Concerns about the sustainability of natural resources are rising, prompting policymakers and companies to encourage consumers to think green. Labelling is one way of doing this, but consumer groups advise against confronting shoppers with too much information and warn that green claims aren't always independently verified.

Overview

The European Commission wants to convince consumers that making an effort to protect the environment can benefit their pockets as well as the planet, for example, by reducing food waste or buying home appliances that use less power and water.

In May 2012, the EU executive tabled recommendations on consumer empowerment in the EU, including proposals to improve awareness of sustainable purchasing.

Private housing and transport have also been singled out as areas where consumers can help to protect the environment. Consumers can contribute by insulating their homes, replacing older appliances with more efficient models, or digging deeper into their pockets to invest in solar heating and other renewable options.

On the road, they can exchange fuel-powered cars for hybrid and electric vehicles - or walk and cycle more.

But with growing numbers of companies touting a wide variety of green claims, consumer groups warn that it is becoming increasingly difficult to know who or what to trust.

Economic and job concerns, meanwhile, may make consumers think twice about spending more up-front for 'greener' goods despite the potential for longer-term payoff.

More generally, some consumer advocates warn that consumers should not be expected to take all the responsibility as they may lack the time or the motivation to check all the information made available to them.

Issues

European policymakers are increasingly looking at ways to empower consumers to change their shopping habits in a bid to encourage more sustainable lifestyles: choosing appliances that use energy and water more efficiently, putting more thought into food purchases, or buying vehicles with a smaller carbon footprint.

But along the way to more sustainable lifestyles, there are challenges. For consumers, the perception that sustainable products are more expensive is perhaps the greatest obstacle to greener purchasing. For governments and policymakers, the challenge is finding the right balance between forcing change through legislation, marketing and education – or employing a bit of all these.

Ysé Serret, of the Organisation for Economic Cooperation and Development’s environment directorate in Paris, says what produces the best results is working at both the supply and demand levels. She says, for example, governments that provide convenient recycling services or good public transport will spur people to use them.

Labels about the environmental impact of goods or practices also help influence buying decisions. Product bans or phase-outs – as the EU is doing with energy-hungry incandescent light bulbs – are another way to compel market changes.

“Some of the environmentally friendly decisions – like consuming organic food or willingness to pay for green energy – are only weakly driven by household demand, and you cannot only rely on household demand if you want to reach very challenging objectives,” Serret told EurActiv in an interview in July 2012.

“It’s really by using this combination of economic instruments to provide the right incentives, soft-policy measures – labelling, information, education – together with also providing … the supply side with related services,” she said, adding that information “is really central and really matters when it comes to spurring behavioural change.”

A preferred route is to give consumers the tools they need to make more environmentally-friendly choices and to help overcome the perception that sustainable products are more expensive.

The European Commission acknowledges this. "Personal action can be expensive," says EU Climate Action Commissioner Connie Hedegaard. "Not everyone can afford to buy a new car. Not everyone can afford to install new geothermal or solar systems. Not everyone can afford to retrofit their houses with new insulation. Lower prices would of course increase demand, and thereby increase action."

At the same time, she said, "If we consider the cost over a lifetime, there are huge savings to be made. With the right information, the consumer has the incentive to make the right choice."

It is important to further develop the market for sustainable products, Hedegaard told the 19th World Congress of Consumers International – an independent global umbrella group representing 220 consumer organisations – held in Hong Kong in May 2011. “There is money to be made and money to be saved for everyone."

2012 ‘Consumer Agenda’

The European Commission rolled out its European Consumer Agenda on 22 May 2012 with several goals:

  • Reinforce consumer safety;
  • Stimulate online shopping;
  • Improve knowledge about consumer rights;
  • Enhance enforcement of consumer laws;
  • Provide information to make sustainable buying easier.

Though a non-legislative package, the Consumer Agenda is seen as a way to influence regulation and public-private initiatives on food safety and sustainability, energy efficiency and sustainable mobility.

"Empowering Europe's 500 million consumers will be a key contribution to growth in the European economy," Health and Consumer Commissioner John Dalli said in releasing the agenda.

