Product, Service & Design Innovation
Innovation or Disruption? The Current State and Projected Future of Certification

Part one of this two-part discussion on The Future of Certification was, in my opinion, the most interesting discussion I attended at SB’16 Copenhagen. This was in part due to the thought-provoking questions and comments coming from the audience, but also due to the openness and honesty of the panellists in the face of some rather critical queries.

Certifications face a number of challenges, many of which are associated with a balancing act: balancing the need to scale against the need to maintain integrity and credibility, the need for global standards against the need for local specificity, and the need to minimize risk against the need to reduce complex, expensive compliance systems. Rüdiger Meyer, CEO of FLOCERT, said if we lower the bar so much that all producers have an opportunity to become certified, the certification is so broad-reaching that it becomes irrelevant. Loa Dalgaard Worm, Executive Director at FSC Denmark, added that supporting certain product lines to scale has to be traded against supporting a greater breadth of producers.

Ioan Nemes – Policy Lead for CSR and Sustainable Agriculture at Oxfam - raised another interesting challenge, related to the impact of certifications on the producers themselves. The cost of compliance for producers is incredibly high, and this automatically isolates small-scale farmers. In reality, are certifications actually helping producers build their own capacity?

If there is uncertainty around the impact of certifications on producers, what about for manufacturers and international brands? One audience member claimed compliance has become so complicated that manufacturers are thoroughly confused. Another asks why there can’t be consolidation across certifications, and yet another proclaims that he was hearing the same conversation 10 years ago.

This all sounds rather dim and brings to question who exactly certifications are helping? But in spite of the criticism, the panellists were far from defensive and openly acknowledged that change needs to happen. Indeed, there is plenty of opportunity for it.

Unlike 10 years ago, a large percentage of producers worldwide are digitally connected. The opportunity to use technology to reduce the cost and complexity of compliance is vast and FSC, FLOCERT and Sustainable Agriculture Network are all exploring it. The prospect of using technology to build the capacity of producers is also worth acknowledging.

“Certification needs to move from compliance to impact,” Meyer said. “We have a history of looking for mistakes, but we need to shift attitudes to look for opportunities.”

“We are at a crossroads,” summarized moderator Etienne White, founder and CEO of Possible, when we chatted after the panel. “Moving forward alone will lead to incremental change, but if we want to leapfrog, we need partnerships.”

Well I, for one, hope a leapfrog is in the making and that 10 years from now the conversation is one of exponential improvement and of satisfaction actors across the board.

Ecolabels: 10 Trends Toward 2030

By Daniel Espeland

The second part of certification discussion looked ahead to projected future trends of the certification and labels industry.

Over the three days, we examined most aspects of sustainability and its potential as a business driver. Here, we looked into the crystal ball, and our panel of retailers, certifiers, producers and the Danish Chamber of Commerce all brought their views of the current state and future outlook - but first we needed some context.

The session was moderated by author Lars Ludvigsen, who opened the session with a 10-minute sneak-peek into his upcoming book about labels, called MÆRK, which covers a wide array of topics related to labels and certifications. Ludvigsen also projected 10 certification trends we can expect towards 2030:

1. The number of labels will grow.
2. A more competitive labeling market with increased competition between labels – and more partnerships for mutual benefit
3. Labels will outperform legislation
4. Labels will be more important than corporate branding
5. Corporate storytelling on sustainability without responsible labelling will be made redundant
6. Labelling will turn into a must for truly sustainable brands
7. Mega-brands will be the last to convert to ecolabelling
8. Labelling will fuel business opportunities for small and medium sized businesses
9. Labels will become fashion
10. Individuals will certify themselves

Next, Jakob Zeuthen, Environmental Director of the Danish Chamber of Commerce, took us through facts and figures about certification, labelling, and where Denmark stands in all of this: According to Zeuthen, 69 percent of Danish consumers use labels as a buying parameter. Zeuthen takes us through a myriad of fun facts concerning eco-legislation, certification and organic production.

Helene Regnell, CSR Director for Dansk Supermarked, then pointed out that having too many labels can be an issue for retailers, especially in terms of consumer communication. She also highlighted that customers generally have 4-6 labels that they know and trust; Regnell hopes that we’ll see fewer and stronger labels in the future.

Anne-Dorte Mathiesen, Chairwoman of Danish Beauty Award, followed up by disputing prediction #5 – that corporate storytelling will become redundant. She does not believe so, as good storytelling through the right channels can be just as, if not more, effective as a label.

Reimer Ivang, co-founder of Better World Fashion, said he believes the way forward lies in circular business models. Ivang pointed out that there is a clear lack of labels and certification standards yet in this sphere. He thinks that this could in part help legitimize the circular economy - a relatively new way of thinking about business and resource consumption.

Jonas Giersing, General Director of Fairtrade Denmark, said he hopes that the trends of the list comes true – those are good scenarios for Fairtrade. He also wants to add an eleventh trend, namely that ‘Labels should offer several engagement models’ for its clients and end users.

Finally, Nille Skalts, Managing Partner for B Corp Denmark, presented her take on the trends list. The way she sees it, labels will tweak and change the DNA of organizations - costumers are not just looking at products, but who's behind them. She also focused on the smaller actors in the market – the startups and SMEs. B Corp is trying to attract yet-matured companies, and to that end they are, among other things, able to waiver the certification fee for the first few years of certification. This lowers the barrier to entry, which can potentially bring in future paying customers.

After some time of discussion, deal-making and open challenges, Ludvigsen brought the session to a close by summarizing a few of the main takeaways: He concluded that there is surely no consensus on which direction this will lead us, but one thing is certain: Labels will be, and are certainly wanted, as part of the future solution.