An Evaluation of Ecolabels, Standards & Certifications in the Chemical Industry

Abstract

In recent years, ecolabels, standards and certifications (ESCs) have been increasingly utilized to signal a product’s environmental and socially responsible profile, both in the business-to-business and business-to-consumer spheres. The growing demand for this sustainability information from consumers, retailers, and governments has put pressure on the suppliers to provide qualitative and quantitative data on products’ environmental footprint. A multi-national chemical company and the University of Michigan School of Natural Resources team have collaborated to conduct this master’s project, An Evaluation of Ecolabels, Standards & Certifications in the Chemical Industry. The purpose of this project is to provide a strategy for multinational chemical companies to better engage their customers in the marketplace in a way that supports the transfer of sustainability information throughout the value chain. The student team engaged with stakeholders in sustainability reporting, studied a number of ecolabel schemes, and developed a survey addressing members of the home and personal care industry to learn from their experience and priorities. Results of the survey indicate that home and personal care manufacturers expect to double the percentage of their products labeled with an ESC in the next five years. Manufacturers use ESCs on finished products to differentiate, and to increase market penetration and perception of product quality. The main barriers to this use of ESCs are the lack of accredited raw materials and supplier information. The R&D department is most often the agent pursuing ingredients labeled with an ESC and the most important decision-making factors influencing procurement are unsurprisingly, performance and price. Suppliers of ingredients to home and personal care manufacturers can use valuable ESCs as a short-term measure to communicate the ingredient sustainability information, but given the ongoing development of the ESC marketplace, businesses throughout the value chain should continue to collaborate with stakeholders and watch for trends.