Eco-Labels: How They Skyrocket Sales And Build Trust — Laurent Bocahut | Why The Product Environmental Footprint Matters, Why Lifecycle Assessment Is Key For Sustainability, What Industries Benefit From Eco-labels, How brands start

Eco-Labels: How They Skyrocket Sales And Build Trust — Laurent Bocahut | Why The Product Environmental Footprint Matters, Why Lifecycle Assessment Is Key For Speaker 2: Hey there, welcome to the Ecommerce Coffee Break. I'm your host, Claus Lauter, and you're listening to the podcast that helps you become a smarter online seller. In today's episode, we talk about how eco-labels are changing the way people shop online for products. Joining me on the show is Laurent Bocahut, CEO and co-founder at pathtrust.com. So, let's dive right into it. Hello and welcome to another episode of the Ecommerce Coffee Break podcast. In today's episode, we will talk about how eco-labels are changing the way people shop online for products and how you can measure and reduce the environmental footprint of your products through data-driven automation. Now, that's a mouthful, but everyone obviously is interested in becoming a more sustainable, environmental-friendly brand out there. And we will dive into this topic today. Joining me today is Laurent Bocahut. He is the CEO and co-founder of PathTrust.com. Laurent is an environmental engineer passionate about sustainability and consumer goods. He launched PathTrust in 2021 to provide brands with accurate automated impact measurements. Since then, his team has grown rapidly, partnering with major brands worldwide to make sustainability more accessible and actionable. So, let's welcome him to the show. Hi, Laurent. How are you today? Speaker 1: Hi, Claus. Very well. Thank you. Thanks for having me here today. Speaker 2: For our listeners who might be new to the concept, can you break down what Product Environment Footprint is and what does it stand for? Speaker 1: Yeah, absolutely. It's actually a method of calculating the environmental footprint of a product. That means we're all used to carbon footprint, but it's not only carbon. You also have water, biodiversity, chemical impacts associated with manufacturing a product. So, taking the pair of a product, the product environmental footprint, That just means accounting for every impact on the environment from its birth to its grave. Speaker 2: Now, consumers nowadays are very conscious about making the right decision to buy products. You were mentioning that there is a life cycle to it. What does that imply and how does that work? Speaker 1: So, yeah, the notion of life cycle is associated with the life of the product. I was just mentioning the birth cradle to grave. That's how we call it. So, what we do basically, we use a method that's called the life cycle assessment. We use this method, the scientific method, to calculate the environmental footprint of the product over this whole life cycle. So we account for raw materials, we account for transportation, we account for transformation, distribution, end of life of the product. At each of these steps, some impacts are emitted to the environment and we take the sum of all these impacts to get an overall score, basically an overall cost, which represents the environmental cost of this product. Speaker 2: Now, that's very interesting because I thought that a producer or somebody who develops a product has all this information, and I know it's so important because there's a lot of regulations bound to that. Talk me through it. How does it work? Speaker 1: Yeah, absolutely. You would think that brands or manufacturers, they have this information, but it's actually very challenging because there's a scientific challenge to it. First of all, it's not easy to calculate at scale a footprint for any kind of products or SKUs. And there's also a data challenge to it because If you want to measure, assess the environmental footprint of your shirt or of your pair of jeans or of a cell phone or whatever, you need to first know what has gone into producing this product. What has gone into producing this shirt? Which material? Is it cotton? Is it silk? Is it wool? Where was it made? Is it knitted or is it woven? How was it transported? By plane, by barge, by rail, etc. So there's a, yeah, there's a complexity to that and our job is to make this complexity manageable at scale for the brands. Speaker 2: Okay. Now, complexity obviously is very difficult to sell on a product landing page of a store. So, I think you're sort of being a translator, let's put it that way. How do you translate this very complex information into something that is easy to digest for a customer? Speaker 1: Yeah, absolutely. That's the whole point, not displaying this complexity to the customer and showing something simple, readily understandable, like a So, an A to E, a green to red environmental score, that's the bread and butter. So, how do we do that? Basically, our job is a little bit comparable to an accountant, but instead of counting costs, we're counting environmental costs. When we work with a brand, for example, we have this large retail client in Apparel in France. We plug our software onto their, basically on the backend of their e-commerce, let's put it that way. We receive, they send us some data, product volumes, SKUs, composition, stuff like that. We put that into our We have a calculation engine and what comes out is a score, a number that is the environmental cost, the raw data basically and we compare that to a reference to come up with a ABCDE and that's what they in turn publish to the consumer on their website when that's the goal they are looking for. Speaker 2: Now, I can imagine that this has a positive impact on conversion rates. People see that the product is environmental-friendly. Do we have any numbers of that? What kind of impact that has? Speaker 1: Yeah, absolutely. We're working with a brand that is called Lagopad. They're doing winter sports equipment, and they've been doing that for years now. And when they started in 2023, They used a plugin to connect our system with their Shopify portal and publish scores in real time since then. And they've seen a 30% increase in traffic on their website. So, yes, it's sizable and we're really starting to see consumer behavior shifting thanks to these environmental signals. Speaker 2: I can imagine. Specifically, what is called fast fashion has a very bad reputation when it comes to environmental factors. Are there any industries besides apparel and fashion where this is a very strong point for making more sales? Speaker 1: Yeah, I can immediately