ECO-LABELING: Green or Smokescreen?

Inflated claims are everywhere, and they can derail your company's sustainability efforts. Here's how to ensure your investments support green goals.

Instead of putting sustainability plans on hold until the economy improves, the vast majority of businesses are forging ahead. Despite their belief that North America is in a recession, 83% of corporate managers plan on increasing green investments over the next two years. Even more startling, 74% of those who believe North America is in a depression are spending more on green. And, more than half say their companies purchased more green products during the depths of the recession than ever before.

This data comes from the 2009 EcoMarkets Summary Report released by environmental marketing firm TerraChoice. The annual report is based on a survey of 580 business-to-business and business-to-government purchasing managers in the United States and Canada from April to July 2009.

Pressure from the government is partly responsible for green's staying power, according to the report. More than three-quarters of respondents say the Obama Administration is influencing green spending, but corporate leadership also plays a major role. More than half (55%) of respondents say senior managers are driving green purchases, while 44.5% say regulatory compliance is the main objective. A slightly smaller percentage (44.3%) say employee demand is motivating green purchases.

Although the business case for sustainability remains strong, the actual process of selecting materials, products and equipment is proving to be a tangled mess of uncertainty. The reason, according to Scot Case, vice president of TerraChoice, is the growing trend of “greenwashing.” More and more companies are making misleading, or downright dishonest, claims about sustainability. And consumers aren't the only ones being fooled. Any corporate or operations manager responsible for recommending or purchasing products should be on the lookout for phony claims.

Over the past 15 years, more than 500 labels, logos and certifications have flooded the global market, says Case. Only three — EcoLogo, Green Seal and EnergyStar — conform to ISO 14024, the standard for environmental labeling. Case, who served as the executive director of the EcoLogo progam, explains that EcoLogo and GreenSeal are more comprehensive in scope than EnergyStar, which only addresses energy efficiency.

Spotting Fakes

Although EcoLogo and GreenSeal are the only comprehensive labels that meet voluntary ISO standards, according to Case, that doesn't mean they are the only credible eco-labels in existence. So, how does a buyer detect a green smokescreen?

Case offers a few suggestions. “A credible eco-label addresses multiple environmental issues across a product's entire lifecycle,” he says, “from raw materials and manufacturing to packaging, shipping and how the product will be used. Most importantly, the claim should be independently verified by a third party through an open, transparent, public process.”

Case advises companies to watch for seven red flags, which he calls “the seven sins of greenwashing,” that could indicate a sham. The sins include:

  1. Hidden tradeoffs: the suggestion that a product is green based on a single environmental attribute (such as recycled content) without attention to other important environmental issues.

  2. No proof: an environmental claim that cannot be substantiated by easily accessible supporting evidence or reliable third-party certification.

  3. Vagueness: a claim that is poorly defined or broad in scope (“chemical free” or “all natural.”

  4. Irrelevance: a claim that may be truthful but not important. The most common example is claiming not to use chlorofluorocarbons (CFCs) when CFCs have been banned for nearly 30 years.

  5. Lesser of two evils: a claim that may be true within a specific product category, but the category as a whole is of questionable environmental value.

  6. Fibbing: environmental declarations that are simply false.

  7. Worshipping false labels: giving the impression of third-party endorsement when no such endorsement exists.

Material Handling and MRO

Greenwashing is obviously a much bigger problem for consumers than it is for material handling professionals, but that's only because the material handling industry hasn't aggressively pursued green certification — yet.

Eco-labels do exist in material handling, and more could emerge in the coming years as sustainability continues to influence equipment buying decisions.

Most material handling managers are familiar with at least one prominent eco-label — the U.S. Green Building Council's LEED certification for buildings. Recognized globally, LEED provides that all-important third-party certification of a building's energy and water efficiency and commitment to emissions reductions, indoor environmental quality improvements and resource management.

For products addressing maintenance, repair and operations (MRO), green labeling is growing but not yet fully mature. Grainger, one of the largest distributors of MRO products, recently added sustainability services to its offerings. The industrial distributor now provides training and facility audits to customers and helps them identify products that can support their green initiatives.

Jeff Rehm, Grainger's sustainability manager, says the distributor looks at four environmental categories, which are loosely aligned with LEED requirements. Products that conserve energy, reduce waste, conserve water and improve indoor air quality are marked with a green leaf icon on Grainger's Web site and in its product catalog.

