3 October 2013 What makes an eco-label successful?

In the last twenty years the number of ecolabel programmes worldwide has grown from a dozen in the 1990’s to over 420 today. This parallels the recent rise of environmentalism, social responsibility and sustainability. But what makes an eco-label successful?

From organic food and wines to timber from sustainably managed forests, energy saving appliances and fair trade goods, consumers are bombarded everyday by such a plethora of ecolabels that it is becoming impossible to know which ones to trust.

Research at Lincoln University led by Business Management senior lecturer, Dr Michaela Balzarova, looks at the everyday issues faced by typical consumers and questions what makes some eco-labels more credible and successful than others. Working with Professor Magali Delmas at the UCLA Institute of the Environment and Sustainability in the USA, the project proposes a framework to analyse the factors that lead to successful eco-labels.

“Eco-labels should exist to inform stakeholders about the environmental attributes of the product or service,” says Dr Balzarova. “Instead decision makers, researchers and consumers are faced with an increasing and confusing array of eco-labels that appear to have a similar purpose, mechanism and scope. The aim of our study is to present the key factors that lead to an eco-label’s success, and to provide recommendations for managers, policy makers and non-governmental organisations to improve the design of eco-labels and enhance their stated objective.”

The researchers argue that successful eco-labels encompass three main elements: recognition, credibility, and value. While no one eco-label has the perfect combination of high visibility and credibility with stringent standards to mitigate social environmental impact, Dr Balzarova says that the top performers are the likes of Energy Star, the Forest Stewardship Council and Fair Trade.

“The value of eco-products on the market and the number of new eco-label programmes are growing rapidly. For example, retail sales of organic foods have increased from $3.8 billion in 1997 to $16.7 billion in 2006,” she says.

The study proposes a number of recommendations to increase the awareness and understanding of eco-labels. While the study is still in working progress, initial results were presented in 2011 to the Sustainable Business Network and were well received.

“New Zealand is a recognised player in developing and promoting prominent environmental labels. To tap into these growing markets it is vital that we understand how to best convey our environmental messages to consumers in a way that is clear, credible and compelling.”

For more information, read the full article on page 41 of the University’s research profile publication Transform.