Carbon Labels – beyond “just a label”

Posted on July 11, 2011 by

Eco labeling has come a long way since it began back in the 1970s. The purpose of these labels is to help consumers identify how eco friendly products are. The newest of them are the recently launched carbon labels that have yet to become as popular as other eco labels. A survey conducted in 2010 on consumers in Britain revealed that only about 20% of British consumers were able to recognize the carbon label. On the other hand, 82% were able to recognize the Fairtrade label and 54% could recognize the organic label. This awareness of the labels is however justifiable considering the fact that organic labeling dates back to the 1970s and Fairtrade dates back to the late 1980s.

Respondents to the eco-label recognition survey 2010

Who benefits from Carbon labels?

Carbon labels have dual benefits. One is that it allows consumers to identify and scale the amount of emission a product emits through its lifetime and second, it allows companies to measure and account their own emissions thereby creating a foundation for reduction efforts. Energy efficiency and optimum resource deployment can reduce carbon footprint and help save resources for the company thereby reducing costs.

But, adding a carbon label involves complex and often costly processes. It requires the tracing of ingredients back to their sources in the supply chain and to account for all emissions along that chain. An important observation is that a majority of a product’s footprints arises not from its manufacturing process but from its supply chain. Measuring carbon emission to establish a base is essential for reduction efforts and is a time consuming and expensive to implement. Moreover there is no guarantee of accuracy when emission factors are used for calculation of emissions that are manually impossible to obtain or difficult to measure. According to 3M, an American manufacturing company, the cost can go up to $30,000 for a single product. The process is further complicated by the existence of a number of carbon footprint and labeling standards in different countries. This makes it difficult to for direct comparisons between the labels.

The main difficulty by far however, is getting suppliers to comply. This means getting them to measure and then reduce their own carbon footprints. Engaging suppliers is essential as most of the companies are in direct control of only a small percentage of the overall foot print.


The deal!

The value of footprinting and labeling lies in identifying opportunities for savings rather than an attempt to convince consumers about a company’s eco-friendliness.

Walker crisps, a potato chips manufacturer, discovered an interesting revelation through its footprint calculation. Walker buys its potatoes by gross weight. It turned out that in order to maximize profits, farmers keep their potatoes in humidifiers to increase their weight. The company would have to fry the potatoes for a longer period of time to remove the extra moisture.  By switching to buying potatoes by dry weight, Walkers could reduce frying time by 10% and the farmers could avoid the cost of humidification. Walker was able to reduce not only energy consumption but the carbon footprint of its product.

Some products, like energy-efficient electronics, have high manufacturing footprints. But, in use, such products consume less energy, so their overall footprint over their lifetime is low. Other products may have low manufacturing footprints but over their lifetimes, emission increases due to the nature of their use. Then there are products whose footprints vary according to consumer behavior. Levi Strauss’ 501 jeans had larger footprint when washed with warm water and machine dried. This footprint could drop by 90% if the jeans are washed with cold water and dried on a line. Adding such information on the product may help reduce the footprint of the product provided the consumers read the information labels.


The opportunities

The world has moved on from the time when eco-labels or carbon labels are look upon as added cost. With growing consumer awareness, there is ample opportunity to tap into the segment of environmentally concerned consumers whose needs are just beginning to be met by companies. For a long time, branding has been one of the main motivations for eco-labeling. Lately however, organizations are beginning to realize the saving opportunities of such endeavours.

At a global level, efforts are being made to standardize footprint measurement and labeling which would remove discrepancies and allow easier cross referencing. This will also ensure a healthy competition amongst green aspirants to ensure that their products are the most eco-friendly. In France, Casino is adjusting its footprint methodology to bring it into line with PAS 2050. The ISO 14067 is expected to be finalized in 2012 while the GHG protocol standards will be released in September. These universal standards will remove the need for companies to meet multiple sets of standards and a growing carbon accounting bureaucracy.

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