What are eco-labels? Environmental or eco-labelling is simply speaking, is a type of pre-set graphic form of media that is used to inform receptive and interested consumers about the impact that a product or service has had on the environment in comparison with similar competing products. The Ecolabel index, which is the leading global directory …
What are eco-labels?
Environmental or eco-labelling is simply speaking, is a type of pre-set graphic form of media that is used to inform receptive and interested consumers about the impact that a product or service has had on the environment in comparison with similar competing products. The Ecolabel index, which is the leading global directory of eco-labels, defines eco-labels as “A sign or logo that is intended to indicate an environmentally preferable product, service or company, based on defined standards or criteria.1”
Eco-labels have been used for decades to inform consumers about the environmental benefits of a product – the first (Blue Angel, Germany) having been introduced back in 19782. Since then, the number of these labels have grown steadily across the globe and currently, the Ecolabel index identifies that currently there are 456 eco-labels operating in 199 countries across 25 industries.
Figure 1. Examples of popular eco-labels: Blue Angel, Nordic Swan, Austrian Eco-label, EU Eco-label.
Eco-labels are awarded to products by various associations upon meeting specific criteria and standards. While they are not mandatory, businesses voluntarily obtain these labels by ensuring that their production complies with the standards required to be awarded an eco-label to stand-out among their competitors. Such award is based on a thorough vetting of a product’s impact on the environment throughout its lifecycle by manufacturers and national and international authorities and associations.
There are many such associations operating at the international, national and regional levels which provide eco-labeling schemes and opportunities. Among these, two well-recognized and popular ones are the EU-Ecolabel and the International Organization for Standardization (ISO) labels which are briefly described below.
EU- Ecolabel, which is an official voluntary label awarded by the EU that certifies “products with a guaranteed, independently-verified low environmental impact.”3 Now celebrating 30 years of existence, the EU-Ecolabel has grown steadily in the last decade with more than 2270 licenses having been awarded to over 87,000 products across different categories.
Further, ISO has also introduced specific standards for environmental labelling through ISO 14020. These ISO standards cover the following range of data and claims:
| ISO 14024, Environmental labels and declarations – Type I environmental labelling – Principles and procedures | for eco-labelling schemes where there are clearly defined criteria for products |
| ISO 14021, Environmental labels and declarations – Type II Self-declared environmental claims | for products and services where there are neither criteria nor labelling schemes |
| ISO 14025, Environmental labels and declarations – Type III environmental declarations – Principles and procedures | for specific aspects of products using a life-cycle approach |
| Foot print communication: ISO 14026, Environmental labels and declarations – Principles, requirements and guidelines for communication of footprint information | the requirements for determining which environmental aspects are covered by the footprint data, ensuring that the information is robust |
| Product category rules: ISO/TS 14027, Environmental labels and declarations – Development of product category rules | necessary when implementing standards for product-related environmental claims |
Source: https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100323.pdf
Forest/ Bioeconomy products
As with conventional products like laundry detergent, eco-labelling schemes are also available for products manufactured through the forest economy and bioeconomy which include both wood and non-wood products. For example, the Forest Stewardship Council (FSC), Lembaga Indonesia Ekolabel (Indonesia), Programme for the Endorsement of Forest Certification (PEFC) schemes, Rainforest Alliance Certified – are all labels that are oriented towards products that ensure sustainable management of forests and the protection of this viable resource. For example, the FSC trademark on a wood-based product or PEFC-certified wood and paper products carry assurances that the wood has originated from forests which are sustainably managed according to strict environmental, social and economic standards. Similarly, Rainforest Alliance-certification is used by products, such as timber, coffee and paper, that have been approved as grown or manufactured in a sustainable manner. In fact, the alliance also works with important stakeholders like foresters, and farmers to ensure that they produce products and services in an environmentally and socially responsible manner.
Moreover, it is important to note that such eco-labels are not only available for forest-based products, but also services like tourism. In fact, many hotels and hostels across the world are investing resources in establishing sustainable ways of working and obtaining certifications for their services. For example, quite a few national parks in Europe including Bulgaria’s Central Balkan National Park and Finland’s Oulanka National Park have received PAN certifications4 which are aimed at improving and promoting sustainable tourism in protected areas.
