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Study on different types of Environmental Labelling (ISO Type II and II\
I Labels): Proposal for an Environmental Labelling StrategyEnvironmental Resources Management
Eaton House, Wallbrook Court,
North Hinksey Lane
Oxford OX2 0QS
Telephone 01865 384800
Facsimile 01865 384848
Email post@ermuk.com
http://www.ermuk.com
FINAL REPORT
DG Environment, European Commission
Study on different types of Environmental
Labelling (ISO Type II and III Labels):
Proposal for an Environmental Labelling Strategy
September 2000
Prepared by: Charles Allison & Anthea Carter
This report has been prepared by Environmental Resources Management the trading name of
Environmental Resources Management Limited, with all reasonable skill, care and diligence
within the terms of the Contract with the client, incorporating our General Terms and Conditions
of Business and taking account of the resources devoted to it by agreement with the client.
We disclaim any responsibility to the client and others in respect of any matters outside the
scope of the above.
This report is confidential to the client and we accept no responsibility of whatsoever nature to
third parties to whom this report, or any part thereof, is made known. Any such party relies on
the report at their own risk.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
I
EXECUTIVE SUMMARY
ERM was contracted by the Eco-labelling unit of DG Environment at the European
Commission to undertake a Study on Different Types of Environmental Labelling (ISO
Type II and III labels): Proposal for an Environmental Labelling Strategy.  The Terms of
Reference for the study are provided in Annex A.
AIMS AND OBJECTIVES
Within the context of the background described above, the aim of the study is to
examine the role of ISO Type II and III environmental labels at EU level in order to
formulate potential options for a European Environmental Labelling Strategy.
The study has three main objectives:
Objective 1: to identify the characteristics of each of the ISO label types (Types I,
II and III) in isolation from each other and subsequently to
recommend future developments
Objective 2: to analyse the possible relationship between Type I, II and III
environmental labels, including consideration of mandatory and
single issue labels
Objective 3: to identify potential options for a European Environmental
Labelling Strategy
BACKGROUND INFORMATION
The International Standards Organisation (ISO) have developed standards for three
types of environmental product claims, termed ISO Type I, II and III. These can be
described as follows:
• Type I (ISO 14024) claims are based on criteria set by a third party and are multi-
issue, being based on the product’s life cycle impacts.  The awarding body may be
either a governmental organisation or a private non-commercial entity.  Examples
include the EC Eco-label, Nordic Swan and German Blue Angel;
• Type II (ISO 14021) claims are based on self-declarations by manufacturers or
retailers.  There are numerous examples of such claims eg ‘made from x%
recycled material’;
• Type III (ISO/TR 14025) claims consist of quantified product information based
on life cycle impacts.  These impacts are presented in a form that facilitates
comparison between products e.g. a set of parameters.  However, there is no
comparing or weighting against other products inherent within the claim.  An
example which has similarities with Type III claims is Volvo’s product profile for
its S80 passenger vehicle.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
II
• Single issue labelling schemes such as the private Forest Stewardship Council
(FSC) and organic food labels do not fall within any of these categories but are
partially covered by ISO 14020 - General Guidelines for Environmental Claims
and Declarations.
Current Situation
Communication of the environmental performance of products and services is
currently dominated by two extremes: (a) formal selective eco-labels such as the EU
Eco-label, Nordic Swan and German Blue Angel, and (b) often uncontrolled, self-
declared environmental claims.
Need for Broader Policy Initiatives on Product Information
It is felt that there is a need for a broader, more integrated approach due to the
problems caused by misleading claims (so-called ‘greenwash’) and the fact that the
use of formal eco-labels to convey product environmental information is not
appropriate in all circumstances.  For example,
• time consuming criteria development means that formal eco-labels are less
suitable where the duration of the eco-label criteria development process is longer
than the products’ market lifetime;
• the likely ceiling on the number of product categories within the EU Eco-label
scheme and its focus on pan-European products typically used in the home or
office, mean that at the European level, some products will not be covered by
formal eco-labels;
• due to the selective nature of formal eco-labels, only a minority of products can
benefit (i.e. the top 10 - 30% of each product group in terms of environmental
performance).
It is in such circumstances that other instruments, complementary to the national and
European Type I Eco-labels, could add value.  This would entail a wider labelling
strategy which utilises a range of communication  instruments, enabling the most
appropriate information and marketing tool to be used within any given context.
Bringing Type II and III environmental claims into the European Integrated Product
Policy (IPP) tool kit, could thus both expand the current scope of product
environmental information and improve its efficacy.
METHODOLOGY
The study was strongly based on the involvement and participation of relevant
European interest groups such as environmental and consumer organisations,
government bodies and industry (both producers and retailers).  The significant
stakeholder expertise and experience of environmental labelling meant that the
emphasis was placed on obtaining stakeholder opinions and stimulating discussion,
rather than producing an ERM ‘think-piece’.  Due to the scope of the project,
stakeholder consultation occurred primarily at the European, rather than Member
State, level.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
III
Information and opinions from the stakeholders were obtained via published
information sources, questionnaire consultation and a one-day workshop held in
Brussels for key stakeholders.  This information, and subsequent analysis by ERM,
was used to complete the three main objectives outlined above.
ROLE OF ENVIRONMENTAL LABELLING WITHIN INTEGRATED PRODUCT POLICY
To set the issue of environmental labelling in its policy context, stakeholders were
asked initially for their opinions on the role and importance of labelling within an
Integrated Product Policy (IPP).  The responses showed divided opinions, due
largely to differences in the potential importance of environmental labelling versus its
importance in its current state.  This strongly suggests that there is a significant need
to improve the present use of environmental labels.  Additional points highlighted
by stakeholders include:
• IPP will have to strike a balance between ‘command and control’ (ie legislation)
and voluntary or market based instruments such as environmental labelling,
preferably using both in a complementary manner.  This balance could change
depending on the rate and urgency of progress.
• Environmental labelling is more suited to addressing certain environmental
effects and products than others, and hence its use within IPP should be targeted
to optimal effect.
• The need for complementary and supportive tools and policies such as ‘green’
public procurement and environmental taxation.  For too long, the Type I Eco-
label, particularly the European scheme, has operated in isolation against a back-
drop of uncontrolled self-made claims.
OBJECTIVE 1:  CHARACTERISTICS OF LABEL TYPES I, II AND III
Stakeholders were asked to assess the characteristics of Type I, II and III labels
against seven key parameters.  These parameters were data sensitivity, labelling
costs, product availability, consumer education and awareness, consumer
understanding, perceived credibility and environmental effectiveness.  These
parameters were chosen as they are critical to improving the use of the labels by
producers and consumers and their use as a policy tool.  Mandatory and single issue
labels were considered where particularly relevant.
One of the difficulties experienced in undertaking an analysis of label type
characteristics at the European level, relates to the degree of variation between labels
of the same type, particularly between Member States.  For example, there are
significant differences between the existing Type I schemes in terms of consumer
recognition and product coverage.  In addition, there are strong differences in
opinion as to the merits of the different label types with some stakeholders
supporting Type I but not Type II and vice-a-versa.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
IV
However, with these qualifications, the label characteristics identified were then
reviewed to identify the principal generic strengths and weaknesses of Type I, II and III
labels.  Based on these strengths and weaknesses, critical success factors were then
identified which point to ‘best practice’ development of  each label type and the
supportive actions needed to ensure their effective use.  These were as follows:
Critical Success Factors, including complementary measures
Label Type:
I II III
⇒ Transparency
⇒ Consumer awareness:
adequate publicity to ensure
recognition of the label and
its credibility
⇒ Endorsement by key
stakeholders
⇒ Ensuring stringent, significant
and up-to-date criteria
developed with stakeholder
participation to maintain
credibility
⇒ Harmonisation of criteria
between different Type I
schemes, in line with above,
to facilitate use by producers
⇒ Robust data checks
⇒ Visibility of logo on product
⇒ Affordable application
process
⇒ Appropriate selection of
products
⇒ Market penetration
⇒ Framework to prevent invalid
claims: Misleading
advertisement directive; ISO
14021; Best practice
guidelines
⇒ Potentially some form of
verification or data checks
⇒ Sector approach to achieve
consensus on significant
environmental impacts
⇒ Issue of conflict with Type I
needs to be addressed
⇒ Label format tailored to end
user eg consumer vs.
Professional purchaser
⇒ Common label parameters
and methodology to be
developed by industry
sector/product group (with
significant stakeholder
involvement) to enable
comparability between
products.  Preferably
harmonised at International
or European level to increase
cost effectiveness
⇒ Set common Life Cycle
analysis and system
boundaries
⇒ Data transferable to Type I
labels & vice-versa
⇒ Access to data
⇒ Control to ensure validity of
approach and data eg:
verification by trusted 3
rd
party
⇒ Dissemination: third party
could assimilate product
information from Type III
claims and make available eg
via Internet, possibly
accompanied by value
judgements
⇒ Issue of conflict or
replacement of supplier
questionnaires / existing
environmental product
declarations eg NITO for IT
equipment needs to be
addressed
⇒ Combined use of life cycle
data for Type I and III would
reduce costs

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
V
OBJECTIVE 2:  ANALYSE THE POSSIBLE RELATIONSHIP BETWEEN TYPE I, II AND III
LABELS
At present, environmental labels exist and are developed on an individual and
independent basis, with no formal framework or guidance regarding their
interactions.  Whilst this has the advantages of allowing full flexibility and
innovation, it can also lead to overlap and antagonisms between label types and
consumer confusion at the multiplicity of information formats.
In order to analyse how effective relationships and linkages between the different
label types might be developed, it is first necessary to establish the circumstances in
which use of each label type is optimised.  In other words, if we would like to
identify where synergies could occur and where conflicts could be avoided, we need
to know when use of a Type II claim is best, when a Type I label is most suitable and
so on.  Only once this has been ascertained is it possible to begin to delineate the
roles of the different label types and establish some order out of the current potential
for chaos.
The suitability of Type I, II and III labels in different circumstances was outlined via
a suitability matrix .  The matrix identifies the conditions in which development or use
of each label type is most suitable (ie effective) according to key product and
purchase variables such as: length of product development, type of purchase
decision, range of significant environmental impacts (single or multiple) and
consumer awareness of these impacts.  Key results were as follows:
Suitability of Type I
⇒ Applicable to purchases by individuals & private and public organisations;
⇒ Individuals - Quick purchase decisions;
⇒ Lack of consumer understanding of complex environmental impacts;
⇒ Use as ‘soft’ policy tool - indirect impact via indication of best practice/future
legislation eg re chemicals;
⇒ More suitable than single issue where there is:
 A wide range of environmental impacts;
 Trade-off between impacts;
 Low public concern surrounding impacts.
Suitability of Type II
⇒ Potentially applicable to purchases by individuals & private and public
organisations, if credibility assured;
⇒ Individuals - quick purchase decisions - high level of recognition;
⇒ Most suitable where there is:
 Single significant environmental impact;
 High level of actual or potential consumer concern.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
VI
Suitability of Type III
⇒ Best suited to purchases by businesses or public bodies;
⇒ Potential role in replacing (or structuring) supplier questionnaires if standardised
and suitably designed;
⇒ Potential use by individual consumers for major purchase decisions with several
high concern environmental impacts.
OBJECTIVE 3:  IDENTIFY POTENTIAL OPTIONS FOR A EUROPEAN ENVIRONMENTAL
LABELLING STRATEGY
Use of Complementary Policy Tools
Any environmental labelling strategy cannot operate in isolation.  It will require the
use of complementary and supportive policy tools, preferably structured within an
IPP.  Many of the present barriers to using product information to influence
purchase decisions require addressing by other policy tools, for example:
• environmental taxation to address product affordability;
• publicity/educational campaigns eg by NGOs and Government, to raise
consumer environmental education and awareness.
Key complementary tools which it is recommended are developed alongside, and
linked to, product environmental information are outlined in Chapter 5 of the report.
Future Options for a European Environmental Labelling Strategy
Strategy options were developed via a pragmatic approach which asked how
existing tools could be used within a strategy, rather than starting from a blank sheet
or carte blanche.  Suggested options were requested via the questionnaire consultation
and these were then presented and discussed at the stakeholder workshop.
Five strategy options are presented.  These comprise three hierarchical strategies
involving use of a label type as a ‘stepping stone’ to encourage and recognise
producer efforts on the road to achieving an ‘ultimate’ label or claim, and two non-
hierarchical strategies, one needs-based and the other restricted to Type I, II, III and
single issue labels.
The workshop discussion on the strategy options resulted in the following
conclusions:
• In devising a future strategy consultees felt that the ISO standards should not be
used to restrict innovation or other claim types - instead product environmental
information should be designed to meet the needs of specific situations.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
VII
• Although some consultees were in favour of a hierarchical strategy using certain
label types as ‘stepping stones’, the strong differences in opinion surrounding the
merits of type I, II and III labels mean that a hierarchical approach is
inappropriate at this stage.  It was thus felt that, at present, a strategy needs to
provide a framework that can support all product environmental information
tools.
CONCLUSIONS
The following conclusions were reached in terms of consultee opinions of the
characteristics of the different label types and how this feeds into the development of
an environmental labelling strategy.
• There is a lack of consensus amongst stakeholders on the merits of the different
label types.  The differences in opinion arise primarily as a result of the labels’
weaknesses, as identified in the report.
• Discussion of these weaknesses currently dominates the debate and is preventing
stakeholders from developing future strategy options in depth.  For example:
• Due to the lack of consensus on the merits of the different label types, no
hierarchical strategy will receive the necessary critical mass of support at the
present time.  This is not to say that a hierarchical strategy will never be
suitable and should not be considered in the future.  It is to say that major
stakeholder differences will remain unresolved until the weaknesses in the
label types are addressed, and hence the debate at the moment is focused on
an operational rather than a strategic level.
• Since this study was strongly based on stakeholder consultation, the lack of
agreement has prevented the full development and critique of strategy options.
Instead, the key recommendations present, what are in our opinion, the measures
needed to address the issues raised and take the debate forward.
• It was concluded that an effective future strategy will need to address not only
complementarities and antagonisms between label types, but should cover all
forms of product environmental information.  Hence the focus will need to be on a
product information strategy rather than a labelling strategy.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
VIII
KEY RECOMMENDATIONS
The key recommendations are grouped into three categories.
1. Put in place actions to address operational weaknesses in the label types.
Real efforts need to be made to address and resolve the weaknesses which currently
exist within applications of the three label types.  Weaknesses and critical success
factors which need addressing have been identified in Chapter 3.  In addition, several
studies exist which make detailed recommendations for improving Type I and Type
II claims 
(1)
.  Discussions continue, particularly in Denmark, on the possibility of
establishing organised Type III schemes and these should be built on and developed
further, preferably in line with Recommendation 2.
Priorities include:
• Addressing the lack of credibility of Type II claims (and potentially Type III) via
stringent legislative control in order to remove invalid claims; and
• Ensuring that Type I labels are:
A) Targeted at the most suitable product categories;
B) Adequately promoted to ensure consumer recognition of the label and 
its credibility;
C) Increasingly harmonised (between existing schemes) to facilitate their 
use by producers both directly and indirectly (eg via the use of criteria as
best practice).
                                                  
(1) Two examples are: 'Promoting and Marketing the European Eco-label in Germany and Austria', 2000. J. Lohse & J. Wulf-Schnabel,
Okopol; ‘Study on Verification & Control of Environmental Product Claims’, 1998, Prospect.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
IX
2. Establish a formal mechanism to develop the linkages between different forms
of product environmental information, in order to optimise synergies, avoid
antagonisms and increase cost-effectiveness.
This mechanism would increase cost-effectiveness via combining common elements
(eg identification of product life-cycle impacts) and optimise use of product
information via delineating the roles of different forms of product environmental
information on a horizontal level (as opposed to a vertical hierarchy).
It is therefore recommended that a formal mechanism is established in the form of
broad feasibility studies for individual products/product groups.  Each study
would:
A. Identify Product or Service Life-Cycle Impacts using expert opinion and existing
information sources such as life-cycle analyses and Type I criteria.
B. Identify Effective Forms of Product Information.  Following further
development, the suitability matrix (see Chapter 4) could be used to identify
which types of product information would be most effective for that particular
product group.
C. Encourage the Development of Effective and Valid Product Information via
Guidelines, Recommendations etc.  Based on the outcome of (B), encourage the
development of effective forms of product information via Recommendations,
Guidelines and Voluntary Agreements, centred around the significant impacts
identified in A.
The studies would aim to streamline the identification of life cycle impacts, pull
together existing information and avoid the duplication of effort which currently
occurs.  Their success will depend on a ‘broad-minded’ approach from all the
stakeholders involved in the individual label types, with a focus on providing the
most effective form(s) of product information as appropriate.  Such an approach
would ultimately strengthen all label types.
All key stakeholders would be involved in providing information, contributing to the
development of guidance etc. as appropriate.  However, a leading organisational
body would be needed.  There are a number of options for this role which should be
debated including:
• The European Union Eco-labelling Board (EUEB) with avoidance of bias towards
Type I achieved via the use of independent consultants;
• An Independent body;
• Group comprised of Member State Environment Ministries/Agencies;
• Industry Associations;
• Combinations of the above.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
X
3. Consider long-term options for a product information strategy (including
information hierarchies) in more depth through a small working group.
The debate on strategy options at the European level is currently in its infancy and
the work presented in Chapter 6 needs to be developed further.  The discussion of
long-term strategy options should:
(a) be taken forward via a relatively small working group containing an 
appropriate mix of pro-active stakeholders;
(b) be placed within the context of IPP following the Commission’s Green 
Paper;
(c) be established on agreed principles; and
(d) be based on the assumption that the weaknesses identified in each of the 
label types will have been resolved.

Environmental Resources Management
Eaton House, Wallbrook Court,
North Hinksey Lane
Oxford OX2 0QS
Telephone 01865 384800
Facsimile 01865 384848
Email post@ermuk.com
http://www.ermuk.com
FINAL REPORT
DG Environment, European Commission
Study on different types of Environmental
Labelling (ISO Type II and III Labels):
Proposal for an Environmental Labelling Strategy
September 2000

FINAL REPORT
DG Environment, European Commission
Study on different types of Environmental
Labelling (ISO Type II and III Labels):
Proposal for an Environmental Labelling Strategy
September 2000
Reference 6577
Prepared by:  Charles Allison & Anthea Carter
For and on behalf of
Environmental Resources Management
Approved by:   Charles Allison
Position:   Technical Director
Date:   19 September 2000
This report has been prepared by Environmental Resources
Management the trading name of Environmental Resources
Management Limited, with all reasonable skill, care and diligence
within the terms of the Contract with the client, incorporating our
General Terms and Conditions of Business and taking account of
the resources devoted to it by agreement with the client.
We disclaim any responsibility to the client and others in respect of
any matters outside the scope of the above.
This report is confidential to the client and we accept no
responsibility of whatsoever nature to third parties to whom this
report, or any part thereof, is made known. Any such party relies on
the report at their own risk.
In line with our company environmental policy we purchase paper for
our documents only from ISO 14001 certified or EMAS verified
manufacturers.  This includes paper with the Nordic Environmental
Label.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
I
EXECUTIVE SUMMARY
ERM was contracted by the Eco-labelling unit of DG Environment at the European
Commission to undertake a Study on Different Types of Environmental Labelling (ISO
Type II and III labels): Proposal for an Environmental Labelling Strategy.  The Terms of
Reference for the study are provided in Annex A.
AIMS AND OBJECTIVES
Within the context of the background described above, the aim of the study is to
examine the role of ISO Type II and III environmental labels at EU level in order
to formulate potential options for a European Environmental Labelling Strategy.
The study has three main objectives:
Objective 1: to identify the characteristics of each of the ISO label types
(Types I, II and III) in isolation from each other and
subsequently to recommend future developments
Objective 2: to analyse the possible relationship between Type I, II and III
environmental labels, including consideration of mandatory and
single issue labels
Objective 3: to identify potential options for a European Environmental
Labelling Strategy
BACKGROUND INFORMATION
The International Standards Organisation (ISO) have developed standards for three
types of environmental product claims, termed ISO Type I, II and III. These can be
described as follows:
• Type I (ISO 14024) claims are based on criteria set by a third party and are
multi-issue, being based on the product’s life cycle impacts.  The awarding
body may be either a governmental organisation or a private non-commercial
entity.  Examples include the EC Eco-label, Nordic Swan and German Blue
Angel;
• Type II (ISO 14021) claims are based on self-declarations by manufacturers or
retailers.  There are numerous examples of such claims eg ‘made from x%
recycled material’;
• Type III (ISO/TR 14025) claims consist of quantified product information based
on life cycle impacts.  These impacts are presented in a form that facilitates
comparison between products e.g. a set of parameters.  However, there is no
comparing or weighting against other products inherent within the claim.  An
example which has similarities with Type III claims is Volvo’s product profile
for its S80 passenger vehicle.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
II
• Single issue labelling schemes such as the private Forest Stewardship Council
(FSC) and organic food labels do not fall within any of these categories but are
partially covered by ISO 14020 - General Guidelines for Environmental Claims
and Declarations.
Current Situation
Communication of the environmental performance of products and services is
currently dominated by two extremes: (a) formal selective eco-labels such as the
EU Eco-label, Nordic Swan and German Blue Angel, and (b) often uncontrolled,
self-declared environmental claims.
Need for Broader Policy Initiatives on Product Information
It is felt that there is a need for a broader, more integrated approach due to the
problems caused by misleading claims (so-called ‘greenwash’) and the fact that
the use of formal eco-labels to convey product environmental information is not
appropriate in all circumstances.  For example,
• time consuming criteria development means that formal eco-labels are less
suitable where the duration of the eco-label criteria development process is
longer than the products’ market lifetime;
• the likely ceiling on the number of product categories within the EU Eco-label
scheme and its focus on pan-European products typically used in the home or
office, mean that at the European level, some products will not be covered by
formal eco-labels;
• due to the selective nature of formal eco-labels, only a minority of products can
benefit (i.e. the top 10 - 30% of each product group in terms of environmental
performance).
It is in such circumstances that other instruments, complementary to the national
and European Type I Eco-labels, could add value.  This would entail a wider
labelling strategy which utilises a range of communication  instruments, enabling
the most appropriate information and marketing tool to be used within any given
context.  Bringing Type II and III environmental claims into the European
Integrated Product Policy (IPP) tool kit, could thus both expand the current scope
of product environmental information and improve its efficacy.
METHODOLOGY
The study was strongly based on the involvement and participation of relevant
European interest groups such as environmental and consumer organisations,
government bodies and industry (both producers and retailers).  The significant
stakeholder expertise and experience of environmental labelling meant that the
emphasis was placed on obtaining stakeholder opinions and stimulating
discussion, rather than producing an ERM ‘think-piece’.  Due to the scope of the
project, stakeholder consultation occurred primarily at the European, rather than
Member State, level.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
III
Information and opinions from the stakeholders were obtained via published
information sources, questionnaire consultation and a one-day workshop held in
Brussels for key stakeholders.  This information, and subsequent analysis by
ERM, was used to complete the three main objectives outlined above.
ROLE OF ENVIRONMENTAL LABELLING WITHIN INTEGRATED PRODUCT POLICY
To set the issue of environmental labelling in its policy context, stakeholders were
asked initially for their opinions on the role and importance of labelling within an
Integrated Product Policy (IPP).  The responses showed divided opinions, due
largely to differences in the potential importance of environmental labelling versus
its importance in its current state.  This strongly suggests that there is a significant
need to improve the present use of environmental labels.  Additional points
highlighted by stakeholders include:
• IPP will have to strike a balance between ‘command and control’ (ie legislation)
and voluntary or market based instruments such as environmental labelling,
preferably using both in a complementary manner.  This balance could change
depending on the rate and urgency of progress.
• Environmental labelling is more suited to addressing certain environmental
effects and products than others, and hence its use within IPP should be
targeted to optimal effect.
• The need for complementary and supportive tools and policies such as ‘green’
public procurement and environmental taxation.  For too long, the Type I Eco-
label, particularly the European scheme, has operated in isolation against a
back-drop of uncontrolled self-made claims.
OBJECTIVE 1:  CHARACTERISTICS OF LABEL TYPES I, II AND III
Stakeholders were asked to assess the characteristics of Type I, II and III labels
against seven key parameters.  These parameters were data sensitivity, labelling
costs, product availability, consumer education and awareness, consumer
understanding, perceived credibility and environmental effectiveness.  These
parameters were chosen as they are critical to improving the use of the labels by
producers and consumers and their use as a policy tool.  Mandatory and single
issue labels were considered where particularly relevant.
One of the difficulties experienced in undertaking an analysis of label type
characteristics at the European level, relates to the degree of variation between
labels of the same type, particularly between Member States.  For example, there
are significant differences between the existing Type I schemes in terms of
consumer recognition and product coverage.  In addition, there are strong
differences in opinion as to the merits of the different label types with some
stakeholders supporting Type I but not Type II and vice-a-versa.

