A Complete Evaluation of Sustainable and Ethical Certifications and Labels

Why you should care

When there are over 450 certifications that exist in the socially conscious space, it’s time we figured out how best to navigate and find value.

by Richa Bhatia & Cindy J Lin

Technical Review Paper

Socially Responsible Certifications & Labels

Certifications and verified labels play an important role in our society today. They are crucial for consumers, helping them make better informed decisions when buying products, and supportive of businesses, serving to reflect the transparency and quality of a product or service. Hey Social Good reviewed over 100 most commonly used certifications or labels to help communicate a product or business’ integrity.

Globally, over 450 certifications, seals, and labels are available, which are established by nonprofit and for-profit organizations (Figure 1). With every niche market, there is a certification that helps consumers and businesses communicate information and integrity of their product or service. Some certifications cover all the applicable standards for a product’s life cycle, from raw material to manufacturing to final product. Examples include the USDA Organic label, Global Organic Textile Standard (GOTS) label, Fair Trade Certification, etc. 

Figure 1. Increase in certifications globally in the last three decades. Currently, the total global number of certifications available grew to over 450 labels (Rodriguez, 2015)

Benefits of Certifications

Certifications help communicate transparency between a business and their consumers. The certificate or seal of approvals or verification help businesses convey their product’s responsible manufacturing and production process. A business shows off their eco-friendly and sustainable practices to better reflect their commitment of mission or values. This is beneficial to consumers because they can shop with confidence, knowing that a product or service meets their expectations or values. For example, for consumers who value sustainability or ethical practices, verification labels help consumers know their products are made with integrity and that a purchase can make a difference to people and the planet. Consumers will feel good about a purchase and likely become a loyal customer. 

Challenges with Certifications 

The challenges with certifications revolve around business costs and consumer knowledge. From our detailed review of over 100 certifications and labels used widely in the United States, the biggest barrier for businesses is the cost of getting certified or verified. In addition, the certification process may be lengthy, costly and unpredictable. As with many custom assessments, a business’ initial cost estimate will increase due to unexpected fees, lab analyses, reviews, etc. 

The steep price range of getting certified with some labels may not be feasible for most businesses in the United States. Small businesses account for over 44% of the economic activity and two-thirds of net new jobs in the United States, according to the U.S. Small Business Administration. This places small businesses at a disadvantage because the cost barrier won’t reflect a small business’ good practices, even when they adopt sustainability and ethical measures. Small businesses will continue to be outcompeted by bigger businesses with larger marketing budgets because they have limited access to their target market or the niche of sustainable shoppers. 

What’s Difficult for Consumers?

For communicating to consumers, the biggest obstacle to overcome is consumer knowledge and education. Most consumers, especially those who do not actively and consciously shop for sustainable products, will not understand the significance or purpose of certifications and labels. Consumers may see a certification or sustainable label on multiple products for years and still not understand its value. Figure 2 shows the consumer gap between purchase intention and label knowledge. In order to generate value from acquiring a certification for your business, it’s important to overcome the knowledge gap. A business needs to show its commitment to better practices by getting verified in some way, and choosing the most appropriate or well-known certification should be part of a business strategic plan. 

Certifications Assmt Figure 2
Figure 2. Gap between consumer knowledge, awareness and their purchase intentions. (Rashid, 2009)

Our Review of 100+ Certifications

We reviewed over 100 known and not so well-known certifications and labels in the sustainable, eco-friendly, ethical, and socially conscious space. We found that a majority of the certifications have a cost or a fee associated with the certifying and application process. The multiple types of costs include application fees, membership fees, renewal fees, donations necessary to process the verifying process, third-party consulting costs, lab analysis costs, etc. Of this subset of most commonly registered certifications found on products or services, some are transparent with the associated costs, and others do not show the costs associated with the certifying process upfront. In some cases, this latter situation may make sense because the verifying organization cannot evaluate the details until they conduct an assessment of the product, service or company type, size and other variable features. 

