COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Building the Single Market for Green Products: Facilitating better information on the environmental performance of products and organisations
Date: 2013-04-09
Institutions: European Commission
Subjects: consumer information, eco-label, environmental impact, marketing standard, organic product, single market

EUROPEAN 
COMMISSION 

Brussels, 9.4.2013  
SWD(2013) 111 final 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

Building the Single Market for Green Products: Facilitating better information on the 
environmental performance of products and organisations 

{COM(2013) 196 final} 
{SWD(2013) 112 final} 

EN 

   EN 

 
 
 
 
  
 
Impact Assessment Report for the COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

Building the Single Market for Green Products: 

Facilitating better information on the environmental performance of products and 
organisations 

Contents 
1. 

Introduction ........................................................................................................................ 5 

2.  Procedural Issues and Consultation of Interested Parties................................................... 6 

2.1. 

Inter-Service Group...................................................................................................... 6 

2.2.  Consultations................................................................................................................ 7 

2.2.1.  Consultation with the EU Member States ............................................................ 7 

2.2.2.  Public Consultation .............................................................................................. 7 

2.2.3.  Ad hoc Consultations ........................................................................................... 7 

2.2.4.  Expert Studies ...................................................................................................... 7 

2.3. 

Impact Assessment Board ............................................................................................ 7 

3.  Problem definition, Baseline scenario and Subsidiarity..................................................... 8 

3.1.  Background – Life Cycle Assessment (LCA) and the methodological context .......... 8 

3.1.1.  Methodological landscape and the role of LCA................................................... 8 

3.1.2.  How methodologies to assess environmental performance are currently used.... 9 

3.1.3.  On-going methodology development in the Commission.................................. 11 

3.2.  Problem definition...................................................................................................... 12 

3.2.1.  The  underlying  issue:  the  proliferation  of  methodologies  is  hampering  the 
functioning of the market of green products .................................................................... 12 

3.2.2.  The scope and scale of the problem ................................................................... 13 

3.3.  How will the problem evolve? (Baseline scenario) ................................................... 18 

3.3.1.  Proliferation of methodologies........................................................................... 19 

3.3.2.  The inapplicability of the principle of mutual recognition ................................ 21 

3.3.3.  Expected effects on environmental and economic performance........................ 23 

3.4.  Who is affected and how? .......................................................................................... 24 

3.5.  Subsidiarity, necessity and EU value added .............................................................. 25 

4.  Objectives......................................................................................................................... 26 

4.1.  Specific objectives ..................................................................................................... 26 

4.2.  Operational objectives................................................................................................ 26 

4.3.  Consistency with other EU policies ........................................................................... 27 

5.  Policy Options .................................................................................................................. 27 
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5.1.  Option 1. Baseline scenario – no policy change ........................................................ 27 

5.2.  Option 2. A new mandatory product policy framework ............................................ 27 

5.3.  Option 3. A mandatory Organisation Environmental Footprint reporting framework ..
.................................................................................................................................... 28 

5.4.  Option  4.  Integration  of  the  methodologies  for  the  environmental  footprint  of 
products (PEF) and organisations (OEF) in relevant policy instruments............................. 29 

5.5.  Option 5. Recommending the application of PEF and OEF on a voluntary basis..... 29 

6.  Analysis of Impacts and Comparison of Options............................................................. 31 

6.1.  General remarks and methodology ............................................................................ 31 

6.2.  Analysis of impacts .................................................................................................... 32 

6.2.1.  New mandatory product policy framework (Option 2)...................................... 32 

6.2.2.  Mandatory OEF reporting framework (Option 3).............................................. 34 

6.2.3. 
Integration  of  PEF  and  OEF  methodologies  in  relevant  policy  instruments  
(Option 4) ......................................................................................................................... 36 

6.2.4.  Recommending the application of PEF and OEF on a voluntary basis (Option 5)
............................................................................................................................ 38 

6.3.  Comparison of policy options related to environmental performance of products.... 40 

6.4.  Comparison of policy options related to environmental performance of organisations
.................................................................................................................................... 42 

6.5.  Comparison of options according to efficiency, effectiveness and coherence .......... 42 

6.6.  The preferred option................................................................................................... 44 

7.  Monitoring and Evaluation............................................................................................... 45 

3 

 
 
 
 
 
 
Glossary 

CAP – Common Agricultural Policy  
CRR – Centre for Retail Research 
CSR – Corporate Social Responsibility 
CWP – Commission Work Programme  
DEFRA – UK Department for Environment, Food and Rural Affairs 
EAP – Environment Action Programme 
EESC – European Economic and Social Committee 
ELCD database – European Reference Life Cycle Database 
EMAS – Eco-Management and Audit Scheme 
ETS – Emissions Trading System  
GHG emissions – Green House Gas emissions 
GPP – Green Public Procurement 
GRI – Global Reporting Initiative  
HANPP – Human appropriation of net primary production 
IA – Impact Assessment 
IAG – Impact Assessment Guidelines  
ICT – Information & Communication Technologies 
ILCD – International Reference Life Cycle Data System  
JRC – European Commission's Joint Research Centre 
LCA – Life Cycle Assessment 
LCC – Life Cycle Costing  
MED – Europe in the Mediterranean programme 
MS – Member State 
OEF – Organisation Environmental Footprint 
OEFSR – Organisation Environmental Footprint Sectoral Rules  
PA – Public Authorities  
PEF – Product Environmental Footprint 
PEFCR – Product Environmental Footprint Category Rules 
REACH – Registration, Evaluation and Authorisation and Restriction of Chemicals 
RERM – Resource Efficiency Road Map 
SCP – Sustainable Consumption and Production 
SCP/SIP  AP  –  Sustainable  Consumption  and  Production  and  Sustainable  Industrial  Policy 
Action Plan  
SME – Small and Medium Enterprises  
SRI – Sustainable and Responsible Investment  
UCPD – Unfair Commercial Practice Directive 
WBCSD – World Business Council for Sustainable Development 
WTP – Willingness to Pay  

4 

 
 
 
 
1. 

INTRODUCTION 

There  is  growing  pressure  on  companies  to  demonstrate  that  the  way  in  which  they  are 
producing  is  environmentally  friendly,  both  at  the  level  of  individual  products  and  as 
organisations.  Information  on  environmental  performance  is  used  for  the  management  of 
supply chains, ensuring that businesses are resource efficient. At the same time, it serves to 
show how "green" a product or an organisation is, because consumers increasingly want to be 
able to better understand the environmental impacts associated with their consumption.  

However, the provision of this information in a transparent and reliable way is complicated by 
the fact that a wide range of different methodologies for the assessment of the environmental 
footprint of products and organisations have been developed. These have their own features, 
rules, and scope, and are applied at national, European and/or international level to differing 
extents. The fact that there is no single accepted methodology has contributed to a situation 
where  there  is  distrust  (by  consumers  and  by  business  alike)  of  environmental  claims,  both 
those  attached  to  products  and  those  included  in  companies  environmental  reports.  In 
addition,  the  multiple  government  and  private  sector  schemes  increase  costs  for  businesses, 
especially  penalising  those  active  in  several  Member  States  or  internationally  because  the 
technical  requirements  differ  in  each  scheme,  thus  generating  hurdles  in  cross-border 
operations. 

This Impact Assessment report will accompany the adoption by the Commission of a package 
of measures to contribute to building the Single Market for Green Products. This package is 
the first part of a two-step process.  

In  the  first  phase,  the  Commission  will  take  the  measures  emerging  out  of  this  report  to 
reduce the ambiguity of what a green product/organisation is and pave the way towards more 
reliable comparability of the environmental performance of products and organisations.  

The Commission will do this by introducing two robust but relatively simple methodologies 
for  assessing  the  life-cycle  environmental  performance  of  products  and  organisations.  The 
Commission  will  recommend  Member  States  and  the  private  sector  to  use  them  on  a 
voluntary  basis  for  both  business  to  business  and  business  to  consumer  transactions.  The 
Commission  will  also  collaborate  with  industry  and  other  relevant  stakeholders  on  the 
development of performance benchmarks for products and organisations in a range of priority 
product categories and sectors.  

After  three  years  of  applying  the  methodologies  on  a  voluntary  basis,  the  Commission  will 
evaluate progress before deciding on any second phase. As part of this it will assess whether 
the methodologies, product and sector performance benchmarks, and incentives can be further 
integrated in a wider range of regulatory instruments and will produce appropriate proposals, 
as indicated in the Commission proposal for a new EU Environmental Action Programme to 
20201.  Some  analysis  is  provided  of  this  more  ambitious  perspective  already  in  this  Impact 
Assessment report, but a new impact assessment will accompany any future proposals. 

This report demonstrates that providing more reliable information on whether production and 
consumption is green will be beneficial for companies and households, and the environment. 

1  

The 7th EAP. See http://ec.europa.eu/environment/newprg/index.htm.  

5 

 
 
 
                                                 
This  will  allow  in  the  medium  term  a  higher  uptake  of  green  products2  and  of  greener 
practices  by  companies  in  the  EU  market.  This  would  not  only  contribute  to  reducing  the 
global  environmental  impacts  of  EU  consumption  but  also  provide  some  opportunities  for 
economic growth and job creation. Green products are often based on innovative technologies 
and are results of advanced production processes and optimised supply chains. Thus, policies 
that stimulate the uptake of green products can bring important additional economic benefits – 
they  can  create  new  markets,  foster  innovation,  and  make  companies  more  competitive  and 
less reliant on scarce and costly resources. 

This response also builds on the existing EU sustainable consumption and production policy 
(SCP),  which  aims  to  stimulate  consumers'  demand  for  more  sustainable  goods  and 
production technologies and to improve the environmental performance of products3. After a 
few years of implementation, the policy has achieved some success, but its shortcomings are 
also  evident.  The  mid-term  evaluation4  published  in  September  2011  confirmed  the  need  to 
develop  common  procedures  and  tools  for  the  calculation  of  the  environmental  impacts  of 
products using a life cycle5 perspective. 

In September 2011, the Commission's Resource Efficiency Roadmap (RERM) recognised that 
"changing the consumption patterns of private and public purchasers (the consumption side) 
will help drive resource efficiency and can also frequently generate direct net cost savings. In 
turn  it  can  help  increase  demand  for  more  resource  efficient  services  and  products”  (the 
production and product side). The RERM also stressed that "the internal market and market 
based  instruments  have  an  important  role  in  setting  the  framework  for  markets  to  reward 
greener  products  and  greener  companies".  The  package  of  measures  emerging  out  of  this 
report will contribute to that larger agenda. 

2. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

2.1. 

Inter-Service Group 

The Interservice Group for the SCP/SIP Action Plan, co-chaired by DG ENV and DG ENTR 
also  functioned  as  the  Impact  Assessment  Steering  Group  of  this  initiative.  The  Steering 
Group  has  met  to-date  5  times  in  total  to  discuss  the  results  of  the  public  consultation  and 
various  versions  of  this  report.  The  group  includes:  DG  AGRI,  CLIMA,  CNECT,  COMP, 
DEVCO,  EAC,  ECFIN,  EEA,  ELARG,  EMPL,  ENER,  ENTR,  ENV,  ESTAT,  JRC  IPTS, 
JRC  IES,  JUST,  MARE,  MARKT,  MOVE,  REGIO,  RTD,  SANCO,  SG,  SJ,  TAXUD, 
TRADE.  

2  

3  

4  

5  

Green products are those that have less of an impact on the environment or are less detrimental to human health that traditional 
equivalents. Green products might, fro instance, be formed or part-formed from recycled components, be manufactured in a 
more energy-efficient way, or be supplied to the market with less packaging (or all three). 
Sustainable Consumption and Production and Sustainable Industrial Policy (SCP/SIP) Action Plan. COM/2008/0397 final of 
25/6/2008. 
ECORYS,  Mid-term  Evaluation  of  the  Sustainable  Consumption  and  Production  and  Sustainable  Industrial  Policy  Action 
Plan, Final Report, September 2011. See Annex 5. 
The  life  cycle  of  a  product  includes  all  activities  carried  out  to  produce  it,  thus  includes  design,  resource  extraction, 
production, distribution, use, and end of life. Life cycle impacts cover all potential environmental impacts arising during the 
life cycle of a product. 

6 

 
 
 
                                                 
2.2. 

Consultations 

2.2.1.  Consultation with the EU Member States 

Since  the  beginning  of  the  preparatory  process,  the  Commission  has  met  5  times  with 
Member States, informing them on the SCP/SIP Action Plan review as well as on the proposal 
for  an  initiative  on  the  Single  Market  for  Green  Products.  The  broad  majority  of  Member 
States have consistently stressed that they see the need for an EU-coordinated approach in this 
matter.  

2.2.2.  Public Consultation 

The present report was preceded by a public consultation launched on 11 January 2012 via the 
EUROPA  website  in  order  to  gather  comments  and  suggestions  from  stakeholders  and 
citizens  concerned.  The  consultation  ran  until  3  April  2012.  398  responses  to  the  online 
consultation  and  more  than  50  position  papers  were  received.  A  clear  indication  emerged, 
urging the Commission to pursue a higher level of synergy and complementarity between EU 
SCP regulatory instruments and policy measures. A summary of the responses is available in 
Annex 7 together with the list of the position papers received. 

2.2.3.  Ad hoc Consultations 

Meetings were held internally and externally with key stakeholders, in order to build a vision 
and identify the right objectives and the necessary tools as early as October 2010.  

The  methodology  for  the  assessment  of  the  environmental  footprint  for  products  and 
organisations was discussed in detail during a workshop that took place in Brussels on 29-30 
November 2011, gathering some 130 key stakeholders6. Also stakeholders not attending the 
meeting  were  given  the  possibility  to  send  comments  and  questions  which  were  then 
discussed during the meeting.  

2.2.4.  Expert Studies 

The  analysis  builds  on  the  results  of  the  evaluation  study  of  the  2008 SCP/SIP  Action  Plan 
and is further supported by four other studies7. The studies provided input to the analysis of 
problems  and  of  the  economic,  social,  and  environmental  impacts  of  the  different  options 
considered.  

2.3. 

Impact Assessment Board 

The  draft  IA  report  and  its  summary  were  submitted  to  the  Board  on  10  October  2012  and 
discussed at the Board meeting of 7 November 2012. The Board in its opinion of 9 November 
2012  on  the  draft  IA  asked  for  significant  improvements  to  the  report,  namely  to  better 

6  

7  

The participants to the meeting acknowledged the importance of the work done by the Commission, highlighting the potential 
benefits  that  this  initiative  could  have  in  the  EU  but  also  at  international  level.  Several  companies  participating  invited  the 
Commission  to  keep  the  high  level  of  ambition  but  also  to  address  a  number  of  technical  difficulties  that  the  draft  Product 
Environmental Footprint (PEF) and Organisation Environmental Footprint (OEF) methodologies discussed at that time were 
not addressing in an appropriate way. These comments, together with the outcomes of the pilot test and the public consultation 
have been taken duly into account when drafting the following versions of both methodologies. The video of the meeting and 
the slides presented are available at: http://ec.europa.eu/environment/eussd/corporate_footprint.htm 
"Support  for  the  Impact  Assessment  of  the  review  of  the  2008  SCP/SIP  Action  Plan"  conducted  by  AEA;  "Support  for  the 
Impact Assessment study of the review of GPP", conducted by AEA; "Support for the Impact Assessment of a new proposal 
on the measurement of the environmental performance of products", conducted by IVM; and "Support the Impact Assessment 
of a new proposal on improving the environmental performance of organisations" conducted by AEA. 

7 

 
 
                                                 
describe  the  problem  and  its  underlying  causes;  to  better  demonstrate  the  need  for  and 
proportionality of EU action; to provide a clearer intervention logic; to better describe, assess, 
and compare the policy options and their packaging; and to identify more clearly the resulting 
impacts. 

A  resubmitted  version  of  the  IA  report  integrated  considerable  changes  and  additional 
analysis.  Additional  information  and  concrete  evidence  about  the  key  failures  has  been 
included,  together  with  an  updated  baseline  scenario,  the  projected  evolution  of  the 
methodologies  landscape  in  Europe,  and  more  details  on  the  existing  national  schemes  in 
Member  States.  Furthermore,  the  comparison  of  the  options  was  made  more  concrete  and 
comprehensive, while the underlying assumptions have been clearly presented, together with 
a  clearer  intervention  logic  and  concretely  defined  objectives.  Also  comments  received  by 
various stakeholders have been integrated throughout the text as appropriate.   

The  Board  re-examined  the  new  IA  report  and  issued  a  new  opinion  on  22  February  2013. 
Following  this  opinion,  the  current  version  of  the  IA  sets  out  more  concretely  the  need  for 
action and the value-added of an EU led proposal, explains better what will be the evolution if 
proliferation of schemes will be continued in EU or at international level, stresses the impacts 
to  business  of  this  proliferation,  discusses  the  mutual  recognition  of  schemes  as  a  possible 
solution  and  demonstrates  better  the  need  for  two  environmental  footprint  methods  at  EU 
level. The information about the different options examined in this IA report as well as their 
comparison  has  been  further  elaborated,  while  appropriate  studies  and  sources  have  been 
identified throughout the report.  

3. 

PROBLEM DEFINITION, BASELINE SCENARIO AND SUBSIDIARITY 

3.1. 

Background – Life Cycle Assessment (LCA)8 and the methodological context 

3.1.1.  Methodological landscape and the role of LCA 

There  are  many  different  methodologies  currently  used  for  measuring  environmental 
performance,  whether  of  products  or  organisations.  Typically,  methodologies  vary  between 
each  other,  leading  to  materially  different  results.  Furthermore,  due  to  the  flexibility 
(methodological  choices  left  to  the  discretion  of  the  user)  built  into  most  of  the 
methodologies,  even  results  obtained  using  the  same  methodology  are  usually  not 
comparable.  

