Chapter 8
Consumer Acceptance of Environmental Labeling on Wood Products

Stanley P. Rhodes

Scientific Certification Systems, Inc.

Consumer acceptance of environmental labeling on wood products depends largely on the source of the environmental claim and on the information communicated to the buyer by the label. This chapter discusses the results of consumer survey research on environmental labeling, provides an example of labeling currently used on wood products in the marketplace, and describes an emerging labeling option.

Consumer Research

Research conducted during the past decade has shown that consumers are interested in receiving accurate, accessible environmental information on product labels but that they are skeptical about environmental claims. Studies also indicate increased consumer acceptance of environmental claims that have been independently verified by a credible, scientific source.

A review of the research reveals examples of consumer distrust of environmental claims made by manufacturers:

  • A 1990 environmental report cited 47 percent of consumers as dismissing environmental claims as "mere gimmickry" (Environmental Protection Agency, 1993).
  • A 1992 study by the Hartman Group reported that only 13 percent of respondents believe corporations are "trustworthy sources of information about environmental matters" (Hartman Group, 1992).
  • Hardware industry research found that only 11 percent of consumers surveyed believe that businesses can be trusted to "do the right thing most of the time" for the environment (Mueller Hardware Research Foundation, 1992).


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Chapter 8 Consumer Acceptance of Environmental Labeling on Wood Products Stanley P. Rhodes Scientific Certification Systems, Inc. Consumer acceptance of environmental labeling on wood products depends largely on the source of the environmental claim and on the information communicated to the buyer by the label. This chapter discusses the results of consumer survey research on environmental labeling, provides an example of labeling currently used on wood products in the marketplace, and describes an emerging labeling option. Consumer Research Research conducted during the past decade has shown that consumers are interested in receiving accurate, accessible environmental information on product labels but that they are skeptical about environmental claims. Studies also indicate increased consumer acceptance of environmental claims that have been independently verified by a credible, scientific source. A review of the research reveals examples of consumer distrust of environmental claims made by manufacturers: A 1990 environmental report cited 47 percent of consumers as dismissing environmental claims as "mere gimmickry" (Environmental Protection Agency, 1993). A 1992 study by the Hartman Group reported that only 13 percent of respondents believe corporations are "trustworthy sources of information about environmental matters" (Hartman Group, 1992). Hardware industry research found that only 11 percent of consumers surveyed believe that businesses can be trusted to "do the right thing most of the time" for the environment (Mueller Hardware Research Foundation, 1992).

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At the same time, other studies show consumer support for labeling and market demand for products with environmentally friendly attributes: A 1991 NBC News and Wall Street Journal survey found that 53 percent of consumers avoid purchasing products because of environmental concerns (Mueller Hardware Foundation, 1992). That same year, a report published by J. Walter Thompson found that 91 percent of consumers polled favor "labeling products which are environmentally safe to help people make smart buying decisions (Thompson, 1991). A 1992 Advertising Age survey reported that 73 percent of respondents believe that environmental marketing claims "sometimes or very often influenced their purchasing decisions"; 60 percent said they are now "more likely to buy a product because of its environmental claims than they were three years earlier" (Environmental Protection Agency, 1993). A Roper/Starch survey in 1994 reported that nearly half of U.S. consumers have purchased "green" products, representing a 70 percent increase since Roper began collecting such statistics in 1990 (Roper/Starch Survey, 1994). A Good Housekeeping study found that 93 percent of American women believe that an independent environmental label would be "very or somewhat useful"; while 82 percent said that they would be more likely to buy products that displayed an independent mark of certification than products that did not (Good Housekeeping Institute, 1990). Surveys conducted in the forest products industry have noted similar findings. In 1992, the Western Wood Products Association conducted a survey of building industry wholesalers, retailers, and professionals. Seventy-one percent of respondents indicated that scientific information on the environmental impacts of wood versus other building materials would be useful to them; 70 percent expressed interest in lumber from "an envirocertification program endorsed by a third-party scientific audit (Western Wood Products Association, 1993). International Standard-Setting Initiatives "Ecolabeling" and certification also have become topics of interest around the world. The International Organization for Standardization (ISO) has taken up the challenge of establishing guidelines for environmental claims and claims verification through its Technical Committee on Environmental Management (TC 207). Thus far, ISO has defined three classifications of ecolabels that present environmental claims to consumers. Type I labeling involves establishing multiple environmental criteria for products in specific categories and the issuance of a seal to applicants meeting those criteria. Examples include the German Blue Angel, the Nordic Swan, and the Japanese Eco-Mark. Labels that claim specific product attributes, such as the percentage of recycled material in a product or its

