BE15: Product Communications

Product communications are honest, ethical and promote responsible use

1. Ambition

A Future-Fit Business does everything it can to help customers make responsible decisions regarding the purchase, use and (in the case of physical goods) post-use processing of its products. In addition, it markets its products honestly and ethically to appropriate audiences.

1.1 What this goal means

Some goods and services may cause harm to people or ecosystems, either because of the way they are designed, or because there is a chance that users could misuse them or dispose of them incorrectly. The company must make potential users¹³⁶ aware of such risks, to empower them to make well-informed decisions regarding the purchase, use and (in the case of physical goods) post‑use processing of its products.

In addition, a company must ensure it markets its products honestly and responsibly by avoiding all misleading claims regarding product benefits, and by only targeting appropriate customer groups (e.g. not marketing cigarettes or alcohol directly to children).

These requirements cover both final products designed for end users, and interim goods which are incorporated or processed into final products by other companies.

To be Future-Fit, a company must: (a) ensure users are informed about any negative impacts of its products, (b) ensure users are not subject to false or misleading claims about the benefits of its products, and (c) ensure products are marketed only to those capable of making informed purchasing decisions.

1.2 Why this goal is needed

As with all Future-Fit Break-Even Goals, a company must reach this goal to ensure that it is doing nothing to undermine society’s progress toward an environmentally restorative, socially just, and economically inclusive future. To find out more about how these goals were derived based on 30+ years of systems science, see the Methodology Guide.

These statistics help to illustrate why it is critical for all companies to reach this goal:

• Confusion over communicating the perishability of food products leads to large amounts of avoidable waste. Uncertainty around best before” and “use by” dates in the UK causes 350,000 tonnes of food, worth £1bn, to be wasted annually. [119]
• The proliferation of environmental and social credentials on products fails to provide meaningful guidance in choosing environmentally-superior products. There are currently 455 different eco-labels applied to products across 25 industries worldwide, often leading to customer confusion surrounding unverified claims. [120]

1.3 How this goal contributes to the SDGs

The UN Sustainable Development Goals (SDGs) are a collective response to the world’s greatest systemic challenges, so they are naturally interconnected. Any given action may impact some SDGs directly, and others via knock-on effects. A Future-Fit Business can be sure that it is helping – and in no way hindering – progress towards the SDGs.

Companies may contribute to several SDGs by communicating honestly, ethically and responsibly to customers about their products, and actively encouraging their suppliers to do the same. But the most direct links with respect to this goal are:

	Link to this Break-Even Goal
	Support efforts to ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles that are in harmony with nature.

1.4 Related goals

The purpose of this section is to help clarify the scope for this goal. It will help you understand which issues are covered by this goal, and where other goals apply instead.

Procurement safeguards the pursuit of future-fitness: The Product communications goal applies to information regarding the company’s products. Harm that might be caused by suppliers’ goods is also encompassed by this goal, to the extent that those goods are embedded into the company’s own offerings. In these cases, the company is responsible for ensuring that their customers have the information they need to safely deal with the supplied components of its products.

Products do not harm people or the environment: The Products do not harm goal focuses on harm to people or the environment caused by the company’s products as a result of their intended use or at the end of their useful life. The Product communications goal supplements that goal by ensuring that customers are equipped to make responsible and informed decisions regarding the purchase, use, and (in the case of physical goods) handling, storage, consumption and disposal of products, to avoid problems that can be reasonably anticipated.

Product concerns are actively solicited, impartially judged and transparently addressed: The Product concerns goal empowers people to raise issues about the company’s goods and services, whereas the Product communications goal – by ensuring that customers are proactively and adequately informed – seeks to minimize the likelihood of concerns arising in the first place.

2. Action

2.1 Getting started

Background information

Effective product communications are key to building customer trust and satisfaction, by setting appropriate expectations and helping people derive maximum benefit from the company’s offerings. In today’s competitive environment, there are more communication channels and a greater capacity for interaction than ever before. Industry and regulatory bodies are pushing for ever-higher levels of transparency. Consumers are becoming more sceptical of insincere or inaccurate marketing claims, and are wary of greenwashing.

A company’s first step toward ensuring the future-fitness of its product communications is to identify who its product users are, and how they are reached by the company’s current communications. This information will serve as a baseline for pursuing improvements.