Methodologies  for  measuring  environmental  performance  of  products  and  organisations  can 
be grouped into two main categories: 

•  Measuring  environmental  performance  through  direct  impacts  (i.e.  impacts  directly 
attributable to the product/organisation, such as for instance the hazardous waste resulting 
from production). Within these methodologies, some cover a single environment impact 
(e.g.  Scope  1  of  the  GHG  Protocol9,  covering  greenhouse  gases;  or  the  Forest 
Stewardship  Council  Certification10),  while  others  cover  several  environmental  impacts 

8  

9  

10  

A life-cycle assessment (LCA) is a technique to assess environmental impacts associated with all the stages of a product's life 
from-cradle-to-grave  (i.e.,  from  raw  material  extraction  through  materials  processing,  manufacture,  distribution,  use,  repair 
and maintenance, and disposal or recycling). 
http://www.ghgprotocol.org/.  Scope  1  refers  to  direct  greenhouse  gas  (GHG)  emissions  from  sources  that  are  owned  or 
controlled by the company; Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by 
the company; Scope 3 covers all other indirect emissions (impacts in the supply chain and during use phase) 
http://ic.fsc.org/  

8 

 
 
                                                 
(e.g. EMAS Key Performance Indicators11; several indicators under the Global Reporting 
Initiative12). 

•  Measuring environmental performance through direct and indirect impacts (i.e. including 
impacts in other phases of the life cycle, e.g. extraction, logistics, use, end of life – Life 
Cycle  Assessment).  Within  these  methodologies,  some  cover  a  single  environmental 
impact  (e.g.  analysis  based  on  the  GHG  Protocol;  CDP  Water13;  PAS  205014),  while 
others cover several environmental impacts (e.g. Life Cycle Assessment Studies based on 
ISO 14040-4415; ILCD16; the EU Ecolabel17).  

Depending  on  the  goal  of  carrying  out  the  assessment,  all  approaches  have  their  value  in 
improving  environmental  performance.  However,  in  terms  of  completeness  and  relevance, 
carrying  out  an  analysis  that  encompasses  all  relevant  life  cycle  phases  and  all  relevant 
environmental impacts for a product or organisation provides for the most complete analysis 
and  points  to  targeted  improvement  opportunities.  It  also  avoids  falling  into  the  risk  of 
improving a single environmental indicator while worsening others. For example, in the case 
of  an  energy-using  product,  where  only  energy  use  is  measured,  improvements  in  energy 
efficiency  might  go  hand  in  hand  with  an  increase  in  the  amount  of  materials  needed  to 
produce  the  appliance  –  with  all  the  environmental  impacts  associated  to  extraction  of 
materials or resource depletion that the producer will not be aware of. 

Currently  there  is  only  limited  coordination  internationally  regarding  methodologies. 
Examples  for  coordination  initiatives  include  guidance  for  the  development  of  product 
category  rules,  coordination  in  the  framework  of  the  International  Standards  Organisation 
(ISO),  and  efforts  to  approximate  carbon  footprint  methodologies  through  the  Carbon 
Disclosure  Standards  Board18.  Despite  these  initiatives,  methodologies  remain  highly 
variable.  

The  gap  in  the  existing  methodologies  based  on  multi-criteria  LCA  is  that  many  technical 
issues  are  still  left  open,  and  several  choices  are  available  for  calculations.  Due  to  this 
flexibility, it is currently not possible to compare the performances of two competing products 
or  two  companies  active  in  the  same  sector19,  which  is  of  fundamental  importance  to  allow 
informed choices for consumers and businesses alike. 

3.1.2.  How methodologies to assess environmental performance are currently used 

Environmental  considerations  are  increasingly  mainstreamed  and  relevant  for  marketing 
strategies,  managing  supply  chains,  and  as  an  element  of  consideration  for  investors.  As  a 
result a growing number of companies and public bodies are using different methodologies to 

11  

12  
13  
14  

15  
16  
17  
18  
19  

See Annex IV of Regulation (EC) No 1221/2009 on the voluntary participation by organisations in a EU eco-management and 
audit scheme (EMAS). Although EMAS suggests taking into consideration both direct and indirect impacts, core indicators 
focus on direct impacts only. Sector-specific guidance is given regarding indirect impacts in Sector Reference Documents. 
https://www.globalreporting.org/Pages/default.aspx  
https://www.cdproject.net/water  
PAS  2050:2011  Specification  for  the  assessment  of  the  life  cycle  greenhouse  gas  emissions  of  goods  and  services,  British 
Standards Institute  
ISO 14044:2006 Environmental management -- Life cycle assessment -- Requirements and guidelines 
International Reference Life Cycle Database Handbook, JRC 
The preparatory study, which forms the basis for defining the criteria, is based on a LCA approach. www.ecolabel.eu 
http://www.cdsb.net/  
Analysis of Existing Environmental Footprint Methodologies for Products and Organizations: Recommendations, Rationale, 
and Alignment, JRC 2010. 

9 

 
 
                                                 
assess the environmental impact of the products they develop or buy. As shown above, some 
of these methodologies are LCA-based, while others cover only direct impacts.  

Industries are more and more using LCA as a green sourcing tool, which is a way to improve 
their  overall  performance  along  the  value  chain.  Some  big  industries  (e.g.  Emerson  in  the 
electronic sector or Nike in the apparel one) are already using LCA-based methodologies to 
identify and select the best performing suppliers, especially with reference to SMEs. In some 
cases,  companies  are  proactively  searching  for  materials  that  will  contribute  to  the 
environmental performance of their products or projects through their entire life cycle. 

In the retail sector there is  a  clear shift  towards  mandatory  sourcing  programs.  Historically, 
most  retailers  worked  in  voluntary  supply  chain  partnerships  with  key  suppliers  to  promote 
and  procure  more  sustainably  sourced  products,  like  seafood  or  paper  products.  However, 
almost  half  of  the  retailer  supply  chain  programs  now  evaluate  a  product’s  sustainability 
performance  as  part  of  a  buying  decision,  which  indicates  that  sustainability  is  no  longer  a 
voluntary partnership proposition but a growing retailer requirement20. Indeed, retailers with 
hundreds of billion euro in purchasing power already now consider a product’s environmental 
performance as part of their decisions as to whether put it on sale. Most large retailers have at 
least  one  sustainability  supply  chain  program  and  the  world’s  three  largest  retailers  – 
Walmart,  Carrefour,  and  Tesco  –  all  have  one or  more  programs  in  place  to  source  greener 
consumer goods for their shelves. 

Governments  also  use  such  information,  as  a  way  of  practising  Green  Public  Procurement 
(GPP)21. Often also private green procurement is done in line with recommended GPP criteria 
(e.g. the EU GPP criteria, but also national criteria). These criteria are usually developed by 
taking  into  account  existing  LCAs.  Those,  however,  vary  in  detail  and  quality  and  often, 
public  authorities  are  only  using  criteria  concentrating  on  one,  or  on  a  small  number  of 
specific  environmental  aspects  of  the  product  having  a  high  importance  for  the  public 
authority.  One  example  is  the  energy  consumption  of  a  product  in  the  use  phase  due  to  its 
financial implications. Aspects related to the production phase of the life cycle are often not 
tackled in the GPP criteria, due to limited data on these and a lack of means of verification. In 
the development and revision of EU GPP criteria the current intention is to consider existing 
LCAs  (often  those  that  were  conducted  for  the  EU  Ecolabel  criteria  of  the  same  product 
group) in order to identify those relevant environmental aspects that need to be addressed. 

Consumers are targeted with several types of "green" marketing information, including labels 
and  environmental  declarations.  Many  of  these  are  based  on  some  forms  of  life  cycle 
methodologies, but often are either not done in consistent ways, are not verifiable and/or only 
focus on a single issue (being it carbon, water, sustainable sourcing, etc.). There is though not 
a  one-to-one  relationship  between  methodologies  and  labels.  Without  a  specific  legislation 
aiming  at  avoiding  the  proliferation  of  labels,  even  the  existence  of  a  single  methodology 
would  not  imply  per  se  a  reduction  in  the  number  of  environmental  labels  currently  co-
existing  on  the  market  (more  than  400  hundred  worldwide22  and  this  number  is  rapidly 
growing).  What  a  common  methodology  would  bring  in  terms  of  communication  to 
consumers  would  be  a  more  level  playing  field  between  competitors  and  more  assurance  in 
terms of credibility and verifiability of the information provided.  

Five Winds International, Retail: Stocking the shelves with Green, 2010. 

20  
21   More than 50% of public authorities in the EU include "some kind of environmental criteria" in the tendering procedures for 
the  ten  product  groups  examined  with  high  environmental  relevance.  Monitoring  of  the  uptake  of  GPP  in  the  EU,  DG 
ENV/CEPS, 2012 
http://www.ecolabelindex.com/  

22  

10 

 
 
                                                 
interest 

long-term  business  approaches.  Market 

Increasingly, investors also want to know that companies they have targeted have responsible, 
sustainable, 
in  non-financial  (e.g., 
Environmental,  Social,  and  Governance)  information  is  growing.  Institutional  investors  and 
stock  exchanges,  for  example,  request  increased  sustainability  reporting  from  listed 
companies,  and  environmental  indices  have  been  established  such  as  the  Dow  Jones 
Sustainability  Index23.  As  an  example  of  such  interest,  the  Carbon  Disclosure  Project24  was 
developed  in  response  to  investor  demand  for  a  system  for  firms  to  measure  and  report 
greenhouse gas emissions and climate change strategies as a tool to set reduction targets and 
individual goals. Whilst most of the currently used assessment approaches are not LCA based, 
there is a growing trend among multi-nationals and big producers to use more and more Life 
Cycle Management principles in their strategic management. 

3.1.3.  On-going methodology development in the Commission 

Against this background, since 2010 the EU's Joint Research Centre has been developing the 
Product  Environmental  Footprint  (PEF)  and  Organisation  Environmental  Footprint  (OEF) 
methods (umbrella methods)25. Both PEF and OEF are LCA-based methodologies to identify 
and quantify the most relevant environmental impacts of products (good and services alike) or 
a  product  and  service  portfolio  (organisation).  They  build  on  existing  approaches  and 
international  standards26,  even  if  using  LCA  for  organisation-level  assessment  represents  a 
relatively novel approach. 

Before considering developing a new methodology, the Commission carried out an in-depth 
analysis of the most widely applied methodologies27, 28. The objective of this analysis was to 
assess  if  the  existing  methodologies  are  "good  enough"  to  achieve  a  number  of  policy 
objectives, such  as: improvement of  resource efficiency along the value chain; definition of 
improvement  of  design  for  environment; 
environmental  performance  benchmarking; 
reproducibility  of  results;  and  comparison  of  environmental  performances.  The  analysis29 
indicated that none of the existing methodologies could be used as such, and a need to "fill 
some methodological gaps".  

One important new feature of both methodologies developed by the Commission is that they 
enable  the  possibility  of  comparing  the  environmental  performance  of  products  and 
organisations.  In  2011-12  the  two  methodologies  have  been  submitted  to  a  road-testing  by 
volunteering companies30. The views of business were generally positive about the approach 

23  
24  
25  

26  

27  

28  

29  
30  

http://www.sustainability-index.com/ 
https://www.cdproject.net/en-US/Pages/HomePage.aspx  
See Annex 9 for a more complete description of PEF and OEF features. More information about the preparatory work carried 
out by JRC IES is available at: http://ec.europa.eu/environment/eussd/product_footprint.htm for PEF and 
http://ec.europa.eu/environment/eussd/corporate_footprint.htm for OEF. 
Analysis of Existing Environmental Footprint Methodologies for Products and Organisations: Recommendations, Rationale, 
and Alignment, JRC, 2011. 
For  products  the  methodologies  assessed  were:  ISO  14044  (Environmental  management  --  Life  cycle  assessment  -- 
Requirements  and  guidelines),  ISO  14067  (carbon  footprint  of  product),  ILCD  (International  Reference  Life  Cycle  Data 
System),  Ecological  footprint,  Product  and  Supply  Chain  Standards  Greenhouse  Gas  Protocol  (WRI/  WBCSD),  French 
Environmental  Footprint  (BPX  30-323),  UK’s  Product  Carbon  footprint  (PAS  2050),  ISO  14025  (Environmental  Product 
Declarations). 
For  organisations  the  methodologies  assessed  were:  ISO  14064  (Greenhouse  gases  --  Part  1,  2  and  3),  ISO/WD  TR  14069 
(GHG  -  Quantification  and  reporting  of  GHG  emissions  for  organisations),  ILCD  (International  Reference  Life  Cycle  Data 
System),  Corporate  Accounting  and  Reporting  Standards  Greenhouse  Gas  Protocol  from  WRI/  WBCSD,  Bilan  Carbon, 
DEFRA - Carbon Disclosure Project (CDP), CDP water, Global Reporting Initiative (GRI). 
The full report is available at: http://ec.europa.eu/environment/eussd/pdf/Deliverable.pdf  
The  methodologies  were  tested  for  10  products  (agriculture,  retail,  construction,  chemicals,  ICT,  food,  manufacturing  - 
footwear,  televisions,  paper),  and  10  organisations  (retail,  food,  energy  production,  water  supply,  feed,  public  sector,  ICT, 
mining, chemicals and paper manufacturing). See Annex 9 for details. 

11 

 
 
                                                 
even if there are some improvements needed. In particular, the road-testing showed that the 
methodologies are well suited to address the complexity of production processes and supply 
chains,  helping  to  strike  a  balance  between  information  need  and  relevance  of  information. 
They also allow streamlined environmental reporting and business-to-consumer information. 
The  road  testing  confirmed  that  the  environmental  footprint  methodologies  are  more 
comprehensive  than  alternative  approaches  currently  used.  While  this  approach  can  be 
practically implemented on real products and organisations, the road test pointed out that the 
full-scale  implementability  of  such  an  approach  will  require  further  work,  especially 
regarding data availability and development of tailored requirements for product groups and 
sectors.  

The  PEF  and  OEF  methodologies  are  now  mature  enough  to  be  used  for  tracking  the 
environmental  performance  of  a  product  and  an  organisation  through  time,  or  to  provide 
information for product or process optimisation. Further developments are however necessary 
to reach the full potential of both methodologies. These include the development of product 
group-specific  Product  Environmental  Footprint  Category  Rules  (PEFCRs)  and  sector-
specific Organisation Environmental Footprint Sector Rules (OEFSRs)31 for priority product 
groups  and  sectors  including  benchmarks;  improved  availability  of  good  quality  life  cycle 
data; setting-up a verification system which is cost-effective; and normalisation and weighting 
system.  The  Communication  originating  from  this  impact  assessment  will  explain  how  to 
move  from  the  first  phase  of  road-testing  to  a  more  widespread  piloting  and  development 
phase  of  the  methodologies  that  would  result  in increasing the user-friendliness of PEF and 
OEF. 

3.2. 

Problem definition 

3.2.1.  The  underlying  issue:  the  proliferation  of  methodologies  is  hampering  the 

functioning of the market of green products 

Many  methodologies  are  available  and  used  to  assess  and  communicate  the  environmental 
footprints  of  products  and  organisations32.  Their  number  is  rapidly  increasing  leading  to  a 
proliferation of national33 and private sector initiatives34. Companies are in principle free to 
choose  which  one  to  apply,  but  are  also  often  required  to  use  a  particular  one  either  by  a 
national  administration  or  by  clients  downstream  in  the  supply  chain.  If  a  firm  supplies 
several  other  firms,  then  it  may  be  asked  to  supply  environmental  information  in  multiple 
ways  implying  the  use  of  multiple  methodologies.  At  the  same  time,  there  is  no  natural 
coalescence around a single specific methodology.  

A  good  illustration  of  this  underlying  driver  is  the  wave  of  methodological  developments 
leading  to  a  continuous  appearance  of  new  –  similar  but  slightly  different  –  LCA-based 

31  

32  

33  

34  

Product  Environmental  Footprint  Category  Rules  are  a  set  of  tailored  methodological  specifications  and  instructions  to  be 
applied for a specific product group. Organisation Environmental Footprint Sectoral Rules are a set of tailored methodological 
specifications and instructions to be applied for a specific sector. See Annex 9 
See  a  list  of  the  most  important  (diverging)  initiatives  on  the  assessment  of  the  environmental  footprint  of  product  and 
organisations in Annexes 17, 18 and 19. 
E.g. France is currently evaluating a pilot programme on product environmental labelling. Since 2008, private companies have 
been  invited  to  participate  in  the  programme  to  demonstrate  and  test  concrete  example  of  multi-criteria  environmental 
labelling . A preliminary evaluation of agri-food products show that 75% of the companies involved in the pilot programme 
intend  to  continue  with  environmental  labelling  and  about  64%  are  in  favour  of  a  EU  harmonised  approach. 
(http://www.developpement-durable.gouv.fr/IMG/pdf/LPS125.pdf)  Other 
the  UK,  Switzerland, 
internationally in Japan, Australia and Canada. See Annex 19 for more details 
E.g.  the  Sustainability  Consortium,  Envifood  Protocol,  GHG  Product  Protocol,  different  labels  and  standards  (carbon 
footprint,  LCA,  water  footprint);  Carbon  Disclosure  Project,  sustainability  indices,  Global  Reporting  Initiative,  etc.  See 
Annexes 18 and 19 for more details.  

initiatives  exist 

in 

12 

 
 
                                                 
methodologies, both  in  Europe and internationally. For example,  if today a company would 
like  to  make  a  product  carbon  footprint  study,  it  might  choose  among  a  long  list  of 
methodologies, such as the following: PAS 2050 , BP X30-323, ISO 14040-44, ISO 14025, 
ISO 14067 (once the standard will be adopted), WRI GHG Protocol, and many more35. For 
analysis at company level, 80 leading methodologies and initiatives were identified according 
to which GHG reporting could be carried out36. However, even looking at the same product or 
organisation, these methodologies would deliver different results, because they are based on 
different models and use different methodological assumptions. As explained in the following 
paragraphs  this  “diversity”  represents  a  serious  problem  both  for  those  who  commit  the 
studies (usually industries) and for the users of the results (other companies along the value 
chain,  consumers,  investors,  procurers,  policy  makers,  insurers  or  any  other  stakeholder 
interested in the results of such studies). The ensuing confusion is an obstacle to the take-up 
of more resource efficient products both by consumers and businesses, and leads to missed 
opportunities (see section 3.2.2). 

Indeed, there are numerous voices from industry calling for a harmonisation of methods to 
assess  the  environmental  performance  of  products  in  order  to  create  a  level  playing  field, 
reduce costs, and prevent free riding. Respondents to the public consultation considered the 
lack  of  consistency  as  one  of  the  most  important  barriers  to  the  display  and  benchmarking 
environmental performance (72.5% agreement), alongside lack of time or expertise (76.4%), 
and  insufficient  market  reward  for  good  environmental  performance  (70%).  When  asked 
about the drivers of the barriers, multiple initiatives in the EU (70.8%) and multiple ways of 
reporting (76.3%) received high agreement from stakeholders.  

