So many small businesses do genuinely good things for people and the planet. But often they hesitate to talk about their efforts because they don't want to overstate their impact or be accused of greenwashing.

Certification is a great solution as it enables you to share your sustainability progress in a credible, verified way. It shows that you have met an independently set standard of what good looks like, provides a clear trust mark for your customers, and offers competitive differentiation beyond the marketing spin.

But which one should you get? Sometimes the world of certifications can seem endless and overwhelming. But hopefully by the end of this article you’ll have a solid idea of which ones are relevant to your business and whether they’re worth getting.

This is part 1 of a series based on a webinar recently run for City of Frankston's Circularity Network. Be sure to also check out parts 2 on how to make sustainability claims and part 3 on building a credible sustainability approach.

Making sense of sustainability labels

A sustainability label is a voluntary certification mark that identifies products or services as environmentally or socially preferable within a certain category. Alternatively these may be referred to as ecolabels, especially for the environmental ones. A certification may or may not come with a label, such as ISO standards generally don’t.

Sustainability labels can generally either apply to a product or an organisation, and are either specific to a single aspect (like carbon reduction) or holistic across sustainability aspects.

Below are a few examples.

If you can identify where a certification sits in these two sets of categories, you will rapidly narrow down the world of labels to a very few that are applicable to your product and your sustainability efforts to date.

What about other frameworks?

In addition to certifications, there’s a lot of other tools and models that don’t reflect performance against a set standard. These include:

• Frameworks (such as GRI or the SDGs) help businesses report or structure sustainability
• Ratings (such as MSCI, DJSI and Ecovadis) assess performance relative to peers
• Pledges and initiatives (such as the UN Global Compact, RE100, Sustainability Advantage NSW, SME Climate Hub) are voluntary commitments to work towards certain principles or goals.

All of these are applied at the organisational level, not the product level.

4 essential questions

Before you start, it’s important to identify what you’re hoping to achieve with a certification. What is the problem you’re trying to solve?

Start by asking these questions:

• Who is the audience?
• What do they care most about?
• What’s it worth to you?
• Is there a recognised label for your sector?

Who is the audience?

It’s important to know what is most relevant to whoever you’re looking to impress. Some labels are more oriented toward consumers, like Fairtrade, 1% for the Planet, B Corp, though they can get you points in some procurements too. Other labels are more oriented toward organisational procurement requirements, like ISO 14001 Environmental Management Systems, Global Greentag and Good Environmental Choice Australia (GECA). If you’re looking to attract employees, organisational certifications and initiatives like B Corp, Sustainable Salons or Great Place to Work might be higher priority.

The region you sell into is likely to make a difference as well, as there’s a lot of regional variation and some labels that are well recognised in Australia, such as Climate Active, may be replaced by others overseas, such as The Climate Label in the US or Carbon Trust in the UK.

Not sure who cares about your sustainability? Take the ‘Is ESG relevant to my business?’ drivers quiz to quickly identify which group might be most important to your business and how it might affect you.

What do they care most about?

You also want to understand what’s most important to that audience, like maybe your customers care more about the product’s carbon footprint than the energy consumption of your head office (especially when it comes to carbon intensive products like energy and air travel). Or maybe your employees care more about you being a Great Place to Work than your charitable donations through 1% for the Planet.

To better understand your audience, it can be worth checking out what your competition is doing. If many of your peers have the same ecolabel, such as Forest Stewardship Council (FSC), it may be somewhat of an industry standard that you should consider meeting because consumers expect it. But don’t let that stop you from looking beyond, as it’s possible your customers might actually be looking for something else, like Organic or Fairtrade, and there may be a gap in the industry.

You can also get a quick assessment of which aspects of sustainability are most important for your business with this free diagnostic tool we made with Sustainability Tracker and Xero.

What’s it worth to you?

Certifications can be costly. Before deciding to pursue one, it’s worth considering whether a label is going to make the difference in getting your customers to buy your product, or if it’s just a nice to have. Is it genuinely likely to differentiate your product on the shelf from your competition, or open doors to procurement contracts you might not otherwise win?

Even if the answer is no, that doesn’t mean you shouldn’t get a certification. Maybe it aligns with your personal values, like B Corp, and it’s worth it to you to show that to the world. But it’s important to be clear on your motivations and what kind of return is expected on the investment.

Is there a recognised label for your sector?

The vast majority of ecolabels are specific to a certain type of product, or have product-specific standards within an umbrella label like GECA. These are always your best bet because they set out specifically what is most important for your specific type of product.

At the end of this article we provide a summary of common certifications for different types of businesses, so make sure to check that out.