Questions to ask

These questions should help you identify what information to gather.

What key product characteristics are likely to influence their users’ decisions or actions?

• How do the company’s direct customers and (if different) its final users interact with its products? What are the key functions of each product? What commitments or consequences are associated with buying the product (e.g. length of contract, future purchasing obligations, rights to information)?
• What is each product made of? Does it contain any potentially harmful substances?¹³⁷ If so, what precautions do users need to take with the product?
• What are the resource demands of the product? Before purchasing, do customers know the types and quantities of energy, fuel, water or other input it will require_?_
• What are the potential impacts of each product on its users and their surroundings? Could the use or (in the case of physical goods) disposal of the company’s products cause or exacerbate health problems?
• What is likely to happen to the product after use? Is it made with materials that are recyclable in the markets where it’s sold? What additional materials – such as packaging – are distributed along with the product? Are they recyclable?

How are product communications currently managed across the company’s product portfolio?

• How does the company define and categorize markets? What is the most granular level of data collected on product sales by location (e.g. are sales tracked by country, city or retail store)?
• How does the company define and categorize its target customers? Does it differentiate between individuals, demographic groups, size or type of business, or public-sector customers?
• Are communications tailored to each market? Do they go beyond minimum regulatory requirements to more effectively reach and inform specific target demographics?
• What are the primary channels through which the company interacts with its customers and users of its products, e.g. packaging, instruction manuals, or websites? When multiple approaches exist, what is each adding to the overall message?
• Does the company have documented internal controls in place which determine how product communications and marketing are performed? Who is responsible for defining and implementing such controls?
• Does the company have any direct relationships with, or other ability to influence, its immediate customers and (if different) the actual users of its products (e.g. through its own retail outlets or those of a partner)?

How to prioritize

What are the best opportunities for making progress?

• Where would improvements to a single product make the largest impact for the company? Which products have the highest sales volumes? Are there markets where multiple product lines could benefit from improvements to a single communication channel, such as a website?
• Are there products for which the company plans to update the packaging in the near future? Could updates to communication practices be timed to coincide with new marketing campaigns?
• If the company creates interim goods that are processed or integrated into products by other organizations, and later sold to end users, is there an opportunity to partner with those other organizations to improve product communications?

Has the company committed to targets or strategies to increase the effectiveness of product communications?

• Does the company track or measure the effectiveness of its product communications? If so, what metrics are used? If not, are there best practices (e.g. recommendations by industry bodies) that the company could employ?
• If controls governing product communications are insufficient or absent, how might their improvement be approached? Whose authorization would be needed, and who would need to be involved to design and implement procedures and incentives to help with their adoption?

Could the company find ways to exceed the requirements of this goal?

• Beyond what is required to reach this goal, is the company able to do anything to ensure that people have the capacity and opportunity to lead fulfilling lives?¹³⁸ Any such activity can speed up society’s progress to future-fitness. For further details see the Positive Pursuit Guide.

The next section describes the fitness criteria needed to tell whether a specific action will result in progress toward future-fitness.

2.2 Pursuing future-fitness

Introduction

The company must seek to ensure that its target customers are equipped to make responsible and informed decisions regarding the purchase, use and (where applicable) post-use processing of its products.

Guidance on identifying user groups

In order to establish effective lines of communications, the company must first identify who the users of its products are. This will allow the company to anticipate and address any unique considerations necessary to ensure that the users are receiving and understanding key product information. A user group can be defined here as a subset of product users whose needs require distinct consideration.

For existing products, companies should tap in to sales information, market research, and customer feedback to understand who its users are, including their location, languages spoken, and their access to and preferences for different modes of communication (e.g. online, telephone, written, in-person).

For new products, companies should draw on market research, such as sales projections by demographic and region, information on comparable products, and industry reports. This process will differ depending on whether product users are expected to be businesses or individuals, and what level of technical knowledge they might be expected to possess.

Fitness criteria

A Future-Fit company puts in place control structures¹³⁹ to ensure that its product communication plans satisfy all of the following five criteria categories.

