Date: Jul 22, 2019
Category: Business Essay
Environmental Issue in Business

Environmental sustainability is the ability to sustain the aspects that are valued in the physical environment or the act of utilizing them without depletion. In fact, there are four main perspectives on environment sustainability. From an ecologist viewpoint, it is possible to achieve sustainability when humans do not interfere in nature at all. Ecologists argue that plants and animals are internally related and interference in their habitat will trigger undesired consequences. The second viewpoint originates from a conservationist angle. Conservationists subscribe to the notion that humans can exploit the environmental resources but in a manner that is not wasteful. Conservationists do not oppose mankind’s exploitation of the environment but rather the negative effects. The third perspective on sustainability is from First Nations and Metis Ways which holds the notion that the earth gave human resources as gifts, and people should only use what they need. Another viewpoint on environmental sustainability is the utilitarian perspective. Utilitarianism assesses the intent of one’s actions; thus, it involves judging actions as right or wrong. Contemporary utilitarianism takes into consideration such environmental risks as ozone depletion, global warming, deforestation, and pollution, among others.

Most people want to sustain the capabilities of the natural environment to maintain favorable living conditions and aspects of the environment that give renewable resources. Apart from the above desirable aspects of sustainability, the functioning of society regardless of depletion of non-renewable resources and the quality of life, among others, are the intended targets of sustainability. ‘Eco-labeling’ refers to a voluntary method of environmental performance accreditation and labeling practiced globally. Therefore, an eco-label is a sticker that recognizes generally proven environmental inclination of a product within the respective category. Unlike green stickers and associated claim statements, eco-labels are awarded by impartial third-parties in relation to certain products that are independently verified to satisfy transparent environmental leadership criteria. Moreover, eco-labels are based on lifecycle considerations. The paper will explore eco-labeling as an environmental policy tool and as a potential trade barrier. The paper will also focus on some well-known eco-labeling programs such as Blue Angel programmer in Germany, Forest Stewardship Council, and Marine Stewardship Council, among others.

Eco-Labels

Eco-labels and green stickers refer to labeling systems for food and consumer products. While the law mandates stickers, eco-labels are voluntary. For instance, major appliances and automobiles in North America use Energy Star eco-label. In this aspect, an eco-label is a form of sustainability metrification directed at consumers so as they find it easy to take into account environmental concerns when shopping. Other labels quantify pollution or energy consumption via index scores. Moreover, they are labels that simply reinforce compliance with a set of practices for sustainability. Apparently, eco-labeling systems were started by NGOs with the European Union, subsequently legislating conduct of eco-labeling. In fact, the European Union has developed its eco-labels for food and consumer products categories.

Confidence in the label is entirely consumer’s decision as rogue manufacturers may embrace ‘green washes’. In this context, ‘green wash’ is a false claim by a manufacturer that the product is purported to meet the environment-friendly aspects. In various researches, there is still no concrete primary data that can help examine the performance of eco-labels. In that respect, most conclusions on eco-labels rely heavily on grey literature. In 1977, the German government embedded eco-labeling into mainstream environmental policy by establishing the Blue Angel programmer. Consequently, eco-labels have become most visible market-based tools for realizing environmental objectives. However, the opponents claim that there is a downside of eco-labeling since it sometimes acts as an unjustified non-tariff barrier to trade. Hereby, a lack of checks and balances is a major problem of eco-labeling. There is no harmonious way to incorporate the new eco-labels in the existing ones. In addition to the above factor, the cost of conformity assessment becomes a trade barrier for developing country producers.

The Environmental Effectiveness of Eco-Labeling

Shade Coffee

The first real example of eco-labeling is the Commission for Environmental Cooperation Shade Coffee. Commission for Environmental Cooperation’s core duties is to promote green marketing. In a bid to realize its objectives, CEC studied the market possibilities of shade-grown coffee as a desirable coffee product that Mexico might export. The visible environmental benefits of shade-grown coffee include maintenance of forest cover that triggers reduced soil erosion and, consequently, watershed conservation. Moreover, while trees use carbon and release oxygen during the day, coffee provides shelter for several species of mammals, reptiles, and flora. Shade-grown coffee, thus, serves as a conservation measure for biological diversity.

It is imperative to acknowledge that the term ‘shade-grown’ is contextual and is open to interpretation as to how much forest cover is maintained. Producers of shade-grown coffee seek harmonized criteria for the accreditation of what defines shade-grown coffee. Producers are, thus, able to charge a premium price for a certified product once they agree on a common standard for shade-grown coffee. On social and economic fronts, shade-grown coffee production is feasible for smallholders who are unable to afford high volume of chemical inputs and hybrid seeds needed for full-sun coffee production. In maintaining the forest cover, the small-scale producers may additionally harvest other forest products such as medical plants, firewood, and fruits to supplement their incomes.

