Who cares about the environment

This is a web page preview of a Microsoft Word document from the Sue Miller site. It is generated by a computer and is not manually edited. Formatting and content may be displayed differently to the original document, and should not be regarded as definitive.

Sue Miller was nominated to the House of Lords in 1998 where she has been a spokesperson since 1999. She is a member of sub committee D of the Select Committee on the European Union which covers Environment, Agriculture, Public Health and Consumer Protection. Her interest in the links between the environment and consumers have prompted this paper. She lives in Somerset where she has been a local councillor for fifteen years.

Bethan Carr has carried out the research work for this paper. Previously, Bethan worked at the Citizenship Foundation, an organisation which encourages the understanding of the rights and responsibilities of citizenship. She will be starting a postgraduate course in environmental technology at Imperial College in the autumn. She is interested in environmental citizenship and the promotion of effective citizenship through information and education.

In corporate marketing departments the development of a good attitude to environmental issues is used as a way of persuading customers to develop retailer or brand loyalty.

In advertising agencies products are aimed to appeal to the `feelgood factor' that being `green' can bring. The on-product claim can seduce customers in ways that should not be legal.

The UK government has failed to take action. Consumers' rights to accurate, comprehensive information are ignored, whilst retailers and manufacturers can make all sorts of claims they wish about their products and manage to keep ecolabelling off the agenda.

Government has allowed retailers and manufacturers to exploit consumer concern. At the same time it has failed to support those manufacturers who are making efforts to raise their environmental standards.

Although a substantial proportion of UK consumers are concerned about the environment, nothing effective has been done to provide them with accurate and comparable environmental information on the products they buy. This, together with a lack of any obligation on UK companies to report on environmental performance, unlike countries such as France, Denmark and the Netherlands, leaves the consumer without comparable environmental information upon which to make informed purchasing decisions.

Consumers want to avoid the companies that are not taking steps to reduce their impact on the environment and they want to take positive steps to use products from companies that are.

`Seven in 10 adults say British companies pay insufficient attention to the environment' and in 1999, `the equivalent of more than nine million consumers in Great Britain said they avoided using the services or products of a company they considered had a poor environmental record.'

In 2001, a MORI poll showed that 92% of the public believe “multinational companies should meet the highest health, animal welfare and environmental standards wherever they are operating”.

According to the National Consumer Council (NCC), 36% of the population are concerned enough to `take positive steps to buy what they believe to be environmentally improved products'. Furthermore `although a third of the population already makes a conscious effort to buy products that are less harmful to the environment, their efforts are generally frustrated by the difficulty of identifying products that offer genuine environmental improvements'.

Marketing departments are well aware of these consumer concerns and have moved to exploit them. Consumers are increasingly faced with a plethora of unregulated environmental claims, which are `by far the most dominant type of information currently in the market'. These claims, rather than empowering consumers to make informed decisions, go unregulated. In 2001, a study commissioned by DEFRA found that 50% of environmental self-declared claims fail the code of practice put in place by government.

In its first report, the government appointed Advisory Committee on Consumer Products and the Environment (ACCPE) states `there are many examples of vague and ambiguous claims still to be found in the market……they fob consumers off with assurances that mean little - a `greenwash effect' which creates a climate of confusion, cynicism or distrust…[and] they obstruct proper communication about environmental issues, undermining initiatives and efforts to promote more sustainable consumption.'

For the consumer who wants information on the environmental credentials of products, this array of claims and symbols has led to complete confusion. Consumers have no way of distinguishing reliably between the genuine and the downright dishonest.

Government intervention in this area has not been successful. In 1996, the National Consumer Council (NCC) recommended that `the government should take specific action to protect consumers from false and misleading environmental claims'. The NCC gave four possible options for change, each of which included statutory backing. Despite these recommendations the government chose to launch a voluntary code of practice with no such backing. This decision was also taken in the light of guidance from the Office of Fair Trading, that a successful code of practice requires the availability of a strong sanction and a plausible threat of statutory regulation.

The voluntary code of practice, The Green Claims Code, has now been accessible to manufacturers and retailers since 1998. It gives clear guidance for on-product environmental claims and symbols which are acceptable and those which are not. If the code is followed, there will no longer be misleading, vague or dishonest claims. Since the code has been introduced, however, there is still a proliferation of claims that are just that and consumers are none the wiser.

