a label which identifies overall environmental preference of a product (i.e.good or service) within a product category based on life cycle considerations. In contrast to a self-styled environmental symbol or claim statement developed by a manufacturer or service provider, an eco-label is awarded by an impartial third party to products that meet established environmental leadership criteria (2004).Consumer Reports lists 140 eco-labels that are commonly found on U.S. products. Eco-labels are an important consumer education tool because they provide simple information about the environmental attributes of a product at the point of purchase. Recognized labels can communicate to a consumer that a product meets a particular environmental standard in just a glance. Eco-labels are more useful to consumers than lengthy corporate responsibility reports or ratings websites because they are, theoretically, simple to use and require little time, research, and effort.
Eco-labels have the potential to meet three major objectives. Eco-labels are first and foremost a tool for educating consumers and building awareness of sustainable product options. By simply observing an eco-label on a product, consumers are informed of the environmental attributes of the product and can differentiate between brands. The eco-label provides environmental information about a product that consumers cannot reasonably ascertain on their own. Even if consumers are not already concerned about environmental impacts of products, eco-labels can “serve as a communication vehicle for awareness transfer to the market at large” (Bratt et al., 2011, p. 1631).
Secondly, eco-labels offer producers an opportunity to display their environmental accomplishments in a way that is verified by a third party. An eco-label “offer[s] a market incentive to environmentally innovative and progressive businesses” (GEN, 2004). Eco-labels give businesses a leading edge in the market and also explain any price premiums that are often inherent in products that are responsibly produced. Overall, “the label is expected to affect the purchasing decision in favor of the labeled product and thereby be morally as well as economically rewarding for those companies that have been awarded the label” (Bratt et al., 2011, p. 1631).
The final objective of eco-labels is to drive sustainability. Eco-labels are meant to be a market-based instrument for improving environmental conditions. By encouraging innovative businesses and green consumerism, eco-labels can potentially eliminate the need for command and control solutions to environmental problems, or at least set the stage for future legislation.
This all sounds brilliant, right? Unfortunately, however, the eco-label world is not without its problems. In my next few posts, I will highlight the major challenges that eco-labels face in achieving the above objectives and will offer recommendations for improvement. Stay tuned for Challenge #1: Abundance of Labels Creates Confusion and Mistrust.
Bratt, C., Hallstedt, S., Robert, K.H., Broman, G., Olkmark, J. (2011). Assessment of eco-labelling criteria development from a strategic sustainability perspective. Journal of Cleaner Production, 19, 1631-1638.
Global Ecolabelling Network. (2004). Information paper: Introduction to ecolabelling. http://www.globalecolabelling.net/docs/documents/intro_to_ecolabelling.pdf.