ENVIRONMENTAL RESOURCES MANAGEMENT DG ENVIRONMENT, EUROPEAN COMMISSION
IV
However, with these qualifications, the label characteristics identified were then
reviewed to identify the principal generic strengths and weaknesses of Type I, II and
III labels.  Based on these strengths and weaknesses, critical success factors were
then identified which point to ‘best practice’ development of  each label type and
the supportive actions needed to ensure their effective use.  These were as
follows:
Critical Success Factors, including complementary measures
Label Type:
I II III
⇒ Transparency
⇒ Consumer awareness:
adequate publicity to ensure
recognition of the label and
its credibility
⇒ Endorsement by key
stakeholders
⇒ Ensuring stringent, significant
and up-to-date criteria
developed with stakeholder
participation to maintain
credibility
⇒ Harmonisation of criteria
between different Type I
schemes, in line with above,
to facilitate use by producers
⇒ Robust data checks
⇒ Visibility of logo on product
⇒ Affordable application
process
⇒ Appropriate selection of
products
⇒ Market penetration
⇒ Framework to prevent invalid
claims: Misleading
advertisement directive; ISO
14021; Best practice
guidelines
⇒ Potentially some form of
verification or data checks
⇒ Sector approach to achieve
consensus on significant
environmental impacts
⇒ Issue of conflict with Type I
needs to be addressed
⇒ Label format tailored to end
user eg consumer vs.
Professional purchaser
⇒ Common label parameters
and methodology to be
developed by industry
sector/product group (with
significant stakeholder
involvement) to enable
comparability between
products.  Preferably
harmonised at International
or European level to increase
cost effectiveness
⇒ Set common Life Cycle
analysis and system
boundaries
⇒ Data transferable to Type I
labels & vice-versa
⇒ Access to data
⇒ Control to ensure validity of
approach and data eg:
verification by trusted 3
rd
party
⇒ Dissemination: third party
could assimilate product
information from Type III
claims and make available eg
via Internet, possibly
accompanied by value
judgements
⇒ Issue of conflict or
replacement of supplier
questionnaires / existing
environmental product
declarations eg NITO for IT
equipment needs to be
addressed
⇒ Combined use of life cycle
data for Type I and III would
reduce costs

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OBJECTIVE 2:  ANALYSE THE POSSIBLE RELATIONSHIP BETWEEN TYPE I, II AND III
LABELS
At present, environmental labels exist and are developed on an individual and
independent basis, with no formal framework or guidance regarding their
interactions.  Whilst this has the advantages of allowing full flexibility and
innovation, it can also lead to overlap and antagonisms between label types and
consumer confusion at the multiplicity of information formats.
In order to analyse how effective relationships and linkages between the different
label types might be developed, it is first necessary to establish the circumstances
in which use of each label type is optimised.  In other words, if we would like to
identify where synergies could occur and where conflicts could be avoided, we
need to know when use of a Type II claim is best, when a Type I label is most
suitable and so on.  Only once this has been ascertained is it possible to begin to
delineate the roles of the different label types and establish some order out of the
current potential for chaos.
The suitability of Type I, II and III labels in different circumstances was outlined
via a suitability matrix .  The matrix identifies the conditions in which development
or use of each label type is most suitable (ie effective) according to key product
and purchase variables such as: length of product development, type of purchase
decision, range of significant environmental impacts (single or multiple) and
consumer awareness of these impacts.  Key results were as follows:
Suitability of Type I
⇒ Applicable to purchases by individuals & private and public organisations;
⇒ Individuals - Quick purchase decisions;
⇒ Lack of consumer understanding of complex environmental impacts;
⇒ Use as ‘soft’ policy tool - indirect impact via indication of best practice/future
legislation eg re chemicals;
⇒ More suitable than single issue where there is:
 A wide range of environmental impacts;
 Trade-off between impacts;
 Low public concern surrounding impacts.
Suitability of Type II
⇒ Potentially applicable to purchases by individuals & private and public
organisations, if credibility assured;
⇒ Individuals - quick purchase decisions - high level of recognition;
⇒ Most suitable where there is:
 Single significant environmental impact;
 High level of actual or potential consumer concern.

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Suitability of Type III
⇒ Best suited to purchases by businesses or public bodies;
⇒ Potential role in replacing (or structuring) supplier questionnaires if
standardised and suitably designed;
⇒ Potential use by individual consumers for major purchase decisions with
several high concern environmental impacts.
OBJECTIVE 3:  IDENTIFY POTENTIAL OPTIONS FOR A EUROPEAN ENVIRONMENTAL
LABELLING STRATEGY
Use of Complementary Policy Tools
Any environmental labelling strategy cannot operate in isolation.  It will require
the use of complementary and supportive policy tools, preferably structured
within an IPP.  Many of the present barriers to using product information to
influence purchase decisions require addressing by other policy tools, for
example:
• environmental taxation to address product affordability;
• publicity/educational campaigns eg by NGOs and Government, to raise
consumer environmental education and awareness.
Key complementary tools which it is recommended are developed alongside, and
linked to, product environmental information are outlined in Chapter 5.
Future Options for a European Environmental Labelling Strategy
Strategy options were developed via a pragmatic approach which asked how
existing tools could be used within a strategy, rather than starting from a blank
sheet or carte blanche.  Suggested options were requested via the questionnaire
consultation and these were then presented and discussed at the stakeholder
workshop.
Five strategy options are presented.  These comprise three hierarchical strategies
involving use of a label type as a ‘stepping stone’ to encourage and recognise
producer efforts on the road to achieving an ‘ultimate’ label or claim, and two
non-hierarchical strategies, one needs-based and the other restricted to Type I, II,
III and single issue labels.
The workshop discussion on the strategy options resulted in the following
conclusions:
• In devising a future strategy consultees felt that the ISO standards should not
be used to restrict innovation or other claim types - instead product
environmental information should be designed to meet the needs of specific
situations.

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• Although some consultees were in favour of a hierarchical strategy using
certain label types as ‘stepping stones’, the strong differences in opinion
surrounding the merits of type I, II and III labels mean that a hierarchical
approach is inappropriate at this stage.  It was thus felt that, at present, a
strategy needs to provide a framework that can support all product
environmental information tools.
CONCLUSIONS
The following conclusions were reached in terms of consultee opinions of the
characteristics of the different label types and how this feeds into the development
of an environmental labelling strategy.
• There is a lack of consensus amongst stakeholders on the merits of the different
label types.  The differences in opinion arise primarily as a result of the labels’
weaknesses, as identified in the report.
• Discussion of these weaknesses currently dominates the debate and is
preventing stakeholders from developing future strategy options in depth.  For
example:
 
• Due to the lack of consensus on the merits of the different label types, no
hierarchical strategy will receive the necessary critical mass of support at
the present time.  This is not to say that a hierarchical strategy will never
be suitable and should not be considered in the future.  It is to say that
major stakeholder differences will remain unresolved until the
weaknesses in the label types are addressed, and hence the debate at the
moment is focused on an operational rather than a strategic level.
• Since this study was strongly based on stakeholder consultation, the lack of
agreement has prevented the full development and critique of strategy options.
Instead, the key recommendations present, what are in our opinion, the
measures needed to address the issues raised and take the debate forward.
• It was concluded that an effective future strategy will need to address not only
complementarities and antagonisms between label types, but should cover all
forms of product environmental information.  Hence the focus will need to be
on a product information strategy rather than a labelling strategy per se.

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KEY RECOMMENDATIONS
The key recommendations are grouped into three categories.
1. Put in place actions to address operational weaknesses in the label types.
Real efforts need to be made to address and resolve the weaknesses which
currently exist within applications of the three label types.  Weaknesses and
critical success factors which need addressing have been identified in Chapter 3.  In
addition, several studies exist which make detailed recommendations for
improving Type I and Type II claims 
(1)
.  Discussions continue, particularly in
Denmark, on the possibility of establishing organised Type III schemes and these
should be built on and developed further, preferably in line with Recommendation
2.
Priorities include:
• Addressing the lack of credibility of Type II claims (and potentially Type III)
via stringent legislative control in order to remove invalid claims; and
 
• Ensuring that Type I labels are:
A) Targeted at the most suitable product categories;
B) Adequately promoted to ensure consumer recognition of the label and 
its credibility;
C) Increasingly co-ordinated (between existing schemes) to facilitate their 
use by producers both directly and indirectly (eg via the use of criteria 
as best practice).
(1) Two examples are: 'Promoting and Marketing the European Eco-label in Germany and Austria', 2000. J. Lohse & J. Wulf-
Schnabel, Okopol; ‘Study on Verification & Control of Environmental Product Claims’, 1998, Prospect.

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2. Establish a formal mechanism to develop the linkages between different
forms of product environmental information, in order to optimise synergies,
avoid antagonisms and increase cost-effectiveness.
This mechanism would increase cost-effectiveness via combining common
elements (eg identification of product life-cycle impacts) and optimise use of
product information via delineating the roles of different forms of product
environmental information on a horizontal level (as opposed to a vertical
hierarchy).
It is therefore recommended that a formal mechanism is established in the form of
broad feasibility studies for individual products/product groups.  Each study
would:
A. Identify Product or Service Life-Cycle Impacts using expert opinion and
existing information sources such as life-cycle analyses and Type I criteria.
B. Identify Effective Forms of Product Information.  Following further
development, the suitability matrix (see Chapter 4) could be used to identify
which types of product information would be most effective for that particular
product group.
C. Encourage the Development of Effective and Valid Product Information via
Guidelines, Recommendations etc.  Based on the outcome of (B), encourage the
development of effective forms of product information via Recommendations,
Guidelines and Voluntary Agreements, centred around the significant impacts
identified in A.
The studies would aim to streamline the identification of life cycle impacts, pull
together existing information and avoid the duplication of effort which currently
occurs.  Their success will depend on a ‘broad-minded’ approach from all the
stakeholders involved in the individual label types, with a focus on providing the
most effective form(s) of product information as appropriate.  Such an approach
would ultimately strengthen all label types.
All key stakeholders would be involved in providing information, contributing to
the development of guidance etc. as appropriate.  However, a leading
organisational body would be needed.  There are a number of options for this role
which should be debated including:
• The European Union Eco-labelling Board (EUEB) with avoidance of bias
towards Type I achieved via the use of independent consultants;
• An Independent body;
• Group comprised of Member State Environment Ministries/Agencies;
• Industry Associations;
• Combinations of the above.

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3. Consider long-term options for a product information strategy (including
information hierarchies) in more depth through a small working group.
The debate on strategy options at the European level is currently in its infancy
and the work presented in Chapter 6 needs to be developed further.  The
discussion of long-term strategy options should:
(a) be taken forward via a relatively small working group containing an 
appropriate mix of pro-active stakeholders;
(b) be placed within the context of IPP following the Commission’s Green 
Paper;
(c) be established on agreed principles; and
(d) be based on the assumption that the weaknesses identified in each of the 
label types will have been resolved.

CONTENTS
1 INTRODUCTION TO THE STUDY 1
1.1 BACKGROUND TO THE STUDY 1
1.2 AIMS AND OBJECTIVES 2
1.3 METHODOLOGY 2
1.4 STRUCTURE OF THE REPORT 4
2 INTRODUCTION TO ENVIRONMENTAL LABELLING 5
2.1 INTRODUCTION 5
2.2 CURRENT SITUATION 5
2.3 ISO ENVIRONMENTAL CLAIM TYPES 6
2.4 ENVIRONMENTAL LABELLING WITHIN INTEGRATED PRODUCT POLICY (IPP) 10
2.5 STAKEHOLDER OPINIONS ON THE ROLE OF ENVIRONMENTAL LABELS 11
3 ANALYSIS OF LABEL TYPE CHARACTERISTICS 14
3.1 INTRODUCTION 14
3.2 KEY PARAMETERS IN THE USE OF PRODUCT ENVIRONMENTAL INFORMATION
 BY PURCHASERS AND PRODUCERS 15
3.3 PARAMETER 1: DATA SENSITIVITY IE CONFIDENTIALITY 16
3.4 PARAMETER 2: LABELLING COSTS 18
3.5 PARAMETER 3: PRODUCT AVAILABILITY 21
3.6 PARAMETER 4: CONSUMER EDUCATION & AWARENESS 24
3.7 PARAMETER 5:  CONSUMER UNDERSTANDING 28
3.8 PARAMETER 6: PERCEIVED CREDIBILITY 31
3.9 PARAMETER 7: OVERALL ENVIRONMENTAL EFFECTIVENESS 34
3.10 SUMMARY: CHARACTERISTICS OF LABEL TYPES I, II AND III 37
3.11 STRENGTHS, WEAKNESSES AND CRITICAL SUCCESS FACTORS FOR
TYPE I, II AND III LABELS 38
4 SUITABILITY OF LABEL TYPES 41
4.1 INTRODUCTION 41
4.2 SUITABILITY MATRIX FOR TYPE I, II AND III LABELS 42
4.3 SUPPORTING INFORMATION FOR SUITABILITY MATRIX 45
4.4 SUMMARY: SUITABILITY OF TYPE I, II AND III LABELS 53
5 CONTEXT OF A EUROPEAN ENVIRONMENTAL LABELLING   STRATEGY 
54
5.1 INTRODUCTION 54
5.2 CONTEXT FOR AN ENVIRONMENTAL LABELLING STRATEGY 54
5.3 COMPLEMENTARY POLICY TOOLS TO ENVIRONMENTAL LABELLING 54

6 FUTURE OPTIONS FOR A EUROPEAN ENVIRONMENTAL LABELLING
STRATEGY 63
6.1 INTRODUCTION 63
6.2 POSSIBLE STRATEGY OPTIONS 63
6.3 CONSULTEE OPINIONS 67
6.4 CRITIQUE OF STRATEGY OPTIONS 68
7 CONCLUSIONS & KEY RECOMMENDATIONS 69
7.1 INTRODUCTION 69
7.2 CONCLUSIONS 69
7.3 KEY RECOMMENDATIONS 70

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1 INTRODUCTION TO THE STUDY
1.1 BACKGROUND TO THE STUDY
ERM was contracted by the Eco-labelling unit of DG Environment at the European
Commission to examine the potential role of Type II and III environmental labels
(1)  
within the context of a comprehensive Community Environmental Labelling
Strategy.  The study is intended to address how these environmental label types
could be supported in a complementary policy framework at EU level, alongside
Type I Eco-labels such as the EC Eco-label.  Such a policy would have the ultimate
aim of strengthening the role of product environmental information as a market
tool to stimulate environmental improvements in products.  The study intends to
culminate in options and recommendations for future lines of action at European
level.  The Terms of Reference are provided in Annex A.
The study was initiated out of the experience that, in the past, Type I labels have
often had to operate in isolation to other policy tools and against other
environmental claims.  This was recognised in the 1997 Progress Report and
Action Plan on the Fifth European Action Programme, which highlighted that “a
coherent framework with guidelines needs to be developed at EU level for a
policy on products at Member State level which goes beyond Eco-labelling”.
It is commonly felt that there is a need to develop, within the context of moves
towards an Integrated Product Policy (IPP), a broader European environmental
labelling strategy, taking into account developments in ISO standards, mandatory
and single-issue labels.  This study represents a ‘first step’ in addressing these
‘wider labelling issues’ at EU level through the promotion of discussion and
consultation with key stakeholders.
(1)   
The recent ISO (International Standards Organisation) standards and technical report define the following types of product
environmental information:
• Type I (ISO 14024) claims are based on criteria set by a third party and are multi-issue, being based on the product’s life
cycle impacts;
• Type II (ISO 14021) claims are based on self-declaration by manufacturers;
• Type III (ISO/TR 14025) claims consist of quantified product information based on life cycle impacts.

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1.2 AIMS AND OBJECTIVES
The aim of the study is to examine the role of ISO Type II and III environmental
labels at EU level in order to formulate options for a European Environmental
Labelling Strategy.
The study has three main objectives:
Objective 1: to identify the characteristics of each of the ISO label types
(Types I, II and III) in isolation from each other and
subsequently to recommend future developments
Objective 2: to analyse the possible relationship between Type I, II and III
environmental labels, including consideration of mandatory and
single issue labels
Objective 3: to identify potential options for a European Environmental
Labelling Strategy
1.3 METHODOLOGY
The study was strongly based on the involvement and participation of relevant
interest groups such as environmental and consumer organisations, government
bodies and industry (including SMEs and retailers). Information and opinions
from the stakeholders were obtained via published information sources,
questionnaire consultation and a one-day workshop held in Brussels for key
stakeholders.  This information, and subsequent analysis by ERM, was used to
complete the three main objectives outlined above.
1.3.1 Published Information
Relevant published information from a variety of sources was used to inform
Objectives 1 to 3 as appropriate.  The main sources used include stakeholder
position statements relating to environmental labelling and IPP (Integrated
Product Policy), member state government and agency Internet sites on these two
topics and the following reports:
• Conclusions and Papers presented at the International Conference - Green
Goods V: Eco-labelling for a Sustainable Future, Berlin, 1998, OECD Environment
Directorate;
• 
Verification and Control of Environmental Claims, 1998, Prospect (Leubuscher,
Hager, Wattiez, Mombrù and Liaska) for DG Sanco
• Green Labels: Consumer interests and transatlantic trade tensions in eco-labelling,
1999, Consumers International;
• Green Guidance: How consumer organisations can give better advice on putting
sustainable consumption into practice - an international study, 1998, Consumers
International;
• Consumer Products and the Environment, October 1998, UK Department of the
Environment, Transport and the Regions (DETR).

