Episode 24: Everything You Need to Know About Third-Party Certifications
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Third-party certifications are becoming extremely common in the marketplace. In this episode, Tad and Julianna discuss what they are, what they mean, what’s driving companies to get them, how they relate to carbon footprint, the benefits of getting third-party certified, and what to look for in a third-party certifier. Tad and Julianna also make an exciting announcement about GreenCircle Certified’s recent inclusion in Amazon’s Climate Pledge Friendly Program!
what are third-party certifications and what do they mean?
“You are right. We do see labels on many of the products we buy. We see all kinds of things going on, and a third-party certification is an independent organization that would evaluate some type of a claim. Some company would say that they have recycled content, that their product is organic, it’s fair trade, or other things like that that we're used to seeing. These are all examples of different certifications and claims that are out there. An independent third-party means that it's an organization that is basically following a detailed process to evaluate these claims, to audit the claims, and to basically verify the information to determine that the claim is accurate and correct. Typically, that's going to be done against some standard. One thing I know for sure is that there is an international standard out there.
It's ISO 17065, and that standard basically gives a certification body guidance on how they should actually conduct the certification process. So, there's a whole series of steps in there about basically making sure that the company is unbiased and that they are following various steps in terms of gathering proper evidence and documentation. If they do have a registered trademark label, making sure that they are following things like mark surveillance to verify that the labels are being used properly, that they do have a means of communicating with clients, and they have a way to deal with nonconformities or issues around the standard that they have. Most certification bodies that are legitimate would be following the ISO 17065 requirements and the thing that we also see with third-party certifiers is that many of them can do two things.
There are companies out there that can just do the third-party certification and basically auditing. Then there are companies that actually develop a standard that could be followed by other certifiers. So, there's standards bodies, there's certification bodies, and typically, a lot of organizations can either do one or both. So, we do see that happen quite often. We do know that it's really important for anybody that's doing third-party certifications to definitely have a good rigorous process. They want to be looking for good information and evidence, documentation, things like that. We are seeing that sometimes there's labels that pop up that just come out of the blue and it's like, “All right, what does that even mean?” And you don't even really know, it's not clear or transparent. The goal of third-party certifications is to make sure that any kind of a claim is meeting the standard and it's legitimate and consistent. That's a really big word when we talk about third-party certification.”
What is really driving these companies to get third-party certifications?
“Well, it definitely depends on what the company is selling and where the pressures are coming from. I would say a big driver for companies to get certifications is consumer demand. Let's look at organic. I mean that's one that we see all the time. There's a label that's used for that and how do you really know what's going on there? However, there is a whole big group of people that really want to be eating more organic food. Seeing that organic label on there gives some assurance to the consumer that “Yeah, this says it's organic, I'm gonna trust the label.” That means it went through some kind of a process to be able to put that label on there. That would be an example of a food company who is meeting requirements there.
To get that label is pretty hard. There's a lot that the company has to go through. I also think that there are other different organizations that are driving this. For example, if you're selling building products, different green building standards might require you to have a certain certification. An example of that would be if you are claiming that you have low emitting materials, there's no bottle organics coming out of a product like flooring or tips on wallboard or something like that. You can earn points by having a third-party certification to verify that it meets a certain standard for those emissions. Then another one that I would say that I think we're gonna see a lot more activity on would definitely be the investor community. I think we're gonna see more and more investors requiring third-party certifications.
Right now, many different companies are getting these forms that they have to fill out or surveys like EcoVadis that basically requires them to disclose things about their sustainability. The thing is, they could basically put anything on that form. There's nobody auditing or checking the data and then they get a score or they get a rating based on filling these forms out. So, I do think we're gonna see companies that are auditing their suppliers. I think we're gonna see investors that are verifying claims. Like if someone says there's zero waste landfill or carbon neutral, we're gonna see more requirements to have some kind of verification of that. So, that's why I think these companies are doing it. There's outside market pressure coming from many directions, consumers coming from different standards bodies, government agencies even. Because I know for example, the federal government right now is looking to source and buy products that have recycled content or bio-based materials and the federal government recognizes certain certifications for that. So, it’s really important that you understand there's a lot of different requirements here.”
Can you explain how third-party certifications relate back to carbon footprint and emissions?
“If you think about that, especially when we think about scope three. Scope three is going to be the impacts from suppliers. So, that would be the energy use of a company that was supplying another, like the end product company, different materials. One thing that you can do there is that the company that's buying those materials could say, “We want to understand what your carbon footprint is, and we also want to understand if you've reduced that carbon footprint, how you did it.” What you would do there is you would be looking at the total energy use from a baseline year and the reduction that occured, because most companies are gonna set sustainability goals around a baseline year. Then if they did use renewable energy to reduce the carbon footprint or whatever, that would be an example of that.
So, that would be one thing where a big company that's buying products could say, for example, if it's an automotive company that's sourcing parts to build a car, truck or an electric vehicle, they might say to their suppliers, “We want to validate your carbon footprint, so we can understand what our overall responsibility is from a carbon perspective. We would like to have a third-party verified claim around your carbon footprint, and any reductions you've made.” Another big area for organizations would be their emissions that are gonna be related to their waste. So, that is category five within scope three. That's what different companies have to look at. I really think that's gonna be a big one for people to really track, especially if they're in producing food or they have a venue that serves a lot of food or there's other organics associated with their operation, that those materials that would go into a landfill would be future methane and a liability for that company in a big way.
So, getting someone to validate and certify their waste diversion from landfill or zero waste to landfill claim would be a way that they could demonstrate that they are not putting anything in a landfill and therefore they're going to have future avoided emissions from methane coming out of that landfill. So, that's how scope three connects. There are different ways you can look at all this, but it's really important to be making sure that proper standards are followed, proper accounting practices are done, and that there’s evidence and consistency in those claims and analysis.”