The Commission’s strategy, he said, “aims to empower consumers and build their confidence by giving them the tools to participate actively in the market, to make it work for them, to exercise their power of choice and to have their rights properly enforced.”

Debate over eco-labelling, certification

Product and content labels - both voluntary and those required by law – theoretically can help in making Earth-friendly buying decisions. But the effectiveness of labelling is hotly debated, with some consumer groups are warning that shoppers cannot always rely on what the label says.

The seafood industry would appear to be a case in point. "Determining which seafood products are best for you and our planet can be a difficult job," warns Food & Water Europe, a pressure group.

"A number of private fish certification programmes boast reliable standards and labels to evaluate and market seafood as 'environmentally friendly' or 'sustainably produced', but what they don't tell you is at least as important as what they do, and that's where things get tricky for conscientious shoppers," the group says.

In May 2011, Food & Water published a new consumer guide to eco-labels in a bid to tell consumers exactly what they do - and do not - tell them about the fish they are eating.

Many eco-labels analysed by the group were found to be inadequate with regard to environmental standards, social responsibility, community relations, labour regulations, international law and transparency.

Food & Water also claimed that many eco-labelling schemes fail to conform to international Food and Agriculture Organization guidelines on transparency, damage mitigation from pollution, and contribution to rural development and food security.

"Consumers aren't told that these labels often have a 'pay to play' aspect," said Eve Mitchell of Food & Water Europe. "A well-managed fishery that can't finance certification may not have an eco-label and still be the best choice, while one that is less sustainable could be certified because someone paid for it."

Confusing information or scepticism about the accuracy of labels can encourage consumers to buy fewer sustainable products, and it can be challenging for consumers to decipher whether labels are meaningful. "To us this is getting very close to actually misleading consumers, which must be dealt with officially," Mitchell said.

Business scramble for sustainability

Multinational corporations are increasingly taking the initiative to convince environmentally-conscious customers that shopping with them is a smart choice.

Examples are numerous, says Commissioner Hedegaard.

"Nike collects used sport shoes to recycle them and re-use the materials for new sporting shoes. Through this measure and a range of other energy-reducing measures in its factories and offices, Nike has brought down its emissions by millions of tonnes," she said.

By 2020, Unilever is aiming to help more than a billion people take action to improve their health and well-being, and to decouple its growth from its environmental impact. "A more sustainable brand is often a more desirable brand," the Anglo-Dutch multinational says.

Its Sustainable Living Plan focuses on three main areas: health and well-being; the environment; and enhanced livelihoods.

Unilever contends it wants to drive consumer preference towards products that “are ethically sourced and protect the Earth's natural resources."

"Delivering these commitments won't be easy. To achieve them we will have to work in partnership with governments, NGOs, suppliers and others to address the big challenges which confront us all," says Paul Polman, chief executive of Unilever.

"Ultimately we will only succeed if we inspire billions of people around the world to take the small, everyday actions that add up to a big difference – actions that will enable us all to live more sustainably," he says. 

Unilever is aiming to halve the greenhouse gas impact of its products across their lifecycle by 2020, halve the water associated with consumer use of its products by 2020, and halve the waste associated with the disposal of its products by 2020.

It is also aiming to source 100% of its agricultural raw materials sustainably by 2020, and to link more than 500,000 smallholder farmers and small-scale distributors into its supply chain by 2020.

Global action

Some of the world’s leading business groups and companies hoped the UN Conference on Sustainable Development, held 20-22 June in Rio de Janeiro, would set the stage for clear targets on greener development and sustainable consumption.

“We are very concerned about the lack of ambition and the lack of drive here amongst the international community to make the change,” Peter Paul Van De Wijs, a managing director of the World Business Council on Sustainable Development (WBCSD), told EurActiv at the time.

Referring to epic showdowns in the European Union over mandatory energy efficiency standards and reducing fossil fuel use, Van De Wijs echoed environmentalists’ concerns that the Rio meeting will generate more rhetoric than substance.