Regarding the consumer angle, 89% of citizens responding declared that they prefer buying 
products that have a lower environmental impact; and the same percentage declare that it is 
important  to  know  the  environmental  impact  of  what  they  buy.  Thus,  the  need  for  reliable 
information for consumers is re-confirmed. 

3.2.2.  The scope and scale of the problem 

The proliferation of methodologies leads to a number of related problems: additional costs for 
business;  reduced  opportunities  cross  border  trading  of  green  products;  lack  of  clarity  for 
consumer choices; and missed opportunities for resource efficiency.   

The analysis provided in this report tends to focus on the EU context, but markets and supply 
chains are globalised, therefore most of the problems highlighted in this chapter are common 
to companies and consumers also outside the EU.  

a) Additional costs for businesses 

The co-existence of different methodologies implies a direct increase of costs for those who 
want  to  assess  and  communicate  the  environmental  footprints  of  their  products  or 
organisations. The increase of costs is due to: (1) increase in training costs to be able to cope 
with the requirements of the different methodologies; (2) increase in costs related to gathering 
of  different  information;  (3)  different  labelling  requirements;  (4)  different  verification 
requirements.  Information  needs  are  multiplied  not  only  with  reference  to  data  under  the 
direct responsibility of the company interested in calculating the environmental performance 

35   A detailed comparative analysis of the most relevant methodologies currently used has been carried out by JRC IES and is 

available at: http://ec.europa.eu/environment/eussd/pdf/Deliverable.pdf  
36   Company GHG emissions reporting - a study on methods and initiatives (2010) 

13 

 
 
                                                 
of their product, but also (sometimes mainly) with reference to the information needed from 
their  suppliers.  Indeed  suppliers  are  more  and  more  faced  with  requests  coming  from  their 
customers asking for the same information (e.g. their carbon footprint) but to be calculated in 
different ways or different information altogether (for the same product some customers may 
ask their supply chain for carbon footprint alone, while other may ask information on carbon 
footprint  plus  lifetime  emission  to  air,  or  material  consumption,  etc.).  Costs  stemming  from 
duplication of efforts are particularly felt in sectors where most impacts stem from the supply 
chain. For example, PUMA has stated that 94% of the environmental impacts of its products 
occur along the supply chain37.  

Concrete examples of how the current situation generates additional cost to business include: 

•  A leading company in the electronics sector has requested a single LCA methodology 
to be used by all its more than 20,000 suppliers. Those suppliers generally have other 
clients,  which  require  providing  similar  information,  but  based  on  a  different 
methodology. Reporting the same data in different formats clearly represents a cost for 
these  suppliers  –  a  cost  that  could  be  avoided  if  a  single  methodology  would  be 
applied in the Single Market and would be increasingly accepted internationally. 

•  Many  international  companies  are  part  of  several  sustainability  indices  (e.g.  Dow 
Jones  Sustainability  Index,  Stoxx  Global  ESG  Leaders,  FTSE4Good)  and  need  to 
reply  to  several  questionnaires  on  their  sustainability  performance,  all  with  different 
contents.  These  companies  have  expressed  in  several  occasion  that  this  is  an 
unnecessary cost for them, a cost that could be reduced by having a single reference 
for measuring the environmental performance. 

b) Reduced opportunities for cross border trading of green products 

Given  the  lack  of  a  commonly  agreed  definition  of  green  products,  it  is  difficult  to 
substantiate the scale of intra-EU and extra-EU trade that is affected by this issue. However, 
according to a recent Eurobarometer, around 1.2 million SMEs are engaged in intra-EU trade, 
and  1  million  of  them  in  extra-EU  trade  in  green  markets38.  On  the  demand  side,  surveys 
suggest  that  90%  of  consumers  buy  green  products  at  least  sometimes,  of  which  export 
products  would  have  a  share.  Overall,  there  is  clearly  considerable  trade  in  green  products, 
and this is likely to be increasing.  

However,  the  proliferation  of  methodologies  may  hinder  this  positive  trend,  reducing  the 
opportunity  of  cross  border  trading  of  green  products.  Companies  may  want  to  trade  across 
borders,  but  find  that  the  requirements  related  to  the  environmental  information  for  the 
products they intend to sell change across those borders. Increasingly, different environmental 
information is requested by national governments in the case of public procurement, reporting 
or labelling requirements, or by private initiatives, for instance by a retailer to let the product 
be displayed in stores.   

The  following  scenario  could  become  the  normal  (but  inefficient)  way  to  market  green 
products in Europe: a Spanish company wishing to market its green product in UK, France, 
Italy, and Switzerland will soon need to apply for several national schemes, even if it is not 
required to do so in Spain. In France, it will have to carry out an environmental assessment in 
line with the French official methodology (BP X30-323); in the UK it will have to apply the 

37  
38  

For a detailed assessment on the importance of indirect impacts, see Annex 16. 
Flash Eurobarometer 342, SMEs, resource efficiency and the green markets, 2012. 

14 

 
 
                                                 
PAS 2050 or the WRI GHG Protocol; in Switzerland, it will have to comply with the Swiss 
approach (currently under development); in Italy it will be asked to join the governmentally 
recognised Italian scheme, and will have to carry out yet another analysis. The same Spanish 
company may also be asked to develop an Environmental Product Declaration (EPD) based 
on  ISO  14025,  to  find  out  after  some  months  that  that  is  not  enough,  because  there  are 
different  competing  EPD  systems  around  the  world  and,  even  if  they  are  all  based  on  ISO 
14025, each have its own specificities so that in the end results are again not comparable and 
therefore more difficult to communicate. Assuming a €4,000 – 10,000 cost for a study 39, the 
company will have to multiply this cost for each market it intends to enter.  

In  this  scenario,  the  Spanish  company  would  incur  a  cost  of  up  to  €20,000  –  50,000  per 
product to be able to compete based on environmental performance in 5 European markets. In 
practice, this is an upper estimate: costs would be lower as some data could be reused so it is 
not 100%  additional requirements  each time. On the other hand, this cost estimate does not 
include  the  costs  for  the  verification  of  the  information  which  could  be  different  for  each 
scheme. 

According to EU Law, Members States enjoy a high degree of flexibility in the preparation, 
adoption and application of their national technical regulations, such as for instance a scheme 
to calculate and communicate environmental performance. However, the regulatory flexibility 
is limited by the requirement that technical regulations are not prepared, adopted or applied 
with  a  view  to,  or  with  the  effect  of,  creating  unnecessary  obstacles  to  trade.  Unnecessary 
obstacles to trade make it more difficult for companies to compete across European borders, 
due to the following reasons: 

•  Loss  of  economies  of  scale:  if  a  firm  must  adjust  its  production  facilities  to  comply 
with  diverse  technical  requirements  in  individual  markets,  production  costs  per  unit 
are likely to increase. This imposes a handicap particularly on SMEs. 

•  Conformity  assessment  procedures:  compliance  with  technical  regulations  generally 
needs  to  be  demonstrated.  This  may  be  done  through  testing,  certification  or 
inspection by laboratories or certification bodies. If this needs to be done in a different 
way  in  each  individual  market  a  company  may  be  discouraged  to  enter,  thus  losing 
business opportunities. 

• 

Information  and  adjustment  costs:  these  costs  have  been  analysed  in  the  previous 
paragraph. Looking at it through the level playing field lens, it is important to stress 
here that exporters are normally at a disadvantage vis-à-vis domestic firms, in terms of 
adjustments costs, if confronted with new regulations. 

c) Lack of clarity for consumer choices 

When buying a product, the most important aspects for consumers are quality (67% thinks it 
is  very  important)  and  price  (47%),  followed  by  the  product's  impact  on  the  environment 
(34%)40. This  is  normal consumer behaviour: people place value on different  attributes of a 
product.  However,  consumers  have  very  poor  information  on  what  is  genuinely  'green'. 
Without  providing  this  information  in  a  trusted  way,  purchasing  decisions  are  distorted  and 
many consumers end up not buying green products despite their declared intention to do so. 
This has been shown by a Eurobarometer survey: while 75% respondents of the poll say they 

39  
40  

See Annex 10 for a more detailed assessment of costs. 
Eurobarometer Europeans’ attitudes towards the issue of sustainable consumption and production, 2009 

15 

 
 
                                                 
are  ready  to  buy  environmentally  friendly  products,  only  17%  had  actually  done  so  in  the 
month before the survey41. The reasons for this vary, but include both a lack of trust on the 
environmental  information  provided  by  producers  or/and  retailers42  and  the  limited  offer  of 
green products. 

Currently, the environmental performances of products are not communicated in a way that is 
comparable and thus limit the ability to make informed choices. At the same time, the number 
of green claims is growing43, even if they are becoming more superficial and vague in their 
use of terminology. This further deteriorates consumer trust: 39% of consumers say business 
claims  about  the  environment  are  not  accurate44.  People  tend  to  distrust  green  claims,  both 
those attached to products and those included in companies' Corporate Social Responsibility 
(CSR)  or  other  environmental  reports45.  This  situation  penalises  those  companies  who  have 
been investing a lot in improving their performances and greening their business models. The 
perception  is  that  companies  are  competing  on  the  basis  of  their  claims  rather  than  on  the 
basis of the underlying environmental performance. 

d) Missed opportunities for resource efficiency  

While  many  companies  have  traditionally  focused  on  their  internal  operations  for  cost 
reduction  initiatives,  this  alone  may  not  address  the  significant  savings  opportunities  for  a 
company along its upstream and downstream supply chain46. By tackling this situation head 
on, companies can reduce their costs (see Box 1 below). The more proactive companies have 
understood the large margins for further efficiency gains along their supply chain and in order 
to exploit that they are more and more using life cycle management approaches47. Those who 
are  using  life  cycle  approaches  to  improve  their  resource  efficiency  can  also  enjoy  other 
benefits, like a better return on investment, develop new markets, improved corporate image, 
better customer loyalty, a better understanding of the risks across their full supply chain, and 
better product differentiation. 

More green products being sold on the market and more organisations getting greener would 
contribute  to  achieving  the  objectives  of  the Resource  Efficiency  flagship  and  the  EU  2020 
Strategy. Although environmental reporting per se does not mean performance improvement, 
many of the companies measuring performance set up targets and actions. For instance, out of 
405  corporations  responding  to  the  Climate  Disclosure  Project,  82%  set  and  disclose 
reduction targets. Most of the reductions reported are a result of emissions reduction activities 
(40%)48. 

43  

Eurobarometer Attitudes of European citizens towards the environment, 2008. 

41  
42   A survey conducted by OECD on 10.000 households shows that prices and trusted information are important factors to move 
consumers towards more environmentally friendly purchasing decisions. OECD (2011), Greening Household Behaviour: the 
Role of Public Policy. 
The  Flash  Eurobarometer  332  of  2012  showed  that  1/3  of  EU  consumers  encountered  misleading  information  about  the 
environmental impacts of a product. See Annex 3.1 for more evidence. 
2011 GFK Green Gauge Report. See also Annex 3. 
The  second  Eurobarometer  survey  on  the  Attitudes  of  European  citizens  towards  environment  (2011)  showed  a  decline  of 
respondents thinking that labels on products allow the identification of those environmentally friendly (47% compared to 52%, 
scored in 2008). In addition, a the Flash Eurobarometer 256 on Europeans' attitude towards SCP (2009) showed that only 6% 
of EU citizens said they completely trust producers’ claims about their products’ environmental performance, while twice as 
many respondents (13%) answered that they do not trust such claims at all. 

44  
45  

46   Deloitte 2011, Deloitte: The High Profit Supply Chain – A Resource Focused Approach. 
47  
48  

For a list of studies supporting this statement, please consult Annex 21. 
Business Resilience in an uncertain, resource-constrained world, CDP Global 500 Climate Change Report 2012 

16 

 
 
                                                 
Box 1 – Examples for the potential of green solutions to save costs - Life Cycle Approaches in progressive 
companies  

Life  Cycle  Approaches  have  been  used  for  years  in  many  companies,  first  as  performance  tracking  tools  for 
internal  uses  only,  then  as  an  integral  part  of  high-level  decision  making.  Companies  using  them  have 
considerably  improved  their  resource  efficiency  (and  reduced  production  costs),  spurred  innovation  by 
improving  the  environmental  features  of  products,  raised  stakeholders'  awareness,  gained  new  markets,  and 
optimised  their  product  lines  by  eliminating  products  with  poor  environmental  performance.  Below  some 
exemplary cases: 
Xerox saves hundreds of millions of US$ each year through its remanufacturing and recycling programs. Easy 
disassembly, durability, reuse, and recycling are incorporated into product design, so that parts of almost all old 
machines can be refurbished and reused in new ones49. For example, in 2009 US$ 400 million (85% of its net 
income)  were  saved  by  designing  for  and  using  remanufactured  parts,  thus  eliminating  42%  of  its  production 
lines and 42% of carbon from equipment production50. 
Wal-mart  is  increasingly  integrating  sustainability  into  its  strategic  thinking.  For  instance,  it  plans  to  reduce 
packaging  by  5%  by  2013,  with  an  expected  net  saving  of  US$  3.4  billion.  If  Wall-Mart  extended  packaging 
reductions to its entire supply chain, a saving of US$ 11 billion could be achieved. Moreover, some  suppliers 
saved up to 71% of their energy bills by implementing the Wall-Mart environmental footprint approach. Wall-
Mart's also states that through implementation of LCA results, detergents producers in US saved over 1.8 Mm3 
of  water,  43000  tons  of plastics,  57000  tons  of  cardboard,  and  several millions  of US$  in  transportation  costs 
over 3 years51. 
Bloomberg  began  looking  at  sustainability  as  a  business  issue  5  years  ago,  by  integrating  sustainability 
information into business decision-making for its clients. In the past 3 years has initiated over 300 sustainability 
projects in 24 countries. It has avoided about 83000 metric tons of CO2-eq since 2008, the equivalent of emissions 
from burning 410 railcars of coal. Considering that every US$1 spent on sustainability saves US$2 in operating 
costs Bloomberg's sustainability efforts have resulted in over US$25 million in net savings since 200852. 
By implementing Life Cycle Management principles, 3M has saved over 1.2 billion US$ over 30 years. In 2007, 
for example, 3M had a total of 438 environmental projects running, reporting a total of 51 million kg of pollution 
prevented, as well as a reduction of 2.5 million tons of CO2-eq greenhouse gases53. 
Philips  uses  Life  Cycle  Assessment  as  an  eco-innovation  tool  to  develop  their  green  products.  From  2007  to 
2010  they  increased  their  sales  of  green products  of  about  50%  (from  20%  to  38%  of  total  sales).  During  the 
same period they reduced the carbon footprint of their products by about 18%54. 
Unilever  is  actively  using  Life  Cycle  based  tools  to  measure  greenhouse  gases  emissions,  waste  production, 
embedded  water  and  water  use  for  about  1600  food,  home,  and  personal  care  products  sold  in  14  countries55. 
According to Unilever, implementing life cycle tools is  key to stay competitive: consumers expect it, retailers 
require it, it fuels innovation, it helps developing new markets, and it saves money56. 
The examples above illustrate the significant cost (and resource) saving potential that can be realised with the 
application  of  Life  Cycle  management  and  Assessment.  In  the  absence  of  a  wide-scale  application  of  similar 
tools, only forerunners can benefit from these opportunities. 

The  incentive  to  develop  new  green  technologies  is  negatively  affected  by  the  fact  that 
consumers or public administrations do not buy green products as much as they would if they 

49  

54  

Forstater  and  Raynard  (2002),  Corporate  Social  Responsibility;  Implications  for  SMEs  in  Developing  Countries,  UNIDO, 
Vienna. Available at http://www.unido.org/userfiles/BethkeK/csr.pdf 
http://www3.weforum.org/docs/IP/CO/WEF_CO_ScalingSustainableConsumptionResourceEfficiency_Report_2012.pdf.  

50  
51   Wal-Mart (2011) Sustainability Report. 
52  
53  

See http://cdn.gotraffic.net/career_videos/Bloomberg-GRI.pdf.  
Life  Cycle  Management:  How  business  uses  it  to  decrease  footprint,  create  opportunities  and  make  value  chains  more 
sustainable”, UNEP/SETAC 2009. 
Philips was recognized as a leader in carbon disclosure and carbon performance by the Carbon Disclosure Project (CDP) 2010 
Global 500 report. The CDP collects emissions data from over 3,000 organisations in 60 countries. Philips received a score of 
94 (out of 100) for carbon disclosure results and was awarded an ‘A’ for its overall carbon performance, making it a company 
with “both higher degrees of maturity in their climate change initiatives and achievement of their objectives” according to the 
CDP. See http://www.annualreport2010.philips.com/content_ar-2010/proofpoints/improve_footprint.asp.  
http://www.unilever.com/sustainable-living.  

55  
56   Greening the Economy through life cycle thinking, UNEP 2012. 
17 

 
 
 
 
                                                 
had  full  information  available,  and  that  investors  are  therefore  not  freeing  funds  for 
environmental  investments  to  the  full  potential  or  are  not  considering  adequately 
environmental  risks.  This  reduction  in  potential  market  share  together  with  the  need  for  an 
upfront  investment  to  deploy  green  solutions  in  an  organisation  tends  to  discourage  the 
management (especially in SMEs) from making the organisation greener. The low take up of 
green products has repercussions on the take-up of eco-innovation as well.  

Innovation  in  the  area  of  clean  technologies  is  very  uneven  across  the  EU  and  European 
companies  feel  the  pressure  of  the  increased  global  competition57.  This  puts  at  risk  the 
competitive  edge  of  EU  eco-industries,  which  are  still  leading  globally  and  are  growing. 
Indeed,  green  technologies  have  been  identified  as  a  possible  source  of  growth  in  the 
Industrial  Policy  Update58.  In  2010,  the  global  market  for  eco-industries  was  estimated  at 
roughly 1.15  trillion euro a year but  it is expected to reach around  2 trillion euro a  year by 
2020.59  The  EU  has  a  strong  export  position  vis-à-vis  nearly  all  of  the  world's  largest 
economies.  EU  companies'  share  in  the  worlds'  eco-industry  market  is  significant  (30%  of 
water  management,  35%  of  sustainable  mobility,  40%  of  green  power  generation,  50%  of 
waste management and recycling, 10% of material and resource efficiency60); and EU SMEs 
are participating actively in the internationalisation of green markets. 

