House of Commons - Environmental Labelling - Environmental Audit Committee

Environmental Labelling - Environmental Audit Committee Contents

3 Focusing on the most relevant labels

Environmental impacts covered by labels

13) The crucial factor in achieving behavioural change is that any label is relevant to consumer concerns and effectively communicates a key issue relating to that product: Dr Alan Knight, Commissioner on Sustainable Consumption at the Sustainable Development Commission, said:

People know there is not one thing called an environmental problem, there are lots of different environmental problems and they associate different problems with different products and they expect that label to talk to that particular issue for that particular product.[13]

14) For instance, when buying fish, the environmentally-conscious consumer will want to know whether or not it is sustainably sourced; when buying kitchen roll, the consumer may look for recycled paper; when buying vegetables, the focus may be on local produce. In some areas, customers may prioritise different issues: for example, the Carbon Trust admitted that: "certain types of organic food may be more carbon-intensive that non-organic equivalents, and consumers should be able to make choices based on the criteria that are important to them".[14]

15) It is crucial for labels to reflect the most important environmental priorities, both in terms of consumer behaviour and the environmental priorities identified for each sector. So if, for instance, a 'traffic light' or 'petal' scheme was adopted and embedded carbon was felt to be the most important element, in each sector this could make up a larger or more prominent portion of the label.

16) Some witnesses expressed concern that labels focusing on different issues for different products could require complicated trade-off decisions by the consumer, and would reduce the effectiveness of environmental labelling. The British Glass Manufacturers Confederation said:

A labelling system which focuses on a single environmental issue […] will inherently fail to address the overall environmental impact of any product. […] failure to include all environmental impacts will inevitably mean that environmentally poor decisions will be made by a consumer that is trying to do the 'right thing'.[15]

Single-issue labels may allow consumers to follow their own priorities, and this could serve as an important adjunct to a sector-based universal labelling scheme. This is an important part of environmental engagement with the market. Consumer choices can help to protect as well as damage the environment.

17) There is a desire for labels that denote an overall 'environmentally good' product, without asking consumers to prioritise different environmental impacts. Such labels may aim to cover all mainstream environmental impacts, like the EU Ecolabel, or to cover a wide range of impacts within a small category, such as the LEAF sustainable farming label.[16] Indeed, the Government itself is investigating the possibility of a single environmental standard for farm management.[17]

18) Dr Alan Knight told us, "these catch-all labels which are trying to do every single issue for every single product tend to get so diluted they are actually losing their impact",[18] and this view was also expressed by a number of other witnesses.[19] Defra said the labels that "aim to cover a complex mixture of environmental issues across a product's life-cycle have often found it harder to make headway in the market".[20] This is true of the EU Ecolabel. It was established to cover a wide range of products, from toiletries through to paints and varnishes and even campsites and hotels, but has only been taken up by a small number of companies and is not well-known to consumers. It also takes the role of choice-editor, or at least label editor, and hands it not to consumers but to the scheme's administrators. Labels assessing environmental performance across a wide range of factors are extremely complex to manage. Consumers can easily lose sight of what they are getting at. The Government should support clarity, simplicity and consistency in labelling.

19) As in food labelling, it is important that a sector-based universal labelling scheme is developed and that clarity and simplicity are not lost in a plethora of different single-issue labels and complex information. Equally we must avoid the situation, as in the Ecolabel, where the simplicity is so great that meaningful comparison becomes difficult.

The EU Ecolabel

20) In July 2008 the European Commission presented proposals for a revised EU Ecolabel, linking it with other EU environmental policies but also taking action to make the scheme less costly and bureaucratic. Defra had recognised these difficulties but was otherwise complimentary about the mechanisms behind the label:

It has got great potential and the mechanism by which the work is done to bring the company, the product, or whatever to the point at which they receive the label, that work is incredibly important work. It is very well done, it is independently assessed and therefore we believe that that is a way forward.[21]

21) Defra acknowledged that the wide scope of the EU Ecolabel meant there had so far been little demand for it.[22] The Commission's proposals aim to widen the scope of the scheme, taking in the particularly complex food and drink market. This extension of the EU Ecolabel's coverage will provide a vital test of consumer willingness to accept wide-ranging generic labels. While we have real doubts about the wisdom of such 'one-size-fits-all' generic labels, the Government should support the continuing development of the label to test its viability fully, including promotion to raise the profile of the label.

22) Joan Ruddock, then Parliamentary Under-Secretary of State (Climate Change, Biodiversity and Waste) at Defra, said: "you might suggest, we should move to some comprehensive label that says, 'this is good for the environment', but I must tell you that this has not been possible".[23] The Government is, however, undertaking work into a generic environmental standard for food production. The Government is right to recognise the difficulties of developing a 'one-size-fits-all' label but this should not prevent it from making progress on making environmental labelling clearer or from making progress with a sector-based universal scheme. The Government should, after a suitable period of time has elapsed, review the revised EU Ecolabel to determine whether it is working any better. The Government may need to go back to the EU with proposals for further revisions that are more flexible and informative, based on the 'traffic light' or 'petal' model, and which might attract more support from consumers. This may require a sectoral approach.

