Why AT&T’s Eco-Rating System Is off the Mark

AT&T has launched its eco-rating system in stores, allowing customers to compare cell phones’ environmental impacts. The system rates handsets on 15 criteria, granting a point for each environmentally preferable criterion the handset possesses. Phones with 14-15 points will get 5 stars;  phones with 5 or fewer points will get no stars. AT&T expects most phones it sells will fall somewhere in the middle.

AT&T has articulated the following goals for this new green labeling scheme:

  • Engage consumers and respond to growing interest
  • Drive industry improvement on sustainability
  • Help set the agenda for more sustainable products
  • Anticipate regulations
  • Demonstrate AT&T leadership

As our recent research shows, a growing number of companies are beginning to take responsibility for the environmental impacts in their supply chains. AT&T’s initiative is not an example of this. Rather than stipulating sustainability standards itself, AT&T puts the onus on consumers to determine the relative importance of the environmental performance of the handsets and the manufacturers that make them.

That’s not necessarily a bad thing. But here’s what is: AT&T has just created the world’s 434th ecolabel (if you believe the tally of the Ecolabel Index).

Does the world really need another green label? Perhaps. But what it doesn’t need is the continued proliferation of brand-specific labeling. The more labels that cover the same product categories the more confusion and likely consumer indifference.

Last year AT&T competitor Sprint led the development of a standard for “environmentally preferred mobile devices” with UL Environment and has committed to certifying all handsets it sells with that standard. The AT&T labeling scheme uses some of the criteria from that standard, and blends in some others. The result is a proprietary set of hoops its suppliers need to jump through that are different from the hoops that may be set by other carriers.

Why is this a problem? Because suppliers are becoming overloaded with sustainability information requests and lack standard measures of environmental performance. In our research, we asked sustainability executives at manufacturers and retailers about the biggest challenges they faced in obtaining environmental sustainability information from their supply chains. The top answer? A lack of standard ways of measuring environmental performance, a lament shared by 62 percent of the respondents to our survey. The introduction of proprietary product rating standards only going makes this worse, and could well hamper rather than help the cause of driving sustainability in the supply chain.

AT&T said it introduced the eco-rating system in part because it wanted to show leadership. Going it alone, though, is an outdated mode of leadership, especially in this arena. A better model is the one embodied in the Sustainable Apparel Coalition. In that organization, dozens of manufacturers and retailers, including direct competitors, came together to develop a single sustainability measurement standard for their entire industry. The coalition unveiled version 1.0 of that standard just this month. They’ve deferred the possible development of a consumer-facing label to a later date.

AT&T can’t really say for sure what impact the new labeling scheme will have on its supply chain. But it is hopeful that it will be good for the top line. According to market researcher NMI, which AT&T hired to help understand the marketing benefits of ecolabels and green seals, “seals increase purchase intent.”

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Filed under marketing, Supply chain, sustainability

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