Figure 3. Example eco-labels for forest/ bioeconomy products and services.
The benefits and challenges regarding eco-labels
Benefits
Eco-labels provide multiple benefits for the consumers, the foremost of which is providing information. Multiple reports from leading consultancies like McKinsey5 and Deloitte6 have concurred that consumers are becoming increasingly inclined to buy products that mitigate damage to the environment and promote sustainability. Eco-labels offer consumers information about the environmentally-friendly origins of a product or service in terms of their sustainable production, and distribution7. Recent research suggests that as eco-labels require producers to show compliance with specific standards and norms before they can use eco-labels, these labels offer consumers a way to build trust in the products and reduce any uncertainty in consumer minds about the negative impacts of their purchases and consumption on the environment.
For businesses, eco-labels act as a tool for strategically communicating with consumers and educating them about sustainable production and product design8. Research studies suggest that eco-labels have become an important behavioral science tool to promote and support policy initiatives for sustainability and circular economy9. Moreover, eco-labels have the potential to give businesses a clear strategic advantage by creating a distinct market image that stands out from competitors. In a highly commercialized economy with hundreds of products being retailed in multiple categories, eco-labels can help businesses’ draw consumers’ attention, particularly those consumers who hold environmental protection and related values as extremely important.
Recent surveys suggests that sustainability and ethics of products have become a key consideration of consumers’ purchase decisions for many product categories, including food10, particularly in Europe. For example, a Statista survey in Poland showed that approximately 70% of surveyed respondents would like to compare and check a product’s Environmental, Social, and Governance (ESG) ranking and over 60% wanted to buy sustainable products in the future11. In another survey among Gen Z consumers in US, over 40 % of respondents stated that they considered the environmental aspects of a product prior to purchase12. These statistics conclusively indicate that obtaining an eco-label may help a business draw consumers attention and claim a piece of their wallets by showcasing eco-labels, and thus, their commitment to sustainable and environment-friendly production.
Challenges
Despite the many benefits that eco-labels have for consumers and businesses, there are challenges that hinder the realization of eco-labelling’s full potential in promoting sustainable consumption, particularly for the forest economy and bioeconomy products. The two biggest challenges are – consumers’ awareness and confusion regarding eco-labels and the premium prices of eco-labelled products.
While consumers have begun to consider the sustainability and environmental impact of their consumed products, a recent survey by Deloitte13 found that only about 25% of consumers consider the labelling of a product as responsibly sourced or manufactured as a sign of its sustainability. The report suggests that this low consideration of labeling while purchasing products could be attributed to consumers’ low level of awareness about different eco-labels and confusion about the many eco-labels that are available. Recent research studies14, 15 also indicate that current knowledge about eco-labels seem limited only to ‘green’ consumers (i.e., those who hold environmental values in high regard) and the widescale realization of eco-labelling benefits would critically need sensitizing a wider share of the audience. This is an important point of note for policymakers who are aiming to promote businesses’ and consumers’ actions towards sustainability and obtaining sustainable development goals. It is essential for policymakers to utilize more educational interventions to resolve existing confusions and enhance consumer knowledge regarding eco-labels. It would also be prudent, perhaps, to educate consumers about not just purchasing eco-labelled products, but also their care, recycling and repairing which links to the basics of the Circular Economy – a domain that is closely related to sustainability.
The second important challenge pertains to the price of the eco-labelled products and their social acceptance16. Eco-products, particularly from the bioeconomy, tend to be priced higher than conventional products which can often hinder consumers’ willingness to purchase them – and this willingness and price consideration varies by product categories. For instance, a recent survey in Singapore about buying eco-labelled consumer goods showed that about 40% of respondents were willing to pay only 10% more prices for an eco-labelled television but 33% would be willing to pay up to 80% more for eco-labelled home furniture. It seems as if consumers’ willingness to pay for eco-labels would be strongly dependent on their judgements about the perceived value of the product, the estimated duration of use and other such factors which need to be identified by further research.