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1.3.2 Questionnaire Consultation
The initial consultation process was based on a questionnaire sent electronically to
stakeholders known to be active or interested in the issue of environmental
labelling, and accompanied by a background document setting out the ISO claim
types and additional explanatory information.
Approximately 30 recipients were identified by ERM in conjunction with Marco
Loprieno and Gerhard Stimmeder (European Commission, DG Environment),
and additional consultees were added to the list as they were recommended by
those already consulted.
Altogether, the questionnaire was sent to 57 representatives covering all
stakeholder groups.  Telephone interviews were offered as an alternative to
submitting a written questionnaire and face-to-face meetings were held with key
UK based consultees.
A total of 30 stakeholders from 10 countries (Canada, Denmark, Finland, Ireland,
Italy, Norway, Portugal, Sweden, Switzerland, UK) provided responses to the
questionnaire (Table 1.1 and Annex B).  This represents a response rate of 53%.
Table 1.1 Questionnaire Responses by Stakeholder Group
Stakeholder Group Sent Received
• Consumer Organisations 4 4
• Environmental NGOs 4 2
• Government and Eco-label competent
bodies
22 12
• Procurement associations 3 0
• Producers and trade associations 13 6
• Retailers and trade associations 7 4
• Other 4 2
Total 57 30
1.3.3 Workshop Consultation
In order to build on the results obtained from the questionnaires and promote
dialogue between consultees, ERM held a workshop on 26 June at the European
Commission offices in Brussels which was attended by 17 external delegates and 5
Commission representatives (Annex C).
All stakeholder groups were represented with the exception of consumer
organisations who were unable to attend.  Delegates were invited on the basis of
their responses to the questionnaire, operation at European level and need to
achieve a balance of stakeholder groups, in agreement with the Commission.

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During the morning session of the workshop, delegates divided into working
groups to comment and build on the questionnaire results, focusing on the
strengths, weaknesses, success factors and suitability of Type I, II and III labels.
The afternoon session presented strategy options identified during the
questionnaire consultation and these formed the basis of a full group discussion to
identify alternative options and comment on those suggested.
1.4 STRUCTURE OF THE REPORT
This draft final report is structured in line with the objectives outlined in section
1.2.
• Chapter 2 provides an introduction to the current tools and policy framework
for environmental product information in Europe including a description of the
main features of the ISO label types, single issue and mandatory labels,
illustrated by examples.  This is followed by a discussion of the role of
environmental labelling within the context of Integrated Product Policy and its
principal aims and objectives, based on stakeholder consultation.
• Chapter 3 addresses Objective 1 via the identification of label type
characteristics presented in relation to seven key parameters, for example,
perceived credibility.  From these it was possible to summarise the strengths
and weaknesses of each label type, followed by critical success factors and
complementary measures which indicate areas for future improvement.
• Chapter 4 analyses the possible relationship between type I, II and III
environmental labels (Objective 2) via a suitability matrix which delineates the
circumstances in which each label type is optimised.  This is accompanied by a
discussion of the parameters involved and areas of complementarity and
antagonism between label types.
• Chapter 5 describes the use of complementary policy tools to support an
environmental labelling strategy, including other forms of product
environmental information.
• Chapter 6 outlines potential strategy options, in line with Objective 3, and
consultees’ opinions of these options.
 
• Chapter 7 presents the conclusions of the study and key recommendations for
future action.

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2 INTRODUCTION TO ENVIRONMENTAL LABELLING
2.1 INTRODUCTION
This section provides an introduction to the current status quo of environmental
labelling in Europe and describes the main features of the ISO and other
environmental label types.  It goes on to discuss the aims and objectives of
environmental labelling and its role within the context of Integrated Product
Policy.
2.2 CURRENT SITUATION
The current situation regarding product environmental information is by no
means uniform across the EU member states.  There are varying degrees of
development and control of product environmental claims and labels, and
differing levels of public environmental awareness and concern.
In general, however, the situation has traditionally consisted of:
a) Uncontrolled self-declared environmental claims;
b) Formal selective Eco-labels (Type I) such as the EU Eco-label, Nordic Swan
and German Blue Angel.
This dichotomy between uncontrolled environmental claims and Type I labels has
created a number of problems due to the proliferation of invalid claims, lack of
recognition of formal Eco-labels and variously both purchaser information
overload and lack of valid and comparable information.  Type I labels have often
had to operate in isolation to other policy tools and against other environmental
claims.
These problems are now beginning to be addressed, albeit to differing degrees at
different levels.  Some selected examples are provided in the box below.
• Member State level
⇒ promotion of linkages between environmental labelling and complementary
policy tools including other forms of product environmental information eg
Danish product panels, UK Advisory Committee on Consumers and the
Environment;
⇒ self-declared environmental claims addressed via codes of conduct eg Nordic
Ombudsmen’s Green Code, UK Green Claims Code, Netherlands
Environmental Advertising Code.
• European level
⇒ increased control of self-declared environmental claims being addressed by the
European Commission.
• International level
⇒ development of ISO standards for some claim types; UN guidelines.

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2.3 ISO ENVIRONMENTAL CLAIM TYPES
The International Standards Organisation (ISO) have developed standards for three
types of environmental product claims, termed ISO Type I, II and III. The main
elements of each claim type can be described as follows:
Table 2.1 ISO Environmental Claim Types 
(1)
 
(2)
 
(3)
Type I
ISO 14024
Type II
ISO 14021
Type III
ISO/TR 14025
KEY FEATURES
• pass/fail award system
• third party grants licence
to use label (typically a
logo)
• voluntary
• text statement and/or
logo
• improvements should be
quantified
• voluntary
• avoid meaningless
statements eg
‘environmentally
friendly’, ‘sustainable’
• quantified information
• may be presented in
variety of forms eg text,
graphs, pictorals
• multi-issue, based on
product’s life cycle
impacts
• generally single issue but
may be multi-issue; must
be significant according to
ISO standard
• multi-issue, based on Life
Cycle study
• criteria set and product
assessed by third party
• self-declared, no third
party involvement
• self-declared but must be
peer reviewed according
to ISO technical report
EXAMPLES
• Α full list of Member State
labels is accessible at
http://europa.eu.int
/comm/environment
/ecolabel/link.htm
• Examples include: Blue
Angel (Germany); Bra
Miljoval (Sweden); EC
Eco-label; Medio
Ambiente (Spain); NF-
Environnement (France);
Nordic Swan; Stichting
Milieukeur (Netherlands)
• Numerous examples exist
such as:
• ‘made from x% recycled
material’
• Volvo’s product profile
for S80 passenger vehicle
follows a Type III format
• ITT Flygt: Environmental
Product Declarations for
all new products in line
with ISO 14025
• See Global Type III
Environmental
Declarations Network
http://www.sms-
standard.se/english/
type3nw/index.asp
(1) International Standard ISO 14024: Environmental labels and declarations - Type I environmental labelling - Principles and
procedures, first edition, 01/04/1999
(2) International Standard ISO 14021: Environmental labels and declarations - Self declared environmental claims (Type II
environmental labelling), 1999
(3) Technical Report ISO/TR 14025: Environmental labels and declarations - Type III environmental labels and declarations, first
edition, 15/03/2000

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Box 2.1 Type I:  EU and National Eco-labels
These label types aim to provide a standardised, credible and recognisable ‘seal of
approval’ that distinguishes the top 10-30% of products in terms of environmental
performance.  Type I labels are based on selective criteria set and certified by a
third party.  The third party or awarding body may be either a governmental
organisation or a private non-commercial entity.
Although quite different in their methodological approach, range of product
groups and criteria, the EU Flower (“Eco-daisy”) and Member State Eco-labels
such as the Nordic Swan, Swedish Falcon and German Blauer Engel (Blue Angel)
are all examples of ISO Type I labels.  They typically consist of a standard logo
and, in addition, the criteria often contain requirements to provide accompanying
explanatory and product use information.
Box 2.2 Type II:  Self-declared Environmental Claims
In a recent report for the European Commission it was recognised that self-
declared environmental claims are a powerful marketing tool 
(1)
.  In some member
states, these environmental claims have successfully raised public environmental
awareness of product impacts and increased market share for less environmentally
damaging products.  This is usually accompanied by some form of verification or
monitoring to maintain the credibility of claims.  In other member states however,
understanding of green issues related to consumption remains low and falsified
‘green’ claims abound (so called ‘greenwash’) leading to a lack of recognition for
valid claims, loss of credibility and consumer confusion.
Following the establishment of an expert working group, DG SANCO of the
European Commission are addressing the use of ISO 14021 to guide and control
self-declared environmental claims at European level.  At present, the control of
these claims is covered by the EC Misleading Advertisement Directive
84/450/EEC (amended by 97/55/EC).  It is possible that amongst other actions,
the Commission will issue Environmental Guidance for the Evaluation of Green Claims
based on ISO 14021 as a Recommendation to provide easily accessible guidance to
consumer organisations, NGOs and producers.
For information on the work of DG SANCO in this area please see:
http://europa.eu.int/comm/consumers/policy/developments/envi_clai/index_
en.html
(1) Verification and Control of Environmental Claims, Leubuscher, Hager, Wattiez, Mombrù and Liaska, 1998

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Box 2.3 Type III: Quantified Environmental Declarations
Product environmental declarations in line with ISO/TR 14025 consist of quantified
environmental data on all significant impacts based on procedures and results
from a Life Cycle study (ISO 14040 series) with additional relevant information, eg
on Environmental Management Systems or social aspects, if desired.
Type III claims are currently covered by an ISO Technical Report 
(1)
  rather than an
accepted international standard and hence there remains significant room for
variability in how Type III claims are developed and managed.  For example,
Type III claims may be:
a) developed and self-declared by a producer; or
b) part of a programme in which an industrial sector or independent body
develops the format (sets categories of parameters, minimum requirements,
form of presentation) and involves third parties.
In both cases, the technical report establishes the requirement for all type III
claims to undergo Critical Review (in accordance with ISO 14040) to verify the
validity of the Life Cycle study and the content and format of the information
presented to purchasers.
There are relatively few examples of Type III claims, however those which
broadly follow the conditions of the technical report include the Canadian
TerraChoice and Swedish Environmental Product Declaration systems.  The
Swedish Materials and Mechanics Standards (SMS) has established a Global Type
III Environmental Declarations Network (see http://www.sms-
standard.se/english/type3nw/index.asp).
(1) ISO Technical Reports must be reviewed within 3 years of their publication and either converted into an International Standard,
extended for a further 3 years or withdrawn.

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Box 2.4 Other forms of Environmental Product Information
The ISO claim types form a method of standardising 3 forms of environmental
product claims out of the multiplicity which currently exist.  Other notable and
established forms of product environmental information not covered by the ISO
standards include:
Single issue labelling schemes with third party certification such as the private
Forest Stewardship Council (FSC) and organic food labels do not fall within any of
the three ISO claim types but are partially covered by ISO 14020 - General
Guidelines for Environmental Claims and Declarations.
Mandatory labels can take any form and may be multi or single issue.  Current
examples include the EC Energy Label and EC CO
2
 emissions label for passenger
cars.
User information which provides instructions on how to use or dispose of the
product in a manner which reduces its environmental impact comes in a variety of
forms.  This form of information is extremely important for those products whose
main impact is concerned with its method of operation and/or disposal.  An
example is the ‘Wash Right’ code for detergents, developed by the European
Detergent Manufacturers Association (AISE) 
(1)
.
Other forms of product environmental information currently used in business-to-
business communications such as quantified Environmental Product Declarations
not based on LCA and supplier questionnaires also fall outside the ISO claim
types.
(1) http://www.washright.com/

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2.4 ENVIRONMENTAL LABELLING WITHIN INTEGRATED PRODUCT POLICY (IPP)
Integrated Product Policy (IPP) is a product focused environmental policy approach
which addresses life cycle environmental impacts.  By addressing the product,
environmental and other impacts can be tackled at source and prevented or
optimised rather than cured or minimised at a later stage (eg waste, air emissions,
industrial safety).  It is important to underline that Integrated Product Policy
addresses the whole life cycle of a product, thus avoiding shifting environmental
problems from one medium to another, as opposed to specific product policy,
which addresses one particular environmental effect 
(1)
.
Policy developments at both European and member state level (eg Nordic
Product-Oriented Environmental Strategy), have shown that IPP will require
numerous varied and inter-linked policy tools.  Raising the demand for products
with improved environmental performance across their whole life-cycle is an
important market based element of IPP.  Central to this element is the
development of mechanisms which will deliver credible and comprehensible
product-related environmental information to both individual and business
consumers, including environmental labelling.
An important over-riding feature of IPP should be its ability to achieve co-
operation and complementarity both between different forms of product
environmental information and between product environmental information and
other policy tools.  As previously mentioned, environmental labelling has often
operated in relative isolation.  However, there is great potential for the
development of synergies between labelling and other environmental policy tools
and these are now being developed.  At the European level, these linkages are
currently occurring on a piecemeal basis, for example between the EC Eco-label
and EMAS via the provision of Eco-label fee reductions for EMAS certified
companies.  However, a more formal framework could be envisaged under IPP to
ensure greater co-ordination and mutual reinforcement.
The role of complementary policy tools is considered in further detail in Chapter 5.
(1) European Commission DG XI; Integrated Product Policy, Ernst & Young et al, March 1999

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2.5 STAKEHOLDER OPINIONS ON THE ROLE OF ENVIRONMENTAL LABELS
Stakeholder opinions on the role, aims and objectives of environmental labels
were gathered from published literature in addition to the questionnaires and
workshop discussions.  The results are presented below.
2.5.1 Role of Environmental Labelling within IPP
Questionnaire consultees were divided in their opinions of the importance of
environmental labelling within IPP.  Many made a distinction between its
potential importance versus its importance in its current state, suggesting that
there is a significant need to improve the present use of environmental labels.  The
majority rated it as Very Important (fourth out of a maximum of five), but also
highlighted:
• IPP will have to strike a balance between ‘command and control’ (ie legislation)
and voluntary or market based instruments such as environmental labelling,
preferably using both in a complementary manner.  This balance could change
depending on the rate and urgency of progress.
• Environmental labelling is more suited to addressing certain environmental
effects and products than others, and hence its use within IPP should be
targeted to optimal effect.
• The need for complementary and supportive tools and policies such as ‘green’
public procurement and environmental taxation.  For too long, the Type I Eco-
label, particularly the European scheme, has operated in isolation against a
back-drop of uncontrolled self-made claims.
2.5.2 Aims and Objectives of Environmental Labels
In discussing the role of environmental labelling it is important to return to first
principles and establish the aims and objectives of environmental labels.
Workshop consultees were provided with a number of votes to distribute between
suggested aims and objectives and the results were as follows:

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Figure 2.1 Aims and Objectives of Environmental Labelling: Stakeholders’ Opinions
Aims and Objectives of Environmental Labelling: 
Stakeholders' Opinions
0
4
8
12
16
20
A B C D E F G H
Option: Aims and Objectives
Government and
competent bodies
Environmental
NGOs
Retailers
Producers and
consultancies
Options: Aims and Objectives
A. Enable consumers to differentiate between products on the basis of environmental
performance
B. Raising general environmental awareness eg via the label or associated marketing
C. Raising consumer awareness of the product’s specific environmental impact(s)
D. Identifying life cycle impacts of product groups, thus facilitating improvements in
product environmental performance
E. Contributing to ‘responsible’/’quality’ company/brand image
F. ‘Reward’ producers for improvements in product environmental performance
G. Providing an indication of best practice/future requirements
H. ‘Shame’ producers into improving product environmental performance eg via
mandatory labels such as EC Energy label
According to ISO 14020 (General Principles for Environmental Labels and
Declarations):
“The overall goal of environmental labels and declarations is, through communication of
verifiable and accurate information, that is not misleading, on environmental aspects of
products and services, to encourage the demand for and supply of those products and
services that cause less stress on the environment, thereby stimulating the potential for
market-driven continuous environmental improvement”
The workshop consultation confirmed that enabling consumers to differentiate
between products on the basis of environmental performance is seen as the
primary objective (Figure 2.1) in line with the overall goal outlined in ISO 14020.
However, some questionnaire consultees challenged the role of options B and C,
ie should labels aim to raise consumer education and awareness?  One consultee
noted, “if the claims are kept clear and simple, the need for education can be kept to a
minimum”.  This illustrates an ongoing debate over whether labels should aim to
educate the consumer or simply provide information that educated consumers
can act upon.  Should the label have an educative role or should this be undertaken
elsewhere?  Will the attempt to educate the consumer confuse and add to the
complexity of information provision as a basis for purchase decisions?

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In reality, analysis at a more detailed level reveals that different label types and
purchase decisions are more suited to certain objectives over others, making
generalisations difficult.  This more detailed analysis is presented in Chapter 3,
which discusses the characteristics of the three ISO label types according to seven
key parameters.

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3 ANALYSIS OF LABEL TYPE CHARACTERISTICS
3.1 INTRODUCTION
The aim of this section is to identify the characteristics, both inherent and
potential, of ISO Type I, II and III environmental labels in relation to parameters
which are key to their use in influencing product purchase decisions and as a
policy tool.  This analysis is then used to summarise the main strengths and
weaknesses of the label types which in turn leads to the identification of critical
success factors and suggestions for improvement.
In identifying inherent and potential characteristics it is necessary to note that
the ISO standards and technical report for claim types I, II and III are voluntary in
status and, particularly for Type II and III, do not yet represent the current
situation.  As a result, when discussing each claim type in this report the ISO
standards are taken as a guide to the type of claim, for example Type II is used to
refer to all self-declared claims rather than self-declared claims which fully comply
with the standard.  Subsequently, the discussions of strengths, weaknesses and
success factors are based on the current situation rather than the conditions set out
within the standards.

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3.2 KEY PARAMETERS IN THE USE OF PRODUCT ENVIRONMENTAL INFORMATION BY
PURCHASERS AND PRODUCERS
The seven key parameters against which the label type characteristics are
analysed were chosen by ERM on the basis that they represent potential and
existing barriers to the use of product environmental information by:
• Producers;
• Purchasers;
• Government - as a policy tool.
The parameters are hence critical to increasing and improving the use of the label
types.  The seven parameters chosen were as follows:
Box 3.1 Key Parameters
Key Parameters affecting Producers
1) Data Sensitivity ie confidentiality
2) Labelling Costs including
⇒ Certification costs
⇒ Expertise requirements
Key Parameters affecting Purchasers
3) Product Availability
4) Consumer Education and Awareness
5) Consumer Understanding
6) Perceived Credibility including
⇒ Data quality
⇒ Management, monitoring and verification
Key Parameter affecting Government use of labels as a Policy Tool
7) Environmental Effectiveness
Questionnaire consultees were asked to identify the strengths and weaknesses of
each label type (I, II and III) individually, according to these parameters.  The
analysis of results is presented in Sections 3.3 - 3.9 via a summary table for each
parameter outlining:
• Why is this parameter Significant?  What are its Implications?
• What Influences this parameter?
• Summary of characteristics for label types I, II and III,
followed by a more detailed discussion for each label type.

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3.3 PARAMETER 1: DATA SENSITIVITY IE CONFIDENTIALITY
3.3.1 Summary of Results
Why is this parameter Significant?  What are its Implications?
• Antagonisms can occur where disclosure of data relating to significant
environmental aspects may lead to the exposure of new technical
developments or product composition with subsequent loss of competitive
advantage.  For example, disclosing the use of a particular substance, not used
yet by competitors, which provides improved product performance.
• Voluntary labelling schemes that require sensitive data to be revealed are
unlikely to have a high uptake by producers and mandatory schemes with
such requirements could damage industry competitiveness.
• This issue is part of a broader debate concerning transparency and freedom of
information that also has implications for reporting requirements and health
and safety labelling.
What Influences this parameter?
• Willingness of producers to supply product specific data
• Legislative and cultural context in which producers operate - this can vary
significantly between member states.  For example, “Swedish companies are
obliged to supply data to public authorities and operate in a culture of relatively open
disclosure.  Whereas at the European level, industry associations have refused to
disclose even aggregated industry data in some circumstances” eg in the case of
detergent product groups.
Summary of characteristics for label types I, II and III
I. If the third party operating the scheme maintains confidentiality of product
specific data provided during licensing, Type I schemes can avoid disclosure of
confidential data since the label is generally limited to a logo and qualitative
supporting statements.  However, general lack of data disclosure by industry
in the first instance can hamper the development of Type I criteria.
II. No implications since industry is in full control of disclosure.
III. Potentially significant implications due to the quantified nature of data
disclosed, however, will strongly depend on label format, party responsible for
development and level of peer review.