“There’s too much political positioning in these discussions rather than taking a broader society view and to take responsibly,” said Van De Wijs, who formerly headed Dow Chemical’s water global water strategy team. “That’s why it’s quite unique that businesses here are calling directly for more targets, more action and smarter regulation.”

Jan Zijderveld, president of Unilever’s Western Europe operations, says setting targets makes sense for the environment – and for businesses. “If you want to achieve something in life, you’ve got to set end goals but also milestones, otherwise it remains talk,” he told EurActiv in an interview.

Without targets, he said, “how do you measure success? How do you know how well you’re doing? How do you hold people accountable for achieving or not achieving it?”

The World Economic Forum – representing 1,000 of the world’s biggest companies – also urged government leaders meeting in Rio to develop “ambitious, universal and equitable goals for sustainable development” and to vest more in public-private solutions to development and ecological challenges.

Buyers beware

Yet some campaign groups weren’t buying into the big business line on sustainable production and consumption.

The Corporate Europe Observatory, a Brussels group that monitors lobbying in the EU, accused businesses of a “lobbying offensive” at the 2002 Johannesburg Earth Summit and warned of “unprecedented levels of industry activity” at Rio.

“Industry presented [at Johannesburg] a flood of voluntary initiatives, which had been taken to address social and environmental problems,” the group said in a statement on the eve of the Rio+20 meeting. “This propaganda show had the desired impact of greenwashing the image of companies whose activities were and are far from sustainable or socially responsible.”

Ultimately, the ability of many consumers to make green choices will depend on the products stocked by their local shops and supermarkets.

Consumers can reduce their CO2 emissions as they go shopping by buying local vegetables by reducing meat consumption.

"There is 10 times more energy needed for producing meat and dairy than for local fruits and vegetables. Many consumers do have a choice and they can make a conscious choice," Hedegaard said.

Waste not, want not

Lack of discretion in food purchasing presents another problem. A McKinsey Global Institute report says that the world produces a shocking 10 million tonnes of edible waste each day, or up to 30% of all food.

In Europe, most waste comes from end consumers –households and restaurants. But in the developing world – where the need is often greatest – most waste occurs in the production phase because of lack of storage, refrigeration or poor distribution systems.

The EU Waste Framework Directive (2008/98/EC) is intended to spur recycling and reuse of products, and requires EU countries to separate bio-waste – such as food throwaways and garden clippings – and to provide composting facilities.

However, compliance varies widely, especially between wealthier northern countries and the newest EU members, Bulgaria and Romania, where recycling programmes are still embryonic.

In January 2012, MEPs declared in a resolution that food waste is unsustainable and unethical in a world facing population growth and rising nutritional challenges. The resolution called for the European Commission and members states to:

  • Take “radical measures” to reduce waste – “from farm to fork” - by 50% before 2025.
  • Improve enforcement of existing EU and national government sanitation laws that mandate recycling of bio-degradable waste.
  • Set food waste-prevention targets for member states under the current waste-reduction target to be in place by 2014.
  • Declare 2013 the 'European Year Against Food Waste'.

MEPs also encouraged changes to food packaging to reduce confusion over “best buy”, “sell by” and “use by” labels found on most packaged products.

But such measures may only have limited impact. There is little wiggle room in expiry dates, with consumer groups and retailers themselves wary of health risks and choosy buyers overlooking foods that are not at peak freshness.

Breaking down barriers to green consumption

Despite encouragements to buy green, consumers often struggle to identify which products truly respect the environment.

Providing complete and trustworthy information contributes to empowering consumers and allows them to make deliberate and informed choices in favour of green products.

Lack of trust is big problem. Consumers cannot tell whether a company's green credentials are accurate or not.

Indeed, a survey carried out by Consumers International in 2007 showed that only 10% of the interviewees trusted the information given by companies.

It falls to governments and consumer organisations to provide credible information and help educate buyers if they are to be empowered and motivated them to embrace a more climate-conscious lifestyle.

Governments will in fact play a crucial role in stimulating the development of well-operating markets for green products, for example by tabling legislation on labelling requirements and tax incentives or by increasing taxes on excessive food packaging.

