Employee Engagement: Is It Just a Myth?

I was at an event on CSR at Social Media Week where Susan MacPhearson of Fenton said,

"employees are the single largest untapped resource in the execution of CSR strategy". 

This statement really stuck with me, and after dwelling on it for weeks, I realized how true it really is.

Companies often boast about their level of employee participation and commitment to CSR initiatives. However, to what extent are employees actually being engaged? Think about some of the most environmentally and socially responsible companies (for me, Nike and Timberland come to mind). Now think about the last time you supported these companies by purchasing a product from one of their stores. Were the employees who helped you aware of the environmental attributes of the products they sold? If you asked an average Nike employee about their Considered Design initiative, how would they respond? Chances are, the average employee will be grossly uninformed about such programs.

In fact, I know first hand that knowledge of CSR initiatives is not "trickling down" from the corporate office to the regional sales floor.  As a lead cashier at a major retail store, I had no idea that the company had made any commitment to CSR or published a CSR report until I googled it.  Our atrocious habit of throwing away 500+ plastic hangers a day made me believe sustainability was a low priority for the company.  Ironically enough, the company's CSR report states, "We are committed to incorporating sustainability into all aspects of our operations and have a fundamental responsibility to minimize our impact on the environment".  Moreover, it says, "Associates at all levels of our organization offer their time, enthusiasm and energy, as well as personal and Company resources in support of many worthy causes through a variety of local, national and international organizations."  So why am I not witnessing any of this myself?  The company's bold commitment to CSR is something to be shouted from the rooftops, yet even employees are unaware.

This lack of awareness is not only plaguing retail companies. A few months ago, I posted about this topic after I attended a networking event at NYU:

I attended a program through NYU’s Wasserman Center today and had the opportunity to meet and network with employees and recruiters from big name companies like Deloitte, Morgan Stanley, IBM, AOL, Macy’s, Black Rock, and Barclays. Since I am looking to get into the CSR field, I asked them what their respective companies were doing in this space. I was a bit disappointed to find that most of them were unable to speak to anything significant their companies have achieved in terms of CSR. I happen to know that most of these companies are taking sustainability concerns into account to some degree, with the exception of Barclays, who will be receiving a Public Eye ”Award” this month. Therefore, this lack of awareness points to a significant problem.

So why is this happening?  Why do employees (especially those, like myself, who are interested in participating in CSR initiatives!) remain an untapped resource?  I'd love to hear your thoughts about how to solve such a problem!  

Eco-Label Recommendations for Improvement

Overall, it is obvious that there are major issues that plague even some of the most popular and highly respected eco-labels. The following post will briefly discuss how some of these challenges can be overcome to strengthen eco-labeling in general.

Increase Regulation and Oversight

One of the most attractive features of eco-labeling is that it has the potential to drive sustainability without the need for government intervention. However, upon analysis it seems that there needs to be some regulation in the eco-labeling space in the United States. Greenwashing, redundancy, meaningless criteria, and increasing certification costs all point to this. A regulating body could provide consumers with assurance that eco-labels are credible and trustworthy, regardless of how many there may be on the market. To some extent the FTC Green Guides already addresses these issues, but because the FTC is not an enforcing agency, it has not eliminated such problems (FTC, 1998). Therefore, it is recommended that either the FTC is provided with enforcing power, or that a separate enforcing agency upholds their guidelines. By preventing labeling agencies from engaging in such greenwashing, eco-labels will once again become the reliable educational tools they were set out to be and consumer mistrust will be abated.

Facilitate Communication and Consolidation among Labeling Agencies

The current labeling environment includes hundreds of very similar labels, which confuses consumers and complicates the certification process for producers. It has already been proven that competition among eco-labels is detrimental; therefore it is recommended that labels that are similar or identical are consolidated (Mahenc, 2009). Consolidating labels will increase consumer recognition because there will be less labels on the market for consumers to know about. Increased communication among labeling agencies must be facilitated in order to encourage consolidation. The Global Ecolabelling Network is the perfect platform for such conservations. Members of the GEN should be provided with an incentive to team up with similar labeling agencies to decrease the amount of competition among them. A consolidation fund could be started to provide monetary support to agencies that decide to revise their criteria in the name of consolidation. This would allow more labels to achieve the market penetration they seek and need to be successful in achieving their objectives.

Raise awareness

Finally, and perhaps most importantly, in order for eco-labels to meet their primary objective of informing consumers’ purchasing decisions, consumers must know more about them and the accolades they verify. When consumers do not recognize the label on a product, neither of the remaining two eco-label objectives can be met. Therefore, it is recommended that eco-labeling agencies unveil awareness campaigns regarding their labels. There are numerous avenues for spreading the word about the meaning of a particular eco-label including print ads, commercials, signage, and websites. If the eco-labeling agency charges a small additional fee at the time of certification, this money can be put towards awareness-raising. Producers will likely not oppose such a fee, because it ensures the reaction they seek from consumers and the competitive edge they seek in the marketplace from using a label. These measures, in combination with newly developed smart phone applications such as the Consumer Reports Eco-Label App, will allow eco-labels to achieve the visibility they need to really make an impact and drive sustainability (Consumer Reports, 2011c). In general, this area has been lacking and the entire eco-labeling space has suffered because of this.

