Eco-labels Positioning your brand, product portfolio and supply chain Table of contents Executive summary 1 The eco-labeling environment 2 Motivators of eco-label strategies ōCoercive motivators ōCompetitive and comprehensive motivators 3 4 5 Strategic choices ōFinding the right match ōChanging course on the supply chain ōAlternative strategies 6 8 10 12 The bottom line on eco-labels ōWhat steps can you take? ōCrafting your eco-label strategy – A roadmap 13 14 15 About Deloitte Research 'HORLWWH5HVHDUFKDSDUWRI'HORLWWH6HUYLFHV/3LGHQWLğHVDQDO\]HVDQGH[SODLQVWKHPDMRULVVXHVGULYLQJWRGD\łV EXVLQHVVG\QDPLFVDQGVKDSLQJWRPRUURZłVJOREDOPDUNHWSODFH)URPSURYRFDWLYHSRLQWVRIYLHZDERXWVWUDWHJ\DQG RUJDQL]DWLRQDOFKDQJHWRVWUDLJKWWDONDERXWHFRQRPLFVUHJXODWLRQDQGWHFKQRORJ\'HORLWWH5HVHDUFKGHOLYHUVLQQRYDWLYH SUDFWLFDOLQVLJKWVFRPSDQLHVFDQXVHWRLPSURYHWKHLUERWWRPOLQHSHUIRUPDQFH2SHUDWLQJWKURXJKDQHWZRUNRI GHGLFDWHGUHVHDUFKSURIHVVLRQDOVVHQLRUSUDFWLWLRQHUVRIWKHYDULRXVPHPEHUğUPVRI'HORLWWH7RXFKH7RKPDWVX/LPLWHG DFDGHPLFVDQGWHFKQRORJ\VSHFLDOLVWV'HORLWWH5HVHDUFKH[KLELWVGHHSLQGXVWU\NQRZOHGJHIXQFWLRQDOXQGHUVWDQGLQJDQG FRPPLWPHQWWRWKRXJKWOHDGHUVKLS,QERDUGURRPVDQGEXVLQHVVMRXUQDOV'HORLWWH5HVHDUFKLVNQRZQIRUEULQJLQJQHZ SHUVSHFWLYHWRUHDOZRUOGFRQFHUQV Disclaimer 7KLVSXEOLFDWLRQFRQWDLQVJHQHUDOLQIRUPDWLRQRQO\DQG'HORLWWH6HUYLFHV/3LVQRWE\PHDQVRIWKLVSXEOLFDWLRQUHQGHULQJ DFFRXQWLQJEXVLQHVVğQDQFLDOLQYHVWPHQWOHJDOWD[RURWKHUSURIHVVLRQDODGYLFHRUVHUYLFHV7KLVSXEOLFDWLRQLVQRWD VXEVWLWXWHIRUVXFKSURIHVVLRQDODGYLFHRUVHUYLFHVQRUVKRXOGLWEHXVHGDVDEDVLVIRUDQ\GHFLVLRQRUDFWLRQWKDWPD\ DIIHFW\RXUEXVLQHVV%HIRUHPDNLQJDQ\GHFLVLRQRUWDNLQJDQ\DFWLRQWKDWPD\DIIHFW\RXUEXVLQHVV\RXVKRXOGFRQVXOW DTXDOLğHGSURIHVVLRQDODGYLVRU'HORLWWH6HUYLFHV/3LWVDIğOLDWHVDQGUHODWHGHQWLWLHVVKDOOQRWEHUHVSRQVLEOHIRUDQ\ORVV VXVWDLQHGE\DQ\SHUVRQZKRUHOLHVRQWKLVSXEOLFDWLRQ 2 Executive summary “This is a complex market to play in, especially for a global player. As a company, you face a mosaic of different national consumer demands, regulation, product and production process constraints, the number, size and geographic distribution of suppliers, and the question of how to label a composite product.” Fortune Global 500 Consumer Products Company (FRODEHOVZKLFKFRQYH\LQIRUPDWLRQDERXWWKH HQYLURQPHQWDODQGVRFLDOLPSDFWRISURGXFWVVWDUWHG HVWDEOLVKLQJDPDUNHWSUHVHQFHGXULQJWKHV6LQFH WKHQUDSLGSUROLIHUDWLRQKDVUHVXOWHGLQFRQIXVLRQDQG UHGXQGDQF\7RGD\PDQDJHUVDUHZRQGHULQJKRZWR GHYHORSDFRKHVLYHHFRODEHOVWUDWHJ\%\GHIDXOWPDQ\ FRPSDQLHVDGRSWDZDLWDQGVHHDSSURDFKZKLOHORRNLQJ IRUFOHDUHUVLJQDOVIURPFRQVXPHUV $JURZLQJQXPEHURIOHDGLQJFRPSDQLHVDUHSXUVXLQJ HFRODEHOVGHVSLWHWKHFRQIXVLRQLQZKDWWKH\GHVFULEH DVDpre-competitive environment'HORLWWHFRQGXFWHG LQGHSWKLQWHUYLHZVZLWKVHQLRUFRUSRUDWHVXVWDLQDELOLW\ H[HFXWLYHVWRSURYLGHPRUHFODULW\RQWKHVHGHFLVLRQV1 1 7KLVUHSRUWHQFDSVXODWHVWKRVHFRQYHUVDWLRQVH[DPLQHV WKHFXUUHQWHFRODEHOLQJODQGVFDSHDQGH[SORUHVWKHZD\V FRPSDQLHVFDQGHFLGHZKHWKHURUQRWDQHFRODEHOVWUDWHJ\ LVDSSURSULDWH 7KHUHVHDUFKğ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ğFDQWPDUNHWVKDUHDUHVWDUWLQJ WRPRUHGLUHFWO\VKDSHWKHHFRODEHOLQJODQGVFDSH)RU H[DPSOHLQWHUYLHZHHVH[SUHVVHGDFOHDUSUHIHUHQFHIRU ULJRURXVFHUWLğFDWLRQV\VWHPVDQGHFRODEHOVWKDWFRYHU PXOWLSOHSURGXFWDWWULEXWHV$OOLQWHUYLHZHGH[HFXWLYHV DQWLFLSDWHJURZLQJFRQVXPHUDZDUHQHVVRIVXVWDLQDELOLW\ DQGDVKLIWIURP%%WR%&VWUDWHJLHV7KHDFWLRQVRI FRPSDQLHVLQWHUYLHZHGIRUWKLVUHVHDUFKDORQJZLWK FRPPRQVWDQGDUGVFDQFUHDWHPRUHRUGHULQWKHHFRODEHO HQYLURQPHQWLQWKHQHDUWHUP 7KLVUHSRUWLVDFRQWULEXWLRQWRWKH$VVHVVPHQWRI6WDQGDUGV&HUWLğFDWLRQ6\VWHPVODXQFKHGLQE\0$56,QFWKH'DYLGDQG/XFLOH3DFNDUG )RXQGDWLRQDQGWKH:DOWRQ)DPLO\)RXQGDWLRQ7KHLQWHUYLHZVZHUHFRQGXFWHGIURP)HEUXDU\WR0D\RIZLWKVHQLRUVXVWDLQDELOLW\ H[HFXWLYHVSULPDULO\IURP)RUWXQHFRPSDQLHVKHDGTXDUWHUHGLQ(XURSHDQGWKH8QLWHG6WDWHV(DFKLQWHUYLHZODVWHGRQHKRXUXVLQJWKHVDPH VHWRITXHVWLRQV,QWHUYLHZHGFRPSDQLHVDUHLQWKHFRQVXPHUSURGXFWUHWDLOZKROHVDOHPDQXIDFWXULQJDQGEDQNLQJLQGXVWULHV$OOLGHQWLI\LQJ LQIRUPDWLRQKDVEHHQNHSWFRQğGHQWLDO Eco-labels: Positioning your brand, product portfolio and supply chain1 &RPSDQLHVFDQGHYHORSWKHLUHFRODEHOVWUDWHJ\E\SXUVXLQJ WKHIROORZLQJWDFWLFV ōDVVHVVKRZWKHLUHQWHUSULVHLVXVLQJRUKDVXVHGHFRODEHOV HYDOXDWHGDJDLQVW%%DQG%&EXVLQHVVGULYHUV ōXQGHUWDNHPDUNHWDQGFXVWRPHUDVVHVVPHQWVWRGHğQHWKH SRWHQWLDOYDOXHULVNVDQGLVVXHVDVVRFLDWHGZLWKDGRSWLQJ RQHRUPRUHHFRODEHOVIRUSURGXFWVDQGRU WKHFRPSDQ\ ōLGHQWLI\DQGHYDOXDWHSRWHQWLDOVWUDWHJLFUHJXODWRU\ RSHUDWLRQDODQGğQDQFLDOLPSOLFDWLRQVRIYDULRXVHFRODEHO FKRLFHVDQGVFHQDULRV ōGHYHORSDFRPSUHKHQVLYHVHTXHQFHGHFRODEHO VWUDWHJ\DQGURDGPDSVXSSRUWHGE\WKHUHTXLUHGSROLFLHV DQGSURFHGXUHV ōZDWFKWUHQGVLQWKHUHWDLOVHFWRUIRUDFWLRQVWKDWPLJKW LQĠXHQFH\RXUXOWLPDWHHFRODEHODSSURDFK ōFRQVLGHUFHUWLğFDWLRQLQWKHVXSSO\FKDLQSDUWLFXODUO\ RIFRPPRGLWLHVVXFKDVFRWWRQFRIIHHFRFRDDQG IRUHVWU\SURGXFWV 2 The eco-labeling environment :KLOHWKHKLVWRU\RIODEHOLQJFRQVXPHUSURGXFWVLVDORQJ RQHHFRODEHOVDUHUHODWLYHO\QHZWRWKHPDUNHWSODFH7KH WHUPRULJLQDWHGLQWKHVZKHQ*HUPDQ\LQWURGXFHG WKH%OXH$QJHOODEHO,QWKH86&RQJUHVVSDVVHG WKH(QHUJ\3ROLF\DQG&RQVHUYDWLRQ$FWZKLFKDXWKRUL]HG WKHPDQGDWRU\ODEHOLQJRIKRXVHKROGDSSOLDQFHVŌWRGD\łV (QHUJ\*XLGHODEHO6LQFHWKHQDGGLWLRQDOHFRODEHOVKDYH UDSLGO\SUROLIHUDWHGVHHğJXUH Figure 2: Organizations managing eco-labels 3% 10% 18% 8% 4% 58% (FRODEHOVFRQYH\LQIRUPDWLRQDERXWDSURGXFWłV HQYLURQPHQWDODQGVRFLDOLPSDFWGXULQJPDQXIDFWXULQJ XWLOL]DWLRQDQGGLVSRVDO7RGDWHPRVWODEHOVIRFXVRQ HQYLURQPHQWDOLVVXHVVXFKDVUHF\FOLQJFDUERQFRQWHQWRU RUJDQLFLQJUHGLHQWVUDWKHUWKDQVRFLDOLVVXHV A noisy marketplace $VWKHQXPEHURIHFRODEHOVJURZVFRPSDQLHVDUH VFUDPEOLQJWRğQGWKHEHVWSODWIRUPVIRUWKHLUVXVWDLQDELOLW\ PHVVDJHV2QWKHSOXVVLGHPRVWHFRODEHOVDUHJOREDOO\ DYDLODEOHDQGDUHXVHGPRUHH[WHQVLYHO\LQ1RUWK$PHULFD DQG(XURSH0RUHWKDQKDOIDUHPDQDJHGE\QRQSURğW RUJDQL]DWLRQVDQGPDQ\FRPSDQLHVFKRRVHDWKLUGSDUW\ FHUWLğHUVHHğJXUHVDQG+RZHYHUFUHGLELOLW\LVD FRQFHUQSDUWLFXODUO\LQWHUPVRIGHPRQVWUDWHGHQYLURQPHQWDO DQGVRFLDORXWFRPHV2YHUSHUFHQWRIWKHSURJUDPVWKDW UDWHHQYLURQPHQWDOSHUIRUPDQFHPDNHSRWHQWLDOO\YDJXHDQG XQVXEVWDQWLDWHGFODLPVDERXWHQYLURQPHQWDOSHUIRUPDQFH 7KHPRVWFRPPRQFRQFHUQUDLVHGE\DOOLQWHUYLHZHG H[HFXWLYHVLVWKHQXPEHURIHFRODEHOVDQGWKHODFNRI PDUNHWSHQHWUDWLRQE\DQ\VLQJOHODEHO Industry Association For-Profit Government Hybrid (for/non profit) Non-Profit Other 4 Source: 2010 Ecolabel Monitor Figure 3: Types of verification/certification 5% 4% 27% 64% First party Third party Second party Varied Source: 2010 Ecolabel Monitor Figure 1: Eco-labels per launch year 6RXUFHZZZHFRODEHOLQGH[FRP $FFRUGLQJWRWKH*OREDO(FRODEHO0RQLWRULVVXHGE\:5,'XNHDQG%LJ5RRP(FRODEHOLQJRUJ 6LQVRI*UHHQZDVKLQJ7HUUD&KRLFH 4 3HUFHQWDJHVPD\QRWDGGXSWRGXHWRURXQGLQJHUURU Eco-labels: Positioning your brand, product portfolio and supply chain3 Motivators of eco-label strategies 5HVHDUFKHUVKDYHLGHQWLğHGWKUHHGLVWLQFWPRWLYDWLRQVWKDW DIIHFWWKHVFDOHDQGQDWXUHRIDFWLRQVRQHQYLURQPHQWDO VXVWDLQDELOLW\FRHUFLYHFRPSHWLWLYHDQGFRPSUHKHQVLYH 7KHVHWKUHHPRWLYDWLRQDOJURXSVGHVFULEHKRZWKH LQWHUYLHZHGFRPSDQLHVDSSURDFKHFRODEHOLQJDQG FHUWLğFDWLRQVHHWDEOH)LUPVcoercedSULPDULO\E\ HQYLURQPHQWDOUHJXODWLRQVXFKDVPDQGDWHGSURFXUHPHQW JXLGHOLQHVWHQGWREHOHVVHQWUHSUHQHXULDODQGPRUH ULVNDYHUVH)LUPVPRWLYDWHGE\FRPSHWLWLYHGULYHUVŌ UHJXODWLRQVWDNHKROGHUSUHVVXUHVDQGFRPSHWLWLYHIDFWRUV ŌHQJDJHLQPRUHH[WHUQDOJUHHQSUDFWLFHVDQGVXSSO\ FKDLQPDQDJHPHQWLQFOXGLQJVXSSOLHUVHOHFWLRQDQG HYDOXDWLRQ)LUPVZLWKDFRPSUHKHQVLYHPRWLYDWLRQFRPSO\ ZLWKUHJXODWLRQVDQGKDYHVXSHULRULQWHUQDOHQYLURQPHQWDO SUDFWLFHVDQGVXSSO\FKDLQPDQDJHPHQW7KH\KDYHPRUH SURDFWLYHVHQLRUPDQDJHPHQWDQGIRFXVRQORQJWHUP SURğWDELOLW\DQGWKHWRWDOHQYLURQPHQWDOLPSDFWRIWKHLU SURGXFWVDQGSURFHVVHV7KHVHğUPVFRQWLQXDOO\PRQLWRU WKHLUVXSSO\FKDLQVWRUHGXFHWKHLUHQYLURQPHQWDOIRRWSULQW 1RQHRIWKHLQWHUYLHZHGFRPSDQLHVIDOOZLWKLQDVLQJOH PRWLYDWLRQDOJURXS0RVWWHQGWRIDOOZLWKLQWKHFRHUFLYH DQGFRPSHWLWLYHPRWLYDWLRQDOJURXSV7KHDSSURDFKYDULHV IURPSURGXFWWRSURGXFW7KHPRVWDPELWLRXVFRPSDQLHV SXUVXHDFRPSUHKHQVLYHDSSURDFKDQGWKHRYHUDOOWUHQGLV LQWKLVGLUHFWLRQ Table 1: Motivators of eco-labeling and certification strategy Coercive motivation ō 3URFXUHPHQWJXLGHOLQHVDVGULYHUIRU FHUWLğFDWLRQODEHOLQJ ō ,QGLYLGXDOSURGXFWIRFXV ō 8VXDOO\VLQJOHDWWULEXWHODEHO ō &DQKDYHLQWHUQDODXGLWVRU WKLUGSDUW\FHUWLğFDWLRQ Competitive motivation ō 0DUNHWRSSRUWXQLW\EUDQGPDQDJHPHQW FRPSHWLWLYHDGYDQWDJH ō ,QGLYLGXDOSURGXFWIRFXVHQWLUH SURGXFWFDWHJRULHV ō 0RVWFUHGLEOHODEHOV ō 3UHIHUSHUFHQWDJHRIFHUWLğHGFRQWHQWYV FHUWLğHGFRQWHQWLQODEHOHGSURGXFW ō ,QWHUQDOFHUWLğFDWLRQDQGVRPH WKLUGSDUW\FHUWLğFDWLRQ Comprehensive motivation ō 'HHSJUHHQPLVVLRQGULYHQ VXSSO\FKDLQPDQDJHPHQWDQG VXVWDLQDEOHPDQXIDFWXULQJ ō 3URGXFWFDWHJRULHVFRUSRUDWHEUDQGLQJ ō /&$EDVHGPXOWLDWWULEXWHODEHOV ō ,QWHUQDOFHUWLğFDWLRQPRUHWKLUGSDUW\ FHUWLğFDWLRQIRUUHWDLOHUV $QWRQ\3DXOUDMHWDOŃ(QYLURQPHQWDO0RWLYDWLRQVD&ODVVLğFDWLRQ6FKHPHDQGLWV,PSDFWRQ(QYLURQPHQWDO6WUDWHJLHVDQG3UDFWLFHVńBusiness Strategy and the Environment. ŋ'2,EVH6HHDOVR*XQQLQJKDPHWDOVHHHYLGHQFHIRUğUPVWKDWDUHODJJDUGVUHOXFWDQWFRPSOLHUVPRUHFRPPLWWHGFRPSOLHUVHQYLURQPHQWDOVWUDWHJLVWV DQGWUXHEHOLHYHUV6KDGHVRI*UHHQ%XVLQHVV5HJXODWLRQ(QYLURQPHQW6WDQIRUG8QLYHUVLW\3UHVV/XELQ(VW\0D\Ń7KH6XVWDLQDELOLW\,PSHUDWLYHŋ/HVVRQIRU/HDGHUV IURP3UHYLRXV*DPH&KDQJLQJ0HJDWUHQGVńHarvard Business Review. 