Navigating the wilderness of green business certifications

The Sweet Candy Co in Salt Lake City reduced the amount of waste it sent to landfills and cut its water and energy use. Now it has an appetite to tout its efforts to make its business operations more eco-friendly.

When looking at all the options, the company decided that getting a green business certification may be the answer, though it was hard to choose from the mass of them on the market.

"I am not super-fluent in this field and I'm trying to head up a [sustainability] team, but I'm confused myself," said Rachel Sweet, the Sweet Candy Co's vice president of marketing.

She's looking for a certification that "stands for something". "I'm concerned about all the different certifications that are coming out and what they're going to end up meaning in consumers' minds," Sweet said.

As more companies strive to display their green credentials, a crop of certifications are springing up but they vary in rigour and oversight. There is no consistency among them and no national authority in charge of setting uniform standards.

"The problem is, it is a new, emerging area," said Tom Hinton, president and CEO of the American Consumer Council (ACC). "As a result, there is a lack of credible organisations trying to fill the demand for certification. Until you have a few other industries and non-profit organisations step forward, consumers and companies run the risk of subscribing to a certification process that may not deliver all it promises."

The ACC launched its Green C Certification in the US in June after identifying a trend four years ago. Consumers wanted to support the green movement by buying from companies known for environmental stewardship, Hinton said. "[But] as we researched the field of environmental compliance, we found no consumer-focused, universal criteria that companies or organisations could use to tell consumers they were environmentally compliant or acting responsibly," he continued. "So we acted to fill the gap as a non-profit organisation that represents the voice of the consumer."

Standards glut

The ACC is not alone. The Green Business Alliance in Boca Raton, Fla, debuted a certification programme this year, while EarthRight Business Institute of Park City, Utah, and Sustainable Business Network of Washington, DC are now conducting pilot programmes with plans to launch final products in late 2008 and early 2009 respectively. Los Angeles is also reportedly developing one modelled after the Bay Area Green Business Program, which started 12 years ago.

It can fatten a company's bottom line, according to Cliff Waldeck, owner of Waldeck Office Supplies in San Francisco, which is certified through San Francisco County. "In the process of being certified green, you save money because you consume less electricity and water," Waldeck said. "You recycle and reuse a lot more."

Having your business certified can also earn your company a special logo to market to customers. "From a business point of view, it makes sense. It's a PR story you can share with your customers, and a positive story for your company that you can talk about," Sweet said. "You can make a customer understand they will make a better investment in you by buying your product because you in turn have positive practices."

Michigan-based Concept to Promotion displays its logo from the Institute for Green Business Certification on its web site and has seen the benefits of showing off its certification. "One of our customers, the University of Michigan, wanted to see a copy of the certification and wanted to know what we had done and asked for very detailed information," said human resources manager Karen Walker. "Haworth Office Furniture, which is very green, was also interested in the fact that we were certified."

Many companies have no experience with making their practices more environmentally friendly, so certifications can provide a step-by-step guide. " I could read a book or procedure but I would not have become well informed enough to do a self-audit," Walker said. "There was no way I could have done that. It would have been so time-consuming to educate myself."

Credibility in the marketplace

Despite these benefits, many organisations remain wary of green certification schemes. Sweet expresses concern that certifications should vouch for a business dedicating time and resources to reduce its ecological footprint. Her company can probably now meet the minimum standards of the EarthRight Business Institute's program, a move which she is strongly considering, but she wants to wait until she can measure the progress of her company's new eco-friendly initiatives before finally committing. "I am very cautious about our company doing too much too soon without much history under our belts when there's so much greenwashing going on," Sweet said.

However, despite this caution the certification market is growing quickly as companies try to get competitive advantage with consumers by being the "first in their industry" to earn the Green C Certification or some other designation, said the ACC's Hinton.

He believes that non-profits, rather than for-profit companies, are ideally positioned to certify companies for green business practices. For one thing, they serve the public good, not their bottom line. "Typically, I have found that while they are good people, [for-profits] exist to generate clients and revenue from those clients," Hinton said.

Hinton argues that businesses should think about three things when considering a certifier: First, the programme should have high standards and rigorous criteria that demand a close examination of the applicant's environmental compliance and sustainability practices. The standard should be set by a credible organisation that has received input from a variety of stakeholders, such as environmental and business groups, and government agencies.

Second, a credible certification should have an independent verification process to ensure applicants are worthy of the certification and actually doing what they claim.

Finally, the certification should have marketplace value and credibility, such as the Green Seal and Forest Stewardship Council certifications.

But the distinction between non-profit and for-profit can be a red herring, according to Linda Brown, executive vice president of Scientific Certification Systems in Emeryville, California, a for-profit certifier of products and performance for the forestry, sustainable agriculture and green building industries, among others. She argues that some non-profits may operate with agendas that could bias the results, citing the example of certificates that are contingent on fees being paid. "They should have no vested interest in the outcome," Brown said.

She also warned that companies should look for potential conflicts of interest between the certifier and business or product and evaluate the professional stature of the certifying staff. Moreover, there should be a level of transparency that allows anyone to look at the standards required for a certification.

Self-certification

Even self-verification programmes, which have less oversight, can still have value, said Ceil Scandone, regional programme co-ordinator of the Bay Area Green Business Program, which is independently verified by a utility or county agency. "If you have integrity and resources, even the self-verifications have a use as an educational tool," she said.

Hinton applauds any company that tries to improve its environmental practices. Often, companies must go through a self-verification process because it is a new area in terms of environmental compliance.

"Having said that, once that company tries to market its certification, I think it is imperative for the company to have a seal of approval from a credible non-profit certification program," Hinton said. "It will give the company greater credibility in the marketplace."

Yet certifications can go in the opposite direction. Some standards can be too stringent to attract participation, said Stephan Sylvan of the US Environmental Protection Agency. Trying to reduce near-term environmental impacts will not happen if only a small part of the market participates.

"The monitoring and verification work is critical to maintain credibility of the initiative and confidence of the buyers. That's really key," said Sylvan, who co-ordinates the EPA's dozens of voluntary programs, such as Energy Star and WasteWise. "It is possible in some cases for people to go too far and chill the market. Some level is important but striking that balance is key."

Tilde Herrera is associate editor at GreenBiz.com, where this article first appeared