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Citation: UNEP “Redefining Ecolabels to Improve Sustainability and Trade in Developing Countries: Lessons andRecommendations from the UNEP project”, 2013.

Disclaimer

The designations employed and the presentation of the material in thispublication do not imply the expression of any opinion whatsoever onthe part of the United Nations Environment Programme concerning thelegal status of any country, territory, city or area or of its authorities, orconcerning delimitation of its frontiers or boundaries. Moreover, theviews expressed do not necessarily represent the decision or thestated policy of the United Nations Environment Programme, nordoes citing of trade names or commercial processes constituteendorsement.

Acknowledgements

Author: Joshua Wickerham

Supervision, technical editing and support: Liazzat Rabbiosi, UNEP DTIE

A number of people helped in preparation of this report. Dr. Anastasia O’Rourke and Aimee Russillo helped extensivelyin framing issues about evaluating standards and ecolabels. The thoughts of project partners and participants lentnew insights into the world of ecolabels. This project is the sum of these and many other people’s efforts, and so isthis report. Numerous experts and project partners also added valuable comments during peer review, especiallyAimee Russillo, Christian Hagemann, Eva Eiderström, Silvia Ferratini, Norma Tregurtha, Thumbarathy Balakrishnan,and Zubeida Zwavel. Liazzat Rabbiosi provided invaluable feedback and guidance on the entire report.

This document has been produced with the financial assistance of the European Union and the Federal Ministry forEconomic Cooperation and Development (Germany). The views expressed herein can in no way be taken to reflectthe official opinion of neither the European Union nor the German Government.

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Table of Contents

List of Abbreviations................................................................................................................. 4

Interviewees .............................................................................................................................. 6

Introduction ............................................................................................................................... 7

I. Background, context, and debates around ecolabels and their roles................................. 8

1. Categorizing ecolabels ........................................................................................................ 8

2. A brief history of ISO Type I ecolabelling ............................................................................. 10

3. Market trends in consumer information .............................................................................. 11

4. Ecolabel use in developed and developing countries, and internationally.......................... 13

II. Major debates around voluntary labelling and standards ................................................... 17

1. Assessing the links between ecolabels, markets, and policies .......................................... 17

2. Ecolabels and international trade: current debates and future considerations .................. 21

III. UNEP Project description, partners and structure................................................................ 27

1. Project overview and goals.................................................................................................. 27

2. Partners, targets, roles and activities................................................................................... 28

IV. Project Analysis ....................................................................................................................... 30

1. Overall Project Goals and Results Analysis ......................................................................... 30

2. Other project impacts and evaluation of those impacts ..................................................... 33

3. Sectors ................................................................................................................................ 34

4. Countries ............................................................................................................................. 37

V. Lessons learned and recommendations ............................................................................... 45

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List of Abbreviations

10YFP 10 Year Framework of Programmes on Sustainable Consumption and Production

AIDCP Agreement on the International Dolphin Conservation Programme

CCC Common Core Criteria

CI Consumers International

COSA Committee on Sustainability Assessment

CSIR Council for Scientific and Industrial Research (CSIR), the South African National Cleaner Production Centre (SA NCPC)

CTE Committee on Trade and Environment of the World Trade Organization

CUTS The Consumer Unity & Trust Society

DEVCO Directorate-General for Development and Cooperation - EuropeAid

DTIE Division of Technology, Industry and Economics (of UNEP)

EDC The Sino-Japan Friendship Centre for Environmental Protection

EMA Eco Mark Africa

EPD Environmental Product Declaration

EU European Union

FAST Finance Alliance for Sustainable Trade

FSC Forest Stewardship Council

FTC Federal Trade Commission (of the United States government)

GATT General Agreement on Tariffs and Trade

GBC Green Building Council

GEN Global Ecolabelling Network

GENICES GEN Internationally Coordinated Ecolabelling System

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Development andInternational Cooperation Agency)

GSCP Global Social Compliance Initiative

GOTS Global Organic Textile Standard

ICC International Chamber of Commerce

IFC International Finance Corporation

IISD International Institute for Sustainable Development

IMNC Mexican Institute for Standardization and Certification

ISEAL International Social and Environmental Accreditation and Labelling Alliance

ISO International Organization for Standardization

JPOI Johannesburg Plan of Implementation

KNCPC Kenya National Cleaner Production Centre

LCA Lifecycle Assessment

MDIC the Ministry of Development, Industry and Foreign Trade of Brazil

MRA Mutual Recognition Agreement

MSC Marine Stewardship Council

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NPR-PPM non-product related process and production methods

OECD Organization for Economic Co-operation and Development

PEFC Programme for the Endorsement of Forestry Certification

REACH Registration, Evaluation, Authorization and Restriction of Chemical substances

SAC Sustainable Apparel Coalition

SANES South African National Ecolabelling Scheme

SCP Sustainable Consumption and Production (the concept and also a branch of the DTIEof UNEP)

SIP Sustainability Information Platform

SPP Sustainable Public Procurement

TAP Technical Assistance Programme

TBT Technical Barriers to Trade

TED Turtle Excluder Device

TSC The Sustainability Consortium

UBA Umwelt Bunde Amt (German Federal Environment Agency)

UNCSD United Nations Conference on Sustainable Development

UNEP United Nations Environment Programme

UNGC United Nations Global Compact

UNIDO United Nations Industrial Development Organization

VSS Voluntary Standards Systems

WTO World Trade Organization

Interviewees

• Rahul Bhajekar, Texanlab Laboratories

• Sasha Courville, formerly with ISEAL Alliance (ISEAL)

• Kevin Dooley, The Sustainability Consortium (TSC)

• Eva Eiderström, Shop and Act Green-Good Environmental Choice Ecolabel

• Silvia Ferratini, European Commission Director-General Environment, European Union, and formerlywith UNEP Sustainable Consumption and Production Branch (until January 2009)

• Christian Hagemann, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) project on theAfrican Ecolabelling Mechanism

• Antonio Juliani, Ministry of Development and Foreign Trade, Brazil

• Purity Karuga, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) project on the AfricanEcolabelling Mechanism

• Heather Mak, SustainAbility

• Carla Aparecida Magalhaes Carsten Braga de Miranda, Ministry of Environment, Brazil

• Liu Zunwen, Environmental Certification Centre of the Ministry of Environmental Protection

• Andre Page, National Cleaner Production Centre (NCPC) at the Council for Scientific and IndustrialResearch (CSIR) in South Africa

• Marcela Pérez Ruenes, Mexican footwear company Elefante

• John Polak, formerly with the Global Ecolabelling Network (GEN)

• Sergio Ponce, Mexican footwear company Caborca

• Aimee Russillo, LiSeed Consulting

• Liazzat Rabbiosi, UNEP Sustainable Consumption and Production Branch

• Luis Angel Sanchez Ramirez, Mexican footwear company Caborca

• Thumbarathy Balakrishnan Simi (Sima TB), Consumer Unity & Trust Society (CUTS), India

• Indrani Thuraisingham, Consumers International regional office for Asia Pacific and the Middle East

• Norma Tregurtha, ISEAL Alliance (ISEAL)

• Mike Wood, South African textile company Zorbatex

• Zubeida Zwavel, National Cleaner Production Centre (NCPC) at the Council for Scientific andIndustrial Research (CSIR) in South Africa

Additional stakeholders provided feedback via an online form filled out for the project’s terminalevaluation. These include:

• Berthold Hoffmann, Gesellschaft für Internationale Zusammenarbeit, GIZ (originally InWent, nowGIZ)

• Melaku Mengistu, Ethiopian Standards Agency/ECPC

• Lelissa Daba, Ethiopian Standards Agency/ECPC

• Nydia Suppen Reynaga, IMNC Mexico/CADIS

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Introduction

International debates about trade and the environment have increasingly focused on identifying andseizing synergies that make trade an engine of sustainable development. This report focuses on arecent United Nations Environment Programme (UNEP) project ‘Enabling developing countries to seizeecolabelling opportunities,’ which focused on leveraging trade to achieve positive environmentalimpacts. The project used lifecycle based ecolabels to drive target country enterprises’ environmentalefficiency at the product and company level and help developing countries tap into developed countrymarkets’ demand for environmentally friendly goods. The overall project goal was to redefine ecolabelsfrom being seen as potential barriers to trade to instead viewing them as opportunities for trade inmore environmentally friendly products.

This report aims to evaluate to what extent the project succeeded in reaching its intended goals, todraw lessons learned, and present recommendations for future actions.

The report contains four major sections. Section I introduces readers to ecolabels and the differencesbetween different information systems, provides an overview of how these systems are used indeveloped and developing countries as well as introduces the major challenges, opportunities, anddebates around voluntary labelling and standards globally.

Section I also traces the debates about ecolabels as possible barriers to trade. This includes possibleimplications of recent World Trade Organization cases and other issues affecting the discussions onTechnical Barriers to Trade, and the relevance of this UNEP project to the debates, including theimportance of working with established rules, practices, and disciplines that avoid unnecessary barriersin developing and using internationally-accepted ecolabels.

Section II introduces the UNEP ‘Enabling developing countries to seize ecolabelling opportunities’project and partners, and the assessment methodology.

Section III of this report focuses on the assessment of the project results in relation to its goals. Thissection is based on interviews with key stakeholders in the project, as well as background research. Itreviews the project as a whole, including a sector and country analysis. It describes the baselinesituations and major developments that happened during the five years of the project.

Section IV provides lessons learned and recommendations to project partners and other stakeholderson further improvement and future projects. Suggestions are targeted toward all stakeholders involvedin the ecolabelling field.

The report’s methodology is based on the compilation and review of all project documents and relevantliterature on trade and ecolabels. It also involved interviews with participants from the project, includingfunders, implementing bodies, country partners, and some target enterprises when available.

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This section provides an overview of ecolabelsand other tools that have been developed tohelp promote sustainable consumption andproduction (SCP) and sustainable trade, aswell as debates around voluntary ecolabellingand others tools as they affect trade, theenvironment, and competitiveness.

1. Categorizing ecolabels

According to the OECD definition,environmental labelling is “voluntary granting oflabels by a private or public body in order toinform consumers and thereby promoteconsumer products which are determined to be

environmentally more friendly than otherfunctionally and competitively similarproducts”1. The key word in this context is‘inform’, which points to the most importantvalue of ecolabels of providing informationabout expectations and requirements toproducers and environmental and socialcredentials of products to consumers. Theavailable information then triggers necessaryactions for improvements.

ISO guidelines categorize ecolabels into threetypes, which are detailed in the table below. Inaddition, this table includes “Type I-like”single- or multi-attribute standards systems,which are not in the ISO classification.

I. Background and context around ecolabels

Table I: Types of ecolabels and standards2

ISO categorization3

Specific type(s)of standard(s)under thiscategory

Example(s)

Relevantinternationally-recognized codesand reference tools

Type I: Multiple-attribute label developedand verified by third parties that awardslicenses for the use of labelling thatindicates overall environmental preferabilityof a product within a category, based onlifecycle considerations.

Lifecycleattribute/lifecyclethinking (ecolabels).

National EcolabellingSchemes (e.g. BlueAngel, ) or regionalecolabelling schemes(e.g. Nordic Swan orEU Flower).

ISO 14024, WTO Codeof Good Practice4, GENcodes, GENICES.

Type I-like: Single- or Multiple-attributestandards systems that rely oncertification, verification, or otherassurance mechanisms to guarantee thesustainability of certain stages ofproduction, often resulting in labels orforms of sustainability claims.

Single or multiple-issue (internationalsocial andenvironmentalvoluntary standardssystems, or VSS).

Bonsucro (sugar sectorsustainability);Fairtrade (social issues,workers’ wages, etc);Forest StewardshipCouncil (forestsustainability).

ISEAL AllianceStandard-SettingCode5, WTO Code ofGood Practice6.

1 OECD “Environmental Labelling in OECD Countries”, OECD, 1991, Paris.2 IISD “International Institute for Sustainable Development’s Business and Sustainable Development: A Global Guide”,http://www.iisd.org/business/markets/eco_label_iso14020.aspx, and The Global Ecolabelling Network’s “What is Ecolabelling?”http://www.globalecolabelling.net/what_is_ecolabelling/3 Based on ISO 14020 Series classification. 4 WTO “WTO Agreement on Technical Barriers to Trade, Annex 3: Code of Good Practice for the Preparation, Adoption and Applicationof Standards”.5 ISEAL Alliance “Standard Setting Code” http://www.isealalliance.org/our-work/codes-of-good-practice/standard-setting-code6 Global Ecolabelling Network http://www.globalecolabelling.net

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Although internationally recognized, the ISOterminology around ecolabelling does notencompass all variety and range of ecolabelsand standards on the market today thatrespond to different needs of users. Forclarification, this report uses “ecolabel” and“ecolabelling scheme” in referring to ISO TypeI ecolabels. This type of ecolabel is based on“lifecycle thinking” that identifies key areas inthe production and use of a product that canminimize the key negative environmentalimpacts. Products chosen for inclusion undera Type I ecolabel constitute the best practicewithin an industry and are usually designed sothat around 20% of production in a particularproduct category can reach the label’s criteria.As such, ecolabels represent a leadershiplabel and provide a market ‘pull’ towardsbetter and continuous environmentalperformance.

This report looks into other types of voluntarysustainability standards, often classified as“ISO Type I-like”. The literature also refers tosuch standards as “private standards” or“private schemes”. This report adopts theofficial language of the International Social andEnvironmental Accreditation and Labelling(ISEAL) Alliance, the global body that codifiesgood practice for international social andenvironmental standards. ISEAL refers to itsmember standard setting bodies as “voluntarystandards systems” (VSS) rather thanstandards alone, because ISEAL notes thatthe credibility of such standards systems relieson diverse components like certification,accreditation, capacity building, labelling, andother aspects, which constitute a system.Both Type I ecolabels and “Type I-like” VSSengage in many of these same activities listedabove.

ISO categorization

Specific type(s) of standard(s)under thiscategory

Example(s)

Relevantinternationally-recognized codesand reference tools

Type II: Self-declarations andenvironmental claims developed by theproducer.

Various “green”claims etc. orcompany codes ofconduct.

Walmart SustainabilityIndex7, “recycled”content label claims,etc.

ISO 14021, FTC Guidesfor the use ofEnvironmentalMarketing Claims8 andICC Framework forResponsibleEnvironmentalCommunications9.

Type III: product declarations providingquantified environmental data based on afull life-cycle assessment under pre-setcategories and parameters set by aqualified third party and verified by that oranother qualified third party.

EnvironmentalProduct Declarations(EPDs).

The International EPD®

System, EcoLeafJapan10.

ISO 14025.

7 Walmart Sustainability Index http://corporate.walmart.com/global-responsibility/environment-sustainability/sustainability-index8 United States Federal Trade Commission, “Guides for the Use of Environmental Marketing Claims” (called the “Green Guides”,revised October 2012 http://www.ftc.gov/os/2012/10/greenguides.pdf9 International Chamber of Commerce “Framework for Responsible Environmental Marketing Communications”,http://www.icc.se/reklam/english/Framework_sustainability_claims.pdf10 The Global Environmental Declarations Network (GEDnet) is an association of Type III environmental declaration organizations andpractitioners include the members from Denmark, China, Germany, Japan, South Korea, Sweden, USA, Norway.

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The major differences between these types oflabels is that VSS target key phases of theproduct lifecycle (e.g. forest management,agricultural production, or energy consumption)and often include social aspects, whereas TypeI ecolabels are more comprehensive in theirassessments. VSS can be designed as leadingstandards to ensure sustainability of a particularsector, such as the FSC for forestry, which setsa very high bar for compliance. Or, they can beset as baselines for a sector like in the case of4C (the Common Code for the CoffeeCommunity), upon which other standards canbe added.

These two types of environmental labels arewidely used and recognized by consumers.They have played and continue to playimportant roles in advancing consumerawareness and shifting production practicesto embed social and environmentalconsiderations at all stages of the value chain.

2. A brief history of ISO Type Iecolabelling

Given that this project focused on usingInternational Organization for Standardization(ISO) Type I ecolabels, the following sectionprovides a brief introduction to these labels.

The first ecolabel, the German Blue Angel, wascreated in 1978 as a market-based mechanismto promote consumer and producer action onsustainable consumption and production(SCP). The Nordic Swan, along with ecolabelsfrom the Netherlands, Canada, Japan and theEuropean Union (EU), soon followed.

Ecolabels emerged as a global phenomenonfollowing Agenda 21 of the Rio Earth Summitin 1992 as a “paradigm of systematic andintegrated policy approaches” towardpromoting sustainable production andconsumption11.

Graphic I: Four decades of national ecolabelling schemes

This graph indicates the number of new national-level ecolabels per year.

11 Rabbiosi, L. and Clairzier, P. “Voluntary environmental or sustainability labelling for sustainable consumption and production”,Multilateral Environmental Agreements Bulletin, Thursday, 24 June 2010, IISD Reporting Services, Published by the InternationalInstitute for Sustainable Development.

