A new report released yesterday has set out the best practices firms should follow as they aim to develop and adopt new eco-labels for promoting the environmental credentials of their products.

The study, which came on the same day as supermarket giant Tesco announced it is to launch a trial of carbon labels showing the carbon footprint of a number of its products, argues that with environmental labels such as organic or FSC certification marks becoming increasingly prominent, marketing departments should be careful about which labels they use and how they fit into their overall sustainability strategy.

Developed by UK charity Forum for the Future and US consultancy Business for Social Responsibility (BSR), the free guide sets out a number of best practices firms should follow when adopting eco-labels. In particular, it recommends companies seek independent verification for any labelling scheme, work with competitors to shape industry-wide rules governing labelling standards, and ensure any adoption of eco-labels fits into a wider environmental strategy.

"It's not just about slapping a label on a packet," insisted Tom Berry, head of retail at Forum for the Future. "Understanding the true environmental credentials of your products and communicating these to consumers can be a source of innovation and competitive advantage."

The report also warns firms that adopting green labels on just one or two products in a larger portfolio can serve to invite criticism of the firm from environmentally conscious consumers.

"Claiming environmental credentials for one 'hero' product in a portfolio of ‘villains’ is a high-risk strategy," the report claims. "Once the spotlight moves to the rest of the portfolio, serious questions will tend to be asked about corporate integrity. Similar concerns apply to certifying one ingredient out of many or just the packaging rather than the whole product."

It advises that a useful defence against such criticism is to highlight plans to improve the entire portfolio over time, but warns that without this context "any eco-promise may seem rather hollow".

The report also argues that firms should use the adoption of eco-labels as the starting point for a more comprehensive overhaul of their product portfolio that results in them "choice editing" – removing products that are not environmentally sustainable.

It argues that while axing non-green products may be a relatively new phenomenon, many retailers already have processes in place that could be used to enable wider choice editing. Retailers already use complex category-management specifications and buying criteria to edit customer choices – by excluding blemished or misshapen fruit and vegetables from sale, for example, the report notes. "Choice editing for sustainability is an obvious next step, but will need industry-wide collaboration to ensure common standards," it adds.