The great eco-label shakedown

Companies see value in certifications.

Coming from the man behind Home Depot’s eco-labeling program and sustainability initiatives, you wouldn’t expect Ron Jarvis to appeal for a kibosh on the word “green.” But in a conversation about the Atlanta-based home improvement giant’s in-house Eco Options label, that’s exactly what Jarvis suggests.

“It would be perfectly okay if we banned the words green and environmentally friendly,” he says. Instead, Jarvis, whose official title is vice president of environmental innovation, urges for more meaningful labels that indicate a product has endured a certification process or more rigorous testing than others on the shelf.  Home Depot’s (NYSE: HD) Eco Options line—which includes about 4,000 products and relies on existing certification programs such as Energy Star and the Forest Stewardship Council, and third-party verification by Bay Area–based Scientific Certification Systems—isn’t among the most rigorous, but the store’s clout means it’s helping shift the marketplace.

But Jarvis isn’t alone in expressing his exhaustion with the abundance of environmental claims being made by product manufacturers. Businesses continue to look to eco-labels and certifications as a means to alleviate confusion among consumers and provide some reassurance to them about the validity of their so-called “green” products. But the proliferation of eco-labels—around 300 currently—is weakening the entire field.

Age-old marketing tactics
The federal government has for more than a century monitored labels on products. Dating back as far as 1906, the original Food and Drugs Act prohibited interstate commerce in misbranded and adulterated foods, drinks and drugs. In 1965, the Fair Packaging and Labeling Act required that all consumer products in interstate commerce be honestly labeled.

But beyond simply making claims, substantiated or not, eco-labels have become a solid marketing tactic, says Marty McDonald, creative director of egg, a Seattle-based marketing agency focused on sustainable brands. In the case of established eco-labels, such as the U.S. Department of Agriculture’s (USDA) organic certification, they confer a level of credibility—even if consumers are hazy about what the labels actually mean, McDonald says.

Sticking with the organic label as an example: Before it was launched by the USDA in 2002, there were dozens of competing organic labels and standards. Since the single label was introduced, the organic food market has grown about 20 percent per year. (However, many think the requirements to use the label are not nearly stringent enough.)