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In 2002, the Johannesburg Plan ofImplementation (JPOI) at the World Summit onSustainable Development called for “effective,transparent, verifiable, non-misleading andnon-discriminatory consumer informationtools12”. It was intended that these consumerinformation tools would lead to changes inunsustainable patterns of production andconsumption. The JPOI called on stakeholdersto “encourage and promote the developmentof a 10-year framework of programmes (10YFP)in support of regional and national initiatives toaccelerate the shift towards sustainableconsumption and production”.13 This led to theMarrakech Process, a “global multi-stakeholderplatform to promote the implementation ofpolicies and capacity building on SCP” as aninput and basis for elaboration of the 10YFP14.

More than 30 national ecolabelling schemeshave since been created and operate in over50 countries. Other ecolabelling programmes,such as a regional initiative in South America,may further increase the number of national-level and regional ecolabels.

In 1994 the Global Ecolabelling Network (GEN)was founded as an international organizationto serve as a platform for cooperation andinformation exchange as well as to buildinternational awareness that promotesecolabelling. As of 2012, GEN had 27members operating in over 50 countries15.

The United Nations conference on SustainableDevelopment (Rio+20) in June 2012 adoptedthe 10YFP as one of its concrete operationaloutcomes. The 10YFP provides a globalframework and political mandate to promotethe shift to SCP and social and economicdevelopment within the carrying capacity ofecosystems. Consumer information and theneed to provide transparent credible and

meaningful product lifecycle information toconsumers at all levels, including the public,business decision-makers, and individualconsumers was one of the programmesprioritized in the 10YFP.

3. Market trends in consumerinformation

Companies have begun more actively toembrace and shape their environmentalsustainability within frameworks of corporatesustainability strategies such as corporatesocial responsibility (CSR), company codes ofconduct, supply chain and life-cycle initiatives.Integrated policy approaches to sustainableproducts drive and reinforce the incorporationof sustainability by the business sector. Theseinitiatives provide support and incentives for theuptake of voluntary and market-basedmechanisms for promoting SCP andsustainable trade.

Corporate social responsibility (CSR) andbusiness sustainability, widely defined, havebecome mainstream driving forces forbusiness strategy development, especially inthe last decade. These trends have hadcatalytic effects on driving the transparencyof production and corporate sustainabilityperformance as market differentiators forcompanies. The ISO 26000 “CSR” guidance,the United Nations Global Compact (UNGC),the United Nations Guiding Principles onHuman Rights, and the Global ReportingInitiative (GRI) provided mechanisms forreporting and reviewing corporate activity inlight of sustainability concerns. The UNGChas over 7,000 participant businesses from145 countries16. The GRI has over 1,800companies reporting according to itsframework17. The resulting emphasis on

12 Johannesburg Plan of Implementation, Chapter 3, 15. (e), which calls for people to “Develop and adopt, where appropriate, on avoluntary basis, effective, transparent, verifiable, non-misleading and non-discriminatory consumer information tools to provideinformation relating to sustainable consumption and production, including human health and safety aspects. These tools should notbe used as disguised trade barriers”, http://www.un.org/esa/sustdev/documents/WSSD_POI_PD/English/POIChapter3.htm.13 Rabbiosi L., and Clairzier P., “Voluntary environmental or sustainability labelling for sustainable consumption and production”,Multilateral Environmental Agreements Bulletin, Thursday, 24 June 2010, IISD Reporting Services, Published by the InternationalInstitute for Sustainable Development.14 ibid15 GEN website, http://www.globalecolabelling.net/16 UN Global Compact http://www.unglobalcompact.org/ParticipantsAndStakeholders/index.html 17 GRI “GRI Sustainability Reporting Statistics, Publication year 2010” https://www.globalreporting.org/resourcelibrary/GRI-Reporting-Stats-2010.pdf

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sustainability has driven companies to findnew ways of improving and monitoringsustainability performance, such as companycodes of conduct, internal or industry-drivenLCA approaches, or the use of third partylabels such VSS and ecolabels.

Industry roundtables, initiatives, and otherprogrammes have emerged in recent yearsto help companies meet their own social andenvironmental targets. The Global SocialCompliance Programme (GSCP) aims toestablish common criteria and equivalenceprocesses to reduce the “audit fatigue” offactories or farms supplying to multiplebrands or buyers against multiple codes ofconduct, ecolabels, or sustainabilitystandards even when the codes often containvery similar baseline content18. TheSustainable Apparel Coalition, comprised of60 leading brands in the industry, has recentlycreated the Higg Index 1.0 to measure theenvironmental and social performance ofapparel and footwear products19. Some of thekey objectives of this initiative are to reduceredundancy in sustainability reporting andcreate a common means to communicatesustainability information to stakeholders. TheSustainability Consortium (TSC) is apartnership among a number of companiesand universities to develop and maintainglobal tools for measuring and reporting onproducts’ sustainability using lifecyclemethodologies20. It is a major initiative in thebusiness sector that has the potential toinfluence production and consumptionpractices worldwide. Nevertheless,stakeholders interviewed for this studyexpressed concern about these initiativeshaving strong ties to companies which couldbe seen as being driven too strongly bycorporate needs rather than the needs ofother stakeholders.

Sustainable finance has also played animportant role in advancing sustainabledevelopment action and in delivering moreinformation on the sustainability issuessurrounding companies. Efforts like theEquator Principles for project finance, basedon the International Finance Corporate (IFC)Performance Standards, require signatorybanks to embed sustainability criteria in theloan evaluation process21. The latest IFCPerformance Standards (PS6) reference theuse of credible sustainability standards as ameans of determining the maturity ofsustainability thinking embedded in projectsbeing considered for financing22. The FinanceAlliance for Sustainable Trade (FAST)23 hasthe objective of enabling access to credit andfinance for socially oriented producers. It isan initiative that connects lenders andproducers to promote sustainable trade,which also includes compliance with themajor VSS.

Sustainability Information Platforms (SIPs)have been established to give consumersmore information about the products andservices they buy. Websites like GoodGuidedraw together hundreds of diverse datapoints to provide three numerical ratings foreach product based on impacts related tohealth, society, and the environment24.Ekobai provides information about certifiedsuppliers of labelled products25. TheEcolabel Index and Standards Map,respectively, provide information aboutnumerous ecolabels. The Ecolabel Indexcurrently has information about over 430ecolabels26. International Trade Centre of theWTO and UNCTAD has developed StandardsMap, which contains detailed informationabout over 90 ecolabels and standards. Itsprimary aim is to inform developing countryproducers about which labels may best

18 For example, the Global Social Compliance Programme website: http://www.gscpnet.com/19 The Sustainable Apparel Coalition Higg Index website: http://www.apparelcoalition.org/higgindex/20 The Sustainability Consortium: http://www.sustainabilityconsortium.org/21 The Equator Principles: http://www.equator-principles.com/22 IFC “IFC Performance Standards and Guidance Notes”, IFC, 2012.http://www1.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/IFC+Sustainability/23 The Finance Alliance for Sustainable Trade: “What is FAST?” http://www.fastinternational.org/en/node/5924 The Good Guide: http://www.goodguide.com25 Ekobai: http://www.ekobai.com26 Ecolabel Index: http://www.ecolabelindex.com/

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impact their trade competitiveness, suit theirproduction levels, as well as allowcomparisons of attributes between differentlabelling systems27.

Government policy-making, especially inadvanced economies, has been directedtoward developing integrated policyapproaches around products as a key bridgealong the production and consumptionspectrum, incorporating a mix of voluntaryinstruments and regulatory requirements. Inaddition, governments have been active inregulating green marketing claims (includingecolabels) by issuing guidance documentsand enforcement actions aimed at protectingconsumers from misleading claims.Examples of government policies andprogrammes concerning the informationalaspects of SCP include the creation ofmandatory standards and disclosureprovisions, the ongoing support and creationof ecolabels or voluntary standards such asEnergy Star, the adoption of reportingrequirements, and sustainable publicprocurement. These efforts show thatcomplementary and reinforcing measuresimprove the effectiveness of ecolabels. In thesame manner, the use of ecolabels in publicpolicy contributes to the achievement of anumber of policy objectives, such asaddressing climate change, energy and waterefficiency, CSR, or waste management. TypeI ecolabels, designed as holistic and cross-cutting tools developed through amultistakeholder process, represent animportant means of acting uponenvironmental and social challenges alongthe supply chain of products.

4. Ecolabel use in developed anddeveloping countries, and internationally

Ecolabel use in developed countries: Ecolabelviability differs between and among developedand developing countries. The impetus toestablish the first ecolabels in northernindustrialized nations in Europe, North America,and Japan grew out of, on the one hand,increasing consumer awareness and concernsabout the products they use, and, on the other,from a growing need for a new orientation inenvironmental policy-making to overcome theobserved implementation gaps withinenvironmental policy. Especially in the mid-1980s after the Chernobyl catastrophe, itappeared clear that legislative approaches alonewere insufficient to protect the environment orprovide adequate controls and incentives tomeet the challenges of sustainabledevelopment28. Many ecolabels, especially VSS,were developed by non-governmentalorganizations (NGOs) taking leadership toovercome the impasse in environmental policy.

Initially, due to their market-based andvoluntary character, the first ecolabels inGermany and the European Community(eventually the EU) were perceived as “standalone” instruments in the field of product-related environmental policy. The innovativeapproaches that ecolabels and standardssystems have taken – multistakeholdergovernance structures, precautionaryprinciples, participatory approaches, and otheraspects of modern environmental policy – havehelped pave the way for integratedenvironmental policies around product in whichecolabels play an important link betweenproduction and consumption29.

27 Standards Map: http://www.standardsmap.org/28 UNEP Training Handbook “Ecolabelling: what it is and how to do it”, 2009. 29 UNEP “Global Outlook on SCP Policies, taking action together”, 2011.

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Ecolabels operate best where there issufficient regulatory and non-regulatorypressure for environmental improvement:government policy, consumer awareness,institutional infrastructure, a culture oftransparency, adequate quality controls,market trust, and business maturity to supporta programme. Therefore, ecolabels are oftendifficult, costly, and lengthy to implement.Labels need to be relevant in the market aswell, reaching consumers and aligning to theirpreferences. Ecolabels often rely ongovernment funding during their initial phases.

John Polak, a former GEN chairman, notedduring an interview that it took 12 years forCanada’s ecolabel to become self-sufficientand free from government funding. Meanwhile,he noted that India’s ecolabel has been inplace since the 1990s, yet it has had arelatively insignificant impact because of lackof political support or recognition by thepopulation. The inference is that not everycountry can develop and operate a fully-fledged Type I ecolabelling programme duethe lack of the important prerequisites forsuccess.

History of the EU Ecolabel: The European Community launched what became the EU Ecolabel(nicknamed the “EU Flower” for the shape of its logo) in 1992 as a “Europe-wide voluntaryenvironmental scheme that consumers could trust.” This ecolabel worked to integrate existing andemerging standards across Europe. By the end of 2011, more than 1,300 licenses for 17,000 labelledproducts had been awarded. Licenses give companies the right to use the EU Ecolabel logo on aproduct group. If comparing types of products by the number of products certified, a little over onethird of EU Flower-approved products are in the category of hard floor coverings. This is followed byindoor paints and varnishes at 14%. All-purpose cleaners and tissue paper each occupy about 10%respectively. Nearly half of all products awarded the EU Flower come from Italy, with 22% coming fromFrance and 9% from the UK.

The EU Ecolabel is governed by the European Commission’s Directorate General for Environment (EC-DGE), along with its Member States, as well as with participation by a balanced group of otherstakeholders. Its functioning is set through Regulation (EC) No 66/2010 of the European Parliament andof the Council of 25 November 2009. Like most ecolabel schemes, the EU Ecolabel is voluntary, basedon lifecycle thinking, and has established mechanisms for selection of a product category and criteriadevelopment.

Table II: Membership in the Global Ecolabelling Network (GEN):

OECD Country Schemes: Australia, Czech Republic, Germany, Israel, Japan, Korea, New Zealand,USA, Sweden (SSNC, TCO).

Other Country Schemes: Brazil, China, Indonesia, Malaysia, Philippines, Russia, Thailand, Ukraine,Croatia, Hong Kong (GC, and HKFEP) Chinese Taipei Singapore.

Regional Schemes: EU, Five Nordic Countries.

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Ecolabel use in developing countries: Theprocess of economic globalization and tradeliberalization has transferred ecolabels todeveloping countries and encouraged theiruptake as a prevalent and credible way ofcommunicating product environmental andsocial performance. Developing countriesoften have higher percentages of SMEs, laxregulatory frameworks, and weaker non-regulatory pressures. However, despite lackof necessary prerequisite conditions, anumber of countrie s—mostly emergingeconomies— have started putting in placerobust national environmental policies,including initiatives to create and usedomestic and regional ecolabelling schemesas resource constraints, global climatechange, and other pressing environmentalissues became part of national developmentstrategies and international competitivenessconsiderations.

Even though ecolabels may be harder tocreate in the context of developing countries,these types of market-based and voluntaryapproaches can be helpful in encouragingand improving compliance with statutorymandatory requirements. In contrast, inindustrialized countries, ecolabels and othervoluntary approaches are often used to createadditional incentives for companies toperform above minimum compliance levels.These differences indicate that voluntaryregulations in developing countries havehigher stakes for success30. The developmentof new national ecolabel schemes signalimportant changes in the capacity ofdeveloping countries and also trends ofgrowing consumer awareness that are makingsuch voluntary approaches viable policyoptions. Indrani Thuraisingham of theConsumers International (CI) Regional officefor the Asia Pacific notes that surveys by CIand other groups demonstrate the preferenceof consumers in developing countries forproducts supported by credibleenvironmental claims as long as prices are notmuch higher than those of non-labelledproducts.

Having the right government, civil society, andbusiness partners is another prerequisite forthe success of an ecolabel. John Polak,former Chair of the Global EcolabellingNetwork (GEN) emphasized the difficulty ofgetting an ecolabel off the ground if thegovernment partner is not strong andmotivated. Trade dynamics also factor into theviability of a label, such as whether there areincentives for firms exporting to a givencountry to seek ecolabels for their products.As the number of ecolabels has grown, theharmonization of various ecolabels’ aspectsacross countries and regions have becomestronger trends in recent years, though somefundamental difficulties remain, which areaddressed below.

4.a Global and Regional EcolabelCooperation

The Global Ecolabelling Network (GEN) isthe main global body that promotesecolabelling awareness, builds capacity,facilitates exchanges, and works towardimprovement of national ecolabels at theinternational level, and has developed tools insupport of these goals. GEN’s internationalcooperation efforts include the TechnicalAssistance Programme (TAP), focusing oncapacity building and mentoring of lessmature programmes, the GEN Code of GoodPractice based on relevant aspects of ISO14024 which represent the rules of GENmembership31. GEN has also promoted andsupported a number of bilateral andmultilateral Mutual Recognition Agreements(MRA) that cover mutual recognition of testingand verification, common core criteria (CCC)and mutual recognition of certification. In2003, GEN created GENICES—the GlobalEcolabelling Network’s InternationallyCoordinated Ecolabelling System. TheGENICES is similar to an accreditationprocess that enables trust building amongecolabelling programmes towards creatingmutual recognition of programmes and otherharmonization processes. It uses peer reviewof ecolabels and other mechanisms to ensure

30 Blackman A., “Can Voluntary Regulation Work in Developing Countries? Lessons from Case Studies”. The Policy Studies Journal,Vol 36, No 1, 2008.31 GEN Discussion Paper on Enhanced Cooperationhttp://www.globalecolabelling.net/about/activities/documents/gen_discussion_paper_on_.htm

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the robustness of the procedures andprocesses for all GEN members.

GEN notes that its expert third-partyassessments based on ISO 14024 allowecolabelling to deliver improved credibility andlegitimacy to companies and allows thesecompanies to be recognized as havingincreased responsibility, efficiency, andeffectiveness. About one third of GEN membershave been through the GENICES process andmany have started the process or expressedtheir intention of doing so. There are a numberof noteworthy mutual recognition initiatives, forexample, the development of CCC on paint,toner cartridge, television, VDO/DVD Player,multifunction device between the programmesof Thailand, South Korea, Taiwan, and Japan.The same programmes have also implementeda mutual recognition system that recognizestesting and verification results in differentcountries. This reduces time and compliance forcompanies applying for the ecolabels in multiplecountries. While a single certification process isnot possible due to different environmentalconditions in each country that define theproduct criteria for ecolabels, harmonization ofthe activities behind ecolabelling schemesthrough CCC or other approaches remainsimportant to ensure better efficiency, betteraccess of the ecolabelling programmes, andenhance other benefits promised by ecolabels.