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3.3.2  Stakeholder comments: Type I
“Where auditing requires the collection of information relating to product design and
manufacture there should be opportunities within the system for businesses to claim
commercial sensitivity to protect intellectual property.” 
(1)
“To reveal all the details of a product or service could threaten the advantage of SMEs in
the market place particularly as they are unlikely to have the resources to fight
counterfeiting of their goods.” 
(1)
Lack of public disclosure of product specific data can be partially compensated for
if the third party has high credibility amongst consumers and Non Governmental
Organisations (NGOs).
Guidelines for the application of Life Cycle Analysis (LCA) within the EU Eco-
label scheme conclude that sensitive foreground data used for criteria setting
should be made public, if necessary in an anonymous form. 
(2)
3.3.3 Stakeholder comments: Type II
No implications regarding data sensitivity since companies have full control over
what information is portrayed.
3.3.4 Stakeholder comments: Type III
There is concern amongst producers that Type III labels “may cause disclosure of
potentially sensitive business information, e.g. about manufacturing processes” due to
their life-cycle basis and requirement for quantified data.  However, it should be
noted that, “currently, Life Cycle Analyses can be performed using aggregated data from
standardised databases and do not necessarily lead to more product specific data becoming
available”
(3)
.
There is currently significant debate surrounding this issue focusing on the level
of life cycle assessment required under the methodology options presented in
ISO/TR 14025, the nature of the critical review and the degree of quantification
required.  At present, a technical report rather than an International Standard
covers Type III labels and hence there is scope for flexibility and future alterations
to address this issue as experience of Type III labels increases.
In addition, it should be noted that a standardised Type III scheme should have
significant industry involvement (as well as other stakeholder groups) in its
design where this issue can be addressed as it arises.
(1) UEAPME, the European Association of Small and Medium Sized Enterprises
(2) Eco-labelling Unit, DG Environment, European Commission
(3) Svenska Naturskyddsföreningen

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3.4 PARAMETER 2: LABELLING COSTS
3.4.1 Summary of Results
Why is this parameter Significant?  What are its Implications?
• The costs associated with different label types are an important consideration
for producers, particularly SMEs.
• Additional costs will ultimately be incorporated into product price, with
subsequent impacts on purchasers.
• The degree to which this occurs will depend on the significance of the
additional costs compared to product price and sales volumes etc.
What Influences this parameter?
The costs associated with using environmental labels relate primarily to:
• Data collection and availability
• Expertise requirements
• Labelling application and licence costs (where applicable)
• Management, monitoring and verification costs (where applicable)
• Promotion and marketing costs
Estimating the impact of these additional costs can be extremely difficult since:
• they are often masked by, or blamed for, premiums applied to ‘green’
products 
(1)
• producers often apply environmental labels to their higher quality, more
innovative products which cost more to produce  
(2)
• the product may carry either additional or reduced costs resulting from the
environmental improvements obtained
• data collection and expertise requirements should not necessarily be seen as
resulting from labelling, rather, labelling is used to provide benefits from good
environmental management and improvements in product environmental
performance which involve data collection and expertise and have additional
costs (eg R&D) and benefits (eg good relations with environmental authorities,
documentation of performance).  In other words, “these costs must be assumed to
provide an advantage for the manufacturer in general .. [rather than] a direct cost of
the environmental label”
(3)
.
Summary of characteristics for label types I, II and III
I. Divided opinions
II. No significant additional costs
III. Costs of undertaking a full life cycle analysis are considerable and, if required,
may be prohibitive for SMEs
(1) SIS Eco-labelling, Sweden
(2) UK DTI (personal opinion)
(3) Norwegian Foundation for Environmental Product Labelling

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3.4.2 Stakeholder comments: Type I
Consultees’ opinions were divided on this issue, for example:
Significant Cost Implications No Significant Cost Implications
“The temporal and financial investment
necessary to enter such a scheme can be
seen as a serious bottleneck to an
application”, particularly for
independent manufacturers and
SMEs.
(1)
“Labelling programmes/schemes have no
impact whatsoever on [product] price,
unless the manufacturer or retailer
believes that they can extract a premium
for being ‘green’”.
(2)
“The awarding scheme is very
expensive.”
(3)
Impact on product price is “generally
neutral, or bringing down prices in the
case of some rebate schemes under
Type 1”.
(4)
Costs of labelling application and licence fees
One specific additional cost associated with Type I schemes are the application or
licence fees.  For example, the Nordic Swan application fee is currently 1800 Euros
and, following approval, the annual licence fee comprises 0.4 % of the product’s
annual turnover from a minimum of 1100 Euros to a maximum of 41 500 Euros 
(5)
.
There were disagreements over the implications of these costs:
Significant Cost Implications No Significant Cost Implications
“The cost of using environmental
declarations cannot exceed the
commercial value.  In the case of the
Nordic Swan, it was concluded
that the cost would be too high”
(6)
“[There are] additional costs with
testing, but used in a sensible way, the
Eco-label should give advantages that
outweigh these costs.  The annual fee is
so low even for the Swan, it does not give
a change in price” 
(7)
The revised EC Eco-label will have flexible fee structures for individual product
groups, fee caps and reduced fee rates for SMEs to make the scheme more
accessible, but at present some stakeholders regard them as being too high 
(8)
.
(1) UEAPME
(2) TerraChoice, Canada
(3) EuroCommerce member, Switzerland
(4) UK Department of the Environment, Transport and the Regions, DETR
(5) Figures are approximate and based on July 2000 conversion rates between the Swedish Kroner and Euro.
(6) Electrolux
(7) Norwegian Foundation for Environmental Product Labelling
(8) 'A milestone for ACCOR group' in July 2000, Environment for Europeans

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Data collection and Expertise requirements
Producers expressed the opinion that as criteria sets based on life-cycle
considerations became more complex and detailed, so the level and costs of data
collection and analysis increased.
(1)  
Some felt that these extra costs could be borne
by the product purchaser whereas others disagreed with this assertion.
3.4.3 Stakeholder comments: Type II
All stakeholders felt that there were no specific additional costs associated with
self-declared labels per se.  Since Type II claims are relatively simple and typically
cover only one or two impacts the costs of data collection are limited.  One
consultee felt that Type II claims in accordance with ISO 14021 may require
additional but minimal costs due to additional data identification and
documentation requirements eg to quantify and validate claims.
Unlike Type I Eco-labels where some of the promotion and marketing costs are
borne by the third party organiser, these costs will be borne by the producer for
Type II labels and may require some additional environmental marketing
expertise.
3.4.4 Stakeholder comments: Type III
The main cost implication of Type III labels relates to the need to undergo some
form of life cycle analysis.  As previously mentioned, ISO/TR 14025 presents 3
methodology options for undertaking life cycle assessment.  The costs associated
with this will depend on:
• Life cycle assessment option chosen;
• Availability of standardised or aggregated LCA data for the product category
concerned;
• Need for and availability of specialist expertise;
• Complexity of environmental impacts.
As life cycle analyses of products and standardised data availability become more
common so the costs to the producer of using Type III labels will decrease.  In
addition, structured Type III schemes organised by industry associations which
set agreed parameters and units of measurement would reduce the individual
costs on companies, particularly SMEs.  At present, however, the data collection
and expertise required is felt to exclude the individual development of Type III
labels by many small and micro-enterprises, unless assistance is provided 
(2)
.
Ultimately, whether it will be cost-effective for SMEs to develop Type III labels
will depend on the product market and supplier demand for such information.
(1) 20 Years of Experience of the German Environmental Labelling Scheme: ‘Blue Angel’, 1998, German Federal Environmental
Agency; Electrolux; EuroCommerce member (Portugal).
(2) ESBA, European Small Business Association.

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3.5 PARAMETER 3: PRODUCT AVAILABILITY
3.5.1 Summary of Results
Why is this parameter Significant?  What are its Implications?
• Product availability and assurance of supply will strongly affect the use of label
types within procurement policies by public organisations and businesses,
including retailers.
• Although demand from organisational procurers will lead to increased
availability, a catch 22 situation can exist whereby organisations feel unable to
pledge to ‘buy green’ without a critical mass of suitable products. A lack of
coverage within product categories can lead to a shortage of supply which is
unacceptable for most organisations for whom availability and consistency of
supply is crucial.
• For some purchase decisions by individual consumers, brand loyalty can
narrow the practical definition of product availability to: ‘is an environmentally
improved product available within my preferred brand?’
What Influences this parameter?
• Scope and capacity of Type I and III label schemes
• Producer uptake
• Retailer stocking
• Affected by many variables other than the characteristics of the label type
• Not a static variable - increases in demand generally lead to growth of supply
Summary of label type characteristics for label types I, II and III
I. Product availability can be a barrier for Type I labels due to their selective
nature and the time taken to develop criteria which can restrict widespread
coverage of product categories.  However, this varies significantly between
different Type I label schemes, due to their differing longevity and as a result
of the increased time and resources required to develop and achieve consensus
on criteria at European, as opposed to Member State, level 
(1)
 .
II. No significant impact on product availability.
III. Difficult to assess due to early stage of development, will vary depending on
market structure and industry involvement.
(1) According to the European Commission Eco-labelling unit, the EC Eco-label process typically takes  18 - 24 months for a product
group.  However this can be significantly extended depending on the commitment of the Member State responsible and the
complexity of the product group in question.

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3.5.2 Stakeholder comments: Type I
Lack of availability of labelled products was highlighted as problematic by
several consultees in terms of incorporating use of Type I labels, eg EC Eco-label,
into procurement policies.  However, product availability is strongly linked to
demand, as one consultee noted, “with increased institutional/public demand for type
I-labelled products, supply will adhere”.  Hence a wide range of demand factors, such
as consumer environmental awareness and label recognition, will affect the
availability of labelled products.
Analysis
Inherent in Type I schemes is the fact that they are selective and generally
restricted to the top 10-30% of products in a product group; maintaining stringent
criteria is crucial to ensure credibility.  This need not be a problem for purchasers
in terms of product availability if this percentage of products do actually carry the
label, products that qualify for the label are able to satisfy consumer priorities (eg
price, quality, brand) and labelled products are stocked in mainstream retail
outlets.  However, low uptake of some Type I labels by producers and retailers
and their vulnerability to boycott by producers has meant that this is not always
the case and is an element that needs continued improvement.
The scope of some Type I labelling schemes in terms of the number of product
categories covered is a more significant restriction.  While some long established
member state schemes cover a wide range of products and services (for example
the German Blue Angel covered 83 product categories by the end of 1998 and
currently applies to around 100 product and service groups) this cannot be said of
all Type I schemes.  The length of time taken to develop agreed criteria and
subsequently update these criteria, in addition to suitability restraints (see Chapter
4), will restrict the rapidity and efficacy of developing widespread coverage of
product categories by Type I schemes.  Due to the increased number of decision
makers involved, this is particularly the case for the EC Eco-label, which currently
covers 15 product categories and is expected to have a future cruising ceiling of
30 over the time-frame of the next 3-4 years 
(1)
.  This is one reason why there is a
need to use other forms of product environmental information.
Uptake of Type I labels by producers will be encouraged if there is increased
harmonisation of criteria between different Type I schemes, since this will reduce
costs and increase benefits for producers operating in EU and global markets.  At
the moment, any co-ordination between Type I labels occurs only on a very
incremental basis.  It is thus extremely important that the commitment within the
revised EC Eco-label Regulation to increased co-operation and co-ordination
between the EC and other Member State Type I schemes is realised.  It has not yet
been ascertained how or in what format this will be achieved, however, the
Commission intends to organise 8 bilateral meetings to explore options and agree
on specific measures.
(1) More details will be provided in the 3-year working plan following the revised EC Eco-label Regulation.

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3.5.3 Stakeholder comments: Type II
Type II labels generally have no significant impact on product availability.
3.5.4 Stakeholder comments: Type III
Type III labels are currently in their infancy although various forms of
environmental product declarations along Type III lines do exist.  Hence whilst
Type III labelled products suffer from limited availability at present, this is likely
to change rapidly due to the burgeoning interest from business and public
procurers.  The non-selective nature of Type III labels together with the potential
development of label formats by industry groups is likely to encourage co-
operation and involvement by producers and hence product availability.
However, in markets dominated by SMEs the cost intensive nature of Type III
declarations may restrict their application and hence availability of labelled
products.

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3.6 PARAMETER 4: CONSUMER EDUCATION & AWARENESS
It is widely accepted that “all types of label are more likely to be effective if there is
already a high degree of public awareness of the environmental issues involved”.
Different label types may be more effective under different consumer awareness
scenarios, which are covered by the suitability matrix in Chapter 4.   Whilst it is
difficult to separate the two, this section aims to identify how the characteristics of
the label types themselves contribute to consumer education and awareness, an
issue that resulted in disparate opinions.  These ranged from “all kind of
environmental labelling have the potential to raise the awareness of the consumer” to
“raising awareness is seldom done via information on products” 
(1)
.
Why is this parameter Significant?  What are its Implications?
• Consumer education and awareness is a prerequisite to the success of most
environmental labels.  However, the relationship between this parameter and
label types can be circular, with labels themselves raising generic and product
specific consumer environmental awareness
What Influences this parameter?
• Label format & visibility
• Associated activities eg marketing
• Credibility including endorsement by stakeholders
• Length of purchase decision
Summary of label type characteristics for label types I, II and III
I. Educating consumers regarding product specific impacts occurs via
requirements to provide accompanying explanatory and product use
information in some Type I schemes.  Associated promotional material
marketing the label can contribute most to raising general consumer awareness.
However, the main use is to enable consumers to differentiate products in
quick purchase decisions, and hence the opportunities for consumer education
via the label itself are relatively limited.
II. Typically provide information about single or a limited range of impacts and
have high visibility.  If in accordance with ISO 14021, these label types can
increase or create awareness of specific product impacts, particularly if
accompanied by related advertising.
III. Rely on a certain level of environmental awareness and understanding for
their interpretation.  However, if presented in formats aimed at individual
consumers for lengthy purchase decisions they have the capacity to illustrate
product-specific environmental impacts and make linkages to global impacts
such as climate change.
Of particular note for this parameter are:
Mandatory labels. Highly visible and can raise consumer awareness.
User Information.  Consumer education via product information is most
important where it relates to user information ie how to use or dispose of the
product.  For example regarding correct dosage, load and temperature selection
for detergents.  Information on the product can also promote other sources of user
information such as advice hotlines.
(1) Svenska Naturskyddsföreningen

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3.6.1 Stakeholder comments: Type I
In general, Type I labels have traditionally consisted principally of a logo and
hence their ability to raise consumer awareness of product specific impacts is seen
as limited.  What they can do is make consumers aware that there are differences
in environmental performance within the product group and identifies the ‘best in
class’.
In terms of educating consumers about product-specific impacts, some Type I
schemes play a minor educative role through requirements to provide
accompanying explanatory and product use information.  For example, “in the
outer circle of the Blue Angel there are references to the special environmental attributes of
the product such as ‘low energy consumption’, ‘low pollutant’ or ‘low noise’”
(1)
.  The
revised EC Eco-label also contains statements providing details of product specific
impacts alongside the ‘flower’ seal of approval.
However, the opportunity for education and awareness raising will vary
depending on the length of time and consideration spent on the purchase
decision.  It could be argued that Type I labels are best suited to quick purchase
decisions (see Chapter 4) and rely on instant recognition of the logo, hence
education and awareness raising should be done primarily via associated tools
and marketing rather than the logo per se.
Promotional campaigns and marketing of the scheme and what the logo
represents can increase general public awareness and lead them to think about the
impacts of the products they buy.  However, the ability of Type I programmes to
utilise associated marketing and promotional campaigns for this purpose will
vary in both level and content between the Type I schemes:
• The level will depend on the funding available;
• The content will depend on the body leading the Type I scheme.  Non-
governmental bodies will be much better placed to highlight the negative
impacts of non-labelled products, ie aggressive and high impact marketing,
than Type I schemes run by government bodies such as the EC Eco-label which
focus on highlighting the positive environmental benefits of labelled goods.
It is important to point out that campaigns to promote Type I schemes,
particularly if led by government ministries or agencies, should not ignore the
other label types as this could lead to conflicting information campaigns and/or
consumer confusion.  For example, the UK government is currently issuing
leaflets to consumers to assist them in identifying credible Type II claims.  The
leaflet, entitled ‘Hi, I’m Green’, also briefly explains the EC Eco-label, EC Energy
label and single issue labels such as the FSC.  Ideally all such initiatives should
cover the most common forms of product information and explain that while
Type I indicate ‘best in class’, Type II claims can also be valid.
(1) 20 Years of Experience of the German Environmental Labelling Scheme: ‘Blue Angel’, 1998, German Federal Environmental
Agency

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The ability of Type I labels to raise education and awareness for professional
purchasers from public or private organisations is potentially much greater.
Professional procurers may use the Type I criteria to identify the product’s
significant environmental impacts, hence providing an educative function.  The
product/service criteria are readily available under all existing Type I schemes.  In
this context, as the EEB point out, Type I schemes are “a way to make the life cycle of
products transparent and raise an interest to put questions about products”.
Type I criteria can also indirectly contribute to consumer awareness via a
roundabout route.  It is highly unlikely that individual consumers will look up
product criteria.  However, the criteria can be used by environmental NGOs to
identify which aspects of a product are cause for environmental concern, leading
to NGO consumer awareness campaigns.
3.6.2 Stakeholder comments: Type II
One consultee wrote, “labelling in and by itself does not raise awareness, unless there is
a parallel program to make them [consumers] aware of the program in question and the
benefits it can bring.  This will not happen with Type II claims as they do not fall within a
‘program’”.  Whilst it is true to say that Type II labels are not generally part of a
parallel awareness-raising programme, it is possible that related product
advertising can undertake an awareness raising role.
Other consultees felt that the main function of Type II claims is to raise awareness
rather than directly influencing purchasing behaviour or enabling differentiation
between products.  They felt that a Type II claim in accordance with ISO 14021
would educate the consumer since it provides details relating  to a product’s
significant environmental impact(s).  However, at the moment, the lack of
credibility and questionable relevance of some environmental impacts
communicated can be a barrier .
Generalisations are complicated by the range of Type II claims and their different
usages.  In the past, Type II product claims have traditionally been issued in
response to existing consumer demand or concern about a particular
environmental impact.  In these cases, the label itself and related product
advertising has the potential to reinforce and expand existing awareness 
(1)
 .
Increasingly, however, Type II claims are used in response to government and
environmental NGO concerns rather than existing consumer demand.  In these
cases, the claim is driven by a need to indicate responsible producer or retailer
conduct to governments and environmental NGOs, thus avoiding negative
publicity or the threat of restrictions.  Often this will be in the absence of existing
consumer demand, and hence the label will have significant ability to initiate
consumer education and awareness.  An example is retailers’ VOC (Volatile
Organic Compounds) labelling on paints.
For an example of VOC labelling see the UK retailer, B&Q’s website at
http://www2.diy.com/about_us/environment/au_e_paint.html.
(1) Note this is not always the case.  Sometimes Type II labels are issued in response to government and environmental NGO
concerns rather than consumer demand, eg retailers'  VOC labelling on paints, which has significant ability to initiate consumer
education and awareness.

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3.6.3 Stakeholder comments: Type III
Type III labels rely on a relatively high level of environmental awareness and
understanding for their interpretation.  However, if presented in formats aimed at
individual consumers for lengthy purchase decisions, they have the capacity to
illustrate a product’s specific environmental impacts and make linkages to global
impacts.  Their wide coverage (being based on LCA) is likely to raise awareness of
less well known impacts.  In addition, one consultee was of the opinion that “Type
3 eco-profiling labels are more likely to appear on most products in the sector and therefore
to have a generally higher visibility in the market [than Type I]”.
3.6.4 Stakeholder comments: Mandatory labels
Mandatory labels generally have the highest visibility of any label type, which
increases their ability to raise awareness.  This is achieved both directly, via being
on the product, and indirectly, via incorporation into mainstream product
information channels such as magazines.  The fact that the information is
provided on all products, is easily obtainable and comes in a standardised and
hence comparable format facilitates its incorporation into comparative articles on
products as found in consumer magazines.  For example, most articles on
washing machines include a column providing the EC Energy label rating and
similarly reviews in car magazines report on the CO
2 
emissions provided by the
new EC label.  These are normally accompanied by some form of explanatory text.
3.6.5 Summary
Some of the differences in opinion arose because of the scope for variation within
the different label types.  For example, Type I has the potential to raise awareness
and educate the consumer but this depends on its promotion, publicity material
and, regarding product-specific education, whether text regarding the main
environmental impacts accompanies the logo.  This provides the opportunity to
identify areas for improvement and critical success factors for the different label
types, which are covered in Section 3.11.

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3.7 PARAMETER 5:  CONSUMER UNDERSTANDING
Why is this parameter Significant?  What are its Implications?
• For all purposes (product differentiation and awareness raising), it is obviously
vital that consumers can understand the information presented
• Can the consumer subsequently use the label to inform their purchase decision
and hence meet the primary objective of environmental labels?
What Influences this parameter?
• Who is the end user ie individual consumer, public or private organisation
• Length of purchase decision
Summary of label type characteristics for label types I, II and III
I. Simple to understand and use to differentiate between products if label type
has high recognition and market penetration
II. Easy to understand but may be meaningless eg ‘environmentally friendly’ or
even misleading if not in accordance with ISO 14021.  This claim type currently
suffers from a lack of credibility
III. Aimed at educated purchasers, typically professional.  Understanding by ‘lay-
people’ will depend on format and length of purchase decision
3.7.1 Stakeholder comments: Type I
Type I is most suited to audiences seeking a simple indicator of product
environmental performance.  By providing an all round ‘seal of approval’, a Type
I label can provide guidance in situations where the average purchaser would find
it impossible to evaluate more detailed information either due to lack of
understanding, lack of time or absence of concern about the wide range of product
environmental impacts.  In other words, if visible and recognised, they make it
easy for purchasers to make a choice based on environmental grounds.
Understanding and use of Type I labels is dependent on the purchaser
recognising what the label represents.  Whilst this has been established for some
schemes, consumer recognition of the EC Eco-label remains low in some Member
States (partly due to low product availability but also lack of promotion) thus
reducing its efficacy.  For example, “Danish consumers are virtually ignorant of the
EU-flower”, whilst “in the UK these [Type I] are not widely used by industry or
understood by customers”.  However, successful promotion of the EC Eco-label in
Spain and Italy shows that this can be addressed.
Individual Consumers
The strength of Type I labels is their simplicity for the consumer.  The fact that
consumers do not have to make comparisons between different environmental
impacts (as they do for Type III labels) makes Type I labels ideal for products with
complex impacts, or those involving trade-offs, particularly for quick purchase
decisions (see Suitability Matrix in Chapter 4).