What are the Gaps for Businesses?

In our detailed review of sustainable and socially conscious labels, the biggest barrier to overcome is the knowledge gap experienced by both consumers and businesses. Most verification processes are complex by nature because it may involve translating thousands of information, such as the impact of over 1000 chemicals on human health as an example. 

Furthermore, we concluded that it can be hard to understand the details of a verifying process and the complex requirements of getting verified. For businesses, the numerous standards and policies for each certification type, product or service can be the largest obstacle, and thus, is challenging for a business to determine which certification best matches their product and service. And even when a particular verifying process appears appropriate, it can be challenging due to the lengthy application process and cost. For example, the USDA Organic label requires a three year commitment and often over $10,000 in application processing.

With regards to consumers, it is critical that industries communicate the value of a certification to their consumers because this may be a simpler way to reflect their transparency and company commitment. When effective communication is achieved, consumers will value the transparency and quality of a business’ commitment to better practices. Some good examples in this space who have benefited include One Percent for the Planet, USDA Organic, and the Forestry Stewardship Council’s assurance of sustainable forested materials.

Figure 3. Hey Social Good’s assessment of most commonly available sustainable and ethical certification labels showed that approximately 70% of labels have cost associated, 5% of the labels are cost free, and 24% did not provide any cost information associated with the certification process.

Cost of Certification Findings

Our review of 100+ certifications showed that most certifications fall into a few categories. When a business undergoes a certifying or verification process, most certifying bodies employ an independent third party (consultant). This means that a private, third party consultant is hired to evaluate if the appropriate standards are met by the business. The second category of certification process includes those businesses who self-report data to compare against existing standards or the certifying body audits directly with their own staff. We found that most certifications have associated costs, and minimally few have no cost. A majority of the certifications verify information only for a single product type (e.g., certification is not applicable on both food and clothing). 

How To Navigate Certifications 

As a Consumer

As a consumer navigating the vast array of certifications, the first step is to educate yourself. This involves reviewing publicly available data or scanning product labels you commonly use at home. Becoming more educated on certification will help you make informed decisions over time.

As a Business

As a business, it may be even more difficult to navigate the world of certifications because of the large number of verifying labels available. A first step is to review products or services in your same industry and check out their labels or certifications adopted. Second, keep in mind the cost application process, and try to obtain best estimates from certifying bodies beforehand. Third, research into the appropriate standards and policies that fit your product or service to better choose wisely a verifying body that aligns with your company and target customer’s values.

Why Do We Need a Single Social Good Verification Process?

The Hey Social Good Verification Process is based on a comprehensive set of best sustainable, ethical, give back, and socially conscious practices that purpose driven companies have adopted to positively impact people and the planet. Unlike other targeted certification methodologies, Hey Social Good’s Social Good Optimization Data (SoGood) Assessment Tool takes on hundreds of label information and activities, and simplifies down the complex data into understandable sustainable, give back and social good medal rankings. The SoGood Assessment reviews the value of the certifications, and takes advantage of the information, along with the team’s intimate knowledge of the sustainability and ethical practices in this space, to use data analytics to evaluate businesses’ socially conscious practices that goes beyond conventional business operations. 

Hey Social Good’s database of businesses and its proprietary SoGood Assessment Tool create the connection between businesses and certifications; it simplifies all the available data and packs it into one place for consumers and businesses to easily understand. The bronze, silver, gold, or platinum ranking that each company earns is a reflection of the  company’s commitment to giving back to the community and/or adopting sustainable practices. 

Our mission is committed to pioneering a new economy where all businesses do more than just provide a product or service. We connect consumers to all the purpose driven businesses, small, medium and large. To date, we reviewed and assessed over 3000 businesses dedicated to making people and the planet safe and healthy.

For more information or to submit your business for a SoGood Assessment, contact hey@heysocialgood.com

Keywords: certification, label, verification, sustainable certificates, ethical labeling, social responsible certification, seal of approvals, consumer knowledge, business certifications

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