If there isn’t one specific to your product or sector, you might want to look at broad organisational ones like B Corp and 1% for the Planet, or check the next article in this series on making claims that don’t align with a specific certification.

If there’s multiple for your sector, how do you pick? When certifications overlap like this, there’s usually a few key differences. One might be more holistic than the other (e.g. Green Star vs NABERS), or a higher level of performance (e.g. NO CO2 vs Trace) or one might be set by an independent body versus the industry setting its own bar (e.g. FSC vs PEFC).

Is certification right for me?

You might be wondering – should I even get a certification at all? And honestly, certification isn’t right for everyone.

Upsides

Certification builds trust with your stakeholders, demonstrating that you've met an external standard of what good looks like – you’re not just saying ‘we’re the best!’ It puts weight behind your claims of why you’re better, especially that you were willing to submit yourself to the rigour and cost of proving your claims.

On the other hand, small businesses often develop strong trust with their stakeholders through personal relationships, consistency and authenticity. Large corporates generally lack this, so they rely on certifications to fill that gap. Certifications are also useful when you haven’t had the chance to build credibility yet, like attracting new customers and winning tenders. So again, this comes back to knowing your audience.

Certifications also have the benefit of providing a sustainability blueprint. They set out what good looks like, provide structure and clear actions for internal improvement, and hold your team accountable to deliver.

Downsides

Certifications can be costly. They differ significantly based on the rigour of the certification and are usually tiered based on your size, ranging anywhere from $2-5k for a micro business, $5-8k for small and $10-30k for a medium sized business (approximate ballpark!). This generally includes an up-front application submission fee, then a verification fee either paid to the certifying body or to a third-party auditor, then an ongoing licensing fee. 

But some can range even higher depending on the detail and rigour required in verification, such as data across numerous sites and product lines, supply chain audits or scientific testing of materials. For example, Climate Active, Fairtrade, Green Star, Marine Stewardship Council (MSC), Global Organic Textile Standard (GOTS) and Roundtable on Sustainable Palm Oil (RSPO) each require significant verification or licensing costs.

And of course, this doesn’t include the time and cost to meet the requirements in the first place.

Understanding the certification process

Across certifications, the process is generally very similar. Once you’re confident you meet the certification criteria, you collect the evidence to show it. Sometimes this is required to be submitted with the application, sometimes it will be requested after.

After you submit the application, the evidence will be reviewed and verified, either by desktop audit (remote), on-site audit, or in most cases a combination of both. If anything is lacking, you will be given an opportunity to provide further evidence or implement the action needed to meet the criteria within 3 to 6 months.

Once you’ve passed the audits, you’ll go through some further administrative signoffs and agreements before you can start using the ecolabel. You will also generally be required to recertify every few years, usually with a somewhat lighter touch audit than the first.

How else can I show I’m sustainable?

If you’re a small business that already has high trust with your local community, customers and employees and you’re not looking to win procurement tenders, certification might not be worth the cost. You can still talk about your sustainability efforts without an ecolabel. We’ll talk about how best to do that in the next article in this series.

Common misconceptions

It seems this space can be so overwhelming that many SMEs don’t know what they don’t know. So here’s some things you might not realise about sustainability certifications.

There isn’t one ‘best’ certification

It’s impossible to identify in this article a handful of ecolabels to recommend. It’s about what’s best for your business. Certifications exist for different purposes, different products and sectors, different sustainability focus areas, and different audiences. So first you need to understand what you’re looking to convey.

An ecolabel isn’t proof that a business is sustainable

Many certifications only focus on a single aspect, like their carbon footprint, or the packaging might use recycled content. This doesn’t mean the company is sustainable as a whole. Every certification has a defined scope, and there might be other areas lacking, like the labour conditions in making that recycled packaging. Even the more holistic certifications don’t cover everything.

A logo isn’t everything

Ecolabels are one tool to communicate your performance, but not the only one. Whether it’s in place of or in addition to, you should also use your website and social media to talk about the specific actions you’ve taken. Your customers aren’t experts on ecolabels, so explain what’s behind the logo and engage them in your efforts and journey. We’ll talk more about this in the next article in this series.

One logo can mean different things

Often a single certifier will have different certifications, but using labels that are very similar visually. For example, FSC has 100% (from well-managed forests), Recycled (made from recycled material) and Mix (supporting responsible forestry). So be sure to check the small print.

Certifications vary in rigour

Rigour takes time and thoroughness, which cost money. But if a certification costs too much, there might not be many businesses willing to pay for it. So all certifications have to choose the balance to strike, and some might rely more on self-reported information and self-monitoring over independent audits and due diligence.

Certification isn’t one-and-done

All certifications require upkeep, whether that’s ongoing reporting, regular checks by the certifier, full recertification every few years, or even needing to demonstrate improvement over time.

