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Certifiably Sustainable?: The Role of Third-Party Certification Systems - Report of a Workshop 1 Introduction Consumption of goods and services represents a growing share of economic activity globally. In the United States, consumption accounts for more than two-thirds of gross domestic product (GDP). This trend of increasing consumption has brought with it negative consequences for the environment and human well-being. Global demand for energy, food, and all manner of goods is on the rise, putting strains on the natural and human capital required to produce them. Extractive industries and production processes are prominent causes of species endangerment (Czech et al., 2000). Modern economies, even if information driven (rather than manufacturing or production based) are underpinned by substantial energy consumption, a primary contributor to the current climate crisis. Expanding international trade has led to many economic opportunities, but has also contributed to unfair labor practices and wealth disparities. Consumption is thus an area of fundamental significance to sustainability, defined as meeting the needs of a stabilizing human population while maintaining the earth’s life-support systems (NRC, 1999). While certain processes have improved or become more efficient, and certain practices have been outlawed or amended, the sheer scale of global consumption and its attendant impacts continue to be major challenges we face in the transition to sustainability. As we continue our search for tools to shift society toward a more sustainable path, it is crucial that we address the challenges posed by consumption. There are several mechanisms currently in use as means to increase the sustainability of production processes and consumption patterns. Lebel and Lorek (2008) have identified 11 such approaches, which range from simply consuming less, to influencing industrial and consumer behavior through
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Certifiably Sustainable?: The Role of Third-Party Certification Systems - Report of a Workshop complex certification systems. While all of these mechanisms are worthy of consideration, third-party certification1 systems have emerged over the past 15 years as a tool with some promise. There has been anecdotal evidence of success, particularly in niche markets, but to date the overall impact of certified goods and services (in terms of making a particular market more sustainable) has been small. Moreover, definitions of sustainable vary across sectors and markets, and rigorous assessments of these programs have been few and far between. These programs are designed to be market-based interventions, and thus are not specifically designed to target certain root causes of unsustainable practices (e.g., endemic corruption or dire poverty). Still, it seems to be an area ripe for further inquiry, to uncover the potential for certification systems to influence more sustainable consumption. In order to take a step in learning from this field of practice, the National Academies’ Science and Technology for Sustainability Program held a workshop in January 2009. A committee of experts was appointed by the National Research Council to develop the workshop and write a report based on the discussions. The workshop was organized to illuminate the decision-making process of those who purchase and produce certified goods and services. It was also intended to help clarify the scope and limitations of the scientific knowledge that might contribute to the economic success of certified products. The workshop involved presentations and discussions with approximately 40 invited experts from academia, business, government, and nongovernmental organizations (NGOs) (see Appendixes A and B for agenda and list of participants). The workshop featured a ground-clearing discussion of certification practices and panel discussions. Workshop discussions were focused on four main objectives: To identify strengths and weaknesses of certification as an approach to encouraging sustainable consumption To identify problem-driven research topics which might be taken up by academia and the analytical community To determine whether or not there is an opportunity for a traditional, National Research Council (NRC) consensus study to articulate guiding principles for scientifically reliable certification systems To highlight what is needed from the various institutional actors to foster improvement in certification systems (i.e., governments and regulatory bodies, businesses, NGOs, research organizations, public-private partnerships, and the academic community) 1 The term “certification” will hereinafter be used to refer specifically to third-party certification programs.
