Stephan Schaller: "In the end a uniform terminology for sustainability guidelines is likely to become accepted."
GS1 Germany currently works on a glossary that is meant to facilitate a common language for industry, retail and customers and clear up the maze of approval seals and ecological requirements in companies along the entire chain of production. In our interview, sustainability expert Stephan Schaller explains why sustainability terms and requirements should be harmonized. He also explains how sustainability is going to develop in retail and names examples of best practices taken from company business practices.
Mr. Schaller, what exactly does GS1 Germany do in the field of sustainability?
The primary focus is on product transparency. This includes opportunities for making sustainability tangible and measurable for companies, customers and end-users. Another important topic is sustainability communications. We concentrate on determining clear phrases for a consistent understanding. This also includes the glossary we are currently working on. It was developed by the Consumer Goods Forum at a global level to promote consumer communications. It addresses product-related sustainability communications.
The glossary defines terms and definitions used to promote environmental benefits of products. There are often no binding definitions for terms such as “sustainable forestry“ or “climate-neutral“ and frequently also no uniform benefits. This is why their use results in more of a cover-up versus a clear understanding. By now, we realize that the glossary is a lot more than just a translation into German. We are also looking for common product claims in Germany and check where there is a need for standardization.
Why are standardizations and standards in sustainability necessary?
Over time, frequently used product descriptions were learned by customers as being relevant. Many people associate the phrase ”controlled cultivation“ with sustainability. The fact is however that this statement has absolutely no legally binding relevance. Trade and industry would like to steer this incorrect interpretation into a positive direction with this glossary. If people agree on common terms, at some point, these will be learned again and sustainability is more transparent.
Especially in supply chain management, uniform sustainability standards and a well-defined vocabulary have enormous benefits. Let’s take a manufacturer who produces for different companies. Every company has its own environmental and sustainability regulations that need to be met and proven individually by the manufacturer. Even if the different customers want the same thing in the end, that being the fulfillment of good environmental and social standards, they have different emphases and terminologies.
In this case in particular, uniform standards would make the job of manufacturers more efficient. Since it is often still not organized efficiently, many still believe sustainability to be a major cost driver.
How is efficiency expressed to the manufacturer’s customers?
It is reflected at the control level for instance, if the manufacturer is being reviewed by the auditors, meaning controllers of his customers, to see whether he/she actually complies with their social and environmental standards. If everybody were working with the same terms and requirements, one single audit team would be enough to communicate its findings to all customers of the manufacturer. It could be even more important for the manufacturer to no longer having to deal with a flood tide of individual checklists, but to be able to learn which major requirements to fulfill in the future instead.
What does this harmonization of sustainability guidelines look like in business practice?
There is the Global Social Compliance Program. It includes a reference document that compiles codes of best practices for social and environmental standards. Based on these codes, companies can evaluate and check their own sustainability guidelines and those of suppliers for example. This way, companies can keep the wording in their own guidelines and still know how compatible they are compared to other companies. However, in the end a uniform terminology for sustainability guidelines is likely to become accepted.
What does sustainability in retail look like today and what benefits does it bring?
Retailers can best express sustainability in their product range. On the one hand, they can specifically promote sustainable products or create their own sustainable store brands. On the other hand, a company can design an overall concept of corporate sustainability.
One very good example of this is the Memo Company, which sells sustainable office products and promotional items. Every product is carefully checked for ecological and social criteria, before it is introduced into the company’s line of products. The advantage from a consumer’s point of view is that they can purchase anything at this company with a clear conscience and only need to focus on what products they need to buy.
Do you have another best practice example?
The Ecorepublic store by Otto is another interesting concept. Otto has created five meta-labels that provide information on different sustainability aspects of the products, for instance about energy consumption or the use of recycling processes during production.
The customer can choose products based on criteria that are important to him/her. Some want fair trade items, others prefer health promoting products, while yet others care about the environment. Such a system of acronyms is quite trendsetting for consumers during times of so many different quality seals.
How do you assess the future of sustainability in terms of consumer behavior?
I think it will be an important topic in the future, particularly in retail. The European Commission released the Product Environmental Footprint Guide in April. It stipulates the provision of an eco-balance for every product. This could become the foundation for products to receive a harmonized eco-label, comparable to the energy efficiency grade for refrigerators. At that time, retail can and must deal with this topic. After all, buyers will then have a tool with which they can decide how eco-friendly products are and whether they fit into their product planning.
What is more, consumer behavior is currently in a period of transition. Customers are critical and research relevant product and production information on location with their Smartphones, which influences their purchase decision. We are also currently noticing a growing sharing economy. These days, rarely used devices such as power drills or lawn mowers, but also cars are being borrowed, shared or leased instead of completely newly acquired by many people. This conserves resources. This sharing mentality offers great potential for future corporate and retail concepts.
The interview was conducted by Elisabeth Henning; EuroShop.de