New International "Green Marketing" Standards Set Worldwide Foundation for Compliance and Enforcement

James L. Connaughton
Sidley & Austin

Introduction
Tell your product and packaging designers, tell your marketers, tell your advertising agency, tell your suppliers, tell your customers, tell your regulators, and finally tell your in-house counsel: after seven years of negotiations, the International Organization for Standarization ("ISO") completed three standards and a technical report that address a wide variety of environmental marketing and communication schemes, including advertising, product and package labeling, and environmental statements. These documents will significantly affect how companies design, package, distribute, and market their products; will reduce costs as a result of international uniformity; will provide greater assurance concerning compliance with the wide variety of consumer deception laws; and will promote consumer understanding and acceptance of environmental marketing claims.

The new standards reflect the active participation and consensus of a broad cross-section of interests (government consumer protection agencies, government environmental officials, environmental label program practitioners, environmental groups, consumer protection groups, and industry) and regions (Asia, North America, South America, Europe, Africa). Given the prominence and influence of ISO standards, organizations will come under increasing pressure to conform their environmental claims activities to the ISO standards. Various initiatives are already underway around to world to educate organizations about the new standards and adopt the new standards as law or government policy on environmental marketing claims. The following is a rundown on the documents and their key implications:

ISO 14020, General Principles of Environmental Labels and Declarations
ISO 14020 establishes nine core principles applicable to the development and use of any kind of environmental labels and declarations. The principles are "motherhood and apple pie" statements, accompanied by brief explanation, about what is required to make accurate, verifiable, and non-deceptive environmental claims. The principles address concepts such as the need for consensus in the development of criteria for particular declarations or labels, a prohibition on the use of labels as barriers to trade, and requirements concerning use of established methodologies and public access to underlying data supporting an environmental claim. ISO 14020 was used as a benchmark in the development of each of the other documents on environmental labels and declarations. The standard also is intended to provide a foundation for developing and evaluating environmental labels and declarations that have not yet been considered for international standardization.

ISO 14021, Self-Declared Environmental Claims
ISO 14021 establishes definitions and specific requirements applicable to thirteen "single-attribute" environmental claims that have become common in the marketplace. These are: "compostable," "degradable," "design for disassembly," "extended life product," "recovered energy," "recyclable," "recycled content," "reduced energy consumption," "reduced resource use," "reduced water consumption," "reusable," "refillable," and "waste reduction." The standard also expands upon ISO 14020 and establishes a set of general guidelines for developing, substantiating and communicating environmental claims and symbols, and provides a comprehensive reference to recognized test methods. Finally, ISO 14021 resolves the long-standing international confusion and conflict about the use of the familiar "Moebius Loop" symbol (i.e., the band of chasing arrows in a triangle shape). The Moebius Loop may be used only in conjunction with claims about recyclability or recycled content.

ISO 14021 represents a classic, practical harmonization exercise aimed at reducing barriers to international trade caused by differences in law and practice around the world concerning environmental claims made by individual organizations. The standard was derived from and goes beyond the various green marketing guidelines issued by the U.S. Federal Trade Commission ("FTC") and similar agencies in other countries. While mostly consistent with these schemes, compromises were made to address conflicts among them.

Standardizing the use of the Moebius Loop posed one of the greatest challenges. Although the Loop is one of the most well recognized environmental symbols, conflicts in law and practice around the world led to concerns about consumer confusion and recommendations in regions such as the European Union to prohibit use of the symbol. The ISO negotiators decided that a more constructive approach would be to settle on a common set of requirements that, when used over time, will lead to a common understanding among consumers worldwide. Another important feature of the standard is guidance prohibiting declarations or marks of conformity concerning implementation of environmental management systems in circumstances where a consumer is likely to misunderstand the message as a claim about the product.

Numerous countries are now taking steps to promote the use of ISO 14021 and to revise, and in some cases replace, their existing laws or policies on environmental marketing claims to harmonize them with the new standard. Oddly, the U.S. is not in the lead. The FTC counterparts in other countries such as Australia and the U.K. have already adopted the standard. The U.S. FTC has only recently met with the U.S. negotiators of ISO 14021 and is still in the early stages of considering what to do with the standard. State attention to the standards appears to be nonexistent. This is expected to change as the standards gain prominence. In addition to individual country activity, Consumers International and a number of other consumers organization have stepped up their education about the standards and have begun to evaluate the extent to which current claims in the marketplace conform to them.

ISO 14024, Eco-Labeling Practitioner Programs
ISO 14024 establishes principles and harmonized practices concerning program administration and development of eco-labels by third party-labeling practitioners. More than 25 of these mostly government-run programs are in existence around the world (e.g., Germany’s Blue Angel, the Nordic White Swan, EU’s Eco-Label). These "seal-of-approval" programs establish criteria by which certain products are to be identified as environmentally preferable to others in a product category and may therefore be marked with a "logo" or "seal of approval." Eco-labeling program representatives from more than a dozen countries participated with other delegates in the creation of the standard.

The standard was crafted in response to concern about inconsistencies in administration of proliferating programs, uncertainties in the way programs substantiate their decisions, and burdens that participation in such programs may impose on foreign producers. Eco-labeling program representatives from more than a dozen countries participated with other delegates in the creation of the standard. The standard mainly deals in a general way with program administration and the process by which preferability criteria are set. The standard does not address the specifics of any particular decisions; nor does it harmonize decisions about preferability from one country to another. Many of the programs have come together under the banner "Global Eco-Labeling Network" ("GEN") to continue to share experiences and discuss issues.

As with ISO 14021, the next critical question is the extent to which eco-label programs implement the new standard. Several of them appear committed to reviewing their practices and revising them to be in conformity with ISO 14024, but the extent of this commitment remains to be seen. Industry sectors subject to eco-labeling schemes also will likely look to the standard as a benchmark.

Technical Report (Type 2) 14025, Eco-Profile Labeling
The last document in the current series is a technical report on the subject of "Eco-profile Labeling." This form of environmental labeling is relatively new and experience in the marketplace has been limited to date. Although there are several different prototypes, eco-profile labeling can be described as the environmental equivalent of the FDA "Nutrition Facts" label, in which information is communicated about a number of environmental concerning a product and the circumstances of its manufacture (e.g., air emissions, recycled content, energy efficiency). Applications have been proposed for both industry-to-industry and industry-to-retail consumer communications.

Mostly due to the novelty of this form of labeling and key differences in some of the prototypes, the 14025 project has generated significant debate and controversy. After attempts to reach consensus on a standard failed, ISO decided to proceed with a technical report that would capture the work done to date. The technical report was approved a short time ago by a very narrow majority. The document should serve as a guide for further development of the concept in practice and for further discussion within ISO. The document describes the majority view on key concepts and also outlines a number of issues that need to be resolved in practice prior to moving forward with a standard. These issues include the data and methodology necessary to support a profile, development of a format that provides relevant information that is understandable to purchasers, and who may develop the profile.

Use the Standards and Let ISO Know What You Think
ISO is already committed to tracking the implementation of ISO 14021 and to continuing the dialogue on eco-profile labeling. However, the real work at this point will occur in the marketplace and in the halls of government. Concrete feedback to ISO concerning direct experience with the standards, particularly from marketing professionals, consumer organizations, environmental groups, and government officials will be critical to the future evolution and success of these documents.

Editor’s Note: Mr. Connaughton is Chair of the U.S. Delegation to ISO TC 207/SC3 on Environmental Labels and Declarations and helped negotiate each of the ISO standards on environmental labels and declarations.