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Certifiably Sustainable?: The Role of Third-Party Certification Systems - Report of a Workshop This report is limited in scope to the presentations, workshop discussions, and background documents produced in preparation for the workshop. The report does not necessarily reflect the views of the committee or the participants as a group. The appendices to the report include the workshop agenda; a list of workshop participants; biographical information on the speakers, participants, organizers of the workshop; and working papers presented to workshop participants as background information. PLACING CERTIFICATION IN CONTEXT Certification has emerged over the past 15 years as a way to differentiate environmentally or socially preferable products from their conventional alternatives, and it now encompasses numerous complex issues, from labor and production processes to end-use considerations. However, like the diverse products and services which exist in today’s marketplace, these standards and labels present consumers and buyers with a surfeit of options, which can lead to confusion, described in more detail in Chapter 5. Additionally, existing certification schemes are not always uniform, nor are they immune to competing and sometimes false claims which, at best, contribute to “green noise” and consumer fatigue, and at worst, undermine certification efforts which do contribute to environmental and social improvements. Currently, no precise set of sustainability standards exist. Instead, as this field matures and advances, there is increasing evidence from practitioners of what works and why, and where there is room for improvement. Through expert discussion, this workshop attempted to examine the vast field of certification as an approach to sustainability (Chapter 2), and in particular consider which aspects of sustainability are being certified (Chapter 3); how certification standards are developed and implemented (Chapter 4); impacts to producer communities, businesses, consumers, and the environment (Chapter 6); and future areas for potential improvement (Chapters 7 and 8). The workshop focused specifically on third-party certification, i.e., products or services that are scrutinized by an independent body of some sort, which then confers the right to advertise and label the product as “green,” “sustainable,” or some other variant. The theory is that consumption of certified products can move supply chains toward sustainability, both in the specific goods or services consumed and by providing incentives to producers and sellers to change their practices. Sustainably caught seafood, green buildings, and carbon offsets for air travel provide examples of goods and services marketed in part on their claims to be more sustainable than competing alternatives. These claims may underpin premium prices, preferential market access, or new advertising campaigns. In most cases, though, these claims are tenuous and not readily transparent. The situation
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Certifiably Sustainable?: The Role of Third-Party Certification Systems - Report of a Workshop hearkens back decades ago to the food industry, when health and nutrition labels proliferated as a response to increasing consumer awareness. Health claims were mostly first-party (producer) claims that were eventually regulated by law, whereas sustainability claims are currently a mix of first-, second- (customer-verified), and third-party claims. Like nutrition labels, certification provides a voluntary supplement to the price mechanism in guiding choices. A certified product or service bears a label that claims the product has been produced in a sustainable fashion. The definition of “sustainable” practice varies widely, and consequently, certification schemes are not all considered equal. Many labels claim that their products deliver both environmental and social benefits, but in practice, schemes typically focus on one or the other. Instead, every existing scheme has both strengths and weaknesses, leading to a diverse but increasingly confusing marketplace. Within the coffee sector alone, consumers may choose from labels such as “shade-grown,” “organic,” “fair trade,” “bird-friendly,” not to mention certified brands like Rainforest Alliance’s or Starbucks’ CAFE practices. In most cases, these standards are now competitors and were developed in response to perceived weaknesses within other certification schemes. Despite this wave of activity in the field, even the most prevalent of certification schemes cover less than 10 percent of the market. More important, the impact of certified production on humans and the natural world has been limited so far. Certification has been shown to be feasible from a technical and economic perspective within some markets, but tangible movement toward sustainability on the ground has been slow. These schemes do not exist in isolation either. As Chapter 2 describes more fully, certification is one among many options for influencing behavior and guiding more sustainable consumption. In some cases, certification is favored as an alternative to regulatory or other information-based approaches (e.g., industry self-reporting), but in most cases certification must co-exist with these other options. Thus its true potential may be in how it could be optimized, to maximize its leverage and strengthen its interactions with other policy tools. CERTIFICATION AS A TOOL Workshop participants were encouraged to view certification as a tool, or a means to an end. This concept helped frame subsequent discussions about measuring impacts and developing more effective certification schemes. Participants challenged the notion that market penetration constitutes success—as one participant put it, certification programs ought to focus on scaling up their impact, not necessarily their schemes. Therefore, certification is but one tool to aid in a market transformation.