Regional initiatives, such as the AfricanEcolabelling Mechanism (AEM) and theRegional Cooperation on Ecolabelling forSouthern Cone Countries projects representthe largest developing country cooperationprojects to use an ecolabel approach. Thoughboth processes have started with the intention

of developing Type I ecolabels, due tonuances of the African context and dynamicsof relations among regional countries, theresult may not be necessarily a traditional ISOType I ecolabel programme. This has much todo with especially the AEM’s focus onagricultural, fish, or other products rather thanthe traditional ecolabel product coverage ofconsumer manufactured goods. The mainintended objective of this pan-Africancooperation is the creation of Eco Mark Africathat will “provide sustainable African productswith a credible and home-grown label thatverifies their environmental preferability andsuperior quality over competing conventionalproducts32”. The African Union supported thelaunch of this project under the African 10YFPon SCP. The EMA intends to use a two-trackapproach, firstly allowing for direct conformityassessment and certification of sustainableAfrican products. The EMA secondly has abenchmarking system that provides atechnical framework for assessing equivalencybetween existing ecolabels using the EMAStandards.

The UNEP-led project “Regional Cooperationon Ecolabelling for Southern Cone Countries:Argentina, Brazil, Chile, Paraguay andUruguay” takes into account various initiativeshappening in the region, facilitates theexchange of information and experiences,supports the development of regionalcooperation on ecolabelling, and promotes therole of public procurement in creating demandfor more sustainable products. This project isin its initial phase of conceptual developmentand any resulting system will depend on on-going feasibility assessments and availableresources for further implementation.

32 Eco Mark Africa http://www.ecomarkafrica.com/objectives.html

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This section is critical to understanding therationale of this project. It summarizes keychallenges and opportunities in assessing thetrade and development effects of ecolabelling.The first half of the section presents thefindings of recent studies that show promisinglinks between sustainability improvements andthe use of ecolabels and voluntary standards,as well as trends pointing to increasinglysophisticated measurement and reporting ofimpacts through common indicators and data.It then explores some of the potential costsand benefits of ecolabels versus other possiblepolicy or market-based interventions, and howecolabels function in such an ecosystem,analyzing the costs of implementing from agovernment policy and fiscal perspective whilealso acknowledging the cost to producers andothers in the value chain. The second half ofthis section then reviews the debates aboutecolabels and trade, particularly the debatesabout ecolabels as possible barriers to trade.This section also includes possibleimplications of recent World TradeOrganization (WTO) cases and other issuesaffecting Technical Barriers to Trade (TBT)discussions, and the relevance of this UNEPproject to the debates.

1. Assessing the links between ecolabels, markets, and policies

Impacts of ecolabels and VSS: Based on theliterature and practices related to ecolabels andVSS, there is no consensus on methodology formeasuring and evaluating the costs, benefits,and impacts of these systems which makes

data gathering challenging. In 2002, OECD-supported roundtables expressed concernsabout the lack of impact data around ecolabelsand standards, with participants noting that,although they saw positive environmentalpossibilities with early ecolabels, determiningcause and effect relation was difficult33.However as the number of ecolabels grows andas stakeholders increasingly demand to knowthe impacts of these systems, it is critical todevelop a consistent body of evidence of theireconomic, social, and environmental effects tojustify the investments necessary to developand use ecolabelling systems and understandconditions under which they are the mosteffective.

For example, as VSS members of the ISEALAlliance implement the ISEAL Impacts Code, itis expected that possible correlations betweenVSS and sustainability impacts can bemeasured year on year based on relevantindicators34. Efforts like the Committee onSustainability Assessment (COSA), aconsortium of NGOs comparing the social,environmental, and economic impacts ofvarious agricultural related standards and bestpractices35, along with other studies, arebeginning to show links between certificationand improved livelihoods, but in-depth analysisacross various systems is still immature36.

Most recently, RESOLVE convened aconsortium of leading researchers andpractitioners to examine the impacts ofsustainability standards. The report “TowardSustainability: The Roles and Limitations ofCertification” concluded that short-term direct

33 Vangelis V., “Round Table on Sustainable Development: Private Voluntary Ecolabels: Trade Distorting, Discriminatory andEnvironmentally Disappointing”, Organisation for Economic Cooperation and Development, 2002.34 The ISEAL Impacts Code: http://www.isealalliance.org/our-work/codes-of-good-practice/impacts-code35 Committee on Sustainability Assessment: http://www.sustainablecommodities.org/cosa36 For example, Waart Y., Ge L., Ton G., and Jansen D., “Sustainable tea production in Kenya; Impact assessment of RainforestAlliance and Farmer Field School training” LEI, 2012, the Hague, or Steering Committee of the State-of-Knowledge Assessment ofStandards and Certification, “Toward sustainability: The roles and limitations of certification” Washington, DC, 2012, RESOLVE, Inc.available www: www.resolv.org/certificationassessment.

II. Major debates around voluntary labelling and standards

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social, environmental, and economic benefitswere limited but widespread37. The study foundthat long-term results are both hard to quantifyand hard to attribute to any single interventionsuch as ecolabelling or standards, especiallybecause certifications and standards work bestalong with a suite of other public policy options.The report notes the common problem amongsustainability interventions to lack strong causalor even correlative evidence, thus preventingthe formation of robust conclusions about theireffectiveness. Monitoring and impactassessment has not yet been effectivelyimplemented. The report also notes that theindirect impacts of standards and certification,such as changes in management systems at theproduction level or civil society involvement incapacity building, may be substantial and morecertain at this time than the more inconclusivedirect impacts.

Evaluating the costs of ecolabels, VSS, andcompany codes of conduct versusgovernment policy options: From a policy andfiscal point of view, an argument can be madethat ecolabels and VSS are less costly thanpolicing environmental performance throughtraditional command and control approaches.This is because voluntary tools give marketincentives for companies to invest in cleanertechnology and better management practices,which can be cheaper than establishing andenforcing a regulation. The argument can beenhanced if the ecolabelling programmesbecome economically self-sufficient. At themoment, not all programmes are completelyfinancially independent, except in a fewcountries, such as Canada, USA, Japan, HongKong, or New Zealand to name few. Establishedand successful VSS also have the potential tobe economically self-sufficient as the FSC andothers have done. Through ecolabels and VSS,the cost of meeting environmental objectivescan thus be shared between producers,companies, governments, and consumers.

This is not to say that traditional commandand control policy should be ignored. In fact,ecolabels or VSS encourage environmentalcompliance of only a certain percentage of themarket and cannot be seen as substitutes forenvironmental regulation. Ecolabels need tobe supported by regulatory and othermechanisms to realize their full marketfunctions. As noted above in the context ofcountries where regulatory frameworks areincomplete or their enforcement is lax,voluntary approaches increase incentives forlegal compliance38. Therefore, ecolabels andVSS work best in value chains that are alsosubject to a mix of regulations and voluntarymeans of promoting sustainable productionand consumption.

The costs of ecolabels and VSS: The maincosts of ecolabelling and VSS fall into two maincategories39:

1. The first costs are around application fees(paid to the ecolabel programme); evaluationfees (paid to the ecolabel programme);compliance monitoring (paid to the ecolabelprogramme), actual certification (conformityassessment) fees or other fees associatedwith assurance of conformity with thestandard or ecolabel criteria (for ecolabels,this means certification and auditor feespaid to independent accredited certifiers,auditors and/or laboratories while for VSS,this means some kind of assurance processfees such as conformity assessment orother fees); programme and licensing fees(paid to the ecolabel programme andsometimes to VSS).40

2. The second group of costs is associatedwith changing production practices, such asthe actual changing of machinery andhuman resources, both of which requirevarying types and amounts of social,political, and economic capital.

37 Steering Committee of the State-of-Knowledge Assessment of Standards and Certification, “Toward sustainability: The roles andlimitations of certification” Washington, DC, 2012, RESOLVE, Inc. www: www.resolv.org/certificationassessment.38 Blackman A., “Can Voluntary Regulation Work in Developing Countries? Lessons from Case Studies”. The Policy Studies Journal,Vol 36, No 1, 200839 The Europe and NIS Regional Round Table “Sustainability standards in international trade: Hurdles or opportunities?” UNIDOGeneral Conference, Thirteenth Session 7 – 11 December, 2009, Vienna: http://www.unido.org/fileadmin/user_media/UNIDO_Worldwide/Europe_and_NIS_Programme/Documents/EuropeNIS2009.pdf40 This ecolabel cost schedule is based on preliminary research by Anastasia O’Rourke at BigRoom (www.bigroom.ca).

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Based on conversations with companies andconsultants involved in this project, estimatesof the cost of applying for a single product toreceive, for example, EU Ecolabel certificationis, on average, between 5,000 and 6,000 Eurosper product. It can be cheaper depending on aparticular ecolabel programme. Few ecolabels,including the EU Ecolabel, offer discounts forsmall-scale firms from developing countries.With an ecolabel, the producer pays for its costwhile suppliers comply with a company codeof conduct based on ecolabels’ criteria.

Due in part to the sheer number and differentpurposes of ecolabels and other systems,companies also face difficulties trying tounderstand and choose the labels andstandards that best fit their needs. Theseinformation challenges translate into costs forcompanies and are one of the main challengesthis project was designed to address. Giventhat the economic costs of such tools often fallon producers and others in the value chain,cataloguing and evaluating the potentialeconomic benefits of ecolabels for producersis crucial.

The economic benefits of ecolabelling andVSS: New Zealand’s ecolabelling programme,Environmental Choice, lists several positiveaspects of ecolabel use, such as improvedeconomic efficiency, reduced consumerinformation costs, crowding out of “greenwashing” claims, validation of productinformation, raising environmental awareness,and reducing impacts of consumption on theenvironment41. Theoretically, all of thesebenefits could apply to any credibleenvironmentally-related label and can work atthe national or international level. Companycredible supply chain tools such as codes ofconduct and auditing could also provide someof these benefits. These benefits are useful tokeep in mind when considering the rationale ofincreasing the number of ecolabelled activity ininternational trade, which was anotherimportant goal of this project.

From producers’, manufacturers’, buyers’, andbrands’ points of view, benefits in usingecolabels and VSS stem from possiblereputational enhancement of the brandassociated with such tools, improvedrelationships between suppliers andpurchasers, consumer recognition, andpossible purchasing preferences by buyers incertain markets, which can lead to bettermarket access. As demonstrated by the caseof the Caborca company in Mexico (seeSection III), companies may also enjoy someless tangible benefits resulting fromimprovements in management systems ormorale among employees, together with moremeasurable benefits like cost savings.Additionally, such experience also betterprepares companies for addressing emergingsustainability-related issues, imminentenvironmental regulations and supply chainrequirements.

Price premiums on certified goods are oftenquoted as a main driver for producers to applyfor an ecolabel, but these premiums are notalways assured. There are systems likeFairtrade that are specifically designed to giveproducers additional income. Fairtrade“premiums” include a minimum “floor” pricefor agricultural goods and usually a “premium”of money to be spent on communitydevelopment42. Depending on the marketsituation with a specific product category,certified products can demand a higher price.For example, the FSC may have pricepremiums due to current certified wood supplyshortages, which can be up to 30% abovenormal market prices43. Standards areincreasingly being used by companies tosecure supply of commodities that facepotential future shortages or sustainabilitychallenges, which can add pre-competitivecosts that may be passed onto consumers.

Consumer willingness to pay for ‘greener’products: For ecolabelled products, thelikelihood of fetching a higher price is also

41 New Zealand Environmental choice website: http://www.enviro-choice.org.nz/about_ecnz/eco_labelling/42 For example, http://www.fairtrade.net/, http://www.fairtradeusa.org/, and http://www.wfto.com/43 Based on personal interviews with Chinese wood product companies exporting FSC-certified wood products using FSC chain-of-custody.

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dependent on recognition of the label andactual willingness of consumers at the retaillevel to make environmentally-friendlypurchasing decisions, which rest on marketconditions and sustainability culture amongpopulations at the point of sale. A 2007 surveyby McKinsey and Company reported in theEuropean Financial Review found that 87percent of consumers “are concerned about theenvironmental and social impacts of theproducts they buy”44. But only 33 percent ofthose consumers said they “are ready to buygreen products or have already done so45”.Such survey statistics reveal how consumers’stated willingness to pay is often very differentfrom actual behaviour. Nevertheless, if variableslike price and product specifics are heldconstant, consumers—especially Europeanconsumers—are more willing to buy productsthey perceive as more environmentally friendly46.Among emerging economies, consumers ofChina, India, and Brazil also prefer to buyproducts with stronger environmental benefits47.

Promoting and driving the uptake ofcredible labels: The report “Signed, Sealed…Delivered? Behind Certifications and BeyondLabels” by SustainAbility48 outlines what theycall the “4Ds” of labels and standards thathelp companies define sustainability issues,deliver impacts on the ground, demonstratethe impacts to civil society and otherstakeholders, and respond to demand forbetter sustainability impacts from business-to-business or business-to-consumercustomers. The report found that labelsthemselves should not be looked atseparately from company action to spurdemand for sustainable products, nor shouldecolabels rely on individual consumers as thedrivers of uptake. Other influential actors inthe marketplace can also help create demandfor certified products in more formal andconsistent ways. Ecolabels have been

successfully used in sustainable publicprocurement (SPP), in which governments intheir capacity as large consumers in themarket demand products with strongerenvironmental performance. In this respect,one of the main benefits of ecolabels is thatthey provide proof of compliance withenvironmental norms and principles, thussaving costs in verification and auditing.Moreover, the criteria used by ecolabels todefine these norms and principles are alsooften used as technical specifications ofproducts in tender documents issued bypublic authorities, which influence biddingcompanies’ sustainability performance.

National versus international scale: Somecountries such as Germany and the Nordiccountries have high consumer recognition oftheir national and regional labels due to theselabels’ long history and establishedreputations. Heather Mak, an author of thereport “Signed, Sealed…Delivered? BehindCertifications and Beyond Labels49”, notedduring the interview for this report thatcountry-specific labels were sometimes hardto get buy-in from other countries. Companiesand consumers often preferred global labelslike the Marine Stewardship Council (MSC) orthe FSC over local ones. Such internationallabels were perceived to have morestakeholders involved and to be more widelyrecognized, and therefore more accepted ininternational markets. This may be partlyattributable to the fact that consumers andproducers may not always be aware of thedifferences between VSS, which focus onspecific hotspot in a lifecycle stage of aproduct, versus LCA thinking-basedecolabels that address key lifecycle concerns.The example thus highlights the importanceof convergence on what product sustainabilitymeans and creation of interoperability andmutual recognition between various labelling

44 The European Financial Review “Cultivating the Green Consumer” http://www.europeanfinancialreview.com/?p=47345 ibid 46 Eurobarometer “Consumer understanding of labels and the safe use of chemicals”, 2010, http://ec.europa.eu/public_opinion/archives/ebs/ebs_360_en.pdf (2010)47 National Geographic, Greendex. http://environment.nationalgeographic.com/environment/greendex/48 SustainAbility “Signed, Sealed... Delivered? Behind Certifications and Beyond Labels”, 2011, http://www.sustainability.com//library/signed-sealed-delivered-1#.UE9XDKIqH0M (2011).49 ibid

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systems. This has been raised as a keychallenge in the field of product sustainabilityinformation, also by those involved in theproject. This issue is revisited in therecommendations in Section V.

In conclusion, the costs and benefits ofecolabels and VSS compared to other tools withpotentially similar sustainability impacts dependin large part on incentives provided to andchoices made by value chain actors. However,these incentives and choices are not clearlyunderstood and defined, even if many ecolabelshave achieved market recognition and areconsidered successful. The role of ecolabels, aspart of a comprehensive set of initiativesincluding regulation and voluntary approachesfor SCP patterns, has been widely supported. Itis important for policy–makers, businessleaders, civil society, and other stakeholders todevelop consensus around methodologies forevaluating ecolabel impacts and effectivenesscompared to other similar systems. It isimportant that all of the stakeholders involvedin defining and developing the approachesdiscussed above continue to work together tocompile and build comprehensive value chaindata necessary to evaluate when and whereecolabels, VSS and other tools are providingwhich benefits and at what costs. Settling thesequestions are especially important in light of thechallenges levelled against ecolabels aspotential barriers to trade.

2. Ecolabels and international trade: current debates and future considerations

Ecolabels as voluntary market-basedmechanisms have been the subject ofinternational trade debates. This sectiondiscusses key arguments in these debates andreports its current status. Understanding theseissues can help to explain the context in whichthis project was set up and assess whether theproject’s responses were relevant, especially the

objective to redefine voluntary environmentallabelling more as a tool for promoting tradeopportunities rather than a barrier.

2.a Framing debates about ecolabels aspotentially trade-restrictive measures

International trade debates around ecolabelsfocus largely on non product related productionand processing methods (NPR-PPMs), whichinclude anything other than the physicalcharacteristics of a product. In the case of mostecolabels, these are the environmental impactsof products. NPR-PPMs are governed by rulesand disciplines of the WTO, which largely applyto government standard setting bodies, whilesome ecolabels, and especially VSS, aredeveloped and governed by non-governmentalorganizations or private bodies50. The two mainissues for ecolabels and VSS at the WTO levelhave been whether they can be considered an“international standard” that is open to all andwhether or not they represent a “de facto”condition for market entry, and thus a barrier totrade.