All major user groups are identified

• For each product type, the company identifies major user groups for which it requires unique communication plans¹⁴⁰, and documents the reasoning behind these groupings.
• The company should also consider the needs of non-target groups, who may be adversely affected by its communications (e.g. marketing potentially harmful products via channels frequented by children).

Communication plans are in place

• The company ensures that it has communication plans in place for each product type that addresses the identified groups, to provide them with crucial information on key product characteristics.
  • The company has assessed that the communication channels used are appropriate for the needs of the user group(s) for which they are intended. This includes considerations such as the range of languages accommodated, and whether those channels are sufficiently accessible (e.g. online, telephone, written, in-person).
• Steps are taken to ensure that each user group is aware of the existence of available product information, and how to access it.

Communications support informed purchase decisions

The company provides clear and concise information to customers on key characteristics of the product that are likely to influence their purchase decisions, in such a way as to make it reasonably accessible during communications leading up to the time of purchase¹⁴¹, including information on (where applicable):

• The nature of the transaction: all information needed for the customer to understand the offering and the consequences associated with its purchase (e.g. contract lengths, future purchasing obligations, exclusions, extras, requirements to share personal data).¹⁴²
• Materials used (in the case of physical goods): a listing of all materials, with steps taken to clearly identify any potentially harmful substances present in the product.
• Resource requirements for operation: a description of the nature and quantities of resources (e.g. water, energy, fuel) required to use the product.
• Other significant considerations:identification of other use-phase characteristics of products, such as potential health impacts, and in-use emissions.

In addition to the content of the information provided, Future-Fit companies deliver and present product information in a manner that is honest and ethical, with particular consideration for:

• Clarity of information: the company ensures that it avoids the use of ambiguous or poorly defined terms (e.g. ‘eco’ or ‘green’) when describing the environmental or health characteristics of its products.
• Evidence-based claims: the company should avoid making comparative or absolute claims or statements (e.g. ‘best performing’, ‘most efficient’) unless it can support such claims with empirical evidence.
• Potentially vulnerable audiences: When certain user groups may require extra guidance (e.g. children, the elderly), efforts should be made to accommodate their needs.¹⁴³ In rare cases where it is not possible to safely accommodate such groups, companies should avoid marketing to them directly.

Communications support the proper use of products

The company provides customers and other product users with the information they need to safely and effectively use the product after the decision to purchase has been made, including (where applicable):

• Safety considerations: the company provides users with any instructions necessary for the safe operation, storage, and disposal of the product.
  • This includes the potential for immediate or long-term physical harm, emissions of harmful substances¹⁴⁴ and any danger that may be caused by interaction with other products or substances.
• Nutrition information: the company provides users with access to clear and simple nutritional guidance together with healthy consumption recommendations (e.g. safe alcohol limits).¹⁴⁵
• Expiry information: the company provides users with clear, accurate, and intuitive guidance on when the product is fit for use – and when it is not – to safeguard their wellbeing, and reduce unnecessary waste.
• Information for efficient use: the company provides users with guidance on ideal usage conditions, how to minimize additional resource requirements, and instructions for preventative maintenance and repair.

Communications support the proper post-use treatment of goods

Information on the proper retirement of post-use goods should be provided to users, in order for them to safely and effectively dispose of goods, while maximizing their potential for re-use:

• If a physical good can be repurposed, all information necessary for users to do so must be provided.¹⁴⁶
• If improper disposal of a product could cause harm (e.g. through the emission of toxic substances), this must be made clear.

Note on in-person or informal product communication

When information is being printed or sent through mass media campaigns, it is relatively easy to plan for and to check whether the criteria are being met. When companies rely on sales staff or others to deliver information in-person, it can be much harder to control the content being delivered to customers. The most effective method in these cases can be to train personnel to foster an understanding of the information that needs to be delivered, combined with periodic site checks or customer surveys to ensure that the appropriate information is being conveyed.

3. Assessment

3.1 Progress indicators

The role of Future-Fit progress indicators is to reflect how far a company is on its journey toward reaching a specific goal. Progress indicators are expressed as simple percentages.

A company should always seek to assess its future-fitness across the full extent of its activities. In some circumstances this may not be possible. In such cases see the section Assessing and reporting with incomplete data in the Implementation Guide.

