Thursday, 22 January 2015

Social & Environmental Accounting for "Consom’actors"

By guest blogger Delphine Gibassier, Toulouse Business School

Green consumer audits started out with two campaigning journals (the New Consumer and the Ethical Consumer) mentioned by Gray et al. (1996). At the time, there was a relative assessment of the performance of corporations made via publically available information. Clearly targeted at the general public, those ratings were the first visible “consumer shadow accounts”. Today, corporate information is more readily accessible, through sustainable reports and websites, and multiple media channels that investigate corporate practices. The new frontier of the consumer “lobby” movement is now targeted to products. Many government-led and privately-led initiatives have started to look beyond eco-labels to try and input environmental accounting directly on the products. Tesco, Casino, Leclerc, and the Sustainability Consortium are examples of privately led initiatives (A recent and smaller initiative is the one of the French company “Bureau Vallée” which rates their office consumer goods with A/B/C/D in their shops). Publically led initiatives include the French experiment “Affichage Environnemental” and the currently in process “PEF” at the European Union level (Product Environmental Footprint).

A new way of empowering consumers with shadow environmental and social accounts is now being processed via external consultancies and their in-house developed applications. A few months ago, I downloaded on my phone the application « Noteo » (application for products notation in France). As both a researcher and a mom of three, I got teased by this application and the easiness of looking at the social and environmental (and health) impacts of products I was intending to buy while shopping.

I have got to say, I never really used it while shopping, first because shopping was a run-run time, and also because we opted out of shopping in person when our third little man entered our life this Summer (Noteo does not work on “drive” websites ;-)). However, I did test out Noteo at home (easy) and also tested the application’s possibility to give in new products that aren’t in.

As a consumer (or “consom’actor” like we say in France), I like the easiness of use and the possibility to interact by acting myself as an enhancer of the application for others (by suggesting products to be added).

I also like the way you can choose what’s most important to you (for example health before the environment, or social..), and also how you can also look at alternatives that are better graded then the one that you are about to choose.

Maybe because my “researcher mind” got the most of me, I however quickly asked myself:
-       how the grades were given, and what was really behind them:

-       how could then so quickly invest in ten of thousands of products’ grading when companies like Tesco opted out of labelling their thousands of products, it took five years to Danone to go through only a few thousands and other companies like Akzo Nobel only talk about having looked at hundreds of products..
-       and why we couldn’t see more one or two “reasons” behind the grades (such as for health, there are 10 products considered dangerous, but only 2 names are given)… not good for transparency (of Noteo)

-       and why there are no more explanations behind the “dangerous” elements (can’t click, can’t see what’s the science behind etc…)

Noteo claims that products are evaluated against 400 criteria (the website says it took five years of work before opening the application with 45,000 products available) and that it uses “IT algorithms” to aggregate raw data, before comparing products between them. The methodology is explained on their website, and appeals to scientific wording and describes a very impressive process of scientific rigour to impress the users and generate trust. It makes me think of the “Green Rankings” of Newsweek… Is the grading more “objective” if giving the impression of being ultra complex? Of course, Noteo is also not exempt from criticism on its business model (where the money comes from… the association has a business cousin that gets money from using their data, for example, to “help” companies make better products).

Clearly, although I like the “quick & easy” nature of the solution, the transparency of the methodology and of results are not there… As a consumer I got quickly frustrated. As the Journalist Sophie Caillat suggests in her article in 2012[1], it is easy to try and look for the “perfect” product that does not exist…  or resist to change by “habit”.

I also heard recently about other apps in other countries to become an “aware” shopper such as EarthTouch and GoodGuide (with whom Noteo says it is in contact).

EarthTouch tells us on its website that the “The Universal Ecolabel® provides an accounting method (Earth Accounting®) for monitoring the finite planetary resources used by humanity in a manner not possible with the current financial accounting system.” The universal ecolabel is described on their website, also no information is given on how this methodology was designed, and where the numbers come from.

GoodGuide say they combine product and company level information to characterize a product's health, environmental and social impacts. They also describe their own methodology on and explain what composes the ratings.

Good Guide
Earth Touch
250 000 products
Not available yet
60 000 products
Social, Health, Environment
Social, Human, Environment, Animal, Manufacture, Use, Post-Use
Social, Health, Environment, Economic
Founded at Berkeley
Founded by a doctor
Former CSR consultant
Looks at company information
Looks at existing eco-labels

Proposes alternatives
Proposes alternatives

As SEA tools and methodologies have the “power” to make some things visible and others invisible for corporations, what about social and environmental accountings for consumers? 

What about what is being told with those applications to the consumer? And back to the supply chain?

What about the “industrialisation” of product accounting? (see also Greenext, the Casino and Leclerc tentatives in France…)

What’s the link (or non-link) with environmental labelling experiments ongoing in France, EU and the work done at the Sustainability Consortium?

So what should we make of “social and environmental accountings” behind those gradings to “empower” shoppers to be come “smart” shoppers? Have you used them?

Are the ratings impaired by the same problem the early ones had in the 90s, that is, is corporate management still reluctant to acknowledge accountability and supply information to them on each and every product (Gray et al. 1996)?

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