April, 2002 - Monitor industry meeting ... May, 2002

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ENERGY STAR Program RequirementsProduct Labeling

• July 22, 2003
• Ann Bailey, Director
• ENERGY STAR Product Labeling

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Why Label Your Products?

• More than 50 of the general population considers
  energy efficiency to be a very important product
  attribute when purchasing electronics (The
  Natural Marketing Institute, 2003)
• ENERGY STAR awareness is 40 nationally and
  exceeds 50 in many major markets
• 50-60 say the presence of the ENERGY STAR
  influenced their purchase decision
• 71 are likely to recommend ENERGY STAR to a
  friend

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Why Label Your Products?

• ENERGY STAR offers the attributes of a strong
  ingredient brand
• immediate point of differentiation
• added value (saves energy, money and the
  environment)
• reduced effort and perceived risk for consumers
• Plus objective third-party credibility
• products that earn the ENERGY STAR meet strict
  energy efficiency guidelines set by the
  Environmental Protection Agency

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Why Label Your Products?

• Print articles mentioning ENERGY STAR have
  reached a combined circulation of more than 700
  million people over the past year
• As of May, 850 companies run ads each month for
  ENERGY STAR products
• ENERGY STAR product ads have risen 25 over the
  past year -- exceeding 10,000 per month

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Partnership Agreement

• Goal standardized format capturing fundamental
  program requirements
• comply with product eligibility criteria
• comply with logo use guidelines
• qualify a product within a set time
• provide shipment data
• keep product lists up-to-date
• label products, product literature and web site
• Transition began in 2000 and takes place as
  product specs are revised - only OE remains

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As of April 1, 2003
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Labeling of Qualified Product

• Interior fixtures 96 (78)
• Portable fixtures 100 (100)
• CFLs 81 (67)
• Programmable Thermostats 75
• Clothes Washers 86
• Refrigerators 94
• Dishwashers 75
• DVDs 47 (TVs 25)
• Ceiling fans 35

Source EPA Retail Store Level
Assessments September 2001 June 2002
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Labeling Language

• Provide clear and consistent labeling of ENERGY
  STAR qualified computer monitors. The ENERGY
  STAR label must be clearly displayed on the
  top/front of the product, on the product
  packaging, in product literature (i.e. user
  manuals, spec sheets, etc.), and on the
  manufacturers Internet site where information
  about ENERGY STAR qualified models is displayed.

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Purpose of Labeling Requirement

• Make it simple for buyers (consumers and
  businesses) to easily identify energy-efficient
  models
• Clearly differentiate between models
• Allow retailers and manufacturers to leverage
  significant outreach
• Ensure partners are recognized for their high
  efficiency products
• Increase awareness of ENERGY STAR among purchasers

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Chronology of Labeling Discussion

• Early 2001 - Initiated discussion with ITI
  concerning the new PA
• March, 2002 - Letter to monitor manufacturers
• explained rationale for PA requirements
• indicated our willingness to consider labeling
  options
• included laundry list of proposals we had heard
  so far
• April, 2002 - Monitor industry meeting
• further discussion of labeling requirement and
  sharing of concerns/suggestions

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Chronology of Labeling Discussion

• May, 2002 - Letter to monitor manufacturers
• announced decision not to accept labels on back
  panel
• stated intention to issue approved set of
  labeling options as official interpretations of
  PA
• final call for suggestions
• June, 2002 - Additional industry input received
• ITI, IBM, Viewsonic, Dell, Apple

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Chronology of Labeling Discussion

• December, 2002 - Partner meeting
• reviewed the new PA requirements
• status report on PA phase-in
• July 22, 2003 - Todays meeting
• presentation of proposal allowing four options
  for labeling of monitors

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Partner Concerns

• Desire not to include brands other than their own
  on the product
• Preference for a transparent, seamless design
• Costs to produce and apply the label
• Contamination of recycling process
• Consumers dont look/ask for the label
• Label does not add value for buyer
• Label does not increase sales for partner

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Options Considered

• Temporary label
• Electronic label
• Folder similar to control panel folder
• On screen display
• Label on monitor base or stand
• Removable label for power cord, similar to safety
  labels on consumer products
• Label incorporated into boot up process (initial
  boot up or all boot ups)

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Options Considered (cont.)