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Certifiably Sustainable?: The Role of Third-Party Certification Systems - Report of a Workshop To understand where certification can be judiciously applied, one must recognize its strengths and limitations and be frank about its capabilities. It is a tool that can be used to communicate certain attributes and thus influence behavior. Because it is nonregulatory, it can push the boundaries or goals of a program beyond what a government agency might be able or willing to do. This also lends to its flexibility, which in theory makes it easier for the program to adapt as stakeholders change or new information is presented. Flexibility is a double-edged sword, though—industries need to make investments to meet these shifting standards, and having too much flexibility at the lower end of the market (i.e., to accommodate weak performers) can potentially undermine the entire program. It is also important to make the distinction between a certification system and a label. The label is a symbol indicating compliance with certain standards, and often is the last, or “customer-facing” element of a certification system. The certification system, by contrast, spans the market from producer to end consumer, involves continual interactions among these various stakeholders in the value chain, and entails numerous processes that are not easily communicated by a consumer label. So breaking this system down into its elements is helpful in identifying how a certification program could be strengthened and at which point certain stakeholders could play a role. As Chapter 3 describes, much of certification’s potential may be in innovations “behind” the label, further upstream before a product or service even reaches household consumers. This idea of innovation also suggests that certification systems will continue to improve. In some cases, such as the Leadership in Energy and Environmental Design (LEED) building standards, there is a process for continual improvement as technology and costs change. Some participants referred to this as an opportunity to “ratchet up” the field. However, several other schemes focus on conformity to specific practices, which may challenge the bottom of the market but does not necessarily drive the top. Whether certification systems reward or inhibit innovation is an open question, and likely depends on the specific form of certification and sector to which it is applied. THE FUTURE OF CERTIFICATION Given the growing interest in certification schemes, and the emergence of new sustainability-related markets (e.g., biofuels or carbon offsets), it appears that certification as a tool is here to stay. Its flexibility seems to be an attractive attribute, as governments, industries, interest groups, and consumers grapple with these increasingly complex environmental and social challenges. Better monitoring of these schemes may reveal where certification can be most influential. To date, there is limited evidence of
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Certifiably Sustainable?: The Role of Third-Party Certification Systems - Report of a Workshop certification programs’ impacts on environmental, economic, or public welfare outcomes, but further inquiry like the Committee on Sustainability Assessment’s (Giovannucci and Potts, 2008) analysis of the coffee sector can be illuminating. In that regard, certification programs should be willing to fail and be forthcoming with these failures, so that the field can mature, and so that the limited resources devoted to these voluntary efforts are invested wisely and efficiently. As several workshop participants noted, mature certification programs will likely develop closer relationships to regulatory agencies. Voluntary standards will not always evolve neatly into regulatory requirements, but as the market grows it will become increasingly necessary to cull non-compliant parties (whether through market forces or direct regulation). It is also conceivable that originating stakeholders will eventually withdraw from mature programs, in order to invest in new issue areas. Thus exit strategies, particularly among the donor community, are an important component of certification programs. As experience has shown, it can take decades for programs to reach even a small fraction of the market, and it is not clear that there are tipping points at which they might become self-sustaining. There is also likely to be a trend toward multi-attribute certification—this could move industries to develop sustainability standards, rather than focus on single attributes (e.g., energy efficient or nontoxic) and then marketing them as “green” or “sustainable.” This may also tamp down the green noise that several participants noted as undermining honest efforts and confusing consumers. In some instances, multiple certification schemes may co-exist as part of a larger initiative. Imagine, for example, a sustainable land management program, where the regional ecosystem produces certified forest products, certified biofuels or other biobased products, and carbon offsets, and incentives are tailored to encourage optimal use of the land. Certification schemes may also be used as a form of outsourcing, reducing transaction costs for individual procurers who can instead rely on a credible, third-party verification system. Finally, there are several areas identified by workshop participants as needing further inquiry and research, to help unlock certification’s potential as a tool for addressing the broader issue of consumption and sustainability (Chapter 8). As one participant noted, certification communicates that something was produced sustainably, but it does not mean that it should have been produced in the first place—participants were mindful that more research was needed on overconsumption. That being said, more research into the appropriate guideposts or endpoints for consumption in a particular sector, e.g., fisheries, could help level the playing field for voluntary programs and provide baselines for studying impacts. Existing schemes have hoped for the “pull” of consumers demanding certified sustainable
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Certifiably Sustainable?: The Role of Third-Party Certification Systems - Report of a Workshop products, but this segment is limited and it appears that there is much to be gained from investigating the potential to “push” sustainable products, i.e., building demand through creative marketing. Consumers have demonstrated that they are willing to purchase more sustainable products (participants noted that in the past, “green” products were considered inferior) but this does not automatically translate in to demand. Many participants agreed that the end goal of certification schemes is to help transform markets, and so much more knowledge must be generated on how and when certification is the right tool for the job.
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