In the fast-paced consumer market, stakeholders use labels and certifications to make quick purchasing decisions. As many shift into green consumerism, hoping for sustainability and capitalism to work harmoniously, ecolabels have been promoted to help navigate this.
Ecolabels are voluntary methods of verifying and labelling products that meet certain environmental performance criteria. The European Union (EU), for instance, believes that with the right ecolabelling scheme, they can help achieve 10 of the 17 Sustainable Development Goals, positively impacting our world.
Ecolabels serve as a quick visual endorsement of a product's sustainability properties and are thought to be supported by governments and advertising boards like the Advertising Standards Agency (ASA) - lending the product and label sustainable credibility.
Although prolific in the modern marketplace, ecolabelling is not a new concept; it dates back to 1977. Now, within our global sustainable zeitgeist, spanning from consumers to governments, ecolabels are firmly embedded in modern trading. However, given that the concept predates many current climate initiatives, we must ask: are ecolabels enough to help humanity reach our sustainability goals?
The Expansion of Ecolabels
Our current markets are saturated with similar products, making it difficult and confusing for consumers to choose. With increasing media attention on environmental crises, many consumers now support products and companies genuinely working towards addressing these crises.
In 2021, 85% of UK consumers reported increasing their green purchasing over the past five years, and 62% considered sustainability a vital aspect of their purchasing decisions. This trend has contributed to the boom in the ecolabelling market, as consumers use their spending power to support sustainable businesses and rely on ecolabels to guide their purchasing decisions quickly.
Beyond marketing tactics and USPs, ecolabels provide a strategic advantage for businesses, allowing them to stand out in a competitive market while adding strong psychological and emotional value to their brand. Ecolabels help strengthen the bond between businesses and their customers by lending credibility through third-party verification and promoting transparency.
However, despite the oversaturation of ecolabels across all market products, reports persist of worsening environmental crises, with many key culprits still having some form of ecolabels; it has raised the question are ecolabels enough for true sustainability?
Issues Surrounding Ecolabels
Discussions around ecolabels have identified several issues:
Different Metrics
Sustainability encompasses various topics, from carbon footprint and biodiversity to land use, water, waste, and responsible farming. Different labelling schemes use different approaches to quantify these factors. Some focus solely on one area, like GHG emissions, while others include multiple factors.
This lack of a unified reporting method is why the GHG Protocol created a single framework for Scope emissions, so all businesses and governments can work from the same benchmarks. Yet, with something so prominent within the public sphere, there still seems to be no unity and unclarity around what each eco-label is truly measuring.
Box Ticking
Companies now see there is a significant commercial value to 'being green'. This has led some businesses to use ecolabels to increase their products' premiums, using it to market the product as highly sorted and comes with high cultural capital, overusing it to better their portfolio's environmental credentials. It has become a box ticking exercise regardless of what areas that ecolabel cover, leading to customers buying products unaware that that do not fulfill their environmental requirements.
Voluntary
Ecolabels are typically voluntary for businesses to obtain, but achieving these certifications usually comes at a financial cost. Privately owned labelling schemes have been criticised for their costs, which can exclude smaller, equally or more sustainable businesses that cannot afford them, leaving the conglomerates to be the ones with the most access to the ecolabels. This desire to create profit also leads to a lowering of the environmental bar which can create a slow slide into greenwashing.
Questioning Validity
The CMA found that almost 100% of toilet products and 91% of dishwashing products in the UK have some form of green label. However, many of these products also have unsustainable elements, leading to concerns about misleading claims.
The CMA launched an investigation into the validity of healthcare and eco-claims, with the Chief Executive stating, "We're concerned many shoppers are being misled and potentially even paying a premium for products that aren’t what they seem."
Missing the Big Picture
Critics argue that the average time to be awarded an ecolabel, less than 12 months, does not provide enough time to review a product or business fully. Some products may be sustainable in one area but fail to address sustainability across their entire lifecycle or product portfolio.
For example, a single ecolabelled product within an otherwise unsustainable product range can be misleading and often confusing for consumers. As a result, ecolabels can be seen as "selling stickers" rather than delivering real market transformation towards sustainability.
Greenwashing
Ecolabels should encourage businesses to adopt environmentally friendly practices, but there is skepticism about their effectiveness, credibility and possible greenwashing. Some ecolabels set low benchmarks to encourage business buy-in rather than driving product innovation. Moreover, new technologies may not fit into existing ecolabel criteria, and some businesses may not pursue ecolabels due to the associated costs.
Finally, some eco-labels may allow trade-offs, such as a product being biodegradable but still containing harmful chemicals.
Sustainability Stickers
The proliferation of ecolabels within the market can almost become part of the ordinary for a product, over them being meaningful for purchasing. This saturation of different and also similar ecolabels can confuse consumers about what they actually refer to, leading to overall leading to confusion and skepticism of their effect. Rather than guiding consumers, ecolabels may be seen as mere "sustainability stickers" representing the bare minimum a business can achieve.
Are Ecolabels Enough?
With the current pressures around environmental protection, ecolabels can be a good way for businesses to showcase their sustainability efforts. However, relying solely on ecolabels in our modern market is not sufficient to achieve sustainable consumption and procurement. While ecolabels offer a quick guide, consumers need to understand the full metrics behind them, including what factors they consider when reviewing products and whether the label is privately owned. As it currently stands, some ecolabels are actually misleading customers into buying products that they think protect against climate change or aquatic toxicity, but don't include those areas as part of their certification or have such a low bar, companies can get the certification without offering the right standard of product.
Ecolabels should operate under a unified framework, free from industry or business biases. They should also consider tiered labelling, distinguishing between products with varying levels of sustainability. For example, a biodegradable product containing harmful chemicals should not be labelled the same as a naturally derived biodegradable product. Establishing tiers within these labels would enhance transparency and promote innovation, moving beyond just discouraging bad practices to encouraging positive advancements in technologies.
While ecolabels can help businesses highlight their products' environmental credentials, an overabundance of labels can dilute their impact. In the final decision-making process, ecolabels provide quick information but should not be the final determining factor. The market currently lacks full transparency, so consumers should delve deeper by asking about supply chains, researching the effects of ingredients, and understanding why a company might not have a particular label or has chosen one label over another. This thorough approach should be a crucial step in the final decision-making process. Although there is more focus on the accountability around ecolabelling, with the EU setting tighter regulations around certification schemes, consumers on any level should do their full research to understand the full scope of a products sustainability claims.