The report, The Green Claims Code: Is it working? looks at the range of claims in the marketplace shortly after the launch of the code and again a year later. In the report the National Consumer Council state, `When the code was launched we were doubtful that, as a voluntary code, it would be credible, uniform in its application and effective. Our experience in monitoring its first year of operation has reinforced this view. The code lacks a strong sanction, and this is a serious barrier to its effectiveness.'

A study commissioned by DEFRA in 2001 again examines environmental claims and declarations and the effectiveness of the voluntary code. The survey showed that 40% of the self declared environmental claims failed the code and a further 10% were border-line. Only 50% of self declared claims we see on products are passing the Code.

Since the introduction of the Code, the following papers have discussed the issue of misleading green claims and each one has recommended that the government give the Green Claims Code statutory backing:

In response to the recommendations from the committee in 1998, the government stated that it would use the NCC's report The Green Claims Code: Is it working? to inform further action. When it appointed the Advisory Committee on Consumer Products and the Environment (ACCPE), the government stated that the committee were to give early priority to the consideration of measures for improving the information available to consumers and in particular improving the quality of green claims on products.

Back in 1996, the NCC stated `It is wrong for consumers to be deceived by false claims on products, and wrong that the claims are not being regulated properly. We also take the view that the use of misleading environmental claims undermines national policy objectives in the environmental field….Since consumers use the marketing information on and with products to help them choose which to buy, they have the right to expect such information to be truthful and unambiguous'.

Six years later, consumers are in much the same state of ignorance as they were prior to the code being established and these self declarations are `by far the most dominant type of information currently in the market, and are likely to remain so for the foreseeable future'. On product, self declared claims allow the producer to select the environmental information they wish to give the consumer. An ecolabelling scheme ensures that consumers receive information regarding the whole life cycle of a product and reassures them that the most important environmental issues of production have been addressed.

`The major difficulty confronting consumers who wish to make environmentally friendly choices is the lack of information provided by manufacturers and suppliers.' Without a reliable, trustworthy and wide spread ecolabelling scheme, the information gap between the consumer and the manufacturer and retailer widens and consumers can only get more disillusioned and frustrated.

The Eco-labelling body in Hong Kong explains the problem they have and the way in which they are addressing it; `There are many `green' product claims in the market. Consumers are sometimes confused by their claims and some have doubts about their validity. To help consumers, it is essential to establish an authoritative, independent and public-acceptable green label scheme that identify products that are more environmentally preferable than other similar products with the same functions in the market. The assessment is based on life cycle considerations from raw materials, manufacturing process, distribution and consumer use, to final disposal. The scheme also reward leadership and initiative in promoting environmental consumerism for manufacturers.'

The 2002 report from the Department of Trade and Industry, Business and Society, recognises that “The public generally understand Corporate Social Responsibility to mean responsibility towards customers, the community, employees and the environment; but awareness of responsible practices is low, and people want to know more.”

Even Tony Blair outlines the importance of the issue `There are concerns about the impact of trade on the environment, on conditions at work, on human health and on animal welfare….Consumers want more and clearer information about how and where products are made'.

The government states that `Labelling is a powerful tool for providing information to consumers and buyers about the goods they are purchasing [and] correcting any information asymmetries…It is particularly helpful in signifying product characteristics which are not readily identifiable by consumers…..Labelling is one of the least trade restrictive measures and can generate important benefits in terms of consumer choice and social, health and environmental outcomes'.

In the UK, despite numerous reports urging action, consumers have little more than price to guide them in their purchasing decisions. Over the last ten years successive governments have missed every opportunity to get ecolabelling started in the UK.

In 1991 and 1998 government Select Committees scrutinised the issues surrounding Eco labelling and reducing the impact of consumer products. Both committees made strong recommendations that ecolabelling be fully supported by government.

The Committee in 1998 stated ` in line with our predecessor Committee's recommendation in 1991, we believe that the UK government should develop a national ecolabelling scheme'. The Committee went on to state that `We recommend that the national ecolabelling scheme should include a generic label based upon the whole life-cycle of a product' and that `Given the need for prompt action in this area, we urge that such a scheme be launched within the lifetime of this Parliament.'

Four years later, this recommendation has not been implemented and on 16 April 2002, the government confirmed that with regards to establishing a national ecolabelling scheme, they `have no plans to do so'.

In September 1999, the government appointed the Advisory Committee on Consumer Products and the Environment (ACCPE) . Their terms of reference are to `advise on the development and co-ordination of policies to reduce the environmental impacts associated with the production and consumption of goods and services, and the priority areas for research and future action in these policy areas'. Two areas they were particularly asked to cover are `Best practice in the environmental information or advice given to consumers, and measures to promote best practice in the market' and `Proposals for new forms of environmental information or awards in the UK market, to stimulate the take-up and use of products with reduced environmental impacts'.