think of the home equipment and furniture vertical. We just yesterday signed a new customer, a large customer, also in France, and they're doing it just for that. I have this policy of showcasing to the customer, to the end consumer, the efforts we are doing in eco-designing the products. So, using this kind of environmental score, these scientific scores, this It makes the claim more objective. It takes greenwashing away from the equation. As long as we do our job properly and as long as they do their job properly, which I believe is the case, that makes things more data-driven and objective. And that's what the consumer is ultimately looking for. Speaker 2: I want to find out a little bit more about the data-driven background of that. I can imagine that brands that have a lot of SKUs, a lot of products in there, it's very complicated to get all the data together. Talk me through the process on how you capture the data and how it gets processed. Speaker 1: Typically, our customers have 10,000, 20,000 SKUs, sometimes only 2,000, but with a large variety of purchase orders and complex supply chains behind that. So, it can be a little bit scary at first, but we have developed this approach over the years where we really start with only the bare minimum data that we need to come up with a Let's say an approximate score. And for that, you basically only need the weight of your product and the composition. So, if you know that your sneakers, they weigh, let's say, 300 grams and they're comprised of, let's say, 50% leather plus 50% polyester. With that, you can already start and get a first rough assessment of your product. That's not for conducting any claim, not for doing eco-design. That's just the bare minimum for getting you started. Once you have that under control, then you can start enriching the data that you send into Packtrust, typically connecting supply chain management solution to our API. Or a traceability solution once you have done that with your ERP. So that's the story behind that. You start with bare minimum and then six months later, you add maybe the location of your tier one supplier. Then you add maybe the main process of manufacturing. And along doing that, you see the precision of your score getting higher and higher. That's because we give Of course, the result, the environmental cost, but we give along with that the precision score, basically the score of your score. Speaker 2: Very interesting. I can imagine other cases that a brand comes to you, they get their eco score and it turns out very badly. Is there any kind of relationship that actually you can get better in your business depending on the results that you provide? Speaker 1: Yes, sure. All this is very counterintuitive and that's why it's so important to have a scientific methodology when you do that. For example, I know that I'm going to maybe surprise some of your auditors or maybe upset some of them, but natural fibers, if you're dealing with animal fibers like wool, like leather, these have a heavy cost on the environment. Because of the animal that has been put to life before getting these raw materials. So that's why when brands are working with animal raw materials, then that's the main point of focus that they should be looking at before thinking of transportation or thinking of You know, fine-tuning the distribution mode or changing the manufacturer. Most of the footprint is within the raw materials. So, that leads us to how can we substitute this material with maybe another kind of leather or recycled wool, etc., etc. And we work with suppliers to help brands get these better options. That's when we work with animal sourced raw materials. On the other side, when you work with synthetic, I'm not saying synthetic is great. It has its downsides, definitely. But when you work with synthetic, usually a large portion, a large active level portion of the footprint is within the process, manufacturing process. And that's where it becomes interesting to go down to the factory level and try to, you know, tweak things at this level. Speaker 2: Do you think that eco-labels will become a standard for fashion brands, lifestyle brands overall? And do you also think that from the governmental side, from the EU and whatsoever, there will be more rules and regulations around that? Speaker 1: Definitely. It's taking time, but we've been steadily observing an advancing regulation into this topic. I want to be careful with regulation. I'm not a strong advocate of adding more regulation to the system, which is already quite well regulated or enough regulated in Europe. It's just that Europe is pushing something which I really like. It's called the PEF, Product Environmental Footprint methodology. And it's really the first time when all EU 27 countries, they have the same We use the same methodology, the same guidelines to measure their product's footprint. So that makes things standardized and comparable. That's what makes it possible for solutions like us to actually measure and compare a product to a benchmark, which is ultimately what our customers and the consumer wants. So, definitely on the European level, this is something that is getting finalized as we speak for Apple and footwear, but also for batteries, for dairies, cosmetics, etc., for a large portion of our consumer goods. And I can mention the particular case, which is the French context. In France, there is a strong push for consumer labeling. So, actually, the French government is passing, as we speak, a decree to make consumer labeling not mandatory but strongly encouraged. Let's put it that way. So, we should start seeing more and more brands labeling their products, let's say, within this summer. Speaker 2: Now, I think it's important to have a standard, even a European standard, so that you can really know how environmental-friendly the product is that you're going to buy. So, what would be your advice for businesses starting with their sustainability journey? What would be the first step for them? Speaker 1: The first step is to get going, basically to put up a team and get going. It's a revolution that is underway and let's say I would think of two key success factors. The first one is having somebody, one or two or three persons depending on your size, but at least one person within the organization that is in charge of this product ESG thing and this person It must be somebody central in the organization that has ties with the IT, that has ties with the product department, and that also has ties with the finance and top management. So, it's a key position to get things