The Carbon Trust’s experiment with carbon labels could transform the behaviour of UK companies and consumers. But there are doubts hanging over the scheme

Labels extolling a product’s ethical virtues are nothing new. Fairtrade goods are now as familiar to shoppers as free-range eggs, while organic food labels reassure consumers that their vegetables have been treated with nothing harsher than compost.

A logo explaining climate change, then, is a logical next step for brands that are cutting their carbon dioxide emissions. The UK Carbon Trust’s Carbon Reduction Label was launched last year with high street retailer Boots, Walkers and Innocent Drinks agreeing to pilot the scheme.

Carbon labels show consumers the “carbon content” of an individual product. An item’s carbon content is the total amount of carbon dioxide emitted from every stage of its production and distribution, from source to store. This is also known as “embedded carbon”, or a carbon footprint. The Carbon Trust scheme stipulates that if an item’s carbon footprint is not cut within two years, brands lose the right to use the carbon reduction label.

Click here if you would like to hear from Neil Campbell, the CEO of Walkers, about the company's experience with carbon labelling - what works, what doesn't

But early reactions from pilot companies such as Boots show that carbon labels are yet to impress themselves on customers. A brand could try to use carbon labels to build its green credentials, but consumers fail to understand the information, according to a survey of Boots customers. A till survey found that just 28 per cent of Boots’ customers knew that a product carbon footprint related to climate change. And 44 per cent confused it with fair trade. But the survey showed a majority thought it was important that a figure was given on how much carbon was used during an item’s production. Another problem was that while few products carry the labels, even clued-up consumers cannot compare like with like.

Given the confusion, pilot firms are distancing themselves from the label’s marketing potential, pointing instead to the benefit of the process for their own, internal energy-efficiency efforts.

Business benefits

Yet carbon labels are catching on among firms operating in the UK. Since the scheme’s launch last March, nine more companies – including Coca-Cola, Cadbury Schweppes, Scottish & Newcastle and Aggregate Industries – have agreed to measure the carbon content of a vast range of products. And Tesco chief executive Sir Terry Leahy has said the all-powerful supermarket will carbon label every product it sells, and use the Carbon Trust’s draft standard to rate 30 products including orange juice, potatoes and light bulbs.

{event} Climate Change Summit 2008

Working with the Carbon Trust has helped Boots reassure customers that it is acting on climate change, says the company’s head of corporate social responsibility, Richard Ellis. But the company’s own research found that few consumers understood the concept of embedded carbon or were able to judge whether 200 grammes of carbon was high or not.

For Boots, which has used the label on a range of Botanics shampoos, the greatest benefits have not come from customer feedback, but saving energy in its supply chain. “The understanding of the carbon impact of the shampoo range was very insightful,” Ellis says. “It’s about going right back to the beginning – looking at ingredients, looking at how a bottle is made, how it is delivered, even at how our stores are lit. It’s a very holistic approach to assessing embedded carbon.”

Handling savings

Looking at every part of the production process, Boots found that 70 per cent of the plastic used in packaging for one shower gel product was contained in the handle. Eliminating the handle substantially cut the amount of carbon used and saved manufacturing costs. Further savings were made at the distribution stage by changing the packaging of goods coming to stores.

The cost of assessing the embedded carbon in the Botanics shampoos was too great to go through again, Ellis says. “There’s no way we can go through that for all of our products. The amount of work that would be required would be beyond our understanding and comprehension,” he says.

Boots may question the value of carbon labels, but its doubts are nothing compared with the concerns of UK stone company Marshalls. A Carbon Trust partner, it told Ethical Corporation that serious question marks hung over the government-funded body.

While saying that Marshalls is committed to working with the Carbon Trust, marketing director Chris Harrop says: “I am however concerned about the organisation’s capability and capacity to deliver against the growing need to provide a credible and comparable measurement system. This is very concerning not only for Marshalls, but for the whole industry and for consumers who are quite clearly seeking this information.”

Harrop says the Carbon Trust is wrong to focus just on carbon emissions and not other environmental impacts. Marshalls finds its “environmental profiling” work with the Building Research Establishment much more useful, he says. The company is working with the Carbon Trust on labelling all its domestic hard landscaping products, including garden patios.

In response, the Carbon Trust says: “Our work with Defra [the UK’s Department for Environment, Food and Rural Affairs] and BSI British Standards is a collaborative and robust process that has the full backing of our other corporate pilot partners and a wide range of stakeholders.”

The trust told Ethical Corporation it was “disappointed” by Harrop’s comments. It says it is committed to developing a single standard of measurement of “embodied greenhouse gas emissions from products and services” and points to the high-level steering group of companies and scientists that are overseeing this process.

