Forest certification with consumer in mind

Spurred by organizations like the Forest Stewardship Council (FSC) and the American Forest and Paper Association (AFPA), environmental certification and labeling programs for forests and forest products are rapidly being implemented. Forest certification is a process in which an independent third party measures current forest management practices against some environmental management standards. Forest product certification requires a chain-of-custody audit to confirm that wood from certified forests is being used in product lines. Forest product certification and labeling can provide a direct link between forest management and the environmentally conscious forest products consumer.

From a policy perspective, one aim of eco-labeling is to educate consumers about the environmental impacts of the product’s consumption, thereby leading to a change in buying behavior, and ultimately, to encourage more environmentally benign forest management practices. From a business perspective, eco-labeling allows firms that use more sustainable forestry management practices to potentially gain market share and/or maximize profits. Currently, hundreds of companies in the United States sell a wide range of certified forest products. In addition, a large number of purchasers of wood (The Home Depot, IKEA International) are committed to stocking environmentally certified forest products, presumably in the hope that consumers desire these types of products. This push to certify has already made an impact on Maine forestry. Currently, approximately 60 percent of the 10 million acres of industrial forestland is certified by either FSC or the AFPA (through their Sustainable Forestry Initiative – SFI).

The widespread implementation of these programs suggests that they be perceived as an effective method of changing consumer behavior. In fact, several research studies have indicated that there is a potential retail market for environmentally certified forest products. However, as John McNulty, vice president of Seven Islands Land Co., recently stated at a certification conference in Augusta, a green market for wood just doesn’t exist. This is not a resounding endorsement given that Seven Islands has been especially aggressive in promoting their green certification.

So why hasn’t forest product certification created an active market? The problem appears simple; if some consumers want to buy products from environmentally managed forests and if some forest owners and managers are willing to alter practices in order to sell to these consumers then we only need a mechanism to organize and match those who demand and those who provide such improved forestry services.

However, several factors can decrease the impact of a labeling program, and could delay or derail the potential benefits of forest certification programs. In order for forest product certification and labeling programs to achieve their objectives, not only must retail consumers hold preferences for certain environmental amenities (which surveys indicate that they do), they must also believe, understand and be able to use the specific information presented to them by the forest product manufacturer.

Although there have been many “production side” critiques of forest and forest product certification (e.g., debate about the principles, criteria and indicators of sustainable forest management), there is little understanding of how the characteristics of a labeling program may affect a certification program’s effectiveness. Here we look at forest product certification from the point of view of consumer research. As part of this discussion we present some results from a current University of Maine study focused on forest product labeling. Results from this study indicate that the current state of forest product labeling is not effective from a policy or business standpoint.

Characteristics of labeling policies

Although there are potentially many different factors that could influence a label’s effectiveness, three factors seem particularly important. One factor is the perceived credibility of the organization certifying the label information. Currently, the two most used forest product certifiers are those approved by the FSC or are members of the AFPA.

A second factor that could influence a label’s effectiveness is the amount of information provided on the label. For simplicity we will discuss only two types of labels. Eco-seals (such as environmental seals of approval or environmental logos) communicate little detail concerning specific forest management attributes. Only those who are familiar with the certification agency and its standards understand the full meaning of the eco-seal. At the other extreme are environmental disclosures that provide detailed information about several of the product attributes (e.g., nutrition labels on food). Currently FSC-approved certifiers, and more recently the AFPA, allow placement of eco-seals upon certified products (another group, Scientific Certification Systems, advocates a more detailed approach).

The third factor that could influence a label’s effectiveness is the degree to which the labels are mandatory. At one extreme, labeling restrictions are mandatory; certain pieces of information are required to be displayed on the product. At the other extreme, labeling restrictions are voluntary. Currently, forest product labeling programs are voluntary.

The University of Maine study

During the summer of 2000 we administered a mail survey to a nationally representative sample of about 2,000 U.S. adults. The survey was specifically designed to indicate how the above factors influenced consumers’ choices of certified forest products.

We find that most consumers are not familiar with eco-labeled forest products; in fact, 93 percent of the U.S. population has not seen a forest product labeled that it was made from wood harvested from environmentally managed forests. When asked who should administer and enforce an eco-labeling program for forest products, most consumers want a federal agency (e.g., the most popular choice was the U.S. Forest Service), followed by environmental groups like the AFPA. However, some environmental groups fared no better than the AFPA. For example, the FSC touted by environmental groups as the best group to perform certification was favored by only 5 percent of consumers.

Why did the groups that currently certify labels for forestry products perform so poorly? The answer seems to be one of familiarity; most participants did not know whether they could trust the label information and felt the certification was just a marketing gimmick. Government agencies and some environmental organizations (e.g., the National Wildlife Federation) have a higher degree of familiarity relative to current independent and industry-based certifiers.

Does the amount of label information currently provided by eco-seals perform well? Unfortunately, we found that simple eco-seals are the least credible and least informative type of environmental label. More detailed labels were simply viewed by consumers as much more credible. Further, this effect was most pronounced with certifying organizations that were less familiar to consumers (like the FSC and AFPA). More detailed labels were also more informative; unlike the more detailed labels, eco-seals simply did not provide enough information for consumers to accurately differentiate across products with respect to their environmental profiles.

The amount of information provided on the label and the degree to which the label is mandatory has a significant effect on how consumers react when choosing forest products. In general, under a voluntary system, eco-seals did not alter consumers’ choices of products. However, voluntary disclosure of more detailed labels did increase consumer choice of more environmentally benign forest products. Thus, under a voluntary system, more detailed labels assisted consumers significantly better than simple eco-seals; the eco-seals simply did not allow identification of the more environmentally benign product.

The results suggest that U.S. retail consumers do value the environmental benefits created from more environmentally benign forest management practices and may be willing to pay a premium for these products. Thus, consumer-driven practices could potentially support a future of environmentally benign forest management practices in Maine with less reliance upon other policy alternatives coming from the Maine Legislature or from passage of forest-related referendums.

However, it seems unlikely that the current state of forest product labeling, where products can voluntarily display various eco-seals (that may reflect different or similar standards), will increase purchases of products from Maine’s environmentally managed forests. Unlike other quality attributes that retail consumers can verify before they purchase or shortly after purchase, the promise of improved forestry practices is impossible for most consumers to verify.

Hence, the success of forest product certification and labeling programs uniquely hinges on forest product companies being able to credibly communicate to the consumer that forestry practices have been altered. Thus, the success of forest product certification will not be solely driven by more production side debates between environmental organizations, industry and landowners.

Parties who are interested in the long-run success of these programs need to focus less on the production side of forest certification and spend more time thinking about the consumer side of the issue.

Mario F. Teisl is an assistant professor at the University of Maine. Kelly O’Brien

is a research assistant at UMaine.