In the United Kingdom, the government has published a Green Claims Guide to help consumers to identify misleading claims and real green products, while in Denmark, the consumer ombudsman has drawn up criteria against similar such 'green washing'.

Governments have also introduced different eco-labels and energy-efficiency labels for appliances, giving consumers precise information on the energy consumption of the product they are purchasing.

In Europe, energy labels have also been introduced at EU level, where A+++ is the most efficient and G is the least-efficient. The letters correspond to certain energy efficiency criteria which are fixed by law, and they are displayed on everyday items like fridges, televisions, washing machines and dishwashers.

Figures quoted by the European Commission suggest that 85% of consumers rank energy efficiency above price as a purchasing criterion.

"Energy efficiency labels do work. They are an incentive for producers to improve their appliances' energy performances," says Commissioner Hedegaard, citing as an example the introduction by the EU of energy labels for fridges in 1995, which saw the percentage of fridge-freezer combinations in the energy class 'A' rise from 2% then to 90% today.

A similar EU-wide labelling scheme has been introduced for car tyres. The labels indicate the fuel efficiency, wet grip and rolling noise performance of tyres. 

Green claims not always trustworthy

With growing numbers of companies touting a wide variety of green claims, it is becoming increasingly difficult for consumers to know who to trust.

"Europeans are faced with a growing amount of misleading green information in all areas of daily life: food and drink, cosmetic products, cars, electricity offers or electric household appliances," Monique Goyens, director-general of European consumers' organisation BEUC, told EurActiv.

Goyens cited the widespread use of  ‘bio’ as part of the brand name for cosmetic products, or exaggerated reference to ‘natural’ despite the fact that the cosmetics are not organic, as examples. "We also find green leaves on packaging even though nothing of the kind appears in the ingredients list," she said.

"Green labels on retailers' own brands are multiplying, but their criteria are rarely transparent or comparable. Only independent, third party-tested labelling schemes, such as the EU Ecolabel, are reliable," said Goyens, declaring that regulation had become "a must" given the proliferation of exaggerated claims. 

Indeed, advertising authorities have their hands full investigating the plethora of green claims that companies are making in their campaigns.

The UK Advertising Standards Authority banned an algae biofuel TV advert by oil giant ExxonMobil because it overstated the technology's climate change mitigation potential.

Similarly, Europe's biggest motoring consumer group warned that more transparency for consumers on the benefits of electric vehicles is urgently required, cautioning that current commercial and political pressures to present battery electric vehicles as 'zero emission' vehicles "are misleading for consumers".

Keeping a lid on expectations

However, experts caution that consumer empowerment must not be seen as a panacea for the world's environmental problems.

In an interview with EurActiv, Maja Göpel, from the World Future Council, was keen to sound a warning note. "We should not be fooled [into believing] that consumer choice can make our economies green: we are all working jobs and raising kids, etc.: occupations that simply do not give us the time to read and check and control all the information on the products out there."

The issue of social justice is also problematic. Indeed, many consumers are simply not able to pay any higher prices for products.

This means that poorer sections of Europe's population cannot participate in 'greening demand' initiatives unless good 'greening supply' strategies are put in place to ensure equitable participation in markets, Göpel said.

Despite the multitude of initiatives being introduced by governments and businesses alike, policymakers are quick to acknowledge that a huge change of values among populations is required if they are to prove successful.

Consumers must be convinced that it is worth taking action and participating in the transition to a greener economy.

"Once we have tackled the availability and the information problems, there is only one final hurdle left – the most difficult one. That is how to convince consumers to systematically buy sustainable products and services," says Commissioner Hedegaard.

It remains to be seen how successful upcoming EU initiatives will be in this regard. 

Positions

EU Environment Commissioner Janez Potočnik has suggested that taxation schemes were needed to change consumer habits and move towards a more resource-efficient society (EurActiv 04/06/10). "We need to change our behaviour, as consumers and as producers. And to do that we need to make our markets work in ways which put a proper value on the resources we use," Potočnik said (EurActiv 24/03/10).

