Understanding ecolabels and sustainability claims

Being green is not only good for the planet – it also helps businesses market their products and generate sales. Because a number of businesses jumped on the eco-friendly marketing bandwagon without actually following any sustainable practices, the New Zealand Government developed an ecolabels system to authenticate sustainability claims made by businesses in New Zealand. In addition, in 2008 the  Ministry of Economic Development and the  Ministry for the Environment established a directory of the various ecolabels to help businesses identify relevant categories of trusted green business practices.

Download the directory of Ecolabels [XLS, 2.9Mb]

There are more than 200 ecolabels and authenticated stamps used by businesses in New Zealand, and companies wanting to make sustainability claims will need to understand the differences between them to select an appropriate category and meet the standards required.

On this page:

• What is an ecolabel?
• The ecolabel advantage
• Categories of ecolabel
• Regulations you need to know

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What is an ecolabel?

An ecolabel is a sign or seal used to indicate that a product has met certain environmental or social standards. Ecolabels come in many different forms, including seals, logos, symbols, claims and declarations, but they all serve to indicate an environmentally friendly or sustainable attribute of a company, or its products or services.
The Government and private sector have embraced the use of ecolabels to support authenticated eco-friendly marketing. A wide range of standards has been developed or adopted as each industry sector looks to provide an environmental or social standard for businesses to live up to.

Ecolabels are also divided into different categories to indicate whether they focus on an aspect of product performance – such as energy efficiency or fair trade – or measure the environmental impact over the entire life cycle from manufacture right through to recycling and disposal.

The ecolabel directory also lists applicable management systems such as ISO 14001 to help businesses identify the applicable sustainability standards they will need to follow.

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The ecolabel advantage

The effectiveness of ecolabels as a marketing tool can make them well worth the time and effort spent to comply with the established standards. They have allowed companies following genuine sustainable practices to find greater access to new markets, emphasise product differentiation and specify a minimum standard to their suppliers and partners while promoting their values to the public.

Ecolabels help buyers looking for environmentally and socially ethical products to identify environmentally-friendly suppliers and can simplify their decision-making process. An ecolabel can carry the weight of a complex environmental report for a member of the public or a retail buyer who wouldn’t necessarily have the time or understanding to plough through the data.

They also draw attention to the environmental and social implications of practices that take place out of sight of the consumer. By raising awareness of issues such as the overuse of water resources in agriculture or the use of sweatshops in developing countries, ecolabels empower consumers to make more ethical choices while strengthening the brands of companies with ethical practices.
Find out more about the Fair Trading Act and the environmental claims you’re allowed to make.

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Categories of ecolabel

The best ecolabels are those based on reputable, relevant and publicly available standards, where holders are subject to regular conformance assessment by an independent auditor.

Type I Ecolabel

Example: Environmental Choice New Zealand

Ecolabels that meet the requirements of ISO 14024 Environmental labels and declarations – Type I environmental labelling – Principles and procedures.

• Based on specifications available to the public
• Operated by third parties
• Involve independent audits
• Consider life cycle environmental impacts

Type II Environmental claim

Example: Correct use of the mobius loop indicating a product is recyclable or has recycled content

Ecolabels that meet ISO 14021 Environmental labels and declarations – Self-declared environmental claims (Type II environmental labelling) requirements.

• Self-declarations, not involving independent audits

Type III Environmental declaration

Ecolabels that meet the requirements of ISO 14025 Environmental labels and declarations – Type III environmental declaration – Principles and procedures.

• Provide ‘eco profiles’ or ‘report cards’

Independent Certification

Example: ISO14001 certificate for environmental management systems

• Includes independent, third-party audited management systems, product certifications or personal registration/certification

Mandatory label or declaration

Example: ENERGY STAR rating labels on whiteware

A label or declaration required by law.

Private scheme

Example: Marks & Spencer air freight label

These are schemes belonging to a retailer or supplier that is part of the supply chain and has a commercial interest in the product/service being certified.

Endorsement

Example: Greenfield Seal from the US Green Business Alliance
The recommendation of a product/service by a third party.

• Endorsement may not involve formal assessment of the product/service.

Award

Example: Green Ribbon from the Ministry of the Environment
An accolade from a third party in recognition of certain environmental achievements.

Self-claim

Example: Eco safe

A declaration or claim made by a manufacturer, importer, distributor, retailer or anyone else likely to benefit that has not been independently assessed.

List

Example: The Green Pages

A directory of products or services that may be grouped (by sector, for example), alphabetised or ranked according to set acceptance criteria.

• Entries may be self-listed by the manufacturer/supplier, sometimes for a fee.

More information on the different ecolabel categories and conditions used around the world can be found through the Global Ecolabelling Network, an international non-profit association made up of local and international member organisations that works to promote and harmonise ecolabelling.

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Regulations you need to know

The value and authenticity of ecolabels in New Zealand are controlled by five core laws.

• The Contractual Remedies Act 1979
  Provides for damages and cancellation where a person has been induced to enter into a contract as a result of a misrepresentation. Common law action may also be available where claims are intended to deceive.
• The Fair Trading Act 1986
  Prohibits misleading or deceptive conduct, and false or misleading representations about traded goods or services. This act is enforced by the  Commerce Commission, which released The Fair Trading Act - Guidelines for Green Marketing in 2008 for businesses making green claims in their marketing.
• The Food Act 1981
  Makes it an offence to make certain false or misleading claims on food packaging, including about the nature, suitability or quality of the food. This act is enforced by the NZ Food Safety Authority.
• The Consumer Guarantees Act 1993
  States where goods are supplied by description to a consumer, there is a guarantee the goods correspond with the description. The Sale of Goods Act 1908 also requires goods sold to correspond with their description. These acts are administered by the  Ministry of Consumer Affairs.
• The Securities Act 1978
  Prohibits false or misleading information in offer documents and advertising for securities such as stocks, shares, unit trusts and superannuation funds. This act is enforced by the  Securities Commission.

Companies making green claims in their advertising should follow the  Advertising Standards Authority Code for Environmental Claims, which states:

• Any generalised claims must consider the whole life cycle of a product and its packaging.
• Qualified claims (such as claiming the product is environmentally safer) may be acceptable if the company can demonstrate an improvement over a competitor’s product or a previous formula.
• All claims must be substantiated, meet regulatory requirements and explain the nature of the benefit.

Other countries, trading blocs and sector groups may also have provisions regarding ecolabel claims.

This information is provided by Business.govt.nz