Risks & Rewards of Green Branding

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Confused by what is and is not Green? You’re not alone.

Part 1 of 5

The last few years have seen a dramatic increase in consumer awareness and concern for environmentally-conscious or “green” consumerism. Coincidentally, as consumers join the movement to be more eco-friendly, businesses have likewise embraced both being green and being perceived as green in their marketing practices. The rapid proliferation of “green” brands begs the question “How do consumers and institutional buyers know if something is “green” or “eco-friendly”?”

To address such concerns, companies and industries have launched “ecolabels” and “eco-certification” schemes to add credibility to green claims, guide eco-friendly purchasing, and improve environmental performance standards. Demand for products with ecolabels is growing, though confusion about which companies are truly environmentally responsible persists.

Since environmental claims made in advertisements are often intangible, businesses need to make them resonate to consumers beyond just feeling good about what they are buying. Consumers and businesses can benefit from eco-labels by: (1) understanding how certification marks, labels and logos can be used to signal green credentials, (2) using and maintaining proper best practices and guidelines to which companies must adhere in order to meet a certified standard, (3) understanding which companies have succeeded in branding and why, (4) understanding how to avoid accusations of “greenwashing”, or exaggerated claims in their marketing, and (5) keeping informed about the changes in the legal and regulatory environment, such as the FTC‘s Green Guides for marketers.

This five-part series on “green” branding will discuss how to identify these issues, provide guidance on proper use of “green” certification marks, a/k/a “eco-labels,” develop policies and procedures to avoid misleading or unproven environmental claims and keep informed about the current trends, marketing strategies and regulatory regimes.

  1. Certification marks, and their role in signaling green credentials

A certification mark “certifies” the nature or origin of the goods or services to which it has been applied. This includes, for example, region or location or origin, materials of construction, method or mode of manufacture or provision, quality assurance, accuracy of the goods or services or any definable characteristic of the goods or services. It can also certify manufacture or provision of services by members of a union or other organization to certain standards.

For example, the Fair Trade Certified™ label applied to food products ensures that farmers and farm workers in developing nations receive a fair price for their product, have direct trade relations with buyers and access to credit, and encourage sustainable farming methods, without the use of a dozen of the most harmful pesticides, and forced child labor. The seal is viewed as a meaningful and clear signal that the producer supports the concepts of social responsibility, pest management and sustainable agriculture.

Under U.S. federal trademark law, a certification mark has a specific definition and certain characteristics. The term “certification mark” means any word, name, symbol, or device, or any combination thereof that is used by a person other than its owner to certify origin, material, manufacture, quality, accuracy, or other characteristics of goods or services.

There are generally three types of certification marks. First, there are geographic certification marks that signal that goods or services originate in a specific region (e.g., ROQUEFORT for cheese). Second, there are quality certification marks that indicate goods or services meet certain standards in relation to quality, materials, or mode of manufacture (e.g., approval by Underwriters Laboratories). Third, there are labor certification marks that certify (i) services performed or labor used in the manufacture of a product were provided by a member of a union or other organization, or (ii) the service provider meets certain standards.

Certification marks possess two distinct characteristics that set them apart from trademarks or service marks. First, unlike a trademark, a certification mark is used by someone other than the owner. The mark is generally applied by other persons to their goods or services, with authorization from the owner of the mark. Second, while the exclusive purpose of a trademark is to indicate commercial source or distinguish the goods or services of one person from another, a certification mark has no such purpose.

A certification mark is not used in the trademark sense of “used.” Rather, it may be used only by persons other than the owner of the mark. That is, the owner of a certification mark does not apply the mark to his or her goods or services and, in fact, usually does not attach or apply the mark at all. The owner of a certification mark does not produce the goods or perform the services in connection with which the mark is used, and thus does not control their nature and quality. Rather, “control” consists of ensure that users of the mark meet the standards established by the certifier.  The purpose of a certification mark is to inform purchasers that the goods or services of a person possess certain characteristics or meet certain qualifications or standards established by another person.

Proper us of “eco-friendly” certification marks can help businesses and marketers to add credibility to “green” marketing claims. As noted above, since the user of a certification mark is not the owner, the organization doing the certifying cannot itself engage in the production or marketing of the goods or services. Furthermore, the organization must be competent to certify that the requirements have been met. This is achieved by confirming adherence to the rules and regulations, providing methods of testing and quality control, and employing appointed individuals or bodies to periodically ensure conformance by a user.