PROBLEM TREE 

Proliferation of methodologies to assess and 
communicate the environmental performance 
of products and organisations 

Additional costs for 
business 

Reduced opportunities 
for cross-border 
trading 

Lack of clarity for 
consumer choices 

Missed opportunities 
for resource 
efficiency  

3.3. 

How will the problem evolve? (Baseline scenario) 

The  baseline  scenario  is  linked  to  the  on-going  implementation  of  the  existing  policy 
instruments introduced or strengthened by the SCP/SIP Action Plan. The Action Plan follows 
a tripartite structure, with the different policy instruments addressing respectively production 
(i.e. EMAS), products (i.e. Ecodesign, Energy label, the EU Ecolabel, Energy Star, and GPP) 
and consumption (i.e. Retail Forum). 

The time horizon of our baseline analysis is from 2011 (latest data available) to 2015. At that 
time,  it  is  foreseen  that  some  key  SCP  policy  instruments  will  be  reviewed  (i.e.  Ecodesign, 

58  

57   Denmark, Sweden and Finland score among the highest globally in clean technologies but so do important competitors such as 
the  US.  China  and  India  are  already  scoring  higher  than  the  Netherlands,  Austria,  Belgium,  France  and  Spain.  See  Global 
Cleantech Innovation Index 2012 report, CleanTech Group and WWF. 
COM(2012) 582 final, A Stronger European Industry for Growth and Economic Recovery - Industrial Policy Communication 
Update 
The number of jobs depending on the Environment and Resource Efficiency, DG ENV/Ecorys 2012 
Roland Berger, ‘Innovative environmental growth markets from a company perspective’, 2007. 

59  
60  

18 

 
 
 
 
                                                 
Energy Labelling, EU Ecolabel, and EMAS). The potential changes to these instruments are 
not considered in the baseline below.  

3.3.1.  Proliferation of methodologies 

Developments at EU level 

It  is  expected  that  the  Commission  will  propose  an  initiative  on  disclosure  of  non-financial 
information,  by  strengthening  the  existing  obligation  under  the  Accounting  Directives.  The 
initiative aims at increasing the quantity and quality of social, environmental, and governance 
information disclosed by large companies and groups. However, it will not propose a detailed 
methodology  for  reporting  this  information,  nor  specify  what  elements  of  environmental 
performance  need  to  be  reported  on.  Without  further  intervention  on  these  aspects,  the 
reliability,  comparability,  relevance,  and  completeness  of  the  environmental  information 
would fall short of stakeholders' needs, particularly investors, which are expected to become 
progressively  more  sensitive  to  environmental  risks  because  of  increasing  resource  scarcity 
and  resource  prices  and  an  improving  understanding  of  sustainability  risks.  This  is 
demonstrated  by  the  growing  interest  in  corporate  sustainability:  in  the  latest  UN  Global 
Compact/Accenture  CEO  study  (2010),  93%  of  the  766  CEO  participants  worldwide, 
declared  sustainability  as  an  “important”  or  “very  important”  factor  for  their  organizations’ 
future success. In fact, 81% stated that sustainability issues are now fully embedded into the 
strategy and operations of their organizations.  

Although  appetite  for  information  would  continue  to  increase,  the  lack  of  standardised, 
reliable  information  will  impede  big  leaps  in  considering  resource/environment  risks 
systematically. Without further EU intervention, claims and reports would continue to vary 
in  ambition  (i.e.  quality  of  information  and  scope)  and  would  not  allow  any  sort  of 
comparison  or  benchmarking.  For  example,  a  recent  report  found  that  94  companies  used 
585 different indicators in environmental reports. Of the indicators disclosed, 22% were used 
by more than 3 corporations; 55% were used only once; 16% were used twice; and 7% were 
used three times61.  

The  number  of  methods  and  initiatives  is  expected  to  increase.  Only  in  the  area  of  carbon 
measurement,  studies  carried  out  by  the  Commission  identified  62  leading  initiatives  and 
methods on product carbon footprinting and 80 on carbon reporting (status in 2010)62. Taking 
into account these numbers, and considering the increasing interest of private initiatives and 
policymakers, we estimate that in the next 5 years 5-10 new initiatives would appear. Without 
further  EU  intervention  prioritising  methodological  approximation  and  the  reduction  of  the 
proliferation  in  methods,  it  is  likely  that  these  new  methods  will  continue  to  vary,  develop 
independently, and render the footprinting landscape even more complex.  

As regards the lack of clarity for consumers, although there is no EU legislation specifically 
harmonising  green  claims  and  marketing,  the  EU  has  regulated  the  use  of  claims  either 
directly  by  including  norms  in  specific  legislation  regulating  different  types  of  performance 
for products, or indirectly by setting general rules for preventing misleading claims, leaving to 
national  market  or  competition  authorities  the  task  to  interpret  and  enforce  them63.  In  the 

61  

62  

63  

An  analysis  of  indicators  disclosed  in  corporate  sustainability  reports,  Laurence  Clement  Roca  and  Cory  Searcy,  2012, 
Journal of Cleaner Production  
Product Carbon Footprinting – a study on methodologies and initiatives, (2010); Company GHG emissions reporting - a study 
on methods and initiatives (2010) 
This has been done, for example, with Regulation (EC) 834/2007 on organic products, Directive 2010/30/EU on labelling for 
energy-related  products,  Directive  1999/94/EC  on  information  of  fuel  consumption,  and  Directive  2003/54/EC  on  common 
rules for the electricity market. These laws provide for specific rules which take precedence over the broader provisions of the 

19 

 
 
                                                 
context  of  the  implementation  of  the  Unfair  Commercial  Practice  Directive  (UCDP),  the 
Commission has issued a specific guidance to promote the use of clear, accurate and relevant 
environmental claims in marketing and advertising64. It is expected that the Commission will 
support an adequate and uniform enforcement in Member States and further elaborate on the 
UCPD guidance by improving the definitions of green products, green production, and green 
organisation;  by  complementing  it  with  more  examples/cases  of  misleading  green  claims 
emerging  from  national  jurisprudence;  and  by  recommending  best  practices  based  on  a  life 
cycle approach and adequate methodologies. 

However,  the  lack  of  a  reliable  method  that consumers trust  would  remain  unsolved. Given 
the  expected  persistence  of  the  proliferation  of  methods  and  initiatives,  and  the  persevering 
incomparability  of  information,  consumers  will  continue  to  face  increasing  and  confusing 
flow  of  environmental  information.  Ultimately,  this  will  lead  the  consumers  to  further  lose 
confidence in environmental labels and claims. 

Developments at Member States level 

Without  additional  EU  intervention,  the  current  tendency  of  governments  to  issue  policies 
regarding  environmental  performance  information  is  expected  to  continue  and  reinforce. 
France  will  consolidate  its  approach  for  environmental  labelling  and  reporting  under  the 
Grenelle  II65;  the  UK  set  up  a  Product  Sustainability  Forum  and  is  about  to  introduce 
mandatory GHG reporting for listed companies, and further initiatives might gradually appear 
on  the  medium-long  term;  Italy  recently  started  a  pilot  project  on  products  carbon 
footprinting. Several Member States have developed or are developing national guidance on 
environmental  claims  (UK,  France,  Ireland,  and  Denmark)  and  this  tends  to  become  the 
rule.  These  initiatives  are  expected  to  have  diverging  objectives  and  scope  and  (slightly) 
different  methods  on  which  they  rely  upon.  Given  the  Commission  efforts  to  set  up 
coordination between Member States on this issue, some degree of convergence is expected, 
but it will take time and will lead to additional costs. 

Development at international level (governments-driven) 

Internationally,  the  situation  is  similar  to  what  is  happening  at  Member  States  level: 
Switzerland will present in 2013 a legislation introducing multi-criteria life cycle assessment 
for  products  and  its  communication  to  consumers.  Japan,  Korea,  Australia,  and  Canada  are 
also  using  LCA  approaches  in  policy  making.  For  example,  the  Ministry  for  Economic 
Development,  Innovation  and  Exportation  in  Quebec  is  investing  $24  million  in  a  pilot 
programme to set up a Carbon Footprinting Scheme. The US Federal Trade Commission has 
just updated and published new "Green Guides" to help marketers in making non-deceptive 
green  claims  and  US  EPA  is  developing  a  guidance  document  on  how  to  develop  Product 
Category Rules. At global level, the International Chamber of Commerce (ICC) has published 
in 2011 a Framework for Responsible Environmental Marketing Communications. 

Private sector initiatives 

As environmental performance is increasingly perceived as a competitiveness factor, leading 
private  sector  initiatives  will  continue  their  activities  and  new  initiatives  will  appear.  For 
example,  the  Sustainability  Consortium  is  one  of  the  biggest  recent  initiatives  related  to 

Directive 2005/29/EC on unfair commercial practices (UCPD), which covers misleading green claims in general and Directive 
2006/114/EC on misleading and comparative advertising. 

Environmental 

Claims, 

see 

64   Guidelines 

for 

the 
http://ec.europa.eu/consumers/cons_safe/news/green/guidelines_en.pdf.  
http://www.legrenelle-environnement.fr/-Loi-Grenelle-2-.html  
20 

Assessment 

of 

65  

 
 
                                                                                                                                                         
products66; the Carbon Disclosure Project recently introduced new initiatives related to other 
environmental aspects such as water and supply chain management; single-impact initiatives 
such  as  Water  Footprint,  or  single  resource-related  initiatives  (e.g.  forests,  green  energy 
labelling),  and  initiatives  focussed  on  a  single  sector  (e.g.  AISE  Charter  for  Sustainable 
Cleaning,  the  Higg  Index  developed  by  the  Sustainable  Apparel  Coalition,  BIO  Hotels,  the 
CANSO  Environmental  Voluntary  Code  of  Practice  for  Air  Navigation  Service  Providers) 
will continue to appear67. Investors will also increasingly require sustainability data through 
different individual questionnaires for the purposes of setting up or maintaining sustainability 
indices,  something  that  big  retailers  like  Wal-Mart  and  Carrefour  are  already  doing.  Their 
interest is growing: e.g. the investors' base behind the Carbon Disclosure Project grew from 
35 investors with assets of 4.5 trillion USD in 2003 to 655 investors with assets of 78 trillion 
USD.  Already  in  2001,  the  OECD  identified  145  codes  of  conduct  concerning  entirely  or 
partially  environmental  stewardship,  of  which  38%  contained  commitments 
for 
environmentally  friendly  products  and  services,  and  33%  addressed  the  provision  of 
information so as to heighten community or consumer awareness68.  

All  the  initiatives  listed  above  are  taking  place  independently.  It  can  be  expected  that  some 
sporadic  methodological  approximation  at  EU  and  international  level  will  still  take  place 
(especially  in  the  area  of  GHGs,  e.g.  through  the  Climate  Disclosure  Standards  Board). 
However,  these  developments  would  not  solve  the  lack  of  harmonization:  they  would  not 
stop  the  current  proliferation  of  inconsistent  and  non-comparable  labels  and  initiatives  that 
inform  (and/or  further  confuse)  consumers  and  other  market  actors  on  the  environmental 
performance  of  products  and  organisations.  Furthermore,  looking  at  existing  and  new 
standards,  most  of  them  do  not  allow  for  direct  comparability  of  results  within  a  product 
group or sector, and, without EU intervention, are not expected to do so in the future either. 

The Commission has already initiated consultation processes with relevant public and private 
international partners in order to promote a continuous dialogue and build on best practices. 

3.3.2.  The inapplicability of the principle of mutual recognition 

In  areas  not  subject  to  Community  harmonisation  legislation  (such  as  the  assessment, 
calculation, and communication of the environmental performance of products) the principle 
of mutual recognition is in general the most established means of ensuring the free movement 
of  goods  within  the  internal  market.  Mutual  recognition  derives  from  the  case-law  of  the 
Court  of  Justice  of  the  European  Union,  and  prescribes  that  a  product lawfully  marketed  in 
one Member State should be allowed to be marketed in any other Member State, even when 
the product does not fully comply with the technical rules of the Member State of destination. 
The  principle  of  mutual  recognition  without  harmonisation  of  methodologies  is  a  pragmatic 
and powerful tool for economic integration, however, it does not seem to be applicable in this 
context for the following reasons: 

•  As explained above, the methodologies applied in certain Member States to calculate 
and communicate the environmental performance of products have different scope and 
ambition, specific and different rules in terms of criteria development and verification 
procedures,  etc.  As  a  result,  there  is  no  possible  equivalence  between  them,  thus 
undermining  the  very  essence  of  the  mutual  recognition  principle,  which  can  work 

66  
67  
68  

http://www.sustainabilityconsortium.org/  
See more detailed examples of schemes in annexes 18 and 19. 
http://www.oecd.org/industry/internationalinvestment/corporateresponsibility/1922656.pdf 

21 

 
 
  
                                                 
only  on  the  basis  of  a  recognition  of  substantial  equivalence  between  the  relevant 
national  norms.  To  provide  an  example,  it  will  not  be  possible  to  grant  green 
credentials to a UK t-shirt in France just because it is "carbon neutral" (enough for the 
country  of  origin  rules)  when  the  French  authority  will  probably  require  the 
compliance with the standard BP X30-323 asking to communicate the environmental 
performance at least for three indicators (e.g. climate change, water, and resources). 

•  At  present,  only  few  Member  States  are  applying  methodologies  to  calculate  and 
communicate  the  environmental  performance  of  products,  therefore  the  mutual 
recognition principle would not be of any help for producers originating from Member 
States  without  any  methodology  and  conformity-assessment  body.  This  means  that 
they would be obliged either to face additional costs to adapt their green products to 
the  technical  rules  of  other  Member  States  or  refrain  from  marketing  them  in  those 
Member States as green products.  

•  Private initiatives  are outside the scope of mutual recognition. In order to be able to 
compete based on environmental performance, companies are de facto obliged to join 
different private initiatives on different markets, based on different methodologies. 

•  Mutual recognition is a powerful instrument to enhance the free movement of goods; 
however it is also a controversial one because -contrary to harmonisation- it may lead 
to  the  competition  between  national  regulatory  systems,  compared  to  the  uniform 
application of a single rule/methodology. This competition may generate sub-optimal 
results,  because  a  producer  could  "shop"  for  the  least  scientifically  robust 
methodology  in  a  Member  State  and  through  mutual  recognition  gain  "green 
credentials"  across  the  Single  Market  for  its  product,  thus  gaining  an  unfair 
competitive  advantage  compared  to  producers  applying  more  rigorous  and  complete 
methodologies. This would also further aggravate the risk of misleading consumers on 
what constitutes a genuine green product. 

•  Mutual  recognition  will  not  solve  the  issue  of  the  homogenous  communication  of 
quantified environmental performance of products, which is a crucial element for their 
comparability. The success of the energy label for white goods can explain the terms 
of the problem: a single method for the visualisation of the energy efficiency classes 
across the EU has made it possible for consumers to get familiar with just one scaling 
system,  thus  increasing  its  recognisability  and  popularity.  At  the  same  time,  it  has 
simplified  EU-wide  compliance  for  producers.  The  mutual  recognition  of  different 
national  methods  to  communicate  the  quantified  environmental  performance  of 
products will further augment the diversity of environmental labels and the confusion 
of  consumers.  In  addition,  mutual  recognition  would  not  remove  hurdles  to  cross 
border  trading:  even  without  legal  requirements,  exporters  will  need  to  use  the 
national  communication  methods  familiar  to  national  consumers  in  order  not  to  be 
disadvantaged vis-à-vis local producers. 

Mutual  recognition  at  international  level  is  configured  differently.  It  is  not  a  consolidated 
principle like in EU law, and it normally takes the shape of Mutual Recognition Agreements 
(MRAs),  which  are  bilateral  agreements  with  key  trading  partners,  such  as  USA,  Japan, 
Australia,  etc.  MRAs  have  the  objective  of  promoting  trade  in  goods  between  the  EU  and 
third  countries  by  facilitating  market  access  and  providing  easier  access  to  conformity 
assessment procedures across the whole territory of the parties to all products covered by the 
agreements.  Despite  the  on-going  work  on  international  approximation  of  methodologies 
mentioned  above,  at  present  there  is  no  indication  that  under  the  baseline  scenario 
negotiations will start covering the issue of assessment, calculation, and communication of the 
22 

 
 
environmental  performance  of  products  and  organisations  in  any  existing  (or  foreseen) 
MRAs. 

3.3.3.  Expected effects on environmental and economic performance 

Effects on environmental performance 

Without  further  EU  intervention,  environmental  improvements  will  be  limited  by  several 
factors. One is lack of reliable information on the most important improvement opportunities 
along  the  life  cycle.  Although  existing  voluntary  instruments  such  as  EMAS  and  the  EU 
Ecolabel  are  driving  direct  and  indirect  environmental  performance  improvement  for 
organisations  and  products,  their  effects  are  limited:  only  4500  organisations  have  EMAS 
registrations69, and the EU Ecolabel is aimed only at best performing products in 28 product 
categories70. Furthermore, under EMAS the measurement of indirect impacts are encouraged, 
but there is limited guidance on how to do it. The EMAS Sectoral Reference Documents are 
helpful in this context but they will only become available for a limited number of sectors (11 
in  total)  and  reach  only  enterprises  that  are  improving  their  impacts  in  the  framework  of  a 
management system.  

The  mandatory  Ecodesign  and  Energy  labelling  instruments  are  effective  in  influencing 
(respectively)  manufacturers/importers  and  consumers  behaviour,  but  such  instruments  only 
cover a limited number of "energy-related products" and so far have concentrated mainly on 
improving energy performance in the use phase only, thus their effect is limited. In addition, 
the  current  legal  framework  for  the  Energy  labelling  does  not  allow  considering  life  cycle 
impacts but it only takes account of those emerging during the use phase. 

Effects on economic performance 

At international level, without EU efforts to trigger more international cooperation and more 
acceptance of the EU methodological approach, EU companies active internationally will face 
an  increasingly  complex  (and  thus  costly)  set  of  requirements  regarding  measuring  and 
communicating  environmental  performance.  The  situation  is  similar  in  case  of  private 
initiatives:  without  the  impetus  of  EU  action  driving  convergence,  incoherent  and 
uncoordinated initiatives will weaken the effect of reputational advantages and increase costs 
for companies wishing to compete based on environmental performance.  

