CSR product labelling, could and should it happen?

Measuring the importance of Corporate Social Responsibility (CSR) business initiatives from a consumer point of view is anything but an exact science, but each time research is conducted it does help to provide a more clear understanding of consumer behaviour. In the past I’ve written about studies that showed a certain level of disconnect between how consumers describe the importance of how goods are being sourced or produced ethically and then that failing to match with their own personal purchasing habits. The data from some surveys has demonstrated that a combination of price and functionality still will often supersede how green a product is or the overall CSR implications of its manufacturing process. In other cases it’s been demonstrated that a lack of choice or successful marketing has meant that the desires of shoppers is often not met by the product selection actually provided. Once again there are many different factors to be considered industry by industry and the sooner we reach some sort of universal grading system such as the nutrition labels we currently have on food the better off consumers will be in tandem with a level playing field for manufacturers.

So just what would appear on a CSR label for products? It’s an interesting theory and of course there could well be different answers dependent on the industry but hypothetically let’s imagine that we were going to look at computers, something that most people own and tend to purchase a new one on a fairly regular basis. Trying to establish an independent third-party to evaluate each of these criteria might be the most difficult part but I don’t think it’s as expensive or as outrageous a proposal as it may initially seem, in fact the funding for such a process could come from the manufacturers themselves. For example if you want to have a CSR label on your product to allow you to be more competitive, you would contribute a certain amount toward the running costs of the evaluating process.

There are certainly other things that could be included in such labeling but these came to mind:

Place of manufacturer: When we purchase a product it will invariably say “Made in xxxx” but that is not usually entire truth, separate components may well be sourced from a number of different countries and that should be outlined on the product label.

Packaging and shipping: A huge amount of paper and cardboard waste is due to product packaging, and overall packaging and shipping score should be applied to each product based on its use of recycled paper and an overall shipping score based on weight and economy of processes used.

Energy Use: Collectively how well is the company performing in both reducing its overall energy use (or maintaining energy use levels per unit made) and what commitment is the company currently making to the transition towards renewable energy? ‘Currently’ is key – it seems every company has ambitious 10,20 or 30 year targets – but where do they stand today? How about the energy use of the product itself when compared with its direct competition?

Community activity: Does the company give back to the community where the bulk of operations take place? This will be a difficult one to evaluate but is indeed part of a quantitative CSR evaluation

Supply chain rating: A growing concern for many corporations and I think that ultimately a pass/fail system may apply. Does your supply chain include only approved vendors?

Investment of profits: What ratio of net profits is reinvested into nonprofits, workplace improvements, health and safety and community investment?

Educational support/industry specific grade: I think each industry should also be graded upon an extra tier specific to that industry. For automakers it might be the aggregate commitment to alternate fuel vehicles (or miles per gallon across the fleet that they manufacture) for computer makers it could be their annual contribution to educational support in the classroom via reduced costs to schools or donations.

Employee satisfaction: Most large companies already conduct internal employee satisfaction surveys, trying to grade these across the whole industry might be difficult but would be useful.

I don’t think for a moment that everything on this list would be easy to prorate or even acquire the information for, moreover it’s not always going to be possible to compare apples with apples but ultimately if CSR labeling initially included three or four of the criteria scores above, they  could be given a score of  1 to 100 to generate a composite CSR score to be included in product labeling.  The label might have four scores listed that result in a composite CSR ‘grade’ with full information available online. With so much shopping conducted online the CSR scores should be visible right beside the price.

It might seem a little far-fetched but something similar ultimately needs to happen, a few generations ago nutrition labels on food were unheard of and Energy Star ratings were just a concept. Consumers deserve the chance to make their decisions based on easily accessible data on the products in question and manufacturers too will ultimately benefit if they are following a structured corporate responsibility program. What do you think? Is it a pipe dream or a realistic hope?

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