Appendix—Government response
Introduction
The Government welcomes the Environmental Audit Committee's
constructive report. We have taken careful note of the Committee's
conclusions and recommendations, and will take these into account
in ongoing and future work on product information, environmental
labelling and promotional claims in marketing.
There have been a number of policy developments in
this field since the Committee collected its core evidence in
2007-08. These include the agreement of a revised EU regulation
governing the voluntary ecolabel scheme; proposals for a new EU framework
directive for energy labelling and for the labelling of particular
types of energy-using products; the extension of the EU framework
to cover 'energy-related' products; and developments in the EU
regimes for labelling cars and tyres. At the same time, Defra
has been taking forward work on principles and guidance for better
environmental declarations and claims in marketing, where there
are some important connections with environmental labelling.
Also over the last year there have been some useful
developments in the evidence base relating to environmental labelling.
These include research and consultation which Defra has been carrying
out as part of its work to revitalise Government guidance for
better environmental declarations and claims in marketing, which
is yielding useful intelligence about approaches and attitudes
(both of consumers and businesses) to labelling. Consumer Focus
has jointly been conducting research with Defra on consumers'
understanding of green claims and labels (due to be published
in summer 2009). In addition Defra are researching environmental
claims about products to improve understanding of the type, frequency
and communication channels for green claims. Various trials of
approaches to carbon labelling on products have been continuing,
and the Sustainable Consumption Institute has researched the evidence
on public perceptions around that debate.
Following the publication of its 'Progress Report
on Sustainable Products and Materials' in July 2008, Defra
has been refining its work programme on products, including the
important area of product information, standards and labelling.
As set out in that report, the Government still sees labelling
as part of the toolkit of interventions or activities to help
raise the environmental performance of products. The judgement
is about where it can genuinely help to drive improvement, how
it fits into a wider package of actions to support progress in
the market, and what form it should take if it is to be an effective
part of the package for a particular type of product.
The Government welcomes the Committee's appreciation
that labelling has a supporting role in what is essentially a
process to encourage behaviour change both on the supply side
and demand side of the products market—with businesses engaged
in more sustainable production choices and consumers moving to
more sustainable patterns of consumption. The Government's strategic
view of how this process can be made to work, which underpins
the whole of this response, can be summarised as follows.
a) It is vital to have a sense of direction about
the environmental priorities which can be tackled through product
policies, and about the types of products where action should
be targeted. This requires sound evidence and a signalling of
priorities by governments, both being widely shared with stakeholders.
b) A prerequisite is the technical ability to
measure the relevant features of environmental performance at
the level of the product. This often requires a process for establishing
standard measurements and methodologies, which can be complex
and resource-intensive.
c) Those on the supply side need motivation (incentives
or pressures) to measure and benchmark the performance of their
products against their competitors'—and to make improved
performance a feature of competition in the market.
These three elements together are crucial to success
in raising the environmental performance of products placed on
the market, which is the essential policy goal. They offer a more
certain route than measures which rely on demand-side 'pull' from
'green consumers' (for the kind of reasons discussed in section 5
of the Committee's report). It is therefore in these areas that
most of the Government's effort on sustainable products is focussed.
In many cases this results in a form of 'choice editing' (as noted
in the report) where the improvement need not involve direct engagement
with the end consumer.
d) A final element, in which labelling may or
may not feature, is communication of product performance to the
end consumer. As the Committee found in its evidence, this communication,
where it is attempted, may be done for different reasons and may
take different forms. There is a wide range of approaches, from
marketing to enhance the corporate reputation of the business
as a whole, through to the value of a particular brand, to the
particular characteristics of one product compared with its competitors.
The market is not uniform and the degree of Government influence
varies widely—relatively high in the case of mandatory requirements
for some specific product types, less in the case of voluntary
or sector-based initiatives, and less again in the case of individual
business marketing.