Thus, without further EU intervention, costs and burdens described in the problem definition 
that companies face due to the proliferation of methodologies and their difficulties to prove 
the environmental performance of their products or their company across borders will persist 
and  worsen.  Additionally,  with  the  emergence  of  new  approaches  and  policies  in  this  area, 
they will face a more complex business environment both within the EU and internationally– 
but also fiercer competition threatening EU industry's leading positions in green markets. 
In a recent survey71 more than 1/3 of 250 business executives said that they could not keep up 
with  consumer  demand  for  sustainable  products  and  services  and  62%  declared  that 
sustainable  investments  were  motivated  by  consumer  expectations  for  green  products.  The 
trends  to  expect  due  to  these  realities  are  more  embedding  of  sustainability  in  design 
processes, investing in research and creating a more resource-efficient supply chain – trends 
that are not expected to set off on time in Europe without EU intervention. 

http://ec.europa.eu/environment/emas/register/  

69  
70   www.ecolabel.eu  
71  

Long-Term  Growth,  Short-Term  Differentiation  and  Profits  from  Sustainable  Products  and  Services,  a  survey  of  business 
executives in the U.K., U.S., Japan, Germany, France, China, Brazil and India, Accenture, 2012. 

23 

 
 
                                                 
3.4.  Who is affected and how? 

Producers are affected by the lack of rewards to invest in green solutions or supply products 
based  on  resource  efficiency  and  life  cycle  considerations,  thus  having  less  opportunity  to 
benefit  from  competitive  advantages  based  on  environmental  grounds.  This  affects 
frontrunners in particular72. They are also affected by rapidly increasing burden from different 
national/private sector schemes. As resources become scarce and prices become increasingly 
volatile (e.g. rare earth minerals), unprepared and less resilient companies may equally suffer, 
causing knock-on impacts on the economy. 
SME:  The  SMEs  active  on  green  markets  (which  represent  26%  of  all  SMEs)73  are 
particularly  affected  by  the  confusing  array  of  methods  and  labels  to  demonstrate  the 
environmental  performance  of  their  products.  Also  as  parts  of  international  supply  chains, 
SMEs  are  already  increasingly  requested  to  provide  environmental  performance  data,  based 
on  different  sets  of  indicators.  They  are  equally  affected  by  increasing  private  and  public 
requirements, within the EU and from third countries, with inconsistencies, for environmental 
information and/or to be accepted as suppliers. 

Companies  and  other  organisations  in  general  have  limited  information  on  which  to 
benchmark  their  environmental  performance,  for  making  meaningful  decisions  relating  to 
supply chain risks, market opportunities, and internal investment priorities.  

Investors, financial institutions and intermediaries are impacted by the lack of clear, reliable 
and  comparable  information  on  the  environmental  performance  of  organisations,  potentially 
leading to inefficient allocation of capital. The limited capacity to take material environmental 
risks into consideration also has potential important impacts on their profitability. 

Public  authorities  are  affected  by  a  lack  of  reliable  information  on  the  environmental 
performance of products, and also by the occasional absence of adequate guidance on how to 
incorporate  environmental  considerations  into  public  procurement  procedures.  EU  GPP 
criteria and guidance can partially, but not fully, bridge this gap. 

Policymakers/Member States may be disadvantaged by having insufficient information on the 
direct and indirect environmental impacts of products available and organisations operating in 
their country, which is impeding them to define environmental policies and support measures 
more effectively. At the same time they are under growing pressure from progressive business 
and  environmental  NGOs  to  develop  environmental  information  schemes,  often  having  to 
duplicate efforts for data and methodology provision.  

Consumers  often  get  confused  by  the  quantity  and  diversity  of  environmental  claims/labels, 
and  by  too  many  “green”  corporate  communications.  This  concerns  especially  the  66%  of 
consumers  that  sometimes  buy  green  products  and  the  8%  that  systematically  buys  them74. 
Consumers  also  suffer  from  the  absence  of  adequate  guidance  on  how  to  incorporate 

72   According  to  the  2012  WBCSD  report  Changing  Pace:  "In  the  current  financial  context,  greener  technologies  and 
sustainable, inclusive business solutions are at a disadvantage when tested for short term returns. Their business case will not 
happen  at  scale  and  speed  unless  governments  introduce  measures  to  lower  their  barriers  of  entry  and  raise  the  costs,  or 
remove the license to operate stranded assets and harmful practices. Markets are merely man made. Changing Pace is about 
innovating  better  rules  for  markets,  and  overcoming  mindsets  and  dilemmas  about  shared  authority  and  leadership. 
Governments and business must pull vigorously in unison to boost sustainable business solutions with smart policy solutions". 
To overcome this baseline scenario the WBCSD report includes the "Green Growth Policy Accelerator" which among others 
includes: "Norms, standards, and codes of conduct scale up proven solutions with a low set-up cost for governments who want 
to rapidly close the gap with their goals. Frontrunners, who have developed and pioneered the solutions, are rewarded with 
lower  barriers  of  entry  and  risks.  International  compatibility  must  be  developed  to  facilitate  trade.  Compliance  must  be 
supported by verification and the capacity to deal with laggards and infringers". 
Flash Eurobarometer 342, SMEs, resource efficiency and the green markets, 2012 
http://economists-pick-research.hktdc.com/business-news/article/Economic-Forum/Green-trends-in-the-EU-and-business-
implications/ef/en/1/1X000000/1X074E5P.htm  

73  
74  

24 

 
 
                                                 
environmental considerations into their purchasing decisions even though it has been clearly 
proved  in  different  Eurobarometer  surveys  that  environmental  considerations  are  important 
for  EU  citizens.  Last,  but  not  least,  consumers  suffer  from  the  lack  of  availability  of 
affordable green products,  which  is  the consequence  of unexploited economies of scale  and 
efficiency. 

3.5. 

Subsidiarity, necessity and EU value added 

As  described  above  Member  States  have  recently  started  to  introduce  their  own  national 
requirements to sort out problems they face in their national markets. Furthermore, business 
players are moving actively to the development of methodologies and schemes. The situation 
is  similar  internationally,  with  the  appearance  of  new  initiatives  related  to  Life  Cycle 
Assessment  (e.g.  Sustainability  Consortium,  the  Japanese  Ecoleaf,  eco-label  schemes  in 
Japan, South Korea, China, Taiwan, Thailand, Singapore and Chile75). 

The proliferation of methodologies, the related difficulties and the increased costs described 
in  section  3.2.2  calls  for  co-ordinated  EU  action,  as  they  directly  affect  the  smooth 
functioning of the Single Market. If the EU chooses to intervene at a later stage, companies 
will  have  had  to  comply  with  several  methodologies  already,  bearing  the  cost  of 
compliance;  national  administrations  will  have  had  to  build  their  policy  implementation 
structures – costs that could have been foregone through earlier EU action. Thus action at 
EU level is justified and the time is now. 

Member  States  create  their  own  schemes  to  resolve  problems  in  national  markets,  to  the 
detriment of the Single Market functionality. The development of methodologies and data at 
Member  States  level  risks  resulting  in  inefficiency,  additional  costs,  and  potential 
inconsistencies. These developments would also not provide investors and financiers holding 
portfolios  across  EU  the  necessary  information  to  judge  whether  a  company‘s  strategy 
adequately  takes  into  account  the  risks  and  challenges  associated  with  their  environmental 
impacts, or if production is sustainable.  

Furthermore, companies trading across borders also face requirements in international green 
markets, and it is not efficient for Member States to pursue international harmonisation on a 
bilateral basis. 

Realising  the  limitations  resulting  from  a  no  co-ordinated  approach  and  from  a  lack  of  a 
common methodology, the Member States -in the framework of the Council- have repeatedly 
requested the Commission to intervene on the proliferation of methodologies in this area76. 

Businesses  perceive  the  request  for  environmental  performance  information  from  their 
stakeholders  and  consumers.  Accordingly,  they  set  up  their  own  schemes  to  meet  this 
demand.  This  behaviour  contributed  to  the  proliferation  of  methodologies  and  initiatives  on 
the  market  presented  in  the  problem  definition.  Although  businesses  feel  the  need  for 
harmonisation,  their  power  to  effect  this  is  limited,  and  will  certainly  not  lead  to  a  level  of 
harmonisation that allows the comparability of environmental performance77.  

Responding to the public consultation, the majority of stakeholders confirmed that there is a 
problem with multiple  initiatives, methodologies and multiple ways  of reporting the  results. 
Taken together, 76% of all those who responded to this question were in agreement or strong 
agreement.  Private  companies  and  industry  were  the  strongest  advocates  of  this  problem. 

75  
76  

77  

PCF World Forum News (2010) International Developments in Product Carbon Footprinting and Carbon Labelling 
Council Conclusions on the Sustainable Production and Consumption Action Plan 4 December 2008, Council Conclusions on 
Sustainable materials management and sustainable production and consumption, December 2010. 
See a more detailed description in section 3.3 (How will the problem evolve?) 

25 

 
 
                                                 
Recognising  that  the  EU  is  best  placed  to  resolve  this  problem,  many  companies  and 
associations  are  asking  the  Commission  to  take  action  on  this.  In  2010  AIM,  the  European 
Brands Association grouping 1800 companies of all sizes with members in 22 countries sent a 
letter to the Commission asking for a harmonised approach for footprinting at EU level. 

The  EU  is  ideally  placed  to  promote  harmonisation  of  methodologies  across  the  Single 
Market,  relying  on  experiences  of  Member  States  and  private  initiatives  in  this  area  and  in 
discussion with the stakeholders. It is also in a unique position to pool together Member State 
good practices in producing two common methodologies and to provide the necessary support 
for  their  further  testing,  development,  and  implementation.  The  EU  can  bring  an  important 
value  added,  as  further  co-ordination  would  bring  significant  cost  savings  for  governments 
and the private sector. All these will be originated from a single, EU-wide, coherent scheme 
associated to increased availability of good quality environmental performance data78.  

In addition, centralised  and co-ordinated action  by the EU  is likely to  carry more weight in 
international  discussions  on  the  harmonisation  of  methodologies  and  disclosure  of 
information compared to individual calls by Member States. With a range of methodologies 
applied  across  the  Single  Market,  the  EU  will  have  difficulty  to  argue  for  international 
approximation of approaches and methodologies – whilst with a common system to rely on, 
the EU can start using its leverage now to simplify the complex international context in this 
area. 

4. 

OBJECTIVES 

The general objective of the EU action is to improve the availability of reliable information 
on the environmental performance of products and organisations.  

4.1. 

Specific objectives 

Promote  the  use  of  a  common  methodology  to  assess  and  communicate  the  environmental 
performance of products and organisations. 

4.2. 

Operational objectives 

The above specific objective can be broken down into operational ones as follows: 

Table 1 - Operational objectives 

Specific objective 

Operational objectives 

Promote the use of a common 
methodology to assess and 
communicate the 
environmental performance of 
products and organisations 

1.1  Launch two methodologies that are relatively 
simple to use, but also robust, one for the 
measurement of the environmental performance of 
products and one for the measurement of the 
environmental performance of organisations  

1.2  Encourage the take-up of the methodologies in 

Member States and by private actors 

78  

Interesting  to  note  that  the  UK  and  French  schemes  already  make  strong  cross-reference  to  EU  developments  and  Italy 
foresees a strong link as well. MS appear to be calling for a harmonised EC-level guidance/support on the assessment of the 
environmental  footprint.  See  also  the  Council  conclusions  of  20  December  2010  inviting  the  Commission  "to  develop  a 
common methodology on the quantitative assessment of environmental impacts of products, throughout their life-cycle".  
26 

 
 
                                                 
1.3  Develop product and sector specific environmental 

footprint category rules through an open, 
transparent, multi-stakeholder process 

Indicators  to  measure  the  fulfilment  of  these  objectives  are  presented  in  chapter  7  on 
monitoring and evaluation. 

4.3. 

Consistency with other EU policies 

A number of EU policies are already in place directly or indirectly aiming at the reduction of 
negative  environmental  impacts  resulting  from  consumption  and  production,  which  have 
strong links with this initiative: Europe 2020 Flagship Initiatives on Resource Efficiency and 
Innovation Union; Consumer Agenda; Unfair Commercial Practices Directive; Single Market 
Act; Small Business Act; Proposal for reform of the public procurement directives; Proposal 
for  the  disclosure  of  non-financial  information  by  companies  (in  preparation);  Industrial 
Policy Update; the  Commission proposal for a 7th  EAP.  A  more  detailed  explanation  of  the 
links is provided in Annex 4. 

5. 

POLICY OPTIONS 

5.1. 

Option 1. Baseline scenario – no policy change 

The Baseline scenario has been presented in section 3.3, above. 

5.2. 

Option 2. A new mandatory product policy framework  

A new EU legal framework for sustainable products will replace and consolidate the existing 
product-related  policy  instruments  included  in  the  2008  SCP/SIP  Action  Plan  (such  as  for 
instance  Ecodesign  and  Ecolabel).  In  practice,  this  would  generate  a  stronger  consistency 
between  requirements  concerning  product-related  environmental  performance,  by  using 
common  evidence  to  improve  coordination  in  standard  setting79;  by  establishing  a  single, 
streamlined (and less costly) “criteria setting” process for the same product categories80; and 
by  applying  a  single  process  for  developing  and  approving  the  requirements  for  the  same 
product categories as well as homogeneous testing and verification methods. 

The  new  legal  framework  would  introduce  requirements  concerning  product  environmental 
performance, including setting minimum market access requirements. This would be done by 
integrating  PEF  and  Product  Environmental  Footprint  Category  Rules  (PEFCRs)  into  the 
approach  currently  used  for  developing  implementing  measures  under  the  Ecodesign 
Directive. It will also identify environmental performance benchmarks for each product group 
and link the benchmarks to environmental performance classes, similarly to the approach used 
for the energy labels categories.  

The new legislative framework instrument will progressively cover all priority products based 
on  their  overall  environmental  performance  and  will  focus  on  the  most  important 

79  

80  

The criteria for the EU product-related policy instruments are usually set on the basis of technical and market evidence that is 
collected by way of specific preparatory studies. If this evidence is univocal for all the EU SCP instruments, assumptions on 
environmental  and  economic/competitive  effects  of  new  criteria  are  the  same  and  the  result  can  be  a  higher  level  of 
homogeneity. 
If the criteria are set as a result of a single process for different “uses”, taking into account the different objectives of the EU 
product-related  policy  instruments,  a  stronger  consistency  can  ensured  (e.g.:  in  defining  the  thresholds  for  Ecolabel  and 
Energy label). 

27 

 
 
 
                                                 
environmental impacts (i.e. beyond energy) relevant for each product, setting also criteria for 
resource  efficiency  (e.g.  recyclability,  reusability,  durability,  recoverability,  upgradeability, 
etc.). It would also cover conformity assessments and market surveillance activities, to make 
sure that the requirements are properly implemented to avoid free riding. 

Priority  product  groups  would  be  defined  using  criteria  such  as  potential  environmental 
impact (assessed through extended input-output analysis and process-based LCAs); household 
expenditure  and  consumption  data  based  on  Eurostat;  production  figures  and  market 
penetration  of  product  groups  within  the  EU  and  its  Member  States;  willingness  of 
stakeholders to contribute; and availability of high quality data81.  

5.3. 

Option  3.  A  mandatory  Organisation  Environmental  Footprint  reporting 
framework 

Under this option the use of the OEF methodology will be obligatory for large organisations 
in priority sectors for reporting/information provision purposes.  

In  order  to  prompt  continuous  improvement,  the  requirement  will  be  associated  with 
incentives for use and benchmarking. In collaboration with stakeholders the Commission will 
develop  over  time  OEF  sector  rules  (OEFSR)82,  increasing  the  consistency  of  their 
environmental  reporting  and  also,  to  some  extent,  the  comparability  of  their  overall 
environmental  performance.  Thus,  it  will  be  possible  for  an  organisation  to  provide  OEF-
based  information  with  the  purpose  of  communicating  its  environmental  performance  and 
showing progress over the years; but in order to participate in benchmarking or sector-based 
league tables, an organisation will have to report on the basis of the established sector rules 
(the sector-specific OEFSR). 

The new legislative instrument will progressively be applied to priority sectors identified on 
the  basis  of  the  significance  of  potential  environmental  impacts  (assessed  through  extended 
input-output analysis and process-based LCAs); production figures and market penetration of 
sectors within  the EU and  its Member States; willingness of stakeholders to contribute; and 
availability of high quality data. OEFSRs will have to be developed for each of those priority 
sectors.  

In  order  to  avoid  duplication  of  effort,  OEFSRs  will  give  guidance  on  how  to  use  OEFSR-
based mandatory reporting in conjunction with other reporting requirements stemming from 
EU  legislation.  Furthermore,  interplay  with  relevant  EU  voluntary  tools  such  as  the  EU 
EMAS  system  would  be  defined  in  order  to  avoid  having  to  report  based  on  different 
methodologies and to ensure coherence of published environmental information83.  

The policy will enable incentives at EU and/or Member State level to improve performance or 
to reward good performance, based on reliable, quantified information provided through the 
OEF  and  OEFSRs.  A  dialogue  on  incentive  frameworks  will  be  established  with  Member 
States to improve approaches to incentives and avoid environmentally harmful subsidies.  

81  

This is an indicative list of criteria that would be further refined and enriched during the implementation phase. Existing and 
new studies would be used, and an open dialogue with key stakeholders would provide further input.  

82   Organisation Environmental Footprint Sectoral Rules are a set of tailored methodological specifications and instructions to be 

83  

applied for a specific sector. See Annex 9 
The  requirements  would  include  rules  regarding  the  measurement,  benchmarking,  and  reporting  of  environmental 
performance. 

28 

 
 
                                                 
5.4. 

Option  4.  Integration  of  the  methodologies  for  the  environmental  footprint  of 
products (PEF) and organisations (OEF) in relevant policy instruments 

Under  this  option  the  PEF  and  OEF  methodologies  are  integrated  in  existing  voluntary  and 
mandatory policy instruments where relevant and technically implementable84. For instance: 

•  Product  Environmental  Footprint  (PEF)  and  Organisation  Environmental  Footprint 
(OEF) would be immediately used in instruments such as Ecolabel, GPP and EMAS 
for  informing  the  criteria-development  process85  and  the  creation  of  Sectoral 
Reference  Documents86  for  determining  relevant  environmental  impacts  and  life 
cycle-based key performance indicators.  

