A Blizzard of “Sustainability” Labels – May/June 2019
Knowable Magazine | May 7, 2019
Earth-friendly certifications and standards abound for products like coffee, chocolate and palm oil. But do the programs work?
A frog the size of a fingernail. A poncho-clad farmer leading his mule. A tree, some intertwining leaves, a silhouetted figure holding a pot. Such logos are stamped on labels of coffee, cocoa, mangoes, jeans and myriad other products, certifying that the object for sale is in some way “sustainable” — made, in other words, in a way that meets humanity’s needs without jeopardizing the ability of future generations to meet their own.
The idea of sustainable economic development was first proposed in the 1980s, when a commission established by the United Nations concluded that human activities were exhausting natural resources and launched efforts to tackle the problem. The concept spans three dimensions: social (for example, ensuring workers are treated fairly), economic (increasing profits, improving quality of life) and environmental (managing land, water and biodiversity so they aren’t lost to future generations). And over the years, a slew of standards that focus on these dimensions in different ways have been implemented by nonprofits and multinational companies.
Consider coffee farms. The Rainforest Alliance standard (that little green frog) requires coffee farmers to increase tree cover on their plantations and ensure fair treatment of workers, among other things. Fair-trade certifications — there are a variety, with logos of leafy yin-yangs, dancing figures and more — require farmers to use water efficiently, prohibit bonded labor and offer safe working conditions. The Smithsonian Migratory Bird Center’s Bird Friendly certification checklist requires a coffee farm to have at least 10 different tree species and at least 40 percent of the plantation covered in shade. Farmers who comply can then sell their certified products at a higher price.
These efforts have led to a deluge of more than 400 ways to certify various goods and services — and much confusion for those consumers who want to choose responsibly. (At my local grocery store, I couldn’t find a single package of coffee without one of these many symbols, or at least the word “sustainable,” printed on it.) What’s more, the data are still unclear on which certifications truly make a product better for the planet or for farmers, says environmental scientist Eric Lambin of Stanford University and the Catholic University of Louvain, who co-authored an article on the topic in the 2018 Annual Review of Environment and Resources.
Lambin says that one thing is clear: Certifications are most likely to work when, in addition to consumers following through on their green intentions by buying certified products, nonprofits put significant muscle into the effort and governments offer their support. This conversation has been edited for length and clarity.
Why are there so many different ways for a product to get certified as sustainable?
In the 1980s, it was largely thought that sustainability objectives would be achieved via government policies that would mandate certain basic sustainability practices. Over the years it became clear that most states — especially developing countries — were not able to do this effectively because they had other priorities and limited capacity. This whole realm of voluntary sustainability standards emerged when private actors, such as non-governmental organizations, various societies and private companies, stepped in. The goal at that stage — was to achieve “governance without government,” a slogan at the time.
This history explains why each certification emerged independently, rather than in an organized fashion. The traders or a local non-governmental organization might start an initiative to make timber or coffee production more sustainable. Someone else might look at golf courses, or water consumption. A lot of these certifications are specific to one commodity, or to a place, such as the tropical rainforest. It’s an uncoordinated, sort of free-market approach.
Sustainability standards can emerge from a number of different routes and players. Variables include who sets the standards, such as an NGO or private company, and who verifies compliance: the firm who set the standard (first party), a party associated with the firm (second party), or an independent group (third party).
Is it useful to have so many standards?
Yes and no. Some level of competition forces standards to demonstrate effectiveness. But too much duplication leads to wasted resources in terms of transaction costs, manpower, verification work, fundraising and advertising.
The other problem is that when you have many organizations that do exactly the same thing, one of them might create a very easy sustainability certification that anyone can get because it doesn’t require much change. And that leads to a race to the bottom. But some do try to be more effective and demonstrate real impact.
Are some standards emerging as clear winners?
We are only starting to have reliable evidence on this. Until four or five years ago, most studies trying to evaluate the impact of the standards were not sufficiently rigorous. Even now, the evidence is still very mixed.
For example, we found that in one province of Colombia, coffee farmers who were Rainforest Alliance–certified planted more trees on their farms compared to neighbors who were not certified. We also noticed that these farmers’ children had studied more years at school than the kids of their neighbors who were not certified. There was a significant difference between the two groups.
It turned out that because a farm must meet 90 criteria to receive the certification, many of these farmers, who were not literate, were quite happy to keep the kids at school for a few more years so they could help with the administrative work of reading forms and filing reports to get certified. In this way, the certification provided more than just environmental benefits — it provided social and potentially economic benefits, too. When kids get a few additional years of schooling, it has a positive impact — not just on farming, but also on job opportunities and innovation.
But when another research group studied coffee certification in Honduras, they came up with slightly different results: While few Rainforest Alliance–certified farmers were expanding their fields into forests, farmers certified by Fairtrade, UTZ and 4C were still causing deforestation.
Why the difference?
Mostly because the social and policy context in Honduras is different. Also, these studies are done by different teams, and we use slightly different methods and definitions, making it tough to compare results. In Honduras, they surveyed farmers to ask about forest clearing but not about tree planting, whereas in Colombia, we used satellite data to find out. The field is only starting to adopt a systematic approach to compare and evaluate the effectiveness of eco-certification.
But these nuanced findings led me to look beyond evaluating the effectiveness of a single standard. In more recent work, we have found that these sustainability certification standards become clearly successful and transformative when they are supported by, or get integrated into, public policy.