The GATT (as the precursor to the WTO)established conditions under whichenvironmental issues could be consideredacceptable in international trade under its ArticleXX on General Exceptions, specifically part b onissues “necessary to protect human, animal orplant life or health”, or part g “relating to theconservation of exhaustible natural resources ifsuch measures are made effective inconjunction with restrictions on domesticproduction or consumption51”.

Generally, WTO principles and rules only allowmembers to adopt trade measures based onPPM that manifest in the characteristics of finalproducts, but there are significant exceptionsand rules governing these exceptions.

A trade-related concern about ecolabels is thatvoluntary standards and ecolabels becomebaseline requirements for market entry and

50 Rotherham T., “The Trade and Environmental Effects of Ecolabels: Assessment and Response”, United Nations EnvironmentProgramme, 2005.51 Rotherham T., “Standards and Labelling”, in “Trade and Environment: A Resource Book”, edited by Adil Najam, Mark Halle, RicardoMeléndez-Ortiz, IISD International Centre for Trade and Sustainable Development (ICTSD) and the Regional and InternationalNetworking Group (The Ring), 2007.

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then eventually become embedded in policyinstruments and technical regulations52, 53. Bydoing so, these approaches have the risk ofignoring local environmental, technological, orcultural appropriateness, or the risk that vestedinterests from domestic industries take over thecreation of standards and ecolabels.Developing countries especially have beenconcerned about the unilateral nature of someecolabelling systems used in and developed byand for the environmental objectives ofindustrialized countries. In this context, theissue of extraterritoriality is often mentioned,whereby rules made in one country get appliedin another.

The Marrakech Agreement in 1994, whichfounded the WTO, established the Agreementon Technical Barriers to Trade (TBT). It outlinesbasic agreements about national-level rulesgoverning social, health, or environmentalimpacts of a product during its production oruse lifecycle and sets when and how suchrequirements may be allowed, includingnotification, use of appropriate internationalstandards, and transparency in developing therules. According to the WTO, the Agreement onTBT “tries to ensure that regulations, standards,testing, and certification procedures do notcreate unnecessary obstacles, while alsoproviding members with the right to implementmeasures to achieve legitimate policyobjectives, such as the protection of humanhealth and safety, or the environment54”. TheAgreement on TBT requires that labelling not bemore trade restrictive than necessary, and thatforeign and domestic products receive similartreatment55.

While the Agreement on TBT applies tomandatory measures, voluntary approaches,

including ecolabels, are covered by the Codeof Good Practice56. WTO Members are underobligation to ensure that all standard settingbodies, irrespective of their status(governmental or non-governmental), acceptthe Code of Good Practice. Provisions includethe need for transparency in standard settingprocesses, coherence and harmonizationamong specific issues guiding theestablishment and operations of voluntarymeasures, making standards publicly available,and other efforts to establish good practices,which are important practices followed byecolabels and VSS.

The most recent “Doha round” of tradenegotiations included a WTO Ministerialdecision not to make ecolabelling part of anyround of trade negotiations, but paragraph 32of the Doha WTO Declaration stated that“labelling requirements for environmentalpurposes” should be further studied by theWTO’s Committee on Trade and Environment(CTE)57.

In the context of global trade, if labellingschemes are not applying the principles ofobjectivity, transparency, fairness, andinclusivity in standard setting, they can createmarket entry barriers. This was highlighted ina 2009 UNIDO report that raised concernsabout ecolabelling increasing the risk ofprotectionism masked as environmental orsocial PPM rules58. The 1990 “Dutch Butterfly”case is illustrative. Uzbekistan organictomatoes were barred from being sold in theNetherlands because the Dutch “Butterfly”ecolabel could only be awarded to companiesregistered under Dutch vegetable auctions,and only Dutch companies could register forthose auctions. This has been cited in OECD

52 ibid, p. 180.53 Vitalis V., “Round Table on Sustainable Development: Private Voluntary Ecolabels: Trade Distorting, Discriminatory andEnvironmentally Disappointing”, OECD, 2002. 54 World Trade Organization “Technical barriers to trade” See Articles 2.1, 2.2, and the preamble to the TBT agreementhttp://www.wto.org/english/tratop_e_tbt_e/tbt_e.htm55 UNEP “Environment and Trade: A Handbook”, 2nd Edition, IISD, 2005, pp. 38-9.56 WTO Agreement on Technical Barriers to Trade, Annex 3: Code of Good Practice for the Preparation, Adoption and Application ofStandards https://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm#annexIII57 Doha WTO Ministerial 2001: Ministerial Declaration, 20 November 2001 http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm58 The Europe and NIS Regional Round Table “Sustainability standards in international trade: Hurdles or opportunities?” UNIDOGeneral Conference, Thirteenth Session 7 – 11 December, 2009, Vienna: http://www.unido.org/fileadmin/user_media/UNIDO_Worldwide/Europe_and_NIS_Programme/Documents/EuropeNIS2009.pdf

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reports as a case of national ecolabel schemesnot allowing third parties to participate59.Ecolabels and VSS have been aware of theseconcerns and addressed them, to varyingdegrees, through best practices (described inSection I) by ISO, GEN, and the ISEAL Alliance.

From a developing country perspective,having greater WTO scrutiny of ecolabellingand standards could be a double-edgedsword. On the one hand, more WTO rulescould bring greater scrutiny to sectors inwhich short-term economic competitivenessis perceived by some to have been adverselyaffected by standards or ecolabels. Such

attention could further push WTO disciplinesinto standards setting processes and thusreduce the risk of standards being setunilaterally or without common criteria. Onthe other hand, establishing precedents atthe WTO level could entrench rules that mayeventually make it hard to bring cases to theWTO against standards that are seen to berestricting trade.60 At the same time, withinthe WTO, least developed countries (LDCs)have insisted on financial and technicalassistance to be able to meet the health andenvironmental standards of developedcountries.61 Such considerations are seen toplay out in the cases below.

59 Vitalis V., “Round Table on Sustainable Development: Private Voluntary Ecolabels: Trade Distorting, Discriminatory andEnvironmentally Disappointing”, OECD , 2002.60 Veena J., “Ecolabels from a Southern Perspective”, in “Trade and Environment: A Resource Book”, edited by Adil Najam, MarkHalle, Ricardo Meléndez-Ortiz, IISD, International Centre for Trade and Sustainable Development (ICTSD) and the Regional andInternational Networking Group (The Ring), 2007. 61 Cameron H., “The Evolution of the Trade and Environment Debate at the WTO”, in “Trade and Environment: A Resource Book”,edited by Adil Najam, Mark Halle, Ricardo Meléndez-Ortiz, IISD, International Centre for Trade and Sustainable Development (ICTSD)and the Regional and International Networking Group (The Ring), 2007. 62 ibid, p. 463 UNEP “Environment and Trade: A Handbook” 2nd Edition, IISD, 2005, p. 32.

Case study I: WTO rulings on Tuna-Dolphin and Shrimp-Turtle cases

The cases related to the “dolphin-safe” tuna standard and the Shrimp-Turtle cases against the United Statesprovide good overviews of issues related to the use of international standards and national standards inaddressing NPR-PPMs and TBTs.

The Tuna-Dolphin case: The background of this case is that in 1991, a GATT dispute settlement panel ruledagainst the United States (US) bans on Mexican-caught tuna, prohibiting tuna imports from countries withoutproper dolphin conservation methods. The US ban applied specifically to Mexican trawling methods thatkilled more dolphins than acceptable by US standards. Mexico argued that the US ban violated its rightsunder GATT by imposing a law extraterritorially, while the United States argued that Mexico was not doingenough to protect dolphins. The GATT ruled that the United States could not prescribe PPMs. In responseto this decision, the United States introduced its national “dolphin safe” tuna label. A case brought againstthe US in 1992 by the Netherlands Antilles found that the US dolphin safe tuna label was consistent withGATT. At the same time, the ruling found that Article XX of GATT did not uphold the United States’ right toprotect animal or plant life beyond its borders and that such attempts were examples of extraterritoriality62.

The Shrimp-Turtle case: The issue of PPMs was revisited in the US Shrimp-Turtle case, brought to the WTOby countries affected by a US ban on live caught shrimp from countries that did not employ technologysimilar to that specified by the United States to ensure endangered sea turtles would not drown in nets. TheWTO Appellate Body upheld the United States’ PPM-based measure under the GATT Article XX(g), thusreversing the earlier interpretation of the article in the 1991 case. Nevertheless, the Body found that the UnitedStates was at fault on processes such as specifying technology —the turtle excluder device (TED)— ratherthan specific environmental objectives; not recognizing exporting country regulations that met USrequirements; failing to explore multilateral processes for achieving similar objectives; failing to consider thecost of TEDs in developing countries; and not giving complainant countries as much time to comply with theregulations as other countries63.

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2.b Possible issues and implications ofthe recent Tuna-Dolphin WTO casefor ecolabels and VSS

One key aspect of the Tuna-Dolphin case iswhether or not VSS or ecolabels are set throughtransparent and multilateral processes, whichwould protect them under WTO guidelines onTBT. This is probably less of a concern toecolabels than it is to VSS, especially since it

remains to be seen whether countries thatcannot comply with EU ecolabels would seekWTO arbitration against the EU. This seemsunlikely under current circumstances, but theTuna-Dolphin case suggests that ecolabels —particularly developed country ecolabels— arevulnerable when a country’s own ecolabel isused for government procurement or if anecolabel is considered the norm of the sector.For example, if market demand for office paper

64 Rotherham T., “Standards and Labelling”, in “Trade and Environment: A Resource Book”, edited by Adil Najam, Mark Halle, RicardoMeléndez-Ortiz, IISD, International Centre for Trade and Sustainable Development (ICTSD) and the Regional and InternationalNetworking Group (The Ring), 2007, p. 181.65 “Mexico-United States dispute on dolphin-safe tuna: Implications of the latest ruling for the voluntary standards movement”, Board Briefing Note - November 2011 and Wilke M. and Schloemann H., “Not-so-voluntary labellingin the WTO tuna-dolphin dispute”, Bridges Trade BioRes Review, Volume 5 Number 3, International Centre for Trade and SustainableDevelopment, November 2011, http://ictsd.org/i/news/bioresreview/117757/ For additional background on the case, see the WorldTrade Organization website “Dispute Settlement: Dispute DS381”: http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm66 World Trade Organization “Dispute Settlement: Dispute DS381” http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm

This case became one of the first WTO precedents for understanding the conditions under which PPMs canbe considered acceptable. It justified the imposition of “conditions on import PPMs to accomplishenvironmental objectives both outside their jurisdiction and in the global commons” as long as suchrestrictions did not discriminate against WTO members64. This case also marked a major milestone ininternational environmental protection through trade.

The Tuna-Dolphin case revisited: In 2008, Mexico requested a WTO consultation over US requirementsfor its dolphin-safe tuna label. In 2011, a WTO Dispute Resolution Panel sided mostly with Mexico. The WTOruled that, even if a label’s use is optional, it can be considered “mandatory” if the use of the “voluntary”label is in practice de facto, or when the use of application of the label is regulated by the state, which wasupheld in a May 16, 2012 Appellate Body ruling65. The crux of the issue is whether a technical regulation isconsidered more restrictive of trade than necessary. In this case, it was ruled that US buyers of fish did nottake into account alternatives to achieving the goals of the label and that it was more trade restrictive thanan alternative label suggested by Mexico.

Article 2.4 of the TBT Agreement requires that countries base their technical regulations on existing internationalstandards and norms when they exist. In this case, Mexico argued under Article 2.4 that the Agreement onthe International Dolphin Conservation Programme (AIDCP) was the relevant international standard and shouldbe used as the benchmark for the US’s dolphin-safe label. The panel rejected this because they did not seethe AIDCP as an equivalent standard capable of providing the level of environmental protection under the USlabel. Nevertheless, the Panel did define what constitutes an international standard. In this case, they said theAIDCP qualified because the organization had a constitution, its own administration, and open membership.The Appellate Body in 2012 reversed the Panel’s finding that the AIDCP was a relevant international standardwithin the meaning of Article 2.4 of the TBT Agreement because AIDCP is invitation-only and that the Panelwas wrong in declaring the AIDCP to be “open to the relevant body of every country and is therefore aninternational standardizing organization66”.

In this case, for the first time, the WTO began to define what constitutes an international standard. Among theconsiderations was that a standard had to be adopted by an international standards body or standardsorganization, and that the standards organization had to have a constitution, its own administration, and openmembership.

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in a certain market leads to a de facto exclusionof non-labelled products, it is conceivable thatthis precedent could allow the WTO to ruleagainst the ecolabel. In the case of an ecolabel,questions thus remain about whether or not itconstitutes an “international” standard, and ifnot, what measures need to be taken to rectify.Some recommendations in this respect arenoted in section V on recommendations. Forexample, it may be important to focus more onGENICES or other forms of mutual recognitionor common criteria, which may allow ecolabelsto be considered more “international” in light ofWTO rules and disciplines. Another issue is todefine under which circumstances technicalregulations could be ruled more restrictive oftrade than necessary. This falls under Article 2.2of the TBT Agreement. The recent Tuna-Dolphincase shows that the WTO Panel sided withMexico in saying that the label was deceptivebecause it misled consumers by suggestingthat no dolphins are injured, when in fact somecan be. The Panel also found fault with the labelbeing granted to fisheries outside of Mexicanfishing areas simply because they did not usethe netting technique used by Mexico, even ifthose other techniques did not result in fewerharmed dolphins. The banning of this specifictechnique was the basis of the “dolphin safetuna” label’s claims. Nevertheless, in May 2012,the Appellate Body reversed the Panel’s initialfindings and found that alternative standardswould not achieve the US policy objectives.

The implications for ecolabelling here are thatlabelling criteria for specific or unnecessarilyrestrictive techniques or technology couldconstitute possible barriers to trade if they arenot absolutely integral to achieving specificpolicy objectives. Thus, an ecolabel developedfor Europe may have criteria that are irrelevantfor other countries and may in fact constituteunfair barriers to trade. Many stakeholdersinvolved in this ecolabelling project noted, forexample, the difficulties of labelling appliancesthat are used in different parts of Europebecause usage patterns differ. The sameargument could apply to the production,

shipping, use, or other aspects of otherproducts’ lifecycles. The relevant questions thenfor ecolabelling organizations that seek mutualrecognition and cross-border trade may bewhether they are referencing internationalstandards, for example the ISO 14020 Generalprinciples for environmental labelling or ISO14021 guideline standards for Type I ecolabels,and whether they are in line with national andinternational policy objectives, and themselvesrepresent international standards underpinnedby necessary internationalization mechanismsto argue that they are international standards.

2.c Other issues affecting trade andvoluntary labelling discussions

Many other debates and trends impact thelikelihood that countries will use the WTO orother mechanisms to argue against ecolabelsand VSS, some of which in coming years havethe possibility of helping developing countriesbecome “advocates” of such market-basedmechanisms for sustainable production,consumption and trade, including:

• The rise of private sector activities likecorporate social responsibility (CSR) andthe corresponding increase in ecolabeluse: The rise of activities that have beenbroadly characterized as CSR or corporatesustainability, often with correspondingsuites of policies promoted by governments,have become a more important factor in thespread of some environmental requirementsthan, for example, many formalenvironmental or trade policies67. Companiesof every size and geography, from leadingcorporations to small and mediumenterprises, have become important driversof sustainable procurement, which thenincrease demand for sustainable productionand raise awareness of sustainableconsumption issues.

• Changing emphasis from the legality ofecolabels to the use of ecolabels: Asincreasing numbers of WTO members have

67 Rotherham T., “The Trade and Environmental Effects of Ecolabels: Assessment and Response”, United Nations EnvironmentProgramme, 2005.

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begun to accept standards and ecolabels aslegitimate policy tools, the focus has shiftedfrom how to stop them to how to improvetheir use and effectiveness, and how todetermine which standards and ecolabelsare best to address which sustainabilitychallenges. In this case the real barrier isseen in lack of institutional and technicalcapacity to deal with standards, especially inSMEs and developing countries68. Thus,emphasis has shifted away from legalarguments against ecolabels and more todealing with the technical and institutionalcapacity in using ecolabels. Thiscorresponds to the renewed emphasis onissues like the rule-making procedures ofstandards based on transparency andopenness; increasing information andreducing barriers; increasing the affordabilityof conformity assessment; clear rules aboutaccreditation; greater involvement ofgovernment actors; more databases aboutecolabels and standards; localappropriateness and global consistency; andincreasing the opportunities for developingcountry companies to benefit fromecolabelling. Countries like China havebegun to assess which sustainabilitystandards and ecolabels play the biggestroles in enhancing the competitiveness ofChinese TNCs69. Simi TB of the ConsumerUnity and Trust Society (CUTS) noted that“an ecolabel when implemented properlyhelps to facilitate developing countryexports, as the label enhances trust of theproduct among developed countryconsumers. When implemented in a biased,casual or non-transparent manner, it mightpose a significant barrier to developingcountry exports”.