•  Sectoral  rules  would  be  developed  to  apply  OEF/OEFSRs  to  relevant  sectors  falling 
under  the  Industrial  Emissions  Directive  to  widen  requirements  and  reporting  on 
additional environmental aspects.  

•  The  European  Pollutant  Release  and  Transfer  Register  (Regulation  166/2006)  would 
be modified to integrate information based on OEF and its elements on a voluntary or 
obligatory basis.  

Under this option it would also be necessary to establish a set of incentives, both by the public 
and  private  sector,  that  would  reward  companies  and  reinforce  the  positive  effect  on 
environmental performance improvements87. 

5.5. 

Option 5. Recommending the application of PEF and OEF on a voluntary basis 

A  Commission  Recommendation  will  be  addressed  to  Member  States  to  recommend  that 
whenever a Member State intends to introduce a voluntary scheme or requirements related to 
the  measurement,  verification,  reporting,  benchmarking,  and  communication  of 
the 
environmental performance of products and organisations, it should apply the PEF and OEF 
methodologies respectively88.  

The Recommendation will be addressed to business as well. It will recommend using PEF and 
OEF  methodologies  in  the  calculation  of  the  environmental  footprint  of  products  or  the 
overall  footprint  of  the  organisation  (company)  whenever  the  producer  or  the  organisation 
decides  to  undertake  such  a  calculation.  It  would  also  invite  the  financial  community 
(investors,  insurers,  banks)  to  use  environmental  performance  information  based  on  the 
application  of  OEF  and/or  OEFSRs  in  assessing  environmental  risks.  In  return,  the 
recommendation  will  invite  Member  State  to  recognise  any  information  or  claim  based  on 
both  methodologies  as  valid  for  the  national  scheme  or  the  requirements  they  intend  to 
introduce at national level.  

The  legal  basis  for  a  Commission  Recommendation  is  Art.  292  of  the  Treaty  on  the 
Functioning  of  the  European  Union,  which  states  that  "The  Commission,  and  the  European 
Central Bank in the specific cases provided for in the Treaties, shall adopt recommendations". 
The Recommendation is considered to be a suitable tool because it is addressed to both public 
and private stakeholders and it provides an EU status to both methodologies. This will make it 

84  

85  
86  
87  
88  

The option for integration and the technical implementability would need to be assessed in detail on a case by case basis. See 
Annex 9 for more information about the methodological developments needed to fully implement PEF and OEF in existing 
policy instruments. 
http://ec.europa.eu/environment/ecolabel/products-groups-and-criteria.html  

http://susproc.jrc.ec.europa.eu/activities/emas/index.html  
For more details on incentives, see Annex 20 and Annex 14. 
E.g.  in  case  of  national  scheme  or  requirements  related  to  non-financial  reporting  or  promoting  the  use  of  environmental 
performance indicators in risk assessments in investment, the reference methodology would be OEF, coupled with OEFSRs. 
29 

 
 
                                                 
easier for the Commission to continue the international dialogue on approximation of existing 
methodologies. 

As part of this policy option the Commission will continue developing the methodologies to 
allow  for  all  potential  areas  of  application.  A  three-year  testing  starting  from  2013  will  be 
organised in order to pilot the development of the first Product Environmental Footprint Rules 
(PEFCRs) and Organisation Environmental Footprint Sector Rules (OEFSRs). The pilot will 
also  give  the  opportunity  to  test  different  approaches  (e.g.  test  different  communication 
channels  for  product  environmental  performance  information  to  final  consumers;  different 
verification  systems;  cooperation  in  the  supply  chain;  practical  testing  of  the  interplay  with 
EMAS; in case of Member State participation, including PEFCRs/ OEFSRs in their incentive 
system; use of electronic tools in the development of the rules). 
The  use  of  meaningful  incentives  to  stimulate  performance  improvement89,  reward 
forerunners,  and  facilitate  the  purchase  of  green  products  would  also  be  recommended  to 
Member  States  and  relevant  private  actors.  The  recommendation  will  suggest  that  the 
selection  of  products  and  organisations  entitled  to  incentives  is  based  on  the  full  or  partial 
application  of  PEF/PEFCRs  and  OEF/OEFSRs.  In  addition  to  the  Recommendation,  a 
coordination  mechanism  will  be  set  up  by  the  Commission  to  enable  exchanges  between 
Member  States  on  best  practices,  effectiveness  of  incentives,  and  potential  areas  of 
coordination. A dialogue will be initiated with the financial community promoting the use of 
environmental performance information in financial decisions. 

Identically  as  in  the  case  of  option  4,  PEF  and  OEF  would  be  used  in  Ecolabel,  GPP  and 
EMAS  for  informing  the  criteria-development  process90  and  the  creation  of  Sectoral 
Reference Documents91 for determining relevant environmental impacts and life cycle-based 
key performance indicators. 

This  option  will  include  work  at  the  international  level  to  promote  the  approximation  of 
methodologies  and  discussions  with  private 
the 
methodologies. 
The  Recommendation  tool,  the  coordination  mechanism  with  Member  States,  3rd  country 
governments, and private initiatives, as well as the resulting incentives are all measures that 
would encourage the take-up of the methodologies. 

the  acceptance  of 

initiatives  on 

The table below presents the relationship between objectives and policy options: 

Table 3 – Intervention logic: relationship between problems, objectives and policy options 

Problem – 
underlying issue 

Proliferation of 
methodologies to 
assess and 
communicate the 
environmental 
performance of 
products and 

Specific objective 

Operational objective 

Promote the use of a 
common methodology 
to assess and 
communicate the 
environmental 
performance of 
products and 

1.1.  Launch  two  methodologies 
that  are  relatively  simple  to 
use, but also robust, one for 
the  measurement  of 
the 
environmental  performance 
of products and one  for the 
the 
measurement 

of 

Relevant 
policy 
option 

Options 2, 3, 
4 and 5 

89  

90  
91  

E.g.  fiscal  incentives  for  consumers  to  purchase  environmentally  friendly  products  that  exist  in  many  Member  States  or 
reputational incentives such as the Japanese Top Runner system for electronic products. 
http://ec.europa.eu/environment/ecolabel/products-groups-and-criteria.html  

http://susproc.jrc.ec.europa.eu/activities/emas/index.html  

30 

 
 
 
                                                 
environmental  performance 
of organisations  

1.2.  Encourage  the  take-up  of 
in 
the  methodologies 
Member  States  and  by 
private actors 

organisations 

organisations 

1.3.  Develop  product  and  sector 
environmental 
rules 
open, 
multi-

specific 
footprint 
through 
transparent, 
stakeholder process 

category 
an 

Options 2, 3, 
4 and 5 

Options 2, 3, 
4 and 5 

6. 

ANALYSIS OF IMPACTS AND COMPARISON OF OPTIONS 

6.1. 

General remarks and methodology 

This  chapter  assesses  and compares  the economic, social, and environmental impacts of the 
policy options described in the previous chapter in relation to the baseline scenario.  

The  two  comparison  tables  are  organised  according  to  options  that  are  mutually  exclusive. 
One table compares options related to products, the other to organisations.  

A comprehensive analysis of the impacts is provided to help understand the tables. Impacts 
are  scored  as  +++:  very  positive;  ++:  positive;  +:  slightly  positive;  0:  neutral;  -:  slightly 
negative; --: negative; and ---: very negative. 

Distributional  impacts  were  taken  into  consideration  by  analysing  the  capacity  of  different 
Member States and regions, and of different market actors (SMEs included) to take up similar 
initiatives.  It  is  expected  that  countries  and  regions  entirely  covered  by  the  Convergence 
objective  under  Regional  Policy  (Bulgaria,  Estonia,  Latvia,  Lithuania,  Malta,  Poland, 
Romania and Slovenia) have less capacity for take-up or implementation of such initiatives. 
The situation would be similar for regions covered by the same objective92. To complete the 
picture, Member States where indicators on the number of ISO 14001 certifications, EMAS 
registered  organisations,  EU  Ecolabel  licenses,  the  number  of  environmental  infringement 
cases per million inhabitants, and the strength of transposition of EU law are weaker, would 
have more difficulty in complying with or taking up the initiatives. According to this analysis, 
the  following  countries  are  in  the  top  ten  on  more  than  one  indicator:  Austria,  Denmark, 
France, Germany, Greece, Hungary, Italy, the Netherlands, Spain, Sweden and the UK93. It is 
expected that the capacity of these Member States would be stronger to implement the new 
initiative.  Effective  distributional  impacts  would  be  monitored,  and  mitigation  measures 
devised in the future94, if necessary. 

Costs  were  calculated  using  cost  data  stemming  from  the  testing  of  the  PEF  and  OEF 
methodologies,  available  data  on  similar  initiatives  and  methods,  and  by  applying  the 
Standard Cost Model95. It is important to note that scores related to operational cost consider 

92  
93  

94  
95  

http://ec.europa.eu/regional_policy/how/coverage/index_en.cfm  

ISO 

Survey, 

The 
http://ec.europa.eu/environment/legal/law/statistics.htm  
See Annex 1 for the detailed results. 
See Annexes 10 and 11. 

EMAS 

2004; 

ISO, 

statistics, 

30/06/2012; 

Eurostat 

Ecolabel 

data, 

2010; 

31 

 
 
                                                 
both implementation costs and cost reductions ensuing from simplifications or from increased 
resource efficiency. 

For assessing impacts on SMEs, the analysis took into consideration the recent Eurobarometer 
on  SMEs  and  resource  efficiency  and  studies.  An  SME  test  was  completed  based  on  the 
findings96.  In  assessing  the  benefits  arising  from  using  Life  Cycle  Assessment,  we  have 
collected  anecdotal  evidence  from  company  sustainability  reports.  To  assess  the  potential 
uptake of PEF and OEF, available data from similar schemes was collected and analysed.  

6.2. 

Analysis of impacts 

Below we provide a synthesis of the analysis of economic, social and environmental impacts. 
The  detailed  analysis  of  all  factors  considered  (functioning  of  the  internal  market  and 
competition,  competitiveness,  trade  and  investment  flows,  operating  costs  &  conduct  of 
business,  impact  on  SMEs,  administrative  burden  on  businesses,  burden  for  public 
administrations & simplification potential, innovation & research, consumers & households, 
employment and labour markets, social inclusion and protection of particular groups, public 
health and overall environmental impact) are described in detail in Annex 1.  

6.2.1.  New mandatory product policy framework (Option 2) 

Economic Impacts (neutral, 0) 

The mandatory approach would enhance the functioning of the Single Market by providing a 
single reference framework and a fully level playing field for cross-border trade. The impact 
on costs for the public administration would be negative due to the need to increase market 
surveillance activities. This option would provide incentives for innovation through enhanced 
competition  based  on  environmental  performance  covering  a  wide  range  of  products,  and 
would thus trigger more investment in green products. 

The  integration  and  better  co-ordination  obtained  through  a  comprehensive  “framework 
instrument” can decrease the costs of companies on, for instance, technical consultancies, or 
cost of compliance and also production costs. Based on in-house research and assuming that 
an LCA database is already available for use, the cost per product could be reduced to €1,500 
for a simple assessment with a limited number of environmental indicators (3-5) and to €4000 
-€10,000 per product group for a more  in-depth LCA. It is expected that for any requirement 
that  relates  to  communicating  environmental  performance  information  to  final  consumers,  a 
maximum of 3-4 indicators would be used97. This cost would be additional for companies that 
don't  measure  the  environmental  performance  of  their  products,  while  it  would  represent  a 
reduction  of  costs  for  those  that  already  measure  it  and  face  the  issue  of  having  to  apply 
different methodologies.  

As  companies  not  currently  measuring  their  environmental  performance  of  their  products 
would  be  required  to  do  so,  there  would  be  additional  operating  costs.  Moreover,  as  the 
methodologies  would  not  have  benefited  from  being  fully  piloted  and  refined,  this  option 
would probably also lead to higher operating costs overall with the quick expansion of scope 
of application and so results in neutral economic impact overall. 

SMEs  active  in  green  markets  would  have  similar  economic  opportunities  to  their  large 
counterparts, whilst for SMEs in supply chains a single reference methodology represents a 

96  
97  

See Annex 2. 

Different options for communicating environmental information for products, BioIS/ DG Environment, 2012 

32 

 
 
                                                 
simplification  respectively  to  the  current  situation,  where  environmental  information  is 
requested  from  them  based  on  different  methodologies.  Even  if  benefits  exceed  the  cost, 
SMEs  might  perceive  initial  cost  of  implementing  a  more  in-depth  approach  (€4,000  – 
10,000)  as  high.  Costs  per  product  would  be  higher  initially  under  this  scenario,  while  the 
additional methodological developments and tools are not fully completed. Again, the lack of 
a  piloting  before  widespread  mandatory  application  risks  increases  in  costs  that  could 
otherwise be avoided. Therefore, support measures are important elements under this option.  

The  two  main  positive  impacts  on  consumers  will  be  directly  linked  to  the  increased 
availability  of  green  products  on  the  market  and  on  the  decreased  level  of  overlapping 
information  and  potential  confusion  deriving  from  the  various  product-related  claims,  label 
and  certification  schemes  currently  operating  on  the  market.  Effects  on  prices  of  green 
products cannot be determined at this stage because depend on the demand elasticity.  

Social Impacts (slightly positive, +) 

This policy option will contribute to the growth in green jobs through the increased demand 
for  the  products  of  eco-industries  both  in  EU  and  internationally.  The  bulk  of  potential  for 
new  jobs  lies  in  the  growing  market  for  products  with  green  features,  for  which  no 
employment  figures  are  available.  Marginal  job  increase  is  expected  in  the  field  of  LCA 
experts and consultancy services.  

The  wider  availability  of  information  would  provide  access  to  green  products  for  a  wider 
array of social groups, simply by enabling green choices among the baskets usually bought. 
Only  indirect  effects  are  expected  for  public  health  through  the  overall  improvement  of  the 
environmental performance of products. Social impacts are maximised under this option due 
to its mandatory nature, however, on the whole, they are often indirect, and therefore not very 
strong.  

Environmental Impacts (very positive, +++) 

This option will have a positive impact particularly related to the stimuli that will be provided 
to  producers  and  consumers  towards  more  the  supply  and  demand  of  green  products.  The 
choice  of  gathering  all  the  requirements  concerning  the  design  and  the  environmental 
performance of products in a unique “framework instrument” should provide producers with 
effective  incentives  to  further  develop  green  products.  These  effects  can  result  in  a  general 
increase  of  the  green  products’  market  shares,  with  a  consequent  improvement  of  the 
environmental performance.  

Moreover,  by  developing  a  unique  “framework  instrument”  on  sustainable  products,  the 
Commission could ensure that the issues connected with resource efficiency, and in particular 
with  material 
recoverability, 
upgradeability)  are  considered  more  carefully,  in  a  synergetic  and  mutually  consistent  way 
when  setting  the  requirements  of  SCP  instruments,  boosting  resource  efficiency  in  a  more 
effective way. 

recyclability, 

reusability, 

efficiency 

resource 

(e.g. 

Stakeholders' opinion 

The  setting  up  of  a  new  legal  framework  instrument  for  sustainable  products  is  not  widely 
supported by stakeholders. Two options were considered in the consultation: 

1.  A  new  legal  framework  instrument  in  substitution  to  the  existing  product-related 
policy  measures  (i.e.  Ecodesign,  Energy  Label,  EU  Ecolabel,  Organic  Label,  GPP). 

33 

 
 
 
This  option  was  considered  not  effective  by  the  38%  of  respondents  (and  slightly 
effective by the 10%).  

2.  A  new  legal  framework  instrument  complementing  and  integrating  the  existing  EU 
SCP  regulatory  instruments.  This  option  was  considered  even  less  positive  than  the 
previous one (46% of respondents states that this option is not effective at all). 

The two options are quite positively considered by citizens (66% and 52%, respectively), but 
not  by  organisations  (business  and  NGOs)  (i.e.  only  23%  of  organisations  believes  that 
introducing  a  new  “package”  substituting  and  integrating  the  existing  EU  SCP  regulatory 
instruments  would  be  effective).  SMEs  emphasise  that  imposing  mandatory  requirements 
would create significant cost and burden for SMEs.  

6.2.2.  Mandatory OEF reporting framework (Option 3) 

Economic Impacts (neutral, 0) 

The  mandatory  application  of  a  single  methodology  for  measuring,  reporting  and 
benchmarking  environmental  performance  for  relevant  impact  categories  would  obtain  the 
maximum  of  level  playing  field  and  fair  competition  on  the  single  market,  including  for 
trading partners; provide simplification potential in the area of environmental reporting both 
for users and for public administrations (by rendering national schemes superfluous); and the 
maximum effect on inducing more innovation related to processes and supply chains, creating 
a critical mass of companies competing based on environmental performance and taking steps 
to improve it.  

By  measuring  environmental  performance  throughout  the  supply  chain,  organisations  can 
exploit efficiency opportunities and reduce cost risks98 in a targeted way (considering where 
in  the  life  cycle  and  what  kind  of  impacts  are  the  most  important),  increasing  their 
competitiveness.  The  allocation  of  capital  is  improved  through  the  availability  of  data  to 
integrate environmental risks into investment decisions.  

During the pilot tests, with the use of only the OEF umbrella methodology, this average cost 
was  estimated  at  €30,190.  It  is  expected  that  due  to  organisational  learning  and  by  using 
OEFSRs,  with  the  improvement  of  access  to  and  availability  of  data  and  with  the 
development  of  tools  provided  by  public  administrations,  industrial  associations  and  the 
market, this cost would be at least halved starting from 201499. It is however not possible to 
estimate  the  exact  cost  due  to  lack  of  data  and  the  novel  nature  of  the  OEF  approach.  This 
cost  would  be  additional  for  companies  that  don't  measure  their  performance,  and  would 
represent a reduction of costs for those that do and face the issue of having to apply different 
methodologies.  

