for ecolabelled products are often a primary motivation for producers, they are not the only driver for their existence. Increased uptake of ecolabelled products is also being attributed to an increase in business-to-business purchasing and professional procurement (AELA 2004). Type I ecolabelling schemes, such as the NZ Environmental Choice and Canadian Environmental Choice Program, have turned their focus from the consumer market towards the professional purchasing market. A study of the market share of Japanese ecolabelled stationary products concluded that ‘the proportion of corporate purchases of these labelled products was significantly larger than that of consumer purchases’ (AELA 2004, p.16). A 2005 European survey that asked consumers which organisations they would trust most to deliver credible ecolabels found identical results across all four countries polled (Norway, Spain, Germany and Italy): consumer or environmental organisations were ranked first, independent bodies were ranked second, while governments were ranked third and retailers were last (Gertz 2005). Different institutions, such as research and test centres, are also needed to support consumer decisions (Gallastegui 2002, p.319). For example, in the United States, the SCS labels products as environmentally preferable products, as well as performing the testing or third-party verification requirements of the LEED Program. 2.6 Competition between labels Increasing competition between labels has been suggested as a possible solution to help alleviate many of the problems that labelling schemes generate. It is also expected that increased competition will also increase the overall credibility of the labels, as it will require tighter environmental criteria (Karl & Orwat 1999a). Each individual ecolabelling scheme can reflect only a part of the entire range of product improvements possible, as it is not feasible for them to take all environmental considerations into account or to give them equal weighting. Where one label might put more emphasis on recyclability, another might put more focus on materials minimisation and so on; thus it is possible for some environmental advancements to go unrewarded. Competition, it is argued, may also work to prevent the ‘lock-in’ effect if one ecolabel scheme establishes and creates product requirements that favour inferior technologies (Morris 1997). However, competition might also create confusion among consumers, contradicting one of the main motives behind the creation of ecolabels (Gallastegui 2002, p.319). The abundance of environmentally friendly logos, brands and labels are perceived by consumers as confusing (van Amstel, Driessen & Glasbergen 2006). Multiple ecolabelling schemes also require recognition and acceptance by producers, sellers and consumers, which is more likely if the number is kept small (Karl & Orwat 1999b). It is argued that fewer, more reliable ecolabels would make the market more transparent (van Amstel, Driessen & Glasbergen 2006). In the UK, it is argued that another national scheme would be resource intensive to set up and run, would require time to establish itself as credible, and therefore would have limited potential for growth (DEFRA 2006). 2.7 Effectiveness of ecolabelling schemes Signs of success noted by the UNEP (2002) include the following achievements from product environmental labelling: • From 1998 to 2001, the area of forests certified by the Forest Stewardship Council more than doubled, to include over 25 million acres in 54 countries. The amount of energy saved through the purchase of products labelled with the US Energy Star label is equivalent to the energy required to power 10 million homes and has reduced air pollution to the equivalent of taking 10 million cars off the road. The market share of energy-efficient, single door fridges in Thailand rose from 12% in 1996 to 96% in 1998, and can be attributed to an appliance labelling program. Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 18 of 75 • • RMIT University However, a commonly recurring sentiment expressed in the PELs literature is the argument that it is difficult to measure and assess the environmental effects of labels, as well as to compare the effects of different labels. The reasons for this include the following: • Most of the studies focus on the market effects, particularly consumer willingness to pay and actual purchases. Some studies focus on a single product, while others consider a range of products. All studies use different methodologies to assess the impacts of product environmental labels. Studies note the difficulty in obtaining data. The limitations of the research data make it hard to make generalisations about the actual impacts of product environmental labels. The variations of ecolabelling types continue to broaden, making comparing their attributes increasingly difficult. The common approach is to evaluate effects on attitudes and behaviour, rather than concrete environmental effects, as the latter type of effects have been considered very difficult to measure in a relevant way. It is clearly difficult to distinguish the effects of an ecolabel from the effects of other measures, which is why studies often conclude that several instruments have jointly contributed to an observed change (International Institute of Environmental Economics 2000, p.28; OECD 2005; Rubik & Frankl 2005). • • • • • • • Energy efficiency labels are suggested to be one of the most successful product environmental labels, which can be directly attributed to the long-term financial benefits of reduced energy costs for the consumers of the products (Rotherdam 2005). Significant environmental gains have been attributed to the energy savings from these labelling programs as well. In 2002, it was estimated that the US Energy Star program avoided greenhouse gas emissions equivalent to those from seven million vehicles and saved more than 50 billion kWh of electricity (OECD 2005). The European Energy label, established by the European Commission, is a compulsory label and must be applied to all white goods, home appliances and light bulbs sold within the EU. The program has been mandatory since January 1995 and is intending to expand to cover automobiles. Each country in the EU is responsible for implementing the program through the establishment of national legislation for compliance, label accuracy, consumer education and promotion of the label. A study of the EU energy labelling scheme, three years postimplementation, indicated that the program has been successful, as consumers are using and understanding the label’s message and the label is influencing the purchasing decisions of consumers. However, the research also found that the label has had little effect on consumers in southern countries and more impact on consumers in northern countries, where there is a history of concern about energy use (Winward, Schiellerup & Boardman 1998). Another study in 1999 concluded that average sales (based on dollar value) of energy-efficient home appliances within the EU had increased by 29% (Bertoldi 1999). In a discrete choice analysis study of the influence of the energy label on Swiss consumers, the authors determined that the energy label had positively influenced consumers’ buying decisions for household appliances and that products with the highest available award (Alabel) generated a willingness to pay that exceeded the direct cost savings that could be expected over the lifetime of the product (Sammer & Wustenhagen 2006). However, the researchers did qualify that the same results may not be realised with voluntary labelling Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 19 of 75 RMIT University schemes, with less well-established, newer schemes, or in countries and regions with different levels of consumer environmental awareness and commitment. Evaluating the environmental impact of labelling schemes is difficult, particularly in the earlier stages of a program. Isolating the effect of the ecolabels from other policies or programs, or from broader changes in technology, community preferences and production decisions, is another challenge to measuring their environmental impact (Jones & Lansdell 2000). The call for the development of refined methodologies to adequately measure the environmental and economic impacts of product environmental labels is common throughout the literature (OECD 2005). In terms of industry participation in the creation and uptake of ecolabelling schemes, Germany and the Nordic countries have achieved the most success. Many of the other government-sponsored voluntary ecolabel programs, including the EU Flower, have had limited uptake by producers and retailers and have attracted little interest from consumers (Gulbrandsen 2006). To be successful in penetrating consumer markets, ecolabels, it is argued, should be concentrated on those products that consumers purchase regularly and that have a significant environmental impact, rather than those purchased infrequently (Erskine & Collins 1997). For example, the EU Flower has been criticised for developing a standard for washing machines as its first category type. A comparison study of five food ecolabels in the Netherlands found that, in general, ecolabels do not require testing of products at the output stage, but rather are ‘designed to give assurances about the planning and implementation stage’ (van Amstel, Driessen & Glasbergen 2006). While consumers often assume that the quality of the environment actually improves through the production and consumption of these products, little measuring and monitoring of the environmental impact actually takes place. An extensive critique of ecolabelling schemes concluded that these schemes do little to achieve their goals as environmental information and policy instruments. Indeed, the author stated that ‘the claim that ecolabels might guide consumers to more environmentally sound purchases is untenable’ (Morris 1997, p.35). The following is an overview of the key criticisms made of labelling schemes: • There is a lack of transparency in selecting and defining new product categories. – Product categories should be selected to maximise future environmental potential, but are often based on political influence and manufacturer interest. – No two products are a perfect substitute for each other and categories are either too broad or too narrow. – Many products have multiple uses (i.e. bleach) and may be eco-preferred in one category but not another. However, consumers continue to use such products for multiple purposes with the incorrect assumption that they are eco-preferred across all uses. There are limitations to life cycle assessment, including the exclusion of nonenvironmental factors, the inability to control the use phase and disposal phase, and the cost. Labelling schemes have the potential to stifle innovation, as companies are not apt to invest in further innovation on labelled products until criteria are updated, for fear of lack of recognition of the innovation (i.e. they choose to continually innovate in materials efficiency and the update standard addresses operational efficiency). Political self-interest and environmental lobbying can influence ecolabels. • • • RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 20 of 75 A basic framework to measure the effectiveness of environmental certification developed by the US EPA lists the following five criteria for evaluating labelling schemes, and was used in a 1997 study to evaluate the Nordic Swan label (Leire & Thidell 2005): • • • • • Consumer awareness Consumer acceptance (credibility/comprehension) Consumer behaviour change Manufacturer behaviour change End benefits (i.e. reduced environmental stress or real improvements in environmental conditions) 2.8 Black product groups and product environmental labels Black product groups include those products associated with especially significant environmental impacts, such as cars, power lawn mowers and pesticides. There is hesitancy from voluntary ecolabelling programs to create standards for these product groups for fear of harming label credibility. For example, a principle applied by the Nordic Swan label for the selection of new product groups is that, in general, is to evaluate whether a certain product is even necessary and hence should be avoided all together. The EU Flower does not currently address product groups where environmental impacts are deemed to be the greatest, such as transport, food and housing. However other non-award type labels, such as gauge-type labels (i.e. energy rating, water rating etc.), have been suggested to better deal with these high impact areas (DEFRA 2006). However, creating standards for black product groups may be an area where large environmental benefits associated with mandatory or voluntary labelling could be achieved. It has been assumed that a need for guidance concerning environmentally preferable products exists within these product groups, and that this could be done without jeopardising the credibility of the ecolabelling scheme. The ecolabelling of services increases the possibilities for including ‘black’ products in ecolabelling to a certain degree. For example, it is difficult to ecolabel vehicles (e.g. cars) since, with existing technologies, they are associated with a number of significant impacts on the environment. If the service of transportation is ecolabelled, rather than the individual vehicle, then the means of transportation can be considered in the evaluation, thereby providing relevant guidance concerning environmentally preferable transportation. Additional confounding factors surrounding the debate on whether to label black product groups are listed below: • Ecolabels cannot influence the development and consumption of certain products associated with a high environmental relevance, and the label’s potential environmental effect will thus be limited. Credibility could also be damaged if product groups with high environmental impact are avoided altogether, and if consumers interpret this as though the label is not serious about trying to mitigate important environmental problems. Consumers may assume a labelled product has little or no environmental impact and this may serve to justify the use of black product groups (International Institute of Environmental Economics 2000, p.40). • • RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 21 of 75 2.9 The Australian consumer In late 1992, an Australian national opinion poll found that there was a deep lack of community trust in the way Australian business and industry approached environmental issues. Only 9% of people believed the environmental information being distributed by large companies and industry, while 87% did not (Kitney 1992). In 1993, an Australian-wide slump in green consumerism and enthusiasm for the environment was noted. This was associated with a lack of consumer confidence in green claims and product performance, an economic recession, and consumer apathy (Lecky 1993). However, by the early 2000s, attitudes towards green consumption had become more positive. For example, a survey in NSW found that people responded positively to the idea of environmental ratings, with 80% saying they would be influenced by an environmental rating on cars and 86% saying they would be influenced by a rating on building designs, materials, plumbing fittings and appliances if they were building a home (Department of Environment and Conservation (NSW) 2004). The 2005 Eye on Australia study looked at Australian consumer attitudes towards the brands they purchase (Lloyd 2005a). The top qualities sought by consumers were trust and credibility, with company values and ethics, innovation, and honesty also being key factors. Neither a brand’s size/market share nor its longevity was considered important by Australian consumers (see Figure 3). The study also found that consumers did not trust big business, but did trust and were keen on the concept of entrepreneurs (Lloyd 2005b). This can be partially explained by large corporate failures (Ansett and HIH Insurance) in the early 2000s, which occurred at the same time when entrepreneurs, such as Richard Branson and Virgin, began to emerge. Consumers viewed large companies as being greedy, dishonest, boring and faceless, while entrepreneurs were seen to be more open, honest, genuine and transparent. Trustworthy Credible Tells the truth Never lets me down The company has values and ethics Consistent Interesting and worth talking about Innovative Inventive Figure 3: 97% 96% 96% 93% 92% 91% 86% 85% 84% Recommended by people I know Fun Entrepreneurial spirit Passionate Unchanging over time Been around for along time Seen everywhere The biggest 78% 68% 63% 63% 44% 41% 39% 15% EYE on Australia 2005, What makes a great brand (Lloyd 2005b) The following list highlights findings in the 2006 Eye on Australia study that may be of relevance to product environmental labelling in Australia (Lloyd 2006): • Fears for destruction of the environment are at their highest level ever for Australian consumers. Information overload is affecting all Australian consumers: 97% of those surveyed indicated that there ‘was more stuff to read than I could ever dream of reading’; 92% indicated that they felt ‘surrounded’ by information. 60% of Australians are concerned about their personal economic future (up from 50% in 2005) and only 29% believe their economic situation will improve in the coming 12 months (down from over 33% in 2005). Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 22 of 75 • • RMIT University • Self-indulgence is being used as an antidote to work stress, concerns about the future and general life stresses. Attitudes and ill will among consumers toward big businesses has not softened since the last survey in 2004; more than two-thirds of those surveyed do not trust big companies, and similar numbers agree that corporations have no morals or ethics. Big business is, for the first time, directly linked to the degradation of the environment; 96% of Australians believe there are companies in Australia that are degrading the environment; 87% feel that big business only does the minimum required to comply with the law.. 50% of respondents indicated they have made active decisions to find out which companies are ethical and buy only their products. • • • An Australian study to test the hypothesis that demographic variables (such as age, income, employment, education and gender) do not influence consumers’ attitudes to environmental labels found that some of the demographic variables were in fact significant. The survey results led to the conclusion that ‘there are some indications that there is a growing sophistication of consumers to comprehend and understand label information within different demographics’ and ‘that older consumers [50–60+years] are likely to be more concerned about environmental issues’ and ‘be more attentive and critical to the content of any green labelling provided’ (D'Souza et al. 2006, p.5). 2.10 Australian experiences with product environmental labels In Australia, the primary approaches to green procurement are: • • • green procurement check lists. green procurement networks for use by private consumers, business and public institutions, such as ECOBuy in Victoria independent organisations and ecolabelling programs, such as research and certification organisations (e.g. Good Environmental Choice Australia) (AELA 2004). A rise in environmental claims being marketed on products in Australia occurred in the late 1980s and early 1990s as environmental awareness became more present in mainstream Western cultures. False and exaggerated claims also became a problem, as many manufacturers simply emphasised aspects of their products that had already existed. Manufacturers clearly benefited from the marketing exercise, with the proportion of households in Sydney and Melbourne who reported making a purchase at the supermarket of at least one product based on its environmental friendliness rising from 3.2% in 1989 to 53.3% in 1990 (Brass 1990). In 1999, a non-profit organisation conducted a study to investigate green and environmental claims found on consumer products in ten countries, including Australia (Consumers International 1999). The study sought to investigate the frequency of claims, assess the national legislation and its effectiveness, identify problem claims, and to test some claims against the ISO 14021 Standard for Type II ecolabels. The study found that most claims were being made in the following product categories: laundry detergents, household cleaners, paints and varnishes, paper products, toiletries, soft drinks, domestic white goods and a small range of garden products. Fifty-two products were reviewed in Australia, and were collected from three stores; Coles, Harvey Norman and David Jones. The largest incidence of the word ‘green’ was found in Australia, although most of the products did not originate from Australia. This phenomenon can be partly explained by the labelling campaign conducted by the NGO Greening Australia. The word ‘sustainability’ was another green claim that had a higher than average number of incidences. The study also found that RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 23 of 75 few logos were found on products in Australia, with the only two noted labels being the Mobius Loop and the Greening Australia tree logo. In Australia, guidelines for Type II claims are issued by the Australian Competition and Consumer Commission (ACCC), which also endorses the use of the Australian Standard 14021 (which is effectively the ISO standard). The current national Type I ecolabelling program in Australia is Good Environmental Choice Australia (GECA). Recently, there has been strong industry support for information disclosure through mandatory product labelling, particularly for energy and water (Beeton et al. 2006). Information disclosure is now commonly viewed, both in Australia and internationally, as one of the roles businesses should play in environmental stewardship. A recent Australian study concluded that Australian consumers ‘appear to have poor knowledge regarding labels and label types’ (D'Souza et al. 2006, p.2). A phone survey of 1200 Victorians found that only 14.5% had heard of the Good Environmental Choice Australia label, while a NSW survey of 1181 shoppers at the point of sale found that only 13% recognised the label (AELA 2004). The surveys did not seek to learn consumers’ recognition of mandatory product environmental labels such as the Energy Rating and WELS programs. A paper by the Department of Primary Industries argued that, in Australia, the government’s role in ecolabelling should be indirect and behind the scenes (Harris & Cole 2003). The paper suggested that the government should not provide financial incentives for private ecolabels or construct their own labels because the role of the state is to protect the ‘public good’ nature of the environment and not to address market failure of asymmetric information (which is the goal of an ecolabel): ‘Direct government involvement in ecolabelling is not likely, in most cases, to be the most cost-effective method of achieving desired environmental care at present’ (Harris & Cole 2003, p.iii). Key reasons listed why the government’s involvement in ecolabelling in Australia would not be cost-effective or provide the ‘most environmental good per dollar spent’ included the following: • Ecolabels only target a relatively small number of consumers prepared to pay a premium for environmentally friendly products. Environmental outcomes are often difficult, or costly, for governments to verify or guarantee (indeed true, as private ecolabel organisations cannot afford to do so). More and more government labelling on products leads to the ‘dilution’ of essential messages. Labelling can lead to side-effects or ‘perverse’ impacts on the consumption of products. Government ecolabels could displace valuable private sector activity. There are often other policy mechanisms available to government to achieve environmental goals that target problems more specifically and cost-effectively (Harris & Cole 2003). • • • • • It is important to note that the authors state that their conclusions largely reflect their concentration on agricultural products (where a number of ecolabelling schemes currently exist in Australia), and that they cite successful examples of Australian government ecolabel programs such as the energy rating of whitegoods. They suggest that government involvement should be assessed on a case by case basis, because of the variables involved, including the government’s ability to signal via reputation, which varies from sector to sector. Suggested roles that the government can play in ecolabelling include: Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 24 of 75 RMIT University • • • • increased monitoring of ecolabelling claims by the ACCC supporting research into the role and reputation of labelling, the role of large retailers, and ecolabels as non-trade barriers increasing the use of experimental economics to investigate ecolabelling issues the development of metrics, information and education to inform producers and consumers and to promote a change in preferences. 2.10.1 Victorian Green Spot Partly as a reaction to the increase in environmental claims, the Victorian Government’s Green Spot program was established in 1989. The purpose of the Green Spot program was to identify and label consumer products that were environmentally sound in terms of four broad impacts: pollution throughout their life cycle; material efficiency; recycled content and recyclability; and adverse environmental health consequences. Types of products that were considered universally environmentally benign were not included in the labelling program (Wahlqvist 1989). The program was launched in two stages, with the first involving the publication of a series of Green Spot Bulletins, which provided advice to consumers on how to make environmentally sound decisions when purchasing a variety of products. The second stage involved the formation of an advisory committee to examine the feasibility and design of a labelling scheme. The advisory committee’s final report was published in December 1989 and recommended that a national scheme be established immediately (Sauer, Hunt & Franklin 1990). The Victorian Government provided $300 000 for the initial development of the scheme in 1989–90 and it was estimated that the cost of the national launch would be $3 million (Industry Commission 1991). As is standard with Type I labels today, the Green Spot label intended to develop primary environmental criteria for a number of product categories, addressing the most significant environmental issues associated with a particular product. In addition, the following general environmental criteria were established to consider every product on a ‘whole of life cycle’ basis: • The source of raw materials and the likely impact on the environment in accessing those materials The energy used for production of a product The environmental effects of wastes arising from the production process and methods used to dispose of gaseous, liquid or solid wastes. In these respects, product manufacturers must comply with state and federal environmental regulations The risk of environmental effects arising from the physical, chemical or biological properties of the product or of its breakdown products Indication of an established route for acceptable recycling or acceptable disposal of products and any environmental impact of such disposal Appropriateness of any packaging of the product and its suitability for recycling The product's capacity for multiple use as opposed to single use and disposal (Sauer, Hunt & Franklin 1990) • • • • • • Draft criteria for four product categories (unbleached paper products, chlorine-free paper products, recycled paper and products made from recycled plastics) were published for public review. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 25 of 75 2.10.2 Environmental Choice Australia (ECA) The Environmental Choice scheme ran from 1992 to 1994 and was a national extension of the Victorian Green Spot program (Commonwealth of Australia 1996). An advisory panel was formed upon recommendation from the Green Spot Advisory Committee report, and the ANZEC Ministers agreed to establish the program nationally. It was expected that, after an initial period of state funding, the program would be run on a self-sufficient business model. The program was administered by the Federal Department of the Arts, Sport and Entertainment (DEST). Companies wishing to use the Environmental Choice logo would be charged a fee of either $3000 or $6000 (based on annual product sales) per product for a two year licence. The aim of this labelling scheme was to address the large number of unsubstantiated environmental claims being made by product manufacturers. The original intent of the Victorian Green Spot program to certify environmentally preferable products, based on their reduced impacts over the life cycle, was not carried over into the Environmental Choice Program. Under the scheme, manufacturers sought to have their environmental claims verified and were then awarded the use of the Environmental Choice logo. Environmental claims would be subject to random tests and the Trade Practices Commission could fine participating companies $100 000 for not complying with their licence. There was strong opposition to the scheme by business and industry organisations, such as the Grocery Manufacturers’ Association (GMA), the Chamber of Manufacturers, the Chemical Specialities’ Manufacturing Association, the Paint Manufacturing Federation, the Chemical Industry Council, the Agricultural and Veterinary Chemicals Association, the Packaging Council, the Can Makers Institute and the Pulp and Paper Manufacturers Federation (Constance 1991; Gardini 1991). The Minister for Industry, Technology and Commerce, Senator Button, was also openly opposed to the program (Garran 1991). By mid-1992, 19 products had joined the scheme, mainly in the cleaning products category. Six of the products were from the same company, Down to Earth. The Grocery Manufacturers’ Association of Australia publicly opposed the scheme after the Minister for the Environment made the accusation that companies who did not put their products forward had something to hide (Lloyd 1992). The main criticisms of the program included the following: • There were no set criteria for applicants to follow; the applicant chose a product attribute and gained endorsement of that attribute — similar products could gain endorsement on different grounds (Commonwealth of Australia 1996, p.186). GMA and DEST both argued that a major problem was that the public began to perceive ECA-endorsed products as environmentally superior to those without endorsement, rather than being a mere verification of the specific claim (Commonwealth of Australia 1996, p.186). Voluntary schemes should not be run by government, as they do not rely on new legislation, and could be run through industry or other private organisations (Gardini 1991). The original intent of the Green Spot scheme was weakened to become the Environmental Choice Program, which only dealt with voluntarily stopping claims that were meaningless, misplaced or misleading, and not labelling environmentally improved products (Constance 1991; Garran 1991). The label only dealt with single environmental claims and did not look at the life cycle impacts of a product, as was originally proposed by the Green Spot program (Susskind 1992). • • • • RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 26 of 75 • The label did not do anything different than to what current industry self-regulatory codes of conduct aimed to achieve and was deemed to be costly and interventionist (Lloyd 1992; Susskind 1992). The logo was misleading because it only validated labels’ statements and did not endorse the overall environmental impact of the product (Lloyd 1992). Industry was in strong opposition to the program because they felt that they had no influence on the program’s creation and that the program did not take a life cycle perspective (Lloyd 1992). • • 2.10.3 Other labelling programs A multitude of other environmental labelling campaigns have existed in Australia including the ‘Promoting the use of Plastics Again’ (PUPA) butterfly logo used in South Australia; the Australian Conservation Foundation’s (ACF) ‘green leap’ program; and the use of logos for cause-related marketing linked to Planet Ark, World Wide Fund for Nature (WWF) and Landcare. The WWF permits companies to use its Panda symbol on a product in return for a royalty. The symbol does not indicate that the product is ultimately green, but rather that the company has provided financial support to the WWF. Support for this program fell during the recession in the mid to late 1990s. In the early 1990s, the ACF ‘green leap’ program provided endorsement to companies based on three-tiers of endorsement: an environmentpreserving improvement made; product endorsement; and full company endorsement (Lawson 1994). Other product environmental labels that currently exist in Australia include Fairtrade Certification, Australian Certified Organic, National Association for Sustainable Agriculture Australia (NASAA) Certified Organic, Green Globe 21, Green Power and the Greenhouse Friendly scheme. Percent Daily Intake (%DI) is a new dietary label that was developed through collaboration between the Australian Food and Grocery Council (AFGC) and industry. While not specifically an environmental label (the intention of the label is to contribute to addressing obesity in Australia), it provides a recent example of cooperation between industry, government and other stakeholders in the development of product labelling (AFGC 2006). In 2006, the Australasian Furniture Research and Development Institute (AFRDI) began research and development on a sustainability standard for commercial office furniture (AFRDI 2006b). The key reasons given for the development of a sustainability standard that relate to product environmental labelling were: • Manufacturers are beginning to be confronted with green specifications and tender requirements that serve to potentially exclude companies from the marketplace and the ability to effectively compete. International trends indicate that design for environment and sustainable production will become a common expectation by governments, major companies and the consumer market. The creation of a standard that improves and measures the sustainability performance of the entire sector is preferable to one that just recognises the best performers. The standard will comply with labelling standards such as the Greenstar credit requirements (AFRDI 2006a). • • • RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 27 of 75 3. SUCCESS FACTORS FOR A RANGE OF ECOLABELS The following table is a summary of the common factors used to assess the success of product environmental labels (PELs). The success indicators are common throughout the literature; however the ‘phase model’ approach has been adapted from a recent comprehensive publication on product environmental labelling (Rubik & Frankl 2005). This framework has been applied to some of the key Australian PELs and a sample of some overseas labels (see Appendix B). Phase Establishment phase Success indicators • • • • • • Number of criteria developed for a product group Quality of criteria Significance of the criteria (environmental) Continual development of new criteria for other significant sectors Involvement of key stakeholders in the criteria development Economic costs outweigh the benefits Number of labelled products available in stores Number of licensed products on the market Market shares of labelled goods and services Environmental significance of available goods and services Consumer awareness, knowledge and trust of the label Consumer and producer behaviour changes attributed to the label Producer acceptance of the label Involvement of NGOs and other relevant organisations Environmental impacts (gains and losses) Market phase (supply and demand side) • • • • • • • • Monitoring and assessment phase Figure 4: • PELs assessment model (Adapted from Rubik & Frankl 2005 and US EPA 1994) Factors for the success and/or failure of a product environmental label can vary greatly, depending on the product group analysed. A framework for six main product categories and criteria to assist in selecting the most appropriate type of product environmental label or information system is shown in Figure 5. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 28 of 75 Environmental product information by product category Consumable goods • Short life span at use phase • Frequently purchased • Consumer can easily change purchasing decisions • Quick simple information needed Durable goods • Longer life span at use phase • Choices most often made in comparative way • Consumer requires more detailed information to compare between competing goods Services Complex • Must address several stakeholders Simple • Provide guidelines for best use Recoverable consumables • Consumer action at end of life has impact on environmental effectiveness • More stakeholders involved at end of life • Example: paper Energy consuming • Main impacts are in the use phase Energy passive • Simple and quickly understandable • Guidance for end of life phase Nonrecoverable consumables • Example: cleaning products Figure 5: Product category orientation framework (Rubik & Frankl 2005) 3.1 Blue Angel, Germany Establishment phase The Blue Angel ecolabel program is considered to be the first and oldest product environmental label. It was established in 1977 and currently has over 3600 certified products across 529 product categories (refer to Figure 6 and Figure 7). The Blue Angel is a voluntary third-party scheme (ISO Type I) licensed by the German Institute for Quality Assurance and Labelling (RAL). RAL is self-financed and is responsible for the contracts, testing and licensing of products. The two other main actors are the Federal Environment Agency (Umweltbundesamt) and the Ecolabel Jury, which consists of a number of stakeholders including industry, scientists, churches and consumer and environmental NGOs. Germany is considered to have a ‘high regulatory state’ that is environmentally progressive, and the voluntary ecolabel gains some of its momentum from this regulatory base. While the institutional arrangement is said to be key to Blue Angel’s RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 29 of 75 credibility and success, ensuring that the scheme is independent and can resist undue industry influence, it was criticised in its early years for having a criteria setting process that was dominated by environmentalists and for not consulting adequately with industry (Jordan et al. 2003). An early case study example of the lack of industry consultation was the original criteria for laundry detergents. Only products that were sold as building blocks (separate chemicals the consumer mixes in quantities appropriate to each wash) were eligible for the label. Market share of this type of detergent went from 1% before the introduction of the label up to 5% after its introduction, but quickly returned to 1% of the market share as the product design was not appealing to consumers; something industry was already well aware of (Morris 1997). The Blue Angel utilises a simplified LCA framework, based on its philosophy of simplicity and transparency and primarily assesses a product or service’s most important environmental characteristics. When the program was first was developed, it awarded the logo for the label based on a product’s singular environmental benefit. The licence award is valid for three years, but flexibility to shorten the time frame exists if more rapid technological progress is expected, as is common in electronics and IT equipment. The Blue Angel does not label black product groups (e.g. it refused to create group for cars, as they are more damaging to the environment than public transport), or product and service groups that as a whole are already seen to be environmentally friendly (i.e. bikes). However, the label has been awarded to car-sharing schemes. Applicants are charged a one-off evaluation fee and a licence fee based on the product’s annual turnover. Applicants from developing countries are offered reduced rates and technical support to ensure that German businesses do not use the label for protectionist purposes. The Federal Environment Agency collects suggestions for new product and service groups; anyone, including foreign non-EU companies, can put forward suggestions (Institut für ökologische Wirtshaftsförderung (IOW) 1999; Jordan et al. 2003; OECD 1997). Total number of products Contracts expiring at end of year due to further development of award criteria Number of new products in the course of one year Figure 6: Trend for Blue Angel certified products 1995–2006 (Adapted from RAL July 2006) RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 30 of 75 Date 01-01-1999 01-01-2000 31-01-2000 31-01-2001 31-12-2002 31-12-2003 31-12-2004 31-05-2005 01-01-2006 01-07-2006 Figure 7: Number of products 3728 3688 4182 3669 3790 3317 3595 3581 3214 3652 Label users 751 760 831 779 710 689 608 578 480 529 Number of products marked with the Blue Angel (Adapted from RAL July 2006) Market phase Market penetration of the label varies greatly between the product groups and therefore cannot be explained simply by consumer awareness. Competition among companies is listed as a key driver for manufacturers to adopt the label, as approximately 92% of companies with the label have a direct competitor also with the label (Institut für ökologische Wirtshaftsförderung (IOW) 1999; Jordan et al. 2003; OECD 1997). Although the Blue Angel has the largest number of product categories and labelled products, six product groups are responsible for about 60% of all the labelled products: paints and varnishes (25%); wall paints (14%); recycled paper (6%); recycled board (5%); copiers (5%); and woodchip wallcovering (4%) (Rubik & Frankl 2005). In Germany, the Blue Angel enjoys a very high level of consumer recognition. A 2004 study found that 83% of respondents recognised the label, while a 1996 survey found that 80% of West Germans and 56% of East Germans were aware of the label. This is due in part to the market saturation of the label; products with the Blue Angel label represent a larger proportion of products with a Type I label than those with any other label (products with a Nordic Swan label are the next largest group). The media and consumer NGOs play a key role in raising and maintaining consumer awareness of the Blue Angel, as the government has not invested a large amount of resources on promotional campaigns. A 2002 study found that the Blue Angel had lost its ‘unique signalling position’ as an indicator of an environmental preferable product, in part due to the increase in additional ecolabels created by individual companies, industrial associations, environmental organisations and testing institutes (Rubik & Frankl 2005, p.83). A survey of consumers found that 55% of consumers used the label as a signal, down from 61% in 1992 (Scholl 2002). For its 25th anniversary year, in 2003, an active marketing plan was undertaken to promote the modernisation of the brand image of the Blue Angel, in order to spark a renewed interest from consumers and manufacturers. Monitoring and assessment phase In October 2006, a strategy workshop, ‘Making the Blue Angel fit for the future’ was held to set the path forward for the label. Some of the strategic outcomes of the workshop included increasing public outreach through the selection of products that appeal to consumers; shortening assessment periods; and extending cooperation, mutual recognition and joint criteria with other labelling programs (Schäfer December 2006). Literature on the Blue Angel suggests that it is the label’s independence from business and government approval that is key to its success with consumers. The institutional structure has remained relatively unchanged since its inception, except for a greater number of criteria RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 31 of 75 and LCA considerations for the standards, and a more direct role for consumer and environmental NGOs in expert hearings. Many also credit the label with having an impact not only on German consumer and producer behaviour but also with creating change in the international marketplace, as it has acted as a model for the development of many other labelling schemes. An OECD (1997) report states that ‘its environmental effectiveness may lie more in its impact on business and government procurement practices and on the setting of environmental standards for certain product groups than its influence on consumer behaviour’. Efforts have been made to integrate and harmonise the label with other Integrated Product Policy (IPP) in the EU, such as the EU’s Environmental Management and Audit Scheme (EMAS), which is widely used by German industry. There is strong industry support for harmonisation of labels in Germany (Institut für ökologische Wirtshaftsförderung (IOW) 1999; Jordan et al. 2003; OECD 1997). Other achievements commonly attributed to the Blue Angel include: • being the first national ecolabel and serving as a trigger and model for the development of other ecolabels its furthering of the use of life cycle analysis as a decision-making and design support tool the multiplier effect of raising public awareness of environmentally preferable products beyond the labelled product groups its strengthening of the domestic market presence of European environmentally preferable products the setting of standards development for product development and manufacturing, as well as for policy directives and support programs being seen as the ‘best in class’ among ecolabels by industry (Dirksen 1996; OECD 2005). • • • • • An official quantitative evaluation of the Blue Angel scheme with regard to its environmental effectiveness does not exist; however, a qualitative review of the label and the lessons learnt was published in 2002 (Muller 2002). Discussion of a 2003 report that sought to quantitatively and qualitatively analyse the achievements of the Blue Angel since 1977 by focusing on three products groups can be found in the ecolabelling literature. The report highlighted that a continuous reduction of negative environmental impacts (e.g. reduced CO2 or nitrogen oxide emissions) paralleled the tightening of the Blue Angel criteria, although it added: ‘However, in all cases, technological developments had taken place in parallel that made it difficult to quantify the ratio of improvement actually attributable to the label’ (OECD 2005, p.17). 3.2 EU Flower, European Union Establishment phase The EU Flower ecolabel program is the second example of a supranational label, and was established in 1992. It currently has 28 product categories (three of which are under revision and four which are under development) and approximately 2000 certified products by a total of approximately 290 different companies. The EU Flower is a voluntary multicriteria based third-party scheme (ISO Type I). Licences are awarded for up to three years, and the criteria for compliance are based on life cycle considerations. Five product groups are responsible for 89% of all ecolabelled products: home care (38%), textile products (20%), footwear (15%), sanitary paper (10%), and bed mattresses (6%) (Rubik & Frankl 2005). RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 32 of 75 Initially, the British Government took an active role in the creation and management of the EU label scheme; however, it ‘downplayed its promotional efforts’ after a 1998 study showed slow and minimal uptake of the scheme (Jordan et al. 2003, p.8). Each member state of the EU has designated a ‘competent body’ that has been charged with implementing the label schemes at a national or regional level. This competent body is responsible for receiving applications and for the award of the label. Establishment and revision of product and service criteria is the responsibility of one or two ‘lead’ competent bodies and the European Commission. The Commission cannot adopt new criteria until there is agreement (by majority vote) from governmental experts of all the member states. The initiative for selecting a group of products is taken either by the Commission or by the European Union Ecolabelling Board (EUEB). DEFRA is the organisation charged with being the competent body for the UK. The governance structure of the EU Flower is outlined in Figure 8. The labelling program is supported through funding from the European Commission, the member states and revenues from the annual licence fee for those holding the Flower label. The fee is set around 0.15% of the turnover of the labelled product (Rubik & Frankl 2005). Supranational schemes, particularly the EU scheme, face some problems in regard to their wide-ranging applicability, as the ‘environmental criteria of ecolabel schemes may be best defined with the full consideration of the specific national environmental situation (e.g. environmental potentials, natural assimilative capacity), typical market conditions and structure, special environmental infrastructure and environmental awareness and preferences of consumers (e.g. depending on income levels, cultural differences, population) of each member state’ (Karl & Orwat 1999b). Therefore, a supranational scheme with criteria developed by a central body will mean that average environmental criteria may be established, which may be too high or too low in comparison with the national conditions of individual countries. On the other hand, supranational schemes are heralded by manufacturers, as they can reduce the transaction costs associated with applying for a host of national labels, and mean that product amendments are required to comply with only one label, resulting in cost reductions and economies of scale for producers. Supranational schemes also provide a certain minimum level of environmental information for countries in the EU without their own ecolabelling program (Karl & Orwat 1999b). RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 33 of 75 Figure 8: An overview of the EU ecolabel scheme, (DEFRA 2006) Market phase The EU Flower often competes with other national schemes in the EU. Because of the dominance of the Blue Angel scheme in Germany, the EU Flower label is not well perceived or accepted in that country and has been seen to be inferior (only two German companies had the label as of 2002), even though in some cases the standard may be higher (Jordan et al. 2003). The EU Flower is often criticised for being too costly, cumbersome, lacking in transparency and suffering from low consumer awareness. In the first four years of the scheme, only 11 product groups were covered and very few awards were made, in comparison to the Blue Angel scheme, which had 210 awards in 14 product groups over the same time frame. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 34 of 75 There is a host of literature discussing the strengths and weaknesses of the EU Flower (Hale 1996; Institut für ökologische Wirtshaftsförderung (IOW) 1999; Jordan et al. 2003; Manzini et al. 2006). This is summarised below. • Strengths – Supranational dimension (Europe-wide scheme) – Selectivity — the criteria for each single category are constantly reviewed – Services — the ecolabel has been extended to include services Weaknesses – Complexity — length of time it takes to develop criteria for a category of products – Cost — direct and indirect costs – Limited access — targets only the top 20%–30% of products – Undifferentiated — not possible to differentiate between two products with the ecolabel – Rigidity — bureaucracy structure that manages the label appears to muddled • Claims that political arguments and interests rule over scientific and environmental arguments (as demonstrated earlier in the case of paper products in the EU) are also suggested for the low uptake and impact of the label (Erskine & Collins 1997). In an effort to raise awareness of the program, the EU Ecolabelling Board held ‘Flower Week’ consumer awareness campaigns throughout the EU in 2004 and 2006. The campaign included in-store activities, seminars and competitions through websites, magazines and schools, and special attention was directed at families, women with small children and schools. The 2004 campaign saw an 80% increase in the number of licence holders and a doubling of ex-factory sales for some licence holders (GEN August 2006). However, a 2006 study that interviewed over 24 000 people in the 25 member states of the Flower program still found that nearly half (48%) of people in the EU do not know what the EU Flower label means (European Commission 2007). Respondents were given eight pre-defined categories, from which they could choose one that — according to them — corresponded with the Flower label. The label was correctly recognised by only 11% of EU citizens. An identical proportion of respondents considered the label to be a green energy label, whilst 9% associated the label with bio-food (see Figure 9). Therefore, not only is the label not well recognised, it is also not well understood. The level of awareness also varies greatly across the 25 member states (see Figure 10). RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 35 of 75 Figure 9: Results of 2006 EU Flower awareness survey (European Commission 2007) Figure 10: Results of 2006 EU Flower awareness survey by member state (European Commission 2007) RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 36 of 75 Monitoring and assessment The EU Flower has been heavily criticised for its low uptake and market impact. An actual environmental gain from labelled products has not been a focus of any studies found in the literature. According to the Department for Food, Environment and Rural Affairs, ‘labelling is a very powerful tool, because consumers and manufacturers can easily relate to it: so a good green label like the Flower has a great deal to offer. The UK strongly supports the aims of the European scheme … [however] … developments since 1992 show that ecolabelling cannot on its own transform the environmental behaviour of industry and consumers, or meet their needs, in the way that was expected when the scheme was set up’ (DEFRA 2006). While it supports ecolabelling, DEFRA is moving its focus toward regulatory tools such as Integrated Product Policy (IPP) and an Eco-Management and Audit Scheme (EMAS) as preferred methods for improving the environmental impact of products (DEFRA 2006; Jordan et al. 2003). Discussion in the EU in general also focuses on Integrated Product Policy, in which greener consumerism is to be promoted. Ecolabelling is seen as one strategy to transmit environmental information regarding the impacts of products and services; however, labelling is only a small part of a broad policy area (Rubik & Frankl 2005). 