The Committee's recommendations to provide information to consumers involve several different tools, one of which is ecolabelling. The ecolabelling recommendation suggests a `family of graded labels' which cover cars, homes and domestic equipment. The main product information initiative that they recommend is an internet based information service. This narrow approach neither recognises the original starting point for the Committee nor the approach of other government departments. The DTI states in its white paper Modern Markets, Confident Consumers `Consumers get their information about products from many sources. But the most important is often that supplied by the producer on the product itself'.

Nevertheless, in their second report the ACCPE states that `We have continued over the last year to consider the communication tools needed to ensure useable information is passed right along the supply chain' and that `Information is a crucial element within product policy'

The second report recommends that the internet based information tool be piloted to professional procurement officers. It may be some time before any such information is available to consumers, if at all, and there is every reason to doubt how comprehensive this will be.

Strangely, the ACCPE did not take their work on from the conclusions of the two Select Committees. The ACCPE instead undertook separate research to come to their conclusions. The ACCPE do recognise the theoretical benefits of an ecolabelling scheme. However, they state in their first report that experience from other countries suggests that these benefits are not achievable and a key factor is low business take-up and that `In the UK, generating active consumer interest in Government-sponsored ecolabels would be difficult, given levels of public awareness about environmental issues that are low by standards elsewhere in Europe'. Rather than prompt the government into action, this statement seems to accept what the committee perceives to be the status quo.

In 1998, the Commons Select Committee expressed `serious concerns about whether it [ACCPE] will have the `clout' or, more particularly, the resources to be effective…In particular, we are not convinced that it will be able to commission meaningful research'.

With regards to the reliable environmental information available to consumers, the government's Advisory Committee was established to move the agenda forward and increase rapidly the means of providing this to consumers. Since their establishment there has been no tangible effect detectable in the market place, no national ecolabelling scheme and no comprehensive, independent source of information. A conclusion from this could be that through the ACCPE, large retailers and industry have managed to keep ecolabelling off the agenda.

The government needs to end the confusion of the Department for Trade and Industry (DTI) and the Department for Environment Food and Rural Affairs having split responsibilities for this one area of work.

The government identify the Department of Trade and Industry (DTI) as the lead department for co-ordinating product labelling policy. The DTI provides the secretariat for the Interdepartmental Group on Product Labelling.

The government identify the Department for Environment, Food and Rural Affairs as having `overall responsibility for promoting a good standard of environmental information in “on-product” claims.'

When commenting on consumer behaviour, a report to the European commission states; `British consumers give a significant place to ethical criteria and loyalty to the brands and retailer's names when choosing a product.' Many of the large retailers rely on a self made ethical and quality brand image to obtain customers' trust.

During the study, large retailers in the UK were interviewed and had stated that a major adverse effect of using the ecolabel is that it could undermine the trust of the customers towards a retailer.

The study states what is probably the underlying factor why large retailers, who rely on their brand name image, are not supporting a widespread third party verified ecolabelling scheme; `the ecolabel would make them [customers] wonder why all products are not labelled.'

When choosing products from a UK retailer, consumers have little more than the price to guide them in their purchasing decision and this alone gives no indication of the environmental impact of the product. The price rarely reflects the actual cost of consuming the product which includes environmental impacts throughout the whole life cycle of the product including the clean up of any pollution caused. In extreme cases people near the production sites may pay with their health and with the quality of their environment. In many others environmental degradation is the accepted price of economic growth.

Many industry associations spend much of their time ensuring that no negative information is released to consumers regarding their product group. There are very little resources spent on promoting the product and a significant amount of time is spent ensuring that its image is completely neutral, giving consumers no reason to question the product's impact or criteria.

Tony Juniper of Friends of the Earth states that one of the main reasons that ecolabelling has not happened is industry resistance and gives an example of paper and wood labelling. Official EU schemes have been opposed successfully by industry groups while the one that survived, the Forestry Stewardship Council label continues to be under fire from the forest companies.

Examples from other countries show that ecolabelling is successful in terms of informing consumer choice as well as encouraging the purchasing of less environmentally damaging products.

One of the first pieces of research to complete an empirical analysis of the effect of a certified label on consumer purchasing habits has proven that ecolabelling boosts product sales.