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Public and Private Procurement by Organisations
Type I labels provide a simple form of differentiation for product purchases which
do not requisite time-consuming comparison and/or for procurers who do not
have the expertise to make such comparisons.  For more significant or
environmentally knowledgeable procurers, the transparency of Type I schemes,
eg availability of criteria, make them easy to comprehend if professional
purchasers wish to find out more.  The lack of ability to compare products with
Type I labels is unlikely to be problematic for procurers as long as the criteria are
sufficiently stringent and only the top 10-30% of products are eligible.  If more
differentiation is needed, then the criteria can be used as a basis for procurers to
seek further information from the producer or supplier.
3.7.2 Stakeholder comments: Type II
Type II claims are generally simple and easy to understand, being designed from
a marketing perspective and aimed at a target market (typically individual
consumers).  Yet the wording can sometimes be confusing or meaningless from an
environmental standpoint and use of the information to influence purchase
decisions can be prevented by lack of credibility.  Type II claims in accordance
with ISO 14021 will address some of these elements.  The claims may or may not
be comparable, the international standard requires the use of figures where
appropriate to substantiate claims, which may facilitate comparison between
products.
3.7.3 Stakeholder comments: Type III
Type III is best suited to highly informed, educated audiences, generally business
or public procurers, who want and are able to make use of broad based
information.  The purchasers must evaluate the information themselves and hence
“must be knowledgeable about the different environmental impacts and their relations and
trade-offs”.  The lack of value judgment, range and detail of information can make
it difficult to use for individual consumers and less informed organisational
procurers.
These conclusions are both general opinion and the result of several
investigations, for example:
• “research carried out [by Konsumentenbond] in Sweden shows that the readability of
such complex environmental information is very low among the average household
consumer”;  whilst on the other hand,
 
• the Danish EPA found that “a great part of the business sector is ready to use the
detailed environmental information that the declarations will contain”.

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In addition, there was widespread consensus that the use of Type III claim types
in business-to-business communications will be optimised if it presents LCA-data
in a uniform, standardised format using agreed sets of parameters. Without some
form of agreed common format for product sectors, comparability between
products will be restricted and the information requirements of procurers may not
be met.  There is no comparing or weighting against other products inherent
within the label type under ISO/TR 14025 although it does encourage “maximum
comparability”.

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3.8 PARAMETER 6: PERCEIVED CREDIBILITY
Credibility has many facets and encompasses both credibility of the product and credibility
of the environmental claim.  Although they are linked, this section focuses on the latter,
i.e. are consumers likely to trust and believe the information provided?  Does the label type
carry credibility with producers, consumer organisations and environmental NGOs?
Why is this parameter Significant?  What are its Implications?
Credibility of the Product
• According to Electrolux, one of the principal benefits of providing product
environmental information is “increased credibility of the brand and products”
• In the past products carrying ‘green’ claims suffered from a perception of poor
product quality and performance, an element now addressed within many
Type I schemes via fitness for use tests and performance criteria (eg EC Eco-
label).
Credibility of the Claim
• Credibility of environmental claims is crucial if purchasers are to use the
information to influence their purchase decisions
• The existence of invalid claims will reduce the credibility of valid
environmental claims unless purchasers can easily differentiate between them
What Influences this parameter?
• Data quality
• Transparency
• Management, monitoring and verification
• Consumer awareness of the label standard/program and awarding body
• Credibility/Reputation of third party (if applicable)
• Credibility/Reputation of producer and/or retailer (both in general and in
particular relating to company environmental and social performance.
Exposure of the latter by media/NGOs can lead to complete loss of consumer
credibility regardless of the validity of specific product claims)
Summary of label type characteristics for label types I, II and III
I. High credibility amongst purchasers and stakeholders familiar with the
scheme, however, this familiarity varies between Type I labels
II. Low consumer credibility unless from very reputable producer or retailer.
Little credibility from the viewpoint of environmental NGOs or consumer
organisations without adequate control via legislation and enforcement 
(1)
III. Credibility with both purchasers and other stakeholders is dependent upon
third party certification/endorsement and to a lesser extent producer
reputation
(1) Svenska Naturskyddsföreningen; WWF

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3.8.1 Stakeholder comments: Type I
The credibility of Type I schemes is extremely high amongst stakeholders
(including purchasers) who are familiar with the schemes but this familiarity can
be lacking amongst individual consumers across Europe, depending on the Type I
scheme in question.  Examples are provided in Box 1.6.
Box 3.2 Variation in Consumer Recognition of Type I schemes
Recognition of Type I labels varies between Member States, for example schemes
such as the German Blue Angel, which was founded in 1978, achieve high
recognition in their native Member State.  In contrast, other Member States have
no national scheme and traditionally low recognition of the pan-European EC
Eco-label.  However, the EC Eco-label is gradually increasing in prominence in
some member states such as France, Spain and Italy and this illustrates that there
is significant potential for increasing awareness across all Member States via
official marketing and promotional activities.  In Denmark, recognition of the
Nordic Swan is far higher than that for the EU Eco-label but, when recognised,
both have “high credibility among the consumers, apparently because public authorities
endorse them”
(1)
.
Consultees noted two potential problems regarding data quality, which may
adversely affect Type I schemes.
“The Eco-labelling Competent Bodies all have different systems for updating and checking
their data (one of the main problems of the scheme is that there are so many Competent
Bodies and few standard procedures - for example, over deciding what constitutes one
product), so [in terms of data quality] a distinction needs to be made between Type 1
schemes with a single administrator and those with several.” 
(2)
“The accuracy and availability of data depends very much on the producers and whether
they are willing to co-operate. Voluntary schemes like eco-labelling schemes are vulnerable
to boycotts.” 
(3)  (4)
Elements needed to maintain or increase the credibility of Type I schemes include:
• balanced stakeholder involvement in criteria development, particularly
including environmental NGOs
• stringent criteria covering entire life cycle
• frequent review of criteria to ensure that they are up to date with technological,
product and environmental developments
• potential expansion or co-operation with other labels to cover social and health
aspects.
(1) Danish Environmental Protection Agency (DK EPA)
(2) EU Competent Body
(3) Norwegian Foundation for Environmental Product Labelling
(4) For example, the German Blue Angel for recycled paper was initially collectively boycotted by the German paper industry in the
late 1970s.  The boycott was broken when an American firm, Scott Paper Co, applied for the label.

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3.8.2 Stakeholder comments: Type II
The lack of credibility of self-declared claims (discussed in Chapter 2, Section 2.2)
due to the existence of invalid declarations has long been cause for concern by
consumer organisations and environmental NGOs.  Declarations may be invalid
due to lack of ability to substantiate claims or their irrelevance in environmental
terms.  Currently, the credibility of Type II programs tends to be determined by
the reputation of the company or organisation concerned, in the marketplace in
which it operates 
(1)
.  Options for addressing this issue and applying ISO 14021 are
discussed in the final chapter.
3.8.3 Stakeholder comments: Type III
Type III labels may be self-declared or may be run as a programme or developed
with an organisation which is able to give the scheme credibility.  The ISO
technical report 14025 requires all type III claims to undergo Critical Review (in
accordance with ISO 14040) to verify the validity of the Life Cycle study and the
content and format of the information presented to purchasers.  However this is
not current established practice.
There was a strong message from environmental and consumer organisations that
“as long as there is no third party certification in these [Type III] schemes, they are not
credible”
(2)
.  Such certification would be facilitated by the quantifiable nature of
Type III labels but would have to cover a wide range of data and impacts
compared to certification of other claim types.
3.8.4 Stakeholder comments: Single issue
According to stakeholder opinion, the consumer credibility of most third party
certified single issue labels such as the FSC (Forest Stewardship Council) and
MSC (Marine Stewardship Council) is excellent due primarily to the high
credibility of the parties involved eg the World Wide Fund for Nature (WWF).
However, in both cases these established single issue labels have recently been
challenged by competing labels.  In the case of the FSC, a rival Pan-European
Forest Certification (PEFC) has been established, whilst the MSC is potentially
threatened by Nordic plans to establish a government-based regional ‘eco-label’
for wild fish and fish products.  In both cases it is likely that the established labels
will retain their high credibility amongst consumers, if consumers are aware of the
NGO involvement.  However, if this involvement is not made clear, there is the
potential for loss of credibility by association if the new schemes have lower
standards and receive negative publicity, in the same way that the existence of
invalid Type II claims has negatively affected the credibility of all environmental
claims including Type I labels.
(1) TerraChoice, Canada; EuroCommerce, Portugal; ANPA, Italy; UK DETR; UK DTI (personal opinion).
(2) World Wide Fund for Nature (WWF)

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3.9 PARAMETER 7: OVERALL ENVIRONMENTAL EFFECTIVENESS
i.e. ability to reduce the environmental impacts of products & encourage continuous
improvement.
Why is this parameter Significant?  What are its Implications?
• The environmental effectiveness of label types will affect their use (and
subsequent promotion) by government as a policy tool
What Influences this parameter?
• Environmental effectiveness is a function of all the previously discussed
parameters.
• However, there are specific additional characteristics of each label type that will
affect their ability to bring about improvements in the environmental
performance of products, for example, since the label types vary in their
coverage of impacts & criteria.
Summary of label type characteristics for label types I, II and III
I. Divergence of opinions
II. Can be high if claims are relevant, avoid trade-offs and impact is a competitive
issue
III. Yes if cover all relevant impacts, explain trade-offs, comparable with other
products and market competition

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3.9.1 Stakeholder comments: Type I
In a survey of German companies 
(1)
, “38% percent believed that the [Blue Angel] eco-
label had led to a clear improvement in the environmental quality of their products”, and
a further 28% agreed to this statement with reservations.
The ability of Type I schemes to bring about improvements in product
environmental performance will depend on the level of market penetration
(which varies between schemes, see Product Availability).  For example, in some
sectors the German Blue Angel has become so firmly established that the awards
criteria have become a standard for products eg photocopiers, heating appliances
and hydraulic fluids 
(2)
.  In a survey of companies using the label 
(1)
, one noted, “In
the beginning, labelling with the Blue Angel had a positive effect on sales.  Today, the
Environmental Label has become the standard.”
Type I pass/fail award schemes are often criticised for being limited to
influencing the top end of the market.  However, there is evidence that Type I
criteria are also seen as an indication of best practice and/or future policy by
producers who use the criteria as guidance to improve their products.  Hence
even when not applied, Type I labels can contribute to improving product
environmental performance and availability of improved products.  This relies on
the criteria being up-to-date which can be problematic.
The review and up-date of Type I criteria provides a formal framework for raising
product environmental performance.  However, the time-scale of review (typically
every 3 years) can act as a restriction and even delay improvements e.g. “the
introduction of refill bags for a product with the Blue Angel was delayed
significantly since it was not allowed by the criteria” 
(3)
.
3.9.2 Stakeholder comments: Type II & III
In order to be environmentally effective, Type II claims must portray a relevant
environmental impact, the improvement of which has no trade-off environmental
impacts.  Similarly, Type III claims must cover all significant environmental
impacts 
(4)
  and explain any notable trade-offs.
There is no formal framework for improving performance within Type II and III
labels which instead rely on market competition to drive improvements 
(5)
 .  For
Type II labels, market competition is likely to depend on the level of actual or
potential consumer concern surrounding the impact being communicated.  For
Type III labels, market competition will be increased if it is possible to compare
products via standardised parameters and measurement.
(1) Assessing the Success of the German Eco-label, 1998, German Federal Environment Agency
(2) 20 Years of Experience of the German Environmental Labelling Scheme: ‘Blue Angel’, 1998, German Federal Environmental
Agency.
(3) AIM
(4) However, Type III can only cover quantifiable aspects and hence do not cover resource depletion, loss of biodiversity etc. like
any LCA-based method (Svenska Naturskyddsföreningen)
(5) SIS Eco-labelling, Sweden

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3.9.3 Stakeholder comments: Mandatory Labels
One of the most effective ways of motivating producers to improve the
environmental performance of their products is to provide ‘negative’ information
i.e. which shows their products in a poor light.  This occurs primarily within
mandatory labelling schemes.  The success of mandatory labels such as the EC
Energy label in effecting improvements in the energy and water efficiency of
applicable wet and cold domestic appliances on the European market have been
proven, although associated voluntary agreements make it difficult to separate the
effects of labelling on its own.  As previously described in Section 3.6.4, the
information provided on products by mandatory labels usually receives
additional exposure in magazines and newspapers.
The downside of mandatory labels is that they rely on legislation which can take
time to develop and implement (typically 5-6 years according to the European
Commission), and can be costly if product data is verified.
3.9.4 Stakeholder comments: User Information
If the main environmental impact occurs during product use and depends largely
on user behaviour, then user information will be most effective.  This needs to be
assessed against the context of product design features which can mitigate
impacts during product use.  For example, for washing machines, systems which
remove excess detergent and automatically correct water use according to load
volume and type may be more effective and have more rapid results than trying
to change user behaviour via information provision.
3.9.5 Stakeholder comments: All Label Types
One consultee noted the possible consequences resulting from consumers
interpretation that the purchase of labelled products provides a feeling of
contentment ie labelled therefore ‘okay’ 
(1)
.  This can create a false sense of security
if consumers do not differentiate between the level of environmental
improvement signified by Type I labels over Type II and III.  In general terms it
may also act against attempts to reduce overall product consumption.
In general, “there is little information available about the effectiveness of environmental
labelling in reducing product impacts, so it is difficult to assess the relative merits of each
type of label.  Generally, labels which appear on most products in a sector and which
compare products in a standardised way, eg. eco-rating and eco-profiling schemes, can act
as a spur to incremental improvement and market transformation across the sector.
Pass/fail eco-labelling schemes are less strong in this respect, although the criteria-setting
process itself can have a wide influence in driving up standards across a sector.” 
(2)
(1) Svenska Naturskyddsföreningen
(2) UK DETR

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3.10 TABLE 3.1 SUMMARY: CHARACTERISTICS OF LABEL TYPES I, II AND III
Key Parameters I II III
Data Sensitivity Can avoid disclosure of confidential data
to user since the label is generally limited
to a logo and qualitative supporting
statements.  But, lack of data disclosure in
the first instance can hamper the
development of Type I criteria.
No implications since industry is in full
control of disclosure.
Potentially significant implications due
to the quantified nature of data
disclosed, however, will strongly
depend on label format, party
responsible for development and level
of peer review.
Labelling Costs Divided opinions No significant additional costs Costs may be prohibitive for SMEs;
reduced via industry schemes.
Product Availability Can be a barrier for Type I labels due to
selective nature, time taken to develop
criteria and limited coverage of product
categories in some instances.
No significant impact on product
availability.
Difficult to assess due to early stage of
development, will vary depending on
market structure and industry
involvement.
Consumer Education &
Awareness
Education regarding product specific
impacts occurs only via requirements to
provide accompanying explanatory and
product use information.  Associated
promotional material marketing the label
can raise general consumer awareness.
If in accordance with ISO 14021, these
label types can increase or create
awareness of specific product impacts,
particularly if accompanied by related
advertising.
If presented in formats aimed at
individual consumers for lengthy
purchase decisions they have the
capacity to illustrate a product’s specific
environmental impacts and make
linkages to global impacts.
Consumer Understanding Simple to understand and use to
differentiate between products if label type
has high recognition and market
penetration
Easy to understand but may be
meaningless eg ‘environmentally
friendly’ and lack credibility if not in
accordance with ISO 14021
Aimed at educated purchasers, typically
organisations.  Understanding by ‘lay-
people’ dependent on label presentation
and length of purchase decision
Perceived Credibility High credibility amongst purchasers and
stakeholders familiar with the scheme,
however, this familiarity varies between
Type I labels
Low consumer credibility unless from
reputable producer or retailer.  Little
credibility from viewpoint of NGOs or
consumer organisations without
adequate control via enforced legislation
Credibility with both purchasers and
other stakeholders is dependent upon
third party certification/endorsement
and to a lesser extent producer
reputation
Environmental
Effectiveness
Divergence of opinions Can be high if claims are relevant, avoid
trade-offs and market competition
High if label covers all relevant impacts,
explains trade-offs, comparable with
other products, market competition

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3.11 STRENGTHS, WEAKNESSES AND CRITICAL SUCCESS FACTORS FOR TYPE I, II AND
III LABELS
The label characteristics identified in the previous section (Section 3.10) were
then reviewed to identify the main strengths and weaknesses of each label
type.  These were presented to workshop consultees for further stakeholder
review and amendments.
It was found that one of the difficulties in identifying label characteristics at a
European level is the degree of variation between labels of the same type and
between Member States.  For example, there are significant differences
between the existing Type I schemes in terms of consumer recognition and
product coverage.  However, with this qualification, Table 3.2 shows the
generic strengths and weaknesses of Type I, II and III labels.
Based on these strengths and weaknesses, critical success factors were then
identified which point to ‘best practice’ development of  each label type and
the supportive actions needed to ensure their effective use.  These are also
presented in Table 3.2.

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Table 3.2 Strengths, Weaknesses and Critical Success Factors of Type I, II and III labels
Label type: I II III
Strengths ∗ High perceived credibility
∗ High validity due to third party
certification
∗ Based on Life Cycle impacts
∗ High level of consumer awareness &
understanding in some countries/for
some schemes (with potential
elsewhere)
∗ Use of criteria as indication of ‘best
practice’
∗ Transparency
∗ High level of consumer
understanding / Simple to
understand
∗ Quick/flexible
∗ ‘Low’ cost
∗ Wide market applicability (products,
company size)
∗ Self-claim, no authorisation, no pre-
clearance - high market flexibility
∗ Based on Life cycle impacts
∗ Detailed information
∗ Gradated information enables
differentiation between labelled
products (within a product
group/function)
∗ Producer freedom/control of format
and marketing (depending on
scheme)
∗ Potential for increased data
availability and sharing
Weaknesses ♦ Cost effectiveness
♦ Complexity reduced to simple
“pass/fail” (from producers
viewpoint this is negative, whereas
from consumers viewpoint it is likely
to be positive)
♦ Criteria may be politically influenced
rather than objective/scientific
♦ Low product availability in some
cases at present time eg for EC Eco-
label
♦ Limited application
♦ Lack of flexibility re product changes
and environmental criteria
♦ Low credibility
♦ Risk of invalid claims and poor data
quality thus misleading consumers
and damaging environmental
effectiveness
♦ Low information content
♦ Everyone can make a green claim, no
differentiation between products,
possibly no competitive advantage
♦ Cost of data collection and analysis
♦ Confidentiality implications
♦ Data accuracy: may be based on
generic/aggregated data
♦ Understanding may be low for
average consumer (depending on
format)
♦ Setting boundaries to life cycle
analysis can be complex and
influence validity and comparability
♦ Value judgements regarding
significance of impacts can be
political rather than
objective/scientific
♦ Common understanding of LCA
methodologies between Member
States needs improving to ensure
comparability and potential
harmonisation.  Consider using LCA
input from EC Eco-label products.
♦ Not currently widely used - affects
comparability and product
availability

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Label type: I II III
Critical Success Factors
including complementary
measures
⇒ Transparency
⇒ Consumer awareness: adequate
publicity to ensure recognition of the
label and its credibility
⇒ Endorsement by key stakeholders
⇒ Ensuring stringent, significant and
up-to-date criteria developed with
stakeholder participation to maintain
credibility
⇒ Harmonisation of criteria between
different Type I schemes, in line with
above, to facilitate use by producers
⇒ Robust data checks
⇒ Visibility of logo on product
⇒ Affordable application process
⇒ Appropriate selection of products
⇒ Market penetration
⇒ Framework to prevent invalid claims:
Misleading advertisement directive;
ISO 14021; Best practice guidelines
⇒ Potentially some form of verification
or data checks
⇒ Sector approach to achieve consensus
on significant environmental impacts
⇒ Issue of conflict with Type I needs to
be addressed
⇒ Label format tailored to end user eg
consumer vs. professional purchaser
⇒ Common label parameters and
methodology to be developed by
industry sector/product group (with
significant stakeholder involvement)
to enable comparability between
products.  Preferably harmonised at
International or European level to
increase cost effectiveness
⇒ Set common Life Cycle analysis and
system boundaries
⇒ Data transferable to Type I labels &
vice-versa
⇒ Access to data
⇒ Control to ensure validity of
approach and data eg: verification by
trusted 3
rd
 party
⇒ Dissemination: third party could
assimilate product information from
Type III claims and make available eg
via Internet, possibly accompanied
by value judgements
⇒ Issue of conflict or replacement of
supplier questionnaires / existing
environmental product declarations
eg NITO for IT equipment needs to
be addressed
⇒ Combined use of life cycle data for
Type I and III would reduce costs

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4 SUITABILITY OF LABEL TYPES
4.1 INTRODUCTION
When is the provision of product environmental information via a label most
effective?  In what circumstances is each label type most appropriate?
This chapter aims to identify at a generic level, across all product categories,
the situations in which type I, II and III labels are most effective.  This is
achieved via the construction of a suitability matrix and subsequent
discussion of the product and purchase variables involved.
By identifying the situations in which each label type is most suitable, it is
possible to begin to delineate conditions for optimal use of each label and
hence provide guidance which can be used to increase effective use of
environmental labels, whilst avoiding potential antagonisms and exploiting
complementarities.
The suitability matrix is based primarily on stakeholders’ opinions and
experiences informed by the questionnaire consultation and partially
developed at the workshop.  Additions have subsequently been made by
ERM.  Therefore, the matrix has not been subject to peer review in its entirety,
and as a result it is suggested that the matrix provides a draft framework for
assessing the suitability of different label types in different situations.
Recommended next steps include expansion to cover other forms of product
environmental information, peer review and testing of its applicability to
specific product categories in order to revise and improve the generic matrix.

