Supply Chain News
April 30, 2011
By George Anderson, Editor-in-Chief, Associate Publisher, RetailWire
RetailWire Discussion: Call Made for Carbon Labels
Solutions For Addressing Greenhouse Gases and Climate Change Abound
 Each business morning on RetailWire.com, retailing execs get plugged in to the latest industry news and issues with key insights from a "BrainTrust" of retail industry experts. Here are excerpts from one of these unique RetailWire online Discussions, along with results from RetailWire.com's Instant Polls.
Solutions for addressing greenhouse gases and climate change abound and a group of researchers writing in the journal Nature Climate Change have a suggestion, as well. Institute carbon labeling on consumer products.
The authors of the article, Michael Vandenbergh of Vanderbilt University Law School, Thomas Dietz of Michigan State University and Paul Stern of the National Research Council, wrote that energy use in household dwellings accounts for 38 percent of greenhouse gas emissions in the U.S. While the authors said household purchases of durable and consumable goods could not be precisely determined at the moment, "Even modest changes in the household sector could significantly reduce emissions."
The argument goes that a large group of consumers are interested in buying more environmentally friendly products. (An eight-country survey in 2008 found 33 percent of consumers have or are ready to buy "green" products.) Consumers are also comfortable with labels on the products they buy for household use.
RetailWire Says: |
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| Finding a label that works across borders is also seen as a need that is not currently being addressed. |
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What Do You Say?
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According to the Nature Climate Change article, "It is not reasonable to expect labelling to solve a complex problem by radically shifting the behaviour of most or all consumers. It is reasonable, however, to expect that labelling may improve a consumer's ability to make choices and may induce firms to change the mix of products offered to consumers. Nutritional labelling, for example, has not eliminated diet-related health problems, but labels do influence product selection and consumption in some cases."
The authors do not make light of the difficulty in assessing the carbon footprint of products, acknowledging that to be of utmost value, labels must track the full life-cycle of a product. Finding a label that works across borders is also seen as a need that is not currently being addressed.
In late 2007, Tesco announced it was beginning a two-year trial of a carbon footprint program by labeling 20 store branded items from four categories including detergents, orange juice, potatoes and light bulbs. Since then, the British chain, working with the non-profit Carbon Trust, has expanded the program to include over 100 own-brand items. Other companies using the carbon reduction label in the U.K. include Dyson, Kingsmill (baker), Morphy Richards (clothing irons) and Walkers (snack division of Pepsico).
Discussion Questions: Is the time right for carbon labeling? Is this an endeavor for an industry organization, for-profit supplier or independent non-governmental organization of some type?
RetailWire BrainTrust Comments:
I suspect most will say what a great idea this is--we'll see--but the questions are:
1. Will the labels in any way be truly accurate? Don't see how this is possible, really, today, for many reasons. Sourcing variance and changes, among many factors.
2. Worth the cost? To get accuracy will require a lot of cost to manufacturers.
3. Unlike nutrition labels, which have an "absolute" value if you will (this stuff is good for me, this stuff isn't) to a consumer the only value will be "relative"--comparing one product versus another. The specific amount of carbon attached to the product is meaningless absent a comparison. How much better is say a score of "19" versus "20"? And will anyone realize that how the product got to the store (some rail transport versus all truck, DC delivery versus direct store delivery, etc.) likely has a much bigger impact on the total carbon emitted than the differences between different products on the label?
But at some point this silly idea will probably go forward anyways, and people will pretend it is meaningful.
Dan Gilmore, President and Editor in Chief, SupplyChainDigest
I don't see how this would benefit the bottom line of any business. Nutrition labels--there is a demand for that. A lot of people would not buy a product unless the ingredients were listed. But carbon labels? I doubt anyone really cares.
David Livingston, Principal, DJL Research
While the idea of carbon labeling is gaining some traction, there continue to be ongoing concerns and real world issues around the veracity of those labels and how consumers can understand what the label means to them.
The carbon impact of a product is typically discovered through a life cycle assessment (LCA). The LCA of a typical product can mean a very deep dive. The University of Stockholm has a great study examining the carbon footprint of a hamburger. It's not just about the meat, bun and associated packaging. It's about the entire process from land use for the cattle, the feedstock, the slaughter and meat packing process, etc.
In other words, it's not an easy task and today, many of the labels are based upon assumptions that can be +/- 25%. At that level of accuracy, I think many consumers, manufacturers and retailers will question the purpose of carbon labeling if it's not accurate and if the consumer doesn't understand what the label means in the first place.
These are real issues that will stop or slow down the idea of carbon labeling until they can be addressed in a way that minimizes cost impact and provides a brand incentive.
Paul Hepperla, VP, Product Strategy, Verisae, Inc.
I believe the time is right for carbon labeling on products. For consumers who don't care about carbon footprint, there is no downside. However, an increasing number of consumers are very interested in reducing carbon footprint. Therefore, products that can certify their "carbon consciousness" and minimal footprint will benefit from a market advantage from their efforts in this regard. There are a number of certifying agencies. The GXT Green Seal is an example of a carbon certification program that is available for companies and products to certify their carbon reduction efforts.
Edward Weisberg, Managing Partner, Ecommerce Expertise
The most interesting statistic in the article is the one that says that only a third of those surveyed indicated any interest in buying "green" products. It's probably safe to assume that this is a highly inflated number since it's unlikely that anyone would indicate that they don't care about the environment. Then the article goes on to say that it is extremely complicated to come up with an accurate measure of the product impact.
So there is a low interest coupled with enormous complexity along with very little potential for significant positive impact. Sounds like the makings for a perfect new multi-$billion EPA program, perhaps a whole new department.
Bill Emerson, President, Emerson Advisors
Some consumers may want to know about the carbon rating for particular products. But I don't believe we're at the point where labels would really be accurate. Who sets the standards so the ratings are consistent? A lot of consumer education would need to go into a program like this, not to mention industry collaboration.
Odonna Mathews, President, Odonna Mathews Consulting
Read the entire story and RetailWire discussion at:
http://www.retailwire.com/discussions/sngl_discussion.cfm/15158
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