In addition to GEN’s work to increaseinternational cooperation among nationalecolabelling schemes, GEN has written thatNPR PPMs can be overcome by efforts like notlimiting access to the label, by following the TBT

Code of Good Practice, by increasing mutualrecognition (particularly information exchange,mutual confidence, agreement on mutualrecognition of testing and auditing, increasingmutual recognition of certification ), basingactivities on ISO 14024, with the expectedresults of improved understanding and reducedbarriers to use and acceptance70. ISEAL hasdeveloped a code of impact assessment todefine and measure the effects of VSS, andother labelling systems should follow suit todemonstrate the effectiveness of ecolabels andbuild a solid business case for their use. Withoutsuch evidence, the likelihood of ecolabellingschemes being seen as barriers to traderemains high.

2.d Relevance of the UNEP project to thedebate

This UNEP project attempts to illustrate thatecolabels and voluntary standards can be atrade opportunity instead of a barrier. The logicof this UNEP project has been to helpdeveloping countries take advantage ofecolabelling opportunities by building capacityto meet the criteria of ecolabels. Producers indeveloping countries increasingly have theability and interest to meet standards set inexport markets because they see theeconomic, social, and environmental benefitsin doing so. As Silvia Ferratini, from DGEnvironment of the European Commission,noted in an interview for this report, byproviding financial support to this project, theEuropean Commission wanted to informstakeholders how to use and benefit fromecolabels to overcome misperception ofseeing them as barriers to trade. “Developingcountries often fear that consumers may onlyprefer ecolabelled products, and thus theymight not be able to meet ecolabelrequirements. Instead, they could use ecolabelas an opportunity to improve their productionpatterns and to reach new segments of themarket”.

68 Rotherham T., “Standards and Labelling”, in “Trade and Environment: A Resource Book”, edited by Adil Najam, Mark Halle, RicardoMeléndez-Ortiz, IISD International Centre for Trade and Sustainable Development (ICTSD) and the Regional and InternationalNetworking Group (The Ring), 2007, pp. 184-5.69 Long G., Zadek S., Wickerham J., “Advancing the Sustainability Practices of China's Transnational Corporations”, IISD, 2010.http://www.iisd.org/publications/pub.aspx?id=130470 Polak J., “Trade as an Environmental Policy Tool? Environment as a Trade Policy Tool? GEN, Ecolabelling and Trade” GlobalEcolabelling Network, 2003 www.wto.org/english/tratop_e/dda_e/symp03_gen_ecolab_e.doc

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This section reviews the ‘Enabling developingcountries to seize ecolabelling opportunities’project’s implementers, partners, and otheractors to explain the structure of the projectand to frame the assessment of projectimpacts in Section III.

1. Project overview and goals

This was a five-year project involving UNEPand multiple partners focused on lifecyclebased ecolabels and involved multiplestakeholders from civil society, industry, andgovernment to create an enabling environmentfor the use and promotion of ecolabels. Theproject aimed specifically to help developingcountries choose one sector in which aproduct could be recognized by anecolabelling scheme in Europe, selected as anexport market with perceived demand for moresustainable products. After the selection of thesectors and existing relevant ecolabels, theEuropean Ecolabel (also called the “EU Flower”for the shape of its logo) was selected for itsregional character, which allows using theecolabelled products in 30 states in the EUcovered by the EU ecolabel programme.

In doing so, UNEP pursued wider objectives,namely:

• To improve access to regional, European,and global markets of environmentallyfriendly products from developingeconomies;

• To promote the mutual supportiveness oftrade and environment especially in rapidlyemerging economies such as Brazil, China,India, Mexico, and South Africa. To increasethe international competitiveness ofdeveloping countries’ manufacturingproducts, such as Kenya’s and Ethopia’s;

• To increase the reliability of ecolabels asmarketing instruments;

• To change developing countries’perceptions of environmental labelling fromunintentional technical barriers to trade, toaccessible tools to improve internationalcompetitiveness that can expand theirnational and international market shareswhen integrated into both nationaleconomic strategies and company businessstrategies71.

Project rationale: As necessitated by currentdebates about the roles of voluntarystandards and ecolabels in promotingsustainable trade or as constituting barriers totrade and the growth of corporatesustainability around the globe, the project’sunderlying rationale was that sustainableconsumption and production tools are nolonger seen as only for developed countries.Because trade continues to play an importantrole in the economic rise of emergingeconomies, it can be a vehicle to promotemore sustainable production andconsumption patterns. Lifecycle basedecolabels (mainly ISO Type I), as voluntary,participatory market-based tools, are bothopportunities and challenges for developingcountries. The project was designed with therealization that, in order for developingcountries to benefit from ecolabels, theyneeded more and better information aboutvoluntary standards and requirements invarious export markets like the EU in order tomeet ecolabelling requirements. Thegovernments of developing countries alsoneeded to understand ecolabels as tools topromote their own sustainable consumptionand production frameworks and useintegrated policy mix including variousstandards strategically in their developmentstrategies.

III. UNEP project description, partners and structure

71 http://www.unep.fr/scp/ecolabelling/background.htm

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The overall objective of the project was toincrease the environmental efficiency of keyexport products and related industrial processesin the target countries supporting theirindustries’ and governments’ active contributionto the 10-Year Framework of Programmes onSustainable Consumption and Production,adopted at the United Nations Conference onSustainable Development (UNCSD) ‘Rio + 20’Conference in June 2012, in order to increasethe environmental efficiency of key exportproducts and related industrial processes.

The project’s specific objective was toincrease the number of products produced intarget countries reaching EU markets asecolabelled with the EU Ecolabel or otherEuropean ecolabels. At a global level, theproject focused on promoting cooperationamong ecolabelling programmes. At countrylevels, the project focused on strengtheningnational ecolabelling systems.

The project’s expected results were:

• Improved understanding and knowledge onecolabelling diffusion, market penetration,barriers and capacity building needs intarget countries and the establishment ofmultistakeholder dialogues;

• Strengthened capacity on ecolabelling andits application and promotion among keyindustry representatives, industrialdesigners and government decision-makers as well as local trainers in targetcountries;

• In each target country, at least one productstarted the process of obtaining the EU oranother European country ecolabel andincreased attention of government decision-makers to the question of promotingecolabelling.

• Roadmap developed toward mutualrecognition of ecolabelling schemes throughincreased cooperation among targetcountries’ and European ecolabellingschemes.

• Lessons-learned from the project shared atregional and global level with as manypotential users of ecolabels and ecolabelling

bodies as possible, leading to maximizedpossibility of replication of the experience.

The project’s main activities were:

• Background and assessment activities,including the establishment ofmultistakeholder dialogues in the targetcountries;

• Capacity building on ecolabelling forindustry representatives, industrial designersand government decision-makers;

• Technical assistance for industrialrepresentatives willing to have the ecolabelawarded to their products and togovernment decision-makers developingpolicies for ecolabelling promotion;

• Exchange of information and knowledge onthe opportunities and the procedures ofincreased cooperation among ecolabellingschemes;

• Development of a roadmap for greatercooperation and mutual recognition amongecolabelling programmes, especially thosefrom developed and developing countries;

• Dissemination of project lessons learned atregional and international level and set thebasis for the replication of the experience.

The project also aimed to achieve multipliereffects, leveraging larger countries influence inthe region such as India, China, Brazil, Mexico,or South Africa to engage its neighbours in theprocess, which could affect trade andproduction patterns.

2. Partners, targets, roles and activities

UNEP carried out all project activities in closecollaboration with national and internationalpartners, as well as with other expertconsultants.

The project’s specific implementation stepsincluded:

• Baseline assessment studies to understandthe ecolabelling diffusion, market

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penetration possibilities and related policyframeworks in each country;

• National roundtables and consultationworkshops in every country, which werelinked with other UNEP projects, likesustainable consumption and production(SCP) roundtables. SCP roundtables includedall UNEP activities on sustainableconsumption and production, not onlyecolabelling;

• Development of the training manual andtraining of trainers to prepare nationalexperts;

• National-level training workshops to workwith key companies and governments;

• Technical assistance to companies to meetthe requirements of the ecolabel;

• Regional conferences and events fordissemination and outreach.

The project counterparts in China, Brazil,Ethiopia, India, Mexico, Kenya, and SouthAfrica were responsible for coordination of theproject with UNEP and nationalimplementation of activities.

Table III: Project partners, countries, and roles

Country: MexicoSector: footwear Partner: MexicanInstitute forStandardizationand Certification

Country: BrazilSector: paperproducts Partner: Ministry ofDevelopment,Industry and Trade

Country: EthiopiaSector: footwear Partner: EthiopianStandards Agency

Country: GermanyPartner: Capacity BuildingInternational (InWent, whichbecame part of GIZ)Federal Environment ProtectionAgency

Global partners:GEN and EC

Country: IndiaSector: textiles Partner:Consumer Unityand Trust Society

Country: ChinaSector: electronics(televisions) Partner: Sino-JapaneseFriendship Centrefor EnvironmentalProtection

Country: KenyaSector: footwear Partner: KenyaNational CleanerProduction Centre

Country: South AfricaSector: textiles Partner: Council forScientific and IndustrialResearch

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This section focuses on the assessment ofthe project results in relation to the projectgoals. Methodologically, this report wasprepared after reviewing all projectbackground documents, interviewing keypeople involved with the project, andreviewing relevant literature. The sectionreviews the project as a whole, including asector-by-sector analysis and a country-by-country analysis.

1. Overall Project Goals and ResultsAnalysis

i Improved understanding on ecolabellingdiffusion and market penetration and thebarriers to ecolabelling in target countriesthrough multi-stakeholder dialogues.

John Polak, who served as a trainer andinvited expert for the project, said that ithelped to bring people together, promotingnetworking and sharing of experiencesamong different people. Eva Eiderström, whoattended the start-up workshop in Bonn,Germany and participated in the project frombeginning to end said that due to labelling’smultidimensional nature and multistakeholderstructure, it can unite different types oforganizations and stakeholders. “It was veryvaluable to provide a platform for groups fromnational industries, civil society, ministries anddepartments to come together and discuss anew common issue like ecolabelling ofproducts”. There was no established view onwhat labelling was or was not; thus bydisseminating complete and objectiveinformation, the project could shape opinionsabout these tools. Liazzat Rabbiosi, projectcoordinator from UNEP, considered that themethodology of the project based on themultistakeholder format of cooperationhelped the groups to inform each other abouttheir realities and has proven to be a valuableand interesting learning experience. She

noted “these dialogues have kept goingduring project implementation and willhopefully carry on as long as the countriessee the need for them”. “A lot more peopleunderstand the EU label now”, said RahulBhajekar, a trainer of trainers in India andManaging Director of Texanlab Laboratories.Mr. Liu Zunwen, Vice Director of theEnvironmental Certification Centre of theChinese Ministry of Environmental Protection,noted that he and his colleagues felt that theyplayed a bridging role between Chinesecompanies and the EU to help Chinesecompanies learn more about the EU Ecolabel.

At the cross country level, the cooperationwith colleagues from other participatingcountries provided invaluable exchanges ofexperiences and knowledge. The format ofthe project, with countries from differentregions experiencing similar external andinternal pressures, was helpful inunderstanding better their own context andsituation and how to deal with theseproblems. The experience of the project inthis respect was very valuable, as noted bymany project partners.

Stakeholders from developing countriesviewing ecolabels as enablers of trade,rather than barriers: The project seemed toreinforce positive views among targetindustries of ecolabels as instruments thatcan increase competitiveness and integrationin international markets rather than act asbarriers to trade. While partners directlyinvolved with the process probably alreadybelieved to some extent in ecolabels aspotential tools to enable trade, greaternumbers of other stakeholders shared themore positive perceptions of ecolabels dueto improved understanding of how theyoperate and of benefits they can provide.John Polak said “this project turned thatideology [that ecolabels are a barrier to trade]totally on its head”.

IV. Project Analysis

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The global picture is supportive of this trend.The sales of certified and ecolabelled productscontinued steadily increasing even during thefinancial crisis of 2008 and beyond, which isan indication of the growing importance ofecolabels as tools for differentiating moresustainable products on global markets. Forexample, the International Institute forSustainable Development (IISD) estimated thatthe production of goods compliant with majorvoluntary standards systems is now reachingsignificant levels of market penetration, over10% of global production72. The Oeko-TexStandard, the independent certificationsystem of environmentally and sociallyresponsible textile production, reported anincrease of certified companies by about 20%in 2011 alone73.

ii Strengthened capacity on ecolabellingand its application and promotion amongkey industry representatives, andgovernment decision-makers as well aslocal trainers in target countries.

Antonio Juliani of the Ministry ofDevelopment, Industry and Foreign Trade(MDIC) in Brazil noted that they engaged inmany activities in order to increaseawareness on ecolabelling. He noted that “itwas our first such experience and it was veryimportant for us to strengthen the ecolabel inBrazil”. All local partners and other localstakeholders expressed the feeling that morepeople understand what ecolabels are andthe way they operate in the market throughwell prepared training material andworkshops.

Some representatives from companies, suchLuis Angel Sanchez Ramirez, the DirectorGeneral of Caborca in Mexico, suggestedthat capacity building efforts only took thecompanies half way, and if companies reallywanted to succeed, they had to have theincentive and capacity to achieve EUecolabel specifications on their own.

Training the trainers seen as widelysuccessful: Silvia Ferratini said that thetraining the trainers was very successful andshould be replicated in the future. “It’s veryimportant to create the know-how that staysin the country. The number of trained peopleshould be maximized”. Rahul Bhajekar, atrainer for India, said that “after the firsttraining in Bonn, the trainers understoodconcepts of how the EU Flower label andother Type I ecolabels worked, not just fortextiles, but also for other products”. “Weunderstood regulations, differentperspectives, and criteria for different sectorsand secondly we met a bunch of like-mindedpeople. That was a great experience”.Berthold Hoffmann said “all partners are well-prepared and equipped. Some best practiceexamples show the huge possibilities ofcertain products and are an encouragingexample for others, who might still finddifficulties. The network support has providedassistance and is likely to continue to do so”.Liazzat Rabbiosi, project coordinator atUNEP, noted that the project was successfulin this respect. “We trained 23 nationalrepresentatives to become experts onecolabelling. We organized eight consultationworkshops of national and global scopewhere we reviewed in depth all the issuespertaining to labelling, its potential for take-up in the selected countries, and barriers andopportunities. We conducted a study with thesame objectives, which also suggestedspecific roadmaps forward to overcome thebarriers and enhance the opportunities.Before developing the training, we consultedwith all project partners on their specificneeds and wishes for what the trainingshould cover. The national workshops took amultistakeholder format with representativesfrom different groups invited to dialogueabout tools such as ecolabelling. Themultistakeholder format has helped thegroups to inform each other about theirrealities and this has been an interestinglearning experience”.

72 Potts J., et al. “The State of Sustainability Initiatives Review 2010: Sustainability and Transparency”, IISD, 2010, International Institutefor Sustainable Development, available http://www.iisd.org/pdf/2010/ssi_sustainability_review_2010.pdf73 https://www.oeko-tex.com/de/worldwide.html

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iii Achieve at least one product certified ineach country or have one product in eachcountry be in the process of obtaining theEU ecolabel or another European countryecolabel, and bring increased attention ofgovernment decision-makers to thequestion of promoting ecolabelling.

Meeting this overall objective was achievedin six of the seven countries (noting thatEthiopia joined the project later and the focusin Kenya changed), with at least 11companies applying for EU ecolabels with themarket’s highest environmental standards inthe given product category. All countriesexcept for Kenya achieved this goal. Perhapsmore companies could have gained ecolabelrecognition if certain issues had beendifferent. These include the lack of or delayedresponse from the competent bodies in theEU, or changes to application forms andrequirements during the middle of theapplication process for some companies.

Increased government attention toecolabelling seems to have been achievedespecially in countries like South Africa,Mexico, China, and Brazil where governmentor government-affiliated agencies backed theproject. All stakeholders in those countriescommented on how specific governmentoffices were more aware and starting toengage in new ways. Mexico and Brazil havedeveloped national SCP strategies and actionplans. In 2010, South Africa launched theIndalo Yethu African National EcolabellingScheme as part of the effort to develop thenational Green Economy Strategy. In India,where the national ecolabelling programme‘EcoMark India’ has been long inefficient andlacked any support and demand, the projectdid not contribute to a noticeable positiveshift. It is interesting to note that even withouta supportive domestic environment, a numberof Indian textiles products, in a sector that ispredominantly SME-based, were awarded theEU ecolabel or certified with other commonindustry standards, mostly due to the marketdemand and pressure.

More details about increased governmentattention to promoting ecolabelling aredetailed in the country-specific results below.

iv Roadmap developed toward mutualrecognition of ecolabel schemesthrough increased cooperation amongtarget countries and European schemes.