• Consumer outreach/advertising in lieu of labeling
• Label on promotional piece in the shipping box
• Label on plastic protective covering for monitor
• Label on accessories, e.g., mouse pad
• Label on point-of-purchase promotional item,
  e.g., shelf-talker, and work with retail staff

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Where We Ended Up

• Four options
• Balance partner concerns with labeling objectives
• Demonstrate flexibility while providing options
  that have roughly equal merit

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Monitor Labeling Options

• - Permanent label on top/front
• - Temporary label on top/front
• - Electronic label
• - Label used in advertising

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Permanent Labeling
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Temporary Labeling
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Temporary Labeling
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Electronic Labeling

• Certification mark appears on monitor screen
  through software driven by the computer such as
• Desktop folder similar to control panel folder
• On screen display
• Boot up screen
• Navigation screen
• Allows flexibility in implementation, depending
  on operating system, but requires failsafe to
  ensure only qualified monitors are labeled
• Will be handled case-by-case

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Electronic Label

• Maximum 2 clicks to get to ENERGY STAR
• Icon should be on a screen with few others
• ENERGY STAR folder to contain information in .pdf
  files
• What is ENERGY STAR
• Energy and environmental benefits of ENERGY STAR
  qualified product
• Information on ENERGY STAR products (OE and
  others)
• Power management

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Electronic Label - Example
From Desktop
ENERGY STAR
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Electronic Label - Example
25
Electronic Label - Example
Two clicks down ENERGY STAR icon
ENERGY STAR
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Labeling via Advertising

• Incorporate the logo into advertising such that
  the number of impressions that result are roughly
  equivalent to the impressions that would have
  resulted from consumer exposure to the label on
  their qualified product
• Provide partners flexibility while guaranteeing
  approximate equivalency of impact as measured by
  the number of impressions achieved
• impressions reach ( of people) X frequency (
  of times)

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Labeling via Advertising

• A 52(S)
• Where
• A of impressions that would need to be
  achieved from the advertising and
• S of ENERGY STAR qualified units shipped by
  the partner in the previous calendar year

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Labeling via Advertising

• Assumptions -- very conservative, derived in
  consultation with PR/Ad experts
• Temporary labels
• 75 of temporary labels removed immediately
• 25 remain on for the life of the monitor
• A monitor is used an average of 208 days/yr
• 60 are in offices, used 5 days/week
• 40 are in homes, used 3 days/week
• combined total average is a little over 4
  days/week
• One impression per day

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Labeling via Advertising

• To determine shipments, partner may use
• actual shipments of qualified monitors in the
  previous year
  OR
• an estimate of shipments calculated by
  multiplying its total monitor shipments by a
  national ENERGY STAR market share percentage
  provided by EPA

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Labeling via Advertising

• At a minimum, ads must properly display the Ask
  About ENERGY STAR or We Sell ENERGY STAR logo
  with a statement conveying the meaning/value of
  ENERGY STAR
• Partners also are encouraged to prominently
  display the certification or promotional logo in
  ads that feature qualified products and offer
  more explanation of ENERGY STAR along with a call
  to action

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Labeling via Advertising

• Appropriate ad media
• TV, radio, print, Internet
• Ads must be targeted to consumers outside
  partners company
• The following may not be used to fulfill this
  requirement
• Employee education
• Use of logo on company web site

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Labeling via Advertising

• Reporting on ad activities
• shipment numbers used to determine of
  impressions needed
• copies of ads in which the logo was included to
  fulfill this requirement
• dates/period ads were placed
• total of impressions achieved

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Real World Example

• Company D sold 4.3 million monitors in 2000,
  Assume 50 were ENERGY STAR qualified
• At 52 impressions/qualified monitor, Co. D needs
  to achieve 112 million impressions
• Translated into dollars
• At an average of 14/thousand impressions, Co. D
  would need to spend 1.5 million on advertising
  that includes ENERGY STAR
• Co. Ds ad budget was 431 million in 2001
• Co. D would be spending less than 1 of its ad
  budget on ads that include ENERGY STAR

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Timing

• Partners are free to pursue any of the 4 labeling
  options beginning at any time
• Official labeling requirement will be deferred
  until OE partners transition to the new logo
• Transition to the new logo will be coordinated
  with changes to the EU agreement and is expected
  to occur in 2005