Eco-labels are all the rage. But look before you leap on this bandwagon, a new report suggests - or you may be doing your green rep more harm than good. Before you send that nifty new logo into production, consider these five common pitfalls. By Emily Rabin Cowan

Organic, Fairtrade, FSC Certified - "eco-promises" are made about a range of issues in advertising, in-store promotions, and on products themselves. For consumers this can be confusing. Which issues are most important? And which labels can they trust?

For companies, the issue of communicating the social and environmental attributes of their products can be just as complicated. What issues should they be highlighting? How can they best communicate to consumers? And how can they ensure that "eco-promises" align with broader business objectives?

The new report Eco-Promising: How to Communicate Credibly About Your Products, published by Business for Social Responsibility and Forum for the Future, highlights the five pitfalls companies face in communicating their efforts via eco-label - and how best to avoid them.

#1: Confusing the Consumer

Pitfall: Study after study shows consumers puzzling over green-marketing terms such as "environmentally friendly" and "carbon neutral" (the U.S. Federal Trade Commission is even looking into tighter regulations for such claims). Amid all the eco-buzz, some consumers say they're tired of trying to figure it all out - a phenomenon known as "green fatigue."

Problem Solved: Boost your green cred with independent certification from widely recognized and well-respected organizations. Plastering a bag of coffee with the word "organic" is one thing; featuring a certified-organic label from the Rainforest Alliance is quite another.

#2: Expecting Too Much from the Consumer

Pitfall: Purchasing decisions grow more complicated the more information you make available (see #1). If consumers are having a hard time parsing the difference between "organic" and "fairtrade," don't ask them to navigate tradeoffs like buying produce from developing countries to support indigenous economies versus buying local to save the greenhouse gas emissions from airfreight.

Problem Solved: Know your products largest environmental impacts and prioritize your marketing message accordingly.

#3: Burdening the Supply Chain

Pitfall: Making good on your green claims can drive up costs for suppliers charged with meeting new environmental criteria. When these costs are passed along to the consumer, watch out: While many consumer tell pollsters they'd be glad to pay more for green products, don't assume they're ready to take on a major markup just for the sake of being green. The vast majority won't.

Problem Solved: Knowing your products' largest environmental impacts (see #2) means having a deep understanding of the lifecycle costs at every stage of the supply chain. Use this knowledge to target your greening efforts where there is most opportunity for improvement, and work closely with suppliers to find cost-effective ways to meet your new requirements. (See Nike's efforts to boost energy efficiency among its suppliers in Asia.) Don't compensate for higher costs by jacking up the price of your new, greener product. Consumers are most likely the reach for the greener option when all other attributes - price, performance, durability, etc. - are about equal. The most effective green pitches emphasize consumer value first.

#4: Creative Constraints and Brand Crowding

Pitfall: Some argue that strict environmental criteria can limit creativity and product innovation. Other say that playing up the green angle can cramp a brand's style.

Problem Solved: Think of "green" as a driver of product innovation, not just another requirement that must be met. For example, industrial appliance firm Ecolab developed a new dishwashing system that helps restaurants cut their energy and water bills - a key selling point for foodservice operator Sodexo, which has purchased the system for all 6,000 of its client operations in the U.S. As far as "cramping a brand's style," consider this: A strong record of transparency and a demonstrated commitment to sustainability goes a long way toward building brand trust among consumers.

#5: Greenwashing

Pitfall: Skeptical consumers question whether companies are really competing on environmental innovation - or just seeking to outdo each other on environmental messaging.

Problem Solved: Avoid charges of the "g-word" by delivering your green message within the context of a meaningful, transparent companywide sustainability effort. Skip this step at your peril - consumers can spot insincerity in a heartbeat. For example, communicating specific green progress and goals is working well for Marks & Spencer, while BP (of "Beyond Petroleum" fame) has taken a beating now that the company's commitment to its renewable energy business seems in doubt.

The Bottom Line

Putting these strategies into practice, while challenging, can pay large dividends in terms of sales, market differentiation, and brand trust, according to Tom Berry, head of retail for Forum for the Future. "It's not just about slapping a label on a packet," he says. "Understanding the true environmental credentials of your products and communicating these to consumers can be a source of innovation and competitive advantage."

To download the report Eco-Promising: How to Communicate Credibly About Your Products, click here (PDF).