Linking labels to consumer priorities

23) In many cases, especially in the case of energy and fuel consumption, the environmentally 'good' choice can also save the consumer money. Joan Ruddock MP told us that, where this link is clearly set out, it has the potential to be a positive deciding factor even for less environmentally-aware consumers. She noted that the link between green choices and cash savings was the reason why the white goods labels had been "hugely successful".[24] Money is also a more readily understood criterion and, crucially, directly relevant to the consumer. The Energy Saving Trust said:

Research shows that most consumers do not understand carbon labelling or embodied energy and that it currently doesn't affect their decision making, but they do understand energy saving (particularly in the context of money saving) and consider this when purchasing lighting and white goods.[25]

24) When the vehicle emissions label was revised in 2004-05, it was linked more closely to financial concerns. Rather than focussing solely on carbon emissions, it was decided to give equal weight to the related factors of fuel efficiency and running costs, which had been "reported to be more important issues for car buyers".[26] Links with tax are another area that can be emphasised: the Society of Motor Manufacturers and Traders (SMMT) told us that, in terms of communicating environmental impacts to customers in the showroom, "linking it to the fiscal system is the strongest possible link".[27]

25) In some areas, government initiatives can help to strengthen this relationship between environmentally positive choices and monetary savings. For instance, in addition to displaying fuel consumption savings, the vehicle emissions label has been greatly strengthened by the direct link between the A-G label grades and the categories of Vehicle Excise Duty, underlining even further the money-saving message. Indeed, this correlation serves a dual purpose: "this, at the same time, has reinforced the message given through the tax regime: lower carbon emissions = lower road tax".[28] However, our 2008 Report into Vehicle Excise Duty noted that recent revisions to VED will complicate the labelling system, and government will have to work hard to ensure that the labelling system is able to communicate effectively the new, more complex arrangements.[29] The second-hand market for cars is hugely significant and the Government should investigate what can be done about making clear the implications for purchasers of second-hand cars.

26) Labels are more successful in influencing the behaviour of consumers when the longer-term financial implications of purchase decisions are highlighted. Labels that rely solely on a consumer's environmental conscience have less impact and will appeal to a smaller audience. Brian Samuel, Head of Policy Research at the Energy Saving Trust, said the Government should support labelling on consumer electricals and white goods through an accompanying fiscal incentive:

You need to incentivise the good and penalise the bad, so I would like to see a stronger linkage between Energy Saving Recommended products and, say, reduced VAT, for instance.[30]

As in the white goods market, environmental labels are particularly effective when consumers do not have to pay a premium for higher standards. They may also be more effective if they can be made to coincide with a financial benefit to the consumer. The Government should examine the scope for strengthening the effectiveness of environmental labelling through fiscal measures.

Raising awareness

27) The British Retail Consortium told us "communication of labels can only be successful within the context of education and marketing campaigns. We need to recognise that customers often have a limited time to shop and, therefore, to read and absorb labels".[31] Substantial advertising and promotion of labels related to less frequent purchases (such as the white goods and vehicles) is particularly vital since consumers will not see these labels on a regular basis unlike, for instance, the food labels encountered every week. The Energy Saving Trust (EST) argued that the impact of a label is 'negligible' unless careful marketing and promotion have made consumers aware of its purpose:[32]

Retailers noted the value of the Energy Saving Trust marketing of ESR to consumers and the extent to which it was easier to sell an ESR product to a customer that was already aware of the logo. They also noted their customers proactively request ESR products […] it is worth nothing that retailers would like to see greater effort behind information, education and awareness promotion of ESR to consumers.[33]

Greg Archer of the LVCP explained that prospective car buyers are often far on in the decision-making process by the time they reach the showroom, and it is therefore crucial to promote labels and their associated comparative data "in the right media so that it reaches people at the right time in their decision making".[34]

28) The Government offers online guides to environmental labels[35] and also more detailed explanations of particular schemes, such as the vehicle emissions labelling information provided on the Act on CO₂ website.[36] Label owners may choose to publicise their own labels; the Government's role is to ensure that the labels it selects as its priority cases receive adequate publicity and are clearly communicated to the consumer at the appropriate point in their decision making. The Government has a unique capacity to provide objective advice to the public and guide consumers through the confusion that labels may cause.

29) Labels are more likely to influence a purchasing decision if the customer has prior awareness and understanding of the label. Where the Government supports a labelling scheme as part of its sustainable consumption strategy, it must actively promote and explain the label to consumers, using publicity to raise their awareness and understanding of labels before they make decisions on purchases. How information on, for example carbon, is presented in marketing materials and advertising is important. The Government should examine whether there is a case for regulating how information is displayed to ensure it is prominent and consistent with a sector-based universal labelling scheme. The way information is presented must be underpinned by standards to ensure the information is displayed prominently and in a way that allows different products to be compared easily and that ensures that environmental information is presented consistently across all forms of marketing media.

13 Q101 Back

14 Ev 23-24 Back

15 Ev 135 Back

16 Ev 82 Back

17 Ev 112 Back

18 Q 97 Back

19 See, for example, Q 139 [David North]. Back

20 Ev 112, Q237 Back

21 Q 320 Back

22 Q 323 Back

23 Q 295 Back

24 Q 301 Back