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4.2 SUITABILITY MATRIX FOR TYPE I, II AND III LABELS
Table 4.1 Suitability of label types I, II & III
Product/Purchase Variable:
Conditions in which label type is most suitable:
                           Type I                                                        Type II                                                      Type III
⇒ Market life-span (of product) ⇒ Less suitable for products with
short market life-span (<2 years)
⇒ All ⇒ Less suitable for short market
life-span if complex life cycle
analysis required
⇒ Length of product
development
⇒ Product specific - no generic
categorisation possible
⇒ All ⇒ Less suitable for short product
development if complex life cycle
analysis required
⇒ Purchaser eg individual,
company, public body
⇒ All (applicable to purchases by
individuals & private and public
organizations)
⇒ End consumer (individual)
⇒ To lesser extent business-
business
⇒ Professional purchasers (public
and private organisations)
⇒ May be used by individual
consumers if user-friendly
format and lengthy/financially
significant purchase decision
⇒ Type of purchase decision ie
length and significance
⇒ All but particularly suitable for
quick purchase decisions
⇒ All but particularly suitable for
quick purchase decisions
⇒ Significant purchase decision
(cost and/or volume) warranting
more lengthy consideration
⇒ Significance of product
environmental impacts eg
very high, high, medium, low
⇒ Very high (best practice), high
and medium
⇒ Avoid low impacts
⇒ All relevant environmental
impacts
⇒ Medium & High
⇒ Avoid low impacts

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Product/Purchase Variable:
Conditions in which label type is most suitable:
                           Type I                                                        Type II                                                      Type III
⇒ Potential for improving
product environmental
impacts eg via:
◊ changes to product
design;
◊ changes to product
manufacture;
◊ changes in consumer use
behaviour;
◊ alternative
product/service
⇒ Should be targeted at products
with significant potential for
reduction of environmental
impact
⇒ Yes – product manufacture –
although some regard this as
potential  trade barrier
⇒ Yes – impacts improved via
consumer use behaviour if occur
alongside impacts improved via
product design
⇒ Not applied to product category
if an alternative environmentally
superior product or service
category exists which fulfils same
function
⇒ Yes – changes to product design
⇒ Possibly limited for manufacture
due to lack of direct consumer
impact and concern
⇒ Not applicable for changes to use
behaviour for which user
information is most suitable
⇒ Alternative product/service must
be taken into consideration when
establishing relevance of claim
⇒ Yes – changes to product design
⇒ Yes – product manufacture
⇒ Particularly where both of above
are relevant
⇒ Not applicable for changes to use
behaviour for which user
information is most suitable All
except consumer use behaviour
⇒ Alternative product/service must
be taken into consideration when
establishing relevance and
comparability of parameters
presented
⇒ Range of significant
environmental impacts
caused by product eg single,
couple, broad range
⇒ Wide range of impacts, not single
issue
⇒ Particularly suitable when there
is a trade-off between
environmental impacts
⇒ Single or, to lesser extent, couple
⇒ Not suitable when there is a
trade-off between environmental
impacts
⇒ All
⇒ Potentially problematic if varied
range of impacts between
products in same category.  This
would reduce comparability and
require complex purchaser
decisions
⇒ Existence of significant social
impacts related to the
product/service
⇒ Avoid products with significant
social impacts unless criteria take
these into account or linkages
with credible social labels (eg
Fair Trade) can be formed
⇒ Can be combined with credible
claims relating to social
performance
⇒ Avoid making environmental
claims if cannot also address
significant social impact(s)
⇒ Avoid products with significant
social impacts unless these are
also reported on or linkages with
credible social labels (eg Fair
Trade) can be formed

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Product/Purchase Variable:
Conditions in which label type is most suitable:
                           Type I                                                        Type II                                                      Type III
⇒ Consumer recognition,
awareness and concern
regarding product’s
environmental impacts
⇒ All, depending on label
recognition
⇒ Particularly useful where there is
a lack of consumer
understanding of environmental
impacts
⇒ High existing and/or potential
concern
⇒ All
⇒ Particularly for professional
purchasers where forthcoming
legislation, NGO pressure etc. is
causing concern
⇒ Existence of other labels both
of same and different type eg
compatible with type x; avoid
overlap with type y
⇒ Conflict between different Type I
labels if applied to same product
category in same market
⇒ Conflict between Type I labels
and certified single issue labels
⇒ Development of Type I may not
be cost-effective if Type II are
valid, credible and well-
established
⇒ If Type I is well established, Type
II will have less impact
⇒ Co-existence with Type I is
debatable
⇒ Co-existence with Type III
possible for different audiences
⇒ Potential linkages with Type I, eg
data transfer, if in appropriate
framework
⇒ Market structure eg
◊ no of producers
◊ volume of sales
⇒ Major rather than niche markets
⇒ Can be applied to market
dominated by small number of
producers if uptake assured
⇒ All ⇒ Major rather than niche markets
⇒ Possibly unsuited to SMEs
⇒ Relevant existing or planned
policies eg producer
responsibility legislation
⇒ Use as ‘soft’ policy tool as
forerunner to future
legislation/fiscal measures – see
discussion under Significance of
Product Environmental Impacts
⇒ Application alongside producer
responsibility legislation only
where several other non-related
significant impacts exist
⇒ Not beneficial if criteria are not
updated in time to account for
forthcoming legislation
⇒ May be applied alongside
producer responsibility
legislation to address additional
impact(s) of high consumer
concern
⇒ May be used alongside existing
legislation to encourage/identify
improvements above and beyond
requirements
⇒ May be used by government and
others as an indicator/
measurement of impact of policy
initiatives eg voluntary
agreements and/or elements of
company performance

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4.3 SUPPORTING INFORMATION FOR SUITABILITY MATRIX
4.3.1 Market Life-Span
The development of Type I criteria is time and resource-consuming,
especially at European level due to the need to achieve consensus from a
large number of parties.  This will be reduced as life cycle assessments and
product data become more commonly available, however Type I will always
take more time to develop and apply in comparison to Type II and, to a lesser
extent, Type III claims.
Type I labels are generally not suitable for fast moving consumer goods and
products with a short market life span, eg electronics, particularly if new
products are significantly different in terms of composition and/or
manufacture.  This is due to both the length of criteria development and the
application process, which in some cases can be longer than the products’
market lifetime.  However, relatively minor changes from previous products
could be incorporated if the criteria for Type I schemes could be made more
flexible and the application procedure streamlined for ‘similar’ new products
by the same producer or service provider.
With the same exception, Type III labels are not suitable for products with
short market life spans due to the time-consuming nature of developing the
label and subsequent cost implications.  However, this will depend on
whether a full life cycle analysis is required, whether an industry scheme is
established to share costs and reduce duplication of effort, and whether
product data is readily available due to its collection and measurement for
other purposes eg EMAS, environmental report etc.
4.3.2 Length of Product Development
Type II claims are not adversely affected by differences in length of product
development.  Type III labels will be unsuited to short product development
cycles if the life cycle analysis required takes longer than the development
process.  However, the Type III label may be issued later if the product’s
market life span is sufficiently long and demand exists.
Length of product development can also be an issue for Type I labels due to
the length of time taken to develop and later revise criteria.  The relationship
between length of product development and Type I labels is complex due to
the number of variables involved.  For example:
∗ not only the length but cost of product development;
∗ timing of new product release ie do products follow set market release
dates as in fashion textiles enabling suitable timing of criteria release eg if
new or revised Type I criteria are published following or near the end of a
long and complex product development cycle then the costs of making
changes to meet those criteria may be prohibitive;
∗ degree of product change required to meet revised criteria.

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This means that this parameter for Type I labels is not open to generic
categorisation and will have to be considered per product category and
market structure.
“All current Eco-label schemes [Type I] work on a pass/fail basis … thus creating, de
facto product standards which can negatively influence the manufacturer's ability to
innovate, since adoption of a radical innovation can result in extended debate and loss
of time before the eco-label can be used.  Since Type II labels do not involve the use of
pass/fail levels, they should not be a barrier to the innovation process.” 
(1)
4.3.3 Purchaser and Type of Purchase Decision
Type I labels are suited to use by all purchasers, both individuals and private
and public organizations including retailers, particularly where there is a lack
of time or knowledge to interpret the environmental impacts.  According to
the German Environment Agency, “two studies have shown that the Blue Angel
is even more important for the target group ‘professional purchaser’ eg in trade, than
for private consumers.” 
(2)
  However these findings could be explained by a lack
of other forms of product environmental information for professional
purchasers at that time and/or low visibility for individual consumers.
In order to be fully utilised by individual consumers for quick purchase
decisions eco-labelled products must be readily available and the eco-label
must be visible on the front of the package and fully recognised.  At the
moment, some “Type 1 pass-fail labels often have the disadvantage that they have a
limited visibility and therefore impact in the market.” 
(3)
Type II labels are potentially applicable to purchases by individuals and
private and public organisations (if credibility is assured).  They are
particularly suited to quick purchase decisions by individuals.
Type III labels are primarily aimed at professional purchasers but consumers
may use them for lengthy purchase decisions (eg cars).  It is possible that a
Type III label could consist of a data sheet to fulfil professional purchaser
information requirements, which are then translated into simplified pictoral
representations (eg histograms) to facilitate consumer understanding. 
(4)
  It
should be noted that consumers are more likely to take note of environmental
information when it is incorporated into existing and common information
channels.  For example, incorporated into the appropriate sections in product
brochures and accompanied by a summary table to facilitate comparison,
rather than presented as a separate information source.
(1) AIM
(2) 20 Years of Experience of the German Environmental Labelling Scheme: ‘Blue Angel’, 1998, German Federal
Environmental Agency
(3) UK Department of the Environment, Transport and the Regions (DETR)
(4) Norwegian Foundation for Environmental Product Labelling

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4.3.4 Significance of Product Environmental Impacts
Environmental labelling relies on action from purchasers to effect change and
hence is not suitable as a primary tool to address highly significant product
environmental impacts which require immediate and stringent action.
However, Type I labels are designed “to reward environmental leadership” 
(1)
and hence can be used to encourage further improvements above and beyond
that requested by legislation.
Mandatory labelling which includes an element of ‘shaming’ producers is
generally more effective at bringing about product improvements than
voluntary labelling and can be used as part of a policy package to address key
priorities eg the EC Energy label aims to effect reductions in domestic energy
use as part of policy targets to reduce CO
2
 emissions.  However, this has to be
balanced against the fact that mandatory labels generally take longer to
develop and implement than voluntary labels.
It should be noted that Type I and Type III labels contribute to knowledge
about the significance of product impacts via data collection and life cycle
analyses.  In addition, Type I criteria often act as indicators of policy and
legislative initiatives.  This can be useful from a government perspective to
prepare the ground for such measures eg via R&D, technology development
etc and from a producers viewpoint in gaining a competitive advantage from
being a ‘front-runner’ in meeting future legislation or fiscal measures.
Due to the time and cost intensive nature of Type I and III labels it is
suggested that these are not used for products with low overall
environmental impacts.
4.3.5 Potential for Improving Product Environmental Impacts, eg via:
◊ Changes to Product Design & Changes in Consumer Use Behaviour
All label types are suited to products that rely on changes to product design
to improve their environmental impacts.
User information (rather than I, II or III labels) should be used for
improvements that require changes in consumer behaviour that cannot be
achieved via product design.  However, where this exists alongside other
impacts, Type I schemes that require the provision of appropriate user
information alongside addressing other impacts would be most appropriate.
◊ Changes to Product Manufacture
There is an ongoing debate about the use of labels to encourage
improvements in product manufacture, related to the trade implications of
differentiating between products on the basis of their production rather than
the product itself.  According to Harald Neitzel, “A product category should not
(1) Global Eco-labelling Network (GEN): http://www.gen.gr.jp/eco.html

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be selected as a project for environmental labelling if the feasibility study relates most
environmental damage and/or the priorities for environmental improvement to PPM
[Process and Production Methods]” 
(1)
.  However, this is challenged by current
Type I practitioners and the success of Type I labels for products whose main
impacts occur during product manufacture, eg the EC Eco-label for textiles.
In cases where the product manufacture issue is of little direct consumer
concern a Type I label will be more suitable.  In such circumstances, a Type II
or III claim which outlines the product manufacture impact would have little
consumer impact.
It should be noted that we are not in favour of environmental management
systems (EMS) being considered as synonymous with good environmental
performance during the manufacturing stage.  Whilst EMSs encourage and
facilitate commendable environmental performance via good management
practices, they only require continuous improvement rather than concrete
levels of performance and hence do not guarantee good performance and
should not be used to indicate such within Type I or Type III labels.
◊ Alternative Product/Service
Type I labels should not be applied to products where the same end and
significant environmental benefits are realised by alternative product or
service categories as this can provide a false indication of optimal
environmental choice eg applying eco-labels to luxury cars.  This should also
be a consideration in determining the relevance of Type II and Type III
claims.
4.3.6 Range of Significant Environmental Impacts caused by Product
Type I labels are useful for a wide range of impacts rather than single issue
and are particularly useful when there is a trade-off between environmental
impacts.
Type II labels are most suited to a single significant environmental impact.
The effectiveness of Type III labels will be reduced if the range of products
within one category varies considerably in their significant environmental
impacts, since then it may be difficult to gain consensus on standardised or
agreed criteria and result in reduced comparability.  Secondly, if there are
trade-off between environmental impacts then Type III labels will require
knowledgeable end users to avoid confusion and lack of understanding as
Type III labels contain no value judgements and producers are unlikely to
explain these trade-offs if it jeopardises competitive advantage.
(1) Applying non product-related criteria in eco-labelling: some controversies and experiences, 1998, Harald Neitzel -
German Federal Environment Agency

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4.3.7 Existence of significant social impacts related to the product/service
In all cases, it is recommended that the situation is avoided in which a
product with a social claim competes against one with an environmental
claim.  Ideally all elements of Sustainable Development need to be addressed,
hence the product should meet both environmental and social criteria.
Type I Eco-labels in particular could receive highly negative publicity if
applicable products are competing against Fair Trade or similarly socially
improved products.  For example, this conflict could arise for shoes, clothing
and textiles.  The development of synergies between environmental and
social claims should be considered.  This is easiest to achieve for Type II
claims but linkages between Type I Eco-labels and credible social labels such
as the Fair Trade symbol could also be feasible.
4.3.8 Consumer Recognition, Awareness and Concern regarding Product’s
Environmental Impacts
The Type I ‘seal of approval’ is particularly useful where there is a lack of
consumer understanding of environmental impacts.  In terms of consumer
awareness and concern, the use of Type I labels will depend to a certain
extent on their level of recognition, for example in Germany the Blue Angel
began with products for which there was already consumer awareness
regarding environmental impacts and hence demand.  Now that the label is
established and recognized, however, it can be used to create awareness. 
(1)
Type II claims are suited to impacts that have high existing or potential
consumer concern.  In the latter case they can be used to create awareness (see
Section 3.6.2 for full discussion).
Type III labels will need to fulfil the information requirements of professional
purchasers.  These will depend on a variety of factors including forthcoming
and existing legislation, and potentially consumer concern in order to avoid
adverse publicity and meet employee expectations.
4.3.9 Existence of Other Labels both of same and different type eg compatible with
type x; avoid overlap with type y
The amicable co-existence of different label types within the same product
category will vary depending on the set-up of Type I and III schemes, level of
recognition of Type I labels and adequate control of invalid Type II labels. The
diagram overleaf provides an illustration of common situations.
(1) Institut fuer oekologische Wirtschaftsforschung, IOEW

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Figure 4.1 Complementarities and Antagonisms between Label Types
Within Label Types
Different Type I claims in use for the same product category in the same
market will confuse consumers and reduce the ‘best in class’ or Rolls Royce
indication of environmental performance, thus reducing their effectiveness.
Type II claims covering different environmental impacts on two products in
the same product category could confuse consumers or could be seen to
enable consumer choice.  This is why Type I or III labels are preferable for
multi-impacts, particularly those which involve trade-offs.
As has already been stated, standardised or agreed criteria for Type III claims,
preferably harmonised at European level, will reduce consumer confusion
and increase comparability.
Between Label Types
Type I labels are likely to compete with, rather than be complemented by,
established, credible Type II and single issue labels covering a specific impact
of high consumer concern.  This is because there will be little incentive to use
a Type I label in such circumstances.  However, if a product has several
environmental impacts, only one of which is of high consumer concern,
possibly a Type II claim could highlight this impact and be accompanied on
the same product by a Type I label to provide credibility.  A definitive answer
is therefore not available.
Type I and type III labels have the potential for great complementarities in
terms of sharing data and life cycle analyses.  However they may compete if
different target audiences are not identified and if the Type I label is not well
established or recognised.
Type II and III labels could easily be complementary, for example a Type III
label could be used for key purchases by private and public organisations and
the life cycle analysis used to identify the most significant impacts.  Where
these coincide with existing or potential consumer concern they can
subsequently be communicated via a Type II label for purchase decisions by
individual consumers.
Complementary
Antagonistic
Type I
& III
Type I &
II/single
issue
Type II
& III

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Avoiding antagonisms between label types and other forms of product
environmental information is a key issue in the development of a future
labelling strategy and is the subject of further discussion in Chapter 5.
4.3.10 Market structure eg
◊ no of producers
◊ volume of sales
The number and origin of products within the market needs to be considered
to determine which label type and geographical coverage (eg member state or
European label) is most appropriate.  Type II claims are suited to all market
structures but due to the more time and resource intensive nature of Type I
and III labels these two claim types will be more effectively applied to major
rather than niche product categories.  In addition, at the present time, Type III
claims are seen as prohibitively costly for small and micro-enterprises.
“The number of certified products [within Type I schemes] should not be used as the
only success indicator.  Sometimes an eco-label in a narrow market with only few
producers can contribute more for environmental protection as in product categories
in which several hundred products are certified” 
(1)
As the quote illustrates, uptake of Type I labels by just one producer can be
extremely effective in a market with few major players, particularly if the
label is applied to a popular brand.  However, targeting these markets can
also risk producer boycotts and lack of uptake.  Type I schemes need to
ensure a certain degree of visibility in the market and level of product
availability if they are to be successful and hence the market structure must,
at least potentially, be in accordance with this aim.
4.3.11 Relevant existing or planned policies eg producer responsibility legislation
User information, Type II, single issue and mandatory labels are particularly
suited to co-existence alongside legislative measures such as producer
responsibility legislation.  For example, if a product has two significant
impacts only one of which is an issue of high consumer concern or results
from user behaviour, this aspect could be addressed by the aforementioned
product information tools and the other addressed via regulation or
alternative means.
Type I Eco-labels should not be developed if planned or existing legislation
will address the most significant impacts in the near future, eg via producer
responsibility requirements, as this would quickly render the Eco-label
redundant.  In situations where the Type I label already exist and legislation
is then brought in which addresses the most significant impacts then either
the Eco-label criteria should be increased beyond the legislative requirements
if this adds value or in the worst case the label should be discontinued.
(1) 20 Years of Experience of the German Environmental Labelling Scheme: ‘Blue Angel’, 1998, German Federal
Environmental Agency

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Case Study: Type I Eco-labels for Large Domestic Appliances
Type I eco-labels for large domestic appliances such as washing machines and
refrigerators highlights the complexity which can affect a label type’s
suitability at any one time.
Without the mandatory EC Energy label, producer responsibility and
Montreal Protocol requirements, the significant environmental impacts of
these appliances were not addressed and a Type I label was eminently
suitable due to the potential for notable improvements.
However, now that the main impacts have or are being addressed by
legislation (CFCs for refrigerators, producer responsibility for waste electrical
and electronic appliances) and the mandatory EC Energy label, Type I labels
for these appliances have become largely redundant.  Producer or retailer
incentives to apply for a Type I label have all but disappeared since the
environmental impacts which a consumer is most interested in, energy and
water consumption, are communicated via a mandatory and easily
comparable label which can be translated directly into pertinent and
understandable cost savings.  This is borne out by the lack of applicants for
the EC Eco-label for washing machines.
Should, however, a jump in technology such as the introduction of ultrasonic
washing machines, achieve improvements in energy and water consumption
which cannot be easily incorporated into the EC Energy label, then Type I
Eco-labels may once more become relevant.
As discussed in Section 4.3.4, Type I and Type III labels are valuable as a long-
term precursor to legislation or voluntary agreements.  These two label types
contribute to knowledge about the significance of product impacts via data
collection and life cycle analyses which can be used to feed into future
legislative initiatives to address these impacts.  Type I criteria often act as
indicators of policy and legislative initiatives.  This can be useful from a
government perspective to prepare the ground for such measures eg via
R&D, technology development, as an indication of what is feasible and from a
producers viewpoint in gaining a competitive advantage from being a ‘front-
runner’ in meeting future legislation or fiscal measures.

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4.4 SUMMARY: SUITABILITY OF TYPE I, II AND III LABELS
Box 4.1 Summary: Suitability of Type I
⇒ Applicable to purchases by individuals & private and public organisations
⇒ Individuals - Quick purchase decisions
⇒ Lack of consumer understanding of complex environmental impacts
⇒ Use as ‘soft’ policy tool - indirect impact via indication of best
practice/future legislation eg re chemicals
⇒ More suitable than single issue where there is:
∗ A wide range of environmental impacts
∗ Trade-off between impacts
∗ Low public concern surrounding impacts
Box 4.2 Summary: Suitability of Type II
⇒ Potentially applicable to purchases by individuals & private and public
organisations, if credibility assured
⇒ Individuals - quick purchase decisions - high level of recognition
⇒ Most suitable where there is:
∗ Single significant environmental impact
∗ High level of actual or potential consumer concern
Box 4.3 Summary: Suitability of Type III
⇒ Best suited to purchases by businesses or public bodies
⇒ Potential role in replacing (or structuring) supplier questionnaires if
standardised and suitably designed
⇒ Potential use by individual consumers for major purchase decisions with
several high concern environmental impacts.