The Government's view on this final element (d) is
that business communication about products should:
— support
genuine improvement in environmental performance;
— stimulate fair competition and increased
market share for improved products; and
— engage consumers in a way which is clear
and helpful, ideally building and reinforcing awareness of key
issues.
The Government hopes that this wider backdrop of
our product strategy will set the context for the following response
to the Committee's individual recommendations. The Committee's
report will be helpful in further consideration and debate on
where future Government action on labelling could be most effective
and where such action could add real value in the drive to deliver
more sustainable production and consumption.
Response to conclusions and recommendations
Recommendations on "The Government's role"
1. The Government needs to put more resources
into promoting better environmental labelling. The Government
should encourage the development of a sector-based universal scheme
comparable to those emerging in food labelling that can incorporate
a wealth of information in a simple and instantly understandable
label for consumers. (Paragraph 10)
The Government is grateful for this proposal. We
see the attractions of a framework that would translate into simple
and easily understandable labelling, sharing a recognisable common
'look'. And there is evidence emerging from research which Defra
and others have been doing over the last year that clear and easy-to-understand
information on green issues, if it is direct and to the point,
does hold appeal for consumers.
The biggest challenge in moving the market in this
direction is the practical complexity. The Committee's example
of food labelling—the 'traffic light' system—is not
without its complications, but is relatively straightforward compared
with the range of products and the range of issues that a broader
environmental labelling framework would have to address.
- The food example takes a single
functional parameter (human nutrition); divides it among major
components of the product function (fat, carbohydrate, etc); and
expresses those against an accepted single measure of each those
components (the 'guideline daily amounts'). And while food products
vary enormously in type, they share the same basic components;
and the methodology for measuring them, at the level of an individual
product, are common and standardised.
- By contrast, the environmental performance of
products involves many parameters. There are potentially many
environmental impacts associated with a single product type. The
relative importance of these impacts may often be unclear, or
not commonly agreed, and may involve trade-offs across the life
cycle. And in very many cases there is no common or standardised
methodology for measuring an impact at the product level or expressing
it against a common benchmark.
- The case of the major energy-using products,
covered by the EU's 'A-G' energy labelling regime, is a successful
example of an environmental labelling, but it is telling that
it operates in a much simpler setting than would be possible for
most types of product. The key impact parameter is energy in use
and there are standard methods for measuring a product's performance
and declaring it. However, even in this apparently more simple
case, the work involved in establishing and agreeing the necessary
standards and benchmarks has been intensive and long-running.
Sitting alongside these challenges of complexity
is the often-stated wish of consumers for simplicity in the information
that is presented to them. Achieving this is even more of a challenge
when most consumers will be judging any environmental information
alongside other parameters. Issues about the cost and performance
of products loom largest for most consumers; and increasingly
social and ethical issues are also competing with environmental
ones for consumers' attention. All of this means that it would
require extensive and extremely careful management to turn all
the analysis and data behind a broad-based environmental scheme
into an effective and useful label that actually works in the
consumer market.
The Government would like to consider the practicalities
of environmental labelling of the kind proposed and to build up
better evidence of what might work. Defra is developing ideas
for some feasibility work, potentially focussing on food as a
pilot area. This would help to test some practical options against
the latest evidence on consumer perceptions and business experience—and
also allow some assessment of potential costs.
2. The Government should be prepared to enforce
such a labelling scheme by statute although we accept that the
ideal would be for manufacturers and retailers themselves to introduce
a clear and robust scheme without the need for government enforcement.
(Paragraph 10)
The Government believes that the aspiration of developing
a common approach to labelling is certainly worth pursuing with
manufacturers and retailers. We will stimulate that debate as
part of Defra's ongoing work on green labelling and marketing,
mentioned above, and in appropriate forums at EU level.
It is important to note that a further consideration
in the practicality of a national-level labelling scheme is how
it could operate at the end of an increasingly globalised supply
chain—and, more specifically, within the rules of the Single
Market. There would therefore be problems for practical effectiveness,
and also for trade, in attempting to legislate for a comprehensive
cross-sectoral scheme for products placed on the UK market.
