Value creation through third-party certification - Case study of phase-free certification for certifying disaster prevention

The purpose of this research is to clarify how third-party certification creates value by looking at a case study of third-party certification. An application of the “phase free” concept is discussed as an example of how third-party certification generates value. Disaster prevention is a typical social issue that diverse members of society must proactively confront. It is, however, considered an uncertain cost by many people, wherein preparing for disasters is not an entrenched practice. “Phase free” is a concept originating in Japan that aims to encourage consumers to purchase products and services that are useful in the event of disasters by providing phase-free certification of such products and services. For example, a plug-in hybrid or electric vehicle can be used as a battery when parked. Even though this power storage function is not recognized at normal times, it will be very useful in the event of a disaster. Phase free, thus, refers to the concept of "deriving considerable benefit during times of emergencies from products and services used in everyday life."Generally, third-party certification is considered to bring about a positive effect on eliminating the asymmetry of information, such as by guaranteeing the quality of products and services in the market, by strengthening a company's competitiveness, and by enhancing reliability. However, due to the considerable economic and time burden imposed on producers in complying with strict standards and the lack of understanding among consumers about the value of certification, the use of certification marks has not gained sufficient traction. There are cases, however, in which third-party authentication is considered to have led to the creation of value. For example, non-fungible tokens (NFT) are also seen to be creating new value by allowing third parties to certify (endorse) value using block chain technology. Phase-free certification, like NFT, appears to be successful in creating value.This study elucidates the features of value creation through phase-free certification by looking into the activities of the Phase Free Association (https://phasefree.or.jp/), which carries out third-party certification. The target of the study is the "School Education Initiatives in Naruto City, Tokushima Prefecture," which was certified by the Phase Free Association in 2021 (Gold Prize winner at the Phase Free Award 2021). An interview with representatives of the Phase Free Association was conducted to clarify how the "value of disaster prevention" is embedded in school education. An analysis was conducted focusing on the benefits that school officials, parents, government officials, and other stakeholders gain from this embedded value of disaster prevention. The study clarifies how balance is achieved between normal-time value (teaching the prescribed school education curriculum) and disaster-time value (protecting children from disasters), as well as investigates the mechanism behind the value-creation process.This study, therefore, contributes to research on third-party certification through analysis of a case of phase-free certification that has succeeded in providing value related to disaster prevention to school education, which is an intangible service.