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biodegradability, are Type II labels. Type III labels present the environmental performance of a product based on a life-cycle assessment. Proposals within ISO to introduce certification and labeling guidelines for wood products based on forest management claims have been unsuccessful to date. The Forest Stewardship Council (FSC) was established by representatives in the environmental movement and in industry to promote sustainable forest management worldwide through the certification and labeling of timber from well-managed forests. The council establishes principles and criteria for forest management and accredits certifiers of forest products. It also works with government entities to develop national forestry standards for certification. Buyers groups have been formed by manufacturers and retailers to support the procurement of wood products from well-managed forests that have been evaluated by FSC-accredited certifiers. Although the drafting of FSC and ISO standards has occurred after the emergence of marketplace labeling initiatives, the guidance of these organizations should help increase label credibility, both domestically and abroad. Accepted and Emerging Options Scientific Certification Systems, Inc. (SCS), an independent testing and certification organization based in Oakland, California, has introduced two certification and labeling options for wood products. The SCS Forest Conservation Program evaluates and certifies forestry operations and issues a label certifying a well-managed forest claim. Certified forest products companies and the downstream manufacturers and retailers of certified wood products may use the label to market their products. The SCS Certified Eco-Profile program allows producers of wood products to communicate comprehensive cradle-to-grave environmental information in an ISO Type III label format. This program evaluates wood products in particular applications. For example, the Eco-Profile label can be used to inform consumers about the specific environmental effects of wood used as a structural building material. Forest Conservation Program The SCS Forest Conservation Program evaluation is structured around three elements that encompass technically sound and socially responsible forest stewardship: timber resource sustainability, forest ecosystem maintenance, and financial and socioeconomic considerations. Clearly, exemplary forest stewardship entails more than sustained timber production. Equally important are the extent to which the integrity of the forest ecosystem is maintained and the extent to which the operation can be sustained over the long-term. To be certified, an operation must meet or exceed threshold standards in each of the three program elements.

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The evaluation of timber resource sustainability measures the extent to which past and current timber management practices have and will yield continuous timber production over the long-term. Examples of specific criteria included in the examination are harvest regulation, pest management strategies, harvest efficiency, stocking and growth control, forest access, and product use. The forest ecosystem maintenance component measures the impact of forest management practices on critical ecosystem elements, such as wildlife habitat and watersheds. It includes an assessment of forest structure and composition, wildlife management policies and activities, pesticide use practices and policies, long-term productivity, watercourse management policies and activities, and ecosystem reserve policies. Financial and socioeconomic measurements appraise the benefits realized by the community and the economic stability of the forest operation. Criteria under this program element encompass financial performance and ownership structure, public use management, employee training and education, community and public involvement, investment of capital, and employee and contract relations. Evaluations are conducted according to structured protocols using an interdisciplinary scientific team (forester, ecologist, sociologist, or forest economist) with recognized regional expertise. The forest management audit process defines areas of management strength and deficiency, establishes baseline performance, and delineates where companies can make environmental improvements. The weighting of evaluation criteria in importance and the selection of performance indicators are based on site-specific conditions and allow for regionalization in the programmatic analysis. The data-gathering process encompasses collection of on-site empirical data, an examination of the landowner's plans and documents, and a review of published data sources. Interviews with local, state, or federal forestry agencies and members of the community also are conducted. The evaluation process has been structured to be as objective as possible in

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defining and quantifying sustainable forest management. Each criterion within each program element is assigned a score by the evaluation team. The weighted scores are averaged to yield a final score for each program element. Assessments can be duplicated in time and place and the assessment methodology has been confirmed through technical reviews of each assessment by independent experts. Forest operations scoring above 80 points on a 100-point scale in all three program elements earn "Well-Managed Forest" certification. Participants in the Forest Conservation Program benefit from the information derived from program audits and have improved forest management practices as a result. Improved forest management stands alone as the most important achievement of certification. However, certification also allows forest products companies to demonstrate accountability to wood products manufacturers, retail buyers, consumers, and government policy makers. Certification supports forest products companies in their efforts to communicate, educate, and inform. In addition to its Well-Managed Forest certification for forest products companies, SCS developed a secondary certification for the downstream manufacturers and retailers of wood from certified forests. By putting specific inventory controls in place, these companies receive "Chain-of-Custody" certification, assuring customers that the wood can be traced to the certified forest source. To date, the Forest Conservation Program has awarded nine Well-Managed Forest certificates and issued 20 Chain-of-Custody certificates. Consumer Acceptance Consumer acceptance of the Well-Managed Forest certification label can be demonstrated in part through marketplace successes. Although there is not enough certified product yet available for a reliable statistical analysis, anecdotal information indicates that certified producers have opened new markets and obtained premium prices for their wood products. These successes extend to secondary manufacturers and retailers of certified forest products, and they cut across all market segments for wood products—from home center retailers and commodity dealers, to architecture and design firms, to value-added product manufacturers. The Collins Pine Company, headquartered in Portland, Oregon, directly attributes to certification sales increases of 25 percent to retailers, 22 percent to furniture manufacturers, and 3–4 percent to commodity dealers. Costa Rica-based Portico gained customers through its certification among home centers and retailers, and increased its market share by nearly 30 percent in 1994 alone. Certification allowed the Seven Islands Land Management Company of Maine to leapfrog beyond sales into primary milling and tap secondary manufacturing through Chain-of-Custody certifications. The company has essentially achieved a vertical integration without making additional investments in downstream facilities. It now receives a 10 percent premium on certified logs and a 5 percent premium on the end-value of products such as shingles.