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5 CONTEXT OF A EUROPEAN ENVIRONMENTAL LABELLING STRATEGY
5.1 INTRODUCTION
This chapter re-iterates the need to place an environmental labelling strategy
within the context of Integrated Product Policy (IPP), and subsequently
outlines complementary policy tools which should be used to support the role
of labels within a labelling or product information strategy.
5.2 CONTEXT FOR AN ENVIRONMENTAL LABELLING STRATEGY
Any future environmental labelling or product information strategy will not
operate in isolation.  As previously discussed in Chapter 2, it will involve the
use and support of complementary policy tools and is likely to be set within
an Integrated Product Policy (IPP).  For example, Denmark, Finland, Iceland,
Norway and Sweden have joined forces to develop a joint product policy
strategy initiated by the Nordic Working Group on Product Oriented
Environmental Policy.  It is expected that such a strategy will contain the
following elements:
• market mechanisms to promote environmentally-improved products;
• green procurement;
• standardised life-cycle analysis methodology;
• support for stakeholder involvement;
• product environmental information (eg eco-labels, declarations, etc).
The latest report on developing IPP at European level, entitled Developing the
Foundation for Integrated Product Policy in the EU, which was undertaken by
consultants Ernst & Young in collaboration with the University of Sussex, was
recently issued by the European Commission. 
(1)
5.3 COMPLEMENTARY POLICY TOOLS TO ENVIRONMENTAL LABELLING
Many of the barriers to using product information to influence purchase
decisions require addressing by other policy tools, for example:
• environmental taxation to address product affordability;
• publicity/educational campaigns eg by NGOs and Government, to raise
consumer environmental education and awareness.
The following is not intended to provide an exhaustive list but instead
provides details of the main policy tools that are most relevant to the
development and promotion of linkages with product environmental
information, and labelling in particular.
(1) The report is available from http://europa.eu.int/comm/environment/ipp/home.htm#report

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5.3.1 Public Procurement
Many EU member states have, or are beginning to, introduce environmental
criteria into public purchasing policies at both national, local and government
agency levels, often linked to the implementation of environmental
management systems (EMS).  This is likely to be facilitated by proposed
changes to EU Directives governing public purchasing which introduce
environmental considerations as possible award criteria although maintain
the over-riding priority of ‘best value for money’.  If accepted by the Council
and European Parliament, these changes should come into effect from 2002.
The role of public procurement in stimulating the availability of
environmentally improved products for both organisational and individual
consumers is seen as crucial by several consultees.  The European public
sector purchases between 850 to 1000 billion Euros of goods and services each
year, which amounts to 12-14 % of European GDP 
(1)
.  Of this, 60-70% is
attributable to local authorities.  The resulting spending power can be utilised
to provide demand for products with reduced environmental impacts
(including labelled goods).  This will have subsequent effects on consumer
and business purchasing by increasing the availability of such products and
lowering product price via economies of scale.  In addition, ‘greening’ public
procurement sets an example of best practice that can be followed by
companies and can result in tool kits, guidelines and experience eg on the use
of product environmental information and indeed its provision via guides
and Internet databases, which may be made available to assist the private
sector.
‘Green’ Guidance for the Procurement of Building Products (USA)
The US Environmental Protection Agency has launched “a new version of a
software package for selecting cost-effective, green building products ... based on
standards agreed to by the EPA, industry and public interest groups.  The new
version includes actual environmental and economic performance data for over 65
building products. The package was developed by the National Institute of Standards
and technology and the Building and Fire Research Laboratory, with support from the
U.S. EPA Preferable Purchasing Program and the HUD Partnership for Advancing
Technology In Housing.  The system assesses the following environmental impacts
for building products: ozone depletion, smog, ecological and human toxicity, global
warming, acid rain, eutrophication, natural resource depletion, indoor air quality and
solid waste.” 
(2)
(1) 'Green Purchasing Gaining Ground' in Enviro Report, No. 2, January 2000, Swedish Environmental Protection
Agency/Swedish Ministry of the Environment;  ‘Proposal to Allow Green Criteria in Public Procurement’ in Environment
Watch: Europe, 26 May 2000.
(2) 'Green Building Products Software Announced', US EPA Press Release, 22/06/2000, http://www.epa.gov

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As has been discussed, both Type I, II and III labels are useful tools which
can be used within procurement policies for different purchase decisions and
levels of purchaser expertise as appropriate.  In addition, purchasers may use
eco-label criteria (rather than being restricted to presence of the actual label)
for significant purchases which will enable greater flexibility and wider
applicability in other member states.  This would help to avoid the
unreliability of supply that can result from the vulnerability of Type I
schemes to boycott or rejection by producers.  Greater harmonisation of
criteria between the different Type I labels would assist their use in
procurement policies.
Care is needed to ensure that environmental labels are utilised appropriately
within procurement policies (both public and private) as the following two
examples illustrate:
• Rather than favouring one producer with a labelled product over all the
others, in certain cases (depending on market structure, competition and
degree of leverage) it may be more effective for a large purchaser to use
their purchasing power via building on existing supplier relationships to
effect improvement 
(1)
 .  This could take the form of helping suppliers to
move towards meeting Type I or single issue label criteria and/or using
Type III labels as a measurement and target setting tool.  This is
particularly significant for major retailers.
• ‘Seal of approval’ labels can sometimes become the victim of their own
success, a situation which is currently affecting successful single issue
labels such as the FSC and organic labels.  Demand for FSC certified
timber now exceeds supply in some areas leaving retailers who have
pledged only to sell certified products facing supply problems, with
subsequent implications for product price.
5.3.2 Fiscal Measures
“In the future taxes should be differentiated in order to support environmentally
labelled products which should be cheaper, or at least no more expensive than
“conventional” products.” 
(2)
Price is a principal factor in most purchase decisions and products with
improved environmental performance can be more expensive for a variety of
reasons eg due to a fiscal system with externalised environmental costs or the
greater costs involved with using innovative or new and small scale
technologies.  The main fiscal policy tools which can be used to address this
issue are environmental taxation and subsidies.
(1) B&Q
(2) Sveriges Konsumentråd / Swedish Consumers’ Association

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Environmental Taxation
The use of environmental taxation can increase the competitiveness of raw
materials and finished products which have reduced environmental impacts.
For example, if eco-label criteria involve the exclusion of an undesirable
substance and alternatives are currently more expensive, this can raise the
cost of eco-labelled products in the market.  This problem could be reduced
by internalising the environmental costs associated with the undesirable
substance via taxation or other fiscal measure.
From an alternative perspective, applying taxes to end products in order to
achieve policy objectives requires a robust method of identifying products
with lower environmental impacts eg tailored labels.  An example is the
potential use of standardised labels or certificates for renewable electricity to
identify which electricity sources classify for exemptions to carbon taxes.  For
this linkage to be formed between the policy tools, a label would need to be
credible, monitored and preferably standardised to ensure comparability and
availability of the necessary information.
Subsidies
Where environmentally preferable products are genuinely more expensive,
they could be subject to price reductions via subsidies in order to encourage
greater uptake and increased market share.  Labels can be used to identify
products which have reduced impacts as part of subsidy schemes
There are many examples of this relating to energy efficient appliances.
Reductions in domestic energy consumption are required to contribute to
meeting Kyoto CO
2
 reduction targets.  However, new technologies, eg which
increase energy efficiency, may be more expensive to produce.  In a recent
report into Lower Carbon Futures 
(1)
, it was identified that “the challenge is to
get the efficient electrical appliances cheaper”.  This may warrant various
forms of subsidy, eg reduced VAT rates on the most efficient appliances.
Examples include electricity companies in Belgium which offer percentage
rebates on energy efficient household appliances for all customers in order to
reduce energy demand.  In the case of energy efficiency, products with
improved environmental performance can sometimes cost more initially but
result in long term financial savings.  This can create a barrier for low income
purchasers and in response several member states have introduced subsidy
schemes for low income bands eg the UK Energy Saving Trust offered
reductions on energy efficient refrigerators for low income households.
In both of these examples, energy efficient products could be or were
identified by their grading on the EC Energy Label, illustrating the
widespread uses of labelling and its potential inter-linkages with other policy
tools.  Note that the format, lack of negative impact on product quality and
widespread application of the label will influence its use in subsidy schemes.
(1) Lower Carbon Futures, 2000, Environmental Change Unit, Oxford University.

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5.3.3 Environmental Management Systems (EMS)
The use of Environmental Management Systems (EMS) such as ISO 14001 and
EMAS by both private and public organisations has grown significantly over
the past 5 years.  EMSs complement environmental labels in two main ways:
a) as a driver for incorporating environmental considerations into purchasing
policy;
b) the development of product oriented Environmental Management Systems
will act to drive improvements in product environmental performance and
hence increase the ability to qualify for environmental labels and reduce
the costs of doing so.
EMS is well recognised to have driven ‘green’ procurement policies,
especially in those organisations such as office based firms whose main
environmental impacts are associated with purchased products eg paper
consumption, energy consumption from office equipment and emissions
from company cars.
Both EMAS and ISO 14001 can already be interpreted to cover life-cycle
environmental impacts of the product/service provided although this is
rarely applied.  At the moment both companies and auditors tend to limit the
use of EMS to the traditional focus on environmental impacts which occur
during production.  However, the current revision of EMAS and impending
review of ISO 14001 may emphasise a more product oriented approach.  This
should both drive and facilitate improvements in product environmental
performance leading to more products/services being able to qualify for
environmental labels, increased data availability and reduced costs.
It should be re-iterated, however, that whilst EMSs encourage and facilitate
commendable environmental performance via good management practices,
they only require continuous improvement rather than concrete levels of
performance and hence do not guarantee good performance.  As a result they
should not be used as a guarantee of good performance within Type I or Type
III labels.
5.3.4 Product Standards
For impacts and products which lack actual and potential consumer
awareness and concern (from both organisations and individuals) labelling
may be ineffective.  This may be due to:
• the predominance of, or antagonisms with, other product characteristics
• lack of appeal, lack of ability to relate to or understand the impact(s).
Product standards can ensure that environmental impacts that are less likely
to be subject to consumer demand are incorporated into product design.
They are likely to be particularly effective where there is a critical mass of
support and consensus from producers.

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For products with several significant impacts, one of which is of high
consumer concern, product standards could be used alongside single issue
labels in cases where there is no trade off between the different impacts.
In other cases, product standards can be used alongside voluntary
environmental labelling to enforce minimum standards while labelling is
used to reward further improvements and best practice.  In this latter case,
product standards need to be linked to labels to ensure that self-declared
claims do not simply state improvements required by the standard and to
ensure that Type I label criteria are set well above product standards to
maintain their ‘Best in Class’ and added value status.
5.3.5 Voluntary Agreements
Several linkages can be made between voluntary agreements and labelling.
1.  Use of labels to identify improvements and targets within a formal agreement
For example, the mandatory EC Energy Label provides all models of
refrigerators, washing machines and dishwashers with an energy efficiency
grading.  These grades formed the basis of a voluntary agreement between
manufacturers and the European Commission to phase out the least efficient
appliances, which were able to be identified via the grade on the EC Energy
Label.  The mandatory nature of the label meant that the agreement could be
easily monitored since all manufacturers must apply for a label and it must be
present on all retail display models.
2.  Use of labels to communicate targets and achievements of voluntary agreements
Type III labels in particular can be used to highlight and communicate the
achievements obtained and targets set as part of voluntary agreements,
potentially resulting in additional competitive advantage.  From a policy
perspective, increasing the exposure of corporate commitments made in
voluntary agreements results in increased pressure on companies to meet
these commitments and informal ‘monitoring’ by consumer and
environmental organisations.
5.3.6 Environmental Education
Environmental education both in generic, impact-specific or product specific
forms and aimed at consumers and sales advisors is critical to the success of
environmental labelling.  Consumer awareness of, and concern for, the
environment in general and the impacts of the products they purchase is
crucial to generate demand for labelled products.  Similarly, experience with
existing labels has shown that there is often a significant information gap
caused by a lack of reference to or explanation of the label/claim by the
retailer or principal source of sales advice 
(1) (2)
.
(1) Lower Carbon Futures, 2000, Environmental Change Unit, University of Oxford;.
(2) Creating the Green Consumer, 1999, A.Carter, Imperial College, University of London.

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5.3.7 Other forms of product environmental information
Labels are only one form of product environmental information and linkages
can be formed between labels and other information sources such as
helplines, procurement guidelines and corporate environmental reports.
Guidelines
“Environmental guidelines elaborated especially for public purchasers have proved to
be a valuable tool in Denmark.  In the guidelines it suggests that products fulfilling
the eco-label criteria are preferred.  The guidelines can also be used for product groups
without eco-label criteria.” 
(1)
Demand exists for product-specific guidelines which can be used both by
organisations in their purchase decisions 
(2) 
 and by producers wishing to
improve the environmental performance of their product and make valid
claims.  Guidelines for specific product categories can:
• Identify the significant environmental impacts (based on existing Type I
criteria and Type III labels);
• Indicate the range of environmental performances available;
• Provide a summary of the different claims applicable to that product
(including explanation of Type I claims and links to criteria; best practice
examples of Type II claims; standardised parameters for Type III claims).
Environmental Reporting
Corporate environmental reports (CERs) are not generally used directly by
individual consumers or professional procurers, the latter tend to use
supplier questionnaires.  However, CERs increasingly include information
and targets on the significant impacts of their products or services.  In recent
debates over extension of corporate reporting regulations in Denmark,
environmental NGOs called for more requirements on product information 
(3)
.
Internet Databases
As the availability of product environmental information increases via labels,
declarations and corporate environmental reports, it could be used by NGOs,
consumer organisations and/or government bodies to produce databases of
product impacts.  These could be used to provide an easy to use and
comprehensive information comparing the environmental performance of
different products.  It would also exert indirect influence on producers via
highlighting poor product environmental performance 
(2)
, particularly if
exposed in the media.
(1) Danish Environmental Protection Agency (EPA)
(2) UK Department of the Environment, Transport and the Regions (DETR)
(3) Denmark to expand corporate reporting rules, 10/5/2000, ENDS Daily

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Existing Consumer Advice Channels
Product environmental information portrayed by labels and in other formats
eg on Internet databases, will receive maximum exposure and attention if it is
incorporated into common consumer advice channels such as magazine
articles, consumer test reports such as Which? and Test Achats, and in store
sales advice (both verbal and written).  Achieving this will depend on the
credibility of the information obtained since these sources will not want to use
or incorporate suspect information.  An example is provided by the EC
Energy label, which is shunned by some sales assistants and magazines due
to the lack of validation of results and publications showing differing
gradings between the official results and those obtained by consumer
organisations.

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Valør & Tinge, December 1999, ‘Two ways and one bridge: economical and informational barriers for the distribution of cleaner products’.
Dialogue path
Documentation path
Tools for
environmental
dialogue
Companies network
Pilot projects on links
in product chains
Certifiable systems for
product chain dialogue
Environmental
directions for use
Eco-labels
Environmental
guidelines
Databases
Environmental
product declarations
Self-declared
environmental claims
    Vision

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6 FUTURE OPTIONS FOR A EUROPEAN ENVIRONMENTAL LABELLING STRATEGY
6.1 INTRODUCTION
This penultimate chapter outlines possible strategy options developed from stakeholder
consultation, which establish different roles for label types within a policy framework.
Consultee opinions of these strategy options are then discussed in more detail.
6.2 POSSIBLE STRATEGY OPTIONS
This section outlines possible options for a European Environmental Labelling Strategy
which were developed from stakeholder consultation.  It is important to note that this study
was devised to examine the roles of Type I, II and III labels within a future strategy, with
appropriate consideration of mandatory and single issue labels.  As such it takes a
pragmatic approach and has asked stakeholders how existing tools can be used within a
strategy, rather than starting from a blank sheet.  Consequently the strategy options
presented in Box 6.1 are framed around these label types.
The options vary according to the strategic role of different environmental labels.  For all
options it is recommended that other supportive tools (outlined in Chapter 5) are utilised
where appropriate.  It is foreseen that these will include complementary forms of product
environmental information namely mandatory labels, Internet databases and user
information.
The absence of a label type within a strategy option indicates that it is not seen to have a
prominent role and will not receive any ‘official’ recognition or promotion within a future
strategy.  It does not mean that it would cease to exist, for example in option C, Type II and
III claims will still be made.  Hence, the position of each label type within the strategy
option indicates that this role would be encouraged and supported by an appropriate policy
framework and official initiatives.
The strategy options are all based on proposals put forward by stakeholders via the
questionnaire and workshop consultations.  They are presented diagrammatically in Box 6.1
(in no particular order of prominence) and subsequently accompanied by a more detailed
description of each option.

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Box 6.1 Strategy Options
A. Type II as an initial ‘stepping stone’ for producers’ on the way to use of Types I and
III
B. Type III as ‘stepping stone’ to Types I and II
C. Type I as ultimate label type, used alongside other policy tools, with other label
types not given prominence in policy framework
D. Complementary roles for I, II, III and single issue on an equal basis (no ‘ultimate’
claim type); restriction of other types of labels
E. Needs based approach - all labels and other forms of product environmental
information on equal footing, given prominence and support within policy
framework where their use is most appropriate
I II III
Single Issue
?Single Issue?
I III
II
I
I II
III
COMPLEMENTARY POLICY TOOLS eg Databases, User information, Mandatory labels
COMPLEMENTARY POLICY TOOLS eg Databases, User information, Mandatory labels
COMPLEMENTARY POLICY TOOLS eg Databases, User information, Mandatory labels
COMPLEMENTARY POLICY TOOLS eg Databases, User information, Mandatory labels
COMPLEMENTARY POLICY TOOLS eg Databases, User information, Mandatory labels
?Single Issue?
I II III
Single Issue Other eg hybrids

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A) Complementary roles for Type I and Type III;  Type II as stepping stone to use of Types I
and III;  possible role for single issue.
Type I would be aimed at individual consumers and those organisational procurers with
little environmental knowledge.  Type III would then complement Type I by being aimed at
knowledgeable organisational procurers who require more detail to fulfil their procurement
policies.  In cases where the same product categories are being addressed, the costs of data
collection eg undertaking a generic LCA to identify main environmental impacts, could be
shared between the two schemes.
Type II would be subject to control of invalid claims and would act as a ‘stepping stone’ to
Types I and III.  The issue of how to avoid conflict between Type II, and Types I and III
should be discussed.
The promotion of single issue in replacement of Type I in certain circumstances (eg to
address impacts of high consumer concern) could be considered.
B) Complementary roles for Types I and II;  Type III as stepping stone to Types I and II.
Type I would be aimed at individual consumers and those organisational procurers with
little environmental knowledge.  The use of Type II (subject to rigorous control of invalid
claims) would be supported for products with a single significant impact subject to high
potential or existing consumer concern.  Type III would be used as a stepping stone for
companies to communicate progress but not able to meet Type I criteria or able to make a
prominent Type II claim such as ‘CFC free’.  Type III would also serve as a basis to identify,
monitor and subsequently manage significant impacts.
C) Type I as ultimate label type, used alongside other policy tools, with no defined role for
Type II or III and no other label types given prominence in policy framework; possible
role for single issue.
Type I would be the main tool for communication with individual consumers.  Procurement
by public and private organisations would be informed via Type I and (possibly
standardised) supplier questionnaires.
Type 1 claims should be promoted fully by the Commission and/or member states eg by TV
and other media covering promotion of the concept as well as of the labelled products
whenever possible.  Type II and Type III claims will persist, but will not be given
prominence and will be subject to increased control to remove invalid claims ie
accountability demanded of the claimants.
The promotion of single issue in replacement of Type I in certain circumstances (eg to
address impacts of high consumer concern) could be considered.

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D) Complementary roles for Type I, II, III and single issue with no ultimate or ‘Rolls Royce’
claim type; other types of labels (with exception of mandatory labels) would be restricted.
Type I would be aimed at individual consumers and those organisational procurers with
little environmental knowledge.
Type II would be subject to control of invalid claims.  It would be aimed at individual
consumers for those product groups for which a Type I is not suitable eg due to short time-
span for product development.  It could also be used for both individual and organisations
in circumstances where it is more appropriate than a generic pass/fail scheme.
Type III would be aimed at knowledgeable organisational procurers who require full details
to fulfil their procurement policies.  They could also form the basis for agreements with
suppliers to improve certain environmental impacts.  They would be subject to some form of
control to ensure validity of data presented and impact coverage.
All other label types with the exception of mandatory labels and user information (which are
complementary) would be restricted in order to avoid conflict, information overload and
consumer confusion.
E) Strategy based on looser definitions of label types and a wider range.  ‘Needs’ based
approach - ‘horses for courses’ - all labels and other forms of product environmental
information on equal footing, given prominence and support within policy framework
where their use is most appropriate
Instead of a tools oriented approach, it is possible to address the issue from a needs
perspective and develop tools specific to each situation and product group.  In other words,
‘horses for courses’.  This could be done on a European and/or member state level in order
to accommodate specific national differences.
This is an approach taken by TerraChoice in Canada (see below) which by being a co-
ordinating body in the development and management of the different schemes helps to
avoid confusion and conflict.  The need for such a body or other framework to co-ordinate
different forms of product environmental information should be a primary consideration.
TerraChoice
TerraChoice is a private body which manages the national eco-labelling program in Canada
for the Canadian government.  In addition they have also developed and are managing a
range of other environmental certification programs for different sectors.  Most of these do
not fall neatly into the ISO Types (I, II or III) although the Environmental Choice Program
(ECP) and pulp and paper program are Type I and III respectively.