As companies not currently measuring their environmental performance would be required to 
do so, there would be additional operating costs. Moreover, as the methodologies would not 
have benefited from being fully piloted and refined, this option would probably also lead to 
higher operating costs overall with the quick expansion of scope of application and so results 
in neutral economic impact overall. 

98  

99  

Recent analysis suggests that a 10% increase in the price of commodities such as oil, coal, wheat and cotton corresponds 
to a 13% impact on earnings before interest, tax, depreciation and amortisation. Most of these risks stem from the supply 
chain (More with Less: Scaling Sustainable Consumption and Resource Efficiency, World Economic Forum, 2012) 
For  example,  it  is  estimated  that  data  collection  and  validation  typically  absorbs  70-80%  of  the  cost  of  the  study.  By 
improving  on  this  aspect  only,  very  significant  cost  reductions  would  be  obtained  (Frans  Berkhout,  Rupert  Howe:  The 
adoption  of  life-cycle  approaches  by  industry:  patterns  and  impacts, Resources,  Conservation  and  Recycling  20  (1997) 
71-94 

34 

 
 
                                                 
For public administrations, additional costs would arise regarding enforcement of the scheme 
(e.g. compliance checks, verification structures).  

SMEs  active  in  green  markets  would  have  similar  economic  opportunities  to  their  large 
counterparts, whilst for SMEs in supply chains a single reference methodology represents a 
simplification  respectively  to  the  current  situation,  where  environmental  information  is 
requested from them based on different methodologies. However, even if benefits exceed the 
cost, SMEs might perceive the initial cost of implementing  an OEF  exercise (estimated c.a. 
efore,  support  measures  are  important 
€3,200  -  €109,000,  see  also  Annex  11)  as  high.  Ther
elements under this option.  

This option does not directly impact consumers. 

Social Impacts (slightly positive +) 

This option will contribute to an increased request for the products of eco-industries both in 
EU  and  internationally,  thus  contributing  to  the  growth  in  green  jobs  as  well.  The  bulk  of 
potential for new jobs lies in the growing market for products with green features, for which 
no employment figures are available. Marginal job increase is expected in the field of LCA 
experts and consultancy services.  

Only  indirect  effects  are  expected  for  public  health  through  the  overall  improvement  of  the 
environmental performance of organisations. The policy option is neutral for social inclusion 
and the protection of particular groups. Social impacts are maximised under this option due to 
its mandatory nature, however, on the whole, they are often indirect, and therefore not very 
strong.  

Environmental Impacts (very positive, +++) 

The  OEF  methodology  ensures  that  all  relevant  environmental  impact  categories  for  an 
organisation  are  taken  into  account,  avoiding  trade-offs  between  important  environmental 
impacts.  It  adopts  a  life  cycle  approach,  ensuring  that  the  environmental  performances 
throughout  the  value  chain  are  taken  into  consideration,  thus  discouraging  the  shifting  of 
environmental burdens along the value chain and directing efforts in a targeted way to most 
important environmental impacts and most important life cycle stages100.  

Through  a  mandatory  implementation  in  large  companies,  and  improvements  triggered 
throughout the supply chain (including in SMEs active in the EU and suppliers and consumers 
in 3rd countries), the environmental improvement potential of this option is maximised.  

Stakeholders' opinion 

The stakeholder consultation presented two options that reflect on such an instrument.  
Regarding  the  introduction  of  a  mandatory  instrument  for  larger  organisations  in  priority 
sectors most stakeholders reacted negatively (43%). However, opinions were split, as 33% of 
respondents  were  either  in  strong  agreement  or  agreement  with  this  option.  The  strongest 
agreement was expressed by public bodies (78%), followed by NGOs (64%) and the general 
public  (61%).  The  strongest  opponents  were  industry  associations  (92%)  and  private 
companies (76%). 

Regarding the introduction of a mandatory instrument for larger organisations in all sectors, 
disagreement  was  stronger  (53%).  37%  of  respondents  expressed  agreement.  The  split 
between  the  different  stakeholder  groups  is  similar  to  the  previous  question.  Strongest 

100  

See Annex 16 

35 

 
 
                                                 
agreement was expressed by the general public (74%), followed by public bodies (73%) and 
NGOs  (72%).  Industrial  associations  disagreed  the  most  (88%),  followed  by  private 
companies (76%). 

6.2.3. 

Integration  of  PEF  and  OEF  methodologies  in  relevant  policy  instruments  
(Option 4) 

Economic Impacts (neutral, 0) 

A single basis integrated into existing instruments for measuring and reporting environmental 
performance  of  products  and  organisations  would  simplify 
the  framework,  reduce 
administrative costs related to applying these instruments simultaneously both for companies 
and  public  administrations,  provide  for  a  more  uniform  application  of  these  instruments 
across the Single Market and provide a more level playing field for competition. 

By  measuring  environmental  performance  throughout  the  supply  chain,  organisations  can 
exploit efficiency opportunities and reduce cost risks101 in a targeted way (considering where 
in  the  life  cycle  and  what  kind  of  impacts  are  the  most  important)  and  represent  a  move 
towards better allocation of capital through the availability of data to integrate environmental 
risks into investment decisions. 

The  average  cost  for  the  use  of  the  OEF  methodology  is  estimated  at  €30,190  for  the  first 
application.  It  is  expected  that  through  organisational  learning  and  by  using  OEFSRs  and 
PEFCRs,  with  the  improvement  of  access  to  and  availability  of  data,  and  with  the 
development  of  tools  provided  by  public  administrations,  industrial  associations  and  the 
market, this cost would be at least halved starting from 2014 for sectors and product groups 
where these developments take place102.  

Based on in-house research and assuming that an LCA database is already available for use, 
the  cost  per  product  could  be  reduced  to  €1,500  for  a  simple  assessment  with  a  limited 
number of environmental indicators (3-5) and to €4000 -€10,000 per product group for a more 
in-depth LCA. The type of analysis to be implemented depends on the instrument into which 
PEF  is  integrated.  It  is  expected  that  for  any  requirement  that  relates  to  communicating 
environmental  performance  information  to  final  consumers,  a  maximum  of  3-4  indicators 
would be used103.  

In the case of voluntary instruments, companies have the flexibility to decide on whether to 
incur these costs; in the case of mandatory instruments, changes will affect only companies 
falling  under  the  existing  instruments.  Operating  costs  will  probably  be  higher  at  the 
beginning  as  the  methodologies  will  not  have  undergone  piloting  and  there  would  be  no 
readily  available  PEFCR/OEFSR.  In  the  medium-long-term,  when  instruments  are  fully 
aligned,  simplification  and  cost  savings  due  to  the  single  underlying  method  would  be 
maximised.  

Impacts  on  SMEs  greatly  depend  on  the  instrument  into  which  PEF  or  OEF  are  integrated, 
thus  they  need  to  be  assessed  when  carrying  out  impact  assessments  for  the  individual 

101  

102  

103  

Recent analysis suggests that a 10% increase in the price of commodities such as oil, coal, wheat and cotton corresponds 
to a 13% impact on earnings before interest, tax, depreciation and amortisation. Most of these risks stem from the supply 
chain (More with Less: Scaling Sustainable Consumption and Resource Efficiency, World Economic Forum, 2012) 
For  example,  it  is  estimated  that  data  collection  and  validation  typically  absorbs  70-80%  of  the  cost  of  the  study.  By 
improving  on  this  aspect  only,  very  significant  cost  reductions  would  be  obtained  (Frans  Berkhout,  Rupert  Howe:  The 
adoption  of  life-cycle  approaches  by  industry:  patterns  and  impacts, Resources,  Conservation  and  Recycling  20  (1997) 
71-94 
Different options for communicating environmental information for products, BioIS/ DG Environment, 2012 

36 

 
 
                                                 
instruments. Regarding the amount of costs per application, these are the same as presented in 
Option  2  and  3,  but  the  scope  of  their  incurrence  varies  according  to  the  voluntary  or 
mandatory nature of the instrument.  

Impacts  on  innovation  are  similarly  varying  in  intensity,  depending  on  whether  there  is  a 
critical  mass  of  companies  using  PEF  and  OEF  leading  to  a  sufficiently  strong  reputational 
driver and competition based on environmental  performance to trigger more innovation and 
take-up of green technologies.  

Consumers  and  households  would  benefit  from 
the  availability  of  more  reliable 
environmental  information  to  take  informed  purchasing  decisions.  There  is  some  evidence 
that shows that products with improved environmental performance are not necessarily priced 
higher  than  other  products  with  the  same  functionality  and  characteristics,  due  to  the  cost 
savings achieved and through economies of scale104. 

Social Impacts (slightly positive, +) 

Through  increased  request  for  the  products  of  eco-industries  both  in  EU  and  internationally 
that this option would reinforce, this policy option will contribute to the growth in green jobs. 
The bulk of potential for new jobs lies in the growing market for products with green features, 
for which no employment figures are available. Marginal job increase is expected in the field 
of LCA experts and consultancy services.  

Only  indirect  effects  are  expected  for  public  health  through  the  overall  improvement  of  the 
environmental  performance  of  organisations.  The  option  would  improve  access  to  green 
products for a wider array of social groups. 

The  intensity  of  social  impacts  would  depend  on  the  instruments  wherein  PEF  or  OEF  is 
integrated.  

Environmental Impacts (positive, ++) 

the  relevant 

individually  when  revising 

The added value in tackling environmental impacts based on PEF and OEF would need to be 
instruments.  The  OEF  and  PEF 
assessed 
methodologies ensure that all relevant environmental impact categories for an organisation or 
product are taken into account, avoiding trade-offs between important environmental impacts. 
They adopt a life cycle approach, ensuring that the performance throughout the value chain is 
taken  into  consideration,  thus  discouraging  the  shifting  of  environmental  burdens  along  the 
value chain and directing efforts in a targeted way to most important environmental impacts 
and most important life cycle stages105.  

These elements would enhance improvement opportunities across several instruments. In the 
case of the voluntary instrument EMAS, which already encourages taking direct and indirect 
aspects into account, OEFSRs can support the creation of Sectoral Reference Documents by 
indicating relevant environmental impacts in a sector and can help define relevant indicators. 
It also has potential of being used as a reporting instrument for the environmental statement. 
These elements would enhance improvement opportunities across several instruments.  

104  
105  

University of Cambridge and Cranfield University (2009) Towards a sustainable industrial system 

It  can  potentially  cover  14  impact  categories  (climate  change;  ozone  depletion;  human  toxicity  -  cancer  effects;  human 
toxicity - non-cancer effects; particulate matter/respiratory inorganics; ionising radiation; photochemical ozone formation; 
acidification;  eutrophication  –  terrestrial;  eutrophication  –  aquatic;  ecotoxicity  -    freshwater  aquatic;  land  use;  resource 
depletion - water; resource depletion – mineral and fossil fuel). Thus, it has the potential to direct improvements in the 
impact categories relevant for the given organisation, sector or product group. See Annex 16  

37 

 
 
                                                 
The  situation  is  similar  for  product  instruments  such  as  Ecolabel,  GPP  and  Ecodesign:  PEF 
and  PEFCRs  can  be  included  in  the  criteria  development  process,  thus  enhancing  the 
environmental  potential  of  the  initiatives.  Depending  on  the  nature  of  the  instrument, 
implementation might be diverse, with diverse environmental improvement potential, thus the 
potential is difficult to gauge exactly. 

Stakeholders' opinion 

When  asked  about  the  option  of  "integrating  the  PEF  methodology  into  the  EU  SCP 
regulatory  instruments  and  policy  measures",  stakeholders  expressed  split  opinions  (32% 
expressed agreement, 33% was undecided, 35% disagreed). Most disagreement was expressed 
by industrial associations (55%) and private companies (44%), with also an important share of 
undecided responses (32% and 27% respectively). Public bodies gave support to this option 
(63%), whilst NGOs were mostly undecided (79%). 

Stakeholders  were  split  on  the  option  of  "expansion  and/or  strengthening  of  existing  policy 
instruments" under the OEF section of the questionnaire (question 4.9). 31.4% of respondents 
strongly  agreed  or  agreed;  24.7%  were  undecided;  44%  disagreed  or  strongly  disagreed 
(19.3%).  Most  disagreement  was  expressed  by  industry  associations  including  SME 
associations (79%) and private companies (53%), whilst public bodies (75%) and the general 
public (71%) expressed more agreement. NGOs were mostly undecided (54%). 

6.2.4.  Recommending the application of PEF and OEF on a voluntary basis (Option 5) 

Economic Impacts (slightly positive, +) 

tool  reinforces 

the  effect  on  reducing 

The  Recommendation 
the  proliferation  of 
methodologies and levelling the playing field on the Single Market by promoting the use of 
the  common  methodologies  in  Member  States  and  organisations.  However,  due  to  the 
voluntary  nature  of  this  "soft  law"  instrument,  certain  positive  effects  are  expected  to  be 
limited compared to the mandatory options and depend greatly on Member State and private 
sector take-up. This holds true also for positive impacts on innovation: it depends on whether 
there  is  a  critical  mass  of  companies  using  PEF  and  OEF  leading  to  a  sufficiently  strong 
reputational  driver  and  competition  based  on  environmental  performance  to  trigger  more 
innovation and take-up of green technologies. 

By  measuring  environmental  performance  throughout  the  supply  chain,  organisations  can 
exploit efficiency opportunities and reduce cost risks106 in a targeted way (considering where 
in  the  life  cycle  and  what  kind  of  impacts  are  the  most  important),  increasing  their 
competitiveness.  There  is  a  potential  to  improve  the  allocation  of  capital  through  the 
availability of data to integrate environmental risks into investment decisions. The impact on 
trade would be positive due to a wider use of a single methodology on the Single Market and 
through the efforts of international cooperation. 

The  amount  of  costs  for  companies  is  the  same  as  with  Option  3.  However,  due  to  the 
voluntary nature of the initiative, companies would only assume costs and burdens if they see 
a  good  reason  to  do  so.  Companies  that  may  find  it  difficult  to  apply  such  methodologies 
would  be  able  to  benefit  from  the  widespread  piloting  and  build-up  of  experience  in  their 
application. Overall, the impact is considered slightly positive. 

106  

Recent analysis suggests that a 10% increase in the price of commodities such as oil, coal, wheat and cotton corresponds 
to a 13% impact on earnings before interest, tax, depreciation and amortisation. Most of these risks stem from the supply 
chain (More with Less: Scaling Sustainable Consumption and Resource Efficiency, World Economic Forum, 2012) 
38 

 
 
                                                 
Impacts  on  SMEs  depend  on  the  take-up  of  the  methodologies  in  Member  States  and  by 
private  initiatives.  Due  to  the  voluntary  nature  of  the  option,  SMEs  can  benefit  from  the 
flexibility  of  adhering  or  not  to  the  initiative.  This  is  particularly  important  for  those  SMEs 
that are selling on national markets only and are therefore less in need of demonstrating their 
environmental performance (87%107). In this case, Member States take-up and the nature of 
the Member State measure will define impacts on SMEs. 

Public  Administrations  would  have  the  flexibility  of  inserting  the  use  of  the  methodologies 
into  their  policy  mix  according  to  their  priorities  and  readiness.  This  flexibility  might  be 
particularly  important  for  Member  States  that  have  developed  less  capacity  in  the 
environmental area.  

the  availability  of  more  reliable 
Consumers  and  households  would  benefit  from 
environmental  information  to  take  informed  purchasing  decisions.  There  is  some  evidence 
that shows that products with improved environmental performance are not necessarily priced 
higher  than  other  products  with  the  same  functionality  and  characteristics,  due  to  the  cost 
savings achieved and through economies of scale.108 The OEF component wouldn't have any 
direct impact on consumers. 

Moreover,  consumers  will  be  directly  involved  during  the  pilots.  Several  communication 
vehicles (labels, QR codes, website information, etc.) will be tested with consumers through 
the collaboration of producers and retailers, analysing the amount and type of environmental 
information consumers will consider necessary during their buying and the impact played by 
information available on their consumption habits. 

Social Impacts (slightly positive +) 

This policy option will contribute to the growth in green jobs through the increased demand 
for  the  products  of  eco-industries  both  in  EU  and  internationally.  The  bulk  of  potential  for 
new  jobs  lies  in  the  growing  market  for  products  with  green  features,  for  which  no 
employment  figures  are  available.  Marginal  job  increase  is  expected  in  the  field  of  LCA 
experts and consultancy services.  

Only  indirect  effects  are  expected  for  public  health  through  the  overall  improvement  of  the 
environmental  performance  of  organisations.  The  option  would  improve  access  to  green 
products for a wider array of social groups. 

The  intensity  of  social  impacts  would  depend  on  the  take-up  of  PEF  and  OEF  in  Member 
States and companies, and it is likely that at least in the first years of implementation, it would 
be positive, but marginal. 

Environmental Impacts (positive, ++) 

According  to  the  UK  impact  assessment  on  company  reporting,  a  newly  reporting 
organisation which has started to monitor its energy related CO2 emissions will experience a 
2% reduction in energy related CO2 emissions109. For PEF, it is estimated that up to 5% - 30% 
reductions  in  environmental  impacts  could  be  generally  achieved  for  products.  The  actual 
reductions would depend on individual products and would vary depending on environmental 
impact  category.  Tools  such  as  PEF  will  contribute  to  achieving  these  reduction  potentials, 
but it is doubtful that PEF is able to achieve the full potential on its own.  

107  
108  
109  

Flash Eurobarometer 342 SMEs, resource efficiency and the green markets, 2012 
University of Cambridge and Cranfield University (2009) Towards a sustainable industrial system 

Final  impact  assessment,  DEFRA,  2012;  The  costs  and  benefits  of  mandatory  greenhouse  gas  reporting.  Adelphi’s 
independent analysis of the Defra Impact Assessment. 

39 

 
 
                                                 
The OEF and PEF methodologies ensure that all relevant environmental impact categories for 
an  organisation  or  product  are  taken  into  account,  avoiding  trade-offs  between  important 
environmental  impacts.  They  adopt  a  life  cycle  approach,  ensuring  that  the  performance 
throughout  the  value  chain  is  taken  into  consideration,  thus  discouraging  the  shifting  of 
environmental burdens along the value chain and directing efforts in a targeted way to most 
important  environmental  impacts  and  most  important  life  cycle  stages110.  Although  it  is  not 
possible  to  quantify  the  benefits,  it  can  be  safely  assumed  that  greater  improvements  on  a 
wider  range  of  environmental  indicators  and  throughout  the  value  chain  would  occur.  The 
intensity of these improvements is limited by the voluntary nature of the instrument. 