Certifications recognized by Grainger include EcoLogo, GreenSeal, EnergyStar, GreenGuard, NEMA Premium, GreenLabel, the USDA's BioPreferred and the U.S. EPA's WaterSense and Design for the Environment as well as the Compostable Logo from the Biodegradable Products Institute (BPI). BPI, a professional association of individuals from government, industry and academia, tests products to determine if they meet ASTM requirements for biodegradability.

While certifications from academic, government or non-profit organizations are preferable, Rehm says, many products don't have certifications simply because they haven't been established yet. “To have a certification, a product category has to have enough customer demand to support that,” Rehm says. “That's a grey area of green. Buyers shouldn't depend solely on certifications. Instead, companies should hold their suppliers accountable for their claims and require them to make the information transparent.”

Retail Giants Develop Eco-Labels

About seven months have passed since Wal-Mart announced its plan to develop a sustainable product index, and it looks like things are moving right along. In July 2009, Wal-Mart announced it had provided initial funding for the Sustainability Consortium, jointly administered by Arizona State University and the University of Arkansas, to develop a global database of information on the lifecycle of products, from raw materials to disposal.

In late November 2009, the Sustainability Consortium partnered with Big Room Inc., a Canadian company that runs Ecolabelling.org, a Web site that collects and indexes eco-labels; the World Resources Institute; and Duke University to survey more than 400 eco-labeling organizations. The goal was to create an index of all the eco-labels in the world.

More recently, in late January 2010, the Sustainability Consortium announced plans to develop an eco-label for consumer electronics. The consortium says it is working with Best Buy, Dell, HP, Intel, Toshiba and Wal-Mart to investigate environmental and social impacts of electronic products and eventually develop a label to identify sustainable products. The group plans to release initial results in the third quarter of 2010.

Are Fuel Cells Really Sustainable?

For the past several years, fuel-cell powered lift trucks have been marketed as more sustainable than internal-combustion (IC) and electric lift trucks. But, are fuel cells truly greener than lead-acid batteries? The answer isn't as simple as you might think.

Crown Equipment Corp. says hydrogen fuel cells are sustainable because they can help companies minimize their carbon footprints. “Most hydrogen is made from natural gas, which has shown to reduce greenhouse gases when compared to electricity made from coal-fueled power plants,” explains Eric Jensen, manager of new technology research and development at Crown.

Still, Jensen is cautious about drawing a conclusion and says it's still too early to tell for sure. “A number of organizations and companies, including Crown, are conducting research and considering all the variables and factors involved to better understand the sustainability benefits of fuel-cell-powered lift trucks,” he says.

Frank Devlin, segment manager at Raymond Corp., also believes there's no simple answer to the sustainability question. “Whether a truck powered by a fuel cell or powered by a battery is more sustainable depends on where the different sources of energy are coming from, not just emissions at the point where the fuel is used,” he says.

Devlin explains that more than 75% of the hydrogen consumed is produced through an energy-intensive process that uses high-temperature steam and high pressures to break down natural gas into hydrogen and carbon monoxide. Because carbon monoxide is toxic, he explains, it is then converted into carbon dioxide, which is a greenhouse gas.

“Hydrogen can also be made by electrolysis of water,” Devlin says. “This process results in hydrogen and oxygen byproducts, but it is very energy-intensive because it uses electricity, which may have been generated from non-sustainable methods.”

However, Devlin points out that fuel cells can be a more efficient form of energy for powering lift trucks. “A larger percentage of the available energy in the fuel is put to useful work, while a smaller percentage is lost as waste heat,” he says, and adds that fuel cells are free of the toxic lead compounds and corrosive fluid associated with lead-acid batteries.

At this time, no fuel cells have been certified to UL standards, according to Devlin. However, the energy storage systems committee of the Industrial Truck Association, chaired by Raymond's manager of systems and advanced engineering, Steve Medwin, is currently working on recommended practices for using hydrogen fuel cells in electric lift trucks.

In addition, Crown recently unveiled a fuel-cell qualification program that certifies Crown electric lift trucks for use with fuel cells. The program evaluates each power option and determines the alternations that must be made to the fuel-cell-powered truck to allow it to meet the same performance and safety standards as a battery-powered electric lift truck.

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