The study, which took place in Denmark and reported in April 2002, looked at the effect of the Nordic Swan ecolabel on three product groups, toilet tissues, detergent and kitchen towels. Denmark joined this Scandinavian scheme in 1997. The study found that for toilet tissue and detergent, the label had a significant effect on sales. A key finding of the research was that consumers showed a `willingness to pay' 10-17% more for these products.

Denmark is among 27 other countries and regions which have developed a national or regional government initiated ecolabelling scheme. The labels for all of these schemes are shown over the page.

The German Blue Angel scheme was the first such scheme to be established. It now gives consumers the choice of ecolabelled products in 88 product categories, covering over four thousand products. Around 80% of the population are familiar with the scheme and manufacturers in the UK and abroad state that in order to market products in Germany it is a commercial necessity to apply for the label.

In the UK, in the absence of a comprehensive national ecolabelling scheme, non-governmental organisations and commercial organisations have developed their own schemes to provide more environmental information to consumers. All of these schemes are product specific and although they are widely known to be credible and reliable sources of information, as with the EU initiated energy labelling scheme, it remains that they only cover a small amount of consumer products and some cover only one of the major impacts of a product.

In areas which these schemes do not cover, British companies turn to other national ecolabelling schemes in order to market their products and let consumers know that their products have a reduced impact on the environment. PBTI Britain markets its remanufactured toners using the Nordic Swan ecolabel award, this is the scheme used in Finland, Norway, Denmark, Iceland and Sweden.

The EU Ecolabelling scheme was established in 1992. The award criteria are high and aimed only at the top environmentally performing products. The label gives consumers throughout Europe assurance that the product they are buying meets these criteria and has a significantly less environmental impact than comparable products within its product group.

The scheme is voluntary. Obligations under community law lie with the member state, which is required to designate a neutral competent body to receive applications for the label and to promote the scheme amongst consumers and producers.

Due to the voluntary nature of the scheme, consumer awareness of the label and pressure on retailers and producers to supply EU ecolabelled products is extremely important. The promotion of the scheme, therefore, is vital to its success within a member state.

In 1998, the National Consumer Council reported that there was approximately a 7% recognition of the scheme amongst consumers in the UK and in 2002, there are four products available on the market in the UK which hold EU Ecolabels.

Promotion amongst consumers has certainly not been successful. This has resulted in past holders of EU ecolabels in the UK giving up the label. The four producers who currently hold the EU Ecolabel in the UK reasonably assumed that the UK government, with the responsibility of being the UK competent body, would promote the scheme and budget accordingly. The case study from one of these producers shows that this has not happened and unless the government take action soon, even the most dedicated producers will give up altogether on the scheme.

Stephen Teverson of Anglo Eastern Green (AEG) invested in the soil improver Orgabiose not only on the basis that it was a high performing product, but that it was specifically developed to have a minimal negative impact on the environment. Orgabiose was developed in France with the stringent environmental criteria of the EU Ecolabel in mind and now holds an EU Ecolabel both in France and, since February 2000, in the UK.

The EU Ecolabel criteria for soil improvers are very stringent. The label reassures consumers that it is `manufactured with organic waste, limiting soil degradation, water pollution and risks to health'. In addition to this, EU Ecolabelled soil improver will not contain peat or sewage sludge, both of which raise serious environmental concerns.

AEG is a small independent company which specialises in green products. Stephen Teverson, the Managing Director has so far invested over £100k in Orgabiose. This has been invested on the basis that AEG would be `offering ecolabelled gardening products to a gardening industry and public who would at least be aware of the EU Ecolabel.'

The Ecolabelling Manager in the Environment, Business and Consumers division of DEFRA met with Stephen and the sales manager, Jan Woodruff in October 2000. He assured them that there would be a national publicity campaign, organised by his press and marketing team, and other initiatives such as an ecolabel bus tour and in store leaflets and dispensers. This was to take place throughout 2001.

During 2001, AEG undertook a mail shot to 2011 garden centres. This was carried out three times and each mailing was followed up with a `phone call. Not one of the garden centres contacted was aware of the EU Ecolabel. AEG also contacted large retailers; B&Q, Focus and Wyevale and wholesalers; Gardman, Solus and ASB. Once again, there was no awareness of the EU Ecolabel.

In 2002, within the gardening sector, B&Q and the Henry Doubleday Research Association are the only parties actively aware of the EU Ecolabel. In both cases, this is down to individuals who found out about the label and promoted it from within.

