Could the hemp industry be the next to adopt carbon labeling?

Could the hemp industry be the next to adopt carbon labeling?

A carbon-labeling trend has been growing in popularity over the past few years. Some experts reportedly believe that the hemp industry could be the next industry to adopt this type of label.

A carbon label displays how much carbon a product released over lifecycle. This reportedly helps improve the transparency between businesses and consumers, while also encouraging businesses to adopt environmentally friendly practices.

What is the importance of carbon labeling?

On April 22, President Joe Biden pledged to cut to U.S. greenhouse gas pollution in half by 2030. This goal, which is intended to help address climate change, could pressure businesses into taking steps toward sustainability. However, this is not the only pressure U.S. businesses could face when it comes to going green.

According to a recent article in Hemp Industry Daily, consumers are already putting pressure on businesses to be environmentally friendly. The article suggests that this pressure will only increase as more and more businesses comply.

Over half of the growth in consumer packaged goods between 2015 and 2019 was attributed to products that addressed sustainability in their marketing, according to New York University’s 2020 Sustainable Market Share Index.

This index shows that products that were marketed as sustainable grew over seven times faster than products that lacked this labeling. Also, the growth attributed to sustainable products continued to grow in 2020 despite the COVID-19 pandemic.

“It’s clear that brand managers who are not pursuing sustainability strategies will be increasingly left behind,” said Randi Kronthal-Sacco in a NYU report. Kronthal-Sacco is a senior scholar of marketing and corporate outreach at NYU and a leader of the research initiative.

To avoid being left behind, many brands across a range of industries have reportedly begun using special product labels to show customers how much carbon their product released during its lifecycle.

“It’s huge this year and I expect to see a lot more of this in the years to come,” Ethan Soloviev, chief innovation officer for research firm HowGood, told Hemp Industry Daily. HowGood reportedly built a sustainability database and impact platform to help businesses make environmental and social improvements.

Carbon labeling may be easier said than done

Carbon labeling seems to align with national goals to fight climate change. It also seems to align with the values consumers weigh when making purchasing decisions.

However, this type of labeling could be confusing or even misleading to consumers if the label has no consistency from business to business. On the other hand, it could become a burden for small businesses if standards are set for carbon labeling but the process for obtaining that labeling is not streamlined.

“[T]he process to get to accurate carbon labels could be an enormous challenge for cannabis, where market standards are new and developing,” reports Hemp Industry Daily.

Carbon labels reportedly must account for the carbon released throughout the entire lifetime of the product, which can include fertilizers that were applied, how the hemp was harvested, what methods were used to process that hemp, how it was transported and more. One potential benefit is that hemp naturally sequesters carbon, so the hemp industry may have an easier time than other agriculture businesses at keeping their total carbon emissions down.

Still, it appears that tracking the carbon emissions over the lifetime of a product may be a very complicated task. This is where a carbon labeling program could provide help.

What is being done to help businesses meet this need?

Derek Smith, the executive director of the Resource Innovation Institute (RII), told Hemp Industry Daily that a group of farmers, engineers and other agriculture professionals are investigating how a carbon labeling program could work. RII is a nonprofit that currently builds platforms to help businesses measure their water use and waste production.

The organization is reportedly expanding their services to the cannabis industry. According to Hemp Industry Daily, RII intends to “establish key performance indicators, standards and ultimately a verification and leadership recognition system for crops produced in controlled environments.”

Smith reportedly explained that RII is building a common data set, which will allow hemp producers to compare how their operation’s data measures up. This comparison can help individual hemp operations see where they could improve their operation’s efficiency.

“Our position has always been that we cannot create a label that we can stand behind as verifying performance until we have enough data set that can inform what is good performance,” Smith said.

RII reportedly intends to eventually develop a badge that compliant companies can display on their products. The nonprofit reportedly hopes to have this badge available by next year.

“As that data set grows, we’ll be able to verify performance and feel confident that the badge we enable leaders to be identified with is substantiated and will truly result in carbon emission reductions,” Smith said.

It is not yet clear when hemp businesses will adopt carbon-related product labels — or even if they will. However, the data suggests that carbon labeling could be beneficial for businesses, consumers, and even the climate if someone can work out some of the kinks associated with it.