4 Coercive motivators +LVWRULFDOO\FRHUFLYHPRWLYDWLRQVZHUHWKHFRPPRQ FDWDO\VWVIRUHFRODEHOLQJDQGFHUWLğFDWLRQ)RUH[DPSOH 1*2FDPSDLJQVIRFXVHGRQVSHFLğFSURGXFWVRUDWWULEXWHV VXFKDVğVKFRIIHHSDOPRLOIRUHVWU\FKLOGODERURUWR[LQV 7DUJHWHGPDQXIDFWXUHUVDQGUHWDLOHUVWHQGHGWRUHVSRQGLQ DFRQIURQWDWLRQDOPRGHWR1*2FDPSDLJQVDQG WKHQHQJDJHGZLWKFULWLFVWRGHYHORSFHUWLğFDWLRQ VFKHPHVVWHZDUGVKLSSURJUDPVRULVVXHDFRUSRUDWH UHVSRQVLELOLW\UHSRUW 0RUHUHFHQWO\JUHHQSXUFKDVLQJJXLGHOLQHVLQVRPH86 VWDWHVDUHVKLIWLQJSXUFKDVLQJSDWWHUQVDQGVWLUULQJXS GHPDQGIRUHQYLURQPHQWDOO\IULHQGO\SURGXFWV6WDUWLQJ LQVWDWHVVXFKDV3HQQV\OYDQLD0DVVDFKXVHWWV 9HUPRQW0DLQHDQG&RQQHFWLFXWVWDUWHGLVVXLQJ HQYLURQPHQWDOO\SUHIHUDEOHSXUFKDVLQJJXLGHOLQHV DFURVVHQWLUHSURGXFWFDWHJRULHVIRUDQ\VWDWHRZQHGRU JRYHUQPHQWIXQGHGHQWLW\7KHVHFDQEHEDVHGRQWKH (3$łV&RPSUHKHQVLYH3URFXUHPHQW*XLGHOLQHVIHGHUDORU VWDWHOHYHOH[HFXWLYHRUGHUVRUVWDWXWHV(FRODEHOVDUH DQHDV\ZD\IRULQVWLWXWLRQDOEX\HUVWRLGHQWLI\FHUWLğHG SURGXFWV7KHODEHOLVEHFRPLQJQHFHVVDU\WRUHWDLQRUJDLQ PDUNHWVKDUHDQGFRPSHWHIRUODUJHFRQWUDFWVLQFHUWDLQ SURGXFWFDWHJRULHVDFFRUGLQJWRD)RUWXQHFRQVXPHU SURGXFWFRPSDQ\H[HFXWLYH Eco-labels: Positioning your brand, product portfolio and supply chain5 Competitive and comprehensive motivators &RPSDQLHVZKRDUHQRWFRHUFHGLQWRDFWLRQRSWIRUDQ HFRODEHODVDZD\WRGULYHJURZWKHQKDQFHWKHLUEUDQGRU JDLQDFRPSHWLWLYHHGJH,WLVDOVREHFRPLQJDVLJQDOWRD JURZLQJFDGUHRIHTXLW\LQYHVWRUVZKRVFUXWLQL]HFRUSRUDWH VXVWDLQDELOLW\SUDFWLFHV$VDQH[HFXWLYHIURPDODUJHJOREDO EDQNQRWHGLQYHVWRUVLQFUHDVLQJO\ORRNIRUFHUWLğFDWLRQRI EDVLFFRPPRGLWLHVOLNHSXOSDQGSDSHU Driving growth *LYHQJURZLQJLQVWLWXWLRQDODQGUHWDLOGHPDQG HFRODEHOLQJDQGFHUWLğFDWLRQLQWKH8QLWHG6WDWHVLVD%% LPSHUDWLYHPRUHWKDQD%&UHTXLUHPHQWIRUWKHWLPH EHLQJ$WDPLQLPXPFHUWLğFDWLRQFDQKHOSFRPSDQLHV JDLQPDUNHWNQRZOHGJHHVWDEOLVKH[SHUWLVHHQJDJH ZLWKODUJHLQVWLWXWLRQDOEX\HUVDQGHGXFDWHWKHP)RU VRPHFRPSDQLHVWKHSXUVXLWRIHFRODEHOVGULYHVWKH GHYHORSPHQWRIQHZSURGXFWV Enhancing a brand $QRWKHUGULYHULVEUDQGGLIIHUHQWLDWLRQZKLFKKDVWKUHH REMHFWLYHVLQFUHDVHFRQVXPHUDZDUHQHVVRIDSURGXFWRU GHIHQGLWVPDUNHWVKDUHUDLVHWKHYLVLELOLW\RIVXVWDLQDELOLW\ LQLWLDWLYHVDQGVWUHQJWKHQWKHFRUSRUDWHUHSXWDWLRQE\ ŃGRLQJWKHULJKWWKLQJń:LWKWKHVHFRQVLGHUDWLRQVLQPLQG UHWDLOHUVDQGPDQXIDFWXUHUVFDQVHOHFWDQHFRODEHOLILW PHHWVWKUHHEDVLFFULWHULD ōDOLJQVZLWKWKHEUDQGVWUDWHJ\ ōDGGVDQHZGLPHQVLRQWRWKHEUDQGYDOXHSURSRVLWLRQ ōLPSURYHVWKHFRPSDQ\łVLPDJHDQGPDUNHWSRVLWLRQ 6 Gaining competitive advantage )RUFRPSDQLHVWKDWKDYHHVWDEOLVKHGVXVWDLQDELOLW\DV SDUWRIWKHLUFRUSRUDWHPLVVLRQVSXEOLFO\DQQRXQFLQJ WDUJHWVLVDQLQFUHDVLQJO\FRPPRQVWUDWHJ\WRGLIIHUHQWLDWH WKHPVHOYHVIURPFRPSHWLWRUV&HUWLğFDWLRQDQGODEHOLQJ FDQKHOSGULYHWKLVSURFHVVLQWRWKHLUVXSSO\FKDLQDQG DFURVVEXVLQHVVRSHUDWLRQV7KHHFRODEHORIIHUVDQ HDV\SODWIRUPWRFRPPXQLFDWHHLWKHUPRGHUDWHRU DPELWLRXVVXVWDLQDELOLW\WDUJHWVWRWKHPDUNHW,QIDFWLQD SUHFRPSHWLWLYHSOD\VRPHFRPSDQLHVSXUVXHHFRODEHOLQJ HYHQZKHQWKHUHLVPLQLPDOFRQVXPHUGHPDQGDFFRUGLQJ WRDQH[HFXWLYHIURPDODUJH)RUWXQHFRQVXPHU SURGXFWğUP &HUWLğFDWLRQFDQKHOSGHPRQVWUDWHWKHUHVSRQVLEOHVRXUFLQJ RIFRPPRGLWLHVDQGDGGUHVVUHFRJQL]HGVXVWDLQDELOLW\ FRQFHUQVLQWKHVXSSO\FKDLQ$QH[HFXWLYHIURPDODUJH IRRGFRPSDQ\QRWHGWKDWFHUWLğFDWLRQPD\KHOSVHFXUH ORQJWHUPDFFHVVWRFURSVZKHUHVXSSOLHVDUHYRODWLOH RUVKULQNLQJ3UHSDULQJIRUWKHVHVXSSO\FKDLQULVNVFDQ VWUHQJWKHQDFRPSDQ\łVFRPSHWLWLYHSRVLWLRQ Strategic choices “We invest in internal resources and systems. Then it is only natural to ask the question whether a third-party statement might add additional value to what we are already doing internally.” Fortune 100 consumer products company executive %HFDXVHWKHUHLVQłWRQHHFRODEHOWRVXLWDOOSURGXFWV FRPSDQLHVQHHGWRFDUHIXOO\LQWHJUDWHWKHLUEUDQGVDQG VXVWDLQDELOLW\PHVVDJHV,QIDFWLQWHUYLHZVUHYHDOWKDWWKH GHFLVLRQWRFHUWLI\DQGSXUVXHDQHFRODEHOGHSHQGVQRW RQO\RQDFRPSDQ\łVEUDQGHTXLW\EXWDOVRRQWKHGHJUHH