This expected outcome was harder toachieve than others. Though a roadmaptoward mutual recognition was created, thisroadmap was not made public because oftheoretic disagreements on the extent ofpossibilities for greater cooperation.

Silvia Ferratini noted that the project onlyaimed at developing a roadmap towardmutual recognition that would lead to greatercooperation among ecolabellingprogrammes. While some ecolabellingprogrammes from countries participating inthe project had an aspiration for a possibilityof mutual recognition with the EU Ecolabel,its legal basis, Regulation (EC) No 66/2010does not allow it at the moment. This can beconsidered in the next revision of the EUEcolabel planned in 2015.

At another level, there was also a concernamong some GEN stakeholders that GEN didnot have enough ownership over the processto accept the roadmap as a joint effortbecause the resulting document was notaligned to GEN’s goals and processes. SomeGEN representatives felt that the roadmapprocess was driven too much by externalexperts that did not fully understand GEN’sexisting goals. For example, Ms. Eiderströmnoted that GEN does not have the mandateor resources to formally assist in developingecolabelling programmes in other countries,so there were too many elements of wishfulthinking in the roadmap developmentprocess. Part of this was the difficulty of GENas a network of ecolabels to enter into legalagreements with UNEP to carry out this workjointly, which is complicated by thedemocratic structure of its 27 members thatmakes decision-making difficult.

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v Lessons learned from the projectshared at the regional and global level soas to maximize the replicability of theproject.

This final report serves as part of the outreachfor this project. As such, its effectiveness asa project learning tool is for readers toevaluate. The project went through anindependent terminal evaluation process,which is part of the project implementationprocedures at UNEP.

Of possible scoring from Highly Satisfactoryto Highly Unsatisfactory, the project wasassessed as satisfactory and the results ofthe evaluation are available on the UNEPwebsite74. The internal project meetingreports and presentations were used todevelop this report. Online learning toolsdeveloped for this project are also usefulresources. Other stakeholders noted thatthere was cross-learning, for example,between the Indian textiles sector and theSouth African sector. Andre Page, ProjectManager of the Clothing and Textiles projectat the National Cleaner Production Centre inSouth Africa, noted: “South African expertscould liaise and that kind of assistance wasimportant—being able to have continuouscontact. Partners in India did the same. Rahul[Bhajekar] was also very helpful and offeredassistance. We appreciated that. It was veryimportant”. More examples of this cross-learning are noted below in Section B onsectors and C on countries below.

2. Other project impacts andevaluation of those impacts

Bringing other countries into theecolabelling fold: The Eco Mark AfricaProgramme (although not an ISO Type Iecolabel) and the South American RegionalCooperation on Ecolabelling for SouthernCone Countries seem to have benefitted fromhaving strong examples from countries likeSouth Africa and Brazil. As stated in the

original project proposal, the project wasdesigned so that “the selection of emergingeconomies such as China, India, Brazil,Mexico, and South Africa will increase theimpacts of the project that will benefit fromthe size of their economies and theirpossibility to bring their neighbour countriesinto the process”. In India, CUTS used theiradvocacy and networks to spreadinformation about the project to other SouthAsian countries. CUTS reported that textilecompanies from neighbouring Bangladeshand Pakistan approached CUTS and UNEPto learn more about this project. Ethiopiajoined the project at a later stage through thenetwork of National Cleaner ProductionCentres of which the Kenya project partner,KNCP, is also a part.

Expectations: Even though the basicrequirements of the project were met, therewas a sense among some stakeholders thatexpectations were too high. Former GENchair John Polak noted that this was anambitious programme. “My only concern isthat it might have raised expectations beyondwhat was achievable”. He added “if you saythat success is four countries using ecolabelsand marketing to the EU with mutualrecognition, then we did not get far down thatpath. If it was about capitalizing on [ongoing]activity around the world, then it wassuccessful”. There was a sense then that theproject did not uniformly build the capacityfor companies to improve their environmentalperformance, but did enable them to useecolabels where they might not haveotherwise used or been aware of them.Nevertheless, these companies can serve asmodels to others in their sectors, regions,and beyond.

Improving environmentally preferabletrade: John Polak said, “If you go back to theobjective of the project, which was tofacilitate the trade of environmentallypreferable products into developed marketplaces, then there was not enough analysison the trade patterns and levels of economic

74 Russillo A., “Enabling developing countries to seize ecolabel opportunities - Capacity building and technical assistance for industriesand governments in developing economies” UNEP Terminal Evaluation, 2012.

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activities involved in the target companies”.For example, in China, the model of televisionselected to apply for the EU ecolabel turnedout to have little consumer demand inEurope. Stakeholders suggested that theinitial product roadmaps should have beenmore focused on markets and may have beentoo theoretical for a practical application.

Ability to take advantage of tradeopportunities, especially for small andmedium enterprises (SMEs): Companiesnoted in interviews that they were looking forincreased recognition and the follow-on tradeimprovements that come from usingecolabels in European markets, but theresults appear mixed. Although companiesthat succeeded in achieving recognition bythe EU ecolabel may have been gained tradeadvantages, but getting the label did notnecessarily help all companies trade moreproducts where the demand side was notgiven adequate consideration.

Overcoming the challenges and barriersecolabels pose to developing countries:Company interviewees said that the projectdid well at educating them about ecolabels ingeneral, but fell short in overcoming somespecific problems. At the same time, mostinterviewed stakeholders suggested thatcompanies benefiting from this project werealready more or less able to meet theecolabelling criteria without the need toextensively upgrade technology. Even thoughthe developing country companies involvedsaid the cost of application for the EUEcolabel was not a major concern,nevertheless, the tests to demonstratecompliance with specific criteria of theecolabel were seen as barriers in somecases. The costs of such tests are highbecause they often need to be performed inrecognized laboratories in Europe due to thelack of such laboratories in origin countries.This was the case of footwear companies inMexico. This is changing though as countriesbuild their own expertise and related facilities.Information barriers were another challenge,but the project helped companies both fill inthe forms and to some degree helpedcompanies assess and meet (throughfinancial grants) the costs and benefits of

ecolabels. The textile companies in SouthAfrica experienced another major constraint,namely the lack of domestic intermediateproducts that qualified for ecolabelled status.One footwear company in Ethiopia hadtrouble getting the content of COD inwastewater treatment in their tanneries at therequired level. While the COD level was in linewith national norms and standards, it was fartoo high for the EU Ecolabel. These highlightstructural problems that may best be solvedin an integrated manner taking a supply chainor sectoral approach.

3. Sectors

This section analyses the four sectors andtheir relevance for being targeted forrecognition by the EU Ecolabel, namelyfootwear (Ethiopia, Kenya, and Mexico),appliances (China), paper (Brazil), and textiles(India and South Africa).

3.a Footwear

Background: In Kenya, the footwear industrycontains a high percentage of workers in theinformal sector, which was a challenge asecolabels are based on evaluation within moreorganized production systems. There was nota single enterprise in Kenya large enough andinterested in applying to the EU Ecolabel. Theonly two large footwear companies weremostly focused on domestic markets wherethere was little to no demand for shoes withmore environmentally preferable features. InEthiopia, the footwear sector enjoys stronggovernment support, being one of thestrategic sectors of the industrialdevelopment programme orientated towardquality improvement and trade expansion. InMexico, the sector is highly industrialized andis based on cluster development with entiresupply chains located in a number of hubsaround the country.

Having a stable product in the fast-changingfootwear industry was also a majorconsideration, so cowboy boots andchildren’s shoes were chosen in Mexico,classic men’s shoes in Ethiopia, and theKenyan case focused on Maasai sandals, all

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of which have fairly unchanging designs thatfit ecolabelling’s rigorous and often lengthyapproval process.

Assessing the effects of the project on thedevelopment of sustainable businesses inthis sector: Although trainers in Mexicolearned much about how ecolabels work onthe example of the EU Ecolabel, private sectoractors did not find capacity-building effortssufficient. The two Mexican companies toapply for the EU Flower spoke more of theirown company contributions to improvingproduction rather than the help they receivedin applying for the labels. Exporting to theUnited States market, especially California,meant that companies were already requiredto meet strong environmental regulations.Thus, the companies introduced few technicalchanges to qualify with the EU Ecolabelstandards. The main challenge, noted bypartners and companies, was cooperationwith suppliers to improve and get relevanttestimonials of compliance. A series ofmeetings and workshops had to be organizedby the project partners and companies tosensitize and train suppliers on the benefits ofecolabels and procuring the right declarationsand tests to show the compliance with certainstandards. As noted earlier, in Ethiopia, theissue of tanneries not complying with therequirements of COD levels put the processto a halt. In Kenya, the project helped bringstructural problems of the industry to theattention of the government. It also facilitateddiscussions on how to move forward andrealize the objective of improving thecompetitiveness of the leather and footwearindustries.

Companies in Mexico and to a certain extentin Ethiopia, benefited from the informationreceived and skills developed from theirparticipation in the project. Notwithstandingtechnical challenges, they were enthusiasticabout their work, and will serve as models forother companies to follow.

3.b Appliances

Background: The electrical appliance sectorwas the most relevant choice for China whenselecting the sectors, which were narroweddown to the television industry. Due to rapidtechnological changes and the volume ofexport, it was seen as a prime sector tobenefit from the use of the EU Ecolabels forexport to Europe75. Energy consumption is akey impact associated with electricalappliance products and a number of VSSfocusing on energy efficiency, such EnergyStar or the EU Energy label, are highlysuccessful in this sector. Additionally, the useof resources and chemicals and disposal oftoxic waste are other major considerations inthe lifecycle of these products, which aretaken into account by Type I ecolabels.

Assessing the effects of the project on thedevelopment of sustainable businesses inthis sector: Surprisingly only one companyexpressed interest in applying for the EUEcolabel. Nevertheless, the data areinteresting and tell a different story. At thebeginning of the project, no products in thecategory of electrical appliances had beenawarded the EU Ecolabel, but by the end ofthe project in 2012, the EU Ecolabel onlinecatalogue included a number of suchproducts from Chinese companies. Assigningdirect causality to this project is difficult, buttrends of overall growth in environmentalawareness and mainstreaming sustainabilityin the business sector in China areremarkable. The choice of a company, whichhad a production base in the Czech Republicand could thus benefit from the interactionwith the EU Ecolabel Competent Body in thatcountry, was successful. However as notedearlier, the industry is subject to fasttechnological changes. Thus, the marketbenefits may be minimal due to low Europeandemand for this line of televisions. Moredetails are noted in the section below onChina.

75 Scheer D., Rubik F., Gold S., “Project Background Paper for ‘Enabling Developing Countries to Seize Ecolabel Opportunities’”,2008, Institute for Ecological Economy Research. 76 ibid

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3.c Paper

Background: This sector comprises arelatively large segment of the Brazilianeconomy, representing 1.2% of BrazilianGDP, and can compete on price and qualityfor the production and export of pulp andpaper products from nearly any region in theworld76. Worldwide, many actors in the sectorare at the forefront of business sustainabilitydue to both regulatory and non-regulatorypressures related to forest and related supplychains management.

Assessing the effects of the project on thedevelopment of sustainable businesses inthis sector: Given the advanced state of thepaper industry in Brazil and the targetcompanies’ use of existing standards likeFSC and PEFC, achieving ecolabelcertification by one Brazilian company shouldhave been relatively straightforward.Nevertheless, project partners said thatconvincing local companies to apply for theEU Ecolabel was one of the challenges in thisproject. It took a large market player, theInternational Paper do Brazil (IP), to lead andgain recognition by the EU Ecolabel forprinting and copy from one of their Brazilianmills. Other local producers remainedhesitant due to perceived lack of demand andonly showed signs of interest once IPobtained the EU Ecolabel.

Several stakeholders observed that paperproducts were an ideal candidate forecolabelling because the sector faced fewcompeting standards, unlike textiles. EvaEiderström also noted that InternationalPaper of Brazil already had global reach andexport channels, which also made it anattractive candidate for EU Ecolabelrecognition. Andre Page of the South AfricanNCPC said that pulp and paper was also oneof their priority sectors in South Africa andhas proven to be successful as in the case ofBrazil, noting that pulp and paper might besomething for South Africa to highlight in thefuture.

The project successes and lessons learned inBrazil may be more important not in relationto the chosen sector but to the selection of alarge company to lead the way and ofgovernment partners, who were able toinfluence companies and other stakeholdersin the government to increase ecolabellingactivities. More details are noted in thesection below on “Brazil”.

3.d Textiles

Background: The textile sectors of India andSouth Africa faced many common issuesrelated to the proliferation of similar orcompeting standards, such as GOTS (theGlobal Organic Textile Standard), Oeko-Tex,and other standards that many stakeholdersneeded to understand and differentiate fromType I ecolabels, especially in being able tounderstand market demands for each. TheIndian textile has a strong sectoral union andhas a good supporting infrastructure likeaffordable testing laboratories. Thefragmentation of the textile sector in SouthAfrica resulted in issues like difficulty insourcing sustainably and locally as well asfinding companies big enough to demandchanges in the supply chain, which held backprogress within the project period.Additionally, there was a lack of interest fromEU buyers and retailers, and specifically aperceived or actual lack of demand from EUconsumers for the EU Ecolabel. In bothcountries some stakeholders expressed asense that in the textiles sector there wereother more popular labels, such as organic orFairtrade and that the EU Flower lackedrecognition and awareness.

Assessing the effects of the project on thedevelopment of sustainable businesses inthis sector: Despite the demand sidedifficulties, the project has played a positiverole in shedding light on differences that existamong numerous voluntary standards andlabels in this specific sector, and buildingskills to apply for a lifecycle based ecolabel.Also, given the links to the government of the

76 ibid

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project partner, the National CleanerProduction Centre (NCPC) at the Council forScientific and Industrial Research (CSIR) inSouth Africa, the support and promotion ofthe textile sector’s competitiveness andenvironmental sustainability have gainedmore prominence in the national industrialagenda.

More than other sectors, partly attributable tothis project, and partly due to the nature ofthe local networks, the textile sector in bothcountries seemed to have developed some ofthe strongest multi-stakeholder networks andcross-sector learning in the project, withseveral companies applying for Europeanecolabelling recognition. In India, CUTS wasalso able to assist the producers fromneighbouring countries interested inecolabelling process.

4. Countries

This section focuses on analyzing theproject’s impacts from the point of view of acountry-by-country analysis.

4.a Brazil

The project advanced the case for ecolabelsamongst the Brazilian government and wasalso a model of how governments can takeleadership in the ecolabelling arena. The factthat the project partner was in the trade andindustry promotion department of theMinistry of Development, Industry and Trade(MDIC) was a good strategic choice for theproject, enabling partners to significantlyadvance the project’s objectives. AntonioJuliani of the MDIC noted that it wasimportant for him that the project’s scopewas in line with government policy and hisdirect role in the ministry. Part of his ministry’smandate was also to work with the privatesector, understand their needs, and promoteits competitiveness, so there would havebeen a different dynamic if he had beenworking for the ministry of environment.Liazzat Rabbiosi, echoing the sentiment,pointed out that “the involvement of thegovernment has turned out to be crucial. This

relates to the weakness of the projectperhaps in some countries—the lack or weakinvolvement of the government. Theirstronger participation would have enabledmore sustainable impact”. According tointerviews, the topic of ecolabelling wasnovel and awareness about its role was low.However, the different ministries seem to bemore open to continuing with these projectsand with ecolabelling in Brazil, demonstratedin the National Action Plan for promoting SCPrecently adopted in Brazil, in whichecolabelling and credible product informationand consumer information tools play animportant role.

Convincing companies to join was thehardest task, according to Carla Braga deMiranda, who was involved in the project onbehalf of the Ministry of the Environment. Shesaid getting the Ministry of the Environmentmore involved was also a challenge becauseof the ministerial emphasis on differentapproaches. Mr. Juliani noted that they usedtheir position in the project and thegovernment to relate ecolabelling to thecompetitiveness of Brazilian products, whichwas more attractive to companies alwayslooking for tools to stay competitive in globalmarkets. Companies seemed to be at firstconcerned about the price, however having acredible ecolabel on a product confirming theenvironmental superiority of a specificproduct over another was seen as anopportunity to access new markets. AntonioJuliani notes that indeed businesses in Brazilhave a legitimate concern about tools suchas ecolabelling being commercial barriers.However, they also increasingly realize that itis important to stay ahead of the game andbe competitive based on factors related tosustainability. For example, InternationalPaper of Brazil, a subsidiary of themultinational brand, was able to use the EUecolabel to help place its own brand“Impulse” from a Brazil paper mill on theEuropean market and to bolster the relativelyunknown brand.

The capacity building component of theproject played an important role in the caseof Brazil, especially understanding the

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processes of gathering and submitting thedocuments to the Competent Body ormaking necessary calculations on emissionsand energy use. The information on the useof ecolabelling in sustainable publicprocurement and integrated policy approachof this tool was an important aspect for thegovernment. By the end of the project, anSME in the textile sector came forward withinterest in getting the EU Ecolabel.