Apparently, the existing market research shows that there is little consumer demand for certified shade-grown coffee. As such, the benefits of accreditation are unknown to the majority of consumers. Thus, importers and roasters can spur demand for certification of shade-grown coffee. Accreditation of shade-grown coffee will, therefore, need a variety of chain custody monitoring. The chain of custody monitoring can be realized by producers bearing the costs of certification. Alternatively, the chain of custody monitoring may be met by the roaster bearing the costs of certification. In the Mexican case, the second approach above is highly applicable as they often lack the requisite capital to pay for an audit of their product. Even though the costs of certifications may be recouped via price premiums, the initial seed capital outlay is beyond the capability of smallest producers. Most roasters are hesitant to pay for a certificate label. In North America, the degree of customer awareness on the meaning of shade-grown eco-label coffee is low. The above low consumer awareness about shade-grown coffee negates the consumers’ desire to pay a premium price for the shade product. Consequently, the roasters have to promote the product themselves which is an extra cost on top of having to pay the certification fee. The above analysis reflects the lackluster participation of most large- and medium-scale roasters on shade-grown coffee certification efforts in North America. However, the recognition factor plays a pivotal role in the success of an eco-label. It can, thus, be concluded that CEC shade-grown eco-label coffee as being inherently successful but practically a failure.

Marine Stewardship Council Nordic Fisheries Eco-Labeling

A voluntary consumer-driven for marine capture fisheries were proposed by the Nordic Technical Working Group. In collaboration with state authorities, the Nordic Technical Working Group established criteria that can be employed by private bodies and non-governmental organizations to eco-label products. The above criteria are seen as most applicable in North-East Atlantic region. The framework requires that fishery must follow the fisheries administration or management plan. In turn, the fisheries management plan must be based on consistent scientific information on the state of fish stocks and commendations for sustainable fish exploitation. Furthermore, the fisheries management framework must have pre-agreed management measures that are implemented immediately as soon as relevant precautionary reference points are met. The last requirement on fish stock demands efficient monitoring and control measures must be implemented.

The Nordic Fisheries eco-labeling sets conditions on the ecosystem for potential players interested in its eco-labeling. First, the group prohibits destructive fishing practices such as the use of poisons or explosives to kill fish. Secondly, the best available technology for selective fishing methods should be embraced to minimize discards of fish, mollusks, and crustaceans. The above eco-labeling monitors discard via a sampling program. Lastly, on ecosystem demands, management framework should control any other emerging issues in the ecosystem that are properly identified through scientific advice as having serious consequence in the subject fishery.

There have been serious challenges concerning the implementation of the Nordic Fisheries eco-labeling program. Eco-labeling is selectively applied despite enhancing regenerative fishing, thereby being treated as a mixed success. With respect to the eco-labeling program, most stock assessment methods and biological reference benchmarks are based on single-species assessments. Consequently, challenges surface when dealing with complex multi-species assemblages. In fact, like any other eco-labeling program, the Nordic program is seen as a potential non-tariff barrier to trade which makes one doubt whether it should enter the mainstream fish market.

The Nordic Fisheries eco-labeling is portrayed as being an inadequate framework to promote environmental sustainability. The above realization is a recurring challenge that afflicts eco-labeling as most programs lack an extensive theoretical framework. Consequently, the Nordic Fisheries eco-labeling approach makes it hard to assess the status of all the population groups within the marine community. Currently, there are still no comprehensive methods of assessing and managing complex multi-species resources by fisheries management. The assessment of multi-species status should examine changes over time in total abundance, age structure, size, productivity, and biodiversity, among other indicators. The Nordic Fisheries eco-labeling should additionally pay attention to endangered species. Hence, the Nordic Fisheries eco-labeling has difficulties addressing rather certifying multi-species fisheries.

Blue Angel Eco-Label

Blue Angel eco-label is a German certification for products that have met environmentally friendly aspects. A group of thirteen people drawn from the environment, consumer groups and trade unions among others convened in 1978 to start one of the world’s oldest eco-labels. Blue Angel covers at least 10,000 products in at least 80 product categories. In fact, most countries have modeled their eco-labels with regard to Blue Angel framework. In fact, the sole purpose of Blue Angel is to furnish consumers with environmentally-friendly products, giving global support to product-oriented environmental protection. As an eco-label, manufacturers can use it on a voluntary basis. Blue Angel concentrates more on the environmental protection characteristics of products. Currently, Blue Angel is being awarded in sectors of water, health, climate and resource conservation. Blue Angel eco-label certification includes a specific environmental improvement, among other factors. Blue Angel certification covers several products which helped Blue Angel achieve success. The remarkable increase in market share for Blue Angel-labeled low-emission gas and oil burners can be cited as reasonable grounds for assessing relative reductions in emissions. In this regard, Blue Angel is a success.