Aside from this question of legislation specific
to an individual label, it is worth noting that there is a general
framework of legislation which is relevant to this area, which
includes The Consumer Protection from Unfair Trading Regulations
2008 and The Sale and Supply of Goods to Consumers Regulations
2002. As the Committee is aware, in the broader field of product
advertising the Advertising Standards Authority (ASA) independently
administers rules laid out in the advertising codes and oversees
a self-regulatory system.
3. The Government should make sure that environmental
labels are backed up by an appropriate set of standards and criteria,
covering issues like independent monitoring and verification of
claims, so that consumers can have confidence in them. The Government
must also ensure that the labels will also make a difference to
the producers who use them. (Paragraph 12)
The Government agrees that robust standards, criteria
and methodologies are essential to underpin good quality labelling—as
they are for the whole process of raising the performance of products
placed on the market. This is a core theme in Defra's sustainable
consumption and production (SCP) programme, and runs through all
of its SCP projects which relate to products.
The Government also fully agrees that good labelling
needs to make a difference for businesses—giving them an
incentive to improve their products and the market recognition
for doing so. Defra plans to include principles on verification,
substantiation and robustness in its current exercise on guidance
for business about green claims and marketing (please see the
response to recommendation 15 below).
RECOMMENDATIONS ON "FOCUSING ON THE MOST RELEVANT
LABELS"
4. 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. (Paragraph 15)
The Government agrees with this conclusion (subject
to our comments above about the proposal for a new, wide-ranging
scheme).
5. 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. (Paragraph 19)
The Government agrees with the conclusion about clarity
and simplicity (subject again to our comments above about the
proposal for a new, wide-ranging scheme).
The example of the EU ecolabel illustrates a conundrum
for environmental labelling more widely. The apparent simplicity
of the label as it applies to products mentioned in the report,
like paint or household cleaning products, conceals the complexity
and rigour of the criteria that are used—which can run to
more 20 pages of detailed specifications. This is an inherent
problem particularly for voluntary 'award' labels. Consumer research
consistently indicates a desire for a quick and simple message,
but a label of high environmental performance may nonetheless
struggle to get its message recognised (please see also the response
to recommendation 1 above).
6. [The] 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.
(Paragraph 21)
7. 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. (Paragraph 22)
The Government remains committed to the development
of the EU ecolabelling scheme and over the last year we have strengthened
the arrangements for running the scheme in the UK market.
Reforms to the scheme have been agreed at EU level
and a revised governing Regulation will come into effect later
this year. These reforms should improve the criteria-setting process
and the links with other product policies, especially green public
procurement, which will have a positive effect in stimulating
higher environmental standards in some key product markets. It
is less certain whether the changes will strengthen the appeal
of the label as a communication and marketing tool. The Government
will continue to work for improvements within the EU framework,
leading in due course to a strong UK input to the next formal
review of the Regulation (scheduled for approximately five years'
time).
8. 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.
(Paragraph 26)
The Government agrees with the Committee about the
way that environmental labelling can reinforce messages about
direct benefits to the consumer, for example through lower costs
in energy, fuel or water consumption. The case of Vehicle Excise
Duty and car labelling is a good example of where, in the right
circumstances, the message can be further reinforced by direct
linkage with a fiscal message. The Government will consider further
opportunities. For example, over the last year it has been working
actively at EU level to seek flexibility on the level of VAT chargeable
on energy-efficient products.
9. 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.
(Paragraph 29)
The Government agrees that awareness of the labelling
schemes that it directly supports needs to be properly promoted,
to assist consumers in making good use of the information provided.
That is considerably easier for schemes which are a legal requirement
for certain types of product and which are therefore widely visible
(as with the EU label for energy-using products, for example)
than for 'award' schemes which are voluntary and more rarely seen
(as with the EU ecolabel).