Antonio Juliani noted that four years of effortyielded the first Brazilian products labelled bythe EU Ecolabel and that this was also the firstproduct to be labelled by the Brazilianecolabel. It is clear from interviews thatworking on this project was a good source oflearning for the Brazilian ecolabellingprogramme. Brazilian partners used thisopportunity to strengthen their ecolabel, whichis currently going through the GENICESprocess in GEN. Antonio Juliani noted that theBrazilian ecolabelling programme did not havesufficient criteria for paper products. Thus theyused the same criteria as the EU programmewith the objective of achieving mutualrecognition. While mutual recognition with theEU Ecolabel at this stage was not feasible, itwas significant to have a product that waslabelled both by the EU and Brazilian labellingschemes, according to Antonio Juliani.

4.b China

Mr. Liu Zunwen, vice-director of theEnvironmental Certification Centre of theChinese Ministry of Commerce, had overallsupervision of the project. His centre is alsoin charge of operating the Chinese Type Iecolabelling programme. The staff of thecentre involved in the project had a goodunderstanding of ecolabelling. The uptake ofthe national programme in the country hasbeen on the rise for the last decade,especially boosted through its use in thegreen public procurement policies of thegovernment. The main interest for theChinese partners was in increasingunderstanding of the voluntary environmentalrequirements of the EU market. Mr. Liu saidthat his team originally sent three experts tothe training of trainers, especially focusing onEU Flower regulations related to televisions.

They invited 20 interested companies toattend the national training workshop.Through this process, he said his teamselected Chonghong brand televisions tohelp them apply for the EU Flower.

As noted by project partners in China, one ofthe biggest challenges was low awarenessamong businesses about ecolabel conceptsand requirements and in generalenvironmental awareness. Later in theprocess, it also became clear that thetelevision selected for the EU ecolabel wasnot in high demand in EU markets. Havingthe mutual recognition with the EU ecolabelwould have made the case for promoting EUEcolabel in China easier.

Through their involvement in the project, andgetting more information about therequirements of the EU ecolabel, Mr. Liu saidthat they have become “more comfortableplaying a bridging role between Chinesecompanies and the EU”. They felt like thisproject was good for spurring trade ratherthan constituting a barrier to trade.

Most importantly, Mr. Liu noted that thisproject helped them understand how to workin this area and in the next national follow upphase to the project they would focus ongreen printing. This will be easier due to thegovernment support and link with publicprocurement, according to Mr. Liu. “Withgovernment support, these projects areeasier, and we can attract more companiesand bring more advanced productiontechniques to China”.

4.c Ethiopia

Ethiopia joined the project at a later stage,being invited by the Kenyan National CleanerProduction Centre. The footwear sector in thecountry has enjoyed strong growth anddynamism, with a number of companiesexporting to the EU and North Americanmarkets. Initially three companies wereidentified and two eventually decided topursue the EU Ecolabel.

Given its later inclusion in the project,Ethiopia was not involved in the original

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national consultation process that helped tocreate a platform for further implementationof the project in other countries. A visit by aEuropean expert from a footwear technologyinstitute specializing in the application of theEU Ecolabel in the industry was organized toexamine the situation in factories, consultstaff, and develop a roadmap for obtainingthe EU Ecolabel. Melaku Mengistu of theEthiopian Standards Agency recounts thatthe factories enacted many of theimprovements outlined in the road map. Theirmain problem was related to meeting theCOD content of wastewater in the tanneries.He noted that the factories have sought toaddress this by sending a formal letter to themain leather supplier, the Ethiopian TanneryShare Company, so that this company couldreduce the COD content. The nationalrequirement for COD level is 500 mg/litre. Thetannery has since reduced the COD leveldown to 320 mg/litre but there is a need forfurther improvement to meet the EUrequirement, which is 250 mg/litre.

Melaku Mengistu noted also that they haveraised awareness among major stakeholderssuch as the Ministry of Trade, Ministry ofIndustry, Ministry of Science and Technology,tanneries, shoe factories, the Leather andShoe Manufacturing Association, the LeatherIndustry Development Institute (which has anaccredited testing laboratory) and academia(such as Addis Ababa University). He notedthat ESA/ECPC continues to lead thisdialogue, coordinating and facilitating withthe aim of helping at least two shoe factoriesobtain ecolabels for their products.Nevertheless, the Ethiopian StandardsAgency noted that more needed to be doneto take this issue up at the policy level andnoted that one of the weaknesses of theproject was its short duration.

4.d India

With the support of this project, two Indiantextile companies have applied to the EUEcolabel. At the close of this project, a thirdcompany was, with support of experts fromthe project, also in the process of applying.Simi TB from the Consumer Unity and TrustSociety (CUTS) noted that four other Indian

companies were awarded the EU Ecolabelover the last few years, three of whichattended trainings organized by CUTS. RahulBhajekar noted that the first Indian companyto be certified to the EU Ecolabel had alreadyapplied before the first training and had seenthe EU ecolabel as “an opportunity for theirbusiness to grow”. Even though thecompanies were large, Bhajekar did not thinkit was easy for either of them given how muchinformation the EU Ecolabel requires fromcompanies. Bhajekar and others noted thatthe Indian textile sector is very fragmented sothat working with suppliers like yarn makers,dye companies, and others becomesburdensome. It is difficult even for largecompanies to obtain authentic informationfrom their supply chains. Much depends alsoon the textile used in final products. As wasa common refrain in this project, stakeholdersnoted that smaller suppliers were often notinterested in changing their practices to meetstandards recognized by European ecolabels.

CUTS itself described ecolabelling and SCPtools in India as being at a very nascentstage. The Indian government has not beenreceptive to ecolabelling and refrained fromparticipating in project meetings. IndianEcoMark, a Type I ecolabelling programmeestablished in 1991, has been ineffective ingaining recognition and market visibility.Liazzat Rabbiosi noted that “the challenge isto reach governments because some partnerorganizations may not have enough leverageto engage them. It has been hard to bring inthe government in India, because they werenot interested”. At the same time, there is anoticeable growth of interest in sustainableconsumption among middle class in thecountry. However, mistrust in companyclaims and the proliferation of greenwashinghas also undermined the credibility of thebusiness sector’s sustainability efforts in theeyes of consumers. This may be anopportune moment to revive the nationalgovernment-supported programme thatprovides credible information about products’environmental and social attributes. In fact,some dialogues are taking place on how torevamp the existing labelling programme andintroduce other approaches to promotesustainable consumption.

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Simi TB from CUTS said: “Indian industriesare largely in need of technical assistanceand environment friendly moderntechnologies. Particularly SMEs have basicknowledge about ecolabels. What theindustries in India need is timely informationabout labelling requirements and soundtechnical assistance”. She noted that theproject, and in particular the multi-stakeholder dialogues, were successful inraising the awareness and knowledge ofstakeholders about ecolabelling and relatedtopics.

Stakeholders interviewed also noted that themarket often lends support for other standardsbesides ecolabels. It was noted, for example,that retailers and buyers in the EUdiscouraged Indian companies from applyingfor the EU Flower label and instead askedthem to focus on other certifications likeGOTS and regulations such as REACH(Registration, Evaluation, Authorization andRestriction of Chemical substances).According to CUTS, late responses from thecompetent bodies in the EU also dissuadedmany companies. CUTS said that a lack offocus on buyer demand —a failure to involveretailers and buyers in the EU— was one of theshortcomings of the project.

As regards the training of trainers, threenational experts from India were equipped todeliver training about the concept ofecolabelling, European ecolabellingprogrammes, the technical requirements forthe target products to be labelled, and howcompanies and governments can market andsupport ecolabelled products andprogrammes. CUTS representatives said thatthese three experts would continue to act asreference persons for ecolabelling in Indiaeven after the project was completed.According to Simi TB from CUTS, through thisproject, strong and unconditional support wasgained from the textile associations (almost allmajor and local associations), which leavesthe project with a sound basis for furtheruptake of lifecycle based ecolabels and thepromotion of related improvements alongtextile supply chains.

4.e Kenya

Kenya was the only country that did not pursuethe project’s set course of action to the end.Largely due to structural issues, Kenya has notbeen ready to adopt an ecolabelling approach.Liazzat Rabbiosi said: “certain conditions hadto be met first”. The initial approach was tolabel Maasai sandals through state institutionsresponsible for training and technicalassistance to the leather industry becausethere were no appropriate partners and nocompanies capable of taking up this approach.However, later it was decided thatunderstanding the bottlenecks of why theindustry lacked the capacity to introduceecolabelling and export to high value marketswould be a more important outcome for thesustainability of the project. In cooperation withthe newly established Leather DevelopmentCouncil under the President’s office, theKenyan National Cleaner Production Centre(the project partners in Kenya) conducted afield survey on the footwear sector supplychain. Its results were then presented in aconsultation workshop with key actors in thesector and the government with the objectiveof agreeing on necessary measures for therevival of the leather industry in Kenya.

It should be noted that the selection ofcountries for such projects is crucial. Thisleads to the need to understand well thebaseline situation and the needs of thecountries before embarking on a specificintervention. Silvia Ferratini of EC noted that,compared to other countries like Brazil, India,or China where production processes aremore advanced, to work with the EU Ecolabelin Kenya might indeed have been premature.Being aware of such possible constraints, theUNEP management at that time decided to goahead and explore the possibilities of theapproach taken. Even if no Kenyan producerwas able to go for an ecolabel at the end ofthe project, the project process heightenedawareness about the possibility of improvingproduction processes through environmentalefficiency and brought closer attention of thegovernment to the problems of the industryand existing opportunities.

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4.f Mexico

Liazzat Rabbiosi summarized the Mexicanexperience in the following way: “Visiting thetwo selected factories in Mexico and talking tothe companies’ representatives, I realized howmuch this experience has changed theirmindsets and perspectives on environmentalissues. They appeared to have become moreconscious and aware about the importance ofthese issues not only in their work but in theirlives, children, everyday shopping decisions,etc. For me this was the most useful impact thatsuch a project may create: the change of valuesand norms in the way people work and live”.

Also important is that the Mexicangovernment has developed a national SCPstrategy, which includes the need forproviding credible information aboutproducts to stimulate more sustainableconsumption as one of the priorities.

The companies involved emphasized ininterviews that most of the improvements inproduction process and environmentalimpacts came from their own desire toenhance the market recognition of theirbrands, secure first mover advantages orreduce costs. Nydia Suppen, the projectcoordinator in Mexico, said: “it was quite asuccess to see how knowledge aboutecolabelling and lifecycle analysis helped thecompanies understand different aspects ofprocess/product efficiency and even gobeyond expectations. For example, one ofthe companies is currently building a newgreen factory”. (See the case studies below).

Participants expressed disappointment thatthe project has not yet demonstrated themultiplier effect they were hoping for inspreading to other regions, other industries,or other countries.

Case Study II: Elefante

Elefante is a medium-sized, family owned company, specializing in production of highly quality children’s andadolescent shoes. It is located in the city of Leon, in the state of Guanajuato, Mexico. Sustainability has nottraditionally been part of Elefante’s brand, but the company representative said that sustainability is a growingtrend in Mexico.

Marcela Pérez-Ruenes, the export manager for Elefante, remembered the anxiety she felt about not beingable to qualify for the EU Ecolabel award, which eventually turned out to be easy for the company. All thetests results were positive, indicating compliance with the labelling requirements. It was a surprise, as theshoe sample sent for testing was a randomly selected from a factory display rack.

“It made us feel very happy”, noted Ms. Pérez-Ruenes. “We had suppliers that could comply with theserequirements. In fact, in Mexico, there are a lot of suppliers that can comply with these standards, making iteasy to source materials”.

Like in most of the cases in this project, the biggest challenge was working with suppliers. “We have to makesure they are complying and continue to produce the way they say they will”, said Ms. Pérez-Ruenes. Trustin the suppliers and that they would not change the production methods after complying with tests is anessential component in such a venture, which requires suppliers and buyers to work and change together.As a recommendation for dealing with such challenges, Ms. Pérez-Ruenes suggested to be specific andclear on what was required from suppliers and producers and why. She noted that knowing which informationto be filled out in which forms was important for the efficiency of the application process. Follow-up and,more fundamentally, support makes trust building efforts more effective.

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4.g South Africa

South Africa joined the project with a keyobjective of developing its own nationalecolabelling system. Even though the SouthAfrican National Ecolabelling Scheme(SANES) was only launched in 2010, therewas a sense that the label, toward the end ofthis project, was already providing a goodsynergistic effect with the project, whichallowed all participants to learn from andimprove. Awareness of ecolabels was fairlywell-developed in some areas of thegovernment, industry, and civil society, butrecognition of the label among key consumerand retail groups remains too low to make thenational label self-sustaining at this point.

The South African textile sector is widelydispersed with many smaller factories andsuppliers. It has been facing difficult trade

conditions, which have led to the decline in themanufacturing sector. Nevertheless, clothingretailers have largely been expanding, exceptfor some relapse during the recent financialcrisis. The industry has been working toexplore both export opportunities and a focuson domestic sourcing. Thus, manystakeholders see ecolabels as playing a role inimproving this situation.

Mr. Page, project coordinator from CSIR-NCPC, noted that finding the right dedicatedpeople and working with government partnerorganizations such as testing facilities was amajor challenge. Zubeida Zwavel, a consultantinvolved throughout the project, explained thatclothing companies are under a lot of pressuredue to increased completion, especiallycheaper imports from China. “Thesecompanies see ecolabels as a way of creatinga niche for them”, she added.

Case study III: Caborca

The Caborca company is also based in Leon, in the state of Guanajuato. It is a medium-sized family ownedcompany, which employs about 250 workers.

When asked about the costs of complying with ecolabels, Mr. Luis Angel Sanchez-Ramirez, General Directorof the Caborca company, said that the benefits of the process of adhering to the EU Flower requirementsactually decreased costs, thus significantly improving bottom-line benefits. Caborca hired a consulting team,trained by the UNEP Resource Efficiency and Cleaner Production Programme through a UNEP/UNIDO Networkof National Cleaner Production Centres. They did inventory of the factory and introduced a number of resourceefficiency measures such as sourcing new materials, better natural lighting by changing the design of the roof,and techniques for reducing materials consumption, which minimized waste and decreased associated costs,with savings across the board. Mr. Sanchez-Ramirez noted some upfront costs in finding sustainable materialssuppliers. However these costs have been recovered because materials with more friendly environmentalattributes turned out to cost on average 8 percent less. He expects the costs of materials to continue to dropas more companies start to produce them at a mass scale. Caborca has also reduced the costs related toworker safety equipment due to the phasing out of toxic materials. The management invested in renovatingthe factory premises and introduction of other measures to improve the work environment. Interviewees notedthat workers have also become happier and more productive as a result.

Mr. Sanchez-Ramirez mentioned the hesitation at first of participating in such an activity given the risks thatit might bring. However, now the whole philosophy of the company has changed with more emphasis beingput on the social wellbeing of employees, minimizing resource use, and marketing of the company as such.Ecolabelling can be seen as a door opener for these changes.

His company is one of Mexico’s most famous cowboy boot manufacturers. It is the company’s plan to launcha new line of ecological boots for sale in Mexican, US, and European markets. He said that “with the changeof culture seen in this project, we can reduce the consumption of resources because we have changed ourthinking”.

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Project partners and other stakeholders notedthat recent years have seen business leaderschange their perceptions. Companies oftennow want to improve their performance andthey see the benefits of participating ininitiatives such as this project. Youngergenerations of designers especially viewsustainability as a new trend in the industry.

While government participation in the projectwas active, the main challenge in the countryis not policy development, butimplementation. For example, the nationalecolabelling programme was launched but stillneeds better marketing and visibility to makeit known to South African consumers. Ms.Zwavel noted that it was important not to losemomentum on the issues after the project.

Improved understanding and knowledgeabout ecolabelling and multi-stakeholderdialogues around its issues were one of thesuccessful results of the project. Andre Pageof the South African NCPC said, “Over theyears, perceptions have changed. Thegovernment is much more open andinterested”. Project partners noted that it iscommon that government and industry do nottalk to each other, and suppliers lack reliableways of marketing their sustainable products,which leads domestic industries to importproducts they would otherwise be able to buyin South Africa. The dialogues organizedthroughout the project implementation wereuseful to start bridging such gaps.

The project worked with three companies. Onechallenge that participating companies had tostruggle with was the supply of localsustainable textiles qualifying for therequirements of the EU Ecolabel. Withupstream sections of the supply chain indecline and a number of mills closing down inearly- and mid-2000s, finding local supplierswas a challenge. It was possible to source fromIndia, for example, through the connection withthe project partners in India, but companiesrealized it was important to do it locally for thesustainability of their supply chains and theentire industry. Ms. Zwavel noted thatimmediate success of the post-project periodwould rely on creating that capacity.