Assessing progress

This goal has one progress indicator. To calculate it the following steps are required:

• For each product¹⁴⁷, assess whether there is in place a communication plan that meets the criteria for each product stage, and which covers the major user groups identified.
• Identify the revenue generated from each product within the reporting period.
• Calculate company-wide progress as the revenue-weighted fitness across all products.

Assessing fitness for each product

Each products’ communication plan is scored using the five fitness criteria categories as follows:

• 0% fit: no assessment has been conducted, or the user groups criteria have not been fully satisfied, or the communications plan criteria have not been fully satisfied.
• 25% fit: the user groups and communications plan criteria categories are satisfied, but no other criteria categories.
• 50% fit: the user groups and communications plan criteria categories are satisfied, plus the criteria for one other category: purchase decisions, use of products, and post-use treatment.
• 75% fit: the user groups and communications plan criteria categories are satisfied, plus the criteria for two other categories: purchase decisions, use of products, and post-use treatment.
• 100% fit: the user groups and communications plan criteria categories are satisfied, plus all three others.

Calculating company progress

The company’s overall progress can now be calculated as a revenue-weighted sum of the fitness of each product.

This can be expressed mathematically as:

\[F=\frac{0.25(R_{p25\%})+0.50(R_{p50\%})+0.75(R_{p75\%})+1(R_{p100\%})}{R_T}\]

Where:

\[F\]	Is the progress toward future-fitness, expressed as a percentage.
\[R_{px\%}\]	Is the sum of revenues from products with a fitness score of x%, based on which of the five fitness criteria categories are being met.
\[R_T\]	Is the total revenue generated across all products.

For an example of how this progress indicator can be calculated, see here.

3.2 Context indicators

The role of the context indicators is to provide stakeholders with the additional information needed to interpret the full extent of a company’s progress.

Total revenue

In addition to the progress indicator, companies must report the total revenue from sold or leased goods and services.

The total revenue is equivalent to the summed values of R_T in the equation above, and so no additional data or effort is required to calculate them.

For an example of how context indicators can be reported, see here.

4. Assurance

4.1 What assurance is for and why it matters

Any company pursuing future-fitness will instil more confidence among its key stakeholders (from its CEO and CFO to external investors) if it can demonstrate the quality of its Future-Fit data, and the robustness of the controls which underpin it.

This is particularly important if a company wishes to report publicly on its progress toward future-fitness, as some companies may require independent assurance before public disclosure. By having effective, well-documented controls in place, a company can help independent assurers to quickly understand how the business functions, aiding their ability to provide assurance and/or recommend improvements.

4.2 Recommendations for this goal

The following points highlight areas for attention with regard to this specific goal. Each company and reporting period is unique, so assurance engagements always vary: in any given situation, assurers may seek to evaluate different controls and documented evidence. Users should therefore see these recommendations as an illustrative list of what may be requested, rather than an exhaustive list of what will be required.

• Document the methods used to identify distinct user groups which require different considerations. Describing how these were identified can help assurers to assess whether the company’s approach runs the risk of failing to provide key information to all users.
• For each user group and product identified, document the existence of a communication plan, which outlines communication channels and strategy. This description can help demonstrate to assurers that the company is providing key information to its customers.
• For each product, document the method used to determine whether there are ‘other significant considerations’ for the use-phase of the company’s products. Describing the steps taken can help assurers to assess whether the company’s approach runs the risk of failing to identify all significant considerations.
• If product names or communications include comparative or absolute claims, retain any empirical evidence used to support the claims being made. This can help assurers to verify the accuracy of the statements being communicated to customers.
• Document the steps required to repurpose the materials, allowing assurers to verify that customers have access to the information they need to properly repurpose product materials.

For a more general explanation of how to design and document internal controls, see the section Pursuing future-fitness in a systematic way in the Implementation Guide.