We will be looking at the issue of how—in areas
where there are these 'official' labels, underpinned by robust
standards—other related information is displayed in marketing
material. Some relevant research is now in progress and we will
consider if guidance or other measures need to be developed with
business as part of Defra's current work on green claims and marketing
(which is described further below).
RECOMMENDATIONS ON "ENSURING QUALITY"
10. The Government has a role to play in policing
the use of environmental labels and intervening directly to remove
those found to be inaccurate or misleading. It should provide
Trading Standards and the ASA with the training, resources, powers
and sanctions required to review all instances of dubious environmental
claims. The Government should issue guidance to both independent
and business-initiated schemes, to ensure that appropriate levels
of accuracy and relevance are adopted by all labelling schemes.
(Paragraph 30)
The Government is acting on a number of fronts which
should help in the areas the Committee mentions.
- Defra is currently running
a project to revise, update and extend its guidance on green claims
and marketing to help business raise the quality of information
used in advertising and on products themselves (self-declared
claims). This work is being done with the active involvement of
key players and professional bodies in the marketing and advertising
industry, as well as the ASA and the local authority coordinating
body.
- The Defra work will also look at what additional
guidance may be needed to ensure good practice is followed in
formal, non-regulatory labelling schemes ('third-party' and 'sectoral').
This would be based on the relevant international (ISO) standards
for such schemes.
- Defra plans to consult shortly on options to
strengthen the arrangements for ensuring compliance with the regulatory
regime for EU energy labelling and minimum standards.
11. The Government should require certification
schemes to make public information explaining the structures,
standards and methods behind the label; ensuring that consumers
can have confidence in the audit and inspection processes that
underpin the claims a label makes. The Government should also
set standards and guidelines for the levels and categories of
information to be provided by any business that seeks to promote
its operations and products through a third-party labelling scheme.
(Paragraph 32)
The Government agrees that third-party and sectoral
schemes should make such information available. Indeed, it is
very much in the interests of scheme practitioners to do so, in
order to build the trust, recognition and take-up that they seek.
We are not aware of any serious shortcomings, but will review
what may be needed and if necessary develop guidance as part of
Defra's ongoing work on green claims and marketing.
12. Labels need to be regularly reviewed and adapted
to ensure they keep up with changes in the market and adequately
reflect consumer concerns. We welcome the Government's involvement
in remodelling the vehicle emissions label, and we urge it to
maintain a programme of regular reviews across its own labelling
portfolio. The Government should also identify areas where non-government
labels are in need of review, and should place pressure on the
label owners to undertake regular reviews. (Paragraph 33)
In the case of the 'portfolio' of government-level
labelling schemes, and specifically in the area of the EU energy
label mentioned in the Committee's report, the Government has
intensified its efforts over the last year to achieve ambitious
revisions to the benchmark levels, in negotiations under the EU
Eco-design Directive.
In the case of third-party and sectoral schemes,
again we are not aware of any serious shortcomings. However, we
will review what may be needed and if necessary develop guidance
as part of Defra's ongoing work on green claims and marketing.
13. The Government's priority should be to resolve
shortcomings in existing labelling schemes, rather than introducing
extra labels to compensate for deficiencies. (Paragraph 34)
The Government agrees with this principle. As mentioned
above, it has led a strong drive to achieve an ambitious revision
of standards in the area highlighted by the Committee, the EU
energy labelling regime.
On the example of the Energy Saving Trust's 'ESR'
label (quoted in paragraph 34 of the Committee's report)
it is worth pointing out that the Trust's voluntary scheme does
offer added value beyond what the mandatory EU label can provide.
It covers a considerably wider range of product types than the
energy label; and it covers a wider range of performance factors.
RECOMMENDATIONS ON "ENGAGING BUSINESS"
14. Effective environmental labelling must be
part of a wider partnership between government, consumers and
business if the goal of a more sustainable economy is to be achieved.
