Responsible business 2001 - Protests & NGOs
A badge of approval
By Sarah Murray
Published: October 23 2001 17:03GMT | Last Updated: October 23 2001 17:47GMT

In the early days of awareness of environmental and social issues, manufacturers keen to cash in tended to plaster their packaging with labels claiming that what was contained within was "environmentally friendly", with little verification available to back up these claims.

But as growing numbers of customers look for concrete evidence that they are shopping responsibly, suppliers are turning to non-governmental organisations (NGOs) to help reassure them.

A new type of relationship is emerging between companies and NGOs, one where NGOs act as certification bodies, verifying, and in many cases permitting use of their logos for this purpose, that products and services are being produced in socially responsible and environmentally friendly ways.

Greenpeace was a pioneer in this respect. In 1992, it helped launch a hydrocarbon called Greenfreeze that replaced the ozone-damaging coolant in refrigerators. The coolant was embraced early on by Iceland, the UK supermarket chain, and leading companies such as Bosch/Siemens, Electrolux, Miele and Whirlpool have since marketed the product.

Even China, through Kelon, the country's largest refrigeration appliances manufacturer, has produced the units using the technology.

The World Wildlife Fund has been particularly active in endorsing products. In 1997, the organisation teamed up with Unilever, one of the world's largest purchasers of frozen fish, to create the Marine Stewardship Council (MSC), an independent body that certifies fisheries around the world that are run on a sustainable basis.

While the WWF was anxious to do something to lessen dangers of over-fishing to the world's eco-system, Unilever was motivated by more practical concerns. The company, whose brands include Findus, Birds Eye, Igloo in Europe and Gorton's in the US, was experiencing problems in sourcing and wanted to secure a constant supply.

Since the MSC was established, five fisheries, including some of the world's most important, have been certified. The salmon fisheries of Alaska, for example, produce about 40 per cent of the world's wild salmon; the rock lobster fishery in Western Australia is one of the country's biggest export fisheries; and the Hoki fishery of New Zealand is the country's leading export fishery, producing 200,000 tonnes of fish annually.

Part of the reason for MSC's success are vested interests. Numerous parties have an interest in participating in the scheme and it is not just companies such as Unilever that benefit. The fisheries themselves become more profitable, producing more fish through increasingly sustainable farming techniques and, further down the food chain, shrewd marketers can use the MSC logo to sell their products to environmentally-concerned consumers.

"It's important that all parties with a stake do the right thing,” says Scott Burns, director of WWF's Endangered Seas Campaign, which supports the MSC's efforts. "But clearly these initiatives are more likely to succeed when goodwill and business bottom line coincide."

In the US, Wholefoods Market, one of the world's largest retailers of natural and organic foods, has been a strong supporter of the scheme. Margaret Wittenberg, vice-president of governmental and public affairs at Wholefoods Market, believes that eco-labelling can help companies stand out from the crowd.

"One of the things that has made us successful is that we try to live according to our core values," she says. "That's what differentiates us and being able to offer products that are certified as sustainably managed is an affirmation that we are walking the talk."

A similar WWF initiative, the Forest Stewardship Council, which was established in 1993, has become the leading international forest certification scheme with 18m hectares certified worldwide, including 1.5m hectares in the US.

Growing numbers of companies have committed to producing and purchasing forest products from well-managed forests endorsed by the FSC, including the US-based Lowes companies, one of the world's largest home improvement retailers.

As the endorsement idea gains momentum, some unlikely alliances are emerging. After all, the Royal Society for the Protection of Birds would not appear to be the logical partner for an energy company. But last year it linked up with Scottish and Southern Energy to offer RSPB Energy, a “green” tariff supporting the growth of renewable energy.

Indeed, energy has proved an area attracting a growing number of links between NGOs and the corporate world. In August this year, Innogy, the UK arm of the demerged energy utility National Power, raised its profile by announcing an agreement with Greenpeace to market through its retail arm, npower, electricity produced by a proposed offshore wind farm.

UK electricity users can choose to receive their bills under a new renewable brand called Juice, which will feed one unit of renewable energy to the national grid for every unit of electricity used by the customer.

It is hardly surprising power companies are keen to embark on such initiatives. A recent report conducted by Clean Edge, a market-intelligence and publishing company, said the clean energy sector will grow 28 per cent annually to $82bn by 2010.