5. Additional information

5.1 Example

ACME Inc. sells lemonade in both glass bottles and in plastic bottles, referred to as GL and PL respectively. ACME has effective controls in place to ensure that the labels on each type of bottle provide clear nutritional guidance, as well as recycling instructions for both glass and plastic. However, the plastic bottle has a safety issue if left in direct sunlight or stored over a certain temperature for a period of time, which ACME does not make clear to its customers. Thus:

\[Fitness\:of\:GL=100\%\] \[Fitness\:of\:PL=75\%\]

ACME sells $300,000 worth of GL and $430,000 worth of PL. ACME can calculate progress towards this goal as:

\[F=\frac{0.25(R_{p25\%})+0.50(R_{p50\%})+0.75(R_{p75\%})+1(R_{p100\%})}{R_T}\] \[=\frac{0.75(430,000)+1(300,000)}{730,000}\approx85\%\]

Context indicator

Total revenue from goods and services = $730,000

5.2 Frequently asked questions

What is a potentially harmful substance?

For the purposes of this goal a substance is considered to be potentially harmful (also referred to as a ‘substance of concern’) if one or more of the following is true:

1. It has properties that make it dangerous or capable of causing immediate harm to human health or the environment.
2. The substance is designated as harmful by a credible industry body, government bodyin an area the company operates, or in credible, peer-reviewed research.
3. It is known to – or has properties that make it likely to – build up in the environment.
4. It is likely to interact with other substances in ways that cause 1, 2 or 3 to be true.

For more detailed guidance on what constitutes a harmful substance, and how to identify if harmful substances are present in a product, see the goal Products do not harm people or the environment.

Is revenue-weighting always appropriate?

Some organizations – such as early-stage companies, some charities, divisions of companies operating as cost-centres, or companies working on pre-production development – may determine that using revenue as a weighting approach to assess progress might paint a misleading picture.

Such cases are likely to be rare, because even companies that do not directly sell goods or services still need to meet their costs, and therefore receive some form of monetary capital or in-kind services and labour. These inputs are directed at operational work-streams, which in turn lead to meeting customer needs, so in many cases it is possible to connect indirect funding (as a proxy for revenue) to appropriate downstream user groups.

When this is not possible, or if it is determined that this technique may mislead stakeholders, companies should consider using cost instead of revenue to determine the completeness of their assessment, and as a method for weighting their progress scores.

Bibliography

[119]

“Changes to food packaging and labels could save UK homes £1billion annually.” The Waste and Resources Action Program (WRAP), 2017 [Online]. Available: https://www.foodanddrinktechnology.com/news/16331/changes-food-packaging-save-1bn-annually/. [Accessed: 02-Sep-2017]

[120]

Atkinson, Lucy, “’Wild west’ of eco-labels: Sustainability claims are confusing consumers.” 2014 [Online]. Available: https://www.theguardian.com/sustainable-business/eco-labels-sustainability-trust-corporate-government. [Accessed: 10-Oct-2017]

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136. The term ‘user’ is chosen deliberately to represent the people or companies who will be the primary interactor with the company’s products, as this may not be the same person as the immediate customer.↩︎

137. See this frequently asked question for additional information.↩︎

138. This is one of the eight Properties of a Future-Fit Society – for more details see the Methodology Guide.↩︎

139. For information on evaluating and designing controls, see the Implementation Guide.↩︎

140. Throughout the fitness criteria section, the term ‘communication plans’ is used, but if a company is able to cover an entire user group adequately with a single solution or mode of communication, there is no explicit requirement for multiple mechanisms to be in place in order to satisfy the criteria.↩︎

141. Such as marketing materials, advertisements, packaging information, and product descriptions.↩︎

142. All such information should be presented in a concise, transparent, intelligible and easily accessible form, using clear and plain language and, additionally where appropriate, graphical aids.↩︎

143. For guidance see the DMA Vulnerable Consumer Task Force.↩︎

144. This include greenhouse gases, due to their contribution to global warming.↩︎

145. For example, a ‘traffic light system’ has long been advocated by many consumer groups as a way to more effectively inform consumers than existing guidance regarding recommended daily amounts.↩︎

146. Note that labels regarding the ability of products to be repurposed must be aligned with the standards set out by the US FTC’s guidance, to the extent that relevant regional regulations permit.↩︎

147. Note that while assessing products, the company can evaluate multiple products or communication plans at the same time, so long as the considerations with respect to the fitness criteria are the same. For example, a company selling personal electronic devices that come in different colours or with different memory configurations, but which are sold in the same regions and have the same packaging, advertisements, user guides, and recycling instructions are unlikely to require separate assessments.↩︎