There is no evidence that the government undertook a promotional scheme in 2001 or at any other time in relation to the EU Ecolabel and EU Ecolabelled soil improvers. In March 2002, the government confirmed that the action that they have taken to promote the EU Ecolabelling scheme has been the publication of point of sale leaflets. There are plans to issue a newsletter but no confirmation as to how this will be distributed.

Although AEG have had numerous discussions with DEFRA and the Ecolabelling team together with assurances that promotional and press campaigns would take place, the only support they have received have been two page leaflets to send out themselves to retailers and distributors.

A major paint manufacturer applied for the EU Eco label for two of their water based gloss paints. One of these was marketed to trade and the other to public and trade. When the criteria for EU Eco labelled paint were being set, the manufacturer supplied data to assist in this and in the past have been very supportive of the scheme.

After being awarded the label the then competent body, responsible for promoting the scheme and awarding the label, the EU Ecolabelling Board, sent the manufacturer point of sale leaflets aimed at promoting the scheme to consumers. No other support was given.

Retailers are the direct customers of paint manufacturers. In store promotions are decided by the retailer and the manufacturer has little influence over this. Leaflets supplied by the manufacturer are unlikely to be supplied at point of sale whilst the retailers use available space to supply their own. The manufacturer describes the promotion by the competent body as commercially naïve.

The manufacturer has since withdrawn from the EU Ecolabelling scheme, finding that there is little awareness of the scheme among consumers and therefore little effect on sales. Instead, they use other ecolabelling schemes available to them. In Germany, several of their paints have been awarded the Blue Angel Eco label. In the UK, in the absence of a government initiated national ecolabelling scheme, a voluntary scheme has been initiated by paint manufacturers and retailers. This scheme addresses one of the issues of paint and varnish use, supplying consumers with information on the VOC (Volatile Organic Compounds) content.

If there was a national ecolabelling scheme available in the UK, paint and varnish manufacturers such as this one would be taking a lead in participating in this.

DEFRA states that `Empowerment of the individual through consumer choice is a central principle of the scheme' and the DEFRA web pages state `A growing number of publicity opportunities now exist for products participating in the scheme, including point of sale material from DEFRA and inclusion in the "Green Store" on the Commission's website. Both the Commission and DEFRA have promotional plans to raise the profile of the label further.'

This all sounds so promising. However, since the UK Ecolabelling Board (UKEB) was disbanded in 1998, there has been little hope of raising awareness of the EU Ecolabelling scheme in the UK. The UKEB was the former UK competent body. A review took place prior to the decision to disband the body and hand over its responsibilities to DETR (now DEFRA). The options given in the review were said to be dependent on the Government's wider environmental strategy and the review states that `If Ministers believe that ecolabelling has no significant role to play in that strategy, the preferred option is to wind up UKEB and run the competent body functions within DETR at the minimum level consistent with meeting legal requirements.' The review goes on to say that `If Ministers consider that ecolabelling has a significant role to play, are prepared to increase spending on this function, and to make legislative time available, setting up a national scheme is seen by many as the best way forward.'

Regarding these options, the government have stated that they `have no plans to establish a national ecolabelling scheme' and, since the disbanding of the UKEB, it would seem that the competent body is functioning at the `minimum level consistent with legal requirements.'

`The success of the EU scheme on a national level strongly depends on a very positive attitude of the ministries and public authorities in the country. It is also proportional to the resources dedicated to its marketing but not 100% linked to them. It depends on the marketing expertise of the persons and the continuity of their responsibility.

The study gives `realistic' targets for 2004, one of which is that : `all relevant manufacturers and retailers should be aware of the ecolabel.' And that `big retailers have to be won to enable a quick penetration.'

In Denmark, the two principal elements of recent promotion of ecolabelling have been the establishing of a textile panel and the ecolabel promotional campaign of 2001.

The government promotional campaign consisted of a TV commercial, broadcast by three TV channels during a three week period in February and March 2001. The campaign focussed on ecolabels on textiles and washing powder. The campaign also included magazine advertisements in women's and consumer's magazines, a public relation strategy and a network of communication between relevant stakeholders which involved retail chains, manufacturers, green and consumer's organisations and trade associations as campaign ambassadors. A parallel NGO campaign was carried out to create debate.

After the spring 2001 phase of the campaign, knowledge of the national ecolabelling scheme almost doubled from 26% to 41% and quadrupled for the EU scheme, from 4% to 16%. For the target group the percentage rose to 26%.