Learning about the global ecolabellingenvironment and the activities and membersof GEN was also important to understand theexperiences of other countries and explorethe existing trends in this area. The SouthAfrican National Ecolabelling Scheme(SANES) is considering joining GEN. Closerintegration and collaboration has been alsoestablished with the African EcolabellingMechanism, which was possible through theparticipation of Zubeida Zwavel in bothinitiatives. Ms. Zwavel was trained as anexpert through the project.

Unlike other countries, South African partnerswere keen to involve the demand side of thesupply chain in the project. Mr. Page said thatone key to success is having retailersinvolved, “because retailers dictate buyingdecisions. If retailers are not part of thediscussion, everything could fall flat”. At thelast meeting organized in February 2012, twomajor retailers in South Africa took part indiscussions and showed interest in engagingin this type of initiative and generaldiscussions broader than just ecolabelling.Awareness-raising on consumer issues wasidentified as a driving force behind theecolabelling approach. According to Mr.Page, “[consumers] could influence retailers,and they influence manufacturers and thiscould affect the whole supply chain. Themore conversations of this type, the more thisbecomes embedded in [business people’s]minds. This leads to continuousimprovement”, he added, reiterating one ofthe key messages of the project.

Another lesson from South Africa relates tothe importance of having companies’ topdecision-makers on board. Since decision-makers may not always be able to attendlarge meetings, it often could be moreefficient to have more bilateral meetings andmini-workshops so the concerns ofcompanies’ top management can beaddressed more specifically. This obviouslymeans additional resources and time spent inmeetings, but this effort can yield goodreturns because companies can makedecisions faster.

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Case Study V: Mogalakwena Crafts and Arts

Mogalakwena Crafts and Arts is a South African handicraft development foundation headed by Dr. ElbeCoetsee. Dr. Coetsee describes their work to “create fabrics and embroider and do appliqué work on basematerials and sell it.” She said, “I create jobs and do skills training. Mogalakwena Craft Art DevelopmentFoundation would like to be recognized as an ecolabelled enterprise”.

Dr. Coetsee experienced many challenges on her ecolabelling journey. The biggest was sourcing ecolabel-certified base materials. She said that from 20 pages of fabric producer contacts received from the NCPCshe spent weeks emailing to no avail. “I could not find any producers anywhere in the world, even with theNCPC assistance. I could find towelling, but I could not find linen or cotton. Spending time this way is a hugecost to a small business”.

Dr. Coetsee said the ecolabel would have been perfect for her foundation because, with all products beinghand-made, there was no need to change anything in their production techniques. Thus achieving the labelspecifications was not a challenge. “With our project, we do not have a lot of washing, use minimal electricityand no harmful waste, and the certification would create credibility for actions already taken”.

Dr. Coetsee suggested that ecolabelling professionals work with industry to create a database of certifiedsuppliers. “With that, it would be so easy to source that base cloth and have that ecolabel network. Theprogramme could have certain categories like fabric and fibres or whatever product that is needed. Thatwould really be great”.

Dr. Coetsee said that “programmes like this are the only way forward for us to survive and for the planet tosurvive, in an ecologically and socially responsible way.”

Case Study IV: Zorbatex in South Africa

Zorbatex is a medium-sized family-run towel manufacturer. Mike Wood, Managing Director at Zorbatex, saidhe went to a workshop of UNEP and met quite a few companies. He said that was when he first showedinterest.

“It was an awakening moment when we realized this was not just a strategic business or marketing tool, buta sense of responsibility that every business manager has to take. The world is industrializing so fast and weare poisoning the world so fast. That is where the commitment was triggered. Subsequently we have got onboard and submitted our forms to the EU Ecolabel Competent Body”.

The road was not easy. They filled out the forms, and when they were about halfway finished, the EU Ecolabelforms were changed and they had to start over. They said the hardest thing was getting their supplierscertified. “The experience was not bad. Just long”, Wood said.

Andre Page of the NCPC mentioned that Zorbatex is a good case study because “Zorbatex sees the value.They participated in an energy efficiency and cleaner production project of NCPC, among other things”.

The biggest costs were time of employees spent on the project, which Wood described as a “hidden cost.”Although we understand it is a European-based system, still, the application costs were expensive for us”.

Wood would have preferred that the ecolabel was certifying a process or even a factory, rather than certifyinga product because Zorbatex often changes products, which require additional certification. He wished that“all products manufactured in a certain process in a certain range of colours or chemicals would automaticallyreceive or have the ability to use the EU label”.

He said Zorbatex was also looking at certification to certain ISO standards and the Oeko-tex labellingprogramme. Wood said, “Oeko-Tex people are in South Africa which makes the process more appealing dueto faster speed and lower cost. The certification authority is in South Africa. No sending samples to Europeneeded”.

Wood said, “We want to be a leader and be recognized for that leadership”.

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This section identifies key lessons andrecommendations drawn from the overview ofthe current discussions around ecolabellingand assessment of the project results. Thesefindings have the potential for wider applicationand use and should be taken into account forimproving future work in the SCP area.

Consumer awareness and market demand:Ecolabelling is primarily a market-basedinstrument. An actual or perceived lack ofdemand for certain ecolabelled products, or achoice of specific types of ecolabels over otherpotentially more popular standards may havelimited market rewards for companies involvedin the project, especially in the Chineseelectronics sector, the South African, or Indiantextile sectors where stakeholders mentionedother labels. The need to focus on the demandside from the beginning came strongly inalmost every country and for sector covered bythe project.

Additional or follow-up projects andinterventions looking at consumer awarenessand work with retailers, and buyers couldcomplement and enhance the objectives ofthis project. Type I ecolabelling’s lifecycle andsupply chain approach allows for looking at theproblems in a holistic way with integration ofother upstream and downstream constraintsincluding demand and consumer issues.

Consumer groups should be involved insetting criteria, operations, and marketing ofthe ecolabels. Particularly the EU ecolabelshould focus more on the marketing of theprogramme among retailers and consumers.Many stakeholders were concerned about alack of awareness of the EU Ecolabel inEuropean markets, so increasing recognitionand demand for such products remainscrucial.

For producers interested in third partycertification and ecolabelling, it is important to

watch the market trends and know whichlabels are most demanded in key domestic andexport markets. There are many online sourcesfor this purpose of which the Standards Mapof the International Trade Centre hascomprehensive information about specificstandards and ecolabels.

The Mexican companies involved in thisproject benefited immensely from focusing onclassic products that are not prone to changesdue to fashion. The recommendations theyreceived early in the project were important,such as focusing on children’s shoes whereconsumers value health issues more than otherconsiderations, or classic shoes and cowboyboots with styles that do not change. As onecompany stated, we “need to invest in aproduct that will be on the shelf for a longtime”.

Choosing the right partners: Undertaking athorough stakeholder analysis at the beginningof the project is important, as is using rigorousselection criteria to understand the positions ofpartners in relation to other stakeholders,especially those in government and businesssectors. These relations made crucialdifferences in each country. On the one hand,some country partners devoted significantlymore time and resources to the project thanothers, with results that often reflected thoselevels of effort and commitment. On the otherhand, some partners, such as those from orclose to government, seemed to have a crucialadvantage for increasing support ofecolabelling in several countries, both amongcompanies and government stakeholders. Forexample, the involvement of trade and industryrelated government agencies was especiallyimportant because they have or are perceivedto have more influence over industry orgovernment decision-makers than otheragencies traditionally dealing withenvironmental matters. They are also seen tobe on the side of companies, rather than being

V. Lessons learned andrecommendations

46

seen as trying to impose environmentalregulations. Choosing a large company toapply a novel concept was also beneficial inBrazil to create a leader, which can then guidethe rest of the market by example.

Link the project cause with the rightmessage and a wider agenda: the topics ofecolabelling concern many important issues,including market access, trade, industrialdevelopment, and sustainability. The uptakeand interest of this project came in large partfrom the right messages that partnersdeveloped, linking ecolabelling withinternational competitiveness. Often boldlystated in the meeting banners and promotionalmaterials, this yielded the necessary attentionto engage national partners in the public andbusiness sectors. The governmentrepresentatives were interested in policyaspects of ecolabelling as well asecolabelling’s potential contributions to otherpolicy objectives when rightly integrated intopolicy-making and implementation processes.Thus it is important to link the topic specificallyto the wider agendas, context, and priorities ofa country.

Use of ecolabels in relation to or instead ofother systems: in this project, focusing onone specific type of label (ISO Type Iecolabels) might have limited the potentialimpacts of the project. The variety of voluntarystandards systems and other labels that existsin the market is due in part to the diversity ofneeds and challenges that they address.Therefore targeting the labels based oncompanies’ needs and strategies could be amore effective approach in future projects ofthis kind. Information to help differentiatelabels and standards is becoming a keycompetitiveness concern for businesses,governments, and other stakeholders or achoice of ecolabelling over other potentiallymore popular standards.

On the other hand, the issue of labelsproliferation remains a challenge, causingconfusion and scepticism about their realeffects and with potential impacts on tradeopportunities. The high degree of changewith many new tools and methods beingcreated is a sign of innovation and testing of

the market in response to the growingconcerns and search for relevant solutions.However, such proliferation may also turn outto be counterproductive by undermining theintended effects of ecolabelling and othersystems and reducing their uptake andeffectiveness. The majority of new tools seemto appear to be developed largely for and bydeveloped countries users, though, as seenin this project and other available researchand surveys, consumers and producers in thedeveloping world are increasingly interestedin sustainability and SCP tools like ecolabels.To encourage their wider application and use,ecolabelling programmes, VSS, and othersystems should work out common groundrules with the objective of making theirapproaches more interoperable, harmonizedand applicable in different contexts, includinga focus on coordinated impactsmeasurement.

Importance of cooperation and mutualrecognition among ecolabels and with otherinformation systems: GEN can play a moreprominent role in encouraging more mutualrecognition and cooperation among Type Iecolabelling programmes. While the currentdraft of the roadmap developed through thisproject may not be practical to GEN ormembers at this stage due to lack of fundingand resources, the promotion of the benefits ofType I ecolabels through the engagement inthis type of project and initiatives, opennessand wider collaboration will help encouragemore visibility of credible lifecycle thinking-based systems.

More specifically, a number of stakeholders incountries with ecolabelling programmesexpressed the wish to develop mutualrecognition with EU ecolabelling schemes,because the EU remains an important tradingpartner and a key export market for many ofthese countries. Although such mutualrecognition would not be possible given theway that the EU ecolabel is designed now, therevision of the label in 2015 brings anopportunity to consider this option. The EUscheme is already open in its decision-makingprocess and includes concession for small-scale producers from developing countries(such as reduced application and

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participation fees). However, there is a chancefor the EU Ecolabel to become moreinternationalized as emerging marketpurchasing power increases, and Europeanproducers will export more consumer goodsto respond to increasing demand for moreenvironmentally-friendly goods. Theecolabelling schemes of China, South Africa,and Brazil are already taking inspiration fromthe EU Ecolabel, which opens up possibilitiesfor recognition and development of commoncore criteria with support and coordination ofGEN.

GEN and other systems such as VSS orsector-based initiatives in the building ortourism sectors should also start more formalcooperation, starting with exchange ofinformation for mutual learning andstrengthening. Throughout the interviewprocess, there was a sense amongpractitioners of different types of standardsor ecolabels that their system was “best” atimproving sustainability impacts. This senseof pride is on the whole positive and likelygrows out of working with systems that areindeed usually very robust and trustworthy,compared to other tools, especially privatesector and corporate initiatives. On the otherhand, such attitudes can also be negativebecause a good system does notautomatically lead to the best environmentalimpacts. Working with one type of systemalone may lead to a professional insularitythat decreases chances for learning fromother systems. Given that no consensus onwhich standards or ecolabels are the mostimpactful or “best”, and that each have theirstrengths and weaknesses, it is important forpractitioners, especially in these sustainabledevelopment related areas, to work togethertoward the larger picture of sustainability,common rules, and ground forcomplementarities to increase their ownsystems’ effectiveness and credibility.

Integrated approach: It is important toremember that this work is not aboutimplementing a specific tool but about changeimprovement. As seen in the project, workingon ecolabelling alone did not seem to besufficient to enable companies to completethe process of getting the ecolabel. The focus

on the lifecycle of the products covered by theecolabelling programmes brought forward anumber of structural issues along the way,which prompts the need to address them in aholistic manner focusing on a supply chainapproach. This implies the involvement ofother stakeholders and market actors (such asfirst and second level suppliers) anddeployment of other necessary measures,which would support ecolabelling.

On the business side, the potential follow-upprojects by UNEP, other developmentagencies, or other capable entities shouldfocus more around sustainable products andenabling tools for the production of suchproducts, which can include eco-design,lifecycle management, cleaner production, orresource efficiency techniques. Theengagement of the demand side (buyers andretailers or large companies with extendedsupply chains) can help provide a marketincentive for smaller companies to invest inimproving their environmental performanceand sustainability aspects of their products.

At the government level, ecolabelling is moreeffective if enabled by other policy approachesand instruments. A renewed effort should bemade to learn and promote best practices inmarket-based mechanisms in conjunction withpolicy incentives or actions, such as subsidies,tax exemption and reduction, industrydevelopment plans, sustainable publicprocurement, consumer education campaigns,or other actions that can spur the uptake ofsustainable production and consumptionpractices. UNEP, being an intergovernmentalorganization and working on a full array of SCPapproaches, is well placed to develop andpromote such approaches.

South – South cooperation: The project hasbeen an excellent example of so-called“south-south” cooperation as an importantdriving force for development and uptake ofsustainability practices. Ecolabels were notprominent in many countries when this projectwas initiated. The project provided a forum forpeer networking that encouraged mutuallearning and ‘spill-over’ effects to othercountries in the region. The choice of theregional anchor countries in the project has

resulted in the involvement of other regionalcountries in the project and has paved theway for the follow-up project such as the oneon the regional cooperation on ecolabelling inthe Southern Cone region of Latin America.Such south-south cooperation and trade canbe an important driver for the sustainability ofecolabelling as it grows from its developedcountry roots to a global system for thepromotion of SCP.

In conclusion, even though this was arelatively small project, the organizers andpartners helped achieve significant advancesin many key areas. Key stakeholders areseeing ecolabels not as barriers to trade, butas mechanisms that can operate acrossborders and encourage more sustainable SCPthrough trade. National and international

ecolabelling mechanisms and partnershipswere strengthened and practitioner networksgrew both in number and quality.

As ecolabelling moves from a developedcountry niche to a globally-prevalent tool, morework will need to be done to understand theireffects in more holistic manner and tounderstand their complementarities within theoverall ecosystem of information tools andother policy support and interventions. Thework in this direction is crucial for the future ofecolabelling and will allow the spreading bestpractices around the world.

Hopefully the networks that were formed, thelessons that were learned, and the successesthat were achieved can be replicated andextended in follow-up projects.

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Copyright © United Nations Environment Programme, 2013

Design/layout: Olela, Paris

Cover photos : Liazzat Rabbiosi, (made during visits to companies in Ethiopia, Mexico & Kenya in the scope of thisproject).

This publication may be reproduced in whole or in part and in any form for educational or non-profit purposes withoutspecial permission from the copyright holder, provided acknowledgement of the source is made. UNEP wouldappreciate receiving a copy of any publication that uses this publication as a source.

No use of this publication may be made for resale or for any other commercial purpose whatsoever without priorpermission in writing from the United Nations Environment Programme.

Citation: UNEP “Redefining Ecolabels to Improve Sustainability and Trade in Developing Countries: Lessons andRecommendations from the UNEP project”, 2013.

Disclaimer

The designations employed and the presentation of the material in thispublication do not imply the expression of any opinion whatsoever onthe part of the United Nations Environment Programme concerning thelegal status of any country, territory, city or area or of its authorities, orconcerning delimitation of its frontiers or boundaries. Moreover, theviews expressed do not necessarily represent the decision or thestated policy of the United Nations Environment Programme, nordoes citing of trade names or commercial processes constituteendorsement.

Acknowledgements

Author: Joshua Wickerham

Supervision, technical editing and support: Liazzat Rabbiosi, UNEP DTIE

A number of people helped in preparation of this report. Dr. Anastasia O’Rourke and Aimee Russillo helped extensivelyin framing issues about evaluating standards and ecolabels. The thoughts of project partners and participants lentnew insights into the world of ecolabels. This project is the sum of these and many other people’s efforts, and so isthis report. Numerous experts and project partners also added valuable comments during peer review, especiallyAimee Russillo, Christian Hagemann, Eva Eiderström, Silvia Ferratini, Norma Tregurtha, Thumbarathy Balakrishnan,and Zubeida Zwavel. Liazzat Rabbiosi provided invaluable feedback and guidance on the entire report.

This document has been produced with the financial assistance of the European Union and the Federal Ministry forEconomic Cooperation and Development (Germany). The views expressed herein can in no way be taken to reflectthe official opinion of neither the European Union nor the German Government.

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