WRZKLFKDFRPSDQ\KDVLQWHJUDWHGVXVWDLQDELOLW\DFURVV WKHHQWLUHHQWHUSULVH$FKLHYLQJDEDODQFHEHWZHHQWKH WZRLVFUXFLDOWRWKHFUHGLELOLW\RIDFRPSDQ\łVGHFLVLRQWR SXUVXHDQHFRODEHOVHHWDEOH &RPSDQLHVZLWKhigh brand equityFDQXVHHFRODEHOVDQG FHUWLğFDWLRQDVDZD\WRUDLVHFRQVXPHUDZDUHQHVVDQG HVWDEOLVKVWDQGDUGVLQWKHLQGXVWU\)RUFRPSDQLHVZLWK high brand equityDQGlow sustainability integration,WKH FKRLFHWRHFRODEHOGHSHQGVRQZKHWKHULWFDQDGGEUDQG YDOXHZLWKRXWWKUHDWHQLQJDQHVWDEOLVKHGUHSXWDWLRQ 7KHVHFRPSDQLHVRIWHQUHO\RQSURGXFWDWWULEXWHVRUEUDQG OR\DOW\WRGULYHVDOHV)RURWKHUFRPSDQLHVZLWKhigh brand equity and high sustainability integration,WKHHFRODEHO FDQEROVWHUWKHFRUSRUDWHEUDQG)RUFRPSDQLHVWKDWDUH IRXQGHGRQVXVWDLQDELOLW\SULQFLSOHVSXUVXLQJWKHPRVW ULJRURXVODEHOLVDVWUDWHJLFPRYHWRPDLQWDLQWKHEUDQG DGYDQWDJHDOUHDG\HVWDEOLVKHGDWWKHHQWHUSULVHOHYHO 2QWKHRWKHUKDQGFRPSDQLHVZLWKlow brand equityFDQ XVHFHUWLğFDWLRQDVDWRROWRGULYHYDOXHDQGVWUHQJWKHQ DVWDOHEUDQG6RPHFRPSDQLHVSXWDODEHORQDSURGXFW HYHQLILWGRHVQRWVWUHQJWKHQWKHEUDQGVRPHGRVR VLPSO\WRNHHSXSZLWKWKHLUFRPSHWLWLRQ7KHODWWHU VWUDWHJ\FDQUDLVHWKHULVNRIJUHHQZDVKLQJDFFXVDWLRQVIRU FRPSDQLHVZLWKlow sustainability integration&RPSDQLHV ZLWKlow sustainability integrationDUHEHWWHUVHUYHGE\ HVWDEOLVKLQJLQWHUQDOVWDQGDUGVDQGDQDUURZDQGOHVV FRVWO\IRFXVRQFHUWLğFDWLRQRIRQO\DIHZSURGXFWVRU Low brand equity High brand equity Table 2: Brand equity and the wholly sustainable enterprise ō 0RUHGLIğFXOWWRFHUWLI\ ō 6HWLQWHUQDOVWDQGDUGV ō 3XUVXHFHUWLğFDWLRQLQVXSSO\FKDLQFRPPRGLWLHV ō (FRODEHORQO\WRDXJPHQWDQGFRPSOHPHQWH[LVWLQJSURGXFW EUDQGYDOXHSURSRVLWLRQ ō &RQVLGHUOLVWLQJFHUWLğHGLQJUHGLHQWVRQH[LVWLQJODEHO ō 3XUVXHEURDGHGXFDWLRQDOFDPSDLJQ ō (DV\WRFHUWLI\ ō 6HWLQWHUQDOVWDQGDUGV ō 3XUVXHULJRURXVWKLUGSDUW\ODEHOVWRPDLQWDLQFRPSHWLWLYHHGJHDV FRPSDQ\DQGIRULQGLYLGXDOSURGXFWV ō /DEHOPD\HURGHDOUHDG\HVWDEOLVKHGVXVWDLQDELOLW\EUDQG ō 0RUHGLIğFXOWWRFHUWLI\ ō 6HWLQWHUQDOVWDQGDUGV ō &HUWLğFDWLRQODEHOLQJPD\KHOSVWUHQJWKHQDVWDOHEUDQG ō 3XUVXHFHUWLğFDWLRQLQVXSSO\FKDLQFRPPRGLWLHV ō (DV\WRFHUWLI\ ō 6HWLQWHUQDOVWDQGDUGV ō &RQVLGHUWKLUGSDUW\PRUHULJRURXVHFRODEHOVHVSHFLDOO\WR HVWDEOLVKEUDQGYDOXHIRUDUHFRJQL]HGSURGXFW ō )RFXVPRUHRQOHYHUDJLQJWKHFRUSRUDWHLPDJHUDWKHUWKDQ LQGLYLGXDOSURGXFWV Low sustainability integration High sustainability integration 6HH'HORLWWHŃ&UHDWLQJWKHZKROO\VXVWDLQDEOHHQWHUSULVHńKWWSZZZGHORLWWHFRPDVVHWV'FRP3HUX/RFDO$VVHWV'RFXPHQWVSHB ZKROO\VXVWDLQEOHBSGI Eco-labels: Positioning your brand, product portfolio and supply chain7 FRPPRGLWLHVLQWKHVXSSO\FKDLQ0DNLQJJUHHQSURGXFW FODLPVDQGSXUVXLQJWKLUGSDUW\FHUWLğ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ğFDWLRQRI HFRODEHOVDQGHQYLURQPHQWDOFODLPVWDUJHWLQJFRQVXPHUV ZLOOOLNHO\EHFRPHPRUHRIDQLVVXHLQWKH8QLWHG6WDWHV ,QGHHGYHULğFDWLRQDQGSURSHUGRFXPHQWDWLRQDUHNH\ LQJUHGLHQWVWREXLOGLQJWUXVWVHHğJXUH Figure 4: Factors improving trust in standard systems 60% 55% 50% 38% 40% 35% 32% 30% 20% 11% 10% 0% Verification Content Standard-setting Governance Source: ISEAL Alliance, “The ISEAL 100, A Survey of Thought Leader Views on Sustainability Standards 2010” 6HHLQIRUPDWLRQRQHQIRUFHPHQWDFWLRQVKWWSZZZIWFJRYRSDUHSRUWHUJUHHQJGVVKWPDFFHVVHG-XQH 8 Impacts Finding the right match “Credibility ultimately matters the most.” Senior retail executive 2QFHDFRPSDQ\GHFLGHVWKDWDQHFRODEHOLVDJRRG VWUDWHJLFRSWLRQWKHQH[WWDVNLVWRğQGWKHULJKWFHUWLğHU 7KHHFRODEHOVKRXOGHQGRUVHDFRPSDQ\łVHIIRUWVDQGKHOS FRPPXQLFDWHWKHVHWRWKHSXEOLF2YHUDOOLQWHUYLHZHHV SUHIHUHFRODEHOVWKDWDUHUREXVWFUHGLEOHDQGFOHDUO\ FRQQHFWHGWRWKHEUDQG Issuing organization 7KHW\SHRILVVXLQJRUJDQL]DWLRQLQGXVWU\1*2RU JRYHUQPHQWDJHQF\LVQRWDVLPSRUWDQWDFFRUGLQJWR H[HFXWLYHVFRPSDUHGZLWKWKHQHHGWRğQGDVXLWDEOH HFRODEHOZLWKFHUWLğFDWLRQUHTXLUHPHQWVWKDWPHDVXUH XSWRLQWHUQDOVWDQGDUGVIRUULJRUDQGVFLHQWLğFREMHFWLYLW\ ,GHDOO\DQHFRODEHOVKRXOGEHJURXQGHGLQDGLYHUVH PXOWLVWDNHKROGHUSURFHVVLQFOXGLQJFRQVXPHUV)RU FRPSDQLHVXQGHUFORVHFRQVXPHUVFUXWLQ\HJUHWDLOHUV DQGFRQVXPHUSURGXFWFRPSDQLHVRUWKRVHFRQFHUQHG ZLWKSXEOLFPLVWUXVWDQLQGHSHQGHQW1*2RUJRYHUQPHQW VSRQVRUHGODEHOLVDVDIHURSWLRQ Transparency and accountability 7KHFHUWLğFDWLRQFULWHULDDQGSURFHVVVKRXOGEHFOHDU XQGHUVWDQGDEOHDQGSXEOLFO\DYDLODEOH$ODUJHQXPEHU SHUFHQWRIHFRODEHOVSXEOLVKODEHOLQJFULWHULD +RZHYHUWKLVLVQRWVXIğFLHQW([HFXWLYHVFRQVXOWHGIRUWKLV UHSRUWZHUHQRWFRQğGHQWLQWKHGHJUHHRIWUDQVSDUHQF\ PDQ\QRWHGWKDWHFRODEHOVRIWHQDSSHDUWREHDŃEODFN ER[ń7KLVLVDOHVVHUFRQFHUQZLWKPRUHZHOONQRZQ HFRODEHOVHJ)DLU7UDGH)7DQG5DLQIRUHVW$OOLDQFH5$ ,QWHUYLHZHGH[HFXWLYHVSUHIHUWKHIROORZLQJDWWULEXWHVLQ FHUWLI\LQJRUJDQL]DWLRQV ōPDLQWDLQWUDQVSDUHQF\ZKHQGHYHORSLQJFULWHULD ōSURYLGHFODULW\RQKRZGDWDDUHHYDOXDWHG ōKDYHDWUDQVSDUHQWGHFLVLRQPDNLQJSURFHVV ōSHUPLWDSSOLFDQWVWRDSSURDFKUHYLHZHUVIRUFODULğFDWLRQ ōSURWHFWFRQğGHQWLDOGDWD ōUHIUDLQIURPğQDQFLDOFRQĠLFWVRILQWHUHVW Rigor versus flexibility ,QWHUYLHZHHVJHQHUDOO\SUHIHUPRUHULJRURXVHFRODEHOV WKDWJDUQHUFUHGLELOLW\LQWKHSXEOLFH\H+RZHYHU FRPSDQLHVQHHGWREDODQFHULJRUZLWKĠH[LELOLW\LQRUGHU WRUHPDLQFRPSHWLWLYHDQGUHVSRQVLYHWRUDSLGO\FKDQJLQJ PDUNHWSODFHQHHGVVHHWDEOH)RUH[DPSOHULVLQJRLO DQGFRPPRGLW\SULFHVRUDVKRUWDJHRIVXSSOLHVPD\ ZDUUDQWDTXLFNFKDQJHLQSURGXFWIRUPXODWLRQ:LWKPRUH ULJRURXVFHUWLğFDWLRQV\VWHPVWKDWFHUWLI\DVSHFLğFSURGXFW IRUPXODWLRQDQGOLVWRILQJUHGLHQWVUHWDLQLQJWKLVĠH[LELOLW\ LVSDUWLFXODUO\WULFN\ Table 3: Rigorous versus flexible certification criteria Rigor Flexibility Advantages ō &UHGLELOLW\ ō 6FLHQWLğFREMHFWLYH ō 0XOWLDWWULEXWH/&$EDVHG ō /HVVSXEOLFEDFNODVK ō 5DLVHWKHEDUIRUFRPSHWLWRUV ō 5DSLGUHVSRQVHWRFKDQJLQJPDUNHWFRQGLWLRQV ō &DQGHPRQVWUDWHJUDGXDOSURJUHVVWRWDUJHWV Disadvantages ō 0RUHFRVWO\ ō 7RRFRPSOH[PDNLQJGLIğFXOWWRSDVVFHUWLI\ ō 1RWHQRXJKSURGXFWVFDUU\ODEHOORZPDUNHWSHQHWUDWLRQ ō /HVVFUHGLEOHSHUFHLYHGDVJUHHQZDVKLQJ ō &DQEHFRPHDGKRFSLHFHPHDODSSURDFKWRODEHOLQJ *OREDO(FRODEHO0RQLWRU Eco-labels: Positioning your brand, product portfolio and supply chain9 /LIH&\FOH$VVHVVPHQW/&$EDVHGODEHOVWKDWFRYHU PXOWLSOHSURGXFWDWWULEXWHVDUHJHQHUDOO\PRUHDWWUDFWLYH WRPRVWLQWHUYLHZHHVEHFDXVHWKH\WHQGWREHPRUH VFLHQWLğF,QDGGLWLRQ/&$EDVHGODEHOVDOORZDFRPSDQ\ WRGHPRQVWUDWHVWUHQJWKDFURVVDZLGHUUDQJHRISURGXFW DWWULEXWHVDQGDSSHDOWRDZLGHUDXGLHQFH6RPH FRQVXPHUVPD\FDUHPRUHDERXWDSDUWLFXODUDWWULEXWHŌ KXPDQKHDOWKWR[LFLW\FRPSDUHGWRUHF\FOHGFRQWHQWIRU H[DPSOHŌZKHUHDVIRURWKHUVWKHRSSRVLWHLVWUXH )RUFRPSDQLHVWKDWDUHSDUWLFXODUO\FRQFHUQHGZLWKWKH FUHGLELOLW\RIHFRODEHOVWKHH[WHQWWRZKLFKDODEHO DFKLHYHVLWVSXUSRUWHGHQYLURQPHQWDODQGVRFLDOJRDOVLV FUXFLDOLQWKHGHFLVLRQWRDOO\WKHLUUHSXWDWLRQDQGEUDQG ZLWKDODEHO7RGDWHLWKDVEHHQGLIğFXOWWRHVWDEOLVK FKDQJHVLQWKHHQYLURQPHQWDODQGVRFLDOLVVXHVWKDWDUH WDUJHWHGE\PDQ\HFRODEHOV8QIRUWXQDWHO\RQO\ SHUFHQWRIFHUWLğFDWLRQRUJDQL]DWLRQVUHJXODUO\PRQLWRUWKH VRFLDODQGHQYLURQPHQWDOLPSDFWRIWKHLUHFRODEHOV11 Maturity and effectiveness ,QWHUYLHZHHVGLIIHUHGRQKRZWKH\YLHZHGWKHPDWXULW\ DQGHIIHFWLYHQHVVRIFHUWLğFDWLRQV\VWHPV,QJHQHUDO WKHQXPEHURIHFRODEHOVLQGLFDWHVLPPDWXULW\0DWXUH HFRODEHOVGHPRQVWUDWHHIIHFWLYHQHVVRQPXOWLSOH GLPHQVLRQVLQFOXGLQJZKHWKHUWKHODEHOFDQLQĠXHQFH FRQVXPHUEHKDYLRU/DEHOVWKDWFRQWLQXHWRHYROYHDQG DGMXVWWRFKDQJLQJGHPDQGVDUHH[SHFWHGWRFRQWLQXHWR DWWUDFWDSSOLFDQWV ,QWHUYLHZHGH[HFXWLYHVSUHIHUHFRODEHOVWKDW ōDUHGHVLJQHGE\FUHGLEOHUHSUHVHQWDWLYHVIURP1*2V LQGXVWU\DQGUHJXODWRU\DJHQFLHVHJ86(3$ $QRWKHULPSRUWDQWTXHVWLRQLVZKHWKHUHFRODEHOVDQG FHUWLğFDWLRQFDQGULYHLQQRYDWLRQ0DQ\ODEHOVUHZDUG WKHFXUUHQWVWDWXVTXROLNHDQ\VWDQGDUGWKH\WHQGWR ORFNLQWRGD\łVWHFKQRORJLHVDQGVHDOWRGD\łVSURGXFWV )RUWKLVUHDVRQVRPHLQWHUYLHZHHVSUHIHUUHGLQWHUQDO VWDQGDUGVRYHUWKLUGSDUW\ODEHOVEHFDXVHWKH\DOORZ IRUDPRUHĠH[LEOHDQGLQQRYDWLYHDSSURDFKWRVXSSO\ FKDLQPDQDJHPHQW ōGRQRWRYHUVWDWHRUPLVUHSUHVHQWHQYLURQPHQWDOEHQHğWV RQWKHODEHO ōKDYHVWDIIZLWKJHQHUDONQRZOHGJHDQGVSHFLğFVFLHQWLğF NQRZKRZ ōDUHREMHFWLYHKDYHVFLHQWLğFPHULWDQGMXVWLğFDWLRQEDVHG RQDUHFRJQL]HGVFLHQWLğFWHVWWKDW\LHOGVFOHDUUHVXOWV DQGFDQEHHDVLO\GRFXPHQWHG ōKDYHPXOWLSOHDWWULEXWHVDQGDUH/&$EDVHG ōDUHQHLWKHUVWDWLFHJDFKHFNOLVWQRUSUHVFULSWLYHEXW WKH\DUHG\QDPLFZLWKFULWHULDDQGWDUJHWVWKDWDOORZIRU LPSURYHGSURGXFWSHUIRUPDQFHDQGSURGXFWLQQRYDWLRQ LQFOXGLQJWKHSRVVLELOLW\WRVXEVWLWXWHDQRWKHULQJUHGLHQW LQDSURGXFWIRUPXODWLRQ 3RSXODUVLQJOHLVVXHHFRODEHOVLQFOXGH,62VWDQGDUGV)DLUWUDGH)7)RUHVW6WHZDUGVKLS&RXQFLO)6&0DULQH6WHZDUGVKLS&RXQFLO06& (QHUJ\6WDURUJDQLFVWDQGDUGVDQG87=FHUWLğHG0XOWLDWWULEXWHHFRODEHOVLQFOXGH(3($7(FR/RJR*UHHQ6HDO8/(QYLURQPHQW'HVLJQIRUWKH (QYLURQPHQW'I(*RRG*XLGH1RUGLF6ZDQ-DSDQłV(FR0DUNDQG*HUPDQ\łV%OXH6ZDQ %ODFNPDQ$-5LYHUDŃ7KH(YLGHQFH%DVHIRU(QYLURQPHQWDODQG6RFLRHFRQRPLF,PSDFWVRIŁ6XVWDLQDEOHł&HUWLğFDWLRQń5))'LVFXVVLRQ 3DSHU 11 *OREDO(FRODEHO0RQLWRU 10 Changing course on the supply chain ([HFXWLRQLVDPXOWL\HDUSURFXUHPHQWORJLVWLFVDQG PDQXIDFWXULQJFKDOOHQJHWKDWPD\UHTXLUHDYHU\GLIIHUHQW