How does a voluntary certification become public policy?
Here’s an example: Bolivia was reforming its forestry code a few years ago. A few forest concessions [public lands that timber companies lease from the state for wood extraction] were eco-certified under the label of the Forest Stewardship Council (FSC), and they were more productive and profitable. So the government decided that rather than write a forestry code from scratch, they would reuse entire segments of the FSC guidelines as the new code.
Suddenly this certification system that was purely voluntary was now public policy.
Large multinational companies also contribute to such upscaling. For example, a company such as Unilever might say that by 2020 or 2030, they commit to completely eliminating tropical deforestation from their supply chain. That means the property of every producer from whom they buy palm oil has to be deforestation-free. With a large company, that’s a significant proportion of the global palm oil production.
But then how does the multinational meet that goal? They might try to implement a change by mandating a certification by the nonprofit Roundtable on Sustainable Palm Oil (RSPO) for all their palm oil suppliers. So now suddenly every producer who wants to sell to Unilever has to be RSPO-certified. Again, you have this powerful upscaling mechanism of a voluntary certification system. And that’s when you start to have a big impact.
It’s almost as if the idea of governance without government doesn’t really work.
Exactly — and for another reason that’s even more fundamental. One of the reasons the Rainforest Alliance coffee certification was successful in Colombia, or RSPO for palm oil is more likely to work in the Sabah state in Malaysia, is because these governments made sustainability a goal with a range of supportive policies.
In Colombia, for example, the Colombian Coffee Growers Federation supported cooperatives of producers to help smallholders meet sustainability standards. These cooperatives then promoted new varieties of plants, introduced technology and explained the benefits of certification to farmers. The government also worked to develop an export market, boosting the reputation of — and demand for — Colombian coffee as this high-quality, eco-certified coffee.
These supportive policies are necessary for a certification system to succeed. It’s not just that you need the government to upscale a voluntary certification, it’s that government intervention is necessary to make efforts successful in the first place, beyond the most progressive producers.
Do consumers also contribute to the success of sustainability efforts?
Commodities that have a consumer-facing aspect tend to be certified more often than ones that are processed and integrated into other products.
For example, you or I make an individual decision to buy this pack of coffee or chocolate over another one, perhaps based on packaging marked with a “certified sustainable” label. For these products, there’s a very short supply chain linking the producer to you, the consumer. So the pressure from the consumers on retailers — and therefore on the whole supply chain — is much more direct, and there’s a greater incentive for producers to make this claim of sustainability.
But that’s not the case for other types of products. Take palm oil, for example — about half the goods that you find in a supermarket have some palm oil in them. It’s in your shampoo, your biscuits, your soap, etc. But you never go and buy a bottle of palm oil. Because it’s just one of many ingredients in a product, it’s difficult to check whether the palm oil has been certified. So there’s also less direct consumer pressure on companies to improve their standards.
Can consumers play a part in improving the standards?
Yes, it’s a combination of consumers and non-governmental organizations. Consumers often have a very poor understanding of the nitty gritty of a certification. But large companies conduct marketing campaigns, and the companies clearly sense that, at least in Europe and North America, there is a new wave of consumer demand for sustainably produced items.
In the past, companies would decide that external certification standards were too stringent, and come up with a much weaker, internal standard to call themselves sustainable. But now a number of studies have shown that this kind of “greenwashing” is penalized by consumers. [Editor’s note: See, for example, this study on greenwashing, another one on greenwashing and hotels, and a third on how consumers perceive corporate attempts at greenwashing.] If a company makes a big sustainability claim, and then a non-governmental organization, scientist or investigative journalist demonstrates the claim was bogus, the company’s reputation is damaged much more severely than if it made no claim whatsoever. [Editor’s note: See this article on the Volkswagen emissions scandal.]
Pressure is especially effective when the supply chain is very concentrated, meaning a few companies hold a large market share. For example, five large companies control about 90 percent of the global trade in palm oil. When it’s that concentrated, consumers and nonprofits can campaign hard, name and shame the companies into taking action on sustainability, like Greenpeace has been doing with Nestlé, Unilever and more. Companies tend to quickly adopt sustainability standards just to protect their reputation among consumers.
What are some choices or actions consumers can take to support sustainability efforts?
Just buying certified products and pushing for more stringent standards helps. Consider coffee: Only 25 percent of the coffee that’s produced under some certification label is sold with a certified label. The rest is just sold as conventional coffee with no price premium, which suggests that consumer demand still doesn’t match production. In surveys, consumers say sustainability is very important to them, but studies of actual market behavior show that their purchasing of certified products is still very low. They don’t translate the preferences they express into actual buying decisions.
It’s really a paradox. Think about it, these smallholder coffee farmers in remote areas are quite poor. They make all the effort to comply with 90 different criteria and get audited every year. It’s a lot of work. And if there’s little consumer demand for certified coffee, the price premium for producers decreases over time. In our Colombia study, for example, the price premium decreased from 20 percent to 2 percent above the price of conventional coffee, and some farmers were abandoning the certification because it was too much work for 2 percent more income.
And most coffee or chocolate consumers are wealthy people in rich countries. All that’s needed is for them to take a second, check on the package whether the product is certified, and pay a few extra cents for it. And too few of them do it.