Summary
To conclude, eco-labels have the capacity to provide multiple benefits to consumers and businesses. These voluntary certifications could go a long way in informing, sensitizing and educating consumers about the impact of sustainably-produced and environmentally-friendly products and allowing businesses to reap the benefits of their investments in sustainable production methods. While these benefits are acknowledged and seemingly evident in attracting consumer attention and share of wallets, some challenges still remain to be addressed in fully realizing the potential of eco-labels as an educational, strategic and policy tool for sustainability.
References
1 Ecolabel Index. Ecolabel.
2 Iraldo et al. 2020. The future of ecolabels. Int J Life Cycle Assess 25, 833–839. https://doi.org/10.1007/s11367-020-01741-9
3 European Commission. EU Ecolabel.
4 WWF. 2003 New PAN Park certified.
5 Charm et al. 2022. Rise of the inclusive, sustainable consumers.
6 Deloitte. The Sustainable Consumer 2023.
7 Wojnarowska et al. 2021. Impact of eco-labelling on the implementation of sustainable production and consumption. Environmental Impact Assessment Review, 86, 106505. https://doi.org/10.1016/j.eiar.2020.106505
8 and 9 Meis-Harris et al. 2021. What is the role of eco-labels for a circular economy? A rapid review of the literature. Journal of Cleaner Production, 306, 127134. https://doi.org/10.1016/j.jclepro.2021.127134
10 Young, E. 2022. Eco-labels on food encourage people to eat more sustainably.
11 WirtualneMedia. (October 4, 2022). Importance of Environmental, Social and Corporate Governance/Sustainable Development Goals (ESG/SDG) in consumer purchasing process in Poland in 2022 [Graph]. In Statista. Retrieved January 18, 2023, from https://www.statista.com/statistics/1342901/poland-importance-of-esg-sdg-in-consumer-purchasing-process/
12 Roper, W. 2020. Young Generation Focused on Climate.
13 Deloitte. The Sustainable Consumer 2023.
14 Wojnarowska et al. 2021. Impact of eco-labelling on the implementation of sustainable production and consumption. Environmental Impact Assessment Review, 86, 106505. https://doi.org/10.1016/j.eiar.2020.10650
15 Meis-Harris et al. 2021. What is the role of eco-labels for a circular economy? A rapid review of the literature. Journal of Cleaner Production, 306, 127134. https://doi.org/10.1016/j.jclepro.2021.127134
16 Morone et al. 2021. Consumer willingness to pay for bio-based products: Do certifications matter? International Journal of Production Economics, 240, 108248. https://doi.org/10.1016/j.ijpe.2021.108248
You might also be interested in the following:
Boesen et al. 2019. Environmental sustainability of liquid food packaging: is there a gap between Danish consumers’ perception and learnings from life cycle assessment? Journal of cleaner production, 210, 1193-1206. https://doi.org/10.1016/j.jclepro.2018.11.055
De-loyde et al. 2022. Promoting sustainable diets using eco-labelling and social nudges: A randomised online experiment. Behavioural Public Policy, 1-17. https://doi.org/10.1017/bpp.2022.27
Global Insights. 2022. Using ecolabels as a tool for systemic change.
Harris, K. 2022. Foresight trend report: Changing the nature of consumption.
Herbes, C. 2021. The Market for Bio‐Based Packaging: Consumers’ Perceptions and Preferences Regarding Bio‐Based Packaging. In: Bio‐based Packaging: Material, Environmental and Economic Aspects, 453-465. https://onlinelibrary.wiley.com/doi/book/10.1002/9781119381228
Singh et al. 2021. Policy review for biomass value chains in the European bioeconomy. Global Transitions, 3, 13-42. https://doi.org/10.1016/j.glt.2020.11.003
Taivalantti, T. 2019. Expert Perceptions of Non-Wood Forest Product Certification in Finland.
All links accessed 23.2.2024
Featured photo: tache / AdobeStock