Carbon and calories

Despite these setbacks, the Carbon Trust’s Euan Murray is upbeat about the new label’s potential. He acknowledges that consumers do not yet understand the concept of embedded carbon – but suggests that this could change quickly in the near future.

“A good parallel here is calories,” says Murray. “Twenty years ago if you asked somebody what number of calories was high and what was low they would not have known. The same thing could happen here.” He adds that research produced by Boots showed that customers were positive about the label – despite its full meaning being currently lost on most people.

Murray says companies stand to gain from telling customers of their intent to reduce energy use. He says: “Consumers understand that they can influence things through behaviour and will reward companies for doing the right thing. A label that indicates a supplier is reducing their carbon will help them to do that.” He believes that in the short term, consumers can trust the label’s message that companies are doing something to cut their carbon footprint because they face losing the labels if promised reductions are not made over the next two years.

In contrast, Tesco says its decision to carbon-label its goods had nothing to do with marketing. Spokesman Trevor Datson, who rejects the suggestion that labelling a large number of products would be unfeasible, says: “I think it would be wrong to look at it as a marketing exercise. You can’t use labels as a unique selling point – the whole point is to help people reduce their personal carbon footprint. It’s not about gaining an image advantage.”

What now?

With only three brands currently running labels, it is still early days for the carbon label. However, it may be that customer choices on carbon are not as novel as they seem. Jessica Sansom, head of sustainability at Innocent Drinks, says consumers already make green product choices in some market segments, such as home appliances.

Like the other companies, Innocent’s motivation was largely related to internal processes rather than marketing. It has since cut the amount of carbon used in making its smoothies bottles by 16 per cent. “Innocent became involved because we wanted to know what the carbon footprint of our items was,” says Sansom. “Once we had the information we were happy to share it with our customers.”

To help customers put the carbon content of smoothies into context, Innocent offers “guideline daily allowance” advice for cutting the “carbon calories”. The allowance is based on government targets of 8.3 tonnes of CO2 emissions per person, per year – or 22kg a day. An Innocent smoothie accounts for 9 per cent of the 2.9kg the company says can be used for food and drink. With such a tool, ethically minded consumers could pick and choose products that use a smaller amount of carbon in order to avoid exceeding their allowance.

From here on in, carbon labels could head down one of two paths. They could follow the route made by labels such as Fairtrade, which trumpet the ethical qualities of a brand over their rivals.

By adopting a carbon label, a brand can position itself as serious about tackling climate change. Just as companies that adopt Fairtrade can tap into concerns about poverty in developing countries, so brands bearing carbon labels could have added appeal to customers that care about saving the planet. Euan Murray claims that Walkers has seen a beneficial change in the way that individuals think about and trust the brand, while Richard Ellis says customers were pleased at Boots’ efforts.

But if labelling does help turn household names into green brands, those who spoke to Ethical Corporation say the effect is minimal. Instead, many industry players look at carbon labelling as a duty to give customers clear information, in much the same way as nutritional panels tell people how much fat, salt and sugar is contained in a food product. Solitaire Townsend of Futerra Communications says labels act as a proof of how green a company can be and can help firms avoid the “greenwash trap”.

“This might seem a bit disappointing if you’ve spent millions on tracking a product footprint, but I’m afraid labels can add weight to your communications – nothing more,” she says, arguing that carbon labels provide technical data and not accreditation like the Fairtrade label. But she adds that in green marketing campaigns, a label is “always welcome” because it backs up the green message.

For Tesco’s Trevor Datson, carbon labels could have a far greater impact on consumer behaviour than Green Clubcard promotions – which offer double loyalty points for energy-efficient items or organic produce. “Carbon labelling is potentially far more powerful in that it will enable customers to make greener choices across all ranges in their everyday consumption,” he says.

As it stands, carbon labelling is set to fall into the category of nutritional information – something that could well become obligatory on packets of all shapes and sizes in years to come. Brands view the label as an outlet providing consumers with the information they require to make educated choices when they shop. For now, consumers can choose a company that appears to have committed itself to reductions, but until consumers can compare like with like, the number on the label is ultimately meaningless.

Carbon Trust partners

Three companies that started working with the Carbon Trust on the initial carbon footprinting and carbon-labelling projects in March 2007 were:

· Walkers
· Boots
· Innocent

In September another nine companies signed up to carbon footprint their products.

· Aggregate Industries
· Cadbury Schweppes
· Coca-Cola
· The Co-operative Group
· Halifax
· Kimberly-Clark
· Marshalls
· Mûller Dairy (UK)
· Scottish & Newcastle

The Carbon Trust is working with supermarket Tesco to carbon label 30 products in five categories: tomatoes, potatoes, orange juice, light bulbs and washing detergent.

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