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6.3 CONSULTEE OPINIONS
6.3.1 Role of Label Types within a Future Strategy
The questionnaire consultation revealed strong differences in support for the different label
types from different stakeholder groups and geographical locations.  The opinions fell
broadly into two categories:
1. Environmental and consumer organisations and some retailers strongly favoured Type I
labels over other claim types, particularly where they were managed or endorsed by
government environment agencies or departments to enhance credibility.  Not
surprisingly, support for Type I labels was much stronger in those countries with
established national schemes (eg Scandinavia) and lower in other member states where
there was also low penetration of the EC Eco-label (eg UK).  In addition to the use of
Type I labels, some saw the potential for Type III labels in business-to-business purchase
decisions if certified by a third-party.  They were highly critical of the validity of Type II
labels and their negative impacts on other label types.
2. Conversely, some producers and retailers were highly critical of Type I schemes and felt
that due to their time and resource intensive nature, the resources put into their
development could have been spent more constructively elsewhere; for example, by
targeting the purchasing policies and effecting change within the corporate strategy of
major retailers.  Specifically, some consultees felt that by their very nature government
bodies were not suited to running efficient schemes and that instead their involvement
should be via endorsement.  They felt that Type II claims, with sufficient control of
invalid claims, were more widely applicable, flexible and useful since they are needs
based, being constructed in response to demand.
Consensus was achieved in the form of general support for the ISO standards and their use
to improve the current standard of Type I, II and III labels.
6.3.2 Consultee Opinions on Strategy Options
The workshop discussion on the strategy options presented in Box 6.1 resulted in the
following conclusions:
•
 In devising a future strategy consultees felt that the ISO standards should not be used to
restrict innovation or other claim types - instead product environmental information
should be designed to meet the needs of specific situations in line with strategy Option E.
•
 Although some consultees were in favour of a hierarchical strategy using certain label
types as ‘stepping stones’, the strong differences in opinion surrounding the merits of
type I, II and III labels mean that a hierarchical approach is inappropriate at this stage.  It
was thus felt that, at present, a strategy needs to provide a framework that can support
all product environmental information tools (Option E).

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6.4 CRITIQUE OF STRATEGY OPTIONS
Following the stakeholder discussions and conclusions described above, it was decided not
to develop a full critique of each strategy option.  Instead, the preferred Option E was
analysed in more depth.
Whilst Option E has the advantage of being able to encompass the different situations which
exist in member states, one of the challenges for a strategy which enables the development
of numerous labels and label types is to find a balance between:
1) Greater harmonisation to:
•
 facilitate use of claim types by producers and retailers operating in a global market;
•
 avoid overlap between labelling initiatives;
•
 avoid consumer confusion via information overload; and
2) National or regional labels of all types developed at different times to meet the differing
situations and approaches to environmental labelling in member states and accession
countries.
In practical terms, how do we avoid a situation where a company wanting to adopt a Type I
or third-party single issue label is faced with numerous  different labelling schemes for his
product within the European market, each with differing criteria and application
procedures.  And similarly, how do we avoid consumer confusion and information overload
which would result if they are faced with three different label types on three products
within the same purchase category?
The great difficulty with the approach outlined in Option E is co-ordinating multiple forms
of product environmental information in order to avoid overlap, inefficiencies and
antagonisms, and maximise opportunities for complementary linkages and synergies.  As
previously highlighted, the need for a co-ordinating body or bodies or other framework to
co-ordinate different forms of product environmental information should be a primary
consideration within this strategy and needs to be explored further.

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7 CONCLUSIONS & KEY RECOMMENDATIONS
7.1 INTRODUCTION
This final chapter presents the conclusions of the study in terms of consultee opinions of the
characteristics of the different label types and how this feeds into the development of an
environmental labelling strategy.  It subsequently makes key recommendations for further
action.
7.2 CONCLUSIONS
•
 There is a lack of consensus amongst stakeholders on the merits of the different label
types.  The differences in opinion arise primarily as a result of the labels’ weaknesses,
identified in Chapter 3.
•
 Discussion of these weaknesses currently dominates the debate and is preventing
stakeholders from developing future strategy options in depth.  For example:
•
 Due to the lack of consensus on the merits of the different label types, no
hierarchical strategy (Options A-C, Chapter 6) will receive the necessary critical mass
of support at the present time.  This is not to say that a hierarchical strategy will
never be suitable and should not be considered in the future.  It is to say that major
stakeholder differences will remain unresolved until the weaknesses in the label
types are addressed, and hence the debate at the moment is focused on an
operational rather than a strategic level.
•
 Since this study was strongly based on stakeholder consultation, the lack of agreement
has prevented the full development and critique of strategy options.  Instead, the key
recommendations present, what are in our opinion, the measures needed to address the
issues raised and take the debate forward.
•
 It was concluded that an effective future strategy will need to address not only
complementarities and antagonisms between label types, but should cover all forms of
product environmental information.  Hence the focus will need to be on a product
information strategy rather than a labelling strategy per se.

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7.3 KEY RECOMMENDATIONS
The key recommendations can be grouped into three categories:
1. Put in place actions to address operational weaknesses in the label types.
Real efforts need to be made to address and resolve the weaknesses which currently exist
within applications of the three label types.  Weaknesses and critical success factors which
need addressing have been identified in Chapter 3.  In addition, several studies exist which
make detailed recommendations for improving Type I and Type II claims 
(1)
, and
discussions continue, particularly in Denmark, on the possibility of developing organised
Type III schemes.  
⇒
 Boxes 7.1 & 7.2
2. Establish a formal mechanism to develop the linkages between different forms of
product environmental information, in order to optimise synergies, avoid antagonisms
and increase cost-effectiveness.
This mechanism would increase cost-effectiveness via combining common elements (eg
identification of product life-cycle impacts) and optimise use of product information via
delineating the roles of different forms of product environmental information on a
horizontal level (as opposed to a vertical hierarchy).
It will require a ‘broad-minded’ approach from all the stakeholders involved in the
individual label types, with a focus on providing the most effective form(s) of product
information as appropriate.  Such an approach would ultimately strengthen all label types. 
⇒
 Boxes 7.3 & 7.4
3. Consider long-term options for a product information strategy (including information
hierarchies) in depth via a small working group.
The debate on strategy options at the European level is currently in its infancy and the work
presented in Chapter 6 needs to be developed further.  The discussion of long-term strategy
options should: (a) be taken forward via a relatively small working group comprised of an
appropriate mix of pro-active stakeholders, (b) be placed within the context of IPP following
the Commission’s Green Paper, (c) be established on agreed principles, and (d) be based on
the assumption that the weaknesses identified in each of the label types (Chapter 3) will have
been resolved.
(1) Two examples are: 'Promoting and Marketing the European Eco-label in Germany and Austria', 2000. J. Lohse & J. Wulf-Schnabel, Okopol;
‘Study on Verification & Control of Environmental Product Claims’, 1998, Prospect.

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Box 7.1 Recommendation 1a
PRIORITIES FOR TYPE I LABELS
Type I labels need to be:
A. Targeted at the most suitable product categories;
B. Adequately promoted to ensure consumer recognition of the label and its credibility;
C. Increasingly harmonised (between existing schemes) to facilitate their use by
producers both directly and indirectly eg via the use of criteria as best practice.
CURRENT ACTION:
A. Type I schemes have different methods of identifying priority product groups.  The new
working plan for the EC Eco-label will identify target product categories and the
methodology used;
B. Promotion of the different schemes varies considerably.  The EC Eco-label is currently
promoted at individual member state level.  Criticisms that promotion is insufficient
must be balanced against available revenue.
C. The intention for increased co-operation was included within the revision of the EC Eco-
label scheme.
FUTURE ACTION NEEDED:
A. Robust methodologies for identifying priority product groups need to be developed in
order to avoid ad-hoc development and ensure that costly investigations are likely to
come to fruition and be effective.  These methodologies should (1) take into account the
use of other label types, as per the suitability matrix in Chapter 4 and (2) be considered
within attempts to increase co-operation between schemes (see C. below);
B. Although funds are a restriction, the main strength of Type I schemes is that they
provide an easily recognisable logo, an element which will not be realised without
adequate promotion.  Promotion is not sufficient on its own, it is both fuelled by and
dependent on the availability of good quality labelled products, but without recognition
expansion of the scheme to other product categories will not be cost-effective.  Ideally
promotion of Type I schemes should also provide explanatory information on other
green claims, both good and bad, and what consumers can do to identify misleading
claims;
C. The commitment within the revised EC Eco-label scheme to increase co-operation and co-
ordination between schemes must be turned into action.  Current schemes were
developed at different times, on different bases/methodologies and with different
objectives and stakeholder drivers.  Whilst remaining tailored to national or regional
circumstances, there needs to be a harmonisation of principles between schemes and
robust criteria development.  This will encourage Type I labels to be used more widely
and cost-effectively both directly on products and indirectly (eg as an indication of best
practice).  Achieving this co-ordination will not be easy but should be viewed as an
opportunity to improve and expand all schemes rather than as a threat to their
independence.

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Box 7.2 Recommendation 1b
ACTION AGAINST INVALID CLAIMS
The success of valid product environmental information of all types will depend on the
adequate control of invalid claims.  There is thus an immediate need to address the lack
of credibility of Type II claims (and potentially Type III) via stringent control in order to
remove invalid claims.
CURRENT ACTION:
DG SANCO established a working group to examine this issue and are currently exploring
future actions.  See Chpter 2, Section 2.3, Box 2.2 for details.
FUTURE ACTION NEEDED:
Actions suggested by consultees during this study are: adequate legislation, detailed
guidelines which can be used to interpret such legislation, a system for monitoring self-
declared claims and subsequent enforcement of legislation.
We recommend that self-declared environmental claims are controlled via the extension of
the EC Misleading Advertising Directive rather than separate regulations.  This viewpoint
has long been held by many consumer and environmental organisations and is one we
endorse.  Voluntary approaches have been largely ineffective, and stringent control will help
those companies with bona fide environmental claims to obtain consumer recognition and
subsequent business benefits.
The use of ISO 14021 or a simplified form thereof could be used as a basis for interpreting
such legislation as it applies to Type II environmental claims.  This is in line with
stakeholders’ views that the standard has widespread application and should become
‘normal’ practice rather than being used only to represent best practice.  We would caution
however, that in developing interpretative criteria for validating ‘green’ claims it is
important to have the further input of marketing experts in order to ensure that the
consumer impact of such claims is not lost via their control.  In other words, to ensure that
the need for environmental validity is balanced against the need to maintain consumer
understanding and appeal.
Of equal importance is ensuring that appropriate legislation is adequately enforced.  Using
existing channels to enforce misleading advertisement legislation is likely to be most cost-
effective, however, there would be a need to ensure that ‘green’ claims are not given a low
priority.  At present, consumer organisations, and to a lesser extent environmental
organisations, act as informal ‘watchdogs’ via issuing reports highlighting examples of
invalid claims.  There could be scope for using these parties and competing companies to
point out misleading ‘green’ claims to the relevant authorities.  Extra resources may then be
needed to enable these authorities to take effective action.  If necessary, these parties could
be granted the necessary legal standing to bring court actions on suspected misleading
claims.

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Box 7.3 Recommendation 2
DEVELOP LINKAGES BETWEEN DIFFERENT FORMS OF PRODUCT
ENVIRONMENTAL INFORMATION
One of the key issues within a future strategy is how to prevent purchasers being faced with
products bearing various different label types portraying divergent and incomparable
information.  Needs-based development of labels and removal of irrelevant Type II claims
will address this to some degree.  However, there remains a need to encourage more co-
ordinated development in order to avoid duplication of effort and maximise effective use of
all forms of product environmental information (eg Type I, II, III, mandatory labels, single
issue labels and user information).
CURRENT ACTION:
No co-ordinating role currently occurs at the European or Member State level.  Even within
the Commission, different labels can be established for the same product, for example Eco-
labels exist for Energy-labelled products, which often makes the former redundant for the
average consumer.
FUTURE ACTION NEEDED:
It is therefore recommended that a formal mechanism is established in the form of broad
feasibility studies for individual products/product groups.  Each study would:
A. Identify Product or Service Life-Cycle Impacts using expert opinion and existing
information sources such as life-cycle analyses and Type I criteria.
B. Identify Effective Forms of Product Information.  Following further development, the
suitability matrix (see Chapter 4) could be used to identify which types of product
information would be most effective for that particular product group.
C. Encourage the Development of Effective and Valid Product Information via Guidelines,
Recommendations etc.  Based on the outcome of (B), encourage the development of
effective forms of product information via the methods suggested in Box 7.4.
The studies would be undertaken at the European level but would obviously take into
account national differences in the market situation and marketing context (eg existence of
national labels, national variations in level of consumer concern) during the analysis.
In many cases these studies should not take a long time to develop due to the existing levels
of information and expert knowledge on key product groups and the lack of requirement
for a full life-cycle assessment.  The studies would aim to streamline the identification of life
cycle impacts, pull together existing information and avoid the duplication of effort which
currently occurs.

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Recommendation 2, continued
Who should undertake this broad feasibility study?
All stakeholders would be involved in providing information, contributing to the
development of guidance etc. as appropriate. However, it is necessary to decide which
would be the leading organisational body.  This decision will need to consider the following
key issues:
•
 funding required;
•
 independence (lack of bias towards a particular label type, objective consideration of
environmental impacts); and
•
 ensuring stakeholder consultation on an egalitarian basis;
•
 ability for rapid decision making and production of output - studies should not be so
time consuming that they delay progress.
We suggest that the following options are debated:
•
 The European Union Eco-labelling Board (EUEB) with avoidance of bias towards Type I
achieved via the use of independent consultants;
•
 An Independent body;
•
 Group comprised of Member State Environment Ministries/Agencies;
•
 Industry Associations;
•
 Combinations of the above.

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Box 7.4 Recommendation 2C (further details)
2C.  Encourage the Development of Effective and Valid Product Information
Encourage the development of the most effective product information types identified in 2B
via the following mechanisms, as appropriate:
•
 Type I - if no Type I schemes exist, stimulate their development at the most appropriate
level by providing information to Type I bodies.  If Type I schemes do exist, ensure co-
ordination in accordance with Recommendation 1 via the use of commonly identified life
cycle impacts (from A) as a basis for establishing criteria;
•
 Type II - produce product-specific guidance for producers consisting of significant life-
cycle impacts (from A), appropriate wording of claims in accordance with ISO 14021,
recommendation to undertake market analysis in order to identify what constitutes
above average product environmental performance & links to existing market analysis
reports eg from Type I label development.  This guidance could have secondary uses
such as forming the basis of voluntary agreements by industry sectors and/or to
interpret legislative requirements relating to Type II claims.
•
 Type III - request industry associations to establish voluntary agreements or guidelines
on common elements (and unit of measurement) to be included in the Type III label,
based on the life-cycle impacts identified in A.  Encourage Type III labels to be aimed at
the most appropriate target audience identified in B.  These actions will increase
comparability and understandability in accordance with Recommendation 1.
•
 Guidelines for organisational procurers outlining the product’s significant life-cycle
impacts and existing forms of product environmental information could be issued to
assist them in deciding between products and/or developing supplier questionnaires.
The Internet would be a preferable medium for disseminating guidance, with different
sections for producers and purchasers (both individual and organisational), covering all
forms of product environmental information including user information.  This could be
expanded to provide environmental performance data for existing products, if feasible.

Annex C
Stakeholders Consulted via
ERM Workshop

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C1 STAKEHOLDERS CONSULTED VIA WORKSHOP ON OPTIONS FOR A
EUROPEAN ENVIRONMENTAL LABELLING STRATEGY, BRUSSELS,
MONDAY 26 JUNE.
C1.1 EXTERNAL DELEGATES
• Eva Eiderstrom - Svenska Naturskyddsföreningen
• Lisbeth Engel Hansen - Eco-labelling Denmark
• Marianne Eskeland - Norwegian Foundation for Environmental Product
Labelling
• Maurizio Fieschi - ANPA - Italian Environment Protection Agency
• Preben Kristensen - Danish Ministry of Environment and Energy
• Charles Laroche - Unilever
• Guido Lena - UEAPME
• Elena Lymberidi - European Environmental Bureau, EEB
• Louise Olsen - Euro Coop
• Juan Palerm - ECA Global
• Jans Prebensen - Danish Ministry of Environment and Energy
• Katrin Recke - AIM
• Bob Ryder - UK Department of the Environment, DETR
• Gerd Scholl - Institut fuer oekologische Wirtschaftsforschung, IOEW
• Consuela Triglia - COOP
• Dr Hamish Will - Lever Brothers
• Ellen von Zitzewitz - WWF
C1.2 EUROPEAN COMMISSION REPRESENTATIVES
Helen Donoghue
DG Environment: Integrated Product Policy (IPP)
Simon Goss
DG Environment: EC Eco-label
Thomas Heynish
DG Environment: Retailers and Sustainable Consumption
Gerhard Stimmeder
DG Environment: EC Eco-label particularly initiatives in tourism and
construction
Mieke de Swert
DG Sanco (Health and Consumer Protection):  Control of ISO Type II claims

Annex B
Stakeholders Consulted via
Questionnaire

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B1 SUMMARY OF RESPONDENTS
A total of 30 completed questionnaires were received covering stakeholder
groups in 10 countries (Canada, Denmark, Finland, Ireland, Italy, Norway,
Portugal, Sweden, Switzerland and UK).
Table B1 Questionnaire Responses by Stakeholder Group
Stakeholder Group Sent Received
• Consumer Organisations 4 4
• Environmental NGOs 4 2
• Government and eco-label competent
bodies
22 12
• Procurement associations 3 0
• Producers and trade associations 13 6
• Retailers and trade associations 7 4
• Other 4 2
Total 57 30
The following is a list of those organisations from whom responses were
received:
B1.1 CONSUMER BODIES AND ORGANISATIONS
• Comitato Consumatori Altroconsumo / Italian Consumer Organisation
• Consumers International (Recent reports)
• Sveriges Konsumentråd / Swedish Consumers' Association
• UK National Consumer Council (NCC)
Note BEUC (European Consumers Association) distributed the questionnaire
to its member state organisations.
B1.2 ENVIRONMENTAL NGOS
• European Environmental Bureau, EEB
• WWF International
B1.3 GOVERNMENT DEPARTMENTS AND ORGANISATIONS & ECO-LABEL COMPETENT
BODIES
• ANPA - Italian Environment Protection Agency
• Danish Ministry of Environment and Energy & Danish competent body
• Norwegian Foundation for Environmental Product Labelling
• NSAI (Irish competent body)
• OECD
• SFS Eco-labelling (Finnish competent body)

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• SIS Eco-labelling (Swedish competent body)
• Svenska Naturskyddsföreningen (Swedish competent body)
• TerraChoice (Canada)
• UK Department of the Environment, DETR (Meeting)
• UK Department of Trade and Industry (personal opinion)
• UK National Health Service (NHS) Purchasing and Supply Agency (Executive
Agency of the Department of Health)
B1.4 PRODUCERS & TRADE ASSOCIATIONS
• AIM
• Electrolux
• Eurocommerce - Portugal
• Eurocommerce - Svensk Handel, Sweden
• European Small Businesses Association (ESBA)
• UEAPME
B1.5 RETAILERS & TRADE ASSOCIATIONS
• B&Q (Meeting)
• Euro Coop (Position statement)
• Eurocommerce - Switzerland
• Eurocommerce - UK Retailer
B1.6 OTHER
• Chairman of ISO 14021 working group (Meeting)
• Interbrand Newell & Sorrell - Marketing consultancy (Meeting)

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B1.7 NO RESPONSE
The following stakeholders were contacted regarding the questionnaire but
were unable to take part in the consultation:
Environmental NGOs
• Friends of the Earth
• WBCSD
Government and eco-label competent bodies
• DG Enterprise
• EC Eco-label competent bodies:
• Belgium
• France
• Germany
• Greece
• Iceland
• Luxembourg
• The Netherlands
• Portugal
• Spain
Procurement associations
• Chartered Institute of Purchasing and Supply (CIPS) - European
Secretariat
• European Partners for the Environment (EPE): Green Procurement
Network
• Procurement Service Austria
Producers and trade associations
• Dow Chemicals Europe
• Panasonic
• Philips
• Procter & Gamble
• Rank Xerox
• UNICE
• Volvo Car Corporation
Retailers
• Brussels Retail Consortium (part of British Retail Consortium, BRC)
• 3 Suisses
• Migros
Other
• BRE
• CEN

Annex A
Terms of Reference

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A1 TERMS OF REFERENCE FROM THE EUROPEAN COMMISSION
The contractor shall carry out a study on the use of ISO Type II and III
standards for environmental labelling at Community level.  Furthermore
these standards should be considered in the broader context of a
comprehensive Community Environmental Labelling strategy.
This involves the following tasks:
A) A brief reference and analysis of relevant Community instruments and
national policies relating to environmental labelling.
B) Analysis of the differentiating characteristics of ISO Type II and III
environmental labels, referring to possible areas of conflict and future
developments.
C) In-depth study of the possible relationship between ISO Type II and III
environmental labels and other types of environmental labelling,
namely Type I labels.  Particular attention shall also be given to the role
of possible mandatory environmental labels and voluntary single issue
labels.
D) Assessment of the impact of the different types of environmental labels
with regard to SMEs and determination of their impact in consumers’
choice.  Consideration of the impact of greening of public procurement.
E) Proposals for future lines of action at Community level, focusing on the
establishment of a comprehensive Environmental Labelling Strategy.
The involvement and participation of relevant interest groups, such as
industry, including SMEs, retailers, environmental and consumer
organisations shall be actively pursued.