VXSSO\FKDLQPDQDJHPHQWVWUDWHJ\,QGHHGWKHUHFDQ EHFURVVEUDQGDQGFURVVEXVLQHVVXQLWLPSOLFDWLRQV SDUWLFXODUO\IRUFRPSRVLWHSURGXFWV7KHHIIRUWYDULHV GHSHQGLQJRQWKHUHTXLUHPHQWVRIWKHFHUWLğFDWLRQV\VWHP ZKLFKFDQPHDQWKHHVWDEOLVKPHQWRIVHJUHJDWHGVWUHDPV DGDSWDWLRQVLQIDFWRULHVDFFUHGLWDWLRQRIVXSSOLHUVDQGFORVH FRRUGLQDWLRQZLWKDEUDQGPDQDJHPHQWWHDP8OWLPDWHO\ WKHVHFKDOOHQJHVDUHEHVWPDQDJHGE\DGHGLFDWHGJOREDO SURFXUHPHQWWHDPIRUFHUWLğHGSURGXFWV 0DQ\DPELWLRXVFRPSDQLHVŌPRWLYDWHGE\FRUSRUDWH PLVVLRQDQGFRPSHWLWLYHSRVLWLRQLQJŌDUHVFDOLQJXS FHUWLğFDWLRQLQWKHHQWLUHVXSSO\FKDLQ3XEOLFGHFODUDWLRQV RIWDUJHWVVXFKDVŃSHUFHQWVXVWDLQDEOHVRXUFLQJ E\ńDUHLQFUHDVLQJO\FRPPRQ0DQ\RIWKHPRVW SURPLQHQWFHUWLğFDWLRQV\VWHPVZKLFKZHUHGHYHORSHG IRUDQLFKHPDUNHWDUHQRWSUHSDUHGWRKDQGOHWKLV H[SRQHQWLDOLQFUHDVHLQYROXPH,PSOHPHQWDWLRQFDQPHDQ LQYHVWPHQWLQVWDQGDUGVHWWLQJFHUWLğFDWLRQV\VWHPVDQG WUDLQLQJRIERWKVXSSOLHUVDQGFHUWLğHUV,QVKRUWLWFDQ PHDQWKDWFRPSDQLHVDEVRUEPRUHVXSSOLHUULVN 2QHRIWKHğUVWVWHSVLVWRHVWDEOLVKDSROLF\WKDWJRYHUQV DFRPSDQ\łVDSSURDFKWRHFRODEHOV$QDGGLWLRQDOVWHSLV WRFUHDWHDQLQWHUQDOGDWDEDVHRIDYDLODEOHODEHOVFODVVLğHG DFFRUGLQJWRDVHWRIGHVLUHGFULWHULD6RPHFRPSDQLHV VKDUHWKHVHGDWDEDVHVZLWKWKHLUVXSSOLHUVWKHUHE\FUHDWLQJ DPDUNHWDGYDQWDJHIRUFHUWDLQODEHOV:KHQDVNHG FRUSRUDWHH[HFXWLYHVDJUHHGWKDWODUJHFRPSDQLHVZLWK PDUNHWGRPLQDQFHDUHLQDEHWWHUSRVLWLRQWRSUHVVXUHWKHLU VXSSOLHUVDQGGULYHFHUWLğFDWLRQ 7KHODFNRILQIRUPDWLRQRQJOREDOVXSSOLHVRIFHUWLğHG SURGXFWVLQDGHTXDWHYROXPHVDWDQHFRQRPLFDOO\ FRPSHWLWLYHFRVWLVDPDMRUKXUGOHVHHWDEOH6LPLODUO\ ODFNRIVXSSOLHUGLYHUVLW\FDQEHZRUULVRPHSDUWLFXODUO\ ZKHQDVLQJOHVRXUFHVXSSOLHUORVHVLWVFHUWLğFDWLRQ7R FRSHZLWKOLPLWHGFHUWLğHGVXSSO\VRPHFRPSDQLHVFRQğQH WKHLUHIIRUWVWRDIHZSURGXFWV6.8VRULQWURGXFHDTXRWD RIFHUWLğHGFRQWHQWDFURVVHQWLUHSURGXFWFDWHJRULHV Table 4: Strategic dilemmas in the supply chain Diversity (conventional supplies) Certified sustainable Advantages ō *XDUDQWHHGVXSSO\LQUHTXLUHGYROXPHV ō )ROORZVNQRZQUXOHVRIJOREDOSULFLQJ GHPDQGVXSSO\ ō *XDUDQWHHGORQJWHUPVXSSO\RIKLJKULVNSURGXFWVHJFRFRDFRIIHH ō 0D\GHFUHDVHWKHYRODWLOLW\RIVXSSO\ ō 0D\EHPRUHFRPSHWLWLYHLQORQJWHUP Disadvantages ō 8QNQRZQDYDLODELOLW\RIORQJWHUPVXSSO\ ō 0D\QRWEHFRVWFRPSHWLWLYHLQWKHORQJUXQ ō %XVLQHVVLQWHUUXSWLRQULVNV ō 3HUFHSWLRQRIOLPLWHGDYDLODELOLW\GXHWRVXVWDLQDELOLW\FRQVWUDLQWV ō /LWWOHGDWDRQVXSSOLHUV ō 7KHJUHDWHUWKHFRQVWUDLQWWKHPRUHGLIğFXOWLWLVWRVRXUFH ō 9RODWLOLW\LQVXSSO\ Eco-labels: Positioning your brand, product portfolio and supply chain11 The pay-off ,QWHUYLHZHGH[HFXWLYHVDJUHHWKDWWKHFRVWVRI FHUWLğFDWLRQDUHPLQLPDO+RZHYHUVRPHDQWLFLSDWHULVLQJ FRVWVHVSHFLDOO\IRUPRUHVFLHQWLğFDOO\ULJRURXVDQGGDWD LQWHQVLYHODEHOV0DLQWDLQLQJFRPSOLDQFHLVFKDOOHQJLQJ EHFDXVHFRPSDQLHVPXVWPDQDJHYDULDEOHUHQHZDO DXGLWDQGIHHVFKHGXOHVIRUGLIIHUHQWSURGXFWVDQGODEHOV &RVWVFDQIXUWKHUULVHZKHQHVWDEOLVKLQJVHJUHJDWHG VWUHDPVUHFRQVLGHULQJIDFWRU\OD\RXWVSXUFKDVLQJQHZ HTXLSPHQWLQYHQWLQJQHZSURGXFWIRUPXODWLRQVVRXUFLQJ QHZVXSSOLHUVDQGFROOHFWLQJGDWD0DQ\FRPSDQLHVPD\ QRWEHDEOHWRSDVVRQWKHVHFRVWVSDUWLFXODUO\WKRVH RSHUDWLQJDWWKHORZHQGRIWKHPDUNHW 2QWKHRWKHUKDQGFHUWLğFDWLRQFDQXQYHLORSSRUWXQLWLHV IRUFRVWUHGXFWLRQVPRVWQRWDEO\IURPHQHUJ\HIğFLHQF\ LPSURYHPHQWV6XFKFRVWFRQWDLQPHQWVWUDWHJLHVFDQKHOS FRPSDQLHVQDYLJDWHIXWXUHVXSSO\YRODWLOLW\DQGLQFUHDVHVLQ FRPPRGLW\SULFHVŌIDFWRUVWKDWDUHDOUHDG\WRSRIPLQG IRUVXSSO\FKDLQPDQDJHUV 2QWKHUHYHQXHVLGHPRVWLQWHUYLHZHGH[HFXWLYHVGRQRW DVVXPHWKDWODEHOLQJDSURGXFWLPPHGLDWHO\LQFUHDVHV VDOHVJLYHQWKHVWDWHRIFRQVXPHUGHPDQG7KDWVDLG VRPHSURGXFWVPD\H[KLELWDVKRUWOLYHGŋSHUFHQW LQFUHDVHLQVDOHVLQWKHğUVW\HDUDIWHUFHUWLğFDWLRQ DFFRUGLQJWRD)RUWXQH*OREDOFRQVXPHUSURGXFWV FRPSDQ\,QVRPHFDVHVWKHODEHOPD\KHOSSUHYHQWDGURS LQVDOHV,QWHUYLHZHHVHVWLPDWHGWKDWDQ\ZKHUHIURPWR SHUFHQWRIDFRPSDQ\łVDQQXDOUHYHQXHFDQFRPHIURP ODEHOHGSURGXFWV 6HH'HORLWWH7KH+LJK3URğW6XSSO\&KDLQŋ$5HVRXUFH)RFXVHG$SSURDFK KWWSZZZGHORLWWHFRPDVVHWV'FRP8QLWHG6WDWHV/RFDO$VVHWV'RFXPHQWV,02V&RUSRUDWH5HVSRQVLELOLW\DQG6XVWDLQDELOLW\XVBVFFB+LJK3URğW6XSSO\&KDLQB-XQHSGI 12 Alternative strategies “Certification is about communicating relevant environmental information to consumers; you can do this in many ways.” Fortune 100 consumer products executive ,QVWHDGRISXUVXLQJSURGXFWHFRODEHOLQJDQGH[WHUQDO FHUWLğFDWLRQDFRPSDQ\FDQODXQFKDQHGXFDWLRQDO FDPSDLJQWKDWH[SODLQVVXVWDLQDELOLW\DWWULEXWHVRIPXOWLSOH SURGXFWVIRULWVVWDNHKROGHUV6RPHFRPSDQLHVVLPSO\ FUHDWHDQLQWHUQDOVWDQGDUGWRJXLGHVXSSOLHUVHOHFWLRQ IRUUDZPDWHULDOVZLWKDNQRZQVXSSO\FKDLQULVN2WKHU FRPSDQLHVFRQGXFWDQ/&$DQGWKHQGLVFORVHWKHGDWD ZLWKRXWDFWXDOO\VHHNLQJFHUWLğFDWLRQWRDSDUWLFXODU SRWHQWLDOO\OHVVFUHGLEOHHFRODEHO<HWRWKHUVGRQRW GLVSOD\WKHHFRODEHORQWKHSURGXFWHYHQWKRXJKLWKDV EHHQFHUWLğHGWRDVWDQGDUG7KLVLVSDUWLFXODUO\WUXHZKHQ H[HFXWLYHVFRQFOXGHWKDWDQHFRODEHOLVQRWUHOHYDQW WRFRQVXPHUV)XUWKHUPRUHPDQ\HFRODEHOVODFNWKH PDUNHWLQJFORXWWRUDLVHFRQVXPHUDZDUHQHVVVHHğJXUH DQGDUHWKXVPD\QRWDGGPXFKYDOXHWRWKHğUP &RUSRUDWHH[HFXWLYHVDUJXHWKDWLWLVLPSRUWDQWWR GHPRQVWUDWHSHUIRUPDQFHWRDVXVWDLQDELOLW\DWWULEXWH UDWKHUWKDQSXWDSRSXODUHFRODEHORQDSURGXFW2WKHUV DGGVXVWDLQDELOLW\LQIRUPDWLRQWRDQH[LVWLQJSURGXFWODEHO UDWKHUWKDQSODFHDVHSDUDWHHFRODEHORQWKHSURGXFW $WWKHVDPHWLPHVHYHUDOUHWDLOHUVVWUDWHJLFDOO\SODFHDQ HFRODEHORQSURGXFWVHYHQLIWKHLUPDQXIDFWXUHUVGR QRW6RPHUHWDLOHUVDUHDOLJQLQJWKHLUHQWLUHEUDQGZLWK DFHUWLğFDWLRQV\VWHPLQVWHDGRISXUVXLQJDQHFRODEHO IRUHYHU\VLQJOHSURGXFW)RUH[DPSOHDODUJHUHWDLOHU LVSRVLWLRQLQJLWVHOIDVDQ)6&EUDQGZKHUHDQ\IRUHVWU\ SURGXFWVWKH\KDQGOHPHHWWKH)6&VWDQGDUG Figure 4: Factors improving trust in standard systems Harmonization of standards 5% Consumer purchases of labeled 5% More expertise 5% More staff 9% Partnership 9% 14% Refinement of criteria Increased Memebership 18% 27% Marketing Funding 32% Public/Consumer Awareness 50% 0 10 20 30 40 50 Source: Golden et al, “An Overview of Ecolabels and Sustainability Certifications in the Global Marketplace,” Duke University, October 2010 Eco-labels: Positioning your brand, product portfolio and supply chain13 The bottom line on eco-labels 0DQ\FRPSDQLHVDJUHHWKDWWKLVLVDSUHFRPSHWLWLYH SOD\LQJğHOGZLWKPDQ\XQDQVZHUHGTXHVWLRQVRQ%& VXVWDLQDELOLW\PHVVDJLQJ$WWKHVDPHWLPHDVUHJXODWLRQ ŌIRUH[DPSOHWKH)7&łVUHYLVHGGuides for the Use of Environmental Marketing ClaimsŌLVEHFRPLQJPRUH VWULQJHQWDQG%%FRPSHWLWLRQLVLQWHQVLI\LQJPRUH FRPSDQLHVDUHWXUQLQJWRFHUWLğFDWLRQDQGHFRODEHOVWR VWUHQJWKHQWKHFRPSHWLWLYHSRVLWLRQVRIWKHLUSURGXFWV +RZHYHULQWHUYLHZHHVEHOLHYHWKHUHZLOOEHDVKLIW IURP%%WR%&VWUDWHJLHVDVFRQVXPHUDZDUHQHVVRI VXVWDLQDELOLW\LQFUHDVHVLQWKH8QLWHG6WDWHVUHDFKLQJ OHYHOVZHVHHWRGD\LQFHUWDLQ(XURSHDQFRXQWULHV7KLVLV SDUWLFXODUO\WUXHLQWKHUHWDLOVSDFHZKHUHFRPSHWLWLRQIRU FRQVXPHUEDQGZLGWKRQVXVWDLQDELOLW\LVVXHVLVJURZLQJ 8QFHUWDLQW\RYHUKRZWRFUDIWDVXVWDLQDELOLW\PHVVDJH IRUDSURGXFWUHPDLQVDPDMRUKXUGOH$FFRUGLQJWRRQH LQWHUYLHZHHŃ7KHPDJLFSKUDVHLVVWLOOPLVVLQJń7KH PHVVDJHZLOOYDU\E\LVVXHFRXQWU\DQGSURGXFWW\SH )RRGDQGSHUVRQDOFDUHSURGXFWVDUHHDVLHUWRFHUWLI\ EHFDXVHWKHJHQHUDOSXEOLFLVPRUHUHVSRQVLYHWRFKDQJHV LQSURGXFWVWKH\FRPHLQWRGLUHFWFRQWDFWZLWK7KLVLV SDUWLFXODUO\WUXHIRUSURGXFWVWDUJHWHGDWLQIDQWVDQG\RXQJ FKLOGUHQ,WLVKDUGHUWRFRPPXQLFDWHWKHVXVWDLQDELOLW\ DWWULEXWHVRIFRPPRGLWLHVWKDWGRQRWSOD\DQLPPHGLDWH UROHLQWKHOLYHVRIFRQVXPHUV “In the past it was market pull. In the future it will become a strategy around market and brand leadership.” Large retail executive ,QWHUYLHZHHVQRWHGWKDWHFRODEHOVQHHGWRFRQYH\ LQIRUPDWLRQWKDWVKDUHVIRXUFKDUDFWHULVWLFV ōLVSHUVRQDODQGKDQGVRQ ōUHVRQDWHVZLWKXQGHUO\LQJSHUFHSWLRQVRISURGXFW SHUIRUPDQFH ōPDWFKHVKRZFRQVXPHUVUHVSRQGWRWKHEUDQGLGHQWLW\ HVSHFLDOO\IRUVWURQJEUDQGV ō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ĠXHQFHZKDWW\SHVRIHFRODEHOVZLOOĠRXULVK RUSHULVK In the transition phase before the market floor has risen, due to market self-regulation or policy/regulation, competition is tight. Fortune Global 500 consumer products executive 14 What steps can you take? ,QWKHQHDUWHUPFRPSDQLHVWKDWZDQWWRHVWDEOLVKDPRUH VWUDWHJLFDSSURDFKWRHFRODEHOVDQGFHUWLğFDWLRQFDQ FRQVLGHUYDULRXVDFWLRQV ōDVVHVVKRZWKHLUHQWHUSULVHLVXVLQJRUKDVXVHG HFRODEHOVHYDOXDWHGDJDLQVW%%DQG%& EXVLQHVVGULYHUV ōXQGHUWDNHPDUNHWDQGFXVWRPHUDVVHVVPHQWVWRGHğQH WKHSRWHQWLDOYDOXHULVNVDQGLVVXHVDVVRFLDWHGZLWK DGRSWLQJRQHRUPRUHHFRODEHOVIRUSURGXFWVDQGRU WKHFRPSDQ\ ōLGHQWLI\DQGHYDOXDWHSRWHQWLDOVWUDWHJLFUHJXODWRU\ RSHUDWLRQDODQGğQDQFLDOLPSOLFDWLRQVRIYDULRXV HFRODEHOFKRLFHVDQGVFHQDULRV ōGHYHORSDFRPSUHKHQVLYHVHTXHQFHGHFRODEHO VWUDWHJ\DQGURDGPDSVXSSRUWHGE\WKHUHTXLUHG SROLFLHVDQGSURFHGXUHV ōZDWFKWUHQGVLQWKHUHWDLOVHFWRUIRUDFWLRQVWKDWPLJKW LQĠXHQFH\RXUXOWLPDWHHFRODEHODSSURDFK ōFRQVLGHUFHUWLğFDWLRQLQWKHVXSSO\FKDLQSDUWLFXODUO\RI FRPPRGLWLHVVXFKDVFRWWRQFRIIHHFRFRDDQGIRUHVWU\ SURGXFWV:LWKODUJHEDQNVSD\LQJPRUHDWWHQWLRQ WRFHUWLğFDWLRQLQWKHVXSSO\FKDLQDQGFRQWLQXHG XQFHUWDLQW\LQWKH%&DUHQDWKLVPD\EHWKHPRVW SUXGHQWVWHSWRDFKLHYLQJQHDUWHUPVXVWDLQDELOLW\JRDOV Eco-labels: Positioning your brand, product portfolio and supply chain15 Crafting your eco-label strategy – A roadmap Is an eco-label right for you? ō'RUHJXODWLRQLQGXVWU\QRUPVRUFXVWRPHUGHPDQGFUHDWHDQ LGHQWLğDEOHPDUNHWQLFKHIRUFHUWLğHGSURGXFWV" ō&DQWKHODEHOKHOS\RXJDLQDFRPSHWLWLYHDGYDQWDJHDGGYDOXHWR \RXUFRPSDQ\DQGUHGXFHVXSSO\FKDLQULVNV" ō:LOOLWKHOS\RXDFKLHYH\RXUFRUSRUDWHVXVWDLQDELOLW\WDUJHWV" ō&DQDFUHGLEOHWKLUGSDUW\FHUWLğHGODEHOEROVWHUEUDQGYDOXHDQG FRQVXPHUWUXVW" D:LOOLWLPSURYHWKHFRPSDQ\łVLPDJH" E'RHVLWOLQHXSZLWKWKHEUDQGVWUDWHJ\" Eco-label selection: ōStep 1: Establish a policy with selection criteria for the eco-label: − 'HVLJQHGE\FUHGLEOHUHSUHVHQWDWLYHVIURP1*2VLQGXVWU\DQG UHJXODWRU\DJHQFLHVHJ86(3$ − 2EMHFWLYHZLWKVFLHQWLğFPHULWDQGMXVWLğFDWLRQEDVHGXSRQD UHFRJQL]HGVFLHQWLğFWHVWWKDWFDQEHHDVLO\GRFXPHQWHGDQG \LHOGVFOHDUUHVXOWV − 0XOWLDWWULEXWH/&$EDVHG − 'RHVQRWRYHUVWDWHRUPLVUHSUHVHQWEHQHğWVRQWKHODEHO − %HG\QDPLFHJQRWDVWDWLFDFKHFNOLVWZLWKFULWHULDWKDWDOORZ IRULPSURYHPHQWLQSURGXFWSHUIRUPDQFHDQGSURGXFWLQQRYDWLRQ LQFOXGLQJWKHSRVVLELOLW\WRVXEVWLWXWHDQRWKHULQJUHGLHQWLQD SURGXFWIRUPXODWLRQ − +DVPDUNHWUHFRJQLWLRQŋRUDWOHDVWWKHSRWHQWLDO ōStep 2: Attributes of a desired certifier: − 7UDQVSDUHQWLQWKHGHYHORSPHQWRIFULWHULDDQGGHFLVLRQPDNLQJ SURFHVV − 6WDIIHGZLWKJHQHUDONQRZOHGJHDQGVSHFLğFVFLHQWLğFNQRZKRZ − 3URYLGHVFODULW\RQKRZWKHGDWDLVHYDOXDWHG − 3HUPLWVDSSOLFDQWVWRDSSURDFKUHYLHZHUVIRUFODULğFDWLRQ − &DQSURWHFWFRQğGHQWLDOGDWD − 5HIUDLQVIURPğQDQFLDOFRQĠLFWVRILQWHUHVW ōStep 3: Identify the message the eco-label should deliver (varies by topic and country/culture): − ,QIRUPDWLRQWKDWLVPRUHSHUVRQDODQGKDQGVRQZLWKDQ LGHQWLğDEOHLPSURYHPHQWLQFRQVXPHUVłOLYHV − 5HVRQDWHZLWKXQGHUO\LQJSHUFHSWLRQVRISURGXFWSHUIRUPDQFH − 0DWFKFRQVXPHUVłUHVSRQVHWRWKHEUDQGLGHQWLW\HVSHFLDOO\IRU VWURQJEUDQGVŋRUIRUFHVDFRPSOHWHEUDQGUHPDNH" ōStep 4: Narrow your selection: − 6HWXSDGDWDEDVHRIFDQGLGDWHODEHOVDQGVHHKRZWKH\DOLJQ ZLWK\RXUSURGXFWEUDQGDQGSROLF\ 16 Potential investments: ō/&$WRJDLQFHUWLğFDWLRQ ō3URGXFWUHGHVLJQ ō0DQXIDFWXULQJFKDQJHV ō&KDQJHVLQSURGXFWLRQVFKHGXOHVWRDFFRPPRGDWHFHUWLğHGSURGXFWV ō(VWDEOLVKPHQWRIVHJUHJDWHGSURGXFWLRQOLQHVDQGRULQSXWVWUHDPV ō(VWDEOLVKPHQWRIDQHZFURVVIXQFWLRQDOWHDPWRRYHUVHHWKHODEHOHG SURGXFWDQGLWVVXSSO\FKDLQ ō0DUNHWLQJFKDQJHVSRLQWRIVDOHPDWHULDOGHYHORSPHQW Are you ready for a supply chain transformation? ō8QGHUVWDQGJOREDOVXSSOLHVRIFHUWLğHGLQJUHGLHQWVŋGDWD,7QHHGV ō'HYHORSDQHDUWHUPVWUDWHJ\DVVXSSOLHVRIFHUWLğHGLQJUHGLHQWVJURZ ō3URFXUHPHQWFKDQJHVVZLWFKWRFHUWLğHGVXSSO\ ō,QYHVWLQ\RXUVXSSO\FKDLQWREXLOGPRUHFHUWLğHGVXSSO\ ō&RQVLGHUSDUWQHULQJZLWKFHUWLğFDWLRQRUJDQL]DWLRQV ō'HYHORSQHZFHUWLğFDWLRQV\VWHPVZKHUHWKH\DUHODFNLQJ ō6HWXSWKLUGSDUW\YHULğFDWLRQV\VWHPVIRU\RXUVXSSO\FKDLQ H[WHUQDOO\YHULğHGRUVHOIFHUWLI\ Assess your overall organizational readiness: ō+RZZHOOLVVXVWDLQDELOLW\LQWHJUDWHGDFURVV\RXUHQWLUHRUJDQL]DWLRQ EXVLQHVVXQLWVDQGEXVLQHVVIXQFWLRQV" ō+RZVWURQJLV\RXUFRPSDQ\łVEUDQGHTXLW\DQGRUWKHEUDQGHTXLW\ RIWKHSURGXFW\RXDUHFRQVLGHULQJIRUDQHFRODEHO" Authors Chris Park 3ULQFLSDO 6XVWDLQDELOLW\DQG&OLPDWH&KDQJH 'HORLWWH//3 FKUSDUN#GHORLWWHFRP Dinah A. Koehler, Sc.D. 6HQLRU5HVHDUFK0DQDJHU 'HORLWWH5HVHDUFK 'HORLWWH6HUYLFHV/3 GNRHKOHU#GHORLWWHFRP Acknowledgements :HZLVKWRWKDQNWKH6WHHULQJ&RPPLWWHHRIWKHŁ$VVHVVPHQWRI6WDQGDUGVDQG&HUWLğFDWLRQ6\VWHPVł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Ń,QIRUPLQJ *UHHQ0DUNHWVń&RQIHUHQFH(UE,QVWLWXWHIRU*OREDO6XVWDLQDEOH(QWHUSULVH8QLYHUVLW\RI0LFKLJDQ$QQ$UERU Visit Deloitte.com 7ROHDUQPRUHDERXWRXU&RQVXPHU3URGXFWV,QGXVWU\SUDFWLFHYLVLWXVRQOLQHDWZZZGHORLWWHFRPXVFRQVXPHUSURGXFWV About Deloitte 'HORLWWHUHIHUVWRRQHRUPRUHRI'HORLWWH7RXFKH7RKPDWVX/LPLWHGD8.SULYDWHFRPSDQ\OLPLWHGE\JXDUDQWHHDQGLWVQHWZRUNRIPHPEHUğUPV HDFKRIZKLFKLVDOHJDOO\VHSDUDWHDQGLQGHSHQGHQWHQWLW\3OHDVHVHHZZZGHORLWWHFRPDERXWIRUDGHWDLOHGGHVFULSWLRQRIWKHOHJDOVWUXFWXUHRI 'HORLWWH7RXFKH7RKPDWVX/LPLWHGDQGLWVPHPEHUğUPV3OHDVHVHHZZZGHORLWWHFRPXVDERXWIRUDGHWDLOHGGHVFULSWLRQRIWKHOHJDOVWUXFWXUHRI 'HORLWWH//3DQGLWVVXEVLGLDULHV&HUWDLQVHUYLFHVPD\QRWEHDYDLODEOHWRDWWHVWFOLHQWVXQGHUWKHUXOHVDQGUHJXODWLRQVRISXEOLFDFFRXQWLQJ &RS\ULJKWŕ'HORLWWH'HYHORSPHQW//&$OOULJKWVUHVHUYHG 0HPEHURI'HORLWWH7RXFKH7RKPDWVX/LPLWHG