Stress on natural resources can only be reduced if the relative prices of different inputs into the economy are changed to reflect the real value of those resources, he argued. He also stressed that changing price signals is a more efficient means of changing behaviour than "the heavy hand of regulation".

"We need to inform consumers about the lifecycle environmental impacts of their choices and one of the best ways to do that is through prices. Prices should reflect the real costs and consequences of our actions, in the short, medium and long terms," Potočnik added.

Former EU Consumer Commissioner Meglena Kuneva said consumers were clearly playing a role in the environmental sustainability challenges that Europe's economies face. Therefore, she suggested that the decision-making process of consumers needs to be better understood in order to find ways to promote "green" choices and recycling.

McKinsey & Company consultants Sheila Bonini and Jeremy Oppenheim argue that the main barriers for greening consumption are lack of awareness, negative perceptions of green goods' performance, distrust in government and business' green claims, high prices and low availability of sustainable choices.

To increase sales of environmentally sensitive products, they note that companies must therefore remove these five barriers. "In other words, they must increase consumers' awareness of green products, improve consumers' perceptions of eco-products' quality, strengthen consumers' trust, lower the prices of green products, and increase these products' availability," they write in an article entitled 'Cultivating the green consumer'.

According to the Greendex 2010, an annual survey monitoring consumer behaviour, the top-scoring consumers of 2010, like in 2008, are in the developing economies of India, Brazil and China, in descending order. "American consumers' behaviour still ranks as the least sustainable of all countries surveyed since the inception of the survey three years ago, followed by Canadian, French and British consumers."

The survey, conducted by the National Geographic Society and international polling firm GlobeScan, also showed that "suspicion of so-called 'greenwashing' – companies making false claims about the environmental impact of their products – is the most significant barrier to further improvement. Out of a list of ten obstacles to doing more for the environment, the perception of 'greenwashing' emerged as the most frequently cited factor, followed closely by governments and industries failing to take action".

The United Nations Environment Programme noted that government messages making people feel guilty about their lifestyles and purchasing habits are having only limited success. Psychologists are concerned that many of these messages are too "guilt-laden" and disapproving. Instead of "turning people on" to the environment, these messages have tended to "switch them off," they argue.

Therefore, the UN thinks that sustainable lifestyles need to be made fashionable and "cool", while explaining to people the real personal benefits of living in harmony with the planet.

The European Environmental Bureau, a group of NGOs, argues that traditional environmental policy approaches are not sufficient to deal with the challenges posed by modern production and consumption patterns, and that 'Ecological Product Policy' is required.

"An essential challenge for the EEB is to move beyond the energy use aspect of products. Environmental requirements for implementing measures are, so far, almost exclusively limited to the energy performances in use stages. Whilst being relevant to an energy using product, the environmental requirements must also include stipulations for: energy and global warming potential; chemical contents; and resources efficiency."

European consumer organisation BEUC notes that energy and sustainability are becoming increasingly relevant for consumers, who are "willing and encouraged to save energy and protect the environment".

But it argues that consumers are unfortunately still not provided with the right tools to reduce their energy consumption or buy ever more efficient products, because "green" products are either unavailable or barely identifiable. At the same time, confusing information and a great variety of industry self-claims regarding energy-efficient products or sustainable supply make buying sustainable products hard, it says.

According to BEUC, unsustainable products should gradually be taken off the market. In addition, it says clear labelling information must be provided to consumers in a reliable way that is not misleading and allows for comparisons between similar products.

The Ecologic Institute, an environmental think-tank, stresses that when designing policy to influence consumer purchases, "you must take into account the way in which people make choices".

"Contrary to the belief of many economists, consumers very rarely weigh-up the full costs and benefits of their purchasing decisions. Instead, they are strongly influenced by emotional factors, the behaviour of other people, by habits, and by the use of mental short-cuts, which all help to speed up decision-making," it notes.

"Rather than being consistent, consumer preferences have also been shown to be inconsistent, changing over time and according to the situation and the way in which information is presented. In turn, while information provision and choice are important, neither necessarily leads to improved consumer decision-making or changes in consumer behaviour," it adds.