Stakeholders' opinion 

In the OEF section of the questionnaire, stakeholders provided the second highest agreement 
to the option for a "recommendation to Member States to use the common methodology for 
initiative related to the measurement, reporting, benchmarking or incentivising environmental 
performance"  (41%  strongly  agree  or  agree).  However,  responses  were  split:  34%  of 
respondents either strongly disagreed or disagreed. The stakeholder groups most favourable to 
this  option  include  the  general  public  (65%)  and  private  companies  (54%).  Industrial 
associations were either undecided (39%) or disagreeing (37%). There was no clear indication 
from public bodies, with respondents split between the different categories.  

In  the  PEF  section  of  the  questionnaire  the  question  closest  to  this  option  is  "voluntary 
scheme  on  communication  and  benchmarking  of  product  environmental  performance  based 
on the PEF methodology". In general, all stakeholders were favourable to this option, except 
NGOs which were split (50% disagreement). Support from public bodies was highest (50%), 
followed  by  industrial  and  trade  associations  (46%),  private  companies  (41%)  and  citizens 
(41%). 

6.3. 

Comparison of policy options related to environmental performance of products 

For  the  purposes  of  comparison  and  in  order  to  create  groups  of  options  that  are  mutually 
exclusive, the policy options presented above are clustered according to whether they relate to 
the environmental performance of products or of organisations: 

Table 2 - Grouping of policy options 
Grouping 

Policy options related to the 
environmental performance of 
products 

Policy options related to the 
environmental performance of 
organisations 

Mutually exclusive policy options 

Option 2 – New mandatory product policy framework 

Option  4  –  Integration  of  PEF  and  OEF  into  relevant 
policy instruments 

Option  5  –  Recommending  the  application  of  PEF  and 
OEF on a voluntary basis 

Option 3 – A mandatory OEF reporting framework 

Option  4  –  Integration  of  PEF  and  OEF  into  relevant 
policy instruments 

Option  5  –  Recommending  the  application  of  PEF  and 
OEF on a voluntary basis 

110  

See Annex 16 

40 

 
 
 
                                                 
Table 4 – Comparison of impacts of options related to the environmental performance of products 

Policy option

f
r
a
m
e
w
o
r
k

p
r
o
d
u
c
t
p
o
l
i
c
y

2
.

A
n
e
w
m
a
n
d
a
t
o
r
y

p
o
l
i
c
y

i
n
s
t
r
u
m
e
n
t
s

a
n
d
O
E
F

i
n
r
e
l
e
v
a
n
t

4
.

I
n
t
e
g
r
a
t
i
o
n
o
f
P
E
F

a
n
d
O
E
F
o
n
a

v
o
l
u
n
t
a
r
y
b
a
s
i
s

a
p
p
l
i
c
a
t
i
o
n
o
f
P
E
F

5
.

R
e
c
o
m
m
e
n
d
i
n
g

t
h
e

Impact category 

for 

public 

administrations 

Functioning of the internal market and competition 
Competitiveness, trade and investment flows 
Operating costs and conduct of business 
Impact on SMEs 
Administrative burdens on businesses 
Burden 
simplification potential 
Innovation and research 
Consumers and households 
Overall economic impact 
Employment and labour markets 
Social inclusion and protection of particular groups 
Public health 
Overall social impact 
Overall environmental impact 

and 

+++ 
++ 
- 
- 
+ 

- 

++ 
+ 
0 
++ 
+ 
+ 
+ 
+++ 

++ 
++ 
0 
0 
0 

+ 

++ 
+ 
0 
++ 
0 
+ 
+ 
++ 

++ 
+ 
+ 
+ 
0 

+ 

++ 
+ 
+ 
++ 
0 
+ 
+ 
++ 

41 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.4. 

Comparison  of  policy  options  related  to  environmental  performance  of 
organisations 

Table 5 – Comparison of impacts of options related to the environmental performance of products 

Policy option

Impact category 

Functioning of the internal market and competition 
Competitiveness, trade and investment flows 
Operating costs and conduct of business 
Impact on SMEs 
Administrative burdens on businesses 
Burden for public administrations and simplification 
potential 
Innovation and research 
Consumers and households 
Overall economic impact 
Employment and labour markets 
Social inclusion and protection of particular groups 
Public health 
Overall social impact 
Overall environmental impact 

3
.

M
a
n
d
a
t
o
r
y
O
E
F

r
e
p
o
r
t
i
n
g
f
r
a
m
e
w
o
r
k
+++ 
++ 
- 
- 
- 

- 

++ 
0 
0 
++ 
0 
+ 
+ 
+++ 

p
o
l
i
c
y

i
n
s
t
r
u
m
e
n
t
s

a
n
d
O
E
F

i
n
r
e
l
e
v
a
n
t

4
.

I
n
t
e
g
r
a
t
i
o
n
o
f
P
E
F

v
o
l
u
n
t
a
r
y
b
a
s
i
s

t
h
e

a
p
p
l
i
c
a
t
i
o
n
o
f

5
.

R
e
c
o
m
m
e
n
d
i
n
g

P
E
F
a
n
d
O
E
F
o
n
a

++ 
++ 
0 
0 
0 

+ 

++ 
+ 
0 
++ 
0 
+ 
+ 
++ 

++ 
+ 
+ 
+ 
0 

+ 

++ 
+ 
+ 
++ 
0 
+ 
+ 
++ 

6.5. 

Comparison of options according to efficiency, effectiveness and coherence 

The scoring system used for the comparing tables 4 and 5 helps in the assessing the relative 
strength of alternative options in each impact category considered, but it does not provide the 
relative weight of each impact category. Therefore, the analysis is complemented by Table 6, 
which compares the options in terms of their effectiveness, efficiency and coherence111. This 
shows that although mandatory options (2 & 3) contribute to reaching the objectives and are 
also  associated  to  the  biggest  potential  for  environmental  improvement,  they  are  also 
associated  with  higher  initial  costs  for  business  and  public  authorities,  making  them  less 
attractive in current times of economic crisis. Previous experiences in law-making in the EU 
has shown that the adaptation and transaction costs for business and public administration are 
less  important  when  the  introduction  of  a  legislative  instrument  has  been  preceded  by  its 
voluntary application. On the basis of the analysis carried out in this report, this appears to be 
the  case  also  for  option  2  and  3,  which  could  become  more  cost-effective  after  a  piloting 
application of PEF and OEF as proposed under option 5. 

Option 1 would only marginally contribute to reaching the objectives and would fall short on 
environmental and resource efficiency improvements as well. The performance of Option 4 is 
variable,  depending  on  the  instrument  where  PEF  and  OEF  are  integrated.  Although  the 

111   Effectiveness  is  defined  as  the  extent  to  which  options  achieve  the  objectives;  Efficiency  is  defined  as  the  extent  to  which 
objectives can be achieved in a cost-effective manner; coherence is defined as the extent to which options are coherent with 
the objectives of EU policy and are likely to limit trade-offs across environmental, social, and economic domains. 

42 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
potential  for  environmental  improvements  and  reaching  the  objectives  is  strong  on  the  long 
term,  initially,  it  would  generate  higher  costs,  and  in  some  cases,  even  duplication  of  costs. 
Option 5 represents the best balance between reaching objectives, the level of costs, and the 
expected environmental benefits, although the benefits are limited by the voluntary approach 
and depend on take-up. 

Table 6 – Evaluation of the options in terms of effectiveness, efficiency and coherence 

Option 

Effectiveness 
(scale: neutral, moderate, 
medium, strong) 

Efficiency 
(scale: neutral, low, 
medium, high) 

Coherence 
(scale: neutral, moderate, 
high, very high) 

1 – Baseline scenario 

Neutral/ moderate 
contribution to the 
achievement of objectives 

No additional resources 
needed (neutral) 

2 – New mandatory 
product policy framework 

Strong contribution to the 
achievement of objectives 

3 – A mandatory OEF 
reporting framework 

Strong contribution to the 
achievement of objectives 

4 – Integration of PEF 
and OEF into relevant 
policy instruments 

Medium to strong 
contribution towards the 
achievement of 
objectives, depending on 
the instrument in which 
methodologies are 
integrated 

Overall medium to high 
costs for public 
authorities and 
companies. 

Potential cost savings due 
to a single framework for 
companies and public 
administrations currently 
using a methodology; 
higher costs for those 
currently not using a 
methodology 

Overall medium to high 
costs for companies and 
public authorities. 

Potential cost savings due 
to the use of a single 
methodology for 
companies and public 
administrations currently 
using a methodology; 
higher costs for those 
currently not using a 
methodology 

Low costs for  public 
administrations 
depending on the 
instrument used; some 
duplication of costs for 
companies while different 
frameworks co-exist; 
important costs savings 
on the longer term due to 
the use of a single 
methodology 

Some relevant EU 
objectives regarding 
resource efficiency not 
met; moderate 
environmental and social 
benefits. 

Relevant EU objectives 
regarding resource 
efficiency met; very high 
environmental benefits; 
moderate social benefits. 

Relevant EU objectives 
regarding resource 
efficiency met; very high 
environmental benefits, 
moderate social benefits. 

Potential to meet relevant 
EU objectives regarding 
resource efficiency on the 
longer term; moderate to 
high environmental 
benefits depending on the 
instrument used; 
moderate social benefits 

5 – Recommending the 
application of PEF and 
OEF on a voluntary basis 

Medium to strong 
contribution to the 
achievement of objectives 
depending on take-up; 

Overall moderate costs 
for companies and public 
authorities. Due to the 
voluntary nature of the 

Potential to meet relevant 
EU objectives regarding 
resource efficiency 
depending on take-up; 

43 

 
 
some loss of effectiveness 
due to the voluntary 
nature of the instrument 

instrument, actors will 
choose to join if they see 
benefits to doing so. 

high environmental 
benefits, moderate social 
benefits. 

6.6. 

The preferred option 

The  preferred  option  is  5  "Recommending  the  application  of  PEF  and  OEF  on  a 
voluntary basis" for the following reasons: 

• 

• 

It scores positively on all relevant aspects compared to the baseline scenario and overall it 
scores better than the alternative options in Tables 3 and 4.  

It  represents  the  best  balance  between  reaching  objectives,  the  level  of  costs,  and  the 
expected  environmental  benefits,  although  the  benefits  are  limited  by  the  voluntary 
approach. 

•  A  voluntary  application  allows  for  gradual  further  development112  of  the  PEF  and  OEF 
methodology  in  a  piloting  process  involving  a  wide  range  of  stakeholders  to  reach  full 
potential  in  the  following  years  (e.g.  through  a  mandatory  application  or  through  wide 
take-up); 

•  Consumers  would  also  be  involved  in  order  to  understand  what  information  suits  their 
needs best and whether environmental performance information provided based on PEF 
provides  the  reliability  and  comparability  to  take  informed  purchasing  decisions.  This 
policy  option  makes  it  possible  to  gather  and  analyse  this  information  and  reduce 
consumer  confusion  and  increase  consumer  trust  in  environmental  information  in  the 
medium – long-term. 

•  Due  to  its  voluntary  nature,  this  option  gives  flexibility  to  organisations  and  Member 

States to decide on the use of the methodology.  

• 

It  enables  exploiting  important  efficiency  opportunities  both  from  an  economic 
(identification of cost saving opportunities throughout the value chain; cost reductions for 
companies  trading  cross-border  in  the  EU)  and  environmental  (exploitation  of 
performance improvement opportunities throughout the value chain, concentrating on the 
most  important  environmental  impacts  and  life  cycle  stages,  reputational  pressure  to 
improve environmental performance) point of view. 

•  The  effects  of  this  option  depend  on  the  take-up  of  the  recommendation  by  Member 
States and other market actors. Taking a very conservative estimation based on data from 
similar schemes, it is assumed that an annual take up rate of between 5% and 10% can be 
reached both for PEF and OEF. In the beginning (and up to 2015), the take-up would be 
lower  (under  1%)  due  to  the  time  needed  for  building  awareness  of  the  methodologies 
and its voluntary nature. The uptake rate is expected to grow further with the availability 
of PEFCRs and OEFSRs, as high as 10%. These are conservative estimates that don't take 
into  account  the  potential  uptake  of  PEF  and  OEF  by  existing  private  initiatives113,  the 
effect of incentives, and of tools simplifying the application of the methodologies.  

112   See detailed information about developments needed in Annex 9. 
113   For  instance,  the  response  rate  to  the  Carbon  Disclosure  Projects’  questionnaire,  sent  out  to  the  500  largest  enterprises  on 
behalf  of  551  investors  with  $71  trillion  of  assets  was  81%  in  2011.  The  success  of  the  scheme  is  largely  due  to  investor 
pressure to respond. See CDP Global 500 Report 2011: Accelerating Low Carbon Growth 

44 

 
 
 
                                                 
•  Despite  some  significant  benefits  across  the  three  pillars,  Options  2  and  3  would  entail 
higher costs at the current level of development of the methodologies. Furthermore, there 
is  a  risk  that  stakeholder  ownership  would  be  lower,  affecting  the  acceptance  and 
effectiveness of the instrument.  

• 

In  general,  all  stakeholders  were  favourable  to  the  introduction  of  a  voluntary  scheme 
based on a PEF methodology, except NGOs (50% in disagreement). Support from public 
bodies  was  highest  (50%),  followed  by  industrial  and  trade  associations  (46%),  private 
companies and citizens (both at 41%). Stakeholder opinion was divided on integrating the 
PEF  methodology  into  the  EU  SCP  regulatory  instruments  and  policy  measures  and 
mostly unfavourable to a new mandatory measure (60% disagreement). 

•  Stakeholders provided the second highest agreement to the option for a "recommendation 
to  Member  States  to  use  the  common  methodology  for  initiative  related  to  the 
measurement,  reporting,  benchmarking  or  incentivising  environmental  performance" 
(41%  strongly  agree  or  agree).  The  stakeholder  groups  most  favourable  to  this  option 
include  the  general  public  (65%)  and  private  companies  (54%).  Industrial  associations 
were  either  undecided  (39%)  or  disagreeing  (37%).  The  most  favoured  option  was  the 
promotion  of  the  common  methodology  on  a  voluntary  basis  (44%  in  agreement).  The 
majority  was  in  disagreement  with  policy  options  related  to  mandatory  tools  in  priority 
(43%)  or  all  sectors  (52.8%)  and  to  the  integration  of  OEF  into  existing  mandatory 
instruments (44%) 

7. 

MONITORING AND EVALUATION 

This  chapter  presents  possible  progress 
indicators  and  monitoring  and  evaluation 
arrangements to check the correct implementation of the preferred option. The presentation of 
the  indicators  is  organised  in  a  table  showing  also  the  operational  objectives  that  the 
indicators measure. The monitoring of all indicators will start after the adoption of the policy, 
planned  for  the  1st  quarter  of  2013  and  will  be  monitored  annually.  Deviations  from  this 
pattern are marked in the table. 

Table 7 – Indicators for monitoring and their relationship to objectives 

Indicator 

Relevant objective

methodological milestones 

Normalisation114 (one-off indicator, marking year of fulfilment) 
Improved availability of good quality data (results of capacity 
building and coordination processes internationally, qualitative 
assessment of EU data availability – public/private) 

1.1, 1.3 

1.1, 1.2, 1.3 

Pilots and product-group specific and sector-specific rules 

Number of stakeholders participating in the PEFCR and OEFSR 
process and the testing by type of stakeholder 
Number of PEFCRs developed/ year 
Number of OEFSRs developed/year 
Analysis  of  consumer  reactions  to  environmental  performance 
information  based  on  PEF  (one-off  analysis  at  termination  of 
testing) 

1.3 

1.2, 1.3 
1.2, 1.3 
1.3 

114   See Annex 9 for explanation.  

45 

 
 
                                                 
Costs  and  benefits  of  PEF  and  OEF  (one-off  analysis  at 
termination of testing) 

1.2, 1.3 

Take-up of methodologies in the Member States and private initiatives 

turnover  of  products  communicating  PEF 

Number of initiatives taking up OEF and PEF per Member State 
Number of private initiatives taking up OEF and PEF 
Nature of initiatives (e.g. reporting, labelling, basis for providing 
incentives) using PEF/OEF 
Screening  against  the  Recommendation  requirements  (fulfilled, 
not fulfilled, partially fulfilled) 
Number  of  organisations/  products  reporting/  communicating 
based on PEF/OEF 
Market  share/ 
information 
Number  of  organisations/products 
reporting/communicating 
improvements in environmental performance based on PEF/OEF 
Number  of  Member  States  participating  in  the  coordination  set 
up by the Commission 
Incentives based on OEF (type, number, for financial incentives: 
amounts 
if  applicable,  environmentally  harmful 
subsidies avoided) 
Use of OEF to avoid Environmentally Harmful Subsidies in EU 
funding/ financing (description of use) 
Number  of  investors  and  amount  of  assets  represented  in  the 
dialogue with the financial community 
Operators  in  the  financial  community  using  OEF  data  for 
decision-making  (e.g.  integration  into  questionnaires  –  number 
of  questionnaires  requiring  OEF-based  data;  assets  covered  by 
OEF-based data) 
Use  of  OEF  data  in  sustainability  indices  (stock  indices 
including  only  sustainable  companies  based  on  investors' 
questionnaires and data provided by companies) 

involved; 

1.2 
1.2 
1.2 

1.1, 1.2 

1.2 

1.2 

1.2, 1.3 

1.2 

1.1, 1.2 

1.1, 1.2 

1.2 

1.2 

1.2 

An  overall  review  of  the  policies  introduced  by  the  policy  initiative  subject  to  the  present 
Impact Assessment is foreseen by 2015, in correspondence with the review of some key SCP 
policy  instruments.  This  initiative  is  also  closely  linked  to  the  7th  Environmental  Action 
Programme  (7th  EAP)115:  it  constitutes  the  first  of  a  two-step  approach,  in  which  policy 
instruments are first implemented in the short term (until 2015) on a voluntary basis. At this 
time the merits of this voluntary approach will be reviewed to assess the possible additional 
benefits of a second step including mandatory requirements.  

115   The adoption of the 7th EAP is planned for autumn 2012. The Impact Assessment Board approved the impact assessment on its 

meeting of 18 July 2012 through written procedure. 

46