Is B Corp worth it? 

The certification I get asked most about by far by small businesses is B Corp. It is a very popular and well-regarded certification, for good reason. So here’s a quick overview.

Upsides

B Corp has strong recognition in the market, meaning benefits in differentiating your business with consumers, potential employees, and in procurement, and sometimes can draw a cost premium. In addition, the B Lab network is a great resource to learn, develop connections, and B Corps often choose to buy from other B Corps.

Downsides

The process can be long and painstaking, often over 6 months, and then you get to repeat it for recertification after 3 and 5 years. Even if you’re doing the right things, you need to make sure they are well documented in policies, emails, records, etc. And of course there is also the cost for certification which ranges from $5,000 for a micro business (5 employees and under $2mil revenue) to $27,500 for a medium business (250 employees and up to $25mil revenue). These fees have recently gone up and some small businesses have expressed that they are no longer seeing enough value.

What’s changed in B Corp 2.0

You may have seen B Corp has recently overhauled their standard. No longer do you get to win points in any category, as long as you hit the 80-point mark. Now they require every business to address some basic requirements in all 7 of the new categories (previously 5). What those requirements are will be highly tailored to your business, based on your sector, size, and answers to their initial risk profile questions. They also do provide options, usually ‘do one of these 5 actions’, and then ‘do one more of these actions by the 3 year recertification and another by the 5 year’.

How can I be sure?

Head over and fill out the B Impact Assessment. In less than an hour you’ll quickly learn what specific actions it recommends for your business, and just how far off you are!

Where to start

Hopefully this article has given you some direction and filled in some gaps for you. But still, where do you start?

1. Identify some labels you’re interested in

We’ve covered a lot of certifications in this article, and you’ve probably identified one or two that might be relevant to you. To give you a little more help, here’s a few you might consider, depending on your business.

• Service-based (offices, cafes, health, community, independent retailers) - consider 1% for the Planet, Trace and B Corp, which are all broadly applicable. Social Traders might also be applicable if you have a social or community mission.
  • It's also worth mentioning Sustainable Salons here, which is officially an initiative rather than a certification but well regarded and has now expanded from hairdressers and barbers to beauty and dermal clinics and pet groomers.
• Textiles, fashion and apparel - Ethical Clothing Australia (ECA), Better Cotton Initiative (BCI), Global Organic Textile Standard (GOTS), OEKO-TEX, Global Recycled Standard (GRS)
• Food and beverages – Australian Certified Organic (ACO), Fairtrade, Marine Stewardship Council (MSC), Aquaculture Stewardship Council (ASC), Roundtable on Sustainable Palm Oil (RSPO), Rainforest Alliance Certified
• Paper products and packaging – Forest Stewardship Council (FSC), Programme for the Endorsement of Forest Certification (PEFC), Australian Packaging Covenant Organisation (APCO)
• Beauty products – Leaping Bunny, ACO, COSMOS, Safe Cosmetics Australia (SCA)
• General manufacturing and other products - ISO 14001 Environmental Management Systems, Life Cycle Assessments (LCAs) & Environmental Product Declarations (EPDs), Global GreenTag, Good Environmental Choice Australia (GECA), International Sustainability and Carbon Certification (ISCC PLUS), OEKO TEX STeP, Cradle to Cradle (C2C Certified)
• Construction and property developers - ISO 14001 EMS, Green Star, WELL Building Standard, National Australian Built Environment Rating System (NABERS), Infrastructure Sustainability (IS)
• Hospitality and tourism – Food Made Good (new to AU), EarthCheck, Green Globe, Green Key, ECO Certification, Sustainable Tourism Certification, Sustainable Tourism Accreditation (ATIC), Strive 4 Sustainability Scorecard.

Note: this isn't an exhaustive list, just a starting point focused on some of the most common in the Australian market.

2. Look up their requirements

Simply looking at the criteria for a certification can be highly enlightening. You may have heard this piece of advice in regards to the B Impact Assessment, but really it applies to all certifications.

Whether you decide to go for certification or not, the requirements give you a blueprint of what sustainability looks like, according to a trusted third party. That in itself is invaluable information you don’t even need to pay a consultant for.

In some cases you might find you already meet many of the requirements and can reasonably aim for certification in the near future. Or if not you can develop a clear action plan to improve.

3. Keep an eye out for what others are using and asking for

In order to answer the 4 essential questions noted above, you need to start collecting data. Pay attention to what others are doing in your space, what certifications you hear mentioned by industry groups and trade publications, any specific certifications noted in procurement tender requests or even in customer inquiries or via social media. Even if certification isn’t important for you currently, expectations in your sector might change!