Arguments about the accessibility of labels must not lead to an
oversimplification or lowest common denominator effect;
the aim should always be to raise standards. (Paragraph 37)
15. In many ways, environmental labelling's real
potential lies not in changing consumer behaviour, but in changing
business behaviour and thereby improving the sustainability of
the manufacturing process and the products available to the consumer.
In improving the overall environmental performance of the economy,
the Government must work more closely with business to show how
environmental labelling can help them to drive changes in their
business and in their supply chains. In order to do this effectively,
labels should be underpinned by proper systems for analysis, audit
and accreditation. (Paragraph 40)
The Government agrees that the role of business in
raising product standards is crucial. We have set out our views
on this more fully in the introduction to this response, as we
consider it is at the heart of the issue; and we very much welcome
the attention which the Committee has given to the theme in this
section of its report.
On the question of working with business on positives
uses of labelling, Defra has recently been running workshops with
business and marketing experts to understand the drivers behind
the use and choice of environmental communication, including labels;
and how this relates to what we know about consumer perceptions,
which are coloured by habits and experiences, wider market and
societal influences, and perceptions about individual 'brands'.
We are hopeful that, as part of the exercise on green claims guidance,
this evidence can be used to demonstrate the value to business
of using robust environmental information in its communication
with supply chains, business customers and household consumers.
On the question of the systems and methods which
are needed to underpin a good standard of environmental labelling
(and indeed to underpin most other product-related measures) the
Government considers it can play an important role in helping
to get the necessary structures and methodologies in place. Again,
our views on this are included in the introduction. A good example
of this kind of contribution is the support we have given to help
put in place a robust methodology for assessing the carbon footprint
of goods and services (PAS 2050).
16. Product road-mapping is an important innovation
in efforts to improve the environmental impact of supply chains.
The Government has a vital role to play in this process. We welcome
the Government's current pilots on product road-mapping and we
urge it to extend this work to further product ranges as soon
as this is feasible. (Paragraph 43)
17. We note the effectiveness of voluntary initiatives
in driving up environmental standards in industry and we are encouraged
that the Government is involved in these processes. (Paragraph 44)
The Government welcomes these conclusions and the
support for its approach on product roadmaps and other voluntary
initiatives to raise product standards. One of the aims of our
work on the 'roadmaps' is to encourage more sectors and businesses
to adopt this kind of approach on their own initiative; and we
will continue to promote this way of working.
18. The Government should seek to establish an
agreement between major retailers, encouraging them to make more
information on major environmental labels available to consumers,
both in store and online. In particular, retailers should be encouraged
to provide this information close to where the products are found
(for example, in the aisles themselves), rather than solely at
information desks or on request. (Paragraph 47)
The Government is grateful for this interesting proposal
and we will, as part of the regular dialogue with major retailers,
discuss what more could be done nationally to raise awareness
of reliable third-party or sectoral labelling schemes which can
support consumer choice about sustainable products and behaviours.
It is worth noting that the European Commission has,
as part of the SCP Action Plan it adopted in July 2008, recently
launched a Retail Forum, the main goals of which are to achieve
greater availability of greener products in the shops; provide
better information to consumers; promote more sustainable consumption;
and build up the information needed to evaluate environmentally
sound products. This seems to us very much in tune with the Committee's
thinking and we will encourage European-wide collaboration through
this new channel.
19. It is unacceptable that certain car dealerships
are still failing to display mandatory EU information on vehicle
performance. The Government must ensure that trading standards
have the training, resources, powers and sanctions necessary to
tackle failures of this kind in every aspect of compulsory product
labelling. (Paragraph 50)
The LowCVP dealer survey for 2008 showed that the
voluntary colour-coded label for new cars was on display in 91%
of showrooms (compared with the finding of 86% in the 2007 survey).
