From July 2011, the display of the carbon footprint is being introduced in France. This will affect products that are imported into the country from the UK. Jean-Yves Cherruault, environmental accounting manager at carbon reduction company Sustain, looks at how the changes will affect British businesses.
Changes are afoot in France. A new initiative is being introduced next year that will allow greater visibility of the environmental impacts of all products manufactured and consumed in France, including those exported from the UK.
A recent study shows that consumption of domestic goods is the country's first source of carbon emissions. In 2005, it was responsible for 75 per cent of the 550 million tonnes of CO2 emissions and imported goods were responsible for a significant proportion of this.
By introducing the carbon footprint label, which will include a minimum of two indicators on other environmental impacts in addition to carbon, it is hoped that consumers will use that information to make a choice about their purchases. It will also give the production and distribution-chain a new indicator to encourage the production of goods that have a lighter carbon footprint.
All products in every sector will be affected including items such as cosmetics, clothes, food, electronic equipment, furniture and finance services.
The scheme starts with a voluntary phase that will last for 12 months from July 2011, which will then be reviewed by Government. Companies will be invited to take part in December 2010 and it will be open to producers, retailers, individuals and trade associations. Organisations outside France are specifically encouraged to take part so the impact on trade between countries can be evaluated.
UK organisations that export to France and want to stay ahead of the curve need to be prepared for when the scheme becomes compulsory, which may happen in 2012. By not participating in this voluntary phase, companies could be risking their reputation, particularly if their business is reliant on the French market. By taking part, organisations can also demonstrate their environmental credentials and position themselves as leaders in this field.
Once a company decides to participate, what next? It needs to understand how to assess the carbon footprints of its products using the methodology chosen by the French Government. The selected approach is the Life Cycle Assessment technique which assesses every impact associated with the product's life from cradle to grave. However, companies will need to be flexible as the methodology and specific rules for each product category may be revised as the scheme evolves.
The big question on peoples' lips is whether this initiative will change consumer behaviour. It's early days and the French Government will be carrying out its own research to help find the answer but there are some important reasons for communicating in this way with customers.
Consumers are a powerful force. Their buying habits have the ability to shape Government and corporate policies - in fact, a 10 to 15 per cent shift in the market can create a compelling business case for sustainability at board level.
The other advantage is that changing behaviour is free and actions can be immediate - it doesn't require expensive technologies to see results. Behaviour change also directly benefits those low carbon businesses which are taking a lead, enabling companies with more ethical practices to prosper.
There is plenty of evidence to show that ethical behaviour has remained strong during the recession and we believe low carbon behaviour could follow the same trend. The total annual retail value of consumer goods sold in the UK bearing the Carbon Reduction Label reached £2 billion in October 2010, and nine out of 10 households in the UK bought a carbon labelled product in the last year. A recent report from GNM Sustainable Business Report, 2010, indicated that 60 per cent of consumers are undecided about whether to consider green issues when making their product choices, so there is a large number of people open to persuasion on this, which represents a huge captive market.
So the platform for a scheme like this exists but there are many challenges to overcome. We know that one of the biggest hurdles is customer perception of green products. Not only do people think they are too expensive and hard to find in the shop, but they also find green labels confusing.
In order for this initiative to be successful, the information presented to customers needs to be more than just a label. It needs to be a call to action. Companies must assess their products against environmental indicators that are relevant to their brand. For instance, it will need to be obvious how a washing powder biodegrades once it is in the waste water, and the impacts will need to be communicated in a credible, transparent and consistent way.
Consumers will only be motivated to act if they can quickly and easily compare the carbon footprints of products and see how their choices are having a positive impact on the environment.
But what happens once the product leaves the supermarket shelf? It's important to remember that behaviour change is needed not only at the point of sale. If a consumer freezes or sends a loaf of bread to landfill, this will affect the environmental impact of the loaf. Consumption of the bread, such as freezing, toasting and waste, can account for as much as 25 per cent of a product's total footprint. So behaviour change needs to happen at every stage.
And what is the rest of Europe doing? The European Union will be watching the French initiative closely and it's interesting to see that companies in other EU member states are starting to use the current French methodology. The EU has recently commissioned Ernst and Young to analyse the risks and benefits of carbon labelling and the need for a product carbon footprint policy at EU level.
The findings show that while tackling CO2 emissions is important, it must not overshadow other environmental impacts. However, it recommended that a common methodology to product carbon footprinting is adopted by all EU members, which will probably be based on the greenhouse gas (GHG) protocol. However, and somewhat worryingly, the study also found that no methodology is yet mature enough to differentiate products accurately.
The trend towards environmental awareness looks unlikely to falter. One day, sustainability will be at the heart of every corporate strategy - it's just a matter of how quickly that day comes. Shoppers are already paying attention to the difference in carbon intensity of products through looking at labels or using technology. They will make better choices once better information is available and will tell everyone they know about it, particularly through social networks, presenting companies with a huge marketing opportunity.
So France could be introducing its new scheme at just the right time. As long as the initiative is transparent, the information is relevant and companies don't preach to customers, it has the potential to empower shoppers by showing they really can make a difference.
By embracing the changes now before the scheme becomes compulsory, there are huge opportunities for UK businesses that export to France to stay ahead of the game and give the scheme every chance of success. It's an opportunity to differentiate their brand and secure their position in the French market and even help influence the mechanics of the scheme. But companies need to prepare now if they want to take part in the voluntary phase. With just over six months to go before the changes are introduced, there's a small window of opportunity for UK businesses to stand up and be counted.
CASE STUDY - Casino
French supermarket chain Casino is a pioneer in carbon labelling. It introduced the carbon label on its own-brand food products in 2006 with the aim of raising awareness of responsible behaviour and monitoring buyer patterns. The company also wanted to improve the environmental credibility of its products and therefore enhance Casino's own reputation.
Casino used a simplified Life Cycle Assessment methodology which assessed the products against two key criteria - CO2 emissions and waste generated by packaging.
Four years on and Casino is reaping the rewards. It's now seen as the French father of environmental labelling and the initiative has had a positive effect on the brand. It is now known as a dynamic and responsible company. It's also contributed to the bottom line in terms of cost savings and attracting new customers. Casino is now well placed in the market as new legal obligations emerge and its streamlined processes, both internally and with suppliers, has given it an important competitive edge.