Another success story of the Blue Angel label is the manufacturers’ striving for low-noise construction machinery. Such construction machines include road-making vehicles and wheel loaders, among others. A significant gain for Blue Angel label and the environment was some regulations permitting only low-noise construction machinery in noise-sensitive areas such as hospitals. Studies have shown that Blue Angel label was a critical factor for professional purchasers and public procurement than it was to private consumers. Owing to the above information, Blue Angel label is by far the most known and successful eco-label adopted.

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Sustainable Forest Management Certification (SFMC)

SFMC was established to address continued deforestation or degradation. Besides deforestation, SFM certification aimed at addressing deprivation and improving the conservation of biological diversity in the tropics. The certification was initially advanced by environmental groups but later evolved into a potential instrument for sustainable forest management. The remarkable success story of SFM is that at least 124 million ha of world’s forests have been certified by several certification schemes designed over the last decade. Forest certification aims to promote forest resources with other tools such as the criteria and indicators. However, SFM certification has visibly failed to save tropical biodiversity even after ten years of implementation.

Thus, predictably most certified areas are in the temperate and boreal zone with Europe being the largest benefit of SFM certification. Apparently, of all SFM certification, tropical countries constitute only 10%. It is imperative to acknowledge that the criteria used to issue certification upon compliance vary both between certification and within one and the same scheme when applied in different regions. However, the varying standards for awarding SFM certification share legal requirements and normally include elements that set higher standards.

SFM eco-label raises several concerns such as the varying quality of actual audits of the standards. Nevertheless, independent audits serve as an incentive for improving forest management. The success of SFM certification relies on the ability to meet the costs incurred since it is a voluntary market-based tool. The mantra of green consumer sentiment is not enough to sustain the motivation for respective players to strive for SFM certification.

Regardless of the above challenges, forest certification can be termed as successful in creating awareness and spreading knowledge on a holistic SFM concept. Forest certification has met most of the SFMC concept of embracing economic, environmental and social issues globally. SFMC is effective because it provides an instrument for a range of other applications for sustainability such as varying carbon sinks. The visible spread of SFM standards has been linked to the incorporation of SFM certification incorporate purchasing policies. For example, the German government has recently made it mandatory to purchase only SFM certified timber products. The remarkable success of Forest Stewardship Council has been associated with the evolution of buyer groups constituting of companies that are committed to purchasing only FSC certified timber products. However, in some scenarios, products made with Forest Stewardship Council certified timber has foregone FSC labeling for consumers showing weak preferences for these products.

 

Environmental sustainability is critical for the existence of mankind and another ecological life on earth. Several indicators such as social and ecological indicators are used to sentence an eco-label on its effectiveness. Eco-labeling is a way to encourage active participation of manufacturers and make them sensitive to the environment. Eco-labeling describes the voluntary method of environmental performance accreditation and labeling that is practiced globally. Therefore, an eco-label is a sticker that recognizes generally proven environmental inclination of a product within the respective category. The salient aim of an eco-labeling programmer is to enhance environmental performance. Proximate causes such as low consumer awareness, insufficient financial rewards for innovators and lack of market segmentation are used as a means to attain improved environmental performance. Eco-labeling furnishes consumers of the environmental impact of selected products, and it promotes economic efficiency as it is comparatively cheaper than regulatory controls of market development. When buyers select an eco-based product, they impact directly on the market forces. Consequently, the market converges toward greater environmental awareness.

Essentially, an eco-label is a means of conveying messages. Currently, eco-labeling is targeting more than the final consumer. For instance, energy efficiency labels that furnish customers on energy consumption of home appliances are among the most successful eco-labels.

Despite the challenges of eco-labeling programs, eco-labeling is critical in drawing businesses, especially manufacturing and mining, into environmental conservation. When proper awareness campaigns are done, consumers will switch to eco-friendly products which force manufacturers to adjust their production processes and approaches to ones that are environmentally sensitive. Monetary incentives combined with the tempting opportunity for product differentiation via eco-labeling trigger massive involvement in environmental sustainability activities by firms.

The success of Blue Angel eco-label relied on awareness by consumer organizations and the media, targeting the same product category labels at professional purchases and public procurement policies that favor the subject programmer. Evidence suggests that eco-labeling is most useful when designed in collaboration with complementary policy initiatives. The enthusiasm for Blue Angel label by producers and their desire to construct reduced-noise construction machinery was associated with the enactment of regulations that allow the use of such machines near hospitals.

Environmental sustainability is more relevant in today’s society that is tackling the effects of global environmental issues. The planet’s fragile system is under stress from several fronts as a consequence of industrialization and expanding infrastructure. There is a need for all stakeholders of production to embrace environmental sustainability, regardless of their perspectives on environmental sustainability. Forest Stewardship Council, Blue Angel, Shade-Grown and Marine Stewardship Council certifications are some of the popular eco-labels that are making an impact on environmental sustainability.