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 / Summer 2008 / Issue 51(originally published by Booz & Company)


The Critical Enabler

Innovations in Information
The power of environmental information became evident in 1986, when the U.S. Emergency Planning and Community Right-to-Know Act (EPCRA) was passed into law. (EPCRA was itself a response to two accidents in Union Carbide chemical plants: the 1984 Bhopal, India, explosion that released enough methyl isocyanate to kill 6,000 people and injure hundreds of thousands more, and a West Virginia leak less than a year later, which injured 150 people and caused damage in three neighboring communities.) To provide the public with data about potential chemical hazards in their communities, and to help community leaders create contingency plans in case of releases of hazardous substances, EPCRA mandated that businesses and industrial facilities disclose the types, locations, and quantities of dangerous chemicals they stored on-site. EPCRA also established the Toxics Release Inventory (TRI) program, a publicly available database of harmful chemicals that could potentially be released from industrial facilities. TRI’s original goals were to empower the public to hold companies accountable, and to foster informed local government decisions about the management of environmental toxins in any particular locale. But the law’s most significant result was an unexpected side effect: Having this information at hand has motivated companies to voluntarily improve their chemical management standards and to reduce or eliminate the use of the most dangerous chemicals.

The role of government in gathering and standardizing information could be even more valuable today, especially with the growing number of online information outlets and the increased comfort that consumers feel in using the Internet as a guide for making pur­chases of all sorts. One area where public-sector involvement is sorely needed is the field of eco-labeling — an emerging process aimed at identifying the environmental impact of goods and services. Growing consumer interest in eco-friendly products and services has led to a proliferation of labels attesting to energy efficiency, recycled material content, and more — in fact, a Web site called has identified more than 300 distinct eco-labels currently in use worldwide. Although their intentions are positive, those generating the labels are operating in a “Wild West” of sorts, where standards for clarity and substantiation are spotty, vague, or even nonexistent. The underlying challenge revolves around the fact that labelers must take what can be an overwhelming amount of information on a product’s manufacture, consumption, toxicity, carbon footprint, and disposal and codify it in a clear, consistent, and organized manner — informing, but not overwhelming, the public.

In general, there are three main categories in which improved labeling would clarify matters for consumers and ultimately make a difference in environmental sustainability: a product’s production and supply chain, the product’s use, and the product’s disposal. Many eco-labels provide information about one area or another, but there is simply no comprehensive, all-encompassing label of the sort that exists for nutritional information. For example, the U.S. government’s most successful eco-label is Energy Star, which was created in 1992 as a voluntary labeling program to identify energy-efficient products. It covers appliances, home elec­tronics, hea­t­ing products, and lighting — nearly 45,000 products in all — and has since been expanded to use in evaluation of homes, buildings, and manufacturing plants. But Energy Star’s rating system for products refers only to the energy they use during their operating lifetime. Emissions from the manufacture and distribution of the product, which may be radically different, are not factored into the rating.

Despite some early public-sector successes with eco-labeling, only 15 percent of the labels identified by were developed by governments, and most of those are outside the United States. To be sure, not every effective eco-label needs the imprimatur of the public sector. Many labels are produced by standards organizations, or by not-for-profit organizations that have shown great ingenuity and entrepreneurship in this field. But consumers rely on the government more than any other entity for information regarding food’s nutritional value or pharmaceuticals’ safety, so it makes sense to tap that authority for environmental labeling. The public sector could create order, streamline the development process, and provide consumers with more comprehensive information about the environmental aspects of products and services.

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  1. Joe Cortright, “Portland’s Green Dividend” (PDF), CEOs for Cities white paper, July 2007: The economic benefits of holistic land use planning, which include saved time and a low spending on transportation.
  2. David Fahrenthold, Lisa Rein, and Kirstin Downey, “Threat of Power Shortages Generating New Urgency,” Washington Post, February 3, 2008: As goes Capetown, so goes the U.S. capital?
  3. Molly Finn, Gary M. Rahl, and William Rowe Jr., “Unrecognized Assets,” s+b, Autumn 2006: Example of an innovative land use strategy, finding hidden sources of value in environmental liabilities.
  4. Lawrence Frank, James F. Sallis, Terry L. Conway, et al., “Many Pathways from Land Use to Health: Associations between Neighborhood Walkability and Active Transportation, Body Mass Index, and Air Quality” (PDF), Journal of the American Planning Association, Winter 2006, 75–87: Linking suburban sprawl with poor human and biosphere health.
  5. William Fulton, Rolf Pendall, Mai Nguyen, and Alicia Harrison, “Who Sprawls Most? How Growth Patterns Differ Across the U.S.” (PDF), The Brookings Institution Center on Urban and Metropolitan Policy, July 2001: Analysis of density trends that shows how sprawl outpaces population — with damaging environmental effects.
  6. Mark Gerencser, Fernando Napolitano, and Reginald Van Lee, “The Megacommunity Manifesto,” s+b, Summer 2006: Overview of the three-sector engagement approach.
  7. Mark Gerencser, Reginald Van Lee, Fernando Napolitano, and Christopher Kelly, Megacommunities: How Leaders of Government, Business and Non-Profits Can Tackle Today’s Global Challenges Together (Palgrave, 2008): How collaborative engagement across the three sectors can help governments become critical enablers.
  8. Karlson “Charlie” Hargroves and Michael H. Smith, eds., The Natural Advantage of Nations: Business Opportunities, Innovation and Governance in the 21st Century (2005; Earthscan Publications, 2006). Case studies demonstrating that sustainable development leads to economic growth.
  9. Rajendra Pachauri and Andy Reisinger, eds., Climate Change 2007: Synthesis Report  (Intergovernmental Panel on Climate Change, 2008): Sobering overview of current environmental prospects.
  10. David Malin Roodman, The Natural Wealth of Nations: Harnessing the Market for the Environment (W.W. Norton, 1998): Argues for more effective government use of incentives in cutting pollution and waste.
  11. Ecolabelling Web site: Devoted to tracking and commenting on eco-labels.
  12. For more on global perspectives, sign up for s+b’s RSS feed.
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