Overall, these recommendations seek to improve one of the most prolific tools available to consumers regarding green product education. Eco-labeling is extremely important in order for green products to receive the preference they deserve among concerned consumers. Eco-labels encourage green production, drive sustainability in the marketplace, and lessen industry’s overall impact on the environment. More efforts should be taken to improve the quality of eco-labeling in meeting these worthy objectives.


References

Federal Trade Commission. (1998). Guides for the use of environmental marketing claims. Retrieved from http://ftc.gov/bcp/grnrule/guides980427.htm.

Mahenc, P. (2009). Wasteful Labeling. Jounrnal of Agricultural and Food Industrial Organization, 7(2).

Consumer Reports. (2011c). New Eco-Label mobile app for iPhone and iPad decodes green product labels and claims. Retrieved from http://news.consumerreports.org/money/2011/11/new-eco-label-mobile-app-for-iphone-and-ipad-decodes-green-product-labels-and-claims.html

Eco-Label Challenge #5: Certification Costs are Misused and can be a Barrier to Entry

Unfortunately, eco-label certification can become a money-making scheme for third party eco-label agencies. A recent article concerning eco-labeling uncovers that, “Manufacturers are often required to make payments to the owner of the eco-label in order to display it on their products, risking low-bar standards for qualification” (Covington, 2011). Though payments to eco-label agencies are certainly necessary in order to fund product testing, audits, and information gathering, if it becomes excessive or misdirected, companies are essentially able to buy their way in, which jeopardizes the integrity of the entire labeling operation.

A recent study entitled “Wasteful Labeling” addresses this very problem. This study argues that labeling will not be able to solve the problem of verifying claims made by businesses if the labeling agency itself is untrustworthy (Mahenc, 2009). The study shows through economic analyses that when the labeling agency is trustworthy, the fee charged for labeling raises revenue with a minimal loss in terms of efficiency, and the money raised is analogous to a tax dedicated to funding the agency’s information gathering and other operations (Mahenc, 2009). Following this, if the agency is untrustworthy, it may charge fees that exceed the appropriate level in order to generate revenue. Similarly, an untrustworthy agency may divert the fees charged for labeling from their primary purpose of collecting information to raise additional revenue. In the first scenario where the price of certification increases, the actual price of the consumer good may also increase to compensate for this, which is a definite detriment. In addition, the high price of certification may discriminate against smaller, less profitable companies that meet the labeling criteria but cannot afford associated costs of labeling their product. In the second scenario, money that should be used to verify product claims communicated by an eco-label is diverted elsewhere, meaning that the thoroughness and quality of the actual certification process is compromised. It is clearly evident that labeling agencies need to be honest and credible to avoid the problems associated with certification costs but this is difficult to ensure in an environment where eco-labels are unregulated.

Next Up: My recommendations for overcoming the 5 challenges facing eco-labels!

References:

Covington, P. (2011). Is it greenwashing or too many eco-labels that is the problem? Triple Pundit. Retrieved from http://www.triplepundit.com/2011/03/greenwashing-many-eco-labels-problem/.

Mahenc, P. (2009). Wasteful Labeling. Jounrnal of Agricultural and Food Industrial Organization, 7(2).

Eco-Label Challenge #4: The Criteria Development Process for Labeling is Faulty

One of the major objectives of eco-labeling is driving sustainability. When consumers choose an eco-labeled product over one without such labels, they are making the assumption that such product benefits the environment in some way. “To utilize its full potential it is necessary that the criteria for the label are strategically developed, i.e. the objectives for those processes being clearly defined and strategies to reach these objectives being laid out within criteria development processes” (Bratt et al., 2011, p. 1631). Unfortunately, due to insufficient criteria development on part of the labeling agencies, this is not always the case.

A recent study assessed two well-respected Swedish eco-labels to determine any gaps in the current criteria development processes in relation to a strategic sustainability perspective. The study demonstrates that most labeling programs lack a full system perspective and a definition of sustainability as well as a statement of objectives to direct the criteria development processes (Bratt et al., 2011). In result, eco-labels do not consider the total environment impacts of a product, but just focus on very specific impact mitigation. Moreover, criteria development rarely goes beyond the present. Labeling agencies do not inform producers about upcoming changes in criteria or suggest improvements producers should make for future certifications (Bratt et al., 2011). This makes it difficult for producers to keep up with changing standards and represents a lost opportunity for encouraging innovation. Overall, criteria development is one of the most important components of a successful eco-labeling operation, but it is often not as effective as it could be in driving sustainability.

References:

Bratt, C., Hallstedt, S., Robert, K.H., Broman, G., Olkmark, J. (2011). Assessment of eco-labelling criteria development from a strategic sustainability perspective. Journal of Cleaner Production, 19, 1631-1638.

