Voluntary environmental programs: Strategies for successful certification

Voluntary environmental programs: Strategies for successful certification

Voluntary environmental programs (VEPs) offer the potential to encourage sustainable production and consumption. However, the authors outline four key considerations that are essential for a VEP's success.

Original Paper:
Potoski, M. and A, Prakash (2013) "Green Clubs: Collective Action and Voluntary Environmental Programs," Annual Review of Political Science, 16:399-419 DOI: http://dx.doi.org/10.1146/annurev-polisci-032211-211224

You've seen them everywhere in grocery stores: labels certifying products as green, sustainable, pesticide-free. Known as voluntary environmental programs, or VEPs, they have become a key part of the consumer experience. Each VEP has a set of requirements that companies are expected to comply with upon joining the program. Viewed as an alternative to rigid government regulations, they aim to improve companies' environmental performance by helping consumers distinguish environmentally friendly products from standard ones and support greener companies instead. Given the vast number of VEPs in the market, however, how do we tell which VEPs are more effective at achieving their aims?
 
In a recent paper published in the Annual Review of Political Science, Matthew Potoski of the University of California, Santa Barbara and Aseem Prakash of the University of Washington, Seattle, propose four key elements to frame the discussion around VEPs, and explore these elements of VEPs that must be addressed if they are to have a significant environmental impact.
 
The first element is a question of emergence: who sponsors VEPs in the first place, and why? Interest in VEPs can come from a wide range of entities, including industry groups, NGOs, or governments. Reasons for doing so, however, may vary. Industry groups may view VEPs as a means to improve their reputation as environmentally conscious businesses. On the other hand, NGOs and governments may be attracted to VEPs as a flexible alternative to the conventional policy approach; free from bureaucratic hoops and political jockeying, VEPs have the capacity of delivering results faster than passing legislation.
 
Once a VEP has been created, the issue then becomes a question of recruitment. How does one convince businesses to join the program and use the label? On the surface, the answer is simple: businesses will agree to join if the benefits of joining outweigh the costs. The form these benefits and costs may take, however, can vary significantly from program to program. For example, while many U.S. federal programs advertise reputational benefits, these state-sponsored programs tend to emphasize monetary benefits instead. Using their own analyses, firms must consider the monetary costs of complying with the rules of the VEP, weighing them against the benefits that the certification can provide.
 
Even if a firm joins the VEP, will they follow through on their promise to improve their environmental performance? The third element deals with enforcing compliance; known in economics as "shirking," businesses that sign on may make no sustained effort of being green if they get the benefits of certification whether they've reduced their environmental impact or not. As such, it's important to regularly check on businesses, either through external auditing or by having firms disclose information about their practices. If a business were found to be non-compliant with the requirements of the program, it would be sanctioned and could risk losing the certification.
 
Finally, the authors analyze the element of stakeholder marketing: VEPs must convince consumers to believe in the value of eco-friendly certification, and reward participating businesses by buying more of their green products. Unfortunately, this is not guaranteed. VEPs can have difficulty establishing their credibility with consumers, who may be skeptical about the significance of the label. Furthermore, consumers end up buying less of polluting products without buying more from eco-friendly businesses. With this in mind, it is important for VEPs to engage with customers and establish their reputation to ensure that the system works as planned.
 
Overall, the authors stress that there is no single model that guarantees effectiveness. Rather, depending on the individual circumstances and how the four main issues are addressed, the VEP's approach can determine whether the program remains a marginal player or becomes a rousing success.

You might like these articles that share the same topics