Eco-Rating Electronics Products: Has the Time Come?

Authors

• Vijay Kanal

  Former Director, Information and Communications Technology Practice, Advisory Services, BSR

• Virginia Terry

  Former Director, Advisory Services, BSR

How safe from toxic substances is that cell phone my children are playing with? How energy efficient is it? And what kind of take-back program does the manufacturer offer at the phone’s end-of-life for safe recycling or disposal?

These are some of the questions customers are starting to ask about the environmental features of cell phones and other electronics products. In almost every opinion poll we’ve seen, consumers say they are concerned about the environmental (and, increasingly, social) impacts of the products they use. And yet information on these and other questions remains largely elusive. Without it, customers cannot make the right product choices, and changing consumer behavior remains one of the bigger impediments to sustainability.

One of the solutions to this challenge has been eco-labels, which have grown substantially in the last several years. Today, hundreds of these labels vie for consumers’ attention on products and services ranging from food to cleaning supplies to flowers and even cosmetics. As the number of these labels has grown, it’s not clear that they are having the desired effect of helping consumers make more sustainable choices. Some of them, such as the EnergyStar label, cover only one aspect of the product’s performance. Others don’t explain what the information on the label means. Despite the proliferation of labels, easy-to-understand, consistent, and comparable information about the environmental impacts of products is not readily available to consumers. While we need to continue to experiment with new ways to engage consumers, when it comes to labels, there is a need for greater clarity and greater harmonization among the labeling schemes. Based on work BSR recently completed, we are using this article to examine some of the successes and challenges still to overcome in eco-labels related to the electronics industry.

Case in Point: The Wireless Industry’s Approach to Labeling and Beyond

When it comes to encouraging better and more sustainable purchasing decisions, the mobile industry provides a compelling opportunity: Hundreds of millions of cell phones are bought and discarded each year, so even small changes in consumer behavior could drive improvements in the environmental and social attributes of these devices, which could have a huge impact on the planet and society. But what will it take to make this happen? To date, a few companies have developed new ways to provide information for consumers about the environmental attributes of the phones they sell. UL Environment has developed a set of interim sustainability requirements for mobile devices as the basis for green certification, and Sprint now requires that all manufacturers of the phones it sells go through the certification process. Sprint, Telefonica, AT&T, and Vodafone have introduced, or are about to introduce, eco-rating systems to inform customers and nudge more manufacturers to improve the environmental (and social) attributes of the devices they make. With their purchasing and distribution power, and hundreds of millions of wireless consumers, these carriers are in a position to heavily influence the design and manufacturing process of the tens of millions of devices they buy and resell from manufacturers every year. Later this year, AT&T’s new eco-rating system, which was developed with support from BSR, will be used to rate most post-paid AT&T-branded handset devices. Based on 15 performance criteria that address sustainability impacts across cell phone life cycles, the system will provide consumers with information, at different levels of detail depending on consumer preference. There will be a label on the package with an aggregate score, additional information on a card at the point of purchase, a code that consumers can quickly scan for more information, and more comprehensive details on the cell phone’s performance against each of the 15 criteria on AT&T’s website. Vodafone’s eco-label provides a score between 1 and 5 based on 162 questions the phone manufacturer must answer. Sprint, using the UL Environment interim standard, which covers over 50 performance criteria, will provide information indicating whether the phone is certified or has achieved platinum-level certification. When fully implemented, these systems will provide customers with simple or detailed information, depending on their needs. They will also allow the industry to track the extent to which consumer behavior is influenced by environmental considerations in the cell phones they buy. For example, by tracking consumer preferences for mobile devices achieving higher eco-ratings and by quantifying “hits” on web-based environmental information, the industry will begin to measure trends in how the ratings systems are used by consumers.

Overcoming the Challenges

One of the biggest challenges for both the wireless industry and consumers is the potential for conflicting information. Since retailers and carriers sell identical products, it’s possible for the same product to be rated differently on different systems. If competing rating systems come to different conclusions about the same product, then consumers will rightly ignore them. How is the industry going to achieve this consistency when their competitive spirit demands that they try to gain any edge over other companies? On this issue of environmental attributes, these companies must ultimately work together for the sake of consumer satisfaction and the sake of the planet. This is particularly important as several industry associations and standards bodies such as GSMA, ITU, and UL Environment begin to develop eco-rating systems for cell phones. These developments provide an opportunity for the industry to put competitive issues aside and collaborate on a system that is consistent, transparent, and easy to understand. Such a system does not have to be limited to mobile devices. If consumers embrace an open and comprehensive communication system, and it leads to changes in consumer behavior, we foresee a day in which other industries also develop eco-rating systems for their products. And if eco-ratings of mobile devices cause even a slight shift in consumer awareness and demand, we are confident that manufacturers will design and build more environmentally friendly and socially responsible products. The mobile device industry and the broader electronics sector could provide leadership on these important issues, and we believe that success in this category will lead to consumer demand for similar information and more sustainably oriented choices in other categories. A rising tide will lift all boats.