Erik Assadourian, senior researcher at the Worldwatch Institute, a think-tank, argues in The Rise and Fall of Consumer Cultures that a cultural shift from consumption to valuing sustainable living is needed because government targets and new technology are not enough to rescue humanity from ecological and social threats.

"It's no longer enough to change our light bulbs; we must change our very cultures," he writes, suggesting that unless we change our unsustainable habits and move beyond "the cult of consumption," civilisation will be washed over by ecological crises.

According to the Worldwatch Institute, consumption of goods and services has risen by 28% over the past decade, with the world digging up the equivalent of 112 Empire State Buildings of material every day.

"In the end, consumers have the power of the purse to decide whether they buy green products or not. So the support by consumer organisations will be key for implementing our climate policies in the next [few] decades," said EU Climate Action Commissioner Connie Hedegaard during a May 2011 speech to the Consumer International World Congress in Hong Kong.

"Providing complete and trustworthy information contributes to empowering consumers, so that they can make a deliberate choice – hopefully for green products," Hedegaard said.

"With the right information, the consumer has the incentive to make the right choice. Therefore it is important to further develop the market for sustainable products. There is money to be made and money to be saved for everyone," she added.

"We must use the power we have. As politicians, as businesses, as [consumer] organisations and as citizens, to make changes. We must understand that green is not just a slogan for environmentalists. It is a new way of organising our economies in order to provide good lives for nine billion people on this planet," the commissioner stated.

"Never has there been a greater need for green consumer organisations empowering consumers to make our growth green," she said.

"For 15 years, we have had a successful energy-labelling scheme. Adding extra categories and changing the colour coding to signify different things over time will not help to make consumers aware of the appliances with the lowest energy consumption. More generally, this new scheme will not have significant effects in directing markets to more energy-efficient products," Monique Goyens, director-general of European consumers' organisation BEUC, told EurActiv. 

"No-one is enthusiastic about new energy labels and the European institutions should have the courage to admit their mistakes and go back to the drawing board," she added.

Regarding carbon footprinting, Goyens said consumer organisations were backing a cautious approach. "Most consumers would not be able to understand grammes of CO2 as a metric, particularly without being provided any benchmarks of whether the figure was high or low. Equally importantly, product carbon footprinting raises some fundamental methodological questions," she told EurActiv.

"Green claims are very difficult to enforce, but we have evidence that they are actually declining, because companies are finding that they don't work. Consumers simply don't trust them," said Jacqueline Minor, head of consumer affairs at the European Commission's health and consumers department (DG SANCO).

"Growth at any cost is not viable. We have to develop new ways of doing business which will increase the positive social benefits arising from Unilever's activities while at the same time reducing our environmental impacts. We want to be a sustainable business in every sense of the word," says Unilever CEO Paul Polmer.

As consumers across the world become more conscious of environmental issues, companies are increasingly keen to tout their green credentials over those of their rivals.

Indeed, the eco-friendly nature of a product is now often a selling point in itself, explained Jan Muehlfeit, Europe chairman at Microsoft.

"As technology has become cheaper and easier to use, the demands of consumers have taken the lead in driving the market for personal computers, cell phones, tablets and online services," Muehlfeit said, adding that this trend was likely to continue as current and future generations of young people enter the job market.

"This is all part of a phenomenon called 'the consumerisation of IT', which is a driving force behind cloud computing," he concluded.

Wenonah Hauter, executive director of Food & Water Europe, said regarding misleading labelling of seafood products: "People often think that if they buy seafood with an eco-label, it's automatically a good choice. Unfortunately, these certifications don't assure that the product consumers are getting is actually eco-friendly, or that consumers are improving their behaviour."

"The most important measure for green demand is to get the prices to reflect all of their costs, including social and environmental ones,"said Maja Göpel, 'future justice director' at the World Future Council, calling for more price transparency.

"We see a lot of resistance on making costs transparent, even though it is the one single measure that is competition neutral and would lead to some form of effective consumer influence on production,"she told EurActiv in an interview. 

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