This is a clear indication that the label has strong support throughout
the industry and that use of the label is still increasing. Given
this high level of take-up by dealers of the very informative
voluntary label, it is likely that there is even higher compliance
with the statutory requirement to display basic fuel economy information.
On the question of mechanisms for monitoring and
enforcement of compliance with other forms of mandatory labelling,
Defra is (as noted in the response to recommendation 10 above)
shortly to consult on options to strengthen the arrangements for
the regulatory regime for EU energy labelling and minimum standards.
RECOMMENDATIONS ON "CARBON LABELLING"
20. Carbon labelling cannot account for all environmental
impacts or be a universal environmental label. But the value of
the carbon label will be increasingly important as consumers'
awareness and knowledge of embedded carbon grows. Embedded carbon
labelling is a form of environmental label that can be applied
to all products and all sectors, and may be the single most important
measure, given the challenge we face in decarbonising the economy.
It is necessary to support efforts to raise an individual's awareness
of their overall consumption of carbon, like the Act on CO2
campaign, and to support the goal of reducing the carbon intensity
of products. (Paragraph 54)
21. The Government should encourage carbon labelling
for all products and services as a priority but ultimately as
part of a universal and comprehensive environmental labelling
scheme. It should legislate for this if necessary. An asymmetric
devolution of powers presents a challenge to the development of
legislation for a UK wide labelling scheme and the Government
should open discussions with the Scottish Executive, the Welsh
Assembly Government and the Northern Ireland Executive on how
a UK wide sector-based universal labelling scheme can be developed.
(Paragraph 55)
The written evidence submitted to the Committee by
Defra in October 2007 set out what the Government sees as a crucial
distinction—between the measurement of the carbon footprint
of products and services, and any communication which a business
makes about the footprint of its product. We considered then that
the ability to measure and the willingness to act to reduce the
footprint former are crucial; that forms of communication to supply-chain
players, stakeholders and consumers are potentially important
but still developing; and that—on the particular question
of carbon labelling on products—options are being tried
but the jury is still out.
Overall that is still where we think things stand,
eighteen months on; but there has been encouraging progress. In
particular, there has been great success in the priority area
of enabling business to measure and address the carbon footprint
of products. The process led by BSI and supported by Defra and
the Carbon Trust, to establish a publicly available methodology,
was robust and inclusive, and the specification (PAS 2050) was
successfully launched in October 2008. It has attracted wide interest
among businesses and among a wider community of policy-makers
and standards experts internationally. The Government is encouraging
this wider engagement through EU and international forums, and
there is every indication that the practice of carbon footprinting
will become much more widespread through global supply chains
over the coming years.
Businesses are still developing the ways that they
use the information to communicate with their suppliers, their
business customers, their stakeholders and (where they sell such
products) their household consumers. But this process should be
able to develop more effectively now that there is a common methodology
for assembling the information and a growing body of live information
to work with. The Government is very interested to monitor these
developments.
In the area of the carbon labelling of products,
a number of businesses have been trying possible approaches, several
of them working closely with the Carbon Trust, and trying to evaluate
what approaches may be viable and genuinely helpful to the consumer.
That work is continuing. But it is clear that there are two big
issues that remain a challenge to any wider take-up of a particular
carbon labelling approach.
- The first issue is technical—the
extent to which a carbon footprinting method and protocol can
yield results which are precise and reliable enough, at the level
of an individual product, to allow numerical values to be expressed
for the purposes of comparing one product with another. At present,
the methods will allow comparison between products produced by
the same business (where the assumptions and data sources are
common). But they are not sufficiently advanced to allow comparisons
across the range of products on the market.
- The second challenge is actually finding an approach
which, at the level of the individual product, would be genuinely
helpful and enabling for consumers. Several interested organisations
have been researching and testing opinion on this second point
over the last year. For example, Forum for the Future and the
Sustainable Consumption Institute have published interesting reports,
based on work done with industry and communication experts and
on quantitative and qualitative market research with consumers.