3.3 Nordic Swan, Nordic countries (including Sweden, Finland and Denmark) Establishment phase The Nordic Swan scheme was established in 1989 and is a supranational Type I ecolabelling scheme. Currently, Norway, Sweden, Finland, Iceland and Denmark participate in the scheme, which is overseen by the Nordic Council of Ministers. The driver for the creation of the multinational scheme was avoiding competition between separate national schemes in these countries, which was leading to consumer confusion. There are approximately 60 product categories and over 1200 products that have been awarded the Nordic Swan label. Funding for the scheme is derived from the member countries and from the annual licence fee charged to label holders. The annual fee ranges from 700 to 41 000 Euros (approximately $1180 to $69 000 AUD) and is based on annual sales of the labelled product. Seven product groups are responsible for 65% of all Nordic Swan labelled products: toner cartridges (12%), printed paper (12%), printing paper (11%), sanitary paper (11%), all-purpose cleaners (8%), detergents for sanitary facilities (6%) and primary batteries (5%) (Rubik & Frankl 2005). Market phase The Nordic Swan label is well recognised, with more than 90% of people in Sweden and slightly fewer people in Norway, Finland and Denmark stating that they recognise the label (Leire & Thidell 2005). A Denmark study of actual store purchase data found that the Nordic Swan label significantly increases the marginal willingness to pay for two types of products: detergent and toilet paper (Greaker 2002). The study looked at the impact of the ecolabel on toilet tissue, kitchen paper towels and compact laundry detergents in Denmark from 1997 to 2000. It found a consumer willingness to pay a 10%–17% premium for ecolabelled toilet paper and detergents, but no willingness to pay a premium for kitchen paper towels. The study also concluded that Danish consumers are willing to act on ecolabels even though there was no direct benefit to them, which signals that altruistic motives and consumer confidence in the government, who certify the label, is high. This also reflects the fact that environmental issues receive substantial media attention in Denmark and that there is a wide acceptance of policies pursuing ambitious environmental goals (Bjørner, Hansen & Russell 2002). RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 37 of 75 Monitoring and assessment phase In 2005, the Nordic Council of Ministers commissioned a study to evaluate the effectiveness of the Nordic Swan label. This study is touted to be one of the only comprehensive studies undertaken to quantify the effects of an environmental label on the environment and to assess changes in the market. The report assessed the influence of the label on total environmental load and found that ‘most product groups covered are environmentally relevant, though some of them are of a marginal importance’ (Rubik & Frankl 2005, p.88). The study highlights that the influence of the label is limited, as the label has so far been unable to influence environmentally significant areas, such as transportation and the product use phase. Another study on the environmental impacts of voluntary environmental labelling, which particularly focused on the Nordic Swan scheme, concluded: It should, however, be recognised that taking any single environmental policy instrument, be it, for example, eco-labelling, emission taxes or environmental management systems, and assessing its potential effect on the total environmental load of society, the results would likely show that the isolated impact of the individual instrument is very limited. This final analysis should therefore also consider factors such as the Swan label’s potential to influence environmental parameters with respect to various product groups. It is a well-established fact that the eco-labelling tool has many inherent limitations due to its voluntary nature and the complexity of the environmental impacts associated with the products. By adding this perspective, the analysis becomes more complex and the results less clear-cut compared to the initial assessment of the Swan label’s environmental effects (International Institute of Environmental Economics 2000, p.34). 3.4 Environmental Choice, Canada and New Zealand Establishment phase The Canadian Environmental Choice Program (ECP) was the world’s second Type I ecolabelling scheme and was created by Environment Canada in 1988. TerraChoice Environmental Services Inc., a private marketing firm, took over management of the program in 1995, while Environment Canada still retains ownership. Currently, there are over 3000 products certified, spread across over 300 product groups. There is a one time fee for certification plus an annual licensing fee based on annual sales volume. The licence is awarded for a three year period and annual compliance with the labelling standard is verified though a statement submitted by the manufacturer. The New Zealand program’s structure and development closely resembles that of the Canadian program. Market phase Under the management of TerraChoice, the ECP has been promoted through a number of significant marketing programs (the most recent one was in 2006) including newsletters, the introduction of the government’s Incorporating Procurement Policies to Eliminate Refuse (GIPPER) Purchasing Guide, the eco-buyer website (www.ecobuyer.net) and promotion at a number of trade shows and in trade publications. TerraChoice has also shifted the target audience for the labelling program from private retail consumers to professional purchasers, including government, industry groups, school boards, and private institutions. Informally, the program is connected to many government and non-governmental procurement programs, whose purchasing guidelines stipulate the procurement of Environmental Choice labelled products. The program claims that a majority of its recent market impact stems from the increasing uptake in the professional purchasing market, particularly in relation to construction materials and office consumables. No literature currently exists in the public domain that reports on the market uptake or impact of the Environmental Choice Program; Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 38 of 75 RMIT University however, TerraChoice creates annual survey reports (available for purchase) on the ecopurchasing market in Canada. Monitoring and assessment phase To combat the illegal and fraudulent use of the Environmental Choice logo, a fraud alert section has been created on the program’s website. Again, no literature exists on the environmental gains from the scheme. However, the New Zealand program attributes the creation of markets for recyclable material in New Zealand to the scheme’s requirement for the use of recycled material in labelled products (OECD 2005). 3.5 Bra Miljoval, Sweden Establishment phase Established in 1987, the Bra Miljoval is owned and operated by an ENGO, the Swedish Society for Nature Conservation (SSNC). SSNC started ecolabelling in 1988 on laundry detergent and paper. There are currently 12 product groups, covering laundry detergents, stain removers and bleaches; cleaners; toilet cleansers; dishwasher detergents; washing-up detergents; soap and shampoos; paper; nappies and similar products; textiles; electricity supplies; passenger transport; and goods transport. Product groups and label criteria are drawn up and decided upon by the Swedish Society for Nature Conservation alone. The SSNC holds itself as a label superior to the Nordic Swan, as it requires labelled products to meet all of the label criteria and not just an average weighted score, as is claimed to be the process for the Nordic Swan label (SSNC 2003). Market phase Critics of the Bra Miljoval program suggest that the product categories selected tend to be dictated by the interests of SSNC and their environmental campaigns (Morris 1997). SSNC has also developed a Green Office project with the goal of influencing professional procurement in Sweden. The program helps companies to create environmental criteria in their procurement policies. No other literature was available on the market impacts and uptake of this program. Monitoring and assessment phase No literature was available on the monitoring and assessment of the Bra Miljoval label program. 3.6 Forest Stewardship Council Establishment phase The most frequent reason given for companies’ support of the Forest Stewardship Council (FSC) scheme is not the environmental effectiveness of the standard, but the fact that it has been developed in a multi-stakeholder environment, giving the labelling scheme credibility in the eyes of the public (Rotherdam 2005). Market phase A key barrier noted to increased market uptake of FSC-certified timber is that supply has often not been able to meet demand. Corporations who have committed to purchasing only certified timber have not been able to obtain supplies of FSC-certified products in sufficient quantity (Gulbrandsen 2006). Anecdotal evidence exists that this is a problem in the Australian architecture and design specification community. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 39 of 75 Monitoring and assessment phase The FSC scheme has had some success, with UNEP (2002) noting that from 1998 to 2001, the area of forest certified by the Forest Stewardship Council more than doubled, to include over 25 million acres in 54 countries. 3.7 International Energy Star Establishment phase The Energy Star program began in 1992, initially addressing office equipment only. Today it has expanded to cover household appliances, home electronics, office equipment, heating and cooling equipment, windows, residential light fixtures and more. This label was created by the US Department of Energy and the US Environmental Protection Agency in conjunction with international partners. The US Environment Protection Agency has made formal arrangements with Australia, New Zealand, Chinese Taipei, the European Union and Canada. Each participating country sets up an administrative arm that is responsible for the promotion and implementation of the program at a local level. Products approved in one country are licensed to display the label in any of the other participating countries. Product information is then shared between the participants. The US EPA and US Department of Environment are responsible for developing the endorsement criteria, but there is now a process to consult all partners when developing new specifications (Harrington & Damnics 2004). The Australian Energy Star program is a voluntary program, run in cooperation with industry. It currently applies to office equipment, including computers, printers, fax machines and photocopiers, and will soon apply to home entertainment equipment, such as TVs, VCRs, DVD players and audio equipment. The Energy Star program is funded and coordinated by the National Appliance and Equipment Energy Efficiency Committee (NAEEEC), and is managed by the NSW Sustainable Energy Development Authority (SEDA). A specialised Energy Star website has been developed to assist manufacturers, retailers, IT and purchasing managers, and consumers to benefit from the Energy Star program. Energy Star compliant office equipment automatically switches itself into a power-saving 'sleep' mode after a certain amount of idle time, ensuring power losses are minimised. On home entertainment goods, the Energy Star logo means that standby power use is minimised. Manufacturers apply for approval to use the Energy Star label, provided their appliances meet the required energy efficiency standards. Development of the Energy Star program Commencement date: 1995 — Japan 1999 — Australia and New Zealand 2000 — Chinese Taipei, European Union 2001 — Canada Appliances labelled: (Note that product coverage varies by country) 1992 — Computers, monitors 1993 — Printers 1994 — Fax machines 1995 — Copiers 1997 — MFDs, scanners RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 40 of 75 Market phase In a market survey of Australian consumers, over half (56%) had something positive to say about the Energy Star label; however, two-thirds of people also had something negative to say about it. The main perceived positives were the blue colour (23%) and that the logo is eye-catching (11%). The primary negative comment expressed about the Energy Star label (32% of the 64% with negatives mention it) was the perception that it does not communicate anything (Artcraft Research 2005). Approximately one-third of the population claimed to be aware of the Energy Star label (without prompting), while around four in ten could recall the Energy Star label when prompted. In terms of the Energy Star label, people were asked to indicate what the label tells them about products it is on. In response, 39% (correctly) mentioned standby power, while others thought that it indicated energy savings (30%) and/or energy efficiency (26%). While 15% of respondents thought that the label indicated the highest rating product (a likely future use of the label, replacing the TESAW label), a further 8% thought that it indicated the lowest rating product (i.e. those earning only one star) (Artcraft Research 2005). The Top Energy Saver Award Winner (TESAW) is an Australian Government award that recognises the most efficient products on the market. It applies to both electrical and gas products that carry an energy rating label and is designed to help consumers quickly identify the most efficient products on the market. In 2005, the Equipment Energy Efficiency Committee recognised that two endorsement labels in the appliance and equipment market was an undesirable outcome for all stakeholders. To overcome this problem, the Equipment Energy Efficiency program has designed a transition to Energy Star for all relevant products. The Energy Star label is seen as the best vehicle, given the global nature of the label and the relevance this has to the majority of suppliers. Energy Star also enables wider leveraging of marketing activities. Refrigerators and freezers are the first likely products to make the transition, which is proposed for April 2007 (AGO 2006a). Monitoring and assessment phase The amount of energy saved through the purchase of products labelled with the US Energy Star label is equivalent to the energy required to power ten million homes and has reduced air pollution to the equivalent of taking ten million cars off the road (UNEP 2002). 3.8 Good Environmental Choice Australia (GECA) Establishment phase The Good Environmental Choice Australia label is the only voluntary multi-criteria ecolabel in Australia. There is currently no government-endorsed or sponsored multi-criteria, third-party verified ecolabel in Australia. The GECA label was established by the Australian Environmental Labelling Association (AELA) Inc., an independent non-profit environmental research and ecolabel certification organisation. The program was initiated in 2001 with a consultation paper and launched to the public in 2002. Criteria and assessment for the label are based on a life cycle analysis of the product’s impacts. There are currently 55 registered products, 32 product categories and three categories under development. AELA has also created the Australian Green Procurement Database, which is a listing of environmentally preferred products. It is currently populated with only GECA-certified products. A lack of clear organisational process and meaningful stakeholder engagement may have affected the development of the Good Environmental Choice Australia label. Previously, the standards development body was also the certifying body, although some steps have been taken to address this potential conflict of interest. As a limited-funded, privately run scheme, it has also been open to criticism with regard to the robustness of the research underpinning new labels, the transparency and evidence base of the program, and the extent of meaningful stakeholder engagement. Such factors could contribute to longer term issues with credibility. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 41 of 75 Market phase In Australia, there is low consumer awareness of the Good Environmental Choice label, along with poor recognition and a lack of understanding of symbols and labels used on packaging (AELA 2004). A survey of shoppers in NSW found that the Good Environmental Choice logo was only recognised by 13% of participants and that there was confusion over its meaning. Meanings associated with the logo included: • • • • • Australian-made (51%) good for you (10%) meets Australian standards (8%) good for the heart (6%) environmentally safe (6%) (Taverner Research Company 2004, p.28). More than half of participants in the same survey (58%) recognised the plastics identification code, but less than 5% correctly identified its meaning. Almost a third of participants (30%) recognised the Australian Recycled Carton Board logo, but only 13% correctly stated that it meant ‘recycled’ — almost half of participants associated it with being ‘recyclable’ (Taverner Research Company 2004, p.27). Currently, and primarily because of the label’s recognition in the Greenstar suite of tools, 62% of the products with a Good Environmental Choice label are in the construction/commercial office fit-out sector (34 of 55 products), and 71% of new labels since 2005 (since the memorandum of understanding was signed with the Green Building Council of Australia) are in the construction sector (27 of 38). Insufficient educational and promotional campaigns concerning the Good Environmental Choice program have resulted in continued confusion over product claims, and many consumers remain unaware of the regulations regarding product labelling, what the labels are, and how to assess the information that such labels provide (AELA 2004). Monitoring and assessment phase At this time, no literature is available on the monitoring and assessment of the Good Environmental Choice Australia program. 3.9 Water Efficiency Labelling and Standards (WELS) scheme, Australia Establishment phase In Australia, a voluntary water efficiency labelling scheme has been in existence since 1988. The coverage of the old voluntary scheme was limited, and it was taken up by few suppliers and generally applied to those products that were already the better performing ones. The main incentive for this label was the support of water utilities (members of the Water Services Association of Australia — WSAA). The label become more of an endorsement, rather than a comparison label aimed at assisting consumers to compare the water efficiency of different models (George Wilkenfeld and Associates Pty Ltd 2003, Artcraft Research, 2005 #129). In mid-2003, the Environment and Heritage Ministers of the Australian Commonwealth, state and territory governments, along with those of New Zealand, agreed to develop a national mandatory WELS scheme, covering showerheads, washing machines, dishwashers and toilets. During the development of the standard, extensive consultations and focus groups took place with a wide range of stakeholders, including water service providers, industry regulators, plumbing regulators, product manufacturers, importers, retailers and consumers. Liability for testing, registration, and enforcement of non-compliance penalties was established. Provisions for labelling non-rateable products were also required and a zero Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 42 of 75 RMIT University star rating was included. The WELS scheme became mandatory on July 1, 2006, with a grace period lasting until 31 December 2007 extended to certain products. Market phase Surveys in 2005 indicated that 41% of Australians recognise the WELS label, rising to 53% when prompted (Artcraft Research 2005). The widespread use of the label has been increasing in the last few years, as the transition from voluntary to mandatory labelling occurs. Monitoring and assessment phase In the WELS final report, it was projected that the mandatory water label would reduce the total water consumption of labelled products by approximately 63 710 mega litres (ML) per annum below the business as usual (BAU) trend line by 2016. This represents a water use saving of approximately 6.4% for the product group subject to WELS, and a saving of 5.2% in total household indoor water consumption. The overall benefit/cost ratio was calculated to be 2.8, with the program costing about $172 million and the value of energy and water savings being approximately $507 million (both net present value based on a ten percent discount rate over the period 2004–16) (George Wilkenfeld and Associates Pty Ltd 2003, p.5). As the program only became mandatory on July 1, 2006 and the final grace period for all products has not ended, studies on the impact of the label do not yet exist. 3.10 Energy Rating for Minimum Energy Performance Standards, Australia Establishment phase The Equipment Energy Efficiency Committee (E3) of the Ministerial Council on Energy is responsible for the mandatory energy rating labelling scheme and for setting and enforcing the Minimum Energy Performance Standard (MEPS). Energy labelling was first introduced in some Australian states in 1986 and now all states have the necessary regulations in place. MEPS are a more recent addition to the Australian scene, only being introduced in 1999. Eight product types are covered by MEPS, while several more will be under active consideration over the next few years. In the 1980s, much effort was devoted to supply-side activities, especially demand management, in order to address power shortages and seasonal peaks and troughs. By the late 1980s, and throughout the 1990s, the onus shifted largely to consumers with the proliferation of a wide range of energy efficiency programs. The information available was almost exclusively focused on energy efficiency as a virtuous end in its own right, though many displays and materials were also aimed at the opportunity presented when building or renovating a home, or purchasing a new appliance. However, as pointed out in a recent report to the NFEE Steering Committee (AGO, 2006a), there has been a profound shift during the last decade to viewing consumer energy use in light of strategic thinking and policy. The extremely high level of awareness and perceived importance of the energy label, and the obvious relevance of the information provided to prospective purchasers revealed in the current study, did not happen overnight. The energy label has been mandatory on all eligible appliances for nearly two decades, and has been consistently promoted by various utilities, energy agencies and even some manufacturers (though at relatively low levels of expenditure) for most of that time. In Australia, energy labelling and MEPS are controlled by state rather than national legislation. The national parliament does not have the constitutional power to legislate in this area, although the Australian Greenhouse Office works with state agencies in managing the RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 43 of 75 program in a nationally coordinated way. The mandatory labelling program requires the cooperation of several organisations. State and territory governments are responsible for legislation, regulation and administration. This includes monitoring the requirement for labels to be displayed, and regulating offences and penalties for non-compliance. The National Appliance and Equipment Energy Efficiency Committee (NAEEEC) was established to provide a coordinating role for the program and to ensure consistency across the country; it also determines policy and sets future directions for the labelling. Meanwhile, Standards Australia is charged with establishing test procedures. They also publish special regulatory standards that show how to calculate ratings and configure the labels, and specify other program requirements (Harrington & Damnics 2004). The labelling program covers refrigerators, freezers, room air-conditioners, dishwashers, clothes washers and clothes dryers. The program requires that these household appliances display an energy star rating label (based on 1 to 6 stars, with 6 stars being the best rating). The label allows consumers to make comparisons between appliances based on their energy performance and thus to purchase more energy-efficient appliances. It also provides an incentive for manufacturers to improve the energy performance of appliances. Major manufacturers and importers recognise the commercial value of energy labelling and are generally very supportive of the program. Market phase In 2005, a nationwide study into consumer awareness and use of the energy rating label was conducted (Artcraft Research 2005). Phone interviews, questionnaires and focus groups were conducted with over 4000 participants. The study found that Australian consumers use and have a remarkably high recognition of the energy rating label. Almost 88% of consumers use the information on the label when purchasing an appliance and 75% indicated that the label is influential in their purchasing process. Australia-wide, 94% of consumers recognise the label unaided and 96% recognise it when prompted. Awareness of the label has increased significantly since 1991, when a Victorian survey found that 45% of the public recognised the label (compared to 94% in Victoria in 2005). However, consumers’ main motivation for using the energy label is not to help the environment (13%), but rather to take advantage of cost savings (39%) and energy savings (38%). An explanation given for the high level of success the label is experiencing with consumers is that the information the label provides communicates directly to the interests and needs of the purchasers. The five most frequently mentioned positive aspects of the energy label are that it stands out (25%), that it states the appliance’s energy consumption (23%), that the stars show the energy efficiency of the appliance (22%), that it has appealing colours (17%), and that it enables comparison between models (15%). The only negative perception of the energy label to reach double figures is that it is difficult to remove after purchase (15%) (Artcraft Research 2005). The energy label changed to a new design in 2000. The old energy rating label had been in use for about 14 years. Improvements in appliance performance caused star ratings to cluster at the top of the range, which also required the introduction of a tougher standard for calculating the star ratings. The new label and standards provide a more meaningful guide to consumers and encourage manufacturers to keep improving the energy efficiency of appliances. The star ratings of all appliances are periodically reviewed and the star rating formulae are changed as necessary. Monitoring and assessment phase The Australian energy labelling program is widely regarded as among the most informative in the world (Department of Environment and Water Resources 2005; Harrington & Wilkenfeld 1997). Extensive studies on the energy labelling program are available on the Australian Greenhouse Office website (http://www.energyrating.gov.au/gfk.html). Key findings on the Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 44 of 75 RMIT University market impact of the energy labelling scheme on various whitegoods from 1993–2005 include: • For all appliances covered by the energy labelling program in Australia, the salesweighted energy consumption is decreasing. Energy consumption of fridges decreased at an average of 3.9% per annum from 1993 to 2005, while energy efficiency increased at 4.6% per annum. Energy consumption of freezers decreased at an average of 4.0% per annum from 1993 to 2005 and energy efficiency increased at 3.3% per annum over the period. Energy consumption for clothes washers showed a slight decrease until 1998, but there was a significant increase in energy in 1999 and 2000 attributed to top loading machines only. Since 2000, energy consumption has been declining, although a slight increase was noted in 2005. Most of the decrease is a result of the increased market share of front loaders. Energy consumption of clothes dryers decreased at an average of 0.7% per annum from 1993 to 2005. Energy consumption for dishwashers decreased at an average of 3.6% per annum from 1993 to 2005 (AGO 2006b). • • • • • RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 45 of 75 4. PELS ANALYSIS This section presents an analysis of the strengths, weaknesses, opportunities and threats of PELs generally, drawing on the assessment of the individual PELs discussed in Section 3. This analysis is designed to inform Sustainability Victoria on the extent to which PELs may be part of the solution to improving the uptake of materials efficiency and environmental purchasing. 4.1 SWOT of PELs 4.1.1 Type I labels Strengths Type 1 labels reward environmental leadership of a product, based on its life cycle impacts. In the trend towards global corporate social responsibility (CSR), Type I labelling schemes provide a sort of ‘proof of compliance’ to the public (Rotherdam 2005). Type I labels are desirable to consumers because they provide simple information for decision making. Weaknesses and threats However, Type 1 labels do not allow consumers to make comparisons of competing products (Erskine & Collins 1997; Leire & Thidell 2005). It is not possible for a purchaser to make a differentiation of the environmental impact of two products carrying the same Type I label. Furthermore, the ‘all or nothingness’ of the multi-criteria label format for complex products, such as computers, means that a product that meets 64 out of 65 criteria, and that has a sound technical reason for not meeting the final one, will not be able to obtain the label, even if the product is environmentally sound (Dirksen 1996). Costs and time associated with obtaining Type I ecolabels are significant issues in some sectors, where short turnover time for many products can mean that a product is obsolete by the time it is awarded the label (Alliance April 2003). Also, voluntary Type I ecolabelling schemes are generally noted to be operating with limited resources (funds and personnel), which can lead to slow turn around times from label submission to award, and slow revision periods for label criteria. This can cause additional problems for fast changing products, such as electronics (Alliance April 2003). Type I labels are also aimed at the top performers in the market (anywhere from 5%–30%), and, as such, consumers may not learn much about the average environmental quality of products in a product group because not all firms have an incentive to get the label. A general limitation of any of the current labelling programs is their potential to affect the use phase and disposal phase of a product (Rubik & Frankl 2005). Materials efficiency is not generally expressed or accounted for in existing product environmental labels, with the exception of water and energy efficiency. Product stewardship is generally a technical requirement included in the standards for many of the Type I labels, but is not able to be regulated or monitored. Consumer studies also show that although consumers are able to recognise popular ecolabels, such as the Nordic Swan label, most of those same people could not explain the meaning of the label correctly (Pedersen & Neergaard 2006). Ecolabels, it is argued, need to provide the consumer with more information, such as the main criteria on which the award is based, how the product performs on key environmental aspects, and a ranking of ecolabelled and non-ecolabelled products. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 46 of 75 Other key critiques of Type I labels include: • • • • • • the lack of objectivity in setting the criteria the difficulty of setting product category boundaries, since no two goods are perfect substitutes for one another and some of the products may have different uses (i.e. bleach) the arbitrariness of the process of selecting and updating criteria the lack of estimated demands for labelled goods the lack of real rewards for environmental improvements (the awards are restricted in most cases to best practices) the shortness of the validity period of the label before its revision, which is especially problematic for capital intensive industries (Erskine & Collins 1996; Gallastegui 2002; Morris 1997; Piotrowski & Kratz 1999; Zarrilli, Jha & Vossenaar 1997). Opportunities A scoring system for multi-criteria labels (e.g. 95% in compliance, rather than ‘all or nothing’) may overcome some limitations of Type I PELs. Furthermore, the success of PELs in general depends upon public sector involvement and long-term strategies focussing on support for PELs themselves, as well as related activities such as rasing consumer education and awareness and improving stakeholder engagement. 4.1.2 Type II labels Strengths The key strengths of the self-declaration Type II labels are that they are cost-effective and simple for firms to develop and adopt. Weaknesses and threats The key weakness of self-declarations is that they are generally not regarded as credible by consumers. A wider problem with Type II labels is that they can affect the credibility and clarity of the information conveyed by Type I labels, especially where consumers are unable to differentiate between self-declarations and the labels that are subject to third-party certification (Pedersen & Neergaard 2006). Third-party labels are currently outnumbered by private labels and self-declarations, making this task difficult for consumers (Thogersen 2000). Third-party programs more likely to be effective if consumers are dissatisfied with existing producer claims, if the third-party label is well-recognised and perceived by users to be credible, and if it provides consumers with additional information about the environmental performance of products. The independency of the program, including transparency, is also important (Karl & Orwat 1999a). Opportunities Third-party certified product environmental labels are a way to improve the credibility of environmental labels with consumers (i.e. Type II labels could be changed to Type I or III labels). Tightening guidelines on product claims is a means to reduce confusion for consumers in differentiating between self-declared labels and independently verified ones. 4.1.3 Type III labels Strengths A key benefit touted for Type III labels is the level of detailed information they provide about a product’s environmental impact. Type III labels also allow purchasers to differentiate between competing products with a similar label, as the intent of Type III labels is ‘to provide the basis for a fair comparison of product by the product’s environmental performance’ (Manzini et al. 2006, p.122). Where Type I labels set minimum environmental criteria, Type III labels provide a quantification of a product’s impacts over its entire life cycle, using life cycle analysis. Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 47 of 75 RMIT University Studies of consumer perception and preferences about the environment have shown that Type I schemes (seals of approval) are not effective agents of change, but rather that Type III schemes (report cards) have more potential for changing consumer preferences (Teisl, Roe & Levy 2002). An Australian study concluded that consumers find both Type I and Type III labelling credible because they are endorsed by a third party (D'Souza et al. 2006). Weaknesses and threats Due to their quantification of impacts over a product’s entire life cycle, Type III labels can be extremely data intensive and costly to develop, and may need to rely on generic industry data (Alliance April 2003).There is also a concern that the level of information provided may be too detailed for consumers. Limited studies exist on environmental product declarations, but there is some discussion in the literature about whether the level of detailed information provided by these labels has the potential to be perceived by consumers as too complex for their purchasing decisions. This contention is supported by a recent study, which found that organisations generally see Type III labels as a business-to-business marketing tool (Manzini et al. 2006). Opportunities Harmonisation, mutual recognition and knowledge sharing are global trends relating to both Type I and Type III labelling organisations. Differing criteria across Type I ecolabels can be a barrier for large international manufacturers, and while it is argued that 80% of the criteria may be identical, many Type I labelling programs seek to differentiate their label by adding unique criteria, and this may not be the best way to encourage efficient or effective ESD design (particularly in electronics) (Alliance April 2003). Many countries, including Sweden, Canada, Japan, Germany, Norway, Denmark, South Korea and Italy are developing Type III programs with a view to creating national applications. The Global Type III Environmental Product Declarations Network (GEDnet) has been established and provides a forum for information exchange similar to the Type I ecolabelling organisation, the Global Ecolabelling Network (GEN). 4.2 Mandatory versus voluntary schemes Voluntary labelling schemes generally have the ability to adapt to improvements in environmental quality and technology at a faster rate than mandatory programs, which are often subject to government decision-making processes (Karl & Orwat 1999a). However, the widespread adoption of a minimum level of environmental performance measures may produce a larger environmental benefit. Voluntary product environmental labels rely on the environmental consciousness of the consumer and the motivation of industry to comply — no consumer is forced to buy labelled products and no manufacturer is forced to change the way their product is produced (Gertz 2005). Although many consumers view themselves as green consumers, relatively few act consistently green, as evidenced by the market share of environmentally preferable products and the observation that most voluntary labelled products are not market leaders (OECD 2005; Pedersen & Neergaard 2006). However, voluntary labelling is sometimes a facilitator and ‘door opener’ for new regulations or mandatory labelling, such as with the energy rating labelling and WELS programs in Australia (OECD 2005). Mandatory labels are cited to be the most beneficial for product groups where a large environmental gain is obtained by improving a broad base of poorly performing products (Rubik & Frankl 2005). RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 48 of 75 5. STAKEHOLDER VIEWS A preliminary stakeholder consultation exercise was conducted as part of the Stage 1 study, in accordance with the project brief. A report on the stakeholder workshop is contained in Appendix C. A summary of the findings is provided below. • Motivations and interests in product environmental labelling vary greatly amongst stakeholders. There is a general consensus that there is a need in Australia for accurate, verifiable product environmental information. Business-to-business and government procurement programs should be given a high level of priority, as their purchasing power and impact is greater than that of the individual consumer. A lack of government endorsement, product availability, and consumer awareness are impeding the broader uptake of the Good Environmental Choice Australia program. Biodiversity, product stewardship, materials efficiency and social issues are areas of environmental impact not currently being addressed in Australia. Data gaps exists in Australia for tools to measure environmental impacts, such as eco-footprinting and life cycle analysis, and more Australian-based data is needed. Reflection on lessons learnt from previous Australian experience with governmentled labelling programs (e.g. Green Spot Program) is crucial, as some of the same issues may still persist today. Product environmental labelling cannot be looked at in isolation and needs to be linked with other policy programs. • • • • • • • The feedback from this limited stakeholder engagement exercise reinforces and supports the findings of the literature review and analysis. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 49 of 75 6. FINDINGS, CONCLUSIONS AND RECOMMENDATIONS There is consensus in the literature that ecolabels are a very complex topic. Translating the basic idea of ecolabelling into practice, while seemingly straightforward, has been fraught with criticism and difficulty. The development and commercialisation of a product environmental labelling scheme is a resource-intensive undertaking and, for voluntary programs, there is no guarantee of market acceptance of a new label. Ecolabelling schemes have numerous difficulties to overcome before they gain widespread acceptance. Without the support and active involvement of manufacturers, any ecolabelling scheme will founder. Producers need to be convinced of the merits of ecolabelling. The criteria for awarding voluntary ecolabels have the potential to be contentious. However, although a significant amount of the literature highlights the weaknesses and failures of product environmental labelling schemes, there are few, if any, calls for an end to product environmental labelling. Instead, most authors offer recommendations for improvements to overcome the existing barriers to success. A call for increased transparency in standards development and international harmonisation of standards is a general trend with product environmental labelling programs, particularly Type I and Type III schemes. It is important to recognise that product environmental labelling alone cannot be expected to change consumer behaviour. All of the literature acknowledges that product environmental labelling has a role to play in sustainable production and consumption. However, to be effective, product environmental labelling needs to be seen as part of a suite of tools, which includes voluntary measures and regulatory policy and programs for environmental protection (DEFRA 2006). Evidence suggests that ecolabelling is most successful when it is developed in conjunction with complimentary policy initiatives. For example, the development and uptake of the Blue Angel’s standard for reduced-noise construction machinery coincided with changes to regulations that allowed the use of this machinery near hospitals, schools and other sensitive sites, as well as at noise-sensitive times of the day (Rotherdam 2005). In Australia, and internationally, demand for third-party verification of environmental claims from influential customers such as retailers, manufacturers and government purchasing programs is increasing (D'Souza et al. 2006). Feedback from participants in the stakeholder workshop confirmed this demand exists in Australia. On the basis of the literature review, we believe that there is a significant gap between consumer demand for information on the environmental impacts of products, and the availability of credible and accessible information. This gap could be filled by a new or expanded PELs scheme, although this is not the only option. Consumers are looking to those they can trust to do the background research for them and to provide them with recommendations on environmentally preferable products. However, Australian and international consumers in general are not familiar with labels and what it is they assess. Informational campaigns are required to educate consumers on the goals and meaning of product environmental labelling programs. There have been limited studies undertaken on the impacts and successes of privately run and owned labelling schemes. As these schemes are self-funded, they are generally underresourced, which can be an impediment to their growth and success. This leaves them open to criticism about their transparency and evidence base. In turn, this can lead to problems with credibility and, ultimately, uptake of the label by product suppliers and manufacturers. More trust is generally placed in schemes where there is significant public sector involvement. These factors, combined with previous unsuccessful attempts to create a national product environmental label in Australia, may be perceived as barriers to be overcome in order to expand multi-criteria product environmental labelling in Australia. Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 50 of 75 RMIT University Success in product environmental labelling relies on relationship building and multistakeholder consultation. The role of consumer groups, environmental NGOs and other advocates is significant to the success or failure of a label, from consumer awareness and acceptance, to the development of criteria. Any activity aiming to fill the environmental product information gap needs to take into account the following key influencing factors, which were identified in the literature review, in order to maximise its potential impact: • • • • • • • • • • • • • The main environmental impacts of the product or service Effective engagement with stakeholders The level of consumer environmental awareness and understanding of a product’s impacts The local market structure (i.e. manufacturer size and dominance) The format of the information provided and how the main message is conveyed Who the target audience is (i.e. professional procurement, business-to-business or individual consumer) The strictness of the criteria and revision periods Any decline in quality and affordability due to environmental criteria, which will reduce a consumer’s willingness to purchase a product Costs, fees and verification processes, which will impact on a manufacturer’s willingness and capability to comply with voluntary programs Credibility and trust, which are crucial to the success of any scheme and rely heavily on the program’s competent body Information diffusion campaigns, which are necessary to promote a program and must be targeted at the appropriate audience Environmental policy targets Linkages between labelling schemes and other environmental policy measures 6.1 Conclusions The key tasks for Stage 1 are complete and have been reported on above. The review and classification of PELs illustrates that there is a wide range of ecolabels operating in a variety of ways, with different aims, criteria, rigour, funding, actor involvement and degrees of success. The assessment of success factors for ten selected ecolabel schemes internationally (Section 3) illustrates this diversity. The SWOT analysis of PELs generally (Section 4) indicates that there are limitations to the use of PELs in driving change, and that they must be connected to other change agents in a coherent policy approach. Indeed, the individual PEL analysis, the SWOT of PELs generally, and the stakeholder information all provide a consistent picture, which can be summarised in two main themes: • • A range of variables determine the success of any individual PEL. PELs are, at best, only part of the ‘answer’. The following recommendations are structured around these themes, and are designed to inform Sustainability Victoria when developing Stage 2 of the project. 6.2 Recommendations Sustainability Victoria may risk adding to confusion if it creates a new PEL system in Australia. Success in product environmental labelling relies on relationship building and multi-stakeholder consultation. As stated above, the role of consumer groups, environmental NGOs, manufacturers and other advocates is significant to the success or failure of a label, from consumer awareness and acceptance, to the development of criteria. A successful PEL is able to: • accurately determine the main environmental impacts of the product or service and communicate this to consumers where there is an identified need for the information in the form provided Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 51 of 75 RMIT University • • • provide credible certification with appropriate costs, fees and verification processes take a long-term view, with regular reviews and long-term resourcing provide appropriate links with other product policy tools. Recommendation 1 An extensive stakeholder assessment exercise should be undertaken to establish the support for existing PELs in Australia and to investigate interest in and the potential for a ‘rebuilding’ of existing schemes. The following strategies would allow Sustainability Victoria to contribute to a strengthening of existing PELs schemes: • Improve the transparency and evidence base of existing programs and contribute to fundamental research on quantitative environmental performance factors Consider developing or sponsoring new ecolabels (evidence suggests competition amongst labels can be positive, provided consumer confusion can be avoided) Identify a particular sector where PELs would be expected to have a significant and immediate impact (where there is need — note this could be for end-consumers or corporate/public procurers in supply chains) Communicate the above to stakeholders, particularly on the supply side Seek involvement and support at a government level, ideally nationally Establish a communication and marketing strategy to build awareness and involvement amongst consumers • • • • • The PELs scheme should then be rolled out to other sectors on an as-needs basis. Recommendation 2 Input and support should be provided for the development of: • • national indicators for measuring progress with ecolabel uptake environmental labelling of the material efficiency of consumer goods (nationally). As with Recommendation 1, this recommendation can be pursued either with existing PELs schemes in mind (e.g. the existing multi-criteria ecolabel in Australia, the Good Environmental Choice label) or for a new PEL strategy. PELs are only one option for providing consumer and professional purchasers with information regarding the sustainability of a product. In the project brief, Sustainability Victoria’s primary objective was to improve and promote the importance of materials efficiency and product stewardship in product design and to develop ways of effectively communicating these strategies to consumers. Irrespective of recommendations in Section 6.2, Sustainability Victoria should consider broader policy interventions that seek to influence the procurement of products that are good or bad for the sustainability of both Victoria and Australia. Broadly, there are two types of recommendations for these activities: filling information and capacity gaps, and developing new ways of tackling the issues. The recommendations are as follows. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 52 of 75 Recommendation 3 Links should be developed with a consumer organisation (such as ECOBuy or CHOICE — Australian Consumers’ Association — who already have established reputations as credible sources for purchasing information) to provide support for the development of product environmental indicators or labelling to complement the purchasing databases/information (note: ECOBuy is able to target two distinct consumer markets — professional purchasers and private consumers — through their operating structure). Recommendation 4 The creation of a new national government policy/regulation to set a minimum level of performance for identified product sectors should be advocated. Sustainability Victoria could narrow the scope of the research to a particular product or service area with known gaps in materials efficiency and product stewardship, and collaborate with relevant industry sectors to understand the product claims they are making in order to explore how companies promote the benefits of their products and whether labelling is the most suitable option. Industry sectors where there is an existing policy context and pressure to provide product environmental information should be chosen, such as packaging, commercial furniture (corporate, professional purchasers), and electronics (consumers, households). Recommendation 5: A public sector purchasing program that focuses on capacity building for procurement rather than on the provision of information should be sponsored. Programs designed to change behaviour by building capacity in sustainable procurement are new overseas and there is potential for their introduction in Australia. Government purchasing programs can play a leadership role in supporting existing PEL schemes in Australia by promoting the organisational procurement of labelled/preferable goods. Organisations have larger purchasing power than private consumers and can therefore have a greater impact on the demand for environmentally preferable goods. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 53 of 75 REFERENCES AELA 2004, The State of Green Procurement in Australia, Good Environmental Choice Australia, . AFGC 2006, Media Release: Leading Food and Beverage Companies Unite on Labelling, Australian Food and Grocery Council. AFRDI 2006a, Progress Report on Development of AFRDI Sustainability Standard for Commercial Furniture: Australasian Furnishing Research & Development Institutue, . ---- 2006b, Furntech - AFRDI Proactive on Furniture Sustainability: Australasian Furnishing Research & Development Institute, . AGO 2006a, Equipment Energy Efficiency Programme, Report No. 2006/03, Department of Environment and Heritage, Commonwealth of Australia. ---- 2006b, Program Evaluation in Australia, Department of Environment and Heritage, Commonwealth of Australia, . Alliance April 2003, Electronic Product Environmental Labels, viewed Jan 2007, . Aoki & Cioffi 2000, 'Poles Apart: Industrial Waste Management Regulation and Enforcement in the United States and Japan', in R Kagan & L Axelrad (eds), Regulatory Encounters: Multinational Corporations And American Adversarial Legalism, University of California Press, Berkeley, CA. Aoki, Kagan & Axelrad 2000, 'Industrial Effluent Control in the United States and Japan', in R Kagan & L Axelrad (eds), Regulatory encounters: Multinational Corporations And American Adversarial Legalism, University of California Press, Berkeley, CA. Artcraft Research 2005, Appliance Performance Labelling in Australia and New Zealand: E3, Manuka, ACT. 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PRODUCT REGISTER — GECA LABEL • • • 55 registered products 62% are construction/commercial office fit-out sector (34 of 55) 71% of new labels since 2005 are in the construction sector (27 of 38) Product Storage and seating Seating Echopanel Water efficiency solutions for commercial, retail and domestic uses Modular carpets Envelopes Filing and storage cabinets Water-free car wash Commercial table and partitions Construction and masonry adhesive Tescom modular carpet tiles Zody chair Office table furniture Gypsum wall lining system Waterless printing Suspended ceiling systems (tiles only) Solaton, Solaton Enet and Solaton Nashiji tiles Two upholstery fabrics Seating, commercial Concrete Carpet tiles Workstation Linoleum MDF stair-based, radiata pine balustrades and handrails and Victorian Ash Hydrocarbon refrigerant gas – commercial and domestic fridges, Construction material Consumable good Commercial furniture Service Commercial furniture Construction material Construction material Commercial furniture Commercial furniture Construction material Consumable good Construction material Company ZAISHU STEM Woven Image Ecoverta Sector Commercial furniture Commercial furniture Construction material Cert Date Recent Date ONTERA Postspeed PLANEX No WET LILIPOD Powers Fasteners Tarkett Haworth Steinhoff Furniture Powerscape Fishprint Fricker Ceiling Systems MacQuarie Textiles ESO Group Hebel Interface Methis Tarkett Stairlock Pty Ltd Construction material Commercial furniture Construction material Construction material Commercial furniture Construction material Construction material July 2006 June 2006 May 2006 Feb 2006 April 2006 Hychill Manufacturing/durable goods Feb 2006 RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 61 of 75 automobile airconditioning Australian Paper Amtico World Waste Solutions Sunny Wipes Pty Ltd Flexitec Office, printing and packaging paper Non-PVC resilient flooring General purpose cleaners Disposable cleaning wipes Recycled rubber pavers/flooring (indoor and outdoor) MDF, particleboard and laminated products Commercial and residential termite control Paints Commercial use paper towel Upholstery fabrics Rice-straw based board Indoor/outdoor paint General purpose and hand cleaners Digital printing Degradable plastic products Paints Bean bags and satchels Car wash (two in NSW) Protective coating applications Biopolymer bags, films and packaging Office stationary, packaging and signage Textiles, undergarments and bedding Linoleum, marmoleum Termite barrier Fly ash cement product Cleaning products, detergents, shampoos, soaps and household Consumable good Construction material Consumable good Commercial use Consumable good Construction material Feb 2005 Dec 2005 Feb 2006 Nov 2005 Oct 2005 Oct 2008 Laminex Termicide Construction material Construction material Nov 2005 Oct 2005 Solver Paints Baywest Paper Towel Sustainable Living Fabrics Ampan Bauwerk Colour Citrofresh Spectrum Printing IGN Korea Wattyl Haul/Urban Boomerang Global 1 Steam Car Wash National Maintenance Products EcoEarth Technologies Bindwell Plastics Ecoliving Construction material Consumable good Construction material Construction material Construction material Consumable good Service Consumable good Construction material Furniture Service Construction material Packaging Consumable good Consumer market Consumable good Construction material Construction material Construction material Consumable good Sept 2005 July 2005 May 2005 May 2005 June 2005 March 2005 March 2005 Dec 2004 Dec 2004 Nov 2004 Oct 2004 Aug 2004 July 2004 Dec 2003 Jan 2004 March 2008 Forbo Granitgard Independent Cement and Lime Herbon Natural Products Dec 2003 Dec 2003 March 2004 May 2004 Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 62 of 75 RMIT University general purpose cleaners Amcor Cartonboard Safe Roads SCA Hygenex Recycled cardboard product Recycled rubber flooring/pavers Tissue, toiletry and commercial sanitary paper products Recycled rubber walls and pavers Three printers Packaging Construction material Consumable good April 2003 April 2002 May 2003 Jan 2003 March 2004 April 2005 May 2005 Jan 2005 March 2007 Ecoflex Australia Fuji Xerox Printing Construction material Durable good RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 63 of 75 APPENDIX B. CLASSIFICATION OF PELS Affiliations International product environmental label Country Governing body Scope Standards methodology Website ISO TYPE I Nordic Swan (including Ecolabelling Denmark, SIS- Ecolabelling AB(Sweden), Ecolabelling Norway) Established in 1989 Norway, Sweden, Finland, Iceland, and Denmark GEN Nordic Ecolabelling Board Multi-national 65 product groups + 898 labelled products • Building and decorating products • Car products • Domestic chemicals • Domestic heating • Machinery • Office equipment • Office products • Other criteria • Paper and pulp products • Services • Sundries • Chemical list, supplement • • • • • • • • • • • • • • • • • • • LCA-based criteria http://www.svanen.nu/Eng/ = English version with links to each local language group http://www.svanen.nu/Eng/criteria/ = source of product list in Scope column EU Flower Established in 1992 EU-wide Administered by DEFRA in UK, NF in France, NSAI ecolabel in Ireland, Blue Angel in Germany, Environmental Friendly Products in Czech Republic GEN Multi-national Washing machines Dishwashers, refrigerators Light bulbs (all of which are also covered by the EU energy label) Vacuum cleaners Televisions Personal computers Laptops Tissue paper products Copying and graphic paper Textiles Footwear Mattresses Laundry detergents, dishwasher detergents, all-purpose cleaners and cleaners for sanitary facilities, hand dishwashing detergents Hard floor coverings Indoor paints and varnishes Soil improvers Growing media Lubricants Tourist accommodation, and camping sites LCA-based criteria http://ec.europa.eu/environment/ecolabel/index_en. htm http://www.defra.gov.uk/environment/consumerprod/ ecolabel/ = UK DEFRA site identifies products within EU which carry the EU ecolabel – see Scope column Blue Angel Established in 1977 Green Seal Established in 1991 Germany GEN National 6,500 products + services for approx 580 label users in 80 categories LCA-based criteria http://www.blauerengel.de/englisch/navigation/body_blauer_engel.ht m - English version http://www.greenseal.org/certification/environmental. cfm USA GEN National • • • • • • • • • Hand cleaners Electric chillers Cleaners Fleet vehicle maintenance Floor care products Lodging properties Paints and coatings Papers and newsprint Windows & doors Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 64 of 75 LCA-based criteria RMIT University Affiliations International product environmental label Country Governing body Scope Standards methodology Website Environmental Choice Program Established in 1988 Canada GEN Government owned, managed by private consulting firm National • • • • • • • • • • Air-conditioners Ballasts Computers Copiers Dishwashers Fax machines Lamps Motors MFD’s, printers Water heaters Solar hot water heaters Photocopiers Computers, printers Lamps Motors Ranges/ovens Refrigerators Televisions Water heaters An independent panel sets standards that products must comply to http://www.environmentalchoice.com/guidelines/guid e.cfm?content=Guidelines&Name= Eco Mark Established in 1989 Japan GEN State owned and operated – Japan Environment Association (JAE) State owned and operated • • • • • • • • • Operates according to ISO 14020 and ISO 14024 Awarded by the Bureau of Indian Standards, which follows requirements set by a technical committee LCA-based criteria http://www.ecomark.jp/english/ = English version http://www.ecomark.jp/english/nintei.html = list of certified products http://envfor.nic.in/cpcb/ Ecomark Scheme India GEN Environmental Choice Established in 1990 NZ GEN Government owned, managed by private consulting firm Over 700 products, which include: • Office printers • Printer paper • Sanitary paper products • Copying and fax machines, printers/multifunctional devices • Toner cartridges • Hand dishwashing detergents, laundry detergents, general purpose cleaners • Recycled plastic products • Paints, wool pile carpet, wool-rich pile carpets, floor covering, commercial modular tile carpets • Laminate and wood panel • Thermal (resistive-type) insulants • Mulch mats • • • • • • • • • http://www.enviro-choice.org.nz/ Environmental Label of the Republic of Croatia Established 1993 Croatia GEN Ministry of Environmental Protection, Physical Planning and Construction Returnable plastic containers Geosynthetics, biodegradable synthetic lubricants, vegetable oil base lubricants Hygienic litter for pets, free from hazardous substances Recovered toner Cartridges, water-based paints and varnishes Water-based adhesives Fire lighting material, free from hazardous substances Materials for thermal insulation Scrap paper products LCA-based criteria http://www.mzopu.hr/default.aspx?id=5145 Environmental Labelling Program Established 1992 Korea GEN The Ministry of Environment and KOECO 4,597 products under the following categories: • Office products • Construction and housing products • Living necessities • Home appliances and furniture • Transportation and leisure-related products • Industrial equipment and supplies Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 65 of 75 LCA-based criteria http://www.koeco.or.kr/eng/index.asp RMIT University Affiliations International product environmental label Country Governing body Scope Standards methodology Website • Multi-purposed and others Common paper products with recycled content Common plastic products with recycled content Common cleaning products Stationery, other common consumable Computer products Electrical household appliances Construction materials Common paper products without recycled content Automotive products Laundry detergents, stain removers and bleaches Cleaners, toilet cleansers, dishwasher detergents, washing-up detergents, soap and shampoos Paper, nappies and similar products Textiles Electricity supplies Passenger transport, goods transport Products made from recycled plastics Energy-saving fluorescent lamps Refrigerators Emulsion paints Flushing toilets No mercury-added dry-cell batteries Low-energy air-conditioners Paper CFC-free sprays Detergents Faucets and sanitary accessories Computers Washing machines Building materials Thermal insulation Energy-efficient motors Products made from cloth Laundry services and dry cleaning services Shampoo, dishwashing detergents Lubricant oils Steel furniture Products made from rubber wood Electronics ballasts Soaps, surface cleaners Correcting agents Photocopiers Gasoline stations Writing instruments Toner cartridges Fertilisers Roof tile paints Passenger cars Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 66 of 75 Green Label Scheme Established in 2000 Hong Kong GEN Hong Kong Green Council • • • • • • • • • Operates according to ISO 14024 http://www.greencouncil.org/eng/greenlabel/cert.asp Bra Miljoval Established in 1987 The Swedish Society for Nature Conservation GEN Swedish Society for Nature Conservation • • • • • • LCA-based criteria http://www.snf.se/bmv/english.cfm Green Label Program Established in 1994 Thailand GEN Thai Green Label Board • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • LCA-based criteria http://www.tei.or.th/greenlabel/ RMIT University Affiliations International product environmental label Country Governing body Scope Standards methodology Website • • Televisions Mobile phones, printers, video media players/recorders Portable computers, fax machines Water heaters Dishwashers Rechargeable batteries Textiles Television sets Recycled toner cartridges Air cleaners Gasoline additives Motor oil filters Shampoos/soaps Transformers Microwave ovens Dehumidifiers Textile products Tourist accommodation services LCA-based criteria http://greenmark.epa.gov.tw/english/criteria.asp Green Mark Program R.O.C.Taiwan GEN Environmental Protection Administration (EPA) • • • • • • • • • • • • • • National Programme for Labelling Environmentally Friendly Products Established 1994 Green Labelling Scheme Established in 19992 Czech Republic GEN Environmentally Friendly Products Agency Singapore Environment Council (SEC) • • LCA-based criteria http://www.cenia.cz/web/www/web-puben.nsf/$pid/MZPMSFIV4BG7 Singapore GEN • • • • • • • • • • • • • • • • • • • • • • Stationery paper, hygiene paper, printing paper, office automation paper Carbon-zinc batteries, alkaline batteries Compact fluorescent lamps (integral), compact fluorescent lamps (modular) Standard laundry powder detergent, concentrated laundry powder detergent, laundry liquid detergent, dishwashing detergent, floor cleaner Washing machines Correction fluid/tape Hairspray/gel/mousse, deodorant stick/roller/spray, shaving foam and cream Computer system units, computer monitors Pre-cast concrete products Brick, tile/ceramics Independent solar cell powered calculators Independent solar cell powered watches Air-conditioners Organic fertilisers Paints and surface coatings Photo copiers Food packaging Crockery and cutlery Products made from recycled/renewable fibres Industrial and institutional cleaners Waste briquettes and charcoal Printers/faxes and multifunctional devices Visual ergonomics and image quality for displays Ergonomics of keyboards, printers, mobile phones and furniture Magnetic and electrical field emission levels Environmental management system for manufacturers, ISO 14001 Use of hazardous compounds such as brominated flame retardants or mercury and cadmium LCA-based criteria http://www.sec.org.sg/greenlabel_htm/ TCO (TCO Development) Established 1992 Sweden • • • • • The primary requirements of TCO certification concern the safety and health of employees and the environment RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 67 of 75 Affiliations International product environmental label Country Governing body Scope Standards methodology Website • • Energy consumption and rapid restart after power down Noise levels and chemical emissions LCA-based criteria http://www.milieukeur.nl/nl-NL/default.aspx (in Dutch only) Milieukeur Established in 1992 Netherlands The Milieukeur Board Over 50 categories, which include: • Adhesive labels • Automatic car-wash • Board and card games • Organic household waste bins • Car care products • Cat litter • Central heating systems • Chain forms • Chairs • Cleaning and product recycling of industrial gloves • Clothes • Coffee filters, coffee makers • Copying paper • (Concrete) pavement tiles • Envelopes • (Smooth) floor coverings • Footwear • Furniture (with the exception of chairs and other seating) • Hand dryers (paper), hand dryers (cotton), handshowers • Offset cleaning agents • Offset paper, paints • Personal computers • Ring binders/organisers • Refrigerators • Television sets • Toilet paper • Toilet chemicals • Toner cartridges • Window products • Writing materials • Writing paper • Foods • • • • • • • • • • • • • • NF Mark Established in 1991 France Association Française de Normalisation Plugs Kitchen furniture Bin bags Lounge furniture Chimney flues Heating appliances Valves and fittings Sanitary appliances Toothbrushes Bathroom furniture Floor tiles DIY equipment Paint, wall coverings Barbecues, road markings, road direction signs Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 68 of 75 The certifications issued by AFAQ AFNOR Certification attest to the compliance of products and services with current standards, whether they are French, European or international. These standards are enhanced with additional specifications, to match the market's expectations as http://www.marquenf.com/accueil.asp?Lang=English – English version RMIT University Affiliations International product environmental label Country Governing body Scope Standards methodology Website • • • • • • • • • School, sports and leisure equipment Fire detectors and fire doors Private moving services and furniture storage Golf course reception services Tourist office reception services Motorbike anti-theft devices Medical equipment Passenger transport service Houses closely as possible. Környezetbarát Termék’ Established 1993 Hungary Hungarian Ecolabelling Organisation Products include: • Paper-based stiff-walled packaging materials • Cosmetics and air fresheners in ‘environmentally-friendly’ packaging • Asbestos-free brake- and clutch lining • Mono-ethylene glycol-free automotive anti-freeze liquid • ‘Environment-friendly’ packaging (general criteria) • Inorganic binding materials for the construction industry with the use of waste materials (general criteria) • Open-system water heaters (boilers) of 5-10 litre capacity • Rapidly biodegradable chain lubricants for chain saws • household refrigerators and freezers • Mono-ethylene glycol-free liquid gauges, car-catalysts for post-assembling • Rock-like building materials and elements (general criteria) • Porous concrete building materials • Electronic telephone switches • Environmentally sound complex cleaning services • Regular cleaning services through the application of textiles made of microfibres • Rapidly biodegradable hydraulic oils, closed, commercial refrigerators of medium internal temperature (0-8 °), energy-efficient radiator valves • Microfibrous cleaning materials • • • • • • • • • • • • • • • • • • • • LCA-based criteria http://www.kornyezetbarat-termek.hu/angism.htm KELA Established in 1992 South Korea GEN Korean Ministry of Environment and Korean Environmental Labelling Association (KELA) Recycled paper, toilet paper Products made from recycled plastic Cloth diapers for babies Non-asbestos brake lining and clutch facing Filters for kitchen sinks Non-bleached and non-dyed towels Valves for adjusting flow and water saving-type faucets (including water saving tops) Packaging materials using wastes Soap made from waste edible oils Bricks made from waste lime Construction materials made from waste glass Products made from used tires Bulb-type fluorescent lamps Cloth shopping bags Construction materials made from waste stone powder Biodegradable engine oil for two-cycle engines Biodegradable hydraulic oil Bricks made with inorganic sludge Palette made with waste wood, water-economising toilet stool Low sulphur petroleum Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 69 of 75 LCA-based criteria http://www.epa.gov/epp/pubs/envlab/korea.pdf RMIT University Affiliations International product environmental label Country Governing body Scope Standards methodology Website • • • • • • • • • • • • • Building materials using remnants from burning Blast furnace cement Returnable can collectors, refillable containers Water-economising fittings for toilets stools Biodegradable sponges Machines for recycling used antifreeze Gravel made of waste materials Oil filters Electricity saving low mercury fluorescent bulbs Plastic containers with same material log attached Solar water heaters Low pollution ferro-concrete pipe Energy-efficient refrigerator with no cfcs Fairtrade standards based upon standards created by the FLO Standards Committee, in which stakeholders from FLO’s member organisations, producer organisations, traders and external experts participate http://www.fairtrade.net/home.html Fair Trade Established in 1997 International Currently operates in 15 European countries as well as Australia and New Zealand, Canada, Japan, Mexico (associate member) and the United States FLO International e.V. FLO-CERT GmbH Fairtrade Labelling Organizations International (FLO) is part of a worldwide network of Fair Trade organisations actively involved in supporting producers, awareness raising and campaigning for changes in the rules and practices of conventional international trade. ISO TYPE III Energy Star Established in 1992 International Created by US EPA, managed locally in each country Includes computers, monitors, printers, fax machines, air-conditioners, dishwashers, refrigerators, clothes washers, MFDs, residential lighting products, scanners, TVs, VCRs, audio products, CFLs and DVDs http://www.energystar.gov/ GEN = Global Ecolabelling Network members. See http://www.gen.gr.jp/ RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 70 of 75 ISO TYPE I Good Environmental Choice Australia (GECA) Australia GEN Australian Environmental Labelling Association Products need to meet a variety of standards including energy usage requirements. Companies pay an annual fee to use the label. Broadacre cropping, horticulture, livestock, seed/greenhouse production, wild harvest, aquaculture, farm forestry, plant raising/nurseries Life cycle assessment http://www.aela.org.au/ Affiliations Australian product environmental label Country Governing body Scope Standards methodology Website Australian Certified Organic Australia Biological Farmers of Australia Co-op Ltd. (BFA) ACO provides certification services to operators from all sectors of the organic industry. Certification ensures compliance with national production standards and allows trace back of all products to their origin. Soil fertility, part property, pest and disease control, conversion, GMOs, conservation www.bfa.com.au Green Power Australia The National GreenPower Accreditation Steering Group is the body that represents the different state government agencies that are working together to offer the GreenPower Accreditation program. The Department of Energy, Utilities and Sustainability in NSW is the current project manager on behalf of the steering group Responsible Forest Management Australia Limited Renewable energy GreenPower is renewable energy that is bought by energy suppliers on behalf of their customers and independently audited and verified by the National GreenPower Accreditation Steering Group. The logo displays the amount of NEW renewable energy sources http://www.greenpower.gov.au/pages/index.php Forest Stewardship Council (FSC) Australia The Forest Stewardship Council (FSC) is an international network to promote responsible management of the world’s forests and includes these two certificates: Forest Management (FM) Certificate and Chain of Custody (COC) Certificate Forest management certification involves an inspection of the forest management unit by an independent FSC-accredited certification body to check that the forest complies with the internationally-agreed FSC principles of responsible forest management. Chain-of-custody certification provides a guarantee about the production of FSC-certified products. Chain-of-custody is the path taken by raw materials from the forest to the consumer, including all successive stages of processing, transformation, manufacturing and distribution. Based on Agenda 21 http://www.fscaustralia.org/ Green Globe Established in 1993 Australia World Travel & Tourism Council (WTTC) It is based on Agenda 21 and principles of sustainable development endorsed by 182 heads of state at the United Nations Rio de Janeiro Earth Summit. It provides companies and communities with a path to sustainable travel and tourism. The Green Globe program addresses the major environmental, social and economic issues that face our planet today by focussing on the following key impact areas: Greenhouse gas emissions Energy efficiency, conservation and management Management of freshwater resources Ecosystem conservation and management Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 71 of 75 http://www.greenglobe.org/page.aspx?page_id=49 RMIT University Affiliations Australian product environmental label Country Governing body Scope Standards methodology Website Management of social and cultural issues Land use planning and management Air quality protection and noise control Waste water management Waste minimisation, reuse and recycling Marine Stewardship Council Established in 1997 Australia MSC The MSC has developed an environmental standard for sustainable and well-managed fisheries. It uses a product label to reward environmentally responsible fishery management and practices. Consumers concerned about overfishing and its environmental and social consequences will increasingly be able to choose seafood products that have been independently assessed against the MSC Standard and labelled to prove it. This will assure them that the product has not contributed to the environmental problem of overfishing. This was a trial only The Fairtrade label is a ‘seal of approval’ that appears on products that meet internationally agreed Fairtrade standards and which guarantees to consumers that their purchases will benefit the producers, their families and the surrounding communities from the developing countries that they originate from. The Fairtrade label can be found on products such as coffee, tea and chocolate. Primary producers (including biodynamic), input manufacturers, processors, packers, wholesalers, transporters, exporters, retailers, restaurants, markets Looks at every level in the process of getting the product to the consumer to ensure that there is fair trade and that producers receive the benefits that they deserve MSC’s principles and criteria for sustainable fishing http://www.msc.org/html/content_458.htm Mining Certification Trial Fair Trade Association of Australia and New Zealand Australia Australia WWF Fairtrade Labelling Australia & New Zealand http://www.minerals.csiro.au/sd/SD_MCEP.htm http://www.fta.org.au/ NASAA Certified Organic Australia NASAA Standards are set by NASAA and checked by accredited regulators http://www.nasaa.com.au/ 03ISO TYPE II Mobius loop (recycling loop) Australia Australian Standards Under ISO 14021, the mobius loop can only be used in relation to products or packaging with 'recyclable' or 'recycled' content. Australian/New Zealand Standard AS/NZS ISO 14021:2000 (ISO 14021) The term 'recyclable' can be used when there is evidence that: the collection, sorting and delivery systems to transfer the materials from the source to the recycling facility are conveniently available to a reasonable proportion of the purchasers, potential purchasers and users of the product the recycling facilities are available to accommodate the collected materials. The product for which the claim is made is being collected and recycled. http://www.sustainability.vic.gov.au/www/html/1941-recyclingsymbol-mobius-loop.asp Mandatory Energy Rating Australia Department of Environment and Heritage (AGO) NAEEEC Mandatory energy ratings for refrigerators, freezers, air-conditioners, dishwashers, clothes dryers, clothes Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 72 of 75 Standards Australia is charged with establishing test procedures. www.energyrating.gov.au RMIT University Affiliations Australian product environmental label Country Governing body Scope Standards methodology Website washers Water Efficiency Labelling Standards (WELS) Australia Department of the Environment and Heritage Categories include showers, tap equipment, flow controllers (optional), toilet (lavatory) equipment, urinal equipment, clothes washing machines, dishwashers Standards set under the national Water Efficiency Labelling and Standards Act 2005 www.waterraing.gov.au Voluntary International Energy Star Australia, USA In Australia - Australian Greenhouse Office ENERGY STAR is an international standard for energy-efficient office equipment including computers, printers and photocopiers, and home electronics such as TVs, audio products and DVD players. www.energystar.gov.au RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 73 of 75 APPENDIX C. STAKEHOLDER WORKSHOP Product environmental labelling: stage one scoping study February 13, 2007 Storey Hall, RMIT University Hosts: Kel Dummett – Sustainability Victoria; Kendra Wasiluk – RMIT Centre for Design. Attendees: Peter McCutcheon, AFRDI; Lloyd Harrington, Energy Efficient Strategies; Simone Teale, Australian Greenhouse Office; Penny Nowlan, Australian Greenhouse Office; Sally Jungwirth, EPA Victoria; Miranda Tolmer, EPA Victoria; Helen Lewis, Centre for Design; Ian Coles, Urban Sustainability Strategies; Tanya Struzina, ECOBuy; FSC Australia Aim: The aim of the workshop was to present and discuss the preliminary research findings from the product environmental labels scoping study undertaken by Centre for Design at RMIT University, in conjunction with Product Ecology, WSP Environmental, and Urban Sustainability Strategies. Input was sought from invited stakeholders to be integrated into the final report. The focus of the workshop was to understand the implications of the research findings to date for the Australian context. Background: Kel Dummett, Sustainability Victoria Kel provided an introduction to Sustainability Victoria and background to the scoping study commissioned by them. Sustainability Victoria is exploring the effectiveness of labelling schemes, both in Australia and overseas, in order to learn what schemes are working well. The aim is to identify effective ways of conveying environmentally preferred product information to consumers. A key objective of the review is to identify the barriers and opportunities for product environmental labelling in Victoria and to prepare a plan for future consultation for the development of PEL-related initiatives or alternative strategies. Overview of research to date: Kendra Wasiluk, Centre for Design RMIT University Kendra provided the workshop participants with an overview of the research findings to date, which can be found in the stakeholder workshop briefing document. Discussion: At this point, the workshop attendees were asked for their response regarding the need for product environmental labelling in Australia. The intention of the stakeholder workshop was to get the initial view of some key stakeholders with an active interest in product environmental labelling. Although the motivations and interests in product environmental labelling varied greatly amongst the stakeholders in this workshop, there was a general consensus that there is a need in Australia for accurate, verifiable product environmental information for consumers. Although food product environmental labels were generally not examined as a part of this study, it was suggested that there may be lessons to be learnt from the use of food labelling in Australia. It was also agreed that business-to-business and government procurement programs should be given a high level of priority, as their purchasing power and impact is greater than that of the individual consumer. Participants were asked whether voluntary product labelling is the way forward for providing product environmental information in Australia. The Good Environmental Choice Australia program was raised by participants, who questioned why broad uptake of the program has not occurred. It was felt that in some sectors, such as construction, uptake was greater, in RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 74 of 75 part because the market drivers and commercial imperatives are in place for sustainable building products. A lack of government endorsement of the program was also seen as a barrier to its uptake. Purchasing organisations, such as ECOBuy, would like to see more products and product groups that would appeal to their consumer base. Again, government and professional procurement programs were viewed to be more influential in creating the market demand for labelled products. Areas of environmental impact not currently being addressed in Australia that were specifically noted in the workshop include biodiversity, product stewardship, materials efficiency and social issues. Some participants strongly felt that product stewardship and take-back schemes would be difficult to address through a labelling scheme. Toxicity was also suggested to be a difficult area to address with labelling in Australia, as the legislative environment in this area is weak. A gap exists in Australia in relation to data used for the tools that measure environmental impacts, such as eco-footprinting and life cycle analysis, and more Australian-based data is required to reduce the reliance on European-based data and to increase the robustness of the measurement outputs. This is important for labelling criteria, which is commonly based on a life cycle impact approach. General consensus was reached that the environmental impacts of products need to be prioritised so that the largest impacts are addressed first, possibly through mandatory measures. What the environmental priorities are and where it is most appropriate to focus Sustainability Victoria’s efforts need to be further explored in Stage Two of this study. Reflection on lessons learnt from previous Australian experience with government-led labelling programs (e.g. Green Spot Program) is crucial, as some of the same issues from the early 1990s may still persist today. All workshop participants agreed that product environmental labelling cannot be looked at in isolation and that the government in Australia has a role to play in raising consumer awareness, by taking a leadership role in its purchasing policies and by supporting the research and development of criteria. Further meetings: It is anticipated that should Sustainability Victoria take this project into Stage Two, more extensive consultation with stakeholders will be undertaken. A list of potential stakeholders can be found in Appendix D. RMIT University Document: Final PEL report 10-07.doc Save Date: 23/10/2007 Page 75 of 75