Envisioned climate labels for products are not addressing the full solution

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(image by Julia Marett)
24th November 2021
Right now, the discussion on instituting climate labels on products is gaining steam in the Nordic countries. The movement is to go beyond today’s situation where there are uncontrolled claims that a few brands have placed on product packaging, to a more state backed labeling scheme such as that which exists already for organic foods, environmental impact, and health in the Nordic countries. 
Yesterday the discussion continued in Denmark at the forum for ‘Climate Labelling of Food’ in Denmark organized by GS1 Denmark [1]. For those who do not know GS1 manages the global system for bar codes on packaging, while Denmark and other Nordic countries are arguably some of the more progressive countries in terms of both sustainability awareness, sustainable purchasing by consumers, and digitalization. Panelists at the forum came from Coop Denmark, Salling Group, Forbrugerrådet Tænk, Orkla, Concito, Dansk Erhverv, and the Danish Government (see the link above for details). 
Only little debate on the solutionIn typical Danish fashion the 100+ participants in the forum, and the panelists represented a broad set of stakeholders but had some consensus and maybe not enough debate. The very little debate at the forum, touched on if a label should be a traditional single badge (like FairTade) or a grading system (like energy labels), but raised the far more important question: is a standalone physical label really what is needed?
The recent analysis by Enablesus (‘Close the Gap’ report) showed that only 34% of consumers valued climate labeling even though 61% of the same consumers considered climate change to be important when purchasing goods and services. At the forum, only 20% of the day’s participants placed a high value on climate labels [2].
﻿Enablesus found that at least half of Danish consumers are searching for more sustainability information about a product and the company behind it (beyond what is on the packing), with 87% of consumers searching on internet sites that combine information. This clearly suggest that consumers do recognize complexity in sustainability in general, and that a combined physical label plus IT solution is what people will get most use out of. Therefore, does it not make sense to have a combined solution for a standard climate label?
Missing the full equationThe type of climate label discussed at the forum is what is known in climate change science as an intensity Factor. This misses the full equation that to significantly reduced net GHG emissions two parts are required, the Factor (e.g. gCO2e per kg of food) and the Activity (e.g. how much total food is produced & consumed). It is the combination of these that leads to impact and a net reduction of GHG emissions.
💚 Impact = Factor x Activity
The Danish government has a goal for reducing GHG emissions in Danish food/agriculture sector by 55-65% in 2030. If half a Danish family’s GHG emissions from food originate from consuming meat and dairy products, even substituting these with plant-based alternatives will only reduce net GHG emissions from their food consumption by roughly 40%. Only by dealing with the Factor in switching to less carbon intensive foods and Activity for reducing consumption can we get to the government target.
What got fully missedAn important issue that got fully missed at the forum is that the GHG emissions from a product do not equal (or explain) the GHG emissions from the company who makes the product. It is not uncommon for consumer goods and food companies to produce a more sustainable product, but also produce a much greater number of less sustainable products. The dairy company Arla is a good example of this since they own the brand Jörd that produces organic oat drinks, yet most of Arla’s operations focus on traditional dairy milk (even organic dairy milk) which as high GHG emissions. It is noted the Arla does a good job in transparently reporting on total company GHG emissions from the farm to the store shelf, but this is something that a consumer cannot find on the climate label for a product that the forum envisioned [3]. 
Where there was consensus The consensus at the forum focused on the potential integrity of climate labels on products and specifically the data behind it, more appropriately the current lack of robust data. Right now, there is only available GHG emissions data with some integrity for a few hundred ‘food types’. As explained by the forum panelists, a food type with data are tomatoes, but not a specific tomato grown in Spain or in Denmark. It was further explained this data on the food type does not show that GHG emissions for tomatoes in Denmark are significantly higher than those in Spain. What is missing is robust data available for each specific product following a life cycle assessment (LCA) for GHG emissions, which for example is required under the Green Claims Code introduced in the U.K. in 2021 [4]. The EU, under the European Green Deal, is also looking at green claim’s regulation for both product and organization environmental footprints [5]. 
Several of the panelists made it clear that Denmark can pave the way in European but that a level playing field across Europe (e.g. the methodology and data behind climate labels) should be the ultimate goal. Otherwise, food producers will be reluctant to voluntarily participate in climate labeling as it can open new risk in unfair product differentiation. This also led to another point of consensus that if different product types (e.g. Milk) are compared within categories (e.g. Dairy) then care must be taken in deciding what product types are placed in a category to compare, and that a lot of consumer education is needed.
Finally, there was some consensus one clear issue, that reducing climate impact can in some cases have a negative impact on other sustainability issues such as local economy, animal welfare, and culture. 
Where does the climate label go from here?With climate change being a recognized and pressing issue in Denmark (and other Nordic countries), it is inevitable that a common climate label will happen, with many forum participants predicting it within 2 to 4 years. Even though it was not defined in the forum, there are five possible conclusions of where the climate label may go from here?
It is very likely that the first government back climate label will not be LCA based, and will only be based on product types, and not offer real means of direct individual product comparisons. 
Any climate label will require a lot of communications (incl. education) work for companies and governments to help the population understand the climate label and its context. 
Consumers will eventually push for a combined physical label and IT solution, and it is likely that this will not only address the climate impact of the product but also the company behind the product. 
There is going to be a lot of piloting and testing of how best to design the climate label (and combined IT solution) in the next few years, to ensure that enough consumers are nudged to more climate friendly food habits.
Hopefully Nordic cooperation will be able to standardize a Nordic climate label as the countries have done for environmental and allergy labels, then possibly an EU climate label in the long term. 
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About the authorDouglas Marett has spent close to two decades addressing sustainability and climate change actions for governments and companies at a global scale, and is the CEO of GH Sustainability and Managing Director at Enablesus.
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References[1] GS1 Denmark (2021). ‘GS1 Forum 2021 – Klimamærkning af fødevarer’. GS1 AISBL. https://www.gs1forum.dk
[2] Enablesus (2021). ‘Close the Gap’. Enablesus ApS. https://info.enablesus.com/wp-content/uploads/2021/09/2021-close-the-gap.pdf
[3] Arla (2020). ‘Styrket bæredygtighedsindsats i udfordrende tider’. Arla Food amba. https://www.arla.com/492ee1/globalassets/arla-global/company---overview/responsibility/csr-reports/2020/dk_csr_arla_2020.pdf 
[4] UK (2021) ‘CMA guidance to environmental claims on goods and services’. Competition & Markets Authority of the United Kingdom. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1018820/Guidance_for_businesses_on_making_environmental_claims_.pdf 
[5] EU (2021) ‘Initiative on substantiating green claims’. European Commission. https://ec.europa.eu/environment/eussd/smgp/initiative_on_green_claims.htm
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Envisioned climate labels for products are not addressing the full solution

Only little debate on the solution

Missing the full equation

What got fully missed

Where there was consensus

Where does the climate label go from here?

About the author

References

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