The results so far highlight the potential of upstream action
by business and of approaches to communication which enable consumers
to turn awareness into everyday behaviours and actions; but they
cast doubt on the practical value to consumers of carbon labels
placed on individual products.
The Government is keenly following the emerging evidence
and the debate being stimulated by it. However, what this suggests
at the moment is that there are some fundamental questions which
would need to be settled before carbon labelling could become
mainstream. As well as the questions noted above, there is the
issue which the Committee itself notes about the relative significance
of the carbon impacts of products alongside other environmental
impacts, and indeed alongside social and ethical impacts. Across
the huge number of different types of product to be considered,
the relative weights of these different impacts—and therefore
the potential relevance of carbon labelling to the consumer—will
vary enormously.
On the wider questions of a 'universal' scheme' and
legislative action, please see the earlier comments in the response
to recommendations 1 and 2 above.
22. We welcome the launch of the Carbon Trust
Standard label, the Carbon Reduction Label and the new Publicly
Available Specification on carbon footprinting. They provide different
ways for businesses to promote their commitment to emissions reduction
and will help to focus efforts on cutting emissions across company
operations. Government and the Carbon Trust should ensure that
the difference between labels that focus on individual products
and schemes that focus on the performance of organisations overall
is well understood by consumers and manufacturers. (Paragraph 59)
We agree with the Committee that there are distinct
forms of emissions measurement across company activities, which
are suited to different purposes and which have different audiences.
We will ensure that this is reflected in the guidance which is
produced on the reporting, disclosure and marketing of companies'
emissions performance.
23. The Government should investigate how any
sector-based universal labelling scheme could be used by companies,
national and local government and other organisations to report
on their environmental performance. An annual report carrying
the 'traffic light' environmental impact label would inevitably
hide much complex methodology and require rigorous auditing but
it would send an admirably simple and effective message to shareholders
and other stakeholders. (Paragraph 60)
The Government is keen that companies should consider
the environmental performance of their goods and services, as
well as the more direct impacts of their processes and operations,
when they report to stakeholders and customers. We will continue
to promote that view in relevant guidance on reporting, disclosure
and marketing.
The Committee's suggestion about a composite indicator
for the impact of a company's goods and services is intriguing
and has attractions. The problem is in the underlying complexity
which the Committee notes. We have commented above (in the response
to recommendation 1) about complexity in relation to the
standardised assessment of different product types. The challenges
would be multiplied greatly in trying to apply a common and composite
approach across the whole 'fleet' of products for which a company
is responsible, and to do so in a way that would be comparable
across companies.
24. The Government must identify areas where lifecycle
assessments could be translated into consumer labels that would
encourage the most environmentally benign choice and that would
send the right signal to manufacturers. (Paragraph 64)
The Government welcomes the discussion on life-cycle
assessment in paragraphs 61-63 of the Committee's report and agrees
fully with the conclusion in paragraph 63 that labelling
should be focussed on the areas where it will make the biggest
difference to the behaviour of consumers and producers. We do
not propose setting out to indicate, as an end in itself, where
there should be new or additional forms of labelling. That would
go against the grain of the strategic approach which we describe
in the introduction to this response—and indeed of the spirit
of recommendation 13, which we support. But we are certainly
interested to consider the scope for worthwhile opportunities
for improved communication to consumers across the range of product
and behaviour change work we are engaged in, nationally and at
EU level, and Defra sees this as a significant part of its SCP
programme.
25. Carbon labelling could have a profound effect
on manufacturers and their supply chains. We believe that the
Government must do more to support and encourage carbon labelling,
including providing a statutory basis if necessary as part of
a sector-based universal and comprehensive labelling scheme. (Paragraph 65)
Please see the Government's response on carbon labelling
under recommendations 20 and 21 above; and on the question of
legislative action under recommendation 2 above.
Department for Environment, Food and Rural Affairs
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