started. And once you have that, the second thing is to start having your data in order. You know, having, let's say, product weight and composition somewhere in your system. From there, you can extract it, export it. That's really the key to start with. Speaker 2: You mentioned that some of your clients are running Shopify stores. How do you help with this whole setup? What's the onboarding process for a new customer, for a new brand? Speaker 1: So, in our solution, we have this data loader thing. We call that an ETL, extract transform load. Basically, that's where you dump your unformatted data and our engine will do the job to, let's say, let's imagine, let's take an example, if you source Kotlin from Egypt and you call that Kotlin-Egypt. In our system, it's called Kotlin underscore Egypt. So this little web app is doing this mapping transcription so that your system and our system can communicate together. So once that's done, data can seamlessly flow from your system to ours. We do the calculation, we send the score back and we send also these little widgets which you can customize to your look and feel and directly embed that into your Shopify or any other CMS as you desire. This can also take the form of an API call if you want to really make it look as you desire. Speaker 2: How long does it usually take to get up and running? Speaker 1: It depends on the maturity of this whole product sustainability thing, but let's say it's very challenging to do it in less than six months, basically. If you start from scratch, you would need at least six months to a year or so to get going. Speaker 2: Okay. Now, I think it's a crucial decision for every brand to make to be on that bandwagon, specifically on the long run. And as you said, there can be conversion rates and traffic increase rates of 30%. I mean, that's then a good decision for the future. Who's your perfect customer? Speaker 1: Well, I think the perfect customer is the one who has understood that we're going there anyway. This is something that's coming. I just would like to touch upon this example of this story, this study by an Irish researcher which published recently and it shows that when you publish, when you grade products with an eco-label, let's say an A to E eco-label, There's a massive shift of consumers towards the A's or B's. So pretty soon, we all know that we all experience this into our supermarket when we shop for food. You know, when you have to choose between a non-labeled product and a labeled product, first you pick the labeled one, either A or E, it doesn't matter, but you pick the one that has a label on it. And now if you have the choice between two labeled products, you will usually try to go for an A or B and that's the same that is coming with Apple and other kind of consumer goods. I think we will go there and yeah, the ideal consumer is the one who has a team in place to address that. Speaker 2: I think having you on the site as a partner in your brand, in your business, and helping with this process is so valuable because I think the complexity in the background is just too much to dive in as a brand itself. So having somebody with the expertise on the site is excellent. How does your pricing structure work? Speaker 1: We have three plans, basically one for SMEs, one for mid-size brands, and one for large organizations. We can start in the range of, let's say, €600 per month. That gives you the basic calculation for a couple of dozens of products. And then, of course, it goes higher with thousands or tens of thousands of SKUs. And there we go into more elaborate data crunching tools and also more advanced features. But yeah, that's the bulk of it, these three plans. And then this gives you access to calculations and compliance. And then on top of that, we offer eco-design capacities and also corporate footprinting consolidation capacities. These are for brands who want not only a score, but also improve the score and then consolidate these scores from product up to the organization level. Speaker 2: I can imagine there's pretty much in every business there's room for improvement. So I think that's something I would look into. Before we come to the end of our coffee break today, is there anything that you want to share with our listeners that we haven't covered yet? Speaker 1: You know, I've been doing what we do at PathTrust with our team since three years now, and I've never been so optimistic for the future of our planet, basically. Because, you know, all the brands, all the suppliers, all the retailers that we speak to, they all want to do better. They all commit to a carbon reduction trajectory. What's missing is just doing that at scale and faster. And I think for that, we need technology and PevTrust is a part of that. So, I'm very enthusiastic about the way I'm seeing the industry evolve, whether we're speaking small brands, whether we're speaking large brands and even the fast fashion. I mean, I know they have bad press. There are brands out there that are really doing something. Of course, it's not always black and white, but I would like to share this optimism. That's my key takeaway. Speaker 2: It makes me very happy that there is some positive movement within this whole industry. Where can people go and find out more about you guys? Speaker 1: The best is to go to our website, Petrus.com or to our LinkedIn corporate page. Speaker 2: Okay, I will put the links in the show notes and you just one click away. Laurent, thanks so much for giving us an insight in sustainability and eco-labels and everything that comes with it. I think people should reach out to you and learn more about it and I think it's a good decision going forward in the future for every brand to be part of it. Thanks so much for your time today. Speaker 1: Thank you, Claus. Thank you, everyone. Speaker 2: Hey, Claus here. Thank you for joining me on another episode of the Ecommerce Coffee Break podcast. Before you go, I'd like to ask two things from you. First, please help me with the algorithm so I can bring more impactful guests on the show. It will make it also easier for others to discover the podcast. Simply like, comment and subscribe in the app you're using to listen to the podcast and even better if you could leave a rating. And finally, sign up for our free newsletter and become a smarter Shopify merchant in just 7 minutes per week. We create content from more than 50 sources, saving you hours of research and helping you stay on top of your ecommerce game with the latest news, insights and trends. 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