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Figure 8-1 Forest Conservation Program label. Each of these participants integrates the Well-Managed Forest certification label into product brochures and marketing materials. Collins Pine's Collins Wood carries the label directly on the lumber. Figure 8-1 is an example of a Forest Conservation Program label. Certified Eco-Profile Labeling The Certified Eco-Profile label (Figure 8-2) was developed by SCS to provide consumers with cradle-to-grave environmental information based on life-cycle assessments. It is similar to a nutritional label, providing a comprehensive summary of a product's environmental performance. Wood products evaluated under this program would be labeled for particular applications, such as use as structural building materials. Certified Eco-Profile labeling has been recognized within ISO as a unique approach that is now being standardized as a Type III label. In addition to the SCS initiative in the United States, ISO activities have spawned Type III programs in Canada and Sweden. Certified Eco-Profile labels displayed on products have been positively received by consumers thus far. One important distinguishing feature of the Certified Eco-Profile label is its basis in life-cycle analysis. Because the methodology is being standardized, it creates a uniform basis for presenting environmental information on the Type III label. The ISO subcommittee has suggested principles and guidelines to harmonize the use of life-cycle analysis for making claims about the environmental performance of a product. First, results should not be reduced to a single score. The variety of the variables examined in life-cycle analysis and their inherent differences make them incapable of homogenization. Second, before any comparative claims can be made between one product and another, a life-cycle impact

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Figure 8-2 Eco-Profile label. assessment should be performed, and the equivalence and functional performance of the products being compared should be established. The specific methodology used to support the Certified Eco-Profile is discussed in Appendix I to this volume and is adapted from ISO/TC 207/SC 5/WG 4 N 47. Using the Label The Certified Eco-Profile label was designed to provide a clear representation of a given product's environmental profile, along with the numerical infor-

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TABLE 8-1 ISO Type III label performance indicators Resources and energy Emissions and wastes Fresh water Greenhouse gases Wood and wood fiber Acid rain gases Oil and gas resources Hydrocarbons Ecosystem depletion Hazardous air pollutants Minerals Ozone-depicting pollutants Total energy Toxic water pollutants Hazardous waste Solid waste mation needed by consumers to make detailed comparisons between products. To fulfill ISO Type III labeling objectives, it summarizes life-cycle findings in up to 14 separate environmental performance indicator categories. Indicators fall into two general groups: "Resources and Energy" and "Emissions and Wastes" (Table 8-1). The units of measurement for each indicator are adjusted to avoid overemphasizing or underemphasizing certain data. References Good Housekeeping Institute. 1990. Concerns Women Have for the Environment. New York, NY: Consumer Research Department. Hartman Group, 1992. The Hartman Environmental Marketing Report. p. 83. Newport Beach, CA. Russell R. Mueller Hardware Research Foundation. 1992. Doing the Right Thing: An Analysis of Environmental Issues and Their Impact on the Hardlines Industry. pp. 13–17. Indianapolis, IN. NBC News/Wall Street Journal Survey. 1991. As cited in Russell R. Mueller Hardware Research Foundation. 1992. Doing the Right Thing: An Analysis of Environmental Issues and Their Impact on the Hardlines Industry. Indianapolis, IN. Roper/Starch Survey. 1994. As cited in Raymond Communications. 1994. State Recycling Law Update. Riverdale, MD. Thompson, J. Walter. 1991. Greenwatch (3). Spring/Summer. New York, NY. U.S. Environmental Protection Agency. 1993. Evaluation of Environmental Marketing Terms. Report #741R92003. Washington, D.C.: Government Printing Office. Western Wood Products Association. 1993. "Building Products and the Environment: A Series of Surveys Measuring Marketplace Environmental Concerns and Perceptions Regarding Wood Products Selection and Use". Portland, OR.