Eco-Label Challenge #3: Criteria for Labels are Weak or Meaningless

The plethora of eco-labels assures coverage of nearly all aspects of environmental impact, from production to disposal. Unfortunately, some labels make claims that are insignificant or meaningless. This is best illustrated by labels that claim a product is free of CFCs. The Consumer Aerosol Products Council, a non-profit organization sponsored by 3M, promotes the use of the “No CFCs” logo on aerosol cans and offers it to companies to display on products (Consumer Reports, 2011). However, because CFCs were banned from virtually all consumer products in the United States as a result of the Montreal Protocol in 1978, this label is completely pointless and misleading. An unsuspecting consumer may incorrectly assume that products without such label contain CFCs and choose to buy those that are certified. This provides companies using these meaningless labels with an unfair advantage over those that are not using them, when in fact all products are produced according to the same standard mandated by law. In a similar fashion, some eco-labels use sub-standard criteria for certification. Eco-labels are meant to verify the claims of leading, innovative companies that perform above the status quo in terms of environmental impact. Labels with low standards falsely portray a message of superior environmental performance, further deteriorating the integrity of labeling schemes. Such meaningless and weak criteria are certainly having an impact on the effectiveness of eco-labeling in meeting their three objectives.

References:

Consumer Reports. (2011b). Label search results: No CFCs. Greener Choices. Retrieved from http://www.greenerchoices.org/eco-labels/label.cfm?LabelID=268.

Eco-Label Challenge #2: Low Awareness and Recognition among Many Consumers

Some eco-labels such as USDA Organic or Energy Star have acquired widespread recognition and have become household names. However, most eco-labeling schemes suffer from lack of consumer awareness. In fact, one study found that found that consumer awareness is lower than twenty percent for non-major NGO labels (Sullivan, 2010). Since eco-labels are often very simply designed and contain little or no explanatory text, consumers must be able to recognize them in order to know what environmental accolades they verify. The abundance of eco-labels makes this incredibly confusing and difficult. There are simply too many labels and designs in use today for the average consumer to have knowledge of them all.

When you consider what the average eco-label looks like to consumers, it becomes increasingly evident that this lack of awareness is a major issue. For instance, the Leaping Bunny Cruelty-Free label is merely a picture of a jumping rabbit (Leaping Bunny, 2009). Consumers are expected to understand that the placement of such label on cosmetic and household products assures that no animal testing is used in any phase of product development by the company, its laboratories, or suppliers. However, the picture used is vague and does not directly communicate the product’s benefits. Unfortunately, consumers will likely just ignore the presence of the label altogether if they cannot decipher its meaning.

This problem of lack of recognition is intensified by the fact that retailers such as Wal-Mart and Whole Foods are developing their own labeling schemes for use on the products they sell, adding a whole new slew of eco-labels to the already massive assortment (Bogdan, 2010). Considering that most consumers take only a few seconds to make purchasing decisions regarding household items, this is a serious downfall to eco-labels on a whole. Consumers will not spend extra time questioning the meaning of a label they do not recognize, and therefore eco-labels are unable to meet their objectives. This apparent lack of market penetration for any single eco-label is a serious problem for eco-labels to overcome.

References:

Sullivan, R. (2010). What’s in a label? ECOS, 20, p. 156-157.

Leaping Bunny. (2010). What is the leaping bunny label? http://www.leapingbunny.org/logo.php.

Bogdan, L. (2010). Eco labels 101: green certifications explained! Retrieved from http://inhabitat.com/demystifying-eco-labels/.

The Lorax Movie Review

A.O. Scott at the NYT claims that The Lorax "is a noisy, useless piece of junk, reverse-engineered into something resembling popular art in accordance with the reigning imperatives of marketing and brand extension." Woah there. Let's not forget that the target audience for The Lorax is children under the age of 12. The little boy sitting next to me at the movie theater whole-heatedly appreciated the musical numbers and colorful mayhem, getting out of his seat and dancing along. Yes, A.O. Scott, kids do want Car chases, Kooky grandmas, and Taylor Swift. What's wrong with delivering a worthy message of the importance of environmental conservation through a medium kids truly appreciate?

I think that The Lorax movie successfully promotes the book's original message in an entertaining way. The only problem is that the message is grounded in a very outdated generalization about corporate behavior. Things have changed since 1971 when Dr. Seuss first wrote The Lorax. Today, the generalization that all companies are operating with a blind eye toward the environment is exaggerated and misleading. Sustainability strategy is considered essential to big-name corporations such as Nike and Best Buy, and all sorts of innovative programs are being developed to mitigate industry impact on the environment. Maybe the producers of The Lorax movie attemtped to compensate for this by offering corporate sponsorships to companies with a common goal of preservation like Seventh Generation, Whole Foods, and Stonyfield Farms. However, The Lorax Movie still pits industry and environment against each other, when the reality is moving toward increased collaboration.

I do agree with Scott on one thing, though. It would have been nice to see the female character, Audrey, do more than just garner male attention in the movie. Unfortunately, however, the charming and beautiful high school woman was incapable of doing anything useful (she even dropped the Truffala seed during the car chase...whoopsies!